First Capital, Inc. Reports Quarterly Earnings Increase

First Capital, Inc. Reports Quarterly Earnings Increase

CORYDON, Ind., July 26, 2013 (GLOBE NEWSWIRE) -- First Capital, Inc.
(Nasdaq:FCAP), the holding company for First Harrison Bank (the "Bank"), today
reported net income of $1.2 million or $0.43 per diluted share for the quarter
ended June 30, 2013, compared to $1.0 million or $0.37 per diluted share for
the same period in 2012.

The increase in net income is primarily due to increases in net interest
income after provision for loan losses and noninterest income and a decrease
in noninterest expense.

Net interest income after provision for loan losses increased $163,000 for the
quarter ended June 30, 2013 as compared to the quarter ended June 30, 2012.
Interest income decreased $122,000 when comparing the two periods as the
average tax-equivalent yield of interest-earning assets decreased from 4.53%
for the three-month period ended June 30, 2012 to 4.43% for the same period in
2013. Interest expense decreased $210,000 as the average cost of
interest-bearing liabilities decreased from 0.75% to 0.50% when comparing the
same two periods. As a result, the interest-rate spread increased from 3.78%
for the quarter ended June 30, 2012 to 3.93% for the same period in 2013.The
provision for loan losses decreased from $300,000 for the quarter ended June
30, 2012 to $225,000 for the quarter ended June 30, 2013 primarily due to a
decrease in impaired loans and the related allowance for loan losses during
the quarter.

Noninterest income increased $88,000 for the three months ended June 30, 2013
as compared to the same period in 2012.Commission income and service charges
on deposit accounts increased by $40,000 and $39,000, respectively, when
comparing the two periods.

Noninterest expenses decreased $54,000 for the three months ended June 30,
2013 as compared to the three months ended June 30, 2012.Compensation and
benefits expense decreased $90,000 when comparing the two periods primarily
due to a pre-tax savings of $130,000 recognized as a result of the voluntary
early retirement program which took effect on September 30, 2012.This was
partially offset by increases in professional service fees of $43,000 and data
processing expenses of $32,000 when comparing the two periods.The increase in
professional fees includes a compensation study, costs associated with an
evaluation of the Bank's asset liability model and increased expenses
associated with the management of the Nevada investment subsidiary.The
increase in data processing expenses was primarily due to an increase in ATM
processing fees and an increase in the number of customers using alternative
delivery channels for their banking products.

For the six months ended June 30, 2013, the Company reported net income of
$2.4 million or $0.86 per diluted share compared to net income of $2.0 million
or $0.70 per diluted share for the same period in 2012. 

Net interest income after provision for loan losses increased $488,000 for the
six months ended June 30, 2013 compared to the same period in 2012.Interest
income decreased $267,000 when comparing the two periods, due to a decrease in
the average tax-equivalent yield on interest-earning assets from 4.69% for
2012 to 4.44% for 2013.This was partially offset by an increase in the
average balance of interest-earning assets from $412.3 million for the
six-months ended June 30, 2012 to $424.6 million for the six months ended June
30, 2013.Interest expense decreased $455,000 as the average cost of
interest-bearing liabilities decreased from 0.79% to 0.52% when comparing the
same two periods while the average balance of the interest-bearing liabilities
increased from $340.6 million for the six months ended June 30, 2012 to $348.1
million for the same period in 2013.The provision for loan losses decreased
from $775,000 for the six months ended June 30, 2012 to $475,000 for the same
period in 2013 as net charge offs decreased from $525,000 for the six months
ended June 30, 2012 to $376,000 for the six months ended June 30, 2013.

Noninterest income increased $175,000 for the six months ended June 30, 2013
as compared to the six months ended June 30, 2012.The increase was primarily
due to increases in commission income and service charges on deposit accounts
of $115,000 and $73,000, respectively.

Noninterest expenses decreased $65,000 for the six months ended June 30, 2013
as compared to the same period in 2012, primarily due to a decrease in
compensation and benefit expenses of $225,000.This was partially offset by
increases in other operating expenses, professional fees and data processing
expenses of $63,000, $58,000 and $54,000, respectively.

Total assets as of June 30, 2013 were $460.6 million compared to $459.1
million at December 31, 2012.Cash and cash equivalents increased $10.5
million during the six months ended June 30, 2013, while securities available
for sale decreased $9.3 million.Deposits increased $5.3 million during the
six months ended June 30, 2013.Nonperforming assets (consisting of nonaccrual
loans, accruing loans 90 days or more past due, troubled debt restructurings
on accrual status, and foreclosed real estate) totaled $7.8 million and $8.4
million at June 30, 2013 and December 31, 2012, respectively.

At June 30, 2013, 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.

FIRST CAPITAL, INC. AND SUBSIDIARY
Consolidated Financial Highlights (Unaudited)
                                                                 
                                   Six Months Ended       Three Months Ended
                                   June 30,               June 30,
OPERATING DATA                      2013      2012         2013      2012
(Dollars in thousands, except per                                
share data)
                                                                 
Total interest income               $9,130  $9,397     $4,554  $4,676
Total interest expense              898      1,353       440      650
Net interest income                 8,232    8,044       4,114    4,026
Provision for loan losses           475      775         225      300
Net interest income after provision 7,757    7,269       3,889    3,726
for loan losses
                                                                 
Total non-interest income           2,350    2,175       1,188    1,100
Total non-interest expense          6,628    6,693       3,306    3,360
Income before income taxes          3,479    2,751       1,771    1,466
Income tax expense                 1,068    790         557      427
Net income                         $2,411  $1,961     $1,214  $1,039
Less net income attributable to the 7        7           4        4
noncontrolling interest
Net income attributable to First    $2,404  $1,954     $1,210  $1,035
Capital, Inc.
                                                                 
Net income per share attributable
toFirst Capital, Inc. common                                     
shareholders:
Basic                              $0.86   $0.70      $0.43   $0.37
                                                                 
Diluted                            $0.86   $0.70      $0.43   $0.37
                                                                 
Weighted average common shares                                    
outstanding:
Basic                              2,784,997 2,785,574    2,784,997 2,785,458
                                                                 
Diluted                            2,784,997 2,785,574    2,784,997 2,785,458
                                                                 
OTHER FINANCIAL DATA                                              
                                                                 
Cash dividends per share            $0.40   $0.38      $0.20   $0.19
Return on average assets            1.05%     0.88%        1.04%     0.91%
(annualized)
Return on average equity            9.01%     7.58%        9.04%     8.00%
(annualized)
Net interest margin                 4.02%     4.03%        4.01%     3.92%
Interest rate spread                3.92%     3.90%        3.93%     3.78%
Net overhead expense as a
percentageof average assets        2.88%     3.00%        2.85%     2.95%
(annualized)
                                                                 
                                   June 30,  December 31,          
BALANCE SHEET INFORMATION           2013      2012                  
                                                                 
Cash and cash equivalents           $33,700 $23,211             
Investment securities               113,675  122,985              
Gross loans                         287,995  285,143              
Allowance for loan losses           4,835    4,736                
Earning assets                      424,632  421,755              
Total assets                        460,577  459,132              
Deposits                            389,613  384,343              
FHLB debt                           5,000    5,100                
Repurchase agreements               11,437   14,092               
Stockholders' equity, net of        52,396   52,824               
noncontrolling interest
Non-performing assets:                                            
Nonaccrual loans                   5,377    7,578                
Accruing loans past due 90 days    481      289                  
Foreclosed real estate             403      295                  
Troubled debt restructurings on    1,535    221                  
accrual status
Regulatory capital ratios (Bank                                   
only):
Tier I - adjusted total assets     10.26%    10.00%                
Tier I - risk based                14.65%    14.35%                
Total risk-based                   15.91%    15.60%                

CONTACT: Chris Frederick
         Chief Financial Officer
         812-734-3464
 
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