Britton & Koontz Revises Earnings for FYE 2009 and Reports 4th Quarter 2009 Loss
NATCHEZ, Miss., March 17 /PRNewswire-FirstCall/ -- Britton & Koontz Capital Corporation (Nasdaq: BKBK) (the "Company") re-evaluated its potential exposure with respect to two impaired commercial loans in its Mississippi market and has increased the allowance for loan loss by $1 million. The Company determined that the provision expense necessary to increase the allowance should be charged to the Company's fourth quarter earnings. As a result, the Company's earnings for the twelve months ended December 31, 2009, were $1.6 million, while the Company experienced a loss of $58 thousand for the three months ended December 31, 2009. These amounts reflect a downward revision from earnings of $569 thousand and $2.3 million for the three and twelve months ended December 31, 2009, that the Company reported on January 25, 2010.
As noted above, the additional provision expense is associated with two commercial loans which are secured by commercial real estate. Both of these loans were identified as impaired at December 31, 2009; however, based upon additional information available, the Company increased the level of impairment on each loan from a partial to total impairment. For one of the loans, Britton & Koontz Bank, N.A. (the "Bank") foreclosed on the commercial real estate securing the loan in January, 2010. Upon gaining access to the property, the Bank discovered that substantial damage and theft had occurred sometime during the weeks of the foreclosure proceedings. The Company believes such damage and theft is covered by insurance, and an insurance claim has been filed in connection with the loss (as well as a police report). At this time, though, the Company cannot be sure whether it will fully recover the previously estimated fair value of the collateral. With respect to the other loan, the loan was classified as partially impaired at December 31, 2009, on the basis of alleged borrower fraud relating to the borrower's title to the commercial real estate securing the loan. The Company demanded payment under the loan's title insurance policy and brought suit against the title insurer in December, 2009. Since the end of 2009, the increasing likelihood of delays in resolving the Company's lawsuit has prompted the Company to increase its partial reserve allocation to a full reserve.
The additional reserves required with respect to these two commercial loans have increased by a total of $1 million to the Company's provision expense for the fourth quarter of 2009. In the absence of negotiated settlements of the Company's claims with the insurance companies, charge-off of some or all of the identified credit exposures on the two credits, equal to approximately $1.5 million, may be necessary at the end of the first quarter of 2010. The Company's revised allowance for loan loss will be $3.9 million, or 1.73% of loans at December 31, 2009, compared to $2.9 million, or 1.29% of loans reported in the Company's January 25, 2010 earnings release.
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. As of December 31, 2009, the Company reported assets of $393 million and equity of $39.8 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 March 1, 2010, were 2,135,466.
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 For the Twelve Months
ended ended
December 31, December 31,
2009 2008 2009 2008
---- ---- ---- ----
Income Statement Data
---------------------
Interest income $5,079,559 $5,596,258 $20,979,459 $22,562,537
Interest expense 1,518,491 1,884,992 6,459,931 8,753,557
--------- --------- --------- ---------
Net interest income 3,561,068 3,711,266 14,519,528 13,808,980
Provision for loan
losses 1,550,000 370,000 3,420,000 730,000
--------- --------- --------- ---------
Net interest income
after provision
for loan losses 2,011,068 3,341,266 11,099,528 13,078,980
Non-interest income 744,698 674,860 2,820,368 3,014,368
Non-interest
expense 3,254,875 2,820,647 12,365,940 11,280,591
--------- --------- --------- ---------
Income before
income taxes (499,109) 1,195,479 1,553,956 4,812,757
Income taxes (440,738) 330,126 (69,673) 1,309,994
------- -------- --------- ---------
Net income $(58,371) $865,353 $1,623,629 $3,502,763
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Return on Average
Assets -0.06% 0.87% 0.40% 0.91%
===== ==== ==== ====
Return on Average
Equity -0.57% 9.23% 4.01% 9.57%
===== ==== ==== ====
Diluted:
Net income per share $(0.03) $0.41 $0.76 $1.65
====== ===== ===== =====
Weighted average
shares
outstanding 2,127,126 2,117,966 2,125,799 2,117,966
========= ========= ========= =========
December 31, September 30, December 31,
Balance Sheet Data 2009 2009 2008
------------------ ------------ ------------ ------------
Total assets $393,110,149 $395,830,265 $413,076,825
Cash and due from
banks 10,303,641 7,552,892 6,951,543
Federal funds sold 58,799 314,942 -
Investment securities 146,590,266 152,599,328 170,720,427
Loans, net of UI &
loans held for sale 223,817,377 223,510,893 225,511,297
Loans held for sale 784,063 764,500 -
Allowance for loan
losses 3,878,738 2,444,714 2,397,802
Deposits-interest
bearing 201,094,816 208,819,093 206,094,593
Deposits-non interest
bearing 49,847,304 43,381,549 51,119,827
---------- ---------- ----------
Total deposits 250,942,120 252,200,642 257,214,420
Short-term debt 50,389,079 52,087,432 71,717,942
Long-term debt 49,000,000 47,000,000 40,010,824
Stockholders' equity 39,840,889 40,964,944 39,541,069
Book value (per share) $18.74 $19.26 $18.67
Total shares
outstanding 2,126,466 2,126,466 2,117,966
Asset Quality Data
------------------
Non-accrual loans $8,709,058 $6,148,680 $3,567,907
Loans 90+ days
past due 1,003,944 1,009,513 517,779
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Total non-performing
loans 9,713,002 7,158,193 4,085,686
Other real estate owned 815,207 1,177,100 919,204
------- --------- -------
Total non-performing
assets $10,528,209 $8,335,293 $5,004,890
Total non-performing
assets
to average assets 2.62% 2.07% 1.31%
Net chargeoffs - ytd $1,939,064 $1,823,088 $763,135
YTD net chargeoffs
as a percent
of average net loans 0.87% 0.82% 0.34%
SOURCE Britton & Koontz Capital Corporation
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