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EXHIBIT 99.1
FIRST CAPITAL, INC. REPORTS THIRD QUARTER EARNINGS INCREASE
Corydon, Indiana--November 2, 2007. First Capital, Inc. (the "Company") (NASDAQ:
FCAP - news), the holding company for First Harrison Bank (the "Bank"), today
reported net income of $893,000 or $0.32 per diluted share for the quarter ended
September 30, 2007, compared to $852,000 or $0.30 per diluted share during the
same period in 2006.
The increase in earnings is due to increases in net interest income after the
provision for loan losses and in noninterest income, partially offset by an
increase in noninterest expense.
Net interest income after provision for loan losses increased $146,000 for the
quarter ended September 30, 2007 as compared to the quarter ended September 30,
2006. Interest income increased $154,000 when comparing the two periods as the
average tax-equivalent yield of interest-earning assets increased from 6.44%
during the quarter ended September 30, 2006 to 6.66% for the same period in
2007. Interest expense increased $105,000 as the average cost of
interest-bearing liabilities increased from 3.65% to 3.82% when comparing the
same two periods. The provision for loan losses decreased from $215,000 during
the quarter ended September 30, 2006 to $118,000 for the three months ended
September 30, 2007.
Noninterest income increased $69,000 for the quarter ended September 30, 2007 as
compared to the quarter ended September 30, 2006. Service charges on deposit
accounts increased $51,000 and cash surrender value of life insurance increased
$45,000 when comparing the two periods. This was partially offset by a decrease
of $30,000 in commission income due to the Bank selling its property and
casualty insurance business in the fourth quarter of 2006.
Noninterest expenses increased $167,000 as compared to the quarter ended
September 30, 2006. Compensation and benefits increased $65,000 for the quarter
ended September 30, 2007 compared to the quarter ended September 30, 2006 due to
normal salary increases. Other operating expenses increased $43,000 when
comparing the quarters ended September 30, 2007 and September 30, 2006 primarily
due to expenses related to the maintenance and sale of foreclosed real estate
properties. Occupancy and equipment expenses increased $26,000 when comparing
the two periods, primarily due to depreciation and maintenance agreements on a
new telephone system installed in the first quarter of 2007.
For the nine months ended September 30, 2007, the Company earned $2.5 million or
$0.88 per diluted share compared to $2.7 million or $0.96 per diluted share for
the same period in 2006.
Net interest income after provision for loan loss increased $25,000 during the
first nine months of 2007 compared to the same period in 2006. Interest income
increased $880,000 when comparing the two periods, due to an increase in the
average tax-equivalent yield on interest-earning assets from 6.34% during the
first nine months of 2006 to 6.57% in the same period of 2007. The average
balance of interest-earning assets also increased, from $415.5 million in 2006
to $419.2 million in 2007. Interest expense increased $1.1 million as the
average cost of interest-bearing liabilities increased from 3.39% in 2006 to
3.77% in 2007. The provision for loan losses decreased $207,000 from $585,000
for 2006 to $378,000 for 2007.
Noninterest income increased $226,000 to $2.6 million during the nine months
ended September 30, 2007 compared to the nine months ended September 30, 2006.
The increase was primarily due to increases in gains on sales of mortgages and
service charges on deposit accounts of $129,000 and $101,000, respectively, when
comparing the two periods. Cash surrender value of life insurance also increased
$63,000 for 2007 compared to 2006 due to the Company's investment of $3.6
million in such contracts in the second quarter of 2007. These increases were
partially offset by a decrease of $108,000 in commission income due to the sale
of the Bank's property and casualty insurance business in the fourth quarter of
2006.
Noninterest expenses increased $623,000 when comparing the nine months ended
September 30, 2007 to the same period in 2006, primarily due to increases in
compensation and benefits and other operating expenses of $258,000 and $191,000,
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.
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Total assets as of September 30, 2007 were $446.8 million compared to $457.1
million at December 31, 2006. The primary factor behind this decrease was a
decrease of $12.2 million in cash and cash equivalents. Those funds were used to
pay off the higher-cost retail repurchase agreements, which decreased $10.7
million.
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 is also near completion on its new
Salem, Indiana office which is expected to open in November 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.
Contact:
Chris Frederick
Chief Financial Officer
812-738-2198 ext. 234
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FIRST CAPITAL, INC. AND SUBSIDIARY
Consolidated Financial Highlights (Unaudited)
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
OPERATING DATA 2007 2006 2007 2006
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(Dollars in thousands, except per share data)
Total interest income $ 20,300 $ 19,420 $ 6,789 $ 6,635
Total interest expense 10,299 9,237 3,456 3,351
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Net interest income 10,001 10,183 3,333 3,284
Provision for loan losses 378 585 118 215
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Net interest income after provision for loan losses 9,623 9,598 3,215 3,069
Total non-interest income 2,621 2,395 899 830
Total non-interest expense 8,547 7,924 2,812 2,645
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Income before income taxes 3,697 4,069 1,302 1,254
Income tax expense 1,186 1,347 409 402
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Net income $ 2,511 $ 2,722 $ 893 $ 852
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Net income per common share, basic $ 0.89 $ 0.96 $ 0.32 $ 0.30
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Weighted average common shares outstanding - basic 2,818,922 2,823,034 2,813,043 2,825,249
Net income per common share, diluted $ 0.88 $ 0.96 $ 0.32 $ 0.30
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Weighted average common shares outstanding - diluted 2,842,157 2,847,584 2,833,734 2,850,453
OTHER FINANCIAL DATA
Cash dividends per share $ 0.51 $ 0.51 $ 0.17 $ 0.17
Return on average assets (annualized) 0.75% 0.82% 0.81% 0.76%
Return on average equity (annualized) 7.52% 8.52% 8.00% 7.92%
Net interest margin 3.29% 3.38% 3.33% 3.24%
Net overhead expense as a percentage
of average assets (annualized) 2.56% 2.39% 2.54% 2.38%
SEPTEMBER 30, DECEMBER 31,
BALANCE SHEET INFORMATION 2007 2006
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(In thousands)
Cash and cash equivalents $ 12,235 $ 24,468
Investment securities 73,321 72,480
Gross loans 334,930 335,895
Allowance for loan losses 2,276 2,320
Earning assets 410,046 422,347
Total assets 446,789 457,105
Deposits 324,457 331,143
FHLB debt 65,494 59,461
Repurchase agreements 8,566 19,228
Stockholders' equity 45,118 44,089
Non-performing assets:
Nonaccrual loans 5,289 3,245
Foreclosed real estate 809 941