Filed by First Capital, Inc.
Pursuant to Rule 425 under the Securities Act of 1933

Subject Company: Hometown Bancshares, Inc.
Commission File No.: 0-25023

On September 26, 2002, First Capital, Inc., an Indiana Corporation,
issued the following press release:

PRESS RELEASE

*FOR IMMEDIATE RELEASE*

FIRST CAPITAL, INC. AND HOMETOWN BANCSHARES, INC.
ANNOUNCE MERGER

CORYDON, Ind.--(BUSINESS WIRE)--September 26, 2002--First Capital, Inc.
(Nasdaq:FCAP - News), Corydon, Indiana, announced today that it has signed a
definitive merger agreement with Hometown Bancshares, Inc., New Albany, Indiana,
under which Hometown Bancshares will merge into First Capital in a transaction
valued at approximately $10.7 million. The transaction will increase First
Capital's assets from $291 million as of June 30, 2002 to approximately $373
million and increase its number of banking offices from nine to eleven. Under
the terms of the transaction, as described in more detail below, shareholders of
Hometown Bancshares will be entitled to receive either $46.50 in cash or shares
of First Capital common stock in exchange for each share of Hometown Bancshares
common stock.

William W. Harrod, President and Chief Executive Officer of First Capital
stated, "We are very pleased to announce our agreement for Hometown Bancshares
to merge with First Capital. This merger of two community-oriented institutions
represents a natural extension of our franchise and will give our combined
company a much stronger presence in the New Albany and Floyd County market area.
We look forward to continuing to emphasize the personal service and community
banking focus that our and Hometown's customers appreciate."

"We believe that this transaction is an excellent opportunity for our customers
and the communities we serve," said Ron Clark, Chief Executive Officer of
Hometown Bancshares. "Our commitment to preserving a community bank atmosphere
and high quality of service will be met by this merger. Moreover, our customers
will benefit from access to a greater selection of services."

The merger is expected to be completed in the first quarter of 2003.

First Capital's management team and board of directors will remain intact
following the merger. An advisory board consisting of each of the non-employee
directors of Hometown Bancshares will be established and will provide advice to
First Capital regarding the operations of the former Hometown branches.

The board of directors of First Capital has authorized the repurchase of up to
345,000 shares of its common stock in connection with the merger for the purpose
of issuing the repurchased shares to shareholders of Hometown Bancshares.

In connection with this transaction, Keefe, Bruyette & Woods, Inc. acted as
financial advisor to First Capital and David A. Noyes & Company acted as
financial advisor to

Hometown Bancshares. Muldoon Murphy & Faucette LLP represented First Capital,
while Wyatt, Tarrant & Combs, LLP represented Hometown Bancshares.

First Capital is the holding company for First Harrison Bank. First Harrison
Bank operates out of nine offices in Indiana. At June 30, 2002, First Capital
had total assets of $291 million and total deposits of $208 million.

Hometown Bancshares is the holding company for Hometown National Bank. Hometown
National Bank operates out of two offices in Indiana. At June 30, 2002, Hometown
Bancshares had total assets of $82 million and total deposits of $75 million.

Terms of the Merger

Under the terms of the agreement, Hometown Bancshares shareholders may elect to
receive either shares of First Capital common stock or $46.50 in cash in
exchange for their shares of Hometown Bancshares common stock. The elections of
Hometown Bancshares shareholders will be subject to the requirement that 50% of
Hometown Bancshares shares be exchanged for cash and 50% be exchanged for First
Capital common stock. To the extent they receive First Capital shares, the
transaction is expected to be tax-free to Hometown Bancshares shareholders.

The number of shares of First Capital common stock into which each Hometown
Bancshares share will be exchanged will be based on the price of First Capital
common stock over a measurement period prior to the closing, as follows:

Average closing price of First Capital
common stock during measurement period Exchange Ratio
- --------------------------------------------- --------------------------------------------

1. $14.44 or less 1. $39.52 divided by average closing price

2. Greater than $14.44 and less than $19.55 2. 2.735

3. $19.55 or more 3. $53.47 divided by average closing price

The merger is subject to certain conditions, including the approval of the
shareholders of Hometown Bancshares and receipt of regulatory approval.

Forward-Looking Statements

This news release contains certain forward-looking statements about the proposed
merger of First Capital and Hometown Bancshares. These statements include
statements regarding the anticipated closing date of the transaction and
anticipated future results. Forward-looking statements can be identified by the
fact that they do not relate strictly to historical or current facts. They often
include words like "believe," "expect," "anticipate," "estimate," and "intend"
or future or conditional verbs such as "will," "would," "should," "could" or
"may." Certain factors that could cause actual results to differ materially from
expected results include delays in completing the merger, difficulties in
achieving cost savings from the merger or in achieving such cost savings within
the expected time frame, difficulties in integrating First Capital and Hometown
Bancshares, increased competitive pressures, changes in the interest rate
environment, changes in general economic conditions, legislative and regulatory
changes that adversely affect the business in which First Capital and Hometown
Bancshares are engaged, and changes in the securities markets.

Additional Information About the Merger and Where to Find It

Shareholders of Hometown Bancshares and other investors are urged to read the
proxy statement/prospectus that will be included in the registration statement
on Form S-4 that First Capital will file with the Securities and Exchange
Commission in connection with the proposed merger because it will contain
important information about First Capital, Hometown Bancshares, the merger, the
persons soliciting proxies in the merger and their interests in the merger and
related matters. Investors will be able to obtain all documents filed with the
SEC by First Capital free of charge at the SEC's website, www.sec.gov. in
addition, documents filed with the SEC by First Capital will be available free
of charge from the Corporate Secretary of First Capital at 220 Federal Drive
N.W., Corydon, Indiana 47112, telephone (812) 738-2198. Read the proxy
statement/prospectus carefully before making a decision concerning the merger.

Contact:

First Capital, Inc.
William W. Harrod, 812/738-2198
or
Hometown Bancshares
C. Ronald Clark, 812/949-2265