First Capital(FCAP) - 2024 Q1 - Quarterly Report

Financial Performance - Net income attributable to the Company was $3.0 million ($0.88 per diluted share) for Q1 2024, down from $3.8 million ($1.14 per diluted share) in Q1 2023[142]. - Noninterest income decreased by $92,000, impacted by a decline in ATM and debit card fees and a loss on equity securities[147]. Assets and Liabilities - Total assets remained stable at $1.16 billion, with a slight decrease of $1.3 million from December 31, 2023 to March 31, 2024[133]. - Net loans receivable increased by $7.0 million, reaching $621.4 million, driven by increases in commercial real estate and multifamily residential loans[134]. - Cash and cash equivalents rose from $38.7 million to $42.1 million, influenced by maturities of available-for-sale securities and increased borrowings[135]. - Total deposits decreased from $1.03 billion to $1.01 billion, with significant competition for deposits impacting fluctuations and costs[137]. Interest Income and Expense - Total interest income increased by $1.7 million, with the average tax-equivalent yield on interest-earning assets rising from 3.73% to 4.29%[143]. - Total interest expense increased by $2.2 million, reflecting a rise in the average cost of interest-bearing liabilities from 0.51% to 1.55%[144]. Credit and Risk Management - Provision for credit losses increased from $193,000 to $280,000, attributed to loan growth and macroeconomic uncertainty[146]. - The Company does not engage in high-risk derivative instruments and is not exposed to foreign currency exchange rate risk or commodity price risk[165]. - Interest rate risk is primarily influenced by the Company's activities in gathering deposits and extending loans, which are sensitive to general economic conditions[166]. Capital Adequacy - The Bank's Community Bank Leverage Ratio (CBLR) improved to 10.29% as of March 31, 2024, indicating strong capital adequacy[158]. - The Company aims for long-term profitability while managing interest rate exposure through strategies that shorten asset maturities and rely on stable retail deposits[164]. Interest Rate Sensitivity - A simulation model indicates that a 300 basis point increase in interest rates could increase net interest income by $808,000 (2.23%) as of March 31, 2024[170]. - The Economic Value of Equity (EVE) could decrease by $6,421,000 (2.87%) with a 300 basis point increase in interest rates as of March 31, 2024[174]. - The Company’s EVE ratio is projected to decrease to 16.67% with a 300 basis point increase in interest rates as of March 31, 2024[174]. - The Company’s net interest income is projected to be affected by various interest rate scenarios, with specific impacts quantified over a one-year horizon[167]. Internal Controls and Reporting - There have been no changes in the Company's internal control over financial reporting that materially affect its effectiveness as of March 31, 2024[180]. - The Company’s management has confirmed the effectiveness of its disclosure controls and procedures to ensure timely and accurate reporting[179].