First Capital Inc. Files Q2 2024 10-Q

TL;DR

FCAP 10-Q filed for Q2 2024. Financials out.

AI Summary

First Capital Inc. filed its 10-Q for the period ending June 30, 2024. The filing details the company's financial performance and position, including its assets, liabilities, and equity. Specific financial figures and operational details for the second quarter of 2024 are presented.

Why It Matters

This filing provides investors and stakeholders with a detailed look at First Capital Inc.'s financial health and operational performance during the second quarter of 2024, crucial for investment decisions.

Risk Assessment

Risk Level: low — This is a routine quarterly financial filing with no immediate red flags or significant new risks indicated.

Key Numbers

• 20240630 — Reporting Period End Date (Indicates the end of the fiscal quarter covered by the report.)
• 20240814 — Filing Date (The date the 10-Q was officially submitted to the SEC.)

Key Players & Entities

• FIRST CAPITAL INC (company) — Filer of the 10-Q
• 20240630 (date) — End of the reporting period
• 20240814 (date) — Filing date
• 0001070296 (company) — Central Index Key for First Capital Inc.

FAQ

Key Financial Figures

• $0.01 — ich registered Common stock, par value $0.01 per share FCAP The NASDAQ Stock Mar

Filing Documents

• fcap20240630_10q.htm (10-Q) — 4013KB
• ex_708048.htm (EX-31.1) — 11KB
• ex_708049.htm (EX-31.2) — 11KB
• ex_708050.htm (EX-32.1) — 6KB
• ex_708051.htm (EX-32.2) — 6KB
• 0001171843-24-004793.txt ( ) — 18723KB
• fcap-20240630.xsd (EX-101.SCH) — 63KB
• fcap-20240630_def.xml (EX-101.DEF) — 527KB
• fcap-20240630_lab.xml (EX-101.LAB) — 449KB
• fcap-20240630_pre.xml (EX-101.PRE) — 558KB
• fcap-20240630_cal.xml (EX-101.CAL) — 76KB
• fcap20240630_10q_htm.xml (XML) — 5847KB

Consolidated Financial Statements

Item 1. Consolidated Financial Statements 3 Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023 (unaudited) 3 Consolidated Statements of Income for the three and six months ended June 30, 2024 and 2023 (unaudited) 4 Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2024 and 2023 (unaudited) 5 Consolidated Statements of Changes in Stockholders' Equity for the three and six months ended June 30, 2024 and 2023 (unaudited) 6 Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (unaudited) 7

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 8 - 41

Management ' s Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management ' s Discussion and Analysis of Financial Condition and Results of Operations 42 - 47

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 48 - 48

Controls and Procedures

Item 4. Controls and Procedures 51 Part II Other Information

Legal Proceedings

Item 1. Legal Proceedings 52

Risk Factors

Item 1A. Risk Factors 52

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 52

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 52

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 52

Other Information

Item 5. Other Information 52

Exhibits

Item 6. Exhibits 53

Signatures

Signatures 54 -2-

- FI NANCIAL INFORMATION

PART I - FI NANCIAL INFORMATION FIRST CAPITAL, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, December 31, 2024 2023 (In thousands) ASSETS Cash and due from banks $ 22,967 $ 20,008 Interest bearing deposits with banks 1,665 3,171 Federal funds sold 25,939 15,491 Total cash and cash equivalents 50,571 38,670 Interest-bearing time deposits 2,940 3,920 Securities available for sale, at fair value (amortized cost $ 447,489 and $ 468,549 , respectively) 414,301 437,271 Securities held to maturity, at amortized cost (fair value $ 4,494 and $ 4,446 , respectively) 7,000 7,000 Loans held for sale 2,174 800 Loans, net of allowance for credit losses of $ 8,560 ($ 8,005 in 2023) 630,024 614,409 Federal Home Loan Bank ("FHLB") and other stock, at cost 1,836 1,836 Premises and equipment 14,262 14,413 Accrued interest receivable 4,575 4,788 Cash value of life insurance 9,219 9,105 Goodwill 6,472 6,472 Core deposit intangible 159 232 Other assets 20,063 18,964 Total Assets $ 1,163,596 $ 1,157,880 LIABILITIES Deposits: Noninterest-bearing $ 203,910 $ 205,535 Interest-bearing 810,336 819,676 Total deposits 1,014,246 1,025,211 Borrowed funds - Bank Term Funding Program ("BTFP") 33,625 21,500 Accrued interest payable 2,352 1,209 Accrued expenses and other liabilities 5,511 4,615 Total liabilities 1,055,734 1,052,535 EQUITY Preferred stock of $. 01 par value per share Authorized 1,000,000 shares; none issued - - Common stock of $. 01 par value per share Authorized 7,500,000 shares; issued 3,806,983 shares ( 3,803,833 in 2023); outstanding 3,353,332 ( 3,350,660 in 2023) 38 38 Additional paid-in capital 41,676 41,588 Retained earnings-substantially restricted 101,075 97,105 Unearned stock compensation ( 204 ) ( 249 ) Accumulated other comprehensive loss ( 25,599 ) ( 24,033 ) Less treasury stock,

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION FIRST CAPITAL, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In thousands, except per share data) INTEREST INCOME Loans, including fees $ 9,472 $ 8,071 $ 18,710 $ 15,709 Securities: Taxable 1,757 1,347 3,386 2,648 Tax-exempt 636 869 1,340 1,734 Dividends 24 11 36 22 Federal funds sold and other income 329 302 583 674 Total interest income 12,218 10,600 24,055 20,787 INTEREST EXPENSE Deposits 3,103 2,153 5,909 3,149 Advances - FHLB 51 58 99 58 Borrowed funds - BTFP 407 77 790 77 Total interest expense 3,561 2,288 6,798 3,284 Net interest income 8,657 8,312 17,257 17,503 Provision for credit losses 360 350 640 543 Net interest income after provision for credit losses 8,297 7,962 16,617 16,960 NONINTEREST INCOME Service charges on deposit accounts 564 578 1,157 1,140 ATM and debit card fees 1,150 1,141 2,210 2,228 Commission and fee income 12 19 25 31 Gain (loss) on sale of securities - ( 14 ) 32 ( 14 ) Unrealized (loss) gain on equity securities ( 6 ) ( 92 ) ( 74 ) 45 Gain on sale of loans 169 104 270 190 Increase in cash surrender value of life insurance 66 66 114 111 Other income 68 61 188 123 Total noninterest income 2,023 1,863 3,922 3,854 NONINTEREST EXPENSE Compensation and benefits 3,962 3,802 7,805 7,591 Occupancy and equipment 480 446 943 893 Data processing 1,115 1,081 2,191 2,112 Professional fees 303 165 562 351 Advertising 79 94 167 177 Other expenses 1,061 1,078 2,089 1,943 Total noninterest expense 7,000 6,666 13,757 13,067 Income before income taxes 3,320 3,159 6,782 7,747 Income tax expense 488 429 995 1,198 Net Income 2,83

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION FIRST CAPITAL, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In thousands) Net Income $ 2,832 $ 2,730 $ 5,787 $ 6,549 OTHER COMPREHENSIVE (LOSS) INCOME Unrealized (losses) gains on securities available for sale: Unrealized holding (losses) gains arising during the period 163 ( 4,597 ) ( 1,878 ) 4,216 Income tax benefit (expense) ( 96 ) 1,085 337 ( 983 ) Net of tax amount 67 ( 3,512 ) ( 1,541 ) 3,233 Less: reclassification adjustment for realized (gains) losses included in net income - 14 ( 32 ) 14 Income tax (expense) benefit - ( 3 ) 7 ( 3 ) Net of tax amount - 11 ( 25 ) 11 Other Comprehensive (Loss) Income, net of tax 67 ( 3,501 ) ( 1,566 ) 3,244 Comprehensive Income (Loss) 2,899 ( 771 ) 4,221 9,793 Less: comprehensive income attributable to the noncontrolling interest in subsidiary 4 4 7 7 Comprehensive Income (Loss) Attributable to First Capital, Inc. $ 2,895 $ ( 775 ) $ 4,214 $ 9,786 See accompanying notes to consolidated financial statements. -5-

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION FIRST CAPITAL, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) Accumulated Additional Other Unearned Common Paid-in Retained Comprehensive Stock Treasury Noncontrolling (In thousands) Stock Capital Earnings Loss Compensation Stock Interest Total Balances at April 1, 2024 $ 38 $ 41,676 $ 99,152 $ ( 25,666 ) $ ( 259 ) $ ( 9,216 ) $ 115 $ 105,840 Net income - - 2,828 - - - 4 2,832 Other comprehensive income - - - 67 - - - 67 Cash dividends - - ( 905 ) - - - ( 14 ) ( 919 ) Stock compensation expense - - - - 55 - - 55 Purchase of treasury shares - - - - - ( 13 ) - ( 13 ) Balances at June 30, 2024 $ 38 $ 41,676 $ 101,075 $ ( 25,599 ) $ ( 204 ) $ ( 9,229 ) $ 105 $ 107,862 Balances at April 1, 2023 $ 38 $ 41,636 $ 90,845 $ ( 28,996 ) $ ( 465 ) $ ( 9,018 ) $ 115 $ 94,155 Net income - - 2,726 - - - 4 2,730 Other comprehensive loss - - - ( 3,501 ) - - - ( 3,501 ) Cash dividends - - ( 905 ) - - - ( 14 ) ( 919 ) Stock compensation expense - - - - 61 - - 61 Purchase of treasury shares - - - - - ( 175 ) - ( 175 ) Restricted stock grant forfeitures - ( 48 ) - - 48 - - - Balances at June 30, 2023 $ 38 $ 41,588 $ 92,666 $ ( 32,497 ) $ ( 356 ) $ ( 9,193 ) $ 105 $ 92,351 Balances at January 1, 2024 $ 38 $ 41,588 $ 97,105 $ ( 24,033 ) $ ( 249 ) $ ( 9,216 ) $ 112 $ 105,345 Net income - - 5,780 - - - 7 5,787 Other comprehensive loss - - - ( 1,566 ) - - - ( 1,566 ) Cash dividends - - ( 1,810 ) - - - ( 14 ) ( 1,824 ) Stock compensation expense - - - - 133 - - 133 Purchase of treas

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION FIRST CAPITAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES (In thousands) Net income $ 5,787 $ 6,549 Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: Amortization of premiums and accretion of discounts on securities, net 580 830 Depreciation and amortization expense 535 509 Deferred income taxes ( 293 ) ( 168 ) Stock compensation expense 133 145 Increase in cash value of life insurance ( 114 ) ( 111 ) (Gain) loss on sale of securities ( 32 ) 14 Provision for credit losses 640 543 Proceeds from sales of loans 15,088 12,871 Loans originated for sale ( 16,192 ) ( 12,884 ) Gain on sale of loans ( 270 ) ( 190 ) Amortization of tax credit investment 986 170 Unrealized loss (gain) on equity securities 74 ( 45 ) Decrease (increase) in accrued interest receivable 213 ( 51 ) Increase in accrued interest payable 1,143 582 Net change in other assets/liabilities 2,423 ( 1,101 ) Net Cash Provided By Operating Activities 10,701 7,663 CASH FLOWS FROM INVESTING ACTIVITIES Net decrease (increase) in interest-bearing time deposits 980 ( 977 ) Purchase of securities available for sale ( 35,358 ) ( 20,144 ) Proceeds from maturities of securities available for sale 22,480 9,885 Proceeds from sales of securities available for sale 19,189 10,816 Principal collected on mortgage-backed obligations 11,202 7,908 Net increase in loans receivable ( 16,255 ) ( 26,153 ) Investment in tax credit entities - ( 100 ) Investment in technology fund ( 50 ) ( 150 ) Purchase of premises and equipment ( 311 ) ( 292 ) Net Cash Provided By (Used In) Investing Activities 1,877 ( 19,207 ) CASH FLOWS FROM FINANCING ACTIVITIES Net decrease in deposits ( 10,965 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Presentation of Interim Information First Capital, Inc. ("Company") is the financial holding company of First Harrison Bank ("Bank"), an Indiana chartered commercial bank and wholly owned subsidiary. First Harrison Investments, Inc. and First Harrison Holdings, Inc. are wholly-owned Nevada corporate subsidiaries of the Bank that jointly own First Harrison, LLC, a Nevada limited liability corporation that holds and manages an investment portfolio. First Harrison REIT, Inc. ("REIT") is a wholly-owned subsidiary of First Harrison Holdings, Inc. that holds a portion of the Bank's real estate mortgage loan portfolio. FHB Risk Mitigation Services, Inc. (the "Captive") was a wholly-owned insurance subsidiary of the Company that provided property and casualty insurance coverage to the Company, the Bank and the Bank's subsidiaries, and reinsurance to nine other third party insurance captives, for which insurance was not available or economically feasible in the insurance marketplace. Refer to Note 13 – Captive Subsidiary for details regarding the status of the Captive. In the opinion of management, the unaudited consolidated financial statements include all adjustments considered necessary to present fairly the financial position as of June 30, 2024, and the results of operations for the three and six months ended June 30, 2024 and 2023 and the cash flows for the six months ended June 30, 2024 and 2023. All of these adjustments are of a normal, recurring nature. Such adjustments are the only adjustments included in the unaudited consolidated financial statements. Interim results are not necessarily indicative of results for a full year or any other period. The accompanying unaudited consolidated financial statements and notes have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial statements and are presented as permitted by the instructions to Form 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (2 – continued) In March 2023, the FASB issued ASU No. 2023-02, Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures using the Proportional Amortization Method . The ASU allows entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the income tax credits and other income tax benefits received, and recognizes the net amortization and income tax credits and other income tax benefits in the income statement as a component of income tax expense. This also aligns the treatment of other tax equity investments with that allowed for low income housing tax credit ("LIHTC") investments. For public business entities, the ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted in any interim period. The Company already utilized the proportional amortization method for its LIHTC investment and early adopted ASU 2023-02 in conjunction with its initial investment in an investment tax credit producing solar property described in more detail in Note 6 – Renewable Energy Tax Credit Investment . The adoption of the ASU did not have a material impact on the Company's consolidated financial position or results of operations. Recently Issued but Not Adopted Accounting Guidance In November 2023, the FASB issued ASU 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures , which requires public entities to disclose information about their reportable segments' significant expenses on an interim and annual basis. Public entities are required to disclose significant expense categories and amounts for each reportable segme

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 3. Investment Securities Investment securities have been classified in the consolidated balance sheets according to management's intent. Investment securities at June 30, 2024 and December 31, 2023 are summarized as follows: Gross Gross Amortized Unrealized Unrealized Fair (In thousands) Cost Gains Losses Value June 30, 2024 Securities available for sale: Agency mortgage-backed securities $ 74,648 $ - $ 9,035 $ 65,613 Agency CMO 48,313 56 561 47,808 Other debt securities: Agency notes and bonds 135,335 8 7,821 127,522 Treasury notes and bonds 45,769 - 978 44,791 Municipal obligations 143,424 200 15,057 128,567 Total securities available for sale $ 447,489 $ 264 $ 33,452 $ 414,301 Securities held to maturity: Other debt securities: Corporate notes $ 7,000 $ - $ 2,506 $ 4,494 Total securities held to maturity $ 7,000 $ - $ 2,506 $ 4,494 December 31, 2023 Securities available for sale: Agency mortgage-backed securities $ 81,166 $ - $ 9,122 $ 72,044 Agency CMO 25,402 94 323 25,173 Other debt securities: Agency notes and bonds 138,174 38 8,707 129,505 Treasury notes and bonds 64,758 - 1,674 63,084 Municipal obligations 159,049 655 12,239 147,465 Total securities available for sale $ 468,549 $ 787 $ 32,065 $ 437,271 Securities held to maturity: Other debt securities: Corporate notes $ 7,000 $ - $ 2,554 $ 4,446 Total securities held to maturity $ 7,000 $ - $ 2,554 $ 4,446 Agency notes and bonds, agency mortgage-backed securities and agency collateralized mortgage obligations ("CMO") include securities issued by the Government National Mortgage Association ("GNMA"), a U.S. government agency, and the Federal National Mortgage Association ("FNMA"), the Federal Home Loan Mortgage Corporation ("FHLMC"), the Fed

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (3 – continued) The amortized cost and fair value of debt securities as of June 30, 2024, by contractual maturity, are shown below. Expected maturities of mortgage-backed securities and CMO may differ from contractual maturities because the mortgages underlying the obligations may be prepaid without penalty. Securities Available for Sale Securities Held to Maturity Amortized Fair Amortized Fair Cost Value Cost Value (In thousands) Due in one year or less $ 61,814 $ 60,386 $ - $ - Due after one year through five years 142,008 133,181 - - Due after five years through ten years 47,965 44,223 2,000 1,299 Due after ten years 72,741 63,090 5,000 3,195 324,528 300,880 7,000 4,494 Mortgage-backed securities and CMO 122,961 113,421 - - $ 447,489 $ 414,301 $ 7,000 $ 4,494 Information pertaining to investment securities with gross unrealized losses at June 30, 2024, aggregated by investment category and the length of time that individual investment securities have been in a continuous loss position, follows. Number of Gross Investment Fair Unrealized Positions Value Losses (Dollars in thousands) June 30, 2024: Securities available for sale: Continuous loss position less than twelve months: Agency CMO 12 $ 25,124 $ 180 Agency notes and bonds 4 2,732 18 Muncipal obligations 88 37,119 2,929 Total less than twelve months 104 64,975 3,127 Continuous loss position more than twelve months: Agency mortgage-backed securities 95 65,612 9,035 Agency CMO 25 11,104 381 Agency notes and bonds 53 122,709 7,803 Treasury notes and bonds 16 44,791 978 Muncipal obligations 129 76,205 12,128 Total more than twelve months 318 320,421 30,325 Total securities available for sale 422 $ 385,396 $ 33,452 Securities held to maturity: Continuous loss

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (3 – continued) Information pertaining to investment securities with gross unrealized losses at December 31, 2023, aggregated by investment category and the length of time that individual investment securities have been in a continuous position, follows. Number of Gross Investment Fair Unrealized Positions Value Losses (Dollars in thousands) December 31, 2023: Securities available for sale: Continuous loss position less than twelve months: Agency CMO 3 $ 8,019 $ 30 Agency notes and bonds 3 2,754 12 Muncipal obligations 74 32,124 2,405 Total less than twelve months 80 42,897 2,447 Continuous loss position more than twelve months: Agency mortgage-backed securities 96 72,044 9,122 Agency CMO 22 4,998 293 Agency notes and bonds 52 123,416 8,695 Treasury notes and bonds 21 63,084 1,674 Muncipal obligations 130 79,643 9,834 Total more than twelve months 321 343,185 29,618 Total securities available for sale 401 $ 386,082 $ 32,065 Securities held to maturity: Continuous loss position more than twelve months: Corporate notes 4 $ 4,446 $ 2,554 Total more than twelve months 4 4,446 2,554 Total securities held to maturity 4 $ 4,446 $ 2,554 The Company has not identified any

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