First Capital(FCAP) - 2024 Q2 - Quarterly Results

Net Income and Earnings Per Share - Net income for Q2 2024 was $2.8 million, or $0.85 per diluted share, compared to $2.7 million, or $0.82 per diluted share, in Q2 2023[1] - Net income for the first six months of 2024 was $5.8 million, or $1.73 per diluted share, compared to $6.5 million, or $1.95 per diluted share, in the same period of 2023[8] Provision for Credit Losses - Provision for credit losses increased from $350,000 in Q2 2023 to $360,000 in Q2 2024 due to loan growth and macroeconomic uncertainty[2] - Net interest income after provision for credit losses increased by $335,000 in Q2 2024 compared to Q2 2023, driven by a rise in the average tax-equivalent yield on interest-earning assets from 3.88% to 4.42%[6] - Net interest income after provision for credit losses decreased by $343,000 for the six months ended June 30, 2024, despite a $3.3 million increase in interest income due to a higher tax-equivalent yield on interest-earning assets (4.36% in 2024 vs. 3.81% in 2023)[23] Tax Rates - Effective tax rate for Q2 2024 was 14.7%, up from 13.6% in Q2 2023[3] Noninterest Income and Expenses - Noninterest expense increased by $334,000 in Q2 2024, primarily due to higher compensation and benefits ($160,000) and professional fees ($138,000)[7] - Noninterest income increased by $68,000 in the first six months of 2024, driven by gains on the sale of loans ($80,000) and other income ($65,000)[9] - Noninterest income increased by $160,000 for the quarter ended June 30, 2024, with gains on sale of loans rising by $65,000 and a reduced loss on equity securities from $92,000 in 2023 to $6,000 in 2024[21] - Noninterest expenses increased by $690,000 for the six months ended June 30, 2024, primarily due to higher compensation and benefits ($214,000), professional fees ($211,000), and other expenses ($146,000)[24] Asset and Liability Management - Total assets remained stable at $1.16 billion as of June 30, 2024, with net loans receivable increasing by $15.6 million and cash and cash equivalents increasing by $11.9 million[11] - Nonperforming assets increased from $1.8 million at December 31, 2023, to $4.1 million at June 30, 2024, primarily due to nonaccrual loans[11] - The company's total average outstanding balance of borrowings increased to $36.3 million in 2024 from $5.3 million in 2023, with an average rate of 4.90% in 2024 compared to 5.09% in 2023[23] Interest Income and Expense - Interest expense increased by $3.5 million for the six months ended June 30, 2024, driven by a higher average cost of interest-bearing liabilities (1.63% in 2024 vs. 0.82% in 2023) and an increase in the average balance of interest-bearing liabilities to $832.2 million in 2024 from $801.1 million in 2023[23] Overhead and Return Metrics - Net overhead expense as a % of average assets before annualization increased to 0.61% in 2024 from 0.58% in 2023, with annualized net overhead expense at 2.44% in 2024 compared to 2.33% in 2023[18] - Return on average equity before annualization was 2.70% in 2024, down from 2.93% in 2023, with annualized return on average equity at 10.78% in 2024 compared to 11.71% in 2023[33] - Return on average assets before annualization was 0.25% in 2024, slightly up from 0.24% in 2023, with annualized return on average assets at 0.99% in 2024 compared to 0.95% in 2023[34] Operational Information - The Bank operates 18 offices across Indiana and Kentucky communities[12]