First Capital, Inc. (the “Company”) (NASDAQ:FCAP), the holding
company for First Harrison Bank (the “Bank”), today reported net
income of $1.6 million or $0.46 per diluted share for the quarter
ended March 31, 2017, compared to $1.6 million or $0.47 per diluted
share for the quarter ended March 31, 2016.
Net interest income after provision for loan
losses increased $2,000 for the quarter ended March 31, 2017 as
compared to the same prior year period. Interest income
decreased $3,000 when comparing the periods due to a decrease in
the average tax-equivalent yield on interest-earning assets from
3.88% for the first quarter of 2016 to 3.70% for the first quarter
of 2017, partially offset by an increase in the average balance of
interest-earning assets from $671.3 million for the first quarter
of 2016 to $704.4 million for the first quarter of 2017. The
decrease in the average tax-equivalent yield for 2017 is primarily
due to the effect of purchase accounting adjustments related to the
December 2015 acquisition of Peoples Bancorp, Inc. of Bullitt
County and its wholly-owned bank subsidiary Peoples Bank of Bullitt
County (collectively, “Peoples”), headquartered in Shepherdsville,
Kentucky. Interest expense decreased $141,000 when comparing
the periods as the average cost of interest-bearing liabilities
decreased from 0.39% to 0.26%. This was partially offset by
an increase in the average balance of interest-bearing liabilities
from $514.2 million to $546.7 million, respectively. The
decrease in the average cost of funds is primarily due to the
repricing of savings and interest-bearing demand deposit accounts
acquired from Peoples. As a result of the changes in
interest-earning assets and interest-bearing liabilities, the
interest rate spread decreased from 3.49% for the quarter ended
March 31, 2016 to 3.44% for the same period in 2017.
Based on management’s analysis of the allowance
for loan losses, the provision for loan losses increased from
$75,000 for the quarter ended March 31, 2016 to $211,000 for the
quarter ended March 31, 2017. The Bank recognized net
charge-offs of $179,000 for the quarter ended March 31, 2017
compared to $171,000 for the same period in 2016.
Noninterest income increased $85,000 for the
quarter ended March 31, 2017 as compared to the same period in
2016. Service charges on deposit accounts increased $77,000
when comparing the two periods. This was partially offset by
an $11,000 decrease in commission and fee income.
Noninterest expense increased $165,000 for the
quarter ended March 31, 2017 as compared to the same period in
2016, due primarily to increases in data processing expense of
$111,000 and net losses on foreclosed real estate of
$161,000. Data processing expense increased when comparing
the two periods primarily due to upgraded networks and additional
electronic banking customers as a result of the Peoples
acquisition.
Total assets increased $18.2 million to $761.9
million at March 31, 2017 from $743.7 million at December 31,
2016. Investment securities increased $16.3 million as
management has sought to invest excess liquidity primarily in
government agency mortgage-backed securities and municipal
obligations. Net loans receivable also increased $3.9 million
from December 31, 2016 to March 31, 2017. Deposits increased
$17.0 million to $681.7 million at March 31, 2017 due primarily to
increases in noninterest-bearing demand deposits and savings
accounts. Nonperforming assets (consisting of nonaccrual
loans, accruing loans 90 days or more past due, troubled debt
restructurings on accrual status, and foreclosed real estate)
decreased from $8.4 million at December 31, 2016 to $8.3 million at
March 31, 2017 as management continues to work to resolve
nonperforming assets acquired from Peoples.
At March 31, 2017, the Bank was considered
well-capitalized under applicable federal regulatory capital
guidelines.
The Bank currently has seventeen offices in the
Indiana communities of Corydon, Edwardsville, Greenville, Floyds
Knobs, Palmyra, New Albany, New Salisbury, Jeffersonville, Salem
and Lanesville and the Kentucky communities of Shepherdsville, Mt.
Washington and Lebanon Junction. In March 2016, the Company
also acquired property for a proposed branch location near the
River Ridge development in Jeffersonville, Indiana. The
Company broke ground on the new office during the quarter ended
December 31, 2016 and expects the new office to open in May
2017.
Access to First Harrison Bank accounts,
including online banking and electronic bill payments, is available
through the Bank’s website at www.firstharrison.com. The
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. For more information and financial
data about the Company, please visit Investor Relations at the
Bank’s aforementioned website. The Bank can also be followed on
Facebook.
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 “anticipate,”
“believe,” “expect,” “intend,” “could” and “should,” 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’s 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’s 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;
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 press release, the
Company’s 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.
FIRST CAPITAL, INC. AND
SUBSIDIARY |
Consolidated Financial Highlights (Unaudited) |
|
|
|
|
Three Months Ended |
|
March 31, |
OPERATING
DATA |
|
2017 |
|
|
2016 |
|
(Dollars in
thousands, except per share data) |
|
|
|
|
|
Total interest
income |
$ |
6,343 |
|
$ |
6,346 |
|
Total interest
expense |
|
359 |
|
|
500 |
|
Net interest
income |
|
5,984 |
|
|
5,846 |
|
Provision for loan
losses |
|
211 |
|
|
75 |
|
Net interest income
after provision for loan losses |
|
5,773 |
|
|
5,771 |
|
|
|
|
Total non-interest
income |
|
1,453 |
|
|
1,368 |
|
Total non-interest
expense |
|
5,155 |
|
|
4,990 |
|
Income before income
taxes |
|
2,071 |
|
|
2,149 |
|
Income tax expense |
|
515 |
|
|
564 |
|
Net income |
|
1,556 |
|
|
1,585 |
|
Less net income
attributable to the noncontrolling interest |
|
3 |
|
|
3 |
|
Net income attributable
to First Capital, Inc. |
$ |
1,553 |
|
$ |
1,582 |
|
|
|
|
Net income per share
attributable to First Capital, Inc. |
|
|
common
shareholders: |
|
|
Basic |
$ |
0.46 |
|
$ |
0.47 |
|
|
|
|
Diluted |
$ |
0.46 |
|
$ |
0.47 |
|
|
|
|
Weighted average common
shares outstanding: |
|
|
Basic |
|
3,342,052 |
|
|
3,339,103 |
|
|
|
|
Diluted |
|
3,347,122 |
|
|
3,341,283 |
|
|
|
|
OTHER FINANCIAL
DATA |
|
|
|
|
|
Cash dividends per
share |
$ |
0.21 |
|
$ |
0.21 |
|
Return on average
assets (annualized) |
|
0.83 |
% |
|
0.88 |
% |
Return on average
equity (annualized) |
|
8.13 |
% |
|
8.37 |
% |
Net interest
margin |
|
3.50 |
% |
|
3.58 |
% |
Interest rate
spread |
|
3.44 |
% |
|
3.49 |
% |
Net overhead expense as
a percentage |
|
|
of average
assets (annualized) |
|
2.75 |
% |
|
2.79 |
% |
|
|
|
|
March 31, |
December 31, |
BALANCE SHEET
INFORMATION |
|
2017 |
|
|
2016 |
|
(Dollars in
thousands) |
|
|
|
|
|
Cash and cash
equivalents |
$ |
47,657 |
|
$ |
45,835 |
|
Interest-bearing time
deposits |
|
13,535 |
|
|
14,735 |
|
Investment
securities |
|
272,187 |
|
|
255,846 |
|
Gross loans |
|
388,502 |
|
|
384,540 |
|
Allowance for loan
losses |
|
3,418 |
|
|
3,386 |
|
Earning assets |
|
708,591 |
|
|
684,890 |
|
Total assets |
|
761,937 |
|
|
743,658 |
|
Deposits |
|
681,659 |
|
|
664,650 |
|
Stockholders' equity,
net of noncontrolling interest |
|
77,068 |
|
|
75,730 |
|
Non-performing
assets: |
|
|
Nonaccrual
loans |
|
3,077 |
|
|
2,946 |
|
Accruing loans
past due 90 days |
|
143 |
|
|
78 |
|
Foreclosed real
estate |
|
4,417 |
|
|
4,674 |
|
Troubled debt
restructurings on accrual status |
|
642 |
|
|
742 |
|
Regulatory capital
ratios (Bank only): |
|
|
Tier 1 - average
total assets |
|
9.27 |
% |
|
9.30 |
% |
Tier 1 - risk
based assets |
|
14.07 |
% |
|
14.28 |
% |
Total
risk-based |
|
14.77 |
% |
|
14.98 |
% |
Contact:
Chris Frederick
Chief Financial Officer
812-734-3464
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