First Capital Inc's Business Segments

First Capital, Inc. was incorporated under Indiana law on September 11, 1998. On December 31, 1998, the Company became the holding company for First Federal Bank, A Federal Savings Bank (the “Bank”) upon the Bank’s reorganization as a wholly owned subsidiary of the Company resulting from the conversion of First Capital, Inc., M.H.C. (the “MHC”), from a federal mutual holding company to a stock holding company. On January 12, 2000, the Company completed a merger of equals with HCB Bancorp, the former holding company for Harrison County Bank, and the Bank changed its name to First Harrison Bank. On March 20, 2003, the Company acquired Hometown Bancshares, Inc. (“Hometown”), a bank holding company located in New Albany, Indiana. On December 4, 2015, the Company acquired Peoples Bancorp, Inc. of Bullitt County and its wholly-owned bank subsidiary, Peoples Bank of Bullitt County (“Peoples”), headquartered in Shepherdsville, Kentucky.

First Capital Inc. offers a diversified range of financial segments, products, and services tailored to meet the needs of diverse customer bases, including individuals, families, and businesses. The company primarily focuses on various types of lending, ensuring that it can support its clients in fulfilling their financial goals, whether related to residential homes, commercial properties, or consumer needs.

Residential Loans

First Capital Inc. has established itself as a prominent lender in the residential mortgage market, targeting both the origination of loans for immediate retention within its loan portfolio and for sale in the secondary market. The residential loans offered by the bank include:

1. Fixed-Rate Mortgage Loans: These loans feature a consistent interest rate throughout the loan term, typically ranging from 15 to 30 years. This stability provides homeowners with predictable monthly payments, making budgeting easier.

2. Adjustable Rate Mortgage (ARM) Loans: These loans have interest rates that adjust periodically based on market conditions, usually starting lower than fixed-rate loans. The adjustment terms are structured to provide borrowers the benefit of lower initial payments, which can be appealing for those who anticipate rising property values or changes in their income.

3. Loan Documentation: The bank ensures that all loan documents comply with standards set forth by leading entities such as the Federal National Mortgage Corporation (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), enabling secure transactions in both investment retention and secondary market sales.

Construction Loans

First Capital Inc. provides construction loans specifically designed for financing residential properties and, to a degree, commercial properties:

1. Loan Structure: These loans usually span a term of six to 12 months and are often linked to a fixed interest rate based on the prime lending rate.

2. Financing Options: Most construction loans issued are structured to transition into permanent financing through the secondary market upon the projects completion. This minimizes disruptions for borrowers and simplifies funding.

3. Pre-Approval for Permanent Financing: In scenarios where construction loans are originated without a commitment for permanent financing, the bank can provide support by evaluating borrower qualifications and project viability.

Commercial Real Estate Loans

First Capital Inc.s commercial real estate loan offerings cater to small businesses and professionals looking to finance physical spaces:

1. Properties Secured: Loans are typically secured by various types of properties, including small retail stores, office spaces, and agricultural properties, providing a broad market reach.

2. Loan-to-Value (LTV) Ratio: Commercial real estate loans offered do not exceed a 75% LTV ratio based on the appraised value, which protects the bank and allows efficient risk management.

3. Interest Rate Terms: These loans often feature variable interest rates that are pegged to the prime lending rate or U.S. Treasury Bill rates, with potential terms of 10 to 15 years, including adjustments every five years. The bank also extends fixed-rate balloon loans, which result in a larger final payment at the end of the term, allowing for longer amortization periods.

Commercial Business Loans

First Capital Inc. provides commercial business loans designed to meet the financial needs of firms across various sectors:

1. Collateral Requirements: These loans are typically secured against business inventory, accounts receivable, and essential equipment, enhancing the bank’s security in terms of borrower obligations.

2. Personal Guaranty: Borrowers are often required to provide personal guarantees, necessitating detailed financial evaluations of the business principals to ensure creditworthiness.

3. Loan-to-Value Standards: Similar to other loan types, commercial business loans generally have a maximum LTV of 75%, balancing risk and opportunity for the bank and its clients.

Consumer Loans

To cater to the personal financial needs of individuals, First Capital Inc. offers a wide range of consumer loans:

1. Secured and Unsecured Loans: The bank provides secured loans including auto loans, home equity loans, home improvement loans, and loans for recreational vehicles like boats and mobile homes as well as unsecured personal loans.

2. Terms and Conditions: Typically structured with fixed interest rates, consumer loans often have terms not exceeding seven years. Home equity and second mortgage loans constitute the largest segment of this portfolio, followed by automobile loans, which are issued for both new and used vehicles.

3. Loan Limits: For consumer loans, the bank commonly offers financing up to 90% of the purchase price for new vehicles, or up to 90% of the blue book value for used vehicles.

By focusing on comprehensive financial products and adaptable lending solutions, First Capital Inc. strives to meet the varied needs of its consumer and commercial clientele, fostering strong relationships while navigating the evolving financial landscape.