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FIRST CAPITAL, INC. REPORTS 9% INCREASE IN FIRST QUARTER EARNINGS
Corydon, Indiana--April 19, 2006. First Capital, Inc. (NASDAQ: FCAP - news), the
holding company for First Harrison Bank (the "Bank"), today reported net income
of $934,000 or $0.36 per diluted share for the quarter ended March 31, 2006,
compared to $856,000 or $0.33 per diluted share for the quarter ended March 31,
2005.
The increase in earnings is due to an increase in net interest income after
provision for loan losses partially offset by a decrease in noninterest income.
Net interest income after provision for loan losses increased $189,000 for the
quarter ended March 31, 2006 as compared to the prior year. Interest income
increased $671,000 when comparing the periods as the average tax-equivalent
yield of interest-earning assets increased from 5.76% in the three-month period
ended March 31, 2005 to 6.23% during the same period in 2006 as a result of
repositioning the balance sheet and an increase in market interest rates.
Interest expense increased $462,000 when comparing the periods as the average
cost of interest-bearing liabilities increased from 2.76% to 3.18% as a result
of the increase in market interest rates. The provision for loan losses
increased from $150,000 for the quarter ended March 31, 2005 to $170,000 for the
same period in 2006.
Noninterest income decreased $49,000 for the three months ended March 31, 2006
as compared to the same period in 2005. Service charges on deposits increased
$36,000 when comparing the two periods while commission income decreased
$43,000. Gains on loans sold and mortgage brokerage fees together decreased
$48,000 due to a slowdown in home purchases and refinancing.
Noninterest expenses decreased $8,000 during the three months ended March 31,
2006 as compared to the three months ended March 31, 2005. Data processing
expenses decreased $31,000 when comparing the two periods due to a reduction on
equipment depreciation and electronic banking expenses. The Bank switched to a
less expensive electronic banking system developed by the Bank's core system
processor. Professional services increased $24,000 during the quarter ended
March 31, 2006 as compared to the same period in 2005 primarily due to an
increase in legal expenses.
Total assets as of March 31, 2006 were $444.8 million compared to $438.4 million
at December 31, 2005. The primary factor behind the asset growth was an $8.6
million increase in gross loans receivable. The funding for the growth was
provided by increases of $12.8 million in deposits and $1.6 million in retail
repurchase agreements partially offset by a reduction of $9.0 million in Federal
Home Loan Bank debt.
First Harrison Bank currently has eleven offices in the Indiana communities of
Corydon, Georgetown, Greenville, Floyds Knobs, Hardinsburg, Palmyra, New Albany,
New Salisbury and Jeffersonville. The Bank has closed the Crandall office and
consolidated that operation into the New Salisbury office as of 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
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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 press release 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.
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FIRST CAPITAL, INC. AND SUBSIDIARY
Consolidated Financial Highlights (Unaudited)
THREE MONTHS ENDED
MARCH 31,
OPERATING DATA 2006 2005
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(Dollars in thousands, except per share data)
Total interest income $ 6,291 $ 5,620
Total interest expense 2,863 2,401
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Net interest income 3,428 3,219
Provision for loan losses 170 150
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Net interest income after provision for loan losses 3,258 3,069
Total non-interest income 737 786
Total non-interest expense 2,583 2,591
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Income before income taxes 1,412 1,264
Income tax expense 478 408
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Net income $ 934 $ 856
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Net income per common share, basic $ 0.36 $ 0.33
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Weighted average common shares outstanding - basic 2,564,346 2,564,467
Net income per common share, diluted $ 0.36 $ 0.33
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Weighted average common shares outstanding - diluted 2,586,350 2,591,884
OTHER FINANCIAL DATA
Cash dividends per share 0.17 0.15
Return on average assets (annualized) 0.85% 0.81%
Return on average equity (annualized) 8.83% 8.37%
Net interest margin 3.44% 3.34%
Net overhead expense as a percentage
of average assets (annualized) 2.36% 2.45%
MARCH 31, DECEMBER 31,
BALANCE SHEET INFORMATION 2006 2005
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(Dollars in thousands)
Cash and cash equivalents $ 15,053 $ 14,673
Investment securities 74,333 76,915
Gross loans receivable 333,187 324,557
Allowance for loan losses 2,237 2,104
Earning assets 412,830 405,162
Total assets 444,804 438,354
Deposits 330,016 317,264
FHLB debt 56,997 65,947
Repurchase agreements 12,284 10,704
Stockholders' equity 42,362 41,957
Non-performing assets:
Nonaccrual loans 1,690 1,906
Foreclosed real estate 535 749
CONTACT:
Chris Frederick
Chief Financial Officer
812-738-2198 ext. 234