First Capital Inc (FCAP) delivered a solid Q3 2024 with revenue of $10.93 million and net income of $2.90 million, translating to earnings per share (EPS) of $0.87. The quarter showed a strong gross margin of 95.76% and an operating margin of approximately 31.47%, highlighting a favorable cost structure relative to revenue. On a year-over-year basis, revenue rose about 28% (YoY), but net income declined roughly 7.7% (YoY) as higher interest expense and other costs pressured profitability; QoQ, revenue declined 23.3% reflecting seasonal dynamics common in small regional banks and pipeline timing as lending activity moderated into Q3.
From a liquidity and balance sheet perspective, FCAP remains conservatively leveraged with total debt to capitalization at 22.4% and a debt ratio of about 2.83%. The company ended the quarter with cash and short-term investments of roughly $438.3 million against total assets of $1.189 billion, underscoring ample liquidity to support loan growth, capital deployment, and potential strategic initiatives. Operating cash flow was robust at $7.58 million, with free cash flow around $7.50 million, driving a sizable annualized cash position and a cash balance of $89.94 million at period end. The dividend policy implies a payout ratio around 33.5%, consistent with prudent capital return in a rate environment that pressures net interest margins in smaller banks.
Overall, FCAP presents a defensively positioned regional bank with a strong liquidity profile, modest leverage, and healthy cash flow generation. The stock trades near a book value basis (P/B ~1.00) with a moderate earnings multiple (P/E ~10.1), suggesting limited downside protection but reasonable upside if regional loan growth and deposit dynamics improve. The absence of explicit forward-looking guidance in the filing requires investors to closely monitor rate movements, asset mix, and cost discipline as key drivers of future profitability.