Britton & Koontz Capital Reports Q3 2011 Financial Results

          Britton & Koontz Capital Reports Q3 2011 Financial Results

  PR Newswire

  NATCHEZ, Miss., Oct. 31, 2011

NATCHEZ, Miss., Oct. 31, 2011 /PRNewswire-FirstCall/ -- The Board of Directors
of Britton & Koontz Capital Corporation (Nasdaq: BKBK, "the Company") today
reported net income/(loss) and earnings per share for the three and nine month
period ended September 30, 2011.

The Company reported a net loss for the three months ended September 30, 2011
of $721 thousand, or ($.34) per diluted share, compared to net income of $681
thousand, or $.32 per diluted share, for the quarter ended September 30, 2010.
For the nine month period ended September 30, 2011, net income and diluted
earnings per share were $84 thousand and $0.04, respectively, compared to $1.2
million and $0.58, respectively, for the same period in 2010. The loss for
the three months ended September 30, 2011, is due primarily to a loan loss
provision expense of approximately $3.4 million for the quarter, partially
offset by a $1.3 million increase in gains on the sale of investment
securities. Reduced earnings for the nine month period is due to the
aforementioned $3.4 million provision expense in the 3rd quarter of 2011 and
lower net interest income of $1.1 million, offset by $2.2 million in
year-to-date gains on the sale of investment securities. 

Net interest income for the three and nine month periods ended September 30,
2011, decreased $412 thousand and $1.1 million, respectively, over the same
period in 2010. The decline for both periods is primarily due to a shift in
the mix of earning assets to lower yielding assets coupled with a loss of
interest on specific non-accrual loans of approximately $225 thousand. The
continued lower interest rate environment during 2011 provided limited
reinvestment opportunity of cash flows back into the investment market and
contributed to the $50.3 million increase in cash reserves at the Federal
Reserve Bank at September 30, 2011, as compared to the balance at September
30, 2010.  Interest rate spread and margin declined during both comparative
periods as the yield on earning assets declined at a greater pace than cost of
interest-bearing liabilities. Interest rate spread declined 41 and 35 basis
points to 2.81% and 2.92% for the three and nine month period ended September
30, 2011, respectively. Interest rate margin declined 48 and 40 basis points
to 3.12% and 3.25% for the three and nine months ended September 30, 2011,
respectively.

Non-interest income increased $1.1 million for the 3rd quarter of 2011
compared to the 3rd quarter of 2010 primarily from the sale of investment
securities. The Company sold approximately $16 million of investment
securities in the 3rd quarter of 2011, recording a gain of $1.3 million.
Additionally, the 3rd quarter of 2010 included $139 thousand on gains from
the sales of other real estate compared to no gains on sales of other real
estate in 2011. Non-interest income increased to $5.0 million for the nine
months ended September 30, 2011, from $3.3 million during the same period in
2010. The increase is primarily due to a $2.2 million increase in gains on
sales of investment securities in 2011 compared to the same period in 2010.
In 2010, gains on sale of other real estate were $606 thousand. Non-interest
expense decreased $426 thousand for the 3rd quarter of 2011 compared to the
3rd quarter of 2010, while the decline was $870 thousand for the nine months
ended September 30, 2011, compared to the same period in 2010. Decreases in
personnel costs and FDIC assessment expense as well as lower provision expense
for loan and late fees associated with the loan portfolio contributed to the
decline in non-interest expense for both the three and nine month periods.

Non-performing assets, which include non-accrual loans, loans delinquent 90
days or more, troubled debt restructurings and other real estate, increased to
$16.2 million, or 4.35% of total assets, at September 30, 2011, from $11.3
million, or 3.01% of total assets at December 31, 2010. Net loan charge-offs
of $1.0 million, or .50% of average loans, through the nine months ended
September 30, 2011, decreased from $2.6 million, or 1.18% of average loans,
during the same period in 2010. However, in spite of the improved
charge-offs, the allowance for loan losses at September 30, 2011, increased to
$6.1 million, or 3.17% of total loans, from $2.4 million, or 1.15% of total
loans, at December 31, 2010. The increase in the allowance reflects an
increase in the loan loss provision primarily in the 3rd quarter of 2011.

The increase in non-performing assets is chiefly the result of the transfer of
one commercial real estate related loan originated in the Company's Baton
Rouge, Louisiana office to non-accrual status during the 3rd quarter of 2011.
The increased provision for loan losses is primarily attributable to
estimated exposure on this credit, as well as the reassessment of a previously
impaired loan and adjustments to historical loss and qualitative factors in
the general reserve calculation to reflect current economic conditions in the
Company's markets. The Company determined to transfer the above-mentioned
credit to non-accrual status based on current project financial information
and internal adjustments to a prior appraisal. The Company also ordered an
independent appraisal of the real estate collateral securing this credit,
although the Company has not yet received the appraisal as of the date of this
release. However, experience with recent independent appraisals reflects a
significant downward valuation trend in keeping with the general negative
economic environment.

The Company's Regulatory Tier 1 Capital of $42 million, or approximately 18%
of risk weighted assets, substantially exceeds the approximate $9 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, 2011, the Company reported assets of $371.3 million and equity
of $38.4 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, 2011, were 2,138,466.

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.

http://www.bkbank.com

                   Britton and Koontz Capital Corporation
                            Financial Highlights
                                 (Unaudited)
                        For the three months ended  For the nine months ended
                              September 30,               September 30,
                            2011          2010          2011         2010
Income Statement Data
                              $           $             $         $  
Interest income             3,778,488    4,624,042    12,185,886   14,245,788
Interest expense            1,002,218    1,435,597     3,438,800    4,392,118
Net interest income         2,776,270    3,188,445     8,747,086    9,853,670
Provision for loan
losses                      3,380,000      150,000     4,692,000    1,449,996
Net interest
income/(loss) after
provision for loan
losses                      (603,730)    3,038,445     4,055,086    8,403,674
Non-interest income         2,076,589      985,118     5,040,923    3,278,770
Non-interest expense        2,745,067    3,171,196     9,502,519   10,373,166
Income/(loss) before
income taxes              (1,272,208)      852,367     (406,510)    1,309,278
Income taxes                (551,401)      171,520     (490,236)       61,288
                              $         $        $          $   
Net income/(loss)          (720,807)     680,847       83,726    1,247,990
Return on Average
Assets                         -0.77%        0.73%         0.03%        0.44%
Return on Average
Equity                         -7.27%        6.75%         0.28%        4.14%
Diluted:
Net income/(loss) per   $        $        $       $     
share                         (0.34)       0.32        0.04      0.58
Weighted average
shares outstanding          2,141,944    2,135,800     2,140,730    2,134,685
                                                                   September
                        September 30,   June 30,    December 31,      30,
Balance Sheet Data          2011          2011          2010         2010
                                  $             $             $          $ 
Total assets              371,302,355  382,409,875   375,419,683  374,615,000
Cash and due from
banks                      56,041,151   39,442,715     5,818,853    5,769,857
Federal funds sold                  -            -       112,497            -
Investment securities     108,990,350  130,791,472   138,904,366  138,225,812
Loans, net of UI &
loans held for sale       192,030,296  196,749,011   210,564,816  214,125,613
Loans held for sale         4,387,626    3,756,617     6,074,014    2,808,369
Allowance for loan
losses                      6,085,035    3,562,305     2,420,143    2,714,126
Deposits-interest
bearing                   212,699,605  217,118,074   212,908,407  214,296,621
Deposits-non interest
bearing                    54,499,352   58,681,484    45,634,123   42,455,103
Total deposits            267,198,957  275,799,558   258,542,530  256,751,724
Short-term debt            14,984,408   17,520,670    24,977,895   25,329,987
Long-term debt             47,000,000   47,000,000    49,000,000   49,000,000
Stockholders' equity       38,384,773   39,783,821    39,931,973   40,374,442
                        $        $        $       $     
Book value (per share)         17.95       18.57        18.70      18.91
Total shares
outstanding                 2,138,466    2,142,466     2,135,466    2,135,466
                                                                   September
                        September 30,   June 30,    December 31,      30,
Asset Quality Data          2011          2011          2010         2010
                                $          $           $        $   
Non-accrual loans          11,748,495    8,851,825     7,509,711    6,701,399
Loans 90+ days past
due                           219,963      653,727       484,154      247,825
Troubled debt
restructurings, still
accruing                      712,474      147,749             -            -
Total non-performing
loans                      12,680,932    9,653,301     7,993,865    6,949,224
Other real estate
owned                       3,469,542    2,975,736     3,303,189    2,895,569
Total non-performing            $            $            $       $   
assets                     16,150,474   12,629,037    11,297,054    9,844,793
Total non-performing
assets to average
assets                          4.26%        3.32%         3.00%        2.60%
                              $         $            $        $   
Net chargeoffs - ytd        1,027,107     169,838     3,133,599    2,614,611
YTD net chargeoffs as
a percent of average
loans                           0.50%        0.08%         1.42%        1.18%

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, +1-601-445-2481 Fax, corporate@bkbank.com
 
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