third quarter 2026
Filed Oct 23, 2026First Capital, Inc. reports quarterly net income of $5.1 million, or $1.53 per diluted share, for the quarter ended September 30, 2026.
Third-quarter net income increased to $5.1 million from $4.5 million, supported by higher net interest income and a higher tax-equivalent net interest margin, while provision expense, noninterest expense and nonperforming assets increased.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total interest income, three months ended September 30, 2026GAAP | $16.09M | – | increased $1.4 million |
| Total interest expense, three months ended September 30, 2026GAAP | $3.58M | – | decreased $119,000 |
| Net interest income, three months ended September 30, 2026GAAP | $12.51M | – | – |
| Provision for credit losses, three months ended September 30, 2026GAAP | $355K | – | increased from $150,000 to $355,000 |
| Net interest income after provision for credit losses, three months ended September 30, 2026GAAP | $12.15M | – | increased $1.3 million |
| Total non-interest income, three months ended September 30, 2026GAAP | $2.29M | – | decreased $14,000 |
| Total non-interest expense, three months ended September 30, 2026GAAP | $8.11M | – | increased $545,000 |
| Income before income taxes, three months ended September 30, 2026GAAP | $6.34M | – | – |
| Income tax expense, three months ended September 30, 2026GAAP | $1.23M | – | increased $164,000 |
| Effective tax rate, three months ended September 30, 2026GAAP | 19.4% | – | – |
| Net income, three months ended September 30, 2026GAAP | $5.11M | – | – |
| Net income attributable to First Capital, Inc., three months ended September 30, 2026GAAP | $5.10M | – | – |
| Diluted net income per share attributable to First Capital, Inc. common shareholders, three months ended September 30, 2026GAAP | $ 1.53 | – | – |
| Basic net income per share attributable to First Capital, Inc. common shareholders, three months ended September 30, 2026GAAP | $ 1.53 | – | – |
| Return on average assets (annualized), three months ended September 30, 2026GAAP | 1.59% | – | – |
| Return on average equity (annualized), three months ended September 30, 2026GAAP | 14.40% | – | – |
| Net interest margin, three months ended September 30, 2026GAAP | 4.01% | – | – |
| Net interest margin (tax-equivalent basis), three months ended September 30, 2026non-GAAP | 4.08% | – | increased from 3.71% to 4.08% |
| Interest rate spread, three months ended September 30, 2026GAAP | 3.59% | – | – |
| Interest rate spread (tax-equivalent basis), three months ended September 30, 2026non-GAAP | 3.66% | – | – |
| Net overhead expense as a percentage of average assets (annualized), three months ended September 30, 2026GAAP | 2.52% | – | – |
| Net income, nine months ended September 30, 2026GAAP | $14.21M | – | – |
| Net income attributable to First Capital, Inc., nine months ended September 30, 2026GAAP | $14.20M | – | – |
| Diluted net income per share attributable to First Capital, Inc. common shareholders, nine months ended September 30, 2026GAAP | $ 4.25 | – | – |
| Net interest income after provision for credit losses, nine months ended September 30, 2026GAAP | $34.88M | – | increased $4.7 million |
| Provision for credit losses, nine months ended September 30, 2026GAAP | $1.13M | – | increased from $794,000 to $1.1 million |
| Total non-interest income, nine months ended September 30, 2026GAAP | $6.54M | – | increased $373,000 |
| Total non-interest expense, nine months ended September 30, 2026GAAP | $23.71M | – | increased $1.5 million |
| Net interest margin (tax-equivalent basis), nine months ended September 30, 2026non-GAAP | 3.96% | – | increased from 3.55% to 3.96% |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- Cash dividends per share, three months ended September 30, 2026: $ 0.32; prior-year period: $ 0.31.
- Cash dividends per share, nine months ended September 30, 2026: $ 0.94; prior-year period: $ 0.89.
What drove it
- Interest income increased $1.4 million in the third quarter as the average tax-equivalent yield on interest-earning assets increased from 4.94% to 5.23% and the average balance of interest-earning assets increased from $1.20 billion to $1.25 billion.
- Interest expense decreased $119,000 as the average cost of interest-bearing liabilities decreased from 1.66% to 1.57%, while the average balance of interest-bearing liabilities increased from $891.3 million to $911.5 million.
- Third-quarter other income increased $92,000 and service charges on deposit accounts increased $57,000. Other income included $48,000 from the technology investment fund and $45,000 from the renewable energy tax credit investment.
- For the nine months, noninterest income increased $373,000, led by a $261,000 gain on equity securities compared with a $127,000 gain in the prior-year period.
- Deposits increased $6.4 million from $1.12 billion at December 31, 2025 to $1.13 billion at September 30, 2026.
Concerns
- Provision for credit losses increased from $150,000 to $355,000 in the third quarter and from $794,000 to $1.1 million for the nine-month period.
- Nonperforming assets increased from $4.4 million at December 31, 2025 to $5.5 million at September 30, 2026, primarily due to the nonaccrual classification of a non-owner occupied commercial real estate loan.
- Third-quarter noninterest expenses increased $545,000, including a $585,000 increase in compensation and benefits and a $75,000 increase in other expenses.
- The allowance for credit losses as a percentage of gross loans increased from 1.52% to 1.60%.
- Third-quarter noninterest income decreased $14,000, reflecting a $9,000 loss on equity securities compared with a $150,000 gain in the prior-year quarter.
What to watch
- The durability of the 4.08% tax-equivalent net interest margin and the 1.57% average cost of interest-bearing liabilities.
- Credit trends following the increase in nonperforming assets to $5.5 million and third-quarter net charge-offs of $123,000.
- Expense growth, particularly compensation and benefits, health insurance costs, consumer fraud losses, consulting fees and marketing expenses.
- Loan and deposit trends, with gross loans at $685,897 (Dollars in thousands) and deposits at $1,129,397 (Dollars in thousands) at September 30, 2026.
Balance sheet and cash flow
- Cash and cash equivalents at September 30, 2026: $ 139,019 (Dollars in thousands); December 31, 2025: $ 137,288 (Dollars in thousands).
- Investment securities at September 30, 2026: $ 401,694 (Dollars in thousands); December 31, 2025: $ 424,190 (Dollars in thousands).
- Gross loans at September 30, 2026: $ 685,897 (Dollars in thousands); December 31, 2025: $ 664,208 (Dollars in thousands).
- Allowance for credit losses at September 30, 2026: $ 10,946 (Dollars in thousands); December 31, 2025: $ 10,108 (Dollars in thousands).
- Total assets at September 30, 2026: $ 1,274,835 (Dollars in thousands); December 31, 2025: $ 1,271,995 (Dollars in thousands).
- Deposits at September 30, 2026: $ 1,129,397 (Dollars in thousands); December 31, 2025: $ 1,122,990 (Dollars in thousands).
- Stockholders' equity, net of noncontrolling interest, at September 30, 2026: $ 135,712 (Dollars in thousands); December 31, 2025: $ 137,797 (Dollars in thousands).
- Allowance for credit losses as a percentage of gross loans at September 30, 2026: 1.60%; December 31, 2025: 1.52%.
- Nonaccrual loans at September 30, 2026: $ 5,434 (Dollars in thousands); December 31, 2025: $ 4,268 (Dollars in thousands).
- Accruing loans past due 90 days at September 30, 2026: $ 32 (Dollars in thousands); December 31, 2025: $ 83 (Dollars in thousands).
- Community Bank Leverage Ratio at September 30, 2026: 11.47%; December 31, 2025: 11.01%.
- Net charge-offs were $123,000 for the quarter ended September 30, 2026 and $17,000 for the quarter ended September 30, 2025.
- Net charge-offs were $292,000 for the nine months ended September 30, 2026 and $214,000 for the nine months ended September 30, 2025.
Analysis
First Capital reported third-quarter net income of $5.1 million, or $1.53 per diluted share, compared with $4.5 million, or $1.34 per diluted share, in the prior-year quarter. The improvement was driven principally by net interest income after provision for credit losses, which increased $1.3 million. For the first nine months, net income was $14.2 million, or $4.25 per diluted share, compared with $11.5 million, or $3.43 per diluted share, in the same period of 2025.
The core interest-earning profile improved. Average tax-equivalent yield on interest-earning assets increased from 4.94% to 5.23% in the quarter, while average cost of interest-bearing liabilities declined from 1.66% to 1.57%. This lifted tax-equivalent net interest margin from 3.71% to 4.08%. Average interest-earning assets increased from $1.20 billion to $1.25 billion, and average interest-bearing liabilities increased from $891.3 million to $911.5 million.
Noninterest income was modestly lower in the quarter, decreasing $14,000. The company recorded a $9,000 loss on equity securities, compared with a $150,000 gain in the prior-year quarter, partly offset by increases in other income and service charges on deposit accounts. Expense pressure remained notable: noninterest expenses increased $545,000, primarily from compensation and benefits and other expenses. The provision for credit losses rose from $150,000 to $355,000.
Balance-sheet growth was concentrated in loans, which increased to $685,897 (Dollars in thousands) from $664,208 (Dollars in thousands), while investment securities declined to $401,694 (Dollars in thousands) from $424,190 (Dollars in thousands). Deposits increased to $1,129,397 (Dollars in thousands). Asset quality requires attention as nonperforming assets rose to $5.5 million from $4.4 million, primarily due to a nonaccrual classification of a non-owner occupied commercial real estate loan.
The release provided no forward guidance. Capital return consisted of a quarterly cash dividend of $0.32 per share, compared with $0.31 per share in the prior-year quarter. The reported 11.47% Community Bank Leverage Ratio was above the 11.01% reported at December 31, 2025.
Not in the filing
stated, not guessed- Forward guidance for revenue, gross margin, operating expenses, tax rate and other metrics was not provided.
- Previous-period outlook was not provided.
- Total revenue was not reported.
- Segment revenue and segment profitability were not reported.
- Gross margin was not reported.
- Operating income was not reported.
- Operating cash flow and free cash flow were not reported.
- Share repurchases were not reported.
- Debt was not reported.
- Prior-quarter comparisons for reported metrics were not provided.
- Named executive quotations were not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.