First Capital, Inc. Reports Quarterly Earnings

Higher lending margins accompanied earnings growth, while credit-loss provisions and nonperforming assets increased.

Rhea-AI Summary

First Capital (NASDAQ: FCAP) reported third-quarter diluted earnings of $1.53 per share, higher than the same quarter last year. Net income was $5.1 million versus $4.5 million, while diluted earnings rose from $1.34. Net interest income after credit-loss provisions reached $12.155 million, versus $10.806 million. Tax-equivalent net interest margin, which adjusts for tax-exempt income, widened to 4.08% from 3.71%.

Quarterly credit-loss provisions increased to $355,000 from $150,000, and noninterest expenses rose $545,000. For the nine months ended September 30, 2026, net income reached $14.2 million and diluted earnings were $4.25, versus $11.5 million and $3.43 a year earlier. Deposits increased $6.4 million from year-end to $1.13 billion. Nonperforming assets rose to $5.5 million from $4.4 million, primarily following the nonaccrual classification of a non-owner-occupied commercial real estate loan.

17 points · 0 major

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0 major · 13 points

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Positive

• Moderate pointThird-quarter diluted earnings increased to $1.53 from $1.34; net income rose to $5.1 million from $4.5 million.
• Moderate pointThird-quarter net interest income after credit-loss provisions rose to $12.155 million from $10.806 million year over year.
• Moderate pointThird-quarter tax-equivalent net interest margin widened to 4.08% from 3.71% year over year.
• Moderate pointNet loans receivable increased $20.9 million between December 31, 2025 and September 30, 2026.
• Minor pointNine-month diluted earnings increased to $4.25 from $3.43; net income rose to $14.2 million from $11.5 million.

12 minor points

• Minor pointNine-month net interest income after credit-loss provisions rose to $34.885 million from $30.155 million year over year.
• Minor pointNine-month tax-equivalent net interest margin widened to 3.96% from 3.55% year over year.
• Minor pointThird-quarter interest expense fell $119,000 year over year as average funding costs declined to 1.57% from 1.66%.
• Minor pointNine-month interest expense fell $471,000 year over year as average funding costs declined to 1.56% from 1.67%.
• Minor pointNine-month noninterest income increased to $6.545 million from $6.172 million year over year.
• Minor pointThird-quarter occupancy and equipment expenses decreased $148,000 year over year; nine-month expenses decreased $110,000.
• Minor pointDeposits increased $6.4 million from year-end 2025 to $1.13 billion at September 30, 2026.
• Minor pointCash and cash equivalents rose to $139.019 million from $137.288 million at year-end 2025.
• Minor pointQuarterly cash dividends per share increased to $0.32 from $0.31; nine-month dividends rose to $0.94 from $0.89.
• Minor pointAnnualized third-quarter return on average assets increased to 1.59% from 1.45%; nine-month return rose to 1.48% from 1.26%.
• Minor pointAnnualized third-quarter return on average equity increased to 14.40% from 14.29%; nine-month return rose to 13.45% from 12.70%.
• Minor pointThe Bank's Community Bank Leverage Ratio increased to 11.47% from 11.01% at year-end 2025.

Negative

• Moderate pointNonperforming assets increased to $5.5 million at September 30, 2026, from $4.4 million at year-end 2025.
• Moderate pointThird-quarter credit-loss provisions increased to $355,000 from $150,000 year over year.
• Moderate pointThird-quarter compensation and benefits increased $585,000 year over year; nine-month costs increased $1.1 million.
• Minor pointNine-month credit-loss provisions increased to $1.130 million from $794,000 year over year.
• Minor pointThird-quarter net charge-offs increased to $123,000 from $17,000; nine-month charge-offs rose to $292,000 from $214,000.

8 minor points

• Minor pointThird-quarter other expenses increased $75,000 year over year; nine-month other expenses increased $253,000.
• Minor pointNine-month professional services expenses increased $132,000 year over year, reflecting higher consulting fees.
• Minor pointNine-month advertising expenses increased $92,000 year over year for new marketing campaigns.
• Minor pointThird-quarter noninterest income decreased $14,000 year over year to $2.292 million.
• Minor pointThird-quarter income tax expense increased $164,000; the effective tax rate rose to 19.4% from 19.2% year over year.
• Minor pointNine-month income tax expense increased $919,000; the effective tax rate rose to 19.8% from 18.4% year over year.
• Minor pointStockholders' equity excluding noncontrolling interest declined to $135.712 million from $137.797 million at year-end 2025.
• Minor pointAnnualized quarterly net overhead expense rose to 2.52% of average assets from 2.44%; nine-month overhead reached 2.47%.

Key Figures

Quarterly net income: $5.1 million vs. $4.5 million Quarterly diluted EPS: $1.53 vs. $1.34 Tax-equivalent net interest margin: 4.08% vs. 3.71% +4 more

Quarterly net income

$5.1 million vs. $4.5 million

Quarter ended September 30, 2026 vs. 2025

Quarterly diluted EPS

$1.53 vs. $1.34

Quarter ended September 30, 2026 vs. 2025

Tax-equivalent net interest margin

4.08% vs. 3.71%

Quarter ended September 30, 2026 vs. 2025

Provision for credit losses

$355,000 vs. $150,000

Quarter ended September 30, 2026 vs. 2025

Nine-month net income

$14.2 million vs. $11.5 million

Nine months ended September 30, 2026 vs. 2025

Nine-month diluted EPS

$4.25 vs. $3.43

Nine months ended September 30, 2026 vs. 2025

Nonperforming assets

$5.5 million vs. $4.4 million

September 30, 2026 vs. December 31, 2025

Historical Context

2 past events · Latest: Jul 24

2 events

1. Jul 24

   Quarterly earnings

   24h Move

   +4.1%

   Year-over-year net income and diluted EPS rose; tax-equivalent margin widened.

2. Apr 24

   Quarterly earnings

   24h Move

   -0.3%

   Year-over-year net income and diluted EPS increased, with net interest margin expansion.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

tax-equivalent net interest margin, allowance for credit losses, net charge-offs, nonaccrual, +1 more

5 terms

tax-equivalent net interest margin financial

"the tax-equivalent net interest margin increased from 3.71%"

Net interest margin measures the percentage difference between interest a lender earns on its assets and interest it pays on liabilities; tax-equivalent net interest margin adjusts that figure to account for tax-exempt interest by converting it into the taxable-equivalent yield using a chosen tax rate. This makes the margin comparable across institutions or assets by reflecting what tax-free income would be worth if it were taxed, like converting prices into the same currency so you can compare them directly.

allowance for credit losses financial

"the Allowance for Credit Losses (“ACL”) on loans and unfunded loan commitments"

Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.

net charge-offs financial

"The Bank recognized net charge-offs of $123,000 and $17,000"

Net charge-offs are the amount of loans or credit a lender removes from its books as uncollectible after subtracting any money later recovered from previously written-off accounts. Think of it like a store writing off unpaid tabs but getting back a few dollars later — the net figure shows the real loss. Investors watch this to judge a lender’s loan quality, future profits and how much capital may be needed to cover bad debts.

nonaccrual financial

"due to the nonaccrual classification of a non-owner occupied commercial real estate loan"

A nonaccrual asset is a loan or investment that a lender stops counting as earning interest because the borrower is not making scheduled payments or the lender doubts future payments. Think of it like putting a subscription on hold when you stop receiving payments; it reduces reported income and signals a higher risk that the lender may not get repaid, which can affect a bank's profits and the value of its loan portfolio.

gaap financial

"non–U.S. Generally Accepted Accounting Principles (“GAAP”) measures"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

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CORYDON, Ind., Oct. 23, 2026 (GLOBE NEWSWIRE) -- First Capital, Inc. (the “Company”) (NASDAQ: FCAP), the holding company for First Harrison Bank (the “Bank”), today reported net income of $5.1 million, or $1.53 per diluted share, for the quarter ended September 30, 2026, compared to net income of $4.5 million, or $1.34 per diluted share, for the quarter ended September 30, 2025.

Results of Operations for the Three Months Ended September 30, 2026 and 2025

Net interest income after provision for credit losses increased $1.3 million for the quarter ended September 30, 2026 compared to the same period in 2025. Interest income increased $1.4 million when comparing the two periods due to an increase in the average tax-equivalent yield⁽¹⁾ on interest-earning assets from 4.94% for the third quarter of 2025 to 5.23% for the same period in 2026, in addition to an increase in the average balance of interest-earning assets from $1.20 billion for the third quarter of 2025 to $1.25 billion for the same period in 2026. Interest expense decreased $119,000 when comparing the periods as the average cost of interest-bearing liabilities decreased from 1.66% for the quarter ended September 30, 2025 to 1.57% for the same period in 2026 while the average balance of interest-bearing liabilities increased from $891.3 million for the quarter ended September 30, 2025 to $911.5 million for the same period in 2026. As a result of the changes in interest-earning assets and interest-bearing liabilities, the tax-equivalent net interest margin⁽¹⁾ increased from 3.71% for the quarter ended September 30, 2025 to 4.08% for the same period in 2026. Refer to the accompanying average balance sheet for more information regarding changes in the composition of the Company’s balance sheet and resulting yields and costs from the quarter ended September 30, 2025 to the quarter ended September 30, 2026.

Based on management’s analysis of the Allowance for Credit Losses (“ACL”) on loans and unfunded loan commitments, the provision for credit losses increased from $150,000 for the quarter ended September 30, 2025 to $355,000 for the quarter ended September 30, 2026.   The Bank recognized net charge-offs of $123,000 and $17,000 for the quarters ended September 30, 2026 and 2025, respectively.

Noninterest income decreased $14,000 for the quarter ended September 30, 2026 as compared to the quarter ended September 30, 2025. The decrease is primarily due to the Company recognizing a $9,000 loss on equity securities during the quarter ended September 30, 2026 compared to a gain of $150,000 during the same period in 2025.   That decrease was partially offset by the Company recognizing increases of $92,000 and $57,000 in other income and service charges on deposit accounts, respectively, when comparing the two periods.   The increase in other income was primarily due to the Company recognizing $48,000 and $45,000 in income from its technology investment fund and its renewable energy tax credit investment, respectively, during the quarter.  

Noninterest expenses increased $545,000 for the quarter ended September 30, 2026 as compared to the same period in 2025. This was primarily due to increases in compensation and benefits and other expenses of $585,000 and $75,000, respectively, when comparing the two periods.   The increase in compensation and benefits is due to increases in salary and wages associated with annual cost of living and performance related adjustments as well as increases in the cost of Company-provided health insurance benefits. The increase in other expenses was primarily due to general inflationary pressures and routine pricing increases rather than any specific item. These increases were partially offset by a $148,000 decrease in occupancy and equipment expenses when comparing the two periods. Occupancy and equipment expenses were elevated during the third quarter of 2025 due to disposal losses associated with two of the Bank’s branches, the upgrade of the Company’s call center system, and the demolition of one of the Bank’s branches. None of these were present during the third quarter of 2026.

Income tax expense increased $164,000 for the quarter ended September 30, 2026 as compared to the same period in 2025 resulting in an effective tax rate of 19.4% for the quarter ended September 30, 2026, compared to 19.2% for the same period in 2025.

Results of Operations for the Nine Months Ended September 30, 2026 and 2025

For the nine months ended September 30, 2026, the Company reported net income of $14.2 million, or $4.25 per diluted share, compared to net income of $11.5 million, or $3.43 per diluted share, for the same period in 2025.

Net interest income after provision for credit losses increased $4.7 million for the nine months ended September 30, 2026 compared to the same period in 2025. Interest income increased $4.6 million when comparing the two periods due to an increase in the average tax-equivalent yield⁽¹⁾ on interest-earning assets from 4.80% for the nine months ended September 30, 2025 to 5.10% for the same period in 2026, in addition to an increase in the average balance of interest-earning assets from $1.19 billion for the nine months ended September 30, 2025 to $1.24 billion for the same period in 2026. Interest expense decreased $471,000 when comparing the periods as the average cost of interest-bearing liabilities decreased from 1.67% for the nine months ended September 30, 2025 to 1.56% for the same period in 2026 while the average balance of interest-bearing liabilities increased from $886.0 million for the nine months ended September 30, 2025 to $906.8 million for the same period in 2026. As a result of the changes in interest-earning assets and interest-bearing liabilities, the tax-equivalent net interest margin⁽¹⁾ increased from 3.55% for the nine months ended September 30, 2025 to 3.96% for the same period in 2026. Refer to the accompanying average balance sheet for more information regarding changes in the composition of the Company’s balance sheet and resulting yields and costs from the nine months ended September 30, 2025 to the nine months ended September 30, 2026.

Based on management’s analysis of the ACL on loans and unfunded loan commitments, the provision for credit losses increased from $794,000 for the nine months ended September 30, 2025 to $1.1 million for the nine months ended September 30, 2026. The Bank recognized net charge-offs of $292,000 and $214,000 for the nine months ended September 30, 2026 and 2025, respectively.

Noninterest income increased $373,000 for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. The increase is primarily due to the Company recognizing a $261,000 gain on equity securities during the nine months ended September 30, 2026 compared to a gain of $127,000 during the same period in 2025. In addition, the Company recognized increases of $110,000, $70,000 and $50,000 in service charges on deposit accounts, other income and ATM and debit card fee income, respectively, when comparing the two periods.   The increase in other income was primarily due to the Company recognizing a $47,000 increase in income from its renewable energy tax credit investment during the nine months ended September 30, 2026, in addition to $48,000 of income from its technology investment fund during the nine months ended September 30, 2026 that the Company did not receive during the same period in 2025. These were partially offset by the Company recognizing a $47,000 gain on the redemption of a bank-owned life insurance policy during the nine months ended September 30, 2025, and no such redemption occurred during the same period in 2026.  

Noninterest expenses increased $1.5 million for the nine months ended September 30, 2026 as compared to the same period in 2025. This was primarily due to increases in compensation and benefits, other expenses, professional services, and advertising expenses of $1.1 million, $253,000, $132,000 and $92,000, respectively, when comparing the two periods. The increase in compensation and benefits is due to increases in salary and wages associated with annual cost of living and performance related adjustments as well as increases in the cost of Company-provided health insurance benefits. The increase in other expenses is primarily due to a $70,000 increase in consumer fraud losses and general inflationary pressures and routine pricing increases during the nine months ended September 30, 2026 as compared to the same period in 2025.   The increase in professional services is due to increased consulting fees. The increase in advertising expenses is related to various new marketing campaigns undertaken during the nine months ended September 30, 2026 as compared to the same period in 2025. These increases were partially offset by a decrease in occupancy and equipment expenses of $110,000 due to a reduction in building maintenance expenses.

Income tax expense increased $919,000 for the nine months ended September 30, 2026 as compared to the same period in 2025 resulting in an effective tax rate of 19.8% for the nine months ended September 30, 2026, compared to 18.4% for the same period in 2025. The increase in the Company’s effective tax rate for the nine months ended September 30, 2026 reflects a higher proportion of net income being subject to taxation compared to the same period last year.

Comparison of Financial Condition at September 30, 2026 and December 31, 2025

Total assets were $1.27 billion at September 30, 2026 and December 31, 2025. Net loans receivable and other assets increased $20.9 million and $2.2 million, respectively, from December 31, 2025 to September 30, 2026. These increases were partially offset by a decrease of $22.5 million in available for sale securities when comparing the two periods. Deposits increased $6.4 million from $1.12 billion at December 31, 2025 to $1.13 billion at September 30, 2026. Nonperforming assets (consisting of nonaccrual loans, accruing loans 90 days or more past due, and foreclosed real estate) increased from $4.4 million at December 31, 2025 to $5.5 million at September 30, 2026. The increase was primarily due to the nonaccrual classification of a non-owner occupied commercial real estate loan.

The Bank currently has 17 offices in the Indiana communities of Corydon, Edwardsville, Greenville, Floyds Knobs, Palmyra, New Albany, New Salisbury, Jeffersonville, Salem, Lanesville and Charlestown and the Kentucky communities of Shepherdsville, Mt. Washington and Lebanon Junction.

Access to First Harrison Bank accounts, including online banking and electronic bill payments, is available through the Bank’s website at www.firstharrison.com. For more information and financial data about the Company, please visit Investor Relations at the Bank’s aforementioned website. The Bank can also be followed on Facebook.

(1) Reconciliations of the non–U.S. Generally Accepted Accounting Principles (“GAAP”) measures are set forth at the end of this press release.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of the words “anticipate,” “believe,” “expect,” “intend,” “could” and “should,” and other words of similar meaning. Forward-looking statements are not historical facts nor guarantees of future performance; rather, they are statements based on the Company’s current beliefs, assumptions, and expectations regarding its business strategies and their intended results and its 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 these 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; competition; the ability of the Company to execute its business plan; legislative and regulatory changes; the quality and composition of the loan and investment portfolios; loan demand; deposit flows; changes in accounting principles and guidelines; 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 press release, the Company’s reports, or made elsewhere from time to time by the Company or on its behalf. These forward-looking statements are made only as of the date of this press release, and the Company assumes no obligation to update any forward-looking statements after the date of this press release.

Contact:
Joshua P. Stevens
Chief Financial Officer
812-738-1570

FIRST CAPITAL, INC. AND SUBSIDIARIES Consolidated Financial Highlights (Unaudited)
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
OPERATING DATA		2026				2025				2026				2025
(Dollars in thousands, except per share data)
Total interest income		$	16,093			$	14,658			$	46,639			$	42,044
Total interest expense			3,583				3,702				10,624				11,095
Net interest income			12,510				10,956				36,015				30,949
Provision for credit losses			355				150				1,130				794
Net interest income after provision for credit losses			12,155				10,806				34,885				30,155
Total non-interest income			2,292				2,306				6,545				6,172
Total non-interest expense			8,109				7,564				23,715				22,239
Income before income taxes			6,338				5,548				17,715				14,088
Income tax expense			1,231				1,067				3,510				2,591
Net income			5,107				4,481				14,205				11,497
Less net income attributable to the noncontrolling interest			3				3				9				9
Net income attributable to First Capital, Inc.		$	5,104			$	4,478			$	14,196			$	11,488
Net income per share attributable to
First Capital, Inc. common shareholders:
Basic		$	1.53			$	1.34			$	4.25			$	3.43
Diluted		$	1.53			$	1.34			$	4.25			$	3.43
Weighted average common shares outstanding:
Basic			3,337,650				3,348,618				3,336,644				3,347,380
Diluted			3,340,438				3,350,008				3,339,574				3,349,321
OTHER FINANCIAL DATA
Cash dividends per share		$	0.32			$	0.31			$	0.94			$	0.89
Return on average assets (annualized)			1.59	%			1.45	%			1.48	%			1.26	%
Return on average equity (annualized)			14.40	%			14.29	%			13.45	%			12.70	%
Net interest margin			4.01	%			3.64	%			3.89	%			3.48	%
Net interest margin (tax-equivalent basis) (1)			4.08	%			3.71	%			3.96	%			3.55	%
Interest rate spread			3.59	%			3.21	%			3.47	%			3.06	%
Interest rate spread (tax-equivalent basis) (1)			3.66	%			3.28	%			3.54	%			3.13	%
Net overhead expense as a percentage of average assets (annualized)			2.52	%			2.44	%			2.47	%			2.44	%

		September 30,				December 31,
BALANCE SHEET INFORMATION		2026				2025
Cash and cash equivalents		$	139,019			$	137,288
Interest-bearing time deposits			1,225				1,470
Investment securities			401,694				424,190
Gross loans			685,897				664,208
Allowance for credit losses			10,946				10,108
Earning assets			1,196,895				1,193,475
Total assets			1,274,835				1,271,995
Deposits			1,129,397				1,122,990
Stockholders' equity, net of noncontrolling interest			135,712				137,797
Allowance for credit losses as a percentage of gross loans			1.60	%			1.52	%
Non-performing assets:
Nonaccrual loans			5,434				4,268
Accruing loans past due 90 days			32				83
Foreclosed real estate			—				—
Regulatory capital ratios (Bank only):
Community Bank Leverage Ratio (2)			11.47	%			11.01	%

(1)	See reconciliation of GAAP and non-GAAP financial measures for additional information relating to the calculation of this item.
(2)	Effective March 31, 2020, the Bank opted in to the Community Bank Leverage Ratio (CBLR) framework. As such, the other regulatory ratios are no longer provided.

FIRST CAPITAL, INC. AND SUBSIDIARIES Consolidated Average Balance Sheets (Unaudited)
		For the Three Months ended September 30,
		2026										2025
									Average										Average
		Average							Yield/			Average							Yield/
		Balance			Interest				Cost			Balance			Interest				Cost
(Dollars in thousands)
Interest earning assets:
Loans (1) (2):
Taxable		$	667,206		$	10,888			6.53	%		$	640,178		$	10,323			6.45	%
Tax-exempt (3)			13,570			201			5.92	%			10,328			109			4.22	%
Total loans			680,776			11,089			6.52	%			650,506			10,432			6.41	%
Investment securities:
Taxable (4)			320,001			3,119			3.90	%			318,628			2,282			2.86	%
Tax-exempt (3)			119,596			918			3.07	%			118,840			866			2.91	%
Total investment securities			439,597			4,037			3.67	%			437,468			3,148			2.88	%
Interest bearing deposits with banks (5)			128,032			1,202			3.76	%			115,623			1,283			4.44	%
Total interest earning assets			1,248,405			16,328			5.23	%			1,203,597			14,863			4.94	%
Non-interest earning assets			37,841										33,930
Total assets		$	1,286,246									$	1,237,527
Interest bearing liabilities:
Interest-bearing demand deposits		$	447,010		$	1,231			1.10	%		$	437,040		$	1,318			1.21	%
Savings accounts			221,400			100			0.18	%			227,997			154			0.27	%
Time deposits			243,061			2,252			3.71	%			226,309			2,230			3.94	%
Total deposits			911,471			3,583			1.57	%			891,346			3,702			1.66	%
Total interest bearing liabilities			911,471			3,583			1.57	%			891,346			3,702			1.66	%
Non-interest bearing liabilities
Non-interest bearing deposits			221,376										211,573
Other liabilities			11,599										9,236
Total liabilities			1,144,446										1,112,155
Stockholders' equity (6)			141,800										125,372
Total liabilities and stockholders' equity		$	1,286,246									$	1,237,527
Net interest income (tax-equivalent basis)					$	12,745									$	11,161
Less: tax equivalent adjustment						(235	)									(205	)
Net interest income					$	12,510									$	10,956
Interest rate spread									3.59	%									3.21	%
Interest rate spread (tax-equivalent basis) (7)									3.66	%									3.28	%
Net interest margin									4.01	%									3.64	%
Net interest margin (tax-equivalent basis) (7)									4.08	%									3.71	%
Ratio of average interest earning assets to average interest bearing liabilities									136.97	%									135.03	%

(1)	Interest income on loans includes fee income of $249,000 and $202,000 for the three months ended September 30, 2026 and 2025, respectively.
(2)	Average loan balances include loans held for sale and nonperforming loans.
(3)	Tax-exempt income has been adjusted to a tax-equivalent basis using the federal marginal tax rate of 21%.
(4)	Includes taxable debt and equity securities and FHLB Stock.
(5)	Includes interest-bearing deposits with banks and interest-bearing time deposits.
(6)	Stockholders' equity attributable to First Capital, Inc.
(7)	Reconciliations of the non–U.S. GAAP measures are set forth at the end of this press release.

  

FIRST CAPITAL, INC. AND SUBSIDIARIES Consolidated Average Balance Sheets (Unaudited)
		For the Nine Months ended September 30,
		2026										2025
									Average										Average
		Average							Yield/			Average							Yield/
		Balance			Interest				Cost			Balance			Interest				Cost
(Dollars in thousands)
Interest earning assets:
Loans (1) (2):
Taxable		$	662,999		$	31,918			6.42	%		$	638,950		$	30,172			6.30	%
Tax-exempt (3)			12,209			486			5.31	%			10,632			337			4.23	%
Total loans			675,208			32,404			6.40	%			649,582			30,509			6.26	%
Investment securities:
Taxable (4)			316,818			8,745			3.68	%			312,409			6,146			2.62	%
Tax-exempt (3)			119,262			2,710			3.03	%			118,714			2,529			2.84	%
Total investment securities			436,080			11,455			3.50	%			431,123			8,675			2.68	%
Interest bearing deposits with banks (5)			124,446			3,451			3.70	%			104,396			3,462			4.42	%
Total interest earning assets			1,235,734			47,310			5.10	%			1,185,101			42,646			4.80	%
Non-interest earning assets			41,886										32,472
Total assets		$	1,277,620									$	1,217,573
Interest bearing liabilities:
Interest-bearing demand deposits		$	442,237		$	3,598			1.08	%		$	438,971		$	4,061			1.23	%
Savings accounts			222,794			299			0.18	%			227,231			482			0.28	%
Time deposits			241,734			6,727			3.71	%			219,751			6,552			3.98	%
Total deposits			906,765			10,624			1.56	%			885,953			11,095			1.67	%
Total interest bearing liabilities			906,765			10,624			1.56	%			885,953			11,095			1.67	%
Non-interest bearing liabilities
Non-interest bearing deposits			217,893										202,719
Other liabilities			12,266										8,287
Total liabilities			1,136,924										1,096,959
Stockholders' equity (6)			140,696										120,614
Total liabilities and stockholders' equity		$	1,277,620									$	1,217,573
Net interest income (tax-equivalent basis)					$	36,686									$	31,551
Less: tax equivalent adjustment						(671	)									(602	)
Net interest income					$	36,015									$	30,949
Interest rate spread									3.47	%									3.06	%
Interest rate spread (tax-equivalent basis) (7)									3.54	%									3.13	%
Net interest margin									3.89	%									3.48	%
Net interest margin (tax-equivalent basis) (7)									3.96	%									3.55	%
Ratio of average interest earning assets to average interest bearing liabilities									136.28	%									133.77	%

(1)	Interest income on loans includes fee income of $668,000 and $599,000 for the nine months ended September 30, 2026 and 2025, respectively.
(2)	Average loan balances include loans held for sale and nonperforming loans.
(3)	Tax-exempt income has been adjusted to a tax-equivalent basis using the federal marginal tax rate of 21%.
(4)	Includes taxable debt and equity securities and FHLB Stock.
(5)	Includes interest-bearing deposits with banks and interest-bearing time deposits.
(6)	Stockholders' equity attributable to First Capital, Inc.
(7)	Reconciliations of the non–U.S. GAAP measures are set forth at the end of this press release.

RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES (UNAUDITED):

This presentation contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management uses these “non-GAAP” measures in its analysis of the Company's performance. Management believes that these non-GAAP financial measures allow for better comparability with prior periods, as well as with peers in the industry who provide a similar presentation, and provide a further understanding of the Company's ongoing operations. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company's consolidated financial statements and reconciles those non-GAAP financial measures with the comparable GAAP financial measures.

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2026				2025				2026				2025
(Dollars in thousands)
Net interest income (A)		$	12,510			$	10,956			$	36,015			$	30,949
Add: Tax-equivalent adjustment			235				205				671				602
Tax-equivalent net interest income (B)			12,745				11,161				36,686				31,551
Average interest earning assets (C)			1,248,405				1,203,597				1,235,734				1,185,101
Net interest margin (A)/(C)			4.01	%			3.64	%			3.89	%			3.48	%
Net interest margin (tax-equivalent basis) (B)/(C)			4.08	%			3.71	%			3.96	%			3.55	%
Total interest income (D)		$	16,093			$	14,658			$	46,639			$	42,044
Add: Tax-equivalent adjustment			235				205				671				602
Total interest income tax-equivalent basis (E)			16,328				14,863				47,310				42,646
Average interest earning assets (F)			1,248,405				1,203,597				1,235,734				1,185,101
Average yield on interest earning assets (D)/(F); (G)			5.16	%			4.87	%			5.03	%			4.73	%
Average yield on interest earning assets tax-equivalent (E)/(F); (H)			5.23	%			4.94	%			5.10	%			4.80	%
Average cost of interest bearing liabilities (I)			1.57	%			1.66	%			1.56	%			1.67	%
Interest rate spread (G)-(I)			3.59	%			3.21	%			3.47	%			3.06	%
Interest rate spread tax-equivalent (H)-(I)			3.66	%			3.28	%			3.54	%			3.13	%

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were First Capital's third-quarter 2026 earnings?

First Capital reported net income of $5.1 million, or $1.53 per diluted share, for the quarter ended September 30, 2026. That compares with $4.5 million, or $1.34 per diluted share, in the same quarter of 2025.

Why did First Capital's compensation costs increase in 2026?

First Capital attributed higher compensation and benefits costs to annual cost-of-living and performance-related pay adjustments and higher company-provided health insurance costs. Compensation and benefits increased $585,000 in the third quarter and $1.1 million over the first nine months, compared with the corresponding 2025 periods.

What drove First Capital's third-quarter 2026 noninterest income decline?

A $9,000 loss on equity securities, compared with a $150,000 gain a year earlier, was the primary driver of the decline. Increases of $92,000 in other income and $57,000 in deposit service charges partly offset that change.

Why did First Capital's nine-month 2026 effective tax rate rise?

First Capital attributed the increase to a higher proportion of net income being subject to taxation. Its effective tax rate for the nine months ended September 30, 2026 was 19.8%, compared with 18.4% in the corresponding 2025 period.