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|  UNITED      STATES                                                                                          |
|-------------------------------------------------------------------------------------------------------------------|
| SECURITIES      AND EXCHANGE COMMISSION                                                                           |
| Washington,      D.C.  20549                                                                            |
| FORM      10-K                                                                                                    |
|                                                                                                              |
| [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE      ACT OF 1934                |
|                                                                                                              |
| For      the fiscal year ended December 31, 2009                                                                  |
|                                                                                                              |
| [  ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES      EXCHANGE ACT OF 1934 |
|                                                                                                              |
| Commission      File Number:  001-33009                                                                 |
|                                                                                               |
| Britton      & Koontz Capital Corporation                                                                     |
| (Exact      name of registrant as specified in its charter)                                                       |
|                                                                                                              |

|                                                                |                                      |
|---------------------------------------------------------------------|-------------------------------------------|
| Mississippi                                                         | 64-0665423                                |
| (State      or other jurisdiction of incorporation or organization) | (I.R.S.      Employer Identification No.) |
|                                                                |                                      |

| 500      Main Street                                           |
|----------------------------------------------------------------|
| Natchez,      Mississippi 39120                                |
| (Address      of principal executive offices) (Zip Code)       |
|                                                           |
| (601)      445-5576                                            |
| (Registrant’s      Telephone Number, Including AreaCode) |

| Securities      registered pursuant to Section 12(b) of the Exchange  Act: |
|----------------------------------------------------------------------------|

| Title      of each class                       | Common      Stock, $2.50 Par Value |
|------------------------------------------------|------------------------------------|
| Name      of each exchange on which registered | The      NASDAQ Capital Market     |

|                                                                       |
|----------------------------------------------------------------------------|
| Securities      registered pursuant to Section 12(g) of the Exchange  Act: |
| None                                                                       |

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| Large      accelerated filer [  ]                                                                        |  Accelerated      filer                  [  ]  |
|--------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Non-accelerated      filer   [  ] (Do      not check if a smaller reporting company) | Smaller      reporting company [X]                                                                                                                           |

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C

|                |   | PART I                                                                                                                  | Page      No. |
|---------------------|--------|-------------------------------------------------------------------------------------------------------------------------|---------------|
| ITEM  1.  | *      | BUSINESS                                                                                                                | 1             |
| ITEM      1A.       | *      | RISK FACTORS                                                                                                            | 7             |
| ITEM      1B.       | *      | UNRESOLVED STAFF COMMENTS                                                                                               | 7             |
| ITEM  2.  | *      | PROPERTIES                                                                                                              | 7             |
| ITEM  3.  | *      | LEGAL PROCEEDINGS                                                                                                       | 8             |
| ITEM  4.  | *      | RESERVED                                                                                                                | 8             |
|                |   |                                                                                                                    |          |
|                |   | PART II                                                                                                                 |          |
| ITEM  5.  | *      | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER      MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES | 9             |
| ITEM  6.  | *      | SELECTED FINANCIAL DATA                                                                                                 | 10            |
| ITEM  7.  | *      | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL      CONDITION AND RESULTS OF OPERATIONS                        | 10            |
| ITEM  7A. | *      | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET      RISK                                                         | 27            |
| ITEM  8.  | *      | FINANCIAL STATEMENTS AND SUPPLEMENTARY      DATA                                                                        | 27            |
| ITEM  9.  | *      | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON      ACCOUNTING AND FINANCIAL DISCLOSURE                               | 69            |
| ITEM      9A(T).    | *      | CONTROLS AND PROCEDURES                                                                                                 | 69            |
| ITEM      9B.       | *      | OTHER INFORMATION                                                                                                       | 69            |
|                |   |                                                                                                                    |          |
|                |   | PART III                                                                                                                |          |
| ITEM      10.       | **     | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE      GOVERNANCE                                                             | 70            |
| ITEM      11.       | **     | EXECUTIVE COMPENSATION                                                                                                  | 71            |
| ITEM      12        | **     | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND      MANAGEMENT AND RELATED STOCKHOLDER MATTERS                     | 71            |
| ITEM      13        | **     | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND      DIRECTOR INDEPENDENCE                                          | 72            |
| ITEM      14.       | **     | PRINCIPAL ACCOUNTING FEES AND    SERVICES                                                                               | 72            |
|                |   |                                                                                                                    |          |
|                |   | PART IV                                                                                                                 |          |
| ITEM      15        | *      | EXHIBITS, FINANCIAL STATEMENT      SCHEDULES                                                                            | 73            |

SIGNATURES

EXHIBITS

| ** | Incorporated      by reference from Britton & Koontz Capital Corporation’s Definitive      Proxy Statement for its 2010 Annual Meeting of Shareholders in accordance      with Instruction G(3) of Form 10-K. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  Location                                                                     |  Own/Lease   |  Use                      | Approximate      OfficeSpace (square feet) |
|------------------------------------------------------------------------------------|-------------------|--------------------------------|--------------------------------------------|
|  Natchez                                                                      |              |                           |                                       |
| 500      Main StreetNatchez,      Mississippi 39120                                |  Owned       |  Main      Office         |  33,790                               |
|                                                                               |              |                           |                                       |
| 411      Highway 61 N.Natchez,      Mississippi 39120                              |  Owned       |  Branch      Office       |  1,671                                |
|                                                                               |              |                           |                                       |
| 55A      Sgt. Prentiss DriveNatchez,      Mississippi 39120                        |  Owned       |  Branch      Office       |  10,720                               |
|  Vicksburg                                                                    |              |                           |                                       |
| 2059      Highway 61 N.Vicksburg,      Mississippi 39183                           |  Owned       |  Branch      Office       |  3,050                                |
|                                                                               |              |                           |                                       |
| 2150      S. Frontage RoadVicksburg,      Mississippi 39180                        |  Owned       |  Branch      Office       |  4,570                                |
|  Baton      Rouge                                                             |              |                           |                                       |
| 8810      BluebonnetSuites      A & BBaton      Rouge, Louisiana 70810         |   Lease |   Branch      Office |   5,112                          |
|                                                                               |              |                           |                                       |
| 4703      Bluebonnet BlvdBaton      Rouge, Louisiana                               | Owned             | Branch      Office             | 4,080                                      |
|                                                                               |              |                           |                                       |
| 7415      Corporate BlvdSuite      935 Building HBaton      Rouge, Louisiana 70809 | Lease             | Branch      Office             | 1,256                                      |

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|             |   | DividendsPer      Share |   |   | High   |   |   | Low    |   |
|------------------|--------|-------------------------|--------|--------|--------|--------|--------|--------|--------|
| 2009             |   |                    |   |   |   |   |   |   |   |
| 4th      Quarter |   | $                       | .18    |   |   | $      | 12.28  |   |   | $ | 10.62 |   |
| 3rd      Quarter |   |                    | .18    |   |   |   | 12.75  |   |   |   | 10.94 |   |
| 2nd      Quarter |   |                    | .18    |   |   |   | 12.99  |   |   |   | 9.60 |   |
| 1st      Quarter |   |                    | .18    |   |   |   | 13.07  |   |   |   | 8.32 |   |
|             |   |                    |   |   |   |   |   |   |   |   |   |   |
|             |   | DividendsPer      Share |   |   | High   |   |   | Low    |   |
| 2008             |   |                    |   |   |   |   |   |   |   |   |   |   |
| 4th      Quarter |   | $                       | .18    |   |   | $      | 13.49  |   |   | $ | 10.10 |   |
| 3rd      Quarter |   |                    | .18    |   |   |   | 16.00  |   |   |   | 11.05 |   |
| 2nd      Quarter |   |                    | .18    |   |   |   | 16.40  |   |   |   | 12.00 |   |
| 1st      Quarter |   |                    | .18    |   |   |   | 18.00  |   |   |   | 15.32 |   |
|             |   |                    |   |   |   |   |   |   |   |   |   |   |

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|                                                                                |   | 12/31/09 |        |   | 12/31/08 |   |        | 12/31/07 |   |
|-------------------------------------------------------------------------------------|--------|----------|-------------|--------|----------|--------|-------------|----------|--------|
|  Obligations      of U.S. Government Agencies and Corporations                 |   | $        | 99,111,627  |   |     | $      | 123,834,755 |     |   | $ | 84,741,030 |   |
| Obligations      of State and Political Subdivisions                                |   |     | 40,600,366  |   |     |   | 39,529,246  |     |   |   | 38,004,634 |   |
|              Total |   | $        | 139,711,993 |   |     | $      | 163,364,001 |     |   | $ | 122,745,664 |   |

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|                                             |   | 12/31/09 |        |   | 12/31/08 |   |        | 12/31/07 |   |   | 12/31/06    |   |   | 12/31/05 |        |
|--------------------------------------------------|--------|----------|-------------|--------|----------|--------|-------------|----------|--------|--------|-------------|--------|--------|----------|-------------|
| Commercial,      financial and agricultural |   | $        | 25,606,000  |   |     | $      | 25,128,000  |     |   | $      | 25,884,000  |   |   | $        | 28,385,000  |   |   | $ | 32,868,000 |   |
| Real      estate-construction                    |   |     | 31,341,000  |   |     |   | 30,910,000  |     |   |   | 45,097,000  |   |   |     | 44,592,000  |   |   |   | 30,069,000 |   |
| Real      estate-residential                     |   |     | 67,213,000  |   |     |   | 74,923,000  |     |   |   | 72,438,000  |   |   |     | 83,256,000  |   |   |   | 98,488,000 |   |
| Real      Estate-other                           |   |     | 95,511,000  |   |     |   | 88,341,000  |     |   |   | 72,123,000  |   |   |     | 76,473,000  |   |   |   | 70,875,000 |   |
| Installment                                      |   |     | 4,806,000   |   |     |   | 6,038,000   |     |   |   | 7,550,000   |   |   |     | 10,680,000  |   |   |   | 12,478,000 |   |
| Other                                            |   |     | 124,000     |   |     |   | 171,000     |     |   |   | 261,000     |   |   |     | 203,000     |   |   |   | 306,000 |   |
| Total      loans                                 |   | $        | 224,601,000 |   |     | $      | 225,511,000 |     |   | $      | 223,353,000 |   |   | $        | 243,589,000 |   |   | $ | 245,084,000 |   |

|                                        |   |          |       |   | Due      after  |   |       |            |   |   |    |   |
|---------------------------------------------|--------|---------------|------------|--------|-----------------|--------|------------|-----------------|--------|--------|---------|--------|
|                                        |   | Due      in   |       |   | one      year   |   |       |            |   |   |    |   |
|                                        |   | one      year |       |   | through         |   |       | Due      after  |   |   |    |   |
|                                        |   | or      less  |       |   | five      years |   |       | five      years |   |   | Total   |   |
| Commercial,      financial and agricultural |   | $             | 15,100,000 |   |            | $      | 10,433,000 |            |   | $      | 73,000  |   |   | $ | 25,606,000 |   |
| Real      estate-construction               |   |          | 24,684,000 |   |            |   | 6,532,000  |            |   |   | 125,000 |   |   |   | 31,341,000 |   |
| Total                                       |   | $             | 39,784,000 |   |            | $      | 16,965,000 |            |   | $      | 198,000 |   |   | $ | 56,947,000 |   |
|                                        |   |          |       |   |            |   |       |            |   |   |    |   |   |   |   |   |
| Predetermined      interest rates           |   |          |       |   |            | $      | 16,928,000 |            |   | $      | 198,000 |   |   |   |   |   |
|                                        |   |          |       |   |            |   |       |            |   |   |    |   |   |   |   |   |
| Floating      or adjustable interest rates  |   |          |       |   |            | $      | 37,000     |            |   | $      | -       |   |   |   |   |   |

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| (Dollars      in thousands)              |   | 12/31/09 |   |   | 12/31/08 |   |   | 12/31/07 |   |   | 12/31/06 |   |   | 12/31/05 |   |
|------------------------------------------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
| Non-accrual      loans by type           |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |
| Real      estate                         |   | $        | 8,510  |   |     | $      | 3,364  |     |   | $      | 992      |   |   | $        | 829    |   |   | $ | 413 |   |
| Installment                              |   |     | 12     |   |     |   | 86     |     |   |   | 87       |   |   |     | 13     |   |   |   | 72 |   |
| Commercial      and all other loans      |   |     | 187    |   |     |   | 118    |     |   |   | 223      |   |   |     | 351    |   |   |   | 574 |   |
| Total      non-accrual loans             |   |     | 8,709  |   |     |   | 3,568  |     |   |   | 1,302    |   |   |     | 1,193  |   |   |   | 1,059 |   |
| Loans      past due 90 days or more      |   |     | 1,004  |   |     |   | 518    |     |   |   | 12       |   |   |     | 232    |   |   |   | 201 |   |
| Total      nonperforming loans           |   |     | 9,713  |   |     |   | 4,086  |     |   |   | 1,314    |   |   |     | 1,425  |   |   |   | 1,260 |   |
| Other      real estate owned (net)       |   |     | 815    |   |     |   | 919    |     |   |   | 747      |   |   |     | 1,257  |   |   |   | 1,471 |   |
| Total      nonperforming assets          |   | $        | 10,528 |   |     | $      | 5,005  |     |   | $      | 2,061    |   |   | $        | 2,682  |   |   | $ | 2,731 |   |
| Nonperforming      loans as a percent    |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |   |   |   |   |
| of      loans, net of unearned interest  |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |   |   |   |   |
| and      loans held for sale             |   |     | 4.34   | %      |     |   | 1.81   | %        |   |   | .59      | %      |   |     | .59    | % |   |   | .51 | % |
| Additional      interest income foregone |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |   |   |   |   |
|  on      non-accrual loans          |   | $        | 425    |   |     | $      | 191    |     |   | $      | 36       |   |   | $        | 31     |   |   | $ | 24 |   |

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|  (Dollars      in thousands)                  |   | 12/31/09 |   |   | 12/31/08 |   |   | 12/31/07 |   |   | 12/31/06 |   |   | 12/31/05 |   |
|----------------------------------------------------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
|  Balance      at beginning of year            |   | $        | 2,398  |   |     | $      | 2,431  |     |   | $      | 2,344    |   |   | $        | 2,378  |   |   | $ | 2,237 |   |
| Charge-offs:                                       |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |   |   |   |   |
| Commercial,      financial & agricultural      |   |     | (140   | )      |     |   | (541   | )        |   |   | (87      | )      |   |     | (571   | ) |   |   | (54 | ) |
| Real      Estate-construction                      |   |     | (276   | )      |     |   | (166   | )        |   |   | (25      | )      |   |     | (3     | ) |   |   | (0 | ) |
| Real      Estate-residential                       |   |     | (138   | )      |     |   | (410   | )        |   |   | (257     | )      |   |     | (5     | ) |   |   | (40 | ) |
| Real      Estate-other                             |   |     | (1,456 | )      |     |   | (7     | )        |   |   | (2       | )      |   |     | 0      |   |   |   | (109 | ) |
| Installment      and other                         |   |     | (60    | )      |     |   | (39    | )        |   |   | (136     | )      |   |     | (64    | ) |   |   | (48 | ) |
| Recoveries:                                        |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |   |   |   |   |
| Commercial,      financial & agricultural      |   |     | 25     |   |     |   | 190    |     |   |   | 110      |   |   |     | 26     |   |   |   | 22 |   |
| Real      Estate-construction                      |   |     | 10     |   |     |   | 6      |     |   |   | -        |   |   |     | -      |   |   |   | - |   |
| Real      Estate-residential                       |   |     | 89     |   |     |   | 83     |     |   |   | 5        |   |   |     | 26     |   |   |   | 22 |   |
| Real      Estate-other                             |   |     | -      |   |     |   | 34     |     |   |   | -        |   |   |     | 51     |   |   |   | 14 |   |
| Installment      and other                         |   |     | 7      |   |     |   | 87     |     |   |   | 39       |   |   |     | 31     |   |   |   | 34 |   |
| Net      (charge-offs) / recoveries                |   |     | (1,939 | )      |     |   | (763   | )        |   |   | (353     | )      |   |     | (509   | ) |   |   | (159 | ) |
| Provision      charged to operations               |   |     | 3,420  |   |     |   | 730    |     |   |   | 440      |   |   |     | 475    |   |   |   | 300 |   |
| Balance      at end of year                        |   | $        | 3,879  |   |     | $      | 2,398  |     |   | $      | 2,431    |   |   | $        | 2,344  |   |   | $ | 2,378 |   |
| Allowance      for loan losses as a percent        |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |   |   |   |   |
| of      loans, net of unearned interest and        |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |   |   |   |   |
| loans      held for sale                           |   |     | 1.73   | %      |     |   | 1.06   | %        |   |   | 1.09     | %      |   |     | .96    | % |   |   | .97 | % |
| Net      charge-offs as a percent of average loans |   |     | .87    | %      |     |   | .34    | %        |   |   | .15      | %      |   |     | .21    | % |   |   | .07 | % |

|                           |   | Amounts      as of December 31,                                   |   |
|--------------------------------|--------|-------------------------------------------------------------------|--------|
|                           |   | 2009                                                              |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Commercial,      financial and |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| agricultural                   |   | $                                                                 | 631    |   |   | $ | 536 |   |   | $ | 473 |   |   | $ | 426 |   |   | $ | 502 |   |
| Real      estate-construction  |   |                                                              | 1,264  |   |   |   | 241 |   |   |   | 265 |   |   |   | 187 |   |   |   | 77 |   |
| Real      estate-residential   |   |                                                              | 301    |   |   |   | 225 |   |   |   | 353 |   |   |   | 248 |   |   |   | 162 |   |
| Real      Estate-other         |   |                                                              | 1,212  |   |   |   | 842 |   |   |   | 735 |   |   |   | 663 |   |   |   | 787 |   |
| Installment                    |   |                                                              | 161    |   |   |   | 247 |   |   |   | 335 |   |   |   | 331 |   |   |   | 354 |   |
| Other                          |   |                                                              | 310    |   |   |   | 307 |   |   |   | 270 |   |   |   | 489 |   |   |   | 496 |   |
| Total      loans               |   | $                                                                 | 3,879  |   |   | $ | 2,398 |   |   | $ | 2,431 |   |   | $ | 2,344 |   |   | $ | 2,378 |   |
|                           |   |   Percent      of loans in each category to total loans |   |
|                           |   |                                                              | 2009   |   |   |   | 2008 |   |   |   | 2007 |   |   |   | 2006 |   |   |   | 2005 |   |
| Commercial,      financial and |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  agricultural             |   |                                                              | 11.40  | % |   |   | 11.14 | % |   |   | 11.59 | % |   |   | 11.65 | % |   |   | 13.41 | % |
| Real      estate-construction  |   |                                                              | 13.97  |   |   |   | 13.71 |   |   |   | 20.19 |   |   |   | 18.31 |   |   |   | 12.27 |   |
| Real      estate-residential   |   |                                                              | 29.93  |   |   |   | 33.22 |   |   |   | 32.29 |   |   |   | 34.18 |   |   |   | 40.18 |   |
| Real      Estate-other         |   |                                                              | 42.51  |   |   |   | 39.17 |   |   |   | 32.43 |   |   |   | 31.40 |   |   |   | 28.92 |   |
| Installment                    |   |                                                              | 2.14   |   |   |   | 2.68 |   |   |   | 3.38 |   |   |   | 4.38 |   |   |   | 5.09 |   |
| Other                          |   |                                                              | .05    |   |   |   | .08 |   |   |   | .12 |   |   |   | .08 |   |   |   | .13 |   |
| Total      loans               |   |                                                              | 100.00 | % |   |   | 100.00 | % |   |   | 100.00 | % |   |   | 100.00 | % |   |   | 100.00 | % |

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| Balance      at December 31, 2008                                   |   |   |   |   | $      | 919    |   |
|---------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|    Write-downs/Reserves,      net                    |   |   | (203   | )      |   |   |   |   |
|    Proceeds      from sales, net of gains and losses |   |   | (741   | )      |   |   |   |   |
|    Gains/(losses)      on sales of ORE               |   |   | (80    | )      |   |   |   |   |
|    Foreclosures                                      |   |   | 1,128  |   |   |   | (104   | ) |
| Balance      at December 31, 2009                                   |   |   |   |   |   | $      | 815    |   |

|                                      |   | 12/31/09 |        |   | 12/31/08 |   |
|-------------------------------------------|--------|----------|-------------|--------|----------|--------|
|                                      |   |     |        |   |     |   |
| Non-interest      bearing demand deposits |   | $        | 49,847,304  |   |     | $      | 51,119,827 |   |
| NOW      accounts                         |   |     | 57,815,246  |   |     |   | 48,338,323 |   |
| Money      market deposit accounts        |   |     | 30,563,856  |   |     |   | 33,662,518 |   |
| Savings      accounts                     |   |     | 18,259,388  |   |     |   | 17,736,516 |   |
| Certificates      of deposit              |   |     | 94,456,326  |   |     |   | 106,357,236 |   |
|                                      |   | $        | 250,942,120 |   |     | $      | 257,214,420 |   |

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|                                |   | 12/31/09 |       |   | 12/31/08 |   |
|-------------------------------------|--------|----------|------------|--------|----------|--------|
| Time      remaining until maturity: |   |     |       |   |     |   |
| Three      months or less           |   | $        | 16,319,474 |   |     | $      | 21,104,104 |   |
| Over      three through six months  |   |     | 6,517,440  |   |     |   | 10,266,988 |   |
| Over      six through twelve months |   |     | 14,213,515 |   |     |   | 12,796,081 |   |
| Over      twelve months             |   |     | 3,628,905  |   |     |   | 3,417,858 |   |
|                                |   | $        | 40,679,334 |   |     | $      | 47,585,031 |   |

|                              |   | 2009   |       |   | 2008   |   |       | 2007   |   |
|-----------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Year-end      balance             |   | $      | 50,234,000 |   |   | $      | 71,563,000 |   |   | $ | 39,964,000 |   |
| Maximum      month-end balance    |   |   | 69,490,000 |   |   |   | 86,688,000 |   |   |   | 67,385,000 |   |
| Year      to date average balance |   |   | 58,761,000 |   |   |   | 60,190,000 |   |   |   | 50,488,000 |   |
| Weighted      average rate        |   |   | .90        | %      |   |   | 2.39       | %      |   |   | 5.07 | % |

|                              |   | 2009   |       |   | 2008   |   |       | 2007   |   |
|-----------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Year-end      balance             |   | $      | 32,018,000 |   |   | $      | 54,929,000 |   |   | $ | 26,735,000 |   |
| Maximum      month-end balance    |   |   | 55,680,000 |   |   |   | 68,864,000 |   |   |   | 48,153,000 |   |
| Year      to date average balance |   |   | 42,596,000 |   |   |   | 44,533,000 |   |   |   | 36,378,000 |   |
| Weighted      average rate        |   |   | .37        | %      |   |   | 1.98       | %      |   |   | 4.67 | % |

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|                                                    |   | Britton      & Koontz Capital Corporation |    |
|---------------------------------------------------------|--------|-----------------------------------------------|---------|
|                                                    |   | Average      Balance Report              |    |
|                                                    |   | Twelve      Months Ended December 31,         |    |
|                                                    |   |                                          |    |   | 2009 |   |   |   |   |   |   |   |   | 2008 |   |   |   |   |   |   |   |   | 2007 |   |   |   |   |
|                                                    |   |                                          |    |   |           Interest |   |   | Average |   |   |   |   |   |     Interest |   |   | Average |   |   |   |   |   |           Interest |   |   | Average |   |
|                                                    |   | Average                                       |    |   | Income/ |   |   | % |   |   | Average |   |   | Income/ |   |   | % |   |   | Average |   |   | Income/ |   |   | % |   |
|                                                    |   | Balance                                       |    |   | Expense |   |   | Yield/Rate |   |   | Balance |   |   | Expense |   |   | Yield/Rate |   |   | Balance |   |   | Expense |   |   | Yield/Rate |   |
| ASSETS                                                  |   |                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                   |   | $                                             | 223,802 |   |   | $ | 13,296 |   |   |   | 5.94 | % |   | $ | 225,633 |   |   | $ | 15,477 |   |   |   | 6.86 | % |   | $ | 237,512 |   |   | $ | 19,010 |   |   |   | 8.00 | % |
| Investment      securities:                             |   |                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage      Backed Securities                         |   |                                          | 114,817 |   |   |   | 5,835 |   |   |   | 5.08 | % |   |   | 98,987 |   |   |   | 5,234 |   |   |   | 5.29 | % |   |   | 67,345 |   |   |   | 3,514 |   |   |   | 5.22 | % |
| State      & municipal-non taxable                  |   |                                          | 39,508  |   |   |   | 1,737 |   |   |   | 4.40 | % |   |   | 37,341 |   |   |   | 1,668 |   |   |   | 4.47 | % |   |   | 36,367 |   |   |   | 1,654 |   |   |   | 4.55 | % |
| State      & municipal-taxable                      |   |                                          | 947     |   |   |   | 57 |   |   |   | 6.00 | % |   |   | 945 |   |   |   | 57 |   |   |   | 6.00 | % |   |   | - |   |   |   | - |   |   |   | 0.00 | % |
| Other                                                   |   |                                          | 4,064   |   |   |   | 51 |   |   |   | 1.25 | % |   |   | 3,086 |   |   |   | 94 |   |   |   | 3.05 | % |   |   | 4,959 |   |   |   | 271 |   |   |   | 5.47 | % |
| Total      investment securities                        |   |                                          | 159,336 |   |   |   | 7,679 |   |   |   | 4.82 | % |   |   | 140,359 |   |   |   | 7,054 |   |   |   | 5.03 | % |   |   | 108,671 |   |   |   | 5,439 |   |   |   | 5.01 | % |
| Interest      bearing bank balances                     |   |                                          | 1,150   |   |   |   | 4 |   |   |   | 0.34 | % |   |   | 1,026 |   |   |   | 27 |   |   |   | 2.62 | % |   |   | 3,045 |   |   |   | 140 |   |   |   | 4.61 | % |
| Federal      funds sold                                 |   |                                          | 268     |   |   |   | 1 |   |   |   | 0.19 | % |   |   | 218 |   |   |   | 5 |   |   |   | 2.17 | % |   |   | 306 |   |   |   | 15 |   |   |   | 4.86 | % |
| Total      earning assets                               |   |                                          | 384,556 |   |   |   | 20,980 |   |   |   | 5.46 | % |   |   | 367,236 |   |   |   | 22,563 |   |   |   | 6.14 | % |   |   | 349,534 |   |   |   | 24,605 |   |   |   | 7.04 | % |
| Allowance      for loan losses                          |   |                                          | (2,799  | ) |   |   |   |   |   |   |   |   |   |   | (2,402 | ) |   |   |   |   |   |   |   |   |   |   | (2,440 | ) |   |   |   |   |   |   |   |   |
| Cash      & due from banks, non-interest bearing    |   |                                          | 5,899   |   |   |   |   |   |   |   |   |   |   |   | 5,968 |   |   |   |   |   |   |   |   |   |   |   | 6,435 |   |   |   |   |   |   |   |   |   |
| Bank      premises & equipment                      |   |                                          | 7,405   |   |   |   |   |   |   |   |   |   |   |   | 7,067 |   |   |   |   |   |   |   |   |   |   |   | 7,565 |   |   |   |   |   |   |   |   |   |
| Cash      Value Life Insurance and other                |   |                                          | 1,080   |   |   |   |   |   |   |   |   |   |   |   | 1,037 |   |   |   |   |   |   |   |   |   |   |   | 997 |   |   |   |   |   |   |   |   |   |
| Other      assets                                       |   |                                          | 4,985   |   |   |   |   |   |   |   |   |   |   |   | 4,257 |   |   |   |   |   |   |   |   |   |   |   | 4,675 |   |   |   |   |   |   |   |   |   |
|  TOTAL      ASSETS                                 |   | $                                             | 401,126 |   |   |   |   |   |   |   |   |   |   | $ | 383,163 |   |   |   |   |   |   |   |   |   |   | $ | 366,765 |   |   |   |   |   |   |   |   |   |
|                                               |   |                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES      AND SHAREHOLDERS EQUITY                |   |                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      bearing deposits:                         |   |                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings                                                 |   | $                                             | 18,129  |   |   | $ | 128 |   |   |   | 0.71 | % |   | $ | 17,778 |   |   | $ | 148 |   |   |   | 0.83 | % |   | $ | 18,207 |   |   | $ | 186 |   |   |   | 1.02 | % |
| Interest      bearing checking                          |   |                                          | 56,828  |   |   |   | 977 |   |   |   | 1.72 | % |   |   | 27,744 |   |   |   | 270 |   |   |   | 0.97 | % |   |   | 25,028 |   |   |   | 408 |   |   |   | 1.63 | % |
| Money      rate savings                                 |   |                                          | 32,084  |   |   |   | 471 |   |   |   | 1.47 | % |   |   | 35,495 |   |   |   | 689 |   |   |   | 1.94 | % |   |   | 36,380 |   |   |   | 1,049 |   |   |   | 2.88 | % |
| Certificates      of deposit and other time deposits    |   |                                          | 100,800 |   |   |   | 2,305 |   |   |   | 2.29 | % |   |   | 112,731 |   |   |   | 4,228 |   |   |   | 3.75 | % |   |   | 129,857 |   |   |   | 6,066 |   |   |   | 4.67 | % |
| Total interest bearing      deposits                    |   |                                          | 207,841 |   |   |   | 3,881 |   |   |   | 1.87 | % |   |   | 193,748 |   |   |   | 5,335 |   |   |   | 2.75 | % |   |   | 209,472 |   |   |   | 7,708 |   |   |   | 3.68 | % |
| Short      term borrowed funds                          |   |                                          | 58,761  |   |   |   | 529 |   |   |   | 0.90 | % |   |   | 60,190 |   |   |   | 1,439 |   |   |   | 2.39 | % |   |   | 50,488 |   |   |   | 2,560 |   |   |   | 5.07 | % |
| Long      term debt                                     |   |                                          | 44,368  |   |   |   | 2,050 |   |   |   | 4.62 | % |   |   | 40,989 |   |   |   | 1,980 |   |   |   | 4.83 | % |   |   | 22,865 |   |   |   | 997 |   |   |   | 4.36 | % |
| Total      interest bearing liabilities                 |   |                                          | 310,970 |   |   |   | 6,460 |   |   |   | 2.08 | % |   |   | 294,927 |   |   |   | 8,754 |   |   |   | 2.97 | % |   |   | 282,825 |   |   |   | 11,265 |   |   |   | 3.98 | % |
| Non-interest      bearing deposits                      |   |                                          | 44,253  |   |   |   |   |   |   |   |   |   |   |   | 47,355 |   |   |   |   |   |   |   |   |   |   |   | 45,598 |   |   |   |   |   |   |   |   |   |
| Other      liabilities                                  |   |                                          | 5,456   |   |   |   |   |   |   |   |   |   |   |   | 4,262 |   |   |   |   |   |   |   |   |   |   |   | 4,188 |   |   |   |   |   |   |   |   |   |
| Shareholders'      equity                               |   |                                          | 40,448  |   |   |   |   |   |   |   |   |   |   |   | 36,619 |   |   |   |   |   |   |   |   |   |   |   | 34,153 |   |   |   |   |   |   |   |   |   |
|  TOTAL      LIABILITIES & SHAREHOLDERS' EQUITY |   | $                                             | 401,126 |   |   | $ | 6,460 |   |   |   |   |   |   | $ | 383,163 |   |   | $ | 8,754 |   |   |   |   |   |   | $ | 366,765 |   |   | $ | 11,265 |   |   |   |   |   |
|  Interest      income and rate earned              |   |                                          |    |   |   | $ | 20,980 |   |   |   | 5.46 | % |   |   |   |   |   | $ | 22,563 |   |   |   | 6.14 | % |   |   |   |   |   | $ | 24,605 |   |   |   | 7.04 | % |
| Interest      expense and rate paid                     |   |                                          |    |   |   |   | 6,460 |   |   |   | 2.08 | % |   |   |   |   |   |   | 8,754 |   |   |   | 2.97 | % |   |   |   |   |   |   | 11,265 |   |   |   | 3.98 | % |
| Interest      rate spread                               |   |                                          |    |   |   |   |   |   |   |   | 3.38 | % |   |   |   |   |   |   |   |   |   |   | 3.18 | % |   |   |   |   |   |   |   |   |   |   | 3.06 | % |
| NET      INTEREST INCOME & NET YIELD ON             |   |                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| AVERAGE      EARNING ASSETS                             |   |                                          |    |   |   | $ | 14,520 |   |   |   | 3.78 | % |   |   |   |   |   | $ | 13,809 |   |   |   | 3.76 | % |   |   |   |   |   | $ | 13,340 |   |   |   | 3.82 | % |
|                                                    |   |                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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|                              |   | December      31, 2009 |    |   | December      31, 2008 |   |
|-----------------------------------|--------|------------------------|---------|--------|------------------------|--------|
|                              |   | Company                |    |   | Bank                   |   |   | Company |   |   | Bank |   |
| Risk-based      capital:          |   |                   |    |   |                   |   |   |   |   |   |   |   |
| Total                             |   | $                      | 45,376  |   |                   | $      | 42,118 |   |   | $ | 44,283 |   |   | $ | 39,335 |   |
| Tier      1                       |   |                   | 42,123  |   |                   |   | 38,867 |   |   |   | 41,885 |   |   |   | 36,937 |   |
| Leverage                          |   |                   | 42,123  |   |                   |   | 38,867 |   |   |   | 41,885 |   |   |   | 36,937 |   |
| Assets:                           |   |                   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Quarterly      average assets (1) |   |                   | 394,593 |   |                   |   | 389,343 |   |   |   | 399,321 |   |   |   | 394,715 |   |
| Risk-weighted      assets         |   |                   | 259,644 |   |                   |   | 259,415 |   |   |   | 255,841 |   |   |   | 255,619 |   |
| Ratios:                           |   |                   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Total      risk-based capital     |   |                   | 17.48   | %      |                   |   | 16.24 | % |   |   | 17.31 | % |   |   | 15.39 | % |
| Tier      1 risk-based capital    |   |                   | 16.22   | %      |                   |   | 14.98 | % |   |   | 16.37 | % |   |   | 14.45 | % |
| Leverage                          |   |                   | 10.68   | %      |                   |   | 9.98 | % |   |   | 10.49 | % |   |   | 9.36 | % |

| (1)   | Excludes      disallowed assets |
|-----------------|---------------------------------|

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|                                  |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|---------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                  |   |   |   |   |   |   |   |   |   |
| Return      on average assets         |   |   | .40    | %      |   |   | .91    | %      |   |   | .82 | % |
| Return      on average equity         |   |   | 4.01   | %      |   |   | 9.57   | %      |   |   | 8.80 | % |
| Dividend      payout ratio            |   |   | 94.30  | %      |   |   | 43.54  | %      |   |   | 50.70 | % |
| Average      equity to average assets |   |   | 10.08  | %      |   |   | 9.56   | %      |   |   | 9.31 | % |
| Net      interest margin              |   |   | 3.78   | %      |   |   | 3.76   | %      |   |   | 3.82 | % |
| Basic      income per share           |   | $      | .76    |   |   | $      | 1.65   |   |   | $ | 1.42 |   |
| Diluted      income per share         |   | $      | .76    |   |   | $      | 1.65   |   |   | $ | 1.42 |   |

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|                                                 | Volume/Rate      Analysis        |   |
|------------------------------------------------------|----------------------------------|--------|
|                                                 | 2009      change from 2008       |   | 2008      change from 2007 |   |
|                                                 | Total                            |   | Volume |   | Rate |   | Total |   | Volume |   | Rate |   |
| ASSETS                                               |  (dollars      in thouands) |   |
| Loans                                                | $                                | (2,181 | ) | $ | (125 | ) | $ | (2,056 | ) | $ | (3,533 | ) | $ | (916 | ) | $ | (2,617 | ) |
| Investment      securities:                          |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage      Backed Securities                      |                             | 600    |   |   | 811 |   |   | (211 | ) |   | 1,721 |   |   | 1,673 |   |   | 48 |   |
| State      & municipal-non taxable               |                             | 68     |   |   | 96 |   |   | (28 | ) |   | 14 |   |   | 44 |   |   | (30 | ) |
| State      & municipal-taxable                   |                             | -      |   |   | - |   |   | - |   |   | 57 |   |   | 57 |   |   | - |   |
| Other                                                |                             | (43    | ) |   | 24 |   |   | (67 | ) |   | (177 | ) |   | (82 | ) |   | (95 | ) |
| Total      investment securities                     |                             | 625    |   |   | 931 |   |   | (306 | ) |   | 1,615 |   |   | 1,692 |   |   | (77 | ) |
| Interest      bearing bank balances                  |                             | (23    | ) |   | 3 |   |   | (26 | ) |   | (114 | ) |   | (69 | ) |   | (45 | ) |
| Federal      funds sold                              |                             | (4     | ) |   | 1 |   |   | (5 | ) |   | (10 | ) |   | (3 | ) |   | (7 | ) |
| Total      earning assets                            |                             | (1,583 | ) |   | 810 |   |   | (2,393 | ) |   | (2,042 | ) |   | 704 |   |   | (2,746 | ) |
| Interest      bearing deposits:                      |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings                                              | $                                | (20    | ) | $ | 3 |   | $ | (23 | ) | $ | (37 | ) | $ | (4 | ) | $ | (33 | ) |
| Interest      bearing checking                       |                             | 707    |   |   | 408 |   |   | 299 |   |   | (138 | ) |   | 40 |   |   | (178 | ) |
| Money      rate savings                              |                             | (218   | ) |   | (62 | ) |   | (156 | ) |   | (360 | ) |   | (25 | ) |   | (335 | ) |
| Certificates      of deposit and other time deposits |                             | (1,923 | ) |   | (410 | ) |   | (1,513 | ) |   | (1,838 | ) |   | (737 | ) |   | (1,101 | ) |
| Total interest bearing      deposits                 |                             | (1,454 | ) |   | (61 | ) |   | (1,393 | ) |   | (2,373 | ) |   | (726 | ) |   | (1,647 | ) |
| Short      term borrowed funds                       |                             | (910   | ) |   | (33 | ) |   | (877 | ) |   | (1,121 | ) |   | 423 |   |   | (1,544 | ) |
| Long      term debt                                  |                             | 70     |   |   | 159 |   |   | (89 | ) |   | 983 |   |   | 865 |   |   | 118 |   |
| Total      interest bearing liabilities              |                             | (2,294 | ) |   | 65 |   |   | (2,359 | ) |   | (2,511 | ) |   | 562 |   |   | (3,073 | ) |
| Change      in Interest Earning Assets               | $                                | (1,583 | ) | $ | 810 |   | $ | (2,393 | ) | $ | (2,042 | ) | $ | 704 |   | $ | (2,746 | ) |
| Change      in Interest Bearing Liabilities          |                             | (2,294 | ) |   | 65 |   |   | (2,359 | ) |   | (2,511 | ) |   | 562 |   |   | (3,073 | ) |
| Change      in Net Interest Income                   | $                                | 711    |   | $ | 745 |   | $ | (34 | ) | $ | 469 |   | $ | 142 |   | $ | 327 |   |

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C

|                                                                                                                 |
|----------------------------------------------------------------------------------------------------------------------|
|                                                                                                                 |
|                                                                                                                 |
|                                                                                                                 |
| Audited      Financial Statements:                                                                                   |
|                                                                                                                 |
| Management’s Annual Report on Internal Control      over Financial Reporting                                   |
|                                                                                                                 |
| Report of Independent Registered Public Accounting      Firm                                                         |
|                                                                                                                 |
| Consolidated Balance Sheets as of December 31, 2009 and      2008                                                    |
|                                                                                                                 |
| Consolidated Statements of Income for the years ended December      31, 2009 and 2008                                |
|                                                                                                                 |
| Consolidated Statements of Changes in Stockholders’ Equity for      the years ended December 31, 2009 and 2008 |
|                                                                                                                 |
| Consolidated Statements of Cash Flows for the years ended      December 31, 2009 and 2008                            |
|                                                                                                                 |
| Notes to the Consolidated Financial      Statements                                                                  |
|                                                                                                                 |
|                                                                                                                 |
|                                                                                                                 |

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BRITTON 

|                                                                                                                     |   | 2009   |        |   | 2008   |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| ASSETS:                                                                                                                  |   |   |        |   |   |   |
| Cash      and Due from Banks:                                                                                            |   |   |        |   |   |   |
| Non-interest      bearing                                                                                                |   | $      | 4,702,159   |   |   | $      | 6,752,462 |   |
| Interest      bearing                                                                                                    |   |   | 5,601,482   |   |   |   | 199,081 |   |
| Total      Cash and Due from Banks                                                                                       |   |   | 10,303,641  |   |   |   | 6,951,543 |   |
| Federal      funds sold                                                                                                  |   |   | 58,799      |   |   |   | - |   |
| Investment      Securities:                                                                                              |   |   |        |   |   |   |   |   |
| Available-for-sale      (amortized cost, in 2009 and 2008, of $94,684,079 and $108,548,988,      respectively)           |   |   | 98,300,252  |   |   |   | 111,895,476 |   |
| Held-to-maturity      (fair value, in 2009 and 2008, of   $45,996,945 and      $54,843,091, respectively) |   |   | 45,027,914  |   |   |   | 54,815,013 |   |
| Equity      securities                                                                                                   |   |   | 3,262,100   |   |   |   | 4,009,938 |   |
| Loans,      less allowance for loan losses of $3,878,738 in 2009 and $2,397,802 in      2008                             |   |   | 219,938,639 |   |   |   | 223,113,495 |   |
| Loans      held for sale                                                                                                 |   |   | 784,063     |   |   |   | - |   |
| Bank      premises and equipment, net                                                                                    |   |   | 8,030,900   |   |   |   | 6,922,835 |   |
| Other      real estate, net of reserves of $0 and $198,390 in 2009 and 2008,      respectively                      |   |   | 815,207     |   |   |   | 919,204 |   |
| Accrued      interest receivable                                                                                         |   |   | 2,002,259   |   |   |   | 2,080,693 |   |
| Cash      surrender value of life insurance                                                                              |   |   | 1,099,395   |   |   |   | 1,055,627 |   |
| Core      deposits, net                                                                                                  |   |   | 450,426     |   |   |   | 558,042 |   |
| Other      assets                                                                                                        |   |   | 3,036,554   |   |   |   | 754,959 |   |
| TOTAL      ASSETS                                                                                                        |   | $      | 393,110,149 |   |   | $      | 413,076,825 |   |

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|                                                                                                                                                                                                                       |   | 2009   |           |   | 2008   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------|--------|--------|--------|
| LIABILITIES:                                                                                                                                                                                                               |   |   |           |   |   |   |
| Deposits:                                                                                                                                                                                                                  |   |   |           |   |   |   |
| Non-interest      bearing                                                                                                                                                                                                  |   | $      | 49,847,304     |   |   | $      | 51,119,827 |   |
| Interest      bearing                                                                                                                                                                                                      |   |   | 201,094,816    |   |   |   | 206,094,593 |   |
| Total      Deposits                                                                                                                                                                                                        |   |   | 250,942,120    |   |   |   | 257,214,420 |   |
|                                                                                                                                                                                                                       |   |   |           |   |   |   |   |   |
| Securities      sold under repurchase agreements                                                                                                                                                                           |   |   | 53,211,325     |   |   |   | 51,633,835 |   |
| Federal      Home Loan Bank advances                                                                                                                                                                                       |   |   | 41,022,754     |   |   |   | 54,939,931 |   |
| Junior      subordinated debentures                                                                                                                                                                                        |   |   | 5,155,000      |   |   |   | 5,155,000 |   |
| Accrued      interest payable (includes $264,879 and $264,954 on securities      sold  under repurchase agreements at December 31, 2009 and 2008,      respectively)                                             |   |   |   793,141 |   |   |   |   1,167,525 |   |
| Advances      from borrowers for taxes and insurance                                                                                                                                                                       |   |   | 259,315        |   |   |   | 313,810 |   |
| Accrued      taxes and other liabilities                                                                                                                                                                                   |   |   | 1,885,605      |   |   |   | 3,111,235 |   |
| Total      Liabilities                                                                                                                                                                                                     |   |   | 353,269,260    |   |   |   | 373,535,756 |   |
|                                                                                                                                                                                                                       |   |   |           |   |   |   |   |   |
| STOCKHOLDERS’      EQUITY:                                                                                                                                                                                           |   |   |           |   |   |   |   |   |
| Common      stock, $2.50 par value per share; 12,000,000 shares authorized; 2,140,966      and 2,132,466 issued and 2,126,466 and 2,117,966 outstanding, as of      December 31, 2009, and December 31, 2008, respectively |   |   | 5,352,415      |   |   |   | 5,331,165 |   |
| Additional      paid-in capital                                                                                                                                                                                            |   |   | 7,396,211      |   |   |   | 7,319,282 |   |
| Retained      earnings                                                                                                                                                                                                     |   |   | 25,082,298     |   |   |   | 25,049,749 |   |
| Accumulated      other comprehensive income/(loss)                                                                                                                                                                         |   |   | 2,267,340      |   |   |   | 2,098,248 |   |
|                                                                                                                                                                                                                       |   |   | 40,098,264     |   |   |   | 39,798,444 |   |
| Less:  Treasury      stock, 14,500 shares, at cost                                                                                                                                                               |   |   | (257,375       | )      |   |   | (257,375 | ) |
| Total      Stockholders’ Equity                                                                                                                                                                                      |   |   | 39,840,889     |   |   |   | 39,541,069 |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                            |   | $      | 393,110,149    |   |   | $      | 413,076,825 |   |

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BR

|                                                         |   | 2009   |       |   | 2008   |   |
|--------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| INTEREST      INCOME:                                        |   |   |       |   |   |   |
| Interest      and fees on loans                              |   | $      | 13,296,099 |   |   | $      | 15,477,317 |   |
| Interest      on investment securities:                      |   |   |       |   |   |   |   |   |
| Taxable      interest income                                 |   |   | 5,946,440  |   |   |   | 5,412,107 |   |
| Exempt      from federal income taxes                        |   |   | 1,736,504  |   |   |   | 1,668,378 |   |
| Other      interest income                                   |   |   | 416        |   |   |   | 4,735 |   |
|                                                         |   |   |       |   |   |   |   |   |
| Total      Interest Income                                   |   |   | 20,979,459 |   |   |   | 22,562,537 |   |
|                                                         |   |   |       |   |   |   |   |   |
| INTEREST      EXPENSE:                                       |   |   |       |   |   |   |   |   |
| Interest      on deposits                                    |   |   | 3,880,690  |   |   |   | 5,334,619 |   |
| Interest      on Federal Home Loan Bank advances             |   |   | 273,640    |   |   |   | 926,113 |   |
| Interest      on trust preferred securities                  |   |   | 203,940    |   |   |   | 328,470 |   |
| Interest      on securities sold under repurchase agreements |   |   | 2,101,661  |   |   |   | 2,164,355 |   |
|                                                         |   |   |       |   |   |   |   |   |
| Total      Interest Expense                                  |   |   | 6,459,931  |   |   |   | 8,753,557 |   |
|                                                         |   |   |       |   |   |   |   |   |
| NET      INTEREST INCOME                                     |   |   | 14,519,528 |   |   |   | 13,808,980 |   |
|                                                         |   |   |       |   |   |   |   |   |
| PROVISION      FOR LOAN LOSSES                               |   |   | 3,420,000  |   |   |   | 730,000 |   |
|                                                         |   |   |       |   |   |   |   |   |
| NET      INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES     |   |   | 11,099,528 |   |   |   | 13,078,980 |   |
|                                                         |   |   |       |   |   |   |   |   |
| OTHER      INCOME:                                           |   |   |       |   |   |   |   |   |
| Service      charges on deposit accounts                     |   |   | 1,677,300  |   |   |   | 1,777,096 |   |
| Income      from fiduciary activities                        |   |   | 2,236      |   |   |   | 2,484 |   |
| Income      from networking arrangements                     |   |   | 62,766     |   |   |   | 160,913 |   |
| Net      gain on sales of loans                              |   |   | 490,666    |   |   |   | 465,019 |   |
| Net      gain (loss) on sale of securities                   |   |   | 92,432     |   |   |   | 148,116 |   |
| Other                                                        |   |   | 494,968    |   |   |   | 460,740 |   |
|                                                         |   |   |       |   |   |   |   |   |
| Total      Other Income                                      |   |   | 2,820,368  |   |   |   | 3,014,368 |   |
| Income      before Other Expenses                            |   |   | 13,919,896 |   |   |   | 16,093,348 |   |

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|                                     |   | 2009   |       |   | 2008   |   |
|------------------------------------------|--------|--------|------------|--------|--------|--------|
| OTHER      EXPENSES:                     |   |   |       |   |   |   |
| Salaries                                 |   |   | 5,456,291  |   |   |   | 5,425,241 |   |
| Employee      benefits                   |   |   | 764,393    |   |   |   | 730,614 |   |
| Director      fees                       |   |   | 146,545    |   |   |   | 166,050 |   |
| Net      occupancy expense               |   |   | 958,517    |   |   |   | 946,737 |   |
| Equipment      expense                   |   |   | 1,243,036  |   |   |   | 1,141,943 |   |
| Other      real estate, net              |   |   | 353,030    |   |   |   | 127,159 |   |
| FDIC      assessment                     |   |   | 719,405    |   |   |   | 49,590 |   |
| Advertising                              |   |   | 236,492    |   |   |   | 219,544 |   |
| Stationery      and supplies             |   |   | 174,917    |   |   |   | 172,059 |   |
| Amortization                             |   |   | 107,616    |   |   |   | 107,616 |   |
| Audit      expense                       |   |   | 252,847    |   |   |   | 219,877 |   |
| Other                                    |   |   | 1,952,851  |   |   |   | 1,974,161 |   |
|                                     |   |   |       |   |   |   |   |   |
| Total      Other Expenses                |   |   | 12,365,940 |   |   |   | 11,280,591 |   |
|                                     |   |   |       |   |   |   |   |   |
| INCOME      BEFORE INCOME TAX EXPENSE    |   |   | 1,553,956  |   |   |   | 4,812,757 |   |
|                                     |   |   |       |   |   |   |   |   |
| INCOME      TAX EXPENSE/(BENEFIT)        |   |   | (69,673    | )      |   |   | 1,309,994 |   |
|                                     |   |   |       |   |   |   |   |   |
| NET      INCOME                          |   | $      | 1,623,629  |   |   | $      | 3,502,763 |   |
|                                     |   |   |       |   |   |   |   |   |
| PER      SHARE DATA:                     |   |   |       |   |   |   |   |   |
|                                     |   |   |       |   |   |   |   |   |
| Basic      earnings per share            |   | $      | 0.76       |   |   | $      | 1.65 |   |
|                                     |   |   |       |   |   |   |   |   |
| Basic      weighted shares outstanding   |   |   | 2,125,371  |   |   |   | 2,117,966 |   |
|                                     |   |   |       |   |   |   |   |   |
| Diluted      earnings per share          |   | $      | 0.76       |   |   | $      | 1.65 |   |
|                                     |   |   |       |   |   |   |   |   |
| Diluted      weighted shares outstanding |   |   | 2,125,799  |   |   |   | 2,117,966 |   |
|                                     |   |   |       |   |   |   |   |   |
| Cash      dividends per share            |   | $      | 0.72       |   |   | $      | 0.72 |   |

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B

|                                                                                                                                    |   |   |              |      |   |    |   |      |       |   |   |          |   |   | Accumulated   |       |   |   |   |      |     |   |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------|-----------|--------|---------|--------|-----------|------------|--------|--------|---------------|--------|--------|---------------|------------|--------|--------|--------|-----------|----------|--------|
|                                                                                                                                    |   |   |              |      |   |    |   |      | Additional |   |   |          |   |   | Other         |       |   |   |   |      |     |   |
|                                                                                                                                    |   |   | Common      Stock |      |   | Paid-In |   |      | Retained   |   |   | Comprehensive |   |   | Treasury      |       |   |   |   |
|                                                                                                                                    |   |   | Shares            |      |   | Amount  |   |      | Capital    |   |   | Earnings      |   |   | Income/(loss) |       |   | Stock  |   |      | Total    |   |
| BALANCE,      December 31, 2007                                                                                                         |   |   |              | 2,117,966 |   |    | $      | 5,331,165 |       |   | $      | 7,305,970     |   |   | $             | 23,071,921 |   |   | $      | 349,184   |     |   | $ | (257,375 | ) |   | $ | 35,800,865 |   |
| Comprehensive      income:                                                                                                              |   |   |              |      |   |    |   |      |       |   |   |          |   |   |          |       |   |   |   |      |     |   |   |   |   |   |   |   |   |
| Net      Income                                                                                                                         |   |   |              | -         |   |    |   | -         |       |   |   | -             |   |   |          | 3,502,763  |   |   |   | -         |     |   |   | - |   |   |   | 3,502,763 |   |
| Other      comprehensive income, net of tax:                                                                                            |   |   |              |      |   |    |   |      |       |   |   |          |   |   |          |       |   |   |   |      |     |   |   |   |   |   |   |   |   |
|           Change in fair value of                                                                                   |   |   |              |      |   |    |   |      |       |   |   |          |   |   |          |       |   |   |   |      |     |   |   |   |   |   |   |   |   |
|                   available for sale securities,                            |   |   |              |      |   |    |   |      |       |   |   |          |   |   |          |       |   |   |   |      |     |   |   |   |   |   |   |   |   |
|                   net of taxes of $1,110,057                                |   |   |              | -         |   |    |   | -         |       |   |   | -             |   |   |          | -          |   |   |   | 1,865,967 |     |   |   | - |   |   |   | 1,865,967 |   |
|            Change in fair value of                                                                             |   |   |              |      |   |    |   |      |       |   |   |          |   |   |          |       |   |   |   |      |     |   |   |   |   |   |   |   |   |
|                   derivatives, net of tax benefit of                   |   |   |              |      |   |    |   |      |       |   |   |          |   |   |          |       |   |   |   |      |     |   |   |   |   |   |   |   |   |
|              $(69,545)         |   |   |              |      | -      |    |   |      | -          |   |   |          | -      |   |          |       | -      |   |   |      | (116,903 | )      |   |   | - |   |   |   | (116,903 | ) |
| Total      Comprehensive Income                                                                                                         |   |   |              | -         |   |    |   | -         |       |   |   | -             |   |   |          | -          |   |   |   | -         |     |   |   | - |   |   |   | 5,251,827 |   |
| Fair      value of unexercised stock options                                                                                            |   |   |              | -         |   |    |   | -         |       |   |   | 13,312        |   |   |          | -          |   |   |   | -         |     |   |   | - |   |   |   | 13,312 |   |
| Cash      Dividends ($0.72 per share)                                                                                                   |   |   |              | -         |   |    |   | -         |       |   |   | -             |   |   |          | (1,524,935 | )      |   |   | -         |     |   |   | - |   |   |   | (1,524,935 | ) |
| BALANCE      at December 31, 2008                                                                                                       |   |   |              | 2,117,966 |   |    | $      | 5,331,165 |       |   | $      | 7,319,282     |   |   | $             | 25,049,749 |   |   | $      | 2,098,248 |     |   | $ | (257,375 | ) |   | $ | 39,541,069 |   |
|                                                                                                                                    |   |   |              |      |   |    |   |      |       |   |   |          |   |   |          |       |   |   |   |      |     |   |   |   |   |   |   |   |   |   |
| Comprehensive      income:                                                                                                              |   |   |              |      |   |    |   |      |       |   |   |          |   |   |          |       |   |   |   |      |     |   |   |   |   |   |   |   |   |
| Net      Income                                                                                                                         |   |   |              | -         |   |    |   | -         |       |   |   | -             |   |   |          | 1,623,629  |   |   |   | -         |     |   |   | - |   |   |   | 1,623,629 |   |
| Other      comprehensive income, net of tax:                                                                                            |   |   |              |      |   |    |   |      |       |   |   |          |   |   |          |       |   |   |   |      |     |   |   |   |   |   |   |   |   |
|  Change      in fair value of                                                                                                      |   |   |              |      |   |    |   |      |       |   |   |          |   |   |          |       |   |   |   |      |     |   |   |   |   |   |   |   |   |
|  available      for sale securities,                                                                                               |   |   |              |      |   |    |   |      |       |   |   |          |   |   |          |       |   |   |   |      |     |   |   |   |   |   |   |   |   |
|  net      of taxes of $100,592                                                                                                     |   |   |              | -         |   |    |   | -         |       |   |   | -             |   |   |          | -          |   |   |   | 169,092   |     |   |   | - |   |   |   | 169,092 |   |
| Total      Comprehensive Income                                                                                                         |   |   |              | -         |   |    |   | -         |       |   |   | -             |   |   |          | -          |   |   |   | -         |     |   |   | - |   |   |   | 1,792,721 |   |
| Common      Stock issued                                                                                                                |   |   |              | 8,500     |   |    |   | 21,250    |       |   |   | 65,450        |   |   |          | -          |   |   |   | -         |     |   |   | - |   |   |   | 86,700 |   |
| Unearned      Compensation                                                                                                              |   |   |              | -         |   |    |   | -         |       |   |   | -             |   |   |          | (60,023    | )      |   |   | -         |     |   |   | - |   |   |   | (60,023 | ) |
| Fair      value of unexercised stock options                                                                                            |   |   |              | -         |   |    |   | -         |       |   |   | 11,479        |   |   |          | -          |   |   |   | -         |     |   |   | - |   |   |   | 11,479 |   |
| Cash      Dividends ($0.72 per share)                                                                                                   |   |   |              | -         |   |    |   | -         |       |   |   | -             |   |   |          | (1,531,057 | )      |   |   | -         |     |   |   | - |   |   |   | (1,531,057 | ) |
| BALANCE      at December 31, 2009                                                                                                       |   |   |              | 2,126,466 |   |    | $      | 5,352,415 |       |   | $      | 7,396,211     |   |   | $             | 25,082,298 |   |   | $      | 2,267,340 |     |   | $ | (257,375 | ) |   | $ | 39,840,889 |   |

----

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----

Table of Contents 

BR

|                                                                                                                                                                                                                                                                                          |   | 2009   |            |   | 2008   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------|--------|--------|--------|
| CASH      FLOWS FROM OPERATING ACTIVITIES:                                                                                                                                                                                                                                                    |   |   |            |   |   |   |
| Net      income                                                                                                                                                                                                                                                                               |   | $      | 1,623,629       |   |   | $      | 3,502,763 |   |
| Adjustments      to reconcile net income to                                                                                                                                                                                                                                                   |   |   |            |   |   |   |   |   |
| net      cash provided by operating activities:                                                                                                                                                                                                                                               |   |   |            |   |   |   |   |   |
| Deferred      taxes                                                                                                                                                                                                                                                                           |   |   | (444,865        | )      |   |   | (171,022 | ) |
| Provision      for loan losses                                                                                                                                                                                                                                                                |   |   | 3,420,000       |   |   |   | 730,000 |   |
| Provision      for depreciation                                                                                                                                                                                                                                                               |   |   | 798,158         |   |   |   | 764,645 |   |
| Provision      for losses on foreclosed real estate                                                                                                                                                                                                                                           |   |   | 216,700         |   |   |   | 140,040 |   |
| Stock      dividends received                                                                                                                                                                                                                                                                 |   |   | (7,200          | )      |   |   | (61,600 | ) |
| Write-down      of other real estate                                                                                                                                                                                                                                                          |   |   | 194,723         |   |   |   | - |   |
| (Gain)      on sale of loans                                                                                                                                                                                                                                                                  |   |   | (205,946        | )      |   |   | (229,001 | ) |
| (Gain)      Loss on sale of other repossessed assets                                                                                                                                                                                                                                          |   |   | -               |   |   |   | 22,000 |   |
| (Gain)      Loss on disposition of premises and equipment                                                                                                                                                                                                                                     |   |   | -               |   |   |   | 3,980 |   |
| (Gain)      Loss on sale of securities                                                                                                                                                                                                                                                        |   |   | (92,432         | )      |   |   | (148,116 | ) |
| (Gain)      Loss on sale of other real estate                                                                                                                                                                                                                                                 |   |   | 79,642          |   |   |   | (84,195 | ) |
| (Gain)      Loss on sale of other securities                                                                                                                                                                                                                                                  |   |   | (1,262          | )      |   |   | 1,285 |   |
| Net      amortization (accretion) of securities                                                                                                                                                                                                                                               |   |   | 25,667          |   |   |   | (99,897 | ) |
| Amortization      of acquisition premium                                                                                                                                                                                                                                                      |   |   | 107,616         |   |   |   | 107,616 |   |
| Unearned      compensation                                                                                                                                                                                                                                                                    |   |   | (60,023         | )      |   |   | - |   |
| Proceeds      from sales, principal paydowns and maturities    of      investment securities held for trading                                                                                                                                                             |   |   | -               |   |   |   | 19,349,806 |   |
| Net      change in:                                                                                                                                                                                                                                                                           |   |   |            |   |   |   |   |   |
| Loans      held for sale                                                                                                                                                                                                                                                                      |   |   | 784,063         |   |   |   | - |   |
| Accrued      interest receivable                                                                                                                                                                                                                                                              |   |   | 78,434          |   |   |   | 213,542 |   |
| Cash      surrender value of life insurance                                                                                                                                                                                                                                                   |   |   | (43,768         | )      |   |   | (41,944 | ) |
| Other      assets                                                                                                                                                                                                                                                                             |   |   | (2,281,594      | )      |   |   | (977,867 | ) |
| Accrued      interest payable                                                                                                                                                                                                                                                                 |   |   | (374,384        | )      |   |   | (902,549 | ) |
| Accrued      taxes and other      liabilities                                         |   |   | (881,356        | )      |   |   | 1,778,759 |   |
|  Net      Cash Provided by Operating Activities                                                                                                                                                                                                                                          |   |   |  2,935,802 |   |   |   |  23,898,245 |   |
|                                                                                                                                                                                                                                                                                          |   |   |            |   |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES:                                                                                                                                                                                                                                                    |   |   |            |   |   |   |   |   |
| (Increase)      decrease in federal funds sold                                                                                                                                                                                                                                                |   |   | (58,799         | )      |   |   | 245,192 |   |
| Proceeds      from sales, principal paydowns and maturities                                                                                                                                                                                                                                   |   |   |            |   |   |   |   |   |
| of      investment securities held-to-maturity                                                                                                                                                                                                                                                |   |   | 14,003,991      |   |   |   | 4,058,669 |   |
| Proceeds      from sales, principal paydowns and maturities                                                                                                                                                                                                                                   |   |   |            |   |   |   |   |   |
| of      investment securities available-for-sale                                                                                                                                                                                                                                              |   |   | 33,108,600      |   |   |   | 10,661,369 |   |
| Proceeds      from redemption of Federal Home Loan                                                                                                                                                                                                                                            |   |   |            |   |   |   |   |   |
| Bank      stock                                                                                                                                                                                                                                                                               |   |   | 756,300         |   |   |   | 945,400 |   |
| Purchases      of investment securities held-to-maturity                                                                                                                                                                                                                                      |   |   | (4,131,731      | )      |   |   | (18,918,362 | ) |
| Purchases      of investment securities available-for-sale                                                                                                                                                                                                                                    |   |   | (19,262,088     | )      |   |   | (55,467,275 | ) |
| Purchase      of other equity securities                                                                                                                                                                                                                                                      |   |   | -               |   |   |   | (2,374,000 | ) |
| Net      (increase)/decrease in loans                                                                                                                                                                                                                                                         |   |   | (2,735,776      | )      |   |   | (4,024,927 | ) |
| Proceeds      from sales of other repossessed assets                                                                                                                                                                                                                                          |   |   | -               |   |   |   | 8,000 |   |
| Proceeds      from sale of other real estate                                                                                                                                                                                                                                                  |   |   | 741,383         |   |   |   | 1,073,908 |   |
| Purchases      of premises and equipment                                                                                                                                                                                                                                                      |   |   | (1,906,223      | )      |   |   | (333,675 | ) |
|  Net      Cash provided by (Used in) Investing Activities                                                                                                                                                                                                                                |   |   | 20,515,657      |   |   |   | (64,125,701 | ) |

----

Table of Contents 

|                                                                         |   | 2009   |        |   | 2008   |   |
|------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| CASH      FLOWS FROM FINANCING ACTIVITIES:                                   |   |   |        |   |   |   |
| Net      increase (decrease) in customer deposits                            |   |   | (6,468,182  | )      |   |   | 17,219,779 |   |
| Net      increase (decrease) in brokered deposits                            |   |   | 195,881     |   |   |   | (6,399,507 | ) |
| Net      increase (decrease) in Federal Home Loan Bank                       |   |   |        |   |   |   |   |   |
| advances                                                                     |   |   | (13,917,177 | )      |   |   | 25,779,200 |   |
| Net      increase (decrease) in securities sold under                        |   |   |        |   |   |   |   |   |
| repurchase      agreements                                                   |   |   | 1,577,490   |   |   |   | 3,404,536 |   |
| Increase      (decrease) in advances from borrowers                          |   |   |        |   |   |   |   |   |
| for      taxes and insurance                                                 |   |   | (54,495     | )      |   |   | (45,691 | ) |
| Cash      dividends paid                                                     |   |   | (1,531,057  | )      |   |   | (1,524,936 | ) |
| Common      stock issued                                                     |   |   | 86,700      |   |   |   | - |   |
| Fair      value of unexercised stock options                                 |   |   | 11,479      |   |   |   | 13,312 |   |
|  Net      Cash Provided by/(Used in)  Financing Activities    |   |   | (20,099,361 | )      |   |   | 38,446,693 |   |
|                                                                         |   |   |        |   |   |   |   |   |
| NET      INCREASE/(DECREASE) IN CASH AND DUE FROM BANKS                      |   |   | 3,352,098   |   |   |   | (1,780,763 | ) |
|  CASH      AND DUE FROM BANKS AT BEGINNING OF YEAR                      |   |   | 6,951,543   |   |   |   | 8,732,306 |   |
|  CASH      AND DUE FROM BANKS AT END OF YEAR                            |   | $      | 10,303,641  |   |   | $      | 6,951,543 |   |
|  SUPPLEMENTAL      DISCLOSURES OF CASH FLOW INFORMATION                 |   |   |        |   |   |   |   |   |
| Cash      payments for:                                                      |   |   |        |   |   |   |   |   |
| Income      taxes                                                            |   | $      | 1,254,865   |   |   | $      | 615,136 |   |
|  Interest      on deposits and borrowings                               |   | $      | 6,834,315   |   |   | $      | 9,656,107 |   |
|                                                                         |   |   |        |   |   |   |   |   |
| SCHEDULE      OF NONCASH INVESTING AND FINANCING ACTIVITIES:                 |   |   |        |   |   |   |   |   |
| Transfers      to other real estate/other repossessed assets                 |   | $      | 1,128,452   |   |   | $      | 1,302,159 |   |
|                                                                         |   |   |        |   |   |   |   |   |
| Change      in unrealized (gains) losses on                                  |   |   |        |   |   |   |   |   |
| securities      available-for-sale                                           |   | $      | 269,684     |   |   | $      | 2,976,024 |   |
|                                                                         |   |   |        |   |   |   |   |   |
| Change      in the deferred tax effect in unrealized                         |   |   |        |   |   |   |   |   |
| gains      (losses) on securities available-for-sale                         |   | $      | 100,592     |   |   | $      | 1,110,057 |   |
|                                                                         |   |   |        |   |   |   |   |   |
| Change      in unrealized gains on derivatives                               |   |   | -           |   |   | $      | (186,448 | ) |
|                                                                         |   |   |        |   |   |   |   |   |
| Change      in the deferred tax effect in unrealized gains on    derivatives |   |   | -           |   |   | $      | (69,545 | ) |

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B

NOTEA.

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| The      Company and its subsidiaries file a consolidated federal income tax      return. Consolidated income tax expense is allocated on the basis of each      company’s income adjusted for permanent  differences. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                    |   | 2009   |      |   | 2008   |   |
|---------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Basic      weighted average shares outstanding          |   |   | 2,125,371 |   |   |   | 2,117,966 |   |
| Dilutive      effect of stock options                   |   |   | 428       |   |   |   | 0 |   |
|  Dilutive      weighted average shares outstanding |   |   | 2,125,799 |   |   |   | 2,117,966 |   |
| Net      income                                         |   | $      | 1,623,629 |   |   | $      | 3,502,763 |   |
| Net      income per share-basic                         |   | $      | 0.76      |   |   | $      | 1.65 |   |
| Net      income per share-dilutive                      |   | $      | 0.76      |   |   | $      | 1.65 |   |

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| During      1999, the Company acquired certain assets and liabilities of three Union      Planters, N.A. branches in Natchez and Vicksburg, Mississippi, which were      accounted for as a purchase.  The Bank paid a premium for the      depositor relationship of $1,614,210.  This premium is included      in other assets and is being amortized over 15 years, which is the      estimated life of the customerbase. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | Recent      Accounting Pronouncements |
|--------|---------------------------------------|

|   | Reclassifications |
|--------|-------------------|

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|                                                                                                                                                        |   |      |       |   | Gross      |   |      | Gross      |   |   |     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|------------|--------|------------|--------|-----------|------------|--------|--------|----------|--------|
|                                                                                                                                                        |   | Amortized |       |   | Unrealized |   |      | Unrealized |   |   | Fair     |   |
|                                                                                                                                                        |   | Cost      |       |   | Gains      |   |      | Losses     |   |   | Value    |   |
| Obligations      of State and                                                                                                                               |   |      |       |   |       |   |      |       |   |   |     |   |
| Political      Subdivisions                                                                                                                                 |   | $         | 33,621,558 |   |       | $      | 758,162   |       |   | $      | (253,581 | )      |   | $ | 34,126,138 |   |
| Mortgage-Backed      Securities                                                                                                                             |   |      | 11,406,356 |   |       |   | 464,451   |       |   |   | -        |   |   |   | 11,870,807 |   |
|                          Total |   | $         | 45,027,914 |   |       | $      | 1,222,613 |       |   | $      | (253,581 | )      |   | $ | 45,996,945 |   |

|                                                                                                                                                        |   |      |       |   | Gross      |   |      | Gross      |   |   |     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|------------|--------|------------|--------|-----------|------------|--------|--------|----------|--------|
|                                                                                                                                                        |   | Amortized |       |   | Unrealized |   |      | Unrealized |   |   | Fair     |   |
|                                                                                                                                                        |   | Cost      |       |   | Gains      |   |      | Losses     |   |   | Value    |   |
| Obligations      of State and                                                                                                                               |   |      |       |   |       |   |      |       |   |   |     |   |
| Political      Subdivisions                                                                                                                                 |   | $         | 6,978,808  |   |       | $      | 171,975   |       |   | $      | (317,748 | )      |   | $ | 6,833,035 |   |
| Mortgage-Backed      Securities                                                                                                                             |   |      | 84,105,117 |   |       |   | 3,899,723 |       |   |   | (12,283  | )      |   |   | 87,992,557 |   |
| Obligations      of Other U.S.                                                                                                                              |   |      |       |   |       |   |      |       |   |   |     |   |   |   |   |   |
| Government      Sponsored Agencies                                                                                                                          |   |      | 3,600,154  |   |       |   | -         |       |   |   | (125,494 | )      |   |   | 3,474,660 |   |
|                          Total |   | $         | 94,684,079 |   |       | $      | 4,071,698 |       |   | $      | (455,525 | )      |   | $ | 98,300,252 |   |

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| NOTE      B. | INVESTMENT      SECURITIES (Continued) |
|--------------|----------------------------------------|

|                                                                                                                                                        |   |      |       |   | Gross      |   |    | Gross      |   |   |     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|------------|--------|------------|--------|---------|------------|--------|--------|----------|--------|
|                                                                                                                                                        |   | Amortized |       |   | Unrealized |   |    | Unrealized |   |   | Fair     |   |
|                                                                                                                                                        |   | Cost      |       |   | Gains      |   |    | Losses     |   |   | Value    |   |
| Obligations      of State and                                                                                                                               |   |      |       |   |       |   |    |       |   |   |     |   |
| Political      Subdivisions                                                                                                                                 |   | $         | 39,529,246 |   |       | $      | 573,387 |       |   | $      | (842,953 | )      |   | $ | 39,259,680 |   |
| Mortgage-Backed      Securities                                                                                                                             |   |      | 15,285,767 |   |       |   | 297,645 |       |   |   | -        |   |   |   | 15,583,412 |   |
|                          Total |   | $         | 54,815,013 |   |       | $      | 871,032 |       |   | $      | (842,953 | )      |   | $ | 54,843,091 |   |

|                                                                                                                                                        |   |      |        |   | Gross      |   |      | Gross      |   |   |    |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-------------|--------|------------|--------|-----------|------------|--------|--------|---------|--------|
|                                                                                                                                                        |   | Amortized |        |   | Unrealized |   |      | Unrealized |   |   | Fair    |   |
|                                                                                                                                                        |   | Cost      |        |   | Gains      |   |      | Losses     |   |   | Value   |   |
|  Mortgage-Backed      Securities                                                                                                                       |   | $         | 108,548,988 |   |       | $      | 3,365,814 |       |   | $      | (19,325 | )      |   | $ | 111,895,476 |   |
|                          Total |   | $         | 108,548,988 |   |       | $      | 3,365,814 |       |   | $      | (19,325 | )      |   | $ | 111,895,476 |   |

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| NOTE      B. | INVESTMENT      SECURITIES  (Continued) |
|--------------|---------------------------------------------------|

|   | The      aggregate fair value and aggregate unrealized losses on securities whose      fair values are below book values as of December 31, 2009, are summarized      below.  Due to the nature of the investment and current market      prices, these unrealized losses are considered a temporary impairment of      the securities. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | As      of December 31, 2009, there were twenty-five securities included in      held-to-maturity and fifteen securities included in      available-for-sale. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                    |   | Less      than 12 Months |      |   | 12      Months or More |   |     | Total  |   |
|-----------------------------------------------------------------------------------------|--------|--------------------------|-----------|--------|------------------------|--------|----------|--------|--------|
|                                                                                    |   | Fair                     |      |   | Unrealized             |   |     | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                                                                                    |   | Value                    |      |   | Loss                   |   |     | Value  |   |   | Loss |   |   | Value |   |   | Loss |   |
| Held-to-Maturity:                                                                       |   |                     |      |   |                   |   |     |   |   |   |   |   |   |   |   |   |   |   |
|  Obligations      of                                                               |   |                     |      |   |                   |   |     |   |   |   |   |   |   |   |   |   |   |   |
| State      and Political                                                                |   |                     |      |   |                   |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Subdivisions      (25)                                                                  |   | $                        | 5,753,701 |   |                   | $      | (39,094  | )      |   | $ | 4,466,850 |   |   | $ | (214,487 | ) |   | $ | 10,220,551 |   |   | $ | (253,581 | ) |
| Total                                                                                   |   | $                        | 5,753,701 |   |                   | $      | (39,094  | )      |   | $ | 4,466,850 |   |   | $ | (214,487 | ) |   | $ | 10,220,551 |   |   | $ | (253,581 | ) |
|                                                                                    |   |                     |      |   |                   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Available      for Sale:                                                                |   |                     |      |   |                   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Obligations      of                                                               |   |                     |      |   |                   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| State      and Political                                                                |   |                     |      |   |                   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subdivisions      (12)                                                                  |   | $                        | 3,647,027 |   |                   | $      | (317,748 | )      |   |   | - |   |   |   | - |   |   | $ | 3,647,027 |   |   | $ | (317,748 | ) |
| Mortgaged-backed                                                                        |   |                     |      |   |                   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Securities      (1)                                                               |   |                     | 924,524   |   |                   |   | (12,283  | )      |   |   | - |   |   |   | - |   |   |   | 924,524 |   |   |   | (12,283 | ) |
| Obligations      of Other    U.S. Government Sponsored Agencies (2) |   |                     | 3,474,660 |   |                   |   | (125,494 | )      |   |   | - |   |   |   | - |   |   |   | 3,474,660 |   |   |   | (125,494 | ) |
| Total                                                                                   |   | $                        | 8,046,211 |   |                   | $      | (455,526 | )      |   |   | - |   |   |   | - |   |   | $ | 8,046,211 |   |   | $ | (455,526 | ) |

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| NOTE      B. | INVESTMENT      SECURITIES  (Continued) |
|--------------|---------------------------------------------------|

|                            |   | Less      than 12 Months |       |   | 12      Months or More |   |     | Total  |   |
|---------------------------------|--------|--------------------------|------------|--------|------------------------|--------|----------|--------|--------|
|                            |   | Fair                     |       |   | Unrealized             |   |     | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                            |   | Value                    |       |   | Loss                   |   |     | Value  |   |   | Loss |   |   | Value |   |   | Loss |   |
| Held-to-Maturity:               |   |                     |       |   |                   |   |     |   |   |   |   |   |   |   |   |   |   |   |
|  Obligations      of       |   |                     |       |   |                   |   |     |   |   |   |   |   |   |   |   |   |   |   |
| State      and Political        |   |                     |       |   |                   |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Subdivisions      (38)          |   | $                        | 10,348,081 |   |                   | $      | (541,309 | )      |   | $ | 2,897,458 |   |   | $ | (301,645 | ) |   | $ | 13,245,539 |   |   | $ | (842,954 | ) |
|  Total                     |   | $                        | 10,348,081 |   |                   | $      | (541,309 | )      |   | $ | 2,897,458 |   |   | $ | (301,645 | ) |   | $ | 13,245,539 |   |   | $ | (842,954 | ) |
|                            |   |                     |       |   |                   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Available      for Sale:        |   |                     |       |   |                   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgaged-backed                |   |                     |       |   |                   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Securities      (2) |   | $                        | 1,262,919  |   |                   | $      | (19,325  | )      |   |   | - |   |   |   | - |   |   | $ | 1,262,919 |   |   | $ | (19,325 | ) |
|  Total                     |   | $                        | 1,262,919  |   |                   | $      | (19,325  | )      |   |   | - |   |   |   | - |   |   | $ | 1,262,919 |   |   | $ | (19,325 | ) |

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| NOTE      B. | INVESTMENT      SECURITIES  (Continued) |
|--------------|---------------------------------------------------|

|                              |   | Mortgage      Backed Securities |   |
|-----------------------------------|--------|---------------------------------|--------|
|                              |   | Held-to-Maturity                |   |   | Available-for-Sale |   |
|                              |   | Weighted      Average Yield     |   |   | Amortized      Cost |   |   | Fair      Value |   |   | Weighted      Average Yield |   |   | Amortized      Cost |   |   | Fair      Value |   |
| Due      after 5 years through 10 |   |                            | 5.240  | % |   | $ | 887,288 |   |   | $ | 939,328 |   |   |   | 3.808 | % |   | $ | 1,143,214 |   |   | $ | 1,172,568 |   |
| Due      after 10 years           |   |                            | 5.256  | % |   |   | 10,519,068 |   |   |   | 10,931,479 |   |   |   | 5.295 | % |   |   | 82,961,903 |   |   |   | 86,819,989 |   |
| Total                             |   |                            | 5.255  | % |   | $ | 11,406,356 |   |   | $ | 11,870,807 |   |   |   | 5.275 | % |   | $ | 84,105,117 |   |   | $ | 87,992,557 |   |

|                    |   | Obligations      of Other U.S. Government Sponsored Entities |   |
|-------------------------|--------|--------------------------------------------------------------|--------|
|                    |   | Held-to-Maturity                                             |   |   | Available-for-Sale |   |
|                    |   | Weighted      Average Yield                                  |   |   | Amortized      Cost |   |   | Fair      Value |   |   | Weighted      Average Yield |   |   | Amortized      Cost |   |   | Fair      Value |   |
| Due      after 10 years |   |                                                         | -      |   |   |   | - |   |   |   | - |   |   |   | 2.929 | % |   | $ | 3,600,154 |   |   | $ | 3,474,660 |   |
| Total                   |   |                                                         | -      |   |   |   | - |   |   |   | - |   |   |   | 2.929 | % |   | $ | 3,600,154 |   |   | $ | 3,474,660 |   |

|                              |   | Obligations      of State and Political Subdivisions |   |
|-----------------------------------|--------|------------------------------------------------------|--------|
|                              |   | Held-to-Maturity                                     |   |   | Available-for-Sale |   |
|                              |   | Weighted      Average Yield                          |   |   | Amortized      Cost |   |   | Fair      Value |   |   | Weighted      Average Yield |   |   | Amortized      Cost |   |   | Fair      Value |   |
| Due      in 1 year or less        |   |                                                 | 6.918  | % |   | $ | 604,946 |   |   | $ | 606,686 |   |   |   | - |   |   | $ | - |   |   | $ | - |   |
| Due      after 1 year through 5   |   |                                                 | 6.738  | % |   |   | 3,321,285 |   |   |   | 3,406,168 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Due      after 5 years through 10 |   |                                                 | 6.998  | % |   |   | 13,825,719 |   |   |   | 14,367,144 |   |   |   | 5.147 | % |   |   | 956,447 |   |   |   | 934,528 |   |
| Due      after ten years          |   |                                                 | 6.366  | % |   |   | 15,869,608 |   |   |   | 15,746,140 |   |   |   | 7.036 | % |   |   | 6,022,361 |   |   |   | 5,898,507 |   |
| Total                             |   |                                                 | 6.673  | % |   | $ | 33,621,558 |   |   | $ | 34,126,138 |   |   |   | 6.780 | % |   | $ | 6,978,808 |   |   | $ | 6,833,035 |   |

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|  NOTE      B. |  INVESTMENT      SECURITIES  (Continued)  |
|--------------------|---------------------------------------------------------------|

| Description                  |   | Fair      Value Measurement |        | Quoted      Prices in Active Markets for Identical Assets (Level 1) |   |  Significant      Other Observable Inputs (Level 2) |   | Significant      Unobservable Inputs (Level 3) |
|------------------------------|--------|-----------------------------|-------------|---------------------------------------------------------------------|--------|----------------------------------------------------------|--------|------------------------------------------------|
|  December      31, 2009 |   | $                           | 98,300,252  |                                                                |   |                                                     | $      | 98,300,252                                     |   |   |
| December      31, 2008       |   | $                           | 111,895,476 |                                                                |   |                                                     | $      | 111,895,476                                    |   |   |

| Level      1 includes      the most reliable sources, and includes quoted prices in active      markets.  Level 2 includes      observable inputs.  Observable inputs are defined to include      inputs other than quoted prices that are observable for the asset or      liability (for example, interest rates and yield curves at commonly quoted      intervals, volatilities, prepayment speeds, loss severities, credit risks,      and default rates) as well as inputs that are derived principally from or      corroborated by observable market data by correlation or other means      (market-corroborated inputs).  Level 3 includes      unobservable inputs and should be used only when observable inputs are      unavailable. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                        |   | 2009   |        |   | 2008   |   |
|---------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Commercial,      Financial and Agricultural |   | $      | 25,606,000  |   |   | $      | 25,128,000 |   |
| Real      Estate-Construction               |   |   | 31,341,000  |   |   |   | 30,910,000 |   |
| Real      Estate-Residential                |   |   | 67,213,000  |   |   |   | 74,923,000 |   |
| Real      Estate-Other                      |   |   | 95,511,000  |   |   |   | 88,341,000 |   |
| Installment                                 |   |   | 4,806,000   |   |   |   | 6,038,000 |   |
| Overdrafts                                  |   |   | 124,000     |   |   |   | 171,000 |   |
|  Total      loans                      |   | $      | 224,601,000 |   |   | $      | 225,511,000 |   |

|   Impaired      loans on which accrual of interest has been discontinued or reduced were      approximately $8,709,000 and $3,568,000 at December 31, 2009, and 2008,      respectively.  If interest on these impaired loans had been      accrued, the income would have approximated $425,000 in 2009 and $191,000      in 2008.  The related allowance amount on impaired loans at      December 31, 2009, was approximately $2,112,836 compared to $408,073 at      December 31, 2008.  Loans which are contractually 90 days or      more past due as of December 31, 2009 and 2008 were approximately      $1,003,944 and $517,779,respectively. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| In      the ordinary course of business, the Bank makes loans to its executive      officers, principal stockholders, directors and to companies in which      these borrowers are principal owners.  Loans outstanding to such      borrowers (including companies in which they are principal owners)      amounted to $957,807 and $1,394,093 at December 31, 2009 and 2008,      respectively.  These loans were made on substantially the same      terms, including interest rate and collateral, as those prevailing at the      time for comparable transactions with other persons and did not involve      more than normal risk of collectibility or present other unfavorable      features. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| The      aggregate amount of loans to such related parties for 2009 and 2008 is as      follows: |
|--------------------------------------------------------------------------------------------------|

|                        |   | 2009   |      |   | 2008   |   |
|-----------------------------|--------|--------|-----------|--------|--------|--------|
| Balance      at January 1   |   | $      | 1,394,093 |   |   | $      | 2,406,672 |   |
| New      Loans              |   |   | 418,645   |   |   |   | 949,898 |   |
| Repayments                  |   |   | (854,931  | )      |   |   | (1,616,796 | ) |
| Transfers      out          |   |   | -         |   |   |   | (345,681 | ) |
| Balance      at December 31 |   | $      | 957,807   |   |   | $      | 1,394,093 |   |

|                                        |   | 2009   |       |   | 2008   |   |
|---------------------------------------------|--------|--------|------------|--------|--------|--------|
| Balance      at January 1                   |   | $      | 2,397,802  |   |   | $      | 2,430,936 |   |
| Credits      charged off:                   |   |   |       |   |   |   |   |   |
| Commercial,      Financial and Agricultural |   |   | (139,581   | )      |   |   | (541,044 | ) |
| Real      Estate – Construction       |   |   | (275,364   | )      |   |   | (165,916 | ) |
| Real      Estate – Residential        |   |   | (138,421   | )      |   |   | (410,109 | ) |
| Real      Estate – Other              |   |   | (1,456,360 | )      |   |   | (6,915 | ) |
| Installment      Loans                      |   |   | (59,873    | )      |   |   | (38,590 | ) |
| Total      Charge-Offs                      |   |   | (2,069,599 | )      |   |   | (1,162,574 | ) |
| Recoveries:                                 |   |   |       |   |   |   |   |   |
| Commercial,      Financial and Agricultural |   |   | 25,159     |   |   |   | 189,689 |   |
| Real      Estate – Construction       |   |   | 10,033     |   |   |   | 6,305 |   |
| Real      Estate – Residential        |   |   | 88,490     |   |   |   | 82,748 |   |
| Real      Estate - Other                    |   |   | -          |   |   |   | 33,772 |   |
| Installment      Loans                      |   |   | 6,853      |   |   |   | 86,926 |   |
| Total      Recoveries                       |   |   | 130,535    |   |   |   | 399,440 |   |
| Net      Credits Charged Off                |   |   | (1,939,064 | )      |   |   | (763,134 | ) |
| Provision      for Loan Losses              |   |   | 3,420,000  |   |   |   | 730,000 |   |
| Balance      at December 31                 |   | $      | 3,878,738  |   |   | $      | 2,397,802 |   |

----

Table of Contents 

| Loans      serviced for others are not included in the accompanying consolidated      balance sheets. The unpaid principal balances of these loans were      approximately $10,509,814 and $9,555,670 in 2009 and 2008,      respectively. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                  |   | 2009   |       |   | 2008   |   |
|---------------------------------------|--------|--------|------------|--------|--------|--------|
| Buildings      and Improvements       |   | $      | 8,124,305  |   |   | $      | 7,440,015 |   |
| Furniture      and Equipment          |   |   | 6,149,909  |   |   |   | 5,225,219 |   |
|                                  |   |   | 14,274,214 |   |   |   | 12,665,234 |   |
| Less:      Accumulated Depreciation   |   |   | (7,612,867 | )      |   |   | (6,856,953 | ) |
| Land                                  |   |   | 1,369,553  |   |   |   | 1,114,553 |   |
| Bank      Premises and Equipment, Net |   | $      | 8,030,900  |   |   | $      | 6,922,835 |   |

|                                      |   | 2009   |        |   | 2008   |   |
|-------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Non-Interest      Bearing Demand Deposits |   | $      | 49,847,304  |   |   | $      | 51,119,827 |   |
| NOW      Accounts                         |   |   | 57,815,246  |   |   |   | 48,338,323 |   |
| Money      Market Deposit Accounts        |   |   | 30,563,856  |   |   |   | 33,662,518 |   |
| Savings      Accounts                     |   |   | 18,259,388  |   |   |   | 17,736,516 |   |
| Certificates      of Deposit              |   |   | 94,456,326  |   |   |   | 106,357,236 |   |
|                                      |   | $      | 250,942,120 |   |   | $      | 257,214,420 |   |

----

Table of Contents 

|                                |   | 2009   |       |   | 2008   |   |
|-------------------------------------|--------|--------|------------|--------|--------|--------|
| Time      Remaining Until Maturity: |   |   |       |   |   |   |
| Three      Months or Less           |   | $      | 16,319,474 |   |   | $      | 21,104,104 |   |
| Over      Three Through Six Months  |   |   | 6,517,440  |   |   |   | 10,266,988 |   |
| Over      Six Through Twelve Months |   |   | 14,213,515 |   |   |   | 12,796,081 |   |
| Over      Twelve Months             |   |   | 3,628,905  |   |   |   | 3,417,858 |   |
|                                |   | $      | 40,679,334 |   |   | $      | 47,585,031 |   |

|   | The      approximate scheduled maturities of certificates of deposits for each of      the next five years are: |
|--------|-----------------------------------------------------------------------------------------------------------------|

| 2010   |   | $      | 83,442,674 |   |
|--------|--------|--------|------------|--------|
| 2011   |   |   | 5,086,285  |   |
| 2012   |   |   | 2,105,583  |   |
| 2013   |   |   | 1,911,072  |   |
| 2014   |   |   | 1,910,712  |   |
|   |   | $      | 94,456,326 |   |

----

Table of Contents 

| 2010   |   | $      | 32,022,754 |   |
|--------|--------|--------|------------|--------|
| 2011   |   |   | -          |   |
| 2012   |   |   | 2,000,000  |   |
| 2013   |   |   | -          |   |
| 2014   |   |   | 7,000,000  |   |
|   |   | $      | 41,022,754 |   |

----

Table of Contents 

| The      summary of stock option activity is shown below: |   |               |   |   | Weighted            |   |
|-----------------------------------------------------------|--------|--------------------|--------|--------|---------------------|--------|
|                                                      |   |               |   |   | Average             |   |
|                                                      |   | OptionsOutstanding |   |   | Exercise      Price |   |
| December      31, 2007                                    |   |               | 27,870 |   |                | $      | 17.40 |   |
| Options      granted                                      |   |               | -      |   |                |   | - |   |
| Options      expired                                      |   |               | -      |   |                |   | - |   |
| Options      forfeited                                    |   |               | (750   | )      |                |   | 14.50 |   |
| December      31, 2008                                    |   |               | 27,120 |   |                | $      | 17.48 |   |
| Options      granted                                      |   |               | 5,000  |   |                |   | 10.20 |   |
| Options      expired                                      |   |               | -      |   |                |   | - |   |
| Options      forfeited                                    |   |               | -      |   |                |   | - |   |
| December      31, 2009                               |   |               | 32,120 |   |                | $      | 16.35 |   |

| Exercise      Price     | Options      Outstanding | Remaining      Contractual Life |
|-------------------------|--------------------------|---------------------------------|
| $      10.20            | 5,000                    | 2.1      years                  |
|    19.02 |  14,000             | 2.4      years                  |
|    18.00 |  5,000              | .3      years                   |
|    14.50 |  8,120              | 1.9      years                  |

----

Table of Contents 

| Assumption                |   | 2009           |   |
|---------------------------|--------|----------------|--------|
|  Dividend      yield |   |           | 5.45   | % |
| Risk      free rate       |   |           | 1.33   | % |
| Expected      life        |   | 2.5      years |   |
| Expected      volatility  |   |           | 72.94  | % |

| 2010   | $  140,960 |
|--------|----------------------|
| 2011   |   140,960  |
| 2012   | 140,960              |
| 2013   | 119,012              |
| 2014   | 39,876               |
|   | $  581,768 |

----

Table of Contents 

|     |   | 2009   |     |   | 2008   |   |
|----------|--------|--------|----------|--------|--------|--------|
| Current  |   | $      | 375,192  |   |   | $      | 1,481,016 |   |
| Deferred |   |   | (444,865 | )      |   |   | (171,022 | ) |
|     |   | $      | (69,673  | )      |   | $      | 1,309,994 |   |

|                             |   | 2009   |     |   | 2008   |   |
|----------------------------------|--------|--------|----------|--------|--------|--------|
| Tax      Based on Statutory Rate |   | $      | 528,345  |   |   | $      | 1,636,337 |   |
| State      Taxes                 |   |   | 30,328   |   |   |   | 153,470 |   |
| Effect      of Tax-Exempt Income |   |   | (599,389 | )      |   |   | (571,665 | ) |
| Other                            |   |   | (28,957  | )      |   |   | 91,852 |   |
|                             |   | $      | (69,673  | )      |   | $      | 1,309,994 |   |

|                                                  |   | 2009   |       |   | 2008   |   |
|-------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Deferred      Tax Liabilities:                        |   |   |       |   |   |   |
| Unrealized      gain on available-for-sale securities |   | $      | (1,348,832 | )      |   | $      | (1,248,240 | ) |
| Depreciation                                          |   |   | (948,554   | )      |   |   | (916,118 | ) |
| Federal      Home Loan Bank dividends                 |   |   | (100,809   | )      |   |   | (129,121 | ) |
|                                                  |   |   | (2,398,195 | )      |   |   | (2,293,479 | ) |
| Deferred      Tax Assets:                             |   |   |       |   |   |   |   |   |
| Provision      for loan losses                        |   |   | 1,156,968  |   |   |   | 604,579 |   |
| Other      real estate                                |   |   | -          |   |   |   | 111,635 |   |
| Deferred      Compensation                            |   |   | 136,751    |   |   |   | - |   |
| Other                                                 |   |   | 51,751     |   |   |   | 180,267 |   |
|                                                  |   |   | 1,345,470  |   |   |   | 896,481 |   |
|  Net      Deferred Tax Liability                 |   | $      | (1,052,725 | )      |   | $      | (1,396,998 | ) |

----

Table of Contents 

|                                               |   | 2009   |       |   | 2008   |   |
|----------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Balance      at beginning of year                  |   | $      | (1,396,998 | )      |   | $      | (527,508 | ) |
| Deferred      tax expense, charged to operations   |   |   | 444,865    |   |   |   | 171,022 |   |
| Other      comprehensive income, charged to equity |   |   | (100,592   | )      |   |   | (1,040,512 | ) |
| Balance      at end of year                        |   | $      | (1,052,725 | )      |   | $      | (1,396,998 | ) |

| NOTE      N. |  REGULATORY      MATTERS |
|--------------|-------------------------------|

----

Table of Contents 

| NOTE      N. | REGULATORY      MATTERS (Continued) |
|--------------|-------------------------------------|

| In      the event of a complete liquidation of the Bank, each Qualifying Depositor      would be entitled to his or her pro rata interest in the Liquidation      Account.  Such claims would be paid before payment to the      Company as the Bank’s sole shareholder.  A merger,      consolidation, purchase of assets and assumption of deposits and/or other      liabilities or similar transaction, with an FDIC-insured institution,      would not be a complete liquidation for the purpose of paying the      Liquidation Account.  In such a transaction, the Liquidation      Account would be required to be assumed by the surviving      institution. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents 

|                            |   | Actual                      |   |   | Minimum      Capital Requirement |   |   | Minimum      To Be Well Capitalized Under Prompt Corrective Action      Provisions |   |
|---------------------------------|--------|-----------------------------|--------|--------|----------------------------------|--------|--------|-----------------------------------------------------------------------------------------|--------|
|                            |   | Amount                      |   |   | Ratio                            |   |   | Amount                                                                                  |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                            |   | (dollars      in thousands) |   |
| As      of December 31, 2009    |   |                        |   |   |                             |   |   |                                                                                    |   |   |   |   |   |   |   |   |   |   |
| Total      Capital (to Risk-    |   |                        |   |   |                             |   |   |                                                                                    |   |   |   |   |   |   |   |   |   |   |
| Weighted      Assets)           |   |                        |   |   |                             |   |   |                                                                                    |   |   |   |   |   |   |   |   |   |   |
|    Consolidated  |   | $                           | 45,376 |   |                             |   | 17.48  | %                                                                                       |   | $ | 20,772 |   |   |   | 8.00 | % |   |   | N/A |   |   |   | N/A |   |
|    The      Bank |   | $                           | 42,118 |   |                             |   | 16.24  | %                                                                                       |   | $ | 20,753 |   |   |   | 8.00 | % |   | $ | 25,942 |   |   |   | 10.00 | % |
| Tier      I Capital (to Risk-   |   |                        |   |   |                             |   |   |                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      Assets)           |   |                        |   |   |                             |   |   |                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Consolidated  |   | $                           | 42,123 |   |                             |   | 16.22  | %                                                                                       |   | $ | 10,386 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
|    The      Bank |   | $                           | 38,867 |   |                             |   | 14.98  | %                                                                                       |   | $ | 10,377 |   |   |   | 4.00 | % |   | $ | 15,565 |   |   |   | 6.00 | % |
| Tier      I Capital (to Average |   |                        |   |   |                             |   |   |                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Assets)                         |   |                        |   |   |                             |   |   |                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Consolidated  |   | $                           | 42,123 |   |                             |   | 10.68  | %                                                                                       |   | $ | 15,784 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
|    The      Bank |   | $                           | 38,867 |   |                             |   | 9.98   | %                                                                                       |   | $ | 15,574 |   |   |   | 4.00 | % |   | $ | 19,467 |   |   |   | 5.00 | % |

|                            |   | Actual                      |   |   | Minimum      Capital Requirement |   |   | Minimum      To Be Well Capitalized Under Prompt Corrective Action      Provisions |   |
|---------------------------------|--------|-----------------------------|--------|--------|----------------------------------|--------|--------|-----------------------------------------------------------------------------------------|--------|
|                            |   | Amount                      |   |   | Ratio                            |   |   | Amount                                                                                  |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                            |   | (dollars      in thousands) |   |
| As      of December 31, 2008    |   |                        |   |   |                             |   |   |                                                                                    |   |   |   |   |   |   |   |   |   |   |
| Total      Capital (to Risk-    |   |                        |   |   |                             |   |   |                                                                                    |   |   |   |   |   |   |   |   |   |   |
| Weighted      Assets)           |   |                        |   |   |                             |   |   |                                                                                    |   |   |   |   |   |   |   |   |   |   |
|    Consolidated  |   | $                           | 44,283 |   |                             |   | 17.31  | %                                                                                       |   | $ | 20,467 |   |   |   | 8.00 | % |   |   | N/A |   |   |   | N/A |   |
|    The      Bank |   | $                           | 39,335 |   |                             |   | 15.39  | %                                                                                       |   | $ | 20,450 |   |   |   | 8.00 | % |   | $ | 25,562 |   |   |   | 10.00 | % |
| Tier      I Capital (to Risk-   |   |                        |   |   |                             |   |   |                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      Assets)           |   |                        |   |   |                             |   |   |                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Consolidated  |   | $                           | 41,885 |   |                             |   | 16.37  | %                                                                                       |   | $ | 10,234 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
|    The      Bank |   | $                           | 36,937 |   |                             |   | 14.45  | %                                                                                       |   | $ | 10,225 |   |   |   | 4.00 | % |   | $ | 15,337 |   |   |   | 6.00 | % |
| Tier      I Capital (to Average |   |                        |   |   |                             |   |   |                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Assets)                         |   |                        |   |   |                             |   |   |                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Consolidated  |   | $                           | 41,885 |   |                             |   | 10.49  | %                                                                                       |   | $ | 15,973 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
|    The      Bank |   | $                           | 36,937 |   |                             |   | 9.36   | %                                                                                       |   | $ | 15,789 |   |   |   | 4.00 | % |   | $ | 19,736 |   |   |   | 5.00 | % |

----

Table of Contents 

| Commitments      to extend credit are agreements to lend money at fixed and variable rates      with fixed expiration dates or termination clauses.  The Bank      applies the same credit standards used in the lending process when      extending these commitments, and periodically reassesses the customer’s      creditworthiness through ongoing credit reviews.  Since many of      the commitments are expected to expire without being drawn upon, the total      commitment amounts do not necessarily represent future cash      requirements.  Collateral is obtained based on the Bank’s      assessment of the transaction.  At December 31, 2009 and 2008,      the Bank’s commitments to extend credit totaled $43,423,096 and      $52,133,219, respectively. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Standby      letters of credit are conditional commitments issued by the Bank to      guarantee the performance of a customer to a third party.  The      credit risk and collateralization policy involved in issuing letters of      credit is essentially the same as that involved in extending loans to      customers.  The Bank had total unfunded letters of credit of      $4,373,546 and $3,575,427 as of December 31, 2009 and 2008,      respectively. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents 

| The      following methods and assumptions were used by the Company in estimating      fair value disclosures for financial  instruments: |
|-------------------------------------------------------------------------------------------------------------------------------------------|

| Loans,      Net - For variable-rate loans which are repricing immediately, fair values      are based on carrying values. Other variable-rate loans, fixed-rate      commercial loans, installment loans, and mortgage loans are valued using      discounted cash flows.  The discount rates used to determine the      present value of these loans are based on interest rates currently being      charged by the Bank on loans with comparable credit risk and      terms. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents 

| The      estimated fair values of the Company's financial instruments, rounded to      the nearest thousand, are asfollows: |
|-----------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents 

|                                          |   | 2009       |    |   | 2008                        |   |
|-----------------------------------------------|--------|------------|---------|--------|-----------------------------|--------|
|                                          |   | Carrying   |    |   | Fair                        |   |   | Carrying |   |   | Fair |   |
|                                          |   | Amount     |    |   | Value                       |   |   | Amount |   |   | Value |   |
|                                          |   |       |    |   | (dollars      in Thousands) |   |   |   |   |
| Financial      Assets:                        |   |       |    |   |                        |   |   |   |   |   |   |   |
| Cash      and due from banks                  |   | $          | 10,304  |   |                        | $      | 10,304 |   |   | $ | 6,951 |   |   | $ | 6,951 |   |
| Federal      funds sold                       |   |       | 59      |   |                        |   | 59 |   |   |   | - |   |   |   | - |   |
| Investment      securities:                   |   |       |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|    Held-to-maturity            |   |       | 45,028  |   |                        |   | 45,997 |   |   |   | 54,815 |   |   |   | 54,843 |   |
|    Available-for-sale          |   |       | 98,300  |   |                        |   | 98,300 |   |   |   | 111,895 |   |   |   | 111,895 |   |
|    Equity      securities      |   |       | 3,262   |   |                        |   | 3,262 |   |   |   | 4,010 |   |   |   | 4,010 |   |
| Cash      surrender value of life insurance   |   |       | 1,099   |   |                        |   | 1,099 |   |   |   | 1,056 |   |   |   | 1,056 |   |
| Loans,      net                               |   |       | 220,723 |   |                        |   | 223,095 |   |   |   | 223,114 |   |   |   | 224,428 |   |
|                                          |   |       |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Financial      Liabilities:                   |   |       |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                      |   |       | 250,942 |   |                        |   | 251,628 |   |   |   | 257,214 |   |   |   | 258,320 |   |
| Short-term      borrowings                    |   |       | 32,023  |   |                        |   | 32,019 |   |   |   | 54,121 |   |   |   | 54,107 |   |
| Long-term      borrowings                     |   |       | 9,000   |   |                        |   | 9,074 |   |   |   | 819 |   |   |   | 825 |   |
| Securities      sold under                    |   |       |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|    repurchase      agreements: |   |       |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Retail                                        |   |       | 13,211  |   |                        |   | 13,210 |   |   |   | 11,634 |   |   |   | 11,638 |   |
| Structured                                    |   |       | 40,000  |   |                        |   | 43,348 |   |   |   | 40,000 |   |   |   | 44,185 |   |
| Junior      subordinated debentures           |   |       | 5,155   |   |                        |   | 5,155 |   |   |   | 5,155 |   |   |   | 5,155 |   |
|                                          |   |       |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   | FaceAmount |    |   | Fair Value             |   |   | FaceAmount |   |   | Fair Value |   |
|                                          |   |       |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Other:                                        |   |       |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Commitments      to extend credit             |   | $          | 43,423  |   |                        | $      | 43,423 |   |   | $ | 52,133 |   |   | $ | 52,133 |   |
| Standby      letters of credit                |   |       | 4,374   |   |                        |   | 4,374 |   |   |   | 3,575 |   |   |   | 3,575 |   |
|                                          |   |       |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |

----

Table of Contents 

| NOTE      T. | CONDENSED      FINANCIAL INFORMATION OF |
|--------------|-----------------------------------------|

|   | BRITTON      & KOONTZ CAPITAL CORPORATION |
|--------|-----------------------------------------------|

|                                           |   | December      31 |       |
|------------------------------------------------|--------|------------------|------------|
|                                           |   | 2009             |       |   | 2008 |   |
| ASSETS:                                        |   |             |       |   |   |   |
| Cash                                           |   | $                | 3,010,844  |   |   | $ | 4,659,463 |   |
| Investment      in subsidiaries                |   |             | 41,894,066 |   |   |   | 39,903,724 |   |
| Other      assets                              |   |             | 93,901     |   |   |   | 136,849 |   |
| TOTAL      ASSETS                              |   | $                | 44,998,811 |   |   | $ | 44,700,036 |   |
| LIABILITIES:                                   |   |             |       |   |   |   |   |   |
| Junior      subordinated debentures            |   | $                | 5,155,000  |   |   | $ | 5,155,000 |   |
| Other      liabilities                         |   |             | 2,922      |   |   |   | 3,967 |   |
| TOTAL      LIABILITIES                         |   |             | 5,157,922  |   |   |   | 5,158,967 |   |
| STOCKHOLDERS’      EQUITY                |   |             | 39,840,889 |   |   |   | 39,541,069 |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS’ |   |             |       |   |   |   |   |   |
| EQUITY                                         |   | $                | 44,998,811 |   |   | $ | 44,700,036 |   |

|                                      |   | Years      Ended December 31, |      |
|-------------------------------------------|--------|-------------------------------|-----------|
|                                      |   | 2009                          |      |   | 2008 |   |
| REVENUE:                                  |   |                          |      |   |   |   |
| Dividend      Received:                   |   |                          |      |   |   |   |
| Britton      & Koontz Bank, N.A.      |   | $                             | -         |   |   | $ | 2,800,000 |   |
| Other      income                         |   |                          | 3,383     |   |   |   | 3,633 |   |
|                                      |   |                          | 3,383     |   |   |   | 2,803,633 |   |
| EXPENSES                                  |   |                          | 319,993   |   |   |   | 439,234 |   |
|                                      |   |                          | (316,610  | ) |   |   | 2,364,399 |   |
| INCOME      TAX EXPENSE (BENEFIT)         |   |                          | (118,989  | ) |   |   | (163,551 | ) |
|                                      |   |                          | (197,621  | ) |   |   | 2,527,950 |   |
| EQUITY      IN UNDISTRIBUTED EARNINGS:    |   |                          |      |   |   |   |   |   |
| Britton      & Koontz Bank, N.A.      |   |                          | 1,821,699 |   |   |   | 975,255 |   |
| B&K      Title Insurance Agency, Inc. |   |                          | (449      | ) |   |   | (442 | ) |
| NET      INCOME                           |   | $                             | 1,623,629 |   |   | $ | 3,502,763 |   |

----

Table of Contents 

| NOTE      T. | CONDENSED      FINANCIAL INFORMATION OF |
|--------------|-----------------------------------------|

|   | BRITTON      & KOONTZ CAPITAL CORPORATION(Continued) |
|--------|----------------------------------------------------------|

|                                                     |   | Years      Ended December 31, |       |
|----------------------------------------------------------|--------|-------------------------------|------------|
|                                                     |   | 2009                          |       |   | 2008 |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES:               |   |                          |       |   |   |   |
| Net      Income                                          |   | $                             | 1,623,629  |   |   | $ | 3,502,763 |   |
| Adjustments      to reconcile net income to net          |   |                          |       |   |   |   |   |   |
| cash      provided by operating activities:              |   |                          |       |   |   |   |   |   |
| Equity      on undistributed earnings                    |   |                          |       |   |   |   |   |   |
| and      losses of affiliates                            |   |                          | (1,821,250 | ) |   |   | (974,813 | ) |
| (Increase)/decrease      in other assets                 |   |                          | 42,948     |   |   |   | 2,781 |   |
| Increase/(decrease)      in other liabilities            |   |                          | (1,045     | ) |   |   | (41,035 | ) |
| Net      Cash Provided by (Used in) Operating Activities |   |                          | (155,718   | ) |   |   | 2,489,696 |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES:               |   |                          |       |   |   |   |   |   |
| Cash      dividends paid                                 |   |                          | (1,531,057 | ) |   |   | (1,524,936 | ) |
| Fair      value of stock options                         |   |                          | 11,479     |   |   |   | 13,312 |   |
| Common      stock issued                                 |   |                          | 86,700     |   |   |   | - |   |
| Unearned      Compensation                               |   |                          | (60,023    | ) |   |   | - |   |
| Net      Cash (Used in) Financing Activities             |   |                          | (1,492,901 | ) |   |   | (1,511,624 | ) |
| NET      INCREASE (DECREASE) IN CASH                     |   |                          | (1,648,619 | ) |   |   | 978,072 |   |
| CASH      AT BEGINNING OF YEAR                           |   |                          | 4,659,463  |   |   |   | 3,681,391 |   |
| CASH      AT END OF YEAR                                 |   | $                             | 3,010,844  |   |   | $ | 4,659,463 |   |

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| DIRECTORS                                                                                                                                                  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                       |
| Robert R. PunchesPartner, Gwin, Lewis & Punches,      LLPChairman, Britton & Koontz Capital      Corporation                                       |
|                                                                                                                                                       |
|                                                                                                                                                       |
| W. W. Allen,      Jr.President, Allen Petroleum Services,      IncVice Chairman, Britton & Koontz Capital      Corporation                             |
|                                                                                                                                                       |
|                                                                                                                                                       |
| W. Page OgdenPresident & Chief Executive      OfficerBritton & Koontz Capital      CorporationBritton & Koontz Bank, National      Association |
|                                                                                                                                                       |
|                                                                                                                                                       |
| Craig      A. Bradford, D.M.D.Pediatric Dentist                                                                                                            |
|                                                                                                                                                       |
|                                                                                                                                                       |
| George R. KurzPrincipal, Kurz &  Hebert                                                                                                                |
|                                                                                                                                                       |
|                                                                                                                                                       |
| Gordon      S. LeBlanc, Jr.Managing      Director-Stonehenge Capital Company, LLC                                                                          |
|                                                                                                                                                       |
|                                                                                                                                                       |
| Bethany L. OvertonPresident, Lambdin-Bisland Realty      Co.                                                                                               |
|                                                                                                                                                       |
|                                                                                                                                                       |
| Vinod K. Thukral, Ph.D.Chairman, Global Bancorp and Global Trust    Bank                                                                                   |

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|   EXECUTIVE OFFICERS                                                                                                                                              |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                        |
| W. Page OgdenPresident & Chief Executive      OfficerBritton & Koontz Capital      CorporationBritton & Koontz Bank, National      Association                  |
|                                                                                                                                                                        |
|                                                                                                                                                                        |
| William M. SaltersTreasurer, Chief Financial & Accounting      OfficerBritton & Koontz Capital      CorporationBritton & Koontz Bank, National      Association |
|                                                                                                                                                                        |
|                                                                                                                                                                        |
| Jarrett E. NicholsonCredit Policy Officer and Chief Operations      OfficerBritton & Koontz Capital      CorporationBritton      & Koontz Bank, NationalAssociation |

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| Plan category                                              |   | Number      of securities to be issued upon exercise of outstanding options, warrants and      rights  |    |   | Weighted-average      exercise price of outstanding options, warrants and      rights  |   |    | Number      of securities remaining available for future      issuance  |   |
|-----------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------|---------|--------|---------------------------------------------------------------------------------------------|--------|---------|------------------------------------------------------------------------------|--------|
| Equity      compensation plans approved by security holders(1)  |   |                                                                                                        | 32,120  |   |                                                                                        | $      | 16.35   |                                                                         |   |   | 74,380 |   |
| Equity      compensation plans not approved by security holders |   |                                                                                                        | — |   |                                                                                        |   | — |                                                                         |   |   | — |   |
| Total                                                           |   |                                                                                                        | 32,120  |   |                                                                                        | $      | 16.35   |                                                                         |   |   | 74,380 |   |

| (1)   | An      aggregate of 115,000 shares of common stock are authorized for issuance      under the 2007 LTIP in the form of stock options and restricted      stock. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 1.   | Consolidated      Financial Statements and Supplementary Information for Years Ended      December 31, 2009 and 2008, which include the following:  |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | Management’s Annual Report on Internal Control      over Financial Reporting |
|-----------------|------------------------------------------------------------------------------------|

| (b)   | Report of Independent Registered Public Accounting      Firm |
|-----------------|--------------------------------------------------------------|

| (c)   | Consolidated BalanceSheets |
|-----------------|----------------------------|

| (d)   | Consolidated Statements ofIncome |
|-----------------|----------------------------------|

| (e)   | Consolidated Statements of Changes in Stockholders’      Equity |
|-----------------|-----------------------------------------------------------------------|

| (f)   | Consolidated Statement of Cash  Flows |
|-----------------|---------------------------------------|

| (g)   | Notes to the Consolidated Financial      Statements |
|-----------------|-----------------------------------------------------|

| 2.   | Financial      Statement Schedules |
|----------------|------------------------------------|

| 3.   | Exhibits      required by Item 601 of RegulationS-K |
|----------------|-----------------------------------------------------|

| Exhibit |     | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.1     | *        | Amended      and Restated Articles of Incorporation of Britton & Koontz Capital      Corporation, incorporated by reference to Exhibit 3.01 to the Registrant’s      Current Report on Form 8-K filed with the Securities and Exchange      Commission (the “Commission”) on February 20, 2009.                                                                                                                                                                                                                                                                                        |
|    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.2     | *        | By-Laws      of Britton & Koontz Capital Corporation, as amended, incorporated by      reference to Exhibit 3.2 to Registrant’s Current Report on Form 8-K filed      with the Commission on October 22, 2008.                                                                                                                                                                                                                                                                                                                                                                                     |
|    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.1     | *        | Shareholder      Rights Agreement dated June 1, 1996 between Britton & Koontz Capital      Corporation and Britton & Koontz First National Bank, as Rights Agent,      incorporated by reference to Exhibit 4.3 to Registrant’s Registration      Statement on Form S-8, Registration No. 333-20631, filed with the      Commission on January 29, 1997, as amended by Amendment No. 1 to Rights      Agreement dated as of August 15, 2006, incorporated by reference to      Exhibit 4.2 to Registrant’s Current Report on Form 8-K filed with the      Commission on August 17, 2006. |
|    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.01   | *† | Employment      Agreement dated February 17, 2009, between Britton & Koontz Capital      Corporation and W. Page Ogden, incorporated by reference to Exhibit 10.01      to Registrant’s Current Report on Form 8-K filed with the Commission on      February 20, 2009.                                                                                                                                                                                                                                                                                                                            |
|    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.02   | *† | Britton      & Koontz Capital Corporation Long-Term Incentive Compensation Plan and      Amendment, incorporated by reference to Exhibit 4.4 to Registrant’s      Registration Statement on Form S-8, Registration No. 333-20631, filed with      the Commission on January 29, 1997.                                                                                                                                                                                                                                                                                                              |
|    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.03   | *† | Britton      & Koontz Capital Corporation 2007 Long-Term Incentive Compensation      Plan, incorporated by reference to Appendix B to Registrant’s Definitive      Proxy Statement filed with the Commission on March 21, 2007.                                                                                                                                                                                                                                                                                                                                                               |
| 10.04   | *† | Salary      Continuation Agreement dated December 18, 2007, between Britton &      Koontz Bank, N.A. and W. Page Ogden, incorporated by reference to Exhibit      10.04 to Registrant’s Current Report on Form 8-K filed with the Commission      on February 27, 2008.                                                                                                                                                                                                                                                                                                                            |
|    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 21      |     | Subsidiaries of Britton & Koontz Capital      Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 23      |     | Consent of Independent Registered Public      Accountants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.1    |     | Certification of Chief Executive Officer as required      pursuant to Section 302 of the Sarbanes-Oxley Act of    2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.2    |     | Certification of Chief Financial Officer as required      pursuant to Section 302 of the Sarbanes-Oxley Act of    2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32.1    |     | Certification of Chief Executive Officer as required      pursuant to Section 906 of the Sarbanes-Oxley Act of    2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|    |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32.2    |     | Certification of Chief Financial Officer as required      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

|   | * | As      indicated in the column entitled “Description of Exhibit,” this exhibit is      incorporated by reference to another filing or  document. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | † | Management      contract or compensatory plan or arrangement required to be filed as an      exhibit to this Annual Report on Form 10-K pursuant to Item 15 of Form      10-K. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Signature                   |   | Title                                                                                    |   | Date                |
|----------------------------------|--------|------------------------------------------------------------------------------------------|--------|---------------------|
| /s/      Robert R. Punches       |   |                                                                                     |   |                |
| Robert      R. Punches           |   | Chairman      and Director                                                               |   | March      16, 2010 |
| /s/      W. W. Allen, Jr.        |   |                                                                                     |   |           |
| W.      W. Allen, Jr.            |   | Vice      Chairman and Director                                                          |   | March      16, 2010 |
|  /s/      W. Page Ogden     |   |                                                                                     |   |                |
| W.      Page Ogden               |   | Principal      Executive Officer and Director                                            |   | March      16, 2010 |
|                             |   |                                                                                     |   |                |
| /s/      Craig A. Bradford, DMD  |   |                                                                                     |   |                |
| Craig      A. Bradford, DMD      |   | Director                                                                                 |   | March      16, 2010 |
| /s/      Bethany L. Overton      |   |                                                                                     |   |           |
| Bethany      L. Overton          |   | Director                                                                                 |   | March      16, 2010 |
| /s/      George R. Kurz          |   |                                                                                     |   |           |
| George      R. Kurz              |   | Director                                                                                 |   | March      16, 2010 |
| /s/      Vinod K. Thukral, Ph.D. |   |                                                                                     |   |           |
| Vinod      K. Thukral, Ph.D.     |   | Director                                                                                 |   | March      16, 2010 |
|                             |   |                                                                                     |   |                |
| /s/      Gordon S. LeBlanc, Jr.  |   |                                                                                     |   |                |
| Gordon      S. LeBlanc, Jr.      |   | Director                                                                                 |   | March      16, 2010 |
| /s/      William M. Salters      |   |                                                                                     |   |           |
| William      M. Salters          |   | Treasurer,      Principal Financial Officer and Principal Accounting Officer   |   | March      16, 2010 |

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|   | EXHIBITINDEX |
|--------|--------------|

| Exhibit |   | Description      of Exhibit                                                                                             |
|---------|--------|-------------------------------------------------------------------------------------------------------------------------|
|    |   |                                                                                                                    |
| 21      |   | Subsidiaries of Britton & Koontz Capital      Corporation                                                           |
|    |   |                                                                                                                    |
| 23      |   | Consent of Independent Registered Public      Accountants                                                               |
|    |   |                                                                                                                    |
| 31.1    |   | Certification of Chief Executive Officer as required      pursuant to Section 302 of the Sarbanes-Oxley Act of    2002. |
|    |   |                                                                                                                    |
| 31.2    |   | Certification of Chief Financial Officer as required      pursuant to Section 302 of the Sarbanes-Oxley Act of    2002. |
|    |   |                                                                                                                    |
| 32.1    |   | Certification of Chief Executive Officer as required      pursuant to Section 906 of the Sarbanes-Oxley Act of    2002  |
|    |   |                                                                                                                    |
| 32.2    |   | Certification of Chief Financial Officer as required      pursuant to Section 906 of the Sarbanes-Oxley Act of    2002  |