| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 18.04 | -58 |
| Intrinsic value (DCF) | 199.39 | 359 |
| Graham-Dodd Method | 33.27 | -23 |
| Graham Formula | 74.75 | 72 |
First Capital, Inc. (NASDAQ: FCAP) is a regional bank holding company operating through its subsidiary, First Harrison Bank, serving individuals and businesses in Indiana and Kentucky. Founded in 1891 and headquartered in Corydon, Indiana, the company provides a comprehensive suite of banking services, including deposit accounts (checking, savings, CDs), mortgage lending (residential, commercial, construction), and consumer loans (auto, home equity, personal). FCAP also offers non-deposit investment products and secondary market mortgage sales. With 18 branches, the bank maintains a strong community-focused presence in its markets. As a small-cap regional bank (market cap ~$163M), FCAP benefits from localized customer relationships but faces competition from larger regional players and digital banking disruptors. Its conservative balance sheet (no debt, $105.9M cash) and consistent profitability (net income $11.9M in latest period) position it as a stable performer in the Banks - Regional sector.
First Capital presents a mixed investment profile. Positives include a debt-free balance sheet, strong liquidity ($105.9M cash), and consistent dividend payments ($1.14/share). The bank's 0.727 beta suggests lower volatility than broader markets, appealing to risk-averse investors. However, its small market cap and regional concentration create vulnerability to local economic downturns. Revenue ($42M) and net income ($11.9M) reflect steady but unspectacular growth potential. The lack of digital banking differentiation may hinder customer acquisition as fintech competition intensifies. Valuation appears reasonable (P/E ~13.7 based on $3.57 EPS), but investors should weigh the stable dividend yield against limited upside from organic expansion in saturated regional markets.
First Capital competes in the crowded regional banking space by leveraging deep community ties and personalized service—advantages that large national banks struggle to replicate. Its 130+ year history in Southern Indiana/Northern Kentucky provides brand recognition and customer loyalty. The bank's competitive edge lies in localized decision-making for commercial loans and relationship-based pricing, though this comes with higher operational costs per customer compared to digital-first competitors. FCAP's mortgage origination capabilities provide cross-selling opportunities but expose it to interest rate sensitivity. While the zero-debt balance sheet ensures stability, it may also reflect conservative growth strategies that limit market share gains. The bank's 18-branch network creates convenience for local customers but lacks the scale efficiencies of larger regional peers. Technology investments appear minimal compared to industry leaders, risking attrition of younger demographics. FCAP's niche is serving small businesses and agricultural clients who value in-person banking—a segment less vulnerable to digital disruption but with limited expansion potential.