GlobeNewswire Inc | Apr 30, 2021 04:32PM EDT

April 30, 2021

DUNMORE, Pa., April 30, 2021 (GLOBE NEWSWIRE) -- FNCB Bancorp, Inc. (NASDAQ: FNCB; www.fncb.com), the parent company of Dunmore-based FNCB Bank (the Bank), (collectively, ("FNCB")today reported net income of $5.8million, or $0.29 per basic and diluted share, for the three months ended March 31, 2021, an increase of $3.7 million, or 182.7% from $2.1 million, or $0.10 per basic and diluted share, for the same three months of2020. The increase in earnings comparing the first quarters of 2021 and 2020 was primarily due to a $2.2 million, or 24.2%, increase in net interest income, a $1.1 million, or 63.8%, increase innon-interest income, and a $1.0 million, or 83.8%, reduction in the provision for loan and lease losses. These positive factors were partially offset by an $0.5 million, or 117.0%, increase in income tax expense, which was due to the higher level of pre-tax net income.

Annualized return on average assets and annualized return on average equity for the threemonths ended March 31, 2021 was 1.61% and 15.27%, respectively, compared to 0.69% and 6.06%, respectively, for the three months ended March 31, 2020.Dividends declared and paid were $0.060 per share for the first quarter of 2021, a 9.1% increase compared to $0.055 per share forthe same period of 2020. Year-to-date2021 dividends equated to an annualizeddividend yield of approximately 3.2% based on the closing stock price of $7.54 per share at March 31, 2021.

First quarter 2021 performance

-- First quarter net income increased $3.7 million, or 182.7%, to $5.8 million, or $0.29 per share in 2021 compared to $2.1 million, or $0.10 per share in 2020; -- Yield on earnings assets (FTE) decreased 21 basis points to 3.85% in 2021 from 4.06% in 2020; -- Cost of funds decreased 55 basis points to 0.34% in 2021 from 0.89% in 2020; -- Net interest margin (FTE) increased 24 basis points to 3.59% in 2021, compared to 3.35% in 2020; -- Provision for loan and lease losses decreased $1.0 million, or 83.8%; -- Non-interest income increased $1.1 million, or 63.8%; -- Non-interest expense decreased $34 thousand, or 0.47%; and -- Efficiency ratio improved to 51.87% in 2021 compared to 66.46% in 2020.

Summary financial position at March 31, 2021as compared to December 31, 2020:

-- Total assets grew $34.4 million, or 2.3%, to $1.500 billion at March 31, 2021 from $1.466 billion at December 31, 2020; -- Loans, net of deferred loan fees and cost and unearned income, increased $30.8 million, or 3.4%, to $931.9 million at March 31, 2021 from $901.1 million at December 31, 2020; -- Included in net loans were PPP loans outstanding, net of loan origination fees and costs, of $103.5 million at March 31, 2021; -- Total deposits increased $35.4 million, or 2.7% to $1.323 billion at March 31, 2021 from $1.287 billion at December 31, 2020; -- Non-performing loans as a percentage of total loans improved to 0.52% at March 31, 2021 from 0.62% at December 31, 2020; and -- The Bank's total risk-based capital and leverage ratios improved to 16.26% and 9.88%, respectively, at March 31, 2021, compared to 15.79% and 9.57%, respectively, at December 31, 2020.

"We are pleased with our strongfirst quarter 2021 results," stated Gerard A. Champi, President and CEO."PPP was once again amajor focus for us thisquarter with the government's extension of this program on January 11, 2021. During the first quarter of 2021, the FNCB team assisted 540 business customers secure $59.0 million in additional funding under round two of the program.Additionally, loan origination fees recognized on the forgiveness of first round PPP loans contributed to our year-over-year earnings performance and margin improvement. We anticipate that the majority of outstanding PPP loans will be forgiven by the end of 2021 and earnings will continue to be favorably impacted by the additionalfee recognition. We continued to see strong deposit growth, which was driven by the second round of PPP funding and additional fiscal stimulus payments, and were able to further reduce our funding costs. Most importantly, during the first quarter, we worked with health care providers to be able to secure and provide vaccines for our employees, as the health and safety of our FNCB family remainsforemost,"concluded Champi.

Impact of the COVID-19pandemic

While the effects from theCOVID-19 pandemic continue to impactnational, regional and local economies,the Unites States economy has begun to show signs of recovering and with the availability and distribution of vaccines, governments have started to lift restrictions on businesses. All FNCB community officesare open, and while fully operational, are still operating under the pandemic preparedness plan. We continue to follow CDC and Commonwealth of Pennsylvania guidelines and take additional precautions to ensure the safety of our customers and our employees. Additionally, FNCB has worked with local health care providers to secure and offer vaccinations to all eligible employees.

While positive developments have occurred, we are keenly aware that FNCBs business and consumer customers may continue to experience varying degrees of financial distress, as uncertainty related to the pandemic still exists. Should the number of cases rise, or new COVID-19 variant infections increase, additional economic restrictions could be mandated again. Commercial activity has improved, but has not returned to pre-pandemic levels, which may result in asset qualitydeterioration. Our commercial customer base includes businesses in industries such as hotel/lodging, restaurants, hospitality, and retail and commercial real estate, all of which have been significantly impacted by the COVID-19 pandemic. We continueto closely monitor customers within these industries asthe economic recovery unfolds.

On December 27, 2020, another COVID-19 relief bill was signed into law that extended and modified several provisions of the PPP. This included an additional allocation of $284 billion in funding.The SBA reactivated the PPP on January 11, 2021, and on January 19, 2021, FNCB began originating additional loans through the PPP. The SBA will continue to accept new applications for this new round of funding through May 31, 2021. During the three months ended March 31, 2021, FNCB originated and received SBA approval and funding for 540 PPP loans totaling $59.0 million and received $2.8 million in related deferred loan origination fees associated with this funding. During the three months ended March 31, 2021, FNCB received forgiveness for PPP loans totaling $30.2 million originated in 2020 under the first round of funding, with $1.3 million in PPP loan origination fees, net of loan origination costs, recognized into interest income upon forgiveness. PPP loans, net of deferred loan origination fees and costs, outstanding at March 31, 2021 were $103.5 million. FNCB expects to apply and receive forgiveness for the majority of these loans by the end of 2021.

Management expects the COVID-19 pandemic, as well as certain provisions of legislative and regulatory relief efforts, to continue to impact FNCB's operations. The full impact is unknown, continues to evolve and will be contingent upon the speed and extent of recovery. At this time, management cannot determine or estimate the full magnitude of the impact and cannot provide any assurances as to how the crisis may ultimately affect FNCB's results of operations or financial position. Management believes that FNCB's balance sheet and capital position are strong, and we will continue to address any issues related to the pandemic in a safe and sound manner as they arise.

Summary Results

Net interest income on a tax-equivalent basis increased $2.3 million, or 24.9%, to $11.6 million for the three months ended March 31, 2021from $9.3million for the comparable period of 2020. The improvement in tax-equivalent net interest income comparing the first quarters of 2021 and 2020reflecteda $1.2 million, or 10.6%, increase in tax-equivalent interest income, coupled with a $1.1 million, or 57.0%, reduction in interest expense. The increase in tax-equivalent interest income was largely due to higher volumes of earning assets and the recognition of PPP origination fees, partially offset by a decrease in the tax-equivalent yield on earning assets. Average earning assets increased $183.8 million, or 16.5%, to $1.296 billion for the first quarter of 2021 from $1.112 billion for the same quarter of 2020 due to higher loan and investment volumes. Comparing the first quarters of 2021 and 2020, average loans increased $86.9 million, or 10.4%, to $920.4 millionfrom $833.5 million, respectively, and average investment securities increased $90.6 million, or 33.4%, to $362.0 million from $271.4 million, respectively. The increase in loan volumes primarily reflected the origination of PPP loans, net of forgiveness received, while the higher level of investment securities was due to the deployment of a portion of excess liquidity into the investment portfolio. The tax-equivalent yield on earning assets decreased 21 basis points to 3.85% for the first quarter of 2021 from 4.06% for the same quarter of 2020, which partially offsetthe positive impact on interest income from higher volumes of earning assets.The 57.0% decrease in interest expense was primarilydue to a 55-basis pointreduction in the cost of funds to 0.34% for the three months ended March 31, 2021 from 0.89% for the same three months of 2020. Specifically, the average rate paid forinterest-bearing deposits decreased 49basis points to 0.32% for the first quarter of 2021from 0.81% for the same period of 2020.The average rates paid forinterest-bearing demand and time deposits, which reflected the reduction in market interest rates,decreased 48basis points and 58basis points, respectively, comparingthe three months ended March 31, 2021 and 2020. FNCB experienced strong deposit growth due to additional fiscal stimulus in the first quarter of 2021. Additionally, changing customer deposit preferences due to the reduction in economic activity and uncertainty related to the COVID-19 pandemic also contributed to the deposit growth, as well as factoring into deposit migration from time deposits into non-maturity deposits. Specifically, average interest-bearing deposits increased $177.9million, or 21.7%, to $999.1 million from $821.2 million comparing the first quarters of 2021 and 2020, respectively.Average interest-bearing demand deposits increased $167.0million, or 31.6%, to $695.8million for the first quarter of 2021compared to $528.8million for the same quarter of 2020, while average savings deposits increased $20.4 million, or 21.7%, to $114.3 million from $94.0 million comparing the first quarters of 2021 and 2020, respectively. Conversely, average time deposits decreased $9.5 million to $188.9 million for the three months ended March 31, 2021 from $198.4 million for the same three months of 2020. FNCB used the excess liquidity from deposit growth to reduce its reliance on and repay higher-costing borrowed funds. As a result, average borrowed funds decreased $51.5 million, or 83.3%, to $10.3 million from $61.8 million comparing the first quarters of 2021 and 2020.FNCBs tax-equivalent net interest margin improved 24basis points to 3.59% for the first quarter of 2021from 3.35% for the same quarter of 2020. The marginimprovement was primarily impacted by activity related to PPP loans, coupled with reduction in funding costs. On a linked quarter basis, FNCB's tax-equivalent net interest margin decreased 11 basis points from 3.70% for the fourth quarter of 2020.

Non-interest income increased $1.1 million, or 63.8%, to $2.8 million for the three months ended March 31, 2021 from $1.7 million for the same three months of 2020. The increaseresulted primarily froma gain of$422 thousand froma bank-owned life insurance death benefit claim that was recognized in the first quarter of 2021,coupled with increases in net gains on equity securitiesand net gains on the sale of mortgage loansheld for sale. Net gains on equity securities totaled$364thousand for the firstquarter of 2021, an increase of $350 thousand compared to $14thousand for the same quarter of 2020. FNCB recorded net gains on the sale of mortgage loans of $224 thousand for the three months ended March 31, 2021, an increase of$128 thousand, or 133.3%, compared to $96thousand for the same three-month period of 2020. Additionally, FNCB experienced increasesin net gains on available-for-sale debt securities, loan related fees and deposit service charges. Net gains on the sales of available-for-sale securities totaled$213thousand for the first quarter of 2021, an increase of $64thousand, or 43.0%, compared to $149thousand for the same quarter of 2020. Additionally, loan-related fees increased $77 thousand, or 137.5% to $133thousand for the three months ended March 31, 2021, compared to $56 thousand for the same period of2020, while an increase in debit card usage contributed to the $49 thousand, or 5.9%,increase in deposit service charges to $874 thousand from $825 thousand comparing the three months ended March 31, 2021 and2020.

Non-interest expense was relatively constant at $7.2 million, decreasing by$34thousand, or 0.5%, comparing the three months ended March 31, 2021 and 2020. Thedecrease primarily reflected reductionsin salaries and benefits,advertising expenses and other operating expenses. Salaries and benefits decreased $193 thousand, or 4.9% to $3.7 million for the three months ended March 31, 2021, from $3.9 million for the same period in 2020,due primarily to the deferral of payroll-related loan origination costs associated with PPP loans. Advertising expenses decreased $90thousand, or 43.5%, to $117 thousand for the first quarter of 2021 from $207 thousand for the same quarter of 2020, as FNCB reduced its advertisingduring the pandemic. Other operating expenses decreased $97 thousand, or 11.1%, to $775 thousand from $872 thousand comparing the three months ended March 31, 2021 and 2020. This decreasereflected reductions in OREO-related expenses, coupled with reductions in office expense, auto expenseandtravel and entertainment expense due to travel restrictions and a large percentage of staff working remotely.These expense reductions were offset by increases in regulatory assessments of $129 thousand, or 218.6%, data processing of $94 thousand, or 13.0%, professional fees of $71 thousand, or 37.8%, and occupancy expense of $55 thousand, or 9.9%, comparing the three months ended March 31, 2021 and 2020. Regulatory assessments for the first quarter of 2020 were reduced by the remainder of theFDIC's small bank assessment credit. There were no such assessment credits in 2021. The increase in data processing expense reflected added costs associated with employees working remotely, coupled with additions to FNCB's digital banking services, while the increase in professional fees was primarily due to additional costs associated with FNCB's annual audit. The increase in FNCB's occupancy expense was largely due tohigher snow removal costs.

Asset Quality

Despite the economic uncertainty related to the pandemic, FNCB's asset quality improvedduring the first quarter of 2021 as total non-performing loans decreased $739 thousand, or 13.2%,to $4.8 million, or 0.52% of total loans,at March 31, 2021 from $5.6 million, or 0.62% of total loans, at December 31, 2020. The improvement primarily reflected the payoff of one commercial relationship and the return of two other commercial loan relationships to accrual status. Year-over-year, non-performing loans decreased $3.8 million, or 43.5%, from $8.6 million, or 1.03% of total loans, at March 31, 2020.FNCBs loan delinquency rate (total delinquent loans as a percentage of total loans)was 0.70% at March 31, 2021compared to 0.99% at December 31, 2020 and 1.41% at March 31, 2020. Annualized net loans charged off, as a percentage of average loans, was 0.03%for the three months ended March 31, 2021 compared to 0.09% for the same three months of 2020. FNCB recorded a provision for loan and lease losses of $186 thousand for the first quarter of 2021 compared to $1.2 million for the first quarter of 2020.The larger provision recorded for the first quarter of 2020 wasdirectly related to the economic disruption and uncertainty caused bythe onset of COVID-19 pandemic. The allowance for loan and lease losses was $12.1million, or 1.30% of total loansat March 31, 2021, compared to $11.9 million, or 1.33% of total loans at December 31, 2020 and $9.9 million, or 1.19%, at March 31, 2020.Excluding PPP loans, which are 100.0% guaranteed by the federal government, this ratio was 1.46% at March 31, 2021.

Financial Condition

Total assets increased $34.4million, or 2.3%, to $1.500billion at March 31, 2021from $1.466billion at December 31, 2020. The change in total assets primarily reflected increases in net loans and available-for-sale debt securities, which were partiallyoffset by a decrease in cash and cash equivalents. Net loans increased$30.7million, or 3.5%, to $919.9million at March 31, 2021 from $889.2million at December 31, 2020,primarily due to the origination and funding of a second round of PPP loans, partially offset by first-round PPP loan forgiveness. Available-for-sale debt securities increased$57.4million, or 16.4%, to$407.4million at March 31, 2021from $350.0million at December 31, 2020, which primarily reflected the deployment of a portion of FNCB's excess liquidity into the investment portfolio. Conversely, the deployment caused cash and cash equivalents to decrease$57.3 million, or 36.7%, to $98.5 million at March 31, 2021 from $155.8 million at December 31, 2020.Total deposits increased$35.4million, or 2.7%, to $1.323billion at March 31, 2021 from$1.287billion atDecember 31, 2020. Specifically, non-interest bearing deposits increased $48.0 million, or 17.7%, due primarily to the second round of PPP loan funding and additional fiscal stimulus payments.Partially offsetting the increase in non-interest bearing deposits was a $12.7 million, or 1.2%, reduction in interest-bearing deposits reflecting the continued runoff and migration of certificates of deposit. Borrowed funds remained constant at $10.3million at March 31, 2021andDecember 31, 2020, comprised entirely of $10.3 million in FNCB's junior subordinated debentures.

Total shareholders equity decreased $930 thousand, or 0.6%, to $154.9million at March 31, 2021from $155.9million at December 31, 2020. Contributing to the decrease in capital was a $5.6 million decrease in accumulated other comprehensive income related primarily to the depreciation in the fair value of FNCB's available-for-sale debt securities, net of deferred taxes, anddividends declared and paid of$1.2 million for the three months ended March 31, 2021. These reductions to capital werepartially offset by net income for the three months ended March 31, 2021of $5.8million. FNCB Bank's regulatory capital improved as the total risk-based capital ratio and Tier 1 leverage ratiosincreased to 16.26% and 9.88% at March 31, 2021 from15.79% and 9.57% at December 31, 2020, respectively.

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 for110 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 Countiesand 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

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 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 novel Coronavirus Disease 2019("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 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 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, 2020.



FNCB Bancorp, Inc.Selected Financial Data Mar 31, Dec 31, Sept 30, Jun 30, Mar 31, 2021 2020 2020 2020 2020 Per share data:Net income(fully $ 0.29 $ 0.26 $ 0.20 $ 0.20 $ 0.10 diluted)Cash dividends $ 0.060 $ 0.055 $ 0.055 $ 0.055 $ 0.055 declaredBook value $ 7.65 $ 7.70 $ 7.41 $ 7.19 $ 6.84 Tangible book $ 7.65 $ 7.70 $ 7.41 $ 7.19 $ 6.84 valueMarket value: High $ 8.94 $ 7.95 $ 6.93 $ 7.19 $ 8.54 Low $ 5.80 $ 5.16 $ 5.08 $ 5.15 $ 5.10 Close $ 7.54 $ 6.40 $ 5.32 $ 5.75 $ 6.91 Common shares 20,240,668 20,245,649 20,243,589 20,208,607 20,174,250 outstanding Selected ratios:Annualizedreturn on 1.61 % 1.41 % 1.15 % 1.21 % 0.69 %average assetsAnnualizedreturn onaverage 15.27 % 13.49 % 11.05 % 11.62 % 6.06 %shareholders'equityEfficiency 51.87 % 54.89 % 66.66 % 56.53 % 66.46 %ratioTier Ileverage ratio 9.88 % 9.57 % 10.17 % 10.60 % 11.09 %(FNCB Bank)Totalrisk-basedcapital to 16.26 % 15.79 % 16.09 % 15.68 % 15.44 %risk-adjustedassets (FNCBBank)Averageshareholders'equity to 10.53 % 10.42 % 10.40 % 10.38 % 11.37 %average totalassetsYield onearning assets 3.85 % 4.05 % 3.65 % 3.70 % 4.06 %(FTE)Cost of funds 0.34 % 0.44 % 0.59 % 0.69 % 0.89 %Net interest 3.51 % 3.61 % 3.06 % 3.01 % 3.17 %spread (FTE)Net interest 3.59 % 3.70 % 3.19 % 3.18 % 3.35 %margin (FTE)Totaldelinquent 0.70 % 0.99 % 0.81 % 0.89 % 1.41 %loans/totalloansAllowance forloan and lease 1.30 % 1.33 % 1.28 % 1.16 % 1.19 %losses/totalloansNon-performingloans/total 0.52 % 0.62 % 0.64 % 0.71 % 1.03 %loansAnnualized netcharge-offs 0.03 % 0.09 % (0.49 %) (0.12 %) 0.09 %(recoveries)/average loans

FNCB Bancorp, Inc.Year-to-Date Consolidated Statements of Income

Three Months Ended March 31, (in thousands, except share data) 2021 2020 Interest income Interest and fees on loans $ 9,786 $ 9,139 Interest and dividends on securities: Taxable 1,906 1,852 Tax-exempt 486 57 Dividends 62 75 Total interest and dividends on 2,454 1,984 securitiesInterest on interest-bearing deposits 3 21 in other banks Total interest income 12,243 11,144 Interest expense Interest on deposits 798 1,660 Interest on borrowed funds Federal Home Loan Bank of Pittsburgh - 219 advancesJunior subordinated debentures 48 88 Total interest on borrowed funds 48 307 Total interest expense 846 1,967 Net interest income before provision 11,397 9,177 for loan and lease lossesProvision for loan and lease losses 186 1,151 Net interest income after provision for 11,211 8,026 loan and lease lossesNon-interest income Deposit service charges 874 825 Net gain on the sale of 213 149 available-for-sale securitiesNet gain on equity securities 364 14 Net gain on the sale of mortgage loans 224 96 held for saleLoan-related fees 133 56 Income from bank-owned life insurance 121 129 Bank-owned life insurance settlement 422 - Merchant services revenue 138 135 Other 285 290 Total non-interest income 2,774 1,694 Non-interest expense Salaries and employee benefits 3,736 3,929 Occupancy expense 609 554 Equipment expense 353 371 Advertising expense 117 207 Data processing expense 819 725 Regulatory assessments 188 59 Bank shares tax 315 300 Professional fees 259 188 Other operating expenses 775 872 Total non-interest expense 7,171 7,205 Income before income taxes 6,814 2,515 Income tax expense 981 452 Net income $ 5,833 $ 2,063 Income per share Basic $ 0.29 $ 0.10 Diluted $ 0.29 $ 0.10 Cash dividends declared per common $ 0.060 $ 0.055 shareWeighted average number of shares outstanding:Basic 20,242,262 20,172,498 Diluted 20,253,606 20,176,565

FNCB Bancorp, Inc.Quarter-to-Date Consolidated Statements of Income Three Months Ended Mar 31, Dec 31, Sept 30, Jun 30, Mar 31, (in thousands, except 2021 2020 2020 2020 2020 share data)Interest income Interest and fees on $ 9,786 $ 10,338 $ 9,078 $ 9,060 $ 9,139 loansInterest anddividends on securitiesTaxable 1,906 1,832 1,698 1,692 1,852 Tax-exempt 486 465 463 388 57 Dividends 62 64 62 47 75 Total interest anddividends on 2,454 2,361 2,223 2,127 1,984 securitiesInterest oninterest-bearing 3 3 1 3 21 deposits in otherbanks Total interest 12,243 12,702 11,302 11,190 11,144 incomeInterest expense Interest on deposits 798 1,077 1,291 1,376 1,660 Interest on borrowed fundsFederal Reserve BankDiscount Window - - 18 14 - advancesFederal Home LoanBank of Pittsburgh - - 95 160 219 advancesJunior subordinated 48 50 52 60 88 debenturesTotal interest on 48 50 165 234 307 borrowed funds Total interest 846 1,127 1,456 1,610 1,967 expenseNet interest incomebefore provision 11,397 11,575 9,846 9,580 9,177 (credit) for loan andlease lossesProvision (credit)for loan and lease 186 (115 ) 74 831 1,151 lossesNet interest incomeafter provision 11,211 11,690 9,772 8,749 8,026 (credit) for loan andlease lossesNon-interest income Deposit service 874 875 844 708 825 chargesNet gain on the saleof available-for-sale 213 24 433 922 149 securitiesNet gain on equity 364 307 846 4 14 securitiesNet gain on the saleof mortgage loans 224 188 186 183 96 held for saleLoan-related fees 133 148 119 25 56 Income frombank-owned life 121 116 118 119 129 insuranceBank-owned life 422 - - - - insurance settlementLoan referral fees/Interest rate swap - 52 76 214 48 revenueMerchant services 138 164 154 112 135 revenueOther 285 211 194 214 242 Total 2,774 2,085 2,970 2,501 1,694 non-interest incomeNon-interest expense Salaries and employee 3,736 3,984 3,835 3,498 3,929 benefitsOccupancy expense 609 532 500 466 554 Equipment expense 353 365 381 360 371 Advertising expense 117 190 175 113 207 Data processing 819 745 754 709 725 expenseRegulatory 188 131 122 75 59 assessmentsBank shares tax 315 (92 ) 263 315 300 Professional fees 259 339 279 193 188 Other operating 775 1,249 1,534 695 872 expenses Total 7,171 7,443 7,843 6,424 7,205 non-interest expenseIncome before income 6,814 6,332 4,899 4,826 2,515 taxesIncome tax expense 981 1,176 792 805 452 Net income $ 5,833 $ 5,156 $ 4,107 $ 4,021 $ 2,063 Income per share Basic $ 0.29 $ 0.26 $ 0.20 $ 0.20 $ 0.10 Diluted $ 0.29 $ 0.26 $ 0.20 $ 0.20 $ 0.10 Cash dividendsdeclared per common $ 0.060 $ 0.055 $ 0.055 $ 0.055 $ 0.055 shareWeighted averagenumber of shares outstanding:Basic 20,242,262 20,241,730 20,235,384 20,191,527 20,172,498 Diluted 20,253,606 20,244,652 20,235,384 20,191,527 20,176,565

FNCB Bancorp, Inc.Consolidated Balance Sheets Mar 31, Dec 31, Sept 30, Jun 30, Mar 31, (in thousands) 2021 2020 2020 2020 2020 Assets Cash and cash equivalents:Cash and due from $ 22,382 $ 24,822 $ 26,121 $ 20,089 $ 15,243 banksInterest-bearingdeposits in other 76,172 130,989 78,895 81,390 30,304 banksTotal cash and cash 98,554 155,811 105,016 101,479 45,547 equivalentsAvailable-for-saledebt securities, at 407,396 350,035 321,399 305,611 302,638 fair valueEquity securities, at 4,267 3,026 2,719 938 934 fair valueRestricted stock, at 1,149 1,745 1,791 3,309 4,224 costLoans held for sale 267 2,107 662 765 470 Loans, net of deferredloan fees and costs 931,943 901,102 960,229 948,428 834,935 and unearned incomeAllowance for loan and (12,076 ) (11,950 ) (12,269 ) (11,024 ) (9,907 )lease lossesNet loans 919,867 889,152 947,960 937,404 825,028 Bank premises and 17,407 17,579 17,413 17,467 17,447 equipment, netAccrued interest 4,567 4,286 4,693 5,201 3,387 receivableBank-owned life 33,074 31,712 31,596 31,478 31,359 insuranceOther assets 13,488 10,226 9,942 14,519 17,198 Total assets $ 1,500,036 $ 1,465,679 $ 1,443,191 $ 1,418,171 $ 1,248,232 Liabilities Deposits: Demand $ 319,532 $ 271,499 $ 274,110 $ 266,846 $ 181,223 (non-interest-bearing)Interest-bearing 1,003,296 1,015,949 998,128 902,781 820,339 Total deposits 1,322,828 1,287,448 1,272,238 1,169,627 1,001,562 Borrowed funds: Federal Reserve BankDiscount Window - - - 36,242 10,000 advancesFederal Home Loan Bank - - - 42,809 77,934 of Pittsburgh advancesJunior subordinated 10,310 10,310 10,310 10,310 10,310 debenturesTotal borrowed funds 10,310 10,310 10,310 89,361 98,244 Accrued interest 99 108 139 248 261 payableOther liabilities 11,869 11,953 10,458 13,578 10,233 Total liabilities 1,345,106 1,309,819 1,293,145 1,272,814 1,110,300 Shareholders' equity Preferred stock - - - - - Common stock 25,300 25,307 25,304 25,260 25,217 Additional paid-in 81,640 81,587 81,500 81,261 81,209 capitalRetained earnings 39,691 35,080 31,044 28,057 25,155 Accumulated other 8,299 13,886 12,198 10,779 6,351 comprehensive incomeTotal shareholders' 154,930 155,860 150,046 145,357 137,932 equity Total liabilitiesand shareholders? $ 1,500,036 $ 1,465,679 $ 1,443,191 $ 1,418,171 $ 1,248,232 equity

FNCB Bancorp, Inc.Summary Tax-equivalent Net Interest Income

Three Months Ended Mar 31, Dec 31, Sept 30, Jun 30, Mar 31, (dollars in 2021 2020 2020 2020 2020 thousands)Interest income Loans: Loans - taxable $ 9,401 $ 9,938 $ 8,688 $ 8,661 $ 8,693 Loans - tax-free 487 506 494 505 565 Total loans 9,888 10,444 9,182 9,166 9,258 Securities: Securities, 1,968 1,896 1,760 1,739 1,927 taxableSecurities, 615 589 586 491 72 tax-freeTotal interest anddividends on 2,583 2,485 2,346 2,230 1,999 securitiesInterest-bearingdeposits in other 3 3 1 3 21 banksTotal interest 12,474 12,932 11,529 11,399 11,278 incomeInterest expense Deposits 798 1,077 1,291 1,376 1,660 Borrowed funds 48 50 165 234 307 Total interest 846 1,127 1,456 1,610 1,967 expenseNet interest $ 11,628 $ 11,805 $ 10,073 $ 9,789 $ 9,311 income Average balances Earning assets: Loans: Loans - taxable $ 873,544 $ 889,964 $ 908,095 $ 875,119 $ 780,855 Loans - tax-free 46,897 46,444 44,826 46,836 52,615 Total loans 920,441 936,408 952,921 921,955 833,470 Securities: Securities, 286,128 255,111 232,081 247,939 263,697 taxableSecurities, 75,876 71,154 69,973 56,220 7,698 tax-freeTotal securities 362,004 326,265 302,054 304,159 271,395 Interest-bearingdeposits in other 13,490 14,808 8,286 6,439 7,230 banks (a)Totalinterest-earning 1,295,935 1,277,481 1,263,261 1,232,553 1,112,095 assets (a)Non-earning assets 175,301 181,708 159,037 108,608 91,553 (a)Total assets $ 1,471,236 $ 1,459,189 $ 1,422,298 $ 1,341,161 $ 1,203,648 Interest-bearing liabilities:Deposits $ 999,085 $ 1,016,916 $ 943,754 $ 850,525 $ 821,216 Borrowed funds 10,310 10,310 51,629 81,813 61,843 Totalinterest-bearing 1,009,395 1,027,226 995,383 932,338 883,059 liabilitiesDemand deposits 294,525 268,531 267,636 258,609 172,132 Other liabilities 12,413 11,377 11,384 11,065 11,636 Shareholders' 154,903 152,055 147,895 139,149 136,821 equityTotal liabilitiesand shareholders' $ 1,471,236 $ 1,459,189 $ 1,422,298 $ 1,341,161 $ 1,203,648 equity Yield/Cost Earning assets: Loans: Interest and fees 4.30 % 4.47 % 3.83 % 3.96 % 4.45 %on loans - taxableInterest and feeson loans - 4.15 % 4.36 % 4.41 % 4.31 % 4.30 %tax-freeTotal loans 4.30 % 4.46 % 3.85 % 3.98 % 4.44 %Securities: Securities, 2.75 % 2.97 % 3.03 % 2.81 % 2.92 %taxableSecurities, 3.24 % 3.31 % 3.35 % 3.49 % 3.74 %tax-freeTotal securities 2.85 % 3.05 % 3.11 % 2.93 % 2.95 %Interest-bearingdeposits in other 0.09 % 0.08 % 0.05 % 0.19 % 1.16 %banks (a)Total earning 3.85 % 4.05 % 3.65 % 3.70 % 4.06 %assets (a)Interest-bearing liabilities:Interest on 0.32 % 0.42 % 0.55 % 0.65 % 0.81 %depositsInterest on 1.86 % 1.94 % 1.28 % 1.14 % 1.99 %borrowed fundsTotalinterest-bearing 0.34 % 0.44 % 0.59 % 0.69 % 0.89 %liabilitiesNet interest 3.51 % 3.61 % 3.06 % 3.01 % 3.17 %spread (a)Net interest 3.59 % 3.70 % 3.19 % 3.18 % 3.35 %margin (a) (a) Reflects revisions to average balances for the three months ended September30, 2020, June 30, 2020 and March 31, 2020 to reclassify certain averagedeposits in other banks from interest-bearing deposits in other banks tonon-earning assets in the amount of $62,315, $21,419 and $1,166, respectively.

FNCB Bancorp, Inc.Asset Quality Data Mar 31, Dec 31, Sept 30, Jun 30, Mar 31, (in thousands) 2021 2020 2020 2020 2020 At period end Non-accrualloans,includingnon-accruing $ 4,842 $ 5,581 $ 6,176 $ 6,740 $ 8,576 troubled debtrestructuredloans (TDRs)Loans past due90 days or - - - - - more and stillaccruingTotalnon-performing 4,842 5,581 6,176 6,740 8,576 loansOther realestate owned 58 58 58 85 85 (OREO)Othernon-performing 1,900 1,900 1,900 1,900 1,900 assetsTotalnon-performing $ 6,800 $ 7,539 $ 8,134 $ 8,725 $ 10,561 assets Accruing TDRs $ 6,962 $ 6,975 $ 7,216 $ 8,592 $ 7,729 For the three months endedAllowance forloan and lease lossesBeginning $ 11,950 $ 12,269 $ 11,024 $ 9,907 $ 8,950 balanceLoans 361 338 582 316 329 charged-offRecoveries ofcharged-off 301 134 1,753 602 135 loansNetcharge-offs 60 204 (1,171 ) (286 ) 194 (recoveries)Provision(credit) for 186 (115 ) 74 831 1,151 loan and leaselossesEnding balance $ 12,076 $ 11,950 $ 12,269 $ 11,024 $ 9,907

FNCB Bancorp, Inc.Non-GAAP Reconciliations Mar 31, Dec 31, Sept 30, Jun 30, Mar 31, (dollars in 2021 2020 2020 2020 2020 thousands)Annualizednet interestmargin:Netinterestmargin (1 3.59 % 3.70 % 3.19 % 3.18 % 3.35 %divided by3)Netinterestmargin,excludingPPP loans 3.37 % 3.49 % 3.40 % 3.34 % 3.35 %(non-GAAP) (2divided by4) Netinterest $ 11,628 $ 11,805 $ 10,073 $ 9,789 $ 9,311 income(FTE) (1)PPP loaninterest 1,499 1,485 298 223 - and feeincomeNetinterestincome(FTE), $ 10,129 $ 10,320 $ 9,775 $ 9,566 $ 9,311 excludingPPP loans(non-GAAP)(2) Averageearning $ 1,295,935 $ 1,277,481 $ 1,263,261 $ 1,232,553 $ 1,112,095 assets (3)(a)Average PPP 94,801 95,837 114,395 86,241 - loansAverageearningassets,excluding $ 1,201,134 $ 1,181,644 $ 1,148,866 $ 1,146,312 $ 1,112,095 PPP loans(non-GAAP) (4) Allowancefor loanand leaselosses/ totalperiodend loansAllowancefor loansand leaselosses/total 1.30 % 1.33 % 1.28 % 1.16 % 1.19 %period endloans (5divided by6)Allowancefor loansand leaselosses/totalperiod end 1.46 % 1.45 % 1.45 % 1.32 % 1.19 %loans,excludingPPP loans(5 dividedby 7) Allowancefor loans $ 12,076 $ 11,950 $ 12,269 $ 11,024 $ 9,907 and leaselosses (5) Totalperiod end $ 931,943 $ 901,102 $ 960,229 $ 948,428 $ 834,935 loans (6)PPP loansoutstanding 103,466 76,004 114,784 113,193 - at periodendTotalperiod endloans, $ 828,477 $ 825,098 $ 845,445 $ 835,235 $ 834,935 excludingPPP loans(7) (a) Reflects revisions to average balances for the three months ended September30, 2020, June 30, 2020 and March 31, 2020 to reclassify certain average deposits in other banks from interest-bearing deposits in other banks tonon-earning assets in the amount of $62,315, $21,419, and $1,166, respectively.