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[Letterhead of First Capital, Inc.]
Third Quarter Report
Nine Months Ended September 30, 2009
Dear Shareholders:
Our net income for the three months ended September 30, 2009 was $10,000
compared to $803,000 for the three months ended September 30, 2008. Earnings
have been negatively impacted by increases in the provision for loan losses and
noninterest expenses during 2009.
Provision for loan losses increased from $602,000 for the three months
ended September 30, 2008 to $980,000 for the same period in 2009. The increase
is primarily related to two commercial credit relationships. We believe we will
continue to see challenging economic times ahead for the near term. We continue
to see declining collateral values on foreclosed properties and continued
pressure on household budgets.
Noninterest expense increased $514,000 when comparing the two periods.
This increase was primarily due to data processing expenses of $444,000 related
to ATM transaction fees. We are disputing a substantial portion of these fees
and are seeking a possible partial refund of the disputed amount.
2009 has been a challenging year for the banking industry. We have seen
TARP money for other banks come and go, some banks fall into the "too big to
fail" group, and continued pressure on operations from regulatory changes and
increased FDIC insurance premiums.
Management and the Board of Directors continue to manage through these
challenging times. We are carefully looking at all expenses, asset quality, and
safe and sound revenue opportunities. As we prepare to move into 2010, we want
to thank you for your continued support of First Harrison Bank. We know that
many of our shareholders are bank customers and use our services and refer their
friends and family to the bank.
Best wishes for a happy new year.
Sincerely,
/s/ William Harrod
William Harrod
President and CEO
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THIRD QUARTER REPORT
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First Capital, Inc. FINANCIAL HIGHLIGHTS (UNAUDITED)
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CORPORATE ADDRESS BALANCE SHEET HIGHLIGHTS As of September 30, Percent
First Capital, Inc. (In thousands except per share and per 2009 2008 Change
220 Federal Drive, NW share information)
Corydon, Indiana 47112 ------------------------------------------------------------------------------------
Total loans (excluding loans held for sale $323,255 $328,796 -1.69%
Allowance for loan losses 4,172 2,755 51.43%
COMMON SHARES Allowance for loan losses as 1.29% 0.84% 54.03%
The common shares of the Company are a percentage of total loans
listed on The Nasdaq Stock Market (R). (excluding loans held for sale)
The trading symbol is FCAP. In newspaper Total assets $456,626 $445,386 2.52%
listings, Company shares are frequently
listed as First Capital, Inc.
Total deposits 368,628 334,672 10.15%
Other borrowings 38,602 61,315 -37.04%
TRANSFER AGENT Total equity attributable to
Investor Relations Department First Capital, Inc. 46,624 46,394 0.50%
Registrar and Transfer Company Book value per share 16.91 16.57 2.02%
10 Commerce Drive
Cranford, New Jersey 07016-9982
Tel: (800)368-5948
www.rtco.com
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Nine
Months
Three Months Nine Months Percent
MARKET MAKERS INCOME SUMMARY STATEMENT Ended September 30, Ended September 30, Change
Sweeney Cartwright (In thousands) 2009 2008 2009 2008
Keefe, Bruyette & Woods, Inc. -------------------------------------------------------------------------------------
Net interest income $3,723 $3,900 $11,060 $11,205 -1.29%
Provision for loan losses 980 602 3,364 1,340 151.04%
Noninterest income 862 928 2,562 2,729 -6.12%
Noninterest expense 3,923 3,069 10,392 8,852 17.40%
Income (loss) before taxes (318) 1,157 (134) 3,742 -103.58%
Income tax expense (benefit) (331) 354 (551) 1,151 -147.87%
Less net income attributable 3 - 9 -
to the noncontrolling interest
in subsidiary
Net income attributable to 10 803 408 2,591 -84.25%
First Capital, Inc.
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Nine
Months
Three Months Nine Months Percent
OTHER FINANCIAL DATA Ended September 30, Ended September 30, Change
(In thousands) 2009 2008 2009 2008
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Diluted earnings per share $ - $ 0.29 $ 0.15 $ 0.92 -83.70%
Cash dividends per share 0.18 0.18 0.54 0.53 1.89%
Return on average assets 0.01% 0.73% 0.12% 0.77% -84.42%
(annualized)
Return on average equity 0.09% 6.90% 1.15% 7.42% -84.50%
(annualized)
Net interest margin 3.66% 3.92% 3.62% 3.68% -1.63%
Net overhead expense as a 3.45% 2.78% 3.05% 2.61% 16.86%
percentage of average assets
(annualized)
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