FIRST CAPITAL, INC. REPORTS SECOND QUARTER EARNINGS
Corydon, Indiana--July 24, 2007. First Capital, Inc. (NASDAQ: FCAP - news), the
holding company for First Harrison Bank (the "Bank"), today reported net income
of $869,000 or $0.31 per diluted share for the quarter ended June 30, 2007,
compared to $936,000 or $0.33 per diluted share during the same period in 2006.
The decrease in earnings is due to an increase in noninterest expense, partially
offset by increases in net interest income after the provision for loan losses
and in noninterest income.
Net interest income after provision for loan losses increased $43,000 for the
quarter ended June 30, 2007 as compared to the quarter ended June 30, 2006.
Interest income increased $253,000 when comparing the two periods as the average
tax-equivalent yield of interest-earning assets increased from 6.37% during the
quarter ended June 30, 2006 to 6.57% for the same period in 2007. Interest
expense increased $375,000 as the average cost of interest-bearing liabilities
increased from 3.33% to 3.75% when comparing the same two periods. The provision
for loan losses decreased from $200,000 during the quarter ended June 30, 2006
to $35,000 for the three months ended June 30, 2007.
Noninterest income increased $74,000 for the quarter ended June 30, 2007 as
compared to the quarter ended June 30, 2006. Gains on sales of mortgages and
service charges on deposit accounts increased $42,000 and $28,000, respectively,
when comparing the two periods. This was partially offset by a decrease of
$40,000 in commission income due to the Bank selling its property and casualty
insurance business in the fourth quarter of 2006.
Noninterest expenses increased $231,000 as compared to the quarter ended June
30, 2006. Other operating expenses increased $87,000 when comparing the quarters
ended June 30, 2007 and June 30, 2006 primarily due to expenses related to the
maintenance and sale of foreclosed real estate properties. Compensation and
benefits increased $50,000 when comparing the two periods, primarily due to
normal salary increases and incentive pay to those involved in the sale of
mortgage loans to the secondary market.
For the six months ended June 30, 2007, the Company earned $1.6 million or $0.57
per diluted share compared to $1.9 million or $0.66 for the same period in 2006.
Net interest income after provision for loan loss decreased $121,000 during the
first six months of 2007 compared to the same period in 2006. Interest income
increased $726,000 when comparing the two periods, due to an increase in the
average tax-equivalent yield on interest-earning assets from 6.30% during the
first six months of 2006 to 6.53% in the same period of 2007. The average
balance of interest-earning assets also increased, from $413.3 million in 2006
to $421.1 million in 2007. Interest expense increased $957,000 as the average
cost of interest-bearing liabilities increased from 3.25% in 2006 to 3.74% in
2007. The average balance of interest-bearing liabilities increased $3.5 million
when comparing the two periods. The provision for loan losses decreased $110,000
from $370,000 for 2006 to $260,000 for 2007.
Noninterest income increased $150,000 to $1.7 million during the six months
ended June 30, 2007 compared to the six months ended June 30, 2006. The increase
was primarily due to a $139,000 increase in gains on sales of mortgages when
comparing the two periods.
Noninterest expenses increased $449,000 when comparing the six months ended June
30, 2007 to the same period in 2006, primarily due to increases in compensation
and benefits and other operating expenses of $175,000 and $161,000,
respectively. The increase in compensation and benefits is primarily due to
normal increases in wages and health insurance costs. The increase in other
operating expenses is primarily due to expenses related to the maintenance and
sale of foreclosed real estate properties.
Total assets as of June 30, 2007 were $445.3 million compared to $457.1 million
at December 31, 2006. The primary factor behind this decrease was a decrease of
$13.4 million in cash and cash equivalents. Those funds were used to pay off the
higher-cost interest bearing deposits and retail repurchase agreements, which
decreased $8.2 million and $3.3 million, respectively.
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 also begun construction on its
new Salem, Indiana office which is expected to open in the fourth quarter of
2007. 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
division of the Bank, offers non-FDIC insured investments to complement the
Bank's offering of traditional banking products and services.
This release 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)
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
OPERATING DATA 2007 2006 2007 2006
(Dollars in thousands, except per share data) ---- ---- ---- ----
Total interest income $ 13,511 $ 12,785 $ 6,747 $ 6,494
Total interest expense 6,843 5,886 3,398 3,023
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Net interest income 6,668 6,899 3,349 3,471
Provision for loan losses 260 370 35 200
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Net interest income after provision for loan losses 6,408 6,529 3,314 3,271
Total non-interest income 1,685 1,535 882 808
Total non-interest expense 5,698 5,249 2,907 2,676
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Income before income taxes 2,395 2,815 1,289 1,403
Income tax expense 777 945 420 467
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Net income $ 1,618 $ 1,870 $ 869 $ 936
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Net income per common share, basic $ 0.57 $ 0.66 $ 0.31 $ 0.33
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Weighted average common shares outstanding - basic 2,821,926 2,821,929 2,820,396 2,822,982
Net income per common share, diluted $ 0.57 $ 0.66 $ 0.31 $ 0.33
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Weighted average common shares outstanding - diluted 2,846,264 2,849,075 2,844,236 2,850,015
OTHER FINANCIAL DATA
Cash dividends per share $ 0.34 $ 0.34 $ 0.17 $ 0.17
Return on average assets (annualized) 0.72% 0.85% 0.78% 0.85%
Return on average equity (annualized) 7.28% 8.82% 7.79% 8.80%
Net interest margin 3.28% 3.45% 3.32% 3.46%
Net overhead expense as a percentage
of average assets (annualized) 2.55% 2.39% 2.62% 2.42%
JUNE 30, DECEMBER 31,
BALANCE SHEET INFORMATION 2007 2006
---- ----
Cash and cash equivalents $ 11,111 $ 24,468
Investment securities 74,164 72,480
Gross loans 334,408 335,895
Allowance for loan losses 2,333 2,320
Earning assets 412,485 422,347
Total assets 445,346 457,105
Deposits 322,852 331,143
FHLB debt 59,124 59,461
Repurchase agreements 15,932 19,228
Stockholders' equity 44,250 44,089
Non-performing assets:
Nonaccrual loans 3,881 3,245
Foreclosed real estate 429 941
Contact:
- --------
Chris Frederick
Chief Financial Officer
812-734-3464