FIRST CAPITAL, INC. REPORTS SECOND QUARTER RESULTS
Corydon, Indiana--July 24, 2009. First Capital, Inc. (NASDAQ: FCAP - news), the
holding company for First Harrison Bank (the "Bank"), today reported net income
of $398,000 or $0.14 per diluted share for the six months ended June 30, 2009,
compared to $1.8 million or $0.63 per diluted share for the same period in 2008.
The decrease in earnings is primarily due to increases in the provision for loan
losses and in noninterest expense.
Net interest income after provision for loan losses decreased $1.6 million for
the six months ended June 30, 2009 as compared to the six months ended June 30,
2008. Interest income decreased $1.5 million when comparing the two periods as
the average tax-equivalent yield of interest-earning assets decreased from 6.31%
during the six months ended June 30, 2008 to 5.64% for the same period in 2009.
This yield reduction was caused by a general decline in market interest rates as
well as the reversal of previously accrued interest of $77,000 on two commercial
credits with balances totaling $4.5 million. Interest expense decreased $1.5
million as the average cost of interest-bearing liabilities decreased from 3.14%
to 2.34% when comparing the same two periods. The provision for loan losses
increased from $738,000 during the six months ended June 30, 2008 to $2.4
million for the six months ended June 30, 2009. This increase was primarily to
allocate specific reserves on the previously mentioned two commercial credits as
well as to adjust for weakened general economic conditions such as depreciating
collateral values, job losses and continued pressures on household budgets in
the Bank's market area.
Noninterest income decreased $101,000 for the six months ended June 30, 2009 as
compared to the same period in 2008. Service charges on deposit accounts
decreased $137,000 when comparing the two periods. This was partially offset by
an increase of $74,000 in gains on the sale of mortgage loans as the Bank
originated and sold $26.6 million of mortgage loans into the secondary market
during the six months ended June 30, 2009 compared to originations of $15.2
million during the same period in 2008.
Noninterest expenses increased $686,000 as compared to the six months ended June
30, 2008. Other operating expenses increased $499,000 when comparing the six
months ended June 30, 2009 and June 30, 2008. The increase in other operating
expenses was primarily due to a $445,000 increase in FDIC deposit insurance
premiums. This included the special assessment imposed on all banks by the FDIC
effective June 30, 2009.
For the quarter ended June 30, 2009, the Company recognized a net loss of
$405,000 or $0.15 per diluted share compared to net income of $889,000 or $0.32
for the same period in 2008.
Net interest income after provision for loan loss decreased $1.6 million during
the quarter ended June 30, 2009 compared to the same period in 2008. Interest
income decreased $795,000 when comparing the two periods, due to a decrease in
the average tax-equivalent yield on interest-earning assets from 6.25% during
the quarter ended June 30, 2008 to 5.51% in the same period of 2009 primarily
due to the items previously mentioned. Interest expense decreased $645,000 as
the average cost of interest-bearing liabilities decreased from 2.93% to 2.26%
when comparing the same two periods. The provision for loan losses increased
from $513,000 for the quarter ended June 30, 2008 to $2.0 million for the same
period in 2008.
Noninterest income decreased $29,000 for the quarter ended June 30, 2009 as
compared to the quarter ended June 30, 2008. The decrease was primarily due to a
$72,000 decrease in service charges on deposits partially offset by an increase
of $62,000 in the gain on the sale of mortgage loans.
Noninterest expenses increased $537,000 when comparing the three months ended
June 30, 2009 to the same period in 2008, primarily due to an increase in other
operating expenses of $403,000. FDIC deposit insurance premiums increased
$365,000 in the same quarter-to-quarter comparison.
Total assets as of June 30, 2009 were $449.3 million compared to $458.6 million
at December 31, 2008. The primary factors behind this decrease were decreases in
cash and cash equivalents and net loans receivable of $7.7 million and $5.6
million, respectively. Federal Home Loan Bank advances and deposits decreased
$4.8 million and $2.7 million, respectively during the same period. At June 30,
2009, the Bank was considered well-capitalized under applicable federal
regulatory capital guidelines.
First Harrison Bank recently added its thirteenth office with the opening of the
Lanesville, Indiana location. This is added to the twelve offices in the Indiana
communities of Corydon, Edwardsville, Greenville, Floyds Knobs, Hardinsburg,
Palmyra, New Albany, New Salisbury, Jeffersonville and Salem. 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 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.
FIRST CAPITAL, INC. AND SUBSIDIARY
Consolidated Financial Highlights (Unaudited)
Six Months Ended Three Months Ended
June 30, June 30,
OPERATING DATA 2009 2008 2009 2008
(Dollars in thousands, except per share data) ---- ---- ---- ----
Total interest income $ 11,615 $ 13,121 $ 5,672 $ 6,467
Total interest expense 4,278 5,816 2,054 2,699
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Net interest income 7,337 7,305 3,618 3,768
Provision for loan losses 2,384 738 1,959 513
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Net interest income after provision for loan losses 4,953 6,567 1,659 3,255
Total non-interest income 1,700 1,801 894 923
Total non-interest expense 6,469 5,783 3,438 2,901
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Income (loss) before income taxes 184 2,585 (885) 1,277
Income tax expense (benefit) (220) 797 (484) 388
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Net income (loss) $ 404 $ 1,788 $ (401) $ 889
Less net income attributable to the noncontrolling interest 6 - 4 -
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Net income (loss) attributable to First Capital, Inc. $ 398 $ 1,788 $ (405) $ 889
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Net income (loss) per share attributable to
First Capital, Inc. common shareholders:
Basic $ 0.14 $ 0.64 $ (0.15) $ 0.32
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Diluted $ 0.14 $ 0.63 $ (0.15) $ 0.32
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Weighted average common shares outstanding:
Basic 2,782,052 2,804,940 2,774,901 2,802,727
Diluted 2,794,385 2,820,170 2,789,018 2,816,620
OTHER FINANCIAL DATA
Cash dividends per share $ 0.36 $ 0.35 $ 0.18 $ 0.18
Return on average assets (annualized) 0.18% 0.78% -0.36% 0.78%
Return on average equity (annualized) 1.66% 7.67% -3.38% 7.59%
Net interest margin 3.60% 3.57% 3.56% 3.69%
Net overhead expense as a percentage
of average assets (annualized) 2.85% 2.54% 3.04% 2.55%
June 30, December 31,
BALANCE SHEET INFORMATION 2009 2008
(in thousands) ---- ----
Cash and cash equivalents $ 14,472 $ 22,149
Investment securities 83,290 82,819
Gross loans 321,128 325,047
Allowance for loan losses 4,345 2,662
Earning assets 411,976 417,938
Total assets 449,344 458,625
Deposits 353,189 355,891
FHLB debt 43,030 47,830
Repurchase agreements 3,822 4,552
Stockholders' equity, net of noncontrolling interest 46,600 47,522
Non-performing assets:
Nonaccrual loans 9,545 4,441
Accruing loans past due 90 days 937 1,092
Foreclosed real estate 900 881
Contact:
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Chris Frederick
Chief Financial Officer
812-734-3464