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): April 27, 2017
FIRST CAPITAL, INC.
(Exact Name of Registrant as Specified in Charter)
| Indiana | 0-25023 | 35-2056949 |
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
| 220 Federal Drive N.W., Corydon, Indiana 47112 |
| (Address of Principal Executive Offices) (Zip Code) |
(812) 738-2198
(Registrant's telephone number, including area code)
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)) | |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). 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. [ ]
Item 2.02. Results of Operations and Financial Condition.
On April 27, 2017, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
Exhibit 99.1. Press release dated April 27, 2017
SIGNATURE
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: April 27, 2017 | By: | /s/ M. Chris Frederick |
| M. Chris Frederick | ||
| Executive Vice President and Chief Financial Officer | ||
EXHIBIT 99.1
First Capital, Inc. Reports Quarterly Earnings
CORYDON, Ind., April 27, 2017 (GLOBE NEWSWIRE) -- First Capital, Inc. (the “Company”) (NASDAQ:FCAP), the holding company for First Harrison Bank (the “Bank”), today reported net income of $1.6 million or $0.46 per diluted share for the quarter ended March 31, 2017, compared to $1.6 million or $0.47 per diluted share for the quarter ended March 31, 2016.
Net interest income after provision for loan losses increased $2,000 for the quarter ended March 31, 2017 as compared to the same prior year period. Interest income decreased $3,000 when comparing the periods due to a decrease in the average tax-equivalent yield on interest-earning assets from 3.88% for the first quarter of 2016 to 3.70% for the first quarter of 2017, partially offset by an increase in the average balance of interest-earning assets from $671.3 million for the first quarter of 2016 to $704.4 million for the first quarter of 2017. The decrease in the average tax-equivalent yield for 2017 is primarily due to the effect of purchase accounting adjustments related to the December 2015 acquisition of Peoples Bancorp, Inc. of Bullitt County and its wholly-owned bank subsidiary Peoples Bank of Bullitt County (collectively, “Peoples”), headquartered in Shepherdsville, Kentucky. Interest expense decreased $141,000 when comparing the periods as the average cost of interest-bearing liabilities decreased from 0.39% to 0.26%. This was partially offset by an increase in the average balance of interest-bearing liabilities from $514.2 million to $546.7 million, respectively. The decrease in the average cost of funds is primarily due to the repricing of savings and interest-bearing demand deposit accounts acquired from Peoples. As a result of the changes in interest-earning assets and interest-bearing liabilities, the interest rate spread decreased from 3.49% for the quarter ended March 31, 2016 to 3.44% for the same period in 2017.
Based on management’s analysis of the allowance for loan losses, the provision for loan losses increased from $75,000 for the quarter ended March 31, 2016 to $211,000 for the quarter ended March 31, 2017. The Bank recognized net charge-offs of $179,000 for the quarter ended March 31, 2017 compared to $171,000 for the same period in 2016.
Noninterest income increased $85,000 for the quarter ended March 31, 2017 as compared to the same period in 2016. Service charges on deposit accounts increased $77,000 when comparing the two periods. This was partially offset by an $11,000 decrease in commission and fee income.
Noninterest expense increased $165,000 for the quarter ended March 31, 2017 as compared to the same period in 2016, due primarily to increases in data processing expense of $111,000 and net losses on foreclosed real estate of $161,000. Data processing expense increased when comparing the two periods primarily due to upgraded networks and additional electronic banking customers as a result of the Peoples acquisition.
Total assets increased $18.2 million to $761.9 million at March 31, 2017 from $743.7 million at December 31, 2016. Investment securities increased $16.3 million as management has sought to invest excess liquidity primarily in government agency mortgage-backed securities and municipal obligations. Net loans receivable also increased $3.9 million from December 31, 2016 to March 31, 2017. Deposits increased $17.0 million to $681.7 million at March 31, 2017 due primarily to increases in noninterest-bearing demand deposits and savings accounts. 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 $8.4 million at December 31, 2016 to $8.3 million at March 31, 2017 as management continues to work to resolve nonperforming assets acquired from Peoples.
At March 31, 2017, the Bank was considered well-capitalized under applicable federal regulatory capital guidelines.
The Bank currently has seventeen offices in the Indiana communities of Corydon, Edwardsville, Greenville, Floyds Knobs, Palmyra, New Albany, New Salisbury, Jeffersonville, Salem and Lanesville and the Kentucky communities of Shepherdsville, Mt. Washington and Lebanon Junction. In March 2016, the Company also acquired property for a proposed branch location near the River Ridge development in Jeffersonville, Indiana. The Company broke ground on the new office during the quarter ended December 31, 2016 and expects the new office to open in May 2017.
Access to First Harrison Bank accounts, including online banking and electronic bill payments, is available through the Bank’s website at www.firstharrison.com. The 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. For more information and financial data about the Company, please visit Investor Relations at the Bank’s aforementioned website. The Bank can also be followed on Facebook.
Cautionary Note Regarding Forward-Looking Statements
This press release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of the words “anticipate,” “believe,” “expect,” “intend,” “could” and “should,” and other words of similar meaning. Forward-looking statements are not historical facts nor guarantees of future performance; rather, they are statements based on the Company’s current beliefs, assumptions, and expectations regarding its business strategies and their intended results and its 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 these 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; competition; the ability of the Company to execute its business plan; 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 press release, the Company’s reports, or made elsewhere from time to time by the Company or on its behalf. These forward-looking statements are made only as of the date of this press release, and the Company assumes no obligation to update any forward-looking statements after the date of this press release.
| FIRST CAPITAL, INC. AND SUBSIDIARY | ||||||
| Consolidated Financial Highlights (Unaudited) | ||||||
| Three Months Ended | ||||||
| March 31, | ||||||
| OPERATING DATA | 2017 | 2016 | ||||
| (Dollars in thousands, except per share data) | ||||||
| Total interest income | $ | 6,343 | $ | 6,346 | ||
| Total interest expense | 359 | 500 | ||||
| Net interest income | 5,984 | 5,846 | ||||
| Provision for loan losses | 211 | 75 | ||||
| Net interest income after provision for loan losses | 5,773 | 5,771 | ||||
| Total non-interest income | 1,453 | 1,368 | ||||
| Total non-interest expense | 5,155 | 4,990 | ||||
| Income before income taxes | 2,071 | 2,149 | ||||
| Income tax expense | 515 | 564 | ||||
| Net income | 1,556 | 1,585 | ||||
| Less net income attributable to the noncontrolling interest | 3 | 3 | ||||
| Net income attributable to First Capital, Inc. | $ | 1,553 | $ | 1,582 | ||
| Net income per share attributable to First Capital, Inc. | ||||||
| common shareholders: | ||||||
| Basic | $ | 0.46 | $ | 0.47 | ||
| Diluted | $ | 0.46 | $ | 0.47 | ||
| Weighted average common shares outstanding: | ||||||
| Basic | 3,342,052 | 3,339,103 | ||||
| Diluted | 3,347,122 | 3,341,283 | ||||
| OTHER FINANCIAL DATA | ||||||
| Cash dividends per share | $ | 0.21 | $ | 0.21 | ||
| Return on average assets (annualized) | 0.83 | % | 0.88 | % | ||
| Return on average equity (annualized) | 8.13 | % | 8.37 | % | ||
| Net interest margin | 3.50 | % | 3.58 | % | ||
| Interest rate spread | 3.44 | % | 3.49 | % | ||
| Net overhead expense as a percentage | ||||||
| of average assets (annualized) | 2.75 | % | 2.79 | % | ||
| March 31, | December 31, | |||||
| BALANCE SHEET INFORMATION | 2017 | 2016 | ||||
| (Dollars in thousands) | ||||||
| Cash and cash equivalents | $ | 47,657 | $ | 45,835 | ||
| Interest-bearing time deposits | 13,535 | 14,735 | ||||
| Investment securities | 272,187 | 255,846 | ||||
| Gross loans | 388,502 | 384,540 | ||||
| Allowance for loan losses | 3,418 | 3,386 | ||||
| Earning assets | 708,591 | 684,890 | ||||
| Total assets | 761,937 | 743,658 | ||||
| Deposits | 681,659 | 664,650 | ||||
| Stockholders' equity, net of noncontrolling interest | 77,068 | 75,730 | ||||
| Non-performing assets: | ||||||
| Nonaccrual loans | 3,077 | 2,946 | ||||
| Accruing loans past due 90 days | 143 | 78 | ||||
| Foreclosed real estate | 4,417 | 4,674 | ||||
| Troubled debt restructurings on accrual status | 642 | 742 | ||||
| Regulatory capital ratios (Bank only): | ||||||
| Tier 1 - average total assets | 9.27 | % | 9.30 | % | ||
| Tier 1 - risk based assets | 14.07 | % | 14.28 | % | ||
| Total risk-based | 14.77 | % | 14.98 | % | ||
Contact:
Chris Frederick
Chief Financial Officer
812-734-3464