First Capital, Inc. Reports Decrease in Net Income for Fiscal Year 2024

First Capital, Inc. reported a net income of $11.9 million, or $3.57 per diluted share, for the fiscal year ending December 31, 2024, a decrease from $12.8 million, or $3.82 per diluted share, in 2023. The company's total assets increased to $1.17 billion, up from $1.14 billion in the previous year, primarily driven by a rise in cash and cash equivalents and net loans receivable. Net loans increased by $16.8 million to $631.2 million, with notable growth in commercial real estate and residential mortgage loans, although this was partially offset by declines in commercial business and multifamily residential loans.

The company's net interest income rose by 3.5% to $35.8 million, attributed to an increase in the average tax-equivalent yield on interest-earning assets, which rose from 3.96% in 2023 to 4.49% in 2024. Total interest income increased by $6.9 million, largely due to higher interest on loans, which grew by $4.9 million as the average balance of loans increased. However, total interest expense also surged by $5.7 million, reflecting higher costs associated with interest-bearing liabilities, which rose from 1.11% in 2023 to 1.73% in 2024.

In terms of operational metrics, the allowance for credit losses (ACL) on loans increased to $9.3 million, or 1.45% of total loans, compared to $8.0 million, or 1.29%, in 2023. The increase in the ACL was driven by loan growth and a rise in nonperforming assets, which totaled $4.4 million at year-end, up from $1.8 million in 2023. The company recognized net charge-offs of $173,000 for 2024, a decrease from $469,000 in the previous year.

First Capital's strategic focus includes enhancing profitability through increased noninterest income and improving operational efficiency. The company plans to expand its commercial and consumer lending activities while continuing to sell a significant portion of newly originated fixed-rate residential mortgage loans in the secondary market. The company also aims to grow its market presence through potential acquisitions and branch expansions, while maintaining a strong emphasis on community engagement.

Looking ahead, First Capital anticipates continued challenges from rising interest rates and competitive pressures in its market area. The company remains committed to managing its credit risk and maintaining adequate liquidity to support its growth objectives. The management's outlook suggests a cautious approach, with a focus on monitoring economic conditions and adjusting strategies as necessary to navigate potential market fluctuations.