FNCB Bancorp (FNCB) investor relations material

Executive summary

• Net income for Q3 2024 was $51.5M ($1.04 per diluted share), up from $50.1M ($0.92 per diluted share) in Q3 2023, driven by higher net interest income and fintech-related fees.

• Total assets reached $8.09B at September 30, 2024, up from $7.71B at year-end 2023, reflecting significant securities purchases and loan growth.

• The company continued its measured entry into consumer fintech lending, with $280.1M in such loans at quarter-end, expected to impact future income and funding costs.

• The payments segment remains a major driver of non-interest income, with prepaid, debit card, and ACH fees showing strong growth.

• Share repurchases under the 2024 program totaled 5.3M shares YTD at an average price of $37.61 per share, with $50M planned for each remaining quarter.

Financial highlights

• Net interest income for Q3 2024 rose 5.5% year-over-year to $93.7M; net interest margin was 4.78%, down from 5.07% in Q3 2023.

• Non-interest income increased 19.9% to $32.1M, led by a $2.4M rise in prepaid/debit card fees and a $1.3M increase in ACH and payment processing fees.

• Provision for credit losses was $3.5M in Q3 2024, up from $1.8M in Q3 2023, reflecting higher leasing charge-offs and a new qualitative factor for classified REBL loans.

• Total non-interest expense grew 12.2% to $53.3M, mainly due to higher salaries, OREO expenses, and a $1.2M loss from a transaction processing delay.

• For the nine months ended September 30, 2024, net income was $161.6M ($3.15 per diluted share), up from $148.3M ($2.68 per diluted share) in the prior year period.

Outlook and guidance

• Management expects consumer fintech lending to meaningfully impact future income and funding costs as the portfolio grows.

• The company believes REBL loan classifications are at or near their peak, supported by independent portfolio review and favorable LTVs.

• Liquidity and capital resources are considered sufficient for the next 12 months and foreseeable future, with strong deposit growth and available credit lines.