FIRST CAPITAL, INC. REPORTS 14% THIRD QUARTER EARNINGS INCREASE
Corydon, Indiana--(BUSINESS WIRE)--October 28, 2005. First Capital, Inc.
(NASDAQ: FCAP - news), the holding company for First Harrison Bank (the "Bank"),
today reported net income of $975,000 or $0.38 per diluted share for the quarter
ended September 30, 2005, compared to $856,000 or $0.30 per diluted share during
the same period in 2004.
The increase in earnings is due to increases in net interest income after the
provision for loan losses and noninterest income and a decrease in noninterest
expense.
Net interest income after provision for loan losses increased $91,000 for the
quarter ended September 30, 2005 as compared to the quarter ended September 30,
2004. Interest income increased $516,000 when comparing the two periods as the
average tax-equivalent yield of interest-earning assets increased from 5.74%
during the quarter ended September 30, 2004 to 6.05% for the same period in
2005. Interest expense increased $375,000 as the average cost of
interest-bearing liabilities increased from 2.69% to 2.99% when comparing the
same two periods. The provision for loan losses increased $50,000 to a total of
$150,000 for the three months ended September 30, 2005.
Noninterest income increased $48,000 for the quarter ended September 30, 2005 as
compared to the quarter ended September 30, 2004. Service charges on deposits
accounts and commission income increased $45,000 and $35,000, respectively while
gains on the sale of mortgage loans decreased $34,000 when comparing the two
periods.
Noninterest expenses decreased $55,000 as compared to the quarter ended
September 30, 2004. Compensation and benefits decreased $52,000 when comparing
the two periods primarily due to decreased stock compensation expense and
employee salaries. Other operating expenses decreased $26,000 during the quarter
ended September 30, 2005 as compared to the same period in the prior year
primarily due to decreases in telephone and office supply expenses. Professional
fees and occupancy and equipment expenses increased $19,000 and $17,000,
respectively.
For the nine months ended September 30, 2005, the Company earned $2.7 million or
$1.04 per diluted share compared to $2.6 million or $0.91 for the same period in
2004.
Net interest income after provision for loan loss increased $172,000 during the
first nine months of 2005 compared to the same period in 2004. Interest income
increased $1.1 million when comparing the two periods, due to an increase in the
average balance of interest-earning assets from $388.2 million during the first
nine months of 2004 to $402.4 million for the same period in 2005 and an
increase in the average tax-equivalent yield on those assets from 5.72% to
5.89%. Interest expense increased $854,000 as the average balance of
interest-bearing liabilities increased $15.1 million and the average cost of
those liabilities increased from 2.67% to 2.87% when comparing the two periods.
The provision for loan losses increased $118,000 when comparing the two periods.
Noninterest income increased $293,000 primarily due to increases in service
charges on deposits and gains on the sale of mortgage loans of $148,000 and
$95,000, respectively.
Noninterest expenses increased $240,000 when comparing the nine months ended
September 30, 2005 to the same period in 2004, primarily due to increases of
$72,000 in occupancy and equipment expense and $70,000 in other operating
expenses. Equipment depreciation and maintenance were the primary factors in the
occupancy increase while charitable contributions and correspondent bank charges
increased the other operating expenses.
Total assets as of September 30, 2005 were $437.7 million compared to $425.3
million at December 31, 2004. Securities available for sale and net loans
receivable increased $11.6 million and $2.0 million, respectively. The funding
for this growth was provided by increases in retail repurchase agreements and
deposits of $9.4 million and $7.8 million, respectively.
First Harrison Bank currently has twelve offices in the Indiana communities of
Corydon, Crandall, Georgetown, Greenville, Floyds Knobs, Hardinsburg, Palmyra,
New Albany, New Salisbury and Jeffersonville. 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
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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.
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)
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2005 2004 2005 2004
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OPERATING DATA
(Dollars in thousands, except per share data)
Total interest income $ 17,531 $ 16,387 $ 6,046 $ 5,530
Total interest expense 7,603 6,749 2,665 2,290
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Net interest income 9,928 9,638 3,381 3,240
Provision for loan losses 463 345 150 100
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Net interest income after provision for loan losses 9,465 9,293 3,231 3,140
Total non-interest income 2,268 1,975 727 679
Total non-interest expense 7,648 7,408 2,465 2,520
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Income before income taxes 4,085 3,860 1,493 1,299
Income tax expense 1,382 1,310 518 443
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Net income $ 2,703 $ 2,550 $ 975 $ 856
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Net income per common share, basic $ 1.05 $ 0.92 $ 0.38 $ 0.31
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Weighted average common shares outstanding - basic 2,565,757 2,774,604 2,566,627 2,774,524
Net income per common share, diluted $ 1.04 $ 0.91 $ 0.38 $ 0.30
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Weighted average common shares outstanding - diluted 2,591,453 2,809,512 2,590,114 2,807,355
OTHER FINANCIAL DATA
Cash dividends per share $ 0.46 $ 0.45 $ 0.16 $ 0.15
Return on average assets (annualized) 0.84% 0.82% 0.90% 0.82%
Return on average equity (annualized) 8.75% 7.68% 9.36% 7.71%
Net interest margin 3.37% 3.40% 3.42% 3.41%
Net overhead expense as a percentage
of average assets (annualized) 2.37% 2.38% 2.27% 2.41%
SEPTEMBER 30, DECEMBER 31,
BALANCE SHEET INFORMATION 2005 2004
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Cash and cash equivalents $ 16,308 $ 17,425
Investment securities 78,035 66,450
Gross loans 321,225 319,564
Allowance for loan losses 2,175 2,478
Earning assets 404,206 390,948
Total assets 437,657 425,302
Deposits 324,256 316,462
FHLB debt 58,647 65,099
Repurchase agreements 10,002 635
Stockholders' equity 41,842 40,714
Non-performing assets:
Nonaccrual loans 2,043 2,075
Foreclosed real estate 640 442