First Capital(US:FCAP)2019-05-09 12:03Financial Performance - Net income for the three months ended March 31, 2019, was $2.1 million, unchanged from the same period in 2018, with net interest income increasing by $780,000[171]. - Total interest income increased by $894,000, with the average balance of interest-earning assets at $741.0 million and a tax-equivalent yield of 4.19% for the three months ended March 31, 2019[173]. - Noninterest income decreased by $21,000, with declines in gains on the sale of securities and loans offset by an unrealized gain on equity securities of $131,000[181]. - Noninterest expense increased by $411,000, driven by higher compensation and benefits, data processing expenses, and net losses on foreclosed real estate[182]. Asset and Deposit Growth - Total assets increased by $19.7 million, or 2.5%, from $794.2 million at December 31, 2018, to $813.9 million at March 31, 2019[164]. - Net loans receivable rose by $15.5 million, from $434.3 million to $449.8 million, with construction loans, residential mortgage loans, and commercial business loans increasing by $5.7 million, $5.1 million, and $3.8 million, respectively[164]. - Total deposits increased from $701.6 million to $718.5 million, with noninterest-bearing checking accounts, interest-bearing checking accounts, and savings accounts rising by $9.5 million, $5.9 million, and $2.5 million, respectively[169]. - Cash and cash equivalents increased from $41.1 million to $55.5 million, primarily due to excess liquidity from increased deposit balances[168]. Capital and Regulatory Compliance - The Bank maintained a Tier 1 capital ratio of 9.7% and was considered "well-capitalized" under regulatory guidelines as of March 31, 2019[190]. Interest Rate Sensitivity - As of March 31, 2019, a 300 basis point increase in interest rates could lead to a projected net interest income increase of $3,381,000, representing an 11.26% change compared to the base case scenario[204]. - The Economic Value of Equity (EVE) is projected to change by $43,010,000 (28.25% increase) with a 300 basis point increase in interest rates as of March 31, 2019[210]. - A 200 basis point increase in interest rates could result in a net interest income increase of $2,078,000, which is a 6.92% change from the base case scenario[204]. - The EVE is expected to decrease by $42,256,000 (27.76% decrease) with a 200 basis point decrease in interest rates[210]. - The company updated discount rates and betas on loans and deposits during the three months ended March 31, 2019, to better reflect market conditions[209]. - The EVE ratio is projected to be 25.27% with a 300 basis point increase in interest rates, indicating a significant sensitivity to interest rate changes[210]. - A static interest rate scenario would result in an EVE of $152,231,000, with no change in value[210]. - The company models various interest rate scenarios to assess overall sensitivity to market interest rate changes, acknowledging inherent limitations in the modeling approach[213]. - The company’s net interest income is sensitive to changes in market interest rates, with potential increases or decreases depending on the direction of the rate changes[205]. Internal Controls and Reporting - There have been no changes in the company's internal control over financial reporting that materially affected its effectiveness during the quarter ended March 31, 2019[216]. - The Company's management has evaluated the effectiveness of its disclosure controls and procedures, concluding they were effective as of the end of the reporting period[215]. - There have been no changes in the Company's internal control over financial reporting that materially affected its reporting during the quarter ended March 31, 2019[216].