Company: FCAP
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001171843-25-001868
Chunk: 812

Company: FIRST CAPITAL INC
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1B
Chunk 812
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 is an estimate of lifetime expected credit losses inherent in the financial assets at the balance sheet date.  As of December 31, 2024, the ACL amounted to $9.3 million.

Management’s methodology for estimating the ACL includes an allowance measured on a collective basis for pools of loans that share similar risk characteristics. Management utilizes the Weighted Average Remaining Maturity method, which uses average annual charge-off rates and the remaining life of the loan, to estimate the ACL.  Management 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. 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.

F-1

We determined that auditing qualitative adjustments was a critical audit matter because it requires significant auditor judgment, auditor subjectivity, and audit effort to evaluate the subjective and complex judgments made by management that were applied in the determination of the qualitative adjustments of the ACL.

The primary procedures we performed to address the critical audit matter included:

			●

			Evaluating the reasonableness of management’s judgments and assumptions related to the qualitative adjustments, including the appropriateness of the qualitative adjustments framework.

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			Evaluating the relevance and reliability of internal and external data used in the determination of qualitative adjustments.

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			Evaluating the accuracy of the calculation of qualitative adjustments.

Crowe LLP

We have served as the Company’s auditor since 2024.

Louisville, Kentucky

March 31, 2025

F-2

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

First Capital, Inc.

Corydon, Indiana

Opinion on the Financial Statements 

We have audited the accompanying consolidated balance sheet of First Capital, Inc. (the “Company”) as of December 31, 2023, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for the years ended December 31, 2023 and 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results