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 30,



June 30,



December 31,



September 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 30,



June 30,



December 31,



September 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

Copyright 2011 PR Newswire

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