Britton & Koontz Capital Reports Improved 1st Quarter 2011 Earnings

     Britton & Koontz Capital Reports Improved 1st Quarter 2011 Earnings    PR Newswire    NATCHEZ, Miss., April 25, 2011  NATCHEZ, Miss., April 25, 2011 /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 quarter ended March 31, 2011, of $575 thousand and $.27 per diluted share, respectively, compared to $63 thousand and $.03 per diluted share, respectively, for the quarter ended March 31, 2010. Annualized returns on average assets and average equity for the quarter ended March 31, 2011, were .61% and 5.80%, respectively, compared to .07% and .63%, respectively, for the same period in 2010.   The increase in earnings in the 1st quarter of 2011 as compared to the same period in 2010 is due to several factors. During the 1st quarter of 2011, the Company's provision for loan losses declined $350 thousand from $1.1 million to $750 thousand, while gains on sales of investment securities increased $219 thousand during the same period. Additionally, earnings in the 1st quarter of 2010 were impacted by a $306 thousand charge incurred after management concluded that the recovery of loan and related late fees previously believed to be recoverable was ultimately uncertain at best. Finally, as described below, net interest income during the 1st quarter of 2011 decreased $308 thousand compared to the same period in 2010.   Net interest income for the quarter ended March 31, 2011, was $3.1 million compared to $3.4 million for the quarter ended March 31, 2010. This decline was due primarily to lower average earning assets, offset slightly by lower funding costs of interest bearing liabilities. Contributing to the lower average earning assets was a $13.3 million decrease in average loans coupled with a small decline in average investment securities offset by increases in average interest bearing cash balances. Net interest margin declined from 3.74% at March 31, 2010, to 3.44% at March 31, 2011, due to the drop in net interest income.  Non-interest income ended March 31, 2011, at $1.5 million compared to $1.1 million at March 31, 2010. A total of approximately $11 million of mortgage-backed securities was sold in both quarters, and gains on such sales in the first quarter of 2011 exceeded gains in the corresponding period in 2010 by $219 thousand. The expansion of the Company's mortgage department contributed an additional $186 thousand in income from the sale of mortgage loans.   Non-interest expense decreased $393 thousand as compared to the 1st quarter of 2010 and ended the 1st quarter of 2011 at $3.1 million. The decrease is primarily due to an approximately $306 thousand charge to expense in the 1st quarter of 2010 related to the provision of loan and late fees receivable and higher personnel costs related to the expanded mortgage operations.   Total non-performing assets, which include non-accrual loans, loans past due 90 days or more and other real estate, ended the 1st quarter of 2011 at $12.6 million compared to $11.3 million at December 31, 2010. The increase is due primarily to one commercial credit in the amount of $1.1 million that was classified as nonaccrual in the 1st quarter of 2011. Non-performing assets as a percentage of assets increased to 3.31% at March 31, 2011, from 3.01% at December 31, 2010. The allowance for loan losses ended the 1st quarter of 2011 at $3.1 million, or 1.49% of loans, net of loans held for sale ("LHFS"), compared to $2.4 million, or 1.15% of loans, net of LHFS, at December 31, 2010. Non-accrual loans increased from $7.5 million at December 31, 2010, to $9.2 million at March 31, 2011 primarily due to the addition of the above mentioned commercial credit, while loans past due 90 days or more were down from $484 thousand at December 31, 2010, to $82 thousand at March 31, 2011. Other real estate remained the same at $3.3 million at March 31, 2011.   The Bank's provision for loan losses for the three month period ending March 31, 2010, was decreased to $750 thousand, compared to $1.1 million for the same period in 2010. The decreased provision was primarily in response to a diminishing level of net charge-offs. From net charge-offs of $1.8 million in the 1st quarter of 2010, net losses dropped to $518 thousand in the 4th quarter of 2010 and $98 thousand for 1st quarter of 2011.  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 March 31, 2011, the Company reported assets of $382.0 million and equity of $39.7 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 March 31, 2011, were 2,142,466.  https://www.bkbank.com  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 March 31,                                  2011             2010 Interest income             $   4,303,497  $   4,874,190 Interest expense                  1,227,967        1,490,557 Net interest income               3,075,530        3,383,633 Provision for loan losses           750,000        1,099,996 Net interest income after provision for loan losses         2,325,530        2,283,637 Non-interest income               1,531,309        1,122,842 Non-interest expense              3,133,548        3,526,876 Income before income taxes          723,291        (120,397) Income taxes                        147,871        (183,690)                                                    $     Net income                 $    575,420          63,293 Return on Average Assets              0.61%            0.07% Return on Average Equity              5.80%            0.63% Diluted:                               $          $       Net income per share                  0.27            0.03 Weighted average shares outstanding                       2,137,907        2,131,706                               March 31,       December 31,       March 31, Balance Sheet Data               2011             2010             2010 Total assets                  $ 381,994,668    $ 375,419,683    $ 369,854,661 Cash and due from banks          30,961,369        5,818,853        6,117,260 Investment securities           128,803,724      138,904,366      127,284,279 Gross loans. net of loans held for sale                   206,835,643      210,564,816      221,211,246 Deposits-interest bearing       224,846,810      212,662,464      206,048,791 Deposits-non interest bearing                          49,320,424       45,880,066       45,683,381 Total deposits                  274,167,234      258,542,530      251,732,172 Short-term borrowed funds        17,076,548       24,977,895       27,039,455 Long-term borrowed funds         49,000,000       49,000,000       49,000,000 Stockholders' equity             39,664,425       39,931,973       39,425,757 Book value (per share)                18.51            18.70            18.46 Total shares outstanding          2,142,466        2,135,466        2,135,466 Asset Quality Data Non-accrual loans           $   9,240,708  $   7,509,711  $   9,335,222 Loans 90+ days past due              81,559          484,154           50,518 Total non-performing loans        9,322,267        7,993,865        9,385,740 Other real estate owned           3,303,189        3,303,189        1,763,965 Total non-performing assets                       $  12,625,456   $  11,297,054   $  11,149,705 Total non-performing assets to average assets              3.34%            3.00%            2.92%                                   $     Net chargeoffs - ytd                98,242  $   3,133,599  $   1,833,337 YTD net chargeoffs as a percent of average net loans                                 0.05%            1.42%            0.82%  SOURCE Britton & Koontz Capital Corporation  Website: https://www.bkbank.com Contact: W. Page Ogden, President & CEO or William M. Salters, Treasurer & CFO, +1-601-445-5576, +1-601-445-2481 Fax, corporate@bkbank.com, https://www.bkbank.com