For the quarter ending March 31, 2025, First Capital, Inc. (FCAP, Financial) experienced a notable increase in net interest income, rising by $923,000 compared to the same period the previous year. This growth was primarily driven by a $1.5 million boost in interest income, attributed to an enhanced average tax-equivalent yield on interest-earning assets, which increased from 4.29% in the first quarter of 2024 to 4.63% in 2025. Additionally, the average balance of these interest-earning assets rose from $1.12 billion to $1.17 billion over the same period.
Interest expense also saw an increase, up by $528,000, as the average cost of interest-bearing liabilities climbed from 1.55% to 1.71%. The average balance of these liabilities grew from $833.7 million to $881.6 million. Consequently, the tax-equivalent net interest margin improved from 3.14% to 3.34% year-over-year.
The company's financial performance indicates positive movement in both the yields and costs associated with its balance sheet components, suggesting strategic management of assets and liabilities in the current economic climate.
