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Britton & Koontz Capital Reports 2010 Earnings

                Britton & Koontz Capital Reports 2010 Earnings

  PR Newswire

  NATCHEZ, Miss., Jan. 21, 2011

NATCHEZ, Miss., Jan. 21, 2011 /PRNewswire-FirstCall/ -- The Board of Directors
of Britton & Koontz Capital Corporation (Nasdaq: BKBK, "the Company") today
reported net income for the year ended December 31, 2010, of $1.9 million, or
$.90 per basic and diluted share, compared to $1.6 million, or $.76 per basic
and diluted share, for 2009. Net income for the quarter ended December 31,
2010, was $665 thousand, or $.31 per basic and diluted share, compared to a
loss of $58 thousand, or $(.03) per basic and diluted share, for the fourth
quarter of 2009. The returns on average assets and equity for the year ended
December 31, 2010, were .51% and 4.76%, respectively, compared to .40% and
4.01%, respectively, for same period in 2009. 

Net interest income for the three and twelve months ended December 31, 2010,
decreased $347 thousand and $1.5 million, respectively, over the same periods
in 2009. The decrease is primarily due to the decline in earning assets
exceeding the decline in costing liabilities. Average earning assets
decreased during both the quarter and annual comparative periods by $26.8
million and $27.5 million, respectively, primarily from a decline in the
Bank's investment securities portfolio. The contributing factor in the
decline in investment securities was the lower interest rate environment
during 2010 which made profitable reinvestment of cash flows back into the
market difficult. Instead, cash flows were primarily used to repay short-term
debt. Asset yields also declined at a faster pace than funding costs for the
three and twelve months ended December 31, 2010, with yields on assets
declining 20 basis points while funding costs fell by only 10 basis points.
Lower interest rates also contributed to the decline of interest rate spread
and margin during the quarter and year ended December 31, 2010. Interest rate
spread declined 9 and 10 basis points to 3.31% and 3.28%, respectively, while
interest rate margin declined 11 and 10 basis points to 3.67% and 3.66%,
respectively, for the quarter and year ended December 31, 2010, respectively.

Non-interest income increased $271 thousand for the 4th quarter of 2010
compared to the 4th 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. These same factors also caused
non-interest income to increase by $1.5 million to $4.3 million for the year
ended December 31, 2010, compared to $2.9 million during the same period in
2009. Non-interest expense declined $87 thousand for the 4th quarter of 2010
compared to the 4th quarter of 2009. Non-interest expense for the year ended
December 31, 2010, increased $1.2 million over the comparable period in 2009.
Approximately 50% of the annual increase in non-interest expense 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

Since December 31, 2009, total assets decreased $17.7 million to $375.4
million at December 31, 2010. The change is due to decreases in total
investment securities of $7.7 million, a drop in net loans of $6.5 million, a
decline in cash and due from banks of $4.5 million, a $432 thousand decline in
fixed assets and an $843 thousand decrease in other assets. Other real estate
increased $2.5 million to $3.3 million. Total deposits increased $7.6 million
to $258.5 million at December 31, 2010, compared to $250.9 million as of
December 31, 2009. The increase in deposits was primarily due to increases in
the Company's rewards checking accounts. 

Non-performing assets, which includes non-accrual loans, loans delinquent 90
days or more and other real estate, increased to $11.3 million, or 3.01% of
total assets, at December 31, 2010, from $10.5 million, or 2.68% of total
assets at December 31, 2009. The Company experienced higher than normal
charge-offs during 2010 of $3.2 million, which included $519 thousand during
the 4th quarter. Net charge-offs as a percentage of average loans increased
to 1.42% at December 31, 2010, compared to .87% at December 31, 2009. The
Company added $1.7 million to its allowance for probable loan losses in 2010
which ended the year at $2.4 million, compared to $3.4 million in 2009. The
higher amount in 2009 was primarily due to an accumulated provision of
approximately $1 million relating to two credits that were charged-off during
2010. The Company believes the allowance for loan loss account is adequate as
of December 31, 2010.

Tier 1 Capital for the Company and its wholly-owned subsidiary, Britton &
Koontz Bank, N.A., was $42.7 million and $39.9 million, respectively, at
December 31, 2010. These amounts substantially exceed the approximately $15
million, or 6% of risk-weighted assets, required to be considered

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, Mississippi, two in Vicksburg, Mississippi, and
three in Baton Rouge, Louisiana, and a loan production office in Central,
Louisiana. As of December 31, 2010, the Company reported assets of $375.4
million and stockholders' equity of $39.9 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 December 31,
2010, were 2,135,466.

Forward Looking Statements

This news release contains statements regarding the projected performance of
Britton & Koontz Capital and its subsidiaries that constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act.
Statements that are not historical or current facts, including statements
about beliefs and expectations, are forward-looking statements. These
statements often include the words "may," "could," "would," "should,"
"believes," "expects," "anticipates," "estimates," "intends," "plans,"
"projects" or similar expressions. 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; significant fluctuations in
interest rates; inflation; significant underperformance in our portfolio of
outstanding loans; and legislation or regulatory changes which adversely
affect the ability of the Company to conduct business combinations or new
operations. Forward-looking statements speak only as of the date they are
made, and the Company undertakes no 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
                                                      For the twelve months
                       For the three months ended             ended
                              December 31,                December 31,
                          2010           2009           2010         2009
Income Statement Data
                              $            $                            $
Interest income           4,526,332      5,079,559  $ 18,772,120   20,979,459
Interest expense          1,312,618      1,518,491     5,704,736    6,459,931
Net interest income       3,213,714      3,561,068    13,067,384   14,519,528
Provision for loan
losses                      225,004      1,550,000     1,675,000    3,420,000
Net interest income
provision for loan
losses                    2,988,710      2,011,068    11,392,384   11,099,528
Non-interest income       1,016,196        744,699     4,294,967    2,820,368
Non-interest expense      3,168,294      3,254,875    13,541,460   12,365,940
Income before income
taxes                       836,612      (499,108)     2,145,891    1,553,956
Income taxes                171,858      (440,738)       233,146     (69,673)
Net income                  664,754       (58,370)     1,912,745    1,623,629
Return on Average
Assets                        0.72%         -0.06%         0.51%        0.40%
Return on Average
Equity                        6.61%         -0.57%         4.76%        4.01%
                      $          $        $       $     
Net income per share          0.31        (0.03)         0.90        0.76
Weighted average
shares outstanding        2,136,047      2,127,126     2,134,941    2,125,799
                      December 31,   December 31,
Balance Sheet Data        2010           2009
Total assets          $ 375,419,683  $ 393,110,149
Cash and due from
banks                     5,818,853     10,303,641
Federal funds sold          112,497         58,799
Investment securities   138,904,366    146,590,266
Loans, net of UI &
loans held for sale     210,564,816    223,817,377
Loans held for sale       6,074,014        784,063
Allowance for loan
losses                    2,420,143      3,878,738
bearing                 212,662,464    201,094,816
Deposits-non interest
bearing                  45,880,066     49,847,304
Total deposits          258,542,530    250,942,120
Short-term debt          24,977,895     50,389,079
Long-term debt           49,000,000     49,000,000
Stockholders' equity     39,931,973     39,840,889
Book value (per         $         $     
share)                       18.70         18.74
Total shares
outstanding               2,135,466      2,126,466
Asset Quality Data
                              $            $  
Non-accrual loans         7,509,711      8,709,058
Loans 90+ days past
due                         484,154      1,003,944
Total non-performing
loans                     7,993,865      9,713,002
Other real estate
owned                     3,303,189        815,207
Total non-performing
assets                   11,297,054     10,528,209
Total non-performing
assets to average
assets                        3.00%          2.62%
Net chargeoffs - ytd      3,133,599      1,939,064
YTD net chargeoffs as
a percent of average
loans                         1.42%          0.87%

SOURCE Britton Koontz Capital Corp.

Contact: W. Page Ogden, President & CEO, or William M. Salters, Treasurer &
CFO, +1-601-445-5576, +1-601-445-2481 Fax,
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