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FIRST CAPITAL, INC. REPORTS 12% FOURTH QUARTER EARNINGS INCREASE
Corydon, Indiana--(BUSINESS WIRE)--January 18, 2006. First Capital, Inc.
(NASDAQ: FCAP - news), the holding company for First Harrison Bank (the "Bank"),
today reported net income of $985,000 or $0.38 per diluted share for the quarter
ended December 31, 2005, compared to $881,000 or $0.32 per diluted share during
the same period in 2004.
The increase in earnings is due to an increase in net interest income after the
provision for loan losses and a decrease in noninterest expense.
Net interest income after provision for loan losses increased $99,000 for the
quarter ended December 31, 2005 as compared to the quarter ended December 31,
2004. Interest income increased $406,000 when comparing the two periods as the
average tax-equivalent yield of interest-earning assets increased from 5.84%
during the quarter ended December 31, 2004 to 6.12% for the same period in 2005.
Interest expense increased $372,000 as the average cost of interest-bearing
liabilities increased from 2.74% to 3.08% when comparing the same two periods.
The provision for loan losses decreased $65,000 to $100,000 for the three months
ended December 31, 2005.
Noninterest income decreased $6,000 for the quarter ended December 31, 2005 as
compared to the quarter ended December 31, 2004. Service charges on deposits
accounts increased $50,000 while gains on the sale of mortgage loans and
mortgage brokerage fees decreased together $59,000 when comparing the two
periods.
Noninterest expenses decreased $54,000 as compared to the quarter ended December
31, 2004. Data processing fees decreased $45,000 when comparing the two periods
primarily due to a reduction in electronic banking expenses as the Bank is now
using a less expensive system developed by the Bank's core system processor.
Occupancy and equipment fees increased $35,000 as compared to the same period in
the prior year primarily due to increased depreciation and property tax expense.
Other operating expenses decreased $68,000 during the quarter ended December 31,
2005 as compared to the quarter ended December 31, 2005 primarily due to a
decrease in charitable contributions. The Bank fulfilled pledges on several
large contributions during the fourth quarter of 2004.
For the year ended December 31, 2005, the Company earned $3.7 million or $1.42
per diluted share compared to $3.4 million or $1.23 per diluted share for 2004,
an increase of 7.5%.
Net interest income after provision for loan loss increased $271,000 during 2005
as compared to 2004. Interest income increased $1.6 million when comparing the
two periods, due to an increase in the average balance of interest-earning
assets from $390.5 million during 2004 to $403.5 million for 2005 and an
increase in the average tax-equivalent yield on those assets from 5.75% to
5.95%. Interest expense increased $1.2 million as the average balance of
interest-bearing liabilities increased $14.0 million and the average cost of
those liabilities increased from 2.69% to 2.93% when comparing the two periods.
The provision for loan losses increased $53,000 when comparing the two periods.
Noninterest income increased $295,000 primarily due to increases in service
charges on deposits and gains on the sale of mortgage loans of $198,000 and
$50,000, respectively.
Noninterest expenses increased $194,000 when comparing 2005 to 2004, primarily
due to increases of $107,000 in occupancy and equipment expense and $61,000 in
advertising expenses. Equipment depreciation and maintenance were the primary
factors in the occupancy increase.
Total assets as of December 31, 2005 were $438.4 million compared to $425.3
million at December 31, 2004. Securities available for sale and net loans
receivable increased $10.5 million and $5.4 million, respectively. The primary
funding for this growth was provided by increases in retail repurchase
agreements of $10.1 million and a reduction of cash and cash equivalents of $2.8
million.
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. The Bank has submitted an
application to the Office of Thrift Supervision to close the Crandall office and
consolidate that operation into the New Salisbury office. This is expected to
take place on or around April 1, 2006. 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 complement the Bank's offering of traditional banking products
and services.
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This report may contain forward-looking statements within the meaning of the
federal securities laws. These statements are not historical facts; rather, they
are 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)
TWELVE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
OPERATING DATA 2005 2004 2005 2004
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(Dollars in thousands, except per share data)
Total interest income $ 23,659 $ 22,109 $ 6,128 $ 5,722
Total interest expense 10,343 9,117 2,740 2,368
--------------- --------------- --------------- ---------------
Net interest income 13,316 12,992 3,388 3,354
Provision for loan losses 563 510 100 165
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Net interest income after provision for loan losses 12,753 12,482 3,288 3,189
Total non-interest income 2,961 2,666 693 699
Total non-interest expense 10,112 9,918 2,464 2,518
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Income before income taxes 5,602 5,230 1,517 1,370
Income tax expense 1,914 1,799 532 489
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Net income $ 3,688 $ 3,431 $ 985 $ 881
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Net income per common share, basic $ 1.44 $ 1.24 $ 0.38 $ 0.32
=============== =============== =============== ===============
Weighted average common shares outstanding - basic 2,565,247 2,763,983 2,563,770 2,732,384
Net income per common share, diluted $ 1.42 $ 1.23 $ 0.38 $ 0.32
=============== =============== =============== ===============
Weighted average common shares outstanding - diluted 2,589,672 2,798,253 2,584,263 2,765,041
OTHER FINANCIAL DATA
Cash dividends per share $ 0.62 $ 0.60 $ 0.16 $ 0.15
Return on average assets (three month data, annualized) 0.86% 0.82% 0.91% 0.83%
Return on average equity (three month data, annualized) 8.91% 7.75% 9.40% 7.95%
Net interest margin 3.39% 3.42% 3.42% 3.47%
Net overhead expense as a percentage
of average assets (three month data, annualized) 2.35% 2.38% 2.27% 2.36%
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DECEMBER 31, DECEMBER 31,
BALANCE SHEET INFORMATION 2005 2004
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Cash and cash equivalents $ 14,673 $ 17,425
Investment securities 76,915 66,450
Gross loans 324,622 319,564
Allowance for loan losses 2,104 2,478
Earning assets 405,161 390,948
Total assets 438,354 425,302
Deposits 317,264 316,462
FHLB debt 65,947 65,099
Repurchase agreements 10,704 635
Stockholders' equity 41,957 40,714
Non-performing assets:
Nonaccrual loans 1,906 2,075
Foreclosed real estate 749 442
CONTACT:
First Capital, Inc.
M. Chris Frederick, 812/738-2198, ext. 234