First Capital(FCAP) - 2019 Q3 - Quarterly Report

Financial Performance - Net income for the nine months ended September 30, 2019 was $7.9 million ($2.37 per diluted share), up from $6.8 million ($2.03 per diluted share) for the same period in 2018[198] - Net interest income increased by $2.5 million for the nine months ended September 30, 2019, primarily due to increases in interest-earning assets and the interest rate spread[200] - Noninterest income for the nine months ended September 30, 2019 increased by $146,000, driven by higher ATM and debit card fees[214] - Noninterest expense for the nine months ended September 30, 2019 rose by $1.2 million, mainly due to increases in compensation and benefit expenses[216] - Income tax expense for the nine-month period ended September 30, 2019 was $1.5 million, with an effective tax rate of 16.3%, up from 14.8% in the same period of 2018[218] Asset and Loan Growth - Total assets increased by $29.1 million, from $794.2 million at December 31, 2018 to $823.3 million at September 30, 2019, representing a growth of 3.7%[190] - Net loans receivable rose by $33.4 million, from $434.3 million at December 31, 2018 to $467.7 million at September 30, 2019, with notable increases in construction loans ($10.3 million) and commercial mortgage loans ($9.1 million)[191] - Total deposits increased from $701.6 million at December 31, 2018 to $719.4 million at September 30, 2019, with noninterest-bearing checking accounts growing by $12.4 million[196] - Cash and cash equivalents increased from $41.1 million at December 31, 2018 to $43.5 million at September 30, 2019, primarily due to excess liquidity from increased deposit balances[195] - As of September 30, 2019, the Company had liquid assets of $3.0 million[224] Capital and Risk Management - The Bank maintained Tier 1 capital ratios of 9.9%, 14.1%, 14.1%, and 14.9%, exceeding the regulatory requirements for being "well-capitalized"[225] - The allowance for loan losses was $4.7 million at September 30, 2019, compared to $4.1 million at December 31, 2018, with nonperforming loans decreasing to $1.8 million[213] - The Company's net interest income could increase by $3,658,000 (12.18%) with a 300 basis point increase in interest rates over a one-year horizon as of September 30, 2019[239] - The Economic Value of Equity (EVE) could increase by $58,898,000 (48.98%) with a 300 basis point increase in interest rates as of September 30, 2019[243] - The Company relies on retail deposits as its primary source of funds, which are considered more stable compared to brokered deposits[233] Internal Controls and Compliance - The Company's management concluded that its disclosure controls and procedures were effective as of the end of the reporting period[249] - There were no changes in the Company's internal control over financial reporting that materially affected its operations during the quarter ended September 30, 2019[250] - For the nine months ended September 30, 2019, the Company did not engage in any off-balance sheet transactions likely to materially affect its financial condition[229] - The Company has not engaged in trading or hedging activities, nor does it face foreign currency exchange rate risk[234] - The Company updated its interest rate risk model during the nine months ended September 30, 2019, reflecting market conditions more accurately[239]