1
EXHIBIT 99.1
FIRST CAPITAL, INC. REPORTS FIRST QUARTER EARNINGS
Corydon, Indiana--(BUSINESS WIRE)--May 2, 2003. First Capital, Inc. (NASDAQ:
FCAP - news), the holding company for First Harrison Bank (the "Bank"), today
reported net income of $721,000 or $0.28 per diluted share for the quarter ended
March 31, 2003, compared to $793,000 or $0.32 per diluted share for the quarter
ended March 31, 2002.
The earnings reduction is due to an increase in noninterest expenses partially
offset by increases in noninterest income and net interest income after
provision for loan losses. The March 2003 acquisition of Hometown Bancshares,
Inc. (Hometown), the holding company for Hometown National Bank in New Albany,
Indiana, and the addition of personnel for the new branch office in
Jeffersonville, Indiana scheduled to open later this month, were the primary
factors in the increase of noninterest expenses.
Net interest income after provision for loan losses increased $89,000 for the
quarter ended March 31, 2003 as compared to the prior year. Interest expense
decreased $163,000 when comparing the first quarter of 2003 against the first
quarter of 2002. This was partially offset by an increase of $105,000 in the
provision for loan losses when comparing the same two periods. Items affecting
management's evaluation of the loan loss provision include the levels and trends
in charge-offs and recoveries, trends in volume and terms of loans, levels and
trends in delinquencies, effects of changes in credit concentrations, changes in
industry and market conditions and national and local economic trends and
conditions.
Noninterest income increased $113,000 as compared to the quarter ended March 31,
2002. Service charges on deposits increased $59,000 during the period. The Bank
also recognized a gain of $51,000 on the sale of securities during the first
quarter of 2003 but did not sell any securities during the same period in 2002.
Noninterest expenses increased $320,000 for the quarter ended March 31, 2003
compared to the quarter ended March 31, 2002. Compensation and benefits
increased by $147,000 compared to the same period last year primarily due to
additional personnel from the Hometown acquisition and in anticipation of the
opening of the Jeffersonville office. Other factors include the increased costs
of employee health insurance and normal salary increases. Data processing fees
increased $87,000 and other operating expenses increased $71,000 when comparing
the first quarter of 2003 to the same period of 2002. The primary factor for the
increase in data processing fees was the conversion of the Hometown accounts to
the Bank's computer system. An increase of $42,000 in advertising expense was
the primary reason for the change in other operating expenses. The Bank has
adopted a more aggressive marketing campaign to target the areas where the
acquired offices are located as well as the new Jeffersonville location.
Total assets as of March 31, 2003 were $396.9 million compared to $308.6 million
at December 31, 2002. At the time of the Hometown acquisition, Hometown National
Bank had assets of $90.5 million, including gross loans receivable of $65.4
million, allowance for loan losses of $1.1 million, nonaccrual loans of
$518,000, foreclosed real estate of $80,000 and short-term investments totaling
$18.2 million. Hometown deposits at the acquisition date totaled $84.7 million.
First Harrison Bank currently has eleven offices in the Indiana communities of
Corydon, Crandall, Georgetown, Greenville, Floyds Knobs, Hardinsburg, Palmyra,
New Albany and New Salisbury. The new location in Jeffersonville is expected to
open in May. Access to First Harrison Bank accounts, including online banking
and electronic bill payments, is available anywhere with Internet access through
the Bank's website at www.firstharrison.com. First Harrison Financial Services,
---------------------
a subsidiary of the Bank, offers a full array of property, casualty and life
insurance products, as well as non FDIC insured investments to compliment the
Bank's offering of traditional banking products and services.
This report may contain forward-looking statements within the meaning of the
federal securities laws. These statements are not historical facts, rather
statements based on the Company's current expectations regarding its business
strategies and their intended results and its future performance.
Forward-looking statements are preceded by terms such as "expects," "believes,"
"anticipates," "intends" and similar expressions.
Forward-looking statements are not guarantees of future performance. Numerous
risks and uncertainties could cause or contribute to the Company's actual
results, performance and achievements to be materially different from those
expressed or implied by the forward-looking statements. Factors that may cause
or contribute to these differences include, without limitation, general economic
conditions, including changes in market interest rates and changes in monetary
and fiscal policies of the federal government; legislative and regulatory
changes; and other factors disclosed periodically in the Company's filings with
the Securities and Exchange Commission.
2
Because of the risks and uncertainties inherent in forward-looking statements,
readers are cautioned not to place undue reliance on them, whether included in
this report or made elsewhere from time to time by the Company or on its behalf.
Except as may be required by applicable law or regulation, the Company assumes
no obligation to update any forward-looking statements.
FIRST CAPITAL, INC. AND SUBSIDIARY
Consolidated Financial Highlights (Unaudited)
THREE MONTHS ENDED
MARCH 31,
2003 2002
---- ----
OPERATING DATA
(Dollars in thousands, except per share data)
Total interest income $ 4,708 $ 4,677
Total interest expense 2,062 2,225
------------------------------------
Net interest income 2,646 2,452
Provision for loan losses 150 45
------------------------------------
Net interest income after provision for loan losses 2,496 2,407
Total non-interest income 509 396
Total non-interest expense 1,918 1,598
------------------------------------
Income before income taxes 1,087 1,205
Income tax expense 366 412
------------------------------------
Net income $ 721 $ 793
====================================
Net income per common share, basic $ 0.29 $ 0.32
====================================
Net income per common share, diluted $ 0.28 $ 0.32
====================================
MARCH 31, DECEMBER 31,
BALANCE SHEET INFORMATION 2003 2002
---- ----
Cash and due from banks $ 8,051 $ 6,610
Interest bearing deposits with banks 16,943 6,044
Investment securities 68,034 66,454
Gross loans 283,023 217,214
Allowance for loan losses 2,395 1,218
Earning assets 368,586 291,210
Total assets 396,909 308,553
Deposits 297,307 216,202
FHLB debt 54,595 53,320
Stockholders' equity 42,613 36,330
Non-performing assets:
Nonaccrual loans 1,170 607
Foreclosed real estate 363 102