CORYDON, Ind., April 30, 2015 (GLOBE NEWSWIRE) -- First Capital, Inc. (Nasdaq:FCAP) (the "Company"), the holding company for First Harrison Bank (the "Bank"), today reported net income of $1.5 million or $0.53 per diluted share for the quarter ended March 31, 2015, compared to $1.3 million or $0.47 per diluted share for the quarter ended March 31, 2014. The increase in net income is primarily due to increases in net interest income after provision for loan losses and noninterest income partially offset by an increase in noninterest expenses.
Net interest income after provision for loan losses increased $74,000 for the quarter ended March 31, 2015 as compared to the same prior year period. Interest income decreased $6,000 when comparing the periods as the average tax-equivalent yield on interest-earning assets decreased from 4.44% for the three-month period ended March 31, 2014 to 4.31% for the same period in 2015. This was partially offset by an increase in the average balance of interest-earning assets from $420.3 million to $432.0 million when comparing the same two periods. The increase in the average balance was primarily due to increases in loans receivable and federal funds sold partially offset by a decrease in investment securities. Interest expense decreased $55,000 when comparing the periods as the average cost of interest-bearing liabilities decreased from 0.36% to 0.29%. As a result, the interest-rate spread decreased from 4.08% for the quarter ended March 31, 2014 to 4.02% for the same period in 2015. The provision for loan losses was $25,000 for the quarter ended March 31, 2014. However, no provision for loan losses was recorded for the quarter ended March 31, 2015 based on management's analysis of the allowance for loan losses and a general improvement in the Bank's loan portfolio evidenced by a decrease in nonperforming loans from $3.2 million at December 31, 2014 to $1.7 million at March 31, 2015. The Bank recognized net charge-offs of $1.2 million for the quarter ended March 31, 2015 compared to a net recovery of $65,000 during the same period in 2014. The net charge-offs recognized in 2015 primarily related to a $1.2 million charge-off on a commercial loan that had been fully reserved for in prior periods.
Noninterest income increased $385,000 for the three months ended March 31, 2015 as compared to the same period in 2014. Gains on the sale of loans and other income increased $201,000 and $108,000, respectively, when comparing the two periods. The increase in the gains on the sale of loans is primarily due to an increase in the Bank's sales activity of commercial Small Business Administration loans during 2015. The increase in other income was primarily due to a gain on life insurance of $110,000 recognized during the quarter ended March 31, 2015.
Noninterest expense increased $380,000 for the three months ended March 31, 2015 as compared to the three months ended March 31, 2014, due primarily to increases in compensation and benefits expense and other operating expenses of $175,000 and $95,000, respectively. The increase in compensation and benefits expense was primarily due to the addition of staff in the commercial and residential lending areas as well as normal increases in salaries and employee benefits. Other operating expenses increased primarily due to increases in costs associated with the maintenance and disposal of other real estate owned and community donations and sponsorships.
Total assets increased $168,000 to $472.9 million at March 31, 2015. Cash and cash equivalents increased $5.3 million which was partially offset by decreases of $3.6 million and $1.4 million in net loans receivable and loans held for sale, respectively. Deposits decreased $1.4 million to $411.2 million at March 31, 2015 due to normal balance fluctuations. Nonperforming assets (consisting of nonaccrual loans, accruing loans 90 days or more past due, troubled debt restructurings on accrual status, and foreclosed real estate) decreased from $5.2 million at December 31, 2014 to $4.2 million at March 31, 2015.
At March 31, 2015, the Bank was considered well-capitalized under applicable federal regulatory capital guidelines.
First Harrison Bank currently has twelve offices in the Indiana communities of Corydon, Edwardsville, Greenville, Floyds Knobs, Palmyra, New Albany, New Salisbury, Jeffersonville, Salem and Lanesville. 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 Bank, through its business arrangement with Investment Centers of America, member SIPC, continues to offer non FDIC insured investments to complement the Bank's offering of traditional banking products and services. You can also follow us now on Facebook.
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) | ||
|
Three Months Ended March 31, |
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| OPERATING DATA | 2015 | 2014 |
| (Dollars in thousands, except per share data) | ||
| Total interest income | $ 4,496 | $ 4,502 |
| Total interest expense | 243 | 298 |
| Net interest income | 4,253 | 4,204 |
| Provision for loan losses | -- | 25 |
| Net interest income after provision for loan losses | 4,253 | 4,179 |
| Total non-interest income | 1,364 | 979 |
| Total non-interest expense | 3,679 | 3,299 |
| Income before income taxes | 1,938 | 1,859 |
| Income tax expense | 469 | 559 |
| Net income | 1,469 | 1,300 |
| Less net income attributable to the noncontrolling interest | 3 | 3 |
| Net income attributable to First Capital, Inc. | $ 1,466 | $ 1,297 |
| Net income per share attributable to First Capital, Inc. common shareholders: | ||
| Basic | $ 0.53 | $ 0.47 |
| Diluted | $ 0.53 | $ 0.47 |
| Weighted average common shares outstanding: | ||
| Basic | 2,740,502 | 2,784,088 |
| Diluted | 2,740,502 | 2,784,088 |
| OTHER FINANCIAL DATA | ||
| Cash dividends per share | $ 0.21 | $ 0.21 |
| Return on average assets (annualized) | 1.26% | 1.16% |
| Return on average equity (annualized) | 10.15% | 9.60% |
| Net interest margin | 4.09% | 4.15% |
| Interest rate spread | 4.02% | 4.08% |
| Net overhead expense as a percentage of average assets (annualized) | 3.17% | 2.94% |
| BALANCE SHEET INFORMATION |
March 31, 2015 |
December 31, 2014 |
| (Dollars in thousands) | ||
| Cash and cash equivalents | $ 38,570 | $ 33,243 |
| Interest-bearing time deposits | 9,015 | 8,270 |
| Investment securities | 99,447 | 100,232 |
| Gross loans | 300,673 | 305,449 |
| Allowance for loan losses | 3,634 | 4,846 |
| Earning assets | 436,252 | 432,544 |
| Total assets | 472,929 | 472,761 |
| Deposits | 411,230 | 412,636 |
| Stockholders' equity, net of noncontrolling interest | 58,295 | 57,121 |
| Non-performing assets: | ||
| Nonaccrual loans | 1,709 | 3,139 |
| Accruing loans past due 90 days | 32 | 85 |
| Foreclosed real estate | 541 | 78 |
| Troubled debt restructurings on accrual status | 1,747 | 1,901 |
| Regulatory capital ratios (Bank only): | ||
| Tier I - adjusted total assets | 10.95% | 10.59% |
| Tier I - risk based | 14.89% | 14.55% |
| Total risk-based | 15.97% | 15.80% |