First Capital, Inc. Reports Quarterly Earnings

Financial Performance - Net income for Q2 2024 was $2.8 million, or $0.85 per diluted share, compared to $2.7 million, or $0.82 per diluted share, in Q2 2023 [1] - Net interest income after provision for credit losses increased by $335,000 in Q2 2024 compared to Q2 2023, driven by a rise in interest income of $1.6 million due to higher tax-equivalent yield on interest-earning assets [2] - Noninterest income increased by $160,000 in Q2 2024 compared to Q2 2023, primarily due to a $65,000 increase in gains on the sale of loans [3] - Income tax expense increased by $59,000 in Q2 2024 compared to Q2 2023, resulting in an effective tax rate of 14.7% versus 13.6% in the prior year [4] Interest Rates and Borrowings - The average tax-equivalent yield on interest-earning assets rose from 3.88% in Q2 2023 to 4.42% in Q2 2024, with the yield on loans increasing from 5.56% to 5.99% [2] - Interest expense increased by $1.3 million in Q2 2024 compared to Q2 2023, driven by a higher average cost of interest-bearing liabilities (1.71% vs. 1.12%) and an increase in the average balance of interest-bearing liabilities [2] - The company's total average outstanding borrowings increased from $10.6 million in Q2 2023 to $37.2 million in Q2 2024, with an average rate of 4.93% versus 5.09% [2] Credit and Loan Performance - The provision for credit losses increased from $350,000 in Q2 2023 to $360,000 in Q2 2024, reflecting loan growth, higher nonperforming assets, and macroeconomic uncertainty [6] - Net charge-offs decreased from $158,000 in Q2 2023 to $30,000 in Q2 2024 [6] - Nonperforming assets increased from $1.8 million at December 31, 2023, to $4.1 million at June 30, 2024, primarily due to the nonaccrual classification of a $2.0 million borrowing relationship [14] Noninterest Expenses - Noninterest expenses increased by $334,000 in Q2 2024 compared to Q2 2023, primarily due to higher compensation and benefits ($160,000) and professional fees ($138,000) [7] - For the six months ended June 30, 2024, noninterest expenses increased by $690,000 compared to the same period in 2023, driven by higher compensation and benefits ($214,000), professional fees ($211,000), and other expenses ($146,000) [12] Six-Month Performance - Net income for the six months ended June 30, 2024, was $5.8 million, or $1.73 per diluted share, compared to $6.5 million, or $1.95 per diluted share, in the same period in 2023 [8] - Net interest income after provision for credit losses decreased by $343,000 for the six months ended June 30, 2024, compared to the same period in 2023, despite a $3.3 million increase in interest income [5][9] - Noninterest income increased by $68,000 for the six months ended June 30, 2024, compared to the same period in 2023, primarily due to higher gains on the sale of loans and other income [11] Balance Sheet and Asset Management - Total assets remained stable at $1.16 billion at both June 30, 2024, and December 31, 2023 [14] - Net loans receivable increased by $15.6 million, and total cash and cash equivalents increased by $11.9 million from December 31, 2023, to June 30, 2024 [14] - Deposits decreased by $11.0 million from $1.03 billion at December 31, 2023, to $1.01 billion at June 30, 2024 [14] Regulatory and Capital Ratios - The Community Bank Leverage Ratio increased from 9.92% in 2023 to 10.44% in 2024 [23] - The allowance for credit losses as a percentage of gross loans increased from 1.29% at December 31, 2023, to 1.34% at June 30, 2024 [22]