GlobeNewswire Inc | Jan 29, 2021 04:30PM EST

January 29, 2021

DUNMORE, Pa., Jan. 29, 2021 (GLOBE NEWSWIRE) -- FNCB Bancorp, Inc. (NASDAQ: FNCB), the parent company of Dunmore-based FNCB Bank (the Bank), today reported net income for2020 of $15.3million, or $0.76 per basic and diluted share, compared to net income of $11.1 million, or $0.56 per basic and diluted share, for 2019. The $4.2 million, or 38.6%, increase in earnings wasdue to increases of$3.9 millionin net interest income and $1.6 million in non-interest income and a $0.8 million reduction in non-interest expense.Partially offsetting these positive factors were increases in the provision forloan and lease lossesand income tax expense of $1.1 million and $0.9 million, respectively. Net income for the fourth quarter of 2020 was $5.2 million, or $0.26 per basic and diluted share, an increase of $1.7 million, or 47.8%, compared to $3.5 million, or $0.17 per basic and diluted share,for the same quarter of 2019, which primarily reflected a $2.3 million increase in net interest income, partially offset by a $0.6 million decrease in non-interest income.

Return on average assets and return on average shareholders equity were 1.13% and 10.66%, respectively, in 2020, compared to 0.92% and 8.88%, respectively in 2019. For the three months ended December 31, 2020, annualized return on average assets and annualized return on average shareholders equity were 1.41% and 13.49%, respectively. Comparatively, annualized return on average assets was 1.15%and annualized return on average shareholders equity was 10.43%for the three months ended December 31, 2019.

Dividends declared and paid in 2020 totaled$0.22 per share, an increase of $0.02 per share, or 10.0%, compared to $0.20 per share for 2019.Total dividends declared and paid for 2020 equated to a dividend yield of approximately 3.44% based on the closing stock price of $6.40 per share at December 31, 2020.

Stock Repurchase Program

On January 27, 2021, FNCB's Board of Directors authorized a stock repurchase program under which up to 975,000 shares of FNCB'soutstanding common stock may be acquired in the open market commencing no earlier than February 3, 2021 and expiring December 31, 2021 pursuant to a trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

The shares will be purchased from time to time at prevailing market prices, through open market transactions depending upon market conditions. Repurchases under the repurchase program will be administered through an independent broker. Repurchases are subject to SEC regulations as well as certain price, market volume and timing constraints specified in the trading plan.Under the program, the purchases will be funded from available working capital presently available to FNCB, and the repurchased shares will be returned to the status of authorized but unissued shares of Common Stock. There is not a guarantee as to the exact number of shares that will be repurchased by FNCB, and FNCB may discontinue purchases at any time that management determines additional repurchases are no longer warranted. As of December 31, 2020, FNCB had approximately 20.2 million shares outstanding.

Gerard A. Champi, President and Chief Executive Officer, remarked, The Boards approval of this program reflects our confidence in FNCBs future.Repurchasing shares is one means of underscoring our commitment to enhancing shareholder value.

2020Highlights:

-- Fourth quarter earnings per share increased $0.09 per share, or 52.9%, to $0.26 per share in 2020 compared to $0.17 per share for the fourth quarter of 2019. For the full year, earnings per share increased $0.20 per share, or 35.7%, to $0.76 per share in 2020 from $0.56 per share in 2019; -- Return on average assets improved to 1.41% for the fourth quarter of 2020 from 1.15% for the same quarter of 2019. For the full year, return on average assets was 1.13% in 2020 compared to 0.92% in 2019; -- For the fourth quarter, return on average shareholders' equity improved to 13.49% in 2020 from 10.43% in 2019. Return on average shareholders' equity for all of 2020 improved to 10.66% compared to 8.88% for 2019; -- Tangible book value increased $1.08 per share, or 16.3%, to $7.70 per share at December 31, 2020 from $6.62 per share at December 31, 2019; -- Total risk-based capital and Tier I Leverage ratios (FNCB Bank) were 15.79% and 9.57% at December 31, 2020 compared to 14.77% and 10.36% at December 31, 2019, respectively; -- Cost of funds for the fourth quarter of 2020 decreased 54 basis points to 0.44% from 0.98% for the fourth quarter of 2019. Year over year, cost of funds decreased 44 basis points to 0.64% in 2020 from 1.08% in 2019; -- Ratio of non-performing loans to total loans improved to 0.62% at December 31, 2020 compared to 1.10% at December 31, 2019; and -- The efficiency ratio improved to 54.89% for the fourth quarter of 2020 from 67.35% for the same quarter of 2019.

Mr. Champi commented, "Despite a very challenging operating environment brought on by the COVID-19 pandemic, wewere able to achievemuch success in2020. I am extremely proud of the effort put forth by our entire FNCB team. In addition to recording very strong earnings results, most importantly, we were able to provide support to our communities through this very difficult time. Our Bank became aleader with respect to the SBA's Paycheck Protection Program ("PPP"), guidingmany businesses in our market area through the application, funding and forgiveness process. Additionally, we were one of a select group of approved lenders participating in the Federal Reserve's Main Street Lending Program.Participation in these programs, along with market opportunities within our investment portfolios and robust demand for residential mortgages, contributed positively to our overall performance and improved our efficiencyin 2020. As we head into 2021, our strong balance sheet position will allow us to continue to support the borrowing needs of individualsand businesses, including funding for the second round of PPP loans that recently became available."

Summary Results

For the three months ended December 31, 2020, tax-equivalent net interest income increased $2.4 million, or 25.4%, to $11.8 million from $9.4million for the same three months of 2019. The increasein tax-equivalent net interest income for the fourth quarter was due to a $1.3 million, or 11.6%, increase in tax-equivalent interest income to $12.9 million in 2020 from $11.6 million in 2019, coupled with a $1.1 million, or 48.1%, reduction in interest expense to $1.1 million in 2020 from $2.2 million in 2019. Included in tax-equivalent interest income in the fourth quarter of 2020 was$1.2 million in net PPP loan origination fees that were recognized upon forgiveness of the respective loan balances. Additionally, the higher amount of tax-equivalent interest income reflected higher balances of earning assets, partially offset by a reduction in the tax-equivalent yield on earning assets.Average earning assetsincreased $171.8 million, or 15.5%, to $1.277 billion for the three months ended December 31, 2020 from $1.106 billion for the same three months of 2019, which reflected increases in volumes of both loans, primarily PPP loans, and investment securities. Partially offsetting the increase in volumeswas a 14 basis point reduction in the tax-equivalent yield on earning assets to 4.05% for the fourth quarter of 2020 from 4.19% for the same quarter of 2019. With respect to the reduction in interest expense, FNCB's cost of funds decreased 54 basis points to 0.44% from 0.98% comparing the three months ended December 31, 2020 and 2019. Specifically, FNCB's cost of interest-bearing deposits decreased 46 basis points to 0.42% from 0.88% comparing the fourth quarters of 2020 and 2019,reflecting areduction in market interest rates and oversupply. Additionally, the drop in short-term market interest rates contributed to a 50 basis point decrease in average borrowing costs to 1.94% from 2.44% comparing the three months ended December 31, 2020 and 2019. FNCBs tax-equivalent net interest margin for the fourth quarter of 2020 improved 29 basis points to 3.70% compared to 3.41% for the same quarter of 2019. The margin improvementprimarily reflected the impact ofPPP loans including interest income and net loan origination fees. Excluding the impact of PPP loans (non-GAAP), FNCB's tax-equivalent net interest margin wouldhave been 3.50% for the fourth quarter of 2020. For the year ended December 31, 2020, tax-equivalent net interest income increased $4.3 million, or 11.7%, to $41.0million compared to $36.7 million for the year ended December 31, 2019. The improvement in net interest income for the year-to-date period was largely due to a reduction infunding costs, recognition of the $1.2 million in net PPP loan origination fees and an increase in average earnings assets, which were partially offset by adecrease in the tax-equivalent yield on average earning assets.For the year ended December 31, 2020, the cost of funds decreased 44 basis points to 0.64% from 1.08% for the year ended December 31, 2019. Conversely, the tax-equivalent earning-asset yielddecreased31 basis points to 3.85% in 2020 compared to 4.16% in 2019. The tax-equivalent net interest margin improved6 basis points to 3.35% in 2020 from 3.29% in 2019. For purposes of presenting net interest income, earning-asset yields and net interest margin information on a tax-equivalent basis, tax-free interest income is adjusted using the statutory federal corporate income tax rate of 21.0% for2020 and 2019.

For the quarter ended December 31, 2020, non-interest income was $2.1 million, adecrease of $0.6 million, or 22.7%, compared to $2.7 million for the same period of 2019. The decrease in non-interest income for the fourth quarter was largely due to reductions in loan referral fees/interest rate swap revenue and netgains on the sale of available-for-sale securities, partially mitigated by an increase in net gains on equity securities and net gains on the sale of mortgage loans held for sale. Loan referral fees/interest rate swap revenue declined $629 thousand, or 92.4%, to $52 thousand for the fourth quarter of 2020 from $681 thousand for the same quarter of 2019,due to a reduction in the number and volume of such transactions. Net gains on the sale of available-for-sale securities was $24 thousand for the three months ended December 31, 2020, a decrease of $501 thousand, or 95.4%, from $525 thousand for the same three months of 2019. Market value appreciation resulted in a net gain on equity securities of $307 thousand for the fourth quarter of 2020compared to a net loss of $2 thousand for the same quarter of 2019. Strong demand for home mortgages contributed to a $133 thousand, or 241.8%, increase in net gains on the sale of mortgage loans held for sale comparingthe fourth quarters of 2020 and 2019. Non-interest income totaled $9.2 million for the year ended December 31, 2020, an increase of $1.6 million, or 21.4%, compared to $7.6 million for the year ended December 31, 2019. The increase in non-interest income for the year-to-date periods was primarily due to an increase in net gainson equity securities of $1.1 million. FNCB recognized a gain of $1.1 million on the conversion of an equity security of a bank holding company that was part of a merger and acquisition transaction completed in the third quarter of 2020. Also contributing to the increase in year-to-date non-interest income were increases of $400 thousand, or 158.1%, in net gains on the sale of mortgage loans held for sale, $301 thousand, or 24.5%, in net gains on the sale of securities, and $217 thousand, or 7.2%, in deposit service charges. Partially offsetting these positive factors was a decrease in loan referral fees/interest rate swap revenue of $313 thousand, or 44.5%, to $390 thousand in 2020 compared to $703 thousand in 2019.

For the three months ended December 31, 2020, non-interest expense decreased by $363 thousand, or 4.7%, to $7.4 million from $7.8 million for the comparable three months of 2019. The reduction in non-interest expense for the fourth quarter was primarily due to a decreasein other operating expenses of $527 thousand, or 25.1%, which largely reflected a $116 thousand credit for off balance sheet commitments for the three months ended December 31, 2020 compared to a provision of $204 thousand for the same three months of 2019. Also factoring into the reduction in other operating expenses comparing the three months ended December 31, 2020 and 2019wereprepayment penalties of $259 thousand for the early payoff of FHLB advances recorded in the fourth quarter of 2019. Non-interest expense for all of 2020 totaled $28.9 million, adecrease of $767 thousand, or 2.6%, from $29.7 million for 2019. Similar to the reasons for the fourth quarter reduction, the decrease in non-interest expense was predominantly due to a $740 thousand, or 12.0%, reductionin other operating expenses, resulting from a $538 thousand favorable swing in the provision for off balance sheet commitments, due to lower commitment volumes.

Asset Quality

FNCB's asset quality improved throughout 2020, as total non-performing loans decreased $3.5 million to $5.6 million, or 0.62% of total loans, at December 31, 2020 from $9.1 million, or 1.10% of total loans, at December 31, 2019.On a linked quarter basis, non-performing loans decreased $595 thousand, or 9.6%, from $6.2 million, or 0.64% of total loans, at September 30, 2020.FNCBs loan delinquency rate (total delinquent loans as a percentage of total loans) was 0.99% at December 31, 2020 compared to 1.46% at the end of 2019. The decrease in non-performing loans and loan delinquencies primarily reflected two largecommercial relationships that returned to accrual status during 2020. Additionally, FNCB recorded a net recovery of previously charged-off loans of $1.1 million, or 0.12% of average loans,for 2020 compared net charge-offs of 0.16% for 2019. The net recovery position for 2020 was related primarily to large recoveries received on two previously charged-off commercial loans. Due to continued economic uncertainty related to the COVID-19 pandemic, FNCB increased its provision for loan and lease losses $1.1 million, or 143.5%, to $1.9 million in 2020 from $0.8 million in 2019. The allowance for loan and lease losses as a percentage of gross loans was 1.33% and 1.08% at December 31, 2020 and 2019, respectively. Excluding PPP loans (non-GAAP), FNCB's allowance for loan and lease losses as a percentage of gross loans was 1.45% at December 31, 2020.

Cares Act and COVID-19 Related Events

On December 27, 2020, a second stimulus bill was signed into law addingemergency relief to the original Cares Act that was enacted in March 2020. The new relief effort includes a second round of PPP funding through the Small Business Administration ("SBA") for qualifying businesses as well as additional fiscal stimulus packages and emergency relief programs. During 2020, FNCB facilitated and funded1,002 PPP loans representing approximately $118.6 million in funding. As of December 31, 2020, FNCB has received $40 million in borrower forgiveness from the SBA and anticipates that the remaining PPP loan balances will qualify for borrower forgiveness under the guidelines of the program. On January 19, 2021, FNCB began originating PPP loans as part of the second round of fundingand as of January 28, 2021,has underwritten, submitted and received SBA approval for 162 loans representing approximately $29.7 million in funding.

During 2020, FNCB also extendedloan payment deferral modifications under Section 1048 of the Cares Act to qualifying commercial and consumer loan customers experiencing financial disruption due to the COVID-19 pandemic. As of December 31, 2020, FNCB had made 843 such modifications on loan balances with an aggregate recorded investment of approximately $151.4 million.Additionally, FNCB extended a second payment deferral modification for 79 loans with an aggregate recorded investment of $22.0 million. As of December 31, 2020, there were 45 loans with an aggregate recorded investment of $9.5 that were still under a payment relief modification.

Financial Condition

Total assets increased $262.1 million, or 21.8%, to $1.466 billion at December 31, 2020,from $1.204 billion at December 31, 2019.The significant year-over-year balance sheet growth reflected substantial increases in cash and cash equivalents,available-for-sale debt securities, and loans, net of net deferred loan costs and unearned income. Cash and cash equivalents increased $121.2 million, or 350.8% to $155.8 million at December 31, 2020 from $34.6 million at December 31, 2019. Available-for-sale debt securities increased $77.2 million, or 28.3%, to $350.0 million at December 31, 2020 from $272.8 million at December 31, 2019.Loans, net of net deferred loan costs and unearned income, grew $72.6 million, or 8.8%,to$901.1 million at December 31, 2020, from$828.5 millionat December 31, 2019. The increase was largely due to the origination of PPP loans, of which $76.0 million, net of net deferred origination fees, were outstanding at December 31, 2020.Total deposits increased $285.7 million, or 28.5%, to $1.287 billionat December 31, 2020 from $1.002 billion at December 31, 2019. Interest-bearing deposits increased $193.7 million, or 23.6%, to $1.016 billion at December 31, 2020 from $822.2 million at December 31, 2019. Additionally,non-interest-bearing deposits increased $92.0 million, or 51.3%, to $271.5 million at December 31, 2020 from $179.5 million at December 31, 2019. FNCB used some of theexcess liquidity in 2020 to repay FHLB of Pittsburgh advances. Total borrowed fundsdecreased $46.9 million, or 82.0%, to $10.3million at December 31, 2020 from $57.2million at December 31, 2019.FNCB had no term or overnight borrowings through the FHLB of Pittsburgh outstanding as of December 31, 2020.

Total shareholders equity increased $22.2million, or 16.7%, to $155.9 million at December 31, 2020 from $133.6 million at December 31, 2019.Contributing to the increase in capital was 2020 net income of $15.3 million and a $10.8million increase in accumulated other comprehensive incomerelated primarily to appreciation in the fairvalue of FNCBs available-for-sale debt securities, net of deferred taxes. Partially offsetting theseincreases were dividends declared and paid in 2020 of $4.4million. FNCB's tangible book value per share improved $1.08,or 16.3%, to $7.70 pershare at December 31, 2020 from $6.62 per share at December 31, 2019.FNCB Banks total risk-based capital and Tier I leverage ratios were 15.79% and 9.57%, respectively, at December 31, 2020 compared to 14.77% and 10.36%, respectively, at December 31, 2019.

Availability of Filings

Copies of FNCBs 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. FNCBs 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 ofFNCBs 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 110 years, FNCB Bank continues as a premier community bank in Northeastern Pennsylvania offering a full suite of personal, small business and commercial banking solutions with industry-leading mobile, online and in-branch products and services. FNCB currently operates through 17community offices located in Lackawanna, Luzerne and Wayne Counties, and remains dedicated to making its customers banking experience simply better. For more information about FNCB, visit www.fncb.com.

INVESTOR CONTACT:James M. Bone, Jr., CPAExecutive Vice President and Chief Financial OfficerFNCB Bank(570) 348-6419james.bone@fncb.com

Forward-looking Statements

FNCB may from time to time make written or oral forward-looking statements, including statements contained in our filings with the Securitiesand Exchange Commission (SEC), in our reports to shareholders, and in our 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 FNCBs 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, will, would, believe, anticipate, estimate, expect, intend, plan,project,futureand similar expressions are intended to identify forward-looking statements. The following factors, among others, could cause FNCBs financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements: the effect of the coronavirus ("COVID-19") pandemic on FNCB and its customers, the Commonwealth of Pennsylvania and the United States, related to the economy and overall financial stability; government and regulatory responses to the COVID-19 pandemic; government intervention in the U.S. financial system including the effects of recent legislative, tax, accounting and regulatory actions and reforms, including, but not limited to,the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act)and the Tax Cuts and Jobs Act; political instability; the ability of FNCB to manage credit risk; weakness in the economic environment, in general, and within FNCBs market area; the deterioration of one or a few of the commercial real estate loans with relatively large balances contained in FNCBs loan portfolio; greater risk of loan defaults and losses from concentration of loans held by FNCB, including those to insiders and related parties; if FNCBsportfolio of loans to small and mid-sized community-based businesses increases its credit risk; if FNCBs ALLL is not sufficient to absorb actual losses or if increases to the ALLL were required; FNCB is subject to interest-rate risk and any changes in interest rates could negatively impact net interest income or the fair value of FNCB's financial assets; if management concludes that the decline in value of any of FNCBs investment securities is other-than-temporary could result in FNCB recording an impairment loss; if FNCBsrisk management framework is ineffective in mitigating risks or losses toFNCB; if FNCB is unable to successfully compete with others for business; a loss of depositor confidence resulting from changes in either FNCBs financial condition or in the general banking industry; if FNCBis unable to retain or grow its core deposit base; inability or insufficient dividends from its subsidiary, FNCB Bank; if FNCB loses access to wholesale funding sources; interruptions or security breaches of FNCBs information systems; any systems failures or interruptions in information technology and telecommunications systems of third parties on which FNCB depends; security breaches; if FNCBs information technology is unable to keep pace with growth or industry developments or if technological developments result in higher costs or less advantageous pricing; the loss of management and other key personnel; dependence on the use of data and modeling in both its managements decision-making generally and in meeting regulatory expectations in particular; additional risk arising from new lines of business, products, product enhancements or services offered by FNCB; inaccuracy of appraisals and other valuation techniques FNCB uses in evaluating and monitoring loans secured by real property and other real estate owned; unsoundness of other financial institutions; damage to FNCBs reputation; defending litigation and other actions; dependence on the accuracy and completeness of information about customers and counterparties; risks arising from future expansion or acquisition activity; environmental risks and associated costs on its foreclosed real estate assets; any remediation ordered, or adverse actions taken, by federal and state regulators, including requiring FNCB to act as a source of financial and managerial strength for the FNCB Bank in times of stress; costs arising from extensive government regulation, supervision and possible regulatory enforcement actions; new or changed legislation or regulation and regulatory initiatives; noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations; failure to comply with numerous "fair and responsible banking" laws; any violation of laws regarding privacy, information security and protection of personal information or another incident involving personal, confidential or proprietary information of individuals; any rulemaking changes implemented by the Consumer Financial Protection Bureau; inability to attract and retain its highest performing employees due to potential limitations on incentive compensation contained in proposed federal agency rulemaking; any future increases in FNCB Banks FDIC deposit insurance premiums and assessments; and the success of FNCB at managing the risks involved in the foregoing and other risks and uncertainties, including those detailed in FNCBs 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 managements analysis only as of the date of this press release, 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 press release.

Readers should carefully review the risk factors described in the Annual Report and other documents that FNCB periodically files with the SEC, including its Form10-K for the year ended December 31, 2019 and Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020.

FNCB Bancorp, Inc.Selected Financial Data Dec 31, Sept 30, Jun 30, Mar 31, Dec 31, 2020 2020 2020 2020 2019 Per share data:Net income(fully $ 0.26 $ 0.20 $ 0.20 $ 0.10 $ 0.17 diluted)Cash dividends $ 0.055 $ 0.055 $ 0.055 $ 0.055 $ 0.050 declaredBook value $ 7.70 $ 7.41 $ 7.19 $ 6.84 $ 6.62 Tangible book $ 7.70 $ 7.41 $ 7.19 $ 6.84 $ 6.62 valueMarket value: High $ 7.95 $ 6.93 $ 7.19 $ 8.54 $ 8.86 Low $ 5.16 $ 5.08 $ 5.15 $ 5.10 $ 7.03 Close $ 6.40 $ 5.32 $ 5.75 $ 6.91 $ 8.45 Common shares 20,245,649 20,243,589 20,208,607 20,174,250 20,171,408 outstanding Selected ratios:Annualizedreturn on 1.41 % 1.15 % 1.21 % 0.69 % 1.15 %average assetsAnnualizedreturn onaverage 13.49 % 11.05 % 11.62 % 6.06 % 10.43 %shareholders'equityEfficiency 54.89 % 66.66 % 56.53 % 66.46 % 67.35 %ratioTier Ileverage ratio 9.57 % 10.17 % 10.60 % 11.09 % 10.36 %(FNCB Bank)Totalrisk-basedcapital to 15.79 % 16.09 % 15.68 % 15.44 % 14.77 %risk-adjustedassets (FNCBBank)Averageshareholders'equity to 10.42 % 10.40 % 10.38 % 11.37 % 11.01 %average totalassetsYield onearning assets 4.05 % 3.65 % 3.70 % 4.06 % 4.19 %(FTE)Cost of funds 0.44 % 0.59 % 0.69 % 0.89 % 0.98 %Net interest 3.61 % 3.06 % 3.01 % 3.17 % 3.21 %spread (FTE)Net interest 3.70 % 3.19 % 3.18 % 3.35 % 3.41 %margin (FTE)Totaldelinquent 0.99 % 0.81 % 0.89 % 1.41 % 1.46 %loans/totalloansAllowance forloan and lease 1.33 % 1.28 % 1.16 % 1.19 % 1.08 %losses/totalloansNon-performingloans/total 0.62 % 0.64 % 0.71 % 1.03 % 1.10 %loansAnnualized netcharge-offs 0.09 % (0.49 %) (0.12 %) 0.09 % 0.16 %(recoveries)/average loans

FNCB Bancorp, Inc.Year-to-Date Consolidated Statements of Income Year Ended December 31, (in thousands, except share data) 2020 2019 Interest income Interest and fees on loans $ 37,615 $ 37,818 Interest and dividends on securities: U.S. government agencies 2,336 3,545 State and political subdivisions, 1,373 149 tax-freeState and political subdivisions, 3,025 3,263 taxableOther securities 1,961 1,093 Total interest and dividends on 8,695 8,050 securitiesInterest on interest-bearing deposits 28 188 in other banksTotal interest income 46,338 46,056 Interest expense Interest on deposits 5,404 8,101 Interest on borrowed funds: Federal Reserve Bank Discount Window 32 - advancesFederal Home Loan Bank of Pittsburgh 474 1,241 advancesSubordinated debentures - 24 Junior subordinated debentures 250 430 Total interest on borrowed funds 756 1,695 Total interest expense 6,160 9,796 Net interest income before provision 40,178 36,260 for loan and lease lossesProvision for loan and lease losses 1,941 797 Net interest income after provision for 38,237 35,463 loan and lease lossesNon-interest income Deposit service charges 3,252 3,035 Net gain on the sale of 1,528 1,227 available-for-sale securitiesNet gain on equity securities 1,171 29 Net gain on the sale of mortgage loans 653 253 held for saleNet gain on the sale of other real - 20 estate ownedLoan-related fees 348 378 Income from bank-owned life insurance 482 520 Loan referral fees/Interest rate swap 390 703 revenueMerchant services revenue 565 536 Other 861 919 Total non-interest income 9,250 7,620 Non-interest expense Salaries and employee benefits 15,246 15,518 Occupancy expense 2,052 1,948 Equipment expense 1,477 1,319 Data processing expense 2,933 3,113 Bank shares tax 786 566 Professional fees 999 1,056 Other operating expenses 5,422 6,162 Total non-interest expense 28,915 29,682 Income before income taxes 18,572 13,401 Income tax expense 3,225 2,326 Net income $ 15,347 $ 11,075 Income per share Basic $ 0.76 $ 0.56 Diluted $ 0.76 $ 0.56 Cash dividends declared per common $ 0.22 $ 0.20 shareWeighted average number of shares outstanding:Basic 20,210,439 19,802,095 Diluted 20,212,187 19,807,592

FNCB Bancorp, Inc.Quarter-to-Date Consolidated Statements of Income Three Months Ended Dec 31, Sept 30, Jun 30, Mar 31, Dec 31, (in thousands, except 2020 2020 2020 2020 2019 share data)Interest income Interest and fees on $ 10,338 $ 9,078 $ 9,060 $ 9,139 $ 9,505 loansInterest anddividends on securities:U.S. government 503 494 589 750 822 agenciesState and politicalsubdivisions, 465 463 388 57 37 tax-freeState and political 784 741 735 765 718 subdivisions, taxableOther securities 609 525 415 412 364 Total interest anddividends on 2,361 2,223 2,127 1,984 1,941 securitiesInterest oninterest-bearing 3 1 3 21 33 deposits in otherbanksTotal interest income 12,702 11,302 11,190 11,144 11,479 Interest expense Interest on deposits 1,077 1,291 1,376 1,660 1,818 Interest on borrowed funds:Federal Reserve BankDiscount Window - 18 14 - - advancesFederal Home LoanBank of Pittsburgh - 95 160 219 253 advancesJunior subordinated 50 52 60 88 99 debenturesTotal interest on 50 165 234 307 352 borrowed fundsTotal interest 1,127 1,456 1,610 1,967 2,170 expenseNet interest incomebefore (credit) 11,575 9,846 9,580 9,177 9,309 provision for loanand lease losses(Credit) Provisionfor loan and lease (115 ) 74 831 1,151 (33 )lossesNet interest incomeafter (credit) 11,690 9,772 8,749 8,026 9,342 provision for loanand lease lossesNon-interest income Deposit service 875 844 708 825 832 chargesNet gain on the saleof available-for-sale 24 433 922 149 525 securitiesNet gain (loss) on 307 846 4 14 (2 )equity securitiesNet gain on the saleof mortgage loans 188 186 183 96 55 held for saleLoan-related fees 148 119 25 56 147 Income frombank-owned life 116 118 119 129 126 insuranceLoan referral fees/Interest rate swap 52 76 214 48 681 revenueMerchant services 164 154 112 135 145 revenueOther 211 194 214 242 187 Total non-interest 2,085 2,970 2,501 1,694 2,696 incomeNon-interest expense Salaries and employee 3,984 3,835 3,498 3,929 3,884 benefitsOccupancy expense 532 500 466 554 494 Equipment expense 365 381 360 371 351 Data processing 745 754 709 725 801 expenseBank shares tax (92 ) 263 315 300 (194 )Professional fees 339 279 193 188 332 Other operating 1,570 1,831 883 1,138 2,097 expensesTotal non-interest 7,443 7,843 6,424 7,205 7,806 expenseIncome before income 6,332 4,899 4,826 2,515 4,232 taxesIncome tax expense 1,176 792 805 452 744 Net income $ 5,156 $ 4,107 $ 4,021 $ 2,063 $ 3,488 Income per share Basic $ 0.26 $ 0.20 $ 0.20 $ 0.10 $ 0.17 Diluted $ 0.26 $ 0.20 $ 0.20 $ 0.10 $ 0.17 Cash dividendsdeclared per common $ 0.055 $ 0.055 $ 0.055 $ 0.055 $ 0.050 shareWeighted averagenumber of shares outstanding:Basic 20,241,730 20,235,384 20,191,527 20,172,498 20,170,241 Diluted 20,244,652 20,235,384 20,191,527 20,176,565 20,175,758

FNCB Bancorp, Inc.Consolidated Balance Sheets Dec 31, Sept 30, Jun 30, Mar 31, Dec 31, (in thousands) 2020 2020 2020 2020 2019 Assets Cash and cash equivalents:Cash and due from $ 24,822 $ 26,121 $ 20,089 $ 15,243 $ 22,861 banksInterest-bearingdeposits in other 130,989 78,895 81,390 30,304 11,704 banksTotal cash and cash 155,811 105,016 101,479 45,547 34,565 equivalentsAvailable-for-saledebt securities, at 350,035 321,399 305,611 302,638 272,839 fair valueEquity securities, at 3,026 2,719 938 934 920 fair valueRestricted stock, at 1,745 1,791 3,309 4,224 3,804 costLoans held for sale 2,107 662 765 470 1,061 Loans, net of netdeferred costs and 901,102 960,229 948,428 834,935 828,479 unearned incomeAllowance for loan and (11,950 ) (12,269 ) (11,024 ) (9,907 ) (8,950 )lease lossesNet loans 889,152 947,960 937,404 825,028 819,529 Bank premises and 17,579 17,413 17,467 17,447 17,518 equipment, netAccrued interest 4,286 4,693 5,201 3,387 3,234 receivableBank-owned life 31,712 31,596 31,478 31,359 31,230 insuranceOther assets 10,226 9,942 14,519 17,198 18,841 Total assets $ 1,465,679 $ 1,443,191 $ 1,418,171 $ 1,248,232 $ 1,203,541 Liabilities Deposits: Demand $ 271,499 $ 274,110 $ 266,846 $ 181,223 $ 179,465 (non-interest-bearing)Interest-bearing 1,015,949 998,128 902,781 820,339 822,244 Total deposits 1,287,448 1,272,238 1,169,627 1,001,562 1,001,709 Borrowed funds: Federal Reserve BankDiscount Window - - 36,242 10,000 - advancesFederal Home Loan Bank - - 42,809 77,934 46,909 of Pittsburgh advancesJunior subordinated 10,310 10,310 10,310 10,310 10,310 debenturesTotal borrowed funds 10,310 10,310 89,361 98,244 57,219 Accrued interest 108 139 248 261 258 payableOther liabilities 11,953 10,458 13,578 10,233 10,748 Total liabilities 1,309,819 1,293,145 1,272,814 1,110,300 1,069,934 Shareholders' equity Preferred stock - - - - - Common stock 25,307 25,304 25,260 25,217 25,214 Additional paid-in 81,587 81,500 81,261 81,209 81,130 capitalRetained earnings 35,080 31,044 28,057 25,155 24,207 Accumulated other 13,886 12,198 10,779 6,351 3,056 comprehensive incomeTotal shareholders' 155,860 150,046 145,357 137,932 133,607 equityTotal liabilities and $ 1,465,679 $ 1,443,191 $ 1,418,171 $ 1,248,232 $ 1,203,541 shareholders? equity

FNCB Bancorp, Inc.Summary Tax-equivalent Net Interest Income Three Months Ended Dec 31, Sept 30, Jun 30, Mar 31, Dec 31, (dollars in 2020 2020 2020 2020 2019 thousands)Interest income Loans: Loans - taxable $ 9,938 $ 8,688 $ 8,661 $ 8,693 $ 9,138 Loans - tax-free 506 494 505 565 464 Total loans 10,444 9,182 9,166 9,258 9,602 Securities: Securities, 1,896 1,760 1,739 1,927 1,904 taxableSecurities, 589 586 491 72 47 tax-freeTotal interest anddividends on 2,485 2,346 2,230 1,999 1,951 securitiesInterest-bearingdeposits in other 3 1 3 21 33 banksTotal interest 12,932 11,529 11,399 11,278 11,586 incomeInterest expense Deposits 1,077 1,291 1,376 1,660 1,818 Borrowed funds 50 165 234 307 352 Total interest 1,127 1,456 1,610 1,967 2,170 expenseNet interest $ 11,805 $ 10,073 $ 9,789 $ 9,311 $ 9,416 income Average balances Earning assets: Loans: Loans - taxable $ 889,964 $ 908,095 $ 875,119 $ 780,855 $ 791,577 Loans - tax-free 46,444 44,826 46,836 52,615 42,954 Total loans 936,408 952,921 921,955 833,470 834,531 Securities: Securities, 255,111 232,081 247,939 263,697 258,790 taxableSecurities, 71,154 69,973 56,220 7,698 4,598 tax-freeTotal securities 326,265 302,054 304,159 271,395 263,388 Interest-bearingdeposits in other 14,808 8,286 6,439 7,230 7,713 banks (a)Totalinterest-earning 1,277,481 1,263,261 1,232,553 1,112,095 1,105,632 assets (a)Non-earning assets 181,708 159,037 108,608 91,553 99,373 (a)Total assets $ 1,459,189 $ 1,422,298 $ 1,341,161 $ 1,203,648 $ 1,205,005 Interest-bearing liabilities:Deposits $ 1,016,916 $ 943,754 $ 850,525 $ 821,216 $ 830,318 Borrowed funds 10,310 51,629 81,813 61,843 57,682 Totalinterest-bearing 1,027,226 995,383 932,338 883,059 888,000 liabilitiesDemand deposits 268,531 267,636 258,609 172,132 172,935 Other liabilities 11,377 11,384 11,065 11,636 11,361 Shareholders' 152,055 147,895 139,149 136,821 132,709 equityTotal liabilitiesand shareholders' $ 1,459,189 $ 1,422,298 $ 1,341,161 $ 1,203,648 $ 1,205,005 equity Yield/Cost Earning assets: Loans: Interest and fees 4.47 % 3.83 % 3.96 % 4.45 % 4.62 %on loans - taxableInterest and feeson loans - 4.36 % 4.41 % 4.31 % 4.30 % 4.32 %tax-freeTotal loans 4.46 % 3.85 % 3.98 % 4.44 % 4.60 %Securities: Securities, 2.97 % 3.03 % 2.81 % 2.92 % 2.94 %taxableSecurities, 3.31 % 3.35 % 3.49 % 3.74 % 4.09 %tax-freeTotal securities 3.05 % 3.11 % 2.93 % 2.95 % 2.96 %Interest-bearingdeposits in other 0.08 % 0.05 % 0.19 % 1.16 % 1.71 %banks (a)Total earning 4.05 % 3.65 % 3.70 % 4.06 % 4.19 %assets (a)Interest-bearing liabilities:Interest on 0.42 % 0.55 % 0.65 % 0.81 % 0.88 %depositsInterest on 1.94 % 1.28 % 1.14 % 1.99 % 2.44 %borrowed fundsTotalinterest-bearing 0.44 % 0.59 % 0.69 % 0.89 % 0.98 %liabilitiesNet interest 3.61 % 3.06 % 3.01 % 3.17 % 3.21 %spread (a)Net interest 3.70 % 3.19 % 3.18 % 3.35 % 3.41 %margin (a) (a) Reflects revisions to average balances for the three months ended September30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019 to reclassifycertain average deposits in other banks from interest-bearing deposits in other banks to non-earning assets in the amount of $62,315, $21,419, $1,166 and$9,128, respectively.

FNCB Bancorp, Inc.Asset Quality Data Dec 31, Sept 30, Jun 30, Mar 31, Dec 31, (in thousands) 2020 2020 2020 2020 2019 At period end Non-accrualloans,includingnon-accruing $ 5,581 $ 6,176 $ 6,740 $ 8,576 $ 9,084 troubled debtrestructuredloans (TDRs)Loans past due90 days or - - - - - more and stillaccruingTotalnon-performing 5,581 6,176 6,740 8,576 9,084 loansOther realestate owned 58 58 85 85 289 (OREO)Othernon-performing 1,900 1,900 1,900 1,900 1,900 assetsTotalnon-performing $ 7,539 $ 8,134 $ 8,725 $ 10,561 $ 11,273 assets Accruing TDRs $ 6,975 $ 7,216 $ 8,592 $ 7,729 $ 7,745 For the three months endedAllowance forloan and lease lossesBeginning $ 12,269 $ 11,024 $ 9,907 $ 8,950 $ 9,315 balanceLoans 338 582 316 329 620 charged-offRecoveries ofcharged-off 134 1,753 602 135 288 loansNetcharge-offs 204 (1,171 ) (286 ) 194 332 (recoveries)(Credit)Provision for (115 ) 74 831 1,151 (33 )loan and leaselossesEnding balance $ 11,950 $ 12,269 $ 11,024 $ 9,907 $ 8,950

FNCB Bancorp, Inc.Non-GAAP Reconciliations Dec 31, Sept 30, Jun 30, Mar 31, Dec 31, (dollars in 2020 2020 2020 2020 2019 thousands)Annualizednet interestmargin:Netinterestmargin (1 3.70 % 3.19 % 3.18 % 3.35 % 3.41 %divided by3)Netinterestmargin,excluding 3.49 % 3.40 % 3.34 % 3.35 % 3.41 %PPP loans(non-GAAP)(2 dividedby 4) Netinterest $ 11,805 $ 10,073 $ 9,789 $ 9,311 $ 9,416 income(FTE) (1)PPP loaninterest 1,485 298 223 - - and feeincomeNetinterestincome(FTE), $ 10,320 $ 9,775 $ 9,566 $ 9,311 $ 9,416 excludingPPP loans(non-GAAP)(2) Averageearning $ 1,277,481 $ 1,263,261 $ 1,232,553 $ 1,112,095 $ 1,105,632 assets (3)(a)Average PPP 95,837 114,395 86,241 - - loansAverageearningassets,excluding $ 1,181,644 $ 1,148,866 $ 1,146,312 $ 1,112,095 $ 1,105,632 PPP loans(non-GAAP)(4) Allowancefor loanand leaselosses/ totalperiod endloansAllowancefor loansand leaselosses/total 1.33 % 1.28 % 1.16 % 1.19 % 1.08 %period endloans (5divided by6)Allowancefor loansand leaselosses/totalperiod end 1.45 % 1.45 % 1.32 % 1.19 % 1.08 %loans,excludingPPP loans(5 dividedby 7) Allowancefor loans $ 11,950 $ 12,269 $ 11,024 $ 9,907 $ 8,950 and leaselosses (5) Totalperiod end $ 901,102 $ 960,229 $ 948,428 $ 834,935 $ 828,479 loans (6)PPP loansoutstanding 76,004 114,784 113,193 - - at periodendTotalperiod endloans, $ 825,098 $ 845,445 $ 835,235 $ 834,935 $ 828,479 excludingPPP loans(7) (a) Reflects revisions to average balances for the three months ended September30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019 to reclassifycertain average deposits in other banks from interest-bearing deposits in other banks to non-earning assets in the amount of $62,315, $21,419, $1,166 and$9,128, respectively.