First Capital Inc. Files Q3 2024 10-Q Report

TL;DR

FCAP Q3 2024 10-Q filed. Financials and segment data updated.

AI Summary

First Capital Inc. filed its 10-Q for the period ending September 30, 2024. The filing details financial performance and operational updates for the third quarter of 2024. Specific financial figures and business segment revenues are presented within the report.

Why It Matters

This filing provides investors with a detailed look at First Capital Inc.'s financial health and operational performance during the third quarter of 2024, influencing 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

• 2024-09-30 — Period End Date (Report covers financial data up to this date.)
• 2024-11-14 — Filing Date (Date the report was submitted to the SEC.)

Key Players & Entities

• FIRST CAPITAL INC (company) — Filer
• 20240930 (date) — Period of Report
• 20241114 (date) — Filing Date
• 0001070296 (company) — Central Index Key

FAQ

Key Financial Figures

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

Filing Documents

• fcap20240930_10q.htm (10-Q) — 4013KB
• ex_743756.htm (EX-31.1) — 11KB
• ex_743757.htm (EX-31.2) — 11KB
• ex_743758.htm (EX-32.1) — 5KB
• ex_743759.htm (EX-32.2) — 4KB
• 0001171843-24-006378.txt ( ) — 18686KB
• fcap-20240930.xsd (EX-101.SCH) — 64KB
• fcap-20240930_cal.xml (EX-101.CAL) — 78KB
• fcap-20240930_def.xml (EX-101.DEF) — 539KB
• fcap-20240930_lab.xml (EX-101.LAB) — 459KB
• fcap-20240930_pre.xml (EX-101.PRE) — 569KB
• fcap20240930_10q_htm.xml (XML) — 5784KB

Consolidated Financial Statements

Item 1. Consolidated Financial Statements 3 Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 (unaudited) 3 Consolidated Statements of Income for the three and nine months ended September 30, 2024 and 2023 (unaudited) 4 Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023 (unaudited) 5 Consolidated Statements of Changes in Stockholders' Equity for the three and nine months ended September 30, 2024 and 2023 (unaudited) 6 Consolidated Statements of Cash Flows for the nine months ended September 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 - 51

Controls and Procedures

Item 4. Controls and Procedures 51 Part II Other Information 52

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

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION FIRST CAPITAL, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) September 30, December 31, 2024 2023 (In thousands) ASSETS Cash and due from banks $ 21,433 $ 20,008 Interest bearing deposits with banks 5,675 3,171 Federal funds sold 62,831 15,491 Total cash and cash equivalents 89,939 38,670 Interest-bearing time deposits 2,695 3,920 Securities available for sale, at fair value (amortized cost $ 432,405 and $ 468,549 , respectively) 408,469 437,271 Securities held to maturity, at amortized cost (fair value $ 4,688 and $ 4,446 , respectively) 7,000 7,000 Loans held for sale 678 800 Loans, net of allowance for credit losses of $ 8,959 ($ 8,005 in 2023) 630,607 614,409 Federal Home Loan Bank ("FHLB") and other stock, at cost 1,836 1,836 Premises and equipment 14,108 14,413 Accrued interest receivable 4,218 4,788 Cash value of life insurance 9,266 9,105 Goodwill 6,472 6,472 Core deposit intangible 122 232 Other assets 13,885 18,964 Total Assets $ 1,189,295 $ 1,157,880 LIABILITIES Deposits: Noninterest-bearing $ 199,804 $ 205,535 Interest-bearing 830,445 819,676 Total deposits 1,030,249 1,025,211 Borrowed funds - Bank Term Funding Program ("BTFP") 33,625 21,500 Accrued interest payable 2,502 1,209 Accrued expenses and other liabilities 6,036 4,615 Total liabilities 1,072,412 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 3,352,003 ( 3,350,660 in 2023) 38 38 Additional paid-in capital 41,676 41,588 Retained earnings-substantially restricted 103,001 97,105 Unearned stock compensation ( 169 ) ( 249 ) Accumulated other comprehensive loss ( 18,501 ) ( 24,033 ) Less treasury stock

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION FIRST CAPITAL, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2024 2023 2024 2023 (In thousands, except per share data) INTEREST INCOME Loans, including fees $ 9,716 $ 8,573 $ 28,426 $ 24,282 Securities: Taxable 1,730 1,426 5,116 4,074 Tax-exempt 628 825 1,968 2,559 Dividends 27 18 63 40 Federal funds sold and other income 1,123 337 1,706 1,011 Total interest income 13,224 11,179 37,279 31,966 INTEREST EXPENSE Deposits 3,688 2,429 9,597 5,578 Advances - FHLB - 50 99 108 Borrowed funds - BTFP 411 163 1,201 240 Total interest expense 4,099 2,642 10,897 5,926 Net interest income 9,125 8,537 26,382 26,040 Provision for credit losses 463 290 1,103 833 Net interest income after provision for credit losses 8,662 8,247 25,279 25,207 NONINTEREST INCOME Service charges on deposit accounts 610 597 1,767 1,737 ATM and debit card fees 1,144 1,127 3,354 3,355 Commission and fee income 23 15 48 46 Gain on sale of securities - 63 32 49 Unrealized loss on equity securities ( 196 ) ( 131 ) ( 270 ) ( 86 ) Gain on sale of loans 124 127 394 317 Increase in cash surrender value of life insurance 47 47 161 158 Other income 48 102 236 225 Total noninterest income 1,800 1,947 5,722 5,801 NONINTEREST EXPENSE Compensation and benefits 3,891 3,731 11,696 11,322 Occupancy and equipment 476 435 1,419 1,328 Data processing 1,164 1,113 3,355 3,225 Professional fees 334 121 896 472 Advertising 107 62 274 239 Other expenses 1,052 1,019 3,141 2,962 Total noninterest expense 7,024 6,481 20,781 19,548 Income before income taxes 3,438 3,713 10,220 11,460 Income tax expense 537 572 1,532 1,77

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION FIRST CAPITAL, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2024 2023 2024 2023 (In thousands) Net Income $ 2,901 $ 3,141 $ 8,688 $ 9,690 OTHER COMPREHENSIVE INCOME (LOSS) Unrealized gains (losses) on securities available for sale: Unrealized holding gains (losses) arising during the period 9,252 ( 6,784 ) 7,374 ( 2,568 ) Income tax (expense) benefit ( 2,154 ) 1,355 ( 1,817 ) 372 Net of tax amount 7,098 ( 5,429 ) 5,557 ( 2,196 ) Less: reclassification adjustment for realized (gains) losses included in net income - 94 ( 32 ) 108 Income tax (expense) benefit - ( 20 ) 7 ( 23 ) Net of tax amount - 74 ( 25 ) 85 Other Comprehensive Income (Loss), net of tax 7,098 ( 5,355 ) 5,532 ( 2,111 ) Comprehensive Income (Loss) 9,999 ( 2,214 ) 14,220 7,579 Less: comprehensive income attributable to the noncontrolling interest in subsidiary 3 3 10 10 Comprehensive Income (Loss) Attributable to First Capital, Inc. $ 9,996 $ ( 2,217 ) $ 14,210 $ 7,569 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 July 1, 2024 $ 38 $ 41,676 $ 101,075 $ ( 25,599 ) $ ( 204 ) $ ( 9,229 ) $ 105 $ 107,862 Net income - - 2,898 - - - 3 2,901 Other comprehensive income - - - 7,098 - - - 7,098 Cash dividends - - ( 972 ) - - - - ( 972 ) Stock compensation expense - - - - 35 - - 35 Purchase of treasury shares - - - - - ( 41 ) - ( 41 ) Balances at September 30, 2024 $ 38 $ 41,676 $ 103,001 $ ( 18,501 ) $ ( 169 ) $ ( 9,270 ) $ 108 $ 116,883 Balances at July 1, 2023 $ 38 $ 41,588 $ 92,666 $ ( 32,497 ) $ ( 356 ) $ ( 9,193 ) $ 105 $ 92,351 Net income - - 3,138 - - - 3 3,141 Other comprehensive loss - - - ( 5,355 ) - - - ( 5,355 ) Cash dividends - - ( 905 ) - - - - ( 905 ) Stock compensation expense - - - - 53 - - 53 Purchase of treasury shares - - - - - ( 23 ) - ( 23 ) Balances at September 30, 2023 $ 38 $ 41,588 $ 94,899 $ ( 37,852 ) $ ( 303 ) $ ( 9,216 ) $ 108 $ 89,262 Balances at January 1, 2024 $ 38 $ 41,588 $ 97,105 $ ( 24,033 ) $ ( 249 ) $ ( 9,216 ) $ 112 $ 105,345 Net income - - 8,678 - - - 10 8,688 Other comprehensive income - - - 5,532 - - - 5,532 Cash dividends - - ( 2,782 ) - - - ( 14 ) ( 2,796 ) Stock compensation expense - - - - 168 - - 168 Purchase of treasury shares - - - - - ( 54 ) - ( 54 ) Restricted stock grant gr

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION FIRST CAPITAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended September 30, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES (In thousands) Net income $ 8,688 $ 9,690 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 844 1,210 Depreciation and amortization expense 809 767 Deferred income taxes ( 440 ) ( 264 ) Stock compensation expense 168 198 Increase in cash value of life insurance ( 161 ) ( 158 ) Gain on sale of securities ( 32 ) ( 49 ) Provision for credit losses 1,103 833 Proceeds from sales of loans 24,844 23,799 Loans originated for sale ( 24,328 ) ( 24,049 ) Gain on sale of loans ( 394 ) ( 317 ) Amortization of tax credit investment 1,393 1,249 Unrealized loss on equity securities 270 86 Decrease (increase) in accrued interest receivable 570 ( 32 ) Increase in accrued interest payable 1,293 1,383 Net change in other assets/liabilities 3,654 ( 1,140 ) Net Cash Provided By Operating Activities 18,281 13,206 CASH FLOWS FROM INVESTING ACTIVITIES Net decrease (increase) in interest-bearing time deposits 1,225 ( 488 ) Purchase of securities available for sale ( 47,794 ) ( 32,839 ) Proceeds from maturities of securities available for sale 46,188 17,630 Proceeds from sales of securities available for sale 19,189 20,202 Principal collected on mortgage-backed obligations 17,750 11,971 Proceeds from sale of equity securities - 156 Net increase in loans receivable ( 17,301 ) ( 45,819 ) Investment in tax credit entities ( 88 ) ( 148 ) Investment in technology fund ( 100 ) ( 200 ) Proceeds from sale of foreclosed real estate - 64 Purchase of premises and equipment ( 394 ) ( 442 ) Net Cash Provided By (Used In)

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 September 30, 2024, and the results of operations for the three and nine months ended September 30, 2024 and 2023 and the cash flows for the nine months ended September 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 ins

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 September 30, 2024 and December 31, 2023 are summarized as follows: Gross Gross Amortized Unrealized Unrealized Fair (In thousands) Cost Gains Losses Value September 30, 2024 Securities available for sale: Agency mortgage-backed securities $ 72,785 $ 42 $ 6,315 $ 66,512 Agency CMO 52,335 199 222 52,312 Other debt securities: Agency notes and bonds 126,601 135 4,901 121,835 Treasury notes and bonds 34,781 - 398 34,383 Municipal obligations 145,903 598 13,074 133,427 Total securities available for sale $ 432,405 $ 974 $ 24,910 $ 408,469 Securities held to maturity: Other debt securities: Corporate notes $ 7,000 $ - $ 2,312 $ 4,688 Total securities held to maturity $ 7,000 $ - $ 2,312 $ 4,688 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 ("

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (3 – continued) The amortized cost and fair value of debt securities as of September 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 $ 60,809 $ 59,782 $ - $ - Due after one year through five years 123,645 118,416 - - Due after five years through ten years 52,663 49,010 2,000 1,354 Due after ten years 70,168 62,437 5,000 3,334 307,285 289,645 7,000 4,688 Mortgage-backed securities and CMO 125,120 118,824 - - $ 432,405 $ 408,469 $ 7,000 $ 4,688 Information pertaining to investment securities with gross unrealized losses at September 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) September 30, 2024: Securities available for sale: Continuous loss position less than twelve months: Agency CMO 3 $ 11,844 $ 38 Muncipal obligations 13 6,970 153 Total less than twelve months 16 18,814 191 Continuous loss position more than twelve months: Agency mortgage-backed securities 94 65,069 6,315 Agency CMO 22 8,315 184 Agency notes and bonds 47 115,349 4,901 Treasury notes and bonds 13 34,383 398 Muncipal obligations 186 101,063 12,921 Total more than twelve months 362 324,179 24,719 Total securities available for sale 378 $ 342,993 $ 24,910 Securities held to maturity: Continuous loss position more than twelve months:

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:

View Full Filing

View this 10-Q filing on SEC EDGAR