First Capital, Inc. reported Q1 2026 earnings, posting net income of $4.3 million, or $1.30 per diluted share, up from $3.2 million ($0.97 per share) in the same period a year earlier. Net interest income after provision for credit losses rose $1.8 million, driven by a $1.6 million increase in interest income and a $259,000 reduction in interest expense, reflecting a higher tax‑equivalent net interest margin of 3.81% versus 3.34% in 2025. Total deposits grew $13.6 million to $1.14 billion, while cash and loan balances increased $12.4 million and $10.3 million respectively, supporting continued asset‑growth and liquidity strength.
The margin expansion was largely a result of higher yields on interest‑earning assets and a lower cost of liabilities, which lifted the net interest margin. Deposit growth indicates a strengthening customer base, and asset quality remained solid, with nonperforming assets falling from $4.4 million at the end of 2025 to $4.0 million at the end of Q1 2026. The company also recorded a loss on the sale of $18.7 million of available‑for‑sale securities, a move intended to reposition its investment portfolio for higher future yields. Noninterest expenses rose, driven by higher professional services, compensation, benefits, and consumer fraud losses.
Management actions included the sale of $18.7 million of available‑for‑sale securities and an allowance for credit losses on loans and unfunded loan commitments. The company declared a quarterly dividend of $0.31 per share, translating to an annualized dividend of $1.24 and a yield of 2.3%. The community bank leverage ratio stood at 11.13% at the end of the quarter.
Investors responded positively to the results, citing margin expansion, deposit growth, and the strategic portfolio repositioning. The strong earnings and liquidity position reinforce confidence in First Capital’s ongoing strategy.
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