Britton & Koontz Capital Reports 2011 Earnings

                Britton & Koontz Capital Reports 2011 Earnings

PR Newswire

NATCHEZ, Miss., Jan. 30, 2012

NATCHEZ, Miss., Jan. 30, 2012 /PRNewswire/ -- The Board of Directors of
Britton & Koontz Capital Corporation (Nasdaq:  BKBK, "the Company") today
reported net income for the year ended December 31, 2011, of $394 thousand, or
$.18 per basic and diluted share, compared to $1.9 million, or $.90 per basic
and diluted share, for 2010. Net income for the quarter ended December 31,
2011, was $311 thousand, or $.15 per basic and diluted share, compared to $665
thousand, or $.31 per basic and diluted share, for the fourth quarter of 2010.
The returns on average assets and equity for the year ended December 31,
2011, were .11% and 1.00%, respectively, compared to .51% and 4.76%,
respectively, for same period in 2010. 

Net interest income for the three and twelve months ended December 31, 2011,
decreased $630 thousand and $1.7 million, respectively, over the same periods
in 2010. The decrease for both periods is primarily due to the shift in
longer-term, higher yielding loans and investment securities to cash. Factors
contributing to the shift were lower volumes and returns on investment
securities due to the lower interest rate environment during 2011, which made
profitable reinvestment of cash flows back into the market difficult and
continued weak loan demand in all markets. In both cases, cash flow was
either used to pay down short-term debt or build up deposits at the Federal
Reserve Bank. As a result of these changes, asset yields declined twice as
fast as funding costs, negatively impacting net interest income. For 2011 as
compared to 2010, interest yield on earning assets fell .84% while interest
cost on funding liabilities fell by only .42%. For the quarterly comparative
period, interest yield on earning assets fell 1.10%, while interest costs on
funding liabilities fell by .47%. Net interest margin declined 70 and 47
basis points to 2.97% and 3.19%, respectively, for the quarter and year ended
December 31, 2011. Net interest income is expected to improve if longer-term
interest rates increase and the spread in the yield curve begins to widen. 

Non-interest income decreased $276 thousand for the 4th quarter of 2011
compared to the 4th quarter of 2010 primarily from lower mortgage-related
income generated in the 4th quarter of 2011 and gains on the sale of other
real estate in 2010. However, non-interest income increased $1.5 million for
the year ended December 31, 2011, compared to the year ended December 31,
2010. The increase is reflected in the increase in gains on the sale of
investment securities by $2.2 million offset by a decrease in gains on the
sale of other real estate by $648 thousand. Mortgage-related income for 2011
remained fairly stable at $1.1 million.

Non-interest expense declined $166 thousand for the 4th quarter of 2011
compared to the 4th quarter of 2010 due primarily to lower personnel expense.
Non-interest expense for the year ended December 31, 2011, decreased $1.1
million over the comparable period in 2010. Approximately $442 thousand of
the annual decrease in non-interest expense is due to lower personnel costs
along with a $69 thousand decrease in FDIC assessment charges due to changes
in the assessment calculation, lower other real estate costs of $100 thousand,
and lower charges to expense of $318 thousand related to the provision of loan
and late fees receivable. 

Since December 31, 2010, total assets decreased $9.3 million to $366.1 million
at December 31, 2011. The change is due primarily to decreases in total
investment securities of $19.9 million, a decrease in net loans of $31.5
million, an increase in cash and due from banks of $42.8 million, and an
increase in other real estate of $398 thousand. Total deposits increased $4.5
million to $263.1 million at December 31, 2011, compared to $258.5 million as
of December 31, 2010. Borrowed funds decreased $11.3 million to $57.5 million
at December 31, 2011, compared to $68.8 million at December 31, 2010. 

Non-performing assets, which include non-accrual loans, loans delinquent 90
days or more, and other real estate, increased to $12.7 million, or 3.47% of
total assets, at December 31, 2011, from $11.3 million, or 3.01% of total
assets, at December 31, 2010. Net charge-offs decreased $309 thousand to $2.8
million at December 31, 2011, from $3.1 million at December 31, 2010. Net
charge-offs as a percentage of average loans remained relatively the same at
1.41% at December 31, 2011, compared to 1.42% at December 31, 2010. The
Company added $4.7 million to its allowance for probable loan losses in 2011
which ended the year at $4.3 million, compared to $2.4 million in 2010. The
higher amount in 2011 was primarily due to increased problem assets including
a $4.2 million multi-family loan that was placed on non-accrual in the 3rd
quarter of 2011. The Company believes the allowance for loan loss account is
adequate as of December 31, 2011.

Tier 1 Capital for the Company and its wholly-owned subsidiary, Britton &
Koontz Bank, N.A., was $42.1 million and $39.8 million, respectively, at
December 31, 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, Mississippi, two in Vicksburg, Mississippi, and
three in Baton Rouge, Louisiana, and a loan production office in Central,
Louisiana. As of December 31, 2011, the Company reported assets of $366.1
million and stockholders' equity of $38.8 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,
2011, were 2,138,466.

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.

http://www.bkbank.com

Britton and Koontz Capital Corporation
Financial Highlights
(Unaudited)
                      For the three months ended  For the twelve months ended
                      December 31,                December 31,
                      2011           2010         2011           2010
Income Statement Data
                      $                         $ 
Interest income       3,540,368      $ 4,526,332  15,726,254     $ 18,772,120
Interest expense      956,189        1,312,618    4,394,991      5,704,736
Net interest income   2,584,179      3,213,714    11,331,263     13,067,384
Provision for loan
losses                -              225,004      4,692,000      1,675,000
Net interest
income/(loss) after
provision for loan
losses                2,584,179      2,988,710    6,639,263      11,392,384
Non-interest income   740,299        1,016,196    5,781,222      4,294,967
Non-interest expense  3,002,230      3,168,294    12,504,750     13,541,460
Income/(loss) before
income taxes          322,248        836,612      (84,265)       2,145,891
Income taxes          11,496         171,858      (478,741)      233,146
                      $           $           $           $ 
Net income/(loss)     310,752       664,754     394,476       1,912,745
Return on Average
Assets                0.34%          0.72%        0.11%          0.51%
Return on Average
Equity                3.23%          6.61%        1.00%          4.76%
Diluted:
Net income/(loss) per $        $        $        $     
share                 0.15          0.31        0.18          0.90
Weighted average
shares outstanding    2,138,466      2,136,047    2,139,926      2,134,941
                      December 31,                December 31,
Balance Sheet Data    2011                        2010
Total assets          $ 366,091,232               $ 375,419,683
Cash and due from
banks                 48,622,717                  5,818,853
Federal funds sold    -                           112,497
Investment securities 118,994,337                 138,904,366
Loans, net of UI &
loans held for sale   184,142,032                 210,564,816
Loans held for sale   2,914,468                   6,074,014
Allowance for loan
losses                4,287,910                   2,420,143
Deposits-interest
bearing               209,960,303                 212,908,407
Deposits-non interest
bearing               53,097,241                  45,634,123
Total deposits        263,057,544                 258,542,530
Short-term debt       35,639,635                  24,977,895
Long-term debt        27,000,000                  49,000,000
Stockholders' equity  38,835,739                  39,931,973
Book value (per       $                      $     
share)                18.16                      18.70
Total shares
outstanding           2,138,466                   2,135,466
                      December 31,                December 31,
Asset Quality Data    2011                        2010
                      $                         $  
Non-accrual loans     8,177,672                   7,509,711
Loans 90+ days past
due                   198,902                     484,154
Troubled debt
restructurings, still
accruing              622,757                     -
Total non-performing
loans                 8,999,331                   7,993,865
Other real estate
owned                 3,701,392                   3,303,189
Total non-performing  $                          $ 
assets                12,700,723                  11,297,054
Total non-performing
assets to average
assets                3.38%                       3.00%
                      $                         $  
Net chargeoffs - ytd  2,824,232                   3,133,599
YTD net chargeoffs as
a percent of average
loans                 1.41%                       1.42%

SOURCE Britton & Koontz Capital Corporation

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