10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

OR

(   ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_____________________ to__________________

Commission File No. 0-25023

First Capital, Inc.

(Exact name of registrant as specified in its charter)

Indiana	35-2056949
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

220 Federal Drive NW, Corydon, Indiana 47112

(Address of principal executive offices) (Zip Code)

Registrant's telephone number including area code 1-812-738-2198

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __X__No ____

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes __X__ No _____

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a small reporting company. See definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

(Check one):	Large Accelerated Filer ___	Accelerated Filer ___
	Non-accelerated Filer ___	Smaller Reporting Company   X

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ____ No    X    

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 2,759,002 shares of common stock were outstanding as of July 29, 2015.

FIRST CAPITAL, INC.

INDEX

Part I	Financial Information	Page
	Item 1.  Consolidated Financial Statements
	Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014 (unaudited)	3
	Consolidated Statements of Income for the three months and six months ended June 30, 2015 and 2014 (unaudited)	4
	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2015 and 2014 (unaudited)	5
	Consolidated Statements of Changes in Stockholders’ Equity for the six months ended June 30, 2015 and 2014 (unaudited)	6
	Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014 (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)	8-38
	Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations	39-44
	Item 3.  Quantitative and Qualitative Disclosures About Market Risk	45-48
	Item 4.  Controls and Procedures	48
Part II	Other Information
	Item 1.  Legal Proceedings	49
	Item 1A.  Risk Factors	49
	Item 2.  Unregistered Sales of Equity Securities and  Use of Proceeds	49
	Item 3.  Defaults Upon Senior Securities	49
	Item 4.  Mine Safety Disclosures	49
	Item 5.  Other Information	49
	Item 6.  Exhibits	50
Signatures		51

- 2 -

PART I - FINANCIAL INFORMATION
FIRST CAPITAL, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30, 2015			December 31, 2014
	(In thousands)
ASSETS
Cash and due from banks	$	8,788		$	13,653
Interest bearing deposits with banks		859			865
Federal funds sold		30,000			18,725
Total cash and cash equivalents		39,647			33,243
Interest-bearing time deposits		9,515			8,270
Securities available for sale, at fair value		98,361			100,226
Securities-held to maturity		5			6
Loans, net		298,865			300,603
Loans held for sale		1,673			1,608
Federal Home Loan Bank stock, at cost		1,550			2,241
Foreclosed real estate		567			78
Premises and equipment		10,238			10,208
Accrued interest receivable		1,538			1,580
Cash value of life insurance		6,002			6,161
Goodwill		5,386			5,386
Other assets		3,577			3,151
Total Assets	$	476,924		$	472,761
LIABILITIES
Deposits:
Noninterest-bearing	$	74,213		$	73,042
Interest-bearing		342,034			339,594
Total deposits		416,247			412,636
Accrued interest payable		94			127
Accrued expenses and other liabilities		2,169			2,765
Total liabilities		418,510			415,528
EQUITY
Preferred stock of $.01 par value per share Authorized 1,000,000 shares; none issued		0			0
Common stock of $.01 par value per share Authorized 5,000,000 shares; issued 3,182,916 shares, (3,164,416 in 2014); outstanding 2,759,002 shares, (2,740,502 in 2014)		32			32
Additional paid-in capital		24,766			24,313
Retained earnings-substantially restricted		41,768			40,229
Unearned stock compensation		(415	)		0
Accumulated other comprehensive income		411			800
Less treasury stock, at cost - 423,914 shares		(8,253	)		(8,253	)
Total First Capital, Inc. stockholders' equity		58,309			57,121
Noncontrolling interest in subsidiary		105			112
Total equity		58,414			57,233
Total Liabilities and Equity	$	476,924		$	472,761

See accompanying notes to consolidated financial statements.

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PART I - FINANCIAL INFORMATION
FIRST CAPITAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
INTEREST INCOME	(In thousands, except per share data)
Loans, including fees	$	3,963	$	4,036	$	7,893	$	7,874
Securities:
Taxable		268		303		530		620
Tax-exempt		244		274		490		564
Federal Home Loan Bank dividends		30		26		52		65
Federal funds sold and interest bearing deposits with banks		50		24		86		42
Total interest income		4,555		4,663		9,051		9,165
INTEREST EXPENSE
Deposits		239		291		482		580
Retail repurchase agreements		0		6		0		12
Advances from Federal Home Loan Bank		0		0		0		3
Total interest expense		239		297		482		595
Net interest income		4,316		4,366		8,569		8,570
Provision for loan losses		50		90		50		115
Net interest income after provision for loan losses		4,266		4,276		8,519		8,455
NONINTEREST INCOME
Service charges on deposit accounts		856		822		1,630		1,545
Commission income		85		120		184		198
Gain on sale of securities		0		54		0		54
Gain on sale of loans		178		212		486		319
Mortgage brokerage fees		33		9		46		14
Increase in cash surrender value of life insurance		34		40		67		77
Other income		28		30		165		59
Total noninterest income		1,214		1,287		2,578		2,266
NONINTEREST EXPENSE
Compensation and benefits		1,971		1,836		3,981		3,671
Occupancy and equipment		312		293		623		612
Data processing		406		397		830		764
Professional fees		380		153		581		298
Advertising		79		69		148		133
Other operating expenses		613		601		1,277		1,170
Total noninterest expense		3,761		3,349		7,440		6,648
Income before income taxes		1,719		2,214		3,657		4,073
Income tax expense		487		692		956		1,251
Net Income		1,232		1,522		2,701		2,822
Less: net income attributable to noncontrolling interest in subsidiary		4		4		7		7
Net Income Attributable to First Capital, Inc.	$	1,228	$	1,518	$	2,694	$	2,815
Earnings per common share attributable to First Capital, Inc.
Basic	$	0.45	$	0.55	$	0.98	$	1.02
Diluted	$	0.45	$	0.55	$	0.98	$	1.02
Dividends per share	$	0.21	$	0.21	$	0.42	$	0.42

See accompanying notes to consolidated financial statements.

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PART I - FINANCIAL INFORMATION
FIRST CAPITAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(In thousands)						(In thousands)
Net Income	$	1,232		$	1,522		$	2,701		$	2,822
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized gains (losses) on securities available for sale:
Unrealized holding gains (losses) arising during the period		(1,073	)		902			(637	)		1,873
Income tax (expense) benefit		418			(354	)		248			(736	)
Net of tax amount		(655	)		548			(389	)		1,137
Less:  reclassification adjustment for realized gains included in net income		0			(54	)		0			(54	)
Income tax expense		0			21			0			21
Net of tax amount		0			(33	)		0			(33	)
Other Comprehensive Income (Loss), net of tax		(655	)		515			(389	)		1,104
Comprehensive Income		577			2,037			2,312			3,926
Less:  comprehensive income attributable to the noncontrolling interest in subsidiary		4			4			7			7
Comprehensive Income Attributable to First Capital, Inc.	$	573		$	2,033		$	2,305		$	3,919

See accompanying notes to consolidated financial statements.

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PART I - FINANCIAL INFORMATION
FIRST CAPITAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)

(In thousands, except share and per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Unearned Stock Compensation			Treasury Stock			Noncontrolling Interest			Total
Balances at January 1, 2014	$	32	$	24,313	$	36,947		$	(720	)	$	0		$	(7,345	)	$	112		$	53,339
Net income		0		0		2,815			0			0			0			7			2,822
Other comprehensive income		0		0		0			1,104			0			0			0			1,104
Cash dividends		0		0		(1,160	)		0			0			0			(14	)		(1,174	)
Purchase of treasury shares		0		0		0			0			0			(844	)		0			(844	)
Balances at June 30, 2014	$	32	$	24,313	$	38,602		$	384		$	0		$	(8,189	)	$	105		$	55,247
Balances at January 1, 2015	$	32	$	24,313	$	40,229		$	800		$	0		$	(8,253	)	$	112		$	57,233
Net income		0		0		2,694			0			0			0			7			2,701
Other comprehensive loss		0		0		0			(389	)		0			0			0			(389	)
Cash dividends		0		0		(1,155	)		0			0			0			(14	)		(1,169	)
Restricted stock grants, net of forfeitures		0		453		0			0			(453	)		0			0			0
Stock compensation expense		0		0		0			0			38			0			0			38
Balances at June 30, 2015	$	32	$	24,766	$	41,768		$	411		$	(415	)	$	(8,253	)	$	105		$	58,414

See accompanying notes to consolidated financial statements.

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PART I - FINANCIAL INFORMATION
FIRST CAPITAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES		(In thousands)
Net income	$	2,701		$	2,822
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Amortization of premiums and accretion of discounts on securities, net		349			347
Depreciation and amortization expense		349			348
Deferred income taxes		263			(65	)
Stock compensation expense		38			0
Increase in cash value of life insurance		(67	)		(77	)
Gain on life insurance		(110	)		0
Gain on sale of securities		0			(54	)
Provision for loan losses		50			115
Proceeds from sales of loans		16,586			12,656
Loans originated for sale		(16,165	)		(14,550	)
Gain on sale of loans		(486	)		(319	)
Decrease in accrued interest receivable		42			165
Decrease in accrued interest payable		(33	)		(37	)
Net change in other assets/liabilities		(735	)		(592	)
Net Cash Provided By Operating Activities		2,782			759
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in interest-bearing time deposits		(1,490	)		(1,475	)
Proceeds from maturities and sales of interest-bearing time deposits		245			0
Purchase of securities available for sale		(15,366	)		(15,469	)
Proceeds from maturities of securities available for sale		10,264			10,923
Proceeds from sales of securities available for sale		0			2,612
Principal collected on mortgage-backed obligations		6,016			4,892
Net (increase) decrease in loans receivable		1,125			(9,564	)
Proceeds from redemption of Federal Home Loan Bank stock		691			0
Proceeds from sale of foreclosed real estate		74			375
Purchase of premises and equipment		(379	)		(473	)
Net Cash Provided By Investing Activities		1,180			(8,179	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits		3,611			12,923
Net decrease in advances from Federal Home Loan Bank		0			(500	)
Net increase in retail repurchase agreements		0			1,307
Purchase of treasury stock		0			(844	)
Dividends paid		(1,169	)		(1,174	)
Net Cash Provided By (Used In) Financing Activities		2,442			11,712
Net Increase in Cash and Cash Equivalents		6,404			4,292
Cash and cash equivalents at beginning of period		33,243			11,136
Cash and Cash Equivalents at End of Period	$	39,647		$	15,428

See accompanying notes to consolidated financial statements.

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FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.            Presentation of Interim Information

First Capital, Inc. (“Company”) is the savings and loan holding company for First Harrison Bank (“Bank”). The information presented in this report relates primarily to the Bank's operations. First Harrison Investments, Inc. and First Harrison Holdings, Inc. are wholly-owned Nevada corporate subsidiaries of the Bank that jointly own First Harrison, LLC, a Nevada limited liability corporation that holds and manages an investment portfolio. First Harrison REIT, Inc. (“REIT”) was incorporated as a wholly-owned subsidiary of First Harrison Holdings, Inc. to hold a portion of the Bank’s real estate mortgage loan portfolio. On January 21, 2009, the REIT issued 105 shares of 12.5% redeemable cumulative preferred stock with an aggregate liquidation value of $105,000 in a private placement offering in order to satisfy certain ownership requirements to qualify as a real estate investment trust. At June 30, 2015, this noncontrolling interest represented 0.2% ownership of the REIT. On September 23, 2014, the Company formed FHB Risk Mitigation Services, Inc. (“Captive”). The Captive is a wholly-owned insurance subsidiary of the Company that provides property and casualty insurance coverage to the Company, the Bank and the Bank’s subsidiaries, and reinsurance to five other third party insurance captives for which insurance may not be currently available or economically feasible in the insurance marketplace.

In the opinion of management, the unaudited consolidated financial statements include all adjustments considered necessary to present fairly the financial position as of June 30, 2015, and the results of operations for the three months and six months ended June 30, 2015 and 2014 and the cash flows for the six months ended June 30, 2015 and 2014. All of these adjustments are of a normal, recurring nature. Such adjustments are the only adjustments included in the unaudited consolidated financial statements. Interim results are not necessarily indicative of results for a full year or any other period.

The accompanying unaudited consolidated financial statements and notes have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and are presented as permitted by the instructions to Form 10-Q. Accordingly, they do not contain certain information included in the Company’s annual audited consolidated financial statements and related footnotes for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K.

The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

2.            Proposed Merger

On June 4, 2015, the Company and Peoples Bancorp, Inc. of Bullitt County (“Peoples”) entered into an Agreement and Plan of Merger (the “Agreement”) pursuant to which Peoples will merge with and into the Company, with the Company as the surviving corporation. Subsequent to the merger, The Peoples Bank of Bullitt County, a wholly-owned subsidiary of Peoples, will merge with and into the Bank, with the Bank as the surviving bank.

- 8 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(2 – continued)

The Agreement provides that shareholders of Peoples may elect to receive either 382.83 shares of Company common stock or $9,475 in cash for each share of Peoples common stock owned, subject to proration provisions specified in the Agreement that provide for a targeted aggregate mix of total consideration of 50% common stock and 50% cash. At the effective time of the merger, the exchange ratio and cash price per share may be adjusted based on provisions in the Agreement for changes in the price of the Company’s common stock or a decrease in the consolidated net book value of Peoples. Shareholders of Peoples also may receive an additional cash payment as specified in the Agreement if Peoples sells certain specified assets prior to the effective time of the merger, or the Company sells such assets within twenty-four months after the effective time of the merger.

Subject to the approval of the merger by the shareholders of both the Company and Peoples, receipt of regulatory approvals and satisfaction of other customary closing conditions, the parties anticipate completing the merger in the fourth quarter of 2015.

- 9-

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.            Investment Securities

Debt and equity securities have been classified in the consolidated balance sheets according to management’s intent. Investment securities at June 30, 2015 and December 31, 2014 are summarized as follows:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2015
Securities available for sale:
Agency mortgage-backed securities	$	34,387	$	154	$	203	$	34,338
Agency CMO		11,478		65		81		11,462
Other debt securities:
Agency notes and bonds		18,554		35		56		18,533
Municipal obligations		31,834		896		179		32,551
Subtotal - debt securities		96,253		1,150		519		96,884
Mutual funds		1,477		0		0		1,477
Total securities available for sale	$	97,730	$	1,150	$	519	$	98,361
Securities held to maturity:
Agency mortgage-backed securities	$	5	$	0	$	0	$	5
Total securities held to maturity	$	5	$	0	$	0	$	5
December 31, 2014
Securities available for sale:
Agency mortgage-backed securities	$	32,135	$	240	$	79	$	32,296
Agency CMO		14,461		74		150		14,385
Other debt securities:
Agency notes and bonds		18,136		32		48		18,120
Municipal obligations		32,178		1,242		78		33,342
Subtotal - debt securities		96,910		1,588		355		98,143
Mutual funds		2,083		0		0		2,083
Total securities available for sale	$	98,993	$	1,588	$	355	$	100,226
Securities held to maturity:
Agency mortgage-backed securities	$	6	$	0	$	0	$	6
Total securities held to maturity	$	6	$	0	$	0	$	6

- 10 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(3 – continued)

Agency notes and bonds, agency mortgage-backed securities and agency collateralized mortgage obligations (CMO) include securities issued by the Government National Mortgage Association (GNMA), a U.S. government agency, and the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC) and the Federal Home Loan Bank (FHLB), which are government-sponsored enterprises.

The amortized cost and fair value of debt securities as of June 30, 2015, by contractual maturity, are shown below. Expected maturities of mortgage-backed securities may differ from contractual maturities because the mortgages underlying the obligations may be prepaid without penalty.

	Securities Available for Sale				Securities Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
(In thousands)
Due in one year or less	$	1,070	$	1,074	$	0	$	0
Due after one year through five years		17,306		17,354		0		0
Due after five years through ten years		19,267		19,604
Due after ten years		12,745		13,052		0		0
		50,388		51,084		0		0
Mortgage-backed securities and CMO		45,865		45,800		5		5
	$	96,253	$	96,884	$	5	$	5

Information pertaining to investment securities available for sale with gross unrealized losses at June 30, 2015, aggregated by investment category and the length of time that individual investment securities have been in a continuous position, follows:

	Number of Investment Positions		Fair Value		Gross Unrealized Losses
(Dollars in thousands)
Continuous loss position less than twelve months:
Agency notes and bonds		9	$	7,696	$	53
Agency mortgage-backed securities		22		17,893		150
Muncipal obligations		17		6,568		95
Total less than twelve months		48		32,157		298
Continuous loss position more than twelve months:
Agency notes and bonds		1		999		3
Agency CMO		9		6,594		81
Agency mortgage-backed securities		4		4,426		53
Muncipal obligations		5		2,306		84
Total more than twelve months		19		14,325		221
Total securities available for sale		67	$	46,482	$	519

- 11 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(3 – continued)

Management evaluates securities for other-than-temporary impairment at least quarterly, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recover in fair value.

At June 30, 2015, the 67 U.S. government agency debt securities, including agency notes and bonds, mortgage-backed securities and CMO, and municipal obligations in a loss position had depreciated approximately 1.1% from the amortized cost basis. All of the U.S. government agency securities and municipal obligations are issued by U.S. government agencies, government-sponsored enterprises and municipal governments, or are secured by first mortgage loans and municipal project revenues. These unrealized losses related principally to current interest rates for similar types of securities. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government, its agencies or other governments, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. As the Company has the ability to hold the debt securities until maturity, or the foreseeable future if classified as available for sale, no declines are deemed to be other-than-temporary.

During the three and six months ended June 30, 2015, the Company did not have any security sales. During the three and six months ended June 30, 2014, the Company realized gross gains on sales of available for sale municipal securities of $54,000.

In June 2014, the Company acquired an additional 31,750 shares of common stock in another financial institution, in addition to the 100,000 shares acquired in December 2013, representing approximately 9% of the outstanding common stock of the entity, for a total investment of $711,000. The investment is accounted for using the cost method of accounting and is included in other assets in the consolidated balance sheet.

4.             Loans and Allowance for Loan Losses

The Company’s loan and allowance for loan loss policies are as follows:

Loans are stated at unpaid principal balances, less net deferred loan fees and the allowance for loan losses. The Company grants real estate mortgage, commercial business and consumer loans. A substantial portion of the loan portfolio is represented by mortgage loans to customers in southern Indiana. The ability of the Company’s customers to honor their loan agreements is dependent upon the real estate and general economic conditions in this area.

Loan origination and commitment fees, as well as certain direct costs of underwriting and closing loans, are deferred and amortized as a yield adjustment to interest income over the lives of the related loans using the interest method. Amortization of net deferred loan fees is discontinued when a loan is placed on nonaccrual status.

- 12 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

The recognition of income on a loan is discontinued and previously accrued interest is reversed, when interest or principal payments become ninety (90) days past due unless, in the opinion of management, the outstanding interest remains collectible. Past due status is determined based on contractual terms. Generally, by applying the cash receipts method, interest income is subsequently recognized only as received until the loan is returned to accrual status. The cash receipts method is used when the likelihood of further loss on the loan is remote. Otherwise, the Company applies the cost recovery method and applies all payments as a reduction of the unpaid principal balance until the loan qualifies for return to accrual status. Interest income on impaired loans is recognized using the cost recovery method, unless the likelihood of further loss on the loan is remote.

A loan is restored to accrual status when all principal and interest payments are brought current and the borrower has demonstrated the ability to make future payments of principal and interest as scheduled, which generally requires that the borrower demonstrate a period of performance of at least six consecutive months.

For portfolio segments other than consumer loans, the Company’s practice is to charge-off any loan or portion of a loan when the loan is determined by management to be uncollectible due to the borrower’s failure to meet repayment terms, the borrower’s deteriorating or deteriorated financial condition, the depreciation of the underlying collateral, the loan’s classification as a loss by regulatory examiners, or for other reasons. A partial charge-off is recorded on a loan when the uncollectibility of a portion of the loan has been confirmed, such as when a loan is discharged in bankruptcy, the collateral is liquidated, a loan is restructured at a reduced principal balance, or other identifiable events that lead management to determine the full principal balance of the loan will not be repaid. A specific reserve is recognized as a component of the allowance for estimated losses on loans individually evaluated for impairment. Partial charge-offs on nonperforming and impaired loans are included in the Company’s historical loss experience used to estimate the general component of the allowance for loan losses as discussed below. Specific reserves are not considered charge-offs in management’s analysis of the allowance for loan losses because they are estimates and the outcome of the loan relationship is undetermined. At June 30, 2015, the Company had 11 loans on which partial charge-offs of $464,000 had been recorded.

Consumer loans not secured by real estate are typically charged off at 90 days past due, or earlier if deemed uncollectible, unless the loans are in the process of collection. Overdrafts are charged off after 45 days past due. Charge-offs are typically recorded on loans secured by real estate when the property is foreclosed upon.

The allowance for loan losses reflects management’s judgment of probable loan losses inherent in the loan portfolio at the balance sheet date. Additions to the allowance for loan losses are made by the provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

- 13 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

The Company uses a disciplined process and methodology to evaluate the allowance for loan losses on at least a quarterly basis that is based upon management’s periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of specific and general components. The specific component relates to loans that are individually evaluated for impairment or loans otherwise classified as doubtful, substandard, or special mention. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan.

The general component covers non-classified loans and classified loans that are found, upon individual evaluation, to not be impaired. Such loans are pooled by segment and losses are modeled using annualized historical loss experience adjusted for qualitative factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent twelve calendar quarters unless the historical loss experience is not considered indicative of the level of risk in the remaining balance of a particular portfolio segment, in which case an adjustment is determined by management. The Company’s historical loss experience is then adjusted by an overall loss factor weighting adjustment based on a qualitative analysis prepared by management and reviewed on a quarterly basis. The overall loss factor considers changes in underwriting standards, economic conditions, changes and trends in past due and classified loans and other internal and external factors.

Management also applies additional loss factor multiples to loans classified as watch, special mention and substandard that are not individually evaluated for impairment. The loss factor multiples for classified loans are based on management’s assessment of historical trends regarding losses experienced on classified loans in prior periods. See below for additional discussion of the overall loss factor and loss factor multiples for classified loans as of June 30, 2015 and December 31, 2014, as well as a discussion of changes in management’s allowance for loan losses methodology from 2014 to 2015.

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 for loans considered impaired in order to evaluate the effectiveness of the estimation process and make any changes in the methodology as necessary.

Management utilizes the following portfolio segments in its analysis of the allowance for loan losses: residential real estate, land, construction, commercial real estate, commercial business, home equity and second mortgage, and other consumer loans. Additional discussion of the portfolio segments and the risks associated with each segment can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

- 14 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

Values for collateral dependent loans are generally based on appraisals obtained from independent licensed real estate appraisers, with adjustments applied for estimated costs to sell the property, costs to complete unfinished or repair damaged property and other factors. New appraisals are generally obtained for all significant properties when a loan is identified as impaired, and a property is considered significant if the value of the property is estimated to exceed $200,000. Subsequent appraisals are obtained as needed or if management believes there has been a significant change in the market value of the property. In instances where it is not deemed necessary to obtain a new appraisal, management bases its impairment and allowance for loan loss analysis on the original appraisal with adjustments for current conditions based on management’s assessment of market factors and management’s inspection of the property.

At June 30, 2015, the recorded investments in loans secured by residential real estate properties for which formal foreclosure proceedings are in process was $436,000.

Loans at June 30, 2015 and December 31, 2014 consisted of the following:

(In thousands)	June 30, 2015			December 31, 2014
Real estate mortgage loans:
Residential	$	107,136		$	106,679
Land		10,526			11,028
Residential construction		13,691			10,347
Commercial real estate		75,521			78,314
Commercial real estate contruction		474			1,422
Commercial business loans		24,983			28,282
Consumer loans:
Home equity and second mortgage loans		37,844			37,513
Automobile loans		27,194			25,274
Loans secured by savings accounts		920			1,018
Unsecured loans		3,445			3,316
Other consumer loans		6,007			5,075
Gross loans		307,741			308,268
Less undisbursed portion of loans in process		(5,824	)		(3,325	)
Principal loan balance		301,917			304,943
Deferred loan origination fees, net		548			506
Allowance for loan losses		(3,600	)		(4,846	)
Loans, net	$	298,865		$	300,603

- 15 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

The following table provides the components of the Company’s recorded investment in loans at June 30, 2015:

	Residential Real Estate		Land		Construction		Commercial Real Estate			Commercial Business			Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Recorded Investment in Loans:
Principal loan balance	$	107,136	$	10,526	$	8,341	$	75,521		$	24,983		$	37,844	$	37,566	$	301,917
Accrued interest receivable		339		38		21		168			131			124		146		967
Net deferred loan origination
fees and costs		63		4		0		(37	)		(7	)		525		0		548
Recorded investment in loans	$	107,538	$	10,568	$	8,362	$	75,652		$	25,107		$	38,493	$	37,712	$	303,432
Recorded Investment in Loans as Evaluated for Impairment:
Individually evaluated for impairment	$	1,419	$	20	$	0	$	1,800		$	0		$	143	$	0	$	3,382
Collectively evaluated for impairment		106,119		10,548		8,362		73,852			25,107			38,350		37,712		300,050
Acquired with deteriorated credit quality		0		0		0		0			0			0		0		0
Ending balance	$	107,538	$	10,568	$	8,362	$	75,652		$	25,107		$	38,493	$	37,712	$	303,432

- 16 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

The following table provides the components of the Company’s recorded investment in loans at December 31, 2014:

	Residential Real Estate		Land		Construction			Commercial Real Estate			Commercial Business			Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Recorded Investment in Loans:
Principal loan balance	$	106,679	$	11,028	$	8,444		$	78,314		$	28,282		$	37,513	$	34,683	$	304,943
Accrued interest receivable		368		48		20			186			131			131		152		1,036
Net deferred loan origination
fees and costs		49		4		(1	)		(20	)		(7	)		481		0		506
Recorded investment in loans	$	107,096	$	11,080	$	8,463		$	78,480		$	28,406		$	38,125	$	34,835	$	306,485
Recorded Investment in Loans as Evaluated for Impairment:
Individually evaluated for impairment	$	1,411	$	16	$	0		$	1,819		$	1,642		$	151	$	0	$	5,039
Collectively evaluated for impairment		105,685		11,064		8,463			76,661			26,764			37,974		34,835		301,446
Acquired with deteriorated credit quality		0		0		0			0			0			0		0		0
Ending balance	$	107,096	$	11,080	$	8,463		$	78,480		$	28,406		$	38,125	$	34,835	$	306,485

- 17 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

An analysis of the allowance for loan losses as of June 30, 2015 is as follows:

	Residential Real Estate		Land		Construction		Commercial Real Estate		Commercial Business		Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	75	$	0	$	0	$	8	$	0	$	10	$	0	$	93
Collectively evaluated for impairment		559		173		51		1,661		161		638		264		3,507
Acquired with deteriorated credit quality		0		0		0		0		0		0		0		0
Ending balance	$	634	$	173	$	51	$	1,669	$	161	$	648	$	264	$	3,600

An analysis of the allowance for loan losses as of December 31, 2014 is as follows:

	Residential Real Estate		Land		Construction		Commercial Real Estate		Commercial Business		Home Equity  & 2nd Mtg		Other Consumer		Total
	(In thousands)
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	47	$	0	$	0	$	11	$	1,293	$	0	$	0	$	1,351
Collectively evaluated for impairment		562		201		60		1,490		187		720		275		3,495
Acquired with deteriorated credit quality		0		0		0		0		0		0		0		0
Ending balance	$	609	$	201	$	60	$	1,501	$	1,480	$	720	$	275	$	4,846

- 18 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

An analysis of the changes in the allowance for loan losses for the three months and six months ended June 30, 2015 is as follows:

	Residential Real Estate			Land			Construction			Commercial Real Estate		Commercial Business			Home Equity  & 2nd Mtg			Other Consumer			Total
	(In thousands)
Allowance for loan losses:
Changes in Allowance for Loan Losses for the three-months ended June 30, 2015
Beginning balance	$	672		$	197		$	65		$	1,462	$	239		$	716		$	283		$	3,634
Provisions for loan losses		(39	)		(24	)		(14	)		204		(58	)		(38	)		19			50
Charge-offs		0			0			0			0		(22	)		(31	)		(72	)		(125	)
Recoveries		1			0			0			3		2			1			34			41
Ending balance	$	634		$	173		$	51		$	1,669	$	161		$	648		$	264		$	3,600
Changes in Allowance for Loan Losses for the six-months ended June 30, 2015
Beginning balance	$	609		$	201		$	60		$	1,501	$	1,480		$	720		$	275		$	4,846
Provisions for loan losses		42			(28	)		(9	)		156		(117	)		(45	)		51			50
Charge-offs		(20	)		0			0			0		(1,205	)		(33	)		(124	)		(1,382	)
Recoveries		3			0			0			12		3			6			62			86
Ending balance	$	634		$	173		$	51		$	1,669	$	161		$	648		$	264		$	3,600

- 19 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

An analysis of the changes in the allowance for loan losses for the three months and six months ended June 30, 2014 is as follows:

	Residential Real Estate			Land		Construction		Commercial Real Estate			Commercial Business			Home Equity  & 2nd Mtg			Other Consumer			Total
	(In thousands)
Allowance for loan losses:
Changes in Allowance for Loan Losses for the three-months ended June 30, 2014
Beginning balance	$	838		$	144	$	70	$	1,276		$	1,450		$	902		$	331		$	5,011
Provisions for loan losses		24			9		8		4			(10	)		41			14			90
Charge-offs		(21	)		0		0		0			0			(36	)		(36	)		(93	)
Recoveries		2			0		0		0			4			25			27			58
Ending balance	$	843		$	153	$	78	$	1,280		$	1,444		$	932		$	336		$	5,066
Changes in Allowance for Loan Losses for the six-months ended June 30, 2014
Beginning balance	$	811		$	152	$	63	$	1,284		$	1,446		$	877		$	289		$	4,922
Provisions for loan losses		113			1		15		(4	)		(7	)		(70	)		67			115
Charge-offs		(84	)		0		0		0			0			(54	)		(88	)		(226	)
Recoveries		3			0		0		0			5			179			68			255
Ending balance	$	843		$	153	$	78	$	1,280		$	1,444		$	932		$	336		$	5,066

- 20 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

At June 30, 2015 and December 31, 2014, management applied specific qualitative factor adjustments to the residential real estate, construction, commercial real estate, commercial business, vacant land, and home equity and second mortgage portfolio segments as they determined that the historical loss experience was not indicative of the level of risk in the remaining balance of those portfolio segments. These adjustments increased the loss factors by 0.25% to 20% for certain loan groups, and increased the estimated allowance for loan losses related to those portfolio segments by approximately $1.4 million and $1.6 million at June 30, 2015 and December 31, 2014, respectively. These changes were made to reflect management’s estimates of inherent losses in these portfolio segments at June 30, 2015 and December 31, 2014.

At June 30, 2015 and December 31, 2014, for each loan portfolio segment, management applied an overall qualitative factor of 1.18 to the Company’s historical loss factors. The overall qualitative factor is derived from management’s analysis of changes and trends in the following qualitative factors: underwriting standards, economic conditions, past due loans and other internal and external factors. Each of the four factors above was assigned an equal weight to arrive at an average for the overall qualitative factor of 1.18 at June 30, 2015 and December 31, 2014, respectively. The effect of the overall qualitative factor was to increase the estimated allowance for loan losses by $527,000 and $520,000 at June 30, 2015 and December 31, 2014, respectively. Additional discussion of the overall qualitative factor can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. There were no changes in management’s assessment of the overall qualitative factor components from December 31, 2014 to June 30, 2015.

Management also adjusts the historical loss factors for loans classified as watch, special mention and substandard that are not individually evaluated for impairment. The adjustments consider the increased likelihood of loss on classified loans based on the Company’s separate historical experience for classified loans. The effect of the adjustments for classified loans was to increase the estimated allowance for loan losses by $532,000 and $664,000 at June 30, 2015 and December 31, 2014, respectively.

- 21 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

The following table summarizes the Company’s impaired loans as of June 30, 2015 and for the three months and six months ended June 30, 2015. The Company did not recognize any interest income on impaired loans using the cash receipts method of accounting for the three or six month periods ended June 30, 2015:

	At June 30, 2015						Three Months Ended June 30, 2015				Six  Months Ended June 30, 2015
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In thousands)
Loans with no related allowance recorded:
Residential	$	1,122	$	1,444	$	0	$	1,235	$	5	$	1,204	$	10
Land		20		22		0		20		0		18		0
Construction		0		0		0		0		0		0		0
Commercial real estate		1,762		1,801		0		1,773		19		1,774		38
Commercial business		0		0		0		13		0		9		0
Home equity/2nd mortgage		63		81		0		65		0		67		1
Other consumer		0		0		0		0		0		0		0
		2,967		3,348		0		3,106		24		3,072		49
Loans with an allowance recorded:
Residential		297		335		75		254		0		259		0
Land		0		0		0		0		0		0		0
Construction		0		0		0		0		0		0		0
Commercial real estate		38		63		8		39		0		40		0
Commercial business		0		0		0		18		0		559		0
Home equity/2nd mortgage		80		81		10		80		0		80		0
Other consumer		0		0		0		0		0		0		0
		415		479		93		391		0		938		0
Total:
Residential		1,419		1,779		75		1,489		5		1,463		10
Land		20		22		0		20		0		18		0
Construction		0		0		0		0		0		0		0
Commercial real estate		1,800		1,864		8		1,812		19		1,814		38
Commercial business		0		0		0		31		0		568		0
Home equity/2nd mortgage		143		162		10		145		0		147		1
Other consumer		0		0		0		0		0		0		0
	$	3,382	$	3,827	$	93	$	3,497	$	24	$	4,010	$	49

- 22 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

The following table summarizes the Company’s impaired loans for the three months and six months ended June 30, 2014. The Company did not recognize any interest income on impaired loans using the cash receipts method of accounting for the three or six month periods ended June 30, 2014:

	Three Months Ended June 30, 2014				Six  Months Ended June 30, 2014
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Loans with no related allowance recorded:
Residential	$	1,345	$	8	$	1,427	$	18
Land		119		0		119		0
Construction		130		0		87		0
Commercial real estate		1,525		17		1,562		34
Commercial business		94		0		126		0
Home equity/2nd mortgage		169		0		197		1
Other consumer		0		0		0		0
		3,382		25		3,518		53
Loans with an allowance recorded:
Residential		436		0		440		0
Land		3		0		2		0
Construction		0		0		0		0
Commercial real estate		1,123		0		1,065		0
Commercial business		1,726		0		1,720		0
Home equity/2nd mortgage		16		0		18		0
Other consumer		0		0		0		0
		3,304		0		3,245		0
Total:
Residential		1,781		8		1,867		18
Land		122		0		121		0
Construction		130		0		87		0
Commercial real estate		2,648		17		2,627		34
Commercial business		1,820		0		1,846		0
Home equity/2nd mortgage		185		0		215		1
Other consumer		0		0		0		0
	$	6,686	$	25	$	6,763	$	53

- 23 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

The following table summarizes the Company’s impaired loans as of December 31, 2014:

	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)
Loans with no related allowance recorded:
Residential	$	1,141	$	1,446	$	0
Land		16		18		0
Construction		0		0		0
Commercial real estate		1,777		1,808		0
Commercial business		0		0		0
Home equity/2nd mortgage		71		87		0
Other consumer		0		0		0
		3,005		3,359		0
Loans with an allowance recorded:
Residential		270		304		47
Land		0		0		0
Construction		0		0		0
Commercial real estate		42		65		11
Commercial business		1,642		1,909		1,293
Home equity/2nd mortgage		80		98		0
Other consumer		0		0		0
		2,034		2,376		1,351
Total:
Residential		1,411		1,750		47
Land		16		18		0
Construction		0		0		0
Commercial real estate		1,819		1,873		11
Commercial business		1,642		1,909		1,293
Home equity/2nd mortgage		151		185		0
Other consumer		0		0		0
	$	5,039	$	5,735	$	1,351

- 24 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

Nonperforming loans consists of nonaccrual loans and loans over 90 days past due and still accruing interest. The following table presents the recorded investment in nonperforming loans at June 30, 2015 and December 31, 2014:

	June 30, 2015						December 31, 2014
	Nonaccrual Loans		Loans 90+ Days Past Due Still Accruing		Total Nonperforming Loans		Nonaccrual Loans		Loans 90+ Days Past Due Still Accruing		Total Nonperforming Loans
	(In thousands)
Residential	$	1,069	$	14	$	1,083	$	919	$	68	$	987
Land		20		0		20		16		0		16
Construction		0		0		0		0		0		0
Commercial real estate		434		21		455		433		0		433
Commercial business		0		0		0		1,642		0		1,642
Home equity/2nd mortgage		122		0		122		129		14		143
Other consumer		0		19		19		0		3		3
Total	$	1,645	$	54	$	1,699	$	3,139	$	85	$	3,224

The following table presents the aging of the recorded investment in loans at June 30, 2015:

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans
	(In thousands)
Residential	$	2,556	$	519	$	587	$	3,662	$	103,876	$	107,538
Land		0		8		20		28		10,540		10,568
Construction		0		0		0		0		8,362		8,362
Commercial real estate		0		192		77		269		75,383		75,652
Commercial business		0		0		0		0		25,107		25,107
Home equity/2nd mortgage		124		92		3		219		38,274		38,493
Other consumer		200		25		19		244		37,468		37,712
Total	$	2,880	$	836	$	706	$	4,422	$	299,010	$	303,432

- 25 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

The following table presents the aging of the recorded investment in loans at December 31, 2014:

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans
	(In thousands)
Residential	$	3,070	$	551	$	308	$	3,929	$	103,167	$	107,096
Land		24		124		0		148		10,932		11,080
Construction		0		0		0		0		8,463		8,463
Commercial real estate		54		133		42		229		78,251		78,480
Commercial business		0		0		0		0		28,406		28,406
Home equity/2nd mortgage		153		23		97		273		37,852		38,125
Other consumer		263		26		3		292		34,543		34,835
Total	$	3,564	$	857	$	450	$	4,871	$	301,614	$	306,485

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, public information, historical payment experience, credit documentation, and current economic trends, among other factors. The Company classifies loans based on credit risk at least quarterly. The Company uses the following regulatory definitions for risk ratings:

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loss: Loans classified as loss are considered uncollectible and of such little value that their continuance on the institution’s books as an asset is not warranted.

Loans not meeting the criteria above that are analyzed individually as part of the described process are considered to be pass rated loans.

- 26 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

The following table presents the recorded investment in loans by risk category as of the date indicated:

	Residential Real Estate		Land		Construction		Commercial Real Estate		Commercial Business		Home Equity  & 2nd Mtg		Other Consumer		Total
	(In thousands)
June 30, 2015
Pass	$	105,401	$	7,661	$	8,362	$	72,937	$	24,264	$	38,229	$	37,639	$	294,493
Special Mention		100		92		0		1,649		514		1		57		2,413
Substandard		968		2,795		0		632		329		141		16		4,881
Doubtful		1,069		20		0		434		0		122		0		1,645
Loss		0		0		0		0		0		0		0		0
Total	$	107,538	$	10,568	$	8,362	$	75,652	$	25,107	$	38,493	$	37,712	$	303,432
December 31, 2014
Pass	$	104,780	$	7,969	$	7,722	$	73,204	$	26,137	$	37,860	$	34,770	$	292,442
Special Mention		105		94		741		2,648		298		2		49		3,937
Substandard		1,292		3,001		0		2,195		329		134		16		6,967
Doubtful		919		16		0		433		1,642		129		0		3,139
Loss		0		0		0		0		0		0		0		0
Total	$	107,096	$	11,080	$	8,463	$	78,480	$	28,406	$	38,125	$	34,835	$	306,485

- 27 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

The following table summarizes the Company’s troubled debt restructurings (TDRs) by accrual status as of June 30, 2015 and December 31, 2014:

	June 30, 2015								December 31, 2014
	Accruing		Nonaccrual		Total		Related Allowance for Loan Losses		Accruing		Nonaccrual		Total		Related Allowance for Loan Losses
	(In thousands)
Troubled debt restructurings:
Residential real estate	$	349	$	310	$	659	$	3	$	492	$	166	$	658	$	6
Commercial real estate		1,367		331		1,698		0		1,386		338		1,724		0
Commercial business		0		0		0		0		0		1,642		1,642		1,292
Home equity and 2nd mortgage		21		0		21		0		22		0		22		0
Total	$	1,737	$	641	$	2,378	$	3	$	1,900	$	2,146	$	4,046	$	1,298

At June 30, 2015 and December 31, 2014, there were no commitments to lend additional funds to debtors whose loan terms have been modified in a TDR.

- 28 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

There were no TDRs that were restructured during the three or six months ended June 30, 2015.

The following table summarizes information in regard to TDRs that were restructured during the six months ended June 30, 2014. There were no TDRs that were restructured during the three months ended June 30, 2014:

	Six months ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Balance		Post-Modification Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings:
Commercial real estate		3	$	542	$	542
Total		3	$	542	$	542

For the TDRs listed above, the terms of modification included a temporary decrease in the borrowers’ monthly payments. There were no principal charge-offs recorded as a result of TDRs during the three months and six months ended June 30, 2014, and there was no specific allowance for loan losses related to TDRs modified during the three months and six months ended June 30, 2014.

There were no TDRs modified within the previous 12 months for which there was a subsequent payment default (defined as the loan becoming more than 90 days past due, being moved to nonaccrual status, or the collateral being foreclosed upon) during the three months and six months ended June 30, 2015 and 2014. In the event that a TDR subsequently defaults, the Company evaluates the restructuring for possible impairment. As a result, the related allowance for loan losses may be increased or charge-offs may be taken to reduce the carrying amount of the loan.

- 29 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

5.             Supplemental Disclosure for Earnings Per Share

	Three Months Ended				Six Months Ended
	6/30/2015		6/30/2014		6/30/2015		6/30/2014
Basic	(Dollars in thousands, except for share and per share data)
Earnings:
Net income attributable to First Capital, Inc.	$	1,228	$	1,518	$	2,694	$	2,815
Shares:
Weighted average common shares outstanding		2,740,689		2,757,335		2,740,596		2,770,637
Net income attributable to First Capital, Inc. per common share, basic	$	0.45	$	0.55	$	0.98	$	1.02
Diluted
Earnings:
Net income attributable to First Capital, Inc.	$	1,228	$	1,518	$	2,694	$	2,815
Shares:
Weighted average common  shares outstanding		2,740,689		2,757,335		2,740,596		2,770,637
Add: Dilutive effect of restricted stock		506		0		156		0
Weighted average common  shares outstanding, as adjusted		2,741,195		2,757,335		2,740,752		2,770,637
Net income attributable to First Capital, Inc. per common share, diluted	$	0.45	$	0.55	$	0.98	$	1.02

Nonvested restricted stock shares are not considered as outstanding for purposes of computing weighted average common shares outstanding.

6.             Stock Option Plan

On May 20, 2009, the Company adopted the 2009 Equity Incentive Plan (the Plan). The Plan provides for the award of stock options, restricted stock, performance shares and stock appreciation rights. The aggregate number of shares of the Company’s common stock available for issuance under the Plan may not exceed 223,000 shares. The Company may grant both non-statutory and statutory stock options which may not have a term exceeding ten years. In the case of incentive stock options, the aggregate fair value of the stock (determined at the time the incentive stock option is granted) for which any optionee may be granted incentive options which are first exercisable during any calendar year shall not exceed $100,000. Option prices may not be less than the fair market value of the underlying stock at the date of the grant. An award of a performance share is a grant of a right to receive shares of the Company’s common stock which is contingent upon the achievement of specific performance criteria or other objectives set at the grant date. Stock appreciation rights are equity or cash settled share-based compensation arrangements whereby the number of shares that will ultimately be issued or the cash payment is based upon the appreciation of the Company’s common stock. Awards granted under the Plan may be granted either alone, in addition to, or in tandem with, any other award granted under the Plan.

The fair market value of stock options granted is estimated at the date of grant using an option pricing model. Expected volatilities are based on historical volatility of the Company's stock. The expected term of options granted represents the period of time that options are expected to be outstanding and is based on historical trends. The risk free rate for the expected life of the options is based on the U.S. Treasury yield curve in effect at the time of grant. As of June 30, 2015, no stock options had been granted under the Plan.

- 30 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(6 – continued)

On February 17, 2015, the Company granted 19,500 restricted stock shares to directors, officers and key employees at a grant-date price of $24.50 per share for a total of $478,000. The restricted stock vests ratably from the grant date through July 1, 2020, with 20% of the shares vesting each year on July 1 beginning July 1, 2016. Compensation expense is measured based on the fair market value of the restricted stock at the grant date and is recognized ratably over the period during which the shares are earned (the vesting period). Compensation expense related to restricted stock recognized for the three-month and six-month periods ended June 30, 2015 amounted to $21,000 and $38,000, respectively.

A summary of the Company’s nonvested restricted shares activity under the Plan as of June 30, 2015 and changes during the six-month period then ended is presented below.

	Number of Shares		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2015		-		-
Granted		19,500	$	24.50
Vested		500		24.50
Forfeited		1,000		24.50
Nonvested at June 30, 2015		18,000	$	24.50

There were 500 restricted shares that vested during the six-month period ended June 30, 2015, upon the retirement of a director. The total fair value of restricted shares that vested during the six-month period ended June 30, 2015 was $13,000. At June 30, 2015, there was $415,000 of total unrecognized compensation expense related to nonvested restricted shares. The compensation expense is expected to be recognized over the remaining vesting period of 5 years.

7.             Supplemental Disclosures of Cash Flow Information

	Six Months Ended June 30,
	2015		2014
	(In thousands)
Cash payments for:
Interest	$	516	$	632
Taxes		1,035		1,042
Noncash investing activities:
Transfers from loans to real estate acquired through foreclosure		562		75

- 31 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

8. Fair Value Measurements

Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements, provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FASB ASC Topic 820 are described as follows:

Level 1: Inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets.

Level 2: Inputs to the valuation methodology include quoted market prices for similar assets or liabilities in active markets; quoted market prices for identical or similar assets or liabilities in markets that are not active; or inputs that are derived principally from or can be corroborated by observable market data by correlation or other means.

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth on the following page. These valuation methodologies were applied to all of the Company’s financial and nonfinancial assets carried at fair value or the lower of cost or fair value. The table below presents the balances of assets measured at fair value on a recurring and nonrecurring basis as of June 30, 2015 and December 31, 2014. The Company had no liabilities measured at fair value as of June 30, 2015 or December 31, 2014.

- 32 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(8 – continued)

	Carrying Value
(In thousands)	Level 1		Level 2		Level 3		Total
June 30, 2015
Assets Measured on a Recurring Basis
Securities available for sale:
Agency mortgage-backed securities	$	0	$	34,338	$	0	$	34,338
Agency CMO		0		11,462		0		11,462
Agency notes and bonds		0		18,533		0		18,533
Municipal obligations		0		32,551		0		32,551
Mutual funds		1,477		0		0		1,477
Total securities available for sale	$	1,477	$	96,884	$	0	$	98,361
Assets Measured on a Nonrecurring Basis
Impaired loans:
Residential real estate	$	0	$	0	$	1,344	$	1,344
Land		0		0		20		20
Construction		0		0		0		0
Commercial real estate		0		0		1,792		1,792
Commercial business		0		0		0		0
Home equity and second mortgage		0		0		133		133
Total impaired loans	$	0	$	0	$	3,289	$	3,289
Loans held for sale	$	0	$	1,673	$	0	$	1,673
Foreclosed real estate:
Residential real estate	$	0	$	0	$	87	$	87
Commercial real estate		0		0		480		480
Total foreclosed real estate	$	0	$	0	$	567	$	567
December 31, 2014
Assets Measured on a Recurring Basis
Securities available for sale:
Agency mortgage-backed securities	$	0	$	32,296	$	0	$	32,296
Agency CMO		0		14,385		0		14,385
Agency notes and bonds		0		18,120		0		18,120
Municipal obligations		0		33,342		0		33,342
Mutual funds		2,083		0		0		2,083
Total securities available for sale	$	2,083	$	98,143	$	0	$	100,226
Assets Measured on a Nonrecurring Basis
Impaired loans:
Residential real estate	$	0	$	0	$	1,364	$	1,364
Land		0		0		16		16
Construction		0		0		0		0
Commercial real estate		0		0		1,808		1,808
Commercial business		0		0		349		349
Home equity and second mortgage		0		0		151		151
Total impaired loans	$	0	$	0	$	3,688	$	3,688
Loans held for sale	$	0	$	1,608	$	0	$	1,608
Foreclosed real estate:
Residential real estate	$	0	$	0	$	78	$	78
Total foreclosed real estate	$	0	$	0	$	78	$	78

- 33 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(8 – continued)

Fair value is based upon quoted market prices, where available. If quoted market prices are not available, fair value is based on internally developed models or obtained from third parties that primarily use, as inputs, observable market-based parameters or a matrix pricing model that employs the Bond Market Association’s standard calculations for cash flow and price/yield analysis and observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value, or the lower of cost or fair value. These adjustments may include unobservable parameters. Any such valuation adjustments have been applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Securities Available for Sale. Securities classified as available for sale are reported at fair value on a recurring basis.  These securities are classified as Level 1 of the valuation hierarchy where quoted market prices from reputable third-party brokers are available in an active market. If quoted market prices are not available, the Company obtains fair value measurements from an independent pricing service.  These securities are reported using Level 2 inputs and the fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, U.S. government and agency yield curves, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and the security’s terms and conditions, among other factors. Changes in fair value of securities available for sale are recorded in other comprehensive income, net of income tax effect.

Impaired Loans. Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly. The fair value of impaired loans is classified as Level 3 in the fair value hierarchy.

Impaired loans are carried at the present value of estimated future cash flows using the loan's effective interest rate or the fair value of collateral less estimated costs to sell if the loan is collateral dependent. At June 30, 2015 and December 31, 2014, all impaired loans were considered to be collateral dependent for the purpose of determining fair value. Collateral may be real estate and/or business assets, including equipment, inventory and/or accounts receivable. The fair value of the collateral is generally determined based on real estate appraisals or other independent evaluations by qualified professionals, adjusted for estimated costs to sell the property, costs to complete or repair the property and other factors to reflect management’s estimate of the fair value of the collateral given the current market conditions and the condition of the collateral. At June 30, 2015 and December 31, 2014, the significant unobservable inputs used in the fair value measurement of impaired loans included a discount from appraised value for estimates of changes in market conditions, the condition of the collateral and estimated costs to sell the collateral ranging from 10% to 20%. The Company recognized provisions for loan losses of $82,000 and $21,000 for the six months ended June 30, 2015 and 2014, respectively, for impaired loans. The Company recognized provisions for loan losses of $47,000 and $8,000 for the three months ended June 30, 2015 and June 30, 2014, respectively.

- 34 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(8 – continued)

Loans Held for Sale. Loans held for sale are carried at the lower of cost or market value. The portfolio is comprised of residential real estate loans and fair value is based on specific prices of underlying contracts for sales to investors.  These measurements are classified as Level 2.

Foreclosed Real Estate. Foreclosed real estate is reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly. The fair value of foreclosed real estate is classified as Level 3 in the fair value hierarchy.

Foreclosed real estate is reported at fair value less estimated costs to dispose of the property. The fair values are determined by real estate appraisals which are then discounted to reflect management’s estimate of the fair value of the property given current market conditions and the condition of the collateral. At June 30, 2015, the significant unobservable inputs used in the fair value measurement of foreclosed real estate included a discount from appraised value for estimates of changes in market conditions, the condition of the collateral and estimated costs to sell the property ranging from 20% to 60%, with a weighted average of 30%. At December 31, 2014, the discount from appraised value ranged from 10% to 60%, with a weighted average of 40%. There were no charges to write down foreclosed real estate recognized in income for the three months and six months ended June 30, 2015, or the three months and six months ended June 30, 2014.

There have been no changes in the valuation techniques and related inputs used for assets measured at fair value on a recurring and nonrecurring basis during the six month periods ended June 30, 2015 and 2014. There were no transfers into or out of the Company’s Level 3 financial assets for the six month periods ended June 30, 2015 and 2014. In addition, there were no transfers into or out of Levels 1 and 2 of the fair value hierarchy during the six month periods ended June 30, 2015 and 2014.

- 35 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(8 – continued)

GAAP requires disclosure of the fair value of financial assets and financial liabilities, whether or not recognized in the balance sheet. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. The estimated fair values of the Company's financial instruments are as follows:

	Carrying		Fair		Fair Vale Measurements Using
(In thousands)	Value		Value		Level 1		Level 2		Level 3
June 30, 2015
Financial assets:
Cash and cash equivalents	$	39,647	$	39,647	$	39,647	$	0	$	0
Interest-bearing time deposits		9,515		9,618		0		9,618		0
Securities available for sale		98,361		98,361		1,477		96,884		0
Securities held to maturity		5		5		0		5		0
Loans held for sale		1,673		1,708		0		1,708		0
Loans, net		298,865		298,602		0		0		298,602
FHLB stock		1,550		1,550		0		1,550		0
Accrued interest receivable		1,538		1,538		0		1,538		0
Cost method investment (included in other assets)		711		711		0		711		0
Financial liabilities:
Deposits		416,247		415,785		0		0		415,785
Accrued interest payable		94		94		0		94		0
December 31, 2014:
Financial assets:
Cash and cash equivalents	$	33,243	$	33,243	$	33,243	$	0	$	0
Interest-bearing time deposits		8,270		8,370		0		8,370		0
Securities available for sale		100,226		100,226		2,083		98,143		0
Securities held to maturity		6		6		0		6		0
Loans held for sale		1,608		1,641		0		1,641		0
Loans, net		300,603		301,864		0		0		301,864
FHLB stock		2,241		2,241		0		2,241		0
Accrued interest receivable		1,580		1,580		0		1,580		0
Cost method investment (included in other assets)		711		711		0		711		0
Financial liabilities:
Deposits		412,636		412,282		0		0		412,282
Accrued interest payable		127		127		0		127		0

- 36 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(8 – continued)

The carrying amounts in the preceding table are included in the consolidated balances sheets under the applicable captions. The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value:

Cash and Cash Equivalents and Interest-Bearing Time Deposits

For cash and short-term investments, including cash and due from banks, interest-bearing deposits with banks, federal funds sold, and interest-bearing time deposits with other financial institutions, the carrying amount is a reasonable estimate of fair value.

Investment Securities

For marketable equity securities, the fair values are based on quoted market prices. For debt securities, the Company obtains fair value measurements from an independent pricing service and the fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, U.S. government and agency yield curves, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and the security’s terms and conditions, among other factors. For FHLB stock, a restricted equity security, the carrying amount is a reasonable estimate of fair value because it is not marketable. For other cost method equity investments where a quoted market value is not available, the carrying amount is a reasonable estimate of fair value.

Loans

The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The carrying amount of accrued interest receivable approximates its fair value. The fair value of loans held for sale is based on specific prices of underlying contracts for sale to investors.

Deposits

The fair value of demand deposits, savings accounts, money market deposit accounts and other transaction accounts is the amount payable on demand at the balance sheet date. The fair value of fixed-maturity certificates of deposit is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities. The carrying amount of accrued interest payable approximates its fair value.

Borrowed Funds

The carrying amounts of retail repurchase agreements approximate their fair value. The fair value of advances from FHLB is estimated by discounting the future cash flows using the current rates at which similar loans with the same remaining maturities could be obtained.

- 37 - 

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

9. Recent Accounting Pronouncements

The following is a summary of recently issued accounting pronouncements that impact the accounting and reporting practices of the Company:

In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The update provides a five-step revenue recognition model for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to their customers (unless the contracts are included in the scope of other standards). The guidance requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. For public entities, the guidance was originally effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. However, in July 2015 the FASB affirmed its proposal to defer the effective date of ASU 2014-09 by one year, making the amendments effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Companies have the option to apply ASU 2014-09 as of the original effective date. Management is evaluating the new guidance, but does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial position or results of operations.

- 38 - 

PART I - ITEM 2

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

FIRST CAPITAL, INC.

Safe Harbor Statement for Forward-Looking Statements

This report may contain forward-looking statements within the meaning of the federal securities laws. These statements are not historical facts; rather they are statements based on the Company’s current expectations regarding its business strategies and their intended results and its future performance. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions.

Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause or contribute to the Company’s actual results, performance and achievements being materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, general economic conditions, including changes in market interest rates and changes in monetary and fiscal policies of the federal government; legislative and regulatory changes; the quality and composition of the loan and investment securities portfolio; loan demand; deposit flows; competition; expected cost savings, synergies and other financial benefits from the proposed merger with Peoples Bancorp, Inc. of Bullitt County might not be realized within the expected time frames and costs or difficulties relating to integrating matters might be greater than expected; the requisite shareholder and regulatory approvals for the Peoples merger might not be obtained; and changes in accounting principles and guidelines. Additional factors that may affect our results are discussed in Part II of the Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2014 under “Item 1A. Risk Factors.” These factors should be considered in evaluating the forward-looking statements and undue reliance should not be placed on such statements. Except as required by applicable law or regulation, the Company assumes no obligation and disclaims any obligation to update any forward-looking statements.

Critical Accounting Policies

During the six months ended June 30, 2015, there was no significant change in the Company’s critical accounting policies or the application of critical accounting policies as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Financial Condition

Total assets increased from $472.8 million at December 31, 2014 to $476.9 million at June 30, 2015, an increase of 0.9%.

Net loans receivable (excluding loans held for sale) decreased $1.7 million from $300.6 million at December 31, 2014 to $298.9 million at June 30, 2015. Commercial business loans and commercial real estate loans decreased $3.3 million and $2.8 million, respectively, during the six months ended June 30, 2015 while other consumer loans increased $2.9 million during the period.

Securities available for sale decreased $1.8 million from $100.2 million at December 31, 2014 to $98.4 million at June 30, 2015. Purchases of $15.4 million of securities classified as available for sale were made during the six months ended June 30, 2015 and consisted primarily of U.S. government agency notes and bonds and mortgage-backed securities. Maturities and principal repayments of available for sale securities totaled $10.3 million and $6.0 million, respectively, during the six months ended June 30, 2015.

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PART I - ITEM 2

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

FIRST CAPITAL, INC.

Cash and cash equivalents increased from $33.2 million at December 31, 2014 to $39.6 million at June 30, 2015, primarily due to an increase of $11.3 million in federal funds sold partially offset by a $4.9 million decrease in cash and due from banks.

Total deposits increased 0.9% from $412.6 million at December 31, 2014 to $416.2 million at June 30, 2015. Interest-bearing demand and savings accounts increased $10.5 million during the six months ended June 30, 2015 primarily due to normal fluctuations in accounts of local municipalities, new accounts and current time deposit accountholders transferring funds to non-maturity deposits as customers opt not to lock in to longer terms in the current low-rate environment. Time deposits decreased $8.0 million over the same six month period. Noninterest-bearing checking accounts increased by $1.2 million during the period due to normal balance fluctuations.

Total stockholders' equity attributable to the Company increased from $57.1 million at December 31, 2014 to $58.3 million at June 30, 2015 primarily due to retained net income of $1.5 million, partially offset by a net decrease of $389,000 in the net unrealized gain on securities available for sale for the six months ended June 30, 2015. The decrease in unrealized gains on available for sale securities during the period is primarily due to changes in long-term market interest rates.

Results of Operations

Net income for the six-month periods ended June 30, 2015 and 2014. Net income attributable to the Company was $2.7 million ($0.98 per share) for the six months ended June 30, 2015 compared to $2.8 million ($1.02 per share) for the same time period in 2014. The decrease is primarily due to an increase in noninterest expense partially offset by an increase in noninterest income.

Net income for the three-month periods ended June 30, 2015 and 2014. Net income attributable to the Company was $1.2 million ($0.45 per share) for the three months ended June 30, 2015 compared to $1.5 million ($0.55 per share) for the three months ended June 30, 2014. The decrease is primarily due to an increase in noninterest expense and a decrease in noninterest income.

Net interest income for the six-month periods ended June 30, 2015 and 2014. Net interest income decreased $1,000 for the six months ended June 30, 2015 compared to the same period in 2014 primarily due to a decrease in the interest rate spread offset by an increase in the ratio of average interest-earning assets to average interest-bearing liabilities.

Total interest income decreased $114,000 for the six months ended June 30, 2015 compared to the same period in 2014. For the six months ended June 30, 2015, the average balance of interest-earning assets and their tax-equivalent yield were $439.8 million and 4.26%, respectively. During the same period in 2014, the average balance of those assets was $424.8 million and the tax-equivalent yield was 4.47%. The decrease in the tax-equivalent yield was due to a decrease in yields across all asset types because the Federal Open Market Committee (FOMC) has kept interest rates near historic low levels. The increase in the average balance of interest-earning assets was primarily due to increases in average balances of federal funds sold and loans receivable, which increased $16.7 million and $5.5 million, respectively, when comparing the two periods. This was partially offset by a decrease of $11.6 million in the average balance of investment securities when comparing the same two periods.

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PART I - ITEM 2

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

FIRST CAPITAL, INC.

Total interest expense decreased $113,000 for the six months ended June 30, 2015 compared to the same period in 2014. The average rate paid on interest-bearing liabilities decreased from 0.35% for the six months ended June 30, 2014 to 0.28% for the same period in 2015. The average balance of interest-bearing liabilities increased from $338.9 million for 2014 to $342.9 million for 2015 primarily due to an increase of $14.8 million in the average balance of interest-bearing deposits partially offset by a $10.8 million decrease in the average balance of borrowed funds. As a result, the tax-equivalent interest rate spread decreased from 4.12% for the six-month period ended June 30, 2014 to 3.98% for the same period in 2015. The ratio of average interest-earning assets to average interest-bearing liabilities increased from 125.4% for 2014 to 128.3% for 2015.

Net interest income for the three-month periods ended June 30, 2015 and 2014. Net interest income decreased $50,000 for the three months ended June 30, 2015 compared to the three months ended June 30, 2014 primarily due to a decrease in the interest rate spread.

Total interest income decreased $108,000 for the three months ended June 30, 2015 compared to the same period in 2014. For the three months ended June 30, 2015, the average balance of interest-earning assets and their tax-equivalent yield were $446.5 million and 4.22%, respectively. During the same period in 2014, the average balance of those assets was $429.4 million and the tax-equivalent yield was 4.49%. The decrease in yield was primarily due to the previously mentioned low rate environment and a change in asset mix. The average balance of federal funds sold increased $23.1 million while the average balance of investment securities decreased $10.9 million when comparing the two periods.

Total interest expense decreased $58,000 for the three months ended June 30, 2015 compared to the three months ended June 30, 2014. The average balance of interest-bearing liabilities increased from $342.2 million to $348.4 million when comparing the two periods and the average rate paid on those liabilities decreased from 0.35% for the three months ended June 30, 2014 to 0.28% for the same period in 2015. As a result, the tax-equivalent interest rate spread decreased from 4.14% for the three months ended June 30, 2014 to 3.94% for the three months ended June 30, 2015. The ratio of average interest-earning assets to average interest-bearing liabilities increased from 125.5% for 2014 to 128.2% for 2015.

Provision for loan losses. The provision for loan losses decreased from $115,000 for the six-month period ended June 30, 2014 to $50,000 for the same period in 2015 and from $90,000 for the three months ended June 30, 2014 to $50,000 for the three months ended June 30, 2015. The reduction in the provision was based on management’s analysis of the allowance for loan losses and a general improvement in the Bank’s loan portfolio evidenced by a decrease in nonperforming loans from $3.2 million at December 31, 2014 to $1.7 million at June 30, 2015. The Bank recognized net charge-offs of $1.3 million for the six months ended June 30, 2015 compared to a net recovery $29,000 during the same period in 2014. The net charge-offs recognized in 2015 primarily related to a $1.2 million charge-off on a commercial loan that had been fully reserved for in prior periods.

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PART I - ITEM 2

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

FIRST CAPITAL, INC.

Provisions for loan losses are charges to earnings to maintain the total allowance for loan losses at a level considered adequate by management to provide for probable known and inherent loan losses based on management’s evaluation of the collectability of the loan portfolio, including the nature of the portfolio, credit concentrations, trends in historical loss experience, specified impaired loans and economic conditions. Although management uses the best information available, future adjustments to the allowance may be necessary due to changes in economic, operating, regulatory and other conditions that may be beyond the Bank’s control. While the Bank maintains the allowance for loan losses at a level that it considers adequate to provide for estimated losses, there can be no assurance that further additions will not be made to the allowance for loan losses and that actual losses will not exceed the estimated amounts.

The methodology used in determining the allowance for loan losses includes segmenting the loan portfolio by identifying risk characteristics common to groups of loans, determining and measuring impairment of individual loans based on the present value of expected future cash flows or the fair value of collateral, and determining and measuring impairment for groups of loans with similar characteristics by applying loss factors that consider the qualitative factors which may affect the loss rates.

The allowance for loan losses was $3.6 million at June 30, 2015 and $4.8 million at December 31, 2014. Management has deemed these amounts as adequate at each date based on its best estimate of probable known and inherent loan losses at each date. As previously mentioned, at June 30, 2015, nonperforming loans amounted to $1.7 million compared to $3.2 million at December 31, 2014. Included in nonperforming loans at June 30, 2015 are loans 90 days or more past due and still accruing interest of $54,000. These loans are accruing interest because the estimated value of the collateral and collection efforts are deemed sufficient to ensure full recovery. At June 30, 2015 and December 31, 2014, nonaccrual loans amounted to $1.6 million and $3.1 million, respectively.

Noninterest income for the six-month periods ended June 30, 2015 and 2014. Noninterest income for the six months ended June 30, 2015 increased $312,000 compared to the six months ended June 30, 2014. The increase was primarily due to increases in gains on the sale of loans and other income of $167,000 and $106,000, respectively, when comparing the two periods. The increase in the gains on the sale of loans is primarily due to an increase in the Bank’s sales activity of commercial Small Business Administration loans during 2015. The increase in other income was primarily due to a gain on life insurance of $110,000 recognized during the quarter ended March 31, 2015.

Noninterest income for the three-month periods ended June 30, 2015 and 2014. Noninterest income for the quarter ended June 30, 2015 decreased $73,000 to $1.2 million compared to $1.3 million for the quarter ended June 30, 2014. The decrease was primarily due to decreases in commission income, gain on the sale of loans and gains on the sale of securities.

Noninterest expense for the six-month periods ended June 30, 2015 and 2014. Noninterest expense for the six months ended June 30, 2015 increased $792,000 compared to the same period in 2014 primarily due to increases in compensation and benefits expense and professional fees. Compensation and benefits expense increased $310,000 when comparing the two periods, primarily due to the addition of staff in the commercial and residential lending areas as well as normal increases in salaries and benefits. Professional fees increased $283,000 primarily due to fees totaling $267,000 associated with the previously announced agreement to acquire Peoples Bancorp, Inc. of Bullitt County, headquartered in Shepherdsville, Kentucky (see Note 2 to the Consolidated Financial Statements).

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PART I - ITEM 2

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

FIRST CAPITAL, INC.

Noninterest expense for the three-month periods ended June 30, 2015 and 2014. Noninterest expense for the quarter ended June 30, 2015 increased $412,000 compared to the quarter ended June 30, 2014. Professional fees and salaries and benefits expense increased $227,000 and $135,000, respectively, when comparing the two periods.

Income tax expense. Income tax expense for the six-month period ended June 30, 2015 was $1.0 million, for an effective tax rate of 26.1%, compared to $1.3 million, for an effective tax rate of 30.7%, for the same period in 2014. For the three-month period ended June 30, 2015, income tax expense and the effective tax rate were $487,000 and 28.3%, respectively, compared to $692,000 and 31.3%, respectively, for the same period in 2014. The decrease in effective tax rates is primarily due to the tax effect of the Company’s formation of a captive insurance subsidiary in September 2014.

Liquidity and Capital Resources

The Bank’s primary sources of funds are customer deposits, proceeds from loan repayments, maturing securities and FHLB advances. 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 June 30, 2015, the Bank had cash and cash equivalents of $39.6 million and securities available-for-sale with a fair value of $98.4 million. If the Bank requires funds beyond its ability to generate them internally, it has additional borrowing capacity with the FHLB of Indianapolis and additional collateral eligible for repurchase agreements.

The Bank’s primary investing activity is the origination of one-to-four family mortgage loans and, to a lesser extent, consumer, multi-family, commercial real estate 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 Bank is required to maintain specific amounts of capital pursuant to regulatory requirements. As of June 30, 2015, the Bank was in compliance with all regulatory capital requirements that were effective as of such date with Tier 1 capital to average assets, common equity Tier 1 capital to risk-weighted assets, Tier 1 capital to risk-weighted assets and total capital to risk-weighted assets ratios of 10.7%, 14.9%, 14.9% and 16.0%, respectively. The regulatory requirements at that date to be considered “well-capitalized” under applicable regulations were 5.0%, 6.5%, 8.0% and 10.0%, respectively. At June 30, 2015, the Bank was considered “well-capitalized” under applicable regulatory guidelines.

- 43 - 

PART I - ITEM 2

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

FIRST CAPITAL, INC.

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 Office of the Comptroller of the Currency (“OCC”) but with prior notice to the OCC, cannot exceed net income for that year to date plus retained net income (as defined in the applicable OCC regulations) for the preceding two calendar years. On a stand-alone basis, the Company had liquid assets of $150,000 at June 30, 2015.

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, 2014.

For the six months ended June 30, 2015, 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.

- 44 - 

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 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 Federal Reserve Board.

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.

- 45 - 

PART I – ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

FIRST CAPITAL, INC.

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 June 30, 2015 and December 31, 2014 financial information:

	At June 30, 2015						At December 31, 2014
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	$	(370	)		(2.14	)%	$	(193	)		(1.08	)%
200bp		61			0.35			192			1.08
100bp		179			1.04			241			1.35
Static		0			0			0			0
(100)bp		(413	)		(2.39	)		(367	)		(2.05	)

At June 30, 2015 and December 31, 2014, the Company’s simulated exposure to a change in interest rates shows that an immediate and sustained increase in rates of 1.00% or 2.00% would increase the Company’s net interest income over a one year horizon compared to a flat interest rate scenario. Alternatively, an immediate and sustained decrease in rates of 1.00% or an immediate and sustained increase in rates of 3.00% would decrease the Company’s net interest income at both time periods over a one year horizon compared to a flat interest rate scenario.

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.

- 46 - 

PART I – ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

FIRST CAPITAL, INC.

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 June 30, 2015 and December 31, 2014 financial information:

	At June 30, 2015
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
300bp	$	60,577	$	(13,531	)		(18.26	)%		13.73	%		(193	)bp
200bp		69,010		(5,098	)		(6.88	)		15.28			(38	)bp
100bp		74,861		753			1.02			16.20			54	bp
Static		74,108		0			0			15.66			0	bp
(100)bp		70,632		(3,476	)		(4.69	)		14.59			(107	)bp

	At December 31, 2014
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
300bp	$	59,328	$	(13,398	)		(18.42	)%		13.52	%		(192	)bp
200bp		67,860		(4,866	)		(6.69	)		15.10			(34	)bp
100bp		73,971		1,245			1.71			16.07			63	bp
Static		72,726		0			0			15.44			0	bp
(100)bp		70,498		(2,228	)		(3.06	)		14.58			(86	)bp

The previous tables indicate that at June 30, 2015 and December 31, 2014, the Company would expect a decrease in its EVE in the event of a sudden and sustained 100 basis point decrease and a 200 to 300 basis point increase in prevailing interest rates, and would expect an increase in its EVE in the event of a sudden and sustained 100 basis point increase in prevailing interest rates.

- 47 - 

PART I – ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

FIRST CAPITAL, INC.

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.

PART I - ITEM 4

CONTROLS AND PROCEDURES

FIRST CAPITAL, INC.

Controls and Procedures

The Company’s management, including the Company’s principal executive officer and principal financial officer, have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the SEC (1) is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

There have been no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

- 48 - 

PART II

OTHER INFORMATION

FIRST CAPITAL, INC.

Item 1.             Legal Proceedings

The Company is not a party to any legal proceedings. Periodically, there have been various claims and lawsuits involving the Bank, mainly as a plaintiff, such as claims to enforce liens, condemnation proceedings on properties in which the Bank holds security interests, claims involving the making and servicing of real property loans and other issues incident to the Bank’s business. The Bank is not a party to any pending legal proceedings that management believes would have a material adverse effect on its financial condition or operations.

Item 1A.          Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014, which could materially affect our business, financial condition or future results. There have been no material changes to the risk factors described in our Annual Report on Form 10-K, however these are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2.              Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

On August 19, 2008, the board of directors authorized the repurchase of up to 240,467 shares of the Company’s outstanding common stock. The stock repurchase program will expire upon the purchase of the maximum number of shares authorized under the program, unless the board of directors terminates the program earlier. There were no shares purchased under the stock repurchase program during the quarter ended June 30, 2015. The maximum number of shares that may yet be purchased under the plan is 145,087.

Item 3.             Defaults upon Senior Securities

Not applicable.

Item 4.             Mine Safety Disclosures

Not applicable.

Item 5.            Other Information

None.

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PART II

OTHER INFORMATION

FIRST CAPITAL, INC.

Item 6. Exhibits

3.1	Articles of Incorporation of First Capital, Inc. (1)
3.2	Fifth Amended and Restated Bylaws of First Capital, Inc. (2)
11	Statement Re: Computation of Per Share Earnings (incorporated by reference to Note 5 of the Unaudited Consolidated Financial Statements contained herein)
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1	Section 1350 Certification of Chief Executive Officer
32.2	Section 1350 Certification of Chief Financial Officer
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statement of Changes in Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to the Consolidated Financial Statements.

___________________

(1) Incorporated by reference to Exhibit 3.1 filed with the Registration Statement on Form SB-2 on September 16, 1998, and any amendments thereto, Registration No. 333-63515.

(2) Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 18, 2013.

- 50 - 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FIRST CAPITAL, INC.
	(Registrant)
Dated  August 13, 2015	BY:	/s/William W. Harrod
		William W. Harrod
		President and CEO
Dated  August 13, 2015	BY:	/s/ Michael C. Frederick
		Michael C. Frederick
		Executive Vice President, CFO
		and Treasurer

- 50 -

EX-31.1

Exhibit 31.1

CERTIFICATION

I, William W. Harrod, certify that:

1. I have reviewed this quarterly report on Form 10-Q of First Capital, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and in preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 13, 2015	/s/ William W. Harrod
	William W. Harrod President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Michael C. Frederick, certify that:

1. I have reviewed this quarterly report on Form 10-Q of First Capital, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and in preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 13, 2015	/s/ Michael C. Frederick
	Michael C. Frederick Executive Vice President, Chief Financial Officer and Treasure

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of First Capital, Inc. and Subsidiaries (the "Company") on Form 10-Q for the period ended June 30, 2015, as filed with the Securities and Exchange Commission (the "Report"), I, William W. Harrod, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

DATE: August 13, 2015	BY:	/s/ William W. Harrod
		William W. Harrod President and Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of First Capital, Inc. and Subsidiaries (the "Company") on Form 10-Q for the period ended June 30, 2015, as filed with the Securities and Exchange Commission (the "Report"), I, Michael C. Frederick, Senior Vice President, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

DATE: August 13, 2015	BY:	/s/ Michael C. Frederick
		Michael C. Frederick Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

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Note 5 - Supplemental Disclosure for Earnings Per Share (Details) - Supplemental Disclosure for Earnings Per Share - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Earnings:
Net income . (in Dollars)	$ 1,228	$ 1,518	$ 2,694	$ 2,815
Shares:
Weighted average common shares outstanding	2,740,689	2,757,335	2,740,596	2,770,637
Net income attributable to First Capital, Inc. per common share, basic (in Dollars per share)	$ 0.45	$ 0.55	$ 0.98	$ 1.02
Shares:
Weighted average common shares outstanding	2,740,689	2,757,335	2,740,596	2,770,637
Add: Dilutive effect of restricted stock	506	0	156	0
Weighted average common shares outstanding, as adjusted	2,741,195	2,757,335	2,740,752	2,770,637
Net income attributable to First Capital, Inc. per common share, diluted (in Dollars per share)	$ 0.45	$ 0.55	$ 0.98	$ 1.02

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Note 4 - Loans and Allowance for Loan Losses (Details) - Impaired Loans - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Loans with no related allowance recorded:
Recorded investment-with no allowance	$ 2,967		$ 2,967		$ 3,005
Unpaid principal balance-with no allowance	3,348		3,348		3,359
Acerage recorded investment-with no allowance	3,106	$ 3,382	3,072	$ 3,518
Interest income recognized-with no allowance	24	25	49	53
Loans with an allowance recorded:
Recorded investment-with allowance	415		415		2,034
Unpaid principal balance-with allowance	479		479		2,376
Related allowance-with allowance	93		93		1,351
Acerage recorded investment-with allowance	391	3,304	938	3,245
Interest income recognized-with allowance	0	0	0	0
Total:
Recorded investment	3,382		3,382		5,039
Unpaid principal balance	3,827		3,827		5,735
Related allowance	93		93		1,351
Acerage recorded investment	3,497	6,686	4,010	6,763
Interest income recognized	24	25	49	53
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member]
Loans with no related allowance recorded:
Recorded investment-with no allowance	1,122		1,122		1,141
Unpaid principal balance-with no allowance	1,444		1,444		1,446
Acerage recorded investment-with no allowance	1,235	1,345	1,204	1,427
Interest income recognized-with no allowance	5	8	10	18
Loans with an allowance recorded:
Recorded investment-with allowance	297		297		270
Unpaid principal balance-with allowance	335		335		304
Related allowance-with allowance	75		75		47
Acerage recorded investment-with allowance	254	436	259	440
Interest income recognized-with allowance	0	0	0	0
Total:
Recorded investment	1,419		1,419		1,411
Unpaid principal balance	1,779		1,779		1,750
Related allowance	75		75		47
Acerage recorded investment	1,489	1,781	1,463	1,867
Interest income recognized	5	8	10	18
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member]
Loans with no related allowance recorded:
Recorded investment-with no allowance	20		20		16
Unpaid principal balance-with no allowance	22		22		18
Acerage recorded investment-with no allowance	20	119	18	119
Interest income recognized-with no allowance	0	0	0	0
Loans with an allowance recorded:
Recorded investment-with allowance	0		0		0
Unpaid principal balance-with allowance	0		0		0
Related allowance-with allowance	0		0		0
Acerage recorded investment-with allowance	0	3	0	2
Interest income recognized-with allowance	0	0	0	0
Total:
Recorded investment	20		20		16
Unpaid principal balance	22		22		18
Related allowance	0		0		0
Acerage recorded investment	20	122	18	121
Interest income recognized	0	0	0	0
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member]
Loans with no related allowance recorded:
Recorded investment-with no allowance	0		0		0
Unpaid principal balance-with no allowance	0		0		0
Acerage recorded investment-with no allowance	0	130	0	87
Interest income recognized-with no allowance	0	0	0	0
Loans with an allowance recorded:
Recorded investment-with allowance	0		0		0
Unpaid principal balance-with allowance	0		0		0
Related allowance-with allowance	0		0		0
Acerage recorded investment-with allowance	0	0	0	0
Interest income recognized-with allowance	0	0	0	0
Total:
Recorded investment	0		0		0
Unpaid principal balance	0		0		0
Related allowance	0		0		0
Acerage recorded investment	0	130	0	87
Interest income recognized	0	0	0	0
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Loans with no related allowance recorded:
Recorded investment-with no allowance	1,762		1,762		1,777
Unpaid principal balance-with no allowance	1,801		1,801		1,808
Acerage recorded investment-with no allowance	1,773	1,525	1,774	1,562
Interest income recognized-with no allowance	19	17	38	34
Loans with an allowance recorded:
Recorded investment-with allowance	38		38		42
Unpaid principal balance-with allowance	63		63		65
Related allowance-with allowance	8		8		11
Acerage recorded investment-with allowance	39	1,123	40	1,065
Interest income recognized-with allowance	0	0	0	0
Total:
Recorded investment	1,800		1,800		1,819
Unpaid principal balance	1,864		1,864		1,873
Related allowance	8		8		11
Acerage recorded investment	1,812	2,648	1,814	2,627
Interest income recognized	19	17	38	34
Commercial Portfolio Segment [Member]
Loans with no related allowance recorded:
Recorded investment-with no allowance	0		0		0
Unpaid principal balance-with no allowance	0		0		0
Acerage recorded investment-with no allowance	13	94	9	126
Interest income recognized-with no allowance	0	0	0	0
Loans with an allowance recorded:
Recorded investment-with allowance	0		0		1,642
Unpaid principal balance-with allowance	0		0		1,909
Related allowance-with allowance	0		0		1,293
Acerage recorded investment-with allowance	18	1,726	559	1,720
Interest income recognized-with allowance	0	0	0	0
Total:
Recorded investment	0		0		1,642
Unpaid principal balance	0		0		1,909
Related allowance	0		0		1,293
Acerage recorded investment	31	1,820	568	1,846
Interest income recognized	0	0	0	0
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member]
Loans with no related allowance recorded:
Recorded investment-with no allowance	63		63		71
Unpaid principal balance-with no allowance	81		81		87
Acerage recorded investment-with no allowance	65	169	67	197
Interest income recognized-with no allowance	0	0	1	1
Loans with an allowance recorded:
Recorded investment-with allowance	80		80		80
Unpaid principal balance-with allowance	81		81		98
Related allowance-with allowance	10		10		0
Acerage recorded investment-with allowance	80	16	80	18
Interest income recognized-with allowance	0	0	0	0
Total:
Recorded investment	143		143		151
Unpaid principal balance	162		162		185
Related allowance	10		10		0
Acerage recorded investment	145	185	147	215
Interest income recognized	0	0	1	1
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member]
Loans with no related allowance recorded:
Recorded investment-with no allowance	0		0		0
Unpaid principal balance-with no allowance	0		0		0
Acerage recorded investment-with no allowance	0	0	0	0
Interest income recognized-with no allowance	0	0	0	0
Loans with an allowance recorded:
Recorded investment-with allowance	0		0		0
Unpaid principal balance-with allowance	0		0		0
Related allowance-with allowance	0		0		0
Acerage recorded investment-with allowance	0	0	0	0
Interest income recognized-with allowance	0	0	0	0
Total:
Recorded investment	0		0		0
Unpaid principal balance	0		0		0
Related allowance	0		0		$ 0
Acerage recorded investment	0	0	0	0
Interest income recognized	$ 0	$ 0	$ 0	$ 0

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Note 3 - Investment Securities (Details)	1 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2014 USD ($) shares	Dec. 31, 2013 shares	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)
Note 3 - Investment Securities (Details) [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions			67		67
Available-for-sale, Securities in Unrealized Loss Positions, Depreciation from Amortized Cost, Percentage			1.10%		1.10%
Proceeds from Sale and Maturity of Marketable Securities			$ 0		$ 0
Equity Method Investment Number Of Common Shares Acquired (in Shares) | shares	31,750	100,000
Percentage Of Outstanding Shares Of Voting Common Stock	9.00%			9.00%		9.00%
Other Assets [Member]
Note 3 - Investment Securities (Details) [Line Items]
Cost Method Investments	$ 711,000			$ 711,000		$ 711,000
Municipal Notes [Member]
Note 3 - Investment Securities (Details) [Line Items]
Available-for-sale Securities, Gross Realized Gains				$ 54,000		$ 54,000

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Note 7 - Supplemental Disclosures of Cash Flow Information (Details) - Supplemental Disclosures of Cash Flow Information - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash payments for:
Interest	$ 516	$ 632
Taxes	1,035	1,042
Noncash investing activities:
Transfers from loans to real estate acquired through foreclosure	$ 562	$ 75

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Note 4 - Loans and Allowance for Loan Losses (Details) - Troubled Debt Restructuring by Accrual Status - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Troubled debt restructurings:
TDR financing receivable	$ 2,378	$ 4,046
Accruing [Member]
Troubled debt restructurings:
TDR financing receivable	1,737
Nonaccrual [Member]
Troubled debt restructurings:
TDR financing receivable	641
Performing Financial Instruments [Member]
Troubled debt restructurings:
TDR financing receivable		1,900
Nonperforming Financial Instruments [Member]
Troubled debt restructurings:
TDR financing receivable		2,146
Troubled Debt Restructuring [Member]
Troubled debt restructurings:
Related allowance for loan losses	3	1,298
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member]
Troubled debt restructurings:
TDR financing receivable	659	658
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Troubled debt restructurings:
TDR financing receivable	1,698	1,724
Real Estate Mortgage Portfolio Segment [Member] | Accruing [Member] | Residential Loan [Member]
Troubled debt restructurings:
TDR financing receivable	349
Real Estate Mortgage Portfolio Segment [Member] | Accruing [Member] | Commercial Real Estate Loan [Member]
Troubled debt restructurings:
TDR financing receivable	1,367
Real Estate Mortgage Portfolio Segment [Member] | Nonaccrual [Member] | Residential Loan [Member]
Troubled debt restructurings:
TDR financing receivable	310
Real Estate Mortgage Portfolio Segment [Member] | Nonaccrual [Member] | Commercial Real Estate Loan [Member]
Troubled debt restructurings:
TDR financing receivable	331
Real Estate Mortgage Portfolio Segment [Member] | Performing Financial Instruments [Member] | Residential Loan [Member]
Troubled debt restructurings:
TDR financing receivable		492
Real Estate Mortgage Portfolio Segment [Member] | Performing Financial Instruments [Member] | Commercial Real Estate Loan [Member]
Troubled debt restructurings:
TDR financing receivable		1,386
Real Estate Mortgage Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Residential Loan [Member]
Troubled debt restructurings:
TDR financing receivable		166
Real Estate Mortgage Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Commercial Real Estate Loan [Member]
Troubled debt restructurings:
TDR financing receivable		338
Real Estate Mortgage Portfolio Segment [Member] | Troubled Debt Restructuring [Member] | Residential Loan [Member]
Troubled debt restructurings:
Related allowance for loan losses	3	6
Real Estate Mortgage Portfolio Segment [Member] | Troubled Debt Restructuring [Member] | Commercial Real Estate Loan [Member]
Troubled debt restructurings:
Related allowance for loan losses	0	0
Commercial Portfolio Segment [Member]
Troubled debt restructurings:
TDR financing receivable	0	1,642
Commercial Portfolio Segment [Member] | Accruing [Member]
Troubled debt restructurings:
TDR financing receivable	0
Commercial Portfolio Segment [Member] | Nonaccrual [Member]
Troubled debt restructurings:
TDR financing receivable	0
Commercial Portfolio Segment [Member] | Performing Financial Instruments [Member]
Troubled debt restructurings:
TDR financing receivable		0
Commercial Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Troubled debt restructurings:
TDR financing receivable		1,642
Commercial Portfolio Segment [Member] | Troubled Debt Restructuring [Member]
Troubled debt restructurings:
Related allowance for loan losses	0	1,292
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member]
Troubled debt restructurings:
TDR financing receivable	21	22
Consumer Portfolio Segment [Member] | Accruing [Member] | Home Equity And Second Mortgage [Member]
Troubled debt restructurings:
TDR financing receivable	21
Consumer Portfolio Segment [Member] | Nonaccrual [Member] | Home Equity And Second Mortgage [Member]
Troubled debt restructurings:
TDR financing receivable	0
Consumer Portfolio Segment [Member] | Performing Financial Instruments [Member] | Home Equity And Second Mortgage [Member]
Troubled debt restructurings:
TDR financing receivable		22
Consumer Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Home Equity And Second Mortgage [Member]
Troubled debt restructurings:
TDR financing receivable		0
Consumer Portfolio Segment [Member] | Troubled Debt Restructuring [Member] | Home Equity And Second Mortgage [Member]
Troubled debt restructurings:
Related allowance for loan losses	$ 0	$ 0

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Note 2 - Proposed Merger

6 Months Ended

Jun. 30, 2015

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

2.            Proposed Merger

On June 4, 2015, the Company and Peoples Bancorp, Inc. of Bullitt County (“Peoples”) entered into an Agreement and Plan of Merger (the “Agreement”) pursuant to which Peoples will merge with and into the Company, with the Company as the surviving corporation. Subsequent to the merger, The Peoples Bank of Bullitt County, a wholly-owned subsidiary of Peoples, will merge with and into the Bank, with the Bank as the surviving bank.

The Agreement provides that shareholders of Peoples may elect to receive either 382.83 shares of Company common stock or $9,475 in cash for each share of Peoples common stock owned, subject to proration provisions specified in the Agreement that provide for a targeted aggregate mix of total consideration of 50% common stock and 50% cash. At the effective time of the merger, the exchange ratio and cash price per share may be adjusted based on provisions in the Agreement for changes in the price of the Company’s common stock or a decrease in the consolidated net book value of Peoples. Shareholders of Peoples also may receive an additional cash payment as specified in the Agreement if Peoples sells certain specified assets prior to the effective time of the merger, or the Company sells such assets within twenty-four months after the effective time of the merger.

Subject to the approval of the merger by the shareholders of both the Company and Peoples, receipt of regulatory approvals and satisfaction of other customary closing conditions, the parties anticipate completing the merger in the fourth quarter of 2015.

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Note 8 - Fair Value Measurements (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Note 8 - Fair Value Measurements (Details) [Line Items]
Financial and Nonfinancial Liabilities, Fair Value Disclosure	$ 0		$ 0		$ 0
Provision for Loan and Lease Losses	50,000	$ 90,000	50,000	$ 115,000
SEC Schedule III, Real Estate, Write-down or Reserve, Amount	0	0	0	0
Impaired Loan [Member]
Note 8 - Fair Value Measurements (Details) [Line Items]
Provision for Loan and Lease Losses	$ 47,000	$ 8,000	$ 82,000	$ 21,000
Fair Value, Inputs, Level 3 [Member] | Minimum [Member] | Impaired Loan [Member]
Note 8 - Fair Value Measurements (Details) [Line Items]
Fair Value Inputs Estimated Selling Costs			10.00%		10.00%
Fair Value, Inputs, Level 3 [Member] | Minimum [Member] | Foreclosed Real Estate [Member]
Note 8 - Fair Value Measurements (Details) [Line Items]
Fair Value Inputs, Discount Rate			20.00%		10.00%
Fair Value, Inputs, Level 3 [Member] | Maximum [Member] | Impaired Loan [Member]
Note 8 - Fair Value Measurements (Details) [Line Items]
Fair Value Inputs Estimated Selling Costs			20.00%		20.00%
Fair Value, Inputs, Level 3 [Member] | Maximum [Member] | Foreclosed Real Estate [Member]
Note 8 - Fair Value Measurements (Details) [Line Items]
Fair Value Inputs, Discount Rate			60.00%		60.00%
Fair Value, Inputs, Level 3 [Member] | Weighted Average [Member] | Foreclosed Real Estate [Member]
Note 8 - Fair Value Measurements (Details) [Line Items]
Fair Value Inputs, Discount Rate			30.00%		40.00%

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Note 4 - Loans and Allowance for Loan Losses (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Note 4 - Loans and Allowance for Loan Losses (Details) [Line Items]
Loans Charge Off Period			90 days
Financing Receivable, Allowance for Credit Losses, Write-downs	$ 125,000	$ 93,000	$ 1,382,000	$ 226,000
Collateral Dependent Loans Value Of Significant Properties	200,000		200,000
Mortgage Loans in Process of Foreclosure, Amount	$ 436,000		$ 436,000
Financing Receivable, Allowance for Credit Losses, Loss Factor Increase			0.25%
Financing Receivable, Allowance for Credit Losses, Loss Factor	20.00%		20.00%
Impaired Financing Receivable, Interest Income, Cash Basis Method	$ 0	$ 0	$ 0	$ 0
Loans and Leases Receivable, Impaired, Commitment to Lend	$ 0		$ 0		$ 0
Financing Receivable, Modifications, Number of Contracts	0	0	0	3
Troubled Debt Restructurings, Principal Charge-offs		$ 0		$ 0
Troubled Debt Restructurings, Specific Allowance		$ 0		$ 0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
Classified Loans [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) [Line Items]
Allowance for Loan and Lease Losses, Period Increase (Decrease)			$ 532,000		664,000
Qualitative Factor Past Due Loans [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) [Line Items]
Financing Receivable, Allowance for Credit Losses, Effect of Change in Method			$ 1,400,000		$ 1,600,000
Overall Qualitative Factor [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) [Line Items]
Financing Receivable Allowance For Credit Losses Risk Factor	1.18		1.18		1.18
Allowance for Loan and Lease Losses, Period Increase (Decrease)			$ 527,000		$ 520,000
Bank Overdrafts [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) [Line Items]
Loans Charge Off Period			45 days
Other Than Consumer Portfolio Segment [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) [Line Items]
Number Of Loan			11
Financing Receivable, Allowance for Credit Losses, Write-downs			$ 464,000
Minimum [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) [Line Items]
Performance Period			6 months

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Note 3 - Investment Securities (Details) - Investment Securities Available for Sale - Jun. 30, 2015 $ in Thousands	USD ($)
Continuous loss position less than twelve months:
Number of Investment Positions	48
Fair Value	$ 32,157
Gross Unrealized Losses	$ 298
Continuous loss position more than twelve months:
Number of Investment Positions	19
Fair Value	$ 14,325
Gross Unrealized Losses	$ 221
Total securities available for sale	67
Total securities available for sale	$ 46,482
Total securities available for sale	$ 519
US Government Agencies Debt Securities [Member]
Continuous loss position less than twelve months:
Number of Investment Positions	9
Fair Value	$ 7,696
Gross Unrealized Losses	$ 53
Continuous loss position more than twelve months:
Number of Investment Positions	1
Fair Value	$ 999
Gross Unrealized Losses	$ 3
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Continuous loss position less than twelve months:
Number of Investment Positions	22
Fair Value	$ 17,893
Gross Unrealized Losses	$ 150
Continuous loss position more than twelve months:
Number of Investment Positions	4
Fair Value	$ 4,426
Gross Unrealized Losses	$ 53
Municipal Notes [Member]
Continuous loss position less than twelve months:
Number of Investment Positions	17
Fair Value	$ 6,568
Gross Unrealized Losses	$ 95
Continuous loss position more than twelve months:
Number of Investment Positions	5
Fair Value	$ 2,306
Gross Unrealized Losses	$ 84
Agency Collateralized Mortgage Obligations [Member]
Continuous loss position more than twelve months:
Number of Investment Positions	9
Fair Value	$ 6,594
Gross Unrealized Losses	$ 81

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Note 8 - Fair Value Measurements (Details) - Assets Measured at Fair Value on Recurring and Nonrecurring Basis - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Securities available for sale:
Securities available for sale	$ 98,361	$ 100,226
Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	98,361	100,226
Fair Value, Measurements, Nonrecurring [Member]
Impaired loans:
Impaired loans	3,289	3,688
Loans held for sale	1,673	1,608
Foreclosed real estate:
Foreclosed real estate	567	78
Real Estate Mortgage Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Residential Loan [Member]
Impaired loans:
Impaired loans	1,344	1,364
Foreclosed real estate:
Foreclosed real estate	87	78
Real Estate Mortgage Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Land Loan [Member]
Impaired loans:
Impaired loans	20	16
Real Estate Mortgage Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Construction Loans [Member]
Impaired loans:
Impaired loans	0	0
Real Estate Mortgage Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Loan [Member]
Impaired loans:
Impaired loans	1,792	1,808
Foreclosed real estate:
Foreclosed real estate	480
Commercial Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member]
Impaired loans:
Impaired loans	0	349
Consumer Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Home Equity And Second Mortgage [Member]
Impaired loans:
Impaired loans	133	151
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Securities available for sale:
Securities available for sale	34,338	32,296
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	34,338	32,296
Agency Collateralized Mortgage Obligations [Member]
Securities available for sale:
Securities available for sale	11,462	14,385
Agency Collateralized Mortgage Obligations [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	11,462	14,385
US Government Agencies Debt Securities [Member]
Securities available for sale:
Securities available for sale	18,533	18,120
US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	18,533	18,120
Municipal Notes [Member]
Securities available for sale:
Securities available for sale	32,551	33,342
Municipal Notes [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	32,551	33,342
Mutual Funds [Member]
Securities available for sale:
Securities available for sale	1,477	2,083
Mutual Funds [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	1,477	2,083
Fair Value, Inputs, Level 1 [Member]
Securities available for sale:
Securities available for sale	1,477	2,083
Impaired loans:
Loans held for sale	0	0
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	1,477	2,083
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Impaired loans:
Impaired loans	0	0
Loans held for sale	0	0
Foreclosed real estate:
Foreclosed real estate	0	0
Fair Value, Inputs, Level 1 [Member] | Real Estate Mortgage Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Residential Loan [Member]
Impaired loans:
Impaired loans	0	0
Foreclosed real estate:
Foreclosed real estate	0	0
Fair Value, Inputs, Level 1 [Member] | Real Estate Mortgage Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Land Loan [Member]
Impaired loans:
Impaired loans	0	0
Fair Value, Inputs, Level 1 [Member] | Real Estate Mortgage Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Construction Loans [Member]
Impaired loans:
Impaired loans	0	0
Fair Value, Inputs, Level 1 [Member] | Real Estate Mortgage Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Loan [Member]
Impaired loans:
Impaired loans	0	0
Foreclosed real estate:
Foreclosed real estate	0
Fair Value, Inputs, Level 1 [Member] | Commercial Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member]
Impaired loans:
Impaired loans	0	0
Fair Value, Inputs, Level 1 [Member] | Consumer Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Home Equity And Second Mortgage [Member]
Impaired loans:
Impaired loans	0	0
Fair Value, Inputs, Level 1 [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | Agency Collateralized Mortgage Obligations [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | Municipal Notes [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | Mutual Funds [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	1,477	2,083
Fair Value, Inputs, Level 2 [Member]
Securities available for sale:
Securities available for sale	96,884	98,143
Impaired loans:
Loans held for sale	1,708	1,641
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	96,884	98,143
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Impaired loans:
Impaired loans	0	0
Loans held for sale	1,673	1,608
Foreclosed real estate:
Foreclosed real estate	0	0
Fair Value, Inputs, Level 2 [Member] | Real Estate Mortgage Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Residential Loan [Member]
Impaired loans:
Impaired loans	0	0
Foreclosed real estate:
Foreclosed real estate	0	0
Fair Value, Inputs, Level 2 [Member] | Real Estate Mortgage Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Land Loan [Member]
Impaired loans:
Impaired loans	0	0
Fair Value, Inputs, Level 2 [Member] | Real Estate Mortgage Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Construction Loans [Member]
Impaired loans:
Impaired loans	0	0
Fair Value, Inputs, Level 2 [Member] | Real Estate Mortgage Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Loan [Member]
Impaired loans:
Impaired loans	0	0
Foreclosed real estate:
Foreclosed real estate	0
Fair Value, Inputs, Level 2 [Member] | Commercial Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member]
Impaired loans:
Impaired loans	0	0
Fair Value, Inputs, Level 2 [Member] | Consumer Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Home Equity And Second Mortgage [Member]
Impaired loans:
Impaired loans	0	0
Fair Value, Inputs, Level 2 [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	34,338	32,296
Fair Value, Inputs, Level 2 [Member] | Agency Collateralized Mortgage Obligations [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	11,462	14,385
Fair Value, Inputs, Level 2 [Member] | US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	18,533	18,120
Fair Value, Inputs, Level 2 [Member] | Municipal Notes [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	32,551	33,342
Fair Value, Inputs, Level 2 [Member] | Mutual Funds [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member]
Securities available for sale:
Securities available for sale	0	0
Impaired loans:
Loans held for sale	0	0
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Impaired loans:
Impaired loans	3,289	3,688
Loans held for sale	0	0
Foreclosed real estate:
Foreclosed real estate	567	78
Fair Value, Inputs, Level 3 [Member] | Real Estate Mortgage Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Residential Loan [Member]
Impaired loans:
Impaired loans	1,344	1,364
Foreclosed real estate:
Foreclosed real estate	87	78
Fair Value, Inputs, Level 3 [Member] | Real Estate Mortgage Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Land Loan [Member]
Impaired loans:
Impaired loans	20	16
Fair Value, Inputs, Level 3 [Member] | Real Estate Mortgage Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Construction Loans [Member]
Impaired loans:
Impaired loans	0	0
Fair Value, Inputs, Level 3 [Member] | Real Estate Mortgage Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Loan [Member]
Impaired loans:
Impaired loans	1,792	1,808
Foreclosed real estate:
Foreclosed real estate	480
Fair Value, Inputs, Level 3 [Member] | Commercial Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member]
Impaired loans:
Impaired loans	0	349
Fair Value, Inputs, Level 3 [Member] | Consumer Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Home Equity And Second Mortgage [Member]
Impaired loans:
Impaired loans	133	151
Fair Value, Inputs, Level 3 [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | Agency Collateralized Mortgage Obligations [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | Municipal Notes [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | Mutual Funds [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale:
Securities available for sale	$ 0	$ 0

XML

Note 4 - Loans and Allowance for Loan Losses (Details) - Loans - USD ($) $ in Thousands	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Real estate mortgage loans:
Loans Gross	$ 307,741		$ 308,268
Less undisbursed portion of loans in process	(5,824)		(3,325)
Principal loan balance	301,917		304,943
Deferred loan origination fees, net	548		506
Allowance for loan losses	(3,600)	$ (3,634)	(4,846)	$ (5,066)	$ (5,011)	$ (4,922)
Loans, net	298,865		300,603
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member]
Real estate mortgage loans:
Loans Gross	107,136		106,679
Principal loan balance	107,136		106,679
Deferred loan origination fees, net	63		49
Allowance for loan losses	(634)	(672)	(609)	(843)	(838)	(811)
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member]
Real estate mortgage loans:
Loans Gross	10,526		11,028
Principal loan balance	10,526		11,028
Deferred loan origination fees, net	4		4
Allowance for loan losses	(173)	(197)	(201)	(153)	(144)	(152)
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member]
Real estate mortgage loans:
Loans Gross	13,691		10,347
Principal loan balance	8,341		8,444
Deferred loan origination fees, net	0		(1)
Allowance for loan losses	(51)	(65)	(60)	(78)	(70)	(63)
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Real estate mortgage loans:
Loans Gross	75,521		78,314
Principal loan balance	75,521		78,314
Deferred loan origination fees, net	(37)		(20)
Allowance for loan losses	(1,669)	(1,462)	(1,501)	(1,280)	(1,276)	(1,284)
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Construction [Member]
Real estate mortgage loans:
Loans Gross	474		1,422
Commercial Portfolio Segment [Member]
Real estate mortgage loans:
Loans Gross	24,983		28,282
Principal loan balance	24,983		28,282
Deferred loan origination fees, net	(7)		(7)
Allowance for loan losses	(161)	(239)	(1,480)	(1,444)	(1,450)	(1,446)
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member]
Real estate mortgage loans:
Loans Gross	37,844		37,513
Principal loan balance	37,844		37,513
Deferred loan origination fees, net	525		481
Allowance for loan losses	(648)	(716)	(720)	(932)	(902)	(877)
Consumer Portfolio Segment [Member] | Automobile Loan [Member]
Real estate mortgage loans:
Loans Gross	27,194		25,274
Consumer Portfolio Segment [Member] | Loans Secured by Saving Accounts [Member]
Real estate mortgage loans:
Loans Gross	920		1,018
Consumer Portfolio Segment [Member] | Unsecured Loan [Member]
Real estate mortgage loans:
Loans Gross	3,445		3,316
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member]
Real estate mortgage loans:
Loans Gross	6,007		5,075
Principal loan balance	37,566		34,683
Deferred loan origination fees, net	0		0
Allowance for loan losses	$ (264)	$ (283)	$ (275)	$ (336)	$ (331)	$ (289)

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Note 4 - Loans and Allowance for Loan Losses (Details) - Loans and Allowances for Loan Losses - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Recorded Investment in Loans:
Principal loan balance	$ 301,917	$ 304,943
Accrued interest receivable	967	1,036
Net deferred loan origination
Net deferred loan origination fees and costs	548	506
Individually evaluated for impairment	3,382	5,039
Collectively evaluated for impairment	300,050	301,446
Recorded investment in loans	303,432	306,485
Receivables Acquired with Deteriorated Credit Quality [Member]
Net deferred loan origination
Recorded investment in loans	0	0
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member]
Recorded Investment in Loans:
Principal loan balance	107,136	106,679
Accrued interest receivable	339	368
Net deferred loan origination
Net deferred loan origination fees and costs	63	49
Individually evaluated for impairment	1,419	1,411
Collectively evaluated for impairment	106,119	105,685
Recorded investment in loans	107,538	107,096
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Net deferred loan origination
Recorded investment in loans	0	0
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member]
Recorded Investment in Loans:
Principal loan balance	10,526	11,028
Accrued interest receivable	38	48
Net deferred loan origination
Net deferred loan origination fees and costs	4	4
Individually evaluated for impairment	20	16
Collectively evaluated for impairment	10,548	11,064
Recorded investment in loans	10,568	11,080
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Net deferred loan origination
Recorded investment in loans	0	0
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member]
Recorded Investment in Loans:
Principal loan balance	8,341	8,444
Accrued interest receivable	21	20
Net deferred loan origination
Net deferred loan origination fees and costs	0	(1)
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	8,362	8,463
Recorded investment in loans	8,362	8,463
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Net deferred loan origination
Recorded investment in loans	0	0
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Recorded Investment in Loans:
Principal loan balance	75,521	78,314
Accrued interest receivable	168	186
Net deferred loan origination
Net deferred loan origination fees and costs	(37)	(20)
Individually evaluated for impairment	1,800	1,819
Collectively evaluated for impairment	73,852	76,661
Recorded investment in loans	75,652	78,480
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Net deferred loan origination
Recorded investment in loans	0	0
Commercial Portfolio Segment [Member]
Recorded Investment in Loans:
Principal loan balance	24,983	28,282
Accrued interest receivable	131	131
Net deferred loan origination
Net deferred loan origination fees and costs	(7)	(7)
Individually evaluated for impairment	0	1,642
Collectively evaluated for impairment	25,107	26,764
Recorded investment in loans	25,107	28,406
Commercial Portfolio Segment [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Net deferred loan origination
Recorded investment in loans	0	0
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member]
Recorded Investment in Loans:
Principal loan balance	37,844	37,513
Accrued interest receivable	124	131
Net deferred loan origination
Net deferred loan origination fees and costs	525	481
Individually evaluated for impairment	143	151
Collectively evaluated for impairment	38,350	37,974
Recorded investment in loans	38,493	38,125
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Net deferred loan origination
Recorded investment in loans	0	0
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member]
Recorded Investment in Loans:
Principal loan balance	37,566	34,683
Accrued interest receivable	146	152
Net deferred loan origination
Net deferred loan origination fees and costs	0	0
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	37,712	34,835
Recorded investment in loans	37,712	34,835
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Net deferred loan origination
Recorded investment in loans	$ 0	$ 0

XML

Note 1 - Presentation of Interim Information

6 Months Ended

Jun. 30, 2015

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1.            Presentation of Interim Information

First Capital, Inc. (“Company”) is the savings and loan holding company for First Harrison Bank (“Bank”). The information presented in this report relates primarily to the Bank's operations. First Harrison Investments, Inc. and First Harrison Holdings, Inc. are wholly-owned Nevada corporate subsidiaries of the Bank that jointly own First Harrison, LLC, a Nevada limited liability corporation that holds and manages an investment portfolio. First Harrison REIT, Inc. (“REIT”) was incorporated as a wholly-owned subsidiary of First Harrison Holdings, Inc. to hold a portion of the Bank’s real estate mortgage loan portfolio. On January 21, 2009, the REIT issued 105 shares of 12.5% redeemable cumulative preferred stock with an aggregate liquidation value of $105,000 in a private placement offering in order to satisfy certain ownership requirements to qualify as a real estate investment trust. At June 30, 2015, this noncontrolling interest represented 0.2% ownership of the REIT. On September 23, 2014, the Company formed FHB Risk Mitigation Services, Inc. (“Captive”). The Captive is a wholly-owned insurance subsidiary of the Company that provides property and casualty insurance coverage to the Company, the Bank and the Bank’s subsidiaries, and reinsurance to five other third party insurance captives for which insurance may not be currently available or economically feasible in the insurance marketplace.

In the opinion of management, the unaudited consolidated financial statements include all adjustments considered necessary to present fairly the financial position as of June 30, 2015, and the results of operations for the three months and six months ended June 30, 2015 and 2014 and the cash flows for the six months ended June 30, 2015 and 2014. All of these adjustments are of a normal, recurring nature. Such adjustments are the only adjustments included in the unaudited consolidated financial statements. Interim results are not necessarily indicative of results for a full year or any other period.

The accompanying unaudited consolidated financial statements and notes have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and are presented as permitted by the instructions to Form 10-Q. Accordingly, they do not contain certain information included in the Company’s annual audited consolidated financial statements and related footnotes for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K.

The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

XML

Note 4 - Loans and Allowance for Loan Losses (Details) - Allowance for Loan Losses - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Ending allowance balance attributable to loans:
Allowance individually evaluated for impairment	$ 93		$ 93		$ 1,351
Allowance collectively evaluated for impairment	3,507		3,507		3,495
Allowance for loan losses	3,600	$ 5,011	3,600	$ 5,066	4,846
Ending balance	3,600	5,066	3,600	5,066
Allowance for loan losses:
Beginning balance	3,634	5,011	4,846	4,922
Provisions	50	90	50	115
Charge-offs	(125)	(93)	(1,382)	(226)
Recoveries	41	58	86	255
Receivables Acquired with Deteriorated Credit Quality [Member]
Ending allowance balance attributable to loans:
Allowance for loan losses	0		0		0
Ending balance	0		0
Allowance for loan losses:
Beginning balance			0
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member]
Ending allowance balance attributable to loans:
Allowance individually evaluated for impairment	75		75		47
Allowance collectively evaluated for impairment	559		559		562
Allowance for loan losses	634	838	634	843	609
Ending balance	634	843	634	843
Allowance for loan losses:
Beginning balance	672	838	609	811
Provisions	(39)	24	42	113
Charge-offs	0	(21)	(20)	(84)
Recoveries	1	2	3	3
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Ending allowance balance attributable to loans:
Allowance for loan losses	0		0		0
Ending balance	0		0
Allowance for loan losses:
Beginning balance			0
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member]
Ending allowance balance attributable to loans:
Allowance individually evaluated for impairment	0		0		0
Allowance collectively evaluated for impairment	173		173		201
Allowance for loan losses	173	144	173	153	201
Ending balance	173	153	173	153
Allowance for loan losses:
Beginning balance	197	144	201	152
Provisions	(24)	9	(28)	1
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Ending allowance balance attributable to loans:
Allowance for loan losses	0		0		0
Ending balance	0		0
Allowance for loan losses:
Beginning balance			0
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member]
Ending allowance balance attributable to loans:
Allowance individually evaluated for impairment	0		0		0
Allowance collectively evaluated for impairment	51		51		60
Allowance for loan losses	51	70	51	78	60
Ending balance	51	78	51	78
Allowance for loan losses:
Beginning balance	65	70	60	63
Provisions	(14)	8	(9)	15
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Ending allowance balance attributable to loans:
Allowance for loan losses	0		0		0
Ending balance	0		0
Allowance for loan losses:
Beginning balance			0
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Ending allowance balance attributable to loans:
Allowance individually evaluated for impairment	8		8		11
Allowance collectively evaluated for impairment	1,661		1,661		1,490
Allowance for loan losses	1,669	1,276	1,669	1,280	1,501
Ending balance	1,669	1,280	1,669	1,280
Allowance for loan losses:
Beginning balance	1,462	1,276	1,501	1,284
Provisions	204	4	156	(4)
Charge-offs	0	0	0	0
Recoveries	3	0	12	0
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Ending allowance balance attributable to loans:
Allowance for loan losses	0		0		0
Ending balance	0		0
Allowance for loan losses:
Beginning balance			0
Commercial Portfolio Segment [Member]
Ending allowance balance attributable to loans:
Allowance individually evaluated for impairment	0		0		1,293
Allowance collectively evaluated for impairment	161		161		187
Allowance for loan losses	161	1,450	161	1,444	1,480
Ending balance	161	1,444	161	1,444
Allowance for loan losses:
Beginning balance	239	1,450	1,480	1,446
Provisions	(58)	(10)	(117)	(7)
Charge-offs	(22)	0	(1,205)	0
Recoveries	2	4	3	5
Commercial Portfolio Segment [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Ending allowance balance attributable to loans:
Allowance for loan losses	0		0		0
Ending balance	0		0
Allowance for loan losses:
Beginning balance			0
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member]
Ending allowance balance attributable to loans:
Allowance individually evaluated for impairment	10		10		0
Allowance collectively evaluated for impairment	638		638		720
Allowance for loan losses	648	902	648	932	720
Ending balance	648	932	648	932
Allowance for loan losses:
Beginning balance	716	902	720	877
Provisions	(38)	41	(45)	(70)
Charge-offs	(31)	(36)	(33)	(54)
Recoveries	1	25	6	179
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Ending allowance balance attributable to loans:
Allowance for loan losses	0		0		0
Ending balance	0		0
Allowance for loan losses:
Beginning balance			0
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member]
Ending allowance balance attributable to loans:
Allowance individually evaluated for impairment	0		0		0
Allowance collectively evaluated for impairment	264		264		275
Allowance for loan losses	264	331	264	336	275
Ending balance	264	336	264	336
Allowance for loan losses:
Beginning balance	283	331	275	289
Provisions	19	14	51	67
Charge-offs	(72)	(36)	(124)	(88)
Recoveries	34	$ 27	62	$ 68
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Ending allowance balance attributable to loans:
Allowance for loan losses	0		0		$ 0
Ending balance	$ 0		0
Allowance for loan losses:
Beginning balance			$ 0

XML

Note 6 - Stock Option Plan (Details) - USD ($)			3 Months Ended	6 Months Ended
	Feb. 17, 2015	May. 20, 2009	Jun. 30, 2015	Jun. 30, 2015
2009 Equity Incentive Plan [Member]
Note 6 - Stock Option Plan (Details) [Line Items]
Maximum Fair Value of First Exercisable Stock Incentive Options		100,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				0
2009 Equity Incentive Plan [Member] | Common Stock [Member]
Note 6 - Stock Option Plan (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		223,000
Restricted Stock [Member]
Note 6 - Stock Option Plan (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period				19,500
Allocated Share-based Compensation Expense			$ 21,000	$ 38,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period				500
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value				$ 13,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options			$ 415,000	$ 415,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition				5 years
Restricted Stock [Member] | Officers,Directors and Key Employees [Member]
Note 6 - Stock Option Plan (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	19,500
Share Price	$ 24.50
Stock Issued During Period, Value, Restricted Stock Award, Gross	$ 478,000
Restricted Stock [Member] | Vesting Each Year On July 1 Beginning July 1, 2016 [Member] | Officers,Directors and Key Employees [Member]
Note 6 - Stock Option Plan (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	20.00%

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
ASSETS
Cash and due from banks	$ 8,788	$ 13,653
Interest bearing deposits with banks	859	865
Federal funds sold	30,000	18,725
Total cash and cash equivalents	39,647	33,243
Interest-bearing time deposits	9,515	8,270
Securities available for sale, at fair value	98,361	100,226
Securities-held to maturity	5	6
Loans, net	298,865	300,603
Loans held for sale	1,673	1,608
Federal Home Loan Bank stock, at cost	1,550	2,241
Foreclosed real estate	567	78
Premises and equipment	10,238	10,208
Accrued interest receivable	1,538	1,580
Cash value of life insurance	6,002	6,161
Goodwill	5,386	5,386
Other assets	3,577	3,151
Total Assets	476,924	472,761
Deposits:
Noninterest-bearing	74,213	73,042
Interest-bearing	342,034	339,594
Total deposits	416,247	412,636
Accrued interest payable	94	127
Accrued expenses and other liabilities	2,169	2,765
Total liabilities	418,510	415,528
EQUITY
Preferred stock of $.01 par value per share Authorized 1,000,000 shares; none issued	0	0
Common stock of $.01 par value per share Authorized 5,000,000 shares; issued 3,182,916 shares, (3,164,416 in 2014); outstanding 2,759,002 shares, (2,740,502 in 2014)	32	32
Additional paid-in capital	24,766	24,313
Retained earnings-substantially restricted	41,768	40,229
Unearned stock compensation	(415)	0
Accumulated other comprehensive income	411	800
Less treasury stock, at cost - 423,914 shares	(8,253)	(8,253)
Total First Capital, Inc. stockholders' equity	58,309	57,121
Noncontrolling interest in subsidiary	105	112
Total equity	58,414	57,233
Total Liabilities and Equity	$ 476,924	$ 472,761

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Note 8 - Fair Value Measurements (Details) - Carrying Value and Estimated Fair Value of Financial Instruments - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Financial assets:
Interest-bearing time deposits	$ 859	$ 865
Securities available for sale	98,361	100,226
Securities held to maturity	5	6
Reported Value Measurement [Member]
Financial assets:
Cash and cash equivalents	39,647	33,243
Interest-bearing time deposits	9,515	8,270
Securities available for sale	98,361	100,226
Securities held to maturity	5	6
Loans held for sale	1,673	1,608
Loans, net	298,865	300,603
FHLB stock	1,550	2,241
Accrued interest receivable	1,538	1,580
Cost method investment	711	711
Financial liabilities:
Deposits	416,247	412,636
Accrued interest payable	94	127
Estimate of Fair Value Measurement [Member]
Financial assets:
Cash and cash equivalents	39,647	33,243
Interest-bearing time deposits	9,618	8,370
Securities available for sale	98,361	100,226
Securities held to maturity	5	6
Loans held for sale	1,708	1,641
Loans, net	298,602	301,864
FHLB stock	1,550	2,241
Accrued interest receivable	1,538	1,580
Cost method investment	711	711
Financial liabilities:
Deposits	415,785	412,282
Accrued interest payable	94	127
Fair Value, Inputs, Level 1 [Member]
Financial assets:
Cash and cash equivalents	39,647	33,243
Interest-bearing time deposits	0	0
Securities available for sale	1,477	2,083
Securities held to maturity	0	0
Loans held for sale	0	0
Loans, net	0	0
FHLB stock	0	0
Accrued interest receivable	0	0
Cost method investment	0	0
Financial liabilities:
Deposits	0	0
Accrued interest payable	0	0
Fair Value, Inputs, Level 2 [Member]
Financial assets:
Cash and cash equivalents	0	0
Interest-bearing time deposits	9,618	8,370
Securities available for sale	96,884	98,143
Securities held to maturity	5	6
Loans held for sale	1,708	1,641
Loans, net	0	0
FHLB stock	1,550	2,241
Accrued interest receivable	1,538	1,580
Cost method investment	711	711
Financial liabilities:
Deposits	0	0
Accrued interest payable	94	127
Fair Value, Inputs, Level 3 [Member]
Financial assets:
Cash and cash equivalents	0	0
Interest-bearing time deposits	0	0
Securities available for sale	0	0
Securities held to maturity	0	0
Loans held for sale	0	0
Loans, net	298,602	301,864
FHLB stock	0	0
Accrued interest receivable	0	0
Cost method investment	0	0
Financial liabilities:
Deposits	415,785	412,282
Accrued interest payable	$ 0	$ 0

XML

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Deferred Compensation, Share-based Payments [Member]	Treasury Stock [Member]	Noncontrolling Interest [Member]	Total
Beginning balance at Dec. 31, 2013	$ 32	$ 24,313	$ 36,947	$ (720)	$ 0	$ (7,345)	$ 112	$ 53,339
Ending balance at Jun. 30, 2014	32	24,313	38,602	384	0	(8,189)	105	55,247
Net Income	0	0	2,815	0	0	0	7	2,822
Other comprehensive income (loss)	0	0	0	1,104	0	0	0	1,104
Cash dividends	0	0	(1,160)	0	0	0	(14)	(1,174)
Stock compensation expense								0
Purchase of treasury shares	0	0	0	0	0	(844)	0	(844)
Beginning balance at Dec. 31, 2014	32	24,313	40,229	800	0	(8,253)	112	57,233
Ending balance at Jun. 30, 2015	32	24,766	41,768	411	(415)	(8,253)	105	58,414
Net Income	0	0	2,694	0	0	0	7	2,701
Other comprehensive income (loss)	0	0	0	(389)	0	0	0	(389)
Cash dividends	0	0	(1,155)	0	0	0	(14)	(1,169)
Restricted stock grants, net of forfeitures	0	453	0	0	(453)	0	0	0
Stock compensation expense	$ 0	$ 0	$ 0	$ 0	$ 38	$ 0	$ 0	$ 38

XML

Note 4 - Loans and Allowance for Loan Losses (Details) - Aging of Recorded Investment in Loans - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	$ 4,422	$ 4,871
Current	299,010	301,614
Total loans	303,432	306,485
Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	2,880	3,564
Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	836	857
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	706	450
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	3,662	3,929
Current	103,876	103,167
Total loans	107,538	107,096
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	2,556	3,070
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	519	551
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	587	308
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	28	148
Current	10,540	10,932
Total loans	10,568	11,080
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	0	24
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	8	124
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	20	0
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	0	0
Current	8,362	8,463
Total loans	8,362	8,463
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	0	0
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	0	0
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	0	0
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	269	229
Current	75,383	78,251
Total loans	75,652	78,480
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	0	54
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	192	133
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	77	42
Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	0	0
Current	25,107	28,406
Total loans	25,107	28,406
Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	0	0
Commercial Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	0	0
Commercial Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	0	0
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	219	273
Current	38,274	37,852
Total loans	38,493	38,125
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	124	153
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	92	23
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	3	97
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	244	292
Current	37,468	34,543
Total loans	37,712	34,835
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	200	263
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	25	26
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	$ 19	$ 3

XML

Note 8 - Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Table Text Block]

	Carrying Value
(In thousands)	Level 1		Level 2		Level 3		Total
June 30, 2015
Assets Measured on a Recurring Basis
Securities available for sale:
Agency mortgage-backed securities	$	0	$	34,338	$	0	$	34,338
Agency CMO		0		11,462		0		11,462
Agency notes and bonds		0		18,533		0		18,533
Municipal obligations		0		32,551		0		32,551
Mutual funds		1,477		0		0		1,477
Total securities available for sale	$	1,477	$	96,884	$	0	$	98,361
Assets Measured on a Nonrecurring Basis
Impaired loans:
Residential real estate	$	0	$	0	$	1,344	$	1,344
Land		0		0		20		20
Construction		0		0		0		0
Commercial real estate		0		0		1,792		1,792
Commercial business		0		0		0		0
Home equity and second mortgage		0		0		133		133
Total impaired loans	$	0	$	0	$	3,289	$	3,289
Loans held for sale	$	0	$	1,673	$	0	$	1,673
Foreclosed real estate:
Residential real estate	$	0	$	0	$	87	$	87
Commercial real estate		0		0		480		480
Total foreclosed real estate	$	0	$	0	$	567	$	567
December 31, 2014
Assets Measured on a Recurring Basis
Securities available for sale:
Agency mortgage-backed securities	$	0	$	32,296	$	0	$	32,296
Agency CMO		0		14,385		0		14,385
Agency notes and bonds		0		18,120		0		18,120
Municipal obligations		0		33,342		0		33,342
Mutual funds		2,083		0		0		2,083
Total securities available for sale	$	2,083	$	98,143	$	0	$	100,226
Assets Measured on a Nonrecurring Basis
Impaired loans:
Residential real estate	$	0	$	0	$	1,364	$	1,364
Land		0		0		16		16
Construction		0		0		0		0
Commercial real estate		0		0		1,808		1,808
Commercial business		0		0		349		349
Home equity and second mortgage		0		0		151		151
Total impaired loans	$	0	$	0	$	3,688	$	3,688
Loans held for sale	$	0	$	1,608	$	0	$	1,608
Foreclosed real estate:
Residential real estate	$	0	$	0	$	78	$	78
Total foreclosed real estate	$	0	$	0	$	78	$	78

Fair Value, by Balance Sheet Grouping [Table Text Block]

	Carrying		Fair		Fair Vale Measurements Using
(In thousands)	Value		Value		Level 1		Level 2		Level 3
June 30, 2015
Financial assets:
Cash and cash equivalents	$	39,647	$	39,647	$	39,647	$	0	$	0
Interest-bearing time deposits		9,515		9,618		0		9,618		0
Securities available for sale		98,361		98,361		1,477		96,884		0
Securities held to maturity		5		5		0		5		0
Loans held for sale		1,673		1,708		0		1,708		0
Loans, net		298,865		298,602		0		0		298,602
FHLB stock		1,550		1,550		0		1,550		0
Accrued interest receivable		1,538		1,538		0		1,538		0
Cost method investment (included in other assets)		711		711		0		711		0
Financial liabilities:
Deposits		416,247		415,785		0		0		415,785
Accrued interest payable		94		94		0		94		0
December 31, 2014:
Financial assets:
Cash and cash equivalents	$	33,243	$	33,243	$	33,243	$	0	$	0
Interest-bearing time deposits		8,270		8,370		0		8,370		0
Securities available for sale		100,226		100,226		2,083		98,143		0
Securities held to maturity		6		6		0		6		0
Loans held for sale		1,608		1,641		0		1,641		0
Loans, net		300,603		301,864		0		0		301,864
FHLB stock		2,241		2,241		0		2,241		0
Accrued interest receivable		1,580		1,580		0		1,580		0
Cost method investment (included in other assets)		711		711		0		711		0
Financial liabilities:
Deposits		412,636		412,282		0		0		412,282
Accrued interest payable		127		127		0		127		0

XML

Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Loans by Risk Category - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	$ 303,432	$ 306,485
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	294,493	292,442
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	2,413	3,937
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	4,881	6,967
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	1,645	3,139
Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	0	0
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	107,538	107,096
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	105,401	104,780
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	100	105
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	968	1,292
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	1,069	919
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	0	0
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	10,568	11,080
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	7,661	7,969
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	92	94
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	2,795	3,001
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	20	16
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	0	0
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	8,362	8,463
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	8,362	7,722
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	0	741
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	0	0
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	0	0
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	0	0
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	75,652	78,480
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	72,937	73,204
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	1,649	2,648
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	632	2,195
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	434	433
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	0	0
Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	25,107	28,406
Commercial Portfolio Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	24,264	26,137
Commercial Portfolio Segment [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	514	298
Commercial Portfolio Segment [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	329	329
Commercial Portfolio Segment [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	0	1,642
Commercial Portfolio Segment [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	0	0
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	38,493	38,125
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	38,229	37,860
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	1	2
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	141	134
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	122	129
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	0	0
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	37,712	34,835
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	37,639	34,770
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	57	49
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	16	16
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	0	0
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded investment in loans	$ 0	$ 0

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Note 2 - Proposed Merger (Details) - Jun. 04, 2015 - Peoples Bancorp, Inc. [Member] - $ / shares	Total
Note 2 - Proposed Merger (Details) [Line Items]
Business Acquisition, Shares to Be Received	$ 382.83
Business Acquisition, Share Price	$ 9,475
Business Acquisition, Equity Transferred, Percentage	50.00%
Business Acquisition, Cash Transferred, Percentage	50.00%
Business Acquisition, Contingent Consideration, Term	24 months

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Net income	$ 2,701	$ 2,822
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Amortization of premiums and accretion of discounts on securities, net	349	347
Depreciation and amortization expense	349	348
Deferred income taxes	263	(65)
Stock compensation expense	38	0
Increase in cash value of life insurance	(67)	(77)
Gain on life insurance	(110)	0
Gain on sale of securities	0	(54)
Provision for loan losses	50	115
Proceeds from sales of loans	16,586	12,656
Loans originated for sale	(16,165)	(14,550)
Gain on sale of loans	(486)	(319)
Decrease in accrued interest receivable	42	165
Decrease in accrued interest payable	(33)	(37)
Net change in other assets/liabilities	(735)	(592)
Net Cash Provided By Operating Activities	2,782	759
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in interest-bearing time deposits	(1,490)	(1,475)
Proceeds from maturities and sales of interest-bearing time deposits	245	0
Purchase of securities available for sale	(15,366)	(15,469)
Proceeds from maturities of securities available for sale	10,264	10,923
Proceeds from sales of securities available for sale	0	2,612
Principal collected on mortgage-backed obligations	6,016	4,892
Net (increase) decrease in loans receivable	1,125	(9,564)
Proceeds from redemption of Federal Home Loan Bank stock	691	0
Proceeds from sale of foreclosed real estate	74	375
Purchase of premises and equipment	(379)	(473)
Net Cash Provided By Investing Activities	1,180	(8,179)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits	3,611	12,923
Net decrease in advances from Federal Home Loan Bank	0	(500)
Net increase in retail repurchase agreements	0	1,307
Purchase of treasury stock	0	(844)
Dividends paid	(1,169)	(1,174)
Net Cash Provided By (Used In) Financing Activities	2,442	11,712
Net Increase in Cash and Cash Equivalents	6,404	4,292
Cash and cash equivalents at beginning of period	33,243	11,136
Cash and Cash Equivalents at End of Period	$ 39,647	$ 15,428

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Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares	Jun. 30, 2015	Dec. 31, 2014
Preferred stock par value (in Dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Common stock par value (in Dollars per share)	$ 0.01	$ 0.01
Common stock authorized shares	5,000,000	5,000,000
Common stock issued shares	3,182,916	3,164,416
Common stock outstanding shares	2,759,002	2,740,502
Less treasury stock, at cost shares	423,914	423,914

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Note 3 - Investment Securities (Tables)

6 Months Ended

Jun. 30, 2015

Disclosure Text Block Supplement [Abstract]

Marketable Securities [Table Text Block]

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2015
Securities available for sale:
Agency mortgage-backed securities	$	34,387	$	154	$	203	$	34,338
Agency CMO		11,478		65		81		11,462
Other debt securities:
Agency notes and bonds		18,554		35		56		18,533
Municipal obligations		31,834		896		179		32,551
Subtotal - debt securities		96,253		1,150		519		96,884
Mutual funds		1,477		0		0		1,477
Total securities available for sale	$	97,730	$	1,150	$	519	$	98,361
Securities held to maturity:
Agency mortgage-backed securities	$	5	$	0	$	0	$	5
Total securities held to maturity	$	5	$	0	$	0	$	5
December 31, 2014
Securities available for sale:
Agency mortgage-backed securities	$	32,135	$	240	$	79	$	32,296
Agency CMO		14,461		74		150		14,385
Other debt securities:
Agency notes and bonds		18,136		32		48		18,120
Municipal obligations		32,178		1,242		78		33,342
Subtotal - debt securities		96,910		1,588		355		98,143
Mutual funds		2,083		0		0		2,083
Total securities available for sale	$	98,993	$	1,588	$	355	$	100,226
Securities held to maturity:
Agency mortgage-backed securities	$	6	$	0	$	0	$	6
Total securities held to maturity	$	6	$	0	$	0	$	6

Investments Classified by Contractual Maturity Date [Table Text Block]

	Securities Available for Sale				Securities Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
(In thousands)
Due in one year or less	$	1,070	$	1,074	$	0	$	0
Due after one year through five years		17,306		17,354		0		0
Due after five years through ten years		19,267		19,604
Due after ten years		12,745		13,052		0		0
		50,388		51,084		0		0
Mortgage-backed securities and CMO		45,865		45,800		5		5
	$	96,253	$	96,884	$	5	$	5

Schedule of Unrealized Loss on Investments [Table Text Block]

	Number of Investment Positions		Fair Value		Gross Unrealized Losses
(Dollars in thousands)
Continuous loss position less than twelve months:
Agency notes and bonds		9	$	7,696	$	53
Agency mortgage-backed securities		22		17,893		150
Muncipal obligations		17		6,568		95
Total less than twelve months		48		32,157		298
Continuous loss position more than twelve months:
Agency notes and bonds		1		999		3
Agency CMO		9		6,594		81
Agency mortgage-backed securities		4		4,426		53
Muncipal obligations		5		2,306		84
Total more than twelve months		19		14,325		221
Total securities available for sale		67	$	46,482	$	519

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Jul. 29, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	FIRST CAPITAL INC
Trading Symbol	FCAP
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		2,759,002
Amendment Flag	false
Entity Central Index Key	0001070296
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2

XML

Note 4 - Loans and Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2015

Note 4 - Loans and Allowance for Loan Losses (Tables) [Line Items]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

(In thousands)	June 30, 2015			December 31, 2014
Real estate mortgage loans:
Residential	$	107,136		$	106,679
Land		10,526			11,028
Residential construction		13,691			10,347
Commercial real estate		75,521			78,314
Commercial real estate contruction		474			1,422
Commercial business loans		24,983			28,282
Consumer loans:
Home equity and second mortgage loans		37,844			37,513
Automobile loans		27,194			25,274
Loans secured by savings accounts		920			1,018
Unsecured loans		3,445			3,316
Other consumer loans		6,007			5,075
Gross loans		307,741			308,268
Less undisbursed portion of loans in process		(5,824	)		(3,325	)
Principal loan balance		301,917			304,943
Deferred loan origination fees, net		548			506
Allowance for loan losses		(3,600	)		(4,846	)
Loans, net	$	298,865		$	300,603

Schedule of Credit Losses Related to Financing Receivables, Current and Noncurrent [Table Text Block]

	Residential Real Estate		Land		Construction		Commercial Real Estate		Commercial Business		Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	75	$	0	$	0	$	8	$	0	$	10	$	0	$	93
Collectively evaluated for impairment		559		173		51		1,661		161		638		264		3,507
Acquired with deteriorated credit quality		0		0		0		0		0		0		0		0
Ending balance	$	634	$	173	$	51	$	1,669	$	161	$	648	$	264	$	3,600

	Residential Real Estate		Land		Construction		Commercial Real Estate		Commercial Business		Home Equity  & 2nd Mtg		Other Consumer		Total
	(In thousands)
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	47	$	0	$	0	$	11	$	1,293	$	0	$	0	$	1,351
Collectively evaluated for impairment		562		201		60		1,490		187		720		275		3,495
Acquired with deteriorated credit quality		0		0		0		0		0		0		0		0
Ending balance	$	609	$	201	$	60	$	1,501	$	1,480	$	720	$	275	$	4,846

	Residential Real Estate			Land			Construction			Commercial Real Estate		Commercial Business			Home Equity  & 2nd Mtg			Other Consumer			Total
	(In thousands)
Allowance for loan losses:
Changes in Allowance for Loan Losses for the three-months ended June 30, 2015
Beginning balance	$	672		$	197		$	65		$	1,462	$	239		$	716		$	283		$	3,634
Provisions for loan losses		(39	)		(24	)		(14	)		204		(58	)		(38	)		19			50
Charge-offs		0			0			0			0		(22	)		(31	)		(72	)		(125	)
Recoveries		1			0			0			3		2			1			34			41
Ending balance	$	634		$	173		$	51		$	1,669	$	161		$	648		$	264		$	3,600
Changes in Allowance for Loan Losses for the six-months ended June 30, 2015
Beginning balance	$	609		$	201		$	60		$	1,501	$	1,480		$	720		$	275		$	4,846
Provisions for loan losses		42			(28	)		(9	)		156		(117	)		(45	)		51			50
Charge-offs		(20	)		0			0			0		(1,205	)		(33	)		(124	)		(1,382	)
Recoveries		3			0			0			12		3			6			62			86
Ending balance	$	634		$	173		$	51		$	1,669	$	161		$	648		$	264		$	3,600

	Residential Real Estate			Land		Construction		Commercial Real Estate			Commercial Business			Home Equity  & 2nd Mtg			Other Consumer			Total
	(In thousands)
Allowance for loan losses:
Changes in Allowance for Loan Losses for the three-months ended June 30, 2014
Beginning balance	$	838		$	144	$	70	$	1,276		$	1,450		$	902		$	331		$	5,011
Provisions for loan losses		24			9		8		4			(10	)		41			14			90
Charge-offs		(21	)		0		0		0			0			(36	)		(36	)		(93	)
Recoveries		2			0		0		0			4			25			27			58
Ending balance	$	843		$	153	$	78	$	1,280		$	1,444		$	932		$	336		$	5,066
Changes in Allowance for Loan Losses for the six-months ended June 30, 2014
Beginning balance	$	811		$	152	$	63	$	1,284		$	1,446		$	877		$	289		$	4,922
Provisions for loan losses		113			1		15		(4	)		(7	)		(70	)		67			115
Charge-offs		(84	)		0		0		0			0			(54	)		(88	)		(226	)
Recoveries		3			0		0		0			5			179			68			255
Ending balance	$	843		$	153	$	78	$	1,280		$	1,444		$	932		$	336		$	5,066

Impaired Financing Receivables [Table Text Block]

	At June 30, 2015						Three Months Ended June 30, 2015				Six  Months Ended June 30, 2015
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In thousands)
Loans with no related allowance recorded:
Residential	$	1,122	$	1,444	$	-	$	1,235	$	5	$	1,204	$	10
Land		20		22		-		20		0		18		0
Construction		0		0		-		0		0		0		0
Commercial real estate		1,762		1,801		-		1,773		19		1,774		38
Commercial business		0		0		-		13		0		9		0
Home equity/2nd mortgage		63		81		-		65		0		67		1
Other consumer		0		0		-		0		0		0		0
		2,967		3,348		-		3,106		24		3,072		49
Loans with an allowance recorded:
Residential		297		335		75		254		0		259		0
Land		0		0		0		0		0		0		0
Construction		0		0		0		0		0		0		0
Commercial real estate		38		63		8		39		0		40		0
Commercial business		0		0		0		18		0		559		0
Home equity/2nd mortgage		80		81		10		80		0		80		0
Other consumer		0		0		0		0		0		0		0
		415		479		93		391		0		938		0
Total:
Residential		1,419		1,779		75		1,489		5		1,463		10
Land		20		22		0		20		0		18		0
Construction		0		0		0		0		0		0		0
Commercial real estate		1,800		1,864		8		1,812		19		1,814		38
Commercial business		0		0		0		31		0		568		0
Home equity/2nd mortgage		143		162		10		145		0		147		1
Other consumer		0		0		0		0		0		0		0
	$	3,382	$	3,827	$	93	$	3,497	$	24	$	4,010	$	49

	Three Months Ended June 30, 2014				Six  Months Ended June 30, 2014
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Loans with no related allowance recorded:
Residential	$	1,345	$	8	$	1,427	$	18
Land		119		0		119		0
Construction		130		0		87		0
Commercial real estate		1,525		17		1,562		34
Commercial business		94		0		126		0
Home equity/2nd mortgage		169		0		197		1
Other consumer		0		0		0		0
		3,382		25		3,518		53
Loans with an allowance recorded:
Residential		436		0		440		0
Land		3		0		2		0
Construction		0		0		0		0
Commercial real estate		1,123		0		1,065		0
Commercial business		1,726		0		1,720		0
Home equity/2nd mortgage		16		0		18		0
Other consumer		0		0		0		0
		3,304		0		3,245		0
Total:
Residential		1,781		8		1,867		18
Land		122		0		121		0
Construction		130		0		87		0
Commercial real estate		2,648		17		2,627		34
Commercial business		1,820		0		1,846		0
Home equity/2nd mortgage		185		0		215		1
Other consumer		0		0		0		0
	$	6,686	$	25	$	6,763	$	53

	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)
Loans with no related allowance recorded:
Residential	$	1,141	$	1,446	$	-
Land		16		18		-
Construction		0		0		-
Commercial real estate		1,777		1,808		-
Commercial business		0		0		-
Home equity/2nd mortgage		71		87		-
Other consumer		0		0		-
		3,005		3,359		-
Loans with an allowance recorded:
Residential		270		304		47
Land		0		0		0
Construction		0		0		0
Commercial real estate		42		65		11
Commercial business		1,642		1,909		1,293
Home equity/2nd mortgage		80		98		0
Other consumer		0		0		0
		2,034		2,376		1,351
Total:
Residential		1,411		1,750		47
Land		16		18		0
Construction		0		0		0
Commercial real estate		1,819		1,873		11
Commercial business		1,642		1,909		1,293
Home equity/2nd mortgage		151		185		0
Other consumer		0		0		0
	$	5,039	$	5,735	$	1,351

Schedule of Financing Receivables, Non Accrual Status [Table Text Block]

	June 30, 2015						December 31, 2014
	Nonaccrual Loans		Loans 90+ Days Past Due Still Accruing		Total Nonperforming Loans		Nonaccrual Loans		Loans 90+ Days Past Due Still Accruing		Total Nonperforming Loans
	(In thousands)
Residential	$	1,069	$	14	$	1,083	$	919	$	68	$	987
Land		20		0		20		16		0		16
Construction		0		0		0		0		0		0
Commercial real estate		434		21		455		433		0		433
Commercial business		0		0		0		1,642		0		1,642
Home equity/2nd mortgage		122		0		122		129		14		143
Other consumer		0		19		19		0		3		3
Total	$	1,645	$	54	$	1,699	$	3,139	$	85	$	3,224

Past Due Financing Receivables [Table Text Block]

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans
	(In thousands)
Residential	$	2,556	$	519	$	587	$	3,662	$	103,876	$	107,538
Land		0		8		20		28		10,540		10,568
Construction		0		0		0		0		8,362		8,362
Commercial real estate		0		192		77		269		75,383		75,652
Commercial business		0		0		0		0		25,107		25,107
Home equity/2nd mortgage		124		92		3		219		38,274		38,493
Other consumer		200		25		19		244		37,468		37,712
Total	$	2,880	$	836	$	706	$	4,422	$	299,010	$	303,432

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans
	(In thousands)
Residential	$	3,070	$	551	$	308	$	3,929	$	103,167	$	107,096
Land		24		124		0		148		10,932		11,080
Construction		0		0		0		0		8,463		8,463
Commercial real estate		54		133		42		229		78,251		78,480
Commercial business		0		0		0		0		28,406		28,406
Home equity/2nd mortgage		153		23		97		273		37,852		38,125
Other consumer		263		26		3		292		34,543		34,835
Total	$	3,564	$	857	$	450	$	4,871	$	301,614	$	306,485

Financing Receivable Credit Quality Indicators [Table Text Block]

	Residential Real Estate		Land		Construction		Commercial Real Estate		Commercial Business		Home Equity  & 2nd Mtg		Other Consumer		Total
	(In thousands)
June 30, 2015
Pass	$	105,401	$	7,661	$	8,362	$	72,937	$	24,264	$	38,229	$	37,639	$	294,493
Special Mention		100		92		0		1,649		514		1		57		2,413
Substandard		968		2,795		0		632		329		141		16		4,881
Doubtful		1,069		20		0		434		0		122		0		1,645
Loss		0		0		0		0		0		0		0		0
Total	$	107,538	$	10,568	$	8,362	$	75,652	$	25,107	$	38,493	$	37,712	$	303,432
December 31, 2014
Pass	$	104,780	$	7,969	$	7,722	$	73,204	$	26,137	$	37,860	$	34,770	$	292,442
Special Mention		105		94		741		2,648		298		2		49		3,937
Substandard		1,292		3,001		0		2,195		329		134		16		6,967
Doubtful		919		16		0		433		1,642		129		0		3,139
Loss		0		0		0		0		0		0		0		0
Total	$	107,096	$	11,080	$	8,463	$	78,480	$	28,406	$	38,125	$	34,835	$	306,485

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	June 30, 2015								December 31, 2014
	Accruing		Nonaccrual		Total		Related Allowance for Loan Losses		Accruing		Nonaccrual		Total		Related Allowance for Loan Losses
	(In thousands)
Troubled debt restructurings:
Residential real estate	$	349	$	310	$	659	$	3	$	492	$	166	$	658	$	6
Commercial real estate		1,367		331		1,698		0		1,386		338		1,724		0
Commercial business		0		0		0		0		0		1,642		1,642		1,292
Home equity and 2nd mortgage		21		0		21		0		22		0		22		0
Total	$	1,737	$	641	$	2,378	$	3	$	1,900	$	2,146	$	4,046	$	1,298

Schedule of Debtor Troubled Debt Restructuring, Current Period [Table Text Block]

	Six months ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Balance		Post-Modification Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings:
Commercial real estate		3	$	542	$	542
Total		3	$	542	$	542

Financing Receivable [Member]

Note 4 - Loans and Allowance for Loan Losses (Tables) [Line Items]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	Residential Real Estate		Land		Construction		Commercial Real Estate			Commercial Business			Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Recorded Investment in Loans:
Principal loan balance	$	107,136	$	10,526	$	8,341	$	75,521		$	24,983		$	37,844	$	37,566	$	301,917
Accrued interest receivable		339		38		21		168			131			124		146		967
Net deferred loan origination
fees and costs		63		4		0		(37	)		(7	)		525		0		548
Recorded investment in loans	$	107,538	$	10,568	$	8,362	$	75,652		$	25,107		$	38,493	$	37,712	$	303,432
Recorded Investment in Loans as Evaluated for Impairment:
Individually evaluated for impairment	$	1,419	$	20	$	0	$	1,800		$	0		$	143	$	0	$	3,382
Collectively evaluated for impairment		106,119		10,548		8,362		73,852			25,107			38,350		37,712		300,050
Acquired with deteriorated credit quality		0		0		0		0			0			0		0		0
Ending balance	$	107,538	$	10,568	$	8,362	$	75,652		$	25,107		$	38,493	$	37,712	$	303,432

	Residential Real Estate		Land		Construction			Commercial Real Estate			Commercial Business			Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Recorded Investment in Loans:
Principal loan balance	$	106,679	$	11,028	$	8,444		$	78,314		$	28,282		$	37,513	$	34,683	$	304,943
Accrued interest receivable		368		48		20			186			131			131		152		1,036
Net deferred loan origination
fees and costs		49		4		(1	)		(20	)		(7	)		481		0		506
Recorded investment in loans	$	107,096	$	11,080	$	8,463		$	78,480		$	28,406		$	38,125	$	34,835	$	306,485
Recorded Investment in Loans as Evaluated for Impairment:
Individually evaluated for impairment	$	1,411	$	16	$	0		$	1,819		$	1,642		$	151	$	0	$	5,039
Collectively evaluated for impairment		105,685		11,064		8,463			76,661			26,764			37,974		34,835		301,446
Acquired with deteriorated credit quality		0		0		0			0			0			0		0		0
Ending balance	$	107,096	$	11,080	$	8,463		$	78,480		$	28,406		$	38,125	$	34,835	$	306,485

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Loans, including fees	$ 3,963	$ 4,036	$ 7,893	$ 7,874
Securities:
Taxable	268	303	530	620
Tax-exempt	244	274	490	564
Federal Home Loan Bank dividends	30	26	52	65
Federal funds sold and interest bearing deposits with banks	50	24	86	42
Total interest income	4,555	4,663	9,051	9,165
INTEREST EXPENSE
Deposits	239	291	482	580
Retail repurchase agreements	0	6	0	12
Advances from Federal Home Loan Bank	0	0	0	3
Total interest expense	239	297	482	595
Net interest income	4,316	4,366	8,569	8,570
Provision for loan losses	50	90	50	115
Net interest income after provision for loan losses	4,266	4,276	8,519	8,455
NONINTEREST INCOME
Service charges on deposit accounts	856	822	1,630	1,545
Commission income	85	120	184	198
Gain on sale of securities	0	54	0	54
Gain on sale of loans	178	212	486	319
Mortgage brokerage fees	33	9	46	14
Increase in cash surrender value of life insurance	34	40	67	77
Other income	28	30	165	59
Total noninterest income	1,214	1,287	2,578	2,266
NONINTEREST EXPENSE
Compensation and benefits	1,971	1,836	3,981	3,671
Occupancy and equipment	312	293	623	612
Data processing	406	397	830	764
Professional fees	380	153	581	298
Advertising	79	69	148	133
Other operating expenses	613	601	1,277	1,170
Total noninterest expense	3,761	3,349	7,440	6,648
Income before income taxes	1,719	2,214	3,657	4,073
Income tax expense	487	692	956	1,251
Net Income	1,232	1,522	2,701	2,822
Less: net income attributable to noncontrolling interest in subsidiary	4	4	7	7
Net Income Attributable to First Capital, Inc.	$ 1,228	$ 1,518	$ 2,694	$ 2,815
Earnings per common share attributable to First Capital, Inc.
Basic (in Dollars per share)	$ 0.45	$ 0.55	$ 0.98	$ 1.02
Diluted (in Dollars per share)	0.45	0.55	0.98	1.02
Dividends per share (in Dollars per share)	$ 0.21	$ 0.21	$ 0.42	$ 0.42

XML

Note 5 - Supplemental Disclosure for Earnings Per Share

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

5.             Supplemental Disclosure for Earnings Per Share

	Three Months Ended				Six Months Ended
	6/30/2015		6/30/2014		6/30/2015		6/30/2014
Basic	(Dollars in thousands, except for share and per share data)
Earnings:
Net income attributable to First Capital, Inc.	$	1,228	$	1,518	$	2,694	$	2,815
Shares:
Weighted average common shares outstanding		2,740,689		2,757,335		2,740,596		2,770,637
Net income attributable to First Capital, Inc. per common share, basic	$	0.45	$	0.55	$	0.98	$	1.02
Diluted
Earnings:
Net income attributable to First Capital, Inc.	$	1,228	$	1,518	$	2,694	$	2,815
Shares:
Weighted average common  shares outstanding		2,740,689		2,757,335		2,740,596		2,770,637
Add: Dilutive effect of restricted stock		506		0		156		0
Weighted average common  shares outstanding, as adjusted		2,741,195		2,757,335		2,740,752		2,770,637
Net income attributable to First Capital, Inc. per common share, diluted	$	0.45	$	0.55	$	0.98	$	1.02

Nonvested restricted stock shares are not considered as outstanding for purposes of computing weighted average common shares outstanding.

XML

Note 4 - Loans and Allowance for Loan Losses

6 Months Ended

Jun. 30, 2015

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

4.             Loans and Allowance for Loan Losses

The Company’s loan and allowance for loan loss policies are as follows:

Loans are stated at unpaid principal balances, less net deferred loan fees and the allowance for loan losses. The Company grants real estate mortgage, commercial business and consumer loans. A substantial portion of the loan portfolio is represented by mortgage loans to customers in southern Indiana. The ability of the Company’s customers to honor their loan agreements is dependent upon the real estate and general economic conditions in this area.

Loan origination and commitment fees, as well as certain direct costs of underwriting and closing loans, are deferred and amortized as a yield adjustment to interest income over the lives of the related loans using the interest method. Amortization of net deferred loan fees is discontinued when a loan is placed on nonaccrual status.

The recognition of income on a loan is discontinued and previously accrued interest is reversed, when interest or principal payments become ninety (90) days past due unless, in the opinion of management, the outstanding interest remains collectible. Past due status is determined based on contractual terms. Generally, by applying the cash receipts method, interest income is subsequently recognized only as received until the loan is returned to accrual status. The cash receipts method is used when the likelihood of further loss on the loan is remote. Otherwise, the Company applies the cost recovery method and applies all payments as a reduction of the unpaid principal balance until the loan qualifies for return to accrual status. Interest income on impaired loans is recognized using the cost recovery method, unless the likelihood of further loss on the loan is remote.

A loan is restored to accrual status when all principal and interest payments are brought current and the borrower has demonstrated the ability to make future payments of principal and interest as scheduled, which generally requires that the borrower demonstrate a period of performance of at least six consecutive months.

For portfolio segments other than consumer loans, the Company’s practice is to charge-off any loan or portion of a loan when the loan is determined by management to be uncollectible due to the borrower’s failure to meet repayment terms, the borrower’s deteriorating or deteriorated financial condition, the depreciation of the underlying collateral, the loan’s classification as a loss by regulatory examiners, or for other reasons. A partial charge-off is recorded on a loan when the uncollectibility of a portion of the loan has been confirmed, such as when a loan is discharged in bankruptcy, the collateral is liquidated, a loan is restructured at a reduced principal balance, or other identifiable events that lead management to determine the full principal balance of the loan will not be repaid. A specific reserve is recognized as a component of the allowance for estimated losses on loans individually evaluated for impairment. Partial charge-offs on nonperforming and impaired loans are included in the Company’s historical loss experience used to estimate the general component of the allowance for loan losses as discussed below. Specific reserves are not considered charge-offs in management’s analysis of the allowance for loan losses because they are estimates and the outcome of the loan relationship is undetermined. At June 30, 2015, the Company had 11 loans on which partial charge-offs of $464,000 had been recorded.

Consumer loans not secured by real estate are typically charged off at 90 days past due, or earlier if deemed uncollectible, unless the loans are in the process of collection. Overdrafts are charged off after 45 days past due. Charge-offs are typically recorded on loans secured by real estate when the property is foreclosed upon.

The allowance for loan losses reflects management’s judgment of probable loan losses inherent in the loan portfolio at the balance sheet date. Additions to the allowance for loan losses are made by the provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The Company uses a disciplined process and methodology to evaluate the allowance for loan losses on at least a quarterly basis that is based upon management’s periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of specific and general components. The specific component relates to loans that are individually evaluated for impairment or loans otherwise classified as doubtful, substandard, or special mention. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan.

The general component covers non-classified loans and classified loans that are found, upon individual evaluation, to not be impaired. Such loans are pooled by segment and losses are modeled using annualized historical loss experience adjusted for qualitative factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent twelve calendar quarters unless the historical loss experience is not considered indicative of the level of risk in the remaining balance of a particular portfolio segment, in which case an adjustment is determined by management. The Company’s historical loss experience is then adjusted by an overall loss factor weighting adjustment based on a qualitative analysis prepared by management and reviewed on a quarterly basis. The overall loss factor considers changes in underwriting standards, economic conditions, changes and trends in past due and classified loans and other internal and external factors.

Management also applies additional loss factor multiples to loans classified as watch, special mention and substandard that are not individually evaluated for impairment. The loss factor multiples for classified loans are based on management’s assessment of historical trends regarding losses experienced on classified loans in prior periods. See below for additional discussion of the overall loss factor and loss factor multiples for classified loans as of June 30, 2015 and December 31, 2014, as well as a discussion of changes in management’s allowance for loan losses methodology from 2014 to 2015.

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 for loans considered impaired in order to evaluate the effectiveness of the estimation process and make any changes in the methodology as necessary.

Management utilizes the following portfolio segments in its analysis of the allowance for loan losses: residential real estate, land, construction, commercial real estate, commercial business, home equity and second mortgage, and other consumer loans. Additional discussion of the portfolio segments and the risks associated with each segment can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

Values for collateral dependent loans are generally based on appraisals obtained from independent licensed real estate appraisers, with adjustments applied for estimated costs to sell the property, costs to complete unfinished or repair damaged property and other factors. New appraisals are generally obtained for all significant properties when a loan is identified as impaired, and a property is considered significant if the value of the property is estimated to exceed $200,000. Subsequent appraisals are obtained as needed or if management believes there has been a significant change in the market value of the property. In instances where it is not deemed necessary to obtain a new appraisal, management bases its impairment and allowance for loan loss analysis on the original appraisal with adjustments for current conditions based on management’s assessment of market factors and management’s inspection of the property.

At June 30, 2015, the recorded investments in loans secured by residential real estate properties for which formal foreclosure proceedings are in process was $436,000.

Loans at June 30, 2015 and December 31, 2014 consisted of the following:

(In thousands)	June 30, 2015			December 31, 2014
Real estate mortgage loans:
Residential	$	107,136		$	106,679
Land		10,526			11,028
Residential construction		13,691			10,347
Commercial real estate		75,521			78,314
Commercial real estate contruction		474			1,422
Commercial business loans		24,983			28,282
Consumer loans:
Home equity and second mortgage loans		37,844			37,513
Automobile loans		27,194			25,274
Loans secured by savings accounts		920			1,018
Unsecured loans		3,445			3,316
Other consumer loans		6,007			5,075
Gross loans		307,741			308,268
Less undisbursed portion of loans in process		(5,824	)		(3,325	)
Principal loan balance		301,917			304,943
Deferred loan origination fees, net		548			506
Allowance for loan losses		(3,600	)		(4,846	)
Loans, net	$	298,865		$	300,603

The following table provides the components of the Company’s recorded investment in loans at June 30, 2015:

	Residential Real Estate		Land		Construction		Commercial Real Estate			Commercial Business			Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Recorded Investment in Loans:
Principal loan balance	$	107,136	$	10,526	$	8,341	$	75,521		$	24,983		$	37,844	$	37,566	$	301,917
Accrued interest receivable		339		38		21		168			131			124		146		967
Net deferred loan origination
fees and costs		63		4		0		(37	)		(7	)		525		0		548
Recorded investment in loans	$	107,538	$	10,568	$	8,362	$	75,652		$	25,107		$	38,493	$	37,712	$	303,432
Recorded Investment in Loans as Evaluated for Impairment:
Individually evaluated for impairment	$	1,419	$	20	$	0	$	1,800		$	0		$	143	$	0	$	3,382
Collectively evaluated for impairment		106,119		10,548		8,362		73,852			25,107			38,350		37,712		300,050
Acquired with deteriorated credit quality		0		0		0		0			0			0		0		0
Ending balance	$	107,538	$	10,568	$	8,362	$	75,652		$	25,107		$	38,493	$	37,712	$	303,432

The following table provides the components of the Company’s recorded investment in loans at December 31, 2014:

	Residential Real Estate		Land		Construction			Commercial Real Estate			Commercial Business			Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Recorded Investment in Loans:
Principal loan balance	$	106,679	$	11,028	$	8,444		$	78,314		$	28,282		$	37,513	$	34,683	$	304,943
Accrued interest receivable		368		48		20			186			131			131		152		1,036
Net deferred loan origination
fees and costs		49		4		(1	)		(20	)		(7	)		481		0		506
Recorded investment in loans	$	107,096	$	11,080	$	8,463		$	78,480		$	28,406		$	38,125	$	34,835	$	306,485
Recorded Investment in Loans as Evaluated for Impairment:
Individually evaluated for impairment	$	1,411	$	16	$	0		$	1,819		$	1,642		$	151	$	0	$	5,039
Collectively evaluated for impairment		105,685		11,064		8,463			76,661			26,764			37,974		34,835		301,446
Acquired with deteriorated credit quality		0		0		0			0			0			0		0		0
Ending balance	$	107,096	$	11,080	$	8,463		$	78,480		$	28,406		$	38,125	$	34,835	$	306,485

An analysis of the allowance for loan losses as of June 30, 2015 is as follows:

	Residential Real Estate		Land		Construction		Commercial Real Estate		Commercial Business		Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	75	$	0	$	0	$	8	$	0	$	10	$	0	$	93
Collectively evaluated for impairment		559		173		51		1,661		161		638		264		3,507
Acquired with deteriorated credit quality		0		0		0		0		0		0		0		0
Ending balance	$	634	$	173	$	51	$	1,669	$	161	$	648	$	264	$	3,600

An analysis of the allowance for loan losses as of December 31, 2014 is as follows:

	Residential Real Estate		Land		Construction		Commercial Real Estate		Commercial Business		Home Equity  & 2nd Mtg		Other Consumer		Total
	(In thousands)
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	47	$	0	$	0	$	11	$	1,293	$	0	$	0	$	1,351
Collectively evaluated for impairment		562		201		60		1,490		187		720		275		3,495
Acquired with deteriorated credit quality		0		0		0		0		0		0		0		0
Ending balance	$	609	$	201	$	60	$	1,501	$	1,480	$	720	$	275	$	4,846

An analysis of the changes in the allowance for loan losses for the three months and six months ended June 30, 2015 is as follows:

	Residential Real Estate			Land			Construction			Commercial Real Estate		Commercial Business			Home Equity  & 2nd Mtg			Other Consumer			Total
	(In thousands)
Allowance for loan losses:
Changes in Allowance for Loan Losses for the three-months ended June 30, 2015
Beginning balance	$	672		$	197		$	65		$	1,462	$	239		$	716		$	283		$	3,634
Provisions for loan losses		(39	)		(24	)		(14	)		204		(58	)		(38	)		19			50
Charge-offs		0			0			0			0		(22	)		(31	)		(72	)		(125	)
Recoveries		1			0			0			3		2			1			34			41
Ending balance	$	634		$	173		$	51		$	1,669	$	161		$	648		$	264		$	3,600
Changes in Allowance for Loan Losses for the six-months ended June 30, 2015
Beginning balance	$	609		$	201		$	60		$	1,501	$	1,480		$	720		$	275		$	4,846
Provisions for loan losses		42			(28	)		(9	)		156		(117	)		(45	)		51			50
Charge-offs		(20	)		0			0			0		(1,205	)		(33	)		(124	)		(1,382	)
Recoveries		3			0			0			12		3			6			62			86
Ending balance	$	634		$	173		$	51		$	1,669	$	161		$	648		$	264		$	3,600

An analysis of the changes in the allowance for loan losses for the three months and six months ended June 30, 2014 is as follows:

	Residential Real Estate			Land		Construction		Commercial Real Estate			Commercial Business			Home Equity  & 2nd Mtg			Other Consumer			Total
	(In thousands)
Allowance for loan losses:
Changes in Allowance for Loan Losses for the three-months ended June 30, 2014
Beginning balance	$	838		$	144	$	70	$	1,276		$	1,450		$	902		$	331		$	5,011
Provisions for loan losses		24			9		8		4			(10	)		41			14			90
Charge-offs		(21	)		0		0		0			0			(36	)		(36	)		(93	)
Recoveries		2			0		0		0			4			25			27			58
Ending balance	$	843		$	153	$	78	$	1,280		$	1,444		$	932		$	336		$	5,066
Changes in Allowance for Loan Losses for the six-months ended June 30, 2014
Beginning balance	$	811		$	152	$	63	$	1,284		$	1,446		$	877		$	289		$	4,922
Provisions for loan losses		113			1		15		(4	)		(7	)		(70	)		67			115
Charge-offs		(84	)		0		0		0			0			(54	)		(88	)		(226	)
Recoveries		3			0		0		0			5			179			68			255
Ending balance	$	843		$	153	$	78	$	1,280		$	1,444		$	932		$	336		$	5,066

At June 30, 2015 and December 31, 2014, management applied specific qualitative factor adjustments to the residential real estate, construction, commercial real estate, commercial business, vacant land, and home equity and second mortgage portfolio segments as they determined that the historical loss experience was not indicative of the level of risk in the remaining balance of those portfolio segments. These adjustments increased the loss factors by 0.25% to 20% for certain loan groups, and increased the estimated allowance for loan losses related to those portfolio segments by approximately $1.4 million and $1.6 million at June 30, 2015 and December 31, 2014, respectively. These changes were made to reflect management’s estimates of inherent losses in these portfolio segments at June 30, 2015 and December 31, 2014.

At June 30, 2015 and December 31, 2014, for each loan portfolio segment, management applied an overall qualitative factor of 1.18 to the Company’s historical loss factors. The overall qualitative factor is derived from management’s analysis of changes and trends in the following qualitative factors: underwriting standards, economic conditions, past due loans and other internal and external factors. Each of the four factors above was assigned an equal weight to arrive at an average for the overall qualitative factor of 1.18 at June 30, 2015 and December 31, 2014, respectively. The effect of the overall qualitative factor was to increase the estimated allowance for loan losses by $527,000 and $520,000 at June 30, 2015 and December 31, 2014, respectively. Additional discussion of the overall qualitative factor can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. There were no changes in management’s assessment of the overall qualitative factor components from December 31, 2014 to June 30, 2015.

Management also adjusts the historical loss factors for loans classified as watch, special mention and substandard that are not individually evaluated for impairment. The adjustments consider the increased likelihood of loss on classified loans based on the Company’s separate historical experience for classified loans. The effect of the adjustments for classified loans was to increase the estimated allowance for loan losses by $532,000 and $664,000 at June 30, 2015 and December 31, 2014, respectively.

The following table summarizes the Company’s impaired loans as of June 30, 2015 and for the three months and six months ended June 30, 2015. The Company did not recognize any interest income on impaired loans using the cash receipts method of accounting for the three or six month periods ended June 30, 2015:

	At June 30, 2015						Three Months Ended June 30, 2015				Six  Months Ended June 30, 2015
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In thousands)
Loans with no related allowance recorded:
Residential	$	1,122	$	1,444	$	-	$	1,235	$	5	$	1,204	$	10
Land		20		22		-		20		0		18		0
Construction		0		0		-		0		0		0		0
Commercial real estate		1,762		1,801		-		1,773		19		1,774		38
Commercial business		0		0		-		13		0		9		0
Home equity/2nd mortgage		63		81		-		65		0		67		1
Other consumer		0		0		-		0		0		0		0
		2,967		3,348		-		3,106		24		3,072		49
Loans with an allowance recorded:
Residential		297		335		75		254		0		259		0
Land		0		0		0		0		0		0		0
Construction		0		0		0		0		0		0		0
Commercial real estate		38		63		8		39		0		40		0
Commercial business		0		0		0		18		0		559		0
Home equity/2nd mortgage		80		81		10		80		0		80		0
Other consumer		0		0		0		0		0		0		0
		415		479		93		391		0		938		0
Total:
Residential		1,419		1,779		75		1,489		5		1,463		10
Land		20		22		0		20		0		18		0
Construction		0		0		0		0		0		0		0
Commercial real estate		1,800		1,864		8		1,812		19		1,814		38
Commercial business		0		0		0		31		0		568		0
Home equity/2nd mortgage		143		162		10		145		0		147		1
Other consumer		0		0		0		0		0		0		0
	$	3,382	$	3,827	$	93	$	3,497	$	24	$	4,010	$	49

The following table summarizes the Company’s impaired loans for the three months and six months ended June 30, 2014. The Company did not recognize any interest income on impaired loans using the cash receipts method of accounting for the three or six month periods ended June 30, 2014:

	Three Months Ended June 30, 2014				Six  Months Ended June 30, 2014
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Loans with no related allowance recorded:
Residential	$	1,345	$	8	$	1,427	$	18
Land		119		0		119		0
Construction		130		0		87		0
Commercial real estate		1,525		17		1,562		34
Commercial business		94		0		126		0
Home equity/2nd mortgage		169		0		197		1
Other consumer		0		0		0		0
		3,382		25		3,518		53
Loans with an allowance recorded:
Residential		436		0		440		0
Land		3		0		2		0
Construction		0		0		0		0
Commercial real estate		1,123		0		1,065		0
Commercial business		1,726		0		1,720		0
Home equity/2nd mortgage		16		0		18		0
Other consumer		0		0		0		0
		3,304		0		3,245		0
Total:
Residential		1,781		8		1,867		18
Land		122		0		121		0
Construction		130		0		87		0
Commercial real estate		2,648		17		2,627		34
Commercial business		1,820		0		1,846		0
Home equity/2nd mortgage		185		0		215		1
Other consumer		0		0		0		0
	$	6,686	$	25	$	6,763	$	53

The following table summarizes the Company’s impaired loans as of December 31, 2014:

	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)
Loans with no related allowance recorded:
Residential	$	1,141	$	1,446	$	-
Land		16		18		-
Construction		0		0		-
Commercial real estate		1,777		1,808		-
Commercial business		0		0		-
Home equity/2nd mortgage		71		87		-
Other consumer		0		0		-
		3,005		3,359		-
Loans with an allowance recorded:
Residential		270		304		47
Land		0		0		0
Construction		0		0		0
Commercial real estate		42		65		11
Commercial business		1,642		1,909		1,293
Home equity/2nd mortgage		80		98		0
Other consumer		0		0		0
		2,034		2,376		1,351
Total:
Residential		1,411		1,750		47
Land		16		18		0
Construction		0		0		0
Commercial real estate		1,819		1,873		11
Commercial business		1,642		1,909		1,293
Home equity/2nd mortgage		151		185		0
Other consumer		0		0		0
	$	5,039	$	5,735	$	1,351

Nonperforming loans consists of nonaccrual loans and loans over 90 days past due and still accruing interest. The following table presents the recorded investment in nonperforming loans at June 30, 2015 and December 31, 2014:

	June 30, 2015						December 31, 2014
	Nonaccrual Loans		Loans 90+ Days Past Due Still Accruing		Total Nonperforming Loans		Nonaccrual Loans		Loans 90+ Days Past Due Still Accruing		Total Nonperforming Loans
	(In thousands)
Residential	$	1,069	$	14	$	1,083	$	919	$	68	$	987
Land		20		0		20		16		0		16
Construction		0		0		0		0		0		0
Commercial real estate		434		21		455		433		0		433
Commercial business		0		0		0		1,642		0		1,642
Home equity/2nd mortgage		122		0		122		129		14		143
Other consumer		0		19		19		0		3		3
Total	$	1,645	$	54	$	1,699	$	3,139	$	85	$	3,224

The following table presents the aging of the recorded investment in loans at June 30, 2015:

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans
	(In thousands)
Residential	$	2,556	$	519	$	587	$	3,662	$	103,876	$	107,538
Land		0		8		20		28		10,540		10,568
Construction		0		0		0		0		8,362		8,362
Commercial real estate		0		192		77		269		75,383		75,652
Commercial business		0		0		0		0		25,107		25,107
Home equity/2nd mortgage		124		92		3		219		38,274		38,493
Other consumer		200		25		19		244		37,468		37,712
Total	$	2,880	$	836	$	706	$	4,422	$	299,010	$	303,432

The following table presents the aging of the recorded investment in loans at December 31, 2014:

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans
	(In thousands)
Residential	$	3,070	$	551	$	308	$	3,929	$	103,167	$	107,096
Land		24		124		0		148		10,932		11,080
Construction		0		0		0		0		8,463		8,463
Commercial real estate		54		133		42		229		78,251		78,480
Commercial business		0		0		0		0		28,406		28,406
Home equity/2nd mortgage		153		23		97		273		37,852		38,125
Other consumer		263		26		3		292		34,543		34,835
Total	$	3,564	$	857	$	450	$	4,871	$	301,614	$	306,485

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, public information, historical payment experience, credit documentation, and current economic trends, among other factors. The Company classifies loans based on credit risk at least quarterly. The Company uses the following regulatory definitions for risk ratings:

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loss: Loans classified as loss are considered uncollectible and of such little value that their continuance on the institution’s books as an asset is not warranted.

Loans not meeting the criteria above that are analyzed individually as part of the described process are considered to be pass rated loans.

The following table presents the recorded investment in loans by risk category as of the date indicated:

	Residential Real Estate		Land		Construction		Commercial Real Estate		Commercial Business		Home Equity  & 2nd Mtg		Other Consumer		Total
	(In thousands)
June 30, 2015
Pass	$	105,401	$	7,661	$	8,362	$	72,937	$	24,264	$	38,229	$	37,639	$	294,493
Special Mention		100		92		0		1,649		514		1		57		2,413
Substandard		968		2,795		0		632		329		141		16		4,881
Doubtful		1,069		20		0		434		0		122		0		1,645
Loss		0		0		0		0		0		0		0		0
Total	$	107,538	$	10,568	$	8,362	$	75,652	$	25,107	$	38,493	$	37,712	$	303,432
December 31, 2014
Pass	$	104,780	$	7,969	$	7,722	$	73,204	$	26,137	$	37,860	$	34,770	$	292,442
Special Mention		105		94		741		2,648		298		2		49		3,937
Substandard		1,292		3,001		0		2,195		329		134		16		6,967
Doubtful		919		16		0		433		1,642		129		0		3,139
Loss		0		0		0		0		0		0		0		0
Total	$	107,096	$	11,080	$	8,463	$	78,480	$	28,406	$	38,125	$	34,835	$	306,485

The following table summarizes the Company’s troubled debt restructurings (TDRs) by accrual status as of June 30, 2015 and December 31, 2014:

	June 30, 2015								December 31, 2014
	Accruing		Nonaccrual		Total		Related Allowance for Loan Losses		Accruing		Nonaccrual		Total		Related Allowance for Loan Losses
	(In thousands)
Troubled debt restructurings:
Residential real estate	$	349	$	310	$	659	$	3	$	492	$	166	$	658	$	6
Commercial real estate		1,367		331		1,698		0		1,386		338		1,724		0
Commercial business		0		0		0		0		0		1,642		1,642		1,292
Home equity and 2nd mortgage		21		0		21		0		22		0		22		0
Total	$	1,737	$	641	$	2,378	$	3	$	1,900	$	2,146	$	4,046	$	1,298

At June 30, 2015 and December 31, 2014, there were no commitments to lend additional funds to debtors whose loan terms have been modified in a TDR.

There were no TDRs that were restructured during the three or six months ended June 30, 2015.

The following table summarizes information in regard to TDRs that were restructured during the six months ended June 30, 2014. There were no TDRs that were restructured during the three months ended June 30, 2014:

	Six months ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Balance		Post-Modification Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings:
Commercial real estate		3	$	542	$	542
Total		3	$	542	$	542

For the TDRs listed above, the terms of modification included a temporary decrease in the borrowers’ monthly payments. There were no principal charge-offs recorded as a result of TDRs during the three months and six months ended June 30, 2014, and there was no specific allowance for loan losses related to TDRs modified during the three months and six months ended June 30, 2014.

There were no TDRs modified within the previous 12 months for which there was a subsequent payment default (defined as the loan becoming more than 90 days past due, being moved to nonaccrual status, or the collateral being foreclosed upon) during the three months and six months ended June 30, 2015 and 2014. In the event that a TDR subsequently defaults, the Company evaluates the restructuring for possible impairment. As a result, the related allowance for loan losses may be increased or charge-offs may be taken to reduce the carrying amount of the loan.

XML

Note 1 - Presentation of Interim Information (Details) - USD ($)	Jan. 21, 2009	Jun. 30, 2015	Dec. 31, 2014
Note 1 - Presentation of Interim Information (Details) [Line Items]
Preferred Stock, Shares Issued (in Shares)		0	0
Cumulative Preferred Stock Subject to Mandatory Redemption [Member] | First Harrison Reit Incorporated [Member]
Note 1 - Presentation of Interim Information (Details) [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners		0.20%
Cumulative Preferred Stock Subject to Mandatory Redemption [Member] | First Harrison Reit Incorporated [Member] | Private Placement [Member]
Note 1 - Presentation of Interim Information (Details) [Line Items]
Preferred Stock, Shares Issued (in Shares)	105
Preferred Stock, Dividend Rate, Percentage	12.50%
Preferred Stock, Liquidation Preference, Value (in Dollars)	$ 105,000

XML

Note 5 - Supplemental Disclosure for Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended				Six Months Ended
	6/30/2015		6/30/2014		6/30/2015		6/30/2014
Basic	(Dollars in thousands, except for share and per share data)
Earnings:
Net income attributable to First Capital, Inc.	$	1,228	$	1,518	$	2,694	$	2,815
Shares:
Weighted average common shares outstanding		2,740,689		2,757,335		2,740,596		2,770,637
Net income attributable to First Capital, Inc. per common share, basic	$	0.45	$	0.55	$	0.98	$	1.02
Diluted
Earnings:
Net income attributable to First Capital, Inc.	$	1,228	$	1,518	$	2,694	$	2,815
Shares:
Weighted average common  shares outstanding		2,740,689		2,757,335		2,740,596		2,770,637
Add: Dilutive effect of restricted stock		506		0		156		0
Weighted average common  shares outstanding, as adjusted		2,741,195		2,757,335		2,740,752		2,770,637
Net income attributable to First Capital, Inc. per common share, diluted	$	0.45	$	0.55	$	0.98	$	1.02

XML

Note 8 - Fair Value Measurements

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

8. Fair Value Measurements

Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements, provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FASB ASC Topic 820 are described as follows:

Level 1: Inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets.

Level 2: Inputs to the valuation methodology include quoted market prices for similar assets or liabilities in active markets; quoted market prices for identical or similar assets or liabilities in markets that are not active; or inputs that are derived principally from or can be corroborated by observable market data by correlation or other means.

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth on the following page. These valuation methodologies were applied to all of the Company’s financial and nonfinancial assets carried at fair value or the lower of cost or fair value. The table below presents the balances of assets measured at fair value on a recurring and nonrecurring basis as of June 30, 2015 and December 31, 2014. The Company had no liabilities measured at fair value as of June 30, 2015 or December 31, 2014.

	Carrying Value
(In thousands)	Level 1		Level 2		Level 3		Total
June 30, 2015
Assets Measured on a Recurring Basis
Securities available for sale:
Agency mortgage-backed securities	$	0	$	34,338	$	0	$	34,338
Agency CMO		0		11,462		0		11,462
Agency notes and bonds		0		18,533		0		18,533
Municipal obligations		0		32,551		0		32,551
Mutual funds		1,477		0		0		1,477
Total securities available for sale	$	1,477	$	96,884	$	0	$	98,361
Assets Measured on a Nonrecurring Basis
Impaired loans:
Residential real estate	$	0	$	0	$	1,344	$	1,344
Land		0		0		20		20
Construction		0		0		0		0
Commercial real estate		0		0		1,792		1,792
Commercial business		0		0		0		0
Home equity and second mortgage		0		0		133		133
Total impaired loans	$	0	$	0	$	3,289	$	3,289
Loans held for sale	$	0	$	1,673	$	0	$	1,673
Foreclosed real estate:
Residential real estate	$	0	$	0	$	87	$	87
Commercial real estate		0		0		480		480
Total foreclosed real estate	$	0	$	0	$	567	$	567
December 31, 2014
Assets Measured on a Recurring Basis
Securities available for sale:
Agency mortgage-backed securities	$	0	$	32,296	$	0	$	32,296
Agency CMO		0		14,385		0		14,385
Agency notes and bonds		0		18,120		0		18,120
Municipal obligations		0		33,342		0		33,342
Mutual funds		2,083		0		0		2,083
Total securities available for sale	$	2,083	$	98,143	$	0	$	100,226
Assets Measured on a Nonrecurring Basis
Impaired loans:
Residential real estate	$	0	$	0	$	1,364	$	1,364
Land		0		0		16		16
Construction		0		0		0		0
Commercial real estate		0		0		1,808		1,808
Commercial business		0		0		349		349
Home equity and second mortgage		0		0		151		151
Total impaired loans	$	0	$	0	$	3,688	$	3,688
Loans held for sale	$	0	$	1,608	$	0	$	1,608
Foreclosed real estate:
Residential real estate	$	0	$	0	$	78	$	78
Total foreclosed real estate	$	0	$	0	$	78	$	78

Fair value is based upon quoted market prices, where available. If quoted market prices are not available, fair value is based on internally developed models or obtained from third parties that primarily use, as inputs, observable market-based parameters or a matrix pricing model that employs the Bond Market Association’s standard calculations for cash flow and price/yield analysis and observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value, or the lower of cost or fair value. These adjustments may include unobservable parameters. Any such valuation adjustments have been applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Securities Available for Sale. Securities classified as available for sale are reported at fair value on a recurring basis.  These securities are classified as Level 1 of the valuation hierarchy where quoted market prices from reputable third-party brokers are available in an active market. If quoted market prices are not available, the Company obtains fair value measurements from an independent pricing service.  These securities are reported using Level 2 inputs and the fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, U.S. government and agency yield curves, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and the security’s terms and conditions, among other factors. Changes in fair value of securities available for sale are recorded in other comprehensive income, net of income tax effect.

Impaired Loans. Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly. The fair value of impaired loans is classified as Level 3 in the fair value hierarchy.

Impaired loans are carried at the present value of estimated future cash flows using the loan's effective interest rate or the fair value of collateral less estimated costs to sell if the loan is collateral dependent. At June 30, 2015 and December 31, 2014, all impaired loans were considered to be collateral dependent for the purpose of determining fair value. Collateral may be real estate and/or business assets, including equipment, inventory and/or accounts receivable. The fair value of the collateral is generally determined based on real estate appraisals or other independent evaluations by qualified professionals, adjusted for estimated costs to sell the property, costs to complete or repair the property and other factors to reflect management’s estimate of the fair value of the collateral given the current market conditions and the condition of the collateral. At June 30, 2015 and December 31, 2014, the significant unobservable inputs used in the fair value measurement of impaired loans included a discount from appraised value for estimates of changes in market conditions, the condition of the collateral and estimated costs to sell the collateral ranging from 10% to 20%. The Company recognized provisions for loan losses of $82,000 and $21,000 for the six months ended June 30, 2015 and 2014, respectively, for impaired loans. The Company recognized provisions for loan losses of $47,000 and $8,000 for the three months ended June 30, 2015 and June 30, 2014, respectively.

Loans Held for Sale. Loans held for sale are carried at the lower of cost or market value. The portfolio is comprised of residential real estate loans and fair value is based on specific prices of underlying contracts for sales to investors.  These measurements are classified as Level 2.

Foreclosed Real Estate. Foreclosed real estate is reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly. The fair value of foreclosed real estate is classified as Level 3 in the fair value hierarchy.

Foreclosed real estate is reported at fair value less estimated costs to dispose of the property. The fair values are determined by real estate appraisals which are then discounted to reflect management’s estimate of the fair value of the property given current market conditions and the condition of the collateral. At June 30, 2015, the significant unobservable inputs used in the fair value measurement of foreclosed real estate included a discount from appraised value for estimates of changes in market conditions, the condition of the collateral and estimated costs to sell the property ranging from 20% to 60%, with a weighted average of 30%. At December 31, 2014, the discount from appraised value ranged from 10% to 60%, with a weighted average of 40%. There were no charges to write down foreclosed real estate recognized in income for the three months and six months ended June 30, 2015, or the three months and six months ended June 30, 2014.

There have been no changes in the valuation techniques and related inputs used for assets measured at fair value on a recurring and nonrecurring basis during the six month periods ended June 30, 2015 and 2014. There were no transfers into or out of the Company’s Level 3 financial assets for the six month periods ended June 30, 2015 and 2014. In addition, there were no transfers into or out of Levels 1 and 2 of the fair value hierarchy during the six month periods ended June 30, 2015 and 2014.

GAAP requires disclosure of the fair value of financial assets and financial liabilities, whether or not recognized in the balance sheet. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. The estimated fair values of the Company's financial instruments are as follows:

	Carrying		Fair		Fair Vale Measurements Using
(In thousands)	Value		Value		Level 1		Level 2		Level 3
June 30, 2015
Financial assets:
Cash and cash equivalents	$	39,647	$	39,647	$	39,647	$	0	$	0
Interest-bearing time deposits		9,515		9,618		0		9,618		0
Securities available for sale		98,361		98,361		1,477		96,884		0
Securities held to maturity		5		5		0		5		0
Loans held for sale		1,673		1,708		0		1,708		0
Loans, net		298,865		298,602		0		0		298,602
FHLB stock		1,550		1,550		0		1,550		0
Accrued interest receivable		1,538		1,538		0		1,538		0
Cost method investment (included in other assets)		711		711		0		711		0
Financial liabilities:
Deposits		416,247		415,785		0		0		415,785
Accrued interest payable		94		94		0		94		0
December 31, 2014:
Financial assets:
Cash and cash equivalents	$	33,243	$	33,243	$	33,243	$	0	$	0
Interest-bearing time deposits		8,270		8,370		0		8,370		0
Securities available for sale		100,226		100,226		2,083		98,143		0
Securities held to maturity		6		6		0		6		0
Loans held for sale		1,608		1,641		0		1,641		0
Loans, net		300,603		301,864		0		0		301,864
FHLB stock		2,241		2,241		0		2,241		0
Accrued interest receivable		1,580		1,580		0		1,580		0
Cost method investment (included in other assets)		711		711		0		711		0
Financial liabilities:
Deposits		412,636		412,282		0		0		412,282
Accrued interest payable		127		127		0		127		0

The carrying amounts in the preceding table are included in the consolidated balances sheets under the applicable captions. The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value:

Cash and Cash Equivalents and Interest-Bearing Time Deposits

For cash and short-term investments, including cash and due from banks, interest-bearing deposits with banks, federal funds sold, and interest-bearing time deposits with other financial institutions, the carrying amount is a reasonable estimate of fair value.

Investment Securities

For marketable equity securities, the fair values are based on quoted market prices. For debt securities, the Company obtains fair value measurements from an independent pricing service and the fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, U.S. government and agency yield curves, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and the security’s terms and conditions, among other factors. For FHLB stock, a restricted equity security, the carrying amount is a reasonable estimate of fair value because it is not marketable. For other cost method equity investments where a quoted market value is not available, the carrying amount is a reasonable estimate of fair value.

Loans

The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The carrying amount of accrued interest receivable approximates its fair value. The fair value of loans held for sale is based on specific prices of underlying contracts for sale to investors.

Deposits

The fair value of demand deposits, savings accounts, money market deposit accounts and other transaction accounts is the amount payable on demand at the balance sheet date. The fair value of fixed-maturity certificates of deposit is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities. The carrying amount of accrued interest payable approximates its fair value.

Borrowed Funds

The carrying amounts of retail repurchase agreements approximate their fair value. The fair value of advances from FHLB is estimated by discounting the future cash flows using the current rates at which similar loans with the same remaining maturities could be obtained.

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Note 6 - Stock Option Plan

6 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

6.             Stock Option Plan

On May 20, 2009, the Company adopted the 2009 Equity Incentive Plan (the Plan). The Plan provides for the award of stock options, restricted stock, performance shares and stock appreciation rights. The aggregate number of shares of the Company’s common stock available for issuance under the Plan may not exceed 223,000 shares. The Company may grant both non-statutory and statutory stock options which may not have a term exceeding ten years. In the case of incentive stock options, the aggregate fair value of the stock (determined at the time the incentive stock option is granted) for which any optionee may be granted incentive options which are first exercisable during any calendar year shall not exceed $100,000. Option prices may not be less than the fair market value of the underlying stock at the date of the grant. An award of a performance share is a grant of a right to receive shares of the Company’s common stock which is contingent upon the achievement of specific performance criteria or other objectives set at the grant date. Stock appreciation rights are equity or cash settled share-based compensation arrangements whereby the number of shares that will ultimately be issued or the cash payment is based upon the appreciation of the Company’s common stock. Awards granted under the Plan may be granted either alone, in addition to, or in tandem with, any other award granted under the Plan.

The fair market value of stock options granted is estimated at the date of grant using an option pricing model. Expected volatilities are based on historical volatility of the Company's stock. The expected term of options granted represents the period of time that options are expected to be outstanding and is based on historical trends. The risk free rate for the expected life of the options is based on the U.S. Treasury yield curve in effect at the time of grant. As of June 30, 2015, no stock options had been granted under the Plan.

On February 17, 2015, the Company granted 19,500 restricted stock shares to directors, officers and key employees at a grant-date price of $24.50 per share for a total of $478,000. The restricted stock vests ratably from the grant date through July 1, 2020, with 20% of the shares vesting each year on July 1 beginning July 1, 2016. Compensation expense is measured based on the fair market value of the restricted stock at the grant date and is recognized ratably over the period during which the shares are earned (the vesting period). Compensation expense related to restricted stock recognized for the three-month and six-month periods ended June 30, 2015 amounted to $21,000 and $38,000, respectively.

A summary of the Company’s nonvested restricted shares activity under the Plan as of June 30, 2015 and changes during the six-month period then ended is presented below.

	Number of Shares		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2015		-		-
Granted		19,500	$	24.50
Vested		500		24.50
Forfeited		1,000		24.50
Nonvested at June 30, 2015		18,000	$	24.50

There were 500 restricted shares that vested during the six-month period ended June 30, 2015, upon the retirement of a director. The total fair value of restricted shares that vested during the six-month period ended June 30, 2015 was $13,000. At June 30, 2015, there was $415,000 of total unrecognized compensation expense related to nonvested restricted shares. The compensation expense is expected to be recognized over the remaining vesting period of 5 years.

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Note 7 - Supplemental Disclosures of Cash Flow Information

6 Months Ended

Jun. 30, 2015

Supplemental Cash Flow Elements [Abstract]

Cash Flow, Supplemental Disclosures [Text Block]

7.             Supplemental Disclosures of Cash Flow Information

	Six Months Ended June 30,
	2015		2014
	(In thousands)
Cash payments for:
Interest	$	516	$	632
Taxes		1,035		1,042
Noncash investing activities:
Transfers from loans to real estate acquired through foreclosure		562		75

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Note 9 - Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2015

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

9. Recent Accounting Pronouncements

The following is a summary of recently issued accounting pronouncements that impact the accounting and reporting practices of the Company:

In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The update provides a five-step revenue recognition model for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to their customers (unless the contracts are included in the scope of other standards). The guidance requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. For public entities, the guidance was originally effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. However, in July 2015 the FASB affirmed its proposal to defer the effective date of ASU 2014-09 by one year, making the amendments effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Companies have the option to apply ASU 2014-09 as of the original effective date. Management is evaluating the new guidance, but does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial position or results of operations.

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Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans [Line Items]
Total Nonperforming Loans	$ 4,422	$ 4,871
Nonperforming Financial Instruments [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans [Line Items]
Nonaccrual Loans	1,645	3,139
Loans 90+ Days Past Due Still Accruing	54	85
Total Nonperforming Loans	1,699	3,224
Real Estate Mortgage Portfolio Segment [Member] | Residential Loan [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans [Line Items]
Total Nonperforming Loans	3,662	3,929
Real Estate Mortgage Portfolio Segment [Member] | Land Loan [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans [Line Items]
Total Nonperforming Loans	28	148
Real Estate Mortgage Portfolio Segment [Member] | Construction Loans [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans [Line Items]
Total Nonperforming Loans	0	0
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans [Line Items]
Total Nonperforming Loans	269	229
Real Estate Mortgage Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Residential Loan [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans [Line Items]
Nonaccrual Loans	1,069	919
Loans 90+ Days Past Due Still Accruing	14	68
Total Nonperforming Loans	1,083	987
Real Estate Mortgage Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Land Loan [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans [Line Items]
Nonaccrual Loans	20	16
Loans 90+ Days Past Due Still Accruing	0	0
Total Nonperforming Loans	20	16
Real Estate Mortgage Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Construction Loans [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans [Line Items]
Nonaccrual Loans	0	0
Loans 90+ Days Past Due Still Accruing	0	0
Total Nonperforming Loans	0	0
Real Estate Mortgage Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Commercial Real Estate Loan [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans [Line Items]
Nonaccrual Loans	434	433
Loans 90+ Days Past Due Still Accruing	21	0
Total Nonperforming Loans	455	433
Commercial Portfolio Segment [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans [Line Items]
Total Nonperforming Loans	0	0
Commercial Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans [Line Items]
Nonaccrual Loans	0	1,642
Loans 90+ Days Past Due Still Accruing	0	0
Total Nonperforming Loans	0	1,642
Consumer Portfolio Segment [Member] | Home Equity And Second Mortgage [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans [Line Items]
Total Nonperforming Loans	219	273
Consumer Portfolio Segment [Member] | Other Consumer Loan [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans [Line Items]
Total Nonperforming Loans	244	292
Consumer Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Home Equity And Second Mortgage [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans [Line Items]
Nonaccrual Loans	122	129
Loans 90+ Days Past Due Still Accruing	0	14
Total Nonperforming Loans	122	143
Consumer Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Other Consumer Loan [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Recorded Investment in Nonperforming Loans [Line Items]
Nonaccrual Loans	0	0
Loans 90+ Days Past Due Still Accruing	19	3
Total Nonperforming Loans	$ 19	$ 3

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Note 7 - Supplemental Disclosures of Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2015

Supplemental Cash Flow Elements [Abstract]

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

	Six Months Ended June 30,
	2015		2014
	(In thousands)
Cash payments for:
Interest	$	516	$	632
Taxes		1,035		1,042
Noncash investing activities:
Transfers from loans to real estate acquired through foreclosure		562		75

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Note 3 - Investment Securities (Details) - Investment Securities - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Securities available for sale:
Securities available for sale, amortized cost	$ 97,730	$ 98,993
Securities available for sale, gross unrealized gains	1,150	1,588
Securities available for sale, gross unrealized losses	519	355
Securities available for sale, fair value	98,361	100,226
Securities held to maturity:
Securities held to maturity, amortized cost	5	6
Securities held to maturity, gross unrealized gains	0	0
Securities held to maturity, gross unrealized losses	0	0
Securities held to maturity, fair value	5	6
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Securities available for sale:
Securities available for sale, amortized cost	34,387	32,135
Securities available for sale, gross unrealized gains	154	240
Securities available for sale, gross unrealized losses	203	79
Securities available for sale, fair value	34,338	32,296
Securities held to maturity:
Securities held to maturity, amortized cost	5	6
Securities held to maturity, gross unrealized gains	0	0
Securities held to maturity, gross unrealized losses	0	0
Securities held to maturity, fair value	5	6
Agency Collateralized Mortgage Obligations [Member]
Securities available for sale:
Securities available for sale, amortized cost	11,478	14,461
Securities available for sale, gross unrealized gains	65	74
Securities available for sale, gross unrealized losses	81	150
Securities available for sale, fair value	11,462	14,385
US Government Agencies Debt Securities [Member]
Securities available for sale:
Securities available for sale, amortized cost	18,554	18,136
Securities available for sale, gross unrealized gains	35	32
Securities available for sale, gross unrealized losses	56	48
Securities available for sale, fair value	18,533	18,120
Municipal Notes [Member]
Securities available for sale:
Securities available for sale, amortized cost	31,834	32,178
Securities available for sale, gross unrealized gains	896	1,242
Securities available for sale, gross unrealized losses	179	78
Securities available for sale, fair value	32,551	33,342
Debt Securities [Member]
Securities available for sale:
Securities available for sale, amortized cost	96,253	96,910
Securities available for sale, gross unrealized gains	1,150	1,588
Securities available for sale, gross unrealized losses	519	355
Securities available for sale, fair value	96,884	98,143
Mutual Funds [Member]
Securities available for sale:
Securities available for sale, amortized cost	1,477	2,083
Securities available for sale, gross unrealized gains	0	0
Securities available for sale, gross unrealized losses	0	0
Securities available for sale, fair value	$ 1,477	$ 2,083

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Note 6 - Stock Option Plan (Details) - Nonvested Restricted Shares Activity - Jun. 30, 2015 - Restricted Stock [Member] - $ / shares	Total
Note 6 - Stock Option Plan (Details) - Nonvested Restricted Shares Activity [Line Items]
Granted	19,500
Granted	$ 24.50
Vested	500
Vested	$ 24.50
Forfeited	1,000
Forfeited	$ 24.50
Nonvested at June 30, 2015	18,000
Nonvested at June 30, 2015	$ 24.50

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Net Income	$ 1,232	$ 1,522	$ 2,701	$ 2,822
Unrealized gains (losses) on securities available for sale:
Unrealized holding gains (losses) arising during the period	(1,073)	902	(637)	1,873
Income tax (expense) benefit	418	(354)	248	(736)
Net of tax amount	(655)	548	(389)	1,137
Less: reclassification adjustment for realized gains included in net income	0	(54)	0	(54)
Income tax expense	0	21	0	21
Net of tax amount	0	(33)	0	(33)
Other Comprehensive Income (Loss), net of tax	(655)	515	(389)	1,104
Comprehensive Income	577	2,037	2,312	3,926
Less: comprehensive income attributable to the noncontrolling interest in subsidiary	4	4	7	7
Comprehensive Income Attributable to First Capital, Inc.	$ 573	$ 2,033	$ 2,305	$ 3,919

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Note 3 - Investment Securities

6 Months Ended

Jun. 30, 2015

Disclosure Text Block Supplement [Abstract]

Investments in Debt and Equity Instruments, Cash and Cash Equivalents, Unrealized and Realized Gains (Losses) [Text Block]

3.            Investment Securities

Debt and equity securities have been classified in the consolidated balance sheets according to management’s intent. Investment securities at June 30, 2015 and December 31, 2014 are summarized as follows:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2015
Securities available for sale:
Agency mortgage-backed securities	$	34,387	$	154	$	203	$	34,338
Agency CMO		11,478		65		81		11,462
Other debt securities:
Agency notes and bonds		18,554		35		56		18,533
Municipal obligations		31,834		896		179		32,551
Subtotal - debt securities		96,253		1,150		519		96,884
Mutual funds		1,477		0		0		1,477
Total securities available for sale	$	97,730	$	1,150	$	519	$	98,361
Securities held to maturity:
Agency mortgage-backed securities	$	5	$	0	$	0	$	5
Total securities held to maturity	$	5	$	0	$	0	$	5
December 31, 2014
Securities available for sale:
Agency mortgage-backed securities	$	32,135	$	240	$	79	$	32,296
Agency CMO		14,461		74		150		14,385
Other debt securities:
Agency notes and bonds		18,136		32		48		18,120
Municipal obligations		32,178		1,242		78		33,342
Subtotal - debt securities		96,910		1,588		355		98,143
Mutual funds		2,083		0		0		2,083
Total securities available for sale	$	98,993	$	1,588	$	355	$	100,226
Securities held to maturity:
Agency mortgage-backed securities	$	6	$	0	$	0	$	6
Total securities held to maturity	$	6	$	0	$	0	$	6

Agency notes and bonds, agency mortgage-backed securities and agency collateralized mortgage obligations (CMO) include securities issued by the Government National Mortgage Association (GNMA), a U.S. government agency, and the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC) and the Federal Home Loan Bank (FHLB), which are government-sponsored enterprises.

The amortized cost and fair value of debt securities as of June 30, 2015, by contractual maturity, are shown below. Expected maturities of mortgage-backed securities may differ from contractual maturities because the mortgages underlying the obligations may be prepaid without penalty.

	Securities Available for Sale				Securities Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
(In thousands)
Due in one year or less	$	1,070	$	1,074	$	0	$	0
Due after one year through five years		17,306		17,354		0		0
Due after five years through ten years		19,267		19,604
Due after ten years		12,745		13,052		0		0
		50,388		51,084		0		0
Mortgage-backed securities and CMO		45,865		45,800		5		5
	$	96,253	$	96,884	$	5	$	5

Information pertaining to investment securities available for sale with gross unrealized losses at June 30, 2015, aggregated by investment category and the length of time that individual investment securities have been in a continuous position, follows:

	Number of Investment Positions		Fair Value		Gross Unrealized Losses
(Dollars in thousands)
Continuous loss position less than twelve months:
Agency notes and bonds		9	$	7,696	$	53
Agency mortgage-backed securities		22		17,893		150
Muncipal obligations		17		6,568		95
Total less than twelve months		48		32,157		298
Continuous loss position more than twelve months:
Agency notes and bonds		1		999		3
Agency CMO		9		6,594		81
Agency mortgage-backed securities		4		4,426		53
Muncipal obligations		5		2,306		84
Total more than twelve months		19		14,325		221
Total securities available for sale		67	$	46,482	$	519

Management evaluates securities for other-than-temporary impairment at least quarterly, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recover in fair value.

At June 30, 2015, the 67 U.S. government agency debt securities, including agency notes and bonds, mortgage-backed securities and CMO, and municipal obligations in a loss position had depreciated approximately 1.1% from the amortized cost basis. All of the U.S. government agency securities and municipal obligations are issued by U.S. government agencies, government-sponsored enterprises and municipal governments, or are secured by first mortgage loans and municipal project revenues. These unrealized losses related principally to current interest rates for similar types of securities. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government, its agencies or other governments, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. As the Company has the ability to hold the debt securities until maturity, or the foreseeable future if classified as available for sale, no declines are deemed to be other-than-temporary.

During the three and six months ended June 30, 2015, the Company did not have any security sales. During the three and six months ended June 30, 2014, the Company realized gross gains on sales of available for sale municipal securities of $54,000.

In June 2014, the Company acquired an additional 31,750 shares of common stock in another financial institution, in addition to the 100,000 shares acquired in December 2013, representing approximately 9% of the outstanding common stock of the entity, for a total investment of $711,000. The investment is accounted for using the cost method of accounting and is included in other assets in the consolidated balance sheet.

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Note 3 - Investment Securities (Details) - Amortized Cost and Fair Value of Debt Securities by Contractual Maturity - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Amortized Cost and Fair Value of Debt Securities by Contractual Maturity [Abstract]
Due in one year or less	$ 1,070
Due in one year or less	1,074
Due in one year or less	0
Due in one year or less	0
Due after one year through five years	17,306
Due after one year through five years	17,354
Due after one year through five years	0
Due after one year through five years	0
Due after five years through ten years	19,267
Due after five years through ten years	19,604
Due after ten years	12,745
Due after ten years	13,052
Due after ten years	0
Due after ten years	0
	50,388
	51,084
	0
	0
Mortgage-backed securities and CMO	45,865
Mortgage-backed securities and CMO	45,800
Mortgage-backed securities and CMO	5
Mortgage-backed securities and CMO	5
	96,253
	96,884
	5	$ 6
	$ 5	$ 6

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Note 4 - Loans and Allowance for Loan Losses (Details) - Troubled Debt Restructurings During the Period $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014 USD ($)
Troubled debt restructurings:
Number of Contracts	0	0	0	3
Pre-Modification Outstanding Balance				$ 542
Post-Modification Outstanding Balance				$ 542
Real Estate Mortgage Portfolio Segment [Member] | Commercial Real Estate Loan [Member]
Troubled debt restructurings:
Number of Contracts				3
Pre-Modification Outstanding Balance				$ 542
Post-Modification Outstanding Balance				$ 542

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Note 6 - Stock Option Plan (Tables)

6 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

	Number of Shares		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2015		-		-
Granted		19,500	$	24.50
Vested		500		24.50
Forfeited		1,000		24.50
Nonvested at June 30, 2015		18,000	$	24.50