Britton & Koontz Capital Reports Third Quarter 2010 Earnings

Oct 22, 2010, 14:23 ET from Britton & Koontz Capital Corporation

NATCHEZ, Miss., Oct. 22 /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 nine month period ended September 30, 2010.

Net income for the three months ended September 30, 2010, was $681 thousand, or $.32 per diluted share, compared to $324 thousand, or $.15 per diluted share, for the quarter ended September 30, 2009.  The increase is primarily related to a decrease in loan provision expense offset by lower net interest income from the reduction in size of the Bank's balance sheet.  For the nine month period ended September 30, 2010, net income and diluted earnings per share were $1.2 million and $0.58, respectively, compared to $1.7 million and $0.79, respectively, for the same period in 2009.  The decrease for the nine month period is due primarily to lower net interest income over the period offset by a decline in loan loss provision expense.

Net interest income for the three and nine month periods ended September 30, 2010, decreased $770 thousand and $420 thousand, respectively, over the same period in 2009.  The decline is primarily due to a decrease in average earning assets during both the quarter and year to date period comparisons.  The lower interest rate environment over the first nine months of 2010 made profitable reinvestment of cash flows back into the market difficult, contributing to the decrease in net interest income during both comparative periods.  Instead, cash flows were primarily used to repay short-term debt.  Lower interest rates also contributed to the decline of interest rate spread and margin during both periods.  Interest rate spread declined 25 and 11 basis points to 3.22% and 3.27% for the three and nine month period ended September 30, 2010, respectively.  Interest rate margin declined 26 and 13 basis points to 3.60% and 3.65% for the three and nine months ended September 30, 2010, respectively.

Non-interest income increased $287 thousand for the 3rd quarter of 2010 compared to the 3rd quarter of 2009 primarily from higher mortgage related income and gains on the sale of other real estate offset by decreases in service charges on deposit accounts.  Non-interest income increased $1.2 million to $3.3 million for the nine months ended September 30, 2010, compared to $2.1 million during the same period in 2009.  The increase is primarily due to higher mortgage related income, gains on sales of other real estate and securities.  Non-interest expense remained relatively stable for the 3rd quarter of 2010 compared to the 3rd quarter of 2009.  Non-interest expense for the nine month period ended September 30, 2010, increased $1.2 million over the comparable period in 2009.  Approximately 50% of the increase is due to higher personnel costs associated with the new hires in the mortgage division along with write-downs of other real estate, higher occupancy and equipment costs and other charges to expense related to the provision of loan and late fees receivable.  These additional costs were offset by lower FDIC assessment charges due to a special assessment of $183 thousand made in the 1st half of 2009.

Non-performing assets, which includes non-accrual loans, loans delinquent 90 days or more and other real estate, decreased to $9.8 million, or 2.63% of total assets, at September 30, 2010, from $10.5 million, or 2.68% of total assets at December 31, 2009.  After higher than normal net charge-offs during the first two quarters of 2010, the Bank experienced a slowdown in charge-offs and net recoveries of $25 thousand were recorded in the 3rd quarter.  The Company's loan loss provision in the 3rd quarter of 2010 was $150 thousand, compared to $920 thousand for the corresponding period in 2009.  For the nine months ended September 30, 2010, the Company's loan loss provision was $1.4 million compared to $1.9 million during the same period in 2009.  The allowance for loan losses of $2.7 million, or 1.27% of loans, at September 30, 2010, compares to $3.9 million, or 1.73% of loans, at December 31, 2009.  The Company believes the allowance for loan loss account is adequate as of September 30, 2010.

The Company's Regulatory Tier 1 Capital of $42 million, or approximately 16% 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, and three in Baton Rouge, Louisiana, and a loan production office in Central, Louisiana.  As of September 30, 2010, the Company reported assets of $374.6 million and equity of $40.4 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, 2010, were 2,135,466.

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.

Britton and Koontz Capital Corporation

Financial Highlights

(Unaudited)

For the three months ended

For the nine months ended

September 30,

September 30,

2010

2009

2010

2009

Income Statement Data

Interest income

$ 4,624,042

$ 5,223,232

$ 14,245,788

$ 15,899,900

Interest expense

1,435,597

1,573,844

4,392,118

4,941,441

Net interest income

3,188,445

3,649,388

9,853,670

10,958,459

Provision for loan losses

150,000

920,000

1,449,996

1,870,000

Net interest income after

provision for loan losses

3,038,445

2,729,388

8,403,674

9,088,459

Non-interest income

985,118

698,239

3,278,770

2,075,669

Non-interest expense

3,171,196

3,000,373

10,373,166

9,111,065

Income before income taxes

852,367

427,254

1,309,278

2,053,063

Income taxes

171,520

103,059

61,288

371,065

Net income

$ 680,847

$ 324,195

$ 1,247,990

$ 1,681,998

Return on Average Assets

0.73%

0.33%

0.44%

0.56%

Return on Average Equity

6.75%

3.18%

4.14%

5.56%

Diluted:

Net income per share

$ 0.32

$ 0.15

$ 0.58

$ 0.79

Weighted average shares outstanding

2,135,800

2,127,070

2,134,685

2,125,282

September 30,

December 31,

September 30,

Balance Sheet Data

2010

2009

2009

Total assets

$ 374,615,000

$ 393,110,149

$ 395,830,265

Cash and due from banks

5,769,857

10,303,641

7,552,892

Federal funds sold

-

58,799

314,942

Investment securities

138,225,812

146,590,266

152,599,328

Loans, net of UI & loans held for sale

214,125,613

223,817,377

223,510,893

Loans held for sale

2,808,369

784,063

764,500

Allowance for loan losses

2,714,126

3,878,738

2,444,714

Deposits-interest bearing

214,296,621

201,094,816

208,819,093

Deposits-non interest bearing

42,455,103

49,847,304

43,381,549

Total deposits

256,751,724

250,942,120

252,200,642

Short-term debt

25,329,987

50,389,079

52,087,432

Long-term debt

49,000,000

49,000,000

47,000,000

Stockholders' equity

40,374,442

39,840,889

40,964,944

Book value (per share)

$ 18.91

$ 18.74

$ 19.26

Total shares outstanding

2,135,466

2,126,466

2,126,466

Asset Quality Data

Non-accrual loans

$ 6,701,399

$ 8,709,058

$ 6,148,680

Loans 90+ days past due

247,825

1,003,944

1,009,513

Total non-performing loans

6,949,224

9,713,002

7,158,193

Other real estate owned

2,895,569

815,207

1,177,100

Total non-performing assets

$ 9,844,793

$ 10,528,209

$ 8,335,293

Total non-performing assets to average assets

2.60%

2.62%

2.07%

Net chargeoffs - ytd

$ 2,614,611

$ 1,939,064

$ 1,823,088

YTD net chargeoffs as a percent of average loans

1.18%

0.87%

0.82%

SOURCE Britton & Koontz Capital Corporation



RELATED LINKS

http://www.bkbank.com