U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report Under Section 13 Or 15(d) Of The Securities Exchange
Act Of 1934 For The Quarterly Period Ended September 30, 1996
[ ] Transition Report Pursuant To Section 13 Or 15(d) Of The Securities
Exchange Act Of 1934
Commission File Number 02-22606
BRITTON & KOONTZ CAPITAL CORPORATION
Mississippi 64-0665423
(State of Incorporation) (IRS Employer
Identification No.)
500 Main Street, Natchez, Mississippi 39120
Telephone: 601-445-5576
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X , No
441,072 Shares of Common Stock, Par Value $10.00, were issued and outstanding
as of October 1, 1996.
Transitional Small Business Disclosure Format: Yes , No X
BRITTON & KOONTZ CAPITAL CORPORATION
AND SUBSIDIARY
INDEX
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets for September 30, 1996
and December 31, 1995
Consolidated Statements of Income for the Three Months and
the Nine Months Ended September 30, 1996 and September 30, 1995
Consolidated Statements of Stockholders' Equity
for the Nine Months Ended September 30, 1996 and
September 30, 1995
Consolidated Statements of Cash Flows for the Nine
Months Ended September 30, 1996 and September 30, 1995
Notes to the Consolidated Financial Statements
Item 2. Management's Discussion and Analysis or
Plan of Operation
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------ ------------
ASSETS:
<S> <C> <C>
Cash and due from banks:
Non-interest bearing $ 3,532,876 $ 3,340,954
Interest bearing 251,260 1,361,539
------------ ------------
Total cash and due from banks 3,784,136 4,702,493
Federal funds sold 175,000 1,450,000
Investment securities:
Held-to-maturity(estimated market value of
$45,952,889 in 1996 and $47,181,462 in 1995) 46,237,459 46,794,280
Equity securities 1,211,850 1,198,950
Loans, less unearned income of $269,440 in 1996 and
$284,865 in 1995; and allowance for loan losses of
$685,156 in 1996 and $723,641 in 1995 94,129,744 91,998,966
Bank premises and equipment, net of accumulated
depreciation 3,702,185 3,569,586
Other real estate owned,less allowance for losses
of $0 in 1996 and $11,658 in 1995 63,250 258,536
Accrued interest receivable 1,356,696 1,137,337
Cash surrender value life insurance 627,328 599,646
Other assets 69,453 77,445
------------ ------------
Total Assets $151,357,101 $151,787,239
============ ============
LIABILITIES:
Deposits
Non-interest bearing 15,419,681 13,983,026
Interest bearing 112,498,586 114,584,214
------------ ------------
Total Deposits $127,918,267 $128,567,240
Securities sold under repurchase agreements 2,454,053 2,722,882
Federal funds purchased 0 0
Accrued Interest Payable 729,044 817,119
Negative Goodwill, net of accumulated amortization
of $1,462,550 in 1996 and $1,196,030 in 1995 1,597,872 1,864,392
Advances from borrowers for taxes & insurance 299,394 381,644
Accrued taxes and other liabilities 1,965,282 2,062,725
------------ ------------
Total Liabilities $134,963,912 $136,416,002
------------ ------------
STOCKHOLDERS EQUITY:
Common stock, $10 par value per share; 3,000,000
shares authorized; 441,072 shares issued and
outstanding in 1996 and 1995 4,410,720 4,410,720
Additional paid-in-capital 3,395,617 3,395,617
Retained earnings 8,586,852 7,564,900
------------ ------------
Total Stockholders' Equity $ 16,393,189 $ 15,371,237
------------ ------------
Total Liabilities and Stockholders' Equity $151,357,101 $151,787,239
============ ============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
1996 1995 1996 1995
__________ __________ __________ __________
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans $2,074,386 $1,974,897 $6,094,693 $5,560,228
Interest on investment securities
Taxable interest income 796,899 868,074 2,430,619 2,731,465
Exempt from federal taxes 19,609 17,340 57,737 52,332
Interest on federal funds sold 996 4,960 58,005 8,036
---------- --------- ---------- ----------
Total Interest Income $2,891,890 $2,865,271 $8,641,054 $8,352,061
---------- ---------- ---------- ----------
Interest Expense:
Interest on deposits $1,217,977 $1,296,224 $3,746,095 $3,616,533
Interest on federal funds purchase 34,281 5,296 34,515 22,315
Interest on securities sold under
repurchase agreements 34,333 34,897 110,358 205,914
---------- ---------- ---------- ----------
Total Interest expense $1,286,591 $1,336,417 $3,890,968 $3,844,762
---------- ---------- ---------- ----------
Net Interest Income $1,605,299 $1,528,854 $4,750,086 $4,507,299
Provision for loan losses 0 25,000 50,000 $75,000
---------- ---------- ---------- ----------
Net interest income after
Provision for loan Losses $1,605,299 $1,503,854 $4,700,086 $4,432,299
---------- ---------- ---------- ----------
Other Income:
Service charge on deposit accounts 167,917 161,661 480,622 461,160
Income from fiduciary activities 13,385 13,799 41,323 42,135
Insurance premiums and commissions 7,864 10,563 31,713 28,119
Gain/(loss) on sale of ORE 0 0 (7,086) (5,610)
Gain/(loss) on sale of mortgage loans 615 0 (399) 0
Gain on sale of premises & equipment 0 0 100 0
Amortization of negative goodwill 84,880 101,560 266,520 318,790
Valuation adjustment loans held for sale 0 0 0 56,248
Other 58,466 23,104 195,039 106,619
---------- ---------- ---------- ----------
Total other income $ 333,127 $ 310,687 $1,007,832 $1,007,461
---------- ---------- ---------- ----------
Other Expense
Salaries 601,838 473,581 1,629,188 1,458,420
Employee benefits 63,043 77,236 202,233 233,041
Net occupancy expense 90,035 80,168 261,216 247,814
Equipment expense 119,107 80,487 370,660 244,217
FDIC assessment 286,553 24,046 345,619 163,071
Stationery & supplies 31,462 22,494 95,020 73,797
Other real estate expense (1,442) 2,082 (6,053) 4,155
Other 269,923 227,260 787,062 637,967
---------- ---------- ---------- ----------
Total other expenses $1,460,519 $ 987,354 $3,684,945 $3,062,482
---------- ---------- ---------- ----------
Income Before Income Taxes 477,907 827,187 2,022,973 2,377,278
Income tax expense 155,607 255,939 648,163 763,872
---------- ---------- ---------- ----------
Net Income $ 322,300 $ 571,248 $1,374,810 $1,613,406
========== ========== ========== ==========
Net Income Per Share $0.73 $1.29 $3.10 $3.65
Weighted Average Shares Outstanding 442,194 442,342 442,831 441,835
The accompanying notes are an integral part of these financial statements
</TABLE>
<PAGE>
BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30 1996 AND 1995
<TABLE>
<CAPTION>
PAR RETAINED
# SHARES VALUE SURPLUS EARNINGS TOTAL
--------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Balance December 31, 1994 439,072 $4,390,720 $3,367,617 $6,272,097 $14,030,434
Net income for nine months
ended September 30, 1995 1,613,406 1,613,406
Cash dividend declared
$.75 per share (330,054) (330,054)
Capital stock issued 2,000 20,000 28,000 48,000
---------- ---------- ---------- ---------- -----------
Balance September 30, 1995 441,072 $4,410,720 $3,395,617 $7,555,449 $15,361,786
========== ========== ========== ========== ===========
Balance December 31, 1995 441,072 $4,410,720 $3,395,617 $7,564,900 $15,371,237
Net income for nine months
ended September 30, 1996 1,374,810 1,374,810
Cash dividend declared
$.80 per share (352,858) (352,858)
---------- ---------- ---------- ---------- -----------
Balance September 30, 1996 441,072 $4,410,720 $3,395,617 $8,586,852 $16,393,189
========== ========== ========== ========== ===========
The accompanying notes are an integral part of these financial statements
</TABLE>
<PAGE>
BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Operating activities
Net Income $ 1,374,810 $ 1,613,406
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Deferred taxes (30,683) (25,956)
Provision for loan losses 50,000 75,000
Provision for depreciation 226,068 192,955
(Gain) loss on sale of other real estate 7,086 5,610
(Gain) loss on sale of loans 399 0
Amortization of investment security premiums, net 62,306 65,984
Amortization of valuation adjustment on acquired loans 88,310 143,840
Amortization of valuation adjustment on acquired deposits (60,380) (77,030)
Amortization of negative goodwill (266,520) (318,790)
Net decrease in loans held for sale 0 485,641
(Increase) decrease in accrued interest receivable (219,359) (177,734)
(Increase) decrease in cash surrender value (27,682) (33,370)
(Increase) decrease in other assets 7,992 (74,262)
Increase (decrease) in accrued interest payable (88,075) 111,840
Increase (decrease) in advances from borrowers for
taxes and insurance (82,250) (58,281)
Increase (decrease) in other liabilities (66,760) (10,224)
------------ ------------
Net cash provided (used) by operating activities $ 975,262 $ 1,918,629
------------ ------------
Investing activities
Purchase of Federal Home Loan Bank Stock (42,100) (45,700)
Proceeds from sale of federal home loan bank stock 29,200 34,900
Purchases of investment securities 0 0
Proceeds from maturities and paydowns
of investment securities 494,515 8,869,505
(Increase) decrease in federal funds sold 1,275,000 0
Net increase in loans (2,327,737) (10,389,391)
Purchases of premises and equipment (358,667) (285,354)
Proceeds from sales of other real estate, net 246,450 49,390
------------ ------------
Net cash provided (used) by investing activities $ (683,339) $(1,766,650)
------------ ------------
Financing activities
Net increase (decrease) in customer deposits (588,593) 5,164,665
Net increase (decrease) in short term borrowings (268,829) (5,159,465)
Common stock issued 0 48,000
Cash dividends paid (352,858) (330,054)
------------ ------------
Net cash provided (used) by financing activities $(1,210,280) $ (276,854)
------------ ------------
Increase (decrease) in cash and cash equivalents (918,357) (124,875)
Cash and cash equivalents at beginning of period 4,702,493 4,223,402
Cash and cash equivalents at end of period $ 3,784,136 $ 4,098,527
============ ============
(Continued)
The accompanying notes are an integral part of these financial statements<PAGE>
</TABLE>
<PAGE>
BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Continued)
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Supplemental disclosures:
Cash paid for:
Interest on deposits and other borrowing $3,979,043 $3,732,922
Income taxes $ 784,244 $ 839,261
Non-cash investing activities:
Transfers from loans to other real estate
owned acquired through foreclosure $ 35,065 $ 94,194
The accompanying notes are an integral part of these financial statements
</TABLE>
<PAGE>
BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
Presentation. The accompanying consolidated balance sheet as of December 31,
1995, has been derived from the audited financial statements of the Company
for the year then ended.
The accompanying consolidated financial statements as of September 30, 1996,
and for the three and nine month periods ending September 30 of 1996 and 1995,
are unaudited and reflect all normal recurring adjustments which, in the
opinion of management, are necessary for the fair presentation of financial
position and operating results of the periods presented.
Nonperforming assets at September 30, 1996 and December 31, 1995, were
as follows:
<TABLE>
<CAPTION>
09/30/96 12/31/95
---------- ----------
<S> <C> <C>
Nonaccrual loans $ 275,362 $ 299,501
Ninety days or more past due 355,097 204,738
---------- ----------
Total nonperforming loans $ 630,459 $ 504,239
Other real estate owned (net) 63,930 258,536
---------- ----------
Total nonperforming assets $ 694,389 $ 762,775
========== ==========
Nonperforming loans as a
percent of loans, net of
unearned interest and loans
held for sale .66% .54%
</TABLE>
The following table reflects the transactions in the allowance for loan losses
for the nine month periods ended September 30, 1996 and 1995:
<TABLE>
<CAPTION> 1996 1995
--------- ---------
<S> <C> <C>
Balance at beginning of year $ 723,641 $ 750,523
Provision charged to operations 50,000 75,000
Charge offs (102,403) (159,229)
Recoveries 13,918 36,334
---------- ----------
Net recoveries (charge offs) $ (88,485) $(122,895)
Balance at end of period $ 685,156 $ 702,628
========== ==========
Allowance for loan losses as a
percent of loans, net of unearned
interest and loans held for sale .72% .75%
</TABLE>
<PAGE>
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations
This discussion is intended to supplement the consolidated financial
statements, expand on material changes in financial condition since year end
and to compare the operating results for the nine months ended September 30,
1996, to the same period in 1995.
Financial Condition
Total assets were $151.4 million at September 30, 1996, compared to
$151.8 million at year end 1995.
Total loans, net of unearned interest and allowance for losses,
increased $2.13 million from $92.0 million at December 31, 1995, to $94.1
million at September 30, 1996.
Nonperforming loans at September 30, 1996, were $630 thousand compared
to $504 thousand at December 31, 1995. The breakdown of nonperforming loans
at September 30, 1996 were nonaccrual loans of $275 thousand and loans past
due ninety days or more of $355 thousand compared to $300 thousand and $205
thousand respectively at December 31, 1995. Nonperforming loans as a percent
of loans, net of unearned income, was .66% at September 30, 1996, as compared
to .54% at December 31, 1995. The increase in ninety days or more past due of
$150 thousand is primarily related to delinquencies in residential mortgages.
The allowance for possible loan losses was $685 thousand at September
30, 1996, compared to $703 thousand at September 30, 1995. The ratio of the
allowance for possible loan losses to loans, net of unearned income and loans
held for sale, remained stable at .72% at September 30, 1996, as compared to
.75% at September 30, 1995. Management regularly reviews the level of the
allowance for possible loan losses and is of the opinion that it is adequate
at September 30, 1996. Net chargeoffs decreased for the first nine months of
1996 to $88 thousand as compared to $123 thousand for the same period in 1995.
Other real estate decreased to $64 thousand compared to $259 thousand
at December 31, 1995, due to the sale of property obtained with the acquisition
of Natchez First Federal Savings Bank in 1993.
Management determines the classification of its securities at
acquisition. Securities that are deemed to be held to maturity are accounted
for by the amortized cost method. These securities decreased $.6 million to
$46.2 million at September 30, 1996, as compared to $46.8 million at December
31, 1995. Equity securities at September 30, 1996, comprised of Federal
Reserve Bank Stock of $239 thousand and Federal Home Loan Bank Stock of $972
thousand remained stable. There were no securities held for sale at either
period.
The Company's cash and cash equivalents decreased to $3.8 million at
September 30, 1996, compared to $4.7 million at December 31, 1995. Cash
provided by operating activities increased by $1.0 million while investing and
financing activities used $.7 million and $1.2 million respectively.
Deposits decreased to $127.9 million at September 30, 1996, compared
to $128.6 million at December 31, 1995.
Stockholders' equity increased to $16.4 million at September 30, 1996,
compared to $15.4 million at the end of 1995. The ratio of Stockholders'
equity to assets increased to 10.83% at September 30, 1996, compared to 10.13%
at the end of 1995, due to growth in retained earnings.
The Company maintained a Tier 1 capital to risk weighted assets ratio
at September 30, 1996, of 19.09%, a total capital to risk weighted assets ratio
of 19.89% and a leverage ratio of 10.74%. These levels exceed the minimum
requirements of the regulatory agencies of 4.00%, 8.00% and 3.00%
respectively.
<PAGE>
Results of Operations
First nine months of 1996 Compared to the First nine months of 1995
Net income through September 30, 1996 was $1.37 million compared to
$1.61 million for the same period in 1995. Earnings per share decreased to
$3.10 per share for the first nine months of 1996 compared to $3.65 per share
for the same period in 1995. These decreases were primarily the result of one-
time expenses such as an additional FDIC assessment of $257 thousand to
recapitalize the SAIF fund, compensation to executive management of $84
thousand to buy back existing stock options, and $40 thousand for legal fees
related to the adoption of a Long-Term Incentive Plan, Shareholder Rights
Agreement and other corporate matters. In addition, the bank has invested $75
thousand in the acquisition of electronic banking capabilities during the
first nine months of 1996. Accounting guidelines provide that the majority of
this expense be charged against current income and not capitalized. Management
of the bank believes that the ability of the bank to expand its market and
compete successfully in the future will depend upon its ability to provide
customers with an electronic method to conduct all or some of their banking
business. These one-time expenses in 1996 were offset by an increase of $243
thousand in net interest income.
The returns on average assets and average equity for the first three
quarters of 1996 were 1.20% and 11.40%, respectively, while the returns were
1.42% and 14.55%, respectively, for the comparable period in 1995.
Net interest income for the period ended September 30, 1996 was $4.75
million, an increase of 5.4%, from $4.51 million over the same period in 1995.
This is attributed primarily to the increase in the company's volume of
average earning assets by $741 thousand along with a decrease in average
interest-bearing liabilities of $667 thousand. The increase in average
earning assets produced a greater effect on net interest income than did the
decrease in average interest-bearing liabilities due to the shift from lower
yielding investment securities, created through maturities, to higher yielding
loans. This move helped the interest spread, the difference between the yield
on interest-earning assets and the rate paid on interest-bearing liabilities,
increase from 3.39% in 1995 to 3.54% in 1996 further enhancing the net
interest income.
As a result of management's continuing assessment of the allowance
for loan losses, the company determined that the current level of $685 thousand
was adequate. The provision added for the three quarters ended September 30,
1996 was $50 thousand as compared to $75 thousand for the same period in 1995.
Other income remained stable at $1.0 million for the nine months ended
September 30, 1996.
Other operating expenses for the nine months ended September 30, 1996
were $3.69 million, an increase of $622 thousand or 20.3% compared to the same
period in 1995. $257 thousand of this increase is related to a one-time FDIC
assessment to recapitalize the SAIF fund. The remaining increase of $365
thousand is primarily the result of expenses related to electronic banking and
increases in salaries and employee benefits along with an increase in legal
fees in relation to the adoption of a Long-Term Incentive Plan and Shareholder
Rights Agreement. The company also showed a gain of $56 thousand for the nine
months ended September 30, 1995 on the valuation of loans held for sale.
The combination of all the above factors produced a pretax income of
$2,023 thousand for the nine months ended September 30, 1996, as compared to
$2,377 thousand for the same period in 1995. Income taxes for the nine months
ended September 30, 1996, were $648 thousand as compared to $764 thousand for
the same period in 1995.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11 Statement Regarding Computation of Per Share Earnings
20 Other Documents or Statements to Security Holders
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
BRITTON & KOONTZ CAPITAL CORPORATION
November 13, 1996 /s/ W. Page Ogden
W. Page Ogden
President and Chief Executive
Officer
November 13, 1996 /s/ Bazile R. Lanneau, Jr.
Bazile R. Lanneau, Jr.
Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
Number Item
- ------- ----
11 Statement Regarding Computation of Per Share Earnings
20 Other Documents or Statements to Security Holders
EXHIBIT 11
Statement Re Computation of Per Share Earnings
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
--------------------------- --------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Primary:
Average shares outstanding: 441,072 440,083 441,072 439,570
Net effect of the assumed
exercise of stock options -
based on the treasury stock
method using average stock price 1,512 2,259 1,882 2,265
Total 442,584 442,342 442,954 441,835
Net income $ 322,300 $ 571,248 $ 1,374,810 $ 1,613,406
Net income per share $ 0.73 $ 1.29 $ 3.10 $ 3.65
Fully Diluted:
Average shares outstanding: 441,072 440,083 441,072 439,570
Net effect of the assumed exercise of
stock options - based on the treasury
stock method using average market
price or period end market price, which
ever is higher 1,542 2,259 1,928 2,448
Total 442,614 442,342 443,000 442,018
Net income $ 322,300 $ 571,248 $ 1,374,810 $ 1,613,406
Net income per share $ .73 $ 1.29 $ 3.10 $ 3.65
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000707604
<NAME> BRITTON & KOONTZ CAPITAL CORPORATION
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 3784136
<INT-BEARING-DEPOSITS> 112498586
<FED-FUNDS-SOLD> 175000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 46237459
<INVESTMENTS-MARKET> 45952889
<LOANS> 94129744
<ALLOWANCE> 685156
<TOTAL-ASSETS> 151357101
<DEPOSITS> 127918267
<SHORT-TERM> 2454053
<LIABILITIES-OTHER> 4591592
<LONG-TERM> 0
0
0
<COMMON> 4410720
<OTHER-SE> 11982469
<TOTAL-LIABILITIES-AND-EQUITY> 151357101
<INTEREST-LOAN> 6094693
<INTEREST-INVEST> 2546361
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 8641054
<INTEREST-DEPOSIT> 3746095
<INTEREST-EXPENSE> 3890968
<INTEREST-INCOME-NET> 4750086
<LOAN-LOSSES> 50000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3684945
<INCOME-PRETAX> 2022973
<INCOME-PRE-EXTRAORDINARY> 1374810
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1374810
<EPS-PRIMARY> 310
<EPS-DILUTED> 310
<YIELD-ACTUAL> 793
<LOANS-NON> 275362
<LOANS-PAST> 355097
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 723641
<CHARGE-OFFS> 102403
<RECOVERIES> 13918
<ALLOWANCE-CLOSE> 685156
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
EXHIBIT 20
Other Documents or Statements to Security Holders
Britton & Koontz Capital Corporation
500 Main Street
P. O. Box 1407
Natchez, MS 39120
601-445-5576
Internet address: http://www.bkbank.com
FOR IMMEDIATE RELEASE: FOR MORE INFORMATION:
August 21, 1996 W. Page Ogden, President & CEO
Bazile R. Lanneau, Jr.,
Executive Vice President
and CFO
601-445-5576
BRITTON & KOONTZ REPORTS SECOND QUARTER 1996 RESULTS
AND ADOPTION OF SHAREHOLDER RIGHTS AGREEMENT
Natchez, Mississippi (August 21, 1996) - Britton & Koontz
Capital Corporation (NASDAQ/Bulletin Board Symbol:QBRKO) today
announced results for the second quarter of 1996. Net income for
the quarter was $547,257 compared to $516,569 for the same period
in 1995. Quarterly earnings per share amounted to $1.23 in 1996
and $1.17 in 1995 on 443,267 shares outstanding.
The returns on average assets and average equity for the first
half of 1996 were 1.37% and 13.21%, respectively, while the returns
were 1.37% and 14.33% for the comparable period in 1995. Total
assets were $153.4 million at June 30, 1996, compared to $151.8
million at year end 1995.
At its July meeting, the Board of Directors adopted a
Shareholder Rights Agreement, which had been earlier authorized by
the shareholders at the annual meeting on May 16. The agreement
provides for the issuance of rights to purchase additional shares
of the Company's common stock and contains provisions that are
designed to protect shareholders in the event of an unsolicited
attempt to acquire the Company. A summary of the agreement is
being mailed to all shareholders of record.
Page Ogden, President & CEO, stated: "The agreement has not
been adopted in reaction to any known efforts to acquire the
Company's stock. The provisions of the agreement, however, are
designed to protect shareholders in the event of an unsolicited
attempt to acquire the Company."
Britton & Koontz Capital Corporation, headquartered in
Natchez, Mississippi, is the parent company of Britton & Koontz
First National Bank which operates three full service offices in
Natchez. In connection with the merger-conversion of Natchez First
Federal Saving Bank in 1993, the company registered its stock in
accordance with SEC regulations.
<PAGE>
August 20, 1996
Dear Shareholder:
I am pleased to enclose the financial results of the Company for
the first six months of 1996. The Company is experiencing steady
earnings and moderate growth. The returns on average assets and
average equity for the first half of 1996 were 1.37% and 13.21%,
respectively, while the returns were 1.37% and 14.33% for the
comparable period in 1995. Total assets were $153.4 million at
June 30, 1996, compared to $151.8 million at year end 1995.
As indicated in previous communications, we are continuing to
invest in technology to bring our customers the best in banking
services and to enhance growth and profitability prospects for
the bank. In particular, we are looking forward to the
introduction of electronic banking via the Internet later this
fall. We invite you to visit the bank's internet site at
www.bkbank.com.
At the May 16 annual meeting, our shareholders overwhelmingly
endorsed a rights plan described in the proxy statement.
Pursuant to shareholder approval the Board of Directors adopted a
Shareholder Rights Agreement at its July meeting. A summary of
the agreement is enclosed for your information.
The purpose of the rights distributed under the Agreement is to
protect shareholders in the event of an unsolicited attempt to
acquire the Company's stock. The agreement has not been adopted
in reaction to any known efforts to acquire the Company's stock.
As always, I invite you to call me with any questions that you
may have concerning your investment in B&K.
Yours truly,
W. Page Ogden
President & CEO
Attachments
<PAGE>
BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------ ------------
<S> <C> <C>
ASSETS:
Cash and due from banks:
Non-interest bearing $ 4,134,756 $ 3,340,954
Interest bearing 87,205 1,361,539
------------ ------------
Total cash and due from banks 4,221,961 4,702,493
Federal funds sold 0 1,450,000
Investment securities:
Held-to-maturity(estimated market value of
$47,983,636 in 1996 and $47,181,462 in 1995) 48,363,203 46,794,280
Equity securities 1,211,550 1,198,950
Loans, less unearned income of $293,889 in 1996 and
$284,865 in 1995; and allowance for loan losses of
$690,691 in 1996 and $723,641 in 1995 94,015,947 91,998,966
Bank premises and equipment, net of accumulated
depreciation 3,632,166 3,569,586
Other real estate owned,less allowance for losses
of $0 in 1996 and $11,658 in 1995 28,194 258,536
Accrued interest receivable 1,211,880 1,137,337
Cash surrender value life insurance 620,173 599,646
Other assets 119,287 77,445
------------ ------------
Total Assets $153,424,341 $151,787,239
============ ============
LIABILITIES:
Deposits
Non-interest bearing 14,817,631 13,983,026
Interest bearing 113,489,161 114,584,214
------------ ------------
Total Deposits $128,306,792 $128,567,240
Securities sold under repurchase agreements 2,697,656 2,722,882
Federal funds purchased 790,000 0
Accrued Interest Payable 770,606 817,119
Negative Goodwill, net of accumulated amortization
of $1,377,670 in 1996 and $1,196,030 in 1995 1,682,752 1,864,392
Advances from borrowers for taxes & insurance 218,352 381,644
Accrued taxes and other liabilities 2,887,294 2,062,725
------------ ------------
Total Liabilities $137,353,452 $136,416,002
------------ ------------
STOCKHOLDERS EQUITY:
Common stock, $10 par value per share; 3,000,000
shares authorized; 441,072 shares issued and
outstanding in 1996 and 1995 4,410,720 4,410,720
Additional paid-in-capital 3,395,617 3,395,617
Retained earnings 8,264,552 7,564,900
------------ ------------
Total Stockholders' Equity $ 16,070,889 $ 15,371,237
------------ ------------
Total Liabilities and Stockholders' Equity $153,424,341 $151,787,239
============ ============
</TABLE>
<PAGE>
BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ---------------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans $2,017,276 $1,857,155 $4,020,307 $3,585,331
Interest on investment securities
Taxable interest income 830,833 912,590 1,633,720 1,863,391
Exempt from federal taxes 19,497 17,571 38,128 34,992
Interest on federal funds sold 30,101 783 57,009 3,076
---------- ---------- ---------- ----------
Total Interest Income $2,897,707 $2,788,099 $5,749,164 $5,486,790
---------- ---------- ---------- ----------
Interest Expense:
Interest on deposits $1,240,463 $1,207,561 $2,528,118 $2,320,309
Interest on federal funds purchased 234 5,799 234 17,019
Interest on securities sold under
repurchase agreements 40,984 59,625 76,025 171,017
---------- ---------- ---------- ----------
Total Interest expense $1,281,681 $1,272,985 $2,604,377 $2,508,345
---------- ---------- ---------- ----------
Net Interest Income $1,616,026 $1,515,114 $3,144,787 $2,978,445
Provision for loan losses 0 25,000 50,000 $50,000
---------- ---------- ---------- ----------
Net interest income after
Provision for loan Losses $1,616,026 $1,490,114 $3,094,787 $2,928,445
---------- ---------- ---------- ----------
Other Income:
Service charge on deposit accounts 155,839 148,720 312,705 299,499
Income from fiduciary activities 14,674 15,028 27,938 28,336
Insurance premiums and commissions 12,708 9,245 23,849 17,556
Gain/(loss) on sale of ORE 1,975 (5,610) (7,086) (5,610)
Gain/(loss) on sale of mortgage loans (36) 0 (1,014) 0
Gain on sale of premises & equipment 0 0 100 0
Amortization of negative goodwill 88,780 106,200 181,640 217,230
Valuation adj loans held for sale 0 36,409 0 56,248
Other 59,937 23,186 136,573 83,515
---------- ---------- ---------- ----------
Total other income $ 333,877 $ 333,178 $674,705 $ 696,774
---------- ---------- ---------- ----------
Other Expense
Salaries 514,259 483,648 1,027,350 984,839
Employee benefits 62,708 74,522 139,190 155,805
Net occupancy expense 91,068 87,292 171,181 167,646
Equipment expense 118,016 74,813 251,553 163,730
FDIC assessment 30,947 69,513 59,066 139,025
Stationery & supplies 30,571 24,016 63,558 51,303
Other real estate expense 2,458 2,284 (4,611) 2,073
Other 308,536 209,548 517,139 410,707
---------- ---------- ---------- ----------
Total other expenses $1,158,563 $1,025,636 $2,224,426 $2,075,128
---------- ---------- ---------- ----------
Income Before Income Taxes 791,340 797,656 1,545,066 1,550,091
Income tax expense 244,083 281,087 492,556 507,933
---------- ---------- ---------- ----------
Net Income $ 547,257 $ 516,569 $1,052,510 $1,042,158
========== ========== ========== ==========
Net Income Per Share $1.23 $1.17 $2.37 $2.36
Weighted Average Shares Outstanding 443,267 440,052 443,172 441,564
</TABLE>
<PAGE>
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
On July 16, 1996, the Board of Directors of Britton & Koontz Capital
Corporation (the "Company") declared a dividend of one common share purchase
right (a "Right") for each outstanding share of common stock, par value
$10.00 per share (the "Common Shares"), of the Company. The dividend is
payable on September 1, 1996 (the "Record Date") to the stockholders of
record on that date. Each Right entitles the registered holder to purchase
from the Company one Common Share of the Company at a price of $150.00 per
share (the "Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and Britton & Koontz First National Bank, as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 25% or more of the
outstanding Common Shares, or (ii) 10 business days (or such later date as
may be determined by action of the Board of Directors prior to such time as
any person or group of affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 25% or more of the outstanding
Common Shares (the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of the Common Share
certificates outstanding as of the Record Date, by such Common Share
certificate with a copy of this Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Shares. Until the Distribution Date
(or earlier redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date upon transfer or new issuance of
Common Shares will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration
of the Rights), the surrender for transfer of any certificates for Common
Shares outstanding as of the Record Date, even without such notation or a
copy of this Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Shares represented by
such certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Shares as of the close of business
on the Distribution Date and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on September 1, 2006 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed
or exchanged by the Company, in each case, as described below.
The Purchase Price payable, and the number of Common Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Shares, (ii) upon the grant to holders of the Common Shares of certain rights
or warrants to subscribe for or purchase Common Shares at a price, or
securities convertible into Common Shares with a conversion price, less than
the then-current market price of the Common Shares or (iii) upon the
distribution to holders of the Common Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Common Shares) or of subscription
rights or warrants (other than those referred to above).
In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated assets or
earning power are sold after a person or group has become an Acquiring Person,
proper provision will be made so that each holder of a Right will thereafter
have the right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common stock of the
acquiring company which at the time of such transaction will have a market value
of two times the exercise price of the Right. In the event that any person or
group of affiliated or associated persons becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter be void),
will thereafter have the right to receive upon exercise that number of Common
Shares having a market value of two times the exercise price of the Right.
<PAGE>
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one Common Share
per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Common Shares will be issued and in lieu
thereof, an adjustment in cash will be made based on the market price of the
Common Shares on the last trading day prior to the date of exercise.
At any time prior to such time as any Person becomes an Acquiring
Person, the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.001 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on such basis
and with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement, which is hereby incorporated herein by reference.
