First Capital(US:FCAP)2025-03-31 20:31Financial Performance - Net income attributable to the Company for 2024 was $11.9 million, or $3.57 per diluted share, a decrease from $12.8 million, or $3.82 per diluted share in 2023 [242]. - Return on average assets for 2024 was 1.02%, down from 1.12% in 2023, and return on average equity decreased to 10.97% from 14.03% [242]. - The efficiency ratio for 2024 was 64.1%, compared to 61.6% in 2023, indicating a decline in operational efficiency [242]. - Total annual shareholder return for 2024 was 19.6%, up from 16.4% in 2023, reflecting an increase in stock price from $27.90 to $32.25 [242]. - Net income attributable to the Company for the year ended December 31, 2024 was $11.9 million, a decrease from $12.8 million in 2023, resulting in diluted earnings per share of $3.57 compared to $3.82 in 2023 [263]. Asset and Deposit Growth - Total assets increased to $1,187.5 million in 2024 from $1,157.9 million in 2023, while total deposits rose to $1,066.4 million from $1,025.2 million [256]. - Total assets increased from $1.16 billion at December 31, 2023 to $1.19 billion at December 31, 2024, primarily due to increases in total cash and cash equivalents and net loans receivable [290]. - Total deposits increased by $41.2 million to $1.07 billion at December 31, 2024, with time deposits rising by $74.3 million [294]. - Cash and cash equivalents rose from $38.7 million at December 31, 2023 to $105.9 million at December 31, 2024, primarily due to inflows from available for sale security proceeds and deposit increases [293]. Interest Income and Expense - Net interest income for 2024 was $35.8 million, an increase from $34.6 million in 2023, driven by higher interest income of $50.5 million [256]. - Net interest income increased by $1.2 million, or 3.5%, from $34.6 million in 2023 to $35.8 million in 2024, driven by an increase in the average tax-equivalent yield on interest-earning assets [264]. - Total interest income rose by $6.9 million in 2024, primarily due to an increase in the tax-equivalent yield on interest-earning assets from 3.96% in 2023 to 4.49% in 2024 [265]. - Total interest expense increased by $5.7 million, from $9.0 million in 2023 to $14.7 million in 2024, due to higher average costs and balances of interest-bearing liabilities [266]. Credit Quality - Nonperforming assets increased to $4.4 million, or 0.37% of total assets, from $1.8 million, or 0.15% of total assets in the previous year [242]. - Provision for credit losses increased from $1.1 million in 2023 to $1.4 million in 2024, attributed to loan growth and an increase in nonperforming assets [267]. - Nonperforming loans rose from $1.8 million at December 31, 2023 to $4.4 million at December 31, 2024, primarily due to the nonaccrual classification of two commercial loan relationships totaling $2.6 million [267]. Operational Strategy - The Company plans to enhance profitability by expanding product offerings and leveraging technology investments to improve efficiency [245]. - Management intends to focus on growth in the loan portfolio and secondary market lending programs in 2025 [245]. - The Company is evaluating growth opportunities through acquisitions to expand its market area and market share [245]. Tax and Regulatory Compliance - The effective tax rate for 2024 was 15.6%, a slight increase from 14.9% in 2023, with income tax expense decreasing by $32,000 [270]. - The Company maintained a CBLR of 10.57% as of December 31, 2024, in compliance with all regulatory capital requirements [301]. Interest Rate Sensitivity - As of December 31, 2024, a 300 basis point increase in interest rates could result in a net interest income increase of $1,314,000 (3.56%) compared to a base case scenario [311]. - The Economic Value of Equity (EVE) at December 31, 2024 would increase by $257,887,000 (10,236) (4.13%) with a 300 basis point increase in interest rates [315]. - The Company expects a decrease in EVE with a sudden and sustained decrease of 100, 200, and 300 basis points in prevailing interest rates as of December 31, 2024 [316]. - The Company utilizes both Net Interest Income at Risk and Economic Value of Equity models to assess interest rate risk exposure [313]. Recent Developments - Recent accounting pronouncements may impact the Company's financial statements, as discussed in Note 1 of the accompanying Notes to Consolidated Financial Statements [318].