Note 5 - Bank Premises and Equipment

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment Disclosure [Text Block]

Note 5. BANK PREMISES AND EQUIPMENT

The following table summarizes bank premises and equipment at December 31, 2022 and 2021:

	December 31,
(in thousands)	2022			2021
Land	$	2,930		$	2,776
Buildings and improvements		14,408			14,249
Furniture, fixtures and equipment		11,048			10,610
Leasehold improvements		3,328			2,980
Total		31,714			30,615
Accumulated depreciation		(16,098	)		(14,533	)
Net	$	15,616		$	16,082

Depreciation and amortization expense of premises and equipment amounted to $1.6 million for both of the years ended December 31, 2022, and 2021.

In 2021, FNCB received approval from its primary regulator to consolidate the Bank’s Wheeler Avenue Community Office into its Main Office, both are located in Dunmore, Lackawanna County, Pennsylvania. FNCB is obligated under a land lease through December 2024 for the Wheeler Avenue property and FNCB received an independent third-party appraisal of the building and improvements, which it owns. Upon regulatory approval to consolidate the two offices, FNCB transferred the building and improvements to OREO at fair value less cost to sell and recorded loss on the transfer of $242 thousand which is included in other operating expenses of the consolidated statement of income for the year ended December 31, 2021. In the fourth quarter of 2022, management decided to utilize the property as a temporary training facility until expiration of the lease in December 2024. Accordingly, the property was transferred out of OREO into bank premises and equipment at fair value during the fourth quarter of 2022. No gain or loss was recorded upon the transfer.