CORYDON, Ind., Jan. 23, 2009 (GLOBE NEWSWIRE) -- First Capital, Inc. (Nasdaq:FCAP) (the "Company"), the holding company for First Harrison Bank (the "Bank"), today reported net income of $3.6 million or $1.27 per diluted share for the year ended December 31, 2008, compared to $3.4 million or $1.20 per diluted share for the year ended December 31, 2007.
Net interest income after provision for loan losses increased $543,000 for the year ended December 31, 2008 as compared to the year ended December 31, 2007. Interest income decreased $1.4 million when comparing the two periods as the average tax-equivalent yield of interest-earning assets decreased from 6.58% during the year ended December 31, 2007 to 6.24% for 2008. The average balance of those earning assets increased from $419.0 million in 2007 to $420.3 million in 2008. Interest expense decreased $3.0 million as the average cost of interest-bearing liabilities decreased from 3.76% to 2.94% when comparing the same two periods. The average balance of those liabilities increased from $364.5 million in 2007 to $365.8 in 2008. The provision for loan losses increased from $558,000 for the year ended December 31, 2007 to $1.6 million for the year ended December 31, 2008. This increase was due to increased specific allowances due to deteriorating commercial real estate values and an increase in the general allowances due to deteriorating general economic conditions such as depreciating collateral values, job losses and continued pressures on household budgets in the Bank's market area.
Noninterest income increased $49,000 for the year ended December 31, 2008 as compared to the year ended December 31, 2007. Service charges on deposits accounts and the cash surrender value of life insurance increased $83,000 and $78,000, respectively, when comparing the two periods. The increase in cash surrender value of life insurance was due to the purchase of $3.6 million of bank-owned life insurance in May 2007. These increases were partially offset by a decrease of $114,000 in mortgage brokerage fees.
Noninterest expenses increased $497,000 during 2008 compared to the year ended December 31, 2007. Other operating expenses and compensation and benefits expense represented $212,000 and $205,000 of the additional expenses, respectively. The increase in other operating expenses was primarily due to an increase in the cost of FDIC insurance due to the Bank exhausting its one-time FDIC credit assessment on deposits in existence as of December 31, 1996. Compensation and benefits increased primarily due to normal salary increases.
For the quarter ended December 31, 2008, the Company earned $978,000 or $0.35 per diluted share compared to $901,000 or $0.32 per diluted share for the same period in 2007.
Net interest income after provision for loan losses increased $301,000 during the quarter ended December 31, 2008 as compared to the quarter ended December 31, 2007. Interest income decreased $626,000 when comparing the two periods as a result of a decrease in the average tax-equivalent yield on interest earning assets from 6.61% during the fourth quarter of 2007 to 5.97% during the same period of 2008. Interest expense decreased $977,000 as the average cost of interest-bearing liabilities decreased from 3.72% to 2.65% when comparing the two periods. The provision for loan losses increased $50,000 when comparing the two periods.
Noninterest income decreased $59,000 primarily due to a decrease of $45,000 in service charges on deposit accounts.
Noninterest expenses increased $192,000 when comparing the quarter ended December 31, 2008 to the quarter ended December 31, 2007, primarily due to a $121,000 increase in other operating expenses. This was primarily due to increases in the cost of FDIC insurance and in expenses related to the maintenance and sale of foreclosed real estate properties.
Total assets as of December 31, 2008 were $458.6 million compared to $453.2 million at December 31, 2007. Securities available for sale and cash and cash equivalents increased $9.7 million and $7.1 million, respectively, while net loans receivable decreased $12.1 million. Deposits increased $27.7 million while Federal Home Loan Bank advances and retail repurchase agreements decreased $12.9 million and $11.0 million, respectively.
First Harrison Bank currently has twelve offices in the Indiana communities of Corydon, Edwardsville, Greenville, Floyds Knobs, Hardinsburg, Palmyra, New Albany, New Salisbury, Jeffersonville and Salem. The Bank has also received regulatory approval for a new office in Lanesville, Indiana in which construction is expected to begin during the first quarter of 2009. 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 Great American Advisors, continues to offer non FDIC insured investments to complement the Bank's offering of traditional banking products and services.
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)
Twelve Months Ended Three Months Ended
December 31, December 31,
2008 2007 2008 2007
OPERATING DATA ---- ---- ---- ----
(Dollars in thousands,
except per share data)
Total interest income $ 25,686 $ 27,085 $ 6,159 $ 6,785
Total interest expense 10,745 13,699 2,423 3,400
---------------------- ----------------------
Net interest income 14,941 13,386 3,736 3,385
Provision for loan
losses 1,570 558 230 180
---------------------- ----------------------
Net interest income
after provision for
loan losses 13,371 12,828 3,506 3,205
Total non-interest
income 3,573 3,524 844 903
Total non-interest
expense 11,846 11,349 2,994 2,802
---------------------- ----------------------
Income before income
taxes 5,098 5,003 1,356 1,306
Income tax expense 1,529 1,591 378 405
---------------------- ----------------------
Net income $ 3,569 $ 3,412 $ 978 $ 901
====================== ======================
Net income per common
share, basic $ 1.27 $ 1.21 $ 0.35 $ 0.32
====================== ======================
Weighted average
common shares
outstanding - basic 2,801,163 2,814,691 2,795,060 2,802,178
Net income per common
share, diluted $ 1.27 $ 1.20 $ 0.35 $ 0.32
====================== ======================
Weighted average common
shares outstanding -
diluted 2,815,276 2,836,601 2,807,566 2,820,724
OTHER FINANCIAL DATA
Cash dividends per
share $ 0.71 $ 0.68 $ 0.18 $ 0.17
Return on average
assets (three month
data, annualized) 0.79% 0.76% 0.86% 0.80%
Return on average
equity (three month
data, annualized) 7.65% 7.74% 8.37% 7.92%
Net interest margin 3.68% 3.31% 3.67% 3.36%
Net overhead expense as
a percentage of
average assets
(three month data,
annualized) 2.62% 2.54% 2.64% 2.49%
December 31, December 31,
BALANCE SHEET INFORMATION 2008 2007
---- ----
Cash and cash equivalents $ 22,149 $ 15,055
Investment securities 82,819 74,041
Gross loans 325,047 336,695
Allowance for loan losses 2,662 2,232
Earning assets 417,938 417,358
Total assets 458,625 453,179
Deposits 355,891 328,151
FHLB debt 47,830 60,694
Repurchase agreements 4,552 15,562
Stockholders' equity 47,522 45,736
Non-performing assets:
Nonaccrual loans 4,441 4,879
Accruing loans past due 90 days 1,092 816
Foreclosed real estate 881 833