Fund – Clean Green Nappy http://cleangreennappy.co.uk/ Thu, 22 Apr 2021 11:38:36 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.2 https://cleangreennappy.co.uk/wp-content/uploads/2021/04/default1.png Fund – Clean Green Nappy http://cleangreennappy.co.uk/ 32 32 Bradley’s Bankruptcy Basics: Chapter 11 Bankruptcy – Reorganization – Insolvency / Bankruptcy / Restructuring https://cleangreennappy.co.uk/bradleys-bankruptcy-basics-chapter-11-bankruptcy-reorganization-insolvency-bankruptcy-restructuring/ https://cleangreennappy.co.uk/bradleys-bankruptcy-basics-chapter-11-bankruptcy-reorganization-insolvency-bankruptcy-restructuring/#respond Fri, 19 Mar 2021 08:43:47 +0000 https://cleangreennappy.co.uk/bradleys-bankruptcy-basics-chapter-11-bankruptcy-reorganization-insolvency-bankruptcy-restructuring/ United States: Bradley Bankruptcy Basics: Chapter 11 Bankruptcy – Reorganization To print this article, simply register or connect to Mondaq.com. Chapter 11 bankruptcy cases are most often filed by businesses. However, some high-income individuals with debts above statutory debt limits to qualify for Chapter 13 may also apply for Chapter 11 relief. In Chapter 11 […]]]>

United States: Bradley Bankruptcy Basics: Chapter 11 Bankruptcy – Reorganization

To print this article, simply register or connect to Mondaq.com.

Chapter 11 bankruptcy cases are most often filed by businesses. However, some high-income individuals with debts above statutory debt limits to qualify for Chapter 13 may also apply for Chapter 11 relief. In Chapter 11 cases, the debtor retains control of its operations as a. that Debtor in Possession (DIP) and has the benefits and duties that are held by a Chapter 7 trustee. However, if the debtor acts in bad faith or does not handle the bankruptcy estate during the case, a Chapter 11 trustee can be appointed to operate the business in the future.

We have set up a high-level overview or ‘life cycle’ of a chapter 11 case, emphasizing concepts and milestones of particular importance to creditors. In addition, we have created a preliminary checklist this will help you navigate the early stages of Chapter 11 bankruptcy.

Chapter 11 Plan

In addition to filing their schedules and statements, Chapter 11 debtors also file a plan that proposes to repay creditors, as well as to restructure debts, reorganize business operations, and / or liquidate some or all of the debtor’s assets. The advantage of receiving a payment under a Chapter 11 plan, rather than a direct Chapter 7 liquidation, is that the debtor will pay more over the course of the plan due to continuing business activities than this. that he would otherwise pay creditors if they were. simply paid by the proceeds from the sale of the debtor’s assets. (In fact, this is a requirement for a Chapter 11 plan to be confirmed.)

Chapter 11 Plans generally replace previous contracts

A Chapter 11 plan is essentially a change in the terms of the agreement or an amendment that modifies the terms of previous contractual agreements that creditors have with the debtor or a proposal that provides for the payment of claims arising from judgments, fees or other non-contractual obligations. Chapter 11 plans may also “assume” or “reject” leases or other “enforceable contracts” (contracts that are not yet terminated) or “assume and assign” leases or enforceable contracts to third parties. Once a Chapter 11 plan is confirmed, the terms of the plan are binding on all parties and take precedence over any terms included in prior agreements to the extent that such agreements are not otherwise provided for and extended in the plan.

After a debtor files their proposed plan, creditors vote to accept or reject it. The debtor must get a certain number of votes accepting the plan for it to be confirmed. If one or more voting creditors reject the plan, the debtor can still “overwrite” the plan and have it confirmed despite the rejecting creditor’s objections. This may cause the debtor to enter into side agreements with certain creditors and give them better treatment in the plan than they might otherwise have received in return for the creditors’ agreement to vote in favor of the plan and hamper the plan. plan on dissenting creditors.

In order for their Chapter 11 plan to be confirmed, the debtor must also meet the legal requirements set out in Section 1129. More information on confirming the plan and objections to confirmation will be included in future blog posts.

Chapter 11 plans come in all shapes and sizes and often offer the most creative way to pay off as much as possible to as many creditors as possible. Plans may include reorganizing the debtor’s business operations to eliminate waste, accommodate bad business decisions, and achieve greater profits in the future; restructure debts to extend loan terms, change the amount or type of collateral, or change payments and interest rates; and the sale of the debtor’s assets and the distribution of the proceeds to creditors.

Motions of the first day

The cases in Chapter 11 often change very quickly. While things are not as bad for small Chapter 11 debtors as they are for debtors with millions or billions in debt, many Chapter 11 debtors will file “first day” claims, so called because they are filed almost immediately after filing for bankruptcy proceedings and hearings on them often take place within days of opening the bankruptcy case. Motions on the first day usually include motions to continue paying employees, motions to continue paying necessary vendors / suppliers, and motions to use cash collateral (i.e. cash on which creditors have collateral). The first day motions hearing usually takes place within the first few days of filing for bankruptcy. Creditors will want to pay close attention to any day one motions that are filed, especially motions to use cash collateral, and be prepared to raise objections if necessary. More information on cash collateral and adequate protection will be provided in future blog posts.

Subchapter V

The new subchapter V of chapter 11 is a unique way to relieve small business debtors. Only debtors with debts of less than approximately $ 2.7 million are eligible to file under subchapter V. However, the CARES law, which was passed in March 2020, temporarily increased this debt limit to 7. , $ 5 million. This increase is expected to end on March 27, 2021; however, Congress is currently considering a bill to further extend the subchapter V debt limit, as well as other changes to the Bankruptcy Code that were included in the CARES Act.

As in other Chapter 11 cases, the Subchapter V debtor retains control of its business operations as a DIP. However, subchapter V cases differ in some respects from other chapter 11 cases. For example, only the debtor can file a plan in subchapter V, while creditors can file plans that compete with the debtor’s plan. debtor in ordinary Chapter 11 cases. In addition, in ordinary Chapter 11 cases, a plan can only be confirmed if a dissenting class of unsecured creditors is paid in full before any payment is made to the creditor’s subordinate creditors. dissident. This is called the “top priority rule”. Plans in subchapter V do not need to meet the absolute priority rule to be confirmed. Subchapter V also provides for the modification of certain mortgages on the principal residence of the debtor when the proceeds of the mortgage have been used in the course of the debtor’s business.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought on your particular situation.

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VELODYNE LIDAR: Management report and analysis of the financial situation and operating results (form 10-K) https://cleangreennappy.co.uk/velodyne-lidar-management-report-and-analysis-of-the-financial-situation-and-operating-results-form-10-k/ https://cleangreennappy.co.uk/velodyne-lidar-management-report-and-analysis-of-the-financial-situation-and-operating-results-form-10-k/#respond Fri, 19 Mar 2021 08:43:47 +0000 https://cleangreennappy.co.uk/velodyne-lidar-management-report-and-analysis-of-the-financial-situation-and-operating-results-form-10-k/ The following discussion of Velodyne's results of operations and financial condition should be read in conjunction with the information set forth in Velodyne's financial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements based upon our current expectations, estimates and projections that involve risks and […]]]>
The following discussion of Velodyne's results of operations and financial
condition should be read in conjunction with the information set forth in
Velodyne's financial statements and the notes thereto included elsewhere in this
Annual Report on Form 10-K. This discussion contains forward-looking statements
based upon our current expectations, estimates and projections that involve
risks and uncertainties. Actual results could differ materially from those
anticipated in these forward-looking statements due to, among other
considerations, the matters discussed under "Cautionary Note Regarding
Forward-Looking Statements" and Item 1A: "Risk Factors."


Overview

Velodyne, the first pure-play lidar company, is a global leader in lidar
technology providing real-time 3D vision for autonomous systems. Our lidar
solutions are advancing the development of safe automated systems throughout the
world, thereby empowering the autonomous revolution by allowing machines to see
their surroundings. Our lidar-based smart vision solutions are also deployed in
many non-automotive applications, including autonomous mobile robots,
UAV/drones, last-mile delivery, precision agriculture, advanced security
systems, and smart city initiatives.

We also license our technology and provide development services to customers and
business partners. Of the more than 300 customers that purchased smart vision
solutions from us and our distributors in the last two fiscal years,
approximately 200 are using our smart vision solutions for the non-automotive
applications. In 2020, we generated approximately 40% of our revenue from sales
to customers deploying our smart vision solutions in non-automotive
applications. In addition, we are transitioning from field programmable gate
arrays to ASICs in order to further improve performance of our products, lower
costs and reduce reliance on any key suppliers.


Impact of COVID-19

The extensive impact of the pandemic caused by the novel coronavirus
("COVID-19") has resulted and will likely continue to result in significant
disruptions to the global economy, as well as businesses and capital markets
around the world. In an effort to halt the outbreak of COVID-19, a number of
countries, states, counties and other jurisdictions have imposed, and may impose
in the future, various measures, including but not limited to, voluntary and
mandatory quarantines, stay-at-home orders, travel restrictions, limitations on
gatherings of people, reduced operations and extended closures of businesses.

The timing of customer orders and our ability to fulfill orders we received was
impacted by various COVID-19 related government mandates across our worldwide
operations. We believe that this reduction in units sold was exacerbated by
COVID-19.We have also witnessed certain current and prospective customers
delaying purchases based on budget constraints or project delays related to
COVID-19. While the broader and long-term implications of the COVID-19 pandemic
on our workforce, operations and supply chain, customer demand, results of
operations and overall financial performance remain uncertain, we continued to
experience disruptions to our business due to the COVID-19 pandemic during the
fourth quarter of 2020.

The impact of COVID-19 and the measures to prevent its spread have had an impact and continue to affect our business in several ways.

•Our workforce. Employee health and safety is our priority. In response to
COVID-19, we established new protocols to help protect the health and safety of
our workforce. The actions include a no-touch temperature scan upon entering our
premises and a policy requiring the use of face masks in our facilities. On the
production floor of our San Jose, California manufacturing facility, we
installed station barriers made of acrylic to separate and protect our
workforce. We implemented global travel restrictions and work-from-home policies
for employees who can accomplish their work remotely, such as those in the
Finance, Marketing, and Communications teams. We continue to stay up-to-date and
follow the county and CDC guideline regarding requirements for a healthy work
environment.

•Operations and supply chain. As a result of COVID-19, we experienced some
production delays in the second quarter and early in the third quarter of 2020
due to travel restrictions to Thailand, the location of one of our key
manufacturing partners. The factory in San Jose was closed briefly in March
2020, then re-opened with strict health precautions in place. The San Jose
factory continued to produce the major lidar products required for the operation
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of our business and our manufacturing partners continue to produce lidar sensors
on our behalf. In March 2020, we engaged a third party logistics partner that
has allowed us to continue to ship finished goods from our San Jose factory. In
the fourth quarter of 2020, the San Jose factory confirmed its first case of
COVID-19, and further cases have been reported. This reduced production
capabilities at our manufacturing sites later in the quarter and impaired our
ability to fulfill certain customer orders in December 2020. A substantial
portion of these deliveries are expected to be fulfilled in the first quarter of
2021 and we are implementing measures to meet anticipated customer demand in
2021. As part of our COVID-19 mitigation efforts, we performed continuous audits
of our supply chain. Early in the pandemic, we learned that certain key
suppliers were operating with limited staffing. Although we believe these key
suppliers are now back to full staffing and capacity, we identified alternative
sources of key suppliers and we are now able to purchase key materials from
these alternative sources. Supply chain disruption due to COVID-19 continues to
be minimal and we had no resultant parts shortages in the fourth quarter of
2020.

•Demand for our products. Demand for our products in the third and fourth
quarters of 2020 was less than that in the corresponding period of 2019. We
believe that this decline in customer demand was, in part, the result of
customers impacted by COVID-19 and delayed purchasing decisions. While we
continue to engage with current and potential customers, we believe some
customers may delay purchases from us because their development programs may
also be delayed as a result of COVID-19. We believe that demand for our products
remains strong, but COVID-19 resulted in some transactions we expected to occur
earlier in 2020 being delayed until 2021.

•Positive customer trend in the pandemic. The global pandemic accelerated a few
key robotic programs, which we believe will offset the impact of some of our
customers' delayed purchasing decisions. The accelerated programs include robots
which disinfect the air and surfaces, providing more sanitized environments, and
touchless delivery robots for food and medical supplies.

•Liquidity, working capital, and the CARES Act. On March 27, 2020, the U.S.
government enacted the CARES Act. On April 8, 2020, we received loan proceeds of
$10.0 million under the CARES Act's Paycheck Protection Program ("PPP") to help
us offset delays in production and customer purchases. The principal and accrued
interest are forgivable after 24 weeks as long as the borrower uses the loan
proceeds for eligible purposes, including payroll, benefits, rent and utilities,
and maintains its payroll levels and that approval is received from the relevant
government entity. The unforgiven portion of the PPP loan is payable over two
years at an interest rate of 1% per annum, with a deferral of interest payments
for ten months after the expiration of the 24-week covered period.

See point 1A: “Risk factors” for a more in-depth discussion of the possible impact of COVID-19 on our business.

Factors affecting our performance

Design wins. We are developing our smart vision solutions as a key enabling
technology for OEMs in automotive and other applications. Because our solutions
must be integrated into a broader platform by the OEM, it is critical that we
achieve design wins with these customers. The time necessary to achieve design
wins varies based on the market and application. The design cycle in the
automotive market tends to be substantially longer and more onerous than in
other markets. Even within the automotive market, achieving a design win with an
automotive OEM takes considerably longer than a design cycle for an aftermarket
application. We consider design wins to be critical to our future success,
although the revenue generated by each design win and the time necessary to
achieve such a win can vary significantly making it difficult to predict our
financial performance.

Pricing, product cost and margins. Our pricing and margins will depend on the
volumes and the features of the solutions we provide to our customers. To date,
most of our revenue has been generated by selling our smart vision solutions
into pre-commercial development phase projects. In general, solutions
incorporated into development-phase products require more complex
configurations, have higher prices and higher gross margins. As our markets
reach maturity and commercialization, we expect prices and margins will
generally decrease. Our commercial-stage customers will require that our smart
vision solutions be manufactured and sold at per-unit prices that enable mass
market adoption. To meet the technological and pricing needs of customers
reaching commercial scale, we are making significant investments in new
solutions for both cost improvements and new features. Our ability to compete in
key markets will depend on the success of these investments and our efforts to
efficiently and reliably produce cost-effective smart vision solutions for our
commercial-stage customers. We have customers with technologies in various
stages of development. We anticipate that our prices will vary by market and
application due to market-specific supply and demand dynamics and product
lifecycles.
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Commercialization of lidar-based applications. Our revenue has been subject to
significant fluctuations. Our customers in pre-commercial development phase may
have purchased their requirements of our products in earlier periods and are not
expected to begin purchasing again in volume unless and until they reach
commercial deployments. As a number of our target markets reach
commercialization, we expect there to be a shift towards higher unit volume at
lower per-unit prices, with more predictable customer demand. We expect that our
results of operations, including revenue and gross margins, will continue to
fluctuate on a quarterly basis for the foreseeable future as our customers
continue research and development projects and begin to commercialize autonomous
solutions that rely on lidar technology. As more customers reach the
commercialization phase and as the market for lidar solutions matures, these
fluctuations in our operating results may become less pronounced. However, in
the near term, our revenue may not grow as we expect until more customers
commercialize their products.

End market concentration. Historically, our revenue has been from a small number
of end markets. For example, in fiscal 2020 and 2019, approximately 57% and 45%,
respectively, of our revenue came from the automotive market, although we had
more than half of our customers from non-automotive markets. We believe our
entry into new markets will continue to facilitate revenue growth and customer
diversification. While we will continue to expand the end markets we serve, we
anticipate that sales to a limited number of end markets will continue to
account for a significant portion of our total revenue for the foreseeable
future. Our end market concentration may cause our financial performance to
fluctuate significantly from period to period based on the success or failure of
the markets in which we compete. Success in an end market, or commercialization,
is uncertain and may develop differently in each case, with unique pricing,
volume and cost dynamics. Additionally, as production scales in order to meet
the demands of commercialization, pricing pressure increases and the amount of
that pressure is expected to vary by market.

Sales volume. A typical design win can generate a wide range of sales volumes
for our solutions, depending on the end market demand for our customers'
products. This can depend on several factors, including the reputation of the
end customer, market penetration, product capabilities, size of the end market
that the product addresses and our end customers' ability to sell their
products. In addition to end market demand, sales volumes also depend on whether
our customer is in the development, commercialization or production phase. In
certain cases, we may provide volume discounts on sales of our solutions, which
may or may not be offset by lower manufacturing costs related to higher volumes.

Continued investment and innovation. We believe that we are the industry-leading
lidar provider with proven designs, extensive product offerings and advanced
manufacturing capabilities. Our financial performance is significantly dependent
on our ability to maintain this leading position. This is further dependent on
the investments we make in research and development. It is essential that we
continually identify and respond to rapidly evolving customer requirements,
develop and introduce innovative new products, enhance and service existing
products and generate active market demand for our products. If we fail to do
this, our leading market position and revenue may be adversely affected, and our
investments in that area will not be recovered.


Components of operating results

Returned

The majority of our revenue comes from the sale of our lidar sensors directly to
end users and through our network of U.S. and international distributors.
Product revenue is recognized when control of the products is transferred to the
customer, which is generally upon shipment. For custom products that require
engineering and development based on customer requirements, revenue is
recognized over time using an output method based on units of product shipped to
date relative to total production units under the contract. We also generate a
portion of our revenue from intellectual property licensing, royalties and the
sale of services related to product development, validation, extended warranty
and product repair services. License revenue is recognized upon delivery of the
intellectual property if there are no substantive future obligations to perform
under the arrangement. Royalties are recognized at the later of the period the
sales occur or the satisfaction of the performance obligation to which some or
all of the royalties have been allocated. As our manufacturing partners to whom
we have licensed our technology start selling to customers we expect royalty
revenue to increase as a percentage of total revenue. Service revenue is
recognized as the services are performed.

Cost of income

Revenue cost includes the cost of manufacturing our lidar sensors, which is primarily comprised of personnel costs directly associated with our manufacturing organization, and amounts paid to our third party contracted manufacturers and

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vendors. Our cost of revenue also includes depreciation and amortization, cost
of component inventory, product testing costs, costs of providing services, an
allocated portion of overhead, facility and IT costs, warranty costs, excess and
obsolete inventory and shipping costs. We expect cost of revenue to increase in
absolute dollars in future periods.

Gross profit and gross margin

Our gross profit in future periods will depend on a variety of factors,
including: market conditions that may impact our pricing; product mix changes
between established products and new products and licenses; excess and obsolete
inventories; our cost structure for manufacturing operations, including
third-party manufacturers, relative to volume; and product support obligations.
Additionally, we believe our transition to an outsourced manufacturing model
will favorably impact our gross profit over time. Our gross margin varies by
product. In addition, our license revenue has lower cost, and therefore it
contributes to higher gross margin. We expect our gross margins to fluctuate
over time, depending on the factors described above.

Functionnary costs

Research and development costs

Research and development expenses consist primarily of personnel-related costs
directly associated with our research and development organization, with the
remainder being prototype expenses, third-party engineering and contractor
costs, an allocated portion of facility and IT costs and depreciation. Our
research and development efforts are focused on enhancing and developing
additional functionality for our existing products and on new product
development, including new releases and upgrades to our lidar sensors. We
expense research and development costs as incurred. We expect our research and
development expenses to increase in absolute dollars as we increase our
investment in software development to broaden the capabilities of our solutions
and introduce new products and features.

Sales and marketing costs

Our sales and marketing expenses consist primarily of personnel-related costs
directly associated with our sales and marketing activities. These include the
cost of sales commissions, marketing programs, trade shows, consulting services,
promotional materials, demonstration equipment, an allocated portion of facility
and IT costs and depreciation. We expect that our sales and marketing expenses
will increase in absolute dollars over time as we hire additional sales and
marketing personnel, increase our marketing activities, grow our domestic and
international operations, and build brand awareness.

General and administrative expenses

General and administrative expenses primarily consist of personnel-related
expenses associated with our general and administrative organization,
professional fees for legal, accounting, and other consulting services, an
allocated portion of facility and IT costs and depreciation. We expect to incur
additional general and administrative expenses as a result of operating as a
public company, including expenses related to compliance with the rules and
regulations of the SEC and stock exchange listing standards, additional
insurance expenses (including directors' and officers' insurance), investor
relations activities and other administrative and professional services. We also
expect to increase the size of our general and administrative function to
support the growth of our business.

Restructuring costs

Restructuring expenses primarily consist of costs of employee termination
benefits incurred in connection with our restructuring plan to downsize the
manufacturing function and related engineering and administrative functions in
our California locations in March 2020. The purposes of this plan are to align
resource requirements with our initiatives to lower our cost structure and to
increase our production capacity by outsourcing a majority of manufacturing
activities. The plan included a reduction of workforce and has been completed as
of December 31, 2020.

Stock-Based Compensation

Prior to the Business Combination, our stock-based compensation expense
primarily related to our stock options. Compensation expense related to RSAs and
RSUs granted under the pre-combination Velodyne's stock incentive plans remained
unrecognized because the liquidity event vesting condition, which is (i) an
initial public offering, or (ii) a Company
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sale event, was not probable of being satisfied. The liquidity-event vesting
condition was not satisfied upon the completion of the Business Combination.
However, on October 30, 2020, the Board waived such condition applicable to the
pre-combination Velodyne RSUs in order to provide the holders of such awards
with the treatment that they would have received if the pre-combination Velodyne
had completed an initial public offering. As a result of this determination, the
Company's outstanding RSUs vested to the extent the applicable service condition
was satisfied as of such date. The vesting of these outstanding RSUs on
October 30, 2020 resulted in approximately $77.5 million of incremental
stock-based compensation expense in the fourth quarter of 2020. It is
anticipated that the Board will waive the liquidity event condition applicable
to the RSAs in 2021. If such determination were to occur with respect to the
outstanding RSAs before the end of 2021, it is expected that the vesting of such
outstanding RSAs would result in approximately $53.0 million of incremental
stock-based compensation expense in the quarter when the determination is made
based on the closing price of our common stock on March 10, 2021.

Interest income and expenses

Interest income consists primarily of income earned on our cash equivalents and
investments in marketable securities. These amounts will vary based on our cash loans,
cash equivalents and short-term investment balances, and also with market rates.
Interest expense consists primarily of interest on our equipment capital leases
and credit facility.

Other Income (Expense), Net

Other income (expense), net consists primarily of foreign currency transaction
gains and losses related to the impact of transactions denominated in a foreign
currency other than the U.S. Dollar. As we have expanded our international
operations, our exposure to fluctuations in foreign currencies has increased,
and we expect this to continue.

Provision for income taxes

Our provision for income taxes consists of federal, state and foreign current
and deferred income taxes. As we expand the scale and scope of our international
business activities, any changes in the United States and foreign taxation of
such activities may increase our overall provision for income taxes in the
future.

We have a full valuation allowance for our net deferred tax assets, including
federal and state net operating loss carryforwards and research and development
credit carryforwards. We expect to maintain this valuation allowance until it
becomes more likely than not that the benefit of our federal and state deferred
tax assets will be realized by way of expected future taxable income.

We believe that we have adequately reserved for our uncertain tax positions,
although we can provide no assurance that the final outcome of these matters
will not be materially different. To the extent that the final outcome of these
matters is different than the amounts recorded, such differences will affect the
provision for income taxes in the period in which such determination is made and
could have a material impact on our financial condition and results of
operations.

Accounting policies and critical estimates

We prepare our consolidated financial statements in accordance with U.S.
generally accepted accounting principles ("GAAP"). The preparation of these
consolidated financial statements requires us to make estimates, assumptions and
judgments that can significantly impact the amounts we report as assets,
liabilities, revenue, costs and expenses and the related disclosures. We base
our estimates on historical experience and other assumptions that we believe are
reasonable under the circumstances. Our actual results could differ
significantly from these estimates under different assumptions and conditions.
We believe that the accounting policies discussed below are critical to
understanding our historical and future performance as these policies involve a
greater degree of judgment and complexity.

Revenue recognition

We adopted the requirements of the new revenue recognition standard, known as
ASC 606, effective January 1, 2018 utilizing the modified retrospective method
of transition. Revenue is recognized upon transfer of control of promised
products and to a small extent services to customers in an amount that reflects
the consideration that we expect to receive in exchange for those products and
services.

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We enter into contracts that can include various combinations of products and
services, which are generally capable of being distinct and accounted for as
separate performance obligations; however, determining whether products or
services are considered distinct performance obligations that should be
accounted for separately versus together may sometimes require significant
judgment.

Transaction price is allocated to each performance obligation on a relative
standalone selling price (SSP) basis. Judgment is required to determine SSP for
each distinct performance obligation. We use a range of amounts to estimate SSP
when products and services are sold separately. In instances where SSP is not
directly observable, we determine SSP using information that may include other
observable inputs available to us.

Accounting for contracts recognized over time under ASC 606 involves the use of
various techniques to estimate total contract revenue and costs. Due to
uncertainties inherent in the estimation process, it is possible that estimates
of costs to complete a performance obligation will be revised in the near-term.
We review and update our contract-related estimates regularly, and record
adjustments as needed. For those performance obligations for which revenue is
recognized using a cost-to-cost input method, changes in total estimated costs,
and related progress towards complete satisfaction of the performance
obligation, are recognized in the period in which the revisions to the estimates
are made.

Changes in judgment from these assumptions and estimates could affect the timing or amount of revenue recognition.

Stock assessment

Inventories are stated at the lower of cost or estimated net realizable value.
Costs are computed under the standard cost method, which approximates actual
costs determined on the first in, first out basis. We record write-downs of
inventories which are obsolete or in excess of anticipated demand. Significant
judgment is used in establishing our forecasts of future demand and obsolete
material exposures. We consider marketability and product life cycle stage,
product development plans, component cost trends, demand forecasts, historical
revenue, and assumptions about future demand and market conditions in
establishing our estimates. If the actual component usage and product demand are
significantly lower than forecast, which may be caused by factors within and
outside of our control, or if there were a higher incidence of inventory
obsolescence because of rapidly changing technology and our customer
requirements, we may be required to increase our inventory writedowns. A change
in our estimates could have a significant impact on the value of our inventory
and our results of operations.

Stock-based compensation

Stock-based compensation consists of expense for stock options, RSAs and RSUs
granted to employees and nonemployees. We estimate the fair value of stock
options granted to employees and directors using the Black-Scholes option
pricing model. We estimate the fair value of RSAs and RSUs based on the fair
market value of our common stock on the date of grant. For market-based
performance RSUs (PRSUs), we use the Monte Carlo simulation model (a binomial
lattice-based valuation model) to determine the fair value of the PRSUs. The
Monte Carlo simulation model uses multiple input variables to determine the
probability of satisfying the market condition requirements. The fair value of
the PRSUs is not subject to change based on future market conditions. The fair
value of stock options and service-condition awards that are expected to vest is
recognized as compensation expense on a straight-line basis over the requisite
service period. We recognize forfeitures as they occur.

Under the pre-combination Velodyne equity incentive plans, we granted RSAs and
RSUs which vest upon the satisfaction of both a time-based condition and a
liquidity event condition. Upon satisfaction of the liquidity event vesting
condition, which is the earlier of (i) an IPO, or (ii) a Company sale event,
RSAs and RSUs for which the service-based condition has been satisfied will vest
immediately, and any remaining unvested RSAs and RSUs will vest over the
remaining service period. Prior to the business combination, no compensation
expense had been recognized for the RSAs and RSUs because the liquidity vesting
condition was not probable of being satisfied. As a result of the Business
Combination, on October 30, 2020, the Board of Directors of Velodyne (the
"Board") waived the liquidity event vesting condition applicable to the
pre-combination Velodyne's RSUs. Therefore, our outstanding RSUs vested to the
extent the applicable service condition was satisfied as of such date. The fair
value of the RSUs were re-measured based on the closing price of our common
stock on October 30, 2020. Stock-based compensation expense for the vested RSUs
as of October 30, 2020 was recognized immediately and compensation expense for
the unvested RSUs are recognized over the remaining service period. If the Board
waives the liquidity event condition applicable to the RSAs, stock-based
compensation for the outstanding RSAs
                                       43
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would be recognized in the period in which such determination is made based on the fair value of our common shares at that date.

Recent accounting statements

In February 2016, the FASB issued Accounting Standards Update (ASU) 2016-02,
Leases (Topic 842), which supersedes FASB Accounting Standards Codification
Topic 840, Leases (Topic 840), and provides principles for the recognition,
measurement, presentation and disclosure of leases for both lessees and lessors.
Among its provisions, this standard requires lessees to recognize right-of-use
assets and lease liabilities on the balance sheets for operating leases, and
also requires additional qualitative and quantitative disclosures about lease
arrangements. Topic 842 is effective for emerging growth companies for fiscal
years beginning after December 15, 2020, and interim periods within fiscal years
beginning after December 15, 2021. We expect to adopt the new standard in the
first quarter of 2021 using the modified retrospective method, under which we
will apply Topic 842 to existing and new leases as of January 1, 2021, but prior
periods will not be restated and will continue to be reported under Topic 840
guidance in effect during those periods. We are currently evaluating the impact
the adoption of these ASUs will have on our financial statements and related
disclosures. We expect to recognize a right-of-use asset and corresponding lease
liability for the lease portfolio to be recorded on our consolidated balance
sheet upon adoption. No material impact is expected with respect to our
consolidated statements of operations or cash flows.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on
Financial Instruments, which has subsequently been amended by ASU No. 2018-19,
ASU No. 2019-04, ASU No. 2019-05, and ASU No. 2019-11. The objective of the
guidance in ASU 2016-13 is to allow entities to recognize estimated credit
losses in the period that the change in valuation occurs. ASU 2016-13 requires
an entity to present financial assets measured on an amortized cost basis on the
balance sheet net of an allowance for credit losses. Available for sale and held
to maturity debt securities are also required to be held net of an allowance for
credit losses. For emerging growth companies, the standard is effective for
fiscal years beginning after December 15, 2022, including interim periods within
those fiscal years. Early adoption is permitted. We expect to adopt the new
standard in the first quarter of 2023 and are currently evaluating the impact
this standard will have on our consolidated financial statements and related
disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):
Simplifying the Accounting for Income Taxes. This standard simplifies the
accounting for income taxes by, among other things, eliminating certain
exceptions related to the approach for intra-period tax allocation, the
methodology for calculating income taxes in an interim period and the
recognition of deferred tax liabilities for outside basis differences. ASU
2019-12 is effective for public business entities for fiscal years beginning
after December 15, 2020, with early adoption permitted. Upon adoption, the
Company must apply certain aspects of this standard retrospectively for all
periods presented while other aspects are applied on a modified retrospective
basis through a cumulative-effect adjustment to retained earnings as of the
beginning of the fiscal year of adoption. The Company expects to adopt the new
standard in 2021. The adoption of this new standard is not expected to have a
significant effect on our consolidated financial statements.

In October 2020, the FASB issued ASU 2020-10, Codification Improvements, which
updates various codification topics by clarifying or improving disclosure
requirements to align with the SEC's regulations. ASU 2020-10 is effective for
public companies, other than smaller reporting companies, for fiscal years
beginning after December 15, 2020. For all other entities, ASU 2020-10 is
effective for fiscal years beginning after December 15, 2021, and interim
periods beginning after December 15, 2022. We are currently evaluating the
impact of adoption of ASU 2020-10 on our consolidated financial statements and
related footnote disclosures.
                                       44
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Results of operations

The results of operations presented below should be considered in conjunction with the consolidated financial statements and the notes appearing elsewhere in this prospectus. The following table presents our consolidated operating results and as a percentage of sales for the periods presented:

                                                       Year Ended December 31,                                   Year Ended December 31,
                                             2020                2019               2018               2020                2019               2018
                                                           (In thousands)                                  (As a percentage of total revenue)
Revenue:
Product                                  $   68,355$  81,424$ 132,933                  72  %              80  %              93  %
License and services                         27,007             19,974             10,013                  28  %              20  %               7  %
Total revenue                                95,362            101,398            142,946                 100  %             100  %             100  %
Cost of revenue:
Product                                      69,115             69,903            111,081                  73  %              69  %              77  %
License and services                          1,131              1,727                985                   1  %               2  %               1  %
Total cost of revenue (1)                    70,246             71,630            112,066                  74  %              71  %              78  %
Gross profit                                 25,116             29,768             30,880                  26  %              29  %              22  %
Operating expenses (1):
Research and development                     88,080             56,850             51,993                  92  %              56  %              36  %
Sales and marketing                          31,753             21,873             22,137                  33  %              22  %              16  %
General and administrative                   65,732             20,058             12,902                  69  %              19  %               9  %
Gain on sale of assets
held-for-sale                                (7,529)                 -                  -                  (8) %               -  %               -  %
Restructuring                                   984                  -                  -                   1  %               -  %               -  %
Total operating expense                     179,020             98,781             87,032                 187  %              97  %              61  %
Operating loss                             (153,904)           (69,013)           (56,152)               (161) %             (68) %             (39) %
Interest income                                 152              1,146                630                   -  %               1  %               -  %
Interest expenses                              (106)               (77)               (14)                  -  %               -  %               -  %
Other income (expense), net                     (90)                35               (136)                  -  %               -  %               -  %
Loss before income taxes                   (153,948)           (67,909)           (55,672)               (161) %             (67) %             (39) %
Provision for (benefit from)
income taxes                                 (4,084)              (683)             6,628                  (4) %              (1) %               5  %
Net loss                                 $ (149,864)$ (67,226)$ (62,300)               (157) %             (66) %             (44) %



(1) Includes stock-based compensation expense as follows:

                                                      Year Ended December 31,
                                                     2020            2019       2018
                                                           (In thousands)
Cost of revenue                               $     7,417           $   -      $   -
Research and Development                           37,030              97         93
Sales and Marketing                                14,773               -          -
General and administrative                         32,280              38        114
Total stock-based compensation expense        $    91,500$ 135

$ 207


Prior to the Business Combination, compensation expense related to RSAs and RSUs
granted under the pre-combination Velodyne's stock incentive plans remained
unrecognized because the performance vesting condition, which is (i) an initial
public offering, or (ii) a Company sale event, was not probable of being met. As
a result of the Business Combination, on October 30, 2020, the Board waived the
liquidity event vesting condition applicable to the pre-combination Velodyne's
RSUs. Therefore, our outstanding RSUs vested to the extent the applicable
service condition
                                       45
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was satisfied as of such date. The vesting of these outstanding RSUs on
October 30, 2020 resulted in approximately $77.5 million of incremental
stock-based compensation expense in the fourth quarter of 2020. It is
anticipated that the Board will waive the liquidity event condition applicable
to the RSAs in 2021. If such determination were to occur with respect to the
outstanding RSAs, it is expected that the vesting of such outstanding RSAs would
result in significant incremental stock-based compensation expense in the
quarter when the determination is made based on the closing price of our common
stock as of such date.

Comparison of completed years December 31, 2020 and 2019

Revenue
                                               Year Ended December 31,            Change        Change
                                                 2020               2019             $            %
                                                       (Dollars in thousands)
  Revenue:
  Products                               $     68,355$  81,424$ (13,069)       (16) %
  License and services                         27,007               19,974          7,033         35
  Total                                  $     95,362$ 101,398$  (6,036)        (6)

  Revenue by geographic location:
  North America                          $     41,228$  49,634$  (8,406)       (17) %
  Asia and Pacific                             39,310               28,791         10,519         37
  Europe, Middle East and Africa               14,824               22,973         (8,149)       (35)
  Total                                  $     95,362$ 101,398$  (6,036)        (6)



Total revenue decreased by $6.0 million, or 6%, to $95.4 million for 2020 from
$101.4 million for 2019. The $13.1 million decrease in product revenue reflected
a decrease of $36.0 million related to reduction in average selling price for
lidar sensors and a decrease of approximately $3.9 million related to reduction
in total units sold as a result of the timing of customer demand related to
their programs, partially offset by $8.9 million increase due to the mix of
sensors sold, an increase of $11.1 million related to a one-time stocking fee, a
$4.1 million one-time refund to a related party customer in September 2019, and
an increase of $2.3 million attributable to higher sales of refurbished units
and parts. The timing of customer orders and our ability to fulfill orders we
received was impacted by various COVID-19 related government mandates across our
worldwide operations. The reduction in average selling price reflected our
continued objective to drive additional adoption of our smart vision solutions
in multiple end markets. Our revenue has been subject to significant
fluctuations. Our customers in pre-commercial development phase may have
purchased their requirements of our products in earlier periods and are not
expected to begin purchasing again in volume unless and until they reach
commercial deployments. As a number of our target markets reach
commercialization, we expect there to be a shift towards higher unit volume at
lower per-unit prices, with more predictable customer demand. The $7.0 million
increase in license and service revenue primarily reflected a $12.0 million
increase in license revenue driven by the recent cross-license agreements. The
increase in license revenue was partially offset by a $5.0 million decrease in
product development and repair services revenue.

The $8.4 million decrease in North America revenue for 2020 was due to a $9.0
million reduction in license revenues, plus a decrease of $6.7 million related
to volume decreases due to the timing of customer programs, a decrease of $12.6
million due to reduction of average selling price of units sold and a decrease
of $1.6 million for repair services, partially offset by an increase of $5.1
million as a result of the mix of units sold, a $2.3 million increase in
refurbished units sold, an
increase of $3.7 million for engineering services and an increase of $11.1
million related to a one-time stocking fee. The $10.5 million increase in
Asia-Pacific revenue was primarily due to a $21.4 million increase in license
revenue from our recent patent cross license agreements, a $4.1 million one-time
refund to a related party customer in September 2019, and an increase of
approximately $2.0 million related to volume, partially offset by a decrease of
approximately $10.1 million due to reduction of average selling price of units
sold and a $5.0 million one-time non-recurring engineering fee in June 2019. The
$8.1 million decrease in Europe, Middle East and Africa revenue was due to a
decrease of $13.3 million due to reduction of average selling price, partially
offset by an increase of $0.8 million related to volume and a $4.5 million
increase related to the mix of sensors sold.
                                       46
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Cost of revenues and gross margin

                                          Year Ended December 31,            Change       Change
                                         2020                  2019            $            %
                                                 (Dollars in thousands)
         Cost of revenue:
         Product                    $    69,115$ 69,903$   (788)        (1) %
         License and services             1,131                1,727

(596) (35)%

         Total cost of revenue      $    70,246$ 71,630$ (1,384)        (2) %
         Gross margin                        26   %               29  %



Cost of revenue decreased by $1.4 million, or 2%, to $70.2 million for 2020 from
$71.6 million for 2019. The $0.8 million product cost reduction was primarily
driven by decreases of $11.9 million in factory overhead and direct cost of
manufacturing, $4.0 million reduction in warranty expense and $1.2 million from
lower sales volume, partially offset by increases of $7.4 million in stock-based
compensation, $3.9 million in excess and obsolete inventory and scrap expenses
and $4.6 million related to product mix. License and services cost of revenue
decreased due to a decrease in repair services cost.

Gross margin decreased from 29% for 2019 to 26% for 2020. The decrease in gross
margin was primarily due to $7.4 million stock-based compensation expense. We
expect to decrease manufacturing labor and overhead costs as we outsource
production to our contract manufacturing partners, with the objective of
reducing the per unit cost of revenue.

Operating Expenses
                                                  Year Ended December 31,            Change       Change
                                                    2020                2019           $            %
                                                         (Dollars in thousands)
Research and development                    $      88,080$ 56,850$ 31,230         55  %
Sales and marketing                                31,753              21,873         9,880         45
General and administrative                         65,732              20,058        45,674        228
Gain on sale of assets held-for-sale               (7,529)                  -        (7,529)          N/A
Restructuring                                         984                   -           984           N/A
Total operating expenses                    $     179,020$ 98,781$ 80,239         81



Research and Development

R&D expenses increased by $31.2 million, or 55%, to $88.1 million for 2020 from
$56.9 million for 2019. The increase was primarily due to increases of $36.9
million in stock-based compensation expense, $2.3 million in allocated facility
and IT expenses, and $0.6 million in depreciation expense, partially offset by
decreases of $6.8 million in prototype product development costs, $0.4 million
in travel expenses, and $0.8 million in personnel related costs, mainly driven
by manufacturing related restructuring activities.
Sales and Marketing

Sales and marketing expenses increased by $9.9 million, or 45%, to $31.8 million
for 2020 from $21.9 million for 2019. The increase was primarily attributable to
$14.8 million stock-based compensation expense, and $0.2 million increase in
commission expense, partially offset by a decrease of $2.3 million in travel and
trade show expenses, a decrease of $1.1 million in allocated facility and IT
expenses, a decrease of $0.7 million in depreciation expense and a decrease of
$0.7 million in demonstration product expense.
General and Administrative

General and administrative expenses increased by $45.7 million, or 228%, to
$65.7 million for 2020 from $20.1 million for 2019. The increase was primarily
attributable to increases of $32.2 million in stock-based compensation expense,
$7.2 million in legal and professional services, $1.4 million in
personnel-related costs, and a $3.5 million write-off of our deferred initial
public offering costs.
                                       47
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Gain on Sale of Assets Held-for-Sale
In March 2020, we reclassified the then carrying value of $4.7 million related
to our Morgan Hill properties previously reported as property, plant and
equipment to assets held for sale and included as other current assets in our
consolidated balance sheets. On July 2, 2020, we sold the properties to a
third-party buyer for $12.3 million and recorded a gain of $7.5 million in 2020.


Restructuring

In March 2020, we initiated a restructuring plan to downsize the manufacturing
function and related engineering and administrative functions in our California
locations. The plan included a reduction in our workforce and has been completed
as of December 31, 2020. As a result of the restructuring program, we incurred
restructuring charges totaling $1.0 million for 2020, primarily related to
employee severance related costs.

Interest income, interest expense and other income (expense), net

                                         Year Ended December 31,            Change      Change
                                            2020                2019          $           %
                                                (Dollars in thousands)
           Interest income         $      152$ 1,146$ (994)       (87) %
           Interest expense              (106)                    (77)        (29)        38
           Other expense, net             (90)                     35        (125)      (357)

Interest income was $ 0.2 million in 2020 compared to $ 1.1 million in 2019. The decrease is mainly related to a decrease in our average balances of cash, cash equivalents and short-term investments in 2020.

Interest expense was primarily related to our capital leases and was insignificant for all periods presented.

Other income (expense), net was insignificant for all periods presented. The
changes were primarily related to foreign exchange gain or loss resulting from
foreign currency exchange rate fluctuations during 2020 and 2019.

Income Taxes
                                           Year Ended December 31,          Change        Change
                                            2020              2019             $            %
                                                   (Dollars in thousands)

Loss before income taxes (153,948) $(67,909) $(86,039) $ 127%

        Benefit from income taxes            (4,084)           (683)         (3,401)       498  %
        Effective tax rate                      2.7  %          1.0  %



We are subject to income taxes in the United States, China and Germany. Our
effective tax rate changed from 1.0% in 2019 to 2.7% in 2020. This change was
primarily due to the $6.7 million tax benefit related to the release of a
valuation allowance associated with carrying back a portion of our 2019 net
operating losses to 2017 that is allowed by the Coronavirus Aid, Relief, and
Economic Security (CARES) Act, partially offset by a $2.5 million tax expense
related to a Chinese foreign income withholding tax.

Enacted on March 27, 2020, the CARES Act provides emergency assistance and
health care response for businesses affected by the 2020 coronavirus pandemic.
The CARES Act, among other things, permits net operating loss carryovers and
carrybacks to offset 100% of taxable income for taxable years beginning before
2021. Additionally, the CARES Act allows net operating losses incurred in 2018,
2019 and 2020 to be carried back to each of the five preceding taxable years to
generate a refund of previously paid income taxes. In April 2020, we filed a
claim to carryback a portion of our 2019 net operating losses to 2017 and
received a $7.1 million tax refund in May 2020. As of December 31, 2020, we had
$173.5 million of U.S. federal and $105.5 million of state net operating loss
carryforwards available to reduce future taxable income, which will be carried
forward indefinitely for U.S. federal tax purposes and will expire beginning in
2028 through 2040 for state tax purposes.
                                       48
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Comparison of completed years December 31, 2019 and 2018

Revenue
                                               Year Ended December 31,            Change        Change
                                                 2019               2018             $            %
                                                       (Dollars in thousands)
  Revenue:
  Products                               $      81,424$ 132,933$ (51,509)       (39) %
  License and services                          19,974              10,013          9,961         99
  Total                                  $     101,398$ 142,946$ (41,548)       (29)

  Revenue by geographic location:
  North America                          $      49,634$  84,541$ (34,907)       (41) %
  Asia and Pacific                              28,791              39,770        (10,979)       (28)
  Europe, Middle East and Africa                22,973              18,635          4,338         23
  Total                                  $     101,398$ 142,946$ (41,548)       (29)



Total revenue decreased by $41.5 million, or 29%, to $101.4 million for 2019,
from $142.9 million for 2018. The product revenue decreased by $51.5 million and
license and service revenue increased by $10.0 million. The decrease in product
revenue was primarily due to a decrease of approximately $36.3 million, driven
by the mix of products sold towards our lower-priced sensors, and a decrease of
approximately $7.8 million related to a reduction in average selling price and a
decrease of approximately $2.5 million driven by lower unit volume. In addition,
we issued a $4.1 million one-time refund to a related party customer in order to
compensate them for unforeseen challenges associated with the use of certain new
products purchased from us in 2018. Starting in 2018, we strategically reduced
the price of our higher volume products to continue to drive additional adoption
of our smart vision solutions in multiple end markets. Our overall unit volume
remained consistent in 2019 across an increased customer base. The increase in
license and services revenue was primarily due to higher services revenue
related to product validation and repair services, and to a lesser extent,
increases in product licensing related revenue.

The $34.9 million decrease in North America revenue was due to a decrease of
approximately $18.3 million due to reduction in volume of units sold to existing
customers driven by customer program timing, coupled with a decrease of
approximately $14.7 million driven by the mix of products sold towards our
lower-priced sensors, and a decrease of approximately $4.3 million due to
decrease in average selling price of units sold, partially offset by an increase
of $2.5 million in license and service revenue. The $11.0 million decrease in
Asia-Pacific revenue was primarily due to a decrease of approximately $17.5
million due to change in mix of products sold, and a $4.1 million one-time
refund to a related party customer, partially offset by an increase of $1.6
million related to increased sales volume and an increase of $6.6 million in
services revenues. The $4.3 million increase in Europe, Middle East and Africa
revenue was driven by an increase of approximately $10.8 million due to an
increase in purchasing volume from customers, partially offset by the impact of
a decrease of approximately $4.3 million driven by reduction in average selling
price, and a decrease of approximately $2.1 million driven by a change in mix of
products sold.

Cost of revenues and gross margin

                                         Year Ended December 31,          Change        Change
                                          2019              2018             $            %
                                                 (Dollars in thousands)
          Cost of revenue:
          Product                    $    69,903$ 111,081$ (41,178)       (37) %
          License and services             1,727              985             742         75  %
          Total cost of revenue      $    71,630$ 112,066$ (40,436)       (36) %
          Gross margin                        29   %           22  %



                                       49
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Cost of revenue decreased by $40.4 million, or 36%, to $71.6 million for 2019,
from $112.1 million for 2018. The decrease in cost of revenue was driven by
decrease in $41.2 million of product revenue and offset by increase in $0.7
million license and service cost. The decrease of product cost primarily due to
an approximately $8.3 million decrease in product costs resulting from the
decrease in product volume and change in product mix during 2019, an
approximately $13.6 million decrease in personnel costs related to manufacturing
labor and overhead from manufacturing process improvements, and an approximately
$16.0 million in material cost and utilization savings.
Gross margin increased from 22% for 2018 to 29% for 2019. The increase was
primarily due to a change in revenue mix with an increase in license and service
revenue, savings on material cost and utilization and increased resource
utilization in 2019 resulting from the improvements we made in our manufacturing
processes in 2018.

Operating Expenses

                                      Year Ended December 31,             Change       Change
                                         2019                2018           $            %
                                              (Dollars in thousands)
Research and development        $      56,850$ 51,993$  4,857          9  %
Sales and marketing                    21,873               22,137          (264)        (1)
General and administrative             20,058               12,902         7,156         55
Total operating expenses        $      98,781$ 87,032$ 11,749         13



Research and Development
Research and development expenses increased by $4.9 million, or 9%, to $56.9
million for 2019, from $52.0 million for 2018. The increase was primarily
attributable to an increase of $4.7 million in personnel related costs, mainly
driven by an increase in employee headcount contributed primarily to the
acquisition of Mapper in July 2019, an increase of $1.9 million in allocated
facility and IT expenses, and an increase of $0.8 million in depreciation
expense, partially offset by a decrease of $3.0 million in prototype product
development costs and a decrease of $0.3 million in professional services.
Sales and Marketing
Sales and marketing expenses decreased by $0.3 million, or 1%, to $21.9 million
for 2019 from $22.1 million for 2018. The decrease was primarily attributable to
a reduction of $1.0 million in personnel-related costs, mainly driven by a
decrease in employee headcount, a decrease of $0.2 million in professional
services, partially offset by increases of $0.7 million in demonstration product
expenses and $0.2 million in travel and trade show expenses.
General and Administrative
General and administrative expenses increased by $7.2 million, or 55%, to $20.1
million for 2019 from $12.9 million for 2018. The increase was primarily
attributable to an increase of $7.8 million in legal, accounting and other
professional services, partially offset by a decrease of $0.5 million in
personnel-related costs, mainly driven by a decrease in employee headcount, a
decrease of $0.2 million in depreciation and other allocated expenses.

Interest income, interest expense and other income (expense), net

                                              Year Ended December 31,             Change      Change
                                                  2019                 2018         $           %
                                                     (Dollars in thousands)
    Interest income                    $        1,146$ 630$  516         82  %
    Interest expense                              (77)                  (14)        (63)       450
    Other income (expense), net                    35

(136) 171 (126)

Interest income was $1.1 million in 2019 compared to $0.6 million in 2018. The
increase was primarily related to an increase in our invested funds due to the
proceeds from the Series B and B-1 preferred stock financing completed in
September 2018 and October 2019, respectively.
                                       50
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Other income (expense), net was $35,000 in 2019 compared to $(136,000) in
2018. The change was primarily related to foreign exchange gain or loss
resulting from foreign currency exchange rate fluctuations in 2019 and 2018.

Income Taxes
                                                      Year Ended December 31,                Change              Change
                                                      2019                 2018                $                    %
                                                                (Dollars in thousands)
Loss before income taxes                         $    (67,909)$ (55,672)$ (12,237)                   22  %
Provision for (benefit from) income taxes                (683)             6,628             (7,311)                 (110) %
Effective tax rate                                        1.0  %           (11.9) %



We are subject to income taxes in the United States, China and Germany. Our
effective tax rate increased from (11.9)% in 2018 to 1.0% in 2019. This change
was primarily due to taxes incurred by foreign subsidiaries and state taxes and
partially offset by release of income tax reserves. Due to the change in our
valuation allowance on our federal and state deferred tax assets, our provision
for income taxes in 2018 includes the effect of establishing a full valuation
allowance for the existing net deferred tax assets. We also continue to provide
a full valuation allowance on our net deferred tax assets in 2019.

Liquidity and Capital Resources
Sources of Liquidity

As of December 31, 2020, we had cash, cash equivalents and short-term
investments totaling $350.3 million, which were held for working capital
purposes. Our cash equivalents and short-term investments are comprised of money
market funds, U.S. government and agency securities, corporate debt securities
and commercial paper. To date, our principal sources of liquidity have been
payments received from sales to customers and the net proceeds we received
through the Business Combination, PIPE offering and private placements of the
pre-combination Velodyne convertible preferred stock. In 2020, we received
$247.0 million in net proceeds from the Business Combination and PIPE offering
on September 29, 2020 and $73.7 million in net proceeds from the exercises of
our warrants. In April 2020 and October 2019, we received $19.9 million and
$49.8 million, respectively, in net proceeds from the sale of our Series B-1
convertible preferred stock. In 2021, we received an additional $89.3 million
from the exercises of our warrants as of March 10, 2021.

In January 2020, we entered into a loan and security agreement with a financial
institution which provides a $25.0 million revolving line of credit (the "2020
Revolving Line"), as amended in September 2020 and December 2020, with an option
to increase the credit limit up to an additional $15.0 million with the bank's
approval (Incremental Revolving Line). As part of the 2020 Revolving Line, there
is a letter of credit sublimit of $5.0 million. The advances under the 2020
Revolving Line bear interest at a rate per annum equal to the prime rate plus an
applicable margin of 1.5% for prime rate advances, or LIBOR rate plus an
applicable margin of 2.5% for LIBOR advances. The unused revolving line facility
fee is 0.15% per annum of the average unused portion of the Revolving Line. In
addition, there is a $50,000 non-refundable commitment fee if we exercise the
Incremental Revolving Line option. The revolving line of credit is secured by
certain of our assets. The 2020 Revolving Line matured on February 27, 2021 and
we intend to extend for one additional year. There were no outstanding
borrowings under the 2020 Revolving Line as of December 31, 2020.

On April 8, 2020, we received loan proceeds of $10.0 million under the CARES
Act's Paycheck Protection Program ("PPP"). The principal and accrued interest
are forgivable after 24 weeks as long as the borrower uses the loan proceeds for
eligible purposes, including payroll, benefits, rent and utilities, and
maintains its payroll levels and that approval is received from the relevant
government entity. The unforgiven portion of the PPP loan is payable over two
years at an interest rate of 1% per annum, with a deferral of interest payments
for ten months after the expiration of the 24-week covered period.

At July 2, 2020, we sold our Morgan hill building to a third party and received the net proceeds of $ 12.3 million.

We have incurred negative cash flows from operating activities and significant
losses from operations in the past as reflected in our accumulated deficit of
$315.7 million as of December 31, 2020. We expect to continue to incur operating
losses at least for the next 12 months due to the investments that we intend to
make in our business and, as a result, we may require additional capital
resources to grow our business. We believe that current cash, cash equivalents,
short-term investments and available borrowing capacity under the revolving
credit facility will be sufficient to fund our operations for
                                       51
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at least the next 12 months. Our future capital requirements, however, will
depend on many factors, including our lidar sales volume, the timing and extent
of spending to support our R&D efforts in smart vision technology, the expansion
of sales and marketing activities, and market adoption of new and enhanced
products and features. We may in the future enter into arrangements to acquire
or invest in complementary businesses, services, and technologies, including
intellectual property rights. From time to time, we may seek to raise additional
funds through equity and debt. If we are unable to raise additional capital when
desired and on reasonable terms, our business, results of operations, and
financial condition be adversely affected.

Summary of cash flow

The following table summarizes our cash flows for the periods presented:

                                                Year Ended December 31,
                                          2020           2019

2018

                                                    (In thousands)
Net cash provided by (used in):
Operating activities                   $ (68,437)$ (43,230)$ (30,503)
Investing activities                    (134,527)        29,544        (19,383)
Financing activities                     347,726         49,790         44,158



Operating Activities

During 2020, operating activities used $68.4 million in cash. The primary
factors affecting our operating cash flows during this period were our net loss
of $149.9 million, impacted by our non-cash net expense of $96.6 million
primarily consisting of stock-based compensation of $91.5 million, depreciation
and amortization of $8.4 million, write-off of deferred IPO costs of $3.5
million and provision for doubtful accounts of $0.5 million, partially offset by
a gain of $7.5 million from sale of assets held-for-sale. The cash used in
changes in our operating assets and liabilities of $20.6 million which primarily
consists of an increase of $2.6 million in accounts receivable, a decrease of
$6.7 million in accrued expenses and other liabilities due to timing of
payments, and an increase of $11.3 million in unbilled receivables from a
licensing arrangement with a customer. These amounts were partially offset by
cash provided from changes in our operating assets and liabilities of $5.4
million was primarily due to an increase of $9.0 million in contract liabilities
primarily due to deferred revenues from a licensing arrangement, partially
offset by a decrease of $6.1 million in customer deposit. The cash provided from
changes in our operating assets and liabilities also included a decrease of $1.6
million in inventories due to decreased sales volume of certain products, a
decrease of $0.2 million in prepaid and other current assets and an increase of
$0.7 million in accounts payable due to timing of payments.

During 2019, operating activities used $43.2 million in cash. The primary
factors affecting our operating cash flows during this period were our net loss
of $67.2 million, impacted by our non-cash charges of $5.9 million primarily
consisting of depreciation and amortization of $8.0 million, partially offset by
deferred income tax of $2.0 million. The cash provided from changes in our
operating assets and liabilities of $24.3 million was primarily due to an
increase of $13.6 million in accrued expenses and other liabilities due to
timing of payments, a decrease of $9.6 million in accounts receivable and a
decrease of $1.1 million in other noncurrent assets. These amounts were
partially offset by cash used in changes in our operating assets and liabilities
of $6.2 million which primarily consists of an increase of $3.6 million in
prepaid expenses and other current assets, a decrease of $1.7 million in
contract liabilities due to the timing of billings and cash received in advance
of revenue and an increase of $0.9 million in inventories due to decreased sales
volume of certain products.

During 2018, operating activities used $30.5 million in cash. The primary
factors affecting our operating cash flows during this period were our net loss
of $62.3 million, impacted by our non-cash charges of $12.9 million primarily
consisting of depreciation and amortization of $6.8 million and deferred income
tax of $5.8 million. The cash provided from changes in our operating assets and
liabilities of $28.0 million was primarily due to a decrease in inventories of
$21.3 million as we consumed previously purchased inventory, an increase in
contract liabilities of $4.3 million due to the timing of billings and cash
received in advance of revenue and a decrease in accounts receivable of $2.4
million. These amounts were partially offset by cash used in changes in our
operating assets and liabilities of $9.0 million which primarily consists of
decreases of $4.4 million in accounts payable and $2.4 million in accrued
expenses and other liabilities due to timing of payments, and an increase of
$1.3 million in prepaid expenses and other current assets.

                                       52
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Investment activities

During 2020, cash used in investing activities was $134.5 million, which was
primarily used to purchase short-term investments of $145.7 million and purchase
property, plant and equipment of $3.3 million, partially offset by proceeds from
the sale of our Morgan Hill building of $12.3 million and sales and maturities
of short-term investments of $2.2 million.

During 2019, cash provided by investing activities was $29.5 million, which was
primarily from sales and maturities of short-term investments of $62.6 million
and proceeds from repayment of notes receivable from stockholders of $3.5
million, partially offset by cash used to purchase short-term investments of
$28.8 million, purchase property, plant and equipment of $5.2 million and to
acquire Mapper of $2.5 million.

During 2018, cash used in investing activities was $19.4 million, which was
primarily used to purchase short-term investments of $35.3 million and purchase
property, plant and equipment of $6.9 million, partially offset by sales and
maturities of short-term investments of $20.8 million and proceeds from the
cancellation of corporate-owned life insurance policies of $2.1 million.

Our machines and equipment are depreciated over a useful life of approximately five years.

Financing Activities

During 2020, cash provided by financing activities was $347.7 million,
consisting primarily of net proceeds of $247.0 million from the Business
Combination and PIPE offering, $73.7 million from exercises of public warrants,
$19.9 million from issuance of preferred stock and proceeds of $10.0 million
from the PPP loan, partially offset by $1.1 million cash paid for IPO costs and
$1.8 million cash paid for repurchases of common stock.

In 2019, cash from financing activities was $ 49.8 million made up of the net proceeds from the issuance of preferred shares, Series B-1 October 2019.

During 2018, cash provided by financing activities was $44.2 million consisting
of net proceeds of $46.7 million from the issuance of Series B preferred stock
in September 2018, partially offset by $2.5 million use of cash to repurchase
our common stock.

Off-balance sheet arrangements

From December 31, 2020, we have not entered into any off-balance sheet arrangements and have no interests in variable interest entities.

© Edgar Online, source Previews

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Lawmakers still aim to penalize Bright Futures grantees for not taking ‘approved’ majors https://cleangreennappy.co.uk/lawmakers-still-aim-to-penalize-bright-futures-grantees-for-not-taking-approved-majors/ https://cleangreennappy.co.uk/lawmakers-still-aim-to-penalize-bright-futures-grantees-for-not-taking-approved-majors/#respond Fri, 19 Mar 2021 08:43:47 +0000 https://cleangreennappy.co.uk/lawmakers-still-aim-to-penalize-bright-futures-grantees-for-not-taking-approved-majors/ Under pressure from a student-led opposition campaign, lawmakers are expected to revise a controversial Senate proposal that would tie Bright Futures scholarships to a list of job-creating diplomas. The measure (SB 86) was tabled last week before being considered by the Senate Education Committee. The sponsor, Senator Dennis Baxley, R-Ocala, told reporters at the time […]]]>

Under pressure from a student-led opposition campaign, lawmakers are expected to revise a controversial Senate proposal that would tie Bright Futures scholarships to a list of job-creating diplomas.

The measure (SB 86) was tabled last week before being considered by the Senate Education Committee. The sponsor, Senator Dennis Baxley, R-Ocala, told reporters at the time that he was receiving “a lot of different contributions” on the proposal, which he said left him wanting to “hit the brakes.”

Under the bill as originally tabled, students at state colleges and universities would not be eligible for Bright Futures scholarships if they enrolled in degree programs not listed on lists of “approved” programs. Students who did not choose study programs would be eligible for 60 hours of classes covered by the popular scholarship program.

But the Senate Education Committee is expected to consider an amendment on Tuesday that would make significant changes to the bill. Under the amendment tabled by Baxley, Bright Futures scholarships would be “reduced”, not canceled, for students who do not choose an academic discipline deemed promising for employment prospects.

Baxley sent a letter to committee members on Monday outlining some of the changes.

“Rather than creating a list of degrees that lead to jobs, the bill creates a list of degrees that DO NOT lead to jobs. Students who choose a degree or program of study that the BOG has determined will not lead to employment will receive a reduced scholarship amount (not eliminated), ”Baxley wrote, referring to the University System Board of Governors of the ‘State.

The amended plan would require the Board of Governors, the State Board of Education, and the Independent Colleges and Universities of Florida to maintain those lists. The change linking Bright Futures’ eligibility to rosters would take effect in the 2023-2024 academic year, a year later than the original proposed plan. It would also apply to the state’s Benacquisto scholarship program for National Merit Scholars.

The amendment would also require the Board of Governors to develop an online dashboard with data on graduates from various fields of study. The dashboard should include information such as median salary after graduation, average student debt, and debt-to-income ratio.

“I hope the research will show that all or most of the degrees our higher education institutions offer DO lead to jobs. But if there are degrees that don’t, I believe we have a moral obligation to let the student know, ”Baxley wrote to the committee.

If passed, the Baxley Amendment would retain some of the features of the original proposal. One such arrangement would change the current tiered structure of providing Bright Futures support at 75% or 100% of tuition and fees to link scholarship levels to the amount allocated in the state budget.

This part of the bill angered students behind the Save Bright Futures group, which created a website and petitioned against the Senate measure.

“There is so much pending on how much students receive per scholarship. So even if you get approved, even if you work hard to get the scholarship… they don’t guarantee a certain percentage of your tuition, ”Kaylee Duong, a high school student from Orlando who is part of the group, told News Florida Service in an interview last week.

The amendment changes part of the original bill that would reduce the number of credit hours Bright Futures grantees would be entitled to if they earned college credits through an “acceleration mechanism,” like the AP or the international baccalaureate classes in high school.

Baxley wrote in his letter to the Senate Education Committee that the provision would remain, but “the amendment specifies the deduction only if the credit is accepted by the institution and applies to the requirements of a career program or to general training course. “

Senate Speaker Wilton Simpson R-Trilby approved the bill and told reporters last week that the “theme” of the measure would remain even with changes.

“Our concern is whether there are degrees that do not lead to jobs. And so, we’re always going to be looking to reduce the Bright Futures portion of this opportunity if that doesn’t lead to a job, ”Simpson said.

Meanwhile, a house version of Baxley’s bill has not been tabled.

Minority House Co-Leader Evan Jenne D-Dania Beach criticized the proposal as “a horrible idea” but told reporters during a media availability Monday “you still have to be ready for any bill to pass in the House. “

“I think it might be a little more difficult time here than in the Senate,” Jenne said.

–Ryan Dailey, Florida Press Service

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Unfavorable curiosity – What to do together with your financial savings? https://cleangreennappy.co.uk/unfavorable-curiosity-what-to-do-together-with-your-financial-savings/ https://cleangreennappy.co.uk/unfavorable-curiosity-what-to-do-together-with-your-financial-savings/#respond Fri, 19 Mar 2021 08:43:47 +0000 https://cleangreennappy.co.uk/negative-interest-what-to-do-with-your-savings/ An uncommon phenomenon that has occurred throughout the Covid-19 pandemic is the willingness of Irish households to save cash. Whereas lockouts have undoubtedly been very troublesome for many individuals, there are additionally those that have rediscovered the behavior of saving. The pandemic restrictions have meant that some households, which weren’t affected by the lack of […]]]>

An uncommon phenomenon that has occurred throughout the Covid-19 pandemic is the willingness of Irish households to save cash.
Whereas lockouts have undoubtedly been very troublesome for many individuals, there are additionally those that have rediscovered the behavior of saving.
The pandemic restrictions have meant that some households, which weren’t affected by the lack of earnings throughout the pandemic, have put aside cash loans that they might usually have spent within the wider economic system.
Latest stories from the central financial institution point out that Irish family deposits reached a file excessive of 125 billion euros on the finish of 2020. This represents a rise of 13 billion euros in 2020.
To place this in context, that is greater than what was saved over the whole 5 years of the government-backed SSIA program within the early 2000s.

It’s considerably ironic that this financial savings growth has come at a time when rates of interest are at traditionally low ranges. Since 2014 Irish banks have been charged for putting their deposits with the European Central Financial institution and it was inevitable that in some unspecified time in the future they might begin to cross this value on to their prospects.
Banks say they’ll not take in the price of holding prospects’ cash on deposit and should due to this fact cross on the charges. The Financial institution of Eire applies unfavorable charges to specialised accounts similar to pension funds in addition to to SMEs with deposits above a sure threshold.
AIB additionally fees unfavorable charges to some SMEs whereas chopping the charges on most private accounts to zero. Credit score unions are additionally charged for depositing their very own prospects’ deposits in banks. This explains why many have now began to impose limits on the person deposits of their members.
So what must you do if you’re a kind of individuals who find yourself with cash on deposit and by no means report any returns? Begin by taking an in depth take a look at your present monetary scenario.

Are there any costly money owed like a bank card or automotive mortgage which may make sense to pay it off early? Paying off a mortgage early would not at all times make monetary sense, particularly should you’re fortunate sufficient to have a follow-up price.
Then ask your self, do you will have an emergency fund? An emergency fund or “wet day fund” is a reserve of cash that could be wanted to cowl something surprising. It ought to at all times be liquid and simply accessible, and as a basic rule, it ought to comprise the equal of three to 6 months of internet earnings.
For the entire remaining funds, it could be time to contemplate your funding choices. To counter unfavorable or zero rates of interest, buyers might want to think about shifting a few of their money from financial institution deposits to property similar to shares, fixed-rate alternate options and actual property.

Initially, it’s good to decide your threat profile and your time horizon. Take into account whether or not you’re a long-term investor or a short-term saver. For instance, if you’re in your 40s and have $ 100,000, you’d do properly to withdraw your cash from a deposit account and discover your long-term funding choices. Nonetheless, should you’re 25 and saving for subsequent 12 months’s trip, a deposit account could also be a viable choice. All of it will depend on your quick and long run monetary targets.
Many well-known life insurance coverage firms have arrange “easy-to-access” financial savings and funding contracts in an try to draw shoppers who’re sad with deposit charges.

These contracts typically provide a variety of funds throughout the chance spectrum. The sort of funding affords shoppers diversification between asset lessons, which can be crucial.
Investing in this kind of managed fund ought to solely be thought of by buyers who’re keen to depart their money invested for quite a lot of years and as these are investments and never deposit accounts they contain inevitably some degree of threat.
Threat and reward go hand in hand for buyers, so it is crucial for people to find out the extent of threat they’re comfy with.

Inflation is one other issue that depositors ought to be involved about in this kind of low rate of interest atmosphere. Your internet return should continuously beat the prevailing inflation price as a way to get an actual return in your cash.
Thankfully, the inflation price is comparatively low for the time being, however the long-term goal inflation price within the Eurozone is 2%, which suggests leaving your cash on deposit for the long run will doubtless erode its actual worth. over time.
Searching for unbiased monetary recommendation is a should for anybody contemplating leaving the submitting. Why? Banks and constructing societies could have a vested curiosity in holding your funds on deposit or promoting their merchandise to you, which suggests their recommendation is never unbiased. No matter your scenario, it seems like this zero rate of interest atmosphere will proceed for quite a lot of years, so it pays to be totally conversant in your long-term funding choices.

Barry Kerr is the Founder and Managing Director of Wealthwise Monetary Planning which has places of work in Carrick on Shannon, Co Leitrim & Oranmore Co Galway. All particulars and views contained on this article are for informational functions solely and don’t represent recommendation. Wealthwise Monetary Planning makes no illustration as to the accuracy, completeness or relevance of any info and won’t be chargeable for any errors, omissions or losses arising from its use. Wealthwise Monetary Ltd T / A Wealthwise Monetary Planning is regulated by the Central Financial institution of Eire # CI6614. www.wealthwise.ie information@wealthwise.ie

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FNCB BANCORP: Administration report and evaluation of the monetary place and working outcomes (Kind 10-Ok) https://cleangreennappy.co.uk/fncb-bancorp-administration-report-and-evaluation-of-the-monetary-place-and-working-outcomes-kind-10-ok/ https://cleangreennappy.co.uk/fncb-bancorp-administration-report-and-evaluation-of-the-monetary-place-and-working-outcomes-kind-10-ok/#respond Fri, 19 Mar 2021 08:43:47 +0000 https://cleangreennappy.co.uk/fncb-bancorp-management-report-and-analysis-of-the-financial-position-and-operating-results-form-10-k/ The administration report (“administration report”) represents an outline of the monetary place and working outcomes of the DGCNP and must be learn along side our consolidated monetary statements and the associated notes included in part 8 “Statements. Monetary and Supplementary Information ”1A,“ Threat Elements ”in Half I of this Annual Report on Kind 10-Ok. FNCB […]]]>

The administration report (“administration report”) represents an outline of the monetary place and working outcomes of the DGCNP and must be learn along side our consolidated monetary statements and the associated notes included in part 8 “Statements. Monetary and Supplementary Information ”1A,“ Threat Elements ”in Half I of this Annual Report on Kind 10-Ok.


FNCB is within the enterprise of offering customary retail and business banking
companies to people, companies and native governments and municipalities
via 17 full-service department places of work operated by FNCB Financial institution, FNCB's
wholly-owned subsidiary, inside its major market space, Northeastern
Pennsylvania.



FORWARD-LOOKING STATEMENTS



FNCB might now and again make written or oral "forward-looking statements,"
together with statements contained in our filings with the SEC, in our experiences to
shareholders, and in our different communications, that are made in good religion by
us pursuant to the "secure harbor" provisions of the Non-public Securities Litigation
Reform Act of 1995.



These forward-looking statements embody statements with respect to FNCB's
beliefs, plans, aims, objectives, expectations, anticipations, estimates and
intentions, which might be topic to important dangers and uncertainties, and are
topic to vary based mostly on varied components (a few of that are past our
management).  The phrases "might," "may," "ought to," "will," "would," "consider,"
"anticipate," "estimate," "anticipate," "intend," "plan," "challenge," "future" and
comparable expressions are supposed to establish forward-looking statements.



Readers are cautioned that these forward-looking statements are solely predictions
and are topic to dangers, uncertainties, and assumption which might be tough to
predict, together with these underneath "Half I, Merchandise 1A. Threat Elements," and elsewhere in
this Annual Report on Kind 10-Ok. Subsequently, precise outcomes might differ materially
and adversely from these expressed in any forward-looking statements. Readers
are additionally cautioned to not place undue reliance on any forward-looking
statements, which mirror administration's evaluation solely as of the date of this
report, even when subsequently made obtainable by FNCB on its web site or
in any other case.  FNCB doesn't undertake to replace any forward-looking assertion,
whether or not written or oral, which may be made now and again by or on behalf of
FNCB to mirror occasions or circumstances occurring after the date of this report.



CRITICAL ACCOUNTING POLICIES


In getting ready the consolidated monetary statements, administration has made
estimates, judgments and assumptions that have an effect on the reported quantities of property
and liabilities as of the date of the consolidated statements of situation and
outcomes of operations for the intervals indicated. Precise outcomes may differ
considerably from these estimates.



FNCB's accounting insurance policies are basic to understanding administration's
dialogue and evaluation of its monetary situation and outcomes of operations.
Administration has recognized the insurance policies on the dedication of the allowance for
mortgage and lease losses ("ALLL"), securities' valuation and impairment analysis,
the valuation of different actual property owned ("OREO") and revenue taxes to be
essential, as administration is required to make subjective and/or complicated judgments
about issues which might be inherently unsure and might be topic to revision as
new data turns into obtainable.



The judgments utilized by administration in making use of the essential accounting insurance policies
mentioned beneath could also be affected by adjustments and/or deterioration within the financial
surroundings, which can impression future monetary outcomes. Particularly, subsequent
evaluations of the mortgage portfolio, in mild of the components then prevailing, might
end in important adjustments within the ALLL in future intervals, and the shortcoming
to gather on excellent loans may end in elevated mortgage losses. In
addition, the valuation of sure securities in FNCB's funding portfolio
might be negatively impacted by illiquidity or dislocation in marketplaces
leading to considerably depressed market costs thus resulting in impairment
losses.



                                       25

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Contents

Provision for losses on loans and leases


Administration evaluates the credit score high quality of FNCB's mortgage portfolio on an ongoing
foundation, and performs a proper evaluate of the adequacy of the ALLL on a quarterly
foundation. The ALLL is established via a provision for mortgage losses charged to
earnings and is maintained at a stage administration considers enough to soak up
estimated possible losses inherent within the mortgage portfolio as of the analysis
date. Loans, or parts of loans, decided by administration to be uncollectible
are charged off in opposition to the ALLL, whereas recoveries of quantities beforehand charged
off are credited to the ALLL.



Figuring out the quantity of the ALLL is taken into account a essential accounting estimate
as a result of it requires important judgment and using estimates associated to the
quantity and timing of anticipated future money flows on impaired loans, estimated
losses on swimming pools of homogeneous loans based mostly on historic loss expertise,
qualitative components, and consideration of present financial traits and
circumstances, all of which can be inclined to important change. Banking
regulators, as an integral a part of their examination of FNCB, additionally evaluate the
ALLL, and will require, based mostly on their judgments about data obtainable to
them on the time of their examination, that sure mortgage balances be charged off
or require that changes be made to the ALLL. Moreover, the ALLL is
decided, partly, by the composition and dimension of the mortgage portfolio.



The ALLL consists primarily of two parts, a particular element and a
basic element. The particular element pertains to loans which might be categorised
as impaired. For such loans, an allowance is established when the discounted
money flows, collateral worth or observable market worth of the impaired mortgage is
decrease than the carrying worth of that mortgage. The final element covers all
different loans and relies on historic loss expertise adjusted by qualitative
components. The final reserve element of the ALLL relies on swimming pools of
unimpaired loans segregated by mortgage section and threat ranking classes of
"Cross", "Particular Point out" or "Substandard and Accruing." Historic loss components
and varied qualitative components are utilized based mostly on the chance profile in every
threat ranking class to find out the suitable reserve associated to these
loans. Substandard loans on non-accrual standing above the $100 thousand mortgage
relationship threshold and all loans thought-about troubled debt restructurings
("TDRs") are categorised as impaired. Primarily based on its evaluations, administration might
set up an unallocated element that's used to cowl any inherent losses
that exist as of the analysis date, however which can not have been recognized
underneath the methodology.



See Notice 2, "Abstract of Vital Accounting Insurance policies" and Notice 5, "Loans" of
the notes to consolidated monetary statements included in Merchandise 8, "Monetary
Statements and Supplementary Information" to this Annual Report on Kind 10-Ok for
further details about the ALLL.



Securities valuation and depreciation valuation


Administration makes use of varied inputs to find out the honest worth of its funding
portfolio. To the extent they exist, unadjusted quoted market costs in lively
markets (Stage 1) or quoted costs for comparable property or fashions utilizing inputs
which might be observable, both instantly or not directly (Stage 2) are utilized to
decide the honest worth of every funding within the portfolio. Within the absence of
observable inputs or if markets are illiquid, valuation strategies are used to
decide honest worth of any investments that require inputs which might be each
unobservable and important to the honest worth measurement (Stage 3). For Stage
3 inputs, valuation strategies are based mostly on varied assumptions, together with, however
not restricted to, money flows, low cost charges, changes for nonperformance and
liquidity, and liquidation values. A big diploma of judgment is concerned
in valuing investments utilizing Stage 3 inputs. Using totally different assumptions
may have a optimistic or detrimental impact on FNCB's monetary situation or
outcomes of operations. See Notice 4, "Securities" and Notice 15, "Honest Worth
Measurements" of the notes to consolidated monetary statements included in Merchandise
8, "Monetary Statements and Supplementary Information" to this Annual Report on Kind
10-Ok for added details about FNCB's securities valuation strategies.



On a quarterly foundation, administration evaluates particular person funding securities in
an unrealized loss place for aside from short-term impairment ("OTTI"). The
analysis for OTTI requires using varied assumptions, together with however not
restricted to, the size of time an funding's honest worth is lower than e-book
worth, the severity of the funding's decline, any credit score deterioration of the
issuer, whether or not administration intends to promote the safety, and whether or not it's
more-likely-than-not that FNCB can be required to promote the safety previous to
restoration of its amortized value foundation. Debt funding securities deemed to have
OTTI are written down by the impairment associated to the estimated credit score loss,
and the non-credit associated impairment loss is acknowledged in different complete
revenue. FNCB didn't acknowledge any OTTI fees on funding securities for
years ended December 31, 2020 and 2019 throughout the consolidated statements of
revenue.



See Notice 2, "Abstract of Vital Accounting Insurance policies" and Notice 4,
"Securities" of the notes to consolidated monetary statements included in Merchandise
8, "Monetary Statements and Supplementary Information" to this Annual Report on Kind
10-Ok for added details about valuation of securities and administration's
analysis for OTTI.



                                       26

————————————————– ——————————

  Desk of Contents



Different Actual Property Owned



OREO consists of property acquired by foreclosures, abandonment or conveyance of
deed in-lieu of foreclosures of a mortgage, and financial institution premises which might be not used
for operation or for future enlargement. OREO is held on the market and is initially
recorded at honest worth much less estimated prices to promote on the date of acquisition
or switch, which establishes a brand new value foundation. Upon acquisition of the
property via foreclosures, or deed-in-lieu of foreclosures, any adjustment to
honest worth much less estimated promoting prices is recorded to the ALLL. The
dedication is made on a person asset foundation. Financial institution premises not used
for operations or future enlargement are transferred to OREO at honest worth much less
estimated promoting prices with any associated write-down included in non-interest
expense. Subsequent to acquisition, valuations are periodically carried out, and
the property are carried on the decrease of value or honest worth much less estimated value to
promote. Honest worth is decided via exterior value determinations, present letters of
intent, dealer worth opinions or executed agreements of sale, except administration
determines that circumstances exist that warrant an adjustment to the worth. Prices
regarding the event and enchancment of the OREO properties could also be
capitalized; holding interval prices and any subsequent adjustments to the valuation
allowance are charged to expense as incurred.



Revenue Taxes



The aims of accounting for revenue taxes are to acknowledge the quantity of
taxes payable or refundable for the present yr and deferred tax liabilities
and property for the longer term tax penalties of occasions which have been acknowledged
in an entity's monetary statements or tax returns. Judgment is required in
assessing the longer term tax penalties of occasions which have been acknowledged in
FNCB's consolidated monetary statements or tax returns. Fluctuations within the
precise final result of those future tax penalties may impression our consolidated
monetary situation or outcomes of operations.



FNCB data an revenue tax provision or profit based mostly on the quantity of
tax at the moment payable or receivable and the change in deferred tax property and
liabilities. Deferred revenue taxes mirror the online tax results of short-term
variations between the carrying quantities of property and liabilities for monetary
and tax reporting functions. Administration conducts quarterly assessments of all
obtainable optimistic and detrimental proof to find out the quantity of deferred tax
property that may extra seemingly than not be realized. FNCB establishes a valuation
allowance for deferred tax property and data a cost to revenue if administration
determines, based mostly on obtainable proof on the time the dedication is made,
that it's extra seemingly than not that some portion or the entire deferred tax
property is not going to be realized. In evaluating the necessity for a valuation allowance,
administration considers previous working outcomes, estimates of future taxable revenue
based mostly on permitted enterprise plans, future capital necessities and ongoing tax
planning methods. This analysis course of entails important administration
judgment about assumptions which might be topic to vary from interval to interval
relying on the associated circumstances. The popularity of deferred tax property
requires administration to make important assumptions and judgments about future
earnings, the intervals during which gadgets will impression taxable revenue, future
company tax charges, and the applying of inherently complicated tax legal guidelines. The use
of various estimates may end up in adjustments within the quantities of deferred tax
gadgets acknowledged, which can end in fairness and earnings volatility as a result of
such adjustments are reported in present interval earnings. Administration's analysis as
of December 31, 2020 and 2019 concluded that no valuation allowance was
vital for web deferred tax property.



In reference to figuring out the revenue tax provision or profit, administration
considers sustaining liabilities for unsure tax positions and tax methods
that it believes comprise a component of uncertainty. Periodically, administration
evaluates every of FNCB's tax positions and methods to find out whether or not a
legal responsibility for unsure tax advantages is required. As of December 31, 2020 and
2019, administration decided that FNCB didn't have any unsure tax positions
or tax methods and that no legal responsibility was required to be recorded.



See Notice 2, "Abstract of Vital Accounting Insurance policies" and Notice 10, "Revenue
Taxes" of the notes to consolidated monetary statements included in Merchandise 8,
"Monetary Statements and Supplementary Information" to this Annual Report on Kind 10-Ok
for added details about the accounting for revenue taxes.



New accounting directives and new authoritative accounting directives can be adopted within the coming intervals


For data concerning new authoritative accounting steerage adopted by FNCB
throughout the yr ended December 31, 2020 and accounting steerage that FNCB will
undertake in future intervals, see Notice 2, "Abstract of Vital Accounting
Insurance policies" of the notes to consolidated monetary statements included in Merchandise 8,
"Monetary Statements and Supplementary Information" to this Annual Report on Kind
10-Ok.



Affect of the response of COVID-19 and FNCB to the pandemic


In March 2020, the outbreak of the novel Coronavirus Illness 2019 ("COVID-19")
was acknowledged as a pandemic by the World Well being Group. The unfold of
COVID-19 has created a world public well being disaster that has resulted in, and
continues to pose, unprecedented uncertainty, volatility and disruption in
monetary markets and in governmental, business and shopper exercise in the
United States and globally, together with the markets that FNCB serves. Federal,
state and native authorities have responded to the pandemic by
mandating the closure of non-essential companies and faculties, journey
restrictions, limitations on public gatherings, and social distancing
protocols. These governmental restrictions, coupled with worry of contracting the
virus, resulted in a disruption in monetary markets together with the fast decline
in business and shopper exercise, lack of revenues by companies, a extreme
spike in unemployment, world provide chain and market volatility. The federal
authorities has taken a number of actions designed to mitigate the impression of the
financial disruption. Particularly, the Federal Open Market Committee ("FOMC")
responded by aggressively slicing the federal funds goal price 150 foundation factors
in two emergency actions together with a 50-basis level discount on March 3, 2020;
and a 100 foundation level discount on March 15, 2020. The federal funds goal price
remained at 0.00% to 0.25% from this level via December 31, 2020.
Moreover, on March 27, 2020, the Coronavirus Support, Aid, and Financial
Safety ("CARES") Act, a $2.0 trillion legislative bundle, was signed into
regulation. The CARES Act accommodates substantial tax and spending provisions
together with direct monetary assist to American households, in depth emergency funding
for hospitals and medical suppliers, and financial stimulus to considerably
impacted business sectors. Moreover, on December 27, 2020, the Consolidated
Appropriations Act of 2021 ("CA Act") was signed into regulation and licensed extra
than $900 billion in further financial aid to small companies and
shoppers.



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As a monetary establishment, FNCB is taken into account important and has remained open
for enterprise and is working underneath its pandemic preparedness plan. To make sure
the monetary wants of its clients are addressed in a secure and constant
method, the Financial institution's places of work are open for normal enterprise, with administrative,
lending and neighborhood department places of work adhering to federal, state, and native
governmental tips and social distancing mandates. Nonetheless, so as to
restrict the unfold of COVID-19 clients are inspired to make the most of
FNCB's drive-thru services, automated teller machines, Buyer Care heart,
distant deposit seize and on-line banking, together with on-line account opening
and chat capabilities, and cellular banking purposes. FNCB can be offering
the mandatory expertise, when wanted, to its operational employees to work remotely
in a safe surroundings. As of December 31, 2020, FNCB didn't face any materials
useful resource constraints via the implementation of its pandemic preparedness
plan. All year long ended December 31, 2020, FNCB incurred
COVID-19-related bills together with stay-at-home pay, computer-related prices,
cleansing and sanitizing services and security provides, none of which have been
thought-about materials. COVID-19 associated bills are included in non-interest
expense within the consolidated statements of revenue. Moreover, FNCB has not
examined for and has not recognized any materials operational or inner management
challenges or dangers, nor does it anticipate any important challenges to its
potential to keep up its programs and controls, associated to operational adjustments
ensuing from the continued implementation of the pandemic preparedness plan.



Financial institution regulators issued steerage and have inspired banks to work prudently
with, and supply short-term cost lodging to, debtors affected by
COVID-19. Moreover, provisions underneath the CARES Act initially allowed banks
offering debtors with a COVID-19 associated modification to elect to not
classify any such modification as a hassle debt restructuring ("TDR") if the
mortgage was no more than 30 days late at December 31, 2019 and the
modification was executed between March 1, 2020, the date the President of the
United States declared the COVID-19 pandemic a nationwide emergency, and the
earlier of 60 days after the date of termination of this nationwide emergency, or
December 31, 2020. The CA Act prolonged TDR aid supplied underneath Part 4013 of
the CARES Act via January 1, 2022, or 60 days after the termination of the
nationwide emergency. FNCB has utilized, and continues to use, the provisions of
Part 4013 of the CARES Act and is prudently working with debtors affected
by COVID-19 by offering cost lodging and different modifications,
together with however not restricted to, cost deferrals involving both interest-only
or full cost deferral for intervals of as much as six months. Whereas curiosity and
charges will nonetheless accrue to revenue, underneath regular GAAP accounting, ought to eventual
credit score losses on these deferred funds emerge, curiosity revenue and charges
accrued would have to be reversed. Because of this, curiosity revenue in future
intervals might be negatively impacted. Whereas FNCB is unable to find out the
impact of such an impression on its monetary situation or outcomes of operations at
this time, it acknowledges that the sustained financial impression might have an effect on its
debtors' potential to repay in future intervals.



The CARES Act contains the Paycheck Safety Program ("PPP"), a
program administered by the Small Enterprise Administration ("SBA") designed to
assist small- and medium-sized companies via federally assured loans
distributed via banks. These loans have been supposed to ensure as much as 24 weeks
of payroll and different prices to assist these companies stay viable and permit
their staff to pay their payments. As an SBA Lender, the Financial institution actively
participated in PPP loans aiding our small enterprise neighborhood in securing
this essential funding. As of December 31, 2020, FNCB was capable of serve
1,002 small enterprise clients with PPP loans totaling $118.6 million. The CA
Act that was enacted on December 27, 2020 offers an extra $284.6 billion
in PPP funding to small companies, together with debtors that beforehand obtained
a PPP mortgage underneath the primary spherical of funding. On January 19, 2021, FNCB started
originating PPP loans as a part of the second spherical of funding and as of February
28, 2021, has underwritten, submitted and obtained SBA approval for 400 loans
representing roughly $52.7 million in funding. It's FNCB's understanding
that loans funded via the PPP are absolutely assured by the USA
authorities. Ought to these circumstances change, FNCB might be required to
enhance its allowance for mortgage and lease losses associated to those loans
leading to a rise within the provision for mortgage and lease losses.



The preliminary draw interval of the primary spherical of the PPP closed on August 8, 2020,
and the SBA started accepting purposes for forgiveness. FNCB notified and
started offering ongoing help to clients with the forgiveness software
course of. As of December 31, 2020, FNCB had submitted 338 forgiveness
purposes to the SBA for PPP loans totaling $53.9 million and had obtained
approval or funding from the SBA related to a portion of those loans
totaling $40.0 million. Moreover, the CA Act accommodates provisions which have
simplified the forgiveness course of for PPP loans underneath $150 thousand.



The Federal Reserve Financial institution additionally supplied assist lending to small and mid-sized
companies and not-for-profit organizations impacted by the COVID-19 pandemic
via the Important Avenue Lending Program. Particularly, the Important Avenue Enterprise
Lending Program offers for 5 mortgage services with whole potential funding
of as much as $600 billion. The Important Avenue New Mortgage Facility ("MSNLF"), the Important
Avenue Precedence Mortgage Facility ("MSPLF") and the Important Avenue Expanded Mortgage
Facility ("MSELF") are three credit score services that present eligible enterprise
debtors impacted by COVID-19 with financing in quantities starting from $250
thousand to $300 million, relying on the power. Phrases of all three
services embody Federal Reserve Financial institution participation of 95.0%, lender
participation of 5.0%, a maturity of 5 years, principal deferral for 2 years,
curiosity deferral for one yr and an adjustable rate of interest based mostly on one- or
three-month LIBOR plus 300 foundation factors. Equally, the Nonprofit Group
New Mortgage Facility ("NONLF") and the Nonprofit Group Expanded Mortgage
Facility ("NOELF") present eligible not-for-profit organizations with financing
in quantities starting from $250 thousand to $10 million. The Financial institution had obtained
approval from the Federal Reserve Financial institution as a collaborating lender within the Important
Avenue Lending Program. In the course of the second half of 2020, FNCB originated
5 MSPLF loans with an combination principal steadiness of $85.9 million and
retained 5.0% of the excellent principal steadiness or $4.3 million which was
excellent as of December 31, 2020. FNCB engaged an impartial third-party
mortgage evaluate agency to verify passable underwriting and threat administration
practices have been employed by administration within the origination of those loans.



Fallout from the COVID-19 pandemic continues to impression nationwide, regional and
native economies, because the variety of confirmed circumstances spiked on the finish of 2020 into
early 2021. Administration continues to watch the mortgage portfolio so as
to establish potential weak point and observe exposures to debtors and industries
which may be impacted extra acutely than others. Moreover, administration
continues to proactively attain out to particular debtors to supply steerage and
help as acceptable.  On a portfolio stage, administration continues to
monitor combination exposures to extremely delicate segments, resembling inns and
hospitality, for adjustments in asset high quality and cost efficiency, and liquidity
ranges. Administration displays unfunded commitments resembling traces of credit score and
overdraft safety to find out liquidity and funding points that will come up
with our clients. FNCB engaged an impartial third-party advisor to
carry out a Credit score Stress Check evaluation of the mortgage portfolio as of March 31, 2020
to help administration with evaluating the ALLL and capital planning with regard
to any potential impacts of COVID-19 on the portfolio. Ought to financial
circumstances worsen, FNCB may expertise additional will increase in its required
allowance for mortgage and lease losses and document further provisions for mortgage
and lease losses. It's doable that FNCB's asset high quality metrics might be
materially and adversely impacted in future intervals if the results of COVID-19
are extended.



Administration expects the COVID-19 pandemic, in addition to sure provisions of the
CARES Act, CA Act and different current legislative and regulatory aid efforts, to
have a fabric impression on FNCB's operations. The total impression is unknown,
continues to evolve and can be contingent upon the length and severity of the
financial downturn. Presently, administration can't decide or estimate the
full magnitude of the impression and can't present any assurances as to how the
disaster might in the end have an effect on FNCB's outcomes of operations or monetary place.
The FNCB workforce will proceed to work diligently to deal with any points associated to
the COVID-19 pandemic in a secure and sound method as
they come up. Administration believes that FNCB's steadiness sheet and capital place
are robust and can permit FNCB to resist the challenges which may be
offered.



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EXECUTIVE OVERVIEW


The next overview must be learn along side this MD&A in its entirety.


Outcomes of Operations



Regardless of a really difficult working surroundings because of the COVID-19 pandemic,
FNCB exhibited robust earnings efficiency in 2020. Web revenue in 2020  amounted
to $15.3 million, or $0.76 per diluted widespread share, a rise of
$4.2 million, or 38.6%, in comparison with $11.1 million, or $0.56 per diluted widespread
share, in 2019. The rise in 2020 web revenue in comparison with 2019 was primarily
attributable to will increase in web curiosity revenue and non-interest revenue and a
lower in non-interest expense. These optimistic components have been partially offset
by will increase within the provision for mortgage and lease losses and revenue tax expense.
Web curiosity revenue was $40.2 million in 2020, a rise of $3.9 million, or
10.8%, from $36.3 million in 2019, which was primarily on account of a $3.6 million, or
37.1% discount in whole curiosity expense. Web curiosity revenue was additionally
favorably impacted by $1.2 million in web mortgage origination charges related to
PPP loans that was acknowledged upon forgiveness. Non-interest revenue elevated
$1.6 million, or 21.4%, to $9.2 million in 2020 from $7.6 million in 2019. The
yr over yr enhance in non-interest revenue largely mirrored will increase
in web positive factors on fairness securities, web positive factors on the gross sales of available-for-sale
debt securities and mortgage loans held on the market, and deposit service fees,
partially offset by a discount in mortgage referral charges/rate of interest swap
income. Non-interest expense decreased $767 thousand, or 2.6%, to $28.9 million
in 2020 from $29.7 million in 2019, which primarily mirrored decrease salaries and
worker advantages, information processing prices and different working bills, partially
offset by will increase in occupancy, tools and financial institution shares tax bills. The
provision for mortgage and lease losses elevated $1.1 million to $1.9 million in
2020, from $0.8 million in 2019, which mirrored further credit score provisioning
in response to uncertainty introduced on by the COVID-19 world pandemic. Revenue
tax expense elevated $0.9 million, or 38.6%, to $3.2 million in 2020 as
in comparison with $2.3 million in 2019.


Return on common property and return on common shareholders' fairness
equaled 1.13% and 10.66%, respectively, in 2020, in comparison with 0.92% and eight.88%,
respectively, in 2019.  FNCB paid dividends to holders of widespread inventory of $0.22
per share in 2020, a rise of $0.02 per share, or 10.0%, in comparison with
$0.20 per share in 2019. Complete dividends declared and paid in 2020 equated to a
dividend yield of roughly 3.44% based mostly on the closing inventory worth of
$6.40 per share on December 31, 2020. The dividend payout ratio was 29.0% in
2020 in comparison with 36.4% in 2019.



Stability Sheet Profile



Complete property elevated $262.1 million, or 21.8%, to $1.466 billion at December
31, 2020 from $1.204 billion at December 31, 2019. The steadiness sheet
enlargement primarily mirrored a powerful influx of deposits, a portion of
which was used to buy funding securities, fund loans and cut back borrowed
funds, with the rest leading to a considerable enhance in money and money
equivalents. Particularly, money and money equivalents elevated $121.2 million,
or 350.8% to $155.8 million at December 31, 2020 from $34.6 million at December
31, 2019.  Out there-for-sale debt securities elevated $77.2 million, or 28.3%,
to $350.0 million at December 31, 2020 from $272.8 million at December 31, 2019.
As well as, loans, web of web deferred prices and unearned revenue, elevated
$72.6 million, or 8.8%, to $901.1 million at December 31, 2020 from
$828.5 million at December 31, 2019 Complete deposits elevated $285.7 million, or
28.5%, to $1.287 billion at December 31, 2020 from $1.002 billion at December
31, 2019. Borrowed funds decreased $46.9 million, or 82.0% to $10.3 million at
December 31, 2020, in comparison with $57.2 million at December 31, 2019, as FNCB used
a number of the extra liquidity to repay FHLB of Pittsburgh advances. FNCB had no
time period or in a single day borrowings via the Federal Dwelling Mortgage Financial institution of Pittsburgh
("FHLB") excellent at December 31, 2020.



Complete shareholders' fairness elevated $22.3 million, or 16.7%, to $155.9 million
at December 31, 2020 from $133.6 million at December 31, 2019. Contributing to
the rise in capital was web revenue in 2020 of $15.3 million and a
$10.8 million enhance in accrued different complete revenue associated
primarily to appreciation within the honest worth of available-for-sale debt
securities, web of deferred taxes, partially offset by year-to-date dividends
declared of $4.4 million. At December 31, 2020, FNCB Financial institution's whole risk-based
capital ratio and the Tier 1 leverage ratio have been 15.79% and 9.57%, respectively,
which exceeded the ten.00% and 5.00% required to be effectively capitalized underneath the
immediate corrective motion provisions of the Basel III capital framework for U.S.
banking organizations.



Administration's Focus in 2020



In 2020, FNCB Financial institution, FNCB's wholly-owned subsidiary, celebrated its a hundred and tenth
anniversary as a neighborhood financial institution serving the native communities in northeastern
Pennsylvania with its mission to make the banking expertise for purchasers
"merely higher". The celebration was tempered by COVID-19 as FNCB operated underneath
its pandemic preparedness plan for almost all of 2020, which has continued
into 2021. Whereas managing the various challenges introduced on by the unfold of the
virus, or by governmental, regulatory and buyer response to the
pandemic, FNCB's essential focus in 2020 was to guard the well being and security of our
clients and staff, present assist and help to companies and others
throughout the neighborhood, and reply to the abrupt shift in how financial institution merchandise and
companies are delivered to the shopper.



FNCB participated within the SBA's PPP, which resulted within the origination of 1,002
loans representing roughly $118.6 million in funding underneath the preliminary
spherical of this program, that instantly assisted native homeowners of small- and
medium-sized companies. Moreover, within the second half of 2020 when the SBA
started accepting purposes for forgiveness, FNCB carried out a digital,
cloud-based administration device to facilitate your complete forgiveness course of,
offering clients with direct entry to academic supplies and the flexibility
to simply add required paperwork. As of December 31, 2020, FNCB had obtained
$40.0 million in borrower forgiveness from the SBA and anticipate that the
remaining PPP mortgage balances will qualify for borrower forgiveness underneath the
tips of this system in 2021. As well as, FNCB grew to become one among eleven choose
lenders within the Commonwealth of Pennsylvania permitted to take part within the
Federal Reserve's Important Avenue Lending Program. Along with these governmental
applications, FNCB labored instantly with debtors to supply mortgage cost deferral
modifications underneath Part 1048 of the Cares Act to qualifying business and
shopper mortgage clients experiencing monetary disruption because of the COVID-19
pandemic.



Initiatives to enhance the shopper expertise included increasing and enhancing
FNCB's digital and conventional product and repair choices that grew to become
important to our clients throughout this unprecedented time. Along with already
offering clients with digital cost choices together with Apple Pay®, Google
Pay®, and Samsung Pay®, throughout the third quarter of 2020, the Financial institution partnered
with Zelle®, a quick, safe and get in touch with free solution to ship and obtain cash loans
between trusted events. As well as, FNCB started increasing utilization of on-line
account opening and facilitating the PPP mortgage origination and forgiveness
course of via using digital signatures. With regard to creating long-term
shareholder worth, administration has been centered on strategic enterprise market
alternatives to drive FNCB's monetary efficiency via environment friendly steadiness
sheet and rate of interest threat administration, development and diversification of
non-interest income streams, in addition to enhancing the marketability and
liquidity of FNCB's inventory, which has aided the robust earnings efficiency.



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Focus for 2021



Waiting for 2021, sustaining a secure surroundings for each employees and
clients will stay a high precedence, in addition to persevering with to boost FNCB's
digital banking platforms to answer evolving buyer calls for. FNCB expanded
the digital cloud-based PPP forgiveness device to incorporate performance for the
software course of for added PPP funding that was permitted underneath the CA
Act  on December 27, 2020. On January 19, 2021, FNCB started originating loans
underneath the second spherical of PPP funding and as of February 28, 2021, has
underwritten, submitted and obtained approval for 400 loans representing
roughly $52.7 million in funding. FNCB will proceed to help enterprise
clients via the forgiveness course of and with the second spherical of funding,
in addition to work prudently with clients requesting additional cost
lodging. In 2021, FNCB expects to learn from the popularity of
roughly $3.0 million in remaining web mortgage origination charges from the primary
spherical of PPP loans, and can proceed to deal with enhancing effectivity and
successfully navigating impending margin compression ensuing from the
low-interest price surroundings. Extra areas of focus for 2021 embody
persevering with to boost the shopper expertise via implementation of a
complete digital technique, strengthening our buyer base and constructing
current buyer pockets share, in addition to a renewed deal with management and
organizational improvement. So far, early in 2021, FNCB introduced the
appointment of a brand new Chief Banking Officer to its Govt Administration Workforce. The
Chief Banking Officer, who has in depth retail monetary gross sales and managerial
expertise will oversee, FNCB's business lending, retail lending and retail
banking items.



Inventory Repurchase Program



FNCB is repeatedly centered on creating long-term shareholder worth. With this
in thoughts, on January 27, 2021, FNCB's Board of Administrators licensed a inventory
repurchase program. This system offers for the acquisition of as much as 975,000
shares of FNCB's excellent widespread inventory in open market transactions starting
on February 3, 2021 and ending on December 31, 2021. Repurchases are made
pursuant to a buying and selling plan that was adopted in accordance with Rule 10b5-1 of
the Securities Change Act of 1934, as amended. Acquisitions underneath this system
can be administered via an impartial dealer at prevailing market costs.
Repurchases are topic to SEC rules in addition to sure worth, market
quantity and timing constraints specified within the buying and selling plan. Below this system,
the purchases can be funded from obtainable working capital presently obtainable
to FNCB, and the repurchased shares can be returned to the standing of licensed
however unissued shares of Frequent Inventory. There may be not a assure as to the precise
variety of shares that can be repurchased by FNCB, and FNCB might discontinue
purchases at any time that administration determines further repurchases aren't any
longer warranted.


SUMMARY OF FINANCIAL PERFORMANCE

Web Curiosity Revenue



Web curiosity revenue is the distinction between (i) curiosity revenue, curiosity and
charges on interest-earning property, and (ii) curiosity expense, curiosity paid on
deposits and borrowed funds. Web curiosity revenue represents the biggest
element of FNCB's working revenue and, as such, is the first determinant of
profitability. Web curiosity revenue is impacted by variations within the quantity, price
and composition of incomes property and interest-bearing liabilities, adjustments in
basic market charges and the extent of non-performing property. Curiosity revenue is
proven on a totally tax-equivalent foundation utilizing the company statutory tax price of
21.0% in 2020, 2019 and 2018.



In 2020, in response to financial fallout from the worldwide pandemic, the Federal
Open Market Committee ("FOMC") decreased the federal funds goal price a complete of
150 foundation factors in two emergency actions: a 50 foundation level lower on March 3,
2020 adopted by one other 100 foundation level lower on March 16, 2020. The federal
funds goal price remained at 0.00% to 0.25% from this level via the
the rest of 2020. These actions resulted in a corresponding lower within the
nationwide prime price to three.25% at December 31, 2020 from 4.75% at December 31,
2019. Because of this, FNCB skilled a lower in mortgage yields all through
2020, in comparison with 2019. As well as, mortgage yields have been impacted by the
origination and funding of low-yielding PPP loans with a price of 1.0%, offset by
the popularity of web mortgage origination charges related to a portion of those
loans that have been forgiven by the SBA. The Financial institution remained aggressive in deposit
price choices, parallel to market circumstances and a surplus of liquidity inside
the business. Because of this, FNCB skilled a lower in funding prices throughout
interest-bearing deposits.



Tax-equivalent web curiosity revenue elevated in 2020, by $4.3 million, or 11.7%,
to $41.0 million in comparison with $36.7 million in 2019. The rise in
tax-equivalent web curiosity revenue primarily mirrored a $3.6 million lower
in curiosity expense, coupled with a $0.6 million enhance in tax-equivalent
curiosity revenue. The lower in curiosity expense largely mirrored important
reductions within the charges paid on interest-bearing demand deposits, time deposits,
and borrowed funds. Additionally factoring into the lower in curiosity expense was a
lower within the common steadiness of higher-costing borrowed funds. Common
borrowed funds decreased $12.3 million, or 19.4%, to $51.3 million in 2020 from
$63.6 million in 2019. Because of the lower in deposit charges, FNCB skilled
some deposit migration, as clients redirected maturing time deposits into
non-maturity deposits. Tax-equivalent curiosity revenue in 2020 was negatively
impacted by decrease charges on common incomes property, which was greater than completely
offset by the rise within the total volumes of common incomes property. FNCB's
tax-equivalent curiosity margin elevated 6 foundation factors to three.35% in 2020 from
3.29% in 2019. Tax-equivalent web curiosity margin, a key measurement used within the
banking business to measure revenue from incomes property relative to the associated fee to
fund these property, is calculated by dividing tax-equivalent web curiosity revenue
by common interest-earning property. Moreover, price unfold, the distinction
between the common yield on interest-earning property proven on a totally
tax-equivalent foundation and the common value of interest-bearing liabilities,
elevated 13 foundation factors to three.21% in 2020 in comparison with 3.08% in 2019.



A lower in funding prices was the driving issue that result in the $3.6
million, or 37.1%, lower in curiosity expense to $6.2 million in 2020 from
$9.8 million in 2019. Charges paid on interest-bearing deposits decreased 37 foundation
factors to 0.59% in 2020 from 0.96% in 2019, leading to a corresponding
lower to curiosity expense of $2.8 million. The lower in deposit charges was
concentrated in different time deposits, which decreased 38 foundation factors to 1.22% in
2020, in comparison with 1.60% in 2019. As well as, interest-bearing demand deposits,
decreased 33 foundation factors to 0.48% in 2020 as in comparison with 0.81% in 2019. The
discount in charges paid on time deposits and interest-bearing demand deposits
contributed $1.9 million and $0.8 million to the general lower in curiosity
expense on account of adjustments in rates of interest. The speed paid on financial savings deposits
decreased barely to 0.10% in 2020 in comparison with 0.13% in 2019 however had minimal
impression on curiosity expense. Moreover, the speed paid on borrowed
funds decreased 119 foundation factors to 1.47% in 2020 from 2.66% in 2019,
contributing $0.6 million to the general lower in curiosity expense. Additionally
contributing to the lower to curiosity expense was a $12.3 million, or
19.4%, lower within the common steadiness of different borrowed funds to $51.3 million
in 2020 from $63.6 million in 2019, which led to a corresponding lower in
curiosity expense of $0.3 million. Whereas FNCB skilled important deposit
development, adjustments in common volumes of interest-bearing deposits resulted in solely
a negligible enhance to curiosity expense, which mirrored the deposit migration
skilled in 2020. Complete common interest-bearing deposits elevated $63.7
million, or 7.5%, to $908.5 million in 2020 from $844.8 million in 2019,
which resulted in an $86 thousand enhance in curiosity expense. Particularly,
the common steadiness of time deposits decreased $43.0 million, or 18.1%, to
$195.1 million in 2020 from $238.1 million in 2019. The lower in common time
deposits resulted in a corresponding lower to curiosity expense of $0.6
million, which was greater than completely offset by a $98.0 million, or
19.1%, enhance in common interest-bearing demand deposits to $611.5 million in
2020 as in comparison with $513.5 million in 2019, which brought on a rise to curiosity
expense by $0.7 million.



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Tax-equivalent curiosity revenue elevated $0.6 million, or 1.4%, to $47.1 million
in 2020 from $46.5 million in 2019, which mirrored greater volumes of common
incomes property, partially offset by decrease incomes asset yields. Common incomes
property elevated $106.2 million, or 9.5%, to $1.223 billion in 2020 from $1.117
billion in 2019, leading to a corresponding enhance to tax-equivalent
curiosity revenue of $4.5 million. Nonetheless, the tax-equivalent yield on incomes
property fell 31 foundation factors to three.85% in 2020 from 4.16% in 2019, which brought on a
partially offsetting lower to tax-equivalent curiosity revenue of $3.9 million.
Modifications within the composition of FNCB's investments portfolio was capable of mitigate
the impression of decrease market charges. General, adjustments in volumes and charges on the
the funding portfolio contributed $1.0 million in tax-equivalent curiosity
revenue. Particularly, common investments elevated $22.8 million, or 8.2% to
$302.2 million in 2020 from $279.4 million in 2019, primarily because of the
enhance in tax-free securities, which averaged $51.4 million in 2020 in contrast
to $4.6 million in 2019. Conversely, taxable securities averaged $250.9 million
in 2020, a lower of $23.8 million, or 8.7%, from $274.7 million in 2019. The
shift in composition of FNCB's funding portfolio mirrored the change in its
revenue tax place, as nearly all of obtainable NOL carryforwards have been
consumed in 2020. The tax-equivalent yield on the funding portfolio elevated
10 foundation factors to three.00% in 2020 from 2.90% in 2019. Conversely, adjustments in
volumes and charges on the mortgage portfolio and interest-bearing deposits in different
banks resulted in decreases to tax-equivalent curiosity revenue of $0.2 million
every. Particularly, common loans elevated $82.0 million, or 9.9%, to $911.4
million in 2020 in comparison with $829.4 million in 2019, leading to a corresponding
enhance to tax-equivalent curiosity revenue of $3.6 million. The tax-equivalent
yield earned on the mortgage portfolio decreased 43 foundation factors to 4.18% in 2020
from 4.61% in 2019, which brought on a lower to tax-equivalent curiosity revenue of
$3.8 million. The impression on adjustments in mortgage volumes and charges largely mirrored
the origination of PPP loans. PPP loans, which carry an rate of interest of 1.00%,
averaged $76.9 million in 2020. Together with amortization of web origination charges
related to PPP loans of $1.2 million, the yield on PPP loans was 2.61% in
2020. Tax-equivalent yield on common interest-bearing deposits decreased 208
foundation factors to 0.30% in 2020 from 2.38% in 2019, leading to a $195 thousand
lower in tax equal curiosity revenue, which was barely offset by the
$1.3 million, or 16.4%, enhance in quantity to $9.2 million in 2020 from
$7.9 million in 2019.



Non-accrual loans



The curiosity revenue that might have been earned on non-accrual and restructured
loans, had these loans carried out in accordance with their authentic phrases
approximated $0.4 million for each years ended December 31, 2020 and 2019.
Moreover, curiosity revenue acknowledged on impaired loans based mostly on funds
obtained approximated $0.4 million for each years ended December 31, 2020 and
2019.


The next desk reveals the parts of web curiosity revenue for the three years ended. December 31, 2020, 2019 and 2018:

Abstract of web curiosity revenue

                                                                               For the 12 months Ended December 31,
                                                  2020                                       2019                                       2018
                                   Common                      Yield/        Common                      Yield/        Common                      Yield/
({dollars} in hundreds)             Stability       Curiosity        Price         Stability       Curiosity        Price         Stability       Curiosity        Price
Belongings:
Incomes property (2)(3)
Loans-taxable (4)                $   863,702$  35,980         4.17 %   $   784,124$  36,332         4.63 %   $   783,438$  34,714         4.43 %
Loans-tax free (4)                    47,669         2,070         4.34 %        45,246         1,881         4.16 %        52,251         2,110         4.04 %
Complete loans (1)(2)                   911,371        38,050         4.18 %       829,370        38,213         4.61 %       835,689        36,824         4.41 %
Securities-taxable                   250,881         7,322         2.92 %       274,739         7,901         2.88 %       302,418         8,483         2.81 %
Securities-tax free                   51,367         1,738         3.38 %         4,618           189         4.09 %         4,087           168         4.11 %
Complete securities (1)(5)              302,248         9,060         3.00 %       279,357         8,090         2.90 %       306,505         8,651         2.82 %
Curiosity-bearing deposits in
different banks (6)                        9,203            28         0.30 %         7,910           188         2.38 %         4,667            88         1.89 %
Complete incomes property               1,222,822        47,138         3.85 %     1,116,637        46,491         4.16 %     1,146,861        45,563         3.97 %
Non-earning property                   145,227                                    101,273                                     84,283
Allowance for mortgage and lease
losses                               (10,867 )                                   (9,359 )                                   (9,584 )
Complete property                     $ 1,357,182$ 1,208,551$ 1,221,560

Liabilities and Shareholders'
Fairness:
Curiosity-bearing liabilities
Curiosity-bearing demand
deposits                         $   611,511         2,933         0.48 %   $   513,542         4,167         0.81 %   $   502,978         2,881         0.57 %
Financial savings deposits                     101,847            97         0.10 %        93,114           124         0.13 %        98,927           133         0.13 %
Time deposits                        195,140         2,374         1.22 %       238,145         3,810         1.60 %       236,162         2,911         1.23 %
Complete interest-bearing
deposits                             908,498         5,404         0.59 %       844,801         8,101         0.96 %       838,067         5,925         0.71 %
Borrowed funds and different
interest-bearing liabilities          51,287           756         1.47 %        63,640         1,695         2.66 %       119,573         2,653         2.22 %
Complete interest-bearing
liabilities                          959,785         6,160         0.64 %       908,441         9,796         1.08 %       957,640         8,578         0.90 %
Demand deposits                      242,017                                    164,035                                    168,313
Different liabilities                     11,368                                     11,395                                      8,831
Shareholders' fairness                 144,012                                    124,680                                     86,776
Complete liabilities and
shareholders' fairness             $ 1,357,182$ 1,208,551$ 1,221,560
Web curiosity revenue/curiosity
price unfold (6)(7)                                  40,978         3.21 %                      36,695         3.08 %                      36,985         3.07 %
Tax equal adjustment                             (800 )                                     (435 )                                     (478 )
Web curiosity revenue as
reported                                         $  40,178$  36,260$  36,507

Web curiosity margin (6)(8)                                         3.35 %                                     3.29 %                                     3.22 %



(1) Curiosity revenue is offered on an equal tax foundation on the price of 21%.

(2) Loans are reported web of unearned revenue.

(3) Loans with out accrual accounting are included in loans inside productive property.

(4) Curiosity revenue on loans contains mortgage prices web of $ 467 in 2020, and web

mortgage charges $ 1,467 in 2019 and $ 1,650 in 2018.

(5) The returns on securities categorised as obtainable on the market are

based mostly on the common historic amortized value.

(6) Data for 2019 contains revisions to common balances to be reclassified

sure common deposits in different banks from deposits remunerated in

different banks to non-performing property within the quantity of $ 4,794.

(7) The rate of interest differential represents the distinction between the common yield

      curiosity incomes property and the price of common curiosity bearing
      liabilities and is offered on a tax equal foundation.
  (8) Web curiosity revenue as a share of whole common curiosity incomes
      property.




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Contents


Probably the most important impression on web revenue between intervals is derived from the
interplay of adjustments within the quantity and charges earned or paid on
interest-earning property and interest-bearing liabilities. The amount of incomes
property, particularly loans and investments, in comparison with the amount of
interest-bearing liabilities represented by deposits and borrowings, mixed
with the unfold, produces the adjustments in web curiosity revenue between intervals.



The next desk summarizes the impact that adjustments in volumes of incomes
property and interest-bearing liabilities and the rates of interest earned and paid
on these property and liabilities have on web curiosity revenue. The web change or
combine element attributable to the mixed impression of price and quantity adjustments has
been allotted proportionately to the change on account of quantity and the change on account of
price.



Price Quantity Evaluation



                                                              For the 12 months Ended December 31,
                                              2020 vs. 2019                                     2019 vs. 2018
                                  Improve (Lower) As a consequence of Change in               Improve (Lower) As a consequence of Change in
(in hundreds)                  Quantity              Price            Complete          Quantity              Price            Complete
Curiosity revenue:
Loans-taxable                 $     3,501$     (3,853 )$   (352 )   $          30       $     1,588$  1,618
Loans-tax free                        103                 86            189              (290 )              61           (229 )
Complete loans                         3,604             (3,767 )         (163 )            (260 )           1,649          1,389
Securities-taxable                   (695 )              116           (579 )            (792 )             210           (582 )
Securities-tax free                 1,587                (38 )        1,549                22                (1 )           21
Complete securities                      892                 78            970              (770 )             209           (561 )
Curiosity-bearing deposits
in different banks                         35               (195 )         (160 )              73                27            100
Complete curiosity revenue               4,531             (3,884 )          647              (957 )           1,885            928

Curiosity expense:
Curiosity-bearing demand
deposits                              692             (1,926 )       (1,234 )              62             1,224          1,286
Financial savings deposits                       11                (38 )          (27 )              (8 )              (1 )           (9 )
Time deposits                        (617 )             (819 )       (1,436 )              25               874            899
Complete interest-bearing
deposits                               86             (2,783 )       (2,697 )              79             2,097          2,176
Borrowed funds and different
interest-bearing
liabilities                          (284 )             (655 )         (939 )          (1,415 )             457           (958 )
Complete curiosity expense               (198 )           (3,438 )       (3,636 )          (1,336 )           2,554          1,218
Web curiosity revenue           $     4,729$       (446 )$  4,283     $         379       $      (669 )$   (290 )

Provision for losses on loans and leases


The availability for mortgage and lease losses is an expense charged in opposition to web
curiosity revenue to supply for possible losses attributable to uncollectible
loans and relies on administration's evaluation of the adequacy of the ALLL. A
credit score to mortgage and lease losses displays the reversal of quantities beforehand
charged to the ALLL. Administration intently displays the mortgage portfolio and the
adequacy of the ALLL by contemplating the underlying monetary efficiency of the
borrower, collateral values and related credit score dangers. Future materials
changes could also be essential to the availability for mortgage and lease losses and the
ALLL if financial circumstances or mortgage efficiency differ considerably from the
assumptions administration thought-about in its analysis of the ALLL.



Throughout 2020, administration took into consideration the potential adversarial impression
that the COVID-19 pandemic has had on financial circumstances in its software of
FNCB's methodology on the allowance for mortgage and lease losses. Particularly,
administration tried to deal with this adversarial impression by adjusting the qualitative
issue related to adjustments in nationwide, native and enterprise financial
circumstances and developments. As well as, administration elevated the unallocated
portion of the ALLL to a most of 10.0% of the entire allowance. Each actions
have resulted in greater credit score provisioning throughout the twelve months ended
December 31, 2020. FNCB recorded a provision for mortgage and lease losses of
$1.9 million for the yr ended December 31, 2020, a rise of $1.1 million
in comparison with $0.8 million for the yr ended December 31, 2019.



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  Desk of Contents



Non-Curiosity Revenue


The next desk presents the parts of non-interest revenue for the years ended. December 31, 2020 and 2019:

Elements of non-interest revenue

                                                              12 months Ended December 31,
(in hundreds)                                               2020                 2019
Deposit service fees                                 $        3,252$        3,035
Web acquire on the sale of available-for-sale securities            1,528

1 227

Web acquire on fairness securities                                    1,171                   29
Web acquire on the sale of mortgage loans held on the market               653                  253
Web acquire on the sale of different actual property owned                      -                   20
Mortgage-related charges                                                  348                  378
Revenue from bank-owned life insurance coverage                              482                  520
Mortgage referral charges                                                 390                  703
Service provider companies income                                          565                  536
Different                                                              861                  919
Complete non-interest revenue                               $        9,250$        7,620




For the yr ended December 31, 2020, non-interest revenue elevated $1.6 million
to $9.2 million in comparison with $7.6 million for the yr ended December 31, 2019.
The 21.4% enhance in non-interest revenue primarily mirrored a $1.1 million
enhance in web positive factors on fairness securities. Web positive factors on fairness securities in
2020 included a $1.1 thousand acquire acknowledged on FNCB's funding within the widespread
inventory of a privately held financial institution holding firm as a part of the completion of a
merger and acquisition. Additionally contributing to the upper stage of non-interest
revenue have been will increase within the web positive factors realized on the sale of mortgage loans
held on the market and available-for-sale debt securities, and a rise in deposit
companies fees. A rise in mortgage quantity on account of traditionally low
rates of interest, coupled with favorable pricing on the secondary market, led to a
$400 thousand, or 158.1%, enhance in web positive factors on the sale of mortgages held
on the market to $653 thousand in 2020, in comparison with $253 thousand in 2019. Web positive factors
on the sale of available-for-sale debt securities elevated $301 thousand, or
24.5%, to $1.5 million in 2020 from $1.2 million in 2019. With regard to deposit
service fees, within the second half of 2019, FNCB engaged an impartial third
social gathering to conduct a complete analysis of FNCB's non-interest revenue and
charge construction to establish alternatives for enhancement.  Suggestions to the
charge construction arising from this evaluation have been absolutely carried out previous to the
starting of 2020. FNCB additionally carried out an automatic, dynamic overdraft
administration system in 2020. Because of this, deposit service fees elevated, $217
thousand, or 7.1%, to $3.2 million in 2020 in comparison with $3.0 million in 2019. The
enhance primarily mirrored will increase in ATM surcharge charges, service fees
on shopper and enterprise demand deposits and overdraft-related charges.



Partially offsetting the will increase to non-interest revenue was a $313 thousand,
or 44.5%, decline in mortgage referral charges/rate of interest swap income to $390
thousand in 2020 from $703 thousand in 2019. Mortgage referral charges embody charges
obtained from third-party counterparties associated to numerous business mortgage
rate of interest swap transactions and charges obtained for the referral of FHA
residential mortgage loans to a third-party dealer. The lower in these charges
mirrored a discount in each the quantity and quantity of such transactions in 2020
as in comparison with 2019.


In 2019, the FNCB additionally recorded a 114 thousand {dollars} Utility for BOLI dying profit, included in different non-interest revenue. There have been no claims for the BOLI dying profit in 2020.


Non-Curiosity Expense



The next desk presents the principle parts of non-interest bills for the years ended. December 31, 2020 and 2019:

Elements of non-interest fees

                                   12 months Ended December 31,
(in hundreds)                       2020             2019
Salaries and worker advantages   $     15,246$  15,518
Occupancy expense                       2,052           1,948
Gear expense                       1,477           1,319
Promoting expense                       685             738
Information processing expense                 2,933           3,113
Financial institution shares tax                           786             566
Skilled charges                         999           1,056
Different working bills                4,737           5,424
Complete non-interest expense       $     28,915$  29,682




Non-interest expense totaled $28.9 million in 2020, a lower of $767 thousand,
or 2.6%, from $29.7 million in 2019. The lower resulted primarily from
decreases in salaries and worker advantages, information processing expense and different
working bills. Partially offsetting these decreases have been will increase in
occupancy prices, tools bills and financial institution shares tax.



Salaries and worker advantages decreased $272 thousand, or 1.75%, to $15.2
million in 2020 from $15.5 million in 2019. The discount in salaries and
worker advantages was largely on account of a rise in payroll-related prices that
have been deferred and amortized over the lifetime of the mortgage underneath ASC 310-20, which
primarily mirrored the 1,002 PPP loans originated in 2020. Additionally impacting the
lower in salaries and worker advantages was a 7.5-person discount in
full-time equal staff, due primarily to COVID-19 limitations on department
operations. Because of this, wage prices decreased $320 thousand, or 2.7%, to $11.7
million in 2020 from $12.0 million in 2019, and payroll taxes decreased $56
thousand, or 5.8%, to $906 thousand in 2020 from $962 thousand in 2019.
Partially offsetting these components have been will increase in worker incentive prices of
$142 thousand, or 20.3%, medical health insurance expense of $121 thousand, or
10.1%, and retirement prices of $95 thousand, or 19.8%. On the finish of 2020, the
Board of Administrators permitted a particular one-time bonus to every worker to convey
appreciation throughout this unprecedented time, which included funds of $500 and
$250 for every full-time and part-time worker, respectively. The whole value of
this one-time incentive cost was $101 thousand, which accounted for the
majority of the rise in incentive prices. Within the fourth quarter of 2019, FNCB
started self-insuring worker healthcare advantages via a consortium. The
enhance in medical health insurance expense mirrored first yr prices and timing
variations of profit billing and funds related to the transition. The
greater quantity of retirement prices was on account of will increase in supplemental worker
retirement plan ("SERP") contributions and adjustments  in FNCB's 401(ok) plan
together with, a rise to the proportion for employer match and establishment of
an auto-enrollment characteristic upon rent.



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Contents


Different working bills decreased $687 thousand, or 12.7%, to $4.7 million in
2020 from $5.4 million in 2019. The lower was predominately on account of a $538
thousand favorable swing within the provision for off-balance sheet commitments due
to decrease dedication volumes. FNCB recorded a credit score for off-balance sheet
commitments of $90 thousand in 2020 in comparison with a provision of $448 thousand in
2019.



Occupancy prices elevated $104 thousand, or 5.4%, to $2.0 million in 2020 from
$1.9 million in 2019, whereas tools bills elevated $158 thousand, or
11.9%, to $1.5 million in 2020, in comparison with $1.3 million in 2019, reflecting a
full-year of  depreciation expense for premises and furnishings and tools
associated to the brand new places of work opened in mid-2019. As well as, COVID-19 associated
bills such because the cleansing and sanitization of department and administrative
places of work, the set up of well being and security tools together with hand
sanitizing stations and plexiglass partitions, computer-related bills to
allow a distant work surroundings additionally factored into the rise in occupancy
and tools expense.


The tax on financial institution shares additionally elevated in 2020, to 786 thousand {dollars}, up 220 thousand {dollars} of
$ 566 thousand registered at December 31, 2019, which mirrored a capital enhance on the stage of the Financial institution.


Provision for Revenue Taxes



FNCB recorded revenue tax expense of $3.2 million in 2020, a rise of $899
thousand, or 38.6%, in comparison with $2.3 million in 2019. The rise in revenue tax
expense was on account of greater taxable revenue in 2020 as in comparison with 2019.



Administration evaluates the carrying quantity of its deferred tax property on a
quarterly foundation, or extra continuously, as vital, in accordance with steerage
set forth in ASC Subject 740 "Revenue Taxes," and applies the factors within the
steerage to find out whether or not it's extra seemingly than not that some portion, or
all, of the deferred tax asset is not going to be realized inside its life cycle, based mostly
on the load of obtainable proof. If administration determines based mostly on obtainable
proof, each optimistic and detrimental, that it's extra seemingly than not that some
portion or the entire deferred tax asset is not going to be realized in future intervals,
a valuation allowance is calculated and recorded. These determinations are
inherently subjective and rely on administration's estimates and judgments used
of their analysis of each optimistic and detrimental proof.



In evaluating obtainable proof, administration considers, amongst different components,
historic monetary efficiency, expectation of future earnings, the flexibility to
carry again losses to recoup taxes beforehand paid, size of statutory carry
ahead intervals, expertise with working loss and tax credit score carry forwards
not expiring unused, tax planning methods and timing of reversals of
short-term variations. In assessing the necessity for a valuation allowance,
administration fastidiously weighs each optimistic and detrimental proof at the moment
obtainable.



Administration carried out an analysis of FNCB 's deferred tax property at December
31, 2020 taking into account each optimistic and detrimental proof as of
that date.  Primarily based on this analysis, administration believes that FNCB's future
taxable revenue can be ample to make the most of deferred tax property.  Accordingly,
administration concluded that no valuation allowance for deferred tax property was
required at December 31, 2020 or 2019.


FINANCIAL CONDITION



Complete property have been $1.466 billion at December 31, 2020, a rise of
$262.1 million, or 21.8%, from $1.204 billion at December 31, 2019. The rise
in whole property resulted from the rise in interest-earning property,
particularly a rise in available-for-sale debt securities of $77.2 million,
or 28.3%, to $350.0 million at December 31, 2020 from $272.8 million at December
31, 2019. Loans, web of the allowance for mortgage and lease losses, additionally elevated
by $69.6 million, or 8.5%, to $889.2 million at December 31, 2020 from $819.5
million at December 31, 2019. The rise was largely because of the origination of
PPP loans, of which $76.0 million, web of web deferred origination charges, have been
excellent at December 31, 2020. Money and money equivalents elevated $121.2
million, or 350.8% to $155.8 million at December 31, 2020 from $34.6 million at
December 31, 2019. Complete deposits elevated $285.7 million, or 28.5%, to
$1.287 billion at December 31, 2020 from $1.002 billion at December 31, 2019.
The rise in deposits was primarily attributable to will increase in each
interest-bearing and non-interest-bearing deposits.  Complete borrowed funds
decreased $46.9 million, or 82.0% to $10.3 million at December 31, 2020 from
$57.2 million at December 31, 2019.  FNCB had no time period or in a single day borrowings
via the FHLB of Pittsburgh excellent as of December 31, 2020.



Complete shareholders' fairness elevated $22.3 million, or 16.7%, to $155.9 million
at December 31, 2020 from $133.6 million at December 31, 2019.  The rise
was on account of web revenue in 2020 of $15.3 million and a $10.8 million enhance in
accrued different complete revenue associated to appreciation within the honest worth
of available-for-sale debt securities, web of deferred taxes, partially offset
by year-to-date dividends declared of $4.4 million. Dividends declared and paid
by FNCB on its widespread inventory totaled $0.22 per share in 2020, a rise of
$0.02 per share, or 10.0%, in comparison with $0.20 per share in 2019. On January 27,
2021, the Board of Administrators of FNCB declared a $0.06 per share dividend for the
first quarter of 2021, which was a 9.1% enhance in comparison with the $0.055 per
share dividend declared for the primary quarter of 2020. The primary quarter
2021 dividend is payable on March 15, 2021 to shareholders of document on March 1,
2021.



Securities



FNCB's funding securities portfolio offers a supply of liquidity wanted to
meet anticipated mortgage demand and curiosity revenue to extend profitability.
Moreover, the funding securities portfolio is used to satisfy pledging
necessities to safe public deposits and for different functions. Debt securities
are categorised as both held-to-maturity or available-for-sale on the time of
buy based mostly on administration's intent. Held-to-maturity securities are carried
at amortized value, whereas available-for-sale securities are carried at honest
worth, with unrealized holding positive factors and losses reported as a element of
shareholders' fairness in accrued different complete revenue (loss), web of
tax. At December 31, 2020 and 2019, all debt securities have been categorised as
available-for-sale. Fairness securities with readily determinable honest values are
carried at honest worth, with positive factors and losses on account of fluctuations in market worth
included within the consolidated statements of revenue. Securities with restricted
marketability and/or restrictions, resembling FHLB of Pittsburgh inventory, are carried
at value. Choices to buy or promote funding securities are based mostly upon
administration's present evaluation of long- and short-term financial and monetary
circumstances, together with the rate of interest surroundings and asset/legal responsibility
administration, liquidity and tax-planning methods.



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At December 31, 2020, the funding portfolio was comprised principally of
fixed-rate securities issued by U.S. authorities or U.S. government-sponsored
companies, which embody mortgage-backed securities and residential and
business CMOs, fixed-rate taxable and tax-free obligations of state and
political subdivisions, non-public CMOs and company debt securities. Aside from
U.S. authorities and government-sponsored companies, there have been no securities of
any particular person issuer that exceeded 10.0% of shareholders' fairness as of December
31, 2020.



The funding portfolio is predominantly fixed-rate in nature. As such,
FNCB's debt securities are inherently topic to rate of interest threat, outlined as
the chance that an funding's worth will change on account of a change in curiosity
charges, within the unfold between two charges and within the form of the yield curve. A
safety's worth is normally affected inversely by adjustments in charges. U.S.Treasury charges fell considerably within the first quarter of 2020 in response to
the outbreak of COVID-19, declaration of a nationwide emergency and financial
shutdown in March 2020. U.S.Treasury charges fluctuated barely however hovered close to
historic lows for the rest of 2020. Conversely, spreads between short- and
long-term charges widened from the slim margins exhibited in 2019, including some
minor slope to the yield curve. Particularly, the unfold between the 2-year and
10-year U.S.Treasury price, which was 0.34% at December 31, 2019 widened 46
foundation factors to 0.80% at December 31, 2020. The two-year Treasury price, which was
1.58% at December 31, 2019 , fell 135 foundation factors to 0.23% at March 31,
2020 and decreased one other 10  foundation factors to 0.13% at December 31, 2020 .
In the meantime, the 10-year Treasury price, which was 1.92% at December 31, 2019 ,
dropped 122 foundation factors to 0.70% at March 31, 2020 , however rebounded 23 foundation
factors to 0.93% at December 31, 2020. Because of the lower in charges evaluating
December 31, 2020 and 2019, FNCB skilled important appreciation within the
honest worth of its funding portfolio. FNCB reported a web unrealized holding
acquire on its funding portfolio of $14.0 million, web of revenue taxes of
$3.7 million at December 31, 2020, in comparison with a $3.1 million web unrealized
holding acquire, web of revenue taxes of $0.8 million, at December 31, 2019.
Nonetheless, any additional enhance in rates of interest may end in depreciation in
the honest worth of FNCB's securities portfolio and capital place.



The next desk reveals the e-book worth of debt securities and available-for-sale fairness securities, the honest worth of which will be simply decided at
December 31, 2020, 2019 and 2018:

Composition of the funding portfolio

                                                                December 31,
(in hundreds)                                        2020          2019          2018
Out there-for-sale debt securities
Obligations of state and political subdivisions     $ 205,828$ 117,763$ 152,187U.S. authorities/government-sponsored companies:
Collateralized mortgage obligations - residential      56,972        80,294

34 207

Assured mortgage bonds – business 3,904 17,723

73,640

Mortgage-backed securities                             13,026        18,485

23 934

Non-public collateralized mortgage obligations            38,199        25,075         2,913
Company debt securities                              24,580         7,182         4,936
Asset-backed securities                                 7,526         5,621         1,802
Negotiable certificates of deposit                          -           696

2,413

Complete available-for-sale debt securities            $ 350,035$ 272,839

$ 296,032

Fairness securities, at honest worth                    $   3,026$     920$     891




Administration displays the funding portfolio repeatedly and adjusts the
funding technique to mirror adjustments in liquidity wants, asset/legal responsibility
technique and tax-planning necessities. The composition of FNCB's funding
portfolio shifted in 2020, reflecting the change in its revenue tax place, as
nearly all of obtainable NOL carryforwards have been consumed in 2020. At December
31, 2020, obtainable NOLs have been roughly $2.0 million, a lower of $18.7
million in comparison with $20.7 million excellent at December 31, 2019. Due to
the change in tax place, FNCB elevated its holdings of tax-free investments
in 2020.



Administration regularly displays the funding portfolio for credit score worthiness,
worth, and yield. Annually administration engages a third-party advisor to
evaluate the municipal portfolio to find out if there's any undue credit score threat
throughout the portfolio. In 2020, administration determined to extend the frequency of
impartial third-party critiques of its municipal investments from yearly to
semi-annually with the newest credit score evaluate carried out as of December 31,
2020. As a part of the impartial evaluate, every safety is in comparison with their
Portfolio Credit score Benchmark to establish which securities might comprise greater than a
minimal threat of cost default.  As of December 31, 2020, the third-party
report concluded that every safety held throughout the portfolio met or exceeded
the benchmark and that not one of the securities required additional evaluate. The following
third-party evaluate is scheduled for June 30, 2021.  Administration additionally displays
municipal securities month-to-month utilizing a third-party Municipal Surveillance Report.



Market circumstances in 2020 allowed administration to promote lower-yielding securities
at a acquire and reinvest a portion of the proceeds into greater yielding securities
inside FNCB's threat tolerance. FNCB bought available-for-sale securities in 2020
with an combination amortized value of $66.7 million. Gross proceeds obtained on
the gross sales totaled $68.2 million, with web positive factors of $1.5 million realized upon
the gross sales and included in non-interest revenue. The securities bought had a
weighted-average yield of 1.63%.



Securities bought throughout the yr ended December 31, 2020 totaled $152.7
million, together with $72.9 million in tax-free obligations of state and political
subdivisions, $22.8 million in taxable obligations of state and political
subdivisions, $19.8 million in non-public CMOs, $17.8 million in company debt
securities, $12.1 million in CMOs of U.S. government-sponsored companies
and $7.3 million in asset-backed securities. Securities bought throughout
2020 had a weighted-average yield of two.58%.



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Contents


The next desk presents the maturities of available-for-sale debt
securities, based mostly on carrying worth at December 31, 2020, and the weighted
common yields of such securities calculated on the premise of the amortized value
and efficient yields weighted for the scheduled maturity of every safety. The
yields on tax-exempt obligations of states and political subdivisions are
offered on a tax-equivalent foundation utilizing the federal company revenue tax price
of 21.0%. As a result of residential, business and personal collateralized mortgage
obligations, mortgage-backed securities and asset-backed securities aren't due
at a single maturity date, they aren't included within the maturity classes in
the next abstract.


Breakdown of the funding portfolio at maturity


                                                                                         December 31, 2020
                                                                                                            Collateralized
                                                                                                               Mortgage
                                                                                                             Obligations,
                                                                                                            Mortgage-Backed
                                  Inside One                                                               and Asset-Backed
({dollars} in hundreds)               12 months          > 1 - 5 Years       6-10 Years       Over 10 Years         Securities          No Fastened Maturity        Complete
Out there-for-sale debt
securities
Obligations of state and
political subdivisions            $     4,718$        65,429$     23,821$       111,860     $               -     $                 -     $ 205,828
Yield                                    2.42 %              2.95 %           2.92 %              2.85 %                                                      2.88 %
U.S.
authorities/government-sponsored
companies:
Collateralized mortgage
obligations - residential                   -                   -                -                   -                56,972                       -        56,972
Yield                                                                                                                   2.75 %                                2.75 %
Collateralized mortgage
obligations - business                    -                   -                -                   -                 3,904                       -         3,904
Yield                                                                                                                   1.98 %                                1.98 %
Mortgage-backed securities                  -                   -                -                   -                13,026                       -        13,026
Yield                                                                                                                   3.17 %                                3.17 %
Non-public collateralized mortgage
obligations                                 -                   -                -                   -                38,199                       -        38,199
Yield                                                                                                                   2.53 %                                2.53 %
Company debt securities                   -               1,004           23,576                   -                     -                       -        24,580
Yield                                                        6.50 %           5.12 %                                                                          5.18 %
Asset-backed securities                     -                   -                -                   -                 7,526                       -         7,526
Yield                                                                                                                   1.57 %                                1.57 %
Complete available-for-sale
maturities                        $     4,718$        66,433$     47,397$       111,860     $         119,627     $                 -     $ 350,035
Weighted common yield                   2.42 %              3.00 %           4.02 %              2.85 %                2.63 %                     - %        2.96 %




OTTI Analysis



There was no OTTI acknowledged throughout the years ended December 31, 2020 and 2019.
For added data concerning administration's analysis of securities for
OTTI, see Notice 4, "Securities" of the notes to consolidated monetary statements
included in Merchandise 8, "Monetary Statements and Supplementary Information" to this Annual
Report on Kind 10-Ok.


Administration didn’t establish any impairment indicators for the FHLB of Pittsburgh or
Atlantic Group Bankers Financial institution inventory at December 31, 2020, 2019 and 2018.

Fairness securities and Fairness securities with out honest worth simply determinable


At December 31, 2019, FNCB owned 201,000 shares of the widespread inventory of a
privately-held financial institution holding firm. The widespread inventory was bought throughout 2017
for $8.25 per share, or $1.7 million in combination, as a part of a non-public
placement pursuant to an exemption from the registration necessities of the
Securities Act of 1933, as amended for choices not involving any public
providing. The widespread inventory of this financial institution holding firm was not traded on any
established market. FNCB had accounted for this transaction as an fairness
safety with out a readily determinable honest worth. The $1.7 million funding
was included in different property at December 31, 2019.



On December 18, 2019, this privately held financial institution holding firm entered into an
Settlement and Plan of Merger ("Merger Settlement") with a publicly traded financial institution
holding firm. The Merger Settlement supplied for the privately held financial institution
holding firm to merge with and into the publicly traded financial institution holding firm,
the corporate surviving the merger ("surviving firm"). The surviving firm's
widespread inventory trades on Nasdaq. The acquisition was accomplished on July 1, 2020.
FNCB obtained $1.2 million in money for 74,113 of the acquired shares having a
value of $611 thousand. FNCB realized a acquire of $611 thousand as a part of this
transaction. The remaining 122,178 shares with a price of $1.0 million have been
transformed into 78,822 shares of the surviving firm's widespread inventory that had a
honest worth of $19.90 per share on July 1, 2020 or $1.6 million in combination,
which exceeded the associated fee foundation of $1.0 million. FNCB acknowledged an unrealized
acquire of $522 thousand on the conversion of this inventory upon the acquisition.



On September 15, 2020, FNCB bought 20,000 shares of the fixed-rate
non-cumulative perpetual most popular inventory of one other publicly traded financial institution holding
firm pursuant to an underwritten public providing at an providing worth of
$25.00 per share or $500 thousand in combination. The popular inventory, which
trades on Nasdaq, pays a quarterly dividend price of seven.50%. Additionally included in
fairness securities at December 31, 2020 and 2019, was a $1.0 million funding
in a mutual fund comprised of 1-4 household residential mortgage-backed
securities collateralized by properties inside FNCB's market space.



Fairness securities held by FNCB with a readily determinable honest worth are
reported at honest worth on the consolidated statements of monetary situation
with unrealized positive factors and losses acknowledged in non-interest revenue within the
consolidated statements of revenue. At December 31, 2020 and 2019, fairness
securities had a price foundation of $2.5 million and $1.0 million, respectively. The
honest worth of fairness securities was $3.0 million at December 31, 2020 and $0.9
million at December 31, 2019.



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On December 29, 2020, FNCB bought 20,000 shares of the fixed-rate,
non-cumulative perpetual most popular inventory of a privately-held financial institution holding
firm at an providing worth of $25.00 per share or $500 thousand in combination,
which is included in different property within the consolidated statements of monetary
situation. The popular inventory pays quarterly dividends at an annual price of
8.25%, commencing March 30, 2021. The popular inventory of this financial institution holding
firm isn't traded on any established market and is accounted for as an
fairness safety with out a determinable honest worth. Below GAAP, an fairness
safety with out a readily determinable honest worth shall be written all the way down to its
honest worth if a qualitative evaluation signifies that the funding is
impaired, and the honest worth of the funding is lower than its carrying worth.
As a part of its qualitative evaluation, administration engaged an impartial third
social gathering of present a valuation of this funding as of December 31, 2020, which
indicated that the funding was not impaired. Administration decided that no
adjustment for impairment was required at December 31, 2020.



Loans



Complete loans, gross elevated by $76.9 million, or 9.3%, to $903.3 million at
December 31, 2020 from $826.4 million at December 31, 2019. The rise in mortgage
balances was largely because of the origination of PPP loans. Gross PPP loans
excellent at December 31, 2020 have been $78.6 million. Moreover, FNCB
skilled reasonable demand for residential actual property loans, development,
land acquisition and improvement loans, business and industrial loans and
loans to state and political subdivisions, whereas business actual property loans
and shopper loans contracted, evaluating December 31, 2020 and 2019.



Traditionally, business lending actions have represented a major
portion of FNCB's mortgage portfolio. Industrial lending contains business and
industrial loans, business actual property loans and development, land
acquisition and improvement loans, and represented 63.3% and 57.3% of whole
loans at December 31, 2020 and December 31, 2019, respectively. The rise in
business lending was largely on account of will increase in business and industrial
loans, particularly PPP loans, and development, land acquisition and
improvement loans. Excluding PPP loans, business lending represented 59.8% of
whole loans at December 31, 2020.



From a collateral standpoint, a majority of FNCB's mortgage portfolio consists of
loans secured by actual property. Actual property secured loans, which embody
business actual property, development, land acquisition and improvement, and
residential actual property loans elevated by $16.2 million, or 3.2%, to
$530.0 million at December 31, 2020 from $513.8 million at December 31, 2019.
The rise was primarily attributable to robust demand for business
development loans, as development, land acquisition and improvement loans
elevated $12.3 million, or 25.9%, to $59.8 million at December 31, 2020 from
$47.5 million at December 31, 2019. Actual property secured loans as a share of
whole gross loans decreased to 58.7% at December 31, 2020 from 62.2% at December
31, 2019. Excluding PPP loans, actual property secured loans as a share of
whole gross loans at December 31, 2020 was 64.3%.



Industrial and industrial loans elevated $90.8 million, or 61.5%, throughout the
yr to $238.4 million at December 31, 2020 from $147.6 million at December 31,
2019. Industrial and industrial loans consist primarily of kit loans,
working capital financing, revolving traces of credit score and loans secured by money
and marketable securities and PPP loans. Excluding PPP loans, business and
industrial loans elevated $12.2 million or 8.3%. Loans secured by business
actual property decreased $4.5 million, or 1.6%, to $273.9 million at December 31,
2020 from $278.4 million at December 31, 2019. Industrial actual property loans
embody long-term business mortgage financing and are primarily secured by
first or second lien mortgages.



FNCB primarily underwrites fixed-rate buy and refinance of residential
mortgage loans on the market within the secondary market to scale back rate of interest threat and
present funding for added loans. Moreover, FNCB presents a "WOW" mortgage
product, which is a non-saleable mortgage with maturity phrases of seven.5 to 19.5
years, and presents clients a pretty mounted rate of interest, low closing prices
and a assured 30-day shut. FNCB additionally presents house fairness loans and residential
fairness traces of credit score ("HELOC") with a most mixed loan-to worth ratio of
90% based mostly on the appraised worth of the property. Dwelling fairness loans have mounted
charges of curiosity and carry phrases as much as 15 years, whereas HELOCs are variable-rate
loans. Residential actual property loans totaled $196.3 million at December 31,
2020, a rise of $8.4 million, or 4.5%, from $187.9 million at December 31,
2019. In 2020, FNCB skilled robust demand for its proprietary WOW mortgage
product, which elevated $21.9 million, or 42.9%, to $72.9 million at December
31, 2020 from $51.0 million at December 31, 2019. Partially offsetting this
enhance have been reductions in conventional 1-4 household mortgages, house fairness loans
and HELOCs.



Client loans totaled $85.9 million at December 31, 2020, a lower of $35.2
million, or 29.1%, from $121.1 million at December 31, 2019. Nearly all of the
lower was concentrated throughout the oblique auto mortgage portfolio, as FNCB did
not aggressively compete for these loans in 2020. Loans to state and municipal
governments elevated $5.1 million, or 11.6%, to $49.0 million at December 31,
2020 from $43.9 million at December 31, 2019.



The next desk presents loans receivable, web by main class at the thirty first of December, for every of the final 5 years:

Mortgage Portfolio Element



                                                            December 31,
(in hundreds)                      2020          2019          2018          2017          2016
Residential actual property           $ 196,328$ 187,863$ 184,531$ 179,439$ 167,906
Industrial actual property              273,903       278,379       262,778       261,783       243,830
Building, land acquisition
and improvement                      59,785        47,484        20,813        20,981        18,357
Industrial and industrial           238,435       147,623       150,962       150,103       150,758
Client                             85,881       121,099       157,086       113,234       104,198
State and political
subdivisions                         49,009        43,908        59,037        42,529        43,709
Complete loans, gross                  903,341       826,356       835,207       768,069       728,758
Unearned revenue                        (110 )         (69 )         (70 )         (80 )         (48 )
Web deferred mortgage (charges) prices       (2,129 )       2,192         3,963         2,654         2,569
Allowance for mortgage and lease
losses                              (11,950 )      (8,950 )      (9,519 )      (9,034 )      (8,419 )
Loans, web                        $ 889,152$ 819,529$ 829,581$ 761,609$ 722,860




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The next desk reveals the breakdown by maturity and the rates of interest of the mortgage portfolio by main class at December 31, 2020:

Breakdown of the mortgage portfolio at maturity

                                                              December 31, 2020
                                         Inside One       One to 5       Over 5
(in hundreds)                              12 months             Years            Years          Complete
Residential actual property                 $      6,941$      14,018$   175,369$  196,328
Industrial actual property                         6,844            53,756         213,303        273,903
Building, land acquisition and
improvement                                    6,378            17,168          36,239         59,785
Industrial and industrial                     69,098           145,835          23,502        238,435
Client                                       1,980            78,280           5,621         85,881
State and political subdivisions                 776             3,681          44,552         49,009
Complete loans, gross                      $     92,017$     312,738$   498,586$  903,341


Loans with predetermined curiosity
charges                                   $     15,859$     259,444$   174,935$  450,238
Loans with floating charges                     76,158            53,294         323,651        453,103
Complete loans, gross                      $     92,017$     312,738$   498,586$  903,341




Below business rules, a focus is taken into account to exist when there
are quantities loaned to a a number of variety of debtors engaged in comparable
actions which might trigger them to be equally impacted by financial or different
circumstances. Sometimes, business tips require disclosure of concentrations
of loans exceeding 10.0% of whole loans excellent. FNCB had no such
concentrations at December 31, 2020 and 2019. Along with business
tips, FNCB's inner coverage considers a focus to exist in its
mortgage portfolio if an combination mortgage steadiness excellent to debtors inside a
particular business exceeds 25.0% of capital. Nonetheless, administration repeatedly
critiques loans in all business classes to find out if a possible
focus exists.



The next desk presents loans by business, the proportion to gross loans
and signifies concentrations better than 25% of capital at December 31, 2020
and 2019:



Mortgage Concentrations



                                                              December 31,
                                                   2020                           2019
                                                       % of Gross                     % of Gross
({dollars} in hundreds)                    Quantity          Loans          Quantity          Loans
Retail area/purchasing facilities           $   43,926            4.86 %   $   43,865            5.31 %
1-4 household residential funding
properties                                  58,114            6.43 %       38,122            4.61 %




Asset High quality



Loans that administration has the intent and talent to carry for the foreseeable
future or till maturity or payoff are acknowledged on the quantity of unpaid principal,
web of unearned curiosity, deferred mortgage charges and prices, and decreased by the ALLL.
The ALLL is established via a provision for mortgage and lease losses charged to
earnings.



FNCB has established and constantly applies mortgage insurance policies and procedures
designed to foster sound underwriting and credit score monitoring practices. Credit score
threat is managed via the efforts of mortgage officers, the Chief Credit score Officer,
the mortgage evaluate operate, and the Credit score Threat Administration and the ALLL
committees, in addition to oversight from the Board of Administrators, together with the
Director's Mortgage Committee. Administration regularly evaluates its credit score threat
administration practices to make sure issues within the mortgage portfolio are addressed in a
well timed method, though, as is the case with any monetary establishment, a
sure diploma of credit score threat relies partly on native and basic financial
circumstances which might be past administration's management.



Below FNCB's threat ranking system, loans which might be rated cross, particular point out,
substandard, uncertain, or loss are reviewed repeatedly as a part of the chance
administration practices. The Credit score Threat Administration Committee, which consists of
key members of administration from the finance, authorized, retail lending and credit score
administration items, meets month-to-month or extra typically as essential to evaluate
particular person drawback credit and exercise methods and offers month-to-month experiences
to the Director's Mortgage Committee and full Board of Administrators.



A mortgage is taken into account impaired when it's possible that FNCB can be unable to
acquire all quantities due (together with principal and curiosity) in keeping with the
contractual phrases of the be aware and mortgage settlement. For functions of the evaluation,
all TDRs, mortgage relationships with an combination excellent steadiness better than
$100 thousand rated substandard and non-accrual, and loans which might be recognized
as uncertain or loss are thought-about impaired. Impaired loans are analyzed
individually to find out the quantity of impairment. For collateral-dependent
loans, impairment is measured based mostly on the honest worth of the collateral
supporting the loans. A mortgage is decided to be collateral dependent when
reimbursement of the mortgage is anticipated to be supplied via the operation or
liquidation of the collateral held. For impaired loans which might be secured by actual
property, administration obtains exterior value determinations yearly, or extra continuously as
warranted, to establish a good worth in order that the impairment evaluation will be
up to date. Ought to a present appraisal not be obtainable on the time of impairment
evaluation, administration might use different valuations sources, together with present letters
of intent, dealer worth opinions or executed agreements of sale. For
non-collateral-dependent loans, impairment is measured based mostly on the current
worth of anticipated future money flows, web of any deferred charges and prices,
discounted on the mortgage's authentic efficient rate of interest.



Loans to debtors which might be experiencing monetary issue which might be modified
and outcome within the granting of concessions to the debtors are categorised as
TDRs and are thought-about to be impaired. Such concessions typically contain an
extension of a mortgage's acknowledged maturity date, a discount of the acknowledged curiosity
price, cost modifications, capitalization of property taxes with respect to
mortgage loans or a mixture of those modifications. Non-accrual TDRs are
returned to accrual standing if principal and curiosity funds, underneath the
modified phrases, are introduced present, are performing underneath the modified phrases for
six consecutive months, and administration believes that assortment of the remaining
curiosity and principal is possible.



Non-performing loans are monitored on an ongoing foundation as a part of FNCB's mortgage
evaluate course of. Moreover, work-out for non-performing loans and OREO are
actively monitored via the Credit score Threat Administration Committee. A possible
loss on a non-performing asset is mostly decided by evaluating the
excellent mortgage steadiness to the honest market worth of the pledged collateral,
much less estimated value to promote.



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Loans are positioned on non-accrual when a mortgage is particularly decided to be
impaired or when administration believes that the gathering of curiosity or
principal is uncertain. This typically happens when a default of curiosity or
principal has existed for 90 days or extra, except the mortgage is effectively secured and
within the strategy of assortment, or when administration turns into conscious of details or
circumstances that the mortgage would default earlier than 90 days. FNCB determines
delinquency standing based mostly on the variety of days because the date of the borrower's
final required contractual mortgage cost. When the curiosity accrual is
discontinued, all unpaid curiosity revenue is reversed and charged again in opposition to
present earnings. Any subsequent money funds obtained are utilized, first to
the excellent mortgage quantities, then to the restoration of any charged-off mortgage
quantities, with any extra handled as a restoration of misplaced curiosity. A non-accrual
mortgage is returned to accrual standing when the mortgage is present as to principal and
curiosity funds, is performing in keeping with contractual phrases for six
consecutive months and future funds are moderately assured.



Administration actively manages impaired loans in an effort to mitigate loss to FNCB
by working with clients to develop methods to resolve borrower
difficulties, via sale or liquidation of collateral, foreclosures, and different
acceptable means. As well as, administration displays employment and financial
circumstances inside FNCB's market space, as weakening of circumstances may end in
actual property devaluations and a rise in mortgage delinquencies, which may
negatively impression asset high quality and trigger a rise within the provision for mortgage
and lease losses. Employment circumstances in FNCB's market space worsened in 2020
because of the COVID-19 pandemic. Unemployment charges throughout the USA and
the Commonwealth of Pennsylvania spiked quickly after the nationwide emergency was
declared, and non-essential companies have been required to shutdown or required to
function underneath capability limitations. At December 31, 2019 (previous to COVID-19) the
seasonally-adjusted unemployment price for the USA, the Commonwealth of
Pennsylvania and the Scranton/Wilkes-Barre/Hazleton Pennsylvania metropolitan
statistical space ("MSA") have been 3.6%, 4.6% and 6.0%, respectively. For April 2020,
amid the closure of non-essential companies, the unemployment price for the
whole United States jumped to 14.8%. Equally, the unemployment charges for the
Commonwealth of Pennsylvania and the Scranton/Wilkes-Barre/Hazleton Pennsylvania
MSA rose to 16.1% and 18.4%, respectively in April 2020. Nonetheless, later within the
yr unemployment charges, though nonetheless elevated compared to December 31,
2019, returned to extra regular ranges as restrictions have been eased. For December
2020, the unemployment charges for each the USA and Commonwealth of
Pennsylvania have been 6.7%, whereas the unemployment price for
the Scranton/Wilkes-Barre/Hazleton Pennsylvania MSA was 7.9%. Administration will
proceed to judge the results of the pandemic as they unfold and proactively
tackle any potential impression to the credit score high quality of FNCB's mortgage portfolio.



Below the honest worth of collateral methodology, the impaired quantity of the mortgage is
deemed to be the distinction between the mortgage quantity and the honest worth of the
collateral, much less the estimated prices to promote. For actual property secured loans,
administration typically estimates promoting prices utilizing an element of 10%, which is
based mostly on typical value components, resembling a 6% dealer fee, 1% switch
taxes, and three% varied different miscellaneous prices related to the gross sales
course of. If the valuation signifies that the honest worth has deteriorated beneath
the carrying worth of the mortgage, the distinction between the honest worth and the
principal steadiness is both charged off or a particular reserve is established.
For impaired loans for which the worth of the collateral much less estimated prices to
promote exceeds the mortgage worth, the impairment is decided to be zero.



The next desk presents data on non-performing property and ToRs accrued throughout the the thirty first of December, for every of the final 5 years:

Non-performing property and TORs being regularized

                                                            December 31,
({dollars} in hundreds)              2020          2019          2018          2017          2016
Non-accrual loans, together with
non-accrual TDRs                  $   5,581$   9,084$   4,696$   2,578$   2,234
Loans late 90 days or extra
and nonetheless accruing                        -             -             -             -             -
Complete non-performing loans            5,581         9,084         4,696         2,578         2,234
Different actual property owned                  58           289           919         1,023         2,048
Different non-performing property           1,900         1,900         1,900

1900 2160 Complete non-performing property $ 7,539$ 11,273$ 7,515$ 5,501$ 6,442

Accruing TDRs                     $   6,975$   7,745$   8,457$   9,299$   4,176
Non-performing loans as a
share of whole loans,
gross                                  0.62 %        1.10 %        0.56 %        0.34 %        0.31 %




Regardless of financial uncertainty and elevated unemployment on account of COVID-19, FNCB's
asset high quality metrics improved all through 2020. Complete non-performing property
decreased $3.7 million, or 33.1%, to $7.5 million at December 31, 2020 from
$11.3 million at December 31, 2019. The lower was due primarily to a lower
in non-accrual loans of $3.5 million, coupled with a $231 thousand lower in
OREO. The discount in non-accrual loans was primarily attributable to the
return of a number of massive business relationships to accrual standing throughout
2020. FNCB's ratio of non-performing loans to whole gross loans decreased to
0.62% at December 31, 2020 from 1.10% at December 31, 2019. Equally, FNCB's
ratio of non-performing property as a share of shareholders' fairness decreased
to 4.8% at December 31, 2020 from 8.4% at December 31, 2019. Whereas credit score
high quality metrics of FNCB's mortgage portfolio improved evaluating December 31, 2020
and December 31, 2019, administration believes the COVID-19 pandemic might have an
adversarial impact on asset high quality sooner or later. Extended disruption to FNCB's
clients may end in elevated mortgage delinquencies, defaults and collateral
devaluations. Administration actively manages drawback credit via exercise
efforts centered on growing methods to resolve borrower difficulties
via liquidation of collateral and different acceptable means. Moreover,
administration continues to watch non-accrual loans, delinquency traits and
financial circumstances inside FNCB's market space on an on-going foundation so as to
proactively tackle any collection-related points and mitigate any potential
losses.


The next desk reveals the evolution of uncertain money owed for the years ended December 31, 2020 and 2019. Mortgage foreclosures characterize an funding recorded on the time of foreclosures, whatever the impact of ensures:

Modifications to NPLs

                                                                  12 months ended December 31,
(in hundreds)                                                    2020               2019
Stability, January 1                                            $      9,084$      4,696
Loans newly positioned on non-accrual                                    2,352              9,030
Change in loans late 90 days or extra and nonetheless accruing              -                  -
Loans transferred to OREO                                                -                  -
Loans returned to performing standing                                 (1,573 )              (45 )
Loans charged-off                                                   (1,514 )           (2,589 )
Mortgage funds obtained                                              (2,768 )           (2,008 )
Stability, December 31                                          $      5,581$      9,084




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The extra curiosity revenue that might have been earned on non-accrual and
restructured loans had the loans been performing in accordance with their
authentic phrases approximated   $0.4 million for each the years ended December 31,
2020 and 2019.


The next desk presents delinquencies and loans not topic to accrual accounting as a share of gross loans to December 31, 2020 and 2019:

Credit score defaults and unaccounted for loans

                        December 31,
                       2020       2019
Accruing:
30-59 days              0.31 %     0.26 %
60-89 days              0.06 %     0.10 %
90+ days                0.00 %     0.00 %
Non-accrual             0.62 %     1.10 %
Complete delinquencies     0.99 %     1.46 %




Complete delinquencies as a % of gross loans decreased  to 0.99% at December
31, 2020 from 1.46% at December 31, 2019. Probably the most predominant issue
contributing to the lower in whole delinquencies was a web lower in
non-accrual loans of $3.5 million, concentrated within the business actual property
section.  Loans 30-59 days late elevated, which surpassed the lower
in mortgage balances that have been 60-89 days late.


Different non-performing property at December 31, 2020 and 2019 was comprised solely
of a categorised account receivable secured by an evergreen letter of credit score in
the quantity of $1.9 million, obtained in 2011 as a part of a settlement settlement
for a big development, land acquisition and improvement mortgage for a
residential improvement challenge within the Pocono area of Monroe County. The
settlement offers for cost to FNCB as actual property constructing heaps are bought.
The challenge was stalled on account of a decline in actual property values on this space
following the monetary disaster of 2008. In 2019, financial improvement on this
market space began to enhance and administration had confirmed that the developer
for this challenge had resumed development exercise, together with the completion of
substantial infrastructure, and had elevated advertising and marketing and gross sales initiatives
associated to the challenge. As of December 31, 2020, no single-unit heaps have been
bought, nonetheless, the development of a seven-unit constructing that homes timeshare
items has been accomplished and homeowners started occupying the items within the fourth
quarter of 2020. Administration continues to watch this challenge intently and is
at the moment in negotiations with with the developer to ascertain a reimbursement plan
starting in 2021. Nonetheless, uncertainty and financial volatility related to
the COVID-19 pandemic are unknown and will negatively impression the timing of
gross sales and funds.



TDRs at December 31, 2020 and 2019 have been $7.7 million and $9.1 million,
respectively. Accruing and non-accruing TDRs have been $7.0 million and $0.7 million,
respectively at December 31, 2020 and $7.7 million and $1.4 million,
respectively at December 31, 2019.  Loans modified as TDRs throughout the yr ended
December 31, 2020, included three business and industrial loans and one
residential mortgage mortgage. The three business loans with an combination pre- and
post-modification recorded funding of $196 thousand, have been modified underneath
forbearance agreements. The modification of the residential mortgage concerned an
extension of phrases and had a pre- and post-modification recorded funding of
$93 thousand. In 2019, there have been seven mortgage relationships modified as TDRs
throughout the yr, which included a complete of ten particular person loans. There was
one relationship with an combination post-modification recorded funding of $865
thousand that was comprised of two business actual property loans and one
business and industrial mortgage for which phrases have been prolonged and taxes
capitalized.  Extra TDR's included 4 residential actual property loans with
a post-modification recorded funding totaling $289 thousand and three different
business and industrial loans totaling $712 thousand, involving an extension
of phrases. Subsequent to modification, FNCB charged-off one of many business
loans within the quantity of $235 thousand.



For extra data on TOR, see be aware 5 “Loans” of the notes to the consolidated monetary statements showing in level 8 “Monetary statements and supplementary information” of this annual report on type 10-Ok.

The common dangerous mortgage steadiness was $ 13.8 million for the 2 accomplished years
December 31, 2020 and 2019. The FNCB acknowledged curiosity on impaired loans of
$ 351 thousand in 2020 and $ 398 thousand in 2019.

Modifications associated to COVID-19


In late March 2020, the federal banking regulators issued steerage encouraging
banks to work prudently with and supply short-term cost lodging to
debtors affected by COVID-19.  Moreover, Part 4013 of the CARES Act
addressed COVID-19 associated modifications and specified that such modifications
made on loans that have been present as of December 31, 2019 don't have to be
categorised as TDRs.  FNCB has utilized this steerage and made 922 such
modifications, with 843 loans having an combination recorded funding of
$151.4 million excellent as of December 31, 2020.  These preliminary modifications
supplied debtors with a short-term, sometimes three-month, interest-only
interval or full cost deferral.  FNCB prolonged a second cost deferral
modification for 79 loans with an combination recorded funding of $22.0
million. Administration is intently monitoring all loans for which a cost deferral
has been granted and can proceed to observe regulatory steerage when working
with the debtors which have been impacted by COVID-19 and apply the provisions
of the CARES Act in making any TDR determinations. As of December 31, 2020,
there have been 45 loans with an combination recorded funding of $9.5 million, or
1.06% of whole loans, that have been nonetheless underneath deferral.



The next desk presents data on mortgage modifications associated to COVID-19 by main mortgage class within the December 31, 2020.

                                                                        As of December 31, 2020
                                       Complete Loans Modified                               Complete Variety of Loans Nonetheless Below Deferral
                                                Recorded         % of Mortgage                                   Recorded              % of Mortgage
(in hundreds)           Variety of Loans       Funding        Class        Variety of Loans            Funding              Class
COVID-19 associated mortgage
modifications:
Residential actual
property                                199     $      17,594            8.96 %                   5         $          196                   0.10 %
Industrial actual
property                                146            94,586           34.53 %                   6                  8,617                   3.15 %
Building, land
acquisition and
improvement                            11            11,019           18.43 %                   -                      -                      -
Industrial and
industrial                            106            21,659            9.08 %                   1                     42                   0.02 %
Client                              381             6,587            7.67 %                  33                    677                   0.79 %
State and political
subdivision                             -                 -               -                     -                      -                      -
Complete                                 843     $     151,445           16.76 %                  45                  9,532                   1.06 %




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Provision for losses on loans and leases


The ALLL represents administration's estimate of possible mortgage losses inherent in
the mortgage portfolio. The ALLL is analyzed in accordance with GAAP and is
maintained at a stage that's based mostly on administration's analysis of the adequacy
of the ALLL in relation to the dangers inherent within the mortgage portfolio.



As a part of its evaluation, administration considers qualitative and environmental components, together with, however not restricted to:

? adjustments in nationwide, native and business financial circumstances and developments,

    together with the situation of assorted market segments;


  ? adjustments within the nature and quantity of the mortgage portfolio;

? adjustments in lending insurance policies and procedures, together with underwriting requirements,

assortment, charging and assortment practices and outcomes;

? adjustments within the expertise, capability and depth of mortgage and employees administration;

? adjustments within the high quality of the mortgage evaluate system and the diploma of oversight

by the board of administrators;

? adjustments within the development of quantity and severity of arrears and filed

loans, together with traits in quantity of non-accrual loans, TORs and others

mortgage modifications;

? the existence and impact of any focus of credit score and adjustments within the

stage of those concentrations;

? the impact of exterior components resembling competitors and authorized and regulatory results

necessities for the extent of estimated credit score losses within the present mortgage

pockets; and

? evaluation of the credit score high quality of shoppers, together with information of their operation

    surroundings and monetary situation.



Valuations are inherently subjective, as outcomes are estimated based mostly on the information and expertise of administration and are topic to interpretation and alter as data turns into obtainable or as future occasions happen. Administration displays the mortgage portfolio on an ongoing foundation with a deal with the weak point of the actual property market and the economic system usually and its impact on reimbursement. Changes to the ALLL are made based mostly on administration’s evaluation of the components talked about above.


For functions of administration's evaluation of the ALLL, all mortgage relationships with
an combination steadiness better than $100 thousand which might be rated substandard and
non-accrual, recognized as uncertain or loss, and all TDRs are thought-about
impaired and are analyzed individually to find out the quantity of impairment.
Circumstances resembling development delays, declining actual property values, and the
lack of ability of the debtors to make scheduled funds have resulted in these
mortgage relationships being categorised as impaired. FNCB makes use of the honest worth of
collateral methodology for collateral-dependent loans and TDRs for which reimbursement
depends upon the sale of collateral. For non-collateral-dependent loans and TDRs,
FNCB measures impairment based mostly on the current worth of anticipated future money
flows discounted on the mortgage's authentic efficient rate of interest. With regard to
collateral-dependent loans, value determinations are obtained no less than yearly to make sure
that impairment measurements mirror present market circumstances. Ought to a present
appraisal not be obtainable on the time of impairment evaluation, different valuation
sources together with present letters of intent, dealer worth opinions or executed
agreements of sale could also be used. Solely downward changes are made based mostly on
these supporting values. Included in all impairment calculations is a price to
promote adjustment of roughly 10%, which relies on typical value components,
together with a 6% dealer fee, 1% switch taxes and three% varied different
miscellaneous prices related to the gross sales course of. Gross sales prices are
periodically reviewed and revised based mostly on precise expertise. The ALLL evaluation
is adjusted for subsequent occasions that will come up after the top of the reporting
interval however earlier than the monetary experiences are filed.



The ALLL equaled $11.9 million at December 31, 2020, a rise of
$3.0 million, or 33.5%, from $8.9 million at December 31, 2019. The rise
resulted from a provision for mortgage and lease losses of $1.9 million coupled with
web recoveries of $1.1 million for the yr ended December 31, 2020.
The rise within the ALLL was primarily associated to financial disruption and
uncertainty brought on by the COVID-19 pandemic. Administration adjusted the qualitative
components for the potential impact of financial and employment uncertainty and
disruption because of the world pandemic into its analysis.



The ALLL consists of each particular and basic parts. The element of the
ALLL that's associated to impaired loans which might be individually evaluated for
impairment, the steerage for which is supplied by ASC 310 "Impairment of a Mortgage"
("ASC 310"), was $416 thousand, or 3.5%, of the entire ALLL at December 31, 2020,
in comparison with $473 thousand, or 5.3%, of the entire ALLL at December 31, 2019. A
basic reserve of $11.5 million was established for loans analyzed collectively
underneath ASC 450 "Contingencies" ("ASC 450"), which represented 96.5% of the entire
ALLL of $11.9 million at December 31, 2020. Included within the basic element of
the ALLL at December 31, 2020 and 2019 have been unallocated reserves of $1.1 million
and $426 thousand, respectively. Primarily based on its evaluations, administration might
set up an unallocated element to cowl any inherent losses that exist as of
the analysis date, however which can not have been recognized underneath the
methodology. The rise within the unallocated reserve was instantly associated to the
enhance in credit score provisioning because of the financial disruption brought on by the
COVID-19 pandemic. Primarily based on these circumstances, administration believes the
enhance and stage of the unallocated reserve to be acceptable at December 31,
2020. The ratio of the ALLL to whole loans at December 31, 2020 and December 31,
2019 was 1.33% and 1.08%, respectively, based mostly on loans, web of web deferred mortgage
prices and unearned revenue of $901.1 million and $828.5 million, respectively.



The next desk presents an allocation of the ALLL by main mortgage class
and % of loans in every class to whole loans at December 31, for every of
the final 5 years:



Allocation of the ALLL



                                                                                                        December 31,
                                          2020                             2019                             2018                             2017                             2016
                                               Share                       Share                       Share                       Share                       Share
                                              of Loans in                      of Loans in                      of Loans in                      of Loans in                      of Loans in
                                                  Every                             Every                             Every                             Every                             Every
                                              Class to                      Class to                      Class to                      Class to                      Class to

({dollars} in hundreds) Allocation Complete mortgage allocation

    Complete Loans       Allowance      Complete Loans       Allowance      Complete Loans       Allowance      Complete Loans
Residential actual property       $     1,715            21.73 %   $     1,147            22.73 %   $     1,175            22.09 %   $     1,236            23.36 %   $     1,171            23.04 %
Industrial actual property              4,268            30.32 %         3,198            33.69 %         3,107            31.46 %         3,499            34.08 %         3,297            33.46 %
Building, land
acquisition and improvement           538             6.62 %           271             5.75 %           188             2.49 %           209             2.73 %           268             2.52 %
Industrial and industrial           2,619            26.39 %         1,997            17.86 %         2,552            18.08 %         2,340            19.54 %         1,736            20.69 %
Client                            1,319             9.51 %         1,658            14.66 %         2,051            18.81 %         1,395            14.75 %         1,457            14.30 %
State and political
subdivisions                          405             5.43 %           253             5.31 %           417             7.07 %           355             5.54 %           490             5.99 %
Unallocated                         1,086                - %           426                - %            29                - %             -                - %             -                - %
Complete                         $    11,950           100.00 %   $     8,950           100.00 %   $     9,519           100.00 %   $     9,034           100.00 %   $     8,419           100.00 %




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The next desk presents an evaluation of the ALLL by mortgage class for every
of the final 5 years:



Reconciliation of the ALLL



                                                     For the 12 months Ended December 31,
({dollars} in hundreds)                  2020          2019         2018         2017         2016
Stability, January 1,                   $  8,950$  9,519$  9,034$  8,419$  8,790
Cost-offs:
Residential actual property                      -            27           63          192          153
Industrial actual property                     336             -        1,845          159          398
Building, land acquisition and
improvement                                  -            18            -            -            -
Industrial and industrial                  254         1,258           97          495        1,107
Client                                   975         1,311        1,134          603          960
State and political subdivision              -             -            -            -            -
Complete charge-offs                        1,565         2,614        3,139        1,449        2,618
Recoveries of charged-off loans:
Residential actual property                     43             9          135           29            4
Industrial actual property                     846            32           42           45            6
Building, land acquisition and
improvement                                  -            82           30          480            9
Industrial and industrial                1,220           364          291          360          507
Client                                   515           761          576          381          568
State and political subdivision              -             -            -            -            -
Complete recoveries                         2,624         1,248        1,074        1,295        1,094
Web (recoveries) charge-offs            (1,059 )       1,366        2,065          154        1,524
Provision for mortgage and lease losses      1,941           797        2,550          769        1,153
Stability, December 31,                 $ 11,950$  8,950$  9,519$  9,034$  8,419

Ratios:
Web (recoveries) charge-offs as a
share of common loans              (0.12 )%       0.16 %       0.25 %

0.02% 0.21%

Allowance for mortgage and lease losses
as a % of gross loans at finish
of interval                                 1.33 %        1.08 %       1.13 %

1.17% 1.15%

Allowance for mortgage and lease losses
as a % of gross loans at finish
of interval, excluding PPP Loans            1.45 %        1.08 %       1.13 %       1.17 %       1.15 %




Different Actual Property Owned



At December 31, 2020, there was one piece of economic land with an combination
carrying worth of $58 thousand held in OREO, in comparison with two properties with an
combination steadiness of $289 thousand at December 31, 2019. The 2 properties that
have been held as of December 31, 2019, included the piece of economic land and a
single household residential actual property property with carrying values of $85
thousand and $204 thousand, respectively.  FNCB recorded a valuation adjustment
to the carrying worth of the piece of economic land of $27 thousand within the
third quarter of 2020. The residential actual property property, which was the
collateral supporting an investor-owned residential mortgage mortgage, was bought in
2020. The settlement with the investor requires FNCB to take title of the
property upon foreclosures and liquidate the property on behalf of the investor
after foreclosures.  FNCB didn't understand any acquire or loss upon the sale.



In the course of the yr ended December 31, 2019, there have been 5 gross sales of properties
with an combination carrying worth of $0.8 million. Web positive factors realized on the sale
of those properties was $20 thousand. Web positive factors on the sale of OREO properties
have been included in non-interest revenue for the yr ended December 31, 2019.



FNCB actively markets OREO properties on the market via a wide range of channels
together with inner advertising and marketing and using outdoors brokers/realtors. The
carrying worth of OREO is mostly calculated at an quantity not better than 90%
of the newest honest market appraised worth except particular circumstances
warrant an exception. A ten% issue is mostly used to estimate prices to promote,
which relies on typical value components, resembling 6% dealer fee, 1%
switch taxes, and three% varied different miscellaneous prices related to the
gross sales course of. This honest worth is up to date on an annual foundation or extra continuously
if new valuation data is offered. Deterioration in the actual property
market may end in further losses on these properties. Valuation
changes associated to OREO totaled $27 thousand for the yr ended December 31,
2020 and $85 thousand for the yr ended December 31, 2019, that are included
in different working expense within the consolidated statements of revenue.



The next desk presents the exercise in OREO for the years ended December
31, 2020 and 2019:



Exercise in OREO



                                 For the Years Ended December 31,
(in hundreds)                     2020                    2019
Stability, Janauary 1           $           289         $           919
Actual property foreclosures                    -                     256
Switch from financial institution premises                 -                       -
Valuation changes                     (27 )                   (85 )
Carrying worth of OREO bought              (204 )                  (801 )
Stability, December 31          $            58         $           289




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The next desk presents a distribution of OREO at December 31, for the previous
5 years:



Distribution of OREO



                                                  December 31,
(in hundreds)                  2020      2019      2018       2017        2016
Land / heaps                     $  58$  85$ 436$   516$   641
Industrial actual property              -         -       438         427       1,380
Residential actual property             -       204        45          80          27

Complete different actual property held $ 58$ 289$ 919$ 1,023$ 2,048



The bills associated to sustaining OREO embody the following write-downs of
the properties associated to declines in worth since foreclosures, web of any revenue
obtained. OREO bills amounted to $164 thousand and $231 thousand and are
included in different working expense within the consolidated statements of
revenue, for the years ended December 31, 2020 and 2019, respectively.



Deposits



Administration acknowledges the significance of deposit development as its major funding
supply for mortgage merchandise and repeatedly  evaluates new merchandise and methods
centered on rising business, shopper and municipal deposit relationships.
FNCB skilled robust deposit demand in 2020, which was concentrated primarily
in non-maturity deposits. The robust demand was typically brought on by components
associated to the COVID-19 pandemic together with amongst others, varied authorities
stimulus initiatives, PPP funding, and adjustments in shopper and saving habits and
enterprise funding in response to financial uncertainty. FNCB did expertise
some deposit migration throughout 2020 as maturing time deposits have been redirected
into non-maturity deposits.

Complete deposits in creased $285.7 million, or 28.5%, to $1.287 billion at
December 31, 2020  from $1.002 billion at December 31, 2019 . Curiosity-bearing
deposits elevated $193.7 million, or 23.6%, to $1.016 billion at December 31,
2020 from $822.2 million at December 31, 2019 . In
addition, non-interest-bearing demand deposits elevated $92.0 million, or
51.3%, to $271.5 million at December 31, 2020 from $179.5 million at December
31, 2019 . The rise in non-interest-bearing deposits was due primarily to
will increase in shopper and small enterprise demand deposit accounts, together with
residual balances retained from PPP mortgage funding. With regard to
interest-bearing deposits, the rise was primarily concentrated in
interest-bearing demand accounts, particularly cash market transaction
accounts, interest-bearing public funds and interest-bearing enterprise checking
accounts. In whole, interest-bearing demand deposits elevated $178.7 million,
or 33.4%, to $713.4 million at December 31, 2020  from $534.7 million at
December 31, 2019 . Time deposits with balances $250 thousand and over decreased
$12.2 million, or 25.2%, to $36.2 million a t December 31, 2020 , from $48.4
million at December 31, 2019, whereas different time deposits elevated $12.1 million,
or 8.34%, to $156.7 million at December 31, 2020 from $144.6 million at December
31, 2019. Included in different time deposits was $20.0 million in brokered time
deposits excellent which might be a part of an rate of interest swap transaction.
Excluding brokered deposits, different time deposits would have contracted $7.9
million, or 5.5%. There have been no brokered time deposits excellent at December
31, 2019 .


Non-interest-bearing demand deposits averaged $78.0 million, or 47.5%, greater at
$242.0 million in 2020 as in comparison with $164.0 million in 2019. Curiosity-bearing
deposits averaged $908.5 million in 2020, a rise of $63.7 million, or 7.5%,
in comparison with $844.8 million in 2019. The rise was concentrated in common
interest-bearing demand deposits which elevated $98.0 million, or 19.1%
evaluating 2020 and 2019. Common financial savings deposits elevated $8.7 million, or
9.3%, to $101.8 million in 2020 from $93.1 million in 2019. Partially offsetting
these will increase was a lower of $43.0 million, or 18.1%, in common time
deposits, to $195.1 million in 2020 from $238.1 million in 2019. FNCB's deposit
funding prices decreased 37 foundation factors, to 0.59% in 2020 from 0.96% in 2019.
Charges on interest-bearing demand and time deposits decreased by 33 foundation factors
and 38 foundation factors, respectively, whereas financial savings deposit charges decreased to a
lesser extent, by 3 foundation factors to 0.10% evaluating 2020 and 2019. The lower
in deposit prices mirrored decrease market rates of interest and oversupply of financial institution
liquidity in 2020.


The common steadiness and the speed paid of the principle deposit classifications over the previous three years are summarized within the following desk:


Deposit Distribution



                                                           For the 12 months Ended December 31,
                                            2020                         2019                         2018
                                    Common                      Common                      Common
({dollars} in hundreds)              Stability         Price         Stability         Price         Stability         Price
Curiosity-bearing deposits:
Demand                            $   611,511         0.48 %   $   513,542         0.81 %   $   502,978         0.57 %
Financial savings                               101,847         0.10 %        93,114         0.13 %        98,927         0.13 %
Time                                  195,140         1.22 %       238,145         1.60 %       236,162         1.23 %
Complete interest-bearing deposits       908,498         0.59 %       844,801         0.96 %       838,067         0.71 %

Non-interest-bearing deposits         242,017                      164,035                      168,313

Complete deposits                    $ 1,150,515$ 1,008,836$ 1,006,380




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The next desk reveals the breakdown of the maturity dates of the time period deposits of
$ 100,000 or extra at December 31, 2020 and 2019:

Breakdown of time period deposits at maturity $ 100,000 or extra

                                December 31,
(in hundreds)               2020         2019
3 months or much less           $ 20,023$  17,471
Over 3 via 6 months      17,180        21,620
Over 6 via 12 months     40,319        35,299
Over 12 months               10,441        27,371
Complete                      $ 87,963$ 101,761




Borrowings



FNCB has an settlement with the FHLB which permits for borrowings, both
in a single day or time period, as much as a most borrowing capability based mostly on a share of
qualifying loans pledged underneath a blanket pledge settlement. Along with
pledging loans, FNCB is required to buy FHLB inventory based mostly upon the quantity of
credit score prolonged. Loans that have been pledged to collateralize borrowings underneath this
settlement have been $500.1 million at December 31, 2020 and $475.3 million at
December 31, 2019. FNCB's most borrowing capability was $352.2 million at
December 31, 2020. There was $75.0 million in letters of credit score to safe
municipal deposits excellent at December 31, 2020 underneath this settlement. There
have been no in a single day borrowings or time period advances via the FHLB excellent at
December 31, 2020.



Advances via the Federal Reserve Financial institution Low cost Window typically embody
short-term advances that are absolutely collateralized by sure pledged loans in
the quantity of $31.5 million underneath the Federal Reserve Financial institution's Borrower-in-Custody
("BIC") program. There have been no advances underneath the BIC program excellent at
December 31, 2020 and December 31, 2019. FNCB had obtainable borrowing capability
of $16.4 million underneath this program at December 31, 2020.



The Paycheck Safety Program Liquidity Facility ("PPPLF") was established by
the Federal Reserve System on April 9, 2020 to supply collaborating lenders
with liquidity to mortgage cash underneath the PPP. PPPLF advances are collateralized
by swimming pools of PPP loans, have an rate of interest of 0.35% and a maturity date equal
to the time period of the pool of PPP loans securing it. Compensation of PPP loans serving
as collateral should be handed on to the Federal Reserve Financial institution Low cost Window to
pay down the corresponding PPPLF advance. At December 31, 2020, there have been no
PPPLF advances excellent and FNCB had liquidity obtainable of $58.3 million
via this facility.



FNCB additionally had $10.3 million of junior subordinated debentures excellent at
December 31, 2020 and 2019. The rate of interest on these debentures resets
quarterly at a selection of 1.67% above the present 3-month LIBOR price, at the moment
1.89% at December 31, 2020. The common rate of interest paid on the junior
subordinated debentures in 2020 was 2.43%, in comparison with 4.17% in 2019.



On September 1, 2009, FNCB provided solely to accredited buyers as much as $25.0
million principal quantity of unsecured subordinated debentures due September 1,
2019 (the "Notes"). The Notes had a set rate of interest of 4.50%. On January 30,
2019, the Board of Administrators of FNCB permitted the acceleration of the ultimate $5.0
million principal reimbursement on the Notes.  The $5.0 million last cost, which
was due and payable on September 1, 2019, was paid to Noteholders on February 8,
2019.



Common borrowed funds decreased $12.3 million, or 19.4%, to $51.3 million in
2020 from $63.6 million in 2019. The common price paid on borrowed funds
decreased 119 foundation factors to 1.47% in 2020 from 2.66% in 2019. The lower in
price on borrowed funds was on account of decreases within the charges paid for FHLB
borrowings and junior subordinated debentures on account of decrease market rates of interest
for almost all of 2020.



See Notice 8, "Borrowed Funds" of the Notes to consolidated monetary statements
included in Merchandise 8, "Monetary Statements and Supplementary Information" to this Annual
Report on Kind 10-Ok for added details about FNCB's borrowed funds.



Liquidity



The time period liquidity refers back to the potential to generate ample quantities of money
to satisfy money circulation wants. Liquidity is required to satisfy the borrowing wants of
FNCB's credit score clients and the withdrawal and maturity necessities of its
deposit clients, in addition to to satisfy different monetary commitments. FNCB's
liquidity place is impacted by a number of components, which embody, amongst others,
mortgage origination volumes, mortgage and funding maturity construction and money flows,
deposit demand and time deposit maturity construction and retention. FNCB has
liquidity and contingent funding insurance policies in place which might be designed with
controls in place to supply superior detection of probably important
funding shortfalls, set up strategies for assessing and monitoring threat ranges,
and institute immediate responses that will alleviate a possible liquidity disaster.
Administration displays FNCB's liquidity place and fluctuations day by day, forecasts
future liquidity wants, performs periodic stress exams on its liquidity ranges
and develops methods to make sure enough liquidity always.



The statements of money flows current the change in money and money equivalents
from working, investing and financing actions. Money and due from banks and
interest-bearing deposits in different banks, which comprise money and money
equivalents, are FNCB's most liquid property. FNCB's liquidity place improved
considerably in 2020, as an inflow of money from financing and working
actions have been solely partially offset by money outflows utilized in investing
actions. Money and money equivalents totaled $155.8 million at December 31,
2020, a rise of $121.2 million from $34.6 million at December 31, 2019.



Financing actions supplied $234.4 million in web money, which resulted
primarily from a $285.7 million web enhance in deposits in 2020. This enhance
was barely offset by web money used to repay FHLB of Pittsburgh time period and
in a single day advances of $46.9 million and pay quarterly dividends totaling $4.4
million. Working actions embody web revenue, adjusted for the results of
non-cash transactions together with, amongst others, depreciation and amortization and
the availability for mortgage and lease losses, and is the first supply for the
remaining funds from operations. In 2020 working actions supplied FNCB with
$22.0 million in web money, which mirrored web revenue of $15.3 million and
non-cash changes to revenue of $6.7 million.



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Web money outflows from investing actions used $135.2 million of money and money
equivalents throughout the yr ended December 31, 2020, which was largely on account of
funding of PPP loans, leading to a web enhance in loans to clients of $73.3
million. As well as, purchases of available-for-sale debt securities in
2020 utilized $152.7 million in money and money equivalents, which was partially
offset by the money proceeds obtained from the sale of available-for-sale debt
securities of $68.3 million and from maturities, calls and principal funds of
available-for-sale securities of $21.7 million.



Administration is actively monitoring FNCB's liquidity place and capital adequacy
in mild of the altering circumstances associated to financial uncertainty introduced
on by the COVID-19 pandemic. Whereas administration believes FNCB's liquidity place
is favorable, they're keenly conscious that adjustments in financial circumstances associated
to COVID-19, or usually, may pose potential stress on liquidity ought to
deposits start exiting the Financial institution or FNCB's asset high quality deteriorates.
Moreover, FNCB may expertise a rise within the utilization of current
traces of credit score as clients handle their very own liquidity wants throughout this time
of financial uncertainty.  Administration believes that FNCB's liquidity place is
ample to satisfy its money circulation wants as of December 31, 2020. FNCB typically
makes use of core deposits as its major supply of liquidity. Core deposits embody
non-interest-bearing and interest-bearing demand deposits, financial savings deposits and
different time deposits, web of brokered deposits and one-way bought deposits
generated via the IntraFiSM Community, which embody time deposits issued
underneath CDARs program and cash market accounts issued via the ICS program.
Collaborating within the IntraFiSM Community applications permits FNCB to service and
appeal to potential high-balance deposits clients who need the safety of
full-FDIC insurance coverage however wish to keep an area deposit relationship.
Reciprocal deposits issued via the IntraFiSM Community program are thought-about
to be core deposits.  As of December 31, 2020, FNCB had roughly
$24.6 million positioned into the reciprocal program. Along with money and money
equivalents of $155.8 million, FNCB had ample sources of further liquidity
together with roughly $276.0 million in obtainable borrowing capability with the
FHLB of Pittsburgh, and obtainable borrowing capability via The Federal Reserve
Low cost Window of $58.3 million underneath the PPPLF and $16.4  million underneath the
BIC program. As well as, FNCB had $47.0 million in federal fund traces of credit score
obtainable via correspondent banks at December 31, 2020.



Capital



A robust capital base is crucial to the continued development and profitability of
FNCB and is subsequently a administration precedence. Administration's principal capital
planning objectives embody: offering an enough return to shareholders; retaining
a ample base from which to supply for future development, and complying with
relevant regulatory requirements. As extra absolutely described in Notice 14, "Regulatory
Issues" to the notes to the consolidated monetary statements included in Merchandise
8 of this Annual Report on Kind 10-Ok, regulatory authorities have prescribed
specified minimal capital ratios as tips for figuring out capital adequacy
to assist guarantee the protection and soundness of monetary establishments.



The next tables current data on the Financial institution’s risk-based capital. December 31, 2020 and 2019, and sure different capital ratios:

                                                                                                    Minimal
                                                                                  Minimal         Required To
                                                                 Minimal       Required For         Be Properly
                                                                 Required         Capital         Capitalized
                                                                   For           Adequacy        Below Immediate
                                                                 Capital       Functions with      Corrective
                                                                 Adequacy      Conservation         Motion
                                          FNCB Financial institution              Functions         Buffer          Laws
({dollars} in hundreds)              Quantity          Ratio         Ratio            Ratio             Ratio

December 31, 2020

Complete capital (to risk-weighted
property)                           $   149,173         15.79 %         8.00 %           10.50 %           10.00 %

Tier I capital (to
risk-weighted property)                 137,356         14.54 %         6.00 %            8.50 %            8.00 %

Tier I widespread fairness (to
risk-weighted property)                 137,356         14.54 %         4.50 %            7.00 %            6.50 %

Tier I capital (to common
property)                               137,356          9.57 %         4.00 %            4.00 %            5.00 %

Complete risk-weighted property            944,546

Complete common property                1,434,776




                                                                                                    Minimal
                                                                                  Minimal         Required To
                                                                 Minimal       Required For         Be Properly
                                                                 Required         Capital         Capitalized
                                                                   For           Adequacy        Below Immediate
                                                                 Capital       Functions with      Corrective
                                                                 Adequacy      Conservation         Motion
                                          FNCB Financial institution              Functions         Buffer          Laws
({dollars} in hundreds)              Quantity          Ratio         Ratio            Ratio             Ratio

December 31, 2019

Complete capital (to risk-weighted
property)                           $   133,406         14.77 %         8.00 %           10.50 %           10.00 %

Tier I capital (to
risk-weighted property)                 123,753         13.70 %         6.00 %             8.5 %            8.00 %

Tier I widespread fairness (to
risk-weighted property)                 123,753         13.70 %         4.50 %            7.00 %            6.50 %

Tier I capital (to common
property)                               123,753         10.36 %         4.00 %            4.00 %            5.00 %

Complete risk-weighted property            903,172

Complete common property                1,194,789




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FNCB's whole regulatory capital elevated $15.8 million to $149.2 million at
December 31, 2020 from $133.4 million at December 31, 2019. The Financial institution's
risk-based capital ratios exceeded the minimal regulatory capital ratios
required for adequately capitalized establishments. Primarily based on the newest
notification from its major regulators, the Financial institution was categorized as effectively
capitalized at December 31, 2020 and 2019. There aren't any circumstances or occasions
since this notification that administration believes have modified this class.



As of December 31, 2020, FNCB had 29,754,351 shares of widespread inventory obtainable
for future sale or share dividends. The variety of shareholders of document at
December 31, 2020 was 1,671. Quarterly market highs and lows, dividends paid and
recognized market makers are highlighted in Half I, Merchandise 5, "Marketplace for Registrant's
Frequent Fairness, Associated Shareholder Issues and Issuer Purchases of Fairness
Securities" of this Annual Report on Kind 10-Ok. For additional dialogue of FNCB's
capital necessities and dividend limitations, seek advice from Notice 15, "Regulatory
Issues," of the notes to consolidated monetary statements included in Merchandise 8,
"Monetary Statements and Supplementary Information" of this Annual Report on Kind
10-Ok.



As well as, the FNCB has 20,000,000 licensed shares of most popular inventory. There have been no most popular shares issued and excellent at December 31, 2020 and 2019.


On January 27, 2021, FNCB's Board of Administrators licensed a inventory repurchase
program underneath which as much as 975,000 shares of FNCB's excellent widespread inventory might
be acquired within the open market commencing no sooner than February 3, 2021 and
expiring December 31, 2021 pursuant to a buying and selling plan that was adopted in
accordance with Rule 10b5-1 of the Securities Change Act of 1934, as
amended. The shares can be bought now and again at prevailing market
costs, via open market transactions relying upon market circumstances.
Repurchases underneath the repurchase program are administered via an impartial
dealer and are topic to SEC rules in addition to sure worth, market
quantity and timing constraints specified within the buying and selling plan. Below this system,
the purchases can be funded from obtainable working capital presently obtainable
to FNCB, and the repurchased shares can be returned to the standing of licensed
however unissued shares of Frequent Inventory.  There may be not a assure as to the precise
variety of shares that can be repurchased by FNCB, and FNCB might discontinue
purchases at any time that administration determines further repurchases aren't any
longer warranted.  As of December 31, 2020, FNCB had roughly 20,245,649
million shares excellent. As of February 28, 2021, 8,188 shares have been
repurchased at a mean worth of $6.81 per share.



On February 8, 2019, FNCB accomplished a public providing of its shares of widespread
inventory in a agency dedication underwritten providing and issued 3,285,550 shares of
its widespread inventory, which included 428,550 shares of widespread inventory issued upon the
train in stuffed with the choice to buy further shares granted to
underwriters, at a public providing worth of $7.00 per share, much less an
underwriting low cost of $0.35 per share. FNCB obtained web proceeds after
deducting underwriting reductions and providing bills of $21.3 million.
Following the receipt of the proceeds throughout the first quarter of 2019, FNCB
made a capital funding in FNCB Financial institution, it is wholly-owned subsidiary of $17.8
million.



FNCB's potential to pay dividends to its shareholders is essentially depending on the
Financial institution's potential to pay dividends to FNCB. Financial institution rules restrict the quantity of
dividends which may be paid with out prior approval of the Financial institution's regulatory
company. Money dividends declared and paid by FNCB throughout 2020 and 2019 have been $0.22
per share and $0.20 per share, respectively. FNCB presents a Dividend Reinvestment
and Inventory Buy plan ("DRP") to its shareholders. For the years ended
December 31, 2020 and 2019 dividend reinvestment shares have been bought in open
market transactions. Nonetheless, shares underneath the optionally available money buy characteristic of
the DRP have been issued from licensed however unissued widespread shares. Shares of widespread
inventory issued underneath the DRP totaled 10,271 and seven,369 for the years ended December
31, 2020 and 2019, respectively. Subsequent to December 31, 2020, on January 27,
2021, FNCB declared a $0.06 per share dividend payable on March 15, 2021 to
shareholders of document on March 1, 2021.



Off-balance sheet preparations


Within the peculiar course of operations, FNCB engages in a wide range of monetary
transactions that, in accordance with GAAP, aren't recorded in our consolidated
monetary statements or are recorded in quantities that differ from the notional
quantities. These transactions contain, to various levels, components of credit score,
rate of interest and liquidity threat. Such transactions could also be used for basic
company functions or for buyer wants. Company objective transactions would
be used to assist handle credit score, rate of interest and liquidity threat or to optimize
capital. Buyer transactions are used to handle clients' requests for
funding.



For the yr ended December 31, 2020, FNCB didn't interact in any off-balance
sheet transactions that might have or could be moderately prone to have a
materials impact on its consolidated monetary situation. For an additional
dialogue of FNCB's off-balance sheet preparations, seek advice from Notice 12,
"Commitments, Contingencies, and Concentrations" to the notes to the
consolidated monetary statements included in Merchandise 8, "Monetary Statements and
Supplementary Information," of this Annual Report on Kind 10-Ok.



The next desk presents off-balance monetary devices whose contractual
quantities characterize credit score threat at December 31, 2020 and 2019. With the exception
of credit score availability for sure business development, land acquisition and
improvement loans having a 24-month draw interval, the entire off-balance sheet
monetary devices excellent at December 31, 2020 expire inside one yr of
their respective contract dates.



Off-Stability Sheet Commitments



                                    December 31,
(in hundreds)                   2020          2019
Commitments to increase credit score   $ 227,908$ 275,891
Standby letters of credit score         18,914        15,081



With a view to deal with the possible losses inherent in these devices, the FNCB has acknowledged reserves for unfunded commitments of 613 thousand {dollars} and $ 703 thousand at
December 31, 2020 and 2019, respectively, which have been included in different liabilities within the consolidated statements of monetary place.


FNCB's Finance unit proactively displays the extent of unused commitments in opposition to
the obtainable sources of liquidity from its funding portfolio, from deposit
gathering actions in addition to obtainable unused borrowing capability from the
FHLB and the Federal Reserve. The Finance unit experiences the outcomes of its
liquidity monitoring repeatedly to FNCB's Asset and Legal responsibility Administration
Committee ("ALCO"), the Funding and Liquidity Committee, the Govt
Administration Committee and the Board of Administrators.



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Contents

© Edgar On-line, supply Previews

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401 (ok) Plan Debtors Default Throughout COVID | Clean Rome LLP https://cleangreennappy.co.uk/401-ok-plan-debtors-default-throughout-covid-clean-rome-llp/ https://cleangreennappy.co.uk/401-ok-plan-debtors-default-throughout-covid-clean-rome-llp/#respond Tue, 09 Mar 2021 10:56:38 +0000 https://cleangreennappy.co.uk/401-k-plan-borrowers-default-during-covid-blank-rome-llp/ The overwhelming majority of 401 (ok) plans enable contributors to borrow towards the advantages of their plan. These loans are secured by the borrowing participant’s plan account and are typically repaid by withholding quantities from the borrower’s paychecks. Plan cash loans are topic to various limits, together with a five-year compensation interval (except the mortgage […]]]>

The overwhelming majority of 401 (ok) plans enable contributors to borrow towards the advantages of their plan. These loans are secured by the borrowing participant’s plan account and are typically repaid by withholding quantities from the borrower’s paychecks.

Plan cash loans are topic to various limits, together with a five-year compensation interval (except the mortgage is used to amass a major residence) and a most borrowing restrict of fifty% of the mortgage steadiness. account acquired from the borrower or $ 50,000.* Failure to adjust to these limits has unfavorable tax penalties for the borrower, which aren’t mentioned on this article. The main focus of this text is what occurs when an individual borrowed from a 401 (ok) plan inside limits, terminates employment, after which defaults on the mortgage – particularly, the adjustments made by the Coronavirus Help, Reduction, and Financial Safety Act (“CARES Act”) and an modification to the tax legislation in 2017, that are useful to the big quantity of people that could discover themselves on this state of affairs through the pandemic.

Plan mortgage defaults by terminated workers = plan distributions

In most 401 (ok) plans, debtors who terminate their employment earlier than repaying their plan mortgage should both pay your entire remaining mortgage quantity inside a interval specified by the plan after termination of employment, or , failing that, be thought-about. be in default on the mortgage, through which case the tax legislation treats the borrower as having obtained a distribution of the plan for the quantity of the excellent mortgage steadiness. The Inside Income Service (“IRS”) designates this quantity as a plan compensation quantity.

Since plan mortgage compensation quantities are handled as plan distributions, the borrower will likely be taxed on the plan compensation quantity. except an equal quantity is contributed as a rollover to an IRA or different qualifying retirement plan. Like all 401 (ok) plan distributions, this rollover should happen inside 60 days of the default that prompted the distribution. There are just a few exceptions to the 60-day rule (which additionally apply to plan mortgage offsets), most notably the aid granted in IRS Discover 2020-23 for various tax closing dates. Beneath this discover, in accordance with emergency catastrophe aid in response to the COVID-19 pandemic, the IRS has prolonged the 60-day switch interval till July 15, 2020, for distributions made after the April 1, 2020 and earlier than Could 16, 2020.

Staff who borrow from their 401 (ok) account and have their employment terminated are sometimes unable to repay their loans. Until they’re able to roll over an quantity equal to the plan mortgage offset quantity triggered by the mortgage default, they won’t solely must pay taxes on the plan offset quantity, however most often of circumstances, they can even owe the IRS a further 10 p.c tax in the event that they haven’t reached the age of 59 and a half. In apply, giving a laid-off worker 60 days to keep away from tax on their plan mortgage, by deferring the quantity they haven’t been capable of repay, presents little or no aid. The CARES Act and the Tax Cuts and Jobs Act enacted in 2017 (the “TCJA”), nevertheless, comprise provisions that can enable many workers whose layoff through the pandemic resulted in mortgage default and compensation for the scheme to have for much longer durations. to carry out a rollover.

Congress to the rescue

Coronavirus-related distributions

The CARES Act creates a brand new class of 401 (ok) and different certified employer plan distributions and IRA distributions which might be paid to eligible people on or after January 1, 2020 and earlier than December 31, 2020 (coronavirus-related distributions). “Certified individuals” are people who find themselves identified with COVID-19 or who’ve a partner or dependent who has been identified with COVID-19, or who’re in monetary issue or who’ve a partner or member. of their family that’s experiencing monetary hardship attributable to COVID-19. The CARES Act limits the quantity of combination distributions from all eligible pension plans that an individual can deal with as coronavirus-related distributions to a most of $ 100,000. Plan mortgage offsets that lead to plan distributions could qualify as coronavirus-related distributions.

The CARES Act provides the beneficiary of a coronavirus-related distribution three years, counting from the day after the distribution was obtained, to reimburse the distribution in a number of contributions to an eligible pension plan, which incorporates IRA and 401 (ok) and different employer-qualified pension plans that settle for re-assessments of coronavirus-related distributions. Re-contributions don’t have to be to the plan or to the IRA that made the distribution. The CARES Act treats the reassessment as if it had been a tax-free switch from the plan or the IRA that made the distribution to the beneficiary’s qualifying retirement plan. One of many complexities related to coronavirus-related distributions is that a person may very well be required to file an amended tax return for the 12 months through which the distribution was obtained, if the distribution is repaid in a subsequent 12 months.

Beneath the CARES Act, if a Certified Individual has plan mortgage compensation that could be a coronavirus-related distribution, and the particular person doesn’t contribute again to the plan compensation quantity, except the particular person does decides in any other case, the particular person consists of the plan compensation quantity proportionally in revenue on the person’s 2020, 2021 and 2022 tax returns. Nevertheless, the extra 10% tax on distributions earlier than the age of 59 and a half doesn’t apply if the plan’s mortgage offset is a coronavirus-related distribution.

Eligible Plan Mortgage Compensation

As a part of the TCJA, Congress added an prolonged rotation interval for so-called qualifying plan mortgage offset quantities. “Qualifying” plan mortgage compensation quantities are plan mortgage compensation quantities that outcome from the termination of a plan or the borrower’s failure to repay a mortgage attributable to “termination of employment. “.

The TCJA extends the rollover interval for qualifying plan loans till the due date (together with extensions) of the person’s tax return for the 12 months through which the compensation is handled as a distribution of the tax return. weight loss plan. This could imply, for instance, that an worker with a mortgage from the plan who terminates their employment on March 1, 2021 and doesn’t repay your entire mortgage steadiness as of March 31, 2021 (as required by the plan) would have till in April 15, 2022 or October 15, 2022, in the event that they file their 2021 tax return in extension, to keep away from the taxation of the mortgage by making a rollover. . . a serious enchancment over the 60-day rollover rule that will require the rollover to happen earlier than Could 30, 2021.

If an worker is laid off in 2020 and defaults on a 401 (ok) plan mortgage leading to plan mortgage compensation, which isn’t a coronavirus-related distribution that may be re-assessed over a three-year interval, the worker might be able to make a rolling contribution of the plan’s mortgage compensation quantity. For instance, contemplate an worker who terminates employment on March 1, 2020 and defaults on a 401 (ok) plan mortgage with a steadiness of $ 30,000 on March 31, 2020, after which takes a distribution from the 401 (ok) account ( ok) Worker’s remaining within the quantity of $ 100,000 as of August 1, 2020. Assuming the worker is a qualifying particular person and the default produces qualifying plan mortgage compensation, the worker might (if needs) maximize the interval throughout which he avoids tax as follows:

  • Designate the $ 100.00 distribution as a coronavirus distribution, utilizing the quantity accessible for such distributions, and have three years to contribute again to the $ 100,000; and
  • Have till October 15, 2021, by extending his 2020 tax return, to resume the quantity of $ 30,000 on the overdue mortgage.

The not too long ago finalized IRS rules deciphering the Certified Plan Compensation Guidelines present {that a} plan mortgage compensation quantity won’t be thought-about to be due upon termination of employment except the compensation ends in a distribution. inside 12 months of the date of termination of employment. This time constraint is mostly irrelevant, since most 401 (ok) plans require compensation of a plan mortgage inside a brief time frame after a person’s employment ends. Nevertheless, some employers enable laid-off workers to proceed repaying their loans after they go away. In these circumstances, a default on the mortgage might happen greater than 12 months after the worker’s employment ends, particularly if the plan has a default therapeutic interval (as allowed by the IRS) till on the final day of the calendar quarter following the calendar quarter. through which a cost is missed. Beneath these circumstances, if the default triggers a plan mortgage compensation distribution in 2020 that isn’t a coronavirus-related distribution, the worker would solely have 60 days to carry out a tax-free rollover.

The place are issues

The CARES legislation’s favorable therapy of coronavirus-related distributions, together with plan mortgage offsets, will finish on December 30, 2020. On the time of writing, it stays unclear whether or not Congress will prolong this therapy. With the pandemic nonetheless not below management, it may be anticipated that workers will proceed to lose their jobs at a excessive fee till early 2021 and, if they’ve any deliberate loans, will likely be taxed on these loans. the tip of their employment. On this case, with out additional legislative intervention, their recourse to increase the timeframe to keep away from taxation of their delinquent loans can be to show to the prolonged rollover interval to offset the plan loans eligible within the TCJA.


* The $ 50,000 restrict was elevated by the Coronavirus Assist, Reduction and Financial Safety Act (“CARES Act”) to $ 100,000 for certified people who took out a plan mortgage between March 27 2020 and September 22, 2020. The CARES Act additionally permits plans to droop and delay mortgage repayments owed by certified individuals for one 12 months through the interval starting March 27, 2020 and ending December 31, 2020, if the mortgage was excellent on March 27, 2020. See the dialogue on this article for the outline of who’s a Certified Individual.

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With the PPP fund dry, anger turns to the banks https://cleangreennappy.co.uk/with-the-ppp-fund-dry-anger-turns-to-the-banks/ https://cleangreennappy.co.uk/with-the-ppp-fund-dry-anger-turns-to-the-banks/#respond Tue, 09 Mar 2021 10:56:38 +0000 https://cleangreennappy.co.uk/with-the-ppp-fund-dry-anger-turns-to-the-banks/ {Photograph} by Jonathan Maze Because the Paycheque Safety Program (PPP) ran out of money final week, controversy surrounded the funding given to huge chains comparable to Ruth’s Chris and Shake Shack, a lot in order that the latter returned its funds, and not less than one petition asks the primary to do the identical. But […]]]>

{Photograph} by Jonathan Maze

Because the Paycheque Safety Program (PPP) ran out of money final week, controversy surrounded the funding given to huge chains comparable to Ruth’s Chris and Shake Shack, a lot in order that the latter returned its funds, and not less than one petition asks the primary to do the identical.

But a few of this angst has been reserved for the lenders themselves. A category motion group focusing on a few of the nation’s largest banks accused them of placing their largest prospects on the entrance line, in the end leaving small companies to seek for what’s left.

The lawsuits, filed in a California federal district court docket, have been filed by small enterprise house owners, together with not less than one restaurant group, towards Wells Fargo, the US Financial institution, Financial institution of America and JPMorgan Chase.

The lawsuits accuse the biggest banks of “rearranging” PPP calls for in favor of bigger prospects who generate increased charges.

Lenders “have given precedence to mortgage purposes in quest of increased mortgage quantities, as a result of the processing of those requests initially generated increased mortgage origination prices for the banks,” says the lawsuit towards Financial institution of America.

The lawsuit argues, for instance, that lenders get charges of 5% for cash loans as much as $ 350,000, 3% for loans of $ 350,000 to $ 2 million, and 1% for loans. from $ 2 to $ 10 million.

But that also interprets into an incentive to focus on massive firms. The 2 loans from Ruth’s Chris totaling $ 20 million, for instance, most likely earned JPMorgan $ 200,000 in charges. In distinction, a mortgage of $ 150,000 would generate charges of solely $ 7,500.

Information from the Small Enterprise Administration as of April 13, for instance, reveals that just about three-quarters of all loans of $ 5 million or extra have been processed on the very begin of the mortgage program.

In distinction, solely 59% of all PPP loans of $ 150,000 or much less have been processed within the first three days of this system, and the speed for these loans accelerated in its remaining days.

The lawsuit means that the speed change proves that the banks initially favored massive debtors. The mortgage program was imagined to be a primary come, first served operation. If this have been the case, the mortgage fee in response to the dimensions of the loans would have been the identical in each instances.

Congress created the Paycheck Safety Program as a part of a $ 2 trillion stimulus package deal. This system offered $ 349 billion for low-interest loans to companies with 500 or fewer staff per location that would develop into grants if 75% of funds are used for payroll.

But this system was put in place in a rush and trusted the banks to make the loans. With lots of of 1000’s of companies eligible for funding and desperate to get assist, the end result overwhelmed lenders and the mortgage processing system.

Huge banks have lengthy favored massive debtors and their increased charges. But the prospect of such actions as a part of a program aimed primarily at small companies, with so many wants and such restricted funding, created appreciable frustration with lenders and the design of the system.

“Foremost Road companies are livid,” Amanda Ballantyne, government director of the Foremost Road Alliance, a small enterprise advocacy group, mentioned Tuesday. “This risk signifies an apparent design flaw in this system that tried to make use of the already discriminated personal lending market that places income first as a back-up mechanism for small companies.”

A lot of the companies that utilized for loans didn’t obtain them.

In response to the Worldwide Franchise Affiliation, a commerce group that advocates for franchise companies, 98% of franchise house owners have utilized for loans and practically two-thirds of them haven’t been authorized. Of those that have, 89% have but to obtain their funds.

Eight publicly traded restaurant firms have not less than utilized for loans and 7 have mentioned they’ve acquired funding, together with Ruth’s and Shake Shack. Meritage Hospitality Group, which operates greater than 300 places, acquired $ 29 million.

J. Alexander acquired $ 15.1 million, whereas Fiesta Restaurant Group and Potbelly acquired $ 10 million.

Giant debtors receiving $ 5 million or extra acquired simply 0.27% of all loans, in response to SBA information, whereas getting 9% of complete funds.

Small operators, alternatively, typically discovered themselves in search of a lender to take out their loans, with many going to a number of banks and others going from their massive financial institution to native lenders. Some imagine debtors will not come again, particularly if these points persist as soon as the second spherical of funding opens.

“I believe a variety of small companies will look to native banks,” mentioned Adam Wasch, lawyer at Florida legislation agency Wasch Raines, which represents each franchisors and franchisees in a wide range of areas. “It is traumatic for them.”

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The scholar mortgage amnesty, an affront to taxpayers https://cleangreennappy.co.uk/the-scholar-mortgage-amnesty-an-affront-to-taxpayers/ https://cleangreennappy.co.uk/the-scholar-mortgage-amnesty-an-affront-to-taxpayers/#respond Tue, 09 Mar 2021 10:56:38 +0000 https://cleangreennappy.co.uk/the-student-loan-amnesty-an-affront-to-taxpayers/ Barack Obama used his telephone and pen to bypass checks on his authority and increase government energy. Now Democrats are pushing Joe Biden to do the identical. On Monday, the Wall Road Journal reported that if Republicans retain management of the Senate, Mr. Biden may make liberal use of government orders to perform what he […]]]>

Barack Obama used his telephone and pen to bypass checks on his authority and increase government energy. Now Democrats are pushing Joe Biden to do the identical.

On Monday, the Wall Road Journal reported that if Republicans retain management of the Senate, Mr. Biden may make liberal use of government orders to perform what he can’t get by Congress. One in every of its targets is to unilaterally wipe out billions of {dollars} in excellent pupil loans, which now stand at $ 1.55 trillion.

Senate Minority Chief Chuck Schumer has beforehand urged Biden to just do that after he takes workplace.

Through the marketing campaign, Biden advocated that taxpayers write off $ 10,000 in pupil debt for each American with greater training cash loans. He additionally mentioned he would write off the scholar mortgage debt of any employee incomes lower than $ 125,000, the Journal famous. Proponents supply the pandemic because the justification for this amnesty program, however it’s merely a sensible cowl. Democrats have been agitating for this large donation lengthy earlier than COVID-19 entered the lexicon.

Republicans have to date refused to observe them – and for good motive. The Biden plan – which might price the wealthy dearly to the detriment of those that by no means went to varsity – treats dad and mom and college students who wronged and sacrificed themselves to cowl tuition charges or who scrupulously honored their obligations monetary like idiots and fools. The place do these hapless pigeons go to get their free cash? Sure, there are reputable cases of hardship, however a common mortgage forgiveness coverage highlights how Democrats have deserted the idea of non-public legal responsibility altogether.

Furthermore, the Biden plan is sorely missing in long-term imaginative and prescient. Those that advocate for pupil mortgage forgiveness typically scoff when confronted with the plain query: After which what? Is the federal authorities simply resetting the calculator and persevering with to undertake the identical insurance policies that failed that brought about this mess till the loop is closed? What do they are saying in regards to the definition of madness?

“I count on the Biden administration to take motion on pupil debt exterior of something that occurs in Congress,” a former official within the Obama administration’s training division instructed the Journal. “The query is how far they may go.”

Republicans are anticipated to reply to any unilateral choice by a Biden administration on pupil mortgage cancellation with a authorized problem. As well as, they need to demand that any mortgage amnesty program be linked to reforms to make sure that U.S. taxpayers are now not tied to mountains of dangerous debt and that faculties and universities cease utilizing beneficiant federal packages. pupil assist as a method of accelerating tuition and charges.

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Greatest low cost auto insurance coverage in Norwalk https://cleangreennappy.co.uk/greatest-low-cost-auto-insurance-coverage-in-norwalk/ https://cleangreennappy.co.uk/greatest-low-cost-auto-insurance-coverage-in-norwalk/#respond Tue, 09 Mar 2021 10:56:38 +0000 https://cleangreennappy.co.uk/best-cheap-auto-insurance-in-norwalk/ Between 2017 and early 2021, there have been just a little extra 9,700 automotive accidents reported on native streets and highways in Norwalk. Each driver at Norwalk is required to hold auto insurance coverage to assist cowl bills within the occasion of an accident. The typical annual value of auto insurance coverage in Norwalk is […]]]>

Between 2017 and early 2021, there have been just a little extra 9,700 automotive accidents reported on native streets and highways in Norwalk. Each driver at Norwalk is required to hold auto insurance coverage to assist cowl bills within the occasion of an accident. The typical annual value of auto insurance coverage in Norwalk is $ 1,841 for a full protection coverage and $ 810 for a minimal protection coverage.

Norwalk drivers have dozens of auto insurance coverage choices. Nevertheless, some suppliers are costlier than others. We have carried out some analysis to determine the perfect low cost auto insurance coverage in Norwalk based mostly on common charges, protection choices, and reductions.

Greatest Auto Insurance coverage Firms in Norwalk

The most effective auto insurance coverage firms in Norwalk are Amica, USAA, Progressive, and State Farm. These 4 suppliers supply affordable charges, beneficiant reductions, distinctive protection choices, spectacular monetary power, and wonderful scores from third-party analysis firms.

Insurance coverage firm JD Energy Buyer Satisfaction Rating Common annual premium for minimal protection Common annual premium for full protection
Amica 863/100 $ 404 $ 1,136
USAA 895/100 $ 484 $ 1,253
Progressive 819/100 $ 1,083 $ 2,573
State farm 855/100 $ 643 $ 1,479

Quadrant Data Companies, 2020

Amica

Amica achieved the perfect total buyer satisfaction score in JD Energy U.S. Auto Insurance coverage Examine 2020 for the New England area. Amica is understood for its extremely rated customer support and grievance dealing with. As well as, Amica affords reasonably priced charges, with a median full protection premium of $ 1,253 per yr.

Amica is a good selection for Norwalk drivers on the lookout for a low value coverage. The corporate affords a variety of reductions, together with financial savings for being a loyal buyer, proudly owning a house, being scholar, bundling two or extra insurance policies, and extra. As well as, Amica affords dividend insurance policies, the place you possibly can get well as much as 20% of your annual premium.

USAA

USAA is one other insurance coverage firm that persistently receives excessive marks from JD Energy. For those who’re on the lookout for an insurance coverage firm with good customer support, low charges, and beneficiant protection choices, USAA is a good selection. The one catch is that the USAA solely sells insurance coverage to active-duty and retired army personnel and their eligible relations.

USAA On common, members who change to USAA save over $ 700 per yr, which is spectacular. Drivers may benefit from quite a lot of reductions for college kids, secure drivers, park your car at a army base, drive sometimes, and bundle insurance policies. USAA additionally affords some worthwhile further coverages, similar to accident forgiveness and changing a brand new automotive.

Progressive

Progressive auto insurance coverage insurance policies are above-average priced, with a full protection premium of $ 2,573 and a minimal protection premium of $ 1,083. The corporate affords extra reductions than nearly some other insurance coverage firm available in the market. For those who can qualify for a couple of, you could possibly scale back your charge considerably.

Progressive a reductions for steady insurance coverage, teen drivers, distant college students, householders, full cost, on-line coverage buy, paperless billing enrollment and extra. Moreover, drivers can join Progressive’s Instantaneous secure driver program, go for the deductible financial savings financial institution and use the Identify your value device to see the insurance policies in your finances.

State farm

State Farm is the nation’s largest auto insurance coverage firm, with greater than 16% of whole market share. Many drivers select State Farm due to reasonably priced fares, on-line instruments and assets, and reductions. State Farm is among the solely auto insurance coverage firms to supply two secure driver financial savings applications.

With State Farm, drivers underneath the age of 25 can register for the Lead away program to avoid wasting as much as 15% on their premium. Extra skilled drivers over the age of 25 can register for the Drive safely and save program for a bigger low cost as much as 30%. Drivers may see if they’ll get a decrease premium by bundling their insurance policies, being declare free, having security gear of their car and extra.

Least expensive auto insurance coverage in Norwalk

the common value of auto insurance coverage in Norwalk is barely costlier than the nationwide common charge in america. The typical American pays $ 1,738 per yr for full protection insurance coverage and $ 563 per yr for minimal protection insurance coverage. Nevertheless, every driver pays a barely totally different charge relying on elements similar to their age and cash loans .

The desk beneath contains the most cost effective auto insurance coverage choices in Norwalk based mostly on market share:

Insurance coverage firm Common annual premium for minimal protection Common annual premium for full protection
Amica $ 404 $ 1,136
Geico $ 416 $ 1,015
USAA $ 484 $ 1,253
State farm $ 643 $ 1,479
In all of the nations $ 647 $ 1,276

Quadrant Data Companies, 2020

Whereas these 5 suppliers supply below-average charges to Norwalk, they don’t seem to be created equal. For instance, USAA solely serves army drivers, whereas the opposite 4 firms present insurance coverage to anybody. By way of scores, USAA, Amica, Geico, and State Farm are rated above common by JD Energy within the New England space, and Nationwide has not been rated in any respect.

As well as, the coverages range significantly between these suppliers. For instance, Geico and State Farm supply restricted protection choices, however Nationwide, Amica, and USAA supply a protracted record of protection, in addition to numerous endorsements. Until you want the minimal protection, you could have to pay a bit extra to get a extra complete coverage.

Norwalk Insurance coverage Necessities

Auto insurance coverage in Norwalk is legally required. For those who personal a car registered within the state of Connecticut, you should buy a minimal quantity of auto insurance coverage. Norwalk’s auto insurance coverage requirement is abbreviated as 25/50/25, which incorporates the next third occasion legal responsibility and coverages for uninsured / underinsured motorists:

  • $ 25,000 of non-public damage safety per individual
  • $ 50,000 in unintended bodily damage safety
  • Unintentional property harm protection of $ 25,000

Drivers on the lookout for the Connecticut’s most cost-effective auto insurance coverage could also be tempted to buy insurance coverage with minimal protection. Nevertheless, there isn’t any assure that the minimal protection insurance coverage will cowl the complete value of an accident. Moreover, drivers who’ve a leased or financed car are normally required to hold full insurance coverage till the mortgage is paid off.

Auto Insurance coverage Reductions in Norwalk

Most Norwalk auto insurance coverage firms supply reductions that may assist drivers get monetary savings on their coverage. Listed below are among the commonest reductions at Norwalk:

  • Bulk coverage supply: Drivers who bundle a house and auto insurance coverage coverage with the identical supplier can normally get a discount of their premium.
  • Good scholar low cost: Many insurance coverage firms supply reductions to good college students who preserve a sure GPA.
  • Low cost on car security gear: In case your automotive has safety features like anti-lock brakes or an anti-theft gadget, you possibly can in all probability get monetary savings in your coverage.
  • Defensive pilot low cost: Taking an permitted defensive driver or secure driver coaching course can normally assist decrease your auto insurance coverage premium.

Regularly Requested Questions

What’s the finest auto insurance coverage firm?

the finest auto insurance coverage firm is totally different for every driver. It is dependent upon the place you reside, what sort of protection you want, what protection you want, your finances and extra. To search out the perfect auto insurance coverage firm for you, examine suppliers and get a number of quotes to see which provider can supply the bottom value for the kind and quantity of protection you want.

How a lot does auto insurance coverage value in Norwalk?

The typical auto insurance coverage quote in Norwalk is $ 1,841 per yr for a full protection coverage and $ 810 per yr for a minimal protection coverage. Nevertheless, take into account that insurance coverage charges range based mostly on private elements similar to your age, credit score rating, declare historical past, the kind of automotive you drive, and your annual mileage.

Methodology

Bankrate makes use of Quadrant Data Companies to research charges for all postal codes and carriers in all 50 states and Washington, DC Charges proven are based mostly on a 40 yr previous female and male driver with a clear driving file , good credit score and the next complete protection limits:

  • $ 100,000 of civil legal responsibility per individual
  • Civil legal responsibility of $ 300,000 per accident
  • Legal responsibility for property harm of $ 50,000 per accident
  • $ 100,000 of uninsured bodily damage by a motorist per individual
  • $ 300,000 in uninsured bodily damage by a motorist per accident
  • $ 500 collision deductible
  • Full $ 500 deductible

To find out the minimal protection limits, Bankrate used minimal protection that meets the necessities of every state. Our pattern drivers personal a 2018 Honda Accord, commute 5 days per week, and journey 12,000 miles a yr.

These are pattern charges and will solely be used for comparability functions. Your quotes could also be totally different.

In regards to the Creator


Elizabeth rivelli

Elizabeth has two years of expertise writing insurance coverage fields similar to Bankrate.com, The Easy Greenback, Protection.com, and NextAdvisor, amongst others. Along with auto insurance coverage, Elizabeth writes repeatedly on residence insurance coverage, tenant insurance coverage, and life insurance coverage. It additionally covers trade tendencies and basic insurance coverage coaching.

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Biden’s tax plan for his first 100 days – Forbes Advisor https://cleangreennappy.co.uk/bidens-tax-plan-for-his-first-100-days-forbes-advisor/ https://cleangreennappy.co.uk/bidens-tax-plan-for-his-first-100-days-forbes-advisor/#respond Tue, 09 Mar 2021 10:56:38 +0000 https://cleangreennappy.co.uk/bidens-tax-plan-for-his-first-100-days-forbes-advisor/ Editorial Be aware: Forbes might cost a fee on gross sales constituted of accomplice hyperlinks on this web page, however this doesn’t have an effect on the opinions or rankings of our editors. Getty This story is a part of a collection concerning the new Biden administration and what Biden has deliberate for his first […]]]>

Editorial Be aware: Forbes might cost a fee on gross sales constituted of accomplice hyperlinks on this web page, however this doesn’t have an effect on the opinions or rankings of our editors.

This story is a part of a collection concerning the new Biden administration and what Biden has deliberate for his first 100 days – and past.

President-elect Joe Biden campaigned on a promise to spice up American funds by elevating taxes for rich People and companies – however how lengthy will it take for these guarantees to develop into legislation?

Seems it might be sooner than we thought: At a press convention Thursday night time, Biden unveiled its $ 1.9 trillion stimulus bundle this features a important change to the favored baby tax credit score and the earned earnings tax credit score. Nonetheless, the remainder of his fiscal legislative agenda will possible be proposed later in his presidency.

Associated: Biden Revenue Tax Calculator: How Might Your Taxes Change?

Study extra about Biden’s first 100 days:

With Democrats accountable for the presidency and Congress, Biden’s probabilities of undertaking his tax legislative agenda have improved – however the first a part of his presidency will probably be centered on restoring the pandemic-stricken financial system and navigating the financial system. a slim Democratic majority within the Senate.

This is what he hopes to perform together with his tax plan and when he might need the chance to make it occur.

First 100 days: lengthen the kid tax credit score (CTC) and the earned earnings tax credit score (EITC)

Biden moved shortly on his first tax-related change. On Thursday, he launched particulars of modifications to the kid tax credit score and the earned earnings tax credit score as is a component of a bigger restoration program.

For one yr, Biden’s Covid-19 plan will briefly improve the kid tax credit score to $ 3,000 for every aged baby. 17 and below and $ 3,600 for youngsters below 6. Moreover, Biden’s plan would additionally make the credit score absolutely repayable for one yr. A refundable tax credit score not solely reduces the quantity of taxes owed, however gives a tax refund even in case you do not owe it.

Beneath present legislation, taxpayers can declare the kid tax credit score as much as $ 2,000 per baby below 17. The credit score is refundable as much as $ 1,400 for every eligible baby, which implies that as much as that quantity could be refunded to you in case you do not owe. tax, or it could scale back the quantity you owe.

Not everyone seems to be eligible for this credit score. The quantity relies on your Modified Adjusted Gross Revenue (MAGI), which is your adjusted gross earnings for sure deductions and earnings. The credit score is being phased out for people with a MAGI higher than $ 200,000 ($ 400,000 for {couples} submitting a joint return).

His plan can be to increase the Earned Revenue Tax Credit score (EITC) for the yr. Biden proposed to extend the EITC for adults with out kids from $ 530 to about $ 1,500 and improve the earnings restrict from $ 16,000 to about $ 21,000. The growth of the EITC would improve the incomes of hundreds of thousands of employees, based on Biden’s steerage observe launched Thursday.

The remainder of Biden’s tax plan will possible have to attend for the financial system to enhance

With a Senate and Home tightly managed by Democrats, main modifications to tax legislation are unlikely within the early days of Biden’s presidency, exterior of the proposed growth of the Little one Tax Credit score and the earned earnings tax credit score – and up to now it is solely a short lived measure. Biden’s chief financial adviser, Jared Bernstein, mentioned at a Politico occasion that early tax will increase “are going to be very depending on financial circumstances”.

And whereas his tax plan primarily impacts the underside line of rich People, low- and middle-income households may benefit from elevated tax credit, as mentioned in his article. American rescue plan– though it is a short-term measure as half of a bigger stimulus bundle, Biden can push to make the modifications everlasting.

Listed here are a number of the fundamental proposals of Biden’s tax plan:

  • Tax brackets for prime earnings earners: Biden proposes to lift the highest bracket of private earnings tax for People incomes greater than $ 400,000. The tax charge will drop from 37% to 39.6%.
  • Capital features tax: His plan would implement a 39.6% tax charge on earnings over $ 1 million for long-term capital features and eligible dividends.
  • Itemized deductions for prime earnings earners: Biden proposes to restrict itemized deductions, which embody state and native taxes, medical payments, mortgage curiosity and different deductions, to twenty-eight% for high-income taxpayers. As a normal rule, if a high-income taxpayer is topic to marginal tax charge by 32%, they’ll scale back their tax legal responsibility on the identical charge (32%). Nonetheless, this proposal would imply that you may solely scale back as much as 28%, regardless of your increased tax charge.
  • Improve company tax charges: Biden proposes to lift the company tax charge from 21% to twenty-eight%. In 2017, the company tax charge fell from 35% to 21% below the Tax Cuts and Jobs Act, a pointy drop that helped improve in nationwide deficit and triggered file share buybacks in American corporations.
  • Minimal company tax: Biden can be proposing a minimal 15% company tax that earns $ 100 million or extra in accounting earnings, the quantity proven within the firm’s monetary statements. This might have main implications for giant firms who traditionally have been capable of deduct billions in earnings from their taxes, no matter their e-book earnings.

Biden’s administration might face different hurdles because it strikes ahead with its broader tax plan. Because of the slim majority within the Senate, his administration would want the unanimous Democratic approval and assist of some Republicans. “This may occasionally restrict the scale and scope of Biden’s tax will increase, particularly because the restoration continues to be underway,” mentioned Garrett Watson, senior coverage analyst at The Tax Basis.

Biden can use finances reconciliation to go key tax proposals

Whereas fulfilling his tax agenda will probably be troublesome, Biden has a trick up his sleeve. Watson believes Biden may attempt to push by massive tax initiatives on the finish of 2021 by a course of often known as finances reconciliation.

Finances reconciliation is a particular course of that facilitates the passage of finances legal guidelines within the Senate. It requires a easy majority of solely 51 votes go a invoice, in contrast to peculiar laws which requires a majority of 60 votes. With latest Georgia Senate victories, the Senate is now cut up 50-50 between Democrats and Republicans, and Harris will function a tiebreaker, making it simpler to go tax laws by this course of.

Whereas finances reconciliation provides a sooner strategy to go a invoice, it nonetheless requires a course of earlier than it’s carried out. The method entails tasking key committees, just like the Senate Finance Committee, to create a finances that meets specified spending targets. The committees then reconcile the budgets to supply a finances reconciliation invoice, which require a easy majority of the Senate to go.

Additionally it is essential to notice that the Senate can solely take into account the finances reconciliation course of for spending, revenues (together with taxes) and debt ceiling payments and solely use the method for one. time finances cycle, the method of getting ready, reconciling and approving a finances for the fiscal yr.

The finances reconciliation course of has been utilized by earlier presidential administrations to go key finances and tax legal guidelines. In 2010, the administration of President Barack Obama used the finances reconciliation course of go a part of the Affected person Safety and Inexpensive Care Act (ACA).

President Donald Trump’s administration additionally handed the 2017 Tax Cuts and Jobs Act as a part of the finances reconciliation course of. At the moment, Republicans managed each the Home and the Senate, however the administration used the device to make sure efficiently handed the tax reform invoice throughout Trump’s first yr in workplace.

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