Britton & Koontz Capital Reports Earnings for Second Quarter 2011

      Britton & Koontz Capital Reports Earnings for Second Quarter 2011

  PR Newswire

  NATCHEZ, Miss., July 29, 2011

NATCHEZ, Miss., July 29, 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 three and
six month period ended June 30, 2011.

Net income for the quarter ended June 30, 2011, was $393 thousand, or $.18 per
diluted share, compared to $504 thousand, or $.24 per diluted share, for the
quarter ended June 30, 2010. The decrease for the three month period is
primarily related to write-downs to other real estate of approximately $244
thousand in regard to updated appraisal reports. Additional items affecting
the change in net income are higher mortgage-related income and sales from
investment securities offset by lower net interest income. For the six month
period ended June 30, 2011, net income and diluted earnings per share was $969
thousand and $0.46, respectively, an increase from $567 thousand and $0.27,
respectively, for the same period in 2010. The increase for the six month
period is due primarily to $875 thousand of additional gains on the sale of
investment securities and higher mortgage-related income of $215 thousand
offset by a drop in net interest income of $694 thousand resulting from a
declining net interest margin and the additional charges to other real estate.

Net interest income for the three and six month periods ended June 30, 2011,
decreased $386 thousand and $694 thousand, respectively, over the same period
in 2010. Average earning assets during the quarter ended June 30, 2011 held
steady at $361 million while they dropped only slightly for the six month
comparison. Although average earning assets remained relatively stable, the
shift in the mix of average earning assets was the primary driver of the
Company's lower net interest income for the three and six-month periods as
cash flows from higher-yielding assets, loans and investment securities were
moved to lower-yielding accounts in the first six months of 2011. Even though
the lower interest rate environment during the past year has made profitable
reinvestment of cash flows back into the market difficult and loan demand
remains flat, the decline in interest rates did not contribute materially to a
decrease in net interest income. The lower rates did contribute to the
decline in interest rate spread and margin compression during both comparative
periods. Interest rate spread declined 39 and 32 basis points to 2.85% and
2.97% for the three and six month period ended June 30, 2011, respectively.
Interest rate margin declined 43 and 36 basis points to 3.20% and 3.32% for
the three and six months ended June 30, 2011, respectively.

Non-interest income increased $722 thousand for the 2nd quarter of 2011
compared to the 2nd quarter of 2010, while non-interest income increased $1.1
million for the first six months of 2011 compared to the corresponding period
in 2010. Both period increases were primarily due to gains on the sale of
investment securities and higher-mortgage related income. Non-interest
expense increased $408 thousand for the 2nd quarter of 2011 compared to the
2nd quarter of 2010, due mainly to the higher charges to other real estate and
other smaller increases across the board. Non-interest expense remained
stable at $6.8 million for the six months ended June 30, 2011, increasing only
$21 thousand compared to the corresponding period in 2010.

Non-performing assets, which include non-accrual loans, troubled debt
restructurings, loans delinquent 90 days or more and other real estate,
increased to $12.7 million, or 3.32% of total assets, at June 30, 2011, from
$11.3 million, or 3.01% of total assets, at December 31, 2010. The increase
in non-performing assets since year-end focuses on the transfer of two
commercial credits in the amount of approximately $1.6 million during the 1st
quarter of 2011 to non-accrual status. Foreclosure on the real estate
collateral of both loans is expected and scheduled in the 3rd quarter of 2011.
Although non-performing loans have increased, net charge-offs have declined
substantially for the six months ended June 30, 2011, to $170 thousand
compared to $2.6 million for the six months ended June 30, 2010.
Nevertheless, subsequent to the end of the quarter, further review has
necessitated the downgrade of six loan relationships in the Company's Baton
Rouge, Louisiana market totaling approximately $15 million. None of the
aforementioned loans has been moved to nonaccrual status, and no material
losses are identified, although the downgrade reflects management's ongoing
concern that the Baton Rouge market, which has seen less economic stress than
other parts of the Company's geographic footprint, is showing signs of slower
growth and weakened repayment sources.

The Company's loan loss provision in the 2nd quarter of 2011 was $300 thousand
compared to $200 thousand for the corresponding period in 2010. For the six
months ended June 30, 2011, the Company's loan loss provision decreased to
$1.1 million compared to $1.3 million thousand during the same period in 2010.
The allowance for loan losses of $3.3 million, or 1.68% of loans, excluding
loans-held-for-sale ("LHFS"), at June 30, 2010, compares to $2.4 million, or
1.15% of loans, excluding LHFS, at December 31, 2010. Even with the increased
level of classified loans, the Company believes the allowance for loan losses
is adequate as of June 30, 2011. In addition to the allowance for loan losses
calculation, the Company has added a $50 thousand allowance for unfunded,
off-balance sheet items. 

The Company's Regulatory Tier 1 Capital of $43 million, or approximately 17%
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, three in Baton
Rouge, Louisiana and a loan production office in Central, Louisiana. As of
June 30, 2011, the Company reported assets of $382.9 million and equity of
$40.1 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 June 30, 2011, were 2,142,466.

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 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

                   Britton and Koontz Capital Corporation
                            Financial Highlights
                   For the three months ended      For the six months ended
                            June 30,                       June 30,
                       2011           2010           2011           2010
Income Statement
                   $        $        $        $      
Interest income        4,103,901      4,747,555      8,407,398      9,621,745
Interest expense       1,208,616      1,465,964      2,436,583      2,956,522
Net interest
income                 2,895,285      3,281,591      5,970,815      6,665,223
Provision for
loan losses              300,000        200,000      1,050,000      1,299,996
Net interest
income after
provision for
loan losses            2,595,285      3,081,591      4,920,815      5,365,227
income                 1,433,025        711,496      2,964,334      1,827,302
expense                3,623,905      3,215,778      6,757,454      6,735,618
Income before
income taxes             404,405        577,309      1,127,695        456,911
Income taxes              11,294         73,458        159,165      (110,232)
                   $        $        $        $      
Net income              393,111        503,851       968,530       567,143
Return on Average
Assets                     0.41%          0.53%          0.51%          0.30%
Return on Average
Equity                     3.96%          5.08%          4.88%          2.83%
                   $        $        $        $      
Net income per                                   
share                    0.18          0.24        0.46        0.27
Weighted average
outstanding            2,143,497      2,136,450      2,140,714      2,134,092

                             June 30,        December 31,       June 30,
Balance Sheet Data             2011              2010             2010
                         $          $         $       
Total assets                  382,671,875     375,419,683    380,791,933
Cash and due from banks         39,442,715        5,818,853        6,921,880
Federal funds sold                       -          112,497           25,496
Investment securities          130,791,472      138,904,366      138,203,875
Loans, net of UI & loans
held for sale                  196,749,011      210,564,816      216,403,258
Loans held for sale              3,756,617        6,074,014        5,949,000
Allowance for loan
losses                           3,300,305        2,420,143        2,538,737
bearing                        217,118,074      212,662,464      213,252,751
Deposits-non interest
bearing                         58,681,484       45,880,066       45,664,635
Total deposits                 275,799,558      258,542,530      258,917,386
Short-term debt                 17,520,670       24,977,895       29,123,336
Long-term debt                  47,000,000       49,000,000       49,000,000
Stockholders' equity            39,947,819       39,931,973       40,352,813
                         $          $         $       
Book value (per share)              18.65            18.70           18.90
Total shares outstanding         2,142,466        2,135,466        2,135,466
Asset Quality Data
                         $          $                    
Non-accrual loans             8,851,825     7,509,711        7,695,388
Loans 90+ days past due            653,727          484,154            1,949
Troubled debt
restructurings, still
accruing                           147,749                -                -
Total non-performing
loans                            9,653,301        7,993,865        7,697,337
Other real estate owned          2,975,736        3,303,189        1,953,871
Total non-performing     $          $                    
assets                        12,629,037     11,297,054        9,651,208
Total non-performing
assets to average assets             3.32%            3.00%            2.54%
                         $          $                    
Net chargeoffs - ytd          169,838     3,133,599        2,640,000
YTD net chargeoffs as a
percent of average loans             0.08%            1.42%            1.18%

SOURCE Britton & Koontz Capital Corporation

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