Britton & Koontz Capital Corporation

500 Main Street
P O Box 1407
601-445-2481  Fax
Natchez, MS  39121
March 17, 2010
W. Page Ogden, President & CEO
(Nasdaq - BKBK)
William M. Salters, Treasurer & CFO

     Natchez, Mississippi – Britton & Koontz Capital Corporation (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
For the Three Months ended December 31,
For the Twelve Months ended December 31,
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  
Return on Average Assets
    -0.06 %     0.87 %     0.40 %     0.91 %
Return on Average Equity
    -0.57 %     9.23 %     4.01 %     9.57 %
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          
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 %        


The following information was filed by Britton Koontz Capital Corp (BKBK) on Wednesday, March 17, 2010 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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