Company: FCAP
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001171843-25-003186
Chunk: 50

Company: FIRST CAPITAL INC
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 50
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 emphasis on all available portfolio data. The Company’s historical look-back periods for the loan portfolio range from one to 10 years depending on the WARM of the given portfolio segment and are updated on an annual basis.

The Company estimates the ACL on loans using relevant available information from internal and external sources relating to past events, current conditions, and reasonable and supportable forecasts.  Reasonable and supportable forecasts typically utilize a 12-month period with immediate reversion to historical losses. Historical loss experience provides the basis for the estimation of expected credit losses. Qualitative adjustments to historical loss information are made for losses reflected by peers, changes in underwriting standards, changes in economic conditions, changes in delinquency levels, collateral values and other factors.

Qualitative adjustments reflect management’s overall estimate of the extent to which current expected credit losses on collectively evaluated loans will differ from historical loss experience. The analysis takes into consideration industry and collateral concentrations, acquired loan portfolio characteristics and other credit-related analytics as deemed appropriate.

Management exercises significant judgment in evaluating the relevant historical loss experience and the qualitative factors.  Management also monitors the differences between estimated and actual incurred loan losses in order to evaluate the effectiveness of the estimation process and make any changes in the methodology as necessary.

-18-

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4 – continued)

Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. There have been no significant changes to the types of collateral securing the Company’s collateral dependent loans. The following table presents the amortized cost basis of, and ACL allocation to, individually evaluated collateral-dependent loans by class of loans as of March 31, 2025:

			March 31, 2025

			Real

			ACL

			Estate

			Equipment

			Other

			Total

			Allocation

			(In thousands) 

			1-4 Family Residential Mortgage

			$
			1,563

			$
			-

			$
			-

			$
			1,563

			$
			-

			Home Equity and Second Mortgage

			639

			-

			-

			639

			-

			Multifamily Residential

			-

			-

			-

			-

			-

			1-4 Family Residential Construction

			91