First Capital(FCAP) - 2024 Q2 - Quarterly Report

Total Assets and Liabilities - Total assets increased to $1,163.6 million as of June 30, 2024, compared to $1,157.9 million as of December 31, 2023[4] - Total deposits decreased to $1,014.2 million as of June 30, 2024, from $1,025.2 million as of December 31, 2023[4] - Loans, net of allowance for credit losses, increased to $630.0 million as of June 30, 2024, from $614.4 million as of December 31, 2023[4] - Securities available for sale decreased to $414.3 million as of June 30, 2024, from $437.3 million as of December 31, 2023[4] - Borrowed funds under the Bank Term Funding Program (BTFP) increased to $33.6 million as of June 30, 2024, from $21.5 million as of December 31, 2023[4] - Retained earnings increased to $101.1 million as of June 30, 2024, from $97.1 million as of December 31, 2023[4] - Total equity increased to $107.9 million as of June 30, 2024, from $105.3 million as of December 31, 2023[4] - Cash and cash equivalents increased to $50.6 million as of June 30, 2024, from $38.7 million as of December 31, 2023[4] - Interest-bearing deposits with banks decreased to $1.7 million as of June 30, 2024, from $3.2 million as of December 31, 2023[4] - Federal funds sold increased to $25.9 million as of June 30, 2024, from $15.5 million as of December 31, 2023[4] - Total assets remained at $1.16 billion at June 30, 2024, with a $5.7 million increase from December 31, 2023[126] - Net loans receivable increased by $15.6 million to $630.0 million at June 30, 2024, driven by increases in commercial real estate, construction, and residential mortgage loans[126] - Cash and cash equivalents increased from $38.7 million to $50.6 million at June 30, 2024, supported by maturities of available-for-sale securities and increased borrowings[127] - Securities available for sale decreased by $23.0 million to $414.3 million at June 30, 2024, with $19.2 million in sales and an unrealized loss of $1.9 million due to rising interest rates[128] - Total deposits decreased by $20 million to $1.01 billion at June 30, 2024, with time deposits increasing by $28.1 million while other deposit categories declined[129] Income and Expenses - Total interest income for the six months ended June 30, 2024, was $24.055 million, compared to $20.787 million in the same period in 2023, representing a 15.7% increase[5] - Net interest income for the six months ended June 30, 2024, was $17.257 million, slightly lower than $17.503 million in the same period in 2023, a decrease of 1.4%[5] - Net income attributable to First Capital, Inc. for the six months ended June 30, 2024, was $5.780 million, down from $6.542 million in the same period in 2023, a decline of 11.6%[5] - Earnings per common share (diluted) for the six months ended June 30, 2024, were $1.73, compared to $1.95 in the same period in 2023, a decrease of 11.3%[5] - Total noninterest income for the six months ended June 30, 2024, was $3.922 million, up from $3.854 million in the same period in 2023, a 1.8% increase[5] - Total noninterest expense for the six months ended June 30, 2024, was $13.757 million, compared to $13.067 million in the same period in 2023, a 5.3% increase[5] - Comprehensive income attributable to First Capital, Inc. for the six months ended June 30, 2024, was $4.214 million, down from $9.786 million in the same period in 2023, a 56.9% decrease[6] - Unrealized losses on securities available for sale for the six months ended June 30, 2024, were $1.878 million, compared to unrealized gains of $4.216 million in the same period in 2023[6] - Provision for credit losses for the six months ended June 30, 2024, was $640 thousand, up from $543 thousand in the same period in 2023, an 18.0% increase[5] - Dividends per share for the six months ended June 30, 2024, remained unchanged at $0.54 compared to the same period in 2023[5] - Net income for Q2 2024 was $2.832 million, compared to $2.730 million in Q2 2023[8] - Net income attributable to First Capital, Inc. for the three months ended June 30, 2024 was $2.828 million, compared to $2.726 million in the same period in 2023, representing a 3.7% increase[91] - Net income attributable to First Capital, Inc. for the six months ended June 30, 2024 was $5.780 million, compared to $6.542 million in the same period in 2023, representing an 11.6% decrease[91] - Basic earnings per share for the three months ended June 30, 2024 was $0.85, compared to $0.82 in the same period in 2023, representing a 3.7% increase[91] - Basic earnings per share for the six months ended June 30, 2024 was $1.73, compared to $1.95 in the same period in 2023, representing an 11.3% decrease[91] - Compensation expense related to restricted stock for the three months ended June 30, 2024 was $56,000, compared to $61,000 in the same period in 2023, representing an 8.2% decrease[95] - Compensation expense related to restricted stock for the six months ended June 30, 2024 was $134,000, compared to $145,000 in the same period in 2023, representing a 7.6% decrease[95] - Total income tax benefit related to stock-based compensation for the three months ended June 30, 2024 was $9,000, compared to $14,000 in the same period in 2023, representing a 35.7% decrease[95] - Total income tax benefit related to stock-based compensation for the six months ended June 30, 2024 was $27,000, compared to $34,000 in the same period in 2023, representing a 20.6% decrease[95] - Cash payments for interest for the six months ended June 30, 2024 were $5.655 million, compared to $2.701 million in the same period in 2023, representing a 109.3% increase[99] - Revenue from contracts with customers was $1,759 thousand for the three months ended June 30, 2024, slightly down from $1,769 thousand in the same period of 2023[115] - Total noninterest income increased to $2,023 thousand for the three months ended June 30, 2024, up from $1,863 thousand in the same period of 2023[115] - Service charges on deposit accounts generated $564 thousand in revenue for the three months ended June 30, 2024, down from $578 thousand in the same period of 2023[115] - ATM and debit card fees increased to $1,150 thousand for the three months ended June 30, 2024, up from $1,141 thousand in the same period of 2023[115] - Investment advisory income decreased to $12 thousand for the three months ended June 30, 2024, down from $19 thousand in the same period of 2023[115] - Net income attributable to the company was $2.8 million ($0.85 per diluted share) for Q2 2024, up from $2.7 million ($0.82 per diluted share) in Q2 2023[132] - Total interest income increased by $1.6 million in Q2 2024, driven by a rise in the average tax-equivalent yield on interest-earning assets to 4.42%[133] - Total interest expense increased by $1.3 million in Q2 2024 due to a higher average cost of interest-bearing liabilities at 1.71% and increased borrowing balances[134] - Noninterest income increased by $160,000 in Q2 2024, primarily due to higher gains on loan sales and reduced losses on equity securities[136] - The company's effective tax rate for Q2 2024 was 14.7%, up from 13.6% in Q2 2023, due to the recognition of tax credit benefits in 2023[138] Loans and Credit Losses - Principal loan balance increased to $637.5 million at June 30, 2024, up from $621.2 million at December 31, 2023[39] - Allowance for credit losses on loans increased to $8.6 million at June 30, 2024, up from $8.0 million at December 31, 2023[39] - 1-4 Family Residential Mortgage loans increased to $137.2 million at June 30, 2024, up from $133.5 million at December 31, 2023[39] - Commercial Real Estate loans increased to $177.5 million at June 30, 2024, up from $168.8 million at December 31, 2023[39] - Total loans amounted to $622.414 million, with the largest segment being 1-4 Family Residential Mortgage at $133.601 million[51] - The Allowance for Credit Losses (ACL) on loans increased to $8.560 million as of June 30, 2024, up from $8.230 million at the beginning of the quarter[52] - Provision for credit losses for the three months ended June 30, 2024, was $360 thousand, with the largest provision in Commercial Business at $617 thousand[52] - Charge-offs for the three months ended June 30, 2024, totaled $85 thousand, primarily driven by Consumer Other at $82 thousand[52] - Recoveries for the three months ended June 30, 2024, were $55 thousand, with the highest recovery in 1-4 Family Residential Mortgage at $13 thousand[52] - The ACL on loans for the six months ended June 30, 2024, increased by $555 thousand, reaching $8.560 million[55] - Provision for credit losses for the six months ended June 30, 2024, was $640 thousand, with the largest provision in Commercial Business at $488 thousand[55] - Charge-offs for the six months ended June 30, 2024, totaled $185 thousand, primarily driven by Consumer Other at $181 thousand[55] - Recoveries for the six months ended June 30, 2024, were $100 thousand, with the highest recovery in Consumer Other at $80 thousand[55] - The Company uses a combination of Open Pool/Snapshot and Weighted Average Remaining Maturity (WARM) methods to estimate expected future credit losses[57] - Collateral dependent loans as of June 30, 2024, totaled $7.112 million, with an ACL allocation of $901 thousand[61] - Nonperforming loans as of June 30, 2024, amounted to $4.122 million, including $3.738 million in nonaccrual loans and $384 thousand in loans past due 90+ days[63] - Total loans at June 30, 2024, were $638.584 million, with $5.075 million past due and $633.509 million current[65] - Nonperforming loans as of December 31, 2023, were $1.751 million, including $1.628 million in nonaccrual loans with no ACL and $123 thousand with ACL[64] - Total loans at December 31, 2023, were $622.414 million, with $4.790 million past due and $617.624 million current[66] - 1-4 Family Residential Mortgage loans past due 30-59 days increased from $2.104 million in December 2023 to $1.293 million in June 2024[66][65] - Home Equity and Second Mortgage loans past due 30-59 days increased from $396 thousand in December 2023 to $586 thousand in June 2024[66][65] - Commercial Real Estate loans past due 60-89 days increased from $0 in December 2023 to $718 thousand in June 2024[66][65] - Consumer and Other loans past due 30-59 days decreased from $302 thousand in December 2023 to $296 thousand in June 2024[66][65] - No interest income was recognized on nonaccrual loans during the three and six months ended June 30, 2024 and 2023[65] - Modified Commercial Business loans with an amortized cost basis of $2.0 million, approximately 3% of all Commercial Business loans, for borrowers experiencing financial distress[68] - No principal forgiven, no payments delayed, and no interest rates reduced for the modified loans[68] - Modified loans extended by three months with an interest-only payment period, totaling six months of interest-only payments for the six months ended June 30, 2024[68] - No modified loans were delinquent as of June 30, 2024[68] - Total loans categorized as "Pass" for 1-4 Family Residential Mortgage amounted to $135.413 million as of June 30, 2024[71] - Loans classified as "Doubtful" for 1-4 Family Residential Mortgage totaled $1.066 million as of June 30, 2024[71] - Current period gross write-offs for 1-4 Family Residential Mortgage were $4,000 as of June 30, 2024[71] - Total loans categorized as "Pass" for Multifamily Residential amounted to $37.207 million as of June 30, 2024[72] - No loans classified as "Special Mention," "Substandard," or "Doubtful" for Multifamily Residential as of June 30, 2024[72] - No current period gross write-offs for Multifamily Residential as of June 30, 2024[72] - Total loans as of June 30, 2024, amounted to $638.584 million, with pass loans contributing $624.419 million[74] - Commercial Real Estate loans totaled $177.347 million, with pass loans making up $169.063 million[73] - Consumer and Other loans reached $59.694 million, with pass loans accounting for $59.601 million[74] - Commercial Business loans stood at $64.685 million, with pass loans comprising $61.850 million[73] - Construction loans totaled $14.400 million, with pass loans contributing $14.313 million[73] - Other Construction, Development, and Land loans amounted to $83.261 million, with pass loans making up $83.159 million[73] - Current period gross write-offs for Consumer and Other loans were $181 thousand[74] - Special Mention loans across all categories totaled $6.960 million[74] - Substandard loans across all categories amounted to $3.467 million[74] - Doubtful loans across all categories totaled $3.738 million[74] - Total loans for 1-4 Family Residential Mortgage increased to $133.6 million in 2023 from $131.8 million in 2022[75] - Pass category loans for Multifamily Residential totaled $39.9 million in 2023, with no significant changes in Special Mention, Substandard, or Doubtful categories[76] - Other Construction, Development, and Land loans in the Pass category reached $76.6 million in 2023, with minimal changes in Special Mention and Doubtful categories[77] - Commercial Real Estate loans in the Pass category grew to $163.5 million in 2023, with Special Mention loans at $4.0 million and Substandard loans at $1.1 million[78] - Commercial Business loans in the Pass category totaled $65.4 million in 2023, with Special Mention loans at $2.8 million and Substandard loans at $38,000[78] - Consumer and Other loans in the Pass category amounted to $56.3 million in 2023, with Substandard loans at $90,000[78] - Total Pass category loans across all segments reached $611.8 million in 2023, with Special Mention loans at $7.1 million and Substandard loans at $1.8 million[78] - Doubtful loans across all segments remained minimal, with the highest amount in Commercial Real Estate at $0[78] - Revolving loans for Commercial Real Estate increased to $2.3 million in 2023, compared to $1.8 million in 2022[78] - Total loans across all categories reached $622.4 million in 2023, reflecting a slight increase from previous years[78] - The company had no foreclosed real estate at June 30, 2024, and no loans secured by residential real estate properties with formal foreclosure proceedings initiated, compared to $1,000 in such loans at December 31, 2023[79] - The ACL for off-balance-sheet credit exposures remained unchanged at $131,000 at both June 30, 2024, and December 31, 2023[80] - The company recognized provisions for credit losses on collateral dependent loans of $852,000 for the three months ended June 30, 2024[110] - Provisions for credit losses on collateral dependent loans for the six months ended June 30, 2024, were $841,000, compared to $40,000 for the same period in 2023[110] - The fair value of collateral dependent loans is determined using a 20% discount from appraised value to account for market conditions, collateral condition,