Executive Summary

Q2 2025 delivered solid results: net income rose to $3.78M and diluted EPS to $1.13, up from $2.83M and $0.85 in Q2 2024, driven by higher asset yields and a wider tax-equivalent net interest margin (3.59% vs. 3.15% YoY) .
Net interest margin expanded sequentially and YoY, while deposits grew to $1.11B and total assets reached $1.24B, highlighting strong balance sheet momentum into mid-year .
Expense pressures were notable: noninterest expense increased $494K YoY on compensation, call-center upgrades, marketing, and data processing investments; effective tax rate rose to 18.4% vs. 14.7% YoY .
Dividend maintained at $0.29 in Q2 (paid June 27) following Q1’s $0.29, signaling steady capital returns amid earnings growth .
Wall Street consensus from S&P Global was unavailable for EPS and revenue; coverage appears limited for FCAP. Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

Net interest income rose to $10.41M (vs. $8.66M in Q2 2024) as average asset yields increased to 4.82% and NIM (tax-equivalent) widened to 3.59%; loan yields improved and interest-bearing liability costs eased .
Balance sheet growth continued: deposits reached $1.11B (+$44.2M YTD) and total assets hit $1.24B (+$55.2M YTD), while nonaccrual loans fell to $3.99M from $4.48M at year-end .
Management maintained the quarterly dividend at $0.29, reinforcing capital return discipline alongside profitability improvements .

What Went Wrong

Noninterest expenses increased $494K YoY, primarily from compensation/benefits (+$308K), occupancy/equipment (+$69K, including call-center upgrades and ATM servicing), advertising (+$41K), and data processing (+$41K) .
Credit costs remained present: provision was $306K (vs. $360K YoY) with net charge-offs of $113K (vs. $30K YoY), reflecting credit normalization and macro uncertainty .
Effective tax rate rose to 18.4% (vs. 14.7% YoY), creating a headwind to net earnings growth relative to pre-tax income improvements .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Net Income ($USD)	$3,265K	$3,238K	$3,778K
Net Income Attributable to FCAP ($USD)	$3,262K	$3,235K	$3,775K
Diluted EPS ($USD)	$0.97	$0.97	$1.13
Total Interest Income ($USD)	$13,192K	$13,346K	$14,040K
Net Interest Income ($USD)	$9,408K	$9,581K	$10,412K
Provision for Credit Losses ($USD)	$346K	$338K	$306K
Total Non-interest Income ($USD)	$1,934K	$1,848K	$2,018K
Total Non-interest Expense ($USD)	$7,047K	$7,181K	$7,494K
Income Before Taxes ($USD)	$3,949K	$3,910K	$4,630K
Income Tax Expense ($USD)	$684K	$672K	$852K
Net Interest Margin (%)	3.26%	3.28%	3.52%
Net Interest Margin (Tax-Equivalent) (%)	3.33%	3.34%	3.59%
Interest Rate Spread (Tax-Equivalent) (%)	2.88%	2.92%	3.18%
ROA (Annualized) (%)	1.10%	1.08%	1.24%
ROE (Annualized) (%)	11.33%	11.12%	12.59%
Cash Dividends per Share ($USD)	$0.29	$0.29	$0.29

KPIs and Balance Sheet

Metric	Dec 31, 2024	Mar 31, 2025	Jun 30, 2025
Cash & Cash Equivalents ($USD)	$105,917K	$116,623K	$134,595K
Investment Securities ($USD)	$396,243K	$398,718K	$402,589K
Gross Loans ($USD)	$640,480K	$652,476K	$658,902K
Deposits ($USD)	$1,066,439K	$1,083,921K	$1,110,627K
Total Assets ($USD)	$1,187,523K	$1,214,538K	$1,242,687K
ACL as % of Gross Loans (%)	1.45%	1.46%	1.48%
Nonaccrual Loans ($USD)	$4,483K	$4,075K	$3,992K
Community Bank Leverage Ratio (%)	10.57%	10.61%	10.80%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per Share ($USD)	Q2 2025	$0.29 (declared Feb 19, payable Mar 28)	$0.29 (declared May 22, payable Jun 27)	Maintained

Note: The company did not provide formal forward-looking revenue, margin, OpEx, OI&E, tax rate, or segment guidance in Q2 materials .

Earnings Call Themes & Trends

No Q2 2025 earnings call transcript was available; themes reflect press releases and 8-Ks.

Topic	Previous Mentions (Q4 2024)	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
Net Interest Margin / Asset Yields	NIM TE 3.33%; asset yields up to 4.64%	NIM TE 3.34%; asset yields 4.63%	NIM TE 3.59%; asset yields 4.82%	Improving
Deposit Growth & Funding	Deposits $1.07B; BTFP borrowings reduced	Deposits $1.08B; average funding cost 1.71%	Deposits $1.11B; funding cost down to 1.64%	Positive
Credit Costs / ACL	Provision $346K; nonaccruals up YoY	Provision $338K; credit normalization	Provision $306K; net charge-offs $113K	Stable to slightly elevated
Noninterest Expense Drivers	Audit/core negotiation fees; higher comp/benefits	Snow removal; disposal losses; higher comp/benefits	Call-center upgrade; ATM servicing; marketing; data processing	Investment-led increase
Tax Rate	Q4 tax rate 17.3%	Q1 tax rate 17.2%	Q2 tax rate 18.4%	Upward pressure
Capital Return	Dividend $0.29	Dividend $0.29	Dividend $0.29 (May)	Maintained

Management Commentary

“Net interest income after provision for credit losses increased $1.8 million…due to an increase in the average tax-equivalent yield on interest-earning assets…to 4.82%…and a decrease in the average cost of interest-bearing liabilities to 1.64%” (Company press release, July 25, 2025) .
“Noninterest expenses increased $494,000…primarily due to increases in compensation and benefits, occupancy and equipment…advertising and data processing” .
“Total assets were $1.24 billion…Deposits increased $44.2 million…Nonperforming assets decreased…to $4.0 million” .

Q&A Highlights

No analyst Q&A documented; investor communications were via the earnings press release and 8-K, which included detailed average balance sheet and margin reconciliations .

Estimates Context

S&P Global consensus estimates for Q2 2025 EPS and revenue were unavailable; coverage appears limited for FCAP. Values retrieved from S&P Global.*

Implication: With no consensus, post-result estimate revisions are unlikely to be a near-term catalyst; investors should anchor on reported NIM trajectory, deposit growth, and expense investments .

Key Takeaways for Investors

Earnings trajectory improving: Q2 diluted EPS of $1.13 vs. $0.97 in Q1 and $0.85 in Q2 2024; NIM expansion to 3.59% (tax-equivalent) supports core profitability .
Balance sheet strength: deposits grew to $1.11B and total assets to $1.24B; nonaccrual loans decreased to $3.99M, and CBLR improved to 10.80% .
Expense investments are near-term headwinds but strategic (call-center upgrade, software licenses, marketing) and should enhance service and scalability .
Credit normalization continues: provision at $306K and net charge-offs of $113K; ACL coverage edged up to 1.48% of gross loans .
Tax rate drift higher (18.4% in Q2) moderates net income leverage from pre-tax gains; watch tax dynamics into H2 .
Dividend stability at $0.29 per quarter underscores capital return consistency and balance sheet prudence .
With limited Street coverage, the stock’s narrative will hinge on demonstrated NIM sustainability, deposit mix, and disciplined OpEx—key catalysts for valuation re-rating in community banks .

*Values retrieved from S&P Global.

FIRST CAPITAL INC (FCAP)·Q2 2025 Earnings Summary