FCAP · First Capital, Inc.

First Capital, Inc. reported strong first-quarter results for 2026, with net income rising 34% to $4.3 million ($1.30 per diluted share) from $3.2 million ($0.97 per share) in the same period last year. The improvement was driven primarily by a $1.8 million increase in net interest income after provision for credit losses, which reached $11.1 million. Interest income grew $1.6 million to $14.9 million, benefiting from a higher average tax-equivalent yield on earning assets (4.96% vs. 4.63%) and a $52 million increase in average earning assets to $1.22 billion. Meanwhile, interest expense declined $259,000 to $3.5 million as the average cost of interest-bearing liabilities fell to 1.56% from 1.71%, despite a $19.8 million increase in average balances. As a result, the tax-equivalent net interest margin expanded 47 basis points to 3.81%. The provision for credit losses increased modestly to $350,000 from $338,000, with net charge-offs of $111,000. Noninterest income rose $200,000 to $2.0 million, led by a $160,000 gain on equity securities and higher ATM/debit card fees and loan sale gains, partially offset by a larger loss on sale of available-for-sale securities ($92,000 vs. $55,000). Noninterest expenses increased $572,000 to $7.8 million, primarily due to higher professional services ($241,000), compensation and benefits ($235,000), and other expenses including consumer fraud losses ($99,000). Income tax expense rose $358,000, with an effective tax rate of 19.2% versus 17.2%. On the balance sheet, total assets grew to $1.28 billion from $1.27 billion at year-end 2025, driven by increases in cash and cash equivalents ($12.4 million) and net loans ($10.3 million), partially offset by a decline in available-for-sale securities ($9.4 million). Deposits increased $13.6 million to $1.14 billion, while nonperforming assets decreased to $4.0 million from $4.4 million. The company maintained a strong capital position with a Community Bank Leverage Ratio of 11.13% at the bank level. No forward guidance was provided in the release.