DUNMORE, Pa., Jan. 31, 2018 (GLOBE NEWSWIRE) -- FNCB Bancorp, Inc. (OTCQX:FNCB) (“FNCB”), the parent company of Dunmore-based FNCB Bank (the “Bank”), today reported net income of $0.1 million, or $0.01 per basic and diluted share, for 2017, compared to net income of $6.3 million, or $0.38 per basic and diluted share, for 2016. For the fourth quarter of 2017, FNCB recorded a net loss of $6.1 million, or $0.36 per basic and diluted share, compared to net income of $1.5 million, or $0.09 per basic and diluted share, for the same quarter of 2016. During the fourth quarter of 2017, FNCB recognized additional, non-recurring income tax expense of $8.0 million resulting from the revaluation of FNCB’s net deferred tax assets following the enactment of the Tax Cuts and Jobs Act (the “Act”) on December 22, 2017. For the year ended December 31, 2017, FNCB’s adjusted net income, which excludes the non-recurring income tax expense related to the revaluation of FNCB’s net deferred tax assets, was $8.1 million, or $0.49 per basic and diluted share, compared to $6.3 million, or $0.38 per basic and diluted share, in 2016, an improvement of $1.8 million, or 29.2%. For the fourth quarter of 2017, adjusted net income, excluding the non-recurring income tax expense related to revaluation of the net deferred tax assets was $1.9 million, or $0.11 per basic and diluted share, an improvement of $0.4 million, or 24.2%, from $1.5 million, or $0.09 per basic and diluted share, for the same quarter of 2016.
On December 22, 2017, President Trump signed the Act into law, which, among other things, reduced the corporate statutory tax rate from a maximum corporate income tax rate of 35% to 21% effective January 1, 2018. Generally accepted accounting principles required FNCB, upon enactment of the Act, to revalue its net deferred tax asset, resulting in an $8.0 million reduction in their value. This non-cash, non-recurring valuation adjustment has been recorded as additional income tax expense in the fourth quarter of 2017. Going forward, FNCB expects to benefit from the lower corporate income tax rate.
2017 HIGHLIGHTS
- FNCB Bancorp, Inc. named to the 2018 OTCQX Best 50 list.
- Dividends declared for 2017 totaled $0.13 per share, an increase of 44.4% compared to $0.09 per share for 2016.
- Net interest income increased $2.5 million, or 8.2%, to $33.0 million in 2017 from $30.5 million in 2016.
- Net loans grew $38.7 million to $761.6 million at December 31, 2017 from $722.9 million at December 31, 2016, an increase of 5.4%.
- Non-performing assets decreased $0.9 million, or 14.6%, from $6.4 million at December 31, 2016 to $5.5 million at the close of 2017.
- FNCB accelerated the payment of $5.0 million in principal on the subordinated debt due September 1, 2018 to September 1, 2017.
“Our strong operating performance continued through the fourth quarter illustrated by solid organic loan and deposit growth, improved earning asset yields and a continued focus on improving efficiency and maintaining stable non-interest expense levels,” said Gerard A. Champi, President and Chief Executive Officer. “Although FNCB recognized a significant one-time, non-cash charge in the fourth quarter of 2017 relating to the revaluation of its net deferred tax assets as a result of the enactment of the new tax law, fourth quarter and 2017 adjusted net income, excluding this charge, were up significantly, and we believe FNCB will realize significant future benefit from the recent tax law changes that are well in excess of the related one-time charge recognized in the fourth quarter of 2017. Importantly, the partial write-down of FNCB’s deferred tax assets had no significant impact on FNCB’s regulatory capital ratios, liquidity, or its ability to continue to pay regular cash dividends. We’re excited by the anticipated positive and ongoing earnings impact that we believe FNCB will recognize in the future from the Tax Cuts and Jobs Act of 2017, and we believe that the reduction in corporate income tax rates will accelerate our efforts to build value for FNCB shareholders.”
For the fourth quarter and year ended December 31, 2017, dividends declared and paid were $0.04 and $0.13 per share, respectively. In comparison, dividends declared and paid for the fourth quarter and year ended December 31, 2016 were $0.03 per share and $0.09 per share, respectively. The closing price of FNCB’s common stock was $7.30 per share at December 31, 2017, an increase of $1.25 per share from the closing price of $6.05 per share at December 31, 2016. The price appreciation, combined with dividends declared, equated to a total return for shareholders of 22.8% for 2017.
Return on average assets and return on average shareholders’ equity were 0.01% and 0.15%, respectively, in 2017. For the three months ended December 31, 2017, return on average assets and return on average shareholders’ equity were (2.09%) and (24.98%), respectively. Return on average assets was 0.55% and 0.57%, respectively, and return on average shareholders’ equity was 6.43% and 6.82%, respectively, for the three months and year ended December 31, 2016.
Summary Results for 2017
For the three months ended December 31, 2017, net interest income increased $1.1 million to $8.8 million compared to $7.7 million for the same period of 2016. FNCB’s tax-equivalent net interest margin improved 24 basis points to 3.35% for the fourth quarter of 2017 from 3.11% for the same quarter of 2016. For the year ended December 31, 2017 net interest income increased $2.5 million, or 7.9%, to $33.0 million in 2017 from $30.5 million in 2016. The tax-equivalent net interest margin widened 10 basis points to 3.23% in 2017 from 3.13% in 2016. The margin improvement for both the fourth quarter and year ended December 31, 2017 reflected strong growth in earning assets, coupled with increases in earning asset yields, partially offset by increases in FNCB’s cost of funds.
For the fourth quarter of 2017, non-interest income increased $0.5 million to $1.9 million from $1.4 million for the same quarter of 2016. The 37.2% increase was largely due to an increase in other income of $0.3 million and net gains on the sale of investment securities of $0.3 million in the fourth quarter of 2017. For the year ended December 31, 2017, non-interest income increased $1.0 million, or 16.5%, to $7.2 million from $6.2 million for the year ended December 31, 2016. Similarly, the yearly improvement primarily reflected a $0.6 million, or 66.4%, increase in net gains on the sale of securities, coupled with a $0.4 million increase in other income.
Non-interest expense for the three months ended December 31, 2017 increased $0.6 million, or 8.9%, to $7.8 million from $7.2 million for the same period of 2016. The increase primarily resulted from a $0.4 million increase in other expenses, coupled with higher salaries and employee benefits, occupancy expense, data processing costs and professional fees. For the year ended December 31, 2017, non-interest expense increased $0.5 million, or 1.9%, to $28.1 million compared to $27.5 million for the year ended December 31, 2016.
Asset Quality
Total non-performing assets decreased $0.9 million, or 14.6%, to $5.5 million at December 31, 2017 from $6.4 million at December 31, 2016. The improvement was primarily due to reductions in other real estate owned and other non-performing assets of $1.0 million and $0.3 million, respectively, comparing December 31, 2017 and 2016. Partially offsetting these decreases was a $0.3 million increase in non-accrual loans to $2.6 million at December 31, 2017 from $2.2 million at December 31, 2016. Despite the increase in non-accrual loans, FNCB’s loan delinquency rate (total delinquent loans as a percentage of total loans) improved to 0.72% at December 31, 2017 from 0.81% at the end of 2016.
The ratio of non-performing loans to total loans was 0.34% and 0.31% at December 31, 2017 and 2016, respectively. The allowance for loan and lease losses as a percentage of total loans was 1.17% at December 31, 2017 compared to 1.15% at the end of 2016. Net charge-offs as a percentage of average loans outstanding for the year ended December 31, 2017 was 0.02%, compared to 0.21% for the year ended December 31, 2016.
Financial Position
Total assets decreased $33.3 million, or 2.8%, to $1.162 billion at December 31, 2017 from $1.196 billion at December 31, 2016. Loans, net of net deferred loan costs and unearned income grew $39.4 million, or 5.4%, to $770.6 million at December 31, 2017 from $731.3 million at December 31, 2016. In addition, securities available for sale increased $14.4 million, or 5.2%, to $290.4 million at December 31, 2017 from $276.0 million at the end of 2016. Total deposits decreased $12.7 million, or 1.3%, to $1.002 billion at December 31, 2017 from $1.015 billion at December 31, 2016. The decrease in total deposits reflected cyclical deposit trends of public funds, coupled with the anticipated exit of short-term funds in the first quarter of 2017 that were received at the end of 2016 related to the sale of a municipal utility. Despite the decrease from year-end 2016, FNCB experienced strong growth in both non-interest bearing and interest-bearing deposits throughout the remainder of 2017. Total deposits grew $79.0 million, or 8.6%, from $923.4 million at March 31, 2017.
Total shareholders’ equity was $89.2 million at December 31, 2017 compared to $90.4 million at December 31, 2016. The $1.2 million reduction was due primarily to dividends declared and paid of $2.2 million, partially offset by common shares issued through the dividend reinvestment and optional cash purchase plans of $0.4 million and stock-based compensation of $0.3 million.
FNCB’s total risk-based capital ratio and the Tier 1 leverage ratio were 12.08% and 7.74%, respectively at December 31, 2017, a slight improvement compared to 12.06% and 7.53%, respectively, at December 31, 2016. The ratios exceeded the 10.00% and 5.00% required to be well capitalized under the prompt corrective action provisions of the Basel III capital framework for U.S. Banking organizations.
Non-GAAP Financial Measures
This release references adjusted net income, which is a non-GAAP financial measure. Adjusted net income represents net income, excluding the $8.0 million non-recurring additional income tax expense resulting from the revaluation of FNCB’s net deferred tax assets required by the change in the statutory corporate income tax rate effective January 1, 2018. Management believes this presentation provides the reader with supplemental information that gives a more concise understanding of the impact from the required revaluation of deferred tax assets and facilitates period-to-period comparisons.
Availability of Filings
Copies of FNCB’s most recent Annual Report on Form 10-K and Quarterly Reports on form 10-Q will be provided upon request from: Shareholder Relations, FNCB Bancorp, Inc., 102 East Drinker Street, Dunmore, PA 18512 or by calling (570) 348-6419. FNCB’s SEC filings including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q are also available free of charge on the Investor Relations page of the FNCB’s website, www.fncb.com, and on the SEC website at: http://www.sec.gov/edgar/searchedgar/companysearch.html
About FNCB Bancorp, Inc.:
FNCB Bancorp, Inc. is the bank holding company of FNCB Bank. Locally-based for over 100 years, FNCB Bank continues as Northeastern Pennsylvania’s premier community bank – offering a full suite of personal, small business and commercial banking solutions with industry-leading mobile, online and in-branch products and services. FNCB operates through 18 branch offices located in Lackawanna, Luzerne and Wayne Counties and a limited purpose office in Lehigh County, and remains dedicated to the communities it serves with an on-going mission to be: Simply a better bank. For more information about the BauerFinancial 5-Star rated FNCB, visit www.fncb.com.
INVESTOR CONTACT:
James M. Bone, Jr., CPA
Executive Vice President and
Chief Financial Officer
FNCB Bank
(570) 348-6419
james.bone@fncb.com
FNCB may from time to time make written or oral “forward-looking statements,” including statements contained in our filings with the Securities and Exchange Commission (“SEC”), in its reports to shareholders, and in other communications, which are made in good faith by us pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include statements with respect to FNCB’s beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, that are subject to significant risks and uncertainties, and are subject to change based on various factors (some of which are beyond our control). The words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan” and similar expressions are intended to identify forward-looking statements. The following factors, among others, could cause FNCB’s financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements: the strength of the United States economy in general and the strength of the local economies in our markets; the effects of, and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; the timely development of and acceptance of new products and services; the ability of FNCB to compete with other institutions for business; the composition and concentrations of FNCB’s lending risk and the adequacy of FNCB’s reserves to manage those risks; the valuation of FNCB’s investment securities; the ability of FNCB to pay dividends or repurchase common shares; the ability of FNCB to retain key personnel; the impact of any pending or threatened litigation against FNCB; the marketability of shares of FNCB and fluctuations in the value of FNCB’s share price; the effectiveness of FNCB’s system of internal controls; the ability of FNCB to attract additional capital investment; the impact of changes in financial services’ laws and regulations (including laws concerning capital adequacy, taxes, banking, securities and insurance); the impact of technological changes and security risks upon our information technology systems; changes in consumer spending and saving habits; the nature, extent, and timing of governmental actions and reforms, and the success of FNCB at managing the risks involved in the foregoing and other risks and uncertainties, including those detailed in FNCB’s filings with the SEC.
FNCB cautions that the foregoing list of important factors is not all inclusive. Readers are also cautioned not to place undue reliance on any forward-looking statements, which reflect management’s analysis only as of the date of this report, even if subsequently made available by FNCB on its website or otherwise. FNCB does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of FNCB to reflect events or circumstances occurring after the date of this report.
Readers should carefully review the risk factors described in the Annual Report and other documents that FNCB periodically files with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2016.
[FNCB provides tabular information as follows]
| FNCB Bancorp, Inc. | ||||||||||||||||||||||
| Selected Financial Data | ||||||||||||||||||||||
| Dec 31, | Sept 30, | Jun 30, | Mar 31, | Dec 31, | ||||||||||||||||||
| 2017 | 2017 | 2017 | 2017 | 2016 | ||||||||||||||||||
| Per share data: | ||||||||||||||||||||||
| Net income (fully diluted) | $ | (0.36 | ) | $ | 0.14 | $ | 0.11 | $ | 0.13 | $ | 0.09 | |||||||||||
| Cash dividends declared | $ | 0.04 | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | ||||||||||||
| Book value | $ | 5.32 | $ | 5.82 | $ | 5.76 | $ | 5.58 | $ | 5.43 | ||||||||||||
| Tangible book value | $ | 5.32 | $ | 5.82 | $ | 5.76 | $ | 5.58 | $ | 5.43 | ||||||||||||
| Market value: | ||||||||||||||||||||||
| High | $ | 7.99 | $ | 8.00 | $ | 8.13 | $ | 7.50 | $ | 6.30 | ||||||||||||
| Low | $ | 6.54 | $ | 7.41 | $ | 6.35 | $ | 6.05 | $ | 5.00 | ||||||||||||
| Close | $ | 7.30 | $ | 7.57 | $ | 7.80 | $ | 6.37 | $ | 6.05 | ||||||||||||
| Common shares outstanding | 16,757,963 | 16,757,963 | 16,757,963 | 16,692,314 | 16,645,845 | |||||||||||||||||
| Selected ratios: | ||||||||||||||||||||||
| Annualized return on average assets | (2.09 | %) | 0.80 | % | 0.65 | % | 0.78 | % | 0.55 | % | ||||||||||||
| Annualized return on average shareholders' equity | (24.98 | %) | 9.27 | % | 7.60 | % | 9.77 | % | 6.43 | % | ||||||||||||
| Efficiency ratio | 73.42 | % | 65.09 | % | 72.81 | % | 74.08 | % | 77.25 | % | ||||||||||||
| Tier I leverage ratio | 7.74 | % | 8.10 | % | 7.99 | % | 7.55 | % | 7.53 | % | ||||||||||||
| Total risk-based capital to risk-adjusted assets | 12.08 | % | 12.17 | % | 12.53 | % | 12.38 | % | 12.06 | % | ||||||||||||
| Average shareholders' equity to average total assets | 8.35 | % | 8.61 | % | 8.49 | % | 7.97 | % | 8.50 | % | ||||||||||||
| Yield on earning assets (FTE) | 3.84 | % | 3.77 | % | 3.66 | % | 3.47 | % | 3.53 | % | ||||||||||||
| Cost of funds | 0.59 | % | 0.59 | % | 0.53 | % | 0.48 | % | 0.49 | % | ||||||||||||
| Net interest spread (FTE) | 3.25 | % | 3.18 | % | 3.13 | % | 2.99 | % | 3.03 | % | ||||||||||||
| Net interest margin (FTE) | 3.35 | % | 3.27 | % | 3.21 | % | 3.07 | % | 3.11 | % | ||||||||||||
| Total delinquent loans/total loans | 0.72 | % | 0.81 | % | 0.94 | % | 0.75 | % | 0.81 | % | ||||||||||||
| Allowance for loan and lease losses/total loans | 1.17 | % | 1.17 | % | 1.16 | % | 1.16 | % | 1.15 | % | ||||||||||||
| Non-performing loans/total loans | 0.34 | % | 0.35 | % | 0.50 | % | 0.27 | % | 0.31 | % | ||||||||||||
| Annualized net charge-offs (recoveries)/average loans | 0.06 | % | 0.08 | % | 0.14 | % | (0.20 | %) | 0.20 | % | ||||||||||||
| FNCB Bancorp, Inc. | |||||||||||||||||
| Non-GAAP Financial Measures | |||||||||||||||||
| Reconciliation of net income to adjusted net income: | |||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| (dollars in thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net (loss) income | $ | (6,114 | ) | $ | 1,524 | $ | 147 | $ | 6,309 | ||||||||
| Deferred tax revaluation charge | 8,007 | - | 8,007 | - | |||||||||||||
| Adjusted net income | $ | 1,893 | $ | 1,524 | $ | 8,154 | $ | 6,309 | |||||||||
| Reconciliation of net income per share to adjusted net income per share: | |||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| (dollars in thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Basic: | |||||||||||||||||
| Net (loss) income per share (basic) | $ | (0.36 | ) | $ | - | $ | 0.01 | $ | 0.38 | ||||||||
| Deferred tax revaluation charge (basic) | $ | 0.48 | $ | - | $ | 0.48 | $ | - | |||||||||
| Adjusted net income per share (basic) | $ | 0.11 | $ | - | $ | 0.49 | $ | 0.38 | |||||||||
| Diluted: | |||||||||||||||||
| Net (loss) income per share (diluted) | $ | (0.36 | ) | $ | 0.09 | $ | 0.01 | $ | 0.38 | ||||||||
| Deferred tax revaluation charge (diluted) | $ | 0.48 | $ | - | $ | 0.48 | $ | - | |||||||||
| Adjusted net income per share (diluted) | $ | 0.11 | $ | 0.09 | $ | 0.49 | $ | 0.38 | |||||||||
| Adjusted return on average assets: | |||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| (dollars in thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Adjusted net income | $ | 1,893 | $ | 1,524 | $ | 8,154 | $ | 6,309 | |||||||||
| Average assets | 1,162,459 | 1,108,653 | 1,137,556 | 1,098,876 | |||||||||||||
| Adjusted return on average assets | 0.65 | % | 0.55 | % | 0.72 | % | 0.57 | % | |||||||||
| Adjusted return on average equity: | |||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| (dollars in thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Adjusted net income | $ | 1,893 | $ | 1,524 | $ | 8,154 | $ | 6,309 | |||||||||
| Average equity | 97,089 | 94,271 | 95,056 | 92,565 | |||||||||||||
| Adjusted return on average equity | 7.74 | % | 6.41 | % | 8.58 | % | 6.82 | % | |||||||||
| FNCB Bancorp, Inc. | ||||||||||
| Year-to-Date Consolidated Statements of Income | ||||||||||
| Year Ended | ||||||||||
| December 31, | ||||||||||
| (in thousands, except share data) | 2017 | 2016 | ||||||||
| Interest income | ||||||||||
| Interest and fees on loans | $ | 29,821 | $ | 27,993 | ||||||
| Interest and dividends on securities | ||||||||||
| U.S. government agencies | 3,426 | 3,557 | ||||||||
| State and political subdivisions, tax-free | 49 | 46 | ||||||||
| State and political subdivisions, taxable | 3,809 | 2,574 | ||||||||
| Other securities | 563 | 545 | ||||||||
| Total interest and dividends on securities | 7,847 | 6,722 | ||||||||
| Interest on interest-bearing deposits in other banks | 180 | 33 | ||||||||
| Total interest income | 37,848 | 34,748 | ||||||||
| Interest expense | ||||||||||
| Interest on deposits | 3,521 | 2,730 | ||||||||
| Interest on borrowed funds | ||||||||||
| Interest on Federal Home Loan Bank of Pittsburgh advances | 599 | 595 | ||||||||
| Interest on subordinated debentures | 380 | 625 | ||||||||
| Interest on junior subordinated debentures | 300 | 247 | ||||||||
| Total interest on borrowed funds | 1,279 | 1,467 | ||||||||
| Total interest expense | 4,800 | 4,197 | ||||||||
| Net interest income before provision for loan and lease losses | 33,048 | 30,551 | ||||||||
| Provision for loan and lease losses | 769 | 1,153 | ||||||||
| Net interest income after provision for loan and lease losses | 32,279 | 29,398 | ||||||||
| Non-interest income | ||||||||||
| Deposit service charges | 2,903 | 2,892 | ||||||||
| Net gain on the sale of securities | 1,597 | 960 | ||||||||
| Net gain on the sale of mortgage loans held for sale | 304 | 340 | ||||||||
| Net gain on the sale of SBA guaranteed loans | 79 | 51 | ||||||||
| Net gain on the sale of other repossessed assets | 47 | - | ||||||||
| Net gain on the sale of other real estate owned | 79 | 49 | ||||||||
| Loan-related fees | 384 | 439 | ||||||||
| Income from bank-owned life insurance | 527 | 552 | ||||||||
| Other | 1,305 | 920 | ||||||||
| Total non-interest income | 7,225 | 6,203 | ||||||||
| Non-interest expense | ||||||||||
| Salaries and employee benefits | 14,161 | 14,320 | ||||||||
| Occupancy expense | 2,105 | 1,777 | ||||||||
| Equipment expense | 1,815 | 1,732 | ||||||||
| Data processing expense | 2,023 | 1,997 | ||||||||
| Regulatory assessments | 686 | 729 | ||||||||
| Bank shares tax | 800 | 836 | ||||||||
| Expense of other real estate owned | 488 | 409 | ||||||||
| Legal expense | 128 | 362 | ||||||||
| Professional fees | 956 | 961 | ||||||||
| Insurance expense | 519 | 516 | ||||||||
| Other operating expenses | 4,388 | 3,906 | ||||||||
| Total non-interest expense | 28,069 | 27,545 | ||||||||
| Income before income taxes | 11,435 | 8,056 | ||||||||
| Income tax expense | 11,288 | 1,747 | ||||||||
| Net income | $ | 147 | $ | 6,309 | ||||||
| Income per share | ||||||||||
| Basic | $ | 0.01 | $ | 0.38 | ||||||
| Diluted | $ | 0.01 | $ | 0.38 | ||||||
| Cash dividends declared per common share | $ | 0.13 | $ | 0.09 | ||||||
| Weighted average number of shares outstanding: | ||||||||||
| Basic | 16,722,966 | 16,571,262 | ||||||||
| Diluted | 16,740,288 | 16,572,695 | ||||||||
| FNCB Bancorp, Inc. | ||||||||||||||||||||||
| Quarter-to-Date Consolidated Statements of (Loss) Income | ||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||
| Dec 31, | Sept 30, | Jun 30, | Mar 31, | Dec 31, | ||||||||||||||||||
| (in thousands, except share data) | 2017 | 2017 | 2017 | 2017 | 2016 | |||||||||||||||||
| Interest income | ||||||||||||||||||||||
| Interest and fees on loans | $ | 8,073 | $ | 7,576 | $ | 7,192 | $ | 6,980 | $ | 7,008 | ||||||||||||
| Interest and dividends on securities | ||||||||||||||||||||||
| U.S. government agencies | 860 | 816 | 850 | 900 | 879 | |||||||||||||||||
| State and political subdivisions, tax-free | 7 | 7 | 12 | 23 | 16 | |||||||||||||||||
| State and political subdivisions, taxable | 993 | 1,016 | 978 | 822 | 740 | |||||||||||||||||
| Other securities | 154 | 166 | 119 | 124 | 114 | |||||||||||||||||
| Total interest and dividends on securities | 2,014 | 2,005 | 1,959 | 1,869 | 1,749 | |||||||||||||||||
| Interest on interest-bearing deposits in other banks | 34 | 24 | 32 | 90 | 19 | |||||||||||||||||
| Total interest income | 10,121 | 9,605 | 9,183 | 8,939 | 8,776 | |||||||||||||||||
| Interest expense | ||||||||||||||||||||||
| Interest on deposits | 1,008 | 943 | 826 | 744 | 721 | |||||||||||||||||
| Interest on borrowed funds | ||||||||||||||||||||||
| Interest on Federal Home Loan Bank of Pittsburgh advances | 175 | 163 | 130 | 131 | 123 | |||||||||||||||||
| Interest on subordinated debentures | 57 | 97 | 114 | 112 | 145 | |||||||||||||||||
| Interest on junior subordinated debentures | 81 | 77 | 73 | 69 | 67 | |||||||||||||||||
| Total interest on borrowed funds | 313 | 337 | 317 | 312 | 335 | |||||||||||||||||
| Total interest expense | 1,321 | 1,280 | 1,143 | 1,056 | 1,056 | |||||||||||||||||
| Net interest income before provision (credit) for loan and lease losses | 8,800 | 8,325 | 8,040 | 7,883 | 7,720 | |||||||||||||||||
| Provision (credit) for loan and lease losses | 283 | 543 | 421 | (478 | ) | 295 | ||||||||||||||||
| Net interest income after provision (credit) for loan and lease losses | 8,517 | 7,782 | 7,619 | 8,361 | 7,425 | |||||||||||||||||
| Non-interest income | ||||||||||||||||||||||
| Deposit service charges | 756 | 728 | 728 | 691 | 735 | |||||||||||||||||
| Net gain on the sale of securities | 259 | 367 | 693 | 278 | - | |||||||||||||||||
| Net gain on the sale of mortgage loans held for sale | 63 | 106 | 110 | 25 | 102 | |||||||||||||||||
| Net (loss) gain on the sale of other repossessed assets | - | - | (10 | ) | 57 | - | ||||||||||||||||
| Net gain on the sale of SBA guaranteed loans | - | 23 | 56 | - | - | |||||||||||||||||
| Net gain on the sale of other real estate owned | 22 | - | 6 | 51 | 20 | |||||||||||||||||
| Loan-related fees | 132 | 96 | 65 | 91 | 152 | |||||||||||||||||
| Income from bank-owned life insurance | 128 | 129 | 135 | 135 | 126 | |||||||||||||||||
| Other | 558 | 265 | 240 | 242 | 263 | |||||||||||||||||
| Total non-interest income | 1,918 | 1,714 | 2,023 | 1,570 | 1,398 | |||||||||||||||||
| Non-interest expense | ||||||||||||||||||||||
| Salaries and employee benefits | 4,092 | 3,247 | 3,298 | 3,524 | 3,954 | |||||||||||||||||
| Occupancy expense | 538 | 394 | 586 | 587 | 476 | |||||||||||||||||
| Equipment expense | 435 | 474 | 446 | 460 | 455 | |||||||||||||||||
| Data processing expense | 521 | 506 | 509 | 487 | 475 | |||||||||||||||||
| Regulatory assessments | 189 | 160 | 164 | 173 | 100 | |||||||||||||||||
| Bank shares tax | 38 | 252 | 252 | 258 | 90 | |||||||||||||||||
| Expense of other real estate owned | 56 | 104 | 288 | 40 | 74 | |||||||||||||||||
| Legal expense | 13 | 23 | 24 | 68 | 77 | |||||||||||||||||
| Professional fees | 294 | 206 | 180 | 276 | 245 | |||||||||||||||||
| Insurance expense | 134 | 132 | 128 | 125 | 132 | |||||||||||||||||
| Other operating expenses | 1,494 | 899 | 1,065 | 930 | 1,085 | |||||||||||||||||
| Total non-interest expense | 7,804 | 6,397 | 6,940 | 6,928 | 7,163 | |||||||||||||||||
| Income before income taxes | 2,631 | 3,099 | 2,702 | 3,003 | 1,660 | |||||||||||||||||
| Income tax expense | 8,745 | 827 | 910 | 806 | 136 | |||||||||||||||||
| Net (loss) income | $ | (6,114 | ) | $ | 2,272 | $ | 1,792 | $ | 2,197 | $ | 1,524 | |||||||||||
| (Loss) Income per share | ||||||||||||||||||||||
| Basic | $ | (0.36 | ) | $ | 0.14 | $ | 0.11 | $ | 0.13 | $ | 0.09 | |||||||||||
| Diluted | $ | (0.36 | ) | $ | 0.14 | $ | 0.11 | $ | 0.13 | $ | 0.09 | |||||||||||
| Cash dividends declared per common share | $ | 0.04 | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | ||||||||||||
| Weighted average number of shares outstanding: | ||||||||||||||||||||||
| Basic | 16,757,963 | 16,757,963 | 16,716,899 | 16,657,551 | 16,621,467 | |||||||||||||||||
| Diluted | 16,774,209 | 16,777,671 | 16,736,995 | 16,670,788 | 16,621,467 | |||||||||||||||||
| FNCB Bancorp, Inc. | |||||||||||||||||||||||
| Consolidated Balance Sheets | |||||||||||||||||||||||
| Dec 31, | Sept 30, | Jun 30, | Mar 31, | Dec 31, | |||||||||||||||||||
| (in thousands) | 2017 | 2017 | 2017 | 2017 | 2016 | ||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash and cash equivalents: | |||||||||||||||||||||||
| Cash and due from banks | $ | 22,755 | $ | 24,881 | $ | 24,169 | $ | 23,571 | $ | 20,562 | |||||||||||||
| Interest-bearing deposits in other banks | 14,991 | 18,929 | 1,991 | 3,154 | 91,883 | ||||||||||||||||||
| Total cash and cash equivalents | 37,746 | 43,810 | 26,160 | 26,725 | 112,445 | ||||||||||||||||||
| Securities available for sale, at fair value | 290,387 | 282,037 | 283,040 | 288,295 | 276,015 | ||||||||||||||||||
| Stock in Federal Home Loan Bank of Pittsburgh at cost | 2,753 | 2,450 | 2,282 | 2,678 | 3,311 | ||||||||||||||||||
| Loans held for sale | 1,095 | 147 | 617 | 563 | 596 | ||||||||||||||||||
| Loans, net of net deferred costs and unearned income | 770,643 | 759,489 | 728,141 | 715,450 | 731,279 | ||||||||||||||||||
| Allowance for loan and lease losses | (9,034 | ) | (8,862 | ) | (8,469 | ) | (8,306 | ) | (8,419 | ) | |||||||||||||
| Net loans | 761,609 | 750,627 | 719,672 | 707,144 | 722,860 | ||||||||||||||||||
| Bank premises and equipment, net | 10,388 | 10,482 | 10,715 | 10,914 | 10,784 | ||||||||||||||||||
| Accrued interest receivable | 3,234 | 3,203 | 2,784 | 2,950 | 2,757 | ||||||||||||||||||
| Bank-owned life insurance | 30,460 | 30,332 | 30,203 | 30,068 | 29,933 | ||||||||||||||||||
| Other real estate owned | 1,023 | 1,088 | 1,183 | 1,352 | 2,048 | ||||||||||||||||||
| Other assets | 23,610 | 32,935 | 31,083 | 33,414 | 34,850 | ||||||||||||||||||
| Total assets | $ | 1,162,305 | $ | 1,157,111 | $ | 1,107,739 | $ | 1,104,103 | $ | 1,195,599 | |||||||||||||
| Liabilities | |||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||
| Demand (non-interest-bearing) | $ | 176,325 | $ | 162,426 | $ | 147,878 | $ | 156,901 | $ | 173,702 | |||||||||||||
| Interest-bearing | 826,123 | 820,786 | 784,872 | 766,525 | 841,437 | ||||||||||||||||||
| Total deposits | 1,002,448 | 983,212 | 932,750 | 923,426 | 1,015,139 | ||||||||||||||||||
| Borrowed funds: | |||||||||||||||||||||||
| Federal Home Loan Bank of Pittsburgh advances | 44,968 | 45,350 | 44,903 | 56,632 | 58,537 | ||||||||||||||||||
| Subordinated debentures | 5,000 | 5,000 | 10,000 | 10,000 | 10,000 | ||||||||||||||||||
| Junior subordinated debentures | 10,310 | 10,310 | 10,310 | 10,310 | 10,310 | ||||||||||||||||||
| Total borrowed funds | 60,278 | 60,660 | 65,213 | 76,942 | 78,847 | ||||||||||||||||||
| Accrued interest payable | 241 | 244 | 235 | 225 | 242 | ||||||||||||||||||
| Other liabilities | 10,147 | 15,513 | 12,797 | 10,107 | 11,000 | ||||||||||||||||||
| Total liabilities | 1,073,114 | 1,059,629 | 1,010,995 | 1,010,700 | 1,105,228 | ||||||||||||||||||
| Shareholders' equity | |||||||||||||||||||||||
| Preferred stock | - | - | - | - | - | ||||||||||||||||||
| Common stock | 20,947 | 20,947 | 20,947 | 20,865 | 20,807 | ||||||||||||||||||
| Additional paid-in capital | 63,210 | 63,143 | 63,076 | 62,841 | 62,593 | ||||||||||||||||||
| Retained earnings | 6,779 | 13,282 | 11,517 | 10,228 | 8,531 | ||||||||||||||||||
| Accumulated other comprehensive (loss) income | (1,745 | ) | 110 | 1,204 | (531 | ) | (1,560 | ) | |||||||||||||||
| Total shareholders' equity | 89,191 | 97,482 | 96,744 | 93,403 | 90,371 | ||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 1,162,305 | $ | 1,157,111 | $ | 1,107,739 | $ | 1,104,103 | $ | 1,195,599 | |||||||||||||
| FNCB Bancorp, Inc. | ||||||||||||||||||||||||
| Summary Tax-equivalent Net Interest Income | ||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||
| Dec 31, | Sept 30, | Jun 30, | Mar 31, | Dec 31, | ||||||||||||||||||||
| (dollars in thousands) | 2017 | 2017 | 2017 | 2017 | 2016 | |||||||||||||||||||
| Interest income | ||||||||||||||||||||||||
| Loans: | ||||||||||||||||||||||||
| Loans - taxable | $ | 7,736 | $ | 7,266 | $ | 6,874 | $ | 6,643 | $ | 6,709 | ||||||||||||||
| Loans - tax-free | 511 | 470 | 482 | 511 | 453 | |||||||||||||||||||
| Total loans | 8,247 | 7,736 | 7,356 | 7,154 | 7,162 | |||||||||||||||||||
| Securities: | ||||||||||||||||||||||||
| Securities, taxable | 2,007 | 1,998 | 1,947 | 1,846 | 1,733 | |||||||||||||||||||
| Securities, tax-free | 11 | 11 | 18 | 35 | 24 | |||||||||||||||||||
| Total interest and dividends on securities | 2,018 | 2,009 | 1,965 | 1,881 | 1,757 | |||||||||||||||||||
| Interest-bearing deposits in other banks | 34 | 24 | 32 | 90 | 19 | |||||||||||||||||||
| Total interest income | 10,299 | 9,769 | 9,353 | 9,125 | 8,938 | |||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||
| Deposits | 1,008 | 943 | 826 | 744 | 721 | |||||||||||||||||||
| Borrowed funds | 313 | 337 | 317 | 312 | 335 | |||||||||||||||||||
| 1,321 | 1,280 | 1,143 | 1,056 | 1,056 | ||||||||||||||||||||
| Net interest income | $ | 8,978 | $ | 8,489 | $ | 8,210 | $ | 8,069 | $ | 7,882 | ||||||||||||||
| Average balances | ||||||||||||||||||||||||
| Earning assets: | ||||||||||||||||||||||||
| Loans: | ||||||||||||||||||||||||
| Loans - taxable | $ | 725,988 | $ | 700,729 | $ | 682,426 | $ | 680,518 | $ | 684,225 | ||||||||||||||
| Loans - tax-free | 41,548 | 38,109 | 40,190 | 43,822 | 41,081 | |||||||||||||||||||
| Total loans | 767,536 | 738,838 | 722,616 | 724,340 | 725,306 | |||||||||||||||||||
| Securities: | ||||||||||||||||||||||||
| Securities, taxable | 292,307 | 290,348 | 287,133 | 284,712 | 270,634 | |||||||||||||||||||
| Securities, tax-free | 600 | 600 | 1,105 | 2,571 | 1,664 | |||||||||||||||||||
| Total securities | 292,907 | 290,948 | 288,238 | 287,283 | 272,298 | |||||||||||||||||||
| Interest-bearing deposits in other banks | 12,215 | 7,499 | 12,676 | 39,520 | 15,727 | |||||||||||||||||||
| Total interest-earning assets | 1,072,658 | 1,037,285 | 1,023,530 | 1,051,143 | 1,013,331 | |||||||||||||||||||
| Non-earning assets | 89,801 | 92,603 | 90,672 | 92,368 | 95,322 | |||||||||||||||||||
| Total assets | $ | 1,162,459 | $ | 1,129,888 | $ | 1,114,202 | $ | 1,143,511 | $ | 1,108,653 | ||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||
| Deposits | $ | 824,680 | $ | 792,649 | $ | 783,672 | $ | 807,981 | $ | 775,565 | ||||||||||||||
| Borrowed funds | 67,476 | 73,168 | 72,347 | 78,306 | 78,780 | |||||||||||||||||||
| Total interest-bearing liabilities | 892,156 | 865,817 | 856,019 | 886,287 | 854,345 | |||||||||||||||||||
| Demand deposits | 162,135 | 156,483 | 152,974 | 155,010 | 149,008 | |||||||||||||||||||
| Other liabilities | 11,079 | 10,325 | 10,633 | 11,045 | 11,029 | |||||||||||||||||||
| Shareholders' equity | 97,089 | 97,263 | 94,576 | 91,169 | 94,271 | |||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,162,459 | $ | 1,129,888 | $ | 1,114,202 | $ | 1,143,511 | $ | 1,108,653 | ||||||||||||||
| Yield/Cost | ||||||||||||||||||||||||
| Earning assets: | ||||||||||||||||||||||||
| Loans: | ||||||||||||||||||||||||
| Interest and fees on loans - taxable | 4.26 | % | 4.15 | % | 4.03 | % | 3.90 | % | 3.94 | % | ||||||||||||||
| Interest and fees on loans - tax-free | 4.92 | % | 4.93 | % | 4.80 | % | 4.66 | % | 4.41 | % | ||||||||||||||
| Total loans | 4.30 | % | 4.19 | % | 4.07 | % | 3.95 | % | 3.97 | % | ||||||||||||||
| Securities: | ||||||||||||||||||||||||
| Securities, taxable | 2.75 | % | 2.75 | % | 2.71 | % | 2.59 | % | 2.56 | % | ||||||||||||||
| Securities, tax-free | 7.33 | % | 7.33 | % | 6.51 | % | 5.42 | % | 5.83 | % | ||||||||||||||
| Total securities | 2.76 | % | 2.76 | % | 2.73 | % | 2.62 | % | 2.58 | % | ||||||||||||||
| Interest-bearing deposits in other banks | 1.11 | % | 1.28 | % | 1.01 | % | 0.91 | % | 0.48 | % | ||||||||||||||
| Total earning assets | 3.84 | % | 3.77 | % | 3.66 | % | 3.47 | % | 3.53 | % | ||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||
| Interest on deposits | 0.49 | % | 0.48 | % | 0.42 | % | 0.37 | % | 0.37 | % | ||||||||||||||
| Interest on borrowed funds | 1.86 | % | 1.84 | % | 1.75 | % | 1.59 | % | 1.70 | % | ||||||||||||||
| Total interest-bearing liabilities | 0.59 | % | 0.59 | % | 0.53 | % | 0.48 | % | 0.49 | % | ||||||||||||||
| Net interest spread | 3.25 | % | 3.18 | % | 3.13 | % | 2.99 | % | 3.03 | % | ||||||||||||||
| Net interest margin | 3.35 | % | 3.27 | % | 3.21 | % | 3.07 | % | 3.11 | % | ||||||||||||||
| FNCB Bancorp, Inc. | ||||||||||||||||||
| Asset Quality Data | ||||||||||||||||||
| Dec 31, | Sept 30, | Jun 30, | Mar 31, | Dec 31, | ||||||||||||||
| (in thousands) | 2017 | 2017 | 2017 | 2017 | 2016 | |||||||||||||
| At period end | ||||||||||||||||||
| Non-accrual loans, including non-accruing troubled debt restructured loans (TDRs) | $ | 2,578 | $ | 2,642 | $ | 3,681 | $ | 1,922 | $ | 2,234 | ||||||||
| Loans past due 90 days or more and still accruing | - | - | - | - | - | |||||||||||||
| Total non-performing loans | 2,578 | 2,642 | 3,681 | 1,922 | 2,234 | |||||||||||||
| Other real estate owned (OREO) | 1,023 | 1,088 | 1,183 | 1,352 | 2,048 | |||||||||||||
| Other non-performing assets | 1,900 | 1,900 | 1,900 | 2,006 | 2,160 | |||||||||||||
| Total non-performing assets | $ | 5,501 | $ | 5,630 | $ | 6,764 | $ | 5,280 | $ | 6,442 | ||||||||
| Accruing TDRs | $ | 9,299 | $ | 9,283 | $ | 9,306 | $ | 8,775 | $ | 4,176 | ||||||||
| For the three months ended | ||||||||||||||||||
| Allowance for loan and lease losses | ||||||||||||||||||
| Beginning balance | $ | 8,862 | $ | 8,469 | $ | 8,306 | $ | 8,419 | $ | 8,490 | ||||||||
| Loans charged-off | 310 | 377 | 465 | 297 | 572 | |||||||||||||
| Recoveries of charged-off loans | 199 | 227 | 207 | 662 | 206 | |||||||||||||
| Net charge-offs (recoveries) | 111 | 150 | 258 | (365 | ) | 366 | ||||||||||||
| Provision (credit) for loan and lease losses | 283 | 543 | 421 | (478 | ) | 295 | ||||||||||||
| Ending balance | $ | 9,034 | $ | 8,862 | $ | 8,469 | $ | 8,306 | $ | 8,419 | ||||||||