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EXHIBIT 99.1
FIRST CAPITAL, INC. REPORTS THIRD QUARTER EARNINGS
Tuesday October 21, 8:00 am ET
CORYDON, Ind., Oct. 21, 2008 (GLOBE NEWSWIRE) -- First Capital, Inc. (the
"Company") (NasdaqCM:FCAP - News), the holding company for First Harrison Bank
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(the "Bank"), today reported net income of $803,000 or $0.29 per diluted share
for the quarter ended September 30, 2008, compared to $893,000 or $0.32 per
diluted share during the same period in 2007.
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 noninterest income.
Net interest income after provision for loan losses increased $83,000 for the
quarter ended September 30, 2008 as compared to the quarter ended September 30,
2007. Interest income decreased $383,000 when comparing the two periods as the
average tax-equivalent yield of interest-earning assets decreased from 6.66%
during the quarter ended September 30, 2007 to 6.36% for the same period in
2008. Interest expense decreased $950,000 as the average cost of
interest-bearing liabilities decreased from 3.82% to 2.81% when comparing the
same two periods. The provision for loan losses increased from $118,000 during
the quarter ended September 30, 2007 to $602,000 for the three months ended
September 30, 2008. This increase is due to increased specific reserves due to
deteriorating commercial real estate values and increased general reserves due
to deteriorating general economic conditions such as depreciating collateral
values, job losses and continued pressures on household budgets in the Bank's
market area.
Noninterest income increased $29,000 for the quarter ended September 30, 2008 as
compared to the quarter ended September 30, 2007. Service charges on deposit
accounts increased $27,000 when comparing the two periods.
Noninterest expenses increased $257,000 as compared to the quarter ended
September 30, 2007. Other operating expenses and compensation and benefits
increased $119,000 and $104,000, respectively, when comparing the quarters ended
September 30, 2008 and September 30, 2007. The increase in operating expenses
was primarily due to increases in the cost of FDIC insurance and in expenses
related to the maintenance and sale of foreclosed real estate properties. The
increase in FDIC insurance costs is due to the Bank exhausting its one-time FDIC
credit assessment on deposits in existence as of December 31, 1996. The increase
in compensation and benefits is primarily due to normal salary increases.
For the nine months ended September 30, 2008, the Company earned $2.6 million or
$0.92 per diluted share compared to $2.5 million or $0.88 for the same period in
2007.
Net interest income after provision for loan loss increased $242,000 during the
first nine months of 2008 compared to the same period in 2007. Interest income
decreased $773,000 when comparing the two periods, due to a decrease in the
average tax-equivalent yield on interest-earning assets from 6.57% during the
first nine months of 2007 to 6.33% in the same period of 2008. Interest expense
decreased $2.0 million as the average cost of interest-bearing liabilities
decreased from 3.77% in 2007 to 3.03% in 2008. The provision for loan losses
increased $962,000 from $378,000 for 2007 to $1.3 million for 2008 for the
reasons discussed above.
Noninterest income increased $108,000 to $2.7 million during the nine months
ended September 30, 2008 compared to the nine months ended September 30, 2007.
The increase was primarily due to a $128,000 increase in service charges on
deposits and an increase of $77,000 in earnings on bank-owned life insurance
when comparing the two periods. These increases were partially offset by a
decrease of $85,000 in mortgage brokerage fees. The increase in cash surrender
value of bank-owned life insurance was due to the purchase of $3.6 million of
bank-owned life insurance in May 2007.
Noninterest expenses increased $305,000 when comparing the nine months ended
September 30, 2008 to the same period in 2007, primarily due to increases in
compensation and benefits and professional fees of $141,000 and
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$128,000, respectively. The increase in compensation and benefits is primarily
due to normal salary increases and the increased cost of employee health
insurance. The increase in professional fees is primarily due to an increase in
legal fees relating to problem loan collections. These were partially offset by
a decrease in advertising expense of $121,000 when comparing the two periods due
to the elimination of television advertising.
Neither the Company nor the Bank has any investment in the equity securities of
Fannie Mae or Freddie Mac.
Total assets as of September 30, 2008 were $445.4 million compared to $453.2
million at December 31, 2007. The primary factor behind this decrease was a
decrease of $8.4 million in net loans receivable, partially offset by an
increase of $3.2 million in cash and cash equivalents. Retail repurchase
agreements and advances from the Federal Home Loan Bank decreased $8.1 million
and $6.9 million, respectively, while deposit accounts increased $6.5 million
from December 31, 2007 to September 30, 2008.
First Harrison Bank currently has twelve offices in the Indiana communities of
Corydon, Edwardsville, Greenville, Floyds Knobs, Hardinsburg, Palmyra, New
Albany, New Salisbury, Jeffersonville and Salem. The Bank has recently relocated
its Edwardsville office within that town. The Bank is also in the process of
obtaining all approvals for a new branch to be located in Lanesville, Indiana.
Construction is to begin on the new office in the last quarter of 2008 and it is
expected to open in the Spring of 2009. 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 http://www.firstharrison.com.
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First Harrison Financial Services, a division of the Bank, offers non-FDIC
insured investments to compliment 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.
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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 2008 2007 2008 2007
(Dollars in thousands, ---- ---- ---- ----
except per share data)
Total interest income $ 19,527 $ 20,300 $ 6,406 $ 6,789
Total interest expense 8,322 10,299 2,506 3,456
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Net interest income 11,205 10,001 3,900 3,333
Provision for loan
losses 1,340 378 602 118
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Net interest income
after provision for
loan losses 9,865 9,623 3,298 3,215
Total non-interest
income 2,729 2,621 928 899
Total non-interest
expense 8,852 8,547 3,069 2,812
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Income before income
taxes 3,742 3,697 1,157 1,302
Income tax expense 1,151 1,186 354 409
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Net income $ 2,591 $ 2,511 $ 803 $ 893
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Net income per common
share, basic $ 0.92 $ 0.89 $ 0.29 $ 0.32
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Weighted average
common shares
outstanding - basic 2,803,220 2,818,922 2,800,598 2,813,043
Net income per common
share, diluted $ 0.92 $ 0.88 $ 0.29 $ 0.32
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Weighted average
common shares
outstanding - diluted 2,817,404 2,842,157 2,813,895 2,833,734
OTHER FINANCIAL DATA
Cash dividends per
share $ 0.53 $ 0.51 $ 0.18 $ 0.17
Return on average
assets (annualized) 0.77% 0.75% 0.73% 0.81%
Return on average
equity (annualized) 7.42% 7.52% 6.90% 8.00%
Net interest margin 3.68% 3.29% 3.92% 3.33%
Net overhead expense
as a percentage of
average assets
(annualized) 2.61% 2.56% 2.78% 2.54%
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September 30, December 31,
BALANCE SHEET 2008 2007
INFORMATION ---- ----
Cash and cash
equivalents $ 18,211 $ 15,055
Investment securities 70,320 74,041
Gross loans 328,796 336,695
Allowance for loan
losses 2,755 2,232
Earning assets 405,435 417,358
Total assets 445,386 453,179
Deposits 334,672 328,151
FHLB debt 53,830 60,694
Repurchase agreements 7,485 15,562
Stockholders' equity 46,394 45,736
Non-performing assets:
Nonaccrual loans 3,838 4,879
Accruing loans past
due 90 days 1,176 795
Foreclosed real
estate 1,317 833
CONTACT:
First Capital, Inc.
Chris Frederick, Chief Financial Officer
812-734-3464