UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March, 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 0-25023 First Capital, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or orga ...

Financial Performance - Net income attributable to the Company was $11.9 million, or $3.55 per diluted share for 2022, compared to $11.4 million, or $3.41 per diluted share for 2021[241]. - The total annual shareholder return for 2022 was -36.0%, compared to -31.4% for 2021[241]. - Net income attributable to the Company for 2022 was $11.9 million, or $3.55 per diluted share, compared to $11.4 million, or $3.41 per diluted share, in 2021, representing a 4.4% increase in net income[256]. Asset and Loan Growth - Total assets as of December 31, 2022, were $1,151,400,000, a slight decrease from $1,156,603,000 in 2021[249]. - Net loans increased to $557,958,000 in 2022 from $483,287,000 in 2021, reflecting a growth of 15.4%[249]. - Total outstanding loans increased by $75.3 million during 2022, contrasting with a decrease of $18.4 million in 2021[260]. - Net loans receivable increased from $483.3 million at December 31, 2021 to $558.0 million at December 31, 2022, with significant growth in residential mortgage loans, commercial real estate loans, commercial business loans, and construction loans[284]. Income and Expenses - Noninterest income for 2022 was $7,927,000, down from $9,551,000 in 2021, representing a decrease of 17%[249]. - Noninterest income decreased by $1.6 million to $7.9 million in 2022, primarily due to a decline in gains on the sale of loans[263]. - Noninterest expense increased by $557,000 to $25.1 million in 2022, mainly due to higher data processing and compensation expenses[264]. Efficiency and Ratios - The Company's efficiency ratio improved to 62.3% for 2022 from 64.8% in 2021[241]. - Return on average assets for 2022 was 1.03%, down from 1.05% in 2021, while return on average equity increased to 13.07% from 10.15%[241]. - The allowance for loan losses was 1.20% of total outstanding loans at December 31, 2022, compared to 1.25% in 2021[241]. - Nonperforming loans as a percentage of net loans remained low at 0.27% in 2022, down from 0.28% in 2021[256]. Interest Income and Rates - Net interest income increased by $4.0 million, or 14.2%, from $28.3 million in 2021 to $32.3 million in 2022, primarily due to increases in the average balance of interest-earning assets and the interest rate spread[257]. - Total interest income rose by $4.5 million in 2022, driven by an increase in the average balance of interest-earning assets from $1.02 billion in 2021 to $1.13 billion in 2022[258]. - The tax-equivalent yield on interest-earning assets increased from 2.95% in 2021 to 3.10% in 2022, attributed to rising short-term interest rates[258]. - The interest rate spread improved to 2.90% in 2022 from 2.80% in 2021, while the net interest margin increased to 2.95% from 2.84%[279]. Capital and Regulatory Compliance - The Bank was in compliance with all regulatory capital requirements with a CBLR of 9.18% as of December 31, 2022[294]. - Total stockholders' equity attributable to the Company decreased by $28.7 million from $113.8 million at December 31, 2021 to $85.2 million at December 31, 2022, primarily due to a $37.5 million net unrealized loss on available for sale securities[289]. - The Company has a shelf registration permitting the issuance of up to $35 million of debt and equity securities, with $35 million remaining available[295]. Interest Rate Sensitivity - As of December 31, 2022, a 300 basis point increase in interest rates would result in a net interest income increase of $4,012,000, representing an 11.28% change compared to the base case scenario[304]. - The Economic Value of Equity (EVE) at December 31, 2022 would increase by $322,611,000 (8.49%) with a 300 basis point increase in interest rates, with an EVE ratio of 30.96%[307]. - In contrast, a 300 basis point decrease in interest rates would lead to a decrease in EVE by $69,583,000 (23.40%) at December 31, 2022[307]. - The company models various interest rate scenarios to assess sensitivity, acknowledging that model outputs are not guarantees of actual results[308]. Other Financial Insights - The company updated deposit betas and decay rates during 2022 to better reflect market conditions, based on a third-party study of customer accounts[306]. - The company’s net interest income is influenced by factors beyond market interest rates, including asset and liability behavior under different interest rate conditions[308]. - Recent accounting pronouncements and their impacts are discussed in Note 1 of the accompanying Notes to Consolidated Financial Statements[309].

Part I - Financial Information This section provides First Capital, Inc.'s unaudited consolidated financial statements and management's discussion of financial condition, operations, and market risks [Item 1. Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents First Capital, Inc.'s unaudited consolidated financial statements, detailing asset and equity changes, income performance, cash flows, and significant accounting policies [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets slightly decreased to **$1.147 billion**, while total equity significantly declined to **$77.8 million** due to unrealized losses on available-for-sale securities Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Assets | $1,146,851 | $1,156,603 | | Loans, net | $541,593 | $483,287 | | Total Deposits | $1,063,099 | $1,035,562 | | Total Liabilities | $1,069,018 | $1,042,663 | | Total Equity | $77,833 | $113,940 | - The decrease in total equity is primarily attributable to a significant negative shift in Accumulated Other Comprehensive Income (Loss), which went from a positive **$1.7 million** to a loss of **$(40.4) million**[8](index=8&type=chunk) [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q3 2022 increased to **$3.1 million**, while the nine-month net income slightly decreased to **$8.4 million** due to lower noninterest income Key Income Statement Data (in thousands, except per share) | Metric | Q3 2022 | Q3 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $8,658 | $7,467 | $23,241 | $21,315 | | Provision for Loan Losses | $175 | $0 | $550 | $75 | | Noninterest Income | $1,873 | $2,270 | $5,985 | $7,260 | | Noninterest Expense | $6,559 | $6,202 | $18,788 | $18,174 | | Net Income Attributable to First Capital, Inc. | $3,125 | $2,936 | $8,362 | $8,605 | | Diluted EPS | $0.93 | $0.88 | $2.49 | $2.57 | - Gain on sale of loans for the nine-month period dropped sharply to **$720,000** in 2022 from **$1.9 million** in 2021, contributing significantly to the decline in noninterest income[12](index=12&type=chunk) [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) The company reported a comprehensive loss of **$7.0 million** for Q3 2022 and **$33.8 million** for the nine months, driven by unrealized losses on available-for-sale securities Comprehensive Income (Loss) Summary (in thousands) | Metric | Q3 2022 | Q3 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $3,128 | $2,939 | $8,372 | $8,615 | | Other Comprehensive Loss, net of tax | $(10,163) | $(193) | $(42,161) | $(2,523) | | Comprehensive Income (Loss) | $(7,035) | $2,746 | $(33,789) | $6,092 | [Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity decreased from **$113.9 million** to **$77.8 million**, primarily due to a **$42.2 million** other comprehensive loss - For the nine months ended September 30, 2022, the key drivers of the change in equity were net income of **$8.4 million**, other comprehensive loss of **$(42.2) million**, and cash dividends of **$(2.6) million**[19](index=19&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was **$12.4 million**, while investing activities used **$126.0 million**, resulting in an **$88.7 million** net decrease in cash Cash Flow Summary - Nine Months Ended Sep 30 (in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash Provided By Operating Activities | $12,399 | $15,701 | | Net Cash Used In Investing Activities | $(125,989) | $(126,382) | | Net Cash Provided By Financing Activities | $24,867 | $99,093 | | **Net Decrease in Cash and Cash Equivalents** | **$(88,723)** | **$(11,588)** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, investment securities with significant unrealized losses, loan portfolio growth, and preparation for CECL adoption - As of September 30, 2022, the securities available for sale portfolio had gross unrealized losses of **$52.7 million**, a substantial increase from **$3.8 million** at year-end 2021, primarily due to rising interest rates[36](index=36&type=chunk)[47](index=47&type=chunk) - Gross loans increased to **$587.1 million** from **$514.8 million** at year-end 2021, with notable growth in residential, construction, and commercial real estate segments[76](index=76&type=chunk) - The allowance for loan losses increased to **$6.6 million** at September 30, 2022, from **$6.1 million** at year-end 2021, with qualitative factor adjustments comprising **$6.2 million** of the total allowance[92](index=92&type=chunk) - The company is preparing to adopt the CECL methodology for credit losses for the fiscal year beginning after December 15, 2022, and expects its **allowance for loan losses to increase upon adoption**[174](index=174&type=chunk)[175](index=175&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, highlighting decreased assets and equity due to unrealized losses, and results of operations, noting a slight net income decrease despite higher net interest income [Financial Condition](index=47&type=section&id=Financial%20Condition) Total assets decreased slightly to **$1.15 billion**, while net loans grew, and stockholders' equity fell due to **$42.2 million** in unrealized security losses - Net loans increased by **$58.3 million**, with commercial real estate and residential mortgage loans growing by **$23.4 million** and **$23.1 million**, respectively[189](index=189&type=chunk) - Cash and cash equivalents decreased from **$172.5 million** to **$83.8 million** as excess liquidity was used to fund loan growth and investment purchases[190](index=190&type=chunk) - Stockholders' equity decreased primarily due to a **$42.2 million** net unrealized loss on available for sale securities, partially offset by a **$5.7 million** increase in retained net income[193](index=193&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Net income for the nine-month period slightly decreased to **$8.4 million**, influenced by lower noninterest income and higher expenses, partially offset by increased net interest income - Net interest income for the nine-month period increased by **$1.9 million** YoY, primarily due to growth in interest-earning assets[197](index=197&type=chunk) - Noninterest income for the nine-month period decreased by **$1.3 million**, largely due to a **$1.2 million** decrease in gains on loans sold as rising interest rates slowed residential mortgage activity[209](index=209&type=chunk) - Noninterest expense for the nine-month period increased by **$614,000**, with data processing and other expenses being the primary drivers[211](index=211&type=chunk) - The provision for loan losses increased to **$550,000** for the nine months of 2022, compared to **$75,000** in the same period of 2021, reflecting growth in the loan portfolio[203](index=203&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) The Bank maintains liquidity through deposits and FHLB access, opted out of the CBLR framework, and remains **well-capitalized** under regulatory guidelines - The Bank **opted out of the Community Bank Leverage Ratio (CBLR) framework** as of September 30, 2022, after its ratio fell below the minimum requirement[222](index=222&type=chunk) Regulatory Capital Ratios as of Sep 30, 2022 | Ratio | Bank's Ratio | 'Well-Capitalized' Minimum | | :--- | :--- | :--- | | Tier 1 capital to average assets | 8.9% | 5.0% | | Common equity Tier 1 capital to risk-weighted assets | 14.5% | 6.5% | | Tier 1 capital to risk-weighted assets | 14.5% | 8.0% | | Total capital to risk-weighted assets | 15.4% | 10.0% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, with models indicating an asset-sensitive position where rising rates are projected to increase Net Interest Income and Economic Value of Equity Net Interest Income Sensitivity Analysis (One-Year Horizon) | Rate Shock | Change in NII (Sep 30, 2022) | % Change | | :--- | :--- | :--- | | +300bp | $3,838k | 10.55% | | +200bp | $2,566k | 7.05% | | +100bp | $1,287k | 3.54% | | -100bp | $(181)k | (0.50)% | | -200bp | $(1,979)k | (5.44)% | Economic Value of Equity (EVE) Sensitivity Analysis | Rate Shock | Change in EVE (Sep 30, 2022) | % Change | | :--- | :--- | :--- | | +300bp | $24,729k | 8.73% | | +200bp | $21,423k | 7.56% | | +100bp | $13,772k | 4.86% | | -100bp | $(16,606)k | (5.86)% | | -200bp | $(51,804)k | (18.29)% | [Item 4. Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[244](index=244&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[245](index=245&type=chunk) Part II - Other Information This section covers legal proceedings, risk factors, stock repurchase activity, and other non-applicable disclosures [Item 1. Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings during the period - **None**[247](index=247&type=chunk) [Item 1A. Risk Factors](index=56&type=page&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021 were reported - **No material changes** to risk factors were reported from the previous Form 10-K[248](index=248&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **883 shares** of common stock at an average price of **$29.07** per share during Q3 2022 under an existing program Issuer Purchases of Equity Securities (Q3 2022) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | July 2022 | 883 | $29.07 | | August 2022 | 0 | N/A | | September 2022 | 0 | N/A | | **Total** | **883** | **$29.07** | - As of the end of the quarter, **135,680 shares** may yet be purchased under the existing stock repurchase program[249](index=249&type=chunk) [Other Items (Items 3, 4, 5, 6)](index=56&type=section&id=Other%20Items) Items 3, 4, and 5 were reported as not applicable or had no information to disclose, while Item 6 lists the exhibits - Items 3, 4, and 5 are **not applicable or have no information to report**[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Title of each class Trading Symbol(s) Name of each exhange on which registered Common stock, par value $0.01 per share FCAP The NASDAQ Stock Market LLC FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from__________ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File No. 0-25023 First Capital, Inc. (Exact name of registrant as specified in its charter) | --- | --- | |------------- ...

Financial Performance - Net income attributable to the Company for 2021 was $11.4 million, or $3.41 per diluted share, compared to $10.1 million, or $3.02 per diluted share for 2020[260]. - Return on average assets for 2021 was 1.05%, down from 1.12% in 2020, while return on average equity increased to 10.15% from 9.64% in 2020[261]. - The efficiency ratio for 2021 was 64.8%, compared to 62.8% for 2020, indicating a decrease in operational efficiency[261]. - Total annual shareholder return for 2021 was -31.4%, compared to -15.7% for 2020, reflecting a significant decline in stock price[263]. - Net income for the year ended December 31, 2020, was $10.1 million ($3.02 per share diluted), a slight decrease from $10.3 million ($3.09 per share diluted) in 2019[300]. Loan and Asset Quality - Net loan charge-offs decreased to $217,000 in 2021 from $237,000 in 2020, with the ratio of net charge-offs to average loans outstanding decreasing to 0.04%[262]. - Total nonperforming assets decreased to $1.4 million, or 0.12% of total assets, at December 31, 2021, down from $1.5 million, or 0.14% of total assets, at December 31, 2020[262]. - Nonperforming loans decreased from $1.5 million at December 31, 2020, to $1.3 million at December 31, 2021[294]. - Management intends to maintain a strong emphasis on asset quality and credit risk management, particularly in light of pandemic impacts[268]. Income and Expenses - Net interest income increased by $246,000, or 0.9%, from $28.1 million in 2020 to $28.3 million in 2021, primarily due to an increase in the average balance of interest-earning assets[291]. - Total interest income decreased by $187,000 in 2021, primarily due to a decrease in the tax-equivalent yield on interest-earning assets from 3.57% in 2020 to 2.95% in 2021[292]. - Total interest expense decreased by $433,000, from $1.6 million in 2020 to $1.1 million in 2021, due to a decrease in the average cost of interest-bearing liabilities from 0.25% to 0.15%[293]. - Noninterest income increased by $952,000 to $9.6 million for 2021, driven by a $588,000 rise in ATM and debit card fees, despite a $277,000 decrease in gains on loans sold[297]. - Noninterest expense rose by $1.5 million to $24.5 million for 2021, primarily due to increases in compensation and benefits ($729,000), data processing ($349,000), and professional fees ($335,000)[298]. - Income tax expense increased by $548,000 to $2.2 million for 2021, with the effective tax rate rising from 14.3% in 2020 to 16.4% in 2021 due to higher pre-tax income and changes in state tax law[299]. Balance Sheet and Capital - Total assets increased from $1.02 billion at December 31, 2020 to $1.16 billion at December 31, 2021, primarily due to an increase in securities available for sale[319]. - The Bank's stockholders' equity increased to $112.5 million at December 31, 2021, up from $105.1 million at December 31, 2020[1]. - The total liabilities rose to $973.2 million in 2021, compared to $803.4 million in 2020[1]. - Total deposits increased to $734.5 million in 2021, with an interest-bearing demand deposit average balance of $427.4 million[1]. - Total stockholders' equity attributable to the Company rose by $3.2 million from $110.6 million at December 31, 2020 to $113.8 million at December 31, 2021, primarily due to retained net income of $7.9 million[324]. - The Company maintained a CBLR of 8.84% as of December 31, 2021, in compliance with all regulatory capital requirements[329]. Strategic Initiatives - The Company aims to enhance profitability by increasing noninterest income and improving operating efficiency through a profit improvement project with an outside consulting firm[270]. - The Bank will continue to focus on growing commercial and personal demand deposit accounts as a low-cost funding source[272]. - The Company is evaluating growth opportunities through acquisitions to expand its market area and market share[274]. Interest Rate Sensitivity - An immediate increase in interest rates of 300 basis points could increase the Company's net interest income by approximately $1.96 million over a one-year horizon[340]. - The Company's economic value of equity (EVE) could increase by 27.75% with a 300 basis point increase in interest rates, reflecting a dollar change of $46.62 million[346]. - The Company updated deposit betas and decay rates during 2021 to better reflect market conditions[342]. - The company models various interest rate scenarios to assess sensitivity to market interest rate changes, acknowledging inherent limitations in the analysis[348]. - Certain assets and liabilities may react differently to changes in market interest rates, affecting net interest income and economic value of equity (EVE)[348]. - Adjustable-rate mortgage loans have features that restrict short-term interest rate changes, impacting overall asset performance[348]. - Expected rates of prepayments on loans and early withdrawals from certificates of deposit may deviate significantly from modeling assumptions in the event of interest rate changes[348]. Regulatory and Accounting Considerations - Recent accounting pronouncements impact financial reporting, detailed in Note 1 of the accompanying Notes to Consolidated Financial Statements[349]. - Market risk analysis is discussed in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Annual Report on Form 10-K[350].

[Part I - Financial Information](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the Company's unaudited consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents First Capital, Inc.'s unaudited consolidated financial statements, including balance sheets, income statements, and cash flow statements, with detailed accounting notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the Company's financial position, detailing assets, liabilities, and equity at specific points in time Consolidated Balance Sheet Highlights (thousands) | Metric | September 30, 2021 | December 31, 2020 | Change (%) | | :-------------------------------- | :------------------- | :------------------ | :--------- | | Total Assets | $1,122,757 | $1,017,551 | 10.3% | | Total Deposits | $1,002,294 | $900,461 | 11.3% | | Total Equity | $114,462 | $110,751 | 3.3% | | Loans, net | $485,505 | $500,331 | -3.0% | | Securities available for sale, at fair value | $418,934 | $283,502 | 47.8% | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) This section outlines the Company's financial performance over periods, detailing revenues, expenses, and net income Net Income and EPS Attributable to First Capital, Inc. (thousands, except per share data) | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | YoY Change (%) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | YoY Change (%) | | :--------------------------------------- | :-------------------------- | :-------------------------- | :------------- | :-------------------------- | :-------------------------- | :------------- | | Net Income Attributable to First Capital, Inc. | $2,936 | $2,746 | 6.9% | $8,605 | $7,278 | 18.2% | | Basic EPS | $0.88 | $0.82 | 7.3% | $2.57 | $2.18 | 17.9% | | Diluted EPS | $0.88 | $0.82 | 7.3% | $2.57 | $2.17 | 18.4% | Key Income Statement Items (thousands) | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | YoY Change (%) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | YoY Change (%) | | :--------------------------------------- | :-------------------------- | :-------------------------- | :------------- | :-------------------------- | :-------------------------- | :------------- | | Total Interest Income | $7,745 | $7,240 | 7.0% | $22,170 | $22,288 | -0.5% | | Total Interest Expense | $278 | $371 | -25.1% | $855 | $1,243 | -31.2% | | Net Interest Income | $7,467 | $6,869 | 8.7% | $21,315 | $21,045 | 1.3% | | Provision for Loan Losses | $0 | $400 | -100.0% | $75 | $1,576 | -95.2% | | Total Noninterest Income | $2,270 | $2,616 | -13.3% | $7,260 | $6,392 | 13.6% | | Total Noninterest Expense | $6,202 | $5,923 | 4.7% | $18,174 | $17,366 | 4.7% | | Income Tax Expense | $596 | $413 | 44.3% | $1,711 | $1,207 | 41.8% | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the Company's comprehensive income, including net income and other comprehensive income items Comprehensive Income Attributable to First Capital, Inc. (thousands) | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | YoY Change (%) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | YoY Change (%) | | :--------------------------------------- | :-------------------------- | :-------------------------- | :------------- | :-------------------------- | :-------------------------- | :------------- | | Net Income | $2,939 | $2,749 | 6.9% | $8,615 | $7,288 | 18.2% | | Unrealized holding gains (losses) on securities available for sale, net of tax | $(193) | $215 | -189.8% | $(2,517) | $4,158 | -160.5% | | Comprehensive Income Attributable to First Capital, Inc. | $2,743 | $2,961 | -7.3% | $6,082 | $11,436 | -46.8% | [Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section details changes in the Company's equity accounts, reflecting net income, dividends, and other comprehensive income Changes in Stockholders' Equity (thousands) | Item | Balances at Jan 1, 2021 | Net Income | Other Comprehensive Loss | Cash Dividends | Stock Compensation Expense | Purchase of Treasury Shares | Balances at Sep 30, 2021 | | :-------------------------- | :---------------------- | :--------- | :----------------------- | :------------- | :------------------------- | :-------------------------- | :----------------------- | | Common Stock | $38 | - | - | - | - | - | $38 | | Additional Paid-in Capital | $41,684 | - | - | - | - | - | $41,684 | | Retained Earnings | $72,155 | $8,605 | - | $(2,632) | - | - | $78,128 | | Accumulated Other Comprehensive Income | $6,822 | - | $(2,523) | - | - | - | $4,299 | | Unearned Stock Compensation | $(1,520) | - | - | - | $359 | - | $(1,161) | | Treasury Stock | $(8,540) | - | - | - | - | $(94) | $(8,634) | | Noncontrolling Interest | $112 | $10 | - | $(14) | - | - | $108 | | **Total Equity** | **$110,751** | **$8,615** | **$(2,523)** | **$(2,646)** | **$359** | **$(94)** | **$114,462** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section reports the Company's cash inflows and outflows from operating, investing, and financing activities Consolidated Statements of Cash Flows (thousands) | Cash Flow Activity | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | YoY Change (%) | | :--------------------------------------- | :-------------------------- | :-------------------------- | :------------- | | Net Cash Provided By Operating Activities | $15,701 | $9,151 | 71.6% | | Net Cash Used In Investing Activities | $(126,382) | $(34,929) | 261.8% | | Net Cash Provided By Financing Activities | $99,093 | $108,629 | -8.7% | | Net Increase (Decrease) in Cash and Cash Equivalents | $(11,588) | $82,851 | -114.0% | | Cash and Cash Equivalents at End of Period | $164,300 | $134,211 | 22.4% | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the accounting policies and specific financial items presented in the consolidated financial statements [1. Presentation of Interim Information](index=9&type=section&id=1.%20Presentation%20of%20Interim%20Information) This note describes the Company's structure, the basis of interim financial statement preparation, and the impact of COVID-19 - First Capital, Inc. is the financial holding company for First Harrison Bank and its wholly-owned subsidiaries, including First Harrison Investments, Inc., First Harrison Holdings, Inc., First Harrison, LLC, First Harrison REIT, Inc., FHB Risk Mitigation Services, Inc., and Heritage Hill, LLC[22](index=22&type=chunk) - The unaudited consolidated financial statements include all necessary normal, recurring adjustments and are prepared in accordance with U.S. GAAP for interim financial statements[23](index=23&type=chunk)[24](index=24&type=chunk) - The COVID-19 pandemic led to significant declines in market interest rates in 2020, which may adversely affect the Company's future financial condition and results of operations. Estimates in financial statements could be materially impacted[29](index=29&type=chunk) - Regulatory guidance and the CARES Act allowed short-term COVID-19 related loan modifications (e.g., six months) not to be classified as troubled debt restructurings (TDRs) if loans were current, with relief extended to January 1, 2022[30](index=30&type=chunk) - The Bank originated approximately **$62.4 million** in Paycheck Protection Program (PPP) loans, including **$16.5 million** in second-draw loans in 2021. As of October 19, 2021, **$49.7 million** of PPP loans had been paid off by the SBA[31](index=31&type=chunk) PPP Fees Recognized in Interest Income (thousands) | Period | PPP Fees Recognized | | :-------------------------- | :------------------ | | 3 months ended Sep 30, 2021 | $784 | | 3 months ended Sep 30, 2020 | $204 | | 9 months ended Sep 30, 2021 | $1,700 | | 9 months ended Sep 30, 2020 | $358 | [2. Investment Securities](index=12&type=section&id=2.%20Investment%20Securities) This note details the Company's investment securities portfolio, including available-for-sale and held-to-maturity categories, and associated unrealized gains or losses Investment Securities Available for Sale (Fair Value, thousands) | Category | September 30, 2021 | December 31, 2020 | | :---------------------------- | :------------------- | :------------------ | | Agency mortgage-backed securities | $96,953 | $61,359 | | Agency CMO | $9,562 | $21,030 | | Agency notes and bonds | $124,845 | $81,531 | | Treasury notes and bonds | $40,528 | N/A | | Municipal obligations | $147,046 | $119,582 | | **Total** | **$418,934** | **$283,502** | Investment Securities Held to Maturity (Fair Value, thousands) | Category | September 30, 2021 | December 31, 2020 | | :-------------- | :------------------- | :------------------ | | Corporate notes | $2,037 | N/A | | **Total** | **$2,037** | **N/A** | Gross Unrealized Losses on Securities Available for Sale (thousands) | Period | Gross Unrealized Losses | | :----- | :---------------------- | | Sep 30, 2021 | $1,427 | | Dec 31, 2020 | $37 | - At September 30, 2021, U.S. government agency debt securities, Treasury notes and bonds, and municipal obligations in a loss position had depreciated approximately **0.7%** from amortized cost, primarily due to current interest rates. Management does not anticipate other-than-temporary impairment losses[44](index=44&type=chunk)[45](index=45&type=chunk) - For equity securities, the Company recognized an unrealized loss of **$67,000** for the three months ended September 30, 2021, and an unrealized gain of **$360,000** for the nine months ended September 30, 2021. The fair value was **$1.9 million** at September 30, 2021[49](index=49&type=chunk) [3. Loans and Allowance for Loan Losses](index=16&type=section&id=3.%20Loans%20and%20Allowance%20for%20Loan%20Losses) This note provides a detailed breakdown of the Company's loan portfolio, allowance for loan losses, nonperforming loans, and troubled debt restructurings - The Company's loan portfolio is primarily composed of real estate mortgage, commercial business, and consumer loans, with a substantial portion in the Louisville, Kentucky metropolitan statistical area[50](index=50&type=chunk) Loans by Type (Principal Loan Balance, thousands) | Loan Type | September 30, 2021 | December 31, 2020 | | :-------------------------------- | :------------------- | :------------------ | | Residential real estate mortgage | $132,226 | $131,217 | | Land | $18,187 | $17,328 | | Residential construction | $50,197 | $39,160 | | Commercial real estate | $133,480 | $135,114 | | Commercial real estate construction | $9,592 | $4,988 | | Commercial business loans | $60,143 | $82,274 | | Home equity and second mortgage loans | $52,456 | $52,001 | | Automobile loans | $44,277 | $43,770 | | Loans secured by savings accounts | $1,007 | $1,083 | | Unsecured loans | $2,241 | $2,766 | | Other consumer loans | $13,827 | $16,117 | | **Gross Loans** | **$517,633** | **$525,818** | - PPP loans guaranteed by the SBA, included in commercial business loans, totaled **$13.2 million** at September 30, 2021, down from **$37.3 million** at December 31, 2020[72](index=72&type=chunk) Allowance for Loan Losses (thousands) | Period | Allowance for Loan Losses | | :----- | :------------------------ | | Sep 30, 2021 | $6,567 | | Dec 31, 2020 | $6,625 | Provision for Loan Losses (thousands) | Period | Provision for Loan Losses | | :-------------------------- | :------------------------ | | 3 months ended Sep 30, 2021 | $0 | | 3 months ended Sep 30, 2020 | $400 | | 9 months ended Sep 30, 2021 | $75 | | 9 months ended Sep 30, 2020 | $1,576 | - The provision for loan losses was significantly higher in 2020 due to economic uncertainties related to the COVID-19 pandemic, with management maintaining qualitative factor adjustments in 2021 due to continued uncertainty[90](index=90&type=chunk)[215](index=215&type=chunk) Nonperforming Loans (Recorded Investment, thousands) | Category | September 30, 2021 | December 31, 2020 | | :-------------------------------- | :------------------- | :------------------ | | Nonaccrual Loans | $1,332 | $1,406 | | Loans 90+ Days Due Still Accruing | $52 | $59 | | **Total Nonperforming Loans** | **$1,384** | **$1,465** | Troubled Debt Restructurings (TDRs) (thousands) | Category | September 30, 2021 Total | December 31, 2020 Total | | :-------------------------------- | :----------------------- | :---------------------- | | Residential real estate | $526 | $556 | | Commercial real estate | $595 | $621 | | Commercial business | $181 | $210 | | Home equity and second mortgage | $287 | $345 | | **Total** | **$1,589** | **$1,732** | - During the nine months ended September 30, 2021, one second mortgage loan TDR (**$290,000**) was moved to nonaccrual status, resulting in a **$7,000** specific reserve[119](index=119&type=chunk) - As of September 30, 2021, the Bank had approved payment extensions on **$68.1 million** of loans (primarily commercial real estate) due to COVID-19, with **$53.0 million** remaining outstanding and all having resumed payments. These were not identified as TDRs due to regulatory relief[120](index=120&type=chunk) Purchased Credit Impaired (PCI) Loans (thousands) | Metric | September 30, 2021 | December 31, 2020 | | :-------------------------------- | :------------------- | :------------------ | | Carrying amount | $288 | $297 | | Allowance for loan losses | $30 | $31 | | Carrying amount, net of allowance | $258 | $266 | - There was a reduction of **$1,000** to the provision for loan losses related to PCI loans for the nine-month period ended September 30, 2021, and no net provisions for the three-month period[125](index=125&type=chunk) [4. Qualified Affordable Housing Project Investment](index=38&type=section&id=4.%20Qualified%20Affordable%20Housing%20Project%20Investment) This note details the Bank's investment in affordable housing projects, including its carrying amount, unfunded commitments, and associated tax benefits - The Bank's investment in qualified affordable housing projects was **$2.6 million** at September 30, 2021, with an unfunded commitment of **$396,000**, expected to be fulfilled through 2029[127](index=127&type=chunk) Amortization Expense and Tax Benefits from Housing Project Investment (thousands) | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Amortization Expense | $89 | $67 | $266 | $249 | | Tax Credits and Other Tax Benefits | $106 | $129 | $317 | $349 | [5. Supplemental Disclosure for Earnings Per Share](index=39&type=section&id=5.%20Supplemental%20Disclosure%20for%20Earnings%20Per%20Share) This note provides a detailed calculation of basic and diluted earnings per common share attributable to First Capital, Inc. Earnings Per Common Share Attributable to First Capital, Inc. (dollars, except shares) | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income attributable to First Capital, Inc. | $2,936 | $2,746 | $8,605 | $7,278 | | Weighted average common shares outstanding (Basic) | 3,349,494 | 3,343,038 | 3,344,832 | 3,338,705 | | Basic EPS | $0.88 | $0.82 | $2.57 | $2.18 | | Weighted average common shares outstanding (Diluted) | 3,349,494 | 3,348,332 | 3,346,273 | 3,348,802 | | Diluted EPS | $0.88 | $0.82 | $2.57 | $2.17 | [6. Stock-Based Compensation Plan](index=40&type=section&id=6.%20Stock-Based%20Compensation%20Plan) This note outlines the Company's equity incentive plan, including restricted stock grants, compensation expense, and unrecognized compensation - The Company adopted the 2019 Equity Incentive Plan, authorizing up to **176,150 shares**, with **161,900 shares** available for issuance as of September 30, 2021. No stock options have been granted under the plans[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) - On February 18, 2020, **14,250 restricted stock shares** were granted at **$67.43 per share**, totaling **$961,000**. These shares vest ratably (**20% annually**) from July 1, 2021, through July 1, 2025[141](index=141&type=chunk) Stock-Based Compensation Expense (thousands) | Period | Compensation Expense | | :-------------------------- | :------------------- | | 3 months ended Sep 30, 2021 | $129 | | 3 months ended Sep 30, 2020 | $92 | | 9 months ended Sep 30, 2021 | $359 | | 9 months ended Sep 30, 2020 | $289 | - At September 30, 2021, there was **$1.2 million** of unrecognized compensation expense related to nonvested restricted shares, expected to be recognized over a weighted average period of **2.9 years**[143](index=143&type=chunk) - **8,350 shares** vested during the nine-month period ended September 30, 2021[143](index=143&type=chunk) [7. Supplemental Disclosures of Cash Flow Information](index=41&type=section&id=7.%20Supplemental%20Disclosures%20of%20Cash%20Flow%20Information) This note provides additional details on non-cash investing and financing activities and other cash flow items Supplemental Cash Flow Information (thousands) | Item | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--------------------------------------- | :-------------------------- | :-------------------------- | | Cash payments for interest | $907 | $1,285 | | Cash payments for taxes (net of refunds) | $1,755 | $656 | | Transfers from loans to real estate acquired through foreclosure | $151 | $58 | [8. Fair Value Measurements](index=42&type=section&id=8.%20Fair%20Value%20Measurements) This note describes the Company's fair value hierarchy and the valuation techniques used for assets measured at fair value on both recurring and nonrecurring bases - The Company uses a fair value hierarchy (Level 1, 2, 3) to categorize inputs for valuation techniques. Level 1 uses quoted prices in active markets, Level 2 uses observable market data, and Level 3 uses unobservable inputs requiring significant management judgment[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk) Assets Measured at Fair Value on a Recurring Basis (September 30, 2021, thousands) | Asset Type | Level 1 | Level 2 | Level 3 | Total | | :---------------------------- | :------ | :------ | :------ | :------ | | Securities available for sale | $0 | $418,934 | $0 | $418,934 | | Equity securities | $1,913 | $0 | $0 | $1,913 | Assets Measured at Fair Value on a Nonrecurring Basis (September 30, 2021, thousands) | Asset Type | Level 1 | Level 2 | Level 3 | Total | | :---------------------------- | :------ | :------ | :------ | :------ | | Impaired loans | $0 | $0 | $2,644 | $2,644 | | Loans held for sale | $0 | $4,087 | $0 | $4,087 | | Foreclosed real estate | $0 | $0 | $64 | $64 | - All impaired loans were considered collateral dependent, with fair value determined by appraisals adjusted by a weighted average discount of **22%** at September 30, 2021 (compared to **27%** at December 31, 2020)[159](index=159&type=chunk)[161](index=161&type=chunk) - Foreclosed real estate is reported at fair value less estimated disposal costs, with a **54% discount** from appraised value at September 30, 2021[164](index=164&type=chunk) [9. Revenue from Contracts with Customers](index=47&type=section&id=9.%20Revenue%20from%20Contracts%20with%20Customers) This note disaggregates the Company's noninterest income, detailing revenue from various customer contracts and their recognition methods Total Noninterest Income (thousands) | Period | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :----------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Noninterest Income | $2,270 | $2,616 | $7,260 | $6,392 | Revenue from Contracts with Customers (thousands) | Revenue Type | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Service charges on deposit accounts | $514 | $464 | $1,348 | $1,292 | | ATM and debit card fees | $1,009 | $939 | $3,027 | $2,580 | | Investment advisory income | $103 | $86 | $272 | $278 | | Other | $28 | $28 | $91 | $92 | | **Total Revenue from Contracts with Customers** | **$1,654** | **$1,517** | **$4,738** | **$4,242** | - Revenue recognition varies by service: transaction-based fees (e.g., stop payment, ATM) are recognized at the point of transaction, account maintenance fees are recognized over the month, and investment advisory fees are primarily earned over time[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) [10. Recent Accounting Pronouncements](index=49&type=section&id=10.%20Recent%20Accounting%20Pronouncements) This note discusses the impact and adoption timeline of ASU No. 2016-13 (CECL) on the Company's financial statements - ASU No. 2016-13 (CECL) replaces the incurred loss methodology with an expected credit loss methodology. Its effective date for smaller reporting companies like First Capital, Inc. is delayed to fiscal years beginning after December 15, 2022[181](index=181&type=chunk)[182](index=182&type=chunk) - First Capital, Inc. does not intend to early adopt CECL and expects its allowance for loan losses to increase through a one-time adjustment to retained earnings upon adoption, though the magnitude is currently unknown[181](index=181&type=chunk)[182](index=182&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes First Capital, Inc.'s financial performance, condition, and the impact of COVID-19 on assets, liabilities, and net income - The Company has implemented various procedures in response to the COVID-19 pandemic, including updating branch operating procedures, expanding remote work capabilities, and assisting customers with payment extensions. As of September 30, 2021, **$53.0 million** of approved payment extensions (primarily commercial real estate) remained outstanding, with all having resumed payments[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - The Bank actively participated in the PPP, originating approximately **$62.4 million** in loans, with **$49.7 million** paid off by the SBA as of October 19, 2021[193](index=193&type=chunk) - Total assets increased by **$105.2 million (10.3%)** to **$1.12 billion** at September 30, 2021, from **$1.02 billion** at December 31, 2020[198](index=198&type=chunk) - Net loans receivable decreased by **$14.8 million** to **$485.5 million**, primarily due to a **$22.1 million** decrease in commercial business loans driven by PPP loan forgiveness[199](index=199&type=chunk) - Securities available for sale increased by **$135.4 million** to **$418.9 million**, largely due to **$211.8 million** in purchases[200](index=200&type=chunk) - Total deposits increased by **$101.8 million** to **$1.00 billion**, mainly from increases in interest-bearing demand, savings, and noninterest-bearing demand deposits[201](index=201&type=chunk) - Total stockholders' equity increased by **$3.8 million** to **$114.4 million**, driven by a **$6.0 million** increase in retained net income, partially offset by a **$2.5 million** decrease in the net unrealized gain on available for sale securities[202](index=202&type=chunk) - Net income attributable to the Company for the nine months ended September 30, 2021, increased to **$8.6 million** (**$2.57 diluted EPS**) from **$7.3 million** (**$2.17 diluted EPS**) in 2020, primarily due to a decrease in the provision for loan losses and an increase in noninterest income[203](index=203&type=chunk) - Net interest income increased by **$270,000** for the nine months ended September 30, 2021, due to increased interest-earning assets, despite a decrease in the interest rate spread[207](index=207&type=chunk) - The provision for loan losses decreased significantly from **$1.6 million** in 2020 to **$75,000** in 2021, reflecting reduced uncertainties surrounding the COVID-19 pandemic[215](index=215&type=chunk) - Noninterest income for the nine months ended September 30, 2021, increased by **$868,000**, primarily due to a **$360,000** unrealized gain on equity securities (compared to a **$126,000** loss in 2020) and a **$447,000** increase in ATM and debit card fees[219](index=219&type=chunk) - Noninterest expense for the nine months ended September 30, 2021, increased by **$808,000**, mainly due to higher compensation and benefits, professional fees, and data processing expenses[223](index=223&type=chunk) - The Bank's Community Bank Leverage Ratio (CBLR) was **8.90%** at September 30, 2021, classifying it as 'well-capitalized' under regulatory guidelines[232](index=232&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) This section details the Company's market risk exposure, primarily interest rate risk, and mitigation strategies using NII at Risk and EVE simulations - The Company's principal financial objective is to achieve long-term profitability while reducing exposure to fluctuating market interest rates by managing asset and liability maturities, shortening effective maturities of interest-earning assets, and relying on stable retail deposits[238](index=238&type=chunk) - The Company does not maintain a trading account, engage in hedging activities, or purchase high-risk derivative instruments, and is not subject to foreign currency exchange rate risk or commodity price risk[239](index=239&type=chunk) - Net Interest Income at Risk (NII at Risk) simulation projects the impact of immediate and sustained parallel shifts in market interest rates on net interest income over a one-year horizon[241](index=241&type=chunk)[244](index=244&type=chunk) Projected Net Interest Income Change (September 30, 2021, thousands) | Immediate Change in Interest Rates | One Year Dollar Change | One Year Percent Change | | :--------------------------------- | :--------------------- | :---------------------- | | +300bp | $1,198 | 4.40% | | +200bp | $1,967 | 7.22% | | +100bp | $956 | 3.51% | | -100bp | $(922) | (3.38)% | | -200bp | $(1,984) | (7.28)% | - Economic Value of Equity (EVE) interest rate sensitivity analysis evaluates the impact of interest rate risk on earnings and capital by discounting present values of all cash flows under different interest rate scenarios[245](index=245&type=chunk) Projected Economic Value of Equity (EVE) Change (September 30, 2021, thousands) | Immediate Change in Interest Rates | Dollar Change | Percent Change | | :--------------------------------- | :------------ | :------------- | | +300bp | $44,829 | 27.67% | | +200bp | $41,009 | 25.32% | | +100bp | $22,054 | 13.61% | | -100bp | $(31,498) | (19.45)% | | -200bp | $(61,425) | (37.92)% | - Both NII and EVE simulations indicate an expected increase in value with rising interest rates and a decrease with falling rates. However, these models have inherent shortcomings, as actual results may differ due to various market factors and behavioral assumptions[249](index=249&type=chunk)[252](index=252&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures, with no material changes to internal control over financial reporting - The Company's management, including the principal executive officer and principal financial officer, concluded that disclosure controls and procedures were effective as of September 30, 2021[254](index=254&type=chunk) - There have been no changes in the Company's internal control over financial reporting during the quarter ended September 30, 2021, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[255](index=255&type=chunk) [Part II - Other Information](index=54&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides additional disclosures, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) This section states that there are no legal proceedings to report for the Company - None[258](index=258&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) This section confirms that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 - There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2020[259](index=259&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides details on the Company's common stock repurchases under its authorized program for the period of July 1 through September 30, 2021 Common Stock Repurchases (July 1 - September 30, 2021) | Period | Total Number of Shares Purchased | Average Price Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | | :--------------------------------- | :------------------------------- | :---------------------- | :------------------------------------------------------------------------------- | :----------------------------------------------------------------------------- | | July 1 through July 31, 2021 | 1,210 | $44.40 | 1,210 | 137,340 | | August 1 through August 31, 2021 | 0 | N/A | 0 | 137,340 | | September 1 through September 30, 2021 | 0 | N/A | 0 | 137,340 | | **Total** | **1,210** | **$44.40** | **1,210** | | - The board of directors authorized the repurchase of up to **240,467 shares** of the Company's outstanding common stock on August 19, 2008[260](index=260&type=chunk) [Item 3. Defaults Upon Senior Securities](index=54&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that this item is not applicable to the Company - Not applicable[261](index=261&type=chunk) [Item 4. Mine Safety Disclosures](index=54&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that this item is not applicable to the Company - Not applicable[262](index=262&type=chunk) [Item 5. Other Information](index=54&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report for the Company - None[263](index=263&type=chunk) [Item 6. Exhibits](index=55&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, financial certifications, and XBRL-related files - Exhibits include Articles of Incorporation, Bylaws, Statement Re: Computation of Per Share Earnings, Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer and Chief Financial Officer, Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer, and various Inline XBRL documents[266](index=266&type=chunk) [Signatures](index=63&type=section&id=SIGNATURES) This section provides the official signatures of the Company's principal executive and financial officers, certifying the report's accuracy - The report was signed on November 12, 2021, by William W. Harrod, President and CEO, and Michael C. Frederick, Executive Vice President, CFO and Treasurer, of First Capital, Inc.[270](index=270&type=chunk)

Financial Performance - Net income for the three months ended June 30, 2021, was $2,734,000, an increase of 11.97% compared to $2,442,000 for the same period in 2020[16]. - Net income for June 2021 was $5,676,000, an increase from $4,539,000 in June 2020, representing a growth of approximately 25.1%[21]. - Net income attributable to First Capital, Inc. for the three months ended June 30, 2021, was $2,730,000, an increase from $2,438,000 for the same period in 2020, representing a growth of 12%[136]. - Basic earnings per share for the three months ended June 30, 2021, was $0.82, compared to $0.73 for the same period in 2020, reflecting an increase of 12%[136]. - Earnings per common share attributable to First Capital, Inc. were $0.82 for the three months ended June 30, 2021, compared to $0.73 for the same period in 2020, representing an increase of 12.33%[16]. Assets and Liabilities - Total assets increased to $1,078,666 thousand as of June 30, 2021, compared to $1,017,551 thousand at December 31, 2020, representing a growth of 6%[10]. - Total deposits rose to $961,581 thousand, up from $900,461 thousand, indicating an increase of approximately 7%[10]. - Loans, net decreased to $484,750 thousand from $500,331 thousand, reflecting a decline of about 3%[10]. - Total equity rose to $112,518 thousand from $110,751 thousand, indicating a growth of approximately 2%[10]. - Total cash and cash equivalents at the end of June 2021 were $183,996,000, compared to $106,421,000 at the end of June 2020, marking an increase of about 73.0%[21]. Income and Expenses - Total interest income decreased to $7,133,000 for the three months ended June 30, 2021, from $7,374,000 in the same period of 2020, representing a decline of 3.27%[16]. - Net interest income after provision for loan losses was $6,844,000 for the three months ended June 30, 2021, compared to $6,145,000 for the same period in 2020, an increase of 11.38%[16]. - Total noninterest income increased to $2,552,000 for the three months ended June 30, 2021, from $2,320,000 in the same period of 2020, reflecting a growth of 10.00%[16]. - Total noninterest expense rose to $6,165,000 for the three months ended June 30, 2021, compared to $5,618,000 in the same period of 2020, an increase of 9.73%[16]. Loan Portfolio and Provisions - The allowance for loan losses was $6.6 million as of June 30, 2021, compared to $6.6 million at December 31, 2020, indicating stability in the allowance despite changes in the loan portfolio[75]. - The company reported a charge-off of $187 for the six months ended June 30, 2020, with recoveries amounting to $124[89]. - Provisions for loan losses during the three months ended June 30, 2021, included a charge-off of $58, resulting in a net recovery of $67[87]. - The company maintained qualitative factor adjustments due to ongoing uncertainties related to the COVID-19 pandemic, impacting the loan portfolio[92]. - The total recorded investment in impaired loans was $3,138,000, with an average interest income recognized of $12,000[97]. Securities and Investments - Securities available for sale increased significantly to $353,482 thousand from $283,502 thousand, marking a growth of approximately 25%[10]. - The total amortized cost of securities held to maturity as of June 30, 2021, was $2.000 million, with a fair value of $2.025 million[39]. - The total amount of equity securities reported was $1,979,000 as of June 30, 2021, compared to $1,553,000 at the end of 2020, showing an increase of approximately 27.4%[161]. - The company recognized unrealized gains of $427,000 on equity investments during the six months ended June 30, 2021, compared to an unrealized loss of $171,000 in the same period of 2020[52]. COVID-19 Impact and Response - The COVID-19 pandemic has led to a significant decline in market interest rates, with the federal funds interest rate range reduced by 150 basis points to 0% to 0.25%[30]. - The Company has enhanced daily cleaning of facilities and encourages the use of online and mobile banking platforms to support safety during the COVID-19 pandemic[193]. - The Company continues to monitor the pandemic closely and is prepared to take additional actions as the situation evolves[198]. - Management believes the allowance for loan losses is adequate to cover estimated losses in the loan portfolio, although additional losses could be recognized as the pandemic continues[197]. Dividends and Shareholder Information - The company declared dividends per share of $0.26 for the three months ended June 30, 2021, up from $0.24 in the same period of 2020, a rise of 8.33%[16]. - The company reported a total of 3,373,872 shares of common stock outstanding as of July 27, 2021[4]. - Weighted average common shares outstanding for the three months ended June 30, 2021, was 3,342,432, slightly up from 3,336,573 shares in the same period of 2020[136]. - The total unrecognized compensation expense related to nonvested restricted shares as of June 30, 2021, was $1.3 million, expected to be recognized over a weighted average period of 3.1 years[147].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission File No. 0-25023 First Capital, Inc. (Exact name of registrant as specified in its charter) | --- | --- | |------------------------- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to __________ Commission File Number: 0-25023 FIRST CAPITAL, INC. (Exact name of registrant as specified in its charter) Indiana 35-2056949 (State or other jurisdic ...