Company: FCAP
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001171843-25-001868
Chunk: 354

Company: FIRST CAPITAL INC
Filing Date: 2025-03-31
Form: 10-K
Item: Item 11
Chunk 354
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 2023 investment, the Bank obtained a $2.0 million standby letter of credit through the FHLB for the Bank’s total committed investment. The letter of credit was issued June 2, 2023 and expired April 30, 2024.

The investment is accounted for using the proportional amortization method.  During 2024 and 2023, the Bank recognized amortization expense of $1.9 million and $1.7 million, respectively, which was included in income tax expense on the consolidated statements of income.  Additionally, during 2024 and 2023, the Bank recognized tax credits and other tax benefits from its solar energy tax credit investment of $2.3 million and $1.8 million, respectively, which was included in income tax expense on the consolidated statements of income.

F-56

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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			CAPTIVE SUBSIDIARY

As described in Note 1, the Company had a wholly-owned insurance subsidiary providing property and casualty insurance coverage to the Company, the Bank and the Bank’s subsidiaries, and reinsurance to nine other third party insurance captives for which insurance may not be currently available or economically feasible in the insurance marketplace. On April 10, 2023, the IRS issued IR-2023-74 and proposed regulations that may result in the Captive being considered a listed transaction. The proposed regulations include the possibility of material tax expense to the consolidated group if finalized in their current form. However, the final regulations have not been published and as such management cannot reasonably estimate or determine the potential tax liability as of December 31, 2024. The Captive was formally dissolved with all remaining assets transferred to the Company on December 31, 2023.

			(25)

			PARENT COMPANY CONDENSED FINANCIAL INFORMATION

Condensed financial information for the Company (parent company only) follows:

			Balance Sheets

			(In thousands)

			As of December 31,

			2024

			2023

			Assets:

			Cash and cash equivalents

			$
			2,861

			$
			3,798

			Other assets

			2,256

			2,528

			Investment in subsidiaries

			109,970

			99,437

			$
			115,087