SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

  Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act
                             of 1934 (fee required)

                   For the fiscal year ended December 31, 2000

                         Commission File Number: 0-22606


                      BRITTON & KOONTZ CAPITAL CORPORATION
                 (Name of Small Business Issuer in its Charter)


             Mississippi                                   64-0665423
   (State or Other Jurisdiction of                      (I.R.S. Employer
   Incorporation or Organization)                      Identification No.)


                                 500 Main Street
                           Natchez, Mississippi 39120
              (Address of Principal Executive Offices) (Zip Code)


                                 (601) 445-5576
                (Issuer's Telephone Number, Including Area Code)


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

                                      None

      Securities registered pursuant to Section 12(g) of the Exchange Act:

                           Common Stock, $10 Par Value
                                (Title of Class)


     Check  whether  the issuer:  (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes X  No___


     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of Regulation S-B is not contained in this form,  and no disclosure  will be
contained,  to the best of the  registrant's  knowledge,  in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. X

     The issuer's revenues for the 2000 fiscal year were $24,183,458.

     The  aggregate   market  value  of  the  issuer's   voting  stock  held  by
non-affiliates computed by reference to the price at which the stock was sold is
$19,358,280 for 1,613,190 shares at an estimated $12.00 per share.

The issuer had 2,109,055 shares of common stock outstanding, Par Value $2.50 as
                                of March 12, 2001

Transitional Small Business Disclosure Format (check one):  Yes     No   X
                                                               ----    -----

<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

     1.   Portions of the  Registrant's  definitive proxy statement with respect
          to its 2000 annual meeting of shareholders,  filed with the Securities
          and Exchange Commission on or about April 2, 2000, are incorporated by
          reference into Part III of this annual report on Form 10-KSB.


<PAGE>


                              CROSS REFERENCE INDEX

                                       TO

                                   FORM 10-KSB

                                     PART I

ITEM  1. DESCRIPTION OF BUSINESS.............................................*
ITEM  2. DESCRIPTION OF PROPERTY.............................................*
ITEM  3. LEGAL PROCEEDINGS...................................................*
ITEM  4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................*

                                     PART II

ITEM  5. MARKET FOR COMMON EQUITY AND RELATED
                  STOCKHOLDER MATTERS........................................*
ITEM  6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
                  PLAN OF OPERATION..........................................*
ITEM  7. FINANCIAL STATEMENTS................................................*
ITEM  8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE .......................*

                                    PART III

ITEM  9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
                  AND CONTROL PERSONS; COMPLIANCE WITH
                  SECTION 16(a) OF THE EXCHANGE ACT..........................**
ITEM 10. EXECUTIVE COMPENSATION..............................................**
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                  AND MANAGEMENT.............................................**
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS......................**
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K..............................*

---------

*        Included herein.

**       The  material  required  by  Items  9  through  12 is  incorporated  by
         reference from the Proxy Statement pursuant to Instruction E(3) of Form
         10-KSB.


<PAGE>




                                     PART I

Item 1.  Description of Business.

General

         The Company

         Britton & Koontz Capital Corporation (the "Company") was organized as a
Mississippi  business  corporation  in July 1982.  Later that year,  the Company
became a one-bank holding company  registered under the Bank Holding Company Act
of 1956,  as  amended  (the  "BHCA"),  when it  acquired  all of the  issued and
outstanding  shares of Britton & Koontz First National Bank, a national  banking
association headquartered in Natchez,  Mississippi (the "Bank"). The Bank is the
only  wholly-owned  subsidiary  of the  Company,  and  stock  of the Bank is the
Company's most  significant  asset. In July 1993, the Company  acquired  Natchez
First Federal  Savings Bank and merged it into the Bank. In December  1998,  the
Company  invested  $1.0  million  for a 35%  interest in Sumx Inc.  ("Sumx"),  a
company  formed to  develop  and  market  internet-based  electronic  banking to
financial  institutions.  See "Sumx Inc." In January 1999, the Company purchased
from Union  Planters  Bank,  N.A. two local  branches with total deposits of $12
million  and $1.8  million in loans.  In July 1999,  the Company  completed  the
acquisition  of another  branch  office  from Union  Planters  Bank,  N.A.  with
deposits of $6 million and $1.4 million in loans.  In January 2000,  the Company
opened a loan  production  office in Baton Rouge,  Louisiana.  On September  15,
2000, the Company  acquired  250,000 shares of Series B Preferred  Stock in Sumx
for $250,000,  bringing the Company's total  percentage  ownership in Sumx up to
approximately  38.25%.  On December 1, 2000,  Louisiana  Bank and Trust  Company
was acquired by the Company, adding approximately $42 million in assets  and two
branches in Baton Rouge, Louisiana.

         The  Company's  major source of income in 2000 was  dividends  from the
Bank in the amount of  $1,550,000.  The Company  expects that dividends from the
Bank will  continue to be the  Company's  major source of income in 2001.  As of
December 31, 2000, the Company had total assets of  approximately  $270 million,
and total consolidated shareholders' equity of approximately $26 million.

         The Bank

         The Bank conducts a full service banking  business from its main office
and three  branch  offices in  Natchez,  Mississippi,  one branch in  Vicksburg,
Mississippi and two branch offices in Baton Rouge,  Louisiana. It also maintains
a  loan  production  office  in  Baton  Rouge,  Louisiana  for  the  purpose  of
originating  1-4 family  residential  first  mortgage  loans,  which the Company
intends  to  convert  into a full  branch  banking  office.  The  Bank  provides
commercial  and  consumer  banking and trust  services to customers in Adams and
Warren  Counties,  Mississippi and East Baton Rouge Parish,  Louisiana,  and the
adjoining  counties and parishes of Mississippi and Louisiana.  The geographical
area  serviced  by the Bank is  economically  diverse  and  includes  public and
private sector industries, including government service, manufacturing, tourism,
agriculture and oil and gas  exploration.  As of December 31, 2000, the Bank had
total assets of  approximately  $269 million and total deposits of approximately
$211 million.


<PAGE>

         The  products and  services  offered by the Bank  include  personal and
commercial  checking accounts,  money market deposit accounts,  savings accounts
and  automated  clearinghouse  services.  The Bank also  offers  money  transfer
services,  safe  deposit  box  facilities  and access to a network of  automated
teller machines. The Bank is a full-service  residential and commercial mortgage
lender.  The  Bank  also  engages  in  other  commercial  and  consumer  lending
activities,  including,  among other things, the issuance of VISA and MasterCard
credit  cards.  The Bank's trust  department  offers a range of trust  services,
acting as trustee, executor,  administrator,  custodian, guardian and agent with
approximately $29 million in assets under management as of December 31, 2000.

         In 1995, the Bank became an Internet  service  provider for the Natchez
area.  The Bank has  extended  its  Internet  dial up service to the  Vicksburg,
Mississippi  market.  In 1996,  the Bank began  offering  Internet-based  online
banking using SumxNet, a software product developed by Sumx.

         As of December 31, 1999, the Company and the Bank had approximately 112
full-time and 8 part-time  employees.  The employees  are not  represented  by a
collective  bargaining unit. The Company believes that its relationship with its
employees is good.

         Sumx Inc.

         On December 3, 1998, the Company acquired  1,000,000 shares of Series A
Preferred  Stock  in  Sumx  Inc.  ("Sumx"),  a  Mississippi   corporation,   for
$1,000,000. On September 15, 2000, the Company acquired 250,000 shares of Series
B Preferred  Stock in Sumx for $250,000.  Depending  upon certain  contingencies
associated with the Series B Preferred Stock, the Company's  ownership  interest
in Sumx may vary from 36.62% to 38.25%.  Assuming the  Company's  interest to be
38.25%,  the remaining  ownership  interests in Sumx are 18.53% by Mr. Bazile R.
Lanneau,  Jr.,  President and Chief  Executive  Officer of Sumx,  Executive Vice
President of the Bank and Vice  President  of the Company,  and 43.22% by Summit
Research,  Inc., a Texas corporation.  The funds provided to Sumx have been used
for marketing and continued  development of the SumxNet  Internet banking system
("SumxNet") and for data center  operations.  Sumx maintains offices in Madison,
Mississippi and Highland Village, Texas.

        Mr. Lanneau has devoted substantial portions of his time to the business
of Sumx, and it is anticipated that he will  continue  to  devote a  substantial
portion of his time to Sumx. Mr. Lanneau receives no compensation  from Sumx; he
is compensated by the Company and the Bank. Mr. Ogden,  President and CEO of the
Company  and  the  Bank,   serves  without   compensation   as  a  director  and
secretary/treasurer of Sumx.

         SumxNet is an  independent  Web-based  banking  solution  that  enables
financial  institutions to incorporate their customer  information directly into
their Internet banking systems  in-house,  thereby allowing banks to package and
price their Internet banking  offerings as they choose.  SumxNet also features a
transaction tracking and billing system, check categorization system,  unlimited
customer  history  depth,  check image access and bill  payment.  As of March 6,
2001, six financial  institutions use SumxNet to offer Internet banking services
to their customers.

<PAGE>


         During 2000, the Company engaged in an extensive  search for a business
partner that could provide installation, support and financial backing to market
SumxNet in the United  States and  internationally.  On December 22,  2000,  the
Company issued a press release announcing that Sumx is negotiating with Diebold,
Incorporated,  a worldwide leader in certain types of banking software  products
("Diebold"),  to market,  install  and support  SumxNet for its global  customer
base. The Company's discussions with Diebold are continuing, and there can be no
assurance that such  discussions  will ultimately  conclude with an agreement to
market SumxNet.

Supervision and Regulation

         The banking  industry is extensively  regulated under federal and state
law. As a bank holding  company,  the Company is subject to regulation under the
BHCA and to supervision by the Board of Governors of the Federal  Reserve System
(the "Federal  Reserve").  Pursuant to the BHCA, the Company may not directly or
indirectly  acquire  the  ownership  or  control of more than 5% of any class of
voting shares or substantially all of the assets of any other company, including
a bank,  without the prior  approval of the Federal  Reserve.  The BHCA  further
limits  the  activities  of both the  Company  and the Bank to the  business  of
banking and activities closely related or incidental to banking.

         As a national  bank,  the Bank is subject to  supervision  and  regular
examination   by  the  Office  of  the   Comptroller   of  the   Currency   (the
"Comptroller").  Such examinations,  however, are for the protection of the Bank
Insurance Fund ("BIF") and, indirectly to a degree, for depositors,  and not for
the  protection  of  investors  and  shareholders.  Pursuant to the terms of the
Federal Deposit Insurance Act (the "FDIA"), the deposits of the Bank are insured
through  the BIF and the  Savings  Association  Insurance  Fund  ("SAIF") of the
Federal Deposit  Insurance  Corporation (the "FDIC").  Accordingly,  the Bank is
subject to regulation  by the FDIC and is also subject to the Federal  Reserve's
requirements to maintain  reserves against  deposits,  restrictions on the types
and  amounts of loans that may be granted and the  interest  that may be charged
thereon,  and  limitations on the types of investments  that may be made and the
types of services that may be offered.

         In 1991,  Congress  enacted the Federal Deposit  Insurance  Corporation
Improvement Act ("FDICIA"), which, among other things, substantially revised the
depository  institution  regulatory and funding  provisions of the FDIA.  FDICIA
also expanded the regulatory and enforcement powers of bank regulatory agencies.
Most  significantly,  FDICIA  mandates  annual  examinations  of  banks by their
primary  regulators  and  requires the federal  banking  agencies to take prompt
"corrective action" whenever financial  institutions do not meet minimum capital
requirements.   FDICIA  establishes  five  capital  tiers:  "well  capitalized,"
"adequately capitalized,"  "undercapitalized,"  "significantly undercapitalized"
and "critically  undercapitalized."  A depository  institution's  capitalization
status will depend on how well its capital  levels  compare to various  relevant
capital measures and certain other factors, as established by regulation.  As of
December 31, 2000,  the Bank  maintained a capital  level which  qualified it as
being "well capitalized" under such regulations.

<PAGE>


         FDICIA also prohibits a depository  institution from making any capital
distribution  (including  payment of a dividend) or paying any management fee to
its  holding  company  if  the  depository   institution   would  thereafter  be
"undercapitalized."  For additional  information  regarding  restrictions on the
Bank's payment of dividends,  see Item 5 - "Market for Common Equity and Related
Stockholder Matters -- Dividends," below.

         The  banking  industry  is  affected  by the  policies  of the  Federal
Reserve.  An  important  function  of the  Federal  Reserve is to  regulate  the
national  supply of bank credit to moderate  recessions  and to curb  inflation.
Among  the  instruments  of  monetary  policy  used by the  Federal  Reserve  to
implement  its  objectives  are:  open-market   operations  in  U.S.  Government
securities,  changes in the  discount  rate on bank  borrowings  and  changes in
reserve requirements on bank deposits.

Interstate Banking and Branching Legislation

         Federal Law

         In  1994,  Congress  passed  the  Riegle-Neal  Interstate  Banking  and
Branching Efficiency Act ("Riegle-Neal"),  which affected the interstate banking
and  branching  abilities  of bank  holding  companies  and  banks.  Riegle-Neal
authorizes a national bank  domiciled in one state to establish  branches in any
other  state as long as  neither  state has opted  out of  interstate  branching
between the date of enactment  of  Riegle-Neal  and May 31,  1997.  Riegle-Neal,
however,  does allow  states to preserve  certain  restrictions  on the entry of
out-of-state  banks,  such as the  fashion  in which  entry can be made,  an age
requirement  for a bank  being  merged or  acquired,  and a deposit  cap.  Under
Riegle-Neal,  once a bank has  established  a branch in  another  state,  it may
exercise the same rights in that state as national and state banks enjoy in that
state, including the ability to branch intra-state.

         Riegle-Neal  also  permits  states to allow banks to enter the state by
establishing  a de novo  branch in that  state.  In order to allow de novo entry
into a  particular  state,  that  state  must  expressly  provide  for  de  novo
branching.  Once a bank has established a branch in a host state through de novo
branching,  it may  exercise the same rights in that state as national and state
banks enjoy, including the ability to branch intra-state. If a state opts out of
interstate branching,  no bank domiciled in that state may establish branches in
other states,  and no bank domiciled in another state may establish  branches in
that state.

         Mississippi Law

         On March 29, 1996, the Governor of  Mississippi  signed into law a bill
in which Mississippi elected to opt in to interstate branching, effective May 1,
1997.  As  enacted,  the bill (1)  allows  all  Mississippi  banks to  establish
branches in any other state  pursuant to the entry rules in the  potential  host
state, and (2) allows  out-of-state  banks to establish  branches in Mississippi
pursuant to  Mississippi's  entry  rules.  The bill does not  authorize  de novo
branching  into  Mississippi.  An  out-of-state  bank can establish  branches in
Mississippi  only by (1) merging with a Mississippi  domiciled  bank, (2) buying
all of the  assets of a  Mississippi  domiciled  bank,  or (3) buying all of the
assets in Mississippi of an out-of-state bank which has branches in Mississippi.
All interstate branching transactions require appropriate regulatory approval.

<PAGE>

         On December 1, 2000,  the Bank  acquired  its first  interstate  branch
offices in Baton Rouge,  Louisiana.  Under  applicable  law, the Bank,  with the
approval of the  Comptroller of the Currency,  can establish  additional de novo
branch  offices  within the states of  Mississippi  and  Louisiana.  The Company
regularly   evaluates   merger  and  acquisition   opportunities,   as  well  as
opportunities to establish additional branch offices, and it anticipates that it
will continue to evaluate such opportunities.

         Financial Modernization

         The  Gramm-Leach-Bliley  Financial Services Moderation Act of 1999 (the
"GLB Act") was signed by the  President  and enacted  into law on  November  12,
1999. The GLB Act potentially affects every facet of a depository  institution's
operations.  The GLB Act does three  fundamental  things that affect the banking
industry:  (a)  repeals  key  provisions  of the  Glass  Steagall  Act to permit
commercial  banks to affiliate with securities  firms,  insurance  companies and
other  financial  service  providers;  (b)  establishes  a  statutory  framework
pursuant to which full  affiliations  can occur between these entities;  and (c)
provides financial services  organizations with flexibility in structuring these
new financial  affiliations  through a financial  holding company structure or a
financial subsidiary.

         As a result of the GLB Act,  banks  will be able to offer  customers  a
wide range of financial products and services without the restraints of previous
legislation.  In addition,  bank holding companies and other financial  services
providers will be able to commence new activities or new affiliations  much more
readily.

         Consequence of Increased Interstate Activity and Increased Bank Powers

         Because of the increasing  liberalization  of the laws and  regulations
affecting  the  conduct  of  interstate  banking  activities  and the  powers of
financial  institutions  generally,  it is anticipated  that  competition in the
Bank's geographical market area will increase.  If large,  regional bank holding
companies  acquire  branches in the Bank's  market area,  they may offer a wider
range of services than are currently offered by the Bank. Some of these regional
competitors  may  take  full  advantage  of  the  powers  of  financial  holding
companies.  In addition,  these competitors are likely to be better  capitalized
than the Bank and the Company.

         Further Changes in Regulatory Requirements

         The  United  States  Congress  and  the  Mississippi  legislature  have
periodically  considered and adopted legislation that has adversely affected the
profitability of the banking industry.  See  "Competition."  Future  legislation
could further modify or eliminate geographic and other business  restrictions on
banks and bank  holding  companies  and  current  prohibitions  affecting  other
financial  institutions,  including  mutual funds,  securities  brokerage firms,
insurance  companies,  banks from other states and investment banking firms. The
effect of any such legislation on the business of the Company or the Bank cannot
be accurately predicted.  The Company also cannot predict what legislation might

<PAGE>

be enacted or what  other  implementing  regulations  might be  adopted,  and if
enacted or adopted, the effect thereof.

Restriction on Dividends

         The Company is a legal entity  separate and distinct from the Bank, and
substantially  all of the  Company's  revenues  result from  amounts paid by the
Bank, as dividends,  to the Company. The payment of dividends by the Bank is, of
course,  dependent upon its earnings and financial condition. The Bank, however,
as a national  bank, is also subject to legal  limitations  on the amount of its
earnings that it may pay as dividends.  For additional information regarding the
restrictions on the Bank's payment of dividends, see Item 5 - "Market for Common
Equity and Related Stockholder Matters--Dividends," below.

Competition

         There is significant competition among banks and bank holding companies
in  Mississippi.  The Bank  competes  with both  national  and  state  banks for
deposits,  loans and trust accounts and with savings and loan  associations  and
credit unions for loans and deposits. The Bank also competes with large national
banks  from the  principal  cities in  Louisiana  and  Mississippi  for  certain
commercial loans.

         The  deregulation  of depository  institutions as well as the increased
ability  of  non-banking  financial  institutions,  such as  finance  companies,
investment  companies,  insurance  companies,  brokerage  companies  and several
governmental  agencies,  to provide services  previously  reserved to commercial
banks has further intensified  competition.  Accordingly,  the Bank now competes
with  these  non-banking  financial  institutions,  all of which are  engaged in
marketing  various types of loans,  commercial  paper,  short-term  obligations,
investments and other services.  Because non-banking financial  institutions are
not  subject  to the same  regulatory  restrictions  as banks  and bank  holding
companies,  in many  instances  they may operate with greater  flexibility.  The
continued deregulation of the financial services industry may have a detrimental
effect on the Bank's long-term growth and profitability.

         Intensity of competition  among  financial  institutions is expected to
increase substantially as a result of the GLB Act and as a result of the ability
of financial institutions to deliver services over the Internet.

         Environmental

         The Company is subject to various federal, state and local statutes and
ordinances  regulating  the  discharge of materials  into the  environment.  The
Company does not believe that it will be required to expend any material amounts
to comply with these laws and regulations.

Item 2.  Description of Property.

         The Company has its principal  offices in its headquarters  building at
500 Main Street,  Natchez,  Adams County,  Mississippi 39120, which is owned and
occupied by the Bank.  The Bank owns the  property on which five of its branches

<PAGE>

are  located  and  leases  the  property  for one of its  branches  and its Loan
Production Office. In the judgment of management,  the facilities of the Company
and the Bank are  generally  suitable  and adequate for the needs of the Company
and the Bank. The following  list describes the locations and general  character
of the properties owned and leased by the Company and the Bank:

<TABLE>
<CAPTION>



                                                                                       Approximate Office
               Location                       Own/Lease          Use                   Space (square feet)
          _____________________               _________     _____________            ______________________

        <S>                                  <C>            <C>                      <C>

         NATCHEZ

          500 Main Street
          Natchez, Mississippi                  Owned        Main Office                  33,723

          411 Highway 61 N.
          Natchez, Mississippi                  Owned        Branch Office                 1,922

          148 N. Shields Lane
          Natchez, Mississippi                  Owned        Branch Office                 6,000

          25 Sgt. Prentiss Drive
          Natchez, Mississippi                  Owned        Branch Office                 9,900


         VICKSBURG

          2150 S. Frontage Road
          Vicksburg, Mississippi                Owned        Branch Office                 6,000


         BATON ROUGE

          7142 Florida Boulevard
          Baton Rouge, La.                      Owned        Branch Office                 6,000

          12716 Perkins Road
          Baton Rouge, La.                      Leased       Branch Office                 2,000

          10626 Linkwood Court
          Suite A
          Baton Rouge, La.                      Leased       Loan Production Office        2,200

</TABLE>


Item 3.  Legal Proceedings.

         There are no pending legal  proceedings  of a material  nature to which
the Company or the Bank is a party.

Item 4.  Submission of Matters to a Vote of Security Holders.

         On  November  28,  2000,  the  Company  held a Special  Meeting  of its
shareholders  to consider  and vote upon a merger  agreement  whereby  Louisiana
Bancshares,  Inc.  merged into the Company and  Louisiana  Bank & Trust  Company
merged into the Bank.  The merger  agreement was approved by a vote of 1,308,144
shares in favor, with 0 shares voting against and 15,858 shares abstaining.


<PAGE>


                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.

(a)      Market Information

         The  Company's  common  stock is listed on the NASDAQ Small Cap Market,
and trades under the symbol  "BKBK." The table below sets forth the high and low
sales prices ranges for the common stock, as quoted by Yahoo Finance.



<TABLE>
<CAPTION>

                                                Dividends
                                                Per Share               High              Low
                                               ___________             ______            ______

<S>                                           <C>                      <C>               <C>
Year 2000
         4th Quarter                           $    .30                $12.00            $10.75
         3rd Quarter                                                   $15.50            $13.06
         2nd Quarter                           $    .30                $16.75            $11.00
         1st Quarter                                                   $18.00            $17.75

Year 1999
         4th Quarter                           $    .30                $18.75            $18.75
         3rd Quarter                                                   $19.50            $19.50
         2nd Quarter                           $    .30                $21.00            $20.37
         1st Quarter                                                   $20.00            $19.00

</TABLE>


(b)      Holders

         On December  31,  2000,  there were 609  shareholders  of record of the
Company's common stock.

(c)      Dividends

         Pursuant to  Mississippi  law, the  Company's  Board of  Directors  may
authorize  the  Company  to pay cash  dividends  to its  shareholders.  The only
limitation  on such a dividend  is that no  distribution  may be made if,  after
giving effect to the  distribution  (a) the Company would not be able to pay its
debts as they come due in the usual  course of  business,  or (b) the  Company's
total assets would be less than the sum of its total liabilities plus the amount
that would be needed,  if the Company  were to be  dissolved  at the time of the
distribution,  to  satisfy  the  preferential  rights  upon  dissolution  of any
shareholders  whose  preferential  rights are  superior to those  receiving  the
distribution.

         The  principal  source of the Company's  cash  revenues,  however,  are
dividends from the Bank. There are certain  limitations under federal law on the
payment of dividends by national  banks.  Under  federal law, the directors of a
national  bank,  after  making  proper  deduction  for all  expenses  and  other
deductions  required  by the  Comptroller,  may credit net profits to the bank's
undivided  profits  account,  and may declare a dividend from that account of so
much of the net profits as they judge expedient.


<PAGE>

         The prior  approval of the  Comptroller  is required,  however,  if the
total of all  dividends  declared by a national  bank in any calendar  year will
exceed the sum of such  bank's net profits  for that year and its  retained  net
profits for the preceding  two calendar  years,  less any required  transfers to
surplus.  Federal law also prohibits a national bank from paying dividends which
would be greater than the bank's undivided profits after deducting statutory bad
debt in  excess  of the  bank's  allowance  for  loan  losses.  Finally,  FDICIA
generally   prohibits  a   depository   institution   from  making  any  capital
distribution  to  its  holding  company  if  the  depository  institution  would
thereafter be "undercapitalized."

         Both the  Company  and the  Bank  are  subject  to  various  additional
regulatory  policies  and  requirements  relating to the  payment of  dividends,
including  requirements to maintain adequate capital above regulatory  minimums.
The appropriate  federal  regulatory  authority is authorized to determine under
certain circumstances  relating to the financial condition of a national bank or
bank holding company that the payment of dividends would be an unsafe or unsound
practice and to prohibit  payment  thereof.  The  Comptroller has indicated that
paying  dividends  that deplete a national  bank's capital base to an inadequate
level would be an unsound and unsafe banking  practice.  The Comptroller and the
Federal  Reserve Board have each  indicated  that banking  organizations  should
generally  pay  dividends  only out of current  operating  earnings.  The Bank's
ability to pay dividends is also limited by prudence,  statutory and  regulatory
guidelines, and a variety of other factors.

         Further, in connection with the acquisition of Natchez First Federal in
1993, the Bank assumed a liquidation account of approximately $2.8 million which
has the effect of  prohibiting  the payment of dividends if the Bank's net worth
would thereby be reduced below the amount required for the liquidation  account.
Management  does not  anticipate  that this  restriction  will  have a  material
adverse effect on the Bank's ability to pay dividends to the Company.

         The Company has declared  semiannual cash dividends in each of the last
two fiscal years totaling,  on an annual basis, $.60 per share for 1999 and $.60
per share for 2000. Historical dividend payout ratios, expressed as a percentage
of net income, for 1999 and 2000 were 41.40% and 43.00%, respectively.

         The declaration of future dividends is at the discretion of the Company
and generally will be dependent upon the earnings of the Bank, the assessment of
capital requirements, considerations of safety and soundness, applicable law and
regulation and other factors.  Subject to the limitations set forth above, it is
the present  policy of the Board of  Directors  of the  Company to continue  the
declaration  of cash  dividends  on the  Company's  Common Stock on a semiannual
basis, to the extent practicable.

         Retained  earnings of the Bank  available for payment of cash dividends
under applicable dividend  regulations exceeded $3.30 million as of December 31,
2000,  although  the Bank  intends to retain most of these funds for capital and
not pay them out as dividends.


<PAGE>


Item 6.  Management's Discussion and Analysis or Plan of Operation.

         This  discussion is intended to supplement the  consolidated  financial
statements  included in this annual report,  to explain  material changes in the
financial  condition of the Company from 1999 through  2000,  and to compare the
operating  results of the Company for 2000 to operating  results in 1999. All of
the Company's  consolidated  financial statements included in this annual report
have been  restated  to  reflect  the  merger in  December  2000 with  Louisiana
Bancshares, Inc., which has been accounted for as a pooling of interests.

Analysis of Financial Condition

Average Assets and Liabilities

         Interest income from earning assets  (including  loans,  securities and
short-term  investments)  represents  the Company's  primary  source of revenue.
Average  earning assets  increased  19.2% to $256.6  million  during 2000,  from
$215.3  million in 1999.  The increase was primarily due to growth in the Bank's
loan and investment  securities  portfolios.  Loan demand remained strong during
2000.  Average  loans,  net of unearned  interest and allowance for loan losses,
increased  16.6% to $187.2 million in 2000,  compared to $160.5 million in 1999.
Average  securities  grew throughout the last year by 38%, from $45.7 million in
1999 to $63.2  million  in 2000.  Loan  and  investment  growth  was  funded  by
increases of $27.6 million in average  deposits  (primarily  higher-paying  time
deposits)  and $11.6 million in average  short-term  borrowed  funds  (primarily
Federal  Home Loan Bank  advances).  The  following  table  analyses  the Bank's
average  assets and the funding  sources of those  assets  during 1999 and 2000.
Yields and costs are  derived  by  dividing  income or  expense  by the  average
balance of assets or  liabilities,  respectively.  Average  balances are derived
from average monthly balances.


<PAGE>
<TABLE>
<CAPTION>



($ in thousands)                                                         Twelve Months Ended December 31,
---------------------------------------------------------------------------------------------------------------------------------

                                                                   2000                                      1999
                                                   -------------------------------------    -------------------------------------
                                                     Average      Income/      Average        Average       Income/     Average
                                                     Balance      Expense      Yield/Rate     Balance       Expense    Yield/Rate
                                                   ------------ ------------  --------------------------  ------------ ----------
ASSETS
<S>                                                <C>          <C>           <C>           <C>           <C>          <C>
Loans (1)(2)                                         $ 187,176     $ 16,944       9.05%       $ 160,485      $ 14,145      8.81%
Investment securities:
     U.S. Government & other                            57,106        3,876       6.79%          43,774         2,766      6.32%
     State & Municipal                                   6,096          312       5.11%           1,936            98      5.05%
                                                   ------------ ------------                ------------  ------------
     Total investment securities                        63,202        4,188       6.63%          45,710         2,864      6.27%
Interest bearing bank balances                             918           54       5.90%             887            48      5.47%
Federal funds sold                                       4,477          262       5.86%           7,448           395      5.30%
Other (Cash Value Life Insurance)                          790           45       5.64%             741            38      5.08%
                                                   ------------ ------------                ------------  ------------
     Total earning assets                              256,563       21,493       8.38%         215,271        17,490      8.12%
                                                   ------------ ------------                ------------  ------------
Allowance for loan losses                               (1,330)                                  (1,129)
Cash & due from banks, non-interest bearing              6,857                                    6,338
Bank premises & equipment                                7,033                                    6,305
Other assets                                             4,976                                    4,823
                                                   ------------                             ------------
     TOTAL ASSETS                                    $ 274,099                                $ 231,608
                                                   ============                             ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing deposits:
Savings                                               $ 16,137        $ 362       2.24%        $ 15,347         $ 349      2.27%
Interest bearing checking                               33,745          954       2.83%          32,853           850      2.59%
Money rate savings                                      11,418          318       2.79%          11,650           343      2.95%
Certificates of deposit and other time deposits (3)    124,660        7,074       5.67%         101,146         5,115      5.06%
                                                   ------------ ------------                ------------  ------------
     Total interest bearing deposits                   185,960        8,708       4.68%         160,996         6,657      4.13%
Short term borrowed funds                               26,934        1,699       6.31%          15,307           804      5.25%
                                                   ------------ ------------                ------------  ------------
     Total interest bearing liabilities                212,894       10,407       4.89%         176,303         7,461      4.23%
                                                   ------------ ------------                ------------  ------------
Non-interest bearing deposits                           30,724                                   28,105
Other liabilities                                        5,339                                    3,699
Shareholders' equity                                    25,142                                   23,502
                                                   ------------                             ------------
     TOTAL LIABILITIES & SHAREHOLDERS' EQUITY        $ 274,099     $ 10,407                   $ 231,609       $ 7,461
                                                   ============ ============                ============  ============
Interest income and rate earned                                    $ 21,493       8.38%                      $ 17,490      8.12%
Interest expense and rate paid                                       10,407       4.89%                         7,461      4.23%
                                                                ------------  ----------                  ------------ ----------
Interest rate spread                                                              3.49%                                    3.89%
                                                                              ==========                               ==========
NET INTEREST INCOME & NET YIELD
 ON AVERAGE EARNING ASSETS                                         $ 11,086       4.32%                      $ 10,029      4.66%
                                                                ============  ==========                  ============ ==========


(1)  Nonaccrual loans are included in average balances for yield computations.
(2)  Includes loan fees and late charges in both interest income and yield computations.
(3)  Includes income (expense) resulting from interest rate caps and swaps used to manage interest rate risk.
</TABLE>


<PAGE>

Investment Securities

         Management  determines  the  classification  of the  Bank's  investment
securities at the time the securities are acquired.  Securities  that are deemed
to be  held-to-maturity  are accounted for by the amortized  cost method,  while
securities  that are purchased as  available-for-sale  are accounted for at fair
value.  Securities  held-to-maturity  increased $7.8 million to $54.5 million at
December 31, 2000,  compared to $46.7  million at December 31, 1999.  The bank's
available-for-sale  securities  portfolio  decreased  by $270  thousand  to $6.2
million at December  31, 2000.  Net  unrealized  losses in the Bank's  portfolio
after tax-effecting the available-for-sale securities,  amounted to $78 thousand
at December 31, 2000.

         The  amortized  cost  and  approximate   market  value  of  the  Bank's
  investment securities classified as held-to-maturity at December 31, 2000, are
  summarized as follows:
<TABLE>
<CAPTION>

                                                                          Gross         Gross             Approximate
                                                       Amortized        Unrealized      Unrealized         Market
                                                         Cost              Gains          Losses            Value
                                                   ================    ============   =============    ===============
<S>                                                <C>                 <C>           <C>              <C>

         Obligations of other U. S.
            government agencies and
            corporations                                $40,604,279    $    742,098       $(149,280)       $41,197,097
         Obligations of state and
            political subdivisions                        7,385,130         210,681            (115)         7,595,696
         Privately issued collateralized

            mortgage obligations                          6,497,250          60,462               -          6,557,712
                                                       ------------    ------------   -------------       ------------

                                                        $54,486,659    $  1,013,241       $(149,395)       $55,350,505
                                                        ===========    ============       =========        ===========


         The  amortized  cost  and  approximate   market  value  of  the  Bank's
investment  securities classified as available-for-sale at December 31, 2000 are
summarized as follows:

                                                                           Gross           Gross         Approximate
                                                       Amortized        Unrealized      Unrealized         Market
                                                         Cost              Gains          Losses            Value
                                                   ================    ============   =============    ===============
<S>                                                <C>                 <C>            <C>              <C>

               Obligations of other U.S
                  government agencies and
                  corporations                        $6,336,675        $       -      $ (121,192)       $6,215,483
                                                      ==========       ============     ==========       ===========



         The  amortized  cost  and  approximate   market  value  of  the  Bank's
investment  securities  classified as  held-to-maturity at December 31, 1999 are
summarized as follows:

<PAGE>
                                                                           Gross           Gross         Approximate
                                                       Amortized        Unrealized      Unrealized         Market
                                                         Cost              Gains          Losses            Value
                                                   ================    ============   =============    ===============
<S>                                                <C>                 <C>            <C>              <C>

               Obligations of other U. S.
                  government agencies and
                  corporations                          $35,562,339       $  91,194     $  (818,904)       $34,834,629
               Obligations of state and
                  political subdivisions                  4,494,348           1,959        (142,246)         4,354,061
               Privately issued collateralized
                  mortgage obligations                    6,662,524           1,475        (149,794)         6,514,205
                                                      -------------       ---------   -------------       ------------

                                                        $46,719,211       $  94,628     $(1,110,944)       $45,702,895
                                                      =============       =========   =============        ===========


         The  amortized  cost  and   approximate   market  value  of  investment
securities  classified as available-for-sale at December 31, 1999 are summarized
as follows:

                                                                           Gross           Gross         Approximate
                                                       Amortized        Unrealized      Unrealized         Market
                                                         Cost              Gains          Losses            Value
                                                   ================    ============   =============    ===============
<S>                                                <C>                 <C>            <C>              <C>

               Obligations of state and
                  political subdivision               $    249,180              -       $      (986)      $    248,194
               Obligations of other U.S.
                  government agencies
                  and corporations                       6,625,243              -          (387,975)         6,237,268
                                                    ---------------    ------------     -----------       ------------

                                                      $  6,874,423              -         $(388,961)      $  6,485,462
                                                     ==============    ============     ===========       ============


</TABLE>


         Investment securities carried at approximately $40,942,000 (approximate
market value  $40,957,000)  at December 31, 2000 and  approximately  $41,884,000
(approximate  market  value  $40,979,000)  at December  31, 1999 were pledged to
collateralize  public  deposits  and for other  purposes  as  required by law or
agreement.

         The amortized  cost and  approximate  market value of  investment  debt
securities   at  December   31,   2000  by   contractual   maturity   (including
mortgage-backed  securities),  are shown below.  Expected maturities will differ
from  contractual  maturities  because  borrowers  may have the right to call or
prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>

                                                                                       Securities available-for-sale
                                                                                      ________________________________
                                                                                                           Approximate
                                                                                        Amortized             Market
                                                                                          Cost                Value
                                                                                      ____________         ___________
<S>                                                                                  <C>                  <C>

               Due in one year or less                                                  $1,997,396          $1,997,077
               Due after one year through five years                                             -                   -
               Due after five years through ten years                                            -                   -
               Due after ten years                                                       4,339,279           4,218,406
                                                                                      ------------        ------------

                                                                                        $6,336,675          $6,215,483
                                                                                        ==========          ==========

<PAGE>

         The Company's cash and cash  equivalents  ended the year 2000 virtually
unchanged  from December 31, 1999 at $8.0  million.  Investing  activities  used
$18.4 million while financing  activities  provided $15.4 million primarily from
the increase in time  deposits and Federal  Home Loan Bank  advances.  Operating
activities provided $2.9 million.

Loans and Nonperforming Loans

         The Bank's loan portfolio at December 31, 2000 and 1999,  consisted  of
the following:

                                                                                       2000                 1999
                                                                                 ----------------    -----------------
<S>                                                                              <C>                 <C>
               Commercial, financial and agricultural                            $     33,102,000    $      26,679,000
               Real estate-construction                                                10,883,000            8,035,000
               Real estate-mortgage                                                   123,192,000          116,204,000
               Installment                                                             19,513,000           18,924,000
               Overdrafts                                                                 218,000              230,000
                                                                                 ----------------    -----------------

               Total loans                                                       $    186,908,000    $     170,072,000
                                                                                 ================    =================


The following table sets forth the periods in which the Bank's loans mature:

                                                                Due In
                             -----------------------------------------------------------------------
                                  1 yr                 1 - 5               Over 5
                                or less                Years               Years            Total
                             -----------------------------------------------------------------------
                                                     (dollars in thousands)

<S>                            <C>                  <C>                  <C>               <C>
         Total Loans           $ 79,331             $ 64,102             $ 43,475          $186,908


</TABLE>


         Nonperforming  loans  increased  to $1.4  million at December 31, 2000,
from $1.1 million at December 31, 1999.  Nonperforming  loans at the end of 2000
consisted of non-accrual loans of $1.1 million and loans past due ninety days or
more  of  $311   thousand,   compared  to  $750  thousand  and  $306   thousand,
respectively,  at December 31, 1999. If interest on such loans had been accrued,
the  income  would  have  approximated  $78,241  and  $18,256  in 2000 and 1999,
respectively. Nonperforming loans as a percent of loans, net of unearned income,
increased  to .74% at December 31, 2000,  from .62% at December 31,  1999..  The
Bank places loans on non-accrual status when management determines that there is
a likelihood that the Borrower will not be able to pay interest and principal on
the loan in accordance with its terms.  The following table presents  additional
information on the Bank's nonperforming assets as of December 31, 2000 and 1999:



<PAGE>

($ in thousands)                                      2000                1999
-------------------------------------------------------------------------------
Nonaccrual loans:
      Real estate                                    $   950            $   665
      Installment                                         39                 59
      Commercial and all other loans                      89                 26
                                              ---------------    ---------------
      Total nonaccrual loans                           1,078                750
Loans past due over 90 days                              311                306
                                              ---------------    ---------------
      Total nonperforming loans                        1,389              1,056
Other real estate                                        773                401
                                              ---------------    ---------------
      Total nonperforming assets                     $ 2,162            $ 1,457
                                              ===============    ===============
Nonperforming loans ratio                              0.74%              0.62%
                                              ===============    ===============



         Allowance for Loan Losses

         The allowance for loan losses  increased  $733 thousand to $1.9 million
at December 31, 2000,  compared to $1.2 million at December 31, 1999.  The ratio
of the allowance for loan losses to loans, net of unearned income,  increased to
1.01% at December 31, 2000, from .68% at December 31, 1999. Approximately 45% of
the  loan  portfolio  is  invested  in 1-4  family  residential  mortgage  loans
requiring  less  allocation  of reserves due to their  generally  higher  credit
quality. However, during 2000, management increased the annual provision to $969
thousand,  compared to $287 thousand in 1999. The acquisition of LBT has allowed
the Company to move into a new market with  expectations  of generating a larger
percentage of the  portfolio in commercial  loans,  which  inherently  have more
risk. The allowance is composed of specific reserves for each loan that has been
identified  as being  impaired  or for loans  that have been  identified  with a
probable loss.

         Changes in the allowance for loan losses are as follows:

                                                 2000                   1999
                                              -----------           ------------

               Balance at January 1           $1,150,249             $1,061,052

                  Credits charged off           (337,393)              (235,967)
                  Recoveries                     101,984                 38,164
                                               ---------              ---------
                  Net credits charged off       (235,409)              (197,803)
                                               ---------              ---------

                  Provision for loan losses      968,721                287,000
                                               ---------              ---------

               Balance at December 31         $1,883,561             $1,150,249
                                              ==========             ==========




         Management  reviews the allowance for loan losses on a monthly basis to
ensure  the  level is  adequate  to  absorb  loan  losses  inherent  in the loan
portfolio.  The  allocation of the allowance for loan losses  between 1-4 family
residential first mortgage loans and other loans, net of unearned  interest,  as
of December 31, 2000 and 1999, is presented in the table below:

<PAGE>



                                                  2000                  1999
-------------------------------------------------------------------------------
1-4 Family Residential 1st Mortgage Loans
     Volume                                 $  82,294,082         $  67,623,075
     Allocated reserve                             71,320                58,759
     Reserves as a percent of volume                0.09%                 0.09%

Other Loans
     Volume                                 $ 104,566,642         $ 102,358,651
     Allocated reserve                          1,812,241             1,091,490
     Reserves as a percent of volume                1.73%                 1.07%

Total Loans
     Volume                                 $ 186,860,724         $ 169,981,726
     Allocated reserve                          1,883,561             1,150,249
     Reserves as a percent of volume                1.01%                 0.68%



         Other Real Estate

         Other real estate  increased  to $773  thousand at December  31,  2000,
compared to $401  thousand  at December  31,  1999.  The  increase is due to the
acquisition of one large commercial tract by the Bank in 2000 in connection with
a loan  made by  Louisiana  Bank & Trust.  The real  estate is  currently  being
marketed for sale.




         Deposits

         Deposits  are the  Company's  primary  source of  funding  for  earning
assets.  Average deposits  increased $27.6 million to $216.7 million at December
31,  2000.  The  increase in average  deposits  includes $10 million in brokered
deposits  opened in March  2000,  callable  one year from the date of  purchase.
Average borrowings, which include federal funds purchased, securities sold under
repurchase  agreements,  and advances  from the Federal Home Loan Bank of Dallas
increased  $11.6  million.  Management  plans  continued  use of  nontraditional
funding  sources to manage overall  funding costs and to meet loan demand in new
locations.  A further  analysis  of the  Company's  funding  uses and sources is
reflected in the table below.

<PAGE>
<TABLE>
<CAPTION>


                                                                   Average Balances                       Percent of Total
----------------------------------------------------------------------------------------------------------------------------------
($ in thousands)                                                2000              1999               2000               1999
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>                <C>                <C>               <C>

Funding Uses
     Loans                                                      $ 187,176         $ 160,485              68.3%              69.3%
     Investments                                                   63,202            45,710              23.1%              19.7%
     Federal funds sold                                             4,477             7,448               1.6%               3.2%
     Other                                                         19,244            17,965               7.0%               7.7%
                                                           ---------------    --------------     --------------    ---------------
     Total                                                      $ 274,099         $ 231,608             100.0%             100.0%
                                                           ===============    ==============     ==============    ===============
Funding Sources
     Non-interest bearing deposits                               $ 30,724          $ 28,105              11.2%              12.1%
     Interest bearing deposits                                    185,961           160,996              67.8%              69.5%
     Short-term borrowings                                         26,934            15,307               9.8%               6.6%
     Other                                                          5,338             3,699               1.9%               1.6%
     Equity                                                        25,142            23,502               9.3%              10.2%
                                                           ---------------    --------------     --------------    ---------------
     Total                                                      $ 274,099         $ 231,608             100.0%             100.0%
                                                           ===============    ==============     ==============    ===============



         Deposits at December 31, 2000 and 1999 consisted of the following:

                                                                                       2000                 1999
                                                                                 ----------------    -----------------

<S>                                                                              <C>                 <C>
               Non-interest bearing demand deposits                              $     33,613,385    $      30,480,396
               NOW accounts                                                            28,771,291           33,005,686
               Money market deposit accounts                                           11,220,083           11,477,550
               Savings accounts                                                        16,016,895           15,930,068
               Certificates of deposit                                                121,733,846          107,492,804
                                                                                 ----------------    -----------------

                                                                                 $    211,355,500    $     198,386,504
                                                                                 ================    =================

         Maturities of certificates  of deposit of $100,000 or more  outstanding
at December 31, 2000 and 1999 are summarized as follows:

                                                                                        2000                1999
                                                                                   ---------------     ---------------

               Time remaining until maturity:

<S>                                                                                <C>                 <C>
                  Three months or less                                             $    14,555,130     $    17,194,957
                  Over three through six months                                          6,485,698           5,849,038
                  Over six through twelve months                                         2,826,715           3,604,394
                  Over twelve months                                                    16,061,156           8,865,760
                                                                                   ---------------     ---------------

                                                                                   $    39,928,699     $    35,514,149
                                                                                   ===============     ===============

<PAGE>
</TABLE>

         Approximate  scheduled  maturities of certificates of deposits for each
of the next five years are:

                                    2001                        $    82,963,000
                                    2002                             18,370,000
                                    2003                              7,230,000
                                    2004                              1,716,000
                                    2005                              6,409,000
                                    Thereafter                        5,046,000
                                                                ---------------
                                                                $   121,734,000


         Liquidity

         The  principal  sources of  liquidity  for the  Company  are cash flows
generated  by the  Company's  earning  assets and the ability to borrow  against
investment  securities and loans. As interest rates  increased  during 2000, the
Bank's asset base was extended.  During 2000,  principal and interest cash flows
from  investment  securities  decreased  to $10.1  million,  or 3.7% of  average
assets,  compared  to $19.2  million,  or 10% of average  assets,  in 1999.  The
portfolio  primarily  includes  investments in obligations of government  agency
obligations, mortgage-backed securities and municipal bonds.

         Sizable core  deposits  provide  liability  liquidity  along with other
sources of funds generated from the normal customer base.  Substantially all the
funds utilized by the Company are generated from the normal  customer base. From
time to time, the Bank utilizes  brokered and national  market  deposits to meet
funding  needs.  At December  31, 2000,  the Company had  brokered  deposits and
national deposits totaling $10.0 million and $3.0 million, respectively.

         In addition to balance  sheet  liquidity,  the  Company  maintains  the
capacity to borrow  additional  funds when the need arises through federal funds
purchased  lines  with  correspondent  banks and broker  repurchase  agreements.
Additional  borrowing  capacity is  available  on 1-4 family  residential  first
mortgage loans through the Federal Home Loan Bank.

         Interest Rate Sensitivity

         The primary assets of banks are portfolios of investment securities and
loans, while liabilities are primarily composed of interest-bearing deposits and
borrowed  funds.  Assets  and  liabilities  have  varying  maturities,  and  the
associated  rates may be fixed or  variable.  The Company  uses  asset/liability
management  techniques to maintain what  management  believes are believed to be
appropriate  levels  and  relationships   between   rate-sensitive   assets  and
liabilities.  Thus the Company seeks to maximize overall returns and to minimize
the risk of loss  associated  with  significant,  often  unforeseen,  shifts  in
interest rates.

         A liability  sensitive  company will  generally  benefit from a falling
interest rate  environment,  as the cost of  interest-bearing  liabilities falls
faster than the yields on interest  earning assets,  thus creating a widening of
the net interest margin.  Conversely,  an asset-sensitive company will generally
benefit   from  a  rising   interest   rate   environment   as  the   yields  on
interest-earning   assets  rise  faster  than  the  costs  on   interest-bearing
liabilities.


<PAGE>

         Management utilizes a computerized interest rate simulation analysis as
its primary measure of interest rate sensitivity. Management's analyses indicate
that a rising rate scenario  continues to present the most potential exposure to
net interest income as the short-term funding base reprices much faster than the
longer-term  asset base causing net interest  income to trend  downward over the
first twelve months. Slower prepayments on mortgage related assets and continued
foregone calls on agency securities begin to produce margin compression.  During
the second  year,  funding  cost  increases  subside  and assets  continue to be
replaced/repriced at higher rates, net interest income begins to trend gradually
higher.  In a falling rate  environment,  net interest  income  increases as the
relatively  short-term  nature of the funding base reacts to decreases in market
rates at a faster pace than the  longer-term  fixed rate and lagging  adjustable
rate mortgage asset base. In the second year,  margins  stabilize and eventually
come  under  pressure  as  assets  continue  to  be  reset  in  the  lower  rate
environment.


         A traditional  measure of interest rate  sensitivity  is the difference
between  the  balances  of  assets  and  liabilities  in the  Company's  current
portfolio  that are  subject  to  repricing  at  various  time  horizons.  These
differences are known as interest  sensitivity gaps: immediate to 3 months, 4 to
12 months, 1 to 3 years, 3 to 5 years,  over 5 years and on a cumulative  basis.
The Company's interest sensitivity analysis as of December 31, 2000, is shown in
the following table.
<TABLE>
<CAPTION>



($ in thousands)
---------------------------------------------------------------------------------------------------------------
                                   Immediate
                                     to 3         4-12        1 to 3        3 to 5       Over 5
                                    Months       Months        Years        Years        Years        Totals
                                  -----------  -----------   ----------   -----------  -----------   ----------
<S>                               <C>          <C>           <C>           <C>         <C>          <C>
Interest Sensitive Assets         $  50,938    $  56,120     $ 62,242      $ 32,092    $  67,602    $ 268,994
Interest Sensitive Liabilities       61,395       81,559       31,995         3,125       90,920      268,994
                                  ===========  ===========   ==========   ===========  ===========   ==========
Interest Sensitivity Gaps         $ (10,457)   $ (25,439)    $ 30,247      $ 28,967    $ (23,318)   $       -
                                  ===========  ===========   ==========   ===========  ===========   ==========
Cumulative ratio of interest
     sensitive assets to interest
     sensitive liabilities             0.83         0.75         0.97          1.13         1.00
                                  ===========  ===========   ==========   ===========  ===========


</TABLE>

         Changes  in the mix of earning  assets or  supporting  liabilities  can
either increase or decrease the net interest margin without  affecting  interest
rate sensitivity. In addition, the interest rate spread between an asset and its
supporting  liability can vary  significantly  while the timing of repricing for
both the asset and the liability  remains the same,  thus impacting net interest
income.  Varying  interest rate  environments can create  unexpected  changes in
prepayment levels of assets and liabilities which are not reflected in the above
interest  sensitivity  analysis report.  These  prepayments may have significant
effects on the  Company's net interest  margin.  Because of these  factors,  the
interest  sensitivity  analysis  contained in the above table does not provide a
complete assessment of the Company's exposure to changes in interest rates.

         Management also evaluates the condition of the economy,  the pattern of
market  interest  rates and other  economic  data in an attempt to determine the

<PAGE>

appropriate mix and repricing characteristics of assets and liabilities required
to produce an optimal net interest margin and thus maximize income.


         In addition to the ongoing monitoring of its interest-sensitive  assets
and liabilities,  the Company from time to time utilizes  interest rate swaps or
caps to augment the  management of its interest rate  sensitivity.  The interest
rate risk factor in these contracts is considered in the overall interest income
and interest rate risk management  strategies.  The income or expense associated
with these hedging techniques is reflected as adjustments to interest expense. A
further discussion of the Company's use of off-balance sheet agreements is shown
in Note R of the financial statements.


Capital and Dividends

         Stockholders'  equity  increased  6.9% to $25.5 million at December 31,
2000,  compared to $23.9 million at the end of 1999. The ratio of  stockholders'
equity to assets  remained stable at 9.5% at December 31, 2000. The Company paid
dividends  of $.60 per share in 2000 and 1999,  which  represented  an  earnings
payout ratio of 43% and 41%, respectively.

         The Bank maintained a Tier 1 capital to  risk-weighted  assets ratio at
December 31, 2000 of 12.61%,  a total capital to  risk-weighted  assets ratio of
13.68% and a leverage  ratio of 8.33%.  These  levels  substantially  exceed the
minimum  requirements  of the  regulatory  agencies  of 4.00%,  8.00% and 4.00%,
respectively,  and place the Company in the  "well-capitalized"  category  under
applicable  regulatory  guidelines.  The following  table further  describes the
Bank's capital ratios.
<TABLE>
<CAPTION>

                                                                     To Be Adequately                To Be Well
                                             Actual                    Capitalized                  Capitalized
                                        __________________________________________________________________________
                                        Amount      Ratio          Amount          Ratio         Amount     Ratio
                                        __________________________________________________________________________
                                                                 (dollars in thousands)

As of December 31, 2000
-----------------------
<S>                                     <C>         <C>           <C>             <C>           <C>         <C>
Total Capital (to Risk-
    Weighted Assets)                    $24,033      13.68%         $14,054        8.00%         $17,568     10.00%
Tier I Capital (to Risk-
    Weighted Assets)                    $22,149      12.61%         $ 7,026        4.00%         $10,539      6.00%
Tier I Capital (to Average
    Assets)                             $22,149       8.33%         $10,636        4.00%         $13,295      5.00%

As of December 31, 1999
-----------------------
Total Capital (to Risk-
    Weighted Assets)                    $21,703      14.03%         $12,375        8.00%         $15,469     10.00%
Tier I Capital (to Risk-
    Weighted Assets)                    $20,552      13.28%         $ 6,190        4.00 %        $ 9,286      6.00%
Tier I Capital (to Average
    Assets)                             $20,552       8.56%         $ 9,604        4.00 %        $12,005      5.00%


</TABLE>

<PAGE>

Results of Operations

         Net Income

         The Company earned $2.7 million ($1.28 per share) in 2000,  compared to
$2.6 million  ($1.21 per share) in 1999.  Returns on average  assets and average
equity for 2000 were .98% and 10.70%, respectively, compared to 1.11% and 10.90%
in 1999. The costs associated with the acquisition of Louisiana Bank & Trust are
reflected in overall lower returns.

         Net Interest Income

         Net  interest  income -- the  difference  between the income  earned on
interest-earning assets and the amounts paid on interest-bearing  liabilities --
increased  $1.1 million (or 10.5%) to $11.1 million in 2000,  due primarily to a
19.2% growth in the volume of average earning assets.  This growth was offset by
two factors.  First, the Bank's  interest-bearing  liabilities  increased 20.1%,
reflecting  the fact that,  compared to 1999, a larger  percentage  of assets in
2000 were funded by interest-bearing  liabilities.  Second,  increasing interest
rates during 2000 generally had the effect of causing the Bank's interest spread
to  decrease,  such that  average  rates  the Bank paid on its  interest-bearing
liabilities  increased  more than the average  rates that the Bank earned on its
interest-earning  assets.  The  following  table  presents  an  analysis  of the
Company's changes in net interest income in 2000 compared to 1999.
<TABLE>
<CAPTION>



($ in thousands)                                                      2000 compared to 1999
-----------------------------------------------------------------------------------------------------------
                                                              Increase (Decrease) Due to Change in
                                                             Total             Volume              Rates
                                                       ---------------    --------------     --------------
<S>                                                    <C>                <C>                <C>
INTEREST EARNED ON:
Loans                                                         $ 2,799           $ 2,407              $ 392
Investment securities:
     U.S. Government & other                                    1,110               893                217
     State & Municipal                                            214               213                  1
Interest bearing bank balances                                      6                 2                  4
Federal funds sold                                               (133)             (171)                38
Other (Cash Surrender Value Life Insurance)                         7                 3                  4
                                                       ---------------    --------------     --------------
     Total earning assets                                     $ 4,003           $ 3,347              $ 656
                                                       ---------------    --------------     --------------
INTEREST PAID ON:
Savings                                                            13                18                 (5)
Interest bearing checking                                         104                24                 80
Money rate savings                                                (25)               (7)               (18)
Certificates of deposit and other time deposits                 1,959             1,284                675
Short-term borrowed funds                                         895               708                187
                                                       ---------------    --------------     --------------
     Total interest bearing liabilities                         2,946             2,027                919
                                                       ---------------    --------------     --------------
NET INTEREST INCOME                                           $ 1,057           $ 1,320             $ (263)
                                                       ===============    ==============     ==============
</TABLE>

<PAGE>



         The Bank's net  interest  margin  decreased  to 4.32% from 4.66% during
2000  primarily  due to the Bank's  decreased  interest  rate spread,  which was
mitigated in part by an increase in the amount of  non-interest  bearing sources
of funds and the increased relative benefit of those funds.

         Provision for Loan Losses

         The provision for loan losses increased $682 thousand in the year 2000,
compared to 1999. The Company's move into the Baton Rouge,  Louisiana  market is
anticipated  to open  opportunities  to  originate  commercial  loans which will
change the loan portfolio mix by reducing residential  mortgages held, currently
at 45%,  and  increasing  commercial  loans with  inherently  greater  risk.  To
determine the provision amount,  management considers factors such as historical
trends of charge-offs  and  recoveries,  past due loans and economic  conditions
along  with  additional  analysis  of  individual  loans  and pools of loans for
exposure.  After  allocating  the  existing  reserves  to  estimated  exposures,
management  then adds to the  reserve  through a loan  loss  provision  to cover
potential losses in the portfolio. Management is of the opinion that the reserve
at December 31, 2000 is adequate to cover estimated exposures.

Non-Interest Income

         Non-interest income, excluding equity in investee losses, increased 28%
from $2.1  million  in 1999 to $2.7  million in 2000.  Substantially  all of the
increase  in  non-interest  income  occurred  when the Company  recognized  $618
thousand in income during the fourth  quarter of 2000 as a result of liquidating
negative  goodwill in connection with selling certain assets associated with the
Company's 1993 purchase of Natchez First Federal Savings Bank.  Income from bank
operations,  however,  continues to reflect  strong core income  including  fees
charged on  deposit  accounts,  fees  charged  on the  Bank's  Internet  service
operations, commissions on consumer investment services and ATM fees.

Non-Interest Expense

         Non-interest  expense  increased  $1.4 million to $9.2 million in 2000,
compared to $7.8 million in 1999.  Salaries and employee benefits increased $681
thousand -- accounting  for nearly  one-half of the increase -- primarily due to
adding  employees  associated  with bank  acquisitions,  stock options to senior
officers of the acquired  institutions  and annual  bank-wide  merit  increases.
Equipment and occupancy  expense  increased  $332  thousand,  primarily from the
occupancy of the Vicksburg branch for an additional 7 months in 2000, along with
additional  depreciation  expense  incurred on equipment to prepare for Y2K. The
Bank is currently  amortizing  premiums on branch  acquisitions that amounted to
$108 thousand in 2000, compared to $88 thousand in 1999.

Income Taxes

         Income taxes for 2000  decreased  $372 thousand to $919  thousand,  due
primarily  due to the  fact  that  the  liquidation  of  the  negative  goodwill
discussed  earlier was  non-taxable  income to the  Company.  In  addition,  the
Company's increase in tax-exempt assets provided $64 thousand tax benefit. Other
factors  contributing to this decrease are more fully discussed in Note L to the
financial statements.

<PAGE>


DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

         This annual report  includes  "forward-looking  statements"  within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the  Securities  Exchange Act of 1934,  as amended.  Although the Company
believes that the expectations reflected in such forward-looking  statements are
reasonable,  such  forward-looking  statements are based on numerous assumptions
(some  of which  may  prove  to be  incorrect)  and are  subject  to  risks  and
uncertainties which could cause the actual results to differ materially from the
Company's expectations. Forward-looking statements have been and will be made in
written  documents and oral  presentations  of the Company.  Such statements are
based on  management's  beliefs as well as assumptions  made by and  information
currently available to management.  When used in the Company's documents or oral
presentations,   the  words  "anticipate,"  "estimate,"  "expect,"  "objective,"
"projection,"  "forecast,"  "goal"  and  similar  expressions  are  intended  to
identify  forward-looking  statements.  In addition to any assumptions and other
factors  referred  to  specifically  in  connection  with  such  forward-looking
statements,  factors  that could cause the  Company's  actual  results to differ
materially from those contemplated in any  forward-looking  statements  include,
among others,  increased competition,  regulatory factors,  economic conditions,
changing  interest rates,  changing market  conditions,  availability or cost of
capital,  employee  workforce  factors,  cost and  other  effects  of legal  and
administrative  proceedings,  and changes in federal, state or local legislature
requirements.  The  Company  undertakes  no  obligation  to update or revise any
forward-looking  statements,  whether as a result of changes in actual  results,
changes in assumptions or other factors affecting such statements.

Item 7. Financial Statements.

         The  audited  financial  statements  of the Company for the years ended
December  31, 2000 and 1999 follow Item 13 of this annual  report.

Item 8.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure.

         None.

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act.

          The  information  required in  response  to this item is  incorporated
herein by reference to the material under the heading "Election of Directors" in
the Company's Proxy  Statement for its 2000 annual meeting of Shareholders  (the
"Proxy Statement").

<PAGE>

Item 10.  Executive Compensation.

          The  information  required in  response  to this item is  incorporated
herein by reference to the material under the heading  "Executive  Compensation"
in the Proxy Statement.

Item 11.  Security Ownership of Certain Beneficial Owners and Management.

         The  information  required  in  response  to this item is  incorporated
herein by  reference  to the material  under the  headings  "Stock  ownership of
Directors,  Officers, and Principal  Shareholders",  "Employment Agreements" and
"Section  16(a)  Beneficial   Ownership  Reporting   Compliance"  of  the  Proxy
Statement.

Item 12.  Certain Relationships and Related Transactions.

         The  information  required  in  response  to this item is  incorporated
herein by reference to the material under the heading "Certain Relationships and
Related Transactions" in the Proxy Statement.

Item 13.  Exhibits, List and Reports on Form 8-K.

(a)      Exhibits

         The  response to this  portion of Item 13 is  submitted  as the Exhibit
Index attached hereto and incorporated herein by this reference.

(b)      Reports on Form 8-K

         The Company filed a current report on Form 8-K, dated November 2, 2000,
reporting third quarter 2000 earnings.

         The Company filed a current report on Form 8-K, dated November 3, 2000,
announcing a semi-annual dividend.

         The Company filed a current report on Form 8-K, dated December 1, 2000,
reporting the completion of the merger with Louisiana Bank & Trust Company.

<PAGE>






                      BRITTON & KOONTZ CAPITAL CORPORATION

                                 AND SUBSIDIARY

                        Consolidated Financial Statements

                     Years Ended December 31, 2000 and 1999

                                      with

                          Independent Auditor's Report


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY

                        CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

                                TABLE OF CONTENTS




INDEPENDENT AUDITOR'S REPORT

FINANCIAL STATEMENTS

    Consolidated Statements of Financial Condition

    Consolidated Statements of Income

    Consolidated Statements of Changes in Stockholders' Equity

    Consolidated Statements of Cash Flows

    Notes to the Consolidated Financial Statements



<PAGE>






                          INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders
Britton & Koontz Capital Corporation and Subsidiary

We have audited the accompanying  consolidated statements of financial condition
of Britton & Koontz Capital  Corporation  and Subsidiary as of December 31, 2000
and  1999,  and the  related  consolidated  statements  of  income,  changes  in
stockholders'   equity,   and  cash  flows  for  the  years  then  ended.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

The consolidated  financial statements as of December 31, 1999, and for the year
then ended have been restated to reflect the pooling of interests with Louisiana
Bancshares,   Inc.  as  described  in  Note  T  to  the  consolidated  financial
statements.  We did  not  audit  the  1999  financial  statements  of  Louisiana
Bancshares,  Inc.,  which  statements  reflect total assets of $43,048,215 as of
December  31,  1999,  and net interest  income of  $1,783,333  for the year then
ended.  Those  statements  were audited by other  auditors whose report has been
furnished to us, and our opinion,  insofar as it relates to the amounts included
for Louisiana  Bancshares,  Inc. as of December 31, 1999,  and for the year then
ended, is based solely on the report of the other auditors.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated
financial  statements  are free of  material  misstatements.  An audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  consolidated  financial  statements.  An audit also includes  assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audits  and the  report of other  auditors  provide a  reasonable  basis for our
opinion.

In our  opinion,  based on our  audits  and the  report of other  auditors,  the
consolidated  financial  statements  referred to in the first paragraph  present
fairly,  in all material  respects,  the financial  position of Britton & Koontz
Capital  Corporation  and  Subsidiary as of December 31, 2000 and 1999,  and the
results  of their  operations  and their  cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.

Vicksburg, Mississippi
January 22, 2001


<PAGE>





                              FINANCIAL STATEMENTS


<PAGE>

<TABLE>
<CAPTION>





               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                           DECEMBER 31, 2000 AND 1999

                                     ASSETS

<S>                                                                             <C>                 <C>


                                                                                      2000                 1999
                                                                                 ----------------    -----------------
ASSETS:

    Cash and due from banks:
       Non-interest bearing                                                      $      7,629,471    $       6,861,546
       Interest bearing                                                                   329,407            1,163,158
                                                                                 ----------------    -----------------
              Total cash and due from banks                                             7,958,878            8,024,704

    Federal funds sold                                                                          -            7,575,000
    Investment securities:
       Held-to-maturity (market value of $55,350,505 and
          $45,702,895, respectively)                                                   54,486,659           46,719,211
       Available-for-sale (amortized cost of $6,336,675 and
          $6,874,423, respectively)                                                     6,215,483            6,485,462
       Equity securities, at cost less equity in unallocated losses                       794,790              751,626
       Other equity securities                                                          2,222,350            1,706,150
    Loans, less unearned income of $46,988 in 2000 and
       $90,185 in 1999, and allowance for loan losses of
       $1,883,561 in 2000 and $1,150,249 in 1999                                      184,977,163          168,831,477
    Bank premises and equipment, net                                                    7,071,668            6,941,572
    Other real estate, net                                                                773,005              400,858
    Accrued interest receivable                                                         2,530,097            1,913,947
    Cash surrender value of life insurance                                                808,329              759,130
    Other assets                                                                        2,280,945            1,792,930
                                                                                 ----------------    -----------------
TOTAL ASSETS                                                                     $    270,119,367    $     251,902,067
                                                                                 ================    =================





See accompanying notes to the consolidated financial statements.


<PAGE>


                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                                       2000                 1999
                                                                                 ----------------    -----------------

LIABILITIES:
    Deposits:
       Non-interest bearing                                                      $     33,613,385    $      30,480,396
       Interest bearing                                                               177,742,115          167,906,108
                                                                                 ----------------    -----------------
              Total deposits                                                          211,355,500          198,386,504

    Federal Home Loan Bank advances                                                    27,175,000           24,850,000
    Securities sold under repurchase agreements                                         2,840,000            1,482,445
    Accrued interest payable                                                            1,887,243              891,735
    Negative goodwill, net of accumulated amortization
       of $3,060,422 in 2000 and $2,276,241 in 1999                                             -              784,181
    Advances from borrowers for taxes and insurance                                       440,834              433,908
    Accrued taxes and other liabilities                                                   897,169            1,195,296
                                                                                 ----------------    -----------------
              Total liabilities                                                       244,595,746          228,024,069
                                                                                 ----------------    -----------------


COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

    Common stock, $2.50 par value per share;
       12,000,000 shares authorized;
       2,116,034 and 2,088,673 shares issued and 2,101,534
          and 2,088,673 shares outstanding at December 31,
          2000 and 1999, respectively                                                   5,290,085            5,221,683
    Additional paid-in capital                                                          7,156,245            7,026,208
    Retained earnings                                                                  13,412,231           11,878,518
    Accumulated other comprehensive income                                                (77,565)            (248,411)
                                                                                 ----------------    ------------------
                                                                                       25,780,996           23,877,998
    Less:  Treasury stock 14,500 shares, at cost                                         (257,375)                   -
                                                                                 ----------------    -----------------
              Total stockholders' equity                                               25,523,621           23,877,998
                                                                                 ----------------    -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                       $    270,119,367    $     251,902,067
                                                                                 ================    =================



<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                                                       2000                 1999
                                                                                 ----------------    -----------------

INTEREST INCOME:

    Interest and fees on loans                                                   $     16,944,177    $      14,145,198
    Interest on investment securities:
       Taxable interest income                                                          3,930,681            2,846,985
       Exempt from federal income taxes                                                   356,233              134,542
    Interest on federal funds sold                                                        262,173              363,126
                                                                                 ----------------    -----------------
          Total interest income                                                        21,493,264           17,489,851
                                                                                 ----------------    -----------------
INTEREST EXPENSE:

    Interest on deposits                                                                8,708,440            6,656,959
    Interest on federal funds purchased                                                 1,599,805              690,582
    Interest on securities sold under repurchase agreements                                99,062              113,297
                                                                                 ----------------    -----------------
          Total interest expense                                                       10,407,307            7,460,838
                                                                                 ----------------    -----------------
NET INTEREST INCOME                                                                    11,085,957           10,029,013

PROVISION FOR LOAN LOSSES                                                                 968,721              287,000
                                                                                 ----------------    -----------------
NET INTEREST INCOME AFTER PROVISION
    FOR LOAN LOSSES                                                                    10,117,236            9,742,013
                                                                                 ----------------    -----------------
OTHER INCOME:

    Service charges on deposit accounts                                                 1,250,071            1,239,164
    Income from fiduciary activities                                                       80,223               80,744
    Insurance premiums and commissions                                                     23,243               26,166
    Other real estate income                                                               10,154                6,220
    Amortization of negative goodwill                                                     784,181              200,800
    Equity in investee losses                                                            (206,836)            (238,523)
    Other                                                                                 749,158              573,040
                                                                                 ----------------    -----------------
          Total other income                                                            2,690,194            1,887,611
                                                                                 ----------------    -----------------








Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF INCOME - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                                                       2000                    1999
                                                                                 ----------------        -----------------

OTHER EXPENSES:

    Salaries                                                                            4,149,655            3,480,758
    Director fees                                                                         176,760              176,010
    Employee benefits                                                                     606,747              563,679
    Net occupancy expense                                                                 702,791              494,528
    Equipment expense                                                                     944,172              819,957
    FDIC assessment                                                                        41,448               56,620
    Stationery and supplies                                                               230,778              247,148
    Amortization                                                                          107,616               87,624
    Other                                                                               2,237,804            1,851,028
                                                                                 ----------------    -----------------
          Total other expenses                                                          9,197,771            7,777,352
                                                                                 ----------------    -----------------

INCOME BEFORE INCOME TAX EXPENSE                                                        3,609,659            3,852,272

INCOME TAX EXPENSE                                                                        918,967            1,291,362
                                                                                 ----------------    -----------------
NET INCOME                                                                       $      2,690,692    $       2,560,910
                                                                                 ================    =================
EARNINGS PER SHARE DATA:

    Basic earnings per share                                                     $           1.29    $           1.23
                                                                                 ================    ================
    Diluted earnings per share                                                   $           1.28    $           1.21
                                                                                 ================    ================





See accompanying notes to the consolidated financial statements.


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                     YEARS ENDED DECEMBER 31, 2000 AND 1999



<S>                                     <C>          <C>          <C>           <C>           <C>           <C>        <C>


                                                                                              Accumulated
                                              Common Stock         Additional                    Other
                                        ------------------------    Paid-In       Retained    Comprehensive  Treasury
                                           Shares       Amount      Capital       Earnings       Income       Stock       Total
                                        -----------  -----------  -----------   ------------  ------------   --------  -------------

BALANCE, December 31, 1998
     as previously reported             $ 1,767,064  $ 4,417,660  $ 3,414,927   $ 11,399,263   $   17,333   $       -  $ 19,249,183
   Adjustment in connection with
     pooling of interest                    321,609      804,023    3,611,281     (1,021,417)       2,594           -     3,396,481
                                        -----------  -----------  -----------   ------------   ----------   ---------  -------------
BALANCE, December 31, 1998,
       as restated                        2,088,673    5,221,683    7,026,208     10,377,846       19,927           -    22,645,664
   Comprehensive income:
     Net income                                   -            -            -      2,560,910            -           -     2,560,910
     Other comprehensive income
       (net of tax):
         Net change in unrealized
           gain on securities available
           for sale, net of taxes
           of $148,783                            -            -            -              -     (268,338)          -      (268,338)
                                        -----------  -----------  -----------   ------------   ----------   ---------  ------------

         Total comprehensive income               -            -            -      2,560,910     (268,338)          -     2,292,572
                                        -----------  -----------  -----------   ------------   ----------   ---------  ------------

   Cash dividends declared
    ($.60 per share)                              -            -            -     (1,060,238)           -           -    (1,060,238)
                                        -----------  -----------  -----------   ------------   ----------   ---------  ------------

BALANCE, December 31, 1999                2,088,673    5,221,683    7,026,208     11,878,518     (248,411)          -    23,877,998
   Comprehensive income:
     Net income                                   -            -            -      2,690,692            -           -     2,690,692
     Other comprehensive income
       (net of tax):
         Net change in unrealized gain
         gain on securities available
         for sale, net of taxes
         of $96,923                               -            -            -              -      170,846           -       170,846
                                        -----------  -----------  -----------   ------------   ----------   ---------  ------------

       Total comprehensive income                 -            -            -      2,690,692      170,846           -     2,861,538
                                        -----------  -----------  -----------   ------------   ----------   ---------  ------------

Stock options exercised                      27,361       68,402      130,037              -            -           -       198,439

Acquisition of treasury stock               (14,500)           -            -              -            -    (257,375)     (257,375)

   Cash dividends declared
     ($.60 per share)                             -            -            -     (1,156,979)           -           -    (1,156,979)
                                        -----------  -----------  -----------   ------------   ----------   ---------  ------------

BALANCE, December 31, 2000                2,101,534  $ 5,290,085  $ 7,156,245   $ 13,412,231   $  (77,565)  $(257,375) $ 25,523,621
                                        ===========  ===========  ===========   ============   ==========   =========  ============


See accompanying notes to the consolidated financial statements.





<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                                                        2000                1999
                                                                                   ---------------     ---------------

<S>                                                                               <C>                 <C>

CASH FLOWS FROM OPERATING ACTIVITIES:

    Net income                                                                     $     2,690,692     $     2,560,910
    Adjustments to reconcile net income to
       net cash provided by operating activities:
          Deferred taxes                                                                  (417,600)            (66,231)
          Provision for loan losses                                                        968,721             287,000
          Provision for depreciation                                                       724,194             660,140
          (Gain) loss  on sale of investments                                                2,940              (4,385)
          Gain on sale of mortgage loans                                                   (40,098)            (12,779)
          Loss on sale of premises and equipment                                                 -               2,990
          (Gain) loss on sale of other real estate                                         (41,379)             12,278
          Stock dividends received                                                        (143,600)            (51,800)
          Amortization (accretion) of investment security
              premiums (discounts), net                                                   (130,499)            (51,062)
          Amortization of valuation adjustment on acquired loans                            21,060              31,520
          Amortization of valuation adjustment on acquired deposits                              -             (74,007)
          Amortization of negative goodwill                                               (784,181)           (200,800)
          Amortization of acquisition premium                                              107,616              87,624
          Equity in investee losses                                                        206,836             238,523
          Write-down of other real estate                                                    9,038              56,890
    Increase in accrued interest receivable                                               (616,150)           (331,995)
    Increase in cash surrender value of life insurance                                     (49,199)            (42,817)
    (Increase) decrease in other assets                                                   (595,631)            218,141
    Increase (decrease) in accrued interest payable                                        995,508            (182,623)
    Increase in accrued taxes and other liabilities                                         22,550              14,609
                                                                                   ---------------     ---------------

              Net cash provided by operating activities                                  2,930,818           3,152,126
                                                                                   ---------------     ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:

    (Increase) decrease in federal funds sold                                            7,575,000            (100,000)
    Proceeds from sales and maturities of investment
       securities held-to-maturity                                                               -             480,000
    Proceeds from sales and maturities of investment
       securities available-for-sale                                                       247,060           6,004,385
    Proceeds from principal paydowns of investment
       securities held-to-maturity                                                       5,248,612           9,447,202
    Proceeds from principal paydowns of investment
       securities available-for-sale                                                       306,598             342,537
    Redemption of securities                                                               103,900              51,900


Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                                                           2000              1999
                                                                                   ---------------     ---------------

    Purchases of investment securities held to maturity                                (12,904,411)        (27,691,905)
    Investment in equity securities                                                       (250,000)                  -
    Purchase of other equity securities                                                   (476,500)                  -
    Net increase in loans                                                              (17,669,921)        (18,272,076)
    Cash and due from banks received in acquisition of branches                                  -          11,271,434
    Proceeds from sale of other real estate                                                234,746             257,000
    Proceeds from sale of premises and equipment                                                 -               4,230
    Purchases of premises and equipment                                                   (854,290)         (1,206,307)
                                                                                   ---------------     ---------------

              Net cash used in investing activities                                    (18,439,206)        (19,411,600)
                                                                                   ---------------     ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:

    Net increase (decrease) in demand deposits                                          (1,272,046)          6,784,117
    Net increase (decrease) in time deposits                                            14,241,042          (1,199,268)
    Increase in Federal Home Loan Bank advances                                          2,325,000          14,600,000
    Decrease in federal funds purchased                                                          -            (350,000)
    Net increase (decrease)in securities sold under
       repurchase agreements                                                             1,357,555            (933,598)
    Increase in advances from borrowers for taxes and insurance                              6,926              76,883
    Cash dividends paid                                                                 (1,156,979)         (1,060,238)
    Cash paid for treasury stock                                                          (257,375)                  -
    Cash received from stock options exercised                                             198,439                   -
                                                                                   ---------------     ---------------

              Net cash provided by financing activities                                 15,442,562          17,917,896
                                                                                   ---------------     ---------------

NET INCREASE (DECREASE) IN CASH AND
    DUE FROM BANKS                                                                         (65,826)          1,658,422

CASH AND DUE FROM BANKS AT
    BEGINNING OF YEAR                                                                    8,024,704           6,366,282
                                                                                   ---------------     ---------------
CASH AND DUE FROM BANKS AT
    END OF YEAR                                                                    $     7,958,878     $     8,024,704
                                                                                   ===============     ===============


Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                                                           2000              1999
                                                                                   ---------------     ---------------

SCHEDULE OF NONCASH INVESTING AND
    FINANCING ACTIVITIES:

       Transfer of loans foreclosed to other real estate                           $       574,552     $        30,181
                                                                                   ===============     ===============

       Total decrease (increase) in unrealized losses
          on securities available-for-sale                                         $       267,769     $      (417,121)
                                                                                   ===============     ===============

       Total (increase) decrease in deferred income taxes
          on unrealized losses on securities available-for-sale                    $       (96,923)    $       148,783
                                                                                   ===============     ===============

Acquisition of branches:
    Loans, net                                                                     $             -     $     3,267,244
    Accrued interest receivable                                                                  -              18,661
    Premises and equipment                                                                       -           1,575,413
    Other branch premises (1)                                                                    -             200,000
    Premium on deposits                                                                          -           1,614,210
    Deposits                                                                                     -         (17,818,783)
    Accrued interest payable                                                                     -            (122,886)
    Other accrued liabilities                                                                    -              (5,293)
                                                                                   ---------------     ---------------

          Cash and due from banks received in
              acquisition of branches                                              $             -     $  (11,271,434)
                                                                                   ===============     ==============





    (1)Other branch  premises were acquired with the intent of  disposition  and
          were placed directly into other real estate.

See accompanying notes to the consolidated financial statements.


<PAGE>
</TABLE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE A.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

               Principles of Consolidation

               The  consolidated  financial  statements  include the accounts of
               Britton & Koontz  Capital  Corporation  ("the  Company")  and its
               wholly-owned  subsidiary,  Britton & Koontz First  National  Bank
               ("the Bank").  All material  intercompany  profits,  balances and
               transactions have been eliminated.

               Nature of Operations

               The Bank operates under a national bank charter and provides full
               banking  services,  including  trust  services.  The primary area
               served by the Bank is the  southwest  region of  Mississippi  and
               East Baton Rouge  Parish in  Louisiana.  Services are provided at
               four   locations  in  Natchez,   Mississippi,   one  location  in
               Vicksburg,   Mississippi,  and  two  locations  in  Baton  Rouge,
               Louisiana.

               Use of Estimates

               The   preparation  of   consolidated   financial   statements  in
               conformity with generally accepted accounting principles requires
               management  to make  estimates  and  assumptions  that affect the
               reported  amounts of assets and  liabilities  and  disclosure  of
               contingent  assets and  liabilities  at the date of the financial
               statements  and the  reported  amounts of revenues  and  expenses
               during the  reporting  period.  Actual  results could differ from
               those estimates.

               Material   estimates   that  are   particularly   susceptible  to
               significant  change relate to the  determination of the allowance
               for losses on loans. In connection with the  determination of the
               allowances for losses on loans,  management  obtains  independent
               appraisals for significant properties.

               While  management uses available  information to recognize losses
               on loans,  future  additions  to the  allowance  may be necessary
               based on  changes  in local  economic  conditions.  In  addition,
               regulatory  agencies,  as an integral  part of their  examination
               process,  periodically  review the Bank's allowance for losses on
               loans. Such agencies may require the Bank to recognize  additions
               to the  allowance  based on  their  judgments  about  information
               available  to them at the time of their  examination.  Because of
               these factors,  it is reasonably  possible that the allowance for
               losses on loans may change materially.

Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE A.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

               Investment Securities

               Management   determines   the   appropriate   classification   of
               securities  at the  time  of  purchase.  If  management  has  the
               positive  intent  and the  Bank  has the  ability  at the time of
               purchase  to  hold  debt  securities  until  maturity,  they  are
               classified as held-to-maturity  and carried at cost, adjusted for
               amortization of premiums and accretion of discounts using methods
               approximating the interest method.  Available-for-sale securities
               include  securities that management intends to use as part of its
               asset and liability  management  strategy and that may be sold in
               response to changes in interest rates,  resultant prepayment risk
               and  other  factors  related  to  interest  rates  and  resultant
               prepayment  risk changes.  These  securities  are carried at fair
               value.  Equity  securities  include stock in the Federal  Reserve
               Bank and the Federal Home Loan Bank, which are restricted and are
               carried at cost. Equity securities also includes an investment in
               the voting stock of Sumx Inc. This  investment is carried at cost
               adjusted for the Company's  share of the  investee's  earnings or
               losses. There is no readily available market for the voting stock
               of  Sumx  Inc.  and,  accordingly,  no  quoted  market  price  is
               available.

               Realized  gains and losses on  dispositions  are based on the net
               proceeds  and the  adjusted  book value of the  securities  sold,
               using the specific  identification  method.  Unrealized gains and
               losses on investment securities  available-for-sale  are based on
               the  difference  between  book  value  and  fair  value  of  each
               security.  These  gains and  losses  are  credited  or charged to
               stockholders' equity, net of applicable taxes. Realized gains and
               losses flow through the Bank's yearly  operations.  The Bank does
               not engage in trading account activities.

               Loans

               Loans are stated at the amount of principal outstanding,  reduced
               by unearned  income and an allowance  for loan  losses.  Unearned
               income on certain  installment loans is recognized as income over
               the  terms  of the  loans  by a  method  which  approximates  the
               interest  method.  Interest on other loans is calculated by using
               the simple  interest  method on daily  balances of the  principal
               amount  outstanding.  Loans are  ordinarily  placed on nonaccrual
               when a loan is  specifically  determined  to be  impaired or when
               principal or interest is delinquent for 90 days or more; however,
               management  may elect to continue the accrual when the  estimated
               net  realizable  value of  collateral  is sufficient to cover the
               principal balance and the accrued  interest.  Any unpaid interest
               previously  accrued on nonaccrual  loans is reversed from income.
               Interest  income,   generally,  is  not  recognized  on  specific
               impaired  loans unless the  likelihood of further loss is remote.
               Interest  payments  received  on  such  loans  are  applied  as a
               reduction of the loan principal balance. Interest income on other
               nonaccrual  loans is  recognized  only to the extent of  interest
               payments received.

Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE A.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

               Allowance for Loan Losses

               The  allowance  is an amount  that  management  believes  will be
               adequate to absorb  possible  losses on  existing  loans that may
               become uncollectible,  based on evaluations of the collectibility
               of loans and prior loan loss  experience.  The  evaluations  take
               into  consideration  such  factors  as  changes in the nature and
               volume of the loan portfolio,  overall portfolio quality,  review
               of specific problem loans,  and current economic  conditions that
               may affect the borrower's ability to pay. Allowances for impaired
               loans are generally  determined based on collateral values or the
               present   value  of   estimated   cash  flows.   Credits   deemed
               uncollectible  are charged to the allowance.  Provisions for loan
               losses and recoveries on loans  previously  charged off are added
               to the allowance.

               Bank Premises and Equipment

               Bank premises and equipment are stated at cost, less  accumulated
               depreciation.   Depreciation   expense   is   computed   by   the
               straight-line method and is charged to expense over the estimated
               useful lives of the assets.

               Other Real Estate

               Other real estate  consists  primarily  of  foreclosed  property.
               Properties acquired through foreclosure or in settlement of loans
               and  in-substance   foreclosures  are  classified  as  foreclosed
               properties  and are  valued  at the  lower of the  loan  value or
               estimated  fair value of the  property  acquired  less  estimated
               selling costs. At the time of foreclosure, the excess, if any, of
               the loan value  over the  estimated  fair  value of the  property
               acquired less estimated selling costs is charged to the allowance
               for loan losses.  Additional  decreases in the carrying values of
               foreclosed  properties  or changes in  estimated  selling  costs,
               subsequent to the time of  foreclosure,  are  recognized  through
               provisions   charged  to   operations.   Revenues   and  expenses
               associated with owning and operating  other real estate and gains
               and  losses  on  dispositions  of such  assets  are  recorded  in
               earnings in the period incurred.

               The fair value of foreclosed  properties is determined based upon
               appraised value, utilizing either the estimated replacement cost,
               the selling price of properties utilized for similar purposes, or
               discounted cash flow analyses of the properties' operations.

Continued


<PAGE>







               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE A.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

               Compensated Absences

               Employees  of the Bank are entitled to paid  vacation,  emergency
               and sick days off,  depending on length of service in the banking
               industry.  Vacation,  emergency  and sick days are  granted on an
               annual basis to eligible employees. Unused vacation and emergency
               days expire on December 31 of each year.  Unused sick days expire
               on each related employee's employment anniversary date each year.

               The  estimated  amount of  compensation  for future  absences  is
               deemed immaterial to the consolidated financial statements,  and,
               accordingly,  no liability has been recorded in the  accompanying
               financial statements. The Bank's policy is to recognize the costs
               of compensated absences when actually paid to employees.

               Income Taxes

               The  provision  for income taxes is based on amounts  reported in
               the  statements of income after  exclusion of  nontaxable  income
               such as interest on state and municipal securities. Also, certain
               items of income and expenses  are  recognized  in different  time
               periods  for  financial  statement  purposes  than for income tax
               purposes.  Thus,  provisions  for deferred  taxes are recorded in
               recognition of such temporary differences.

               Deferred  taxes  are  provided  on  a  liability  method  whereby
               deferred  tax  assets are  recognized  for  deductible  temporary
               differences  and  deferred tax  liabilities  are  recognized  for
               taxable  temporary  differences.  Temporary  differences  are the
               differences   between   the   reported   amounts  of  assets  and
               liabilities and their tax bases.  Deferred tax assets are reduced
               by a valuation  allowance when, in the opinion of management,  it
               is more likely than not that some  portion or all of the deferred
               tax  assets  will  not  be  realized.  Deferred  tax  assets  and
               liabilities  are  adjusted for the effects of changes in tax laws
               and rates on the date of enactment.

               The Company and its  wholly-owned  subsidiary 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.

Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE A.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

               Earnings Per Share

               Basic earnings per share is the income  available to the weighted
               average  number of shares of common  stock  outstanding  for each
               period presented. All shares held by the Employee Stock Ownership
               Plan (ESOP) are treated as  outstanding in computing the earnings
               per share.  Stock options are used in the  calculation of diluted
               earnings per share if they are dilutive (i.e., the average market
               price exceeds the exercise price). The following table reconciles
               the basic and diluted earnings per share amounts:

<TABLE>
<CAPTION>



<S>                                                                        <C>               <C>                 <C>
                                                                               Income             Shares           Per Share
                                                                             (Numerator)      (Denominator)          Amount
                                                                             -----------      -------------       ------------
               Year ended December 31, 2000: Basic earnings per share:

                     Income available to common
                         shareholders                                       $ 2,690,692         2,080,046          $    1.29
                                                                                                                   =========
                  Diluted earnings per share:
                     Options                                                          -            21,667
                                                                            -----------       -----------

                  Income available to common
                     shareholders assuming conversion                       $  2,690,692        2,101,713          $    1.28
                                                                            ============      ===========          =========

               Year ended December 31, 1999: Basic earnings per share:

                     Income available to common
                         shareholders                                       $  2,560,910        2,088,673          $    1.23
                                                                                                                   =========
                  Diluted earnings per share:
                     Options                                                           -           28,209
                                                                            ------------      -----------

                  Income available to common
                     shareholders assuming conversion                       $  2,560,910        2,116,882          $    1.21
                                                                            ============      ===========          =========



</TABLE>

               Options to purchase  36,584  shares of common  stock at $6.93 per
               share  were  granted  in July,  1996.  Additionally,  options  to
               purchase  30,000  share of common  stock at $19.94 per share were
               granted in November,  1997.  Options to purchase 10,540 shares of
               common  stock at $11.39  per share were  granted in March,  1998.
               Those options whose  exercise  price  exceeded the average market
               price  of the  common  shares  are not  included  in the  options
               adjustment for diluted  earnings per share.  These options expire
               at various times from 2006 through 2008.

Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
             YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE A.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

               Off-Balance-Sheet Financial Instruments

               In the  ordinary  course of  business,  the Bank has entered into
               off-balance-sheet    financial    instruments    consisting    of
               interest-rate  swap and cap  agreements,  commitments  to  extend
               credit and commercial  letters of credit.  Financial  instruments
               related to loans are recorded in the  financial  statements  when
               they become payable.

               Cash Flows

               For  purposes  of the  statements  of  cash  flows,  the  Company
               considers only cash and due from banks to be cash equivalents.

               The Company paid income taxes of  $1,313,466  and  $1,374,540  in
               2000 and 1999, respectively. Interest paid on deposit liabilities
               and other  borrowings  was  $9,411,799 and $7,541,643 in 2000 and
               1999, respectively.

               Recent Accounting Pronouncements

               In June 1998,  the Financial  Accounting  Standards  Board (FASB)
               issued SFAS No. 133,  Accounting for Derivative  Instruments  and
               Hedging Activities. SFAS 133 establishes accounting and reporting
               standards for derivative  instruments and for hedging activities.
               This statement was originally  effective for all fiscal  quarters
               beginning  after  June 15,  1999.  The  issuance  of SFAS No. 137
               deferred the effective date of SFAS No. 133 until fiscal quarters
               beginning  after June 15,  2000.  Additionally,  in June 2000 the
               FASB  issued  SFAS No. 138,  Accounting  for  Certain  Derivative
               Financial  Instruments and Certain Hedging  Activities.  SFAS No.
               138 addresses a limited number of issues  causing  implementation
               difficulties for numerous  entities that apply SFAS No. 133. This
               statement  is  effective  for all fiscal  quarters for all fiscal
               years  beginning  after  June 15,  2000.  The  adoption  of these
               statements  should not have a material effect on the consolidated
               financial statements.

               Advertising Costs

               Advertising  and marketing  costs are recorded as expenses in the
               year in which they are incurred.  Advertising and marketing costs
               charged to  operations  during  2000 and 1999 were  $180,324  and
               $183,102, respectively.

Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE A.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

               Negative Goodwill

               During 1993, the Company  purchased Natchez First Federal Savings
               Bank in a business combination  accounted for as a purchase.  The
               combination created negative goodwill of $3,060,422.  This amount
               is being  amortized  into income  over the life of the  acquired,
               long-term, interest-bearing assets.

               Interest-Rate Swap Agreements

               The Bank enters into  interest-rate swap agreements to modify the
               interest  rate  characteristics  of its assets  and  liabilities.
               These agreements may involve the receipt or payment of fixed rate
               amounts in  exchange  for  floating  rate  interest  receipts  or
               payments  over the life of the  agreement  without an exchange of
               the underlying  principal amount.  The differential to be paid or
               received is accrued as interest rates change and recognized as an
               adjustment  to  interest  income or expense.  The related  amount
               payable to or  receivable  from  counter-parties  is  included in
               other  liabilities  or  assets.  The  fair  values  of  the  swap
               agreements are not recognized in the financial statements.

               Interest-Rate Cap Agreements

               The cost of interest-rate cap agreements is amortized to interest
               expense  over the  terms of the  caps.  The  unamortized  cost is
               included  in  other  assets  in  the  consolidated  statement  of
               financial  position.  Amounts receivable under cap agreements are
               accrued as a  reduction  of interest  expense.  The Bank does not
               engage in trading of derivatives.  All such financial instruments
               are used to manage interest rate risk.

               Goodwill

               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 and borrower relationships. This
               premium  is  included  in other  assets  and is  being  amortized
               straight-line over 15 years.

               Reclassifications

               Certain 1999 amounts have been  reclassified  to conform with the
               2000 presentation.

Continued


<PAGE>

<TABLE>
<CAPTION>





               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE B.        INVESTMENT SECURITIES

               The  amortized  cost and  approximate  market value of investment
               securities  classified as  held-to-maturity at December 31, 2000,
               are summarized as follows:

                                                                           Gross           Gross         Approximate
                                                       Amortized        Unrealized      Unrealized         Market
                                                         Cost              Gains          Losses            Value
                                                   ----------------    ------------   -------------    ---------------
<S>                                               <C>                 <C>            <C>              <C>

               Obligations of other U. S.
                  government agencies and
                  corporations                     $     40,604,279    $    742,098   $    (149,280)   $    41,197,097
               Obligations of state and
                  political subdivisions                  7,385,130         210,681            (115)         7,595,696
               Privately issued collateralized

                  mortgage obligations                    6,497,250          60,462               -          6,557,712
                                                   ----------------    ------------   -------------    ---------------

                                                   $     54,486,659    $  1,013,241   $    (149,395)   $    55,350,505
                                                   ================    ============   =============    ===============

               The  amortized  cost and  approximate  market value of investment
               securities classified as available-for-sale at December 31, 2000,
               are summarized as follows:

                                                                           Gross           Gross         Approximate
                                                       Amortized        Unrealized      Unrealized         Market
                                                         Cost              Gains          Losses            Value
                                                   ----------------    ------------   -------------    ---------------

               Obligations of other U.S.
                  government agencies
                  and corporations                 $      6,336,675    $          -   $    (121,192)   $     6,215,483
                                                   ================    ============   =============    ===============














Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE B.        INVESTMENT SECURITIES - CONTINUED

               The  amortized  cost and  approximate  market value of investment
               securities  classified as  held-to-maturity at December 31, 1999,
               are summarized as follows:

                                                                           Gross           Gross         Approximate
                                                       Amortized        Unrealized      Unrealized         Market
                                                         Cost              Gains          Losses            Value
                                                   ----------------    ------------   -------------    ---------------

               Obligations of other U. S.
                  government agencies and
                  corporations                     $     35,562,339    $     91,194   $    (818,904)   $    34,834,629
               Obligations of state and
                  political subdivisions                  4,494,348           1,959        (142,246)         4,354,061
               Privately issued collateralized

                  mortgage obligations                    6,662,524           1,475        (149,794)         6,514,205
                                                   ----------------    ------------   -------------    ---------------

                                                   $     46,719,211    $     94,628   $  (1,110,944)   $    45,702,895
                                                   ================    ============   =============    ===============

               The  amortized  cost and  approximate  market value of investment
               securities classified as available-for-sale at December 31, 1999,
               are summarized as follows:

                                                                           Gross           Gross         Approximate
                                                       Amortized        Unrealized      Unrealized         Market
                                                         Cost              Gains          Losses            Value
                                                   ----------------    ------------   -------------    ---------------

               Obligations of state and
                  political subdivision            $        249,180    $          -   $        (986)   $       248,194
               Obligations of other U.S.
                  government agencies
                  and corporations                        6,625,243               -        (387,975)         6,237,268
                                                   ----------------    ------------   -------------    ---------------

                                                   $      6,874,423    $          -   $    (388,961)   $     6,485,462
                                                   ================    ============   =============    ===============



</TABLE>


Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE B.        INVESTMENT SECURITIES - CONTINUED

               Equity  securities  include the Bank's  investment in the Federal
               Home Loan  Bank,  the  Federal  Reserve  Bank and First  National
               Bankers  Bank.   The  Bank  acquired   $620,100  and  $51,800  of
               additional  stock in the Federal Home Loan Bank and no additional
               stock in the Federal Reserve Bank or First National  Bankers Bank
               during  2000  and  1999,  respectively.   The  Bank  subsequently
               redeemed  $103,900  and $51,900 of stock in the Federal Home Loan
               Bank during 2000 and 1999, respectively. This stock is considered
               a  restricted  stock as only  banks  which are  members  of these
               organizations  may  acquire  or redeem  the  stock.  The stock is
               redeemable  at its  face  value;  therefore,  there  are no gross
               unrealized gains or losses associated with these investments.

               Equity securities also reflect an investment in Sumx Inc. Britton
               & Koontz Capital Corporation  invested $1 million during 1998 and
               $250,000 during 2000 in this electronic  banking  development and
               marketing company.  This investment reflects an approximate 37.5%
               preferred  interest  in  the  voting  stock  of  Sumx  Inc.  This
               investment  is  carried  at  equity,  which  is the  cost  of the
               investment adjusted for the Company's  proportionate share of the
               investee's earnings or losses.

               Sumx Inc.  incurred a net loss of $578,870  and  $681,493  during
               2000  and  1999,   respectively.   The  Company's   proportionate
               share of these losses were  $206,836 and  $238,523,  respectively
               and are reflected in other income.

               The President and CEO and the Vice  President of Britton & Koontz
               Capital  Corporation  serve as two of the  three  members  of the
               Board of Directors of Sumx Inc. In addition,  the Vice  President
               of Britton & Koontz Capital  Corporation  individually owns 19.5%
               of the voting  stock of Sumx Inc.  The Company  has also  entered
               into an agreement with Sumx Inc. whereby this Vice President will
               devote  substantially  all of his time to the  management of Sumx
               Inc. for up to two years for an annual fee of $90,000.

               Investment   securities  carried  at  approximately   $40,942,000
               (approximate  market value $40,957,000) at December 31, 2000, and
               approximately  $41,884,000 (approximate market value $40,979,000)
               at  December  31,  1999,  were  pledged to  collateralize  public
               deposits and for other purposes as required by law or agreement.

Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>


NOTE B.        INVESTMENT SECURITIES - CONTINUED

               The  amortized  cost and  approximate  market value of investment
               debt  securities  at December 31, 2000, by  contractual  maturity
               (including mortgage-backed securities), are shown below. Expected
               maturities  will  differ  from  contractual   maturities  because
               borrowers may have the right to call or prepay  obligations  with
               or without call or prepayment penalties.




                                                                                       Securities held-to-maturity
                                                                                   -----------------------------------
                                                                                                         Approximate
                                                                                      Amortized            Market

                                                                                        Cost                Value
                                                                                   ---------------     ---------------
<S>                                                                               <C>                 <C>

               Due in one year or less                                             $           631     $           633
               Due after one year through five years                                     6,376,017           6,377,244
               Due after five years through ten years                                   10,427,349          10,556,104
               Due after ten years                                                      37,682,662          38,416,524
                                                                                   ---------------     ---------------

                                                                                   $    54,486,659     $    55,350,505
                                                                                   ===============     ===============



                                                                                      Securities available-for-sale
                                                                                   -----------------------------------
                                                                                                         Approximate
                                                                                      Amortized            Market

                                                                                        Cost                Value
                                                                                   ---------------     ---------------

               Due in one year or less                                             $     1,997,396     $     1,997,077
               Due after one year through five years                                             -                   -
               Due after five years through ten years                                            -                   -
               Due after ten years                                                       4,339,279           4,218,406
                                                                                   ---------------     ---------------

                                                                                   $     6,336,675     $     6,215,483
                                                                                   ===============     ===============










Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE C.        LOANS

               The Bank's loan portfolio at December 31, 2000 and 1999, consists of the following:


<S>                                                                             <C>                 <C>

                                                                                       2000                 1999
                                                                                 ----------------    -----------------
               Commercial, financial and agricultural                            $     33,102,000    $      26,679,000
               Real estate-construction                                                10,883,000            8,035,000
               Real estate-mortgage                                                   123,192,000          116,204,000
               Installment                                                             19,513,000           18,924,000
               Overdrafts                                                                 218,000              230,000
                                                                                 ----------------    -----------------

               Total loans                                                       $    186,908,000    $     170,072,000
                                                                                 ================    =================

               Loans on which  accrual  of  interest  has been  discontinued  or
               reduced  amount  to  approximately  $1,078,943  and  $750,329  at
               December  31,  2000 and 1999,  respectively.  If interest on such
               loans  had been  accrued,  the  income  would  have  approximated
               $78,241 and $18,256 in 2000 and 1999, respectively.

               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 $2,616,613  and $3,601,540 at
               December 31, 2000 and 1999,  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.

               Changes in these loans are as follows:

                                                                                       2000                 1999
                                                                                 ----------------    -----------------

               Balance at January 1                                              $      3,601,540    $       2,966,708
               New loans                                                                1,766,532            1,427,480
               Repayments                                                              (2,751,459)            (792,648)
                                                                                 ----------------    ------------------

               Balance at December 31                                            $      2,616,613    $       3,601,540
                                                                                 ================    =================








Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE D.        ALLOWANCE FOR LOAN LOSSES

               Changes in the allowance for loan losses are as follows:
<S>                                                                                <C>                 <C>

                                                                                           2000              1999
                                                                                     --------------     --------------

               Balance at January 1                                                  $    1,150,249     $    1,061,052
                                                                                     --------------     --------------

                  Credits charged off                                                      (337,393)          (235,967)
                  Recoveries                                                                101,984             38,164
                                                                                     --------------     --------------
                  Net credits charged off                                                  (235,409)          (197,803)
                                                                                     --------------     --------------

                  Provision for loan losses                                                 968,721            287,000
                                                                                     --------------     --------------

               Balance at December 31                                                $    1,883,561     $    1,150,249
                                                                                     ==============     ==============

NOTE E.        LOAN SERVICING

               Mortgage  loans  serviced  for  others  are not  included  in the
               accompanying  consolidated statements of financial condition. The
               unpaid  principal  balances of these loans were  $10,662,581  and
               $1,473,480 in 2000 and 1999, respectively.

NOTE F.        BANK PREMISES AND EQUIPMENT

               A summary of Bank premises and equipment is as follows:

                                                                                           2000              1999
                                                                                     --------------     --------------

               Land                                                                  $    1,257,875     $      886,375
               Buildings                                                                  5,632,482          5,570,749
               Furniture and equipment                                                    5,439,078          5,019,162
               Leasehold improvements                                                       102,251            102,251
                                                                                     --------------     --------------
                                                                                         12,431,686         11,578,537
               Less accumulated depreciation                                              5,360,018          4,636,965
                                                                                     --------------     --------------

               Bank premises and equipment, net                                      $    7,071,668     $    6,941,572
                                                                                     ==============     ==============







Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE G.        TRUST DEPARTMENT ASSETS

               Property (other than cash deposits) held by the Bank in fiduciary
               or agency  capacities  for its  customers  is not included in the
               accompanying  consolidated  statements of financial  condition as
               such items are not assets of the Bank. Trust fees are reported on
               the cash basis. The difference between cash basis and the accrual
               basis is immaterial.

NOTE H.        DEPOSITS

               Maturities  of  certificates  of  deposit  of  $100,000  or  more
               outstanding  at December  31, 2000 and 1999,  are  summarized  as
               follows:

                                                                                        2000                1999
                                                                                   ---------------     ---------------
<S>                                                                               <C>                 <C>

               Time remaining until maturity:

                  Three months or less                                             $    14,555,130     $    17,194,957
                  Over three through six months                                          6,485,698           5,849,038
                  Over six through twelve months                                         2,826,715           3,604,394
                  Over twelve months                                                    16,061,156           8,865,760
                                                                                   ---------------     ---------------

                                                                                   $    39,928,699     $    35,514,149
                                                                                   ===============     ===============

               Approximate  scheduled maturities of certificates of deposits for
each of the next five years are:

                                    2001                                           $    82,963,000
                                    2002                                                18,370,000
                                    2003                                                 7,230,000
                                    2004                                                 1,716,000
                                    2005                                                 6,409,000
                                    Thereafter                                           5,046,000
                                                                                   ---------------

                                                                                   $   121,734,000

Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE H.        DEPOSITS - CONTINUED

               Deposits  at  December  31,  2000  and  1999,  consisted  of  the
following:
<S>                                                                             <C>                 <C>

                                                                                       2000                 1999
                                                                                 ----------------    -----------------

               Non-interest bearing demand deposits                              $     33,613,385    $      30,480,396
               NOW accounts                                                            28,771,291           33,005,686
               Money market deposit accounts                                           11,220,083           11,477,550
               Savings accounts                                                        16,016,895           15,930,068
               Certificates of deposit                                                121,733,846          107,492,804
                                                                                 ----------------    -----------------

                                                                                 $    211,355,500    $     198,386,504
                                                                                 ================    =================

NOTE I.        FEDERAL HOME LOAN BANK ADVANCES

               During  2000,  the  Bank  received  advances  from  and  remitted
               payments to the Federal Home Loan Bank. On December 29, 2000, the
               Bank received a $26,175,000 advance which remained outstanding at
               December 31, 2000.  This  advance  accrues  interest at an annual
               rate of 6.85% and  matures on January  2,  2001.  The  advance is
               collateralized  by a portion  of the  Bank's  one to four  family
               residential  mortgage  portfolio in  accordance  with the Advance
               Security  and  Collateral  Agreement  with the Federal  Home Loan
               Bank.

               The Bank has two term loans with the Federal Home Loan Bank.  The
               loans are for $500,000 each with interest  rates ranging of 5.89%
               and 5.93%.  These loans  mature on June 26 and December 10, 2001,
               respectively.

               During  1999,  the  Bank  received  advances  from  and  remitted
               payments to the Federal Home Loan Bank. On December 31, 1999, the
               Bank received a $17,850,000 advance which remained outstanding at
               December 31, 1999.  This  advance  accrued  interest at an annual
               rate of 5.79% and  matured on January 10,  2000.  The advance was
               collateralized  by a portion  of the  Bank's  one to four  family
               residential  mortgage  portfolio in  accordance  with the advance
               security  and  collateral  agreement  with the Federal  Home Loan
               Bank.

               Additionally,  during  1999,  the Bank had a  $8,000,000  line of
               credit  with the Federal  Home Loan Bank  bearing  interest  from
               5.07% to  6.06%.  At  December  31,  1999,  the  Bank  had  drawn
               $7,000,000 on this line maturing in 2000.

Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE J.        EMPLOYEE BENEFIT PLANS

               The Bank has an employee  stock  ownership plan which is designed
               to invest primarily in employer stock. Essentially, all employees
               of the Britton & Koontz Capital  Corporation and its wholly-owned
               subsidiary are covered under this plan,  with employees  becoming
               fully   vested   in  their   benefits   after   seven   years  of
               participation. Employer contributions are determined by the Board
               of Directors each year and are allocated  among  participants  on
               the basis of their total  annual  compensation.  Dividends on the
               Company  stock owned by the plan are  recorded as a reduction  of
               retained earnings.  Operating  expenses include  contributions to
               the plan of $34,614 and  $40,000 in 2000 and 1999,  respectively.
               This  plan  owned  228,570  shares of  Britton  & Koontz  Capital
               Corporation stock, as of December 31, 2000 and 1999 at an overall
               cost to the plan of $5.82 per share.

               Employees  with one or more  years of  service  are  eligible  to
               participate  in a 401(k) plan  established  by the Bank effective
               January 1, 1997. Under this plan,  employees may contribute up to
               12%  of  their  yearly  salary,  not  to  exceed  $7,000.   These
               contributions are immediately 100% vested. Employer contributions
               are vested 20% after three years of service and an additional 20%
               for each  additional  year of service,  fully  vested after seven
               years of service.  Employer contributions to the plan are made at
               the discretion of the Board of Directors and  aggregated  $80,000
               for the years ended December 31, 2000 and 1999.

               During 1996,  the Company  adopted a long-term  incentive plan in
               which all  employees  of the Company and the Bank are eligible to
               participate.  The  plan  provides  for  discretionary  grants  of
               various  incentives  including  stock  options;  shares of common
               stock  subject  to  restrictions   on  transfer,   forfeitability
               provisions or other limitations;  and shares of common stock, the
               issuance and  delivery of which may be subject to the  attainment
               of specified performance objectives.  A maximum of 160,000 shares
               of common stock is available for grant under the plan, subject to
               adjustment  on  account  of  stock  dividends  or  stock  splits,
               recapitalizations,  mergers,  consolidations  or other  corporate
               reorganizations.  The plan is  administered  by a committee of at
               least two

Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE J.        EMPLOYEE BENEFIT PLANS - CONTINUED

               non-employee   directors  as  appointed  by  the  full  Board  of
               Directors. During 1996, 1997 and 1998 the Company granted options
               to purchase a total of 77,124 shares. All options expire 10 years
               from the date of grant. 22,818 and 18,595 shares were exercisable
               as of December  31, 2000 and 1999,  respectively.  The summary of
               stock option activity is shown below:


                                                                                                         Weighted
                                                                                   Options                Average
                                                                                 Outstanding          Exercise Price
                                                                            -------------------    -------------------
<S>                                                                         <C>                    <C>

               December 31, 1998                                                      77,124            $    12.61
               Options granted                                                             -            $     0.00
               Stock options exercised                                                     -            $     0.00
                                                                                  ----------

               December 31, 1999                                                      77,124            $    12.61
               Options granted                                                             -            $     0.00
               Stock options exercised                                                27,361            $     7.25
                                                                                  ----------

               December 31, 2000                                                      49,763            $    15.54
                                                                                  ==========


</TABLE>



               The following table  summarizes  information  about stock options
outstanding at December 31, 2000:

    Exercise Price      Options Outstanding       Remaining Contractual Life

       $  19.94               30,000                        6.9 years
          11.39                8,558                        8.3 years
           6.93               11,205                        6.5 years













Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE J.        EMPLOYEE BENEFIT PLANS - CONTINUED

               During  1997,  the Company  adopted SFAS No 123,  Accounting  for
               Stock-Based  Compensation,  which requires  companies to estimate
               the fair value for stock options on date of grant. Under SFAS No.
               123, the Company is required to record the  estimated  fair value
               of stock  options  issued as  compensation  expense in its income
               statements over the related  service  periods or,  alternatively,
               continue  to apply  accounting  methodologies  as  prescribed  by
               Accounting  Principles  Board ("APB") Opinion No. 25,  Accounting
               for Stock Issued to Employees, and disclose the pro forma effects
               of the  estimated  fair  value of  stock  options  issued  in the
               accompanying   footnotes  to  its   financial   statements.   The
               determination  of fair value is only  required for stock  options
               issued  beginning in 1996.  In adopting SFAS No. 123, the Company
               decided to continue  to follow the  accounting  methodologies  as
               prescribed by APB Opinion No. 25.

               The pro forma  effects  of the total  compensation  expense  that
               would have been recognized under SFAS No. 123 are as follows:

<TABLE>
<CAPTION>



                                                                                       2000                  1999
                                                                                 ---------------        --------------
<S>                                                                             <C>                     <C>

               Net income, as reported                                           $     2,690,692        $    2,560,910
               Pro forma net income                                              $     2,612,880        $    2,442,193
               Basic earnings per share, as reported                             $          1.29        $         1.23
               Pro forma basic earnings per share                                $          1.26        $         1.17
               Diluted earnings per share, as reported                           $          1.28        $         1.21
               Pro forma diluted earnings per share                              $          1.24        $         1.15

               In adopting SFAS No. 123, the Company utilized the  Black-Scholes
               Option  Pricing Model to estimate the fair value of stock options
               granted using the following weighted average assumptions:

                           Expected dividend yield                2.94%
                           Expected option life                   7.25 years
                           Expected volatility                   25.00%
                           Risk-free interest rates               5.85%


               Based on the  results of the  model,  the fair value of the stock
               options  issued on the date of grant averaged $5.57 per share for
               the 77,124 shares granted.

Continued


<PAGE>

</TABLE>





               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE J.        EMPLOYEE BENEFIT PLANS - CONTINUED

               During  1994,  the  Bank  entered  into  a  nonqualified   salary
               continuation  plan with its executive  officers.  These  officers
               will be entitled to agreed-upon benefits which will begin vesting
               when each participant  reaches the age of fifty-five.  The vested
               percentage will increase  annually  through the age of sixty-five
               when the officers will be fully  vested.  Payment of any benefits
               is contingent  upon the officers'  continued  employment with the
               Bank through the age of fifty-five. The projected benefit to each
               officer at age  sixty-five  is allocated  through a present value
               calculation  to each year from  inception of the plan through age
               sixty-five.  The Plan also  includes a change of control  benefit
               for these officers.  If any or all of the covered  executives are
               terminated  from  employment  within  36  months  of  a  sale  or
               acquisition  of the Bank,  the  executive(s)  may elect  from the
               acquirer to receive fully vested income benefits as stated above,
               or to receive an agreed-upon lump-sum  distribution,  which would
               total  $640,000 if all covered  executives  selected this option.
               The financial  statements  for the years ended  December 31, 2000
               and 1999,  respectively,  include  $35,840 and $33,316 of expense
               related to this plan.

               In  addition to other  benefits,  the  Company  provides  medical
               insurance to its employees and makes medical insurance  available
               to  its  employees'  families.  The  Company  self-insures  up to
               $20,000 per person per year with a total annual  maximum based on
               the  number  of  covered  employees  ($297,392  and  $258,351  at
               December 31, 2000 and 1999, respectively). Claims exceeding these
               annual limits are covered by traditional insurance contracts.

NOTE K.        LEASES

               The Bank entered into an operating lease during 1996 for a branch
               office.  This facility is leased under a 10 year operating  lease
               expiring in 2006 with a renewal option for an additional 5 years.
               During 1999, the Bank also entered into an operating  lease for a
               loan  production  office.  This facility is leased under a 3 year
               operating  lease  expiring  in 2002 with a renewal  option for an
               additional 3 years.  All leases are of the normal  operating type
               and  generally  short-term  in  nature  and  not  susceptible  to
               capitalization for financial accounting reporting purposes.  Rent
               expense  charged to income was  $67,223  and  $32,749 in 2000 and
               1999, respectively.

               Future  obligations  for these leases at December 31, 2000 are as
follows:

                                    2001                                62,975
                                    2002                                64,425
                                    2003                                29,925
                                    2004                                29,925
                                    2005                                29,925
                                    Thereafter                          19,950


Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE L.        INCOME TAX PROVISION

               The  provision  for  income  taxes  included in  the consolidated
               statements of income is as follows:


                                                 2000              1999
                                            --------------     --------------
               Current                      $    1,336,567     $    1,357,593
               Deferred                           (417,600)           (66,231)
                                            --------------     ---------------
                                            $      918,967     $    1,291,362
                                            ==============     ==============

               Accrued  income taxes  payable of $30,140 in 2000 are included in
               accrued taxes and other liabilities.

               Refundable  income taxes of $14,404 in 1999 are included in other
assets.

               Net deferred tax  liabilities of $243,785 in 2000 and $564,462 in
               1999,  are  included  in  accrued  taxes and  other  liabilities.
               Amounts  comprising  deferred tax assets and  liabilities  are as
               follows:
<TABLE>
<CAPTION>



                                                                                           2000              1999
<S>                                                                                 <C>                <C>
                                                                                     --------------     --------------
               Deferred tax liability:
                  Provision for loan losses                                          $            -     $      168,641
                  Insurance                                                                  69,363             57,148
                  Discount accretion                                                          5,392              1,185
                  Depreciation                                                              674,042            621,098
                  Federal Home Loan Bank dividends                                          189,469            152,077
                  Purchase accounting adjustment amortization                                12,764             20,731
                  Self-insured medical plan                                                   9,681              9,681
                  Accrual to cash conversion                                                      -             44,915
                                                                                     --------------     --------------
               Total gross deferred tax liability                                    $      960,711     $    1,075,476
                                                                                     ==============     ==============
               Deferred tax asset:
                  Provision for loan losses                                          $      161,713     $            -
                  Unrealized loss on available-for-sale securities                           43,627            140,550
                  Deferred compensation                                                      69,337             55,969
                  Investee losses                                                           169,793             88,969
                  Other real estate                                                          76,607             66,756
                  Net operating loss                                                        144,097            158,770
                  Acquisition expenses                                                       51,752                  -
                                                                                     --------------     --------------
               Total gross deferred tax asset, net
                  of valuation allowance of $-0-                                     $      716,926     $      511,014
                                                                                     ==============     ==============


Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE L.        INCOME TAX PROVISION - CONTINUED

               The temporary  differences resulting in deferred income taxes and
               the tax effect of each are as follows:

                                                                                           2000              1999
                                                                                     --------------     --------------

               Discount accretion                                                    $        4,207     $       (9,229)
               Depreciation                                                                  52,944             37,589
               Federal Home Loan Bank dividends                                              37,392             20,436
               Provision for loan losses                                                   (330,354)           (37,213)
               Amortization of purchase accounting adjustments                               (7,967)           (15,683)
               Insurance                                                                     12,215             12,066
               Deferred compensation                                                        (13,368)           (12,427)
               Self-insured medical plan                                                          -             (3,729)
               Unrealized loss on available-for-sale securities                              96,923           (148,783)
               Investee losses                                                              (80,824)           (88,969)
               Accrual to cash conversion                                                   (44,915)            22,369
               Other real estate                                                             (9,851)           (14,122)
               Net operating loss                                                            14,673             22,681
               Acquisition expenses                                                         (51,752)                 -
                                                                                     --------------     --------------
                                                                                     $     (320,677)    $     (215,014)
                                                                                     ==============     ==============

               The provision for federal income taxes is less than that computed
               by applying the federal  statutory  rate of 34% in 2000 and 1999,
               as indicated in the following analysis:

                                                                                           2000              1999
                                                                                     --------------     --------------

               Tax based on statutory rate                                           $    1,227,284     $    1,330,261
               State taxes                                                                  143,153            151,637
               Effect of tax-exempt income                                                 (110,798)           (46,795)
               Amortization of negative goodwill                                           (266,622)           (68,272)
               Other                                                                        (74,050)           (75,469)
                                                                                     --------------     --------------
                                                                                     $      918,967     $    1,291,362
                                                                                     ==============     ==============

               The income tax  provision  includes  substantially  no amounts in
               1999 and 1998, resulting from securities transactions.

               For  federal  income  tax  purposes,  the bank has  approximately
               $380,000  of  net  operating  loss  carryforwards   available  at
               December 31,  2000, and  expiring  in 2006.  Due to the merger of
               Louisiana Bank & Trust into Britton & Koontz First National Bank,
               the Company is limited on its annual utilization of this loss.

Continued


<PAGE>
</TABLE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE M.        SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

               At  December  31,  2000 and  1999,  the  Bank  had  sold  various
               investment  securities  with an  agreement  to  repurchase  these
               securities  at  various  times  within one year.  The  underlying
               securities are U.S.  Government  obligations  and  obligations of
               other U.S. Government agencies and corporations. These securities
               generally  remain  under the Bank's  control and are  included in
               investment securities.  The related liability to repurchase these
               securities  is  included  in  securities  sold  under  repurchase
               agreements.  These securities have coupon rates ranging from 5.5%
               to 7.00%  and  maturity  dates  ranging  from  2008 to 2009.  The
               maximum  amount of  outstanding  agreements  at any month-end was
               $3,368,190 and $2,316,043 during 2000 and 1999, respectively. The
               monthly  average amount of outstanding  agreements was $1,901,530
               and $1,874,606  during 2000 and 1999,  respectively.  At December
               31, 2000, the securities underlying the repurchase agreements had
               an  approximate  amortized  cost of $3,098,491 and an approximate
               market value of $3,019,201.

NOTE N.        REGULATORY MATTERS

               The  primary  sources  of  revenue  of  Britton & Koontz  Capital
               Corporation are dividends from its  subsidiary,  Britton & Koontz
               First  National   Bank.  On  December  31,  2000,   approximately
               $3,327,000 was available for future  distribution  by the Bank as
               dividends  without  prior  approval  of  the  banking  regulatory
               agencies.  However,  such  distribution  would be  subject to the
               requirements described in the following paragraphs.

               In accordance with Office of Thrift  Supervision  regulations,  a
               special  "Liquidation  Account"  has  been  established  for  the
               benefit of certain Qualifying Depositors of Natchez First Federal
               Savings Bank (acquired by Britton & Koontz First National Bank in
               1993) in an initial  amount of  approximately  $2.8 million.  The
               Liquidation  Account serves as a restriction on the  distribution
               of stockholders'  equity in Britton & Koontz First National Bank,
               and no cash  dividend  may be paid on its  capital  stock  if the
               effect  thereof  would  be to cause  the  regulatory  capital  of
               Britton  & Koontz  First  National  Bank to be  reduced  below an
               amount equal to the adjusted Liquidation Account balance.

Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE N.        REGULATORY MATTERS - CONTINUED

               In the event of a complete  liquidation of Britton & Koontz First
               National 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  Britton  &  Koontz  Capital
               Corporation  as the Britton & Koontz First  National  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.

               The Bank is subject to various  regulatory  capital  requirements
               administered by federal banking agencies. Failure to meet minimum
               capital   requirements  can  initiate   certain   mandatory---and
               possibly additional  discretionary---actions  by regulators that,
               if undertaken,  could have a direct material effect on the Bank's
               financial  statements.  Under capital adequacy guidelines and the
               regulatory  framework for prompt corrective action, the Bank must
               meet  specific  capital  guidelines  that  involve   quantitative
               measures  of  the  Bank's   assets,   liabilities,   and  certain
               off-balance-sheet items as calculated under regulatory accounting
               practices. The Bank's capital amounts and classification are also
               subject  to  qualitative   judgments  by  the  regulators   about
               components, risk weightings, and other factors.

               Quantitative measures established by regulation to ensure capital
               adequacy  require the Bank to maintain minimum amounts and ratios
               (set  forth in the table  below) of total and Tier I capital  (as
               defined in the regulation) to risk-weighted  assets (as defined),
               and of  Tier  I  capital  (as  defined)  to  average  assets  (as
               defined).  Management believes, as of December 31, 2000, that the
               Bank  meets  all  capital  adequacy  requirements  to which it is
               subject.

               The most recent regulatory  notification  categorized the Bank as
               well capitalized under the regulatory  capital  framework.  To be
               categorized as well  capitalized,  the Bank must maintain minimum
               total risk-based,  Tier I risk-based,  and Tier I leverage ratios
               as set  forth in the  table.  There are no  conditions  or events
               since that notification that management believes have changed the
               institution's category.

Continued


<PAGE>

<TABLE>
<CAPTION>





               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE N.        REGULATORY MATTERS - CONTINUED

               The Bank's actual  capital  amounts and ratios are also presented
in the table.

                                                                     To Be Adequately                To Be Well
                                             Actual                     Capitalized                  Capitalized
                                 ----------------------------   -------------------------    -------------------------
                                     Amount          Ratio         Amount         Ratio        Amount         Ratio
                                 --------------   -----------   -----------   -----------    -----------   -----------
                                                                 (amounts in thousands)
<S>                              <C>              <C>           <C>           <C>            <C>           <C>

As of December 31, 2000
-----------------------
Total Capital (to Risk-
    Weighted Assets)             $       24,033      13.68%     $    14,054        8.00%     $    17,568      10.00%
Tier I Capital (to Risk-
    Weighted Assets)             $       22,149      12.61%     $     7,026        4.00%     $    10,539       6.00%
Tier I Capital (to Average
    Assets)                      $       22,149       8.33%     $    10,636        4.00%     $    13,295       5.00%

As of December 31, 1999
-----------------------
Total Capital (to Risk-
    Weighted Assets)             $       21,703      14.03%     $    12,375        8.00%     $    15,469      10.00%
Tier I Capital (to Risk-
    Weighted Assets)             $       20,552      13.28%     $     6,190        4.00 %    $     9,286       6.00%
Tier I Capital (to Average
    Assets)                      $       20,552       8.56%     $     9,604        4.00 %    $    12,005       5.00%









</TABLE>

Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE O.        COMMITMENTS AND CONTINGENCIES

               The   Bank   is   a   party   to   financial   instruments   with
               off-balance-sheet  risk in the normal  course of business to meet
               the financing needs of its customers. These financial instruments
               include  commitments to extend credit and  commercial  letters of
               credit. These instruments  involve, to varying degrees,  elements
               of  credit  and  interest  rate  risk in  excess  of the  amounts
               recognized in the consolidated statements of financial condition.

               Commitments  to extend  credit are  agreements to lend money 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.

               Commercial  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 standby letters of credit is essentially the same as that
               involved in extending loans to customers.

               The Bank's maximum  exposure to credit loss is represented by the
               contractual  amount  of the  commitments  to  extend  credit  and
               letters of credit as follows:

                                                   2000                1999
                                               ------------        ------------

               Commitments to extend credit    $ 35,848,104        $ 31,951,659
                                               ============        ============

               Commercial letters of credit    $    864,795        $    904,795
                                               ============        ============

               The Bank is required to maintain  average reserves at the Federal
               Reserve Bank. This requirement  approximated $913,000 at December
               31, 2000. The Bank is in compliance with this requirement.

Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE O.        COMMITMENTS AND CONTINGENCIES - CONTINUED

               Britton  &  Koontz  Capital   Corporation  and  its  wholly-owned
               subsidiary, Britton & Koontz First National Bank, are involved in
               certain litigation incurred in the normal course of business.  In
               the opinion of management and legal counsel,  liabilities arising
               from such claims,  if any, would not have a material  effect upon
               the Company's consolidated financial statements.

NOTE P.        CONCENTRATIONS OF CREDIT

               Substantially   all  of  the  Bank's  loans,   commitments,   and
               commercial  letters of credit have been  granted to  customers in
               the  Bank's  market  area.  Investments  in state  and  municipal
               securities also involve  governmental  entities in and around the
               Bank's market area. The  concentrations of credit by type of loan
               are set  forth  in Note C. The  distribution  of  commitments  to
               extend credit approximates the distribution of loans outstanding.
               Commercial  letters of credit are granted primarily to commercial
               borrowers.

NOTE Q.        DIVIDENDS

               Britton & Koontz Capital Corporation's only subsidiary, Britton &
               Koontz  First  National  Bank,  paid  dividends  to  the  Capital
               Corporation  amounting to $1,550,000  $1,400,000,  and $2,262,449
               for the years 2000, 1999 and 1998, respectively.

NOTE R.        INTEREST RATE RISK MANAGEMENT

               During 2000, the Bank entered into an off-balance  sheet interest
               rate swap  agreement  to  reduce  its  interest-rate  risk and to
               decrease its costs of funds for special deposit promotions. Under
               the terms of this  agreement,  the Bank receives a fixed rate and
               is obligated to pay a floating rate based on one month LIBOR plus
               3 basis points  calculated  on a contractual  notional  amount of
               $10,000,000  at December 31, 2000.  The original term is for five
               years  ($5,000,000  notional),  expiring  in March,  2005 and ten
               years ($5,000,000  notional)  expiring in March,  2010. The fixed
               payment rate was 7.4% and 8.0%,  respectively  during  2000.  The
               average variable-payment rate was 6.52% at December 31, 2000. The
               interest  differentials received from this agreement and recorded
               in current operations was $88,803 during 2000.

Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE R.        INTEREST RATE RISK MANAGEMENT - CONTINUED

               During 1999, the Bank entered into an off-balance  sheet interest
               rate swap  agreement  to  reduce  its  interest-rate  risk and to
               decrease its costs of funds for special deposit promotions. Under
               the terms of this  agreement,  the Bank receives a fixed rate and
               is  obligated  to pay a floating  rate based on three month LIBOR
               calculated  on a  contractual  notional  amount of  $5,000,000 at
               December 31,  1999.  The  original  term is for eighteen  months,
               expiring in February,  2001.  The fixed  payment rate was 6.0% at
               December 31, 1999.  The average  variable-payment  rate was 6.49%
               and  5.8%  during  2000  and  1999,  respectively.  The  interest
               differentials  received  from  this  agreement  and  recorded  in
               current  operations  was $27,958 and $4,446 during 2000 and 1999,
               respectively.

               During  2000,   the  Bank   entered  into  an   off-balance-sheet
               interest-rate  cap  agreement to reduce the  potential  impact of
               increases in interest  rates on  floating-rate  liabilities.  The
               agreement  entitles the Bank to receive from  counterparties on a
               quarterly  basis the  amounts,  if any,  by which the three month
               LIBOR  exceeds 7.0%  computed on a $20 million  notional  amount.
               This  interest-rate  cap expires on August 22, 2002.  At December
               31,  2000,  the  original  cost of the cap of  $94,000  had  been
               amortized into interest expense to a balance of $78,333.

               During  1998,   the  Bank   entered  into  an   off-balance-sheet
               interest-rate  cap  agreement to reduce the  potential  impact of
               increases in interest  rates on  floating-rate  liabilities.  The
               agreement  entitles the Bank to receive from  counterparties on a
               quarterly  basis the  amounts,  if any,  by which the three month
               LIBOR  exceeds 6.0%  computed on a $10 million  notional  amount.
               This interest-rate cap expired on September 22, 2000. At December
               31,  2000,  the  original  cost of the cap of  $20,000  had  been
               amortized into interest expense.

NOTE S.        ACQUISITION OF BRANCHES

               During 1999,  the Bank  acquired  three bank  branches from Union
               Planters Bank,  N.A. The Bank paid a premium for the  acquisition
               of  $1,614,210.  This premium  relates to depositor  and borrower
               relationships and is based on the estimated benefits attributable
               to the  relationships  that  existed  at the date of  acquisition
               without  regard to new  depositors or borrowers  that may replace
               them. This premium is being  amortized over fifteen years,  which
               is the estimated lives of these existing relationships.

Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE T.        BUSINESS COMBINATION

               Effective December 1, 2000, Britton & Koontz Capital  Corporation
               merged with Louisiana Bancshares, Inc. and Britton & Koontz First
               National Bank merged with Louisiana  Bank & Trust.  This business
               combination   was  accounted  for  as  a  pooling  of  interests.
               Louisiana  Bancshares and Louisiana Bank & Trust were merged into
               the  operations  of  Britton & Koontz  through  the  issuance  of
               321,670 shares of Britton & Koontz Capital  Corporation  stock in
               exchange for the 3,051,907 shares of outstanding  common stock of
               Louisiana Bancshares.  Additionally,  options to purchase 447,099
               shares of  Louisiana  Bancshares  were  exchanged  for options to
               purchase  47,124 shares of Britton & Koontz  Capital  Corporation
               stock.

               The accompanying financial statements for 2000 and 1999 are based
               on the  assumption  that the Companies were combined for the full
               years.

               Summarized  results of operations  of the separate  companies for
               1999 and the period  from  January 1, 2000  through  December  1,
               2000, the date of the merger are as follows:


<TABLE>
<CAPTION>




                                                       January 1 through                        Year ended
                                                       December 1, 2000                      December 31, 1999
                                            ------------------------------------    ----------------------------------
<S>                                        <C>                 <C>                 <C>                 <C>

                                                Britton &          Louisiana           Britton &          Louisiana
                                                  Koontz           Bancshares            Koontz           Bancshares
                                            ----------------    ----------------    ---------------     --------------

               Interest income              $     15,904,633    $      3,229,763    $    14,106,105     $    3,383,746
               Interest expense                   (7,938,354)         (1,540,905)        (5,860,425)        (1,600,413)
                                            ----------------    ----------------    ---------------     --------------
                 Net interest income               7,966,279           1,688,858          8,245,680          1,783,333
               Provision for loan losses            (310,000)            (11,000)          (275,000)           (12,000)
                                            ----------------    ----------------    ---------------     --------------
                 Net income after
                   provision for

                   loan losses                     7,656,279           1,677,858          7,970,680          1,771,333
               Non-interest income                 2,341,081             128,905          1,717,903            169,708
               Non-interest expense               (6,607,675)         (1,526,372)        (6,353,786)        (1,423,566)
                                            ----------------    ----------------    ---------------     --------------
                 Net income before

                   income tax expense              3,389,685             280,391          3,334,797            517,475
               Income tax expense                 (1,150,650)           (150,000)        (1,114,561)          (176,801)
                                            ----------------    ----------------    ---------------     --------------

               Net income                   $      2,239,035    $        130,391    $     2,220,236     $      340,674
                                            ================    ================    ===============     ==============






Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE T.        BUSINESS COMBINATION - CONTINUED

               The summarized  assets and liabilities of the separate  companies
               as of December 1, 2000 (the date of acquisition) and December 31,
               1999 were as follows:

                                                       December 1, 2000                      December 31, 1999
                                            ------------------------------------    ----------------------------------
                                                 Britton &          Louisiana           Britton &          Louisiana
                                                  Koontz           Bancshares            Koontz           Bancshares
                                            ----------------    ----------------    ---------------    -------------
<S>                                        <C>                 <C>                 <C>                <C>

               Cash and due from Banks      $     12,580,114    $      2,235,243    $     5,586,693    $   2,438,011
               Investment securities              60,830,635           6,601,813         52,765,838        2,896,611
               Loans, net                        157,184,641          31,592,580        139,140,966       29,690,511
               Bank premises and
                 equipment, net                    6,407,123             680,777          6,215,852          725,720
               Other assets                        5,651,331             997,066          5,144,503        7,297,362
                                            ----------------    ----------------    ---------------    -------------

               Total assets                 $    242,653,844    $     42,107,479    $   208,853,852    $  43,048,215
                                            ================    ================    ===============    =============

               Deposits                     $    185,430,406    $     36,360,862    $   166,317,270    $  32,069,234
               Federal Home Loan
                 Bank advances                    26,850,000           1,500,000         17,850,000        7,000,000
               Other liabilities                   9,166,314             386,928          4,534,841          252,724
                                            ----------------    ----------------    ---------------    -------------
                   Total liabilities             221,446,720          38,247,790        188,702,111       39,321,958
               Equity                             21,207,124           3,859,689         20,151,741        3,726,257
                                            ----------------    ----------------    ---------------    -------------
               Total liabilities

                 and equity                 $    242,653,844    $     42,107,479    $   208,853,852    $  43,048,215
                                            ================    ================    ===============    =============








</TABLE>


Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE T.        BUSINESS COMBINATION - CONTINUED

               Following  is a  reconciliation  of the  amounts of net  interest
               income and net income previously  reported for 1999 with restated
               amounts:

                                                            Year ended
                                                        December 31, 1999


                  Net interest income:

                    As previously reported              $     8,245,680
                    Louisiana Bancshares                      1,783,333
                                                        ---------------

                    As restated                         $    10,029,013
                                                        ===============

               Net income:
                    As previously reported              $     2,220,236
                      Louisiana Bancshares                      340,674
                                                        ---------------

                    As restated                         $     2,560,910
                                                        ===============

               Basic earnings per share:
                    As previously reported              $          1.26
                                                        ===============

                    As restated                         $          1.23
                                                        ===============

               Diluted earnings per share:
                    As previously reported              $          1.26
                                                        ===============

                    As restated                         $          1.21
                                                        ===============














Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE U.        FAIR VALUE OF FINANCIAL INSTRUMENTS

               In December of 1991,  the Financial  Accounting  Standards  Board
               issued  Statement  of  Financial  Accounting  Standards  No.  107
               relative  to   disclosures   about  fair   values  of   financial
               instruments.  The  statement  requires  disclosure  of  financial
               instruments'   fair  values,  as  well  as  the  methodology  and
               significant  assumptions  used in estimating  fair values.  These
               requirements have been  incorporated  throughout the notes to the
               consolidated  financial statements.  In cases where quoted market
               prices are not  available,  fair  values  are based on  estimates
               using   present   value   techniques.    Those   techniques   are
               significantly  affected by the  assumptions  used,  including the
               discount rate and estimates of future cash flows. In that regard,
               the derived fair value  estimates for those assets or liabilities
               cannot be substantiated by comparison to independent markets and,
               in many cases, can not be realized in immediate settlement of the
               instrument.  All nonfinancial  instruments,  by definition,  have
               been excluded from these  disclosure  requirements.  Accordingly,
               the aggregate  fair value amounts  presented do not represent the
               underlying  value of the  Company  and may not be  indicative  of
               amounts that might  ultimately  be realized upon  disposition  or
               settlement of those assets and liabilities.

               The following  methods and  assumptions  are used to estimate the
               fair value of each class of financial instruments for which it is
               possible to estimate that value:

               Cash and Due From Banks

               Fair value equals the carrying value of such assets.

               Federal Funds Sold

               Due to the short-term nature of this asset, the carrying value of
               this item approximates its fair value.

               Investment Securities

               Fair values for investment  securities are based on quoted market
               prices,  where  available.   If  quoted  market  prices  are  not
               available,  fair  values  are  based on quoted  market  prices of
               comparable instruments.

Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE U.        FAIR VALUE OF FINANCIAL INSTRUMENTS - CONTINUED

               Cash Surrender Value of Life Insurance

               The fair value of this item approximates its carrying value.

               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 comparable
               loans as to credit risk and term.

               Deposits

               The fair  values of  demand  deposits  are equal to the  carrying
               value of such  deposits.  Demand  deposits  include  non-interest
               bearing demand  deposits,  savings  accounts,  NOW accounts,  and
               money market  demand  accounts.  Discounted  cash flows have been
               used to value fixed rate term deposits. The discount rate used is
               based on interest  rates  currently  being offered by the Bank on
               comparable deposits as to amount and term.

               Federal Home Loan Bank Advances

               Due to the short-term nature of these  liabilities,  the carrying
               values of these items approximates their fair values.

               Securities Sold Under Repurchase Agreements

               The fair value of these items approximates their carrying values.

               Off-Balance Sheet Instruments

               Loan  commitments  are negotiated at current market rates and are
               relatively short-term in nature.  Therefore,  the estimated value
               of loan commitments approximates the face amount.

               Fair values for interest  rate swaps and caps are based on quoted
               market prices,  where available.  If quoted market prices are not
               available,  fair  values  are  based on quoted  market  prices of
               comparable instruments.

Continued


<PAGE>

<TABLE>
<CAPTION>





               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE U.        FAIR VALUE OF FINANCIAL INSTRUMENTS - CONTINUED

               The estimated fair values of the Company's financial  instruments
are as follows:

                                                                                                 2000
                                                                                 -------------------------------------
                                                                                     Carrying               Fair
                                                                                      Amount                Value
                                                                                 ----------------    -----------------
<S>                                                                             <C>                 <C>

               Financial assets:
                  Cash and due from banks                                        $      7,959,000    $       7,959,000
                  Investment securities:
                     Held-to-maturity                                            $     54,487,000    $      55,351,000
                     Available-for-sale                                          $      6,215,000    $       6,215,000
                     Equity securities                                           $      3,017,000    $       3,017,000
                  Cash surrender value of life insurance                         $        808,000    $         808,000
                  Loans                                                          $    184,977,000    $     187,305,000

               Financial liabilities:
                  Deposits                                                       $    211,356,000    $     212,043,000
                  Federal Home Loan Bank advances                                $     27,175,000    $      27,175,000
                  Securities sold under repurchase agreements                    $      2,840,000    $       2,840,000

                                                                                       Face                 Fair
                                                                                      Amount                Value
                                                                                 ----------------    -----------------

               Other:
                  Commitments to extend credit                                   $     35,848,000    $      35,848,000
                  Commercial letters of credit                                   $        865,000    $         865,000
                  Interest rate swaps                                                           -                8,000
                  Interest rate caps                                                            -                7,000













Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE U.        FAIR VALUE OF FINANCIAL INSTRUMENTS - CONTINUED

                                                                                                 1999
                                                                                 -------------------------------------
                                                                                     Carrying               Fair
                                                                                      Amount                Value
                                                                                 ----------------    -----------------
<S>                                                                             <C>                 <C>

               Financial assets:
                  Cash and due from banks                                        $      8,025,000    $       8,025,000
                  Federal funds sold                                             $      7,575,000    $       7,575,000
                  Investment securities:
                     Held-to-maturity                                            $     46,719,000    $      45,703,000
                     Available-for-sale                                          $      6,485,000    $       6,485,000
                     Equity securities                                           $      2,458,000    $       2,458,000
                  Cash surrender value of life insurance                         $        759,000    $         759,000
                  Loans                                                          $    168,831,000    $     167,784,000

               Financial liabilities:
                  Deposits                                                       $    198,387,000    $     197,914,000
                  Federal Home Loan Bank advances                                $     24,850,000    $      24,850,000
                  Securities sold under repurchase agreements                    $      1,482,000    $       1,482,000

                                                                                       Face                 Fair
                                                                                      Amount                Value
                                                                                 ----------------    -----------------

               Other:
                  Commitments to extend credit                                   $     31,952,000    $      31,952,000
                  Commercial letters of credit                                   $        905,000    $         905,000
                  Interest rate swaps                                                           -              (35,000)
                  Interest rate caps                                                            -               22,000














Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE V.        SUMMARIZED FINANCIAL INFORMATION OF BRITTON & KOONTZ CAPITAL
               CORPORATION



               Summarized  financial  information  of  Britton & Koontz  Capital
               Corporation, parent company only, is as follows:



                        STATEMENTS OF FINANCIAL CONDITION

                                                                                            December 31,
                                                                                       2000                 1999
                                                                                 ----------------    ----------------
<S>                                                                             <C>                 <C>

               ASSETS:

                  Cash                                                           $        767,968    $        916,975
                  Investments in:
                     Britton & Koontz First National Bank                              23,491,078          21,831,339
                     Sumx Inc.                                                            794,790             751,626
                  Premise and equipment, net                                              200,420             205,971
                  Cash surrender value of life insurance                                   97,370              80,919
                  Other assets                                                            171,995              91,168
                                                                                 ----------------    ----------------

               TOTAL ASSETS                                                      $     25,523,621    $     23,877,998
                                                                                 ================    ================

               STOCKHOLDERS' EQUITY                                              $     25,523,621    $     23,877,998
                                                                                 ================    ================





















Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE V.        SUMMARIZED FINANCIAL INFORMATION OF BRITTON & KOONTZ CAPITAL
               CORPORATION - CONTINUED

                              STATEMENTS OF INCOME

                                                                                      Years Ended December 31,
                                                                                       2000                 1999
                                                                                 ----------------    ----------------
<S>                                                                             <C>                 <C>

               REVENUE:
                  Dividends received:

                     Britton & Koontz First National Bank                        $      1,550,000    $      1,400,000
                  Interest and other income earned                                         21,700              11,227
                                                                                 ----------------    ----------------
                                                                                        1,571,700           1,411,227

               EXPENSES     243,889                                                        56,593
                         ----------                                              ----------------
                                                                                        1,327,811           1,354,634

               INCOME TAX BENEFIT                                                         (80,824)            (88,969)
                                                                                 ----------------    ----------------
                                                                                        1,408,635           1,443,603

               EQUITY IN UNDISTRIBUTED
                  EARNINGS (LOSSES):

                     Britton & Koontz First National Bank                               1,488,893           1,355,830
                     Sumx Inc.                                                           (206,836)           (238,523)
                                                                                 ----------------    ----------------

                            NET INCOME                                           $      2,690,692    $      2,560,910
                                                                                 ================    ================



Continued


<PAGE>






               BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE V.        SUMMARIZED FINANCIAL INFORMATION OF BRITTON & KOONTZ CAPITAL CORPORATION - CONTINUED

                            STATEMENTS OF CASH FLOWS

                                                                                      Years Ended December 31,
                                                                                       2000                 1999
                                                                                 ----------------    ----------------
<S>                                                                             <C>                 <C>

               CASH FLOWS FROM OPERATING ACTIVITIES:

                  Net income                                                     $      2,690,692    $      2,560,910
                  Adjustments to reconcile net income to net
                     cash provided by operating activities:
                         Provision for depreciation                                         5,551               5,124
                         Equity on undistributed earnings
                            and losses of affiliates                                   (1,282,057)         (1,117,307)
                  Increase in cash surrender value of life insurance                      (16,451)            (10,469)
                  Increase in other assets                                                (80,827)            (89,807)
                                                                                 ----------------    ----------------

                            Net cash provided by operating
                             activities                                                 1,316,908           1,348,451
                                                                                 ----------------    ----------------

               CASH FLOWS FROM INVESTING ACTIVITIES:

                  Investment in Sumx Inc.                                                (250,000)                  -
                  Purchase of premise and equipment                                             -            (188,038)
                                                                                 ----------------    ----------------
                            Net cash used in investing activities                        (250,000)           (188,038)
                                                                                 ----------------    ----------------

               CASH FLOWS FROM FINANCING ACTIVITIES:

                  Cash dividends paid                                                  (1,156,979)         (1,060,238)
                  Cash paid for treasury stock                                           (257,375)                   -
                  Cash received from stock options exercised                              198,439                    -
                                                                                 ----------------    -----------------

                            Net cash used in financing activities                      (1,215,915)         (1,060,238)
                                                                                 ----------------    ----------------

               NET INCREASE (DECREASE) IN CASH                                           (149,007)            100,175
               CASH AT BEGINNING OF YEAR                                                  916,975             816,800
                                                                                 ----------------    ----------------
               CASH AT END OF YEAR                                               $        767,968    $        916,975
                                                                                 ================    ================

               SCHEDULE OF NONCASH INVESTING AND
                  FINANCING ACTIVITIES:

                     Change in unrealized gain on securities
                         available-for-sale, net of deferred
                         income taxes                                            $        170,846    $       (268,338)
                                                                                 ================    ================

</TABLE>

<PAGE>

                                  SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                                            BRITTON & KOONTZ CAPITAL CORPORATION
                                            (Registrant)



                                            By: /s/ W. Page Ogden
                                                _______________________________
                                                 W. Page Ogden
                                                 President and
                                                 Chief Executive Officer

         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  registrant and in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>




Signature                                            Title                                       Date


<S>                                                 <C>                                         <C>
/s/ W. Page Ogden                                    President,                                  March 31, 2001
W. Page Ogden                                        Chief Executive
                                                     Officer and
                                                     Director
                                                     (Principal Executive Officer)


/s/ W. W. Allen, Jr.                                 Director                                    March 31, 2001
W. W. Allen, Jr.


/s/ Craig A. Bradford                                Director                                    March 31, 2001
Craig A. Bradford, DMD


/s/ James J. Cole                                    Director                                    March 31, 2001
James J. Cole



                                      {SIGNATURES CONTINUE ON FOLLOWING PAGE}



Signature                                            Title                                       Date


/s/ William J. Feltus, Jr.                           Chairman and                                March 31, 2001
William J. Feltus, Jr.                               Director


/s/ A. J. Ferguson                                   Director                                    March 31, 2001
A. J. Ferguson


/s/ C. Hayden Kaiser, Jr.                            Vice Chairman                               March 31, 2001
Hayden Kaiser, Jr.                                   and Director


/s/ Bazile R. Lanneau, Jr.                           Vice President, Chief                       March 31, 2001
Bazile R. Lanneau, Jr.                               Financial Officer, Treasurer,
                                                     Assistant Secretary and Director
                                                     (Principal Financial Officer)
                                                     (Principal Accounting Officer)


/s/ Albert W. Metcalfe                               Secretary and                               March 31, 2001
Albert W. Metcalfe                                   Director


/s/ Bethany L. Overton                               Director                                    March 31, 2001
Bethany L. Overton


/s/ R. Andrew Patty II                               Director                                    March 31, 2001
R. Andrew Patty II


/s/ Robert R. Punches                                Director                                    March 31, 2001
Robert R. Punches


/s/ Vinod K. Thukral, Ph.D.                          Director                                    March 31, 2001
Vinod K. Thukral, Ph.D.



</TABLE>

<PAGE>


                    EXHIBITS TO ANNUAL REPORT ON FORM 10-KSB

                     OF BRITTON & KOONTZ CAPITAL CORPORATION

                               FOR THE FISCAL YEAR

                             ENDED DECEMBER 31, 2000


<PAGE>


                                  EXHIBIT INDEX



Exhibit                             Description of Exhibit

3.1               Restated Articles of Incorporation of Britton & Koontz Capital
                  Corporation,  incorporated  by  reference  to  Exhibit  4.1 to
                  Registrant's  Registration Statement on Form S-8, Registration
                  No. 333-20631, filed with the Commission on January 29, 1997.*

3.2               By-Laws of Britton & Koontz  Capital  Corporation,  as amended
                  and  restated,  incorporated  by  reference  to Exhibit 3.2 to
                  Registrant's  Annual  Report  on Form  10-KSB  filed  with the
                  Commission on March 30, 1998.*

4.1               Certain  provisions  defining  the  rights of Shareholders are
                  found in the Articles of Incorporation and By-Laws of  Britton
                  & Koontz Capital Corporation. See Exhibits 3.1 and 3.2,above.*

4.2               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.*

10.01             Employment  Agreement dated December 31, 1996, between Britton
                  & Koontz Capital  Corporation and W. Page Ogden,  incorporated
                  by reference to Exhibit 10.1 to Registrant's  Annual Report on
                  Form 10-KSB filed with the Commission on March 28, 1997.*

10.02             Employment Agreement  dated December 31, 1996, between Britton
                  &  Koontz  Capital  Corporation  and  Bazile  R. Lanneau, Jr.,
                  incorporated  by  reference  to  Exhibit  10.2 to Registrant's
                  Annual Report on  Form 10-KSB  filed  with  the  Commission on
                  March 28, 1997.*

10.03             Employment  Agreement dated December 31, 1998, between Britton
                  & Koontz Capital  Corporation and James J. Cole,  incorporated
                  by reference to Exhibit 10.03 to Registrant's Annual Report on
                  Form 10-KSB filed with the Commission on March 30, 1999.*

10.04             Salary Continuation Plan Agreements dated  September 26, 1994,
                  between Britton & Koontz Capital Corporation and W. Page Ogden
                  , Bazile  R. Lanneau, Jr.  and  James J. Cole, incorporated by
                  reference to Exhibit 10 to Registrant's Current Report on Form
                  10-QSB filed with the Commission on November 14, 1994*

10.05             System  Purchase  Agreement dated January 22, 1996 between the
                  Britton & Koontz First  National Bank and  InterBank  Systems,
                  Inc.,   incorporated   by   reference   to  Exhibit   10.5  to
                  Registrant's  Annual  Report  on Form  10-KSB  filed  with the
                  Commission  on March  29,  1996 and Form  10-KSB/A,  Amendment
                  Number 1, filed with the Commission on June 14, 1996.*


<PAGE>


10.06             Independent   Contractor  Agreement  dated  January  22,  1996
                  between  InterBank  Systems,  Inc. and Summit Research,  Inc.,
                  incorporated  by  reference  to Exhibit  10.6 to  Registrant's
                  Annual  Report on Form  10-KSB  filed with the  Commission  on
                  March 29, 1996 and Form  10-KSB/A,  Amendment  Number 1, filed
                  with the Commission on June 14, 1996.*

10.07             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.*

10.09             Stock  Purchase  Agreement  dated December  3,  1998,  between
                  Britton & Koontz Capital Corporation and Sumx Inc incorporated
                  by reference to Exhibit 10.09 to Registrant's Annual Report on
                  Form 10-KSB filed with the Commission on March 30, 1999.*

10.10             Investor  Rights  Agreement  dated  December  3,  1998,  among
                  Britton & Koontz Capital Corporation, Summit  Research,  Inc.,
                  Bazile R. Lanneau, Jr. and Sumx Inc. incorporated by reference
                  to Exhibit 10.10 to Registrant's  Annual Report on Form 10-KSB
                  filed with the Commission on March 30, 1999.*

10.11             Voting  Agreement  dated  December  3,  1998,  among Britton &
                  Koontz Capital Corporation, Summit Research, Inc. and Bazile R
                  Lanneau, Jr. incorporated by  reference  to  Exhibit  10.11 to
                  Registrant's  Annual  Report  on  Form  10-KSB  filed with the
                  Commission on March 30, 1999.*

10.12             Management  Service  Agreement  dated  December 3, 1998, among
                  Britton & Koontz Capital Corporation, Sumx Inc.  and Bazile R.
                  Lanneau, Jr.  incorporated  by  reference  to Exhibit 10.12 to
                  Registrant's  Annual  Report  on  Form  10-KSB  filed with the
                  Commission on March 30, 1999.*

11                Statement re: Computation of per share earnings

21                Subsidiaries of the Registrant

23.1              Consent of Independent Auditors


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