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HomeBank CapitalFirst Capital, Inc. Reports Quarterly Earnings Nasdaq:FCAP

First Capital, Inc. Reports Quarterly Earnings Nasdaq:FCAP

CORYDON, Ind., April 26, 2021 (GLOBE NEWSWIRE) — First Capital, Inc. (the “Company”) (NASDAQ: FCAP), the holding company for First Harrison Bank (the “Bank”), today reported net income of $2.9 million or $0.88 per diluted share for the quarter ended March 31, 2021, compared to $2.1 million or $0.63 per diluted share for the quarter ended March 31, 2020. The increase in net income is primarily due to an increase in noninterest income.

Net interest income after provision for loan losses increased $74,000 for the quarter ended March 31, 2021 as compared to the same period in 2020. Interest income decreased $382,000 when comparing the periods due to a decrease in the average tax-equivalent yield on interest-earning assets from 4.10% for the first quarter of 2020 to 3.13% for the first quarter of 2021 partially offset by an increase in the average balance of interest-earning assets from $761.7 million for the first quarter of 2020 to $954.8 million for the first quarter of 2021. The decrease in the tax-equivalent yield was due to the Federal Open Market Committee (FOMC) lowering interest rates during March 2020 due to the COVID-19 pandemic and an increase in the average balance of federal funds sold. Federal funds sold increased primarily due to increased balances in deposit accounts from stimulus programs and normal deposit growth. Interest expense decreased $180,000 when comparing the periods due to a decrease in the average cost of interest-bearing liabilities from 0.33% for the first quarter of 2020 to 0.17% for the first quarter of 2021 partially offset by an increase in the average balance of interest-bearing liabilities from $571.2 million for the first quarter of 2020 to $684.7 million for the first quarter of 2021. As a result of the changes in interest-earning assets and interest-bearing liabilities, the interest rate spread decreased from 3.77% for the quarter ended March 31, 2020 to 2.96% for the same period in 2021.

Based on management’s analysis of the allowance for loan losses, the provision for loan losses decreased from $351,000 for the quarter ended March 31, 2020 to $75,000 for the quarter ended March 31, 2021. The provision for loan losses was higher in the first quarter of 2020 compared to the first quarter of 2021 due to changes to the qualitative factors within the Bank’s allowance for loan losses calculation related to uncertainties that surrounded the COVID-19 pandemic in the first quarter of 2020. The Bank recognized net charge-offs of $72,000 for the quarter ended March 30, 2021 compared to $105,000 for the same period in 2020.

Noninterest income increased $982,000 for the quarter ended March 31, 2021 as compared to the same period in 2020. The first quarter of 2021 included a $234,000 unrealized gain on equity securities compared to a $394,000 unrealized loss on equity securities during the same period in 2020. Gains on the sale of loans and ATM and debit card fees increased $277,000 and $203,000,…

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