First Capital (NASDAQ: FCAP) lifts Q1 2026 profit and margins
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
First Capital, Inc. reported stronger quarterly results for the three months ended March 31, 2026. Net income attributable to the company rose to $4.33 million, or $1.30 per diluted share, up from $3.24 million, or $0.97 per diluted share a year earlier.
Net interest income after provision for credit losses increased to $11.07 million, helped by higher interest income and a wider tax-equivalent net interest margin of 3.81% versus 3.34%. The average yield on interest-earning assets improved while the average cost of interest-bearing liabilities declined.
Noninterest income grew to $2.05 million, supported by higher gains on equity securities, ATM and debit card fees, and loan sale gains, partly offset by a $92,000 loss on sale of $18.7 million of available-for-sale securities. Noninterest expenses rose to $7.75 million, driven by higher consulting, compensation, benefits and consumer fraud losses.
Total assets reached $1.28 billion at March 31, 2026, with deposits increasing to $1.14 billion. Nonperforming assets declined to $4.0 million. Return on average assets improved to 1.37% and return on average equity to 12.36%, while the Bank’s Community Bank Leverage Ratio stood at 11.13%.
Positive
- Stronger profitability: Net income attributable to First Capital, Inc. increased to $4.33 million and diluted EPS to $1.30 for Q1 2026, with ROA improving to 1.37% and ROE to 12.36%, reflecting meaningfully better earnings performance versus the prior-year quarter.
- Margin expansion and balance sheet growth: Tax-equivalent net interest margin rose to 3.81% from 3.34%, while total assets grew to $1.28 billion and deposits to $1.14 billion, indicating improved core banking profitability and modest balance sheet expansion.
Negative
- Rising operating and fraud-related costs: Noninterest expenses increased to $7.75 million, driven by higher professional services, compensation, health insurance and consumer fraud losses, which partly offset the benefit of stronger net interest income and noninterest income.
- Realized securities losses to reposition portfolio: The company recorded a $92,000 loss on sale of available-for-sale securities in Q1 2026 linked to selling $18.7 million of securities to reposition the investment portfolio for anticipated future yield improvements.
Insights
First Capital delivered stronger profitability with improved margins despite higher operating costs.
First Capital, Inc. showed a notable profit increase, with net income attributable to the company rising to $4.33 million and EPS to $1.30. This was driven by higher interest income and a wider tax-equivalent net interest margin of 3.81% versus 3.34% a year earlier.
Asset growth was modest, as total assets reached $1.28 billion and deposits increased to $1.14 billion. Credit quality metrics were stable to slightly better, with nonperforming assets down to $4.0 million and the allowance for credit losses at 1.53% of gross loans.
Operating costs did rise, with noninterest expense up to $7.75 million, including higher consulting fees, compensation, health benefits and consumer fraud losses. Even so, return on average assets improved to 1.37% and return on average equity to 12.36% for Q1 2026, indicating stronger overall profitability.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Net income attributable: $4.33M
Diluted EPS: $1.30
Net interest income after provision: $11.07M
+5 more
8 metrics
Net income attributable
$4.33M
Quarter ended March 31, 2026 vs $3.24M in 2025
Diluted EPS
$1.30
Quarter ended March 31, 2026 vs $0.97 in 2025
Net interest income after provision
$11.07M
Q1 2026 vs $9.24M in Q1 2025
Tax-equivalent net interest margin
3.81%
Quarter ended March 31, 2026 vs 3.34% in 2025
Total assets
$1.28B
Balance at March 31, 2026 vs $1.27B at Dec. 31, 2025
Nonperforming assets
$4.0M
Balance at March 31, 2026 vs $4.4M at Dec. 31, 2025
Noninterest expense
$7.75M
Quarter ended March 31, 2026 vs $7.18M in 2025
Community Bank Leverage Ratio
11.13%
Bank-only regulatory capital ratio at March 31, 2026
Key Terms
net interest margin, provision for credit losses, noninterest income, nonperforming assets, +2 more
6 terms
net interest margin financial
"the tax-equivalent net interest margin(1) increased from 3.34% for the quarter ended March 31, 2025 to 3.81% for the same period in 2026"
Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.
provision for credit losses financial
"the provision for credit losses increased from $338,000 for the quarter ended March 31, 2025 to $350,000 for the quarter ended March 31, 2026"
Provision for credit losses is an amount set aside by a financial institution to cover potential future losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution manage risks and stay financially healthy. For investors, it signals how cautious a lender is about potential loan defaults and can impact the company's profitability and financial stability.
noninterest income financial
"Noninterest income increased $200,000 for the quarter ended March 31, 2026 as compared to the quarter ended March 31, 2025"
Noninterest income is the money a bank or financial firm earns from activities other than charging interest on loans, such as account fees, transaction charges, advisory and underwriting fees, trading gains, and service income — like a store making extra money from repairs, warranties or delivery charges rather than product sales. It matters to investors because it shows how diversified a company’s revenue is and whether it can withstand changes in interest rates; a strong noninterest income stream can stabilize profits but may also be more variable than steady loan interest.
nonperforming assets financial
"Nonperforming assets (consisting of nonaccrual loans, accruing loans 90 days or more past due, and foreclosed real estate) decreased from $4.4 million at December 31, 2025 to $4.0 million at March 31, 2026"
Nonperforming assets are loans or investments that are not generating expected payments or returns because the borrower has fallen behind on payments or the investment has lost value. They matter to investors because a high level of nonperforming assets can indicate financial trouble for a bank or institution, potentially affecting its stability and profitability.
Community Bank Leverage Ratio financial
"Community Bank Leverage Ratio (2) | | | 11.13% | | | 11.01%"
Community bank leverage ratio is a regulatory measure that compares a bank’s core capital (its safety cushion) to the size of its balance sheet, showing what share of assets is backed by tangible equity rather than borrowed money. Investors use it like a health check: a higher ratio means the bank has more buffer to absorb losses, support lending and dividends, and face fewer regulatory limits, while a lower ratio signals greater risk.
tax-equivalent basis financial
"Tax-exempt income has been adjusted to a tax-equivalent basis using the federal marginal tax rate of 21%"
A tax-equivalent basis is a way to compare investments by converting a tax-free return into the taxable return you would need to receive the same after-tax income, using your marginal tax rate. It matters to investors because it lets you compare dissimilar securities — for example, a tax-exempt bond versus a taxable bond — on an equal footing, much like converting different currencies to the same money before comparing prices.
FAQ
How did First Capital (FCAP) perform financially in the quarter ended March 31, 2026?
First Capital reported higher profitability, with net income attributable to the company of $4.33 million and diluted EPS of $1.30. This compares to $3.24 million in net income and $0.97 diluted EPS in the prior-year quarter, reflecting stronger earnings.
What happened to First Capital (FCAP) net interest margin and interest income in Q1 2026?
Net interest income after provision for credit losses rose to $11.07 million, supported by a higher tax-equivalent net interest margin of 3.81% versus 3.34%. Total interest income increased to $14.92 million, helped by higher yields and larger average interest-earning asset balances.
How did noninterest income and expenses change for First Capital (FCAP) in Q1 2026?
Noninterest income increased to $2.05 million, driven by higher gains on equity securities, ATM and debit card fees, and loan sale gains. Noninterest expenses also rose to $7.75 million, mainly from higher consulting fees, compensation, health benefits and increased consumer fraud-related losses.
What were First Capital (FCAP) key balance sheet figures as of March 31, 2026?
At March 31, 2026, First Capital reported total assets of $1.28 billion, deposits of $1.14 billion and gross loans of $674.75 million. Cash and cash equivalents were $149.64 million, while investment securities totaled $414.76 million on the balance sheet.
How did credit quality and nonperforming assets trend for First Capital (FCAP)?
Credit quality indicators were stable to slightly improved. Nonperforming assets decreased to $4.0 million from $4.4 million, while the allowance for credit losses increased to $10.35 million, or 1.53% of gross loans, compared with 1.52% at year-end 2025.
What were First Capital (FCAP) returns on assets and equity in Q1 2026?
Return on average assets improved to 1.37%, up from 1.08% in the prior-year quarter. Return on average equity also increased, reaching 12.36% compared with 11.12% a year earlier, highlighting stronger profitability on both asset and equity bases.
Did First Capital (FCAP) change its dividend in the quarter ended March 31, 2026?
Cash dividends per share rose to $0.31 in the quarter, compared with $0.29 a year earlier. This reflects a modest increase in cash returned to common shareholders alongside the company’s improved earnings performance in the same period.