# FIRST CAPITAL INC (FCAP) Informational only - not investment advice. CIK: 0001070296 SIC: 6035 Savings Institution, Federally Chartered SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Depository Institutions](/major-group/60/) > [SIC 6035 Savings Institution, Federally Chartered](/industry/6035/) Latest 10-K filed: 2026-03-31 SEC page: https://www.sec.gov/edgar/browse/?CIK=1070296 Filing source: https://www.sec.gov/Archives/edgar/data/1070296/000110465926037802/fcap-20251231x10k.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 56847000 | USD | 2025 | 2026-03-31 | | Net income | 16367000 | USD | 2025 | 2026-03-31 | | Assets | 1271995000 | USD | 2025 | 2026-03-31 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-31. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001070296.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | 25,094,000 | 26,422,000 | 28,886,000 | 32,054,000 | 29,647,000 | 29,460,000 | 33,940,000 | 43,605,000 | 50,471,000 | 56,847,000 | | Net income | | 6,864,000 | 7,439,000 | 9,253,000 | 10,325,000 | 10,131,000 | 11,424,000 | 11,902,000 | 12,790,000 | 11,940,000 | 16,367,000 | | Operating income | 7,175,000 | 9,400,000 | 10,555,000 | 10,660,000 | 12,325,000 | 11,836,000 | 13,677,000 | 14,235,000 | 15,051,000 | 14,169,000 | | | Diluted EPS | | 2.05 | 2.23 | 2.77 | 3.09 | 3.02 | 3.41 | 3.55 | 3.82 | 3.57 | 4.89 | | Operating cash flow | | 8,240,000 | 13,419,000 | 13,348,000 | 14,077,000 | 12,060,000 | 21,631,000 | 16,531,000 | 14,163,000 | 22,345,000 | 21,284,000 | | Capital expenditures | | 1,992,000 | 1,269,000 | 402,000 | 2,973,000 | 602,000 | 288,000 | 415,000 | 627,000 | 717,000 | 1,352,000 | | Dividends paid | | 2,817,000 | 2,883,000 | 3,101,000 | 3,209,000 | 3,255,000 | 3,522,000 | 3,520,000 | 3,634,000 | 3,768,000 | 4,035,000 | | Share buybacks | | 34,000 | 16,000 | 32,000 | 2,000 | 13,000 | 40,000 | 0.00 | 502,000 | 41,000 | 578,000 | | Assets | | 743,658,000 | 758,956,000 | 794,162,000 | 827,496,000 | 1,017,551,000 | 1,156,603,000 | 1,151,400,000 | 1,157,880,000 | 1,187,523,000 | 1,271,995,000 | | Liabilities | | 667,816,000 | 677,906,000 | 708,206,000 | 728,548,000 | 906,800,000 | 1,042,663,000 | 1,066,130,000 | 1,052,535,000 | 1,072,812,000 | 1,134,086,000 | | Stockholders' equity | | 75,730,000 | 80,938,000 | 85,844,000 | 98,836,000 | 110,639,000 | 113,828,000 | 85,158,000 | 105,233,000 | 114,599,000 | 137,797,000 | | Free cash flow | | 6,248,000 | 12,150,000 | 12,946,000 | 11,104,000 | 11,458,000 | 21,343,000 | 16,116,000 | 13,536,000 | 21,628,000 | 19,932,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | | 27.35% | 28.15% | 32.03% | 32.21% | 34.17% | 38.78% | 35.07% | 29.33% | 23.66% | 28.79% | | Operating margin | | 37.46% | 39.95% | 36.90% | 38.45% | 39.92% | 46.43% | 41.94% | 34.52% | 28.07% | | | Return on equity | | 9.06% | 9.19% | 10.78% | 10.45% | 9.16% | 10.04% | 13.98% | 12.15% | 10.42% | 11.88% | | Return on assets | | 0.92% | 0.98% | 1.17% | 1.25% | 1.00% | 0.99% | 1.03% | 1.10% | 1.01% | 1.29% | | Liabilities / equity | | 8.82 | 8.38 | 8.25 | 7.37 | 8.20 | 9.16 | 12.52 | 10.00 | 9.36 | 8.23 | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001070296.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | 0.81 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 0.93 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 1.14 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 10,600,000 | 2,726,000 | 0.82 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 11,179,000 | 3,138,000 | 0.94 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 11,639,000 | 3,110,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 11,837,000 | 2,952,000 | 0.88 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 12,218,000 | 2,828,000 | 0.85 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 13,224,000 | 2,898,000 | 0.87 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 13,192,000 | 3,262,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 13,346,000 | 3,235,000 | 0.97 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 14,040,000 | 3,775,000 | 1.13 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 14,658,000 | 4,478,000 | 1.34 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 14,803,000 | 4,879,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 14,924,000 | 4,330,000 | 1.30 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1070296/000110465926059444/fcap-20260331x10q.htm Extracted from Part I Item 2 to the first post-MD&A boundary after HTML sanitization. Confidence: high Filing date: 2026-05-12 Report date: 2026-03-31 PART I - ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FIRST CAPITAL, INC. Total deposits increased $13.6 million from $1.12 billion at December 31, 2025 to $1.14 billion at March 31, 2026. Savings accounts and time deposit increases of $9.0 million and $5.4 million, respectively, were partially offset by a decrease of $1.5 million in non-interest bearing checking accounts during the three months ended March 31, 2026  Deposit inflows and outflows are influenced by prevailing market interest rates, competition, local and national economic conditions, and fluctuations in our customers’ own liquidity needs and may also be influenced by recent developments in the financial services industry. ​ The Company had no outstanding borrowings at March 31, 2026 or December 31, 2025. ​ Total stockholders’ equity attributable to the Company increased from $137.8 million at December 31, 2025 to $138.0 million at March 31, 2026, primarily due to a $3.3 million increase in retained net income partially offset by a $3.1 million net unrealized loss on available for sale securities. The net unrealized loss on available for sale securities during the period is primarily due to increased market interest rates. ​ Results of Operations for the Three Month Periods Ended March 31, 2026 and 2025 Net income.  Net income attributable to the Company was $4.3 million ($1.30 per diluted share) for the three months ended March 31, 2026 compared to $3.2 million ($0.97 per diluted share) for the three months ended March 31, 2025. ​ Net interest income.  Net interest income after provision for credit losses increased $1.8 million for the three months ended March 31, 2026 as compared to the same period in 2025. ​ Total interest income increased $1.6 million when comparing the two periods primarily due to an increase in the average tax-equivalent yield on interest-earning assets from 4.63% for the first quarter of 2025 to 4.96% for the same period in 2026, in addition to an increase in the average balance of interest-earning assets from $1.17 billion for the first quarter of 2025 to $1.22 billion for the same period in 2026. ​ Total interest expense decreased $259,000 when comparing the two periods.  The average cost of interest-bearing liabilities decreased from 1.71% for the quarter ended March 31, 2025 to 1.56% for the same period in 2026, while the average balance of interest-bearing liabilities increased from $881.6 million for the quarter ended March 31, 2025 to $901.4 million for the same period in 2026. ​ As a result of the changes in interest-earning assets and interest-bearing liabilities, the tax-equivalent net interest margin increased from 3.34% for the quarter ended March 31, 2025 to 3.81% for the same period in 2026. ​ Provision for credit losses.  Based on management’s analysis of the ACL on loans and unfunded loan commitments, the provision for credit losses increased from $338,000 for the quarter ended March 31, 2025 to $350,000 for the quarter ended March 31, 2026.  The Bank recognized net charge-offs of $111,000 and $84,000 for the quarters ended March 31, 2026 and 2025, respectively. Noninterest income.  Noninterest income increased $200,000 for the quarter ended March 31, 2026 as compared to the quarter ended March 31, 2025 primarily due to the Company recognizing an increase of $160,000 in the gain on equity securities when comparing the two periods.  In addition, the Company recognized increases of $45,000 and $44,000 in ATM and debit card fee income, and the gain on sale of loans, respectively, when comparing the two periods.  These increases were partially offset by the Company recognizing a $92,000 loss on the sale of available for sale securities for the quarter ended March 31, 2026 compared to a loss of $55,000 for the same period in 2025.  The loss on sale of available for sale securities during the quarter ended March 31, 2026 was a result of management’s decision to sell $18.7 million of available for sale securities to better position the Company’s investment portfolio for increased future yields. Noninterest expense.  Noninterest expenses increased $572,000 for the quarter ended March 31, 2026 as compared to the same period in 2025.  This was primarily due to increases in professional services, compensation and benefits and other expenses of $241,000, $235,000 and $99,000, respectively.  The increase in professional services is due to increased consulting fees.  The increase in compensation and benefits is due to increases in salary and wages associated with annual cost of living and performance related adjustments as well as increases in the cost of Company-provided health insurance benefits.  The increase in other expenses is primarily due to an increase in consumer fraud losses recognized for the quarter ended March 31, 2026 as compared to the same period in 2025. Income tax expense.  Income tax expense increased $358,000 for the quarter ended March 31, 2026 as compared to the same period in 2025 resulting in an effective tax rate of 19.2% for the quarter ended March 31, 2026, compared to 17.2% for the same period in 2025.  The increase in the Bank’s effective tax rate for the quarter ended March 31, 2026 reflects a higher proportion of net income being subject to taxation compared to the same period last year. - 30 - Table of Contents PART I - ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FIRST CAPITAL, INC. Liquidity and Capital Resources The Bank’s primary sources of funds are customer deposits, proceeds from loan repayments, maturing securities and borrowings from the FHLB or FRB. While loan repayments and maturities are a predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by market interest rates, general economic conditions and competition. At March 31, 2026, the Bank had cash and cash equivalents of $149.6 million and securities available-for-sale with a fair value of $407.8 million. If the Bank requires funds beyond its ability to generate them internally, it has additional borrowing capacity with the FHLB, FRB, collateral eligible for repurchase agreements and unsecured federal funds purchased lines of credit with other financial institutions. The Bank’s primary investing activity is the origination of one-to-four family mortgage loans and commercial real estate loans and, to a lesser extent, consumer, multi-family, commercial business and residential construction loans. The Bank also invests in U.S. Government and agency securities and mortgage-backed securities issued by U.S. Government agencies. The Bank must maintain an adequate level of liquidity to ensure the availability of sufficient funds to support loan growth and deposit withdrawals, to satisfy financial commitments and to take advantage of investment opportunities. Historically, the Bank has been able to retain a significant amount of its deposits as they mature. The Company is a separate legal entity from the Bank and must provide for its own liquidity. In addition to its operating expenses, the Company, on a stand-alone basis, is responsible for paying any dividends declared to its shareholders. The Board of Directors of the Company also has authorized the repurchase of shares of its common stock. The Company’s primary source of income is dividends received from the Bank. The amount of dividends that the Bank may declare and pay to the Company in any calendar year, without the receipt of prior approval from the Indiana Department of Financial Institutions (“IDFI”), cannot exceed net income for that year to date plus retained net income (as defined under Indiana law) for the preceding two calendar years. On a stand-alone basis, the Company had liquid assets of $2.3 million at March 31, 2026. The Bank is required to maintain specific amounts of capital pursuant to regulatory requirements. Beginning in 2020, qualifying community banks with assets of less than $10 billion are eligible to opt in to the Community Bank Leverage Ratio (“CBLR”) framework. The CBLR is the ratio of a bank’s tangible equity capital to average total consolidated assets. A qualifying community bank that exceeds this ratio will be deemed to be in compliance with all other capital and leverage requirements, including the capital requirements to be considered “well capitalized” under Prompt Corrective Action statutes. The federal banking agencies may consider a financial institution’s risk profile when evaluating whether it qualifies as a community bank for purposes of the capital ratio requirement. The federal banking agencies must set the minimum capital for the new CBLR at not less than 8% and not more than 10%, and has set the minimum ratio at 9% effective January 1, 2022. A financial institution that falls below the minimum CBLR generally has a two quarter grace period to get back into compliance as long as it maintains a minimum CBLR of 8%. A financial institution can elect to be subject to or opt out of the CBLR framework at any time. As a qualified community bank, the Bank had opted into the CBLR framework as of March 31, 2026 and December 31, 2025 and its CBLR was 11.13% and 11.01% as of those dates, respectively. Management believes that the Bank met all capital adequacy requirements to which it was subject as of March 31, 2026. At both March 31, 2026 and December 31, 2025, the Bank was considered “well-capitalized” under applicable regulatory guidelines. Off-Balance Sheet Arrangements In the normal course of operations, the Company engages in a variety of financial transactions that, in accordance with GAAP, are not recorded on the Company’s financial statements. These transactions involve, to varying degrees, elements of credit, interest rate and liquidity risk. Such transactions are primarily used to manage customers’ requests for funding and take the form of loan commitments and letters of credit. A further presentation of the Company’s off-balance sheet arrangements is presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. See Note 4 of this quarterly report for additional information regarding the ACL for these off-balance sheet arrangements. For the three months ended March 31, 2026, the Company did not engage in any off-balance sheet transactions reasonably likely to have a material effect on the Company’s financial condition, results of operations or cash flows. ​ ​ - 31 - Table of Contents PART I - ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK FIRST CAPITAL, INC. Qualitative Aspects of Market Risk.  Market risk is the risk that the estimated fair value of the Company’s assets and liabilities will decline as a result of changes in interest rates or financial market volatility, or that the Company’s net income will be significantly reduced by interest rate changes. The Company’s principal financial objective is to achieve long-term profitability while reducing its exposure to fluctuating market interest rates. The Company has sought to reduce the exposure of its earnings to changes in market interest rates by attempting to manage the mismatch between asset and liability maturities and interest rates. In order to reduce the exposure to interest rate fluctuations, the Company has developed strategies to manage its liquidity, shorten its effective maturities of certain interest-earning assets and decrease the interest rate sensitivity of its asset base. Management has sought to decrease the average maturity of its assets by emphasizing the origination of short-term commercial and consumer loans, all of which are retained by the Company for its portfolio. The Company relies on retail deposits as its primary source of funds. Management believes retail deposits, compared to brokered deposits, reduce the effects of interest rate fluctuations because they generally represent a more sta [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION General As the holding company for the Bank, the Company conducts its business primarily through the Bank. The Bank’s results of operations depend primarily on net interest income, which is the difference between the income earned on its interest-earning assets, such as loans and investments, and the cost of its interest-bearing liabilities, consisting primarily of deposits and borrowings from the FHLB. The Bank’s net income is also affected by, among other things, fee income, provisions for credit losses, operating expenses and income tax provisions. The Bank’s results of operations are also significantly affected by general economic and competitive conditions, particularly changes in market interest rates, government legislation and policies concerning monetary and fiscal affairs, housing and financial institutions and the intended actions of the regulatory authorities. Management uses various indicators to evaluate the Company’s financial condition and results of operations. Indicators include the following: ● Net income and earnings per share – Net income attributable to the Company was $16.4 million, or $4.89 per diluted share for 2025 compared to $11.9 million, or $3.57 per diluted share for 2024 and $12.8 million, or $3.82 per diluted share for 2023. ● Return on average assets and return on average equity – Return on average assets for 2025 was 1.34% compared to 1.02% for 2024 and 1.12% for 2023, and return on average equity for 2025 was 13.18% compared to 10.97% for 2024 and 14.03% for 2023. ● Efficiency ratio – The Company’s efficiency ratio (defined as noninterest expenses divided by net interest income plus noninterest income) was 58.4% for 2025 compared to 64.1% for 2024 and 61.6% for 2023. ● Asset quality – Net loan charge-offs totaled $469,000 for 2023, $173,000 for 2024 and $317,000 for 2025, and the ratio of net charge-offs to average loans outstanding remained virtually unchanged at 0.08% for 2023, 0.03% for 2024 and 0.05% for 2025. In addition, total nonperforming assets (consisting of nonperforming loans) remained virtually unchanged at $4.4 million, or 0.37% of total assets, at December 31, 2024 and $4.4 million, or 0.34% of total assets, at December 31, 2025. The ACL on loans was 1.52% of total outstanding loans and 232.3% of nonaccrual loans at December 31, 2025 compared to 1.45% of total outstanding loans and 211.8% of nonaccrual loans at December 31, 2024. ● Shareholder return – Total annual shareholder return, including the increase in the Company’s stock price from $32.25 at December 31, 2024 to $59.20 at December 31, 2025 and dividends of $1.20 per share, was 87.3% for 2025 compared to 19.6% for 2024 and 16.4% for 2023. The total return for the three-year period was 151.4%. Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding the financial condition and results of operations of the Company and the Bank. The information contained in this section should be read in conjunction with the consolidated financial statements and the accompanying Notes to Consolidated Financial Statements included in this report. Operating Strategy The Company is the parent company of an independent community-oriented financial institution that delivers quality customer service and offers a wide range of deposit, loan and investment products to its customers. The commitment to customer needs, the focus on providing consistent customer service, and community service and support are the keys to the Bank’s past and future success. The Company has no other material income other than that generated by the Bank and its subsidiaries. 40 Table of Contents The Bank’s primary business strategy is attracting deposits from the general public and using those funds to originate residential mortgage loans, multi-family residential loans, commercial real estate and business loans and consumer loans. The Bank invests excess liquidity primarily in interest-bearing deposits with the FHLB and other financial institutions, federal funds sold, U.S. government and agency securities, local municipal obligations and mortgage-backed securities. In recent years, the Company’s operating strategy has also included strategies designed to enhance profitability by increasing sources of noninterest income and improving operating efficiency while managing its capital and limiting its credit risk and interest rate risk exposures. To accomplish these objectives, the Company has focused on the following: ● Monitoring asset quality and credit risk in the loan and investment portfolios and originating high-quality commercial and consumer loans. In 2026, management will continue to focus on maintaining a reduced level of nonperforming assets through improved collection efforts and underwriting on nonperforming loans. ● Being active in the local community, particularly through our efforts with local schools, to uphold our high standing in our community and marketing to our next generation of customers. ● Improving profitability by expanding our product offerings to customers and leveraging recent investments in technology to increase the productivity and efficiency of our staff. We continue to implement recommendations from a previously completed profit improvement project conducted by an outside consulting firm that we believe will improve overall profitability in future periods through increased noninterest income and decreased noninterest expenses. ● Continuing to emphasize commercial real estate and other commercial business lending as well as consumer lending. The Bank will also continue to focus on increasing secondary market lending as a source of noninterest income. Management intends to continue to focus on growth in the loan portfolio and the secondary market lending programs in our market areas. ● Growing commercial and personal demand deposit accounts which provide a low-cost funding source. ● Continuing to evaluate vendor contracts for potential cost savings and efficiencies. ● Continuing our capital management strategy to enhance shareholder value through the repurchase of Company stock and the payment of dividends. ● Evaluating growth opportunities to expand the Bank’s market area and market share through acquisitions of other financial institutions or branches of other institutions. Our focus in 2026 will be to continue the enhancement and expansion of our customer relationships in these and surrounding markets. ● Ensuring that the Company attracts and retains talented personnel and that an optimal level of performance and customer service is promoted at all levels of the Company. Critical Accounting Policies and Estimates The accounting and reporting policies of the Company comply with U.S. GAAP and conform to general practices within the banking industry. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. The financial position and results of operations can be affected by these estimates and assumptions, which are integral to understanding reported results. Critical accounting policies are those policies that require management to make assumptions about matters that are highly uncertain at the time an accounting estimate is made; and different estimates that the Company reasonably could have used in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, would have a material impact on the Company’s financial condition, changes in financial condition or results of operations. Most accounting policies are not considered by management to be critical accounting policies. Several factors are considered in determining whether or not a policy is critical in the preparation of financial statements. These factors include, among other things, whether the estimates are significant to the financial statements, the nature of the estimates, the ability to readily validate the estimates with other information including third parties or available prices, and sensitivity of the estimates to changes in economic conditions and whether alternative accounting methods may be utilized under U.S. GAAP. 41 Table of Contents Significant accounting policies, including the impact of recent accounting pronouncements, are discussed in Note 1 of the accompanying Notes to Consolidated Financial Statements. Those policies considered to be critical accounting policies are described below. ACL on Loans. The ACL is a valuation account that is deducted from an asset’s amortized cost basis to present the net amount expected to be collected on the asset. Loans are charged off against the ACL when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged off and expected to be charged-off. The Company utilizes the Weighted Average Remaining Maturity method, which uses average annual charge-off rates and the remaining life of the loan, to estimate the ACL. For the Company’s loan portfolios, the remaining contractual life for each loan is adjusted by the expected scheduled payments and estimated prepayments. The average annual charge-off rate is applied to the amortization adjusted remaining life of the loan to determine the unadjusted lifetime historical charge-off rate. The Company’s expected loss estimate is anchored in historical credit loss experience, with an emphasis on all available portfolio data. The Company estimates the ACL on loans using relevant available information from internal and external sources relating to past events, current conditions, and reasonable and supportable forecasts. Historical loss experience provides the basis for the estimation of expected credit losses. Qualitative adjustments to historical loss information are made for losses reflected by peers, changes in underwriting standards, changes in economic conditions, changes in delinquency levels, collateral values and other factors. Qualitative adjustments reflect management’s overall estimate of the extent to which current expected credit losses on collectively evaluated loans will differ from historical loss experience. The analysis takes into consideration industry and collateral concentrations, acquired loan portfolio characteristics and other credit-related analytics as deemed appropriate. Management exercises significant judgment in evaluating the relevant historical loss experience and the qualitative factors. Management also monitors the differences between estimated and actual incurred loan losses in order to evaluate the effectiveness of the estimation process and make any changes in the methodology as necessary. The ACL is measured on a collective (pooled) basis when similar risk characteristics exist. When a loan no longer exhibits risk characteristics similar to those of the loan portfolio, management individually evaluates that loan for a specific allocation of the ACL. Specific reserves on individually analyzed loans are determined by comparing the loan balance to the present value of expected cash flows or expected collateral proceeds. Management reviews the level of the ACL on loans at least quarterly. Although we believe that we use the best information available to establish the ACL on loans, future adjustments to the allowance may be necessary if economic or other conditions differ substantially from the assumptions used in making the evaluation. In addition, the IDFI and FDIC, as an integral part of their examination process, periodically review our ACL on loans and may require us to recognize adjustments to the allowance based on their judgments about information available to them at the time of their examination. A large loss could deplete the allowance and require increased provisions to replenish the allowance, which would adversely affect earnings. Note 1 and Note 4 of the accompanying Notes to Consolidated Financial Statements describe the methodology used to determine the ACL on loans. 42 Table of Contents Selected Financial Data. The consolidated financial data presented below is qualified in its entirety by the more detailed financial data appearing elsewhere in this report, including the Company’s audited consolidated financial statements. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FINANCIAL CONDITION DATA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31,  ​   ​ ​ ​ 2025   ​ ​ ​ 2024   ​ ​ ​ 2023   ​ ​ ​ 2022   ​ ​ ​ 2021 ​ (In thousands) Total assets ​ $ 1,271,995 ​ $ 1,187,523 ​ $ 1,157,880 ​ $ 1,151,400 ​ $ 1,156,603 Cash and cash equivalents (1) ​ 137,288 ​ 105,917 ​ 38,670 ​ 66,298 ​ 172,509 Securities available for sale ​ 417,190 ​ 389,243 ​ 437,271 ​ 460,819 ​ 447,335 Securities held to maturity ​ 7,000 ​ 7,000 ​ 7,000 ​ 7,000 ​ 2,000 Interest-bearing time deposits ​ 1,470 ​ 2,695 ​ 3,920 ​ 3,677 ​ 4,839 Net loans ​ 654,100 ​ 631,199 ​ 614,409 ​ 557,958 ​ 483,287 Deposits ​ 1,122,990 ​ 1,066,439 ​ 1,025,211 ​ 1,060,396 ​ 1,035,562 Borrowings ​ — ​ — ​ 21,500 ​ — ​ — Stockholders' equity, net of noncontrolling interest in subsidiary ​ 137,797 ​ 114,599 ​ 105,233 ​ 85,158 ​ 113,828 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATING DATA: ​ For the Year Ended ​ ​ December 31,  ​   ​ ​ ​ 2025   ​ ​ ​ 2024   ​ ​ ​ 2023   ​ ​ ​ 2022   ​ ​ ​ 2021 ​ ​ (In thousands) Interest income ​ $ 56,847 ​ $ 50,471 ​ $ 43,605 ​ $ 33,940 ​ $ 29,460 Interest expense ​ 14,697 ​ 14,681 ​ 9,017 ​ 1,594 ​ 1,128 Net interest income ​ 42,150 ​ 35,790 ​ 34,588 ​ 32,346 ​ 28,332 Provision for (recapture of) credit losses ​ 1,144 ​ 1,449 ​ 1,141 ​ 950 ​ (325) Net interest income after provision for (recapture of) credit losses ​ 41,006 ​ 34,341 ​ 33,447 ​ 31,396 ​ 28,657 Noninterest income ​ 8,465 ​ 7,656 ​ 7,632 ​ 7,927 ​ 9,551 Noninterest expense ​ 29,562 ​ 27,828 ​ 26,028 ​ 25,088 ​ 24,531 Income before income taxes ​ 19,909 ​ 14,169 ​ 15,051 ​ 14,235 ​ 13,677 Income tax expense ​ 3,529 ​ 2,216 ​ 2,248 ​ 2,320 ​ 2,240 Net Income ​ 16,380 ​ 11,953 ​ 12,803 ​ 11,915 ​ 11,437 ​ ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ Less: net income attributable to noncontrolling interest in subsidiary ​ 13 ​ 13 ​ 13 ​ 13 ​ 13 Net Income attributable to First Capital Inc. ​ $ 16,367 ​ $ 11,940 ​ $ 12,790 ​ $ 11,902 ​ $ 11,424 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PER SHARE DATA (2): ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ Net income - basic ​ $ 4.89 ​ $ 3.57 ​ $ 3.82 ​ $ 3.55 ​ $ 3.41 Net income - diluted ​ 4.89 ​ 3.57 ​ 3.82 ​ 3.55 ​ 3.41 Dividends ​ 1.20 ​ 1.12 ​ 1.08 ​ 1.04 ​ 1.04 (1) Includes cash and due from banks, interest-bearing deposits in other depository institutions and federal funds sold. (2)Per share data excludes net income attributable to noncontrolling interests. 43 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ SELECTED FINANCIAL RATIOS: ​ At or For the Year Ended ​ ​ December 31,  ​   ​ ​ ​ 2025   ​ ​ ​ 2024   ​ ​ ​ 2023   ​ ​ ​ 2022   ​ ​ ​ 2021 Performance Ratios: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on assets (1) 1.34 %   1.02 %   1.12 %   1.03 %   1.05 % Return on average equity (2) 13.18 %   10.97 %   14.03 %   13.07 %   10.15 % Dividend payout ratio (3) 24.54 %   31.37 %   28.27 %   29.30 %   30.50 % Average equity to average assets 10.14 %   9.31 %   7.97 %   7.89 %   10.37 % Interest rate spread (4) 3.19 %   2.76 %   2.85 %   2.90 %   2.80 % Net interest margin (5) 3.61 %   3.20 %   3.16 %   2.95 %   2.84 % Non-interest expense to average assets 2.41 %   2.38 %   2.28 %   2.17 %   2.26 % Average interest earning assets to average interest bearing liabilities 134.30 %   134.25 %   138.88 %   140.23 %   139.51 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Regulatory Capital Ratios (Bank only): ​   ​   ​   ​   ​   ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Community bank leverage ratio (6) 11.01 %   10.57 %   9.92 %   9.18 %   8.84 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Asset Quality Ratios:   ​   ​   ​   ​   ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonperforming loans as a percent of net loans (7) 0.67 %   0.69 %   0.28 %   0.27 %   0.28 % Nonperforming assets as a percent of total assets (8) 0.34 %   0.37 %   0.15 %   0.13 %   0.12 % Allowance for credit losses as a percent of gross loans receivable 1.52 %   1.45 %   1.29 %   1.20 %   1.25 % (1) Net income attributable to First Capital, Inc. divided by average assets. (2) Net income attributable to First Capital, Inc. divided by average equity. (3) Common stock dividends declared per share divided by net income per share. (4) Difference between weighted average yield on interest-earning assets and weighted average cost of interest-bearing liabilities. Tax exempt income is reported on a tax equivalent basis using a federal marginal rate of 21%. (5) Net interest income as a percentage of average interest-earning assets. (6) Effective March 31, 2020, the Bank opted in to the Community Bank Leverage Ratio (CBLR) framework. As such, the other regulatory ratios are no longer provided. (7) Nonperforming loans consist of loans accounted for on a nonaccrual basis and accruing loans 90 days or more past due. (8) Nonperforming assets consist of nonperforming loans and real estate acquired in settlement of loans. ​ Results of Operations for the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Net Income. Net income attributable to the Company was $16.4 million ($4.89 per share diluted; weighted average common shares outstanding of 3,347,989, as adjusted) for the year ended December 31, 2025 compared to $11.9 million ($3.57 per share diluted; weighted average common shares outstanding of 3,346,161, as adjusted) for the year ended December 31, 2024. Net Interest Income. Net interest income increased $6.4 million, or 17.8%, from $35.8 million for 2024 to $42.2 million for 2025 primarily due to increases in the average tax-equivalent yield on interest-earning assets, the average balance of interest-earning assets and a decrease in the cost of interest-bearing liabilities, partially offset by an increase in the average balance of interest-bearing liabilities. Total interest income increased $6.4 million for 2025 as compared to 2024. The increase was primarily due to an increase in the tax-equivalent yield on interest-earning assets increased from 4.49% in 2024 to 4.85% in 2025. The increase in the yield was primarily due to an increase in the tax-equivalent yield on loans from 6.05% in 2024 to 6.29% in 2025. Interest on loans increased $2.6 million when comparing the two periods due to an increase in the average balance of loans from $634.0 million in 2024 to $651.8 million in 2025. In addition, the Company’s lower yielding securities continue to mature with proceeds being reinvested in higher yielding loans or interest-bearing deposits with other banks. Interest and dividends on investment securities (including FHLB stock) increased $1.9 million for 2025 compared to 2024 due to an increase in the tax-equivalent yield on investment securities from 2.25% in 2024 to 2.80% in 2025, partially offset by a decrease in the average balance of investment securities from $455.1 million for 2024 to $433.8 million for 2025. Other interest income increased $1.9 million for 2025 as compared to 2024 primarily due to an increase in the average balance of interest-bearing deposits with banks from $52.0 million in 2024 to $104.4 million in 2025 partially offset by the yield of interest-bearing deposits with banks decreasing from 5.09% to 4.31% when comparing the two periods. 44 Table of Contents Total interest expense was $14.7 million for 2025 and 2024.  Increases in the average balance of interest-bearing liabilities from $850.0 million for 2024 to $886.0 million for 2025 were offset by a decrease in the average cost of interest-bearing liabilities from 1.73% for 2024 to 1.66% for 2025. The Company’s average balance of interest-bearing deposits increased from $820.4 million for 2024 to $886.0 million for 2025 in addition to the average cost of interest-bearing deposits increasing from 1.61% for 2024 to 1.66% for 2025. The Company’s average balance of outstanding advances from the FHLB decreased from $1.7 million at an average rate of 5.70% for 2024 to the Company having no outstanding advances for 2025.  The Company’s average outstanding borrowings under the Federal Reserve Bank’s BTFP decreased from $27.9 million at an average rate of 4.85% for 2024 to having no outstanding borrowings for 2025. For further information, see “Average Balances and Yields” below. The changes in interest income and interest expense resulting from changes in volume and changes in rates for 2025 and 2024 are shown in the schedule captioned “Rate/Volume Analysis” included herein. Provision for Credit Losses. Based on management’s analysis of the ACL on loans and unfunded loan commitments, the provision for credit losses decreased from $1.4 million for 2024 to $1.1 million for 2025.   The decrease primarily reflected a lower incremental change in estimated lifetime expected credit losses under the Bank’s ACL methodology for loans and unfunded commitments compared to prior year. The Bank recognized net charge-offs of $317,000 for 2025 compared to $173,000 for 2024. In addition, nonperforming loans remained unchanged at $4.4 million at December 31, 2025 and 2024. Noninterest Income. Noninterest income increased $809,000 for 2025 as compared to 2024 primarily due to the Company recognizing a $149,000 gain on equity securities for 2025 compared to a $374,000 loss on equity securities for 2024.  In addition, the Company recognized a $238,000 increase in gains on sale of loans as well as an increase of $73,000 in ATM and debit card fee income when comparing the two periods.  These increases were partially offset by the Company recognizing a net $94,000 loss on sale of available for sale securities during 2025 compared to a net $32,000 gain on sale of available for sale securities during 2024. Noninterest Expense. Noninterest expenses increased $1.7 million for the year ended December 31, 2025 as compared to the same period in 2024. This was primarily due to increases in compensation and benefits and occupancy and equipment expenses of $1.3 million and $472,000, respectively. The increase in compensation and benefits is due to increases in salary and wages associated with annual cost of living and performance related adjustments as well as increases in the cost of Company-provided health insurance benefits.  The increase in occupancy and equipment expenses is primarily due to costs associated with snow removal across the Company’s branch network in the first quarter of 2025, as well as losses on the disposal of premises and equipment associated with two of the Bank’s branches, the upgrade of the Company’s call center system, and the demolition of one of the Bank’s branches. Income Tax Expense. Income tax expense increased $1.3 million for 2025 as compared to 2024 resulting in an effective tax rate of 17.7% for 2025, compared to 15.6% for 2024. See Note 12 of the accompanying Notes to Consolidated Financial Statements for additional details on the Company’s income tax expense. Results of Operations for the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Net Income. Net income attributable to the Company was $11.9 million ($3.57 per share diluted; weighted average common shares outstanding of 3,346,161 as adjusted) for the year ended December 31, 2024 compared to $12.8 million ($3.82 per share diluted; weighted average common shares outstanding of 3,347,341, as adjusted) for the year ended December 31, 2023. Net Interest Income. Net interest income increased $1.2 million, or 3.5%, from $34.6 million for 2023 to $35.8 million for 2024 primarily due to increases in the average tax-equivalent yield on interest-earning assets partially offset by increases in the average balance and cost of interest-bearing liabilities. 45 Table of Contents Total interest income increased $6.9 million for 2024 as compared to 2023.  The increase was primarily due to an increase in the tax-equivalent yield on interest-earning assets from 3.96% in 2023 to 4.49% in 2024.  The increase in the yield was primarily due to an increase in the tax-equivalent yield on loans from 5.66% in 2023 to 6.05% in 2024.  Interest on loans increased $4.9 million when comparing the two periods due to an increase in the average balance of loans from $590.6 million in 2023 to $634.0 million in 2024.  In addition, the Company’s lower yielding securities continue to mature with proceeds being reinvested in higher yielding loans or federal funds sold.  Interest and dividends on investment securities (including FHLB stock) increased $567,000 for 2024 compared to 2023 due to an increase in the tax-equivalent yield on investment securities from 1.95% in 2023 to 2.25% in 2024, partially offset by a decrease in the average balance of investment securities from $506.5 million for 2023 to $455.1 million for 2024.  Other interest income increased $1.4 million for 2024 as compared to 2023 primarily due to an increase in the average balance of federal funds sold from $19.5 million in 2023 to $45.6 million in 2024 in addition to the tax-equivalent yield of federal funds sold increasing from 5.07% to 5.17% when comparing the two periods. Total interest expense increased $5.7 million, from $9.0 million for 2023 to $14.7 million for 2024, due to increases in the average cost of interest-bearing liabilities from 1.11% for 2023 to 1.73% for 2024 and in the average balance of interest-bearing liabilities from $809.2 million for 2023 to $850.0 million for 2024.  The Company’s average balance of interest-bearing deposits increased from $794.4 million for 2023 to $820.4 million for 2024 in addition to the average cost of interest-bearing deposits increasing from 1.04% for 2023 to 1.61% for 2024.  The Company’s average outstanding borrowings from the FHLB decreased from $6.1 million for 2023 to $1.7 million for 2024, partially offset by an increase in the average rate on outstanding advances from the FHLB from 5.59% for 2023 to 5.70% for 2024.  The Company’s average outstanding borrowings under the Federal Reserve Bank’s BTFP increased from $8.6 million for $27.9 million for 2024, partially offset by a decrease in the average rate on outstanding borrowings under the Federal Reserve Bank’s BTFP from 5.05% for 2023 to 4.85% for 2024.  For further information, see “Average Balances and Yields” below. The changes in interest income and interest expense resulting from changes in volume and changes in rates for 2024 and 2023 are shown in the schedule captioned “Rate/Volume Analysis” included herein. Provision for Loan Losses. Based on management’s analysis of the ACL on loans and unfunded loan commitments, the provision for credit losses increased from $1.1 million for 2023 to $1.4 million for 2024 primarily due to loan growth, an increase in nonperforming assets during the year, as well as management’s consideration of the macroeconomic uncertainty. The Bank recognized net charge-offs of $173,000 for 2024 compared to $469,000 for 2023. In addition, nonperforming loans increased from $1.8 million at December 31, 2023 to $4.4 million at December 31, 2024.  The increase was primarily due to the nonaccrual classification of two commercial loan relationships totaling $2.6 million.  Loans in these relationships are secured by a variety of real estate and business assets. Noninterest Income. Noninterest income increased $24,000 for 2024 as compared to 2023 primarily due to increases in gains on the sale of loans and service charges on deposit accounts of $133,000 and $59,000, respectively. These were partially offset by the Company recognizing a $374,000 loss on equity securities during the year ended December 31, 2024 compared to a $207,000 loss during the same period in 2023. Noninterest Expense.  Noninterest expenses increased $1.8 million for 2024 as compared to 2023.  This was primarily due to increases in professional fees, compensation and benefits, and other expenses of $663,000, $536,000 and $260,000, respectively, when comparing the two periods.  The increase in professional fees is primarily due to increased costs associated with the Company’s annual audit and fees being accrued for the Company’s ongoing core contract negotiations.  The increase in compensation and benefits is due to standard increases in salary and wages as well as increases in the cost of Company-provided health insurance benefits.  The increase in other expenses included a $90,000 increase in the Company’s support of local communities through partnerships and donations, a $64,000 increase in check and debit card fraud losses, $30,000 in increased dues and subscriptions, and $25,000 in increased expenses related to employee training and education. Income Tax Expense. Income tax expense decreased $32,000 for 2024 as compared to 2023 resulting in an effective tax rate of 15.6% for 2024, compared to 14.9% for 2023.  See Note 12 of the accompanying Notes to Consolidated Financial Statements for additional details on the Company’s income tax expense. 46 Table of Contents Average Balances and Yields. The following table sets forth certain information for the periods indicated regarding average balances of assets and liabilities, as well as the total dollar amounts of interest income from average interest-earnings assets and interest expense on average interest-bearing liabilities and average yields and costs. Such yields and costs for the periods indicated are derived by dividing income or expense by the average historical cost balances of assets or liabilities, respectively, for the periods presented and do not give effect to changes in fair value that are included as a separate component of stockholders’ equity. Average balances are derived from daily balances. Tax-exempt income on loans and investment securities has been adjusted to a tax equivalent basis using the federal marginal tax rate of 21%. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31,  ​ ​ 2025 ​ 2024 ​ 2023 ​   ​ ​ ​ ​ ​   ​ ​ ​ ​ ​   ​ ​ ​ Average   ​ ​ ​ ​ ​   ​ ​ ​ ​ ​   ​ ​ ​ Average   ​ ​ ​ ​ ​   ​ ​ ​ ​ ​   ​ ​ ​ Average ​ ​ Average ​ ​ ​ ​ Yield/ ​ Average ​ ​ ​ ​ Yield/ ​ Average ​ ​ ​ ​ Yield/ (Dollars in thousands) ​ Balance ​ Interest ​ Cost ​ Balance ​ Interest ​ Cost ​ Balance ​ Interest ​ Cost Interest-earning assets: ​   ​ ​   ​ ​   ​ ​   ​ ​   ​   ​ ​   ​ ​   ​   ​ ​ Loans (1) (2) (3): ​   ​ ​   ​ ​   ​ ​   ​ ​   ​   ​ ​   ​ ​   ​   ​ ​ Taxable ​ $ 641,291 ​ $ 40,566 ​ 6.33 %   $ 624,193 ​ $ 37,974 6.08 %   $ 582,465 ​ $ 33,153 5.69 % Tax-exempt ​ 10,522 ​ 446 ​ 4.24 %   9,805 ​ 377 3.84 %   8,144 ​ 249 3.06 % Total loans ​ 651,813 ​ 41,012 ​ 6.29 %   633,998 ​ 38,351 6.05 %   590,609 ​ 33,402 5.66 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investment securities: ​   ​ ​   ​ ​   ​ ​   ​ ​   ​   ​ ​   ​ ​   ​   ​ ​ Taxable (4) ​ 314,384 ​ 8,711 ​ 2.77 %   333,195 ​ 6,918 2.08 %   358,860 ​ 5,635 1.57 % Tax-exempt ​ 119,379 ​ 3,438 ​ 2.88 %   121,947 ​ 3,329 2.73 %   147,667 ​ 4,236 2.87 % Total investment securities ​ 433,763 ​ 12,149 ​ 2.80 %   455,142 ​ 10,247 2.25 %   506,527 ​ 9,871 1.95 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest bearing deposits with banks (5) ​ 104,385 ​ 4,502 ​ 4.31 %   52,036 ​ 2,651 5.09 %   26,591 ​ 1,274 4.79 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total interest-earning assets ​ 1,189,961 ​ 57,663 ​ 4.85 %   1,141,176 ​ 51,249 4.49 %   1,123,727 ​ 44,547 3.96 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest-earning assets ​ 34,977 ​ ​ ​ ​ ​ ​ 28,479 ​   ​   ​ ​ ​ 20,139 ​   ​   ​ ​ Total assets ​ $ 1,224,938 ​ ​ ​ ​ ​ ​ ​ $ 1,169,655 ​   ​   ​ ​ $ 1,143,866 ​   ​   ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​   ​ ​   ​ ​   ​ ​   ​ ​   ​   ​ ​   ​ ​   ​   ​ ​ Interest-bearing demand deposits ​ $ 436,909 ​ $ 5,280 ​ 1.21 %   $ 433,495 ​ $ 6,086 1.40 %   $ 447,895 ​ $ 4,652 1.04 % Savings accounts ​ 225,817 ​ 598 ​ 0.26 %   230,353 ​ 810 0.35 %   255,126 ​ 917 0.36 % Time deposits ​ 223,315 ​ 8,819 ​ 3.95 %   156,534 ​ 6,331 4.04 %   91,423 ​ 2,672 2.92 % Total deposits ​ 886,041 ​ 14,697 ​ 1.66 %   820,382 ​ 13,227 1.61 %   794,444 ​ 8,241 1.04 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FHLB advances ​ — ​ — ​ — %   1,736 ​ 99 5.70 %   6,084 ​ 340 5.59 % BTFP advances ​ — ​ — ​ — %   27,918 ​ 1,355 4.85 %   8,632 ​ 436 5.05 % Total borrowings ​ — ​ — ​ — %   29,654 ​ 1,454 4.90 %   14,716 ​ 776 5.27 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total interest-bearing liabilities ​ 886,041 ​ 14,697 ​ 1.66 %   850,036 ​ 14,681 1.73 %   809,160 ​ 9,017 1.11 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​   ​ ​   ​ ​   ​ ​   ​ ​   ​   ​ ​   ​ ​   ​   ​ ​ Noninterest-bearing liabilities: ​   ​ ​   ​ ​   ​ ​   ​ ​   ​   ​ ​   ​ ​   ​   ​ ​ Noninterest-bearing deposits ​ 205,822 ​ ​ ​ ​ ​ ​ ​ 203,699 ​   ​   ​ ​ 236,471 ​   ​   ​ ​ Other liabilities ​ 8,852 ​ ​ ​ ​ ​ ​ ​ 7,046 ​   ​   ​ ​ 7,056 ​   ​   ​ ​ Total liabilities ​ 1,100,715 ​ ​ ​ ​ ​ ​ ​ 1,060,781 ​   ​   ​ ​ 1,052,687 ​   ​   ​ ​ Stockholders' equity (6) ​ 124,223 ​ ​ ​ ​ ​ ​ ​ 108,874 ​   ​   ​ ​ 91,179 ​   ​   ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity ​ $ 1,224,938 ​ ​ ​ ​ ​ ​ ​ $ 1,169,655 ​   ​   ​ ​ $ 1,143,866 ​   ​   ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income (tax equivalent basis) ​ ​ ​ ​ $ 42,966 ​ ​ ​ ​   ​ ​ $ 36,568   ​ ​   ​ ​ $ 35,530   ​ ​ Less: tax equivalent adjustment ​ ​ ​ ​ (816) ​ ​ ​ ​   ​ ​ (778)   ​ ​   ​ ​ (942)   ​ ​ Net interest income ​ ​ ​ ​ $ 42,150 ​ ​ ​ ​   ​ ​ $ 35,790   ​ ​   ​ ​ $ 34,588   ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate spread ​ ​ ​ ​ ​ 3.12 %     ​ ​   ​ 2.70 %     ​ ​   ​ 2.77 %   Interest rate spread (tax equivalent basis) ​ ​ ​ ​ ​ 3.19 %     ​ ​   ​ 2.76 %     ​ ​   ​ 2.85 %   Net interest margin ​ ​ ​ ​ ​ 3.54 %     ​ ​   ​ 3.14 %     ​ ​   ​ 3.08 %   Net interest margin (tax equivalent basis) ​ ​ ​ ​ ​ 3.61 %     ​ ​   ​ 3.20 %     ​ ​   ​ 3.16 %   ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratio of average interest-earning assets to average interest-bearing liabilities ​ ​ ​ ​ ​ 134.30 %     ​ ​   ​ 134.25 %     ​ ​   ​ 138.88 %   (1) Interest income on loans includes fee income of $806,000, $727,000, and $961,000 for the years ended December 31, 2025, 2024, and 2023, respectively. (2) Average loan balances include loans held for sale and nonperforming loans. (3) Tax-exempt income has been adjusted to a tax-equivalent basis using the federal marginal tax rate of 21%. (4) Includes taxable debt and equity securities and FHLB Stock. (5) Includes interest-bearing deposits with banks, federal funds sold and interest-bearing time deposits. (6) Stockholders’ equity attributable to First Capital, Inc. ​ 47 Table of Contents Rate/Volume Analysis. The following table sets forth the effects of changing rates and volumes on net interest income and interest expense computed on a tax-equivalent basis. Information is provided with respect to (i) effects on interest income attributable to changes in volume (changes in volume multiplied by prior rate); (ii) effects attributable to changes in rate (changes in rate multiplied by prior volume); and (iii) effects attributable to changes in rate and volume (change in rate multiplied by changes in volume). Tax exempt income on loans and investment securities has been adjusted to a tax-equivalent basis using the federal marginal tax rate of 21%. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​   ​ ​ ​ 2025 Compared to 2024   ​ ​ ​ 2024 Compared to 2023 ​ ​ Increase (Decrease) Due to ​ Increase (Decrease) Due to ​ ​ ​ ​   ​ ​ ​ ​ ​   ​ ​ ​ Rate/   ​ ​ ​ ​ ​ ​ ​ ​   ​ ​ ​ ​ ​   ​ ​ ​ Rate/   ​ ​ ​ ​ ​ ​ ​ Rate ​ Volume ​ Volume ​ Net ​ Rate ​ Volume ​ Volume ​ Net ​ (In thousands) Interest-earning assets: ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ Loans: ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ Taxable ​ $ 1,510 ​ $ 1,040 ​ $ 42 ​ $ 2,592 ​ $ 2,284 ​ $ 2,374 ​ $ 163 ​ $ 4,821 Tax-exempt ​ 39 ​ 28 ​ 2 ​ 69 ​ 64 ​ 51 ​ 13 ​ 128 Total loans ​ 1,549 ​ 1,068 ​ 44 ​ 2,661 ​ 2,348 ​ 2,425 ​ 176 ​ 4,949 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investment securities: ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ Taxable ​ 2,314 ​ (391) ​ (130) ​ 1,793 ​ 1,817 ​ (403) ​ (131) ​ 1,283 Tax-exempt ​ 183 ​ (70) ​ (4) ​ 109 ​ (205) ​ (738) ​ 36 ​ (907) Total investment securities ​ 2,497 ​ (461) ​ (134) ​ 1,902 ​ 1,612 ​ (1,141) ​ (95) ​ 376 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest bearing deposits with banks ​ (407) ​ 2,667 ​ (409) ​ 1,851 ​ 57 ​ 1,297 ​ 23 ​ 1,377 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total net change in income on interest-earning assets ​ 3,639 ​ 3,274 ​ (499) ​ 6,414 ​ 4,017 ​ 2,581 ​ 104 ​ 6,702 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ ​   ​ Interest-bearing deposits ​ 381 ​ 1,059 ​ 30 ​ 1,470 ​ 4,568 ​ 270 ​ 148 ​ 4,986 Borrowed funds ​ — ​ (1,454) ​ — ​ (1,454) ​ (54) ​ 787 ​ (55) ​ 678 Total net change in expense on interest-bearing liabilities ​ 381 ​ (395) ​ 30 ​ 16 ​ 4,514 ​ 1,057 ​ 93 ​ 5,664 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net change in net interest income (tax equivalent basis) ​ $ 3,258 ​ $ 3,669 ​ $ (529) ​ $ 6,398 ​ $ (497) ​ $ 1,524 ​ $ 11 ​ $ 1,038 ​ Comparison of Financial Condition at December 31, 2025 and 2024 Total assets increased from $1.19 billion at December 31, 2024 to $1.27 billion at December 31, 2025 primarily due to increases in total cash and cash equivalents, securities available for sale and net loans receivable. Net loans receivable (excluding loans held for sale) increased $22.9 million from $631.2 million at December 31, 2024 to $654.1 million at December 31, 2025. Increases in multifamily residential, commercial real estate, and home equity and second mortgage loans of $32.7 million, $22.3 million, and $4.9 million were partially offset by decreases in other construction, development and land loans of $34.6 million. The Bank continued to sell the majority of newly originated fixed-rate residential mortgage loans in the secondary market. The Bank originated $41.8 million in residential mortgages for sale in the secondary market during 2025 compared to $32.8 million in 2024. Of the total originations in 2025, $13.4 million paid off existing loans in the Bank’s portfolio. Originating mortgage loans for sale in the secondary market allows the Bank to better manage its interest rate risk, while offering a full line of mortgage products to prospective customers. Securities available for sale, at fair value, consisting primarily of U.S. agency mortgage-backed securities and collateralized mortgage obligations, U.S. agency notes and bonds, Treasury notes and bonds and municipal obligations, increased from $389.2 million at December 31, 2024 to $417.2 million at December 31, 2025.  Purchases of $137.9 million were partially offset by principal repayments of $38.8 million, maturities of $67.1 million and sales of $17.9 million during 2025. There was also an unrealized gain of $14.6 million on the securities available for sale portfolio during 2025 due primarily to decreasing market rates during the year. The Bank invests excess cash in securities that provide liquidity, yield and low credit risk. Accordingly, we purchase mortgage-backed securities to provide cash flow for loan demand and deposit changes, we purchase U.S Treasury and federal agency notes for short-term yield and low risk, and municipals are purchased to improve our tax equivalent yield focusing on longer term profitability. Cash and cash equivalents increased from $105.9 million at December 31, 2024 to $137.3 million at December 31, 2025, primarily due to deposit account increases. 48 Table of Contents Total deposits increased $56.6 million to $1.12 billion at December 31, 2025. During 2025, time deposits and non-interest bearing deposits increased $37.5 million and $22.1 million, respectively. These increases were partially offset by decreases in interest-bearing demand deposit accounts (including money market accounts) of $2.9 million. At December 31, 2025 and 2024, the Company had no outstanding borrowed funds. During the year ended December 31, 2024, the Company utilized a series of short-term fixed-rate bullet and variable rate advances from the FHLB and the BTFP in order to meet daily liquidity requirements and to fund growth in earning assets. Total stockholders’ equity attributable to the Company increased $23.2 million from $114.6 million at December 31, 2024 to $137.8 million at December 31, 2025. This increase is primarily the result of the $12.3 million increase in retained net income and an $11.3 million decrease in the net unrealized loss on available for sale securities. The decrease in the net unrealized loss on available for sale securities during 2025 is primarily due to decreases in market interest rates. As of December 31, 2025, the Company had repurchased 140,478 shares of the 240,467 shares authorized by the Board of Directors under the current stock repurchase program which was announced in August 2008 and 469,012 shares since the original repurchase program began in 2001. Liquidity and Capital Resources Liquidity refers to the ability of a financial institution to generate sufficient cash flow to fund current loan demand, meet deposit withdrawals and pay operating expenses. The Bank’s primary sources of funds are customer deposits, proceeds from loan repayments, maturing securities and borrowings from the FHLB or FRB. While loan repayments and maturities are a predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by market interest rates, general economic conditions and competition. At December 31, 2025, the Bank had cash and cash equivalents of $137.3 million and securities available-for-sale with a fair value of $417.2 million. If the Bank requires funds beyond its ability to generate them internally, it has additional borrowing capacity with the FHLB, the FRB’s Discount Window through the pledging of additional eligible collateral securities, collateral eligible for repurchase agreements and unsecured federal funds purchased lines of credit with other financial institutions. The Bank must maintain an adequate level of liquidity to ensure the availability of sufficient funds to support loan growth and deposit withdrawals, to satisfy financial commitments and to take advantage of investment opportunities.  The Bank is guided by a board-approved Liquidity Management Policy and the Interagency Policy Statement on Funding and Liquidity Risk Management.  The Liquidity Management Policy is overseen by the Bank’s Asset Liability Committee (“ALCO”) which is chaired by the Bank’s Chief Financial Officer and comprised of line of business leaders at the Bank and one member of the Bank’s Board of Directors.  Management monitors the Bank’s liquidity position on an ongoing basis, and the ALCO meets quarterly to review liquidity metrics and compliance with the Liquidity Management Policy.  As directed by the Liquidity Management Policy, the ALCO evaluates a number of liquidity-based ratios including a comparison of liquid assets to total assets, consistent with policy guidelines.  The Liquidity Management Policy also outlines required liquidity stress testing and contingency funding planning.  Stress scenarios consider, among other factors, utilization of established borrowing lines with the FHLB, the FRB’s Discount Window, and other financial institutions, the issuance of brokered deposits, deposit runoff at various levels of severity, funding of unfunded loan commitments, and scenarios assuming limited access to certain funding sources.  Stress testing results, contingency funding plans, and related processes, including periodic testing of borrowing lines and brokered deposit capabilities, are reviewed by the ALCO and reported to the Board of Directors. At December 31, 2025, the Bank had total commitments to extend credit of $180.3 million. See Note 16 in the accompanying Notes to Consolidated Financial Statements. At December 31, 2025, the Bank had certificates of deposit scheduled to mature within one year of $222.0 million. Historically, the Bank has been able to retain a significant amount of its deposits as they mature. The Company is a separate legal entity from the Bank and must provide for its own liquidity. In addition to its operating expenses, the Company requires funds to pay any dividends to its shareholders and to repurchase any shares of its common stock. The Company’s primary source of income is dividends received from the Bank. The amount of dividends the Bank may declare and pay to the Company in any calendar year, without the receipt of prior approval from the banking regulators, cannot exceed net income for that year to date plus retained net income (as defined) for the preceding two calendar years. At December 31, 2025, the Company (on an unconsolidated basis) had liquid assets of $2.3 million. 49 Table of Contents The Bank is required to maintain specific amounts of capital pursuant to regulations. As previously mentioned in this report, in 2020 the Bank elected to opt in to the CBLR framework. As of December 31, 2025 the Bank was in compliance with all regulatory capital requirements which were effective as of such date with a CBLR of 11.01%. See Note 18 in the accompanying Notes to Consolidated Financial Statements. Effect of Inflation and Changing Prices The consolidated financial statements and related financial data presented in this report have been prepared in accordance with U.S. GAAP, which generally require the measurement of financial position and operating results in terms of historical dollars, without considering the changes in relative purchasing power of money over time due to inflation. The primary impact of inflation is reflected in increased operating costs. Unlike most industrial companies, virtually all the assets and liabilities of the financial institution are monetary in nature. As a result, interest rates generally have a more significant impact on the financial institution’s performance than do general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services. Market Risk Analysis Qualitative Aspects of Market Risk. Market risk is the risk that the estimated fair value of our assets and liabilities will decline as a result of changes in interest rates or financial market volatility, or that our net income will be significantly reduced by interest rate changes. The Company’s principal financial objective is to achieve long-term profitability while reducing its exposure to fluctuating market interest rates by operating within acceptable limits established for interest rate risk and maintaining adequate levels of funding and liquidity. The Company has sought to reduce the exposure of its earnings to changes in market interest rates by attempting to manage the mismatch between asset and liability maturities and interest rates. In order to reduce the exposure to interest rate fluctuations, the Company has developed strategies to manage its liquidity, shorten its effective maturities of certain interest-earning assets and decrease the interest rate sensitivity of its asset base. Management has sought to decrease the average maturity of its assets by emphasizing the origination of short-term commercial and consumer loans, all of which are retained by the Company for its portfolio. The Company relies on retail deposits as its primary source of funds. Management believes the use of retail deposits, compared to brokered deposits, reduces the effects of interest rate fluctuations because they generally represent a more stable source of funds. Quantitative Aspects of Market Risk. The Company does not maintain a trading account for any class of financial instrument nor does the Company engage in hedging activities or purchase high-risk derivative instruments. Furthermore, the Company is not subject to foreign currency exchange rate risk or commodity price risk. Potential cash flows, sales, or replacement value of many of our assets and liabilities, especially those that earn or pay interest, are sensitive to changes in the general level of interest rates. This interest rate risk arises primarily from our normal business activities of gathering deposits, extending loans and investing in investment securities. Many factors affect the Company’s exposure to changes in interest rates, such as general economic and financial conditions, customer preferences, historical pricing relationships, and re-pricing characteristics of financial instruments. The Company’s earnings can also be affected by the monetary and fiscal policies of the U.S. Government and its agencies, particularly the FRB. An element in the Company’s ongoing process is to measure and monitor interest rate risk using a Net Interest Income at Risk simulation to model the interest rate sensitivity of the balance sheet and to quantify the impact of changing interest rates on the Company. The model quantifies the effects of various possible interest rate scenarios on projected net interest income over a one-year horizon. The model assumes a semi-static balance sheet and measures the impact on net interest income relative to a base case scenario of hypothetical changes in interest rates over twelve months and provides no effect given to any steps that management might take to counter the effect of the interest rate movements. The scenarios include prepayment assumptions, changes in the level of interest rates, the shape of the yield curve, and spreads between market interest rates in order to capture the impact from re-pricing, yield curve, option, and basis risks. 50 Table of Contents Results of the Company’s simulation modeling, which assumes an immediate and sustained parallel shift in market interest rates, project that the Company’s net interest income could change as follows over a one-year horizon, relative to our base case scenario, based on December 31, 2025 and 2024 financial information. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2025 ​ At December 31, 2024 Immediate Change ​ One Year Horizon ​ One Year Horizon in the Level ​ Dollar ​ Percent ​ Dollar ​ Percent of Interest Rates   ​ ​ ​ Change   ​ ​ ​ Change   ​ ​ ​ Change   ​ ​ ​ Change ​ ​ (Dollars in thousands) 300bp   ​ ​ ​ $ 7,555   ​ ​ ​ 16.40 %   $ 1,314   ​ ​ ​ 3.56 % 200bp ​ 5,114 11.10 ​ 1,154 3.13 ​ 100bp ​ 2,563 5.56 ​ 656 1.78 ​ Static ​ — — ​ — — ​ (100)bp ​ (2,624) (5.70) ​ (897) (2.43) ​ (200)bp ​ (5,295) (11.49) ​ (1,681) (4.55) ​ (300)bp ​ (7,191) (15.61) ​ (2,490) (6.74) ​ ​ At December 31, 2025 and 2024, the Company’s simulated exposure to an increase in interest rates shows that an immediate and sustained increase in rates of 1.00%, 2.00% or 3.00% would increase the Company’s net interest income over a one year horizon compared to a flat interest rate scenario. At December 31, 2025 and 2024, an immediate and sustained decrease in rates of 1.00%, 2.00% or 3.00% would decrease the Company’s net interest income over a one year horizon compared to a flat interest rate scenario. During the year ended December 31, 2025, management evaluated and adjusted deposit rate betas and key interest rate index ties in its scenarios to better reflect the current interest rate environment and increased competitive pressure for deposits. The Company also has longer term interest rate risk exposure, which may not be appropriately measured by Net Interest Income at Risk modeling. Therefore, the Company also uses an Economic Value of Equity (“EVE”) interest rate sensitivity analysis in order to evaluate the impact of its interest rate risk on earnings and capital. This is measured by computing the changes in net EVE for its cash flows from assets, liabilities and off-balance sheet items in the event of a range of assumed changes in market interest rates. EVE modeling involves discounting present values of all cash flows for on and off balance sheet items under different interest rate scenarios and provides no effect given to any steps that management might take to counter the effect of the interest rate movements. The discounted present value of all cash flows represents the Company’s EVE and is equal to the market value of assets minus the market value of liabilities, with adjustments made for off-balance sheet items. The amount of base case EVE and its sensitivity to shifts in interest rates provide a measure of the longer term re-pricing and option risk in the balance sheet. Results of the Company’s simulation modeling, which assumes an immediate and sustained parallel shift in market interest rates, project that the Company’s EVE could change as follows, relative to the Company’s base case scenario, based on December 31, 2025 and 2024 financial information. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2025 ​ Immediate Change ​ Economic Value of Equity ​ Economic Value of Equity as a ​ in the Level ​ Dollar ​ Dollar ​ Percent ​ Percent of Present Value of Assets ​ of Interest Rates   ​ ​ ​ Amount   ​ ​ ​ Change   ​ ​ ​ Change   ​ ​ ​ EVE Ratio   ​ ​ ​ Change ​ ​ ​ (Dollars in thousands) ​ 300bp ​ $ 196,627 ​ $ (3,425) (1.71) %   17.19 %   96 bp 200bp ​ 200,019 ​ (33) (0.02) 17.04 81 bp 100bp ​ 201,438 ​ 1,386 0.69 16.73 50 bp Static ​ 200,052 ​ — — 16.23 0 bp (100)bp ​ 197,721 ​ (2,331) (1.17) 15.68 (55) bp (200)bp ​ 192,020 ​ (8,032) (4.01) 14.87 (136) bp (300)bp ​ 189,830 ​ (10,222) (5.11) 14.32 (191) bp ​ 51 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2024 ​ Immediate Change ​ Economic Value of Equity ​ Economic Value of Equity as a ​ in the Level ​ Dollar ​ Dollar ​ Percent ​ Percent of Present Value of Assets ​ of Interest Rates   ​ ​ ​ Amount   ​ ​ ​ Change   ​ ​ ​ Change   ​ ​ ​ EVE Ratio   ​ ​ ​ Change ​ ​ ​ (Dollars in thousands) ​ 300bp ​ $ 257,887 ​ $ 10,236 4.13 %   23.76 %   261 bp 200bp ​ 257,819 ​ 10,168 4.11 23.17 202 bp 100bp ​ 254,035 ​ 6,384 2.58 22.26 111 bp Static ​ 247,651 ​ — — 21.15 0 bp (100)bp ​ 230,424 ​ (17,227) (6.96) 19.24 (192) bp (200)bp ​ 212,461 ​ (35,190) (14.21) 17.26 (389) bp (300)bp ​ 190,313 ​ (57,338) (23.15) 15.02 (613) bp ​ The previous tables indicate that at December 31, 2025 the Company would expect decreases in its EVE in the event of sudden and sustained 200 and 300 basis point increases in prevailing interest rates as well as a sudden and sustained decreases of 100, 200 and 300 basis points in prevailing interest rates, while it would expect an increase in its EVE in the event of a sudden and sustained 100 basis point increase in prevailing interest rates. At December 31, 2024, the Company would expect an increase in its EVE in the event of sudden and sustained 100, 200 and 300 basis points increases in prevailing interest rates and a decrease in its EVE in the event of sudden and sustained 100, 200 and 300 basis point decreases in prevailing interest rates.  During the year ended December 31, 2025, management evaluated and adjusted deposit rate betas and key interest rate index ties in its scenarios to better reflect the current interest rate environment and increased competitive pressure for deposits. The models are driven by expected behavior in various interest rate scenarios and many factors besides market interest rates affect the Company’s net interest income and EVE. For this reason, the Company models many different combinations of interest rates and balance sheet assumptions to understand its overall sensitivity to market interest rate changes. Therefore, as with any method of measuring interest rate risk, certain shortcomings are inherent in the method of analysis presented in the foregoing tables and it is recognized that the model outputs are not guarantees of actual results. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable-rate mortgage loans, have features that restrict changes in interest rates on a short-term basis and over the life of the asset. Further, in the event of a change in interest rates, expected rates of prepayments on loans and early withdrawals from certificates of deposit could deviate significantly from those assumed in the modeling scenarios. Impact of Recent Accounting Pronouncements For a discussion of the impact of recent accounting pronouncements, see Note 1 of the accompanying Notes to Consolidated Financial Statements.