FIRST CAPITAL INC [FCAP] Filings

10-Q 1 fcap20230630_10q.htm FORM 10-Q fcap20230630_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from____________________ to____________________________________________

Commission File No. 0-25023

First Capital, Inc.

(Exact name of registrant as specified in its charter)

Indiana	35-2056949
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

220 Federal Drive NW, Corydon, Indiana 47112 1-812-738-2198

(Address of principal executive offices, zip code, telephone number)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicat

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exhange on which registered
Common stock, par value $0.01 per share	FCAP	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 3,350,660 shares of common stock were outstanding as of July 31, 2023.

FIRST CAPITAL, INC.

INDEX

Part I	Financial Information	Page

	Item 1. Consolidated Financial Statements

	Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022 (unaudited)	3

	Consolidated Statements of Income for the three and six months ended June 30, 2023 and 2022 (unaudited)	4

	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2023 and 2022 (unaudited)	5

	Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022 (unaudited)	6

	Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022 (unaudited)	7

	Notes to Consolidated Financial Statements (unaudited)	8-48

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	49-54

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	55-58

	Item 4. Controls and Procedures	58

Part II	Other Information

	Item 1. Legal Proceedings	59

	Item 1A. Risk Factors	59

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	59

	Item 3. Defaults Upon Senior Securities	59

	Item 4. Mine Safety Disclosures	59

	Item 5. Other Information	59

	Item 6. Exhibits	60

Signatures		61

-2-

PART I - FINANCIAL INFORMATION
FIRST CAPITAL, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

	June 30,			December 31,
	2023			2022
	(In thousands)
ASSETS
Cash and due from banks	$	22,609		$	25,231
Interest bearing deposits with banks		1,358			3,820
Federal funds sold		23,504			37,247
Total cash and cash equivalents		47,471			66,298

Interest-bearing time deposits		4,654			3,677
Securities available for sale, at fair value (amortized cost $498,156 and $507,466, respectively)		455,742			460,819
Securities held to maturity, at amortized cost (fair value $4,748 and $5,311, respectively)		7,000			7,000
Loans held for sale		996			793
Loans, net of allowance for credit losses of $7,515 ($6,772 in 2022)		582,944			557,958
Federal Home Loan Bank and other stock, at cost		1,836			1,836
Foreclosed real estate		63			-
Premises and equipment		14,524			14,668
Accrued interest receivable		4,336			4,285
Cash value of life insurance		9,010			8,899
Goodwill		6,472			6,472
Core deposit intangible		306			379
Other assets		19,306			18,316

Total Assets	$	1,154,660		$	1,151,400

LIABILITIES
Deposits:
Noninterest-bearing	$	233,880		$	254,842
Interest-bearing		808,561			805,554
Total deposits		1,042,441			1,060,396

Borrowed funds		13,000			-
Accrued interest payable		705			123
Accrued expenses and other liabilities		6,163			5,611
Total liabilities		1,062,309			1,066,130

EQUITY
Preferred stock of $.01 par value per share
Authorized 1,000,000 shares; none issued		-			-
Common stock of $.01 par value per share Authorized 7,500,000 shares; issued 3,803,833 shares (3,804,683 in 2022); outstanding 3,351,412 (3,371,362 in 2022)		38			38
Additional paid-in capital		41,588			41,636
Retained earnings-substantially restricted		92,666			88,465
Unearned stock compensation		(356	)		(549	)
Accumulated other comprehensive loss		(32,497	)		(35,741	)
Less treasury stock, at cost - 452,421 shares (433,321 in 2022)		(9,193	)		(8,691	)
Total First Capital, Inc. stockholders' equity		92,246			85,158

Noncontrolling interest in subsidiary		105			112
Total equity		92,351			85,270

Total Liabilities and Equity	$	1,154,660		$	1,151,400

See accompanying notes to consolidated financial statements.

-3-

PART I - FINANCIAL INFORMATION
FIRST CAPITAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
INTEREST INCOME	(In thousands, except per share data)
Loans, including fees	$	8,071		$	5,859		$	15,709		$	11,352
Securities:
Taxable		1,347			1,061			2,648			1,948
Tax-exempt		869			780			1,734			1,521
Dividends		11			4			22			9
Federal funds sold and other interest income		302			194			674			273
Total interest income		10,600			7,898			20,787			15,103
INTEREST EXPENSE
Deposits		2,153			267			3,149			520
Borrowed funds		135			-			135			-
Total interest expense		2,288			267			3,284			520
Net interest income		8,312			7,631			17,503			14,583
Provision for credit losses		350			200			543			375
Net interest income after provision for credit losses		7,962			7,431			16,960			14,208
NONINTEREST INCOME
Service charges on deposit accounts		578			543			1,140			1,052
ATM and debit card fees		1,141			1,066			2,228			2,073
Commission and fee income		19			118			31			240
Loss on sale of securities available for sale		(14	)		-			(14	)		-
Unrealized gain (loss) on equity securities		(92	)		(99	)		45			(36	)
Gain on sale of loans		104			215			190			550
Increase in cash surrender value of life insurance		66			63			111			113
Other income		61			59			123			120
Total noninterest income		1,863			1,965			3,854			4,112
NONINTEREST EXPENSE
Compensation and benefits		3,802			3,651			7,591			7,145
Occupancy and equipment		446			456			893			923
Data processing		1,081			993			2,112			1,862
Professional fees		165			178			351			468
Advertising		94			79			177			141
Other expenses		1,078			878			1,943			1,690
Total noninterest expense		6,666			6,235			13,067			12,229
Income before income taxes		3,159			3,161			7,747			6,091
Income tax expense		429			447			1,198			847
Net Income		2,730			2,714			6,549			5,244
Less: net income attributable to noncontrolling interest in subsidiary		4			4			7			7
Net Income Attributable to First Capital, Inc.	$	2,726		$	2,710		$	6,542		$	5,237

Earnings per common share attributable to First Capital, Inc.:
Basic	$	0.82		$	0.81		$	1.95		$	1.56
Diluted	$	0.82		$	0.81		$	1.95		$	1.56

Dividends per share	$	0.27		$	0.26		$	0.54		$	0.52

See accompanying notes to consolidated financial statements.

-4-

PART I - FINANCIAL INFORMATION
FIRST CAPITAL, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
	(In thousands)

Net Income	$	2,730		$	2,714		$	6,549		$	5,244

OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized gains (losses) on securities available for sale:
Unrealized holding gains (losses) arising during the period		(4,597	)		(16,626	)		4,216			(41,540	)
Income tax (expense) benefit		1,085			3,799			(983	)		9,542
Net of tax amount		(3,512	)		(12,827	)		3,233			(31,998	)

Less: reclassification adjustment for realized losses included in net income		14			-			14			-
Income tax benefit		(3	)		-			(3	)		-
Net of tax amount		11			-			11			-

Other Comprehensive Income (Loss), net of tax		(3,501	)		(12,827	)		3,244			(31,998	)

Comprehensive Income (Loss)		(771	)		(10,113	)		9,793			(26,754	)
Less: comprehensive income attributable to the noncontrolling interest in subsidiary		4			4			7			7

Comprehensive Income (Loss) Attributable to First Capital, Inc.	$	(775	)	$	(10,117	)	$	9,786		$	(26,761	)

See accompanying notes to consolidated financial statements.

-5-

PART I - FINANCIAL INFORMATION

FIRST CAPITAL, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)

									Accumulated
			*Additional*						*Other*			*Unearned*
	*Common*		*Paid-in*			*Retained*			*Comprehensive*			*Stock*			*Treasury*			*Noncontrolling*
(In thousands)	*Stock*		*Capital*			*Earnings*			*Loss*			*Compensation*			*Stock*			*Interest*			*Total*

Balances at April 1, 2023	$	38	$	41,636		$	90,845		$	(28,996	)	$	(465	)	$	(9,018	)	$	115		$	94,155
Net income		-		-			2,726			-			-			-			4			2,730
Other comprehensive loss		-		-			-			(3,501	)		-			-			-			(3,501	)
Cash dividends		-		-			(905	)		-			-			-			(14	)		(919	)
Stock compensation expense		-		-			-			-			61			-			-			61
Purchase of treasury shares		-		-			-			-			-			(175	)		-			(175	)
Restricted stock grant forfeitures		-		(48	)		-			-			48			-			-			-

Balances at June 30, 2023	$	38	$	41,588		$	92,666		$	(32,497	)	$	(356	)	$	(9,193	)	$	105		$	92,351

Balances at April 1, 2022	$	38	$	41,684		$	81,720		$	(17,437	)	$	(935	)	$	(8,665	)	$	115		$	96,520
Net income		-		-			2,710			-			-			-			4			2,714
Other comprehensive loss		-		-			-			(12,827	)		-			-			-			(12,827	)
Cash dividends		-		-			(877	)		-			-			-			(14	)		(891	)
Stock compensation expense		-		-			-			-			98			-			-			98

Balances at June 30, 2022	$	38	$	41,684		$	83,553		$	(30,264	)	$	(837	)	$	(8,665	)	$	105		$	85,614

Balances at December 31, 2022	$	38	$	41,636		$	88,465		$	(35,741	)	$	(549	)	$	(8,691	)	$	112		$	85,270
Cumulative Effect of Change in Accounting Principles (See Note 2 - Recent Accounting Pronouncements)		-		-			(529	)		-			-			-			-			(529	)
Balances at January 1, 2023 (as adjusted)		38		41,636			87,936			(35,741	)		(549	)		(8,691	)		112			84,741

Net income		-		-			6,542			-			-			-			7			6,549
Other comprehensive income		-		-			-			3,244			-			-			-			3,244
Cash dividends		-		-			(1,812	)		-			-			-			(14	)		(1,826	)
Stock compensation expense		-		-			-			-			145			-			-			145
Purchase of treasury shares		-		-			-			-			-			(502	)		-			(502	)
Restricted stock grant forfeitures		-		(48	)		-			-			48			-			-			-

Balances at June 30, 2023	$	38	$	41,588		$	92,666		$	(32,497	)	$	(356	)	$	(9,193	)	$	105		$	92,351

Balances at January 1, 2022	$	38	$	41,684		$	80,070		$	1,734		$	(1,033	)	$	(8,665	)	$	112		$	113,940
Net income		-		-			5,237			-			-			-			7			5,244
Other comprehensive loss		-		-			-			(31,998	)		-			-			-			(31,998	)
Cash dividends		-		-			(1,754	)		-			-			-			(14	)		(1,768	)
Stock compensation expense		-		-			-			-			196			-			-			196

Balances at June 30, 2022	$	38	$	41,684		$	83,553		$	(30,264	)	$	(837	)	$	(8,665	)	$	105		$	85,614

See accompanying notes to consolidated financial statements.

-6-

PART I - FINANCIAL INFORMATION
FIRST CAPITAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Six Months Ended
	June 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES	(In thousands)
Net income	$	6,549		$	5,244
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Amortization of premiums and accretion of discounts on securities, net		830			1,102
Depreciation and amortization expense		509			543
Deferred income taxes		(168	)		(200	)
Stock compensation expense		145			196
Increase in cash value of life insurance		(111	)		(113	)
Loss on sale of securities		14			-
Provision for credit losses		543			375
Proceeds from sales of loans		12,871			29,574
Loans originated for sale		(12,884	)		(27,217	)
Gain on sale of loans		(190	)		(550	)
Amortization of tax credit investment		170			177
Unrealized (gain) loss on equity securities		(45	)		36
Net realized and unrealized gain on foreclosed real estate		-			(15	)
Increase in accrued interest receivable		(51	)		(378	)
Increase (decrease) in accrued interest payable		582			(18	)
Net change in other assets/liabilities		(1,101	)		(1,655	)
Net Cash Provided By Operating Activities		7,663			7,101

CASH FLOWS FROM INVESTING ACTIVITIES
Net (increase) decrease in interest-bearing time deposits

FIRST CAPITAL INC [FCAP] Filings
10-Q	[2023-08-11]
10-Q	[2023-05-15]
10-K	[2023-03-22]
10-Q	[2022-11-14]
10-Q	[2022-08-15]
10-Q	[2022-05-16]
10-K	[2022-03-14]
10-Q	[2021-11-12]
10-Q	[2021-08-13]
10-Q	[2021-05-14]
10-K	[2021-03-15]
10-Q	[2020-11-09]
10-Q	[2020-08-10]
10-Q	[2020-05-08]
10-K	[2020-03-16]
10-Q	[2019-11-12]
10-Q	[2019-08-09]
10-Q	[2019-05-09]
10-K	[2019-03-13]
10-Q	[2018-11-09]
10-Q	[2018-08-08]
10-Q	[2018-05-09]
10-K	[2018-03-12]
10-Q	[2017-11-09]
10-Q	[2017-08-08]
10-Q	[2017-05-09]
10-K	[2017-03-14]
10-Q	[2016-11-14]
10-Q	[2016-08-12]
10-Q	[2016-05-13]
10-K	[2016-03-29]
10-Q	[2015-11-13]
10-Q	[2015-08-13]
10-Q	[2015-05-13]
10-K	[2015-03-27]
10-Q	[2014-11-12]
10-Q	[2014-08-13]
10-Q	[2014-05-13]
10-K	[2014-03-27]
10-Q	[2013-11-13]
10-Q	[2013-08-13]
10-Q	[2013-05-13]
10-K	[2013-03-27]
10-Q	[2012-11-13]
10-Q	[2012-08-13]
10-Q	[2012-05-10]
10-K	[2012-03-22]