First Capital, Inc. (Nasdaq:FCAP), the holding company for First
Harrison Bank (the "Bank"), today reported record net income of
$1.5 million or $0.55 per diluted share for the quarter ended June
30, 2014, compared to $1.2 million or $0.43 per diluted share for
the same period in 2013.
The increase in net income is primarily due to increases in net
interest income after provision for loan losses and noninterest
income.
Net interest income after provision for loan losses increased
$387,000 for the quarter ended June 30, 2014 as compared to the
quarter ended June 30, 2013. Interest income increased $109,000
when comparing the two periods as the average tax-equivalent yield
of interest-earning assets increased from 4.43% for the three-month
period ended June 30, 2013 to 4.49% for the same period in 2014.
Interest expense decreased $143,000 as the average cost of
interest-bearing liabilities decreased from 0.50% to 0.35% when
comparing the same two periods. As a result, the interest-rate
spread increased from 3.93% for the quarter ended June 30, 2013 to
4.14% for the same period in 2014. The provision for loan losses
decreased from $225,000 for the quarter ended June 30, 2013 to
$90,000 for the quarter ended June 30, 2014 primarily due to a
decrease in impaired loans and a decrease in net charge-offs from
$182,000 during the quarter ended June 30, 2013 to $35,000 during
the same period in 2014.
Noninterest income increased $99,000 for the three months ended
June 30, 2014 as compared to the same period in 2013 primarily due
to increases in commission income, service charges on deposit
accounts and gains on the sale of securities.
Noninterest expenses increased $43,000 for the three months
ended June 30, 2014 as compared to the three months ended June 30,
2013. Compensation and benefits expense increased $112,000 when
comparing the two periods primarily due to normal increases in
salaries and benefits. This was partially offset by decreases
in other operating expenses of $65,000 and professional service
fees of $49,000. The decrease in other operating expenses was
primarily due to decreased costs associated with the maintenance
and disposal of property acquired through foreclosure. The
decrease in professional fees is primarily due to a compensation
study and an evaluation of the Bank's asset liability model, both
of which occurred in 2013.
For the six months ended June 30, 2014, the Company reported net
income of $2.8 million or $1.02 per diluted share compared to net
income of $2.4 million or $0.86 per diluted share for the same
period in 2013.
Net interest income after provision for loan losses increased
$698,000 for the six months ended June 30, 2014 compared to the
same period in 2013. Interest income increased $35,000 when
comparing the two periods, due to an increase in the average
tax-equivalent yield on interest-earning assets from 4.44% for 2013
to 4.47% for 2014. Interest expense decreased $303,000 as the
average cost of interest-bearing liabilities decreased from 0.52%
to 0.35% when comparing the same two periods and the average
balance of the interest-bearing liabilities decreased from $348.1
million for the six months ended June 30, 2013 to $338.9 million
for the same period in 2014. The provision for loan losses
decreased from $475,000 for the six months ended June 30, 2013 to
$115,000 for the same period in 2014 as net charge offs decreased
from $376,000 for the six months ended June 30, 2013 to a net
recovery of $29,000 for the six months ended June 30, 2014.
Noninterest income decreased $84,000 for the six months ended
June 30, 2014 as compared to the six months ended June 30,
2013. The decrease was due to a $162,000 decrease in gains on
the sale of loans. This was primarily due to the overall
slowdown in mortgage activity in the Bank's primary lending
market.
Noninterest expenses increased $20,000 for the six months ended
June 30, 2014 as compared to the same period in 2013, primarily due
to an increase in compensation and benefit expenses of $196,000
that was partially offset by a decrease in other operating expenses
of $194,000.
Total assets as of June 30, 2014 were $459.5 million compared to
$444.4 million at December 31, 2013. Net loans receivable
increased $9.5 million during the first six months of
2014. Deposits also increased $12.9 million during the six
months ended June 30, 2014. Nonperforming assets (consisting
of nonaccrual loans, accruing loans 90 days or more past due,
troubled debt restructurings on accrual status, and foreclosed real
estate) totaled $6.3 million and $7.6 million at June 30, 2014 and
December 31, 2013, respectively.
At June 30, 2014, the Bank was considered well-capitalized under
applicable federal regulatory capital guidelines.
First Harrison Bank currently has thirteen offices in the
Indiana communities of Corydon, Edwardsville, Greenville, Floyds
Knobs, Hardinsburg, Palmyra, New Albany, New Salisbury,
Jeffersonville, Salem and Lanesville. Access to First Harrison
Bank accounts, including online banking and electronic bill
payments, is available anywhere with Internet access through the
Bank's website at www.firstharrison.com. First Harrison Bank,
through its business arrangement with Investment Centers of
America, member SIPC, continues to offer non FDIC insured
investments to complement the Bank's offering of traditional
banking products and services. You can also follow us now on
Facebook.
This release may contain forward-looking statements within the
meaning of the federal securities laws. These statements are
not historical facts; rather, they are statements based on the
Company's current expectations regarding its business strategies
and their intended results and its future
performance. Forward-looking statements are preceded by terms
such as "expects," "believes," "anticipates," "intends" and similar
expressions.
Forward-looking statements are not guarantees of future
performance. Numerous risks and uncertainties could cause or
contribute to the Company's actual results, performance and
achievements to be materially different from those expressed or
implied by the 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; legislative and regulatory changes; and
other factors disclosed periodically in the Company's 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 report or made
elsewhere from time to time by the Company or on its
behalf. Except as may be required by applicable law or
regulation, the Company assumes no obligation to update any
forward-looking statements.
FIRST CAPITAL, INC. AND
SUBSIDIARY |
Consolidated Financial
Highlights (Unaudited) |
|
|
|
|
|
|
Six Months
Ended |
Three Months
Ended |
|
June 30, |
June 30, |
OPERATING DATA |
2014 |
2013 |
2014 |
2013 |
(Dollars in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
Total interest income |
$ 9,165 |
$ 9,130 |
$ 4,663 |
$ 4,554 |
Total interest expense |
595 |
898 |
297 |
440 |
Net interest income |
8,570 |
8,232 |
4,366 |
4,114 |
Provision for loan losses |
115 |
475 |
90 |
225 |
Net interest income after provision for loan
losses |
8,455 |
7,757 |
4,276 |
3,889 |
|
|
|
|
|
Total non-interest income |
2,266 |
2,350 |
1,287 |
1,188 |
Total non-interest expense |
6,648 |
6,628 |
3,349 |
3,306 |
Income before income taxes |
4,073 |
3,479 |
2,214 |
1,771 |
Income tax expense |
1,251 |
1,068 |
692 |
557 |
Net income |
$ 2,822 |
$ 2,411 |
$ 1,522 |
$ 1,214 |
Less net income attributable to the
noncontrolling interest |
7 |
7 |
4 |
4 |
Net income attributable to First Capital,
Inc. |
$ 2,815 |
$ 2,404 |
$ 1,518 |
$ 1,210 |
|
|
|
|
|
Net income per share attributable to |
|
|
|
|
First Capital, Inc. common shareholders: |
|
|
|
|
Basic |
$ 1.02 |
$ 0.86 |
$ 0.55 |
$ 0.43 |
|
|
|
|
|
Diluted |
$ 1.02 |
$ 0.86 |
$ 0.55 |
$ 0.43 |
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
Basic |
2,770,637 |
2,784,997 |
2,757,335 |
2,784,997 |
|
|
|
|
|
Diluted |
2,770,637 |
2,784,997 |
2,757,335 |
2,784,997 |
|
|
|
|
|
OTHER FINANCIAL DATA |
|
|
|
|
|
|
|
|
|
Cash dividends per share |
$ 0.42 |
$ 0.40 |
$ 0.21 |
$ 0.20 |
Return on average assets (annualized) |
1.24% |
1.05% |
1.33% |
1.04% |
Return on average equity (annualized) |
10.34% |
9.01% |
11.06% |
9.04% |
Net interest margin |
4.19% |
4.02% |
4.22% |
4.01% |
Interest rate spread |
4.12% |
3.92% |
4.14% |
3.93% |
Net overhead expense as a percentage of
average assets (annualized) |
2.94% |
2.88% |
2.93% |
2.85% |
|
|
|
|
|
|
June 30, |
December 31, |
|
|
BALANCE SHEET
INFORMATION |
2014 |
2013 |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ 15,428 |
$ 11,136 |
|
|
Interest-bearing time deposits |
5,900 |
4,425 |
|
|
Investment securities |
107,262 |
108,771 |
|
|
Gross loans |
303,063 |
293,428 |
|
|
Allowance for loan losses |
5,066 |
4,922 |
|
|
Earning assets |
421,995 |
407,211 |
|
|
Total assets |
459,537 |
444,384 |
|
|
Deposits |
386,753 |
373,830 |
|
|
FHLB debt |
5,000 |
5,500 |
|
|
Repurchase agreements |
10,617 |
9,310 |
|
|
Stockholders' equity, net of noncontrolling
interest |
55,142 |
53,227 |
|
|
Non-performing assets: |
|
|
|
|
Nonaccrual loans |
4,389 |
5,256 |
|
|
Accruing loans past due 90
days |
70 |
227 |
|
|
Foreclosed real estate |
49 |
466 |
|
|
Troubled debt restructurings on
accrual status |
1,815 |
1,662 |
|
|
Regulatory capital ratios (Bank only): |
|
|
|
|
Tier I - adjusted total
assets |
10.66% |
10.89% |
|
|
Tier I - risk based |
14.68% |
14.86% |
|
|
Total risk-based |
15.93% |
16.11% |
|
|
|
|
|
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|
CONTACT: Chris Frederick
Chief Financial Officer
812-734-3464
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