Britton & Koontz Capital Reports Earnings For Second Quarter 2012

Jul 31, 2012, 16:57 ET from Britton & Koontz Capital Corporation

NATCHEZ, Miss., July 31, 2012 /PRNewswire-FirstCall/ -- The Board of Directors of Britton & Koontz Capital Corporation (OTC-QB or OTCBB: 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, 2012.  Net income for the quarter ended June 30, 2012, was $69 thousand, or $.03 per diluted share, compared to $229 thousand, or $.11 per diluted share, for the quarter ended June 30, 2011.  For the six month period ended June 30, 2012, net income and diluted earnings per share was $312 thousand and $0.15, respectively, a decrease from $805 thousand and $0.38, respectively, for the same period in 2011. 

Net interest income for the three and six month periods ended June 30, 2012, decreased $618 thousand and $1.3 million, respectively, over the same period in 2011.  Approximately 60% of the decrease over the comparative periods was a result of the decreases in the volume of average earning assets of $41 million and $34 million, respectively.  Low loan demand and a poor investment environment were the primary contributors to the decrease in volumes.  Although the decline in the volume of earnings assets represents the majority of the decline in net interest income, lower interest rates were a major contributor as well, accounting for approximately 40% of the decline in net interest income.  Cash flows from higher yielding assets into lower yielding assets occurred as loans and investment securities were paid down and held as cash due to weak loan demand and the poor investment environment.  As a result, interest rate spread declined 30 and 39 basis points to 2.55% and 2.58% for the three and six month period ended June 30, 2012, respectively.  Not only did the decline in interest rate have a significant negative effect to net interest income, it also had a disproportionate effect on asset yields as compared to funding cost.  For both the three and six month comparative periods, asset yields declined 67 and 76 basis points, respectively, while funding costs declined only 37 and 36 basis points, respectively.  Interest rate margin declined 36 and 45 basis points, respectively, to 2.84% and 2.87% for the same periods.

Non-interest income decreased $355 thousand for the 2nd quarter of 2012 compared to the 2nd quarter of 2011, while non-interest income decreased $1.2 million for the first six months of 2012 compared to the corresponding period in 2011.  Both period decreases were primarily due to gains of $656 thousand and $1.3 million on the sale of investment securities and higher-mortgage related income in 2011.  Non-interest expense decreased $211 thousand for the 2nd quarter of 2012 compared to the 2nd quarter of 2011, while non-interest expense decreased $461 thousand for the first six months of 2012 compared to the corresponding period in 2011.  Both period decreases were due primarily to lower personnel costs.

Non-performing assets ("NPA"), which include non-accrual loans, troubled debt restructurings, loans delinquent 90 days or more and other real estate, were relatively unchanged at $12.7 million, or 3.75% of total assets, at June 30, 2012, from $12.7 million, or 3.47% of total assets, at December 31, 2011.  The decline in total assets contributed to the increase in the ratio of NPA to total assets.  Net charge-offs for the six months ended June 30, 2012, were $348 thousand compared to $170 thousand for the six months ended June 30, 2011, and $2.8 million for the year ended December 31, 2011.

The Company did not provide any loan loss provision during the first six months of 2012, as management determined that the existing balance of the allowance for loan and lease loss account ("ALLL") was sufficient to cover losses expected in the portfolio.  The ALLL of $3.9 million, or 2.34% of total loans, at June 30, 2012, compares to $3.6 million, or 1.77% of total loans, at June 30, 2011 and $4.3 million, or 2.29% of total loans, at December 31, 2011.  Even with the charge-offs during 2012, the Company believes the ALLL remains adequate as of June 30, 2012.    

The Company's regulatory capital substantially exceeds the minimum regulatory capital requirements.

Effective July 10, 2012, the Company voluntarily delisted its common stock from NASDAQ.  The stock has continued to trade under the symbol "BKBK" on the OTC-QB or OTCBB marketplace.  Investors can view the Company's stock quotes for the Company at www.otcmarkets.com or www.otcbb.com/.  The Company is in the process of terminating the registration of its common stock and suspending its public reporting obligations under Sections 12(g) and 15(d) of the Securities Exchange Act of 1934, as amended. 

The Company expects to discontinue issuing earnings releases effective in the 3rd quarter of 2012 and instead begin posting its quarterly regulatory reports along with its annual report on its website at www.bkbank.com

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, 2012, the Company reported assets of $340.7 million and equity of $39.6 million.  Total shares outstanding at June 30, 2012, were 2,138,466 and the transfer agent is American Stock Transfer & Trust Company.

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 developments.

  



















Britton and Koontz Capital Corporation

Financial Highlights

(Unaudited)












For the three months ended


For the six months ended



June 30,


June 30,












2012


2011


2012


2011

Income Statement Data









Interest income


$     3,108,409


$     4,103,901


$ 6,386,032


$ 8,407,398

Interest expense


830,663


1,208,616


1,712,004


2,436,583

Net interest income


2,277,746


2,895,285


4,674,028


5,970,815

Provision for loan losses


-


562,000


-


1,312,000

Net interest income/(loss) after









 provision for loan losses


2,277,746


2,333,285


4,674,028


4,658,815

Non-interest income


968,748


1,323,901


1,697,374


2,855,210

Non-interest expense


3,304,203


3,514,781


6,187,098


6,648,330

Income/(loss) before income taxes


(57,709)


142,405


184,304


865,695

Income taxes


(127,093)


(86,706)


(127,610)


61,164

Net income/(loss)


$          69,384


$        229,111


$    311,914


$    804,531










Return on Average Assets


0.08%


0.24%


0.18%


0.42%

Return on Average Equity


0.71%


2.31%


1.59%


4.05%










Diluted:









Net income/(loss) per share 


$              0.03


$              0.11


$          0.15


$          0.38

Weighted average shares outstanding


2,138,466


2,143,497


2,138,466


2,140,714





















June 30,


December 31,





Balance Sheet Data


2012


2011





Total assets


$ 340,714,119


$ 366,091,232





Cash and due from banks


50,165,706


48,622,717





Federal funds sold


-


-





Investment securities


105,973,864


118,994,337





Loans, net of UI & loans held for sale


164,761,099


184,142,032





Loans held for sale


3,864,726


2,914,468





Allowance for loan losses


3,940,236


4,287,910





Deposits-interest bearing


187,385,014


209,960,303





Deposits-non interest bearing


50,771,545


53,097,241





Total deposits


238,156,559


263,057,544





Short-term debt


34,370,251


35,639,635





Long-term debt


27,000,000


27,000,000





Stockholders' equity


39,567,468


38,835,739





Book value (per share)


$            18.50


$            18.16





Total shares outstanding


2,138,466


2,138,466


































June 30,


December 31,





Asset Quality Data


2012


2011





Non-accrual loans


$     5,211,677


$     8,177,672





Loans 90+ days past due


54,738


198,902





Troubled debt restructurings, still accruing


-


615,392





Total non-performing loans


5,266,415


8,991,966





Other real estate owned


7,489,002


3,701,392





Total non-performing assets


$   12,755,417


$   12,693,358





Total non-performing assets to average assets


3.67%


3.38%





Net chargeoffs - ytd


$        347,675


$     2,824,232





YTD net chargeoffs as a percent of average loans


0.20%


1.41%





  

SOURCE Britton & Koontz Capital Corporation



RELATED LINKS

http://www.bkbank.com