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


                   For the fiscal year ended December 31, 2001


                         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, $2.50 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  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.

        The issuer's revenues for the 2001 fiscal year were $23,381,524.

     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
$23,186,850 for 1,545,790 shares at an estimated $15.00 per share.


                The issuer had 2,109,055 shares of common stock
                       outstanding as of March 12, 2002.

       Transitional Small Business Disclosure Format (check one): Yes___ No_X_


<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE


1.   Portions of the  Registrant's  2001 Definitive Proxy statement with respect
     to its 2002 annual meeting of  shareholders,  filed with the Securities and
     Exchange  Commission  on or about April 2, 2002,  and the Annual  Report to
     Shareholders  for fiscal year ended December 31, 2001 are  incorporated  by
     reference into Parts II and 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 5 through 7 is  incorporated  by reference
     from  the  Company's  2001  Annual  Report  to  Shareholders   pursuant  to
     Instruction E(2) of Form 10-KSB

***  The material  required by Items 9 through 12 is  incorporated  by reference
     from  the  Company's  Proxy  Statement  for  its  2002  Annual  Meeting  of
     Shareholders pursuant to Instruction E(3) of Form 10-KSB.


<PAGE>



19


                                     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 a
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   merged  into  the  Bank,   adding
approximately $42 million in assets and two branches in Baton Rouge,  Louisiana.
On April 17, 2001 B&K Title Insurance Agency, Inc. was originated under the laws
of the State of  Mississippi.  In May 2001, the Company  acquired 1000 shares of
common stock of B&K Title Insurance Agency,  Inc., becoming the Company's second
wholly-owned  subsidiary.  On June 1, 2001,  the  Company  received  approval to
convert the loan production  office in Baton Rouge,  Louisiana to a full service
branch.

     The Company's major source of income in 2001 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 2002. As of December 31,
2001,  the Company had total assets of  approximately  $299  million,  and total
consolidated shareholders' equity of approximately $28 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  three  branch  offices  in Baton  Rouge,  Louisiana.  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 in  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,  2001,  the Bank had total  assets of  approximately  $298 million and total
deposits of approximately $219 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 $28 million in assets under management as of December 31, 2001.

     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,  2001,  the Company and the Bank had  approximately  121
full-time and 11 part-time  employees.  The employees are not  represented  by a
collective  bargaining unit. The Company believes that its relationship with its
employees is good.

         The Insurance Agency

     B&K Title Insurance Agency,  Inc. has entered into an agreement,  as agent,
to issue policies of title insurance upon  properties in all Counties,  State of
Mississippi,  in the name of Mississippi  Guaranty Title  Insurance  Company,  a
Mississippi corporation.

         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.  Sumx is owned 36.62% by the Company,  19.01% 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 44.36% 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
Natchez and 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. Pursuant to a Management  Services Agreement,  Sumx
pays the Company $90,000 per year for the services of Mr.  Lanneau.  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.

<PAGE>


     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,  bill payment and cash  management
features.

     In May of 2001,  Sumx  entered into an exclusive  agreement  with  Diebold,
Incorporated  (Diebold),  a global leader in providing  integrated  self-service
delivery  systems and services to market,  install and support Diebold  Internet
Banking,  powered by Sumx, for its customer base.  Diebold  Internet  Banking is
offered  both as a managed  service  and an on-site  solution  to both banks and
credit unions.

     As of March 25, 2002, eight financial  institutions will use Sumx' Internet
banking  technology to provide Internet banking services to their customers (six
banks through Sumx, and one bank and credit union through Diebold).


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."

     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.

<PAGE>

         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.

     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.

<PAGE>

         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
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".

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.

<PAGE>

         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
are located and leases the property for two of its branches.  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:


    Location                Own/Lease          Use         Approximate Office
                                                           Space (square feet)
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

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       Branch Office           2,200


Item 3.  Legal Proceedings.

     The Company and the Bank are involved in 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 adverse effect upon
the Company's consolidated financial condition.

<PAGE>

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

         Not Applicable


                                                  PART II

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

     The  information  required  in  response  to this item is  incorporated  by
reference to the material under the heading "Information about our common stock"
in the Company's 2001 Annual Report to its Shareholders (the "Annual Report").


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

     The  information  required  in  response  to this item is  incorporated  by
reference to the material under the heading "Management  Discussion and Analysis
of Financial Condition and Results of Operations" in the Annual Report.


Item 7.  Financial Statements.

     The  information  required  in  response  to this item is  incorporated  by
reference to the material under the heading "Consolidated  Financial Statements"
in the 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 headings  "Nominees  (Class III Directors),"
"Continuing  Directors  (Class I and II  Directors),"  "Executive  Officers" and
"Section 16(a) Beneficial Ownership Reporting Compliance" in the Company's Proxy
Statement for its 2002 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  headings  "Executive  Compensation"  and
"Employment Agreements" 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 heading  "Stock  Ownership  of  Directors,
Officers, and Certain Beneficial Owners" in 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  October 30, 2001,
reporting third quarter 2001 earnings.

     The Company filed a current  report on Form 8-K,  dated  November 29, 2001,
announcing a semi-annual dividend.


<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.


Signature                         Title                               Date


/s/ W. Page Ogden             President,                         March 29, 2002
-----------------             Chief Executive Officer and
W. Page Ogden                 Director
                              (Principal Executive Officer)



/s/ W. W. Allen, Jr           Director                           March 29, 2002
-------------------
W. W. Allen, Jr.


/s/ Craig A. Bradford         Director                           March 29, 2002
---------------------
Craig A. Bradford, DMD


/s/ James J. Cole             Director                           March 29, 2002
-----------------
James J. Cole

<PAGE>


Signature                      Title                                  Date


/s/ W. J. Feltus III.         Chairman and                       March 29, 2002
--------------------          Director
W. J. Feltus III


/s/ A. J. Ferguson            Director                           March 29, 2002
------------------
A. J. Ferguson


/s/ Bazile R. Lanneau, Jr.    Vice President, Chief              March 29, 2002
-------------------------     Financial Officer, Treasurer,
Bazile R. Lanneau, Jr.        Assistant Secretary and Director
                              (Principal Financial Officer)
                              (Principal Accounting Officer)



/s/ Albert W. Metcalfe         Secretary and                     March 29, 2002
---------------------------    Director
Albert W. Metcalfe


/s/ Bethany L. Overton         Director                          March 29, 2002
----------------------
Bethany L. Overton


/s/ R. Andrew Patty II         Director                          March 29, 2002
----------------------
R. Andrew Patty II


/s/ Robert R. Punches          Director                          March 29, 2002
---------------------
Robert R. Punches


/s/ Vinod K. Thukral, Ph.D.    Director                          March 29, 2002
---------------------------
Vinod K. Thukral, Ph.D.



<PAGE>





















                    EXHIBITS TO ANNUAL REPORT ON FORM 10-KSB

                     OF BRITTON & KOONTZ CAPITAL CORPORATION

                               FOR THE FISCAL YEAR

                             ENDED DECEMBER 31, 2001





<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

13                Annual Report to Shareholders

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.






<PAGE>
<TABLE>
<CAPTION>


                                   EXHIBIT 11

                 Statement Re: Computation of Per Share Earnings




                                                                         Twelve Months Ended
                                                                              December 31
                                                              ______________________________________
                                                                   2001                      2000
                                                              ___________                ___________
Basic:

<S>                                                           <C>                        <C>
Average shares outstanding:                                     2,108,973                  2,080,046

Net Income                                                    $ 3,247,783                $ 2,690,692
                                                              ===========                ===========

Net income per share                                          $      1.54                $      1.29
                                                              ===========                ===========







Diluted:

Average shares outstanding:                                     2,108,973                  2,080,046

Net effect of the assumed exercise of stock
options based on the treasury stock method
using average market price for the period.                            851                     21,668
                                                              -----------                -----------

Total                                                           2,109,824                  2,101,714
                                                              ===========                ===========

Net income                                                    $ 3,247,783                $ 2,690,692
                                                              ===========                ===========

Net income per share                                          $      1.54                $      1.28
                                                              ===========                ===========


</TABLE>

<PAGE>





















                                   EXHIBIT 13


                          ANNUAL REPORT TO SHAREHOLDERS


















<PAGE>




Message to Shareholders:

From the Chairman

     At our shareholder meeting in April, I shall retire as your Chairman.  I am
deeply honored to have served on the Board for over 30 years and as Chairman for
20 years. In 1996, at my recommendation, your board unanimously passed mandatory
retirement  age of 72. Our objective was to insure that your board did not, with
the simple passage of time, represent the perspective of only one age group. The
vibrancy of the bank has indeed been  reflected in a dedicated,  vigorous  board
with new faces appearing regularly at the table.

     It has been a  tremendous  source  of pride to see our bank  grow  from $76
million in assets to almost $300 million over the last twenty years. In the late
1980's and early 1990's we endured  bleak  economic  times and emerged a strong,
independent  organization.  In the 1990's,  after the merger with Natchez  First
Federal, we established the bank as the premier mortgage company in the Miss-Lou
area. We invested  heavily in technology  and even brought  affordable  Internet
access to the  Miss-Lou  area in 1995 with  bkbank.com.  We provided the venture
capital and laboratory for the development of the on-line banking  technology of
Sumx Inc., which recently entered into a promising  partnership with the Diebold
Corporation.  We expanded  our  shareholder  base  dramatically,  and by 1996 we
listed  BKBK  stock  on  NASDAQ:  a  move  which  provided   liquidity  for  our
shareholders  and an  enhanced  currency to expand the bank.  In 2000,  we found
further acceptance of our stock in an exchange to acquire Louisiana Bank & Trust
in Baton Rouge.  With the LBT acquisition  and an earlier branch  acquisition in
Vicksburg,  we are well on our way to developing a regional  presence  along the
Mississippi River corridor.

     It is  every  Chairman's  wish  to be  able  to  exit  at a time  when  the
organization is on the move. As some of you may know, I have always  possessed a
great love of ships and naval history. If I may use a nautical metaphor, B&K has
already set a course in the waters of the new century.  Our vessel is worthy and
our crew is up to the task before us. My active  association  with the bank will
be a cherished memory,  and I am indeed grateful to have contributed in some way
to extending the legacy of our 166 year old institution.





Yours truly,


W.J. Feltus III
Chairman of the Board



<PAGE>

Message to Shareholders:

From the President

     No one could have predicted the highly unusual  operating  environment  for
B&K and all other banks in 2001. The indelible horror of September 11, 2001, and
the subsequent War on Terrorism;  the Fed's dramatic cuts in short-term interest
rates,  the  appearance of a recession,  and a continued  volatile  stock market
combined  to  produce an  unsettling  backdrop  for  consumers  and  businesses.
However,  the fact that banks and their  customers  completed  this unusual year
without panic and with an eye toward a better  future speaks to the  fundamental
strength of our institutions and economy.

     Your bank enjoyed a solid year in terms of both growth and earnings. In the
public market for our stock (NASDAQ: BKBK), we saw the share price rise 25% from
$12 to $15  during  the year.  Our  growth  was very  much in step with  banking
industry trends,  particularly those of smaller community banks that continue to
prosper in the midst of  industry-wide  consolidation  and  deregulation  of the
financial  services.  At B&K we are fortunate to be in three  excellent  markets
along the Mississippi River: Natchez,  Vicksburg, and Baton Rouge. Each presents
unique challenges for us to address,  but each beckons us with  opportunity.  On
the technology  front, we see on-going  opportunity to expand our online banking
services.  The widespread  industry emphasis on this delivery channel bodes well
for our  investment in Sumx Inc. and its  partnership  with Diebold  Corporation
(NYSE: DBD).

     It is with mixed emotion that I bid farewell to our longtime Chairman, Will
Feltus, who reaches retirement from our Board at our annual shareholder meeting.
In my fourteen  years of working  with him at B&K,  Will has been an  invaluable
source of counsel.  His  leadership  as Chairman  reflects in Board  proceedings
characterized by efficient deliberation,  a free exchange of ideas, and ultimate
consensus. The interest of our shareholders has always been his top priority. We
shall  miss his  steady  hand at the  wheel.  Yet,  we hope that the  freedom of
retirement brings him even more joy and satisfaction in a life  characterized by
success as family man, community leader, businessman, and certainly, banker.





Yours truly,


W. Page Ogden
President & CEO







<PAGE>
<TABLE>
<CAPTION>




Financial Highlights
                                                             2001                  2000
--------------------------------------------------------------------------------------------
<S>                                                        <C>                   <C>
YEAR END BALANCE
(in thousands)
Total Assets                                                 $298,856              $270,119
Total Deposits                                                217,680               211,323
Loans (net of unearned income)                                185,127               186,861
Stockholders' Equity                                           28,291                25,524
FOR THE YEAR
(in thousands)
Net Income                                                      3,248                 2,691
Net Interest Income                                            12,080                11,086


PER SHARE
Earnings per share-Basic                                        $1.54                 $1.29
Earnings per share-Diluted                                       1.54                  1.28
Cash dividends                                                   0.61                  0.60


OTHER KEY INFORMATION
--------------------------------------------------------------------------------------------
Return on Average Assets (%)                                     1.19                  0.98
Return on Average Equity (%)                                    12.76                 10.70
Dividend Payout (%)                                             39.61                 43.01
Net Interest Income/Average Earning Assets (%)                   4.73                  4.32
Allowance for Loan Losses/Loans (%)                              1.14                  1.01
Non Performing Loans/Loans (%)                                   1.51                  0.74
Loans/Deposits (%)                                               0.85                  0.88
Total Stockholders' Equity/Assets (%)                            9.47%                 9.45%
Tier 1 Leverage Ratio (%)                                        9.52                  8.76
Year End Stock Price                                           $15.00                $12.00
Weighted Average Shares Outstanding:
Basic                                                       2,108,973             2,080,046
Diluted                                                     2,109,824             2,101,714



<PAGE>
</TABLE>





                      BRITTON & KOONTZ CAPITAL CORPORATION
                                AND SUBSIDIARIES

                        Consolidated Financial Statements

                     Years Ended December 31, 2001 and 2000

                                      with

                          Independent Auditor's Report


<PAGE>





                          INDEPENDENT AUDITOR'S REPORT



To the Board of Directors and Stockholders

Britton & Koontz Capital Corporation and Subsidiaries


     We have  audited the  accompanying  consolidated  statements  of  financial
condition  of  Britton  & Koontz  Capital  Corporation  and  Subsidiaries  as of
December 31, 2001 and 2000, 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.

     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 provide a reasonable basis for our opinion.

     In our opinion,  the consolidated  financial  statements  referred to above
present fairly, in all material  respects,  the financial  position of Britton &
Koontz Capital  Corporation  and  Subsidiaries as of December 31, 2001 and 2000,
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 15, 2002



<PAGE>

<TABLE>
<CAPTION>





              BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                           DECEMBER 31, 2001 AND 2000



                                     ASSETS

                                                                                       2001                 2000
                                                                                 ----------------    -----------------

<S>                                                                             <C>                 <C>
ASSETS:
    Cash and due from banks:
       Non-interest bearing                                                      $      7,160,387    $       7,629,471
       Interest bearing                                                                 7,398,849              329,407
                                                                                 ----------------    -----------------

                  Total cash and due from banks                                        14,559,236            7,958,878

    Federal funds sold                                                                  1,050,000                    -
    Investment securities:
       Held-to-maturity (market value of $27,867,675 and
          $55,350,505, respectively)                                                   27,967,610           54,486,659
       Available-for-sale (amortized cost of $53,590,873 and
          $6,336,675, respectively)                                                    54,665,875            6,215,483
       Equity securities, at cost less equity in unallocated losses                       558,826              794,790
       Other equity securities                                                          3,163,900            2,222,350
    Loans, less unearned income of $24,594 in 2001 and
       $46,988 in 2000, and allowance for loan losses of
       $2,108,247 in 2001 and $1,883,561 in 2000                                      177,603,099          184,977,163
    Loans held-for-sale                                                                 5,415,543                    -
    Bank premises and equipment, net                                                    7,170,954            7,071,668
    Other real estate, net                                                              1,526,213              773,005
    Accrued interest receivable                                                         2,325,525            2,530,097
    Cash surrender value of life insurance                                                856,390              808,329
    Acquisition premium, net of accumulated amortization
       of $302,856 in 2001 and $195,240 in 2000                                         1,311,354            1,418,970
    Other assets                                                                          681,940              861,975
                                                                                 ----------------    -----------------





TOTAL ASSETS                                                                     $    298,856,465    $     270,119,367
                                                                                 ================    =================




Continued


<PAGE>













                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                                       2001                 2000
                                                                                 ----------------    -----------------

LIABILITIES:
    Deposits:
       Non-interest bearing                                                      $     33,165,781   $       33,580,417
       Interest bearing                                                               184,514,075          177,742,115
                                                                                 ----------------   ------------------

              Total deposits                                                          217,679,856          211,322,532
    Federal Home Loan Bank advances                                                    47,000,000           27,175,000
    Securities sold under repurchase agreements                                         3,098,017            2,840,000
    Accrued interest payable                                                            1,319,813            1,887,243
    Advances from borrowers for taxes and insurance                                       314,566              440,834
    Accrued taxes and other liabilities                                                 1,153,073              930,137
                                                                                 ----------------   ------------------

              Total liabilities                                                       270,565,325          244,595,746
                                                                                 ----------------   ------------------


COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
    Common stock, $2.50 par value per share;
       12,000,000 shares authorized;
       2,123,555 and 2,116,034 shares issued and 2,109,055
          and 2,101,534 shares outstanding at December 31,
          2001 and 2000, respectively                                                   5,308,888            5,290,085
         Additional paid-in capital                                                     7,189,563            7,156,245
    Retained earnings                                                                  15,373,489           13,412,231
    Accumulated other comprehensive income                                                676,575              (77,565)
                                                                                 ----------------   -------------------
                                                                                       28,548,515           25,780,996
    Less:  Treasury stock 14,500 shares, at cost                                         (257,375)            (257,375)
                                                                                 -----------------  ------------------

              Total stockholders' equity                                               28,291,140           25,523,621

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                       $    298,856,465   $      270,119,367
                                                                                 ================   ==================




See accompanying notes to the consolidated financial statements.
<PAGE>
</TABLE>


<TABLE>
<CAPTION>




              BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


                                                                                       2001                 2000
                                                                                 ----------------    -----------------

<S>                                                                             <C>                <C>
INTEREST INCOME:
    Interest and fees on loans                                                   $     16,897,617    $      16,944,177
    Interest on investment securities:
       Taxable interest income                                                          3,668,297            3,930,681
       Exempt from federal income taxes                                                   728,721              356,233
    Interest on federal funds sold                                                         18,267              262,173
                                                                                 ----------------    -----------------

          Total interest income                                                        21,312,902           21,493,264
                                                                                 ----------------    -----------------

INTEREST EXPENSE:
    Interest on deposits                                                                7,613,718            8,708,440
    Interest on Federal Home Loan Bank advances                                         1,461,116            1,535,002
    Interest on federal funds purchased                                                    23,577               64,803
    Interest on securities sold under repurchase agreements                               134,106               99,062
                                                                                 ----------------    -----------------

          Total interest expense                                                        9,232,517           10,407,307
                                                                                 ----------------    -----------------

NET INTEREST INCOME                                                                    12,080,385           11,085,957

PROVISION FOR LOAN LOSSES                                                                 525,000              968,721
                                                                                 ----------------    -----------------

NET INTEREST INCOME AFTER PROVISION
    FOR LOAN LOSSES                                                                    11,555,385           10,117,236
                                                                                 ----------------    -----------------

OTHER INCOME:
    Service charges on deposit accounts                                                 1,249,103            1,250,071
    Income from fiduciary activities                                                       71,832               80,223
    Insurance premiums and commissions                                                     18,975               23,243
    Other real estate income (expense)                                                    (22,090)              10,154
    Amortization of negative goodwill                                                           -              784,181
    Equity in investee losses                                                            (235,964)            (206,836)
    Other                                                                                 986,766              749,158
                                                                                 ----------------    -----------------

          Total other income                                                            2,068,622            2,690,194
                                                                                 ----------------    -----------------







Continued

<PAGE>






              BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF INCOME - CONTINUED
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


                                                                                       2001                 2000
                                                                                 ----------------    -----------------

OTHER EXPENSES:
    Salaries                                                                            4,130,509            4,149,655
    Director fees                                                                         160,410              176,760
    Employee benefits                                                                     669,575              606,747
    Net occupancy expense                                                                 731,539              702,791
    Equipment expense                                                                     889,527              944,172
    FDIC assessment                                                                        39,204               41,448
    Stationery and supplies                                                               219,628              230,778
    Amortization                                                                          107,616              107,616
    Other                                                                               1,975,261            2,237,804
                                                                                 ----------------    -----------------

          Total other expenses                                                          8,923,269            9,197,771
                                                                                 ----------------    -----------------

INCOME BEFORE INCOME TAX EXPENSE                                                        4,700,738            3,609,659

INCOME TAX EXPENSE                                                                      1,452,956              918,967
                                                                                 ----------------    -----------------

NET INCOME                                                                       $      3,247,782           $2,690,692
                                                                                 ================    =================

EARNINGS PER SHARE DATA:
    Basic earnings per share                                                     $           1.54    $            1.29
                                                                                 ================    =================

    Diluted earnings per share                                                   $           1.54    $            1.28
                                                                                 ================    ===========-=====



See accompanying notes to the consolidated financial statements.

</TABLE>

<PAGE>


<TABLE>
<CAPTION>




              BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


                                                                                       Additional
                                                       Common Stock                      Paid-In           Retained
                                            ------------------------------------
                                                  Shares             Amount              Capital           Earnings
                                            ----------------    ----------------    ---------------     --------------

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

         Total comprehensive income                        -                   -                  -          2,690,692
                                            ----------------    ----------------    ---------------     --------------

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

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

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

BALANCE, December 31, 2000                         2,101,534           5,290,085          7,156,245         13,412,231
   Comprehensive income:
     Net income                                            -                   -                  -          3,247,782
     Other comprehensive income
       (net of tax):
         Net change in unrealized
         gain on securities available
         for sale, net of taxes
         of  $442,054                                      -                   -                  -                  -
                                            ----------------    ----------------    ---------------     --------------

       Total comprehensive income                          -                   -                  -          3,247,782
                                            ----------------    ----------------    ---------------     --------------

Stock options exercised                                7,521              18,803             33,318                  -

Cash dividends declared
   ($.61 per share)                                        -                   -                  -         (1,286,524)
                                            ----------------    ----------------    ---------------     --------------

BALANCE, December 31, 2001                         2,109,055    $      5,308,888    $     7,189,563     $   15,373,489
                                            ================    ================    ===============     ==============





See accompanying notes to the consolidated financial statements.


<PAGE>
</TABLE>




<TABLE>
<CAPTION>






               Accumulated
                  Other
              Comprehensive          Treasury
                 Income                Stock                 Total
           ----------------      ----------------      ----------------
          <C>                   <C>                   <C>
           $       (248,411)     $              -      $     23,877,998

                          -                     -             2,690,692





                    170,846                     -               170,846
           ----------------      ----------------      ----------------

                    170,846                     -             2,861,538
           ----------------      ----------------      ----------------

                          -                     -               198,439

                          -              (257,375)             (257,375)


                          -                     -            (1,156,979)
           ----------------      ----------------      ----------------

                    (77,565)             (257,375)           25,523,621

                          -                     -             3,247,782





                    754,140                     -               754,140
           ----------------      ----------------      ----------------

                    754,140                     -             4,001,922
           ----------------      ----------------      ----------------

                          -                     -                52,121

                          -                     -            (1,286,524)
           ----------------      ----------------      ----------------

           $        676,575      $       (257,375)     $     28,291,140
           ================      =================     ================









<PAGE>
</TABLE>


<TABLE>
<CAPTION>



              BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


                                                                                        2001                2000
                                                                                   ---------------     ---------------

<S>                                                                               <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                                     $     3,247,782     $     2,690,692
    Adjustments to reconcile net income to
       net cash provided by operating activities:
          Deferred taxes                                                                  (148,331)           (417,600)
          Provision for loan losses                                                        525,000             968,721
          Provision for depreciation                                                       760,717             724,194
          (Gain) loss  on sale of investments available-for-sale                          (129,287)              2,940
          Gain on sale of mortgage loans                                                  (308,010)            (40,098)
          Loss on sale of premises and equipment                                             9,808                   -
          Gain on sale of other real estate                                                 (4,105)            (41,379)
          Stock dividends received                                                         (82,100)           (143,600)
          Amortization (accretion) of investment security
              premiums (discounts), net                                                     71,448            (130,499)
          Amortization of valuation adjustment on acquired loans                            10,305              21,060
          Amortization of negative goodwill                                                      -            (784,181)
          Amortization of acquisition premium                                              107,616             107,616
          Equity in investee losses                                                        235,964             206,836
          Write-down of other real estate                                                   14,856               9,038
    (Increase) decrease in accrued interest receivable                                     204,572            (616,150)
    Increase in cash surrender value of life insurance                                     (48,061)            (49,199)
    (Increase) decrease in other assets                                                    180,035            (595,631)
    Increase (decrease) in accrued interest payable                                       (567,430)            995,508
    Increase (decrease) in accrued taxes and other liabilities                             (70,787)             22,550
                                                                                   ----------------    ---------------

              Net cash provided by operating activities                                  4,009,992           2,930,818
                                                                                   ---------------     ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    (Increase) decrease in federal funds sold                                           (1,050,000)          7,575,000
    Proceeds from sales and maturities of investment
       securities held-to-maturity                                                       2,175,000                   -
    Proceeds from sales and maturities of investment
       securities available-for-sale                                                     6,497,432             247,060
    Proceeds from principal paydowns of investment
       securities held-to-maturity                                                               -           5,248,612
    Proceeds from principal paydowns of investment
       securities available-for-sale                                                    11,423,926             306,598
    Redemption of securities                                                                     -             103,900


Continued

<PAGE>






              BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


                                                                                           2001              2000
                                                                                   ---------------     ---------------

    Purchases of investment securities held-to-maturity                                (25,905,655)        (12,904,411)
    Purchases of investment securities available-for-sale                              (11,072,943)                  -
    Investment in equity securities                                                              -            (250,000)
    Purchase of other equity securities                                                   (859,450)           (476,500)
    Increase in loans                                                                  (12,786,044)        (24,314,030)
    Proceeds from sale of loans                                                          9,783,213           6,644,109
    Proceeds from sale of other real estate                                                175,028             234,746
    Proceeds from sale of premises and equipment                                            22,395                   -
    Purchases of premises and equipment                                                   (892,206)           (854,290)
                                                                                   ---------------     ---------------

              Net cash used in investing activities                                    (22,489,304)        (18,439,206)
                                                                                   ----------------    ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net increase (decrease) in demand deposits                                           9,414,584          (1,272,046)
    Net increase (decrease) in time deposits                                            (3,057,260)         14,241,042
    Net increase in Federal Home Loan Bank advances                                     19,825,000           2,325,000
    Net increase in securities sold under
       repurchase agreements                                                               258,017           1,357,555
    Increase (decrease) in advances from borrowers
       for taxes and insurance                                                            (126,268)              6,926
    Cash dividends paid                                                                 (1,286,524)         (1,156,979)
    Cash paid for treasury stock                                                                 -            (257,375)
    Cash received from stock options exercised                                              52,121             198,439
                                                                                   ---------------     ---------------

              Net cash provided by financing activities                                 25,079,670          15,442,562
                                                                                   ---------------     ---------------

NET INCREASE (DECREASE) IN CASH AND
    DUE FROM BANKS                                                                       6,600,358             (65,826)

CASH AND DUE FROM BANKS AT
    BEGINNING OF YEAR                                                                    7,958,878           8,024,704
                                                                                   ---------------     ---------------

CASH AND DUE FROM BANKS AT
    END OF YEAR                                                                    $    14,559,236     $     7,958,878
                                                                                   ===============     ===============







Continued


<PAGE>






              BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


                                                                                           2001              2000
                                                                                   ---------------     ---------------

SCHEDULE OF NONCASH INVESTING AND
    FINANCING ACTIVITIES:
       Transfer of loans foreclosed to other real estate                           $       938,987     $       574,552
                                                                                   ===============     ===============

       Total decrease in unrealized losses
          on securities available-for-sale                                         $     1,196,194     $       267,769
                                                                                   ===============     ===============

       Total increase in deferred income taxes
          on the change in unrealized losses on
          securities available-for-sale                                            $      (442,054)    $       (96,923)
                                                                                   ================    ===============


       Securitized loans transferred to investments                                $     3,795,070     $             -
                                                                                   ===============     ===============

       Reclassification of held-to-maturity
          securities to available-for-sale securities                              $    50,648,250     $             -
                                                                                   ===============     ===============







See accompanying notes to the consolidated financial statements.

</TABLE>
<PAGE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000


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 subsidiaries, Britton & Koontz First National Bank
               ("the Bank") and B & K Title Insurance Agency, Inc. 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.

               During 2001, the Company formed and began operating the
               wholly-owned subsidiary B & K Title Insurance Agency, Inc.

               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 in the near term. However
               the amount of the change that is reasonably possible cannot be
               estimated.
Continued

<PAGE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


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 include 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 SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE A.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

               Securitized loans are transferred to a long-term investment
               category at the lower of cost or market value on the transfer
               date. Any material difference between the carrying amount of the
               loans and their outstanding principal balance is recognized as an
               adjustment to yield by the interest method.

               Loans Held-for-Sale

               Loans held-for-sale are primarily thirty-year and fifteen-year
               fixed-rate, one-to-four family real estate loans which are valued
               at the lower of cost or market, as determined by outstanding
               commitments from investors or current investor yield
               requirements, calculated on an individual basis. These loans are
               originated with the intent of selling them on the secondary
               market.

               Unrealized losses on loans held-for-sale are charged against
               income in the period of decline. Such declines are recorded in a
               valuation allowance account and deducted from the cost basis of
               the loans. Gains on loans held-for-sale are recognized when
               realized.

               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
Continued

<PAGE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE A.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

               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.

               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.

Continued

<PAGE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE A.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

               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.

               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>


                                                                       Income             Shares           Per Share
                                                                     (Numerator)      (Denominator)         Amount
                                                                     -----------     -------------       ------------
<S>                                                              <C>                 <C>                 <C>
         Year ended December 31, 2001: Basic earnings per share:
                     Income available to common
                         shareholders                             $     3,247,783         2,108,973       $     1.54
                                                                                                          ===========
                  Diluted earnings per share:
                     Options                                                    -               851
                                                                  ---------------    --------------

                  Income available to common
                     shareholders assuming conversion             $     3,247,783         2,109,824       $     1.54
                                                                  ===============    ==============       ===========

         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
                                                                  ===============    ==============       ===========


               Earnings Per Share (Continued)

               The Company has granted options to purchase various amounts of
               the Company's common stock at various prices ranging from $11.39
               to $19.94 per share. 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.




Continued
</TABLE>

<PAGE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


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 $1,483,096 and $1,313,466 in
               2001 and 2000, respectively. Interest paid on deposit liabilities
               and other borrowings was $9,799,947 and $9,411,799 in 2001 and
               2000, in that order.

               Recent Accounting Pronouncements

               In June 2001, the Financial Accounting Standards Board (FASB)
               issued SFAS 141, Business Combinations, SFAS 142, Goodwill and
               Other Intangible Assets, and SFAS 143, Accounting for Asset
               Retirement Obligations. SFAS 141 addresses financial accounting
               and reporting for business combinations and superseded Accounting
               Principles Board (APB) Opinion No. 16, Business Combinations.
               SFAS 141 eliminated the use of the pooling method of accounting
               for a business combination in favor of the purchase method. This
               statement is effective for all business combinations initiated
               after June 30, 2001.

               SFAS 142 addresses financial accounting and reporting for
               acquired goodwill and other intangible assets and superseded APB
               Opinion No. 17, Intangible Assets. It addresses how intangible
               assets that are acquired individually or with a group of other
               assets (but not those acquired in a business combination) should
               be accounted for in financial statements upon their acquisition.
               This statement also addresses how goodwill and other intangible
               assets should be accounted for after they have been initially
               recognized in the financial statements. This statement is
               effective for fiscal years beginning after December 15, 2001.

               SFAS 143 addresses financial and reporting for obligations
               associated with the retirement of tangible long-lived assets and
               the associated retirement costs. This statement is effective for
               fiscal years beginning after June 15, 2002.

               The effects of these statements are not expected to have a
               material effect on the consolidated financial statements.
Continued

<PAGE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE A.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

               In August 2001, the FASB issued SFAS 144, Accounting for the
               Impairment or Disposal of Long-Lived Assets. SFAS 144 supersedes
               SFAS 121, Accounting for the Impairment of Long-Lived Assets and
               for Long-Lived Assets to be Disposed Of. This standard
               establishes a single accounting model for long-lived assets to be
               disposed of based on the framework established in SFAS 121. This
               Statement is effective for all fiscal years beginning after
               December 15, 2001. The effects of this statement are not expected
               to have a material effect on the consolidated financial
               statement.

               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 2001 and 2000 were $181,593 and
               $180,324, respectively.

               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
               was 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 unless
               material.

               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.

Continued

<PAGE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE A.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

               Acquisition Premium

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

               Reclassifications

               Certain 2000 amounts have been reclassified to conform with the
2001 presentation.


<TABLE>
<CAPTION>

NOTE B.        INVESTMENT SECURITIES

               The amortized cost and approximate market value of investment
               securities classified as held-to-maturity at December 31, 2001,
               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 subdivisions           $     27,967,610    $    233,456   $    (333,391)   $    27,867,675
                                                   ================    ============   ==============   ===============


               The amortized cost and
               approximate market value
               of investment securities
               classified as available-
               for-sale at December 31, 2001,
               are summarized as follows:

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

               Obligations of other U.S.
                  government agencies
                  and corporations                 $     42,330,355    $  1,144,737   $     (50,527)   $    43,424,565
               Privately issued collateralized
                  mortgage obligations                    6,137,974           2,576         (95,840)         6,044,710
               Corporate securities                       5,122,544          85,041         (10,985)         5,196,600
                                                   ----------------    ------------   --------------   ---------------

                                                   $     53,590,873    $  1,232,354   $    (157,352)   $    54,665,875
                                                   ================    ============   =============    ===============

Continued

<PAGE>
</TABLE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE B.        INVESTMENT SECURITIES - CONTINUED

               In 2001, debt securities with an amortized cost of $50,648,250
               were transferred from held-to-maturity to available-for-sale
               because of the reclassification opportunity allowed for in SFAS
               133. The securities had an unrealized gain of $653,280.

               The amortized cost and approximate market value of 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 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
</TABLE>

<PAGE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


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 $809,300 and $620,100 of
               additional stock in the Federal Home Loan Bank and no additional
               stock in the Federal Reserve Bank or First National Bankers Bank
               during 2001 and 2000, respectively. The Bank subsequently
               redeemed $0 and $103,900 of stock in the Federal Home Loan Bank
               during 2001 and 2000, 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 36.62%
               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 $644,357  and  $578,870  during
               2001 and 2000,  respectively.  The Company's proportionate  share
               of these  losses was  $235,964 and  $206,836,  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 an annual fee of $90,000.

               Investment securities carried at approximately $57,163,000
               (approximate market value $58,046,000) at December 31, 2001, and
               approximately $40,942,000 (approximate market value $40,957,000)
               at December 31, 2000, were pledged to collateralize public
               deposits and for other purposes as required or permitted by law
               or agreement.









Continued

<PAGE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE B.        INVESTMENT SECURITIES - CONTINUED

               The amortized cost and approximate market value of investment
               debt securities at December 31, 2001, 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 held-to-maturity
                                                                                   -----------------------------------
                                                                                                         Approximate
                                                                                      Amortized            Market
                                                                                        Cost                Value
                                                                                   ---------------     ---------------

<S>                                                                                <C>                 <C>
               Due in one year or less                                             $             -     $             -
               Due after one year through five years                                       334,908             346,923
               Due after five years through ten years                                    2,950,930           2,994,210
               Due after ten years                                                      24,681,772          24,526,542
                                                                                   ---------------     ---------------

                                                                                   $    27,967,610     $    27,867,675
                                                                                   ===============     ===============

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

               Due in one year or less                                             $        81,427     $        81,731
               Due after one year through five years                                    10,231,178          10,225,995
               Due after five years through ten years                                    6,758,602           6,940,634
               Due after ten years                                                      36,519,666          37,417,515
                                                                                   ---------------     ---------------

                                                                                   $    53,590,873     $    54,665,875
                                                                                   ===============     ===============

         During 2001, the Company had total unrealized holding gains on
         securities classified as available-for-sale of $1,325,481. Upon
         disposition of an underlying security, the Company reclassified
         $129,287 of these gains from other comprehensive income to a realized
         gain included in net income.







Continued

<PAGE>
</TABLE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>


NOTE C.        LOANS

               The Bank's loan portfolio at December 31, 2001 and 2000, consists
of the following:

                                                                                       2001                 2000
                                                                                 ----------------    -----------------
<S>                                                                              <C>                 <C>
               Commercial, financial and agricultural                            $     35,886,000    $      33,102,000
               Real estate-construction                                                 9,890,000           10,883,000
               Real estate-mortgage                                                   121,296,000          123,192,000
               Installment                                                             17,962,000           19,513,000
               Overdrafts                                                                 117,000              218,000
                                                                                 ----------------    -----------------

               Total loans                                                       $    185,151,000    $     186,908,000
                                                                                 ================    =================

</TABLE>

               Loans on which accrual of interest has been discontinued or
               reduced amount to approximately $1,285,000 and $1,079,000 at
               December 31, 2001 and 2000, respectively. If interest on such
               loans had been accrued, the income would have approximated
               $167,000 and $78,000 in 2001 and 2000, respectively. At December
               31, 2001, the recorded investment in loans that were considered
               to be impaired was $389,726, primarily all of which were on a
               nonaccrual basis. There was approximately $76,000 in the
               allowance for loan losses specifically allocated to $389,726 of
               impaired loans. The average recorded investment in impaired loans
               for the year ended December 31, 2001 was approximately $138,797.
               No material amount of interest income was recognized on impaired
               loans for the year then ended.

               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 $3,407,502 and $2,616,613 at
               December 31, 2001 and 2000, 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.
<TABLE>
<CAPTION>

               Changes in these loans are as follows:
                                                                                       2001                 2000
                                                                                 ----------------    -----------------

<S>                               <C>                                            <C>                 <C>
               Balance at January 1                                              $      2,616,613    $       3,601,540
               New loans                                                                2,842,375            1,766,532
               Repayments                                                              (2,051,486)          (2,751,459)
                                                                                 -----------------          ----------

               Balance at December 31                                            $      3,407,502    $       2,616,613
                                                                                 ================    =================

Continued

<PAGE>
</TABLE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE D.        ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>

               Changes in the allowance for loan losses are as follows:

                                                                                           2001              2000
                                                                                     --------------     --------------

<S>                               <C>                                                <C>                <C>
               Balance at January 1                                                  $    1,883,561     $    1,150,249
                                                                                     --------------     --------------

                  Credits charged off                                                      (396,998)          (337,393)
                  Recoveries                                                                 96,684            101,984
                                                                                     --------------     --------------
                  Net credits charged off                                                  (300,314)          (235,409)
                                                                                     --------------     --------------

                  Provision for loan losses                                                 525,000            968,721
                                                                                     --------------     --------------

               Balance at December 31                                                $    2,108,247         $1,883,561
                                                                                     ==============         ==========
</TABLE>

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 approximately
               $7,659,000 and $10,663,000 in 2001 and 2000, respectively.

NOTE F.        BANK PREMISES AND EQUIPMENT
<TABLE>
<CAPTION>

               A summary of Bank premises and equipment is as follows:

                                                                                           2001              2000
                                                                                     --------------     --------------

<S>                                                                                  <C>                <C>
               Land                                                                  $    1,257,747     $    1,257,875
               Buildings                                                                  5,673,606          5,632,482
               Furniture and equipment                                                    5,150,784          5,439,078
               Leasehold improvements                                                       102,251            102,251
                                                                                     --------------     --------------
                                                                                         12,184,388         12,431,686
               Less accumulated depreciation                                              5,013,434          5,360,018
                                                                                     --------------     --------------

               Bank premises and equipment, net                                      $    7,170,954     $    7,071,668
                                                                                     ==============     ==============







Continued

<PAGE>
</TABLE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


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
<TABLE>
<CAPTION>

               Maturities of certificates of deposit of $100,000 or more
               outstanding at December 31, 2001 and 2000, are summarized as
               follows:

                                                                                        2001                2000
                                                                                   ---------------     ---------------

               Time remaining until maturity:
<S>                                                                                <C>                 <C>
                  Three months or less                                             $    22,743,964     $    14,555,130
                  Over three through six months                                         11,649,111           6,485,698
                  Over six through twelve months                                         5,969,317           2,826,715
                  Over twelve months                                                     7,227,437          16,061,156
                                                                                   --------------------     ----------

                                                                                   $    47,589,829     $    39,928,699
                                                                                   ===============     ===============


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

                                    2002                       $    92,056,000
                                    2003                            15,999,000
                                    2004                             7,528,000
                                    2005                             1,538,000
                                    2006                             1,531,000
                                    Thereafter                          25,000
                                                               ---------------
                                                               $   118,677,000










Continued

<PAGE>
</TABLE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000
<TABLE>
<CAPTION>


NOTE H.        DEPOSITS - CONTINUED

               Deposits at December 31, 2001 and 2000, consisted of the
following:

                                                                                       2001                 2000
                                                                                 ----------------    -----------------

<S>                                                                              <C>                 <C>
               Non-interest bearing demand deposits                              $     33,165,781    $      33,580,417
               NOW accounts                                                            29,375,838           28,771,291
               Money market deposit accounts                                           18,352,807           11,220,083
               Savings accounts                                                        18,108,845           16,016,895
               Certificates of deposit                                                118,676,585          121,733,846
                                                                                 ----------------    -----------------

                                                                                 $    217,679,856    $     211,322,532
                                                                                 ================    =================
</TABLE>

NOTE I.        FEDERAL HOME LOAN BANK ADVANCES

               During 2001 and 2000, the Bank received advances from and
               remitted payments to the Federal Home Loan Bank. These advances
               are collateralized by a portion of the Bank's one-to-four family
               residential mortgage portfolio and certain secured commercial
               loans in accordance with the Advance Security and Collateral
               Agreement with the Federal Home Loan Bank. These advances consist
               of:

                  Eight fixed-rate term loans with the Federal Home Loan Bank.
                  The loans range from $2,380,000 to $8,000,000, totaling
                  $37,000,000, with interest rates ranging from 4.729% to
                  5.348%. These loans mature from February 27, 2002 to December
                  19, 2005.

                  Two amortizable fixed-rate loans with the Federal Home Loan
                  Bank. The loans are for $5,000,000 each with interest rates
                  ranging of 3.967% and 4.177%. These loans mature on January 2,
                  2007.

                  On December 29, 2000, the Bank received a $26,175,000 advance,
                  which remained outstanding at December 31, 2000. This advance
                  accrued interest at an annual rate of 6.85% and matured on
                  January 2, 2001.

               In addition, the Bank also had two term loans with the Federal
               Home Loan Bank. The loans were for $500,000 each with interest
               rates ranging of 5.89% and 5.93%. These loans matured on June 26
               and December 10, 2001, respectively.





Continued

<PAGE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


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 Bank with one year of service and of age 21 are covered
               under this plan and fully vested in their benefits after seven
               years service. 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 $34,800 and $34,614 in 2001 and 2000, respectively.
               This plan owned 241,970 and 228,570 shares of Britton & Koontz
               Capital Corporation stock, as of December 31, 2001 and 2000, at
               an overall cost to the plan of $6.24 and $5.82 per share,
               respectively.

               Employees with one year of service and are of age 21 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,(as adjusted for
               cost of living). 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 $162,486 and $128,355 for the years
               ended December 31, 2001 and 2000, respectively.

               During 1996, the Company adopted a long-term incentive plan in
               which all employees of the Company and its subsidiaries 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 SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>



NOTE J.        EMPLOYEE BENEFIT PLANS - CONTINUED

               non-employee directors appointed by the full Board of Directors.
               Since adoption, the Company has granted options to purchase a
               total of 97,124 shares. All options expire 10 years from the date
               of grant. Options to acquire 21,567 and 22,818 shares were
               exercisable as of December 31, 2001 and 2000, respectively. The
               summary of stock option activity is shown below:

                                                                                                          Weighted
                                                                                   Options                 Average
                                                                                 Outstanding            Exercise Price
                                                                                -------------         -----------------

<S>                                                                               <C>               <C>
               December 31, 1999                                                      77,124            $    12.61
               Options granted                                                             -            $     0.00
               Options exercised                                                     (27,361)           $     7.25
                                                                                      ------            ----------

               December 31, 2000                                                      49,763            $    15.54
               Options granted                                                        20,000            $    13.49
               Options exercised                                                      (7,521)           $     6.93
               Options forfeited                                                      (4,533)           $     7.76
                                                                                  ----------            ----------

               December 31, 2001                                                      57,709            $    16.56
                                                                                  ==========            ==========

               The following table summarizes information about stock options
outstanding at December 31, 2001:

               Exercise Price   Options Outstanding   Remaining Contractual Life

                 $  19.94              30,000                 5.9  years
                 $  11.39               7,709                 7.3  years
                 $  13.49              20,000                 9.5  years












Continued

<PAGE>
</TABLE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


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>

                                                                                       2001                  2000
                                                                                 ---------------        --------------

<S>                                                                              <C>                    <C>
               Net income, as reported                                           $     3,247,782        $    2,690,692
               Pro forma net income                                              $     3,218,823        $    2,612,880
               Basic earnings per share, as reported                             $          1.54        $         1.29
               Pro forma basic earnings per share                                $          1.53        $         1.26
               Diluted earnings per share, as reported                           $          1.54        $         1.28
               Pro forma diluted earnings per share                              $          1.53        $         1.24

</TABLE>




               In adopting SFAS No. 123, the Company utilized the Black-Scholes
               Option Pricing Model to estimate the fair value of stock options
               granted. For options granted during 2001, the following weighted
               average assumptions were used:


                           Expected dividend yield                  4.25%
                           Expected option life                     7.25 years
                           Expected volatility                     27.06%
                           Risk-free interest rates                 5.36%


               Based on the results of the model, the fair value of the stock
               options issued during 2001, averaged $3.08 per share for the
               options to acquire 20,000 shares granted.




Continued


<PAGE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


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, 2001
               and 2000, respectively, include $39,067 and $35,840 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
               $25,000 per person per year with a total annual maximum based on
               the number of covered employees ($329,028 and $297,392 at
               December 31, 2001 and 2000, 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 $70,645 and $67,223 in 2001 and
               2000, respectively.

               Future obligations for these leases at December 31, 2001 are as
follows:

                                    2002                         $      64,425
                                    2003                         $      29,925
                                    2004                         $      29,925
                                    2005                         $      29,925
                                    2006                         $      19,950
Continued

<PAGE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000



NOTE L.        INCOME TAX PROVISION

               The provision for income taxes included in the consolidated
               statements of income is as follows:
<TABLE>
<CAPTION>
<S>                                                                                  <C>                <C>
                                                                                          2001             2000
                                                                                     --------------     ------------

               Current                                                               $  1,601,287       $  1,336,567
               Deferred                                                                  (148,331)          (417,600)
                                                                                     --------------     ------------
                                                                                     $  1,452,956       $    918,967
                                                                                     ==============     ============
</TABLE>

               Accrued income taxes payable of $0 in 2001 and $30,140 in 2000
               are included in accrued taxes and other liabilities.

               Net deferred tax liabilities of $537,508 in 2001 and $243,785 in
               2000 are included in accrued taxes and other liabilities. Amounts
               comprising deferred tax assets and liabilities are as follows:
<TABLE>
<CAPTION>

                                                                                           2001              2000
                                                                                     --------------     --------------
               Deferred tax liability:
<S>                                                                                  <C>                <C>
                  Unrealized gain on available-for-sale securities                   $      398,427     $            -
                  Insurance                                                                  82,979             69,363
                  Discount accretion                                                              -              5,392
                  Depreciation                                                              687,429            674,042
                  Federal Home Loan Bank dividends                                          220,093            189,469
                  Purchase accounting adjustment amortization                                 7,479             12,764
                  Self-insured medical plan                                                       -              9,681
                  Accrual to cash conversion                                                 32,532                  -
                                                                                     --------------     --------------
               Total gross deferred tax liability                                    $    1,428,939     $      960,711
                                                                                     ==============     ==============

               Deferred tax asset:
                  Provision for loan losses                                          $      357,538     $      161,713
                  Unrealized loss on available-for-sale securities                                -             43,627
                  Deferred compensation                                                      83,909             69,337
                  Investee losses                                                           257,807            169,793
                  Other real estate                                                          74,693             76,607
                  Net operating loss                                                         65,732            144,097
                  Acquisition expenses                                                       51,752             51,752
                                                                                     --------------     --------------
               Total gross deferred tax asset, net
                  of valuation allowance of $-0-                                     $      891,431     $      716,926
                                                                                     ==============     ==============





Continued

<PAGE>
</TABLE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE L.        INCOME TAX PROVISION - CONTINUED


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

                                                                                           2001              2000
                                                                                     --------------     --------------

<S>                                                                                  <C>                <C>
               Discount accretion                                                    $       (5,392)    $        4,207
               Depreciation                                                                  13,387             52,944
               Federal Home Loan Bank dividends                                              30,624             37,392
               Provision for loan losses                                                   (195,825)          (330,354)
               Amortization of purchase accounting adjustments                               (5,285)            (7,967)
               Insurance                                                                     13,616             12,215
               Deferred compensation                                                        (14,572)           (13,368)
               Self-insured medical plan                                                     (9,681)                 -
               Unrealized gain or loss on available-for-sale securities                     442,054             96,923
               Investee losses                                                              (88,014)           (80,824)
               Accrual to cash conversion                                                    32,532            (44,915)
               Other real estate                                                              1,914             (9,851)
               Net operating loss                                                            78,365             14,673
               Acquisition expenses                                                               -            (51,752)
                                                                                     --------------     --------------
                                                                                     $      293,723     $     (320,677)
                                                                                     ==============     ==============

</TABLE>

               The provision for federal income taxes is less than that computed
               by applying the federal statutory rate of 34% in 2001 and 2000,
               as indicated in the following analysis:


<TABLE>
<CAPTION>

                                                                                           2001              2000
                                                                                     --------------     --------------

<S>                                                                                  <C>                <C>
               Tax based on statutory rate                                           $    1,598,251     $    1,227,284
               State taxes                                                                  158,786            143,153
               Effect of tax-exempt income                                                 (231,600)          (110,798)
               Amortization of negative goodwill                                                  -           (266,622)
               Other                                                                        (72,481)           (74,050)
                                                                                     --------------     --------------
                                                                                     $    1,452,956     $      918,967
                                                                                     ==============     ==============

</TABLE>


               The income tax provision includes approximately $48,000 and $0 in
               2001 and 2000 resulting from securities transactions.

               For federal income tax purposes, the bank has approximately
               $180,000 of net operating loss carryforwards available at
               December 31, 2001. These carryforwards were acquired in a recent
               merger and expire in 2006. Due to the merger of Louisiana Bank &
               Trust into Britton & Koontz First National Bank during 2000, the
               Company is limited on its annual utilization of this loss.
Continued

<PAGE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE M.        SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

               At December 31, 2001 and 2000, 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 2.25%
               to 4.50% and maturity dates ranging from 2009 to 2029. The
               maximum amount of outstanding agreements at any month-end was
               $3,098,017 and $3,368,190 during 2001 and 2000, respectively. The
               monthly average amount of outstanding agreements was $2,911,085
               and $1,901,530 during 2001 and 2000, respectively. At December
               31, 2001, the securities underlying the repurchase agreements had
               an approximate amortized cost of $5,747,000 and an approximate
               market value of $5,780,000.

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, 2001, approximately
               $4,220,820 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 SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


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 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, 2001, 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>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000
<TABLE>
<CAPTION>


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)

As of December 31, 2001
-----------------------
<S>                              <C>                 <C>        <C>              <C>        <C>              <C>
Total Capital (to Risk-
    Weighted Assets)             $     26,235        13.75%     $   15,261        8.00%      $   19,075       10.00%
Tier I Capital (to Risk-
    Weighted Assets)             $     24,127        12.65%     $    7,630        4.00%      $   11,445        6.00%
Tier I Capital (to Average
    Assets)                      $     24,127         8.81%     $   10,951        4.00%      $   13,689        5.00%

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%






</TABLE>













Continued

<PAGE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


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:

                                                     2001             2000
                                                --------------   --------------

               Commitments to extend credit    $    37,531,926   $   35,848,104
                                               ===============   ==============

               Commercial letters of credit    $     1,371,568   $      864,795
                                               ===============   ==============

               The Bank is required to maintain average reserves at the Federal
               Reserve Bank. This requirement approximated $463,000 at December
               31, 2001. The Bank is in compliance with this requirement.

               At December 31, 2001, the Bank had committed to sell
               approximately $5,416,000 of loans originated near year-end. These
               loans are classified as loans held-for-sale and are carried at
               the lower of cost or market. Due to the short period from
               origination, the cost and market value of these loans are
               approximately the same.




Continued

<PAGE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


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 subsidiary, Britton &
               Koontz First National Bank, paid dividends to the Capital
               Corporation amounting to $1,550,000, $1,550,000 and $1,400,000
               for the years 2001, 2000, and 1999, 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. In
               accordance with the provisions of the instruments, these interest
               rate swaps were called during 2001. The interest differentials
               received from this agreement and recorded in current operations
               was $24,562 during 2001.






Continued

<PAGE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE R.        INTEREST RATE RISK MANAGEMENT - CONTINUED

               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, 2001, the original cost of the cap of $94,000 had been
               amortized into interest expense to a balance of $31,333.

NOTE S.        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 are based on the
               assumption that the Companies were combined for the full year.



















Continued

<PAGE>







BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000

NOTE S.        BUSINESS COMBINATION-CONTINUED

               Summarized results of operations of the separate companies for
               period from January 1, 2000, through December 1, 2000, the date
               of the merger are as follows:
<TABLE>
<CAPTION>

                                                                                             January 1 through
                                                                                             December 31, 2000
                                                                                    ----------------------------------
                                                                                        Britton &          Louisiana
                                                                                         Koontz           Bancshares
<S>                                                                                 <C>                 <C>
               Interest income                                                      $    15,904,633     $    3,229,763
               Interest expense                                                          (7,938,354)        (1,540,905)
                                                                                    ---------------         ----------
                 Net interest income                                                      7,966,279          1,688,858
               Provision for loan losses                                                   (310,000)           (11,000)
                                                                                    ---------------     --------------
                 Net income after
                   provision for
                   loan losses                                                            7,656,279          1,677,858
               Non-interest income                                                        2,341,081            128,905
               Non-interest expense                                                      (6,607,675)        (1,526,372)
                                                                                    ---------------     --------------
                 Net income before
                   income tax expense                                                     3,389,685            280,391
               Income tax expense                                                        (1,150,650)          (150,000)
                                                                                    ---------------     --------------

               Net income                                                           $     2,239,035     $      130,391
                                                                                    ===============     ==============
</TABLE>

               The summarized assets and liabilities of the separate companies
               as of December 1, 2000, (the date of acquisition) were as
               follows:
<TABLE>
<CAPTION>


                                                                                             December 1, 2000
                                                                                    ----------------------------------
                                                                                        Britton &          Louisiana
                                                                                         Koontz           Bancshares

<S>                                                                                 <C>                <C>
               Cash and due from banks                                              $    12,580,114    $     2,235,243
               Investment securities                                                     60,830,635          6,601,813
               Loans, net                                                               157,184,641         31,592,580
               Bank premises and equipment, net                                           6,407,123            680,777
               Other assets                                                               5,651,331            997,066
                                                                                    ---------------     --------------

               Total assets                                                         $   242,653,844    $    42,107,479
                                                                                    ===============    ===============

               Deposits                                                             $   185,430,406    $    36,360,862
               Federal Home Loan Bank advances                                           26,850,000          1,500,000
               Other liabilities                                                          9,166,314            386,928
                                                                                    ---------------    ---------------
                   Total liabilities                                                    221,446,720         38,247,790
               Equity                                                                    21,207,124          3,859,689
                                                                                    ---------------    ---------------
               Total liabilities
                 and equity                                                         $   242,653,844    $    42,107,479
                                                                                    ===============    ===============
Continued

<PAGE>


</TABLE>




BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE T.        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 SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE T.        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 SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE T.        FAIR VALUE OF FINANCIAL INSTRUMENTS - CONTINUED

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

                                                                                                 2001
                                                                                 -------------------------------------
                                                                                     Carrying               Fair
                                                                                      Amount                Value
                                                                                 ----------------    -----------------

               Financial assets:
<S>                                                                              <C>                 <C>
                  Cash and due from banks                                        $     14,559,000    $      14,559,000
                  Federal funds sold                                             $      1,050,000    $       1,050,000
                  Investment securities:
                     Held-to-maturity                                            $     27,968,000    $      27,868,000
                     Available-for-sale                                          $     54,666,000    $      54,666,000
                     Equity securities                                           $      3,723,000    $       3,723,000
                  Cash surrender value of life insurance                         $        856,390    $         856,390
                  Loans, net                                                     $    183,019,000    $     186,348,000

               Financial liabilities:
                  Deposits                                                       $    217,680,000    $     219,245,000
                  Federal Home Loan Bank advances                                $     47,000,000    $      47,000,000
                  Securities sold under repurchase agreements                    $      3,098,000    $       3,098,000

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

               Other:
                  Commitments to extend credit                                   $     37,532,000    $      37,532,000
                  Commercial letters of credit                                   $      1,372,000    $       1,372,000
                  Interest rate caps                                             $              -    $               -













Continued

<PAGE>
</TABLE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE T.        FAIR VALUE OF FINANCIAL INSTRUMENTS - CONTINUED
<TABLE>
<CAPTION>

                                                                                                 2000
                                                                                 -------------------------------------
                                                                                     Carrying               Fair
                                                                                      Amount                Value
                                                                                 ----------------    -----------------

               Financial assets:
<S>                                                                              <C>                 <C>
                  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, net                                                     $    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>
</TABLE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000
<TABLE>
<CAPTION>

NOTE U.        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,
                                                                                       2001                 2000
                                                                                 ----------------    ----------------
               ASSETS:
<S>                                                                              <C>                 <C>
                  Cash                                                           $        836,876    $        767,968
                  Investments in:
                     Britton & Koontz First National Bank                              26,115,147          23,491,078
                     B & K Title Insurance Agency                                          20,338                   -
                     Sumx Inc.                                                            558,826             794,790
                  Loans                                                                    59,645                   -
                  Premise and equipment, net                                              195,296             200,420
                  Cash surrender value of life insurance                                  108,926              97,370
                  Other assets                                                            396,086             171,995
                                                                                 ----------------    ----------------

               TOTAL ASSETS                                                      $     28,291,140    $     25,523,621
                                                                                 ================    ================

               STOCKHOLDERS' EQUITY                                              $     28,291,140    $     25,523,621
                                                                                 ================    ================



















Continued

<PAGE>
</TABLE>






BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000
<TABLE>
<CAPTION>

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


                              STATEMENTS OF INCOME

                                                                                   Years Ended December 31,
                                                                                       2001                 2000
                                                                                 ----------------    ----------------
               REVENUE:
<S>                                                                              <C>                 <C>
                  Dividends received:
                     Britton & Koontz First National Bank                        $      1,550,000    $      1,550,000
                  Interest and other income earned                                         12,573              21,700
                                                                                 ----------------    ----------------
                                                                                        1,562,573           1,571,700

               EXPENSES                                                                    54,608             243,889
                                                                                 ----------------    ----------------
                                                                                        1,507,965           1,327,811

               INCOME TAX BENEFIT                                                         (88,014)            (80,824)
                                                                                 ----------------    ----------------
                                                                                        1,595,979           1,408,635

               EQUITY IN UNDISTRIBUTED
                  EARNINGS (LOSSES):
                     Britton & Koontz First National Bank                               1,869,929           1,488,893
                     Sumx Inc.                                                           (235,964)           (206,836)
                     B & K Title Insurance Agency, Inc.                                    17,838                   -
                                                                                 ----------------    ----------------

                            NET INCOME                                           $      3,247,782    $      2,690,692
                                                                                 ================    ================

















Continued

<PAGE>
</TABLE>


BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 2001 AND 2000
<TABLE>
<CAPTION>
NOTE U.        SUMMARIZED FINANCIAL INFORMATION OF BRITTON & KOONTZ CAPITAL CORPORATION - CONTINUED


                            STATEMENTS OF CASH FLOWS
                                                                                  Years Ended December 31,
                                                                                       2001                 2000
                                                                                 ----------------    ----------------

               CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                              <C>                 <C>
                  Net income                                                     $      3,247,782    $      2,690,692
                  Adjustments to reconcile net income to net
                     cash provided by operating activities:
                         Provision for depreciation                                         5,124               5,551
                         Equity on undistributed earnings
                            and losses of affiliates                                   (1,651,803)         (1,282,057)
                  Increase in cash surrender value of life insurance                      (11,556)            (16,451)
                  Increase in other assets                                               (224,091)            (80,827)
                                                                                 ----------------    ----------------

                            Net cash provided by operating activities                   1,365,456           1,316,908
                                                                                 ----------------    ----------------

               CASH FLOWS FROM INVESTING ACTIVITIES:
                  Investment in Sumx Inc.                                                       -            (250,000)
                  Investment in B & K Title Insurance Agency, Inc.                         (2,500)                  -
                  Purchase of premise and equipment                                             -                   -
                  Increase in loans                                                       (59,645)                  -
                                                                                 ----------------    ----------------

                            Net cash used in investing activities                         (62,145)           (250,000)
                                                                                 ----------------    ----------------

               CASH FLOWS FROM FINANCING ACTIVITIES:
                  Cash dividends paid                                                  (1,286,524)         (1,156,979)
                  Cash paid for treasury stock                                                  -            (257,375)
                  Cash received from stock options exercised                               52,121             198,439
                                                                                 ----------------    ----------------

                            Net cash used in financing activities                      (1,234,403)         (1,215,915)
                                                                                 -----------------   ----------------

               NET INCREASE (DECREASE) IN CASH                                             68,908            (149,007)
               CASH AT BEGINNING OF YEAR                                                  767,968             916,975
                                                                                 ----------------    ----------------

               CASH AT END OF YEAR                                               $        836,876    $        767,968
                                                                                 ================    ================

               SCHEDULE OF NONCASH INVESTING AND
                  FINANCING ACTIVITIES:
                     Change in unrealized losses on securities
                         available-for-sale, net of deferred
                         income taxes                                            $        754,140    $         170,846
                                                                                 ================    =================



</TABLE>
<PAGE>



                    Management's Discussion and Analysis of
                  Financial Condition and Results 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 Britton & Koontz Capital Corporation (the "Company") from
2000 through 2001, and to compare the operating  results of the Company for 2001
to operating results in 2000.

     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 a 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
merged  into the Bank,  adding  approximately  $42  million  in  assets  and two
branches in Baton  Rouge,  Louisiana.  On April 17,  2001,  B&K Title  Insurance
Agency,  Inc. was organized under the laws of the State of  Mississippi.  In May
2001,  the Company  acquired 1000 shares of Common Stock of B&K Title  Insurance
Agency,  Inc., which made it the Company's second  wholly-owned  subsidiary.  On
June 1, 2001,  the Company  received  approval  to convert  the loan  production
office in Baton Rouge, Louisiana, to a full service branch.

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. Even
though  total  assets of the  Company  grew from 2000 to 2001 by 10.6% to $298.9
million,  average-earning  assets  decreased  slightly to $255.3  million during
2001, from $256.6 million in 2000.  Average loans, net of unearned  interest and
allowance  for loan  losses,  decreased to $185.0  million in 2001,  compared to
$187.2 million in 2000.  This result was from the Company's  strategy to replace
1-4 family residential loans by sales and  securitizations  with commercial loan
growth in the Baton Rouge,  Louisiana,  market opened up by the  acquisition  of
Louisiana  Bank and Trust in December 2000 and  Vicksburg,  Mississippi,  market
from purchases of Union Planters  branches in 1999.  Loan demand remained strong
during 2001. Excluding sales and securitizations of $13.6 million, average loans
grew 5.6%.  Average  securities  grew  throughout  the year by 6.2%,  from $63.2
million in 2000 to $67.1  million in 2001.  The  following  table  analyses  the
Bank's  average  assets and the funding  sources of those assets during 2000 and
2001.   Dividing  income  or  expense  by  the  average  balance  of  assets  or
liabilities, respectively, derives yields and costs.


<PAGE>
<TABLE>
<CAPTION>

                                                                         Twelve Months Ended December 31,
                                                   ------------------------------------------------------------------------------
                                                                   2001                 ($ in thousands)     2000
                                                   ------------------------------------------------------------------------------
                                                     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)                                         $ 185,012     $ 16,898       9.13%       $ 187,176      $ 16,944      9.05%
Investment securities:
     U.S. Government & other                            54,088        3,645       6.74%          57,106         3,876      6.79%
     State & Municipal                                  13,060          649       4.97%           6,096           312      5.11%
                                                   ------------ ------------                ------------  ------------
     Total investment securities                        67,148        4,294       6.39%          63,202         4,188      6.63%
Interest bearing bank balances                           1,680           60       3.55%             918            54      5.90%
Federal funds sold                                         612           18       2.98%           4,477           262      5.86%
Other (Cash Value Life Insurance)                          836           43       5.17%             790            45      5.64%
                                                   ------------ ------------                ------------  ------------
     Total earning assets                              255,288       21,313       8.35%         256,563        21,493      8.38%
                                                   ------------ ------------                ------------  ------------
Allowance for loan losses                               (2,037)                                  (1,330)
Cash & due from banks, non-interest bearing              7,088                                    6,857
Bank premises & equipment                                7,088                                    7,033
Other assets                                             5,594                                    4,976
                                                   ------------                             ------------
     TOTAL ASSETS                                    $ 273,021                                $ 274,098
                                                   ============                             ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing deposits:
Savings                                               $ 17,046        $ 367       2.15%        $ 16,137         $ 362      2.24%
Interest bearing checking                               34,276          652       1.90%          33,745           954      2.83%
Money rate savings                                      14,938          448       3.00%          11,418           318      2.79%
Certificates of deposit and other time deposits(3)     112,249        6,147       5.48%         124,660         7,074      5.67%
                                                   ------------ ------------                ------------  ------------
     Total interest bearing deposits                   178,509        7,614       4.27%         185,960         8,708      4.68%
Short-term borrowed funds                               14,744          826       5.60%          26,934         1,699      6.31%
Long-term borrowed funds                                16,468          793       4.81%               -             -
                                                   ------------ ------------                ------------  ------------
     Total interest bearing liabilities                209,722        9,233       4.40%         212,894        10,407      4.89%
Non-interest bearing deposits                           31,516                                   30,724
Other liabilities                                        6,337                                    5,339
Shareholders' equity                                    25,446                                   25,142
                                                   ------------ ------------                ------------  ------------
     TOTAL LIABILITIES & SHAREHOLDERS' EQUITY        $ 273,021      $ 9,233       4.40%       $ 274,098      $ 10,407      4.89%
                                                   ============ ============                ============  ============
Interest income and rate earned                                    $ 21,313       8.35%                      $ 21,493      8.38%
Interest expense and rate paid                                        9,233       4.40%                        10,407      4.89%
                                                                ------------                              ------------
                                                                              ----------                               ----------
Interest rate spread                                                              3.95%                                    3.49%
                                                                              ==========                               ==========
NET INTEREST INCOME & NET YIELD
 ON AVERAGE EARNING ASSETS                                         $ 12,080       4.73%                      $ 11,086      4.32%
                                                                ============  ==========                  ============ ==========

(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

     Securities  primarily consist of mortgage-backed,  U.S. government agencies
and municipal securities.  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. Management determines the
classification  of the Bank's  investment  securities at the time the securities
are acquired,  however,  debt  securities  with an amortized cost of $50,648,250
were  transferred from  held-to-maturity  to  available-for-sale  because of the
reclassification   opportunity   allowed   for  in  the  FASB  133.   Securities
held-to-maturity  decreased $26.5 million to $28.0 million at December 31, 2001,
compared to $54.5  million at December 31, 2000.  The bank's  available-for-sale
securities portfolio increased by $48.5 million to $54.7 million at December 31,
2000. Net  unrealized  gains in the Bank's  portfolio  after  tax-effecting  the
available-for-sale securities, amounted to $677 thousand at December 31, 2001.

     The amortized cost and  approximate  market value of the Bank's  investment
securities  classified as  held-to-maturity at December 31, 2001, are summarized
as follows:
<TABLE>
<CAPTION>


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

<S>                                               <C>                  <C>            <C>              <C>
               Obligations of state and
                  political subdivisions           $     27,967,610    $    233,456   $    (333,391)   $    27,867,675
                                                   ================    ============   ==============   ===============

</TABLE>


     The amortized cost and  approximate  market value of the Bank's  investment
securities classified as available-for-sale at December 31, 2001, 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                 $     42,330,355    $  1,144,737   $     (50,527)   $    43,424,565
               Privately issued collateralized
                  mortgage obligations                    6,137,974           2,576         (95,840)         6,044,710
               Corporate securities                       5,122,544          85,041         (10,985)         5,196,600
                                                   ----------------    ------------   --------------   ---------------

                                                   $     53,590,873    $  1,232,354   $    (157,352)   $    54,665,875
                                                   ================    ============   =============    ===============


</TABLE>


     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
                                                   ================    ============   =============    ===============
</TABLE>

<PAGE>

     The amortized cost and  approximate  market value of investment  securities
classified  as  available-for-sale  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                 $      6,336,675    $          -   $    (121,192)   $     6,215,483
                                                   ================    ============   =============    ===============

</TABLE>


     Investment  securities  carried at approximately  $57,163,000  (approximate
market value  $58,046,000) at December 31, 2001, and  approximately  $40,942,000
(approximate  market value  $40,957,000)  at December 31, 2000,  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,  2001,   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 held-to-maturity
                                                                                   -----------------------------------
                                                                                                         Approximate
                                                                                      Amortized            Market
                                                                                        Cost                Value
                                                                                   ---------------     ---------------

<S>                                                                                <C>                 <C>
               Due in one year or less                                             $             -     $             -
               Due after one year through five years                                       334,908             346,923
               Due after five years through ten years                                    2,950,930           2,994,210
               Due after ten years                                                      24,681,772          24,526,542
                                                                                   ---------------     ---------------

                                                                                   $    27,967,610     $    27,867,675
                                                                                   ===============     ===============


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

               Due in one year or less                                             $        81,427     $        81,731
               Due after one year through five years                                    10,231,178          10,225,995
               Due after five years through ten years                                    6,758,602           6,940,634
               Due after ten years                                                      36,519,666          37,417,515
                                                                                   ---------------     ---------------

                                                                                   $    53,590,873     $    54,665,875
                                                                                   ===============     ===============


<PAGE>
</TABLE>


     The  Company's  cash and cash  equivalents  increased  to $14.6  million at
December 31, 2001,  compared to $8.0 million at December 31, 2000, due primarily
from the purchase of one large public funds  certificate  of deposit in the last
few days of 2001.  Investing  activities  used  $22.5  million  while  financing
activities provided $25.1 million primarily from the increase in demand deposits
and Federal Home Loan Bank advances. Operating activities provided $4.0 million.
<TABLE>
<CAPTION>


         Loans and Non-performing Loans

     The Bank's loan  portfolio at December 31, 2001 and 2000,  consisted of the
following:
                                                                                       2001                 2000
                                                                                 ----------------    -----------------
<S>                                                                              <C>                 <C>
               Commercial, financial and agricultural                            $     35,886,000    $      33,102,000
               Real estate-construction                                                 9,890,000           10,883,000
               Real estate-mortgage                                                   121,296,000          123,192,000
               Installment                                                             17,962,000           19,513,000
               Overdrafts                                                                 117,000              218,000
                                                                                 ----------------    -----------------

               Total loans                                                       $    185,151,000    $     186,908,000
                                                                                 ================    =================

</TABLE>

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

            1 Year            1 - 5          Over 5
            or less           Years           Years           Total
         --------------    ------------    ------------    -------------

            $ 97,587        $ 72,857        $ 14,707         $185,151
         ==============    ============    ============    =============


     As a result of slowing  economic  activity in all  markets of the  Company,
nonperforming  loans  increased to $2.8 million at December 31, 2001,  from $1.4
million at December 31, 2000.  Nonperforming  loans at the end of 2001 consisted
of  nonaccrual  loans of $1.3  million and loans past due ninety days or more of
$1.5  million,  compared to $1.1  million and $311  thousand,  respectively,  at
December 31, 2000. If interest on such loans had been accrued,  the income would
have  approximated  $167,000  and  $78,000  in  2001  and  2000,   respectively.
Nonperforming loans as a percent of loans, net of unearned income,  increased to
1.51% at December  31, 2001,  from .74% at December  31,  2000.  The Bank places
loans on non-accrual status when management  determines that there is 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, 2001 and 2000:




                                                  2001               2000
                                             ---------------    ---------------
                                                     ($ in thousands)
Nonaccrual loans:
      Real estate                                $ 750              $ 950
      Installment                                   86                 39
      Commercial and all other loans               449                 89
                                             ---------------    ---------------
      Total nonaccrual loans                     1,285              1,078
Loans past due over 90 days                      1,510                311
                                             ---------------    ---------------
      Total nonperforming loans                  2,795              1,389
Other real estate                                1,526                773
                                             ---------------    ---------------
      Total nonperforming assets               $ 4,321            $ 2,162
                                             ---------------    ---------------
Nonperforming loans ratio                         1.51%              0.74%
                                             ===============    ===============


<PAGE>


         Allowance for Loan Losses

     The  allowance for loan losses  increased  $225 thousand to $2.1 million at
December 31, 2001,  compared to $1.9 million at December 31, 2000.  The ratio of
the allowance  for loan losses to loans,  net of unearned  income,  increased to
1.14% at December 31, 2001, from 1.01% at December 31, 2000.  Approximately  37%
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 2001,  the addition of more  commercial  loans to the
portfolio  while at the same time reducing the 1-4 family  portfolio from 45% to
37%, prompted  management to increase the reserve.  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.

                                                  2001               2000
                                             ---------------    ---------------

Balance at January 1,                          $ 1,883,561        $ 1,150,249

      Credits charged off                         (396,998)          (337,393)
      Recoveries                                    96,684            101,984
                                              ---------------   ---------------
      Net credits charged off                     (300,314)          (235,409)
                                              ---------------   ---------------

      Provision for loan losses                    525,000            968,721

              1                               ---------------   ---------------
Balance at December 31,                        $ 2,108,247        $ 1,883,561
                                              ===============   ===============


     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, 2001 and 2000, is presented in the table below:
<TABLE>
<CAPTION>


                                                                  2001                  2000
                                                            ------------------    ------------------
1-4 Family Residential 1st Mortgage Loans
<S>                                                         <C>                   <C>
     Volume                                                      $ 59,688,824          $ 82,294,082
     Allocated reserve                                                104,165                71,320
     Reserves as a percent of volume                                    0.17%                 0.09%
Other Loans
     Volume                                                     $ 125,438,065         $ 104,566,642
     Allocated reserve                                              2,004,082             1,812,241
     Reserves as a percent of volume                                    1.60%                 1.73%
Total Loans
     Volume                                                     $ 185,126,889         $ 186,860,724
     Allocated reserve                                              2,108,247             1,883,561
     Reserves as a percent of volume                                    1.14%                 1.01%


<PAGE>
</TABLE>

         Other Real Estate

     Other real estate  (ORE)  increased  to $1.5  million at December 31, 2001,
compared  to $773  thousand  at  December  31,  2000.  The  change in ORE is due
primarily to three pieces of property that were foreclosed  during the year: one
residential property in Baton Rouge, Louisiana, which is under contract to sell;
and two pieces of  commercial  property  located in Adams  County,  Mississippi.
Management is actively marketing all ORE and sold several properties during 2001
with an accumulated  gain of $4 thousand.  The table below shows the activity in
other real estate.




Balance at December 31, 2000                                $ 773,005

     Writedowns                               (14,856)
     Sales                                   (170,923)
     Foreclosures                             938,987         753,208
                                            ---------      ----------

Balance at December 31, 2001                               $1,526,213
                                                           ==========


         Deposits

     Deposits are the Company's  primary  source of funding for earning  assets.
Average  deposits  decreased  $6.7 million to $210 million at December 31, 2001.
The decrease in average deposits was due primarily to the call of $10 million in
wholesale  deposits in March 2001.  Average  borrowings,  which include  federal
funds purchased,  securities sold under repurchase agreements, and advances from
the Federal Home Loan Bank of Dallas  increased $4.3 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.



<TABLE>
<CAPTION>


                                                  Average Balances                     Percent of Total
                                          ---------------------------------     --------------------------------
                                               2000              2000               2001              2000
                                          ---------------   ---------------     --------------    --------------
                                                                     ($ in thousands)
Funding Uses
<S>                                       <C>               <C>                 <C>               <C>
     Loans                                     $ 185,012         $ 187,176              67.8%             68.3%
     Investments                                  67,148            63,202              24.6%             23.1%
     Federal funds sold                              612             4,477               0.2%              1.6%
     Other                                        20,249            19,243               7.4%              7.0%
                                          ---------------   ---------------     --------------    --------------
     Total                                     $ 273,021         $ 274,098             100.0%            100.0%
                                          ===============   ===============     ==============    ==============
Funding Sources
     Non-interest bearing deposits              $ 31,516          $ 30,724              11.5%             11.2%
     Interest bearing deposits                   178,509           185,960              65.4%             67.8%
     Short-term borrowings                        14,744            26,934               5.4%              9.8%
     Long-term borrowings                         16,468                 -               6.0%              0.0%
     Other                                         6,338             5,338               2.3%              1.9%
     Equity                                       25,446            25,142              15.4%              9.3%
                                          ---------------   ---------------     --------------    --------------
     Total                                     $ 273,021         $ 274,098             100.0%            100.0%
                                          ===============   ===============     ==============    ==============

</TABLE>
<PAGE>



     Maturities of  certificates  of deposit of $100,000 or more  outstanding at
December 31, 2001 and 2000, are summarized as follows:


<TABLE>
<CAPTION>

                                                                 2001                 2000
                                                           ------------------   ------------------
Time remaining until maturity:
<S>                                                        <C>                  <C>
      Three months or less                                       $22,743,964          $14,555,130
      Over three through six months                               11,649,111            6,485,698
      Over six through twelve months                               5,969,317            2,826,715
      Over twelve months                                           7,227,437           16,061,156

                                                           ------------------   ------------------
                                                                 $47,589,829          $39,928,699
                                                           ==================   ==================

</TABLE>

     Approximate  schedule of maturities of  certificates of deposit for each of
the next five years are:


                                  2002                           $92,056,000
                                  2003                            15,999,000
                                  2004                             7,528,000
                                  2005                             1,538,000
                                  2006                             1,531,000
                                  Thereafter                          25,000

                                                           ------------------
                                                                $118,677,000
                                                           ==================


     Deposits at December 31, 2001 and 2000, consist of the following:
<TABLE>
<CAPTION>
                                                                 2001                 2000
                                                           ------------------   ------------------



<S>                                                        <C>                  <C>
      Non-interest bearing demand deposits                       $33,165,781          $33,580,417
      Now accounts                                                29,375,838           28,771,291
      Money market deposit accounts                               18,352,807           11,220,083
      Savings accounts                                            18,108,845           16,016,895
      Certificates of deposit                                    118,676,585          121,733,846

                                                           ------------------   ------------------
                                                                $217,679,856         $211,322,532
                                                           ==================   ==================

</TABLE>


         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. The investment portfolio primarily includes investments in
obligations of government  agency  obligations,  mortgage-backed  securities and
municipal bonds.

     Sizable core deposits  provide  liability  liquidity  along with  wholesale
sources  of funds.  Substantially  all the funds  utilized  by the  Company  are
generated from the normal  customer  base.  From time to time, the Bank utilizes
wholesale and national  market  deposits to meet funding needs.  At December 31,
2001, the Company did not have any wholesale  deposits but had national deposits
totaling $8.0 million.

     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.

     As  interest  rates  decreased  during  2001,  the  Bank's  asset  base was
shortened.  During  2001,  principal  and  interest  cash flows from  investment
securities  increased to $24.5 million,  or 9.0% of average assets,  compared to
$10.1 million, or 3.7% of average assets, in 2000.

<PAGE>

         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 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.

     Management utilizes a computerized interest rate simulation analysis as its
primary measure of interest rate  sensitivity.  Recent reductions in deposit and
market rates continue to benefit the Bank by lowering  funding costs faster than
asset yields.  If rates remain at current  levels,  Net interest income (NII) is
expected to increase  by 1-2% from year one to year two.  Management's  analyses
indicate that a falling rate scenario will present the most  potential  exposure
to net interest income.  If rates fall from current levels,  net interest margin
will be  compressed as asset yields fall while floors on  non-maturity  deposits
hold funding costs higher.  The balance sheet's  long-term asset  sensitivity is
expected to result in a continued  downward trend in NII beyond the  twenty-four
month horizon.  In a rising rate environment NII is expected to decrease by 1-2%
compared to the base over the twenty-four month simulation horizon.  The balance
sheet's long-term  asset-sensitive  structure positions the Bank to benefit in a
sustained higher 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, 2001, is shown in
the following table.

<TABLE>
<CAPTION>


                                 Immediate
                                   to 3         4-12        1 to 3        3 to 5       Over 5
                                  Months       Months        Years        Years        Years        Totals
                                -----------  -----------  ----------   -----------  -----------   ----------
                                                            ($ in thousands)
<S>                             <C>          <C>          <C>          <C>          <C>           <C>
Interest Sensitive Assets        $ 65,069    $  55,250    $  63,936    $   36,428   $   57,255    $ 277,938
Interest Sensitive Liabilities     53,338       85,338       44,875        17,069       68,118      268,738
                                -----------  -----------  -----------  -----------  -----------   ----------
Interest Sensitivity Gaps        $ 11,731    $ (30,088)   $  19,061    $   19,359   $ (10,863)
                                ===========  ===========  ===========  ===========  ===========
Cumulative ratio of interest
   sensitive assets to
   interest sensitive
   liabilities                       1.22         0.87         1.00          1.10         1.03
                                ===========  ===========  ===========  ===========  ===========


</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
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.



<PAGE>

Capital and Dividends

     Stockholders' equity increased 10.9% to $28.3 million at December 31, 2001,
compared to $25.5 million at the end of 2000. The ratio of stockholders'  equity
to assets  remained  stable at 9.5% at  December  31,  2001.  The  Company  paid
dividends  of $.61 per share in 2001 and $.60 per share in 2000 and 1999,  which
represented an earnings payout ratio of 40%, 43% and 41%, respectively.

     The Bank  maintained  a Tier 1 capital  to  risk-weighted  assets  ratio at
December 31, 2001, of 12.65%, a total capital to  risk-weighted  assets ratio of
13.75% and a leverage  ratio of 8.81%.  These  levels  substantially  exceed the
minimum  requirements  of the  regulatory  agencies 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
                                  ------------   ------------    ------------   ------------   -------------   ------------
                                                                      ($ in thousands)
As of December 31, 2001
<S>                               <C>             <C>            <C>             <C>            <C>              <C>
Total Capital (to Risk-
      Weighted Assets)               $ 26,235         13.75%        $ 15,261          8.00%        $ 19,075         10.00%
Tier I Capital (to Risk-
      Weighted Assets)               $ 24,127         12.65%        $ 7,630           4.00%        $ 11,445          6.00%
Tier I Capital (to Average
      Assets)                        $ 24,127          8.81%        $ 10,951          4.00%        $ 13,689          5.00%
As of December 31, 2001
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%





</TABLE>

Results of Operations

         Net Income

     The Company earned $3.2 million ($1.54 per share) in 2001, compared to $2.7
million ($1.28 per share) in 2000.  Returns on average assets and average equity
for 2001 were 1.19% and  12.76%,  respectively,  compared  to .98% and 10.70% in
2000.

         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  9.0% or $994  thousand to $12.1 million in 2001. A shift in the asset
mix from mortgage  loans to commercial  loans  combined with lower funding costs
positioned  the bank to benefit in a falling rate  environment.  The increase in
NII is attributable to $715 thousand in rate  reductions,  primarily on interest
bearing liabilities, and $279 thousand in volume reductions. The following table
presents an analysis of the  Company's  changes in net  interest  income in 2001
compared to 2000.

<PAGE>
<TABLE>
<CAPTION>


                                                                      2001 compared to 2000
                                                              Increase (Decrease) Due to Change in
                                                           Total             Volume              Rates
                                                       ---------------    --------------     --------------
INTEREST EARNED ON:                                                      ($ in thousands)
<S>                                                     <C>                <C>                <C>
Loans                                                       $ (46)           $ (197)             $ 151
Investment securities:
     U.S. Government & other                                 (231)             (204)               (27)
     State & Municipal                                        337               346                 (9)
Interest bearing bank balances                                  6                33                (27)
Federal funds sold                                           (244)             (156)               (88)
Other (Cash Surrender Value Life Insurance)                    (2)                3                 (5)
                                                       ---------------    --------------     --------------
     Total earning assets                                  $ (180)           $ (175)              $ (5)
                                                       ---------------    --------------     --------------
INTEREST PAID ON:
Savings                                                         5                20                (15)
Interest bearing checking                                    (302)               15               (317)
Money rate savings                                            130               104                 26
Certificates of deposit and other time deposits              (927)             (686)              (241)
Short-term borrowed funds                                    (873)             (700)              (173)
Long-term borrowed funds                                      793               793                  -
                                                       ---------------    --------------     --------------
     Total interest bearing liabilities                    (1,174)             (454)              (720)
                                                       ---------------    --------------     --------------
NET INTEREST INCOME                                         $ 994             $ 279              $ 715
                                                       ===============    ==============     ==============

</TABLE>


     The Bank's net  interest  margin  increased to 4.73% from 4.32% during 2001
primarily due to the Bank's  decreased  interest  rate paid on interest  bearing
liabilities and borrowed funds.


         Provision for Loan Losses

     The provision for loan losses was reduced during 2001 because of a one-time
allocation  to the  reserve in 2000 to move the ratio of  reserves to loans over
1%.  During  2001,  the  Company  added an  additional  $525  thousand to offset
anticipated  shifts  in the  asset  mix from  1-4  family  residential  loans to
commercial loans provided by the Company's move into the Baton Rouge,  Louisiana
and  Vicksburg,   Mississippi   markets.  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, 2001,
is adequate to cover estimated exposures.


<PAGE>

Other Income

     Other  income  excluding  one-time  events in 2000  increased  8% from $1.9
million in 2000 to $2.1 million in 2001.  Income from bank operations  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.  As rates  dropped and  mortgage  refinancing
increased,  additional $268 thousand was provided  through the sales of mortgage
loans originated.

Other Expense

     Other expenses decreased $280 thousand to $8.9 million in 2001, compared to
$9.2 million in 2000  primarily  due to one-time  expenses  associated  with the
acquisition  of  Louisiana  Bank and  Trust.  The Bank is  currently  amortizing
premiums on branch acquisitions that amounted to $108 thousand in 2001.

Income Taxes

     Income  taxes  for  2001  increased  $534  thousand  to $1.5  million,  due
primarily  to the fact that the  liquidation  of the  negative  goodwill in 2000
provided  approximately  $618 thousand of additional  non-taxable  income to the
Company. Other factors contributing to this decrease are more fully discussed in
Note L to the financial statements.


Information Regarding our Common Stock

     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 price ranges for the common stock as quoted by Yahoo Finance.

                                  Dividends
                                  Per Share           High              Low
Year 2001
         4th Quarter                $ .31            $15.25            $13.50
         3rd Quarter                                 $14.85            $12.26
         2nd Quarter                $ .30            $13.70            $11.51
         1st Quarter                                 $13.75            $11.50

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


     On  December  31,  2001,  there  were 625  shareholders  of  record  of the
Company's common stock.

     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 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  of the  Currency,  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.  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.


<PAGE>

     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
three fiscal years  totaling,  on an annual  basis,  $.60 per share for 1999 and
$.60 per share for 2000 and $.61 in 2001.  Historical  dividend  payout  ratios,
expressed as a percentage of net income,  for 1999,  2000 and 2001, were 41.40%,
43.00% and 39.61%, 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 $4.2 million as of December 31, 2001,
although  the Bank intends to retain most of these funds for capital and not pay
them out as dividends.






                 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.




<PAGE>



Corporate Information


Annual Meeting/ Principal Office:
         3:30 P.M., Thursday, April 25, 2002
         Britton & Koontz First National Bank
         500 Main Street
         Natchez, Mississippi 39120

Transfer Agent and Registrar:
         American Stock Transfer & Trust
         59 Maiden Lane
         New York, New York 10038
         718-921-8200

Independent Auditors:
         May & Company
         110 Monument Place
         P.O. Box 821568
         Vicksburg, Mississippi 39182

For Additional Information Contact:
         Bazile R. Lanneau, Jr.
         Chief Financial Officer
         601-445-5576
         e-mail: corporate@bkbank.com

     For copies of the Annual Report on Form 10-KSB or Quarterly Reports on Form
10-QSB filed with the Securities and Exchange Commission visit www.bkbank.com or
Contact:
         Cliffie Anderson
         Investor Relations
         500 Main Street
         P.O. Box 1407
         Natchez, Mississippi 39121
         601-445-5576
         e-mail: corporate@bkbank.com

     Questions regarding stock holdings, certificates,  replacement,  dividends,
and address changes should be addressed to:
         American Stock Transfer & Trust
         59 Maiden Lane
         New York, New York 10038
         715-921-8200


<PAGE>



Directors and Executive Officers

W. W. Allen, Jr.
President
Allen Petroleum Services, Inc.
Craig A . Bradford, D.M.D.
Pediatric Dentist

James J. Cole
Executive Vice-President
Britton & Koontz First National Bank

W. J. Feltus, III
President
Feltus Brothers, Ltd.
Chairman
Britton & Koontz Capital Corporation
Britton & Koontz First National Bank

A. J. Ferguson
Petroleum Geologist

Bazile R. Lanneau, Jr.
President & Chief Executive Officer
Sumx Inc.
Vice-President, Assistant Secretary,
Treasurer & Chief Financial Officer
Britton & Koontz Capital Corporation and
Executive Vice-President
Britton & Koontz First National Bank

Albert W. Metcalfe
President
Jordan Auto Company, Inc.
Secretary
Britton & Koontz Capital Corporation
Britton & Koontz First National Bank

W. Page Ogden
President & Chief Executive Officer
Britton & Koontz Capital Corporation and
Britton & Koontz First National Bank
Directors and Executive Officers

Bethany L. Overton
President
Lambdin-Bisland Realty Co.

R. Andrew Patty II
Member
Sieberth and Patty, LLC, Attorneys

Robert R. Punches
Partner
Gwin, Lewis & Punches, LLP, Attorneys

Vinod K. Thukral, Ph.D.
Professor
Tulane University

Directors Emeriti:

Wilton R. Dale
Petroleum Geologist
Co-Owner, Dale Exploration Company

C.H. Kaiser , Jr.
Partner
Jordan, Kaiser and Sessions, Engineering

Donald Killelea, M.D.
Pediatrician - retired

Bazile R. Lanneau
Life Insurance


<PAGE>



Britton & Koontz First National Bank Locations:

Natchez , Mississippi

Main Office
500 Main Street, 39120

Tracetown Shopping Center
55 Seargent S. Prentiss Drive, 39120

Shields Lane
148 N. Shields Lane, 39120

Highway 61 N  at  St. Catherine Creek
411 Highway 61 North, 39120


Vicksburg, Mississippi

2150 S. Frontage Road, 39180


Baton Rouge, Louisiana

Florida
7142 Florida Boulevard, 70806

Perkins
12716 Perkins Road, 70810

Bluebonnet
10626 Linkwood Court, Suite A, 70810



Future Locations:

Carter Street
Vidalia, Louisiana

Highway 61 N at Sherman Avenue
Vicksburg, Mississippi




<PAGE>





                                   EXHIBIT 21

                         SUBSIDIARIES OF THE REGISTRANT


         The following is a list of subsidiaries of the Company at December 31,
2001 and all are included in the Company's consolidated financial statements:


                                         Jurisdiction          Percentage of
                                              of             Voting Securities
Subsidiaries                            Incorporation             Owned
------------                            -------------        -----------------

Britton & Koontz First National Bank     Federal Law               100%

B&K Title Insurance Agency, Inc.         Mississippi               100%

Sumx Inc.                                Mississippi              36.62%






<PAGE>





                                  EXHIBIT 23.1

                         CONSENT OF INDEPENDENT AUDITORS




We consent to the incorporation by reference in this Annual Report (Form 10-KSB)
of Britton & Koontz Capital  Corporation  and  Subsidiaries  of our report dated
January 15, 2002,  included in the 2001 Annual Report to Shareholders of Britton
& Koontz Capital Corporation and Subsidiaries.

/s/ May & Company

Vicksburg, Mississippi
March 10, 2002