First Capital (FCAP) has surged 132% over the past year, reaching a new 5-year. Shares have strong technical momentum and maintain a 100% “Buy” opinion from Barchart Despite limited analyst coverage, sentiment is positive. FCAP could benefit further if 30-year mortgage rates drop below 5%. Today’s Featured Stock Valued at $233 million, First Capital (FCAP) is a holding company. Through its subsidiary, First Federal Bank, it is engaged primarily in the origination of residential mortgage loans. ...

Financial Performance - Net income for the three months ended September 30, 2025, was $4,481,000, a 54.7% increase compared to $2,901,000 for the same period in 2024[9]. - Earnings per common share attributable to First Capital, Inc. increased to $1.34 for the three months ended September 30, 2025, compared to $0.87 in 2024, reflecting a growth of 54.0%[9]. - Comprehensive income attributable to First Capital, Inc. for the nine months ended September 30, 2025, was $20,809,000, up from $14,210,000 in 2024, reflecting a 46.5% increase[12]. - For the nine months ended September 30, 2025, net income attributable to First Capital, Inc. was $11,488,000, compared to $8,678,000 in 2024, indicating a 32.5% increase[84]. - Net income attributable to the Company was $4.5 million ($1.34 per diluted share) for the three months ended September 30, 2025, compared to $2.9 million ($0.87 per diluted share) for the same period in 2024[127]. Asset and Liability Management - Total assets increased to $1,235,477,000 as of September 30, 2025, up from $1,187,523,000 at the end of 2024, representing a growth of 4.0%[7]. - Total liabilities increased to $1,102,928,000 as of September 30, 2025, compared to $1,072,812,000 at the end of 2024, representing a growth of 2.8%[7]. - Total deposits reached $1,094,733,000 as of September 30, 2025, an increase of 2.5% from $1,066,439,000 at the end of 2024[7]. - Cash and cash equivalents increased from $105.9 million at December 31, 2024, to $112.2 million at September 30, 2025, primarily due to net deposit inflows[121]. Income and Expense Analysis - Total interest income rose to $14,658,000 for the three months ended September 30, 2025, up 10.9% from $13,224,000 in the prior year[9]. - Noninterest income increased to $2,306,000 for the three months ended September 30, 2025, compared to $1,800,000 in 2024, marking a growth of 28.1%[9]. - Noninterest expenses increased by $540,000 for the quarter ended September 30, 2025, primarily due to increases in occupancy and equipment and compensation and benefits expenses[133]. - Cash payments for interest for the nine months ended September 30, 2025, totaled $10,899,000, an increase from $9,604,000 in 2024, representing a 13.4% increase[93]. Credit Quality and Loan Performance - The provision for credit losses was $150,000 for the three months ended September 30, 2025, down from $463,000 in the same period of 2024, indicating improved credit quality[9]. - The allowance for credit losses increased to $9,861,000 from $9,281,000, indicating a rise of 6.24%[40]. - Nonperforming loans totaled $3,866 million as of September 30, 2025, consisting of $2,006 million in nonaccrual loans and $1,860 million in loans 90 days or more past due[60]. - The total for Special Mention loans across all categories is $667,000, indicating potential risk[67]. - The company continues to assess risks associated with various loan segments, including economic conditions and property values, which may impact repayment[40][41][42][43][44][45][46][47][48]. Securities and Investments - Total securities available for sale amounted to $439.2 million, with a fair value of $421.6 million, reflecting a gross unrealized loss of $19.8 million[24]. - The company’s investment in equity securities had a fair value of $1.0 million as of September 30, 2025, up from $887,000 at December 31, 2024[38]. - Securities available for sale increased by $32.4 million from $389.2 million at December 31, 2024, to $421.6 million at September 30, 2025[122]. Capital Management - The Bank's CBLR was 10.82% as of September 30, 2025, indicating compliance with capital adequacy requirements[152]. - The Company has a borrowing capacity limit of $50.2 million with the FHLB based on pledged collateral as of September 30, 2025[79]. - The Company purchased a total of 1,443 shares at an average price of $43.55 during the reporting period, with a remaining repurchase authorization of 113,236 shares[176]. Risk Management - The Company aims for long-term profitability while managing interest rate exposure through strategies like shortening asset maturities and relying on retail deposits[158]. - Management monitors the differences between estimated and actual incurred loan losses to evaluate the effectiveness of the estimation process[57]. - The Company has not engaged in trading accounts or high-risk derivatives, thus avoiding foreign currency exchange rate risk and commodity price risk[159]. Corporate Governance - The report is signed by Michael C. Frederick, President and CEO, and Joshua P. Stevens, Executive Vice President, CFO and Treasurer[184]. - Management has effective disclosure controls and procedures in place, ensuring timely and accurate reporting[170].

Financial Performance - For the quarter ended September 30, 2025, First Capital, Inc. reported net income of $4.5 million, or $1.34 per diluted share, a significant increase from $2.9 million, or $0.87 per diluted share, for the same period in 2024, representing a 55.2% increase in net income[1] - For the nine months ended September 30, 2025, net income was $11.5 million, or $3.43 per diluted share, compared to $8.7 million, or $2.59 per diluted share, for the same period in 2024, marking a 32.2% increase in net income[7] - Net income attributable to First Capital, Inc. increased to $4,478,000 in Q3 2025, a 54.7% rise compared to $2,898,000 in Q3 2024[24] Interest Income and Margin - Net interest income after provision for credit losses increased by $2.1 million for the quarter ended September 30, 2025, driven by an increase in interest income of $1.4 million and a tax-equivalent net interest margin increase from 3.19% to 3.71%[2] - Total interest income for Q3 2025 was $14,658,000, an increase of 10.9% from $13,224,000 in Q3 2024[24] - For the nine months ended September 30, 2025, net interest income was $30,949,000, an increase from $26,382,000 in the same period of 2024, representing a growth of 10.8%[34] - Total interest income for the nine months ended September 30, 2025, was $42,044,000, compared to $37,279,000 in 2024, reflecting an increase of 12.3%[34] - The net interest margin for the nine months ended September 30, 2025, was 3.48%, compared to 3.09% in 2024, showing an improvement of 12.6%[34] Credit Quality - The provision for credit losses decreased from $463,000 in Q3 2024 to $150,000 in Q3 2025, reflecting improved credit quality with net charge-offs of $17,000 in Q3 2025 compared to $64,000 in Q3 2024[3] - Non-performing assets included nonaccrual loans of $3,866,000 as of September 30, 2025, down from $4,382,000 at the end of 2024[25] - Nonperforming assets decreased from $4.4 million at December 31, 2024, to $3.9 million at September 30, 2025, indicating improved asset quality[15] Expenses and Tax - Noninterest expenses increased by $540,000 for the quarter ended September 30, 2025, mainly due to higher occupancy and equipment costs of $331,000 and compensation and benefits expenses of $202,000[5] - The effective tax rate increased to 19.2% for the quarter ended September 30, 2025, up from 15.6% in the same period last year, resulting in an increase in income tax expense of $530,000[6] Assets and Equity - Total assets increased to $1.24 billion at September 30, 2025, up from $1.19 billion at December 31, 2024, with deposits rising by $28.3 million to $1.09 billion[15] - Total assets grew to $1,235,477,000 as of September 30, 2025, compared to $1,187,523,000 at the end of 2024, reflecting a 4.0% increase[25] - Stockholders' equity as of September 30, 2025, was $120,614,000, an increase from $106,774,000 in 2024, representing a growth of 12.9%[31] Loans and Deposits - Gross loans increased to $652,193,000 as of September 30, 2025, up from $640,480,000 at the end of 2024, representing a growth of 1.1%[25] - Total deposits for the nine months ended September 30, 2025, were $885,953,000, compared to $811,447,000 in 2024, reflecting an increase of 9.2%[31] Operational Metrics - The Community Bank Leverage Ratio was 10.82% as of September 30, 2025, compared to 10.57% at the end of 2024[25] - Return on average assets (annualized) improved to 1.45% in Q3 2025 from 0.97% in Q3 2024[24] - The average yield on interest-earning assets for the nine months ended September 30, 2025, was 4.73%, up from 4.37% in 2024, indicating a rise of 8.2%[34] - The interest rate spread for the nine months ended September 30, 2025, was 3.06%, up from 2.65% in 2024, indicating an increase of 15.5%[34] - The average cost of interest-bearing liabilities for the nine months ended September 30, 2025, was 1.67%, a slight decrease from 1.72% in 2024[34] Dividends - Cash dividends per share rose to $0.31 in Q3 2025, compared to $0.29 in Q3 2024, marking a 6.9% increase[24] Market Presence - The company currently operates 17 offices across Indiana and Kentucky, supporting its market presence and customer accessibility[16]

Core Points - First Capital, Inc. reported a net income of $4.5 million, or $1.34 per diluted share, for Q3 2025, an increase from $2.9 million, or $0.87 per diluted share, in Q3 2024 [1][7][24] Financial Performance for Q3 2025 vs. Q3 2024 - Net interest income after provision for credit losses increased by $2.1 million, driven by a rise in interest income of $1.4 million due to an increase in average tax-equivalent yield on interest-earning assets from 4.59% to 4.94% and an increase in the average balance of interest-earning assets from $1.17 billion to $1.20 billion [2] - Interest expense decreased by $397,000, with the average cost of interest-bearing liabilities falling from 1.87% to 1.66% [2] - The tax-equivalent net interest margin improved from 3.19% to 3.71% [2] Provision for Credit Losses - The provision for credit losses decreased from $463,000 in Q3 2024 to $150,000 in Q3 2025, with net charge-offs of $17,000 and $64,000 for the respective quarters [3][10] Noninterest Income and Expenses - Noninterest income rose by $506,000, primarily due to a $150,000 gain on equity securities compared to a $196,000 loss in the previous year [4] - Noninterest expenses increased by $540,000, mainly due to higher occupancy and equipment expenses ($331,000) and compensation and benefits ($202,000) [5] Income Tax Expense - Income tax expense increased by $530,000, resulting in an effective tax rate of 19.2% for Q3 2025, up from 15.6% in Q3 2024 [6] Financial Performance for Nine Months Ended September 30, 2025 vs. 2024 - For the nine months ended September 30, 2025, net income was $11.5 million, or $3.43 per diluted share, compared to $8.7 million, or $2.59 per diluted share, in the same period of 2024 [7] - Net interest income after provision for credit losses increased by $4.9 million, with interest income rising by $4.8 million due to an increase in average tax-equivalent yield from 4.44% to 4.80% [8] - Noninterest income increased by $450,000, primarily due to a $127,000 gain on equity securities compared to a loss of $270,000 in the previous year [11] - Noninterest expenses rose by $1.5 million, largely due to increases in compensation and benefits ($769,000) and occupancy and equipment expenses ($560,000) [12] Balance Sheet Highlights - Total assets increased to $1.24 billion at September 30, 2025, up from $1.19 billion at December 31, 2024 [14] - Deposits rose by $28.3 million, from $1.07 billion to $1.09 billion [14] - Nonperforming assets decreased from $4.4 million to $3.9 million [14]

Core Points - First Capital, Inc. has entered into a Joint Rule 10b5-1/Rule 10b-18 Plan Agreement to repurchase up to 113,236 shares of its common stock starting September 4, 2025, and expiring August 28, 2026, unless terminated earlier [1] - The new Plan is part of a previously disclosed stock repurchase authorization approved on August 19, 2008, which allowed for the repurchase of up to 240,467 shares, of which 127,231 shares have already been repurchased as of August 29, 2025 [2] - The President and CEO of First Capital expressed excitement about the enhanced flexibility of the stock repurchase plan, aligning it with the company's long-term capital allocation strategy and reflecting confidence in the company's value [3] Company Overview - First Capital, Inc. is the holding company for First Harrison Bank, which operates seventeen offices across Indiana and Kentucky [3] - The bank provides access to accounts, online banking, and electronic bill payments through its website [3]

[Company Information and Filing Details](index=1&type=section&id=Company%20Information%20and%20Filing%20Details) [Registrant Information](index=1&type=section&id=Registrant%20Information) First Capital, Inc is a non-accelerated filer and smaller reporting company incorporated in Indiana, with its common stock traded on The NASDAQ Stock Market LLC - Company type: **Non-accelerated filer** and **Smaller reporting company**[3](index=3&type=chunk) Registrant Details | Metric | Detail | | :--- | :--- | | Company Name | First Capital, Inc | | State of Incorporation | Indiana | | Ticker Symbol | FCAP | | Exchange | The NASDAQ Stock Market LLC | | Shares Outstanding as of July 20, 2025 | 3,355,118 shares | [Securities and Filing Status](index=1&type=section&id=Securities%20and%20Filing%20Status) The company has filed all required reports in the past 12 months and submitted all interactive data files electronically - The company has filed all required reports in the past 12 months and has electronically submitted all interactive data files[2](index=2&type=chunk) - As of July 20, 2025, there were **3,355,118 shares** of common stock outstanding[3](index=3&type=chunk) [Part I Financial Information](index=3&type=section&id=Part%20I%20Financial%20Information) [Item 1. Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section contains the unaudited consolidated financial statements of First Capital, Inc as of June 30, 2025, and December 31, 2024 [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $1.243 billion as of June 30, 2025, a 4.64% increase from year-end 2024, driven by growth in cash, securities, and net loans Key Consolidated Balance Sheet Data (As of June 30, in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Assets | $1,242,687 | $1,187,523 | $55,164 | 4.64% | | Cash and Cash Equivalents | $134,595 | $105,917 | $28,678 | 27.08% | | Available-for-Sale Securities | $395,589 | $389,243 | $6,346 | 1.63% | | Net Loans | $649,174 | $631,199 | $17,975 | 2.85% | | Total Liabilities | $1,119,382 | $1,072,812 | $46,570 | 4.34% | | Total Deposits | $1,110,627 | $1,066,439 | $44,188 | 4.14% | | Total Stockholders' Equity | $123,305 | $114,711 | $8,594 | 7.50% | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) Net income and earnings per share showed significant growth for the three and six-month periods ended June 30, 2025, driven by higher net interest income Key Consolidated Income Statement Data (in thousands of USD, except per share data) | Metric | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Income Attributable to First Capital, Inc | $3,775 | $2,828 | 33.56% | | Basic Earnings Per Share | $1.13 | $0.85 | 32.94% | | Diluted Earnings Per Share | $1.13 | $0.85 | 32.94% | | Net Interest Income | $10,412 | $8,657 | 20.27% | | Provision for Credit Losses | $306 | $360 | -14.86% | | Noninterest Income | $2,018 | $2,023 | -0.25% | | Noninterest Expense | $7,494 | $7,000 | 7.06% | | Income Tax Expense | $852 | $488 | 74.59% | | Metric | H1 2025 (6 Months) | H1 2024 (6 Months) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Income Attributable to First Capital, Inc | $7,010 | $5,780 | 21.28% | | Basic Earnings Per Share | $2.09 | $1.73 | 20.81% | | Diluted Earnings Per Share | $2.09 | $1.73 | 20.81% | | Net Interest Income | $19,993 | $17,257 | 15.88% | | Provision for Credit Losses | $644 | $640 | 0.63% | | Noninterest Income | $3,866 | $3,922 | -1.43% | | Noninterest Expense | $14,675 | $13,757 | 6.67% | | Income Tax Expense | $1,524 | $995 | 53.17% | [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income attributable to First Capital, Inc grew significantly to $10.5 million for the six months ended June 30, 2025, driven by unrealized gains on securities Key Consolidated Comprehensive Income Data (As of June 30, in thousands of USD) | Metric | 2025 (6 Months) | 2024 (6 Months) | Change ($) | | :--- | :--- | :--- | :--- | | Net Income | $7,016 | $5,787 | $1,229 | | Unrealized Gain (Loss) on AFS Securities, Net of Tax | $3,426 | $(1,541) | $4,967 | | Other Comprehensive Income (Loss), Net of Tax | $3,469 | $(1,566) | $5,035 | | Comprehensive Income Attributable to First Capital, Inc | $10,479 | $4,214 | $6,265 | [Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Total stockholders' equity increased to $123.3 million as of June 30, 2025, driven by net income and other comprehensive income Key Changes in Consolidated Stockholders' Equity (As of June 30, in thousands of USD) | Metric | Balance Jan 1, 2025 | Balance Jun 30, 2025 | Change ($) | | :--- | :--- | :--- | :--- | | Total Stockholders' Equity | $114,711 | $123,305 | $8,594 | | Net Income | $7,010 | - | $7,010 | | Other Comprehensive Income | $3,469 | - | $3,469 | | Cash Dividends | $(1,946) | - | $(1,946) | | Stock-Based Compensation Expense | $77 | - | $77 | | Purchase of Treasury Stock | $(9) | - | $(9) | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents increased by $28.7 million in the first six months of 2025, primarily due to a significant net cash inflow from financing activities Key Consolidated Cash Flow Data (As of June 30, in thousands of USD) | Metric | 2025 (6 Months) | 2024 (6 Months) | Change ($) | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | $8,111 | $10,701 | $(2,590) | | Net Cash from Investing Activities | $(21,653) | $1,877 | $(23,530) | | Net Cash from Financing Activities | $42,220 | $(677) | $42,897 | | Net Increase in Cash and Cash Equivalents | $28,678 | $11,901 | $16,777 | | Cash and Cash Equivalents at End of Period | $134,595 | $50,571 | $84,024 | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes on accounting policies, recent standards, investment securities, loans, credit losses, and other financial statement components [1. Presentation of Interim Information](index=11&type=section&id=1.%20Presentation%20of%20Interim%20Information) The unaudited consolidated financial statements are prepared in accordance with U.S. GAAP and include all necessary recurring adjustments - The company is the financial holding company for First Harrison Bank, and its consolidated financial statements are prepared in accordance with GAAP[18](index=18&type=chunk)[20](index=20&type=chunk) - The financial statements include all normal, recurring adjustments deemed necessary by management, and interim results are not necessarily indicative of full-year performance[19](index=19&type=chunk) [2. Recent Accounting Pronouncements](index=11&type=section&id=2.%20Recent%20Accounting%20Pronouncements) FASB issued ASU 2023-09, enhancing income tax disclosures, which is not expected to materially impact the company's financial condition or results - FASB issued ASU 2023-09, requiring public business entities to disclose specific categories in the income tax rate reconciliation and disaggregate income taxes paid[22](index=22&type=chunk) - The ASU is effective for annual periods after December 15, 2024, and is **not expected to have a material impact** on the company's financial condition or results of operations[22](index=22&type=chunk)[23](index=23&type=chunk) [3. Investment Securities](index=12&type=section&id=3.%20Investment%20Securities) As of June 30, 2025, unrealized losses on securities were primarily driven by interest rate fluctuations, with no credit losses identified Investment Securities Overview (As of June 30, in thousands of USD) | Security Type | Amortized Cost (2025) | Fair Value (2025) | Gross Unrealized Losses (2025) | | :--- | :--- | :--- | :--- | | Available-for-Sale Securities | $420,705 | $395,589 | $25,859 | | Held-to-Maturity Securities | $7,000 | $5,243 | $1,757 | - As of June 30, 2025, unrealized losses on available-for-sale and held-to-maturity securities were **primarily due to interest rate fluctuations**, with management concluding no credit losses existed[29](index=29&type=chunk)[31](index=31&type=chunk) - As of June 30, 2025, unrealized losses on municipal bonds and U.S. government agency debt securities were approximately **7.8% of their amortized cost**[31](index=31&type=chunk) - As of June 30, 2025, unrealized losses on held-to-maturity corporate notes were approximately **25.1% of their amortized cost**[31](index=31&type=chunk) - As of June 30, 2025, the company held common stock of another bank holding company with a fair value of **$864,000**, recognizing an unrealized loss of $23,000 during the six-month period[37](index=37&type=chunk) [4. Loans and Allowance for Credit Losses](index=17&type=section&id=4.%20Loans%20and%20Allowance%20for%20Credit%20Losses) Total loans reached $657.8 million as of June 30, 2025, with an allowance for credit losses of $9.7 million, while nonaccrual loans decreased Loan Portfolio Overview (As of June 30, in thousands of USD) | Loan Type | June 30, 2025 | December 31, 2024 | Change ($) | | :--- | :--- | :--- | :--- | | 1-4 Family Residential Mortgage | $144,621 | $138,936 | $5,685 | | Home Equity and Second Mortgage | $68,613 | $66,549 | $2,064 | | Multi-Family Residential | $46,348 | $36,822 | $9,526 | | 1-4 Family Residential Construction | $19,297 | $15,245 | $4,052 | | Other Construction, Development and Land | $69,271 | $75,840 | $(6,569) | | Commercial Real Estate | $188,690 | $184,851 | $3,839 | | Commercial Business | $64,230 | $62,727 | $1,503 | | Consumer and Other | $56,708 | $58,406 | $(1,698) | | **Total Loans** | **$657,778** | **$639,376** | **$18,402** | | Allowance for Credit Losses | $9,728 | $9,281 | $447 | | Net Loans | $649,174 | $631,199 | $17,975 | Nonaccrual and Past Due Loans (As of June 30, in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | | :--- | :--- | :--- | :--- | | Total Nonaccrual Loans | $3,992 | $4,382 | $(390) | | Loans 90+ Days Past Due and Still Accruing | $0 | $0 | $0 | | **Total Nonperforming Loans** | **$3,992** | **$4,382** | **$(390)** | - As of June 30, 2025, the company had **no loan modifications** for borrowers experiencing financial difficulty[57](index=57&type=chunk)[58](index=58&type=chunk) - The company risk-grades loans as special mention, substandard, doubtful, and loss based on factors like debt service capacity and financial information[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) [5. Qualified Affordable Housing Project Investment](index=29&type=section&id=5.%20Qualified%20Affordable%20Housing%20Project%20Investment) The company's investment in qualified affordable housing projects totaled $1.4 million as of June 30, 2025, accounted for using the proportional amortization method Qualified Affordable Housing Project Investment (in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Investment Balance | $1,400 | $1,600 | | Unfunded Commitments | $120 | $168 | | Amortization Expense (6 Months) | $169 | $144 | | Income Tax Credits & Benefits (6 Months) | $206 | $203 | [6. Renewable Energy Tax Credit Investment](index=30&type=section&id=6.%20Renewable%20Energy%20Tax%20Credit%20Investment) The company's investment in solar energy tax credits totaled $3.2 million as of June 30, 2025, accounted for using the proportional amortization method Renewable Energy Tax Credit Investment (in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Investment Balance | $3,200 | $401 | | Unfunded Commitments | $2,900 | $276 | | Amortization Expense (6 Months) | $1,200 | $842 | | Income Tax Credits & Benefits (6 Months) | $1,200 | $1,000 | [7. Borrowed Funds](index=30&type=section&id=7.%20Borrowed%20Funds) The company had no outstanding borrowed funds as of June 30, 2025, and maintains additional borrowing capacity through the FRB and FHLB - The company had **no outstanding borrowed funds** as of June 30, 2025, and December 31, 2024[73](index=73&type=chunk) - In January 2024, the company repaid all BTFP and FHLB borrowings and later re-borrowed **$33.6 million** in BTFP funds, which were fully repaid by November 2024[74](index=74&type=chunk) - The company has additional borrowing capacity through the FRB discount window and the FHLB, with an FHLB borrowing limit of **$28.1 million** as of June 30, 2025[75](index=75&type=chunk)[76](index=76&type=chunk) [8. Supplemental Disclosure for Earnings Per Share](index=32&type=section&id=8.%20Supplemental%20Disclosure%20for%20Earnings%20Per%20Share) Basic and diluted EPS were $1.13 for the three months and $2.09 for the six months ended June 30, 2025, with some restricted stock excluded due to anti-dilutive effects Earnings Per Share Data (As of June 30, in thousands of USD, except per share data) | Metric | 2025 (3 Months) | 2024 (3 Months) | 2025 (6 Months) | 2024 (6 Months) | | :--- | :--- | :--- | :--- | :--- | | Net Income Attributable to First Capital, Inc | $3,775 | $2,828 | $7,010 | $5,780 | | Basic EPS | $1.13 | $0.85 | $2.09 | $1.73 | | Diluted EPS | $1.13 | $0.85 | $2.09 | $1.73 | | Dilutive Effect of Restricted Stock (Shares) | 3,691 | 123 | 2,557 | 0 | | Anti-Dilutive Restricted Stock Excluded (Shares) | - | - | - | 7,925 | [9. Stock-Based Compensation Plan](index=33&type=section&id=9.%20Stock-Based%20Compensation%20Plan) The company grants restricted stock under its 2019 Equity Incentive Plan, with $205,000 in unrecognized compensation expense as of June 30, 2025 - The company grants restricted stock through its 2019 Equity Incentive Plan, with **155,750 common shares** available for issuance as of June 30, 2025[83](index=83&type=chunk)[84](index=84&type=chunk) - As of June 30, 2025, the weighted-average grant-date fair value of nonvested restricted stock was **$40.93**[89](index=89&type=chunk) - For the six months of 2025, compensation expense related to restricted stock was **$77,000**, with an associated income tax expense of $18,000[86](index=86&type=chunk) Nonvested Restricted Stock Activity (As of June 30, Shares) | Metric | 2025 (6 Months) | | :--- | :--- | | Nonvested at Beginning of Period | 4,800 | | Granted | 3,900 | | Nonvested at End of Period | 8,700 | | Unrecognized Compensation Expense | $205,000 | | Expected Recognition Period | 4.7 years | [10. Supplemental Disclosures of Cash Flow Information](index=35&type=section&id=10.%20Supplemental%20Disclosures%20of%20Cash%20Flow%20Information) For the six months ended June 30, 2025, cash paid for interest was $7.1 million, and non-cash investing activities included a $2.7 million investment agreement Supplemental Cash Flow Disclosures (As of June 30, in thousands of USD) | Metric | 2025 (6 Months) | 2024 (6 Months) | | :--- | :--- | :--- | | Cash Paid for Interest | $7,104 | $5,655 | | Cash Paid for Income Taxes (Net) | $105 | $77 | | Renewable Energy Tax Credit Facility Investment Agreement | $2,656 | $2,000 | [11. Fair Value Measurements](index=35&type=section&id=11.%20Fair%20Value%20Measurements) The company measures assets at fair value using a three-level hierarchy, with most securities valued using Level 1 and 2 inputs - Fair value measurements are categorized into three levels: **Level 1** (quoted prices), **Level 2** (observable inputs), and **Level 3** (unobservable inputs)[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk) - The fair value of collateral-dependent loans is measured using **Level 3 inputs**, based on the collateral's fair value less estimated selling costs, with discount rates of 20% to 23%[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) Assets Measured at Fair Value by Level (As of June 30, in thousands of USD) | Asset Type | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | **Assets Measured on a Recurring Basis:** | | | | | | Available-for-Sale Securities | $8,784 | $386,805 | $0 | $395,589 | | Equity Securities | $864 | $0 | $0 | $864 | | **Assets Measured on a Nonrecurring Basis:** | | | | | | Collateral-Dependent Loans | $0 | $0 | $610 | $610 | [12. Revenue from Contracts with Customers](index=40&type=section&id=12.%20Revenue%20from%20Contracts%20with%20Customers) The company's revenue from customer contracts is primarily derived from noninterest income sources like service charges and card fees - Service charges on deposit accounts, ATM and debit card fees, and other income are recognized as services are performed or over the period of the obligation[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) Sources of Revenue from Contracts with Customers (As of June 30, in thousands of USD) | Revenue Type | Q2 2025 (3 Months) | Q2 2024 (3 Months) | H1 2025 (6 Months) | H1 2024 (6 Months) | | :--- | :--- | :--- | :--- | :--- | | Service charges on deposit accounts | $588 | $564 | $1,181 | $1,157 | | ATM and debit card fees | $1,147 | $1,150 | $2,183 | $2,210 | | Other | $46 | $45 | $94 | $93 | | **Total Revenue from Contracts with Customers** | **$1,781** | **$1,759** | **$3,458** | **$3,460** | [13. Segment Information](index=40&type=section&id=13.%20Segment%20Information) The company operates as a single reportable segment, community banking, with performance evaluated by the Chief Operating Decision Maker (CODM) - The company's sole reportable segment is **community banking**, with all operations conducted domestically[108](index=108&type=chunk) - The CODM assesses segment performance by evaluating revenue streams, significant expenses, and budget-to-actual results, using consolidated net income for benchmarking[108](index=108&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses the company's financial condition and results of operations as of June 30, 2025, highlighting growth in assets, equity, and net income [Safe Harbor Statement for Forward-Looking Statements](index=42&type=section&id=Safe%20Harbor%20Statement%20for%20Forward-Looking%20Statements) This report contains forward-looking statements based on current expectations, which are subject to various risks and uncertainties - Forward-looking statements are based on current expectations, are not historical facts, and are subject to risks such as economic conditions, interest rate changes, and regulatory shifts[111](index=111&type=chunk)[112](index=112&type=chunk) [Critical Accounting Policies](index=42&type=section&id=Critical%20Accounting%20Policies) The company's financial statements are prepared under GAAP, requiring management estimates, with no material changes to critical policies in the first half of 2025 - The company's financial statements are prepared in accordance with GAAP, requiring management to make estimates and judgments based on historical experience and reasonable assumptions[113](index=113&type=chunk) - There were **no material changes** to the company's critical accounting policies or their application during the six months ended June 30, 2025[113](index=113&type=chunk) [Comparison of Financial Condition at June 30, 2025 and December 31, 2024](index=42&type=section&id=Comparison%20of%20Financial%20Condition%20at%20June%2030,%202025%20and%20December%2031,%202024) Total assets grew by $55.2 million to $1.243 billion, driven by increases in net loans, cash, and securities, funded primarily by deposit growth Key Changes in Financial Condition (As of June 30, in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Assets | $1,242,687 | $1,187,523 | $55,164 | 4.64% | | Net Loans | $649,174 | $631,199 | $17,975 | 2.85% | | Cash and Cash Equivalents | $134,595 | $105,917 | $28,678 | 27.08% | | Available-for-Sale Securities | $395,589 | $389,243 | $6,346 | 1.63% | | Total Deposits | $1,110,627 | $1,066,439 | $44,188 | 4.14% | | Total Stockholders' Equity Attributable to Company | $123,200 | $114,599 | $8,601 | 7.51% | - Net loan growth was primarily driven by increases in **multi-family residential, 1-4 family residential mortgage, and commercial real estate loans**[115](index=115&type=chunk) - The increase in available-for-sale securities was partly due to **$4.6 million in unrealized gains** resulting from lower market interest rates[118](index=118&type=chunk) - Deposit growth was mainly from increases in **certificates of deposit, noninterest-bearing checking, and interest-bearing checking accounts**[120](index=120&type=chunk) [Results of Operations for the Three Month Periods Ended June 30, 2025 and 2024](index=44&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Month%20Periods%20Ended%20June%2030,%202025%20and%202024) Net income for the second quarter of 2025 increased 33.56% to $3.8 million, driven by a 20.27% rise in net interest income Key Three-Month Operating Results (As of June 30, in thousands of USD, except per share data) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Income Attributable to Company | $3,775 | $2,828 | $947 | 33.56% | | Diluted Earnings Per Share | $1.13 | $0.85 | $0.28 | 32.94% | | Net Interest Income (after provision) | $10,106 | $8,297 | $1,809 | 21.80% | | Provision for Credit Losses | $306 | $360 | $(54) | -15.00% | | Noninterest Income | $2,018 | $2,023 | $(5) | -0.25% | | Noninterest Expense | $7,494 | $7,000 | $494 | 7.06% | | Income Tax Expense | $852 | $488 | $364 | 74.59% | - Total interest income increased by **$1.8 million**, primarily due to the average tax-equivalent yield on interest-earning assets rising from 4.42% to 4.82%[123](index=123&type=chunk) - The **net interest margin increased from 3.15% to 3.59%**[125](index=125&type=chunk) - The increase in noninterest expense was mainly due to higher costs for **salaries and benefits, office equipment, advertising, and data processing**[128](index=128&type=chunk)[129](index=129&type=chunk) [Results of Operations for the Six Month Periods Ended June 30, 2025 and 2024](index=46&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Month%20Periods%20Ended%20June%2030,%202025%20and%202024) Net income for the first half of 2025 increased 21.28% to $7.0 million, driven by a 15.88% rise in net interest income Key Six-Month Operating Results (As of June 30, in thousands of USD, except per share data) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Income Attributable to Company | $7,010 | $5,780 | $1,230 | 21.28% | | Diluted Earnings Per Share | $2.09 | $1.73 | $0.36 | 20.81% | | Net Interest Income (after provision) | $19,349 | $16,617 | $2,732 | 16.44% | | Provision for Credit Losses | $644 | $640 | $4 | 0.63% | | Noninterest Income | $3,866 | $3,922 | $(56) | -1.43% | | Noninterest Expense | $14,675 | $13,757 | $918 | 6.67% | | Income Tax Expense | $1,524 | $995 | $529 | 53.17% | - Total interest income increased by **$3.3 million**, primarily due to the average tax-equivalent yield on interest-earning assets rising from 4.36% to 4.73%[134](index=134&type=chunk) - The **net interest margin increased from 3.15% to 3.47%**[136](index=136&type=chunk) - The increase in noninterest expense was mainly due to higher costs for **salaries and benefits and office equipment**, with the latter related to Q1 2025 snow removal and system upgrades[139](index=139&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity through customer deposits and loan repayments, and the bank is considered "well capitalized" with a CBLR of 10.80% - The bank's primary funding sources include **customer deposits, loan repayments, and maturing securities**[143](index=143&type=chunk) - As a separate legal entity, the company's primary source of income is **dividends paid by the bank**[146](index=146&type=chunk) - The bank is considered **"well capitalized"** by regulators[147](index=147&type=chunk) Liquidity and Capital Resources Overview (As of June 30, in thousands of USD) | Metric | June 30, 2025 | | :--- | :--- | | Cash and Cash Equivalents | $134,600 | | Fair Value of Available-for-Sale Securities | $395,600 | | Community Bank Leverage Ratio (CBLR) | 10.80% | | Minimum CBLR Requirement | 9% | [Off-Balance Sheet Arrangements](index=48&type=section&id=Off-Balance%20Sheet%20Arrangements) The company engages in off-balance sheet transactions like loan commitments and letters of credit, with no material impact on financial condition in H1 2025 - The company's off-balance sheet transactions primarily consist of **loan commitments and letters of credit**, which involve credit, interest rate, and liquidity risks[148](index=148&type=chunk) - During the six months ended June 30, 2025, the company did not engage in any off-balance sheet transactions that had a **material effect** on its financial condition, results, or cash flows[149](index=149&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, which is managed through asset-liability strategies and quantified via NII and EVE simulations [Qualitative Aspects of Market Risk](index=50&type=section&id=Qualitative%20Aspects%20of%20Market%20Risk) Market risk arises from potential declines in asset and liability fair values due to interest rate changes, managed to achieve long-term profitability - Market risk is the risk of declining fair values of assets and liabilities due to **changes in interest rates** or financial market volatility[152](index=152&type=chunk) - The company mitigates interest rate risk by managing **asset-liability term mismatches**, emphasizing shorter-term loans, and relying on retail deposits[153](index=153&type=chunk) - The company does **not engage in trading accounts, hedging activities, or high-risk derivatives** and is not exposed to foreign currency or commodity price risk[154](index=154&type=chunk) [Quantitative Aspects of Market Risk](index=50&type=section&id=Quantitative%20Aspects%20of%20Market%20Risk) Simulations show that rising interest rates would increase net interest income and economic value of equity, while falling rates would have the opposite effect - The company quantifies interest rate risk using **Net Interest Income (NII) at Risk** simulations and **Economic Value of Equity (EVE)** analysis[156](index=156&type=chunk)[160](index=160&type=chunk) - Management evaluated and adjusted **deposit rate betas** and key rate index linkages during 2025 to better reflect the current interest rate environment and competitive pressures[157](index=157&type=chunk)[161](index=161&type=chunk) Impact of Interest Rate Changes on Net Interest Income (As of June 30, 2025, in thousands of USD) | Rate Change | One-Year NII Change ($) | One-Year NII Change (%) | | :--- | :--- | :--- | | +300bp | $6,471 | 14.95% | | +200bp | $4,512 | 10.42% | | +100bp | $2,381 | 5.50% | | -100bp | $(2,382) | (5.50)% | | -200bp | $(4,626) | (10.69)% | | -300bp | $(6,732) | (15.55)% | Impact of Interest Rate Changes on Economic Value of Equity (EVE) (As of June 30, 2025, in thousands of USD) | Rate Change | EVE Amount | EVE Change ($) | EVE Change (%) | | :--- | :--- | :--- | :--- | | +300bp | $183,949 | $(595) | (0.32)% | | +200bp | $186,380 | $1,836 | 0.99% | | +100bp | $186,765 | $2,221 | 1.20% | | -100bp | $182,179 | $(2,365) | (1.28)% | | -200bp | $175,633 | $(8,911) | (4.83)% | | -300bp | $173,238 | $(11,306) | (6.13)% | [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period, with no material changes to internal controls - The company's disclosure controls and procedures were deemed **effective** in ensuring timely recording, processing, and reporting of information[165](index=165&type=chunk) - There were **no material changes** in internal control over financial reporting during the six months ended June 30, 2025[166](index=166&type=chunk) [Part II Other Information](index=55&type=section&id=Part%20II%20Other%20Information) [Item 1. Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company has no legal proceedings to disclose at this time - The company currently has **no legal proceedings** to disclose[169](index=169&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's 2024 Annual Report on Form 10-K - There have been **no material changes** to the risk factors disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024[170](index=170&type=chunk) - Recent changes in international trade regulations or policies, including tariffs, could lead to **higher-than-anticipated inflation and supply chain disruptions**, affecting borrower performance[170](index=170&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any shares during the three months ended June 30, 2025, with 113,471 shares remaining available under its buyback plan - The Board of Directors authorized the repurchase of up to **240,467 shares** of common stock on August 19, 2008, a plan that remains in effect[171](index=171&type=chunk) Stock Repurchase Plan (As of June 30, 2025) | Period | Total Shares Purchased | Average Price Paid | Shares Purchased (Under Plan) | Max Shares Available Under Plan | | :--- | :--- | :--- | :--- | :--- | | April 1 - April 30, 2025 | — | N/A | — | 113,471 | | May 1 - May 31, 2025 | — | N/A | — | 113,471 | | June 1 - June 30, 2025 | — | N/A | — | 113,471 | | **Total** | **—** | **N/A** | **—** | **—** | [Item 3. Defaults Upon Senior Securities](index=55&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable - Not applicable[172](index=172&type=chunk) [Item 4. Mine Safety Disclosures](index=55&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[173](index=173&type=chunk) [Item 5. Other Information](index=55&type=section&id=Item%205.%20Other%20Information) None - None[174](index=174&type=chunk) [Item 6. Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This report includes exhibits such as the company's articles of incorporation, officer certifications, and Inline XBRL files - Exhibits include the company's articles of incorporation, amended articles, CEO and CFO certifications, and Inline XBRL-related files[176](index=176&type=chunk) [Signatures](index=57&type=section&id=Signatures) [Signatures](index=57&type=section&id=Signatures) The report was signed on August 14, 2025, by the company's President & CEO and its Executive Vice President & CFO - This report was signed on August 14, 2025, by **Michael C. Frederick**, President and CEO, and **Joshua P. Stevens**, Executive Vice President, CFO, and Treasurer[179](index=179&type=chunk)

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Company Overview](index=1&type=section&id=Company%20Overview) First Capital, Inc. (FCAP) reported increased net income and EPS for Q2 and H1 2025, reflecting strong performance from First Harrison Bank - **First Capital, Inc.** (NASDAQ: FCAP) is the holding company for **First Harrison Bank**[2](index=2&type=chunk) Net Income and Diluted EPS Summary | Metric | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :-------------------- | :------ | :------ | :----- | :------ | :------ | :----- | | Net Income (millions) | $3.8 | $2.8 | +$1.0M | $7.0 | $5.8 | +$1.2M | | Diluted EPS | $1.13 | $0.85 | +$0.28 | $2.09 | $1.73 | +$0.36 | [Results of Operations - Three Months Ended June 30, 2025 and 2024](index=1&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) [Net Income and Earnings Per Share (EPS)](index=1&type=section&id=Net%20Income%20and%20Earnings%20Per%20Share%20(EPS)%20-%20Q2) Q2 2025 net income and diluted EPS increased, driven by improved net interest income and lower credit loss provisions Q2 Net Income and Diluted EPS | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------- | :------ | :------ | :----- | | Net Income (millions) | $3.8 | $2.8 | +$1.0M | | Diluted EPS | $1.13 | $0.85 | +$0.28 | [Net Interest Income and Margin](index=1&type=section&id=Net%20Interest%20Income%20and%20Margin%20-%20Q2) Q2 net interest income after credit loss provision increased by **$1.8 million**, driven by higher asset yield and balance, significantly improving net interest margin - Net interest income after provision for credit losses increased by **$1.8 million** for Q2 **2025** compared to Q2 **2024**[3](index=3&type=chunk) Q2 Net Interest Income and Margin Components | Metric | Q2 2025 | Q2 2024 | Change | | :------------------------------------ | :------ | :------ | :----- | | Average Tax-Equivalent Yield on IEAs | 4.82% | 4.42% | +0.40% | | Average Balance of IEAs (billions) | $1.18 | $1.12 | +$0.06B | | Average Cost of Interest-Bearing Liab | 1.64% | 1.71% | -0.07% | | Average Balance of Interest-Bearing Liab (millions) | $883.8 | $830.7 | +$53.1M | | Tax-Equivalent Net Interest Margin | 3.59% | 3.15% | +0.44% | [Provision for Credit Losses](index=1&type=section&id=Provision%20for%20Credit%20Losses%20-%20Q2) The provision for credit losses decreased in Q2 2025 compared to Q2 2024, while net charge-offs increased Q2 Provision for Credit Losses and Net Charge-offs | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------- | :------ | :------ | :----- | | Provision for Credit Losses | $306,000 | $360,000 | -$54,000 | | Net Charge-offs | $113,000 | $30,000 | +$83,000 | [Noninterest Income](index=1&type=section&id=Noninterest%20Income%20-%20Q2) Q2 noninterest income slightly decreased, mainly due to larger equity securities losses, partially offset by a bank-owned life insurance policy redemption gain - Noninterest income decreased by **$5,000** for Q2 **2025** compared to Q2 **2024**[5](index=5&type=chunk) - Loss on equity securities: **$41,000** in Q2 **2025** vs. **$6,000** in Q2 **2024** - Decrease of **$17,000** in both gains on sale of loans and increase in cash surrender value of bank-owned life insurance policies - Partially offset by a **$46,000** gain on the redemption of a bank-owned life insurance policy in Q2 **2025** [Noninterest Expenses](index=1&type=section&id=Noninterest%20Expenses%20-%20Q2) Q2 noninterest expenses increased due to higher compensation, occupancy, advertising, and data processing costs, reflecting adjustments and system upgrades - Noninterest expenses increased by **$494,000** for Q2 **2025** compared to Q2 **2024**[6](index=6&type=chunk) - Compensation and benefits increased by **$308,000** (due to salary/wage adjustments and health insurance costs) - Occupancy and equipment increased by **$69,000** (due to call center system upgrade and ATM servicing) - Advertising increased by **$41,000** (due to new marketing efforts) - Data processing expenses increased by **$41,000** (due to licensing upgrades and new software) [Income Tax Expense](index=1&type=section&id=Income%20Tax%20Expense%20-%20Q2) Q2 income tax expense increased, resulting in a higher effective tax rate due to a larger proportion of net income being taxable Q2 Income Tax Expense and Effective Tax Rate | Metric | Q2 2025 | Q2 2024 | Change | | :------------------ | :------ | :------ | :----- | | Income Tax Expense | $364,000 | N/A | +$364,000 | | Effective Tax Rate | 18.4% | 14.7% | +3.7% | [Results of Operations - Six Months Ended June 30, 2025 and 2024](index=1&type=section&id=Results%20of%20Operations%20-%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) [Net Income and Earnings Per Share (EPS)](index=1&type=section&id=Net%20Income%20and%20Earnings%20Per%20Share%20(EPS)%20-%20H1) H1 2025 net income and diluted EPS increased, driven by higher net interest income, despite increased credit loss provisions and noninterest expenses H1 Net Income and Diluted EPS | Metric | H1 2025 | H1 2024 | Change | | :-------------------- | :------ | :------ | :----- | | Net Income (millions) | $7.0 | $5.8 | +$1.2M | | Diluted EPS | $2.09 | $1.73 | +$0.36 | [Net Interest Income and Margin](index=1&type=section&id=Net%20Interest%20Income%20and%20Margin%20-%20H1) H1 net interest income after credit loss provision increased by **$2.7 million**, driven by higher asset yield and balance, improving net interest margin - Net interest income after provision for credit losses increased by **$2.7 million** for H1 **2025** compared to H1 **2024**[9](index=9&type=chunk) H1 Net Interest Income and Margin Components | Metric | H1 2025 | H1 2024 | Change | | :------------------------------------ | :------ | :------ | :----- | | Average Tax-Equivalent Yield on IEAs | 4.73% | 4.36% | +0.37% | | Average Balance of IEAs (billions) | $1.18 | $1.12 | +$0.06B | | Average Cost of Interest-Bearing Liab | 1.67% | 1.63% | +0.04% | | Average Balance of Interest-Bearing Liab (millions) | $883.2 | $832.2 | +$51.0M | | Tax-Equivalent Net Interest Margin | 3.47% | 3.15% | +0.32% | [Provision for Credit Losses](index=3&type=section&id=Provision%20for%20Credit%20Losses%20-%20H1) H1 provision for credit losses slightly increased due to loan growth and macroeconomic uncertainty, alongside a notable increase in net charge-offs H1 Provision for Credit Losses and Net Charge-offs | Metric | H1 2025 | H1 2024 | Change | | :-------------------------- | :------ | :------ | :----- | | Provision for Credit Losses | $644,000 | $640,000 | +$4,000 | | Net Charge-offs | $197,000 | $85,000 | +$112,000 | - The increase in provision for credit losses was due to loan growth and management's consideration of macroeconomic uncertainty[11](index=11&type=chunk) [Noninterest Income](index=3&type=section&id=Noninterest%20Income%20-%20H1) H1 noninterest income decreased, mainly due to a loss on sale of available-for-sale securities and lower loan sale gains, partially offset by a policy redemption gain - Noninterest income decreased by **$56,000** for H1 **2025** compared to H1 **2024**[12](index=12&type=chunk) - Loss on sale of available-for-sale securities: **$55,000** in H1 **2025** vs. **$32,000** gain in H1 **2024** - Decrease of **$29,000** in gains on sale of loans - Partially offset by a **$51,000** reduction in loss on equity securities, a **$24,000** increase in service charges on deposit accounts, and a **$46,000** gain on redemption of a bank-owned life insurance policy [Noninterest Expenses](index=3&type=section&id=Noninterest%20Expenses%20-%20H1) H1 noninterest expenses increased significantly, driven by higher compensation, benefits, occupancy, and equipment costs, reflecting adjustments and system upgrades - Noninterest expenses increased by **$918,000** for H1 **2025** compared to H1 **2024**[13](index=13&type=chunk) - Compensation and benefits increased by **$567,000** (due to salary/wage adjustments and health insurance costs) - Occupancy and equipment increased by **$229,000** (due to snow removal costs, loss on disposal of premises/equipment, call center system upgrade, and increased ATM servicing expense) [Income Tax Expense](index=3&type=section&id=Income%20Tax%20Expense%20-%20H1) H1 income tax expense increased, resulting in a higher effective tax rate due to a larger proportion of net income being taxable H1 Income Tax Expense and Effective Tax Rate | Metric | H1 2025 | H1 2024 | Change | | :------------------ | :------ | :------ | :----- | | Income Tax Expense | $529,000 | N/A | +$529,000 | | Effective Tax Rate | 17.9% | 14.7% | +3.2% | [Financial Condition - June 30, 2025 vs December 31, 2024](index=3&type=section&id=Financial%20Condition%20-%20June%2030%2C%202025%20vs%20December%2031%2C%202024) [Balance Sheet Overview](index=3&type=section&id=Balance%20Sheet%20Overview) Total assets increased to **$1.24 billion** at June 30, 2025, driven by increases in cash, net loans, and securities, with significant deposit growth Balance Sheet Overview | Metric | June 30, 2025 (billions) | Dec 31, 2024 (billions) | Change (millions) | | :-------------------------- | :----------------------- | :---------------------- | :---------------- | | Total Assets | $1.24 | $1.19 | +$50 | | Cash & Cash Equivalents | N/A | N/A | +$28.7 | | Net Loans Receivable | N/A | N/A | +$18.0 | | Securities Available for Sale | N/A | N/A | +$6.3 | | Deposits | $1.11 | $1.07 | +$44.2 | [Asset Quality](index=3&type=section&id=Asset%20Quality) Nonperforming assets decreased from December 31, 2024, indicating an improvement in asset quality Asset Quality Overview | Metric | June 30, 2025 (millions) | Dec 31, 2024 (millions) | Change (millions) | | :------------------ | :----------------------- | :---------------------- | :---------------- | | Nonperforming Assets | $4.0 | $4.5 | -$0.5 | [Financial Statements and Reconciliations](index=4&type=section&id=Financial%20Statements%20and%20Reconciliations) [Consolidated Financial Highlights](index=4&type=section&id=Consolidated%20Financial%20Highlights) Key operating and financial data for Q2 and H1 2025 and 2024, and balance sheet information for June 30, 2025 and December 31, 2024, are summarized Consolidated Financial Highlights - Operating Data | OPERATING DATA (Dollars in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | | Total interest income | $14,040 | $12,218 | $27,386 | $24,055 | | Total interest expense | $3,628 | $3,561 | $7,393 | $6,798 | | Net interest income | $10,412 | $8,657 | $19,993 | $17,257 | | Provision for credit losses | $306 | $360 | $644 | $640 | | Net income attributable to FCAP | $3,775 | $2,828 | $7,010 | $5,780 | | Diluted EPS | $1.13 | $0.85 | $2.09 | $1.73 | | Cash dividends per share | $0.29 | $0.27 | $0.58 | $0.54 | | Return on average assets (annualized) | 1.24% | 0.99% | 1.16% | 1.01% | | Return on average equity (annualized) | 12.59% | 10.78% | 11.86% | 11.03% | | Net interest margin (tax-equivalent) | 3.59% | 3.15% | 3.47% | 3.15% | Consolidated Financial Highlights - Balance Sheet Information | BALANCE SHEET INFORMATION (Dollars in thousands) | June 30, 2025 | Dec 31, 2024 | | :----------------------------------------------- | :------------ | :----------- | | Total assets | $1,242,687 | $1,187,523 | | Deposits | $1,110,627 | $1,066,439 | | Stockholders' equity | $123,200 | $114,599 | | Allowance for credit losses as % of gross loans | 1.48% | 1.45% | | Nonaccrual loans | $3,992 | $4,382 | | Community Bank Leverage Ratio (Bank only) | 10.80% | 10.57% | [Consolidated Average Balance Sheets (Three Months)](index=6&type=section&id=Consolidated%20Average%20Balance%20Sheets%20(Three%20Months)) Average balances, interest income/expense, and yields/costs for interest-earning assets and liabilities for Q2 2025 and 2024 are detailed, showing net interest income and margin components Consolidated Average Balance Sheets (Three Months) | (Dollars in thousands) | Q2 2025 Avg Balance | Q2 2025 Interest | Q2 2025 Yield/Cost | Q2 2024 Avg Balance | Q2 2024 Interest | Q2 2024 Yield/Cost | | :--------------------- | :------------------ | :--------------- | :----------------- | :------------------ | :--------------- | :----------------- | | Total interest earning assets | $1,182,018 | $14,241 | 4.82% | $1,121,842 | $12,405 | 4.42% | | Total interest bearing liabilities | $883,761 | $3,628 | 1.64% | $830,717 | $3,561 | 1.71% | | Net interest income (tax-equivalent basis) | N/A | $10,613 | N/A | N/A | $8,844 | N/A | | Net interest margin (tax-equivalent basis) | N/A | N/A | 3.59% | N/A | N/A | 3.15% | [Consolidated Average Balance Sheets (Six Months)](index=7&type=section&id=Consolidated%20Average%20Balance%20Sheets%20(Six%20Months)) Average balances, interest income/expense, and yields/costs for interest-earning assets and liabilities for H1 2025 and 2024 are presented, offering a comprehensive view of interest rate dynamics Consolidated Average Balance Sheets (Six Months) | (Dollars in thousands) | H1 2025 Avg Balance | H1 2025 Interest | H1 2025 Yield/Cost | H1 2024 Avg Balance | H1 2024 Interest | H1 2024 Yield/Cost | | :--------------------- | :------------------ | :--------------- | :----------------- | :------------------ | :--------------- | :----------------- | | Total interest earning assets | $1,175,733 | $27,783 | 4.73% | $1,121,487 | $24,443 | 4.36% | | Total interest bearing liabilities | $883,212 | $7,393 | 1.67% | $832,196 | $6,798 | 1.63% | | Net interest income (tax-equivalent basis) | N/A | $20,390 | N/A | N/A | $17,645 | N/A | | Net interest margin (tax-equivalent basis) | N/A | N/A | 3.47% | N/A | N/A | 3.15% | [Reconciliation of GAAP and Non-GAAP Financial Measures](index=8&type=section&id=Reconciliation%20of%20GAAP%20and%20Non-GAAP%20Financial%20Measures) Reconciliation of non-GAAP financial measures, including tax-equivalent net interest income and margin, to comparable GAAP measures is provided for better comparability - Non-GAAP measures are used by management for better comparability with prior periods and industry peers, and to provide a further understanding of the Company's ongoing operations[33](index=33&type=chunk) Reconciliation of GAAP and Non-GAAP Net Interest Measures | (Dollars in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | | Net interest income (GAAP) | $10,412 | $8,657 | $19,993 | $17,257 | | Tax-equivalent adjustment | $201 | $187 | $397 | $388 | | Tax-equivalent net interest income | $10,613 | $8,844 | $20,390 | $17,645 | | Net interest margin (GAAP) | 3.52% | 3.09% | 3.40% | 3.08% | | Net interest margin (tax-equivalent) | 3.59% | 3.15% | 3.47% | 3.15% | | Average yield on interest earning assets (GAAP) | 4.75% | 4.36% | 4.66% | 4.29% | | Average yield on interest earning assets (tax-equivalent) | 4.82% | 4.42% | 4.73% | 4.36% | | Average cost of interest bearing liabilities | 1.64% | 1.71% | 1.67% | 1.63% | | Interest rate spread (tax-equivalent) | 3.18% | 2.71% | 3.06% | 2.73% | [Additional Information](index=3&type=section&id=Additional%20Information) [Company Profile and Branch Network](index=3&type=section&id=Company%20Profile%20and%20Branch%20Network) **First Harrison Bank** operates **17 offices** in Indiana and Kentucky, offering banking services including online banking and electronic bill payments via its website - The Bank operates **17 offices** in Indiana (Corydon, Edwardsville, Greenville, Floyds Knobs, Palmyra, New Albany, New Salisbury, Jeffersonville, Salem, Lanesville, Charlestown) and Kentucky (Shepherdsville, Mt. Washington, Lebanon Junction)[16](index=16&type=chunk) - Access to **First Harrison Bank** accounts, including online banking and electronic bill payments, is available through www.firstharrison.com[17](index=17&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) Forward-looking statements in this release are based on current beliefs and expectations, subject to risks and uncertainties, and the Company assumes no obligation to update them - Forward-looking statements are identified by words like 'anticipate,' 'believe,' 'expect,' 'intend,' 'could,' and 'should,' and are based on the Company's current beliefs, assumptions, and expectations[19](index=19&type=chunk) - Numerous risks and uncertainties, including general economic conditions, market interest rates, competition, regulatory changes, and loan quality, could cause actual results to differ materially[20](index=20&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, and the Company assumes no obligation to update them after the press release date[21](index=21&type=chunk) [Contact Information](index=3&type=section&id=Contact%20Information) Investor inquiries can be directed to Joshua P. Stevens, Chief Financial Officer - Contact: Joshua P. Stevens, Chief Financial Officer - Phone: **812-738-1570**

Financial Performance - Net income attributable to First Capital, Inc. for the three months ended March 31, 2025, was $3,235 thousand, compared to $2,952 thousand for the same period in 2024, reflecting an increase of 9.6%[11]. - Earnings per common share attributable to First Capital, Inc. increased to $0.97 for Q1 2025, compared to $0.88 for Q1 2024, representing a growth of 10.2%[11]. - Comprehensive income attributable to First Capital, Inc. for Q1 2025 was $6,426 thousand, significantly higher than $1,319 thousand in Q1 2024[14]. - Net income for the three months ended March 31, 2025, was $3,238,000, an increase of 9.5% compared to $2,955,000 for the same period in 2024[19]. - Cash dividends paid during the three months ended March 31, 2025, totaled $974,000, compared to $905,000 in the same period of 2024, reflecting an increase of 7.6%[19]. Asset Growth - Total assets increased to $1,214,538 thousand as of March 31, 2025, up from $1,187,523 thousand at December 31, 2024, representing a growth of 2.3%[9]. - Cash and cash equivalents totaled $116,623 thousand as of March 31, 2025, up from $105,917 thousand at the end of 2024, an increase of 10.8%[9]. - Total deposits reached $1,083,921 thousand as of March 31, 2025, an increase of 1.5% from $1,066,439 thousand at the end of 2024[9]. - The net increase in deposits for the three months ended March 31, 2025, was $17,482,000, compared to a decrease of $15,119,000 in the same period of 2024[19]. - Total loans increased to $651,359,000 as of March 31, 2025, up from $639,376,000 at December 31, 2024, representing a growth of approximately 1.54%[42]. Income and Interest - Total interest income rose to $13,346 thousand for Q1 2025, a 12.7% increase from $11,837 thousand in Q1 2024[11]. - Net interest income after provision for credit losses was $9,243 thousand for Q1 2025, up from $8,320 thousand in Q1 2024, marking an increase of 11.1%[11]. - The tax equivalent net interest margin increased from 3.14% for the quarter ended March 31, 2024, to 3.34% for the same period in 2025[137]. - Total interest income increased by $1.5 million due to an increase in the average tax-equivalent yield on interest-earning assets from 4.29% to 4.63%[135]. Credit Losses and Provisions - The allowance for credit losses was $9,535 thousand as of March 31, 2025, compared to $9,281 thousand in 2024, indicating a slight increase in credit risk management[9]. - The provision for credit losses increased to $338,000 for the three months ended March 31, 2025, from $280,000 in the same period of 2024[19]. - Nonperforming loans totaled $4,075,000 as of March 31, 2025, compared to $4,382,000 as of December 31, 2024, showing a decrease of approximately 6.99%[59]. - The total charge-offs for the three months ended March 31, 2025, were $127,000, compared to $100,000 for the same period in 2024, representing a 27% increase[52]. Loan Portfolio - The principal loan balance for 1-4 Family Residential Mortgage increased to $140,853,000 as of March 31, 2025, from $138,936,000 at December 31, 2024, reflecting a growth of 1.31%[42]. - Multi-family Residential loans rose to $45,891,000 as of March 31, 2025, compared to $36,822,000 at December 31, 2024, marking a significant increase of 24.6%[42]. - Commercial Real Estate loans increased to $189,309,000 as of March 31, 2025, up from $184,851,000 at December 31, 2024, which is an increase of 2.48%[42]. - Consumer and Other loans decreased slightly to $57,148,000 as of March 31, 2025, from $58,406,000 at December 31, 2024, a decline of 2.15%[42]. Securities and Investments - As of March 31, 2025, total securities available for sale amounted to $417,251,000 with a fair value of $391,718,000, reflecting a gross unrealized loss of $26,555,000[26]. - The company purchased securities available for sale totaling $30,783,000 during the three months ended March 31, 2025, compared to $27,030,000 in 2024[19]. - The investment in qualified affordable housing projects was $1.5 million as of March 31, 2025, down from $1.6 million at the end of 2024[76]. - The balance of investments in renewable energy tax credits increased significantly to $4.1 million as of March 31, 2025, compared to $401,000 at December 31, 2024[78]. Risk Management and Compliance - The Bank's Community Bank Leverage Ratio (CBLR) was 10.61% as of March 31, 2025, indicating compliance with capital adequacy requirements[148]. - The Company does not engage in high-risk derivative instruments and is not exposed to foreign currency exchange rate risk or commodity price risk[156]. - The Company has not experienced any material changes in risk factors since the last annual report[174]. - There have been no changes in the Company's internal control over financial reporting that materially affect its effectiveness[170].

Financial Performance - First Capital, Inc. reported net income of $3.2 million, or $0.97 per diluted share, for Q1 2025, compared to $3.0 million, or $0.88 per diluted share, for Q1 2024, representing a 6.67% increase in net income year-over-year[2] - Net interest income after provision for credit losses increased by $923,000 to $9.243 million for Q1 2025, compared to $8.320 million for Q1 2024, reflecting a 11.09% growth[3][16] - Noninterest income decreased by $51,000 to $1.848 million in Q1 2025, primarily due to a $55,000 loss on the sale of available-for-sale securities[5][17] - Noninterest expenses increased by $424,000 to $7.181 million in Q1 2025, driven by higher compensation and benefits, and occupancy and equipment expenses[6][17] - The effective tax rate increased to 17.2% for Q1 2025, compared to 14.6% for Q1 2024[7] Interest Income and Margin - Total interest income rose to $13.346 million in Q1 2025, up from $11.837 million in Q1 2024, marking an increase of 12.74%[16] - Net interest income for the three months ended March 31, 2025, was $9,581,000, an increase from $8,600,000 in the same period of 2024, representing a growth of 11.4%[21] - Total interest income on a tax-equivalent basis increased to $13,542,000 in Q1 2025 from $12,038,000 in Q1 2024, reflecting a year-over-year increase of 12.5%[25] - The net interest margin improved to 3.28% in Q1 2025 from 3.07% in Q1 2024, indicating a positive trend in profitability[24] - The interest rate spread increased to 2.85% in Q1 2025, up from 2.67% in Q1 2024, suggesting enhanced earnings from interest-earning assets[21] - The average yield on interest-earning assets on a tax-equivalent basis was 4.63% in Q1 2025, compared to 4.29% in Q1 2024, indicating improved asset performance[25] Asset and Deposit Growth - Total assets grew to $1.21 billion as of March 31, 2025, compared to $1.19 billion at December 31, 2024, reflecting a 1.68% increase[8][17] - Total assets as of March 31, 2025, were $1,198,710,000, compared to $1,148,486,000 as of March 31, 2024, reflecting a growth of 4.4%[21] - Deposits increased by $17.5 million to $1.08 billion from $1.07 billion at the end of 2024[8] - Total deposits increased to $881,635,000 in Q1 2025 from $798,357,000 in Q1 2024, representing a growth of 10.4%[21] Credit Quality - The provision for credit losses increased from $280,000 in Q1 2024 to $338,000 in Q1 2025, due to loan growth and macroeconomic uncertainty[4] - Nonperforming assets decreased from $4.5 million at December 31, 2024, to $4.1 million at March 31, 2025[9] Equity and Leverage - Stockholders' equity increased to $116,409,000 as of March 31, 2025, from $104,985,000 in the same period of 2024, reflecting a growth of 10.4%[21] - The ratio of average interest-earning assets to average interest-bearing liabilities was 132.65% in Q1 2025, slightly down from 134.48% in Q1 2024, indicating a stable leverage position[21] - Average interest-earning assets rose to $1,169,491,000 in Q1 2025, compared to $1,121,160,000 in Q1 2024, marking an increase of 4.3%[24]

Financial Performance - Net income attributable to the Company for 2024 was $11.9 million, or $3.57 per diluted share, a decrease from $12.8 million, or $3.82 per diluted share in 2023 [242]. - Return on average assets for 2024 was 1.02%, down from 1.12% in 2023, and return on average equity decreased to 10.97% from 14.03% [242]. - The efficiency ratio for 2024 was 64.1%, compared to 61.6% in 2023, indicating a decline in operational efficiency [242]. - Total annual shareholder return for 2024 was 19.6%, up from 16.4% in 2023, reflecting an increase in stock price from $27.90 to $32.25 [242]. - Net income attributable to the Company for the year ended December 31, 2024 was $11.9 million, a decrease from $12.8 million in 2023, resulting in diluted earnings per share of $3.57 compared to $3.82 in 2023 [263]. Asset and Deposit Growth - Total assets increased to $1,187.5 million in 2024 from $1,157.9 million in 2023, while total deposits rose to $1,066.4 million from $1,025.2 million [256]. - Total assets increased from $1.16 billion at December 31, 2023 to $1.19 billion at December 31, 2024, primarily due to increases in total cash and cash equivalents and net loans receivable [290]. - Total deposits increased by $41.2 million to $1.07 billion at December 31, 2024, with time deposits rising by $74.3 million [294]. - Cash and cash equivalents rose from $38.7 million at December 31, 2023 to $105.9 million at December 31, 2024, primarily due to inflows from available for sale security proceeds and deposit increases [293]. Interest Income and Expense - Net interest income for 2024 was $35.8 million, an increase from $34.6 million in 2023, driven by higher interest income of $50.5 million [256]. - Net interest income increased by $1.2 million, or 3.5%, from $34.6 million in 2023 to $35.8 million in 2024, driven by an increase in the average tax-equivalent yield on interest-earning assets [264]. - Total interest income rose by $6.9 million in 2024, primarily due to an increase in the tax-equivalent yield on interest-earning assets from 3.96% in 2023 to 4.49% in 2024 [265]. - Total interest expense increased by $5.7 million, from $9.0 million in 2023 to $14.7 million in 2024, due to higher average costs and balances of interest-bearing liabilities [266]. Credit Quality - Nonperforming assets increased to $4.4 million, or 0.37% of total assets, from $1.8 million, or 0.15% of total assets in the previous year [242]. - Provision for credit losses increased from $1.1 million in 2023 to $1.4 million in 2024, attributed to loan growth and an increase in nonperforming assets [267]. - Nonperforming loans rose from $1.8 million at December 31, 2023 to $4.4 million at December 31, 2024, primarily due to the nonaccrual classification of two commercial loan relationships totaling $2.6 million [267]. Operational Strategy - The Company plans to enhance profitability by expanding product offerings and leveraging technology investments to improve efficiency [245]. - Management intends to focus on growth in the loan portfolio and secondary market lending programs in 2025 [245]. - The Company is evaluating growth opportunities through acquisitions to expand its market area and market share [245]. Tax and Regulatory Compliance - The effective tax rate for 2024 was 15.6%, a slight increase from 14.9% in 2023, with income tax expense decreasing by $32,000 [270]. - The Company maintained a CBLR of 10.57% as of December 31, 2024, in compliance with all regulatory capital requirements [301]. Interest Rate Sensitivity - As of December 31, 2024, a 300 basis point increase in interest rates could result in a net interest income increase of $1,314,000 (3.56%) compared to a base case scenario [311]. - The Economic Value of Equity (EVE) at December 31, 2024 would increase by $257,887,000 (10,236) (4.13%) with a 300 basis point increase in interest rates [315]. - The Company expects a decrease in EVE with a sudden and sustained decrease of 100, 200, and 300 basis points in prevailing interest rates as of December 31, 2024 [316]. - The Company utilizes both Net Interest Income at Risk and Economic Value of Equity models to assess interest rate risk exposure [313]. Recent Developments - Recent accounting pronouncements may impact the Company's financial statements, as discussed in Note 1 of the accompanying Notes to Consolidated Financial Statements [318].