Company: FCAP
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001171843-25-001868
Chunk: 431

Company: FIRST CAPITAL INC
Filing Date: 2025-03-31
Form: 10-K
Item: Item 12
Chunk 431
---
  These include commitments to extend credit and standby letters of credit, which are some of the instruments used by the Company to meet the financing needs of its customers.  These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the consolidated balance sheet.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments.  The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. 

F-48

FIRST CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(16 - continued)

The following is a summary of the commitments to extend credit at December 31, 2024 and 2023:

			(In thousands)

			2024

			2023

			Loan commitments:

			Fixed rate

			$
			5,302

			$
			666

			Adjustable rate

			11,233

			20,684

			Standby letters of credit

			2,078

			1,894

			Undisbursed commercial and personal lines of credit

			34,727

			40,187

			Undisbursed portion of construction loans in process

			22,516

			40,879

			Undisbursed portion of home equity lines of credit

			79,000

			77,376

			Total commitments

			$
			154,856

			$
			181,686

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.  Certain commitments have fixed expiration dates, or other termination clauses, and may require payment of a fee.  Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.  The Company evaluates each customer’s creditworthiness on a case-by-case basis.  The amount of collateral or other security obtained, if deemed necessary by the Company upon extension of credit, varies and is based on management’s credit evaluation.  Collateral held varies but may include deposits held in financial institutions; U.S. Treasury securities; other marketable securities; accounts receivable