Britton & Koontz Capital Reports Third Quarter 2010 Earnings

         Britton & Koontz Capital Reports Third Quarter 2010 Earnings

  PR Newswire

  NATCHEZ, Miss., Oct. 22

NATCHEZ, Miss., Oct. 22 /PRNewswire-FirstCall/ -- The Board of Directors of
Britton & Koontz Capital Corporation (Nasdaq: BKBK, "B&K Capital" or "the
Company") today reported net income and earnings per share for the three and
nine month period ended September 30, 2010.

Net income for the three months ended September 30, 2010, was $681 thousand,
or $.32 per diluted share, compared to $324 thousand, or $.15 per diluted
share, for the quarter ended September 30, 2009. The increase is primarily
related to a decrease in loan provision expense offset by lower net interest
income from the reduction in size of the Bank's balance sheet. For the nine
month period ended September 30, 2010, net income and diluted earnings per
share were $1.2 million and $0.58, respectively, compared to $1.7 million and
$0.79, respectively, for the same period in 2009. The decrease for the nine
month period is due primarily to lower net interest income over the period
offset by a decline in loan loss provision expense.

Net interest income for the three and nine month periods ended September 30,
2010, decreased $770 thousand and $420 thousand, respectively, over the same
period in 2009. The decline is primarily due to a decrease in average earning
assets during both the quarter and year to date period comparisons. The lower
interest rate environment over the first nine months of 2010 made profitable
reinvestment of cash flows back into the market difficult, contributing to the
decrease in net interest income during both comparative periods. Instead,
cash flows were primarily used to repay short-term debt. Lower interest rates
also contributed to the decline of interest rate spread and margin during both
periods. Interest rate spread declined 25 and 11 basis points to 3.22% and
3.27% for the three and nine month period ended September 30, 2010,
respectively. Interest rate margin declined 26 and 13 basis points to 3.60%
and 3.65% for the three and nine months ended September 30, 2010,
respectively.

Non-interest income increased $287 thousand for the 3rd quarter of 2010
compared to the 3rd quarter of 2009 primarily from higher mortgage related
income and gains on the sale of other real estate offset by decreases in
service charges on deposit accounts. Non-interest income increased $1.2
million to $3.3 million for the nine months ended September 30, 2010, compared
to $2.1 million during the same period in 2009. The increase is primarily due
to higher mortgage related income, gains on sales of other real estate and
securities. Non-interest expense remained relatively stable for the 3rd
quarter of 2010 compared to the 3rd quarter of 2009. Non-interest expense for
the nine month period ended September 30, 2010, increased $1.2 million over
the comparable period in 2009. Approximately 50% of the increase is due to
higher personnel costs associated with the new hires in the mortgage division
along with write-downs of other real estate, higher occupancy and equipment
costs and other charges to expense related to the provision of loan and late
fees receivable. These additional costs were offset by lower FDIC assessment
charges due to a special assessment of $183 thousand made in the 1st half of
2009.

Non-performing assets, which includes non-accrual loans, loans delinquent 90
days or more and other real estate, decreased to $9.8 million, or 2.63% of
total assets, at September 30, 2010, from $10.5 million, or 2.68% of total
assets at December 31, 2009. After higher than normal net charge-offs during
the first two quarters of 2010, the Bank experienced a slowdown in charge-offs
and net recoveries of $25 thousand were recorded in the 3rd quarter. The
Company's loan loss provision in the 3rd quarter of 2010 was $150 thousand,
compared to $920 thousand for the corresponding period in 2009. For the nine
months ended September 30, 2010, the Company's loan loss provision was $1.4
million compared to $1.9 million during the same period in 2009. The
allowance for loan losses of $2.7 million, or 1.27% of loans, at September 30,
2010, compares to $3.9 million, or 1.73% of loans, at December 31, 2009. The
Company believes the allowance for loan loss account is adequate as of
September 30, 2010.

The Company's Regulatory Tier 1 Capital of $42 million, or approximately 16%
of risk weighted assets, substantially exceeds the approximate $10 million, or
4%, minimum regulatory capital requirements. 

Britton & Koontz Capital Corporation, headquartered in Natchez, Mississippi,
is the parent company of Britton & Koontz Bank, N.A. which operates three full
service offices in Natchez, two in Vicksburg, Mississippi, and three in Baton
Rouge, Louisiana, and a loan production office in Central, Louisiana. As of
September 30, 2010, the Company reported assets of $374.6 million and equity
of $40.4 million. The Company's stock is traded on NASDAQ under the symbol
BKBK and the transfer agent is American Stock Transfer & Trust Company. Total
shares outstanding at September 30, 2010, were 2,135,466.

Forward Looking Statements

This news release contains statements regarding the projected performance of
Britton & Koontz Capital Corporation and its subsidiaries. These statements
constitute forward-looking information within the meaning of the Private
Securities Litigation Reform Act. Actual results may differ materially from
the projections provided in this release since such projections involve
significant known and unknown risks and uncertainties. Factors that might
cause such differences include, but are not limited to: competitive pressures
among financial institutions increasing significantly; economic conditions,
either nationally or locally, in areas in which the Company conducts
operations being less favorable than expected; and legislation or regulatory
changes which adversely affect the ability of the combined Company to conduct
business combinations or new operations. The Company disclaims any obligation
to update such factors or to publicly announce the results of any revisions to
any of the forward-looking statements included herein to reflect future events
or developments.

                   Britton and Koontz Capital Corporation
                            Financial Highlights
                                 (Unaudited)
                         For the three months ended For the nine months ended
                               September 30,              September 30,
                             2010          2009         2010         2009
Income Statement Data
Interest income            $ 4,624,042  $ 5,223,232 $ 14,245,788 $ 15,899,900
Interest expense             1,435,597    1,573,844    4,392,118    4,941,441
Net interest income          3,188,445    3,649,388    9,853,670   10,958,459
Provision for loan
losses                         150,000      920,000    1,449,996    1,870,000
Net interest income
after
provision for loan
losses                       3,038,445    2,729,388    8,403,674    9,088,459
Non-interest income            985,118      698,239    3,278,770    2,075,669
Non-interest expense         3,171,196    3,000,373   10,373,166    9,111,065
Income before income
taxes                          852,367      427,254    1,309,278    2,053,063
Income taxes                   171,520      103,059       61,288      371,065
Net income                   $ 680,847    $ 324,195  $ 1,247,990  $ 1,681,998
Return on Average Assets         0.73%        0.33%        0.44%        0.56%
Return on Average Equity         6.75%        3.18%        4.14%        5.56%
Diluted:
Net income per share            $ 0.32       $ 0.15       $ 0.58       $ 0.79
Weighted average shares
outstanding                  2,135,800    2,127,070    2,134,685    2,125,282

                                    September 30, December 31,  September 30,
Balance Sheet Data                      2010          2009          2009
Total assets                        $ 374,615,000 $ 393,110,149 $ 395,830,265
Cash and due from banks                 5,769,857    10,303,641     7,552,892
Federal funds sold                              -        58,799       314,942
Investment securities                 138,225,812   146,590,266   152,599,328
Loans, net of UI & loans held for
sale                                  214,125,613   223,817,377   223,510,893
Loans held for sale                     2,808,369       784,063       764,500
Allowance for loan losses               2,714,126     3,878,738     2,444,714
Deposits-interest bearing             214,296,621   201,094,816   208,819,093
Deposits-non interest bearing          42,455,103    49,847,304    43,381,549
Total deposits                        256,751,724   250,942,120   252,200,642
Short-term debt                        25,329,987    50,389,079    52,087,432
Long-term debt                         49,000,000    49,000,000    47,000,000
Stockholders' equity                   40,374,442    39,840,889    40,964,944
Book value (per share)                    $ 18.91       $ 18.74       $ 19.26
Total shares outstanding                2,135,466     2,126,466     2,126,466
Asset Quality Data
Non-accrual loans                     $ 6,701,399   $ 8,709,058   $ 6,148,680
Loans 90+ days past due                   247,825     1,003,944     1,009,513
Total non-performing loans              6,949,224     9,713,002     7,158,193
Other real estate owned                 2,895,569       815,207     1,177,100
Total non-performing assets           $ 9,844,793  $ 10,528,209   $ 8,335,293
Total non-performing assets to
average assets                              2.60%         2.62%         2.07%
Net chargeoffs - ytd                  $ 2,614,611   $ 1,939,064   $ 1,823,088
YTD net chargeoffs as a percent of
average loans                               1.18%         0.87%         0.82%

SOURCE Britton & Koontz Capital Corporation

Website: http://www.bkbank.com
Contact: W. Page Ogden, President & CEO or William M. Salters, Treasurer & CFO
, +1-601-445-5576, or Fax +1-601-445-2481, corporate@bkbank.com,
http://www.bkbank.com
 
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