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[FIRST CAPITAL, INC. LETTERHEAD]
FIRST QUARTER REP0RT
REPORT TO SHAREHOLDERS
First Capital, Inc.
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Dear Shareholders:
We have purchased our Salem branch property and hope to start construction in
the near future. We expect excellent growth at the office due to our current
name recognition and current Washington County market share. This will further
support our efforts to grow non-interest checking accounts, business
relationships and commercial loans.
Net income for the first quarter was impacted by continued pressure on net
interest margin due to the inverted Treasury yield curve and increased
non-interest expense related to the maintenance and sale of foreclosed real
estate. The flat yield curve continued to put pressure on our net interest
margin. Management is working carefully to manage our net interest margin, while
not being tempted to make short term decisions that could negatively impact the
net interest margin over the long term.
Interest rates for mortgage loans are still favorable and we expect our fee
income from mortgage sales to exceed last year. Our marketing efforts are
directed at checking accounts and business accounts.
Why leave your business to make deposits? Our staff has been working hard
preparing for "Remote Capture" of business deposits. From the convenience of
your office or retail business, simply scan your deposits and electronically
send it to the bank. This new technology will save you travel time and speed up
getting your deposit to the bank. Existing and new customers are signing up for
this service.
The stock repurchase plan is still available to those shareholders that would
like to sell stock back to the company. We still have 67,849 shares available
for repurchase. Please contact us with any questions you may have.
Thank you for your continued support.
Sincerely;
/s/ William Harrod
William Harrod
President and CEO
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THIRD QUARTER REPORT
First Capital, Inc.
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BALANCE SHEET HIGHLIGHTS As of March 31, Percent
(In thousands, except per share information) 2007 2006 Change
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CORPORATE ADDRESS Total loans (excluding loans held for sale) $330,628 $333,187 -0.77%
First Capital, Inc. Allowance for loan losses 2,469 2,237 10.37%
220 Federal Drive, NW Allowance for loan losses as a percentage
Corydon, Indiana 47112 of total loans (excluding loans held for sale) 0.75% 0.67% 11.23%
Total assets $450,515 $444,804 1.28%
Total deposits 330,023 330,016 0.00%
Other borrowings 72,773 69,281 5.04%
Shareholders equity 44,415 42,362 4.85%
Book value per share 17.16 14.88 15.33%
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COMMON SHARES Three Months Months
The common shares of the Company INCOME STATEMENT SUMMARY Ended March 31, Percent
are listed on The Nasdaq Stock (In thousands) 2007 2006 Change
Market(R). The trading symbol is -----------------------------------------------------------------------------------------------
FCAP. In newspaper listings, Net interest income $3,319 $3,428 -3.18
Company shares are frequently Provision for loan losses 225 170 32.35%
listed as First Capital, Inc. Noninterest income 803 737 8.96%
Noninterest expense 2,791 2,583 8.05%
Earnings before taxes 1,106 1,412 -21.67%
Provision for income taxes 357 478 -25.31%
Net Income 749 934 -19.81%
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TRANSFER AGENT Three Months Months
Investor Relations Department OTHER FINANCIAL DATA Ended March 31, Percent
Registrar and Transfer Company 2007 2006 Change
10 Commerce Drive -----------------------------------------------------------------------------------------------
Cranford, New Jersey 07016-9982 Diluted earnings per share $0.26 $0.33 -21.21%
Tel: (800) 368-5948 Cash dividends per share 0.17 0.15 13.33%
www.rtco.com Return on average assets (annualized) 0.67% 0.85% -21.18%
Return on average equity (annualized) 6.75% 8.83% -23.56%
Net interest margin 3.23% 3.44% -6.10%
Net overhead expense as a percentage
of average assets (annualized) 2.49% 2.36% 5.51%
* Per share information provided gives effect to the 10% stock dividend declared on June 19,
2006.
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