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FIRST CAPITAL INC (FCAP)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 EPS was $0.97, up 4% YoY from $0.93; net income was $3.265M as tax-equivalent NIM expanded to 3.33% and net interest income rose 10% YoY, offset partially by higher noninterest expense and a higher effective tax rate of 17.3% .
  • Earning asset yields rose to 4.64% tax-equivalent in Q4 (from 4.20% in Q4’23), while the average cost of interest-bearing liabilities increased to 1.76%; NIM expansion reflected higher loan yields and mix shift away from lower-yielding securities .
  • Credit remained manageable though the ACL build continued amid higher nonperforming assets (nonaccrual loans increased to $4.483M vs. $1.751M YoY) and net charge-offs were $24K in Q4; ACL/loans rose to 1.45% at year-end .
  • Balance sheet quality and liquidity improved into year-end: deposits grew to $1.066B (from $1.025B) and BTFP borrowings were reduced to zero at 12/31 (from $21.5M), while cash and equivalents increased to $105.9M .

What Went Well and What Went Wrong

  • What Went Well

    • NIM expansion and higher asset yields: tax-equivalent NIM rose to 3.33% vs. 3.11% YoY; average yield on interest-earning assets rose to 4.64% vs. 4.20% YoY in Q4 .
    • Deposit growth and deleveraging: deposits ended Q4 at $1.066B (+$41M YoY) and borrowed funds were reduced to $0 from $21.5M at 12/31/23; cash and equivalents increased $67.2M YoY to $105.9M .
    • Steady fee trends: Q4 noninterest income rose $103K YoY (gains on sale of loans +$56K; service charges +$29K) despite losses on equity securities; nine-month trends showed higher loan sale gains and service charges .

  • What Went Wrong

    • Nonperforming assets increased: nonaccrual loans rose to $4.483M at 12/31/24 (from $1.751M), largely two commercial relationships totaling $2.6M; provision increased to $346K in Q4 (from $308K) .
    • Higher noninterest expense: Q4 noninterest expense rose $567K YoY (professional fees +$239K; comp/benefits +$162K; occupancy/equipment +$66K), reflecting audit, core contract negotiations, health benefits, and depreciation/repairs .
    • Higher effective tax rate in Q4: 17.3% vs. 13.3% YoY, tied to the finalization of estimates associated with solar tax credit investments; this reduced net income leverage in an otherwise stronger pre-tax quarter .

Financial Results

P&L summary – quarterly comparisons

Metric (USD, except per-share and %)Q4 2023Q2 2024Q3 2024Q4 2024
Total interest income ($000s)11,639 12,218 13,224 13,192
Total interest expense ($000s)3,091 3,561 4,099 3,784
Net interest income ($000s)8,548 8,657 9,125 9,408
Provision for credit losses ($000s)308 360 463 346
Noninterest income ($000s)1,831 2,023 1,800 1,934
Noninterest expense ($000s)6,480 7,000 7,024 7,047
Income before income taxes ($000s)3,591 3,320 3,438 3,949
Income tax expense ($000s)478 488 537 684
Net income ($000s)3,113 2,832 2,901 3,265
Diluted EPS ($)0.93 0.85 0.87 0.97
Net interest margin (%, non-TE unless noted)3.03 3.15 (TE) 3.12 3.26; 3.33 (TE)
Effective tax rate (%, quarterly)13.3 14.7 15.6 17.3

Balance sheet and credit KPIs

KPIQ3 2024Q4 2024
Total assets ($000s)1,189,295 1,187,523
Deposits ($000s)1,030,249 1,066,439
Borrowed funds ($000s)33,625 0
Cash and cash equivalents ($000s)89,939 105,917
Investment securities ($000s)415,469 396,243
Gross loans ($000s)639,566 640,480
Allowance for credit losses ($000s)8,959 9,281
ACL as % of gross loans1.40% 1.45%
Nonaccrual loans ($000s)4,483 4,483
CBLR (Bank only)10.25% 10.57%

Operating metrics and spreads (Q4 YoY)

  • Average yield on interest-earning assets (tax-equivalent): 4.64% vs. 4.20% .
  • Average cost of interest-bearing liabilities: 1.76% vs. 1.51% .
  • Interest rate spread (tax-equivalent): 2.88% vs. 2.69% .

Note on segments: The company does not present segment-reported revenue in quarterly press releases; results reflect consolidated banking operations .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per share (quarterly)Q4 2024 distribution$0.27 (through Q2’24) $0.29 declared Nov 25, 2024; paid Dec 27, 2024 Raised (announced Aug 21, 2024)
Dividend per share (quarterly)Next distribution$0.29 (Q4 baseline) $0.29 declared Feb 19, 2025; paid Mar 28, 2025 Maintained

No explicit revenue/margin/tax/expense guidance was provided in Q4 materials .

Earnings Call Themes & Trends

A Q4 2024 earnings call transcript was not available in the document set; themes below reflect disclosures from Q2–Q4 press releases.

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Net interest marginTE NIM 3.15%; asset yields rising; cost of funds rising NIM 3.12%; reinvestment of maturing lower-yield securities into higher-yielding loans/fed funds NIM 3.26%; TE NIM 3.33%; asset yield 4.64% Improving
Credit quality/ACLACL/loans 1.34%; NPA uptick from new nonaccrual Nonperforming assets increased to $4.5M; provision higher Nonaccrual loans $4.483M; provision $346K; ACL/loans 1.45% Stable-to-watch
Balance sheet/liquidityBTFP borrowings $33.6M; cash up modestly BTFP $33.6M; cash $89.9M Borrowings $0; cash $105.9M; deposits +$41M YoY Positive
Taxes14.7% effective tax rate 15.6% effective tax rate 17.3% effective tax rate on solar tax credit estimate finalization Higher
Fees/Other incomeHigher gain on sale of loans; equity securities losses small Equity securities losses; mixed fee trends Fees higher YoY; equity securities loss $104K Mixed
OpexHigher audit/core contract fees; comp/benefits up Professional fees and comp/benefits drove increases Professional fees and comp/benefits up; occupancy/equipment up Elevated

Management Commentary

  • Strategy and capital returns: “We are very pleased to provide a 7.4% increase to the quarterly cash dividend... The increased dividend was declared as a result of First Capital, Inc.’s continued profitability and our commitment to returning capital to our shareholders.” — Michael C. Frederick, President & CEO (Aug 21, 2024) .
  • Operating drivers (press releases): Q4 results benefited from higher asset yields (loan yields up; asset yield 4.64% TE), while funding costs also rose; lower-yielding securities continued to roll off over 2024 with reinvestment in higher-yielding assets (loans, fed funds) .

Q&A Highlights

No Q4 2024 earnings call transcript was available; therefore, no Q&A themes or clarifications can be summarized from a call in this period [ListDocuments returned none].

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was not retrievable during this session and may be unavailable given FCAP’s limited analyst coverage. As a result, we cannot provide a vs. consensus comparison for Q4 2024 at this time (S&P Global request returned a daily limit error; consensus may not exist or was inaccessible) [GetEstimates error].

Key Takeaways for Investors

  • Asset-sensitive revenue profile is showing through: higher asset yields and mix shift supported NIM expansion in Q4, helping EPS rise YoY despite higher opex and taxes .
  • Credit watch remains prudent: nonaccruals increased during 2024 due to two commercial relationships ($2.6M); ACL coverage rose to 1.45% of loans; Q4 net charge-offs were minimal ($24K) .
  • Deleveraging and liquidity improved: deposits grew to $1.066B and BTFP borrowings were at $0 by year-end; cash and equivalents increased to $105.9M, bolstering flexibility into 2025 .
  • Expense inflation persists: professional fees (audit, core system negotiations) and benefits continue to pressure efficiency; watch for normalization as negotiations conclude .
  • Effective tax rate drifted higher on tax credit timing; expect normalization tied to tax credit cadence rather than core profitability changes .
  • Dividend sustainability signaled: Q4 distribution of $0.29 was maintained; raise was implemented in August 2024, indicating confidence in earnings power and capital levels (CBLR 10.57%) .
  • Near-term trading lens: Momentum from NIM expansion and balance sheet cleanup (zero borrowings) are positives; stock sensitivity may hinge on updates to NPAs/ACL trajectory and expense containment through 1H 2025 .

Appendix: Additional Data Points (for reference)

  • Average earning asset yield (Q4 2024, TE): 4.64% vs. 4.20% YoY; average cost of interest-bearing liabilities: 1.76% vs. 1.51% .
  • Return on average assets (annualized): Q4 2024 1.10% vs. 1.09% YoY .
  • Return on average equity (annualized): Q4 2024 11.33% vs. 13.67% YoY .

Sources: Q4 2024 8-K and press release, including consolidated financial highlights and reconciliations ; Q3 2024 8-K/press release ; Q2 2024 8-K/press release ; Dividend press releases .