8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 22, 2011

FIRST CAPITAL, INC.

(Exact name of registrant as specified in its charter)

Indiana	0-25023	35-2056949
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

220 Federal Drive N.W., Corydon, Indiana 47112

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (812) 738-2198

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02                      Results of Operations and Financial Condition.

On July 22, 2011, First Capital, Inc., the holding company for First Harrison Bank, announced its financial results for the quarter ended June 30, 2011.  The press release announcing financial results for the quarter ended June 30, 2011 is included as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01                      Financial Statements and Exhibits.

(a) Financial Statements of Busines Acquired:  Not applicable

(b) Pro Forma Financial Information:  Not applicable

(c) Shell Company Transactions: Not applicable

(d) Exhibits

Number Description

99.1 Press Release Dated July 22, 2011

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FIRST CAPITAL, INC.
Date:  July 28, 2011	By:	/s/ M. Chris Frederick
		M. Chris Frederick
		Senior Vice President and Chief Financial Officer

EX-99.1

EXHIBIT 99.1

FIRST CAPITAL, INC. REPORTS QUARTERLY EARNINGS

Corydon, Indiana—July 22, 2011.  First Capital, Inc. (NASDAQ:  FCAP - news), the holding company for First Harrison Bank (the “Bank”), today reported net income of $941,000 or $0.34 per diluted share for the quarter ended June 30, 2011, compared to $988,000 or $0.35 per diluted share for the same period in 2010.

The decrease in earnings is primarily due to a decrease in noninterest income partially offset by a decrease in noninterest expense.

Net interest income after provision for loan losses decreased $11,000 for the quarter ended June 30, 2011 as compared to the quarter ended June 30, 2010. Interest income decreased $433,000 when comparing the two periods as the average tax-equivalent yield of interest-earning assets decreased from 5.37% during the quarter ended June 30, 2010 to 5.05% for the same period in 2011 and the average balance of interest-earning assets decreased from $425.8 million in 2010 to $419.3 million in 2011.  Interest expense decreased $427,000 as the average cost of interest-bearing liabilities decreased from 1.53% to 1.13% when comparing the same two periods while the average balance of interest-bearing liabilities decreased from $374.7 million in 2010 to $354.8 million in 2011, primarily due to decreases in the average balance of time accounts and Federal Home Loan Bank advances.  As a result, the interest-rate spread increased from 3.84% for the quarter ended June 30, 2010 to 3.92% for the same period in 2011.  The provision for loan losses increased from $420,000 for the quarter ended June 30, 2010 to $425,000 for the quarter ended June 30, 2011.  The Bank continued to provide reserves during the quarter to offset current period charge-offs and to provide for inherent loss exposure due to 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 $48,000 for the three months ended June 30, 2011 as compared to the same period in 2010.  Gains on the sales of mortgage loans decreased $62,000 when comparing the two periods and the Bank recognized a loss of $19,000 on the sale of available for sale securities during the quarter ended June 30, 2011.

Noninterest expenses decreased $24,000 for the three months ended June 30, 2011 as compared to the three months ended June 30, 2010.  Other operating expenses decreased $149,000 for the three months ended June 30, 2011 as compared to the same period in 2010.  This was partially offset by an increase in compensation and benefits of $137,000 when comparing the same two periods.  The decrease in other operating expenses was primarily due to reductions in the costs associated with the maintenance and sale of foreclosed properties and a decrease in FDIC deposit insurance premiums.  The increase in compensation and benefits is primarily due to normal salary increases and an increase in the cost of health insurance.

For the six months ended June 30, 2011, the Company reported net income of $1.8 million or $0.66 per diluted share compared to net income of $2.0 million or $0.71 per diluted share for the same period in 2010.   During the six months ended June 20, 2010, the Company received a pre-tax refund of disputed ATM charges of $278,000 which were paid in 2009.  If this refund, net of tax, is excluded from earnings for the six months ended June 30, 2010, net income for the period would have been $1.8 million ($0.65 per share diluted).

Net interest income after provision for loan loss increased $26,000 for the six months ended June 30, 2011 compared to the same period in 2010.  Interest income decreased $813,000 when comparing the two periods, due to a decrease in the average tax-equivalent yield on interest-earning assets from 5.31% for 2010 to 5.08% for 2011.  Interest expense decreased $884,000 as the average cost of interest-bearing liabilities decreased from 1.57% to 1.17% when comparing the same two periods.  The provision for loan losses increased from $880,000 for the six months ended June 30, 2010 to $925,000 for the same period in 2011.

Noninterest income increased $52,000 for the six months ended June 30, 2011 as compared to the six months ended June 30, 2010.  The increase was primarily due to a $93,000 increase in service charges on deposits.

Noninterest expenses increased $338,000 for the six months ended June 30, 2011 as compared to the same period in 2010, primarily due to an increase in data processing expenses of $337,000 primarily due to the receipt of the previously mentioned $278,000 refund of disputed ATM charges in the first quarter of 2010.

Total assets as of June 30, 2011 were $445.0 million compared to $452.4 million at December 31, 2010.  Securities available for sale increased $10.4 million during the six months ended June 30, 2011, while cash and cash equivalents and net loans receivable decreased $7.5 million and $5.1 million, respectively.  Deposits decreased $8.8 million during the six months ended June 30, 2011.  Nonperforming assets (consisting of nonaccrual loans, accruing loans 90 days or more past due and foreclosed real estate) totaled $8.8 million and $8.5 million at June 30, 2011 and December 31, 2010, respectively.  At June 30, 2011, the Bank was considered well-capitalized under applicable federal regulatory capital guidelines.

First Harrison Bank currently has thirteen offices in the Indiana communities of Corydon, Edwardsville, Greenville, Floyds Knobs, Hardinsburg, 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 Lincoln Investments, 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.

Contact:

Chris Frederick

Chief Financial Officer

812-734-3464

FIRST CAPITAL, INC. AND SUBSIDIARY

Consolidated Financial Highlights (Unaudited)

	Six Months Ended						Three Months Ended
	June 30,						June 30,
OPERATING DATA	2011			2010			2011			2010
(Dollars in thousands, except per share data)
Total interest income	$	10,249		$	11,062		$	5,150		$	5,583
Total interest expense		2,058			2,942			1,006			1,433
Net interest income		8,191			8,120			4,144			4,150
Provision for loan losses		925			880			425			420
Net interest income after provision for loan losses		7,266			7,240			3,719			3,730
Total non-interest income		1,878			1,826			955			1,003
Total non-interest expense		6,623			6,285			3,371			3,395
Income before income taxes		2,521			2,781			1,303			1,338
Income tax expense		677			785			358			346
Net income	$	1,844		$	1,996		$	945		$	992
Less net income attributable to the noncontrolling interest		7			7			4			4
Net income attributable to First Capital, Inc.	$	1,837		$	1,989		$	941		$	988
Net income per share attributable to
First Capital, Inc. common shareholders:
Basic	$	0.66		$	0.71		$	0.34		$	0.35
Diluted	$	0.66		$	0.71		$	0.34		$	0.35
Weighted average common shares outstanding:
Basic		2,787,139			2,782,965			2,787,009			2,788,404
Diluted		2,787,139			2,785,050			2,787,009			2,788,404
OTHER FINANCIAL DATA
Cash dividends per share	$	0.38		$	0.36		$	0.19		$	0.18
Return on average assets (annualized)		0.82	%		0.86	%		0.84	%		0.85	%
Return on average equity (annualized)		7.58	%		8.45	%		7.71	%		8.32	%
Net interest margin		4.09	%		3.93	%		4.09	%		4.03	%
Interest rate spread		3.91	%		3.74	%		3.92	%		3.84	%
Net overhead expense as a percentage
of average assets (annualized)		2.97	%		2.72	%		3.00	%		2.92	%

	June 30,			December 31,
BALANCE SHEET INFORMATION	2011			2010
Cash and cash equivalents	$	14,125		$	21,575
Investment securities		111,244			100,883
Gross loans		293,998			299,023
Allowance for loan losses		4,561			4,473
Earning assets		405,008			414,114
Total assets		444,979			452,378
Deposits		369,169			378,003
FHLB debt		15,279			15,729
Repurchase agreements		9,276			8,669
Stockholders' equity, net of noncontrolling interest		49,523			47,893
Non-performing assets:
Nonaccrual loans		7,684			7,541
Accruing loans past due 90 days		531			370
Foreclosed real estate		556			591
Regulatory capital ratios (Bank only):
Tier I - adjusted total assets		9.66	%		9.32	%
Tier I - risk based		15.30	%		14.83	%
Total risk-based		16.11	%		15.54	%