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First Capital, Inc. Reports Quarterly Earnings

CORYDON, Ind., July 25, 2025 (GLOBE NEWSWIRE) -- First Capital, Inc. (the 鈥淐ompany鈥�) (NASDAQ: FCAP), the holding company for First Harrison Bank (the 鈥淏ank鈥�), today reported net income of $3.8 million, or $1.13 per diluted share, for the quarter ended June听30,听2025, compared to net income of $2.8 million, or $0.85 per diluted share, for the quarter ended June听30,听2024.

Results of Operations for the Three Months Ended June听30,听2025 and 2024

Net interest income after provision for credit losses increased $1.8 million for the quarter ended June 30, 2025 compared to the same period in 2024. Interest income increased $1.8 million when comparing the two periods due to an increase in the average tax-equivalent yield⁽¹⁾ on interest-earning assets from 4.42% for the quarter ended June 30, 2024 to 4.82% for the same period in 2025, in addition to an increase in the average balance of interest-earning assets from $1.12 billion for the quarter ended June 30, 2024 to $1.18 billion for the same period in 2025. Interest expense increased $67,000 when comparing the two periods. The average cost of interest-bearing liabilities decreased from 1.71% for the quarter ended June 30, 2024 to 1.64% for the same period in 2025, while the average balance of interest-bearing liabilities increased from $830.7 million for the quarter ended June 30, 2024 to $883.8 million for the same period in 2025. As a result of the changes in interest-earning assets and interest-bearing liabilities, the tax-equivalent net interest margin⁽¹⁾ increased from 3.15% for the quarter ended June 30, 2024 to 3.59% for the same period in 2025. Refer to the accompanying average balance sheet for more information regarding changes in the composition of the Company鈥檚 balance sheet and resulting yields and costs from the quarter ended June 30, 2024 to the quarter ended June 30, 2025.

Based on management鈥檚 analysis of the Allowance for Credit Losses (鈥淎CL鈥�) on loans and unfunded loan commitments, the provision for credit losses decreased from $360,000 for the quarter ended June 30, 2024 to $306,000 for the quarter ended June 30, 2025. The Bank recognized net charge-offs of $113,000 and $30,000 for the quarters ended June 30, 2025 and 2024, respectively.

Noninterest income decreased $5,000 for the quarter ended June 30, 2025 as compared to the quarter ended June 30, 2024 primarily due to the Company recognizing a $41,000 loss on equity securities for the quarter ended June 30, 2025 compared to a $6,000 loss on equity securities for the quarter ended June 30, 2024. In addition, the Company recognized a $17,000 decrease in both gains on sale of loans and in the increase of the cash surrender of bank owned life insurance policies when comparing the two periods. These were partially offset by the Company recognizing a $46,000 gain on the redemption of a bank-owned life insurance policy during the quarter ended June 30, 2025, which is reported in other income.

Noninterest expenses increased $494,000 for the quarter ended June 30, 2025 as compared to the same period in 2024. This was primarily due to increases in compensation and benefits, occupancy and equipment, advertising and data processing expenses of $308,000, $69,000, $41,000, and $41,000, respectively. The increase in compensation and benefits is due to increases in salary and wages associated with annual cost of living and performance related adjustments as well as increases in the cost of Company-provided health insurance benefits. The increase in occupancy and equipment expenses is primarily due to costs associated with the upgrade of the Company鈥檚 call center system as well as increased ATM servicing expenses. The increase in advertising expenses is related to various new marketing efforts undertaken in the current quarter. The increase in data processing expense is related to licensing upgrades and various new software.

Income tax expense increased $364,000 for the quarter ended June 30, 2025 as compared to the same period in 2024 resulting in an effective tax rate of 18.4% for the quarter ended June 30, 2025, compared to 14.7% for the same period in 2024. The increase in the Bank鈥檚 effective tax rate for the quarter reflects a higher proportion of net income being subject to taxation compared to the same period last year.

Results of Operations for the Six Months Ended June 30, 2025 and 2024

For the six months ended June 30, 2025, the Company reported net income of $7.0 million, or $2.09 per diluted share, compared to net income of $5.8 million, or $1.73 per diluted share, for the same period in 2024.

Net interest income after provision for credit losses increased $2.7 million for the six months ended June 30, 2025 compared to the same period in 2024. Interest income increased $3.3 million when comparing the two periods due to an increase in the average tax-equivalent yield⁽¹⁾ on interest-earning assets from 4.36% for the six months ended June 30, 2024 to 4.73% for the same period in 2025, in addition to an increase in the average balance of interest-earning assets from $1.12 billion for the six months ended June 30, 2024 to $1.18 billion for the same period in 2025. Interest expense increased $595,000 as the average cost of interest-bearing liabilities increased from 1.63% for the six months ended June 30, 2024 to 1.67% for the same period in 2025, in addition to an increase in the average balance of interest-bearing liabilities from $832.2 million for the six months ended June 30, 2024 to $883.2 million for the same period in 2025. As a result of the changes in interest-earning assets and interest-bearing liabilities, the tax-equivalent net interest margin⁽¹⁾ increased from 3.15% for the six months ended June 30, 2024 to 3.47% for the same period in 2025. Refer to the accompanying average balance sheet for more information regarding changes in the composition of the Company鈥檚 balance sheet and resulting yields and costs from the six months ended June 30, 2024 to the six months ended June 30, 2025.

Based on management鈥檚 analysis of the ACL on loans and unfunded loan commitments, the provision for credit losses increased from $640,000 for the six months ended June 30, 2024 to $644,000 for the six months ended June 30, 2025. The increase was due to loan growth during the period as well as management鈥檚 consideration of macroeconomic uncertainty. The Bank recognized net charge-offs of $197,000 and $85,000 for the six months ended June 30, 2025 and 2024, respectively.

Noninterest income decreased $56,000 for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 primarily due to the Company recognizing a $55,000 loss on sale of available for sale securities for the six months ended June 30, 2025 compared to a $32,000 gain on sale of available for sale securities for the six months ended June 30, 2024. In addition, the Company also recognized a $29,000 decrease in gains on sale of loans when comparing the two periods. These were partially offset by a $51,000 reduction in the loss on equity securities and a $24,000 increase in service charges on deposit accounts when comparing the two periods. In addition, the Company also recognized a $46,000 gain on the redemption of a bank-owned life insurance policy during the six months ended June 30, 2025, which is reported in other income.

Noninterest expenses increased $918,000 for the six months ended June 30, 2025 as compared to the same period in 2024. This was primarily due to increases in compensation and benefits and occupancy and equipment expenses of $567,000 and $229,000, respectively, when comparing the two periods. The increase in compensation and benefits is due to increases in salary and wages associated with annual cost of living and performance related adjustments as well as increases in the cost of Company-provided health insurance benefits. The increase in occupancy and equipment expenses is primarily due to costs associated with snow removal across the Company鈥檚 branch network given the historic storms in our communities in the first quarter of 2025, as well as a loss on the disposal of premises and equipment, the upgrade of the Company鈥檚 call center system, and increased ATM servicing expense.

Income tax expense increased $529,000 for the six months ended June 30, 2025 as compared to the same period in 2024 resulting in an effective tax rate of 17.9% for the six months ended June 30, 2025, compared to 14.7% for the same period in 2024. The increase in the Bank鈥檚 effective tax rate for the six months ended June 30, 2025 reflects a higher proportion of net income being subject to taxation compared to the same period last year.

Comparison of Financial Condition at June 30, 2025 and December 31, 2024

Total assets were $1.24 billion at June 30, 2025 compared to $1.19 billion at December 31, 2024. Total cash and cash equivalents, net loans receivable and securities available for sale increased $28.7 million, $18.0 million, and $6.3 million, respectively, from December 31, 2024 to June 30, 2025. Deposits increased $44.2 million from $1.07 billion at December 31, 2024 to $1.11 billion at June 30, 2025. Nonperforming assets (consisting of nonaccrual loans, accruing loans 90 days or more past due, and foreclosed real estate) decreased from $4.5 million at December 31, 2024 to $4.0 million at June 30, 2025.

The Bank currently has 17 offices in the Indiana communities of Corydon, Edwardsville, Greenville, Floyds Knobs, Palmyra, New Albany, New Salisbury, Jeffersonville, Salem, Lanesville and Charlestown and the Kentucky communities of Shepherdsville, Mt. Washington and Lebanon Junction.

Access to First Harrison Bank accounts, including online banking and electronic bill payments, is available through the Bank鈥檚 website at www.firstharrison.com. For more information and financial data about the Company, please visit Investor Relations at the Bank鈥檚 aforementioned website. The Bank can also be followed on Facebook.

⁽¹⁾ Reconciliations of the non鈥揢.S. Generally Accepted Accounting Principles (鈥淕AAP鈥�) measures are set forth at the end of this press release.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of the words 鈥渁nticipate,鈥� 鈥渂elieve,鈥� 鈥渆xpect,鈥� 鈥渋ntend,鈥� 鈥渃ould鈥� and 鈥渟hould,鈥� and other words of similar meaning. Forward-looking statements are not historical facts nor guarantees of future performance; rather, they are statements based on the Company鈥檚 current beliefs, assumptions, and expectations regarding its business strategies and their intended results and its future performance.

Numerous risks and uncertainties could cause or contribute to the Company鈥檚 actual results, performance and achievements to be materially different from those expressed or implied by these forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, general economic conditions, including changes in market interest rates and changes in monetary and fiscal policies of the federal government; competition; the ability of the Company to execute its business plan; legislative and regulatory changes; the quality and composition of the loan and investment portfolios; loan demand; deposit flows; changes in accounting principles and guidelines; and other factors disclosed periodically in the Company鈥檚 filings with the Securities and Exchange Commission.

Because of the risks and uncertainties inherent in forward-looking statements, readers are cautioned not to place undue reliance on them, whether included in this press release, the Company鈥檚 reports, or made elsewhere from time to time by the Company or on its behalf. These forward-looking statements are made only as of the date of this press release, and the Company assumes no obligation to update any forward-looking statements after the date of this press release.

Contact:
Joshua P. Stevens
Chief Financial Officer
812-738-1570

__________________________
(1)听听See reconciliation of GAAP and non-GAAP financial measures for additional information relating to the calculation of this item.
(2)听听Effective March 31, 2020, the Bank opted in to the Community Bank Leverage Ratio (CBLR) framework. As such, the other regulatory ratios are no longer provided.

__________________________
(1)听听Interest income on loans includes fee income of $222,000 and $184,000 for the three months ended June 30, 2025 and 2024, respectively.
(2)听听Average loan balances include loans held for sale and nonperforming loans.
(3)听听Tax-exempt income has been adjusted to a tax-equivalent basis using the federal marginal tax rate of 21%.
(4)听听Includes taxable debt and equity securities and FHLB Stock.
(5)听听Includes interest-bearing deposits with banks and interest-bearing time deposits.
(6)听听Stockholders' equity attributable to First Capital, Inc.
(7)听 Reconciliations of the non鈥揢.S. GAAP measures are set forth at the end of this press release.

__________________________
(1)听听Interest income on loans includes fee income of $397,000 and $358,000 for the six months ended June 30, 2025 and 2024, respectively.
(2)听听Average loan balances include loans held for sale and nonperforming loans.
(3)听听Tax-exempt income has been adjusted to a tax-equivalent basis using the federal marginal tax rate of 21%.
(4)听听Includes taxable debt and equity securities and FHLB Stock.
(5)听听Includes interest-bearing deposits with banks and interest-bearing time deposits.
(6)听听Stockholders' equity attributable to First Capital, Inc.
(7)听听Reconciliations of the non鈥揢.S. GAAP measures are set forth at the end of this press release.

RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES (UNAUDITED):

This presentation contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (鈥淕AAP鈥�). Management uses these 鈥渘on-GAAP鈥� measures in its analysis of the Company's performance. Management believes that these non-GAAP financial measures allow for better comparability with prior periods, as well as with peers in the industry who provide a similar presentation, and provide a further understanding of the Company's ongoing operations. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company's consolidated financial statements and reconciles those non-GAAP financial measures with the comparable GAAP financial measures.