UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 10-Q

(Mark One)

[X] Quarterly  Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934 For the Quarterly Period Ended September 30, 2005

                                       or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934 For the transition period from ___________ to ___________


                         Commission File Number 0-22606



                      BRITTON & KOONTZ CAPITAL CORPORATION
             (Exact name of Registrant as Specified in Its Charter)



         Mississippi
(State or other jurisdiction of                        64-0665423
 incorporation or organization)          (I.R.S. Employer Identification Number)


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

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


Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  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  [ ]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes [ ]   No  [X]

Indicate by check mark whether the registrant is a shell company (as  defined in
Rule 12b-2 of the Exchange Act.
Yes [ ]   No  [X]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date:

       2,116,316 Shares of Common Stock, Par Value $2.50, were outstanding
                            as of November 11, 2005.

<PAGE>

                      BRITTON & KOONTZ CAPITAL CORPORATION
                                AND SUBSIDIARIES

                                      INDEX


PART I.     FINANCIAL INFORMATION


         Item 1. Financial Statements

                 Consolidated Statements of Financial Condition
                 Consolidated Statements of Income
                 Consolidated Statements of Changes in Stockholders' Equity
                 Consolidated Statements of Cash Flows
                 Notes to the Consolidated Financial Statements


         Item 2. Management's Discussion and Analysis of Financial Condition and
                 Results of Operations

         Item 3. Quantitative and Qualitative Disclosures About Market Risk

         Item 4. Controls and Procedures


PART II.    OTHER INFORMATION

         Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

         Item 6.  Exhibits



SIGNATURES


CERTIFICATIONS

<PAGE>





PART I   FINANCIAL INFORMATION

         Item 1.  Financial Statements

<PAGE>

<TABLE>
<CAPTION>





              BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION





                                               A S S E T S


                                                                         September 30,     December 31,
 ASSETS:                                                                     2005             2004
                                                                       ----------------  ----------------
<S>                                                                    <C>               <C>
 Cash and due from banks:
       Non-interest bearing                                               $ 10,392,355       $ 5,739,604
       Interest bearing                                                        469,253           837,221
                                                                       ----------------  ----------------
              Total cash and due from banks                                 10,861,608         6,576,825

 Federal funds sold                                                                  -           109,031
 Investment Securities:
       Held-to-maturity (market value, in 2005 and 2004,
           of $39,819,126 and $41,337,742, respectively)                    38,268,288        39,803,853
       Available-for-sale (amortized cost, in 2005 and 2004,
           of $86,387,076 and $91,068,652, respectively)                    85,742,288        91,947,189
       Equity securities                                                     6,054,300         5,551,600
 Loans, less unearned income of $1,307 in 2005 and
           $1,996 in 2004, and allowance for loan losses of
           $2,403,094 in 2005 and $2,236,778 in 2004                       240,798,353       217,073,919
 Loans held for sale                                                         1,175,300         1,688,338
 Bank premises and equipment, net                                            8,193,583         8,265,756
 Other real estate                                                           1,284,879         1,320,337
 Accrued interest receivable                                                 2,355,882         2,127,079
 Cash surrender value of life insurance                                        928,515           943,481
 Core Deposit, net                                                             907,794           988,506
 Other assets                                                                  999,048           954,720
                                                                       ----------------  ----------------

 TOTAL ASSETS                                                            $ 397,569,838     $ 377,350,634
                                                                       ================  ================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>




                                  LIABILITIES AND STOCKHOLDERS' EQUITY


                                                                         September 30,    December 31,
 LIABILITIES:                                                               2005              2004
                                                                       ----------------  ----------------
 Deposits
<S>                                                                    <C>               <C>
       Non-interest bearing                                               $ 47,782,133      $ 39,868,482
       Interest bearing                                                    194,994,408       186,419,447
                                                                       ----------------  ----------------
              Total deposits                                               242,776,541       226,287,929

 Federal Home Loan Bank advances                                           105,097,559        96,922,871
 Federal funds purchased                                                     3,450,000         6,435,000
 Securities sold under repurchase agreements                                 6,272,957         8,103,381
 Accrued interest payable                                                    1,132,305           984,859
 Advances from borrowers for taxes and insurance                               390,880           399,443
 Accrued taxes and other liabilities                                         1,691,710         1,910,383
 Junior subordinated debentures                                              5,155,000         5,155,000
                                                                       ----------------  ----------------
              Total liabilities                                            365,966,952       346,198,866
                                                                       ----------------  ----------------



 STOCKHOLDERS' EQUITY:
 Common stock - $2.50 par value per share;
       12,000,000 shares authorized; 2,130,816 and 2,116,316 issued
       and outstanding, respectively, for September 30, 2005, and
      December 31, 2004                                                      5,327,040         5,327,040
 Additional paid-in capital                                                  7,254,113         7,254,113
 Retained earnings                                                          19,670,028        18,181,718
 Accumulated other comprehensive income                                       (390,920)          646,272
                                                                       ----------------  ----------------
                                                                            31,860,261        31,409,143
 Cost of 14,500 shares of common stock held by the company                    (257,375)         (257,375)
                                                                       ----------------  ----------------

              Total stockholders' equity                                    31,602,886        31,151,768
                                                                       ----------------  ----------------

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                              $ 397,569,838     $ 377,350,634
                                                                       ================  ================


</TABLE>
<PAGE>
<TABLE>
<CAPTION>


              BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

                                                                    Three Months Ended                Nine Months Ended
                                                                      September 30,                     September 30,
                                                             --------------------------------  -------------------------------

                                                                  2005             2004            2005             2004
                                                             ---------------  ---------------  --------------  ---------------
 INTEREST INCOME:
<S>                                                          <C>              <C>              <C>             <C>
 Interest and fees on loans                                     $ 4,181,057      $ 3,529,398     $11,733,133      $10,483,266
 Interest on investment securities:
     Taxable interest income                                      1,067,892        1,045,754       3,264,967        3,066,327
     Exempt from federal taxes                                      408,217          408,467       1,225,395        1,222,681
 Interest on federal funds sold                                         600              167           1,368            2,091
                                                             ---------------  ---------------  --------------  ---------------

 Total interest income                                            5,657,766        4,983,786      16,224,863       14,774,365
                                                             ---------------  ---------------  --------------  ---------------

 INTEREST EXPENSE:
 Interest on deposits                                             1,127,632          828,399       2,949,870        2,482,942
 Interest on Federal Home Loan Bank advances                        939,025          683,616       2,590,035        1,963,781
 Interest on federal funds purchased                                 74,595           36,395         180,855           51,095
 Interest on trust preferred securities                              84,940           59,092         235,751          169,492
 Interest on securities sold under repurchase agreements             44,172           40,215         151,870           99,536
                                                             ---------------  ---------------  --------------  ---------------

 Total interest expense                                           2,270,364        1,647,717       6,108,381        4,766,846
                                                             ---------------  ---------------  --------------  ---------------

 NET INTEREST INCOME                                              3,387,402        3,336,069      10,116,482       10,007,519

 Provision for loan losses                                           60,000          120,000         240,000          360,000
                                                             ---------------  ---------------  --------------  ---------------

 NET INTEREST INCOME AFTER PROVISION
 FOR LOAN LOSSES                                                  3,327,402        3,216,069       9,876,482        9,647,519
                                                             ---------------  ---------------  --------------  ---------------

 OTHER INCOME:
 Service charges on deposit accounts                                375,974          359,169       1,048,441        1,001,770
 Income from fiduciary activities                                    10,661           10,142          31,133           34,604
 Income from investment activities                                   60,254           44,813         137,462          104,737
 Gain/(loss) on sale of ORE                                          (3,127)           7,536          (5,591)         (42,970)
 Gain/(loss) on sale of mortgage loans                               95,884           75,440         272,644          268,209
 Gain/(loss) on sale of premises & equipment                            992                -           1,142          173,445
 Gain/(loss) on sale of other assets                                 (1,500)           8,299          (1,500)             193
 Other                                                              102,835          121,708         352,869          422,217
                                                             ---------------  ---------------  --------------  ---------------

 Total other income                                                 641,973          627,107       1,836,600        1,962,205
                                                             ---------------  ---------------  --------------  ---------------
<PAGE>
</TABLE>
<TABLE>
<CAPTION>

 OTHER EXPENSES:
<S>                                                          <C>              <C>              <C>             <C>
 Salaries                                                         1,442,388        1,377,589       4,136,264        4,669,755
 Employee benefits                                                  253,373          241,353         736,739          728,486
 Director fees                                                       50,354           48,385         156,707          142,255
 Net occupancy expense                                              227,743          241,083         682,127          687,385
 Equipment expenses                                                 279,440          248,002         807,246          713,836
 FDIC assessment                                                      7,883            8,657          23,564           26,200
 Advertising                                                         33,064           66,699         137,204          190,436
 Stationery and supplies                                             47,652           56,374         133,130          178,841
 Audit expense                                                       47,551           44,078         142,755          119,781
 Other real estate expense                                           45,776           13,057          68,128           40,968
 Amortization of deposit premium                                     26,904           26,904          80,712           80,712
 Other                                                              412,311          551,897       1,394,596        1,482,196
                                                             ---------------  ---------------  --------------  ---------------

 Total other expenses                                             2,874,439        2,924,078       8,499,172        9,060,851
                                                             ---------------  ---------------  --------------  ---------------

 INCOME BEFORE INCOME TAX EXPENSE                                 1,094,936          919,098       3,213,910        2,548,873

 Income tax expense                                                 266,683          200,162         646,278          524,619
                                                             ---------------  ---------------  --------------  ---------------

 NET INCOME                                                       $ 828,253        $ 718,936     $ 2,567,632      $ 2,024,254
                                                             ===============  ===============  ==============  ===============


 EARNINGS PER SHARE DATA:

 Basic earnings per share                                            $ 0.39           $ 0.34          $ 1.21           $ 0.96
                                                             ===============  ===============  ==============  ===============

 Basic weighted shares outstanding                                2,116,316        2,116,070       2,116,316        2,114,089
                                                             ===============  ===============  ==============  ===============


 Diluted earnings per share                                          $ 0.39           $ 0.34          $ 1.21           $ 0.96
                                                             ===============  ===============  ==============  ===============

 Diluted weighted shares outstanding                              2,122,912        2,119,959       2,121,368        2,117,806
                                                             ===============  ===============  ==============  ===============

<PAGE>
</TABLE>
<TABLE>
<CAPTION>




              BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004




                                                                                           Accumulated
                                            Common Stock         Additional                   Other                       Total
                                      ------------------------    Paid-in      Retained    Comprehensive   Treasury    Stockholders'
                                        Shares       Amount       Capital      Earnings      Income         Stock         Equity
                                      ----------   -----------  -----------  ------------ ------------   ----------   ------------

<S>                                   <C>          <C>          <C>          <C>          <C>            <C>          <C>
 Balance at December 31, 2003         2,113,087    $5,318,968   $7,225,408   $ 16,690,918 $ 1,218,680    $(257,375)   $ 30,196,599

 Comprehensive Income:
     Net income                               -             -            -      2,024,254           -                    2,024,254

     Other comprehensive income:
     Change in fair value of
        available for sale securities,
        net of taxes of $30,077                                                              (145,297)                    (145,297)
     Change in fair value of
        derivatives, net of taxes
        of $38,584                                                                            (64,856)                     (64,856)
                                                                                                                      ------------
 Total Comprehensive Income                                                                                              1,814,101

 Cash Dividend declared
        $.32 per share                                                           (676,187)                                (676,187)

 Issuance of common stock                 3,229         8,072       28,705                                                  36,777
                                      ----------   -----------  -----------  ------------ ------------   ----------   ------------
 Balance at September 30, 2004        2,116,316    $5,327,040   $7,254,113   $ 18,038,985 $ 1,008,527    $(257,375)   $ 31,371,290
                                      ==========   ===========  ===========  ============ ============   ==========   ============


 Balance at December 31, 2004         2,116,316    $5,327,040   $7,254,113   $ 18,181,718 $   646,272    $(257,375)   $ 31,151,768

 Comprehensive Income:
     Net income                               -             -            -      2,567,632           -                    2,567,632

     Other comprehensive income:
     Change in fair value of
        available for sale securities,
        net of taxes of $568,200                                                             (955,125)                    (955,125)
     Change in fair value of
        derivatives, net of taxes
        of $48,821                                                                            (82,067)                     (82,067)
                                                                                                                      ------------
 Total Comprehensive Income                                                                                              1,530,440

 Cash Dividend declared
        $.51 per share                                                         (1,079,322)                              (1,079,322)
                                      ----------   -----------  -----------  ------------ ------------   ----------   ------------
 Balance at September 30, 2005        2,116,316    $5,327,040   $7,254,113   $ 19,670,028 $  (390,920)   $(257,375)   $ 31,602,886
                                      ==========   ===========  ===========  ============ ============   ==========   ============


</TABLE>
<PAGE>
<TABLE>
<CAPTION>



              BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           PERIODS ENDED SEPTEMBER 30,

                                                                                               2005                  2004
                                                                                         -----------------     ------------------

 CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                                      <C>                   <C>
 Net income                                                                                   $ 2,567,632            $ 2,024,254
 Adjustments to reconcile net income to net cash
 provided by (used in) operating activities:
            Deferred income taxes                                                                (156,227)                70,113
            Provision for loan losses                                                             240,000                360,001
            Provision for depreciation                                                            597,461                529,435
            Stock dividends received                                                             (131,200)               (56,300)
            (Gain)/loss on sale of other real estate                                                5,591                 42,970
            (Gain)/loss on sale of other repossessed assets                                         1,500                   (193)
            (Gain)/loss on sale of mortgage loans                                                (272,644)              (268,209)
            (Gain)/loss on sale of premises and equipment                                          (1,142)              (173,445)
            Net amortization (accretion) of securities                                            251,751                478,226
            Amortization of deposit premium                                                        80,712                 80,712
            Writedown of other real estate                                                         34,255                 36,000
            Writedown of other repossessed assets                                                   5,000                      -
 Net change in:
            Loans held for sale                                                                   513,038              1,707,156
            Accrued interest receivable                                                          (228,803)               (34,722)
            Cash surrender value                                                                   14,966                (31,104)
            Other assets                                                                         (175,217)              (718,043)
            Accrued interest payable                                                              147,446                 80,305
            Accrued taxes and other liabilities                                                   554,574              1,684,282

                                                                                         -----------------     ------------------

            Net cash provided by (used in) operating activities                                 4,048,693              5,811,438
                                                                                         -----------------     ------------------

 CASH FLOWS FROM INVESTING ACTIVITIES
            (Increase)/decrease in federal funds sold                                             109,031                 41,362
            Proceeds from sales, maturities and paydowns
            of investment securities                                                           19,994,952             21,086,149
            Purchase of FHLB stock                                                               (371,500)              (129,700)
            Purchases of investment securities                                                (14,029,560)           (16,905,504)
            (Increase)/decrease in loans                                                      (24,130,276)           (14,663,870)
            Proceeds from sale and transfers of other real estate                                 397,032              1,015,045
            Proceeds from sale and transfers of other repossessed assets                           30,565                 52,800
            Proceeds from sale of premises and equipment                                            1,142                771,918
            Purchase of premises and equipment                                                   (525,288)              (720,152)

                                                                                         -----------------     ------------------

            Net cash provided by (used in) investing activities                               (18,523,902)            (9,451,952)
                                                                                         -----------------     ------------------
<PAGE>
</TABLE>
<TABLE>
<CAPTION>

                                                                                               2005                  2004
                                                                                         -----------------     ------------------

 CASH FLOWS FROM FINANCING ACTIVITIES
<S>                                                                                      <C>                   <C>
            Increase /(decrease) in customer deposits                                          18,469,612            (13,781,266)
            Increase /(decrease) in brokered deposits                                          (1,981,000)             5,265,000
            Increase /(decrease) in securities sold under
            repurchase agreements                                                              (1,830,424)             1,145,216
            Increase /(decrease) in federal funds purchased                                    (2,985,000)             4,075,000
            Increase /(decrease) in FHLB advances                                               8,174,688              8,179,591
            Increase /(decrease) in advances from borrowers
            for taxes and insurance                                                                (8,563)               (27,070)
            Cash dividends paid                                                                (1,079,321)              (676,188)
            Common stock issued                                                                         -                 36,777
                                                                                         -----------------     ------------------

            Net cash provided by (used in) financing activities                                18,759,992              4,217,060
                                                                                         -----------------     ------------------

 NET INCREASE/(DECREASE) IN CASH AND DUE FROM BANKS                                             4,284,783                576,546
                                                                                         -----------------     ------------------

 CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD                                                 6,576,825              8,359,755
                                                                                         -----------------     ------------------

 CASH AND DUE FROM BANKS AT END OF PERIOD                                                     $10,861,608            $ 8,936,301
                                                                                         =================     ==================


 SUPPLEMENTAL DISCLOSURES OF CASH FLOW
 INFORMATION:

            Cash paid during the year for interest                                            $ 5,960,935            $ 4,686,541
                                                                                         =================     ==================

            Cash paid during the year for income taxes                                        $   550,676            $   490,379
                                                                                         =================     ==================


 SCHEDULE OF NONCASH INVESTING AND
 FINANCING ACTIVITIES:

             Transfers from loans foreclosed to other real estate                             $   401,121            $   211,016
                                                                                         =================     ==================

            Change in unrealized gains (losses)
             on securities available for sale                                                 $(1,523,325)           $  (175,374)
                                                                                         =================     ==================

            Change in the deferred tax effect in unrealized
             gains (losses) on securities available for sale                                  $  (568,200)           $   (30,077)
                                                                                         =================     ==================

            Change in unrealized gains (losses) on derivative                                 $  (130,888)           $  (103,440)
                                                                                         =================     ==================

            Change in the deferred tax effect in
            unrealized gains (losses) on derivative                                           $   (48,821)           $   (38,584)
                                                                                         =================     ==================

</TABLE>
<PAGE>



              BRITTON & KOONTZ CAPITAL CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                    SEPTEMBER 30, 2005 AND DECEMBER 31, 2004


Note A.  Basis of Presentation

         The consolidated balance sheet for Britton & Koontz Capital Corporation
(the  "Company")  as of December  31,  2004,  has been  derived from the audited
financial  statements of the Company for the year then ended.  The  accompanying
consolidated  financial  statements as of September 30, 2005,  are unaudited and
reflect all normal  recurring  adjustments  which, in the opinion of management,
are  necessary  for the fair  presentation  of financial  position and operating
results of the periods presented. Certain 2004 amounts have been reclassified to
conform to the 2005 presentation.

Note B.  Interest Rate Risk Management

         On May 9, 2002, Britton & Koontz Bank, N.A., the Company's wholly-owned
subsidiary  (the "Bank"),  entered into an off-balance  sheet interest rate swap
agreement to convert existing prime based loans to a fixed rate. Under the terms
of the  agreement,  the Bank receives a fixed rate of 7.635% and is obligated to
pay a  floating  rate  based  on  USD-Prime-H.15,  calculated  on a  contractual
notional amount of $5,000,000. The original term is for five years, expiring May
10, 2007. The fair value of this derivative, designated as a cash flow hedge and
considered highly effective, was $21,311 at September 30, 2005, and is reflected
in other assets.

Note C.  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.  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.  At September 30, 2005, no charge was
recorded. Gains on loans are recognized when realized.

Note D.  Junior Subordinated Debentures

         On March 26,  2003,  the Company  finalized  its  participation  in FTN
Financial  Capital Market's and Keefe,  Bruyette & Woods' pooled trust preferred
offering.  The Company  established  Britton & Koontz  Statutory Trust # 1 which
issued 5,000  capital  securities  and 155 common  securities  with an aggregate
liquidation  amount of $5 million and $155 thousand,  respectively.  The term of
the capital securities and debentures is 30 years, callable after 5 years at the
option of the Company. The initial interest rate was 4.41%,  adjusting quarterly
at 3-Month LIBOR plus 3.15% and capped at 11.75%. The interest rate at September
30, 2005, was 6.62%.

  Note E.  Loan Commitments

         In the ordinary course of business, the Company enters into commitments
to extend credit to its customers.  Letters of credit  included in the financial
statements at September 30, 2005,  and December 31, 2004,  were $2.5 million and
$2.1 million,  respectively.  As of September 30, 2005,  the Company had entered
into other commercial and residential  loan  commitments with certain  customers
that had an aggregate unused balance of $68.8 million, compared to $40.7 million
at December 31, 2004.  Because letters of credit and loan commitments  often are
not used in their entirety,  if at all, before they expire, the balances on such
commitments should not be used to project actual future liquidity  requirements.
However,  the Company  does  incorporate  expectations  about the level of draws
under all credit-related commitments into its funds management process.

<PAGE>


  Note F.  Earnings per Share

         Basic  income per share  amounts are computed by dividing net income by
the weighted  average  number of common shares  outstanding.  Diluted income per
share assumes exercise of all potential common stock, including options granted,
unless the effect is  anti-dilutive.  The  following  is  information  about the
computation of earnings per share for the three and nine months ended  September
30, 2005.

<TABLE>
<CAPTION>


For the three months ended September 30, 2005
                                                                                             Per Share
                                                              Net Income       Shares         Amount
                                                              ----------      ---------      ---------
<S>                                                           <C>             <C>            <C>
Basic income per share
   Income available to common shareholders                    $   828,253      2,116,316      $0.39

Effect of diluted securities                                                       6,596
                                                              ----------------------------------------
Dilutive income per share
   Income available to common shareholders
       Plus assumed conversion                                $   828,253      2,122,912      $0.39


For the nine months ended September 30, 2005
                                                                                             Per Share
                                                              Net Income       Shares         Amount
                                                              ----------      ---------      ---------
Basic income per share
   Income available to common shareholders                    $ 2,567,632      2,116,316      $1.21

Effect of diluted securities                                                       5,052
                                                              ----------------------------------------
Dilutive income per share
   Income available to common shareholders
       Plus assumed conversion                                $ 2,567,632      2,121,368      $1.21

</TABLE>

Item 2. Management's Discussion and Analysis of Financial Condition  and Results
        of Operations

             This  discussion  is  intended  to  present  a review  of the major
factors  affecting  the  financial  condition of the Company as of September 30,
2005,  and the results of operations of the Company for the three and nine month
periods ended  September 30, 2005, as compared to the  corresponding  periods of
2004.


SUMMARY

             The Company  reported net income of $828 thousand  ($0.39 basic and
diluted earnings per share) for the three-month period ended September 30, 2005,
compared to net income of $719  thousand  ($0.34 basic and diluted  earnings per
share) for the same period in 2004.  For the nine-month  period ended  September
30, 2005,  the Company had net income of $2.6  million  ($1.21 basic and diluted
earnings  per share),  compared to net income of $2.0  million  ($0.96 basic and
diluted earnings per share) for the same period in 2004.

             Total  assets  increased  $20.2  million  from  $377.4  million  at
December 31, 2004, to $397.6  million at September  30, 2005.  Cash and due from
banks  increased  $4.3 million to $10.9 million;  available-for-sale  investment
securities  decreased  $6.2 million to $85.7 million while the  held-to-maturity
portfolio fell $1.5 million to $38.3 million.  More than  offsetting the loss in
securities was a significant increase in loans. Net loans,  excluding loans held
for sale,  increased  $23.7 million to $240.8  million since  December 31, 2004.
Other real estate  owned  decreased  $35 thousand  over the same  period.  Since
year-end,  deposits have increased  $16.5 million to $242.8 million at September
30, 2005,  while borrowings  increased $3.4 million over the same period.  Total
stockholders'  equity  increased $451 thousand to $31.6 million at September 30,
2005, from $31.2 million at December 31, 2004.

<PAGE>

             The Company's  locations  were on the  perimeter of the  geographic
area severely affected by Hurricanes Katrina and Rita. However, Company premises
and systems  were not damaged by the storms.  Furthermore,  management  does not
anticipate any material losses in loans and securities or significant reductions
in non-interest income or deposits as a result of the storms. In response to the
needs of  evacuees  of the  storms,  the  Company  has  temporarily  lifted  the
non-customer  surcharges on its ATMs, participated in extensive check cashing of
relief  funds,  assisted  another  bank in the  damaged  area  with a  temporary
location  in the  Company's  Baton  Rouge  office,  and  offered  other low cost
services to assist in disaster relief.

             Included  in the  third  quarter  results  were  additional  salary
expense of $125 thousand.  On September 15, the Company  offered  employees with
certain  years of service a graduated  voluntary  severance  package.  Under the
terms of this  offer,  the  Company  had the  right  to  refuse  the  employee's
acceptance of the severance package if management determined that the employee's
departure  would  materially  and  adversely  affect the Company.  The severance
package was offered with the intention of reducing  expenses  without  impairing
the ability of the  Company to operate  effectively.  The offer was  extended to
covered  employees  until  November  1. The  one-time  expense of $125  thousand
associated  with  those  employees  who had  accepted  the  offer  by the end of
September was charged to third quarter  earnings.  The Company expects to charge
approximately  $430  thousand,  including  $65 thousand in  connection  with the
possible extension of health-related insurance coverage, against earnings in the
fourth  quarter  of 2005 as a result of  employees  accepting  the  offer  after
September 30, 2005.

             Financial Condition

             Assets

             The  Company's  total assets  increased  $20.2  million from $377.4
million at December 31, 2004,  to $397.6  million at  September  30, 2005.  This
increase  was due to  greater  than  expected  loan  growth  in all three of the
Company's markets through September 30, 2005. The Company  anticipates that loan
growth  through  the final  three  months of this year will  continue  to exceed
previous  expectations.  By funding  additional loan growth with cash flows from
the investment portfolio, the Company projects total assets to remain just under
$400 million at December 31, 2005. This shift in assets from securities to loans
reflects  the  Company's  efforts  to slow the  compression  in the  Bank's  net
interest  margin by  changing  to an asset mix with an  anticipated  greater net
interest margin.  This shift in asset mix is also likely to increase our ability
to receive fee income from the origination of loans.

             Investment Securities

             The Company's  investment portfolio at September 30, 2005, consists
of  government  agency,  mortgage-backed  and municipal  securities.  Investment
securities  that are  deemed to be  held-to-maturity  are  accounted  for by the
amortized cost method while securities in the available-for-sale  categories are
accounted for at fair value.

             Management  determines  the  classification  of its  securities  at
acquisition. Total held-to-maturity and available-for-sale investment securities
were $124  million at  September  30,  2005,  a  reduction  of $8 million  since
December 31, 2004. This decrease  reflects  managements  shift from re-investing
cash flows back into the investment  portfolio to using these cash flows to fund
commercial loans. The continued flattening of the yield curve,  throughout 2005,
does not provide  enough  incentive to remain in the securities  market.  Equity
securities increased $503 thousand due primarily to the purchase of Federal Home
Loan Bank stock.  These  securities are comprised  primarily of Federal  Reserve
Bank stock of $522 thousand,  Federal Home Loan Bank stock of $5.2 million,  the
Company's   investment  in  its  statutory   trust  of  $155  thousand  and  ECD
Investments, LLC membership interests of $100 thousand.

             The amortized cost of the Bank's investment securities at September
30, 2005, and December 31, 2004, are summarized in Table 1.

<PAGE>
<TABLE>
<CAPTION>


             TABLE 1: COMPOSITION OF INVESTMENT PORTFOLIO (Amortized Cost)


                                                     09/30/05                    12/31/04
                                                 ------------------          -----------------
<S>                                              <C>                         <C>
    Mortgage-Backed Securities                     $ 83,258,536               $ 90,545,807
    Agencies                                          6,495,822                  3,997,544
    Obligations of state and
      Political Subdivisions                         34,901,006                 35,321,402
    Corporate Securities                                      0                  1,007,752
                                                 -------------------         -----------------
                                                  $ 124,655,364              $ 130,872,505
                                                 ===================         =================
</TABLE>

             Loans held to maturity

         Loan demand in the Company's  market areas has been strong  through the
first nine months of 2005, as was expected.  However,  loans grew at a pace that
exceeded Company projections of growth through this period by over $8.0 million,
or 3.4%. Loans, net of the loan loss reserve, increased 10.9%, or $23.7 million,
to $240.8  million at September  30, 2005,  from $217.1  million at December 31,
2004. The majority of the increase came as a result of increased activity in the
commercial real estate portfolio along with increases in the mortgage 1-4 family
residential  loans.  The increase in the commercial loan area is attributable to
management's commitment to establishing a strong and capable lending team in the
Baton Rouge, Louisiana, market while the increase in mortgage loans is primarily
due to discontinued specials offered on shorter-term  mortgage loans.  Beginning
in the fourth  quarter,  management  will begin selling all conforming  mortgage
originations and attempt to open avenues to sell more  non-conforming  loans. In
addition to selling new originations,  management will begin to sell many of the
1-4 family  residential  loans and move more of the proceeds into the commercial
area to bring  about more of a balance in the total loan  portfolio.  Conforming
loans meet all underwriting  and product  guidelines as determined by Fannie Mae
for eligibility to be sold on the secondary  market while  non-conforming  loans
lack one or all of the standards set by Fannie Mae. These standards  include but
are not limited to credit worthiness, proper appraisals,  loan-to-value, payment
and debt to income ratios.  Loans originated as  non-conforming  may be eligible
for the secondary  market after a seasoning  period if certain  guidelines  have
been met and the payment history is satisfactory. All markets experienced growth
during the first nine months; however, loan growth in the Baton Rouge, Louisiana
market was 26% since December 31, 2004, while the Vicksburg,  Mississippi market
contributed  growth  of 5% since  December  31,  2004.  Loans  to  total  assets
increased  to 61.5% at  September  30,  2005,  compared to 58.6% at December 31,
2004. At September 30, 2005,  the loans to deposit ratio was 100.7%  compared to
97.8% at year-end.

             Management has traditionally sold mortgage loans with maturities of
15  years  and  greater  while  holding  in the  portfolio  loans  with  shorter
maturities. Even with the recent decision to begin selling shorter-term mortgage
loans,  management still anticipates continued loan growth through the remainder
of  this  year  primarily  from  the  Baton  Rouge,  Louisiana,  and  Vicksburg,
Mississippi,  markets. Table 2 presents the Bank's loan portfolio composition at
September 30, 2005, and December 31, 2004.

<TABLE>
<CAPTION>

             TABLE 2: COMPOSITION OF LOAN PORTFOLIO

                                                   09/30/05                 12/31/04
                                             ----------------       ------------------
<S>                                          <C>                    <C>
Commercial, financial & agricultural           $   35,991,000           $   31,589,000
Real estate-construction                           27,625,000               18,360,000
Real estate-1-4 family residential                 98,677,000               90,290,000
Real estate-other                                  68,813,000               66,284,000
Installment                                        13,010,000               14,229,000
Other                                                 262,000                  249,000
                                            -----------------       ------------------
       Total loans                             $  244,378,000           $  221,001,000
                                            =================       ==================

</TABLE>
<PAGE>


             Bank Premises

             There have been no  significant  changes in the Company's  premises
since year-end.

             Asset Quality

             Nonperforming  assets,  including  non-accrual  loans,  other  real
estate  and loans 90 days or more  delinquent,  increased  $1.1  million to $3.3
million at  September  30, 2005,  from $2.2  million at December  31, 2004.  The
Bank's  nonperforming  loan ratio  increased to .84% at September 30, 2005, from
..41% at December 31, 2004. The increase in non-accrual loans is due primarily to
one  large  commercial  real  estate  credit  which  carries  a  Small  Business
Administration  (SBA) guarantee of 75% of the principal  amount of the loan. Due
to the process of liquidation on an SBA loan,  including the time involved,  the
Bank decided that the  conservative  approach was to move the entire  balance to
non-accrual as opposed to moving only the non-guaranteed portion to non-accrual.
Loans 90 days delinquent increased $178 thousand;  this increase is attributable
to one commercial credit in the amount of $234 thousand. Subsequent to September
30,  2005,  this loan has been moved to a  non-accrual  basis,  and the  Company
expects to resolve this credit by the end of the first quarter of 2006. The loan
is  collateralized  and based upon the most recent data  available,  the Company
believes the current reserve of $25 thousand  established  toward this credit is
adequate to cover any  potential  loss. A breakdown of  nonperforming  assets at
September 30, 2005, and December 31, 2004, is shown in Table 3.
<TABLE>
<CAPTION>


             TABLE 3: BREAKDOWN OF NONPERFORMING ASSETS

                                                       09/30/05           12/31/04
                                                    -------------      --------------
                                                            (dollars in thousands)
<S>                                                 <C>                <C>
    Non-accrual loans by type
      Real estate                                     $     1,325        $       532
      Installment                                              62                 26
      Commercial and all other loans                          345                214
                                                       ----------         ----------
          Total non-accrual loans                           1,732                772
      Loans past due 90 days or more                          307                129
                                                       ----------         ----------
          Total nonperforming loans                         2,040                901
      Other real estate owned (net)                         1,285              1,320
                                                       ----------         ----------
          Total nonperforming assets                  $     3,324        $     2,221
                                                       ==========         ==========
    Nonperforming loans as a percent of loans, net
      of unearned interest and loans held for sale           .84%               .41%
                                                       ==========         ==========
</TABLE>

             Allowance for Possible Loan Losses

             The allowance for possible loan losses is established as losses are
estimated  and  expensed  through a provision  for loan losses  charged  against
operations and is maintained at a level that  management  considers  adequate to
absorb  losses in the loan  portfolio.  The  allowance  is  subject to change as
management  reevaluates the adequacy of the allowance.  Management's judgment in
determining the adequacy of the allowance is inherently  subjective and is based
on  the   evaluation   of  individual   loans,   the  known  and  inherent  risk
characteristics  and size of the loan  portfolios,  the  assessment  of  current
economic and real estate  market  conditions,  estimates of the current value of
underlying collateral, past loan loss experience, review of regulatory authority
examination  reports  and  evaluations  of  specific  loans and  other  relevant
factors.  Each loan is assigned a risk rating between one and nine with a rating
of "one" being the least risk and a rating of "nine" reflecting the most risk or
a complete loss.  Risk ratings are assigned by the  originating  loan officer or
loan  committee  at the  initiation  of the  transactions  and are  reviewed and
changed, when necessary, during the life of the loan.

<PAGE>

             The  allowance  consists  of  specific,   general  and  unallocated
components.  The  specific  component  relates  to  loans  that  are  considered
impaired.  Loan loss reserve factors are multiplied against the balances in each
risk rating  category to arrive at the  appropriate  level for the allowance for
loan losses.  Loans assigned a risk rating of "five" or above are monitored more
closely by the Chief  Lending  Officer  and loan review  personnel.  The general
component  of  the   allowance   for  loan  losses  groups  loans  with  similar
characteristics  and allocates a percentage based upon historical losses and the
inherent  risks within each  category The  unallocated  portion of the allowance
reflects management's estimate of probable but undetected losses inherent in the
portfolio;   such  estimates  are  influenced  by   uncertainties   in  economic
conditions,  delays in obtaining information,  including unfavorable information
about a borrower's  financial  condition,  difficulty in identifying  triggering
events that correlate  perfectly to subsequent loss rates, and risk factors that
have not yet manifested  themselves in loss allocation factors.  The methodology
for  determining  the adequacy of the allowance for loan losses is  consistently
applied; however, revisions may be made to the methodology and assumptions based
on historical  information  related to charge-off  and recovery  experience  and
management's evaluation of the current loan portfolio.

             Based upon this evaluation,  management  believes the allowance for
loan losses of $2.4 million at  September  30, 2005,  which  represents  .99% of
gross loans held to maturity, is adequate, under prevailing economic conditions,
to absorb losses on existing loans. At December 31, 2004, the allowance for loan
losses was $2.2 million, or 1.02%, of gross loans held to maturity.

             Two major  hurricanes  hit the Gulf Coast  region  during the third
quarter of 2005.  The  Company's  branch  location  in Baton  Rouge,  Louisiana,
although  closest to impact,  did not sustain  major  damage.  The Bank has lent
money to individuals who either have property in or live in effected areas.  The
Bank has been  monitoring  all loans to individuals in the areas impacted and as
of  September  30,  2005,  does not  believe  the  loan  portfolio  will  suffer
significant  losses from the areas impacted by the  hurricanes.  The calculation
for the  Allowance  for Loan Losses as of  September  30,  2005,  has taken into
account the potential for some losses in the portfolio from the storms. The Bank
will  continue to monitor  closely all loans in the effected  areas and make any
additions to the reserve as deemed  necessary  based upon  additional  facts and
circumstances.

             Provision for Possible Loan Losses

             The  provision  for possible loan losses is a charge to earnings to
maintain the  allowance  for  possible  loan losses at a level  consistent  with
management's  assessment of the loan  portfolio in light of current and expected
economic conditions.  The Company's regular review of the allowance is an effort
to  maintain it at an adequate  level and provide  necessary  data to maintain a
proper provision  expense to earnings.  Based upon this  evaluation,  management
eliminated the monthly provision for September 2005. Management believes current
reserves at September  30, 2005,  are adequate to provide  coverage for possible
loan losses that may be inherent in the portfolio.

             Table 4  details  allowance  activity  for  the  nine  months ended
September 30, 2005, and September 30, 2004:

<PAGE>



             TABLE 4: ACTIVITY OF ALLOWANCE FOR POSSIBLE LOAN LOSSES

                                                    09/30/05          09/30/04
                                                  -------------    -------------
                                                      (dollars in thousands)

    Balance at beginning of year                     $  2,237          $  2,070
     Charge-offs:
      Real Estate                                         (50)              (13)
      Commercial                                          (50)              (72)
      Installment and other                               (39)              (42)
    Recoveries:
      Real Estate                                          26                 2
      Commercial                                           10                12
      Installment and other                                29                27
                                                   ----------         ----------
    Net (charge-offs)/recoveries                          (74)              (86)
      Provision charged to operations                     240               360
                                                   ----------         ----------
    Balance at end of period                         $  2,403          $  2,344
                                                   ==========         ==========

    Allowance for loan losses as a percent
      of loans, net of unearned interest
         and loans held for sale                         .99%             1.06%
                                                   ==========         ==========
    Net charge-offs as a percent of
      average loans                                      .03%              .04%
                                                   ==========         ==========

             Potential Problem Loans

             At September 30, 2005,  the Company had no loans,  other than those
  balances   incorporated  in  tables  3  and  4  above,  which  management  had
  significant  doubts as to the ability of the  borrower to comply with  current
  repayment terms.

             Deposits

             Total  deposits  increased  $16.5  million  from $226.3  million at
December 31, 2004, to $242.8  million at September 30, 2005.  Customer  deposits
increased $18.5 million,  replacing $2.0 million in brokered  deposits.  Each of
the Company's markets is very competitive,  and management  expects deposit cost
to increase as  short-term  interest  rates  continue to climb.  In an effort to
protect  against  rising funding  costs,  the Company  decided to purchased $9.0
million in Brokered  deposits to be used to pay down variable  Federal Home Loan
Bank  advances and federal  funds lines.  This purchase was concluded in October
2005.

             TABLE 5: COMPOSITION OF DEPOSITS

                                          09/30/05                 12/31/04
                                     -----------------        ----------------
Non-Interest Bearing                  $   47,782,133           $   39,868,482
NOW Accounts                              24,528,896               28,103,197
Money Market Deposit Accounts             31,619,934               24,974,678
Savings Accounts                          19,651,044               16,490,444
Certificates of Deposit                  119,194,534              116,851,128
                                     -----------------        ----------------
       Total Deposits                  $ 242,776,541           $  226,287,929
                                     =================        ================

<PAGE>

             Borrowings

             Total Bank borrowings,  including  Federal Home Loan Bank advances,
federal  funds  purchased and customer  repurchase  agreements,  increased  $3.4
million from $111.5 million at December 31, 2004, to $114.8 million at September
30, 2005.  The Company also has $5.2  million in  borrowings  as a result of its
issuance of junior  subordinated  debentures  (See Note D, "Junior  Subordinated
Debentures,"  to the Company's  consolidated  financial  statements  for further
information).  The  additional  borrowings  were  used to fund  the  demand  for
additional loan growth throughout 2005.

             Capital

             Stockholders'  equity  totaled $31.6 million at September 30, 2005,
compared to $31.2  million at December 31, 2004.  The increase is primarily  the
result of net  income,  dividends  paid and the  change  in other  comprehensive
income/(loss)  over the first nine months totaling $2.6 million,  ($1.1) million
and ($1.1) million,  respectively.  Other comprehensive  income is the result of
unrealized gains or losses in available-for-sale  securities and the recognition
of the fair value of certain derivative instruments. Dividends paid for the nine
months ended  September  30,  2005,  increased to $0.51 per share from $0.32 per
share  for the same  period in 2004.  The  increase  is due to a change  made in
August  2005,  from a  semi-annual to a quarterly paid  dividend.  The  ratio of
shareholders' equity to assets decreased to 7.9% at September 30, 2005, compared
to 8.3% at December 31, 2004.

             The Company  maintained  a total  capital to risk  weighted  assets
ratio of 14.58%,  a Tier 1 capital to risk weighted assets ratio of 13.68% and a
leverage ratio of 9.26% at September 30, 2005. These levels substantially exceed
the  minimum  requirements  of  the  regulatory  agencies  for  well-capitalized
institutions of 10.00%, 6.00% and 5.00% respectively.

             Off-Balance Sheet Arrangements

             There have been no significant changes in the Company's off-balance
  sheet  arrangements  during the nine months ended September 30, 2005. See Note
  B, "Interest Rate Risk  Management,"  and Note E, "Loan  Commitments,"  to the
  Company's consolidated financial statements for a description of the Company's
  off-balance sheet arrangements.

             Results of Operations

             Net Income

             Net income for the three months ended September 30, 2005, increased
to $828  thousand,  or $0.39 per diluted share,  compared to $719  thousand,  or
$0.34 per diluted share, for the same period in 2004.  Returns on average assets
and  average  equity were .84% and 10.53%,  respectively,  for the three  months
ended September 30, 2005, compared to .76% and 9.28%, respectively, for the same
period in 2004. The increase in net income was due primarily to lower  personnel
costs  associated with a decline in full-time  equivalents  from 131 at December
31, 2004, to 121 at September 30, 2005 and higher  revenues  resulting from loan
originations.  Lower salaries and benefits of approximately $87 thousand for the
three months ended  September  30, 2005,  compared to the same period last year,
were  the  result  of the  reduction  in  personnel.  Excluding  the  additional
personnel expense resulting from the severance package discussed above under the
caption   "Summary,"   salaries   would  have  been   reduced  even  further  by
approximately  $212  thousand.  During this same  comparative  period,  loan fee
income  increased  approximately  $200 thousand  primarily from the Baton Rouge,
Louisiana  market.  Both of these scenarios  resulted in a third quarter of 2005
more profitable than the comparable period in 2004.

             For the nine  months  ended  September  30,  2005,  net  income and
diluted  earnings per share were $2.6 million,  or $1.21 per share,  compared to
$2.0  million,  or $0.96 per share,  for the same period in 2004.  The increase,
much like for the third  quarter,  was due  primarily to reduction in personnel.
Management  does not believe the reduction in personnel  will  adversely  affect
ongoing operations.

             Net Interest Income and Net Interest Margin

             One of the  largest  components  of the  Company's  earnings is net
interest income, which is the difference between the interest and fees earned on
loans and investments and the interest paid for deposits and borrowed funds. The
net interest margin is net interest income  expressed as a percentage of average
earning assets.

<PAGE>

             Net interest income  increased $51 thousand to $3.4 million for the
three months ended  September 30, 2005, as compared to $3.3 million for the same
period in 2004. Due to the structure of the Company's  balance sheet, the rising
interest  rate  environment  and the  flattening  yield curve  between short and
long-term interest rates had a negative impact of approximately $126 thousand on
net interest income in the third quarter of 2005. However, significant growth in
the loan portfolio  helped  minimize the negative effect and added $177 thousand
to net interest  income.  The lower rate  environment  also  contributed  to the
reduction of the net interest  margin to 3.65% for the quarter  ended  September
30, 2005, compared to 3.73% at September 30, 2004.

             For the nine months ended  September 30, 2005, net interest  income
increased  $109 thousand to $10.1  million  compared to the same period in 2004.
The increase was due  primarily to the same reasons  expressed in the  quarterly
analysis.  Growth in the portfolio,  contributing  $534  thousand,  outpaced the
negative  effect of the rising  interest rate  environment  which  decreased net
interest income by $425 thousand.  Net interest  margin  decreased from 3.78% to
3.64% over the nine month period.

             Non-Interest Income

             Non-interest  income includes service charges on deposit  accounts,
income from  fiduciary  activities,  gains from the sale of  mortgage  loans and
other revenue not derived from interest on earning assets.  Non-interest  income
for the three months ended  September 30, 2005,  increased $15 thousand over the
same period in 2004  primarily  from  increases in gains on sale of  residential
mortgage  loans.  Gains of $96  thousand on the sale of $8.6 million in mortgage
loans was realized  during the third quarter of 2005 compared to $75 thousand on
$8.0 million in sales for the same period in 2004.  Management believes mortgage
originations  will  continue to be strong in the near future  because  long-term
interest rates remain relatively low. However, as the interest rate curve begins
to shift from its current  flattening  position to a more normal  historic level
with higher  long-term  interest rates,  mortgage  originations  are expected to
decline.

             For the nine months ended September 30, 2005,  non-interest  income
decreased $126 thousand compared to the same period in 2004 primarily due to the
gain of $175  thousand  recorded  from the branch sale in 2004.  Excluding  this
one-time sale, non-interest income for the nine months ended September 30, 2005,
would have exceeded the  corresponding  period in 2004 on the strength of higher
service  charges  on  deposits  and  revenues  from  the  Company's   investment
department.   Gains  on  mortgage   originations   remained  relatively  stable,
increasing  slightly to $273  thousand.  Mortgage loan sales for the nine months
ended September 30, 2005, fell 19.4% to $25.3 million  compared to $31.4 million
during the same period in 2004.

             Non-Interest Expense

             Non-interest  expense  includes  salaries and benefits,  occupancy,
equipment  and other  operating  expenses.  Non-interest  expenses for the three
months ended  September 30, 2004 and 2005, was $2.9 million.  The Bank increased
salary  expense by $125 thousand due to certain  employees  having  accepted the
voluntary  severance  offer.  The Company expects to charge  approximately  $430
thousand,  including $65 thousand in connection  with the possible  extension of
health-related  insurance  coverage,  against  earnings in the fourth quarter of
2005 as a result of employees accepting the offer after September 30, 2005.

             Non-interest  expense for the nine months ended  September 30, 2005
decreased $562 thousand to $8.5 million compared to $9.1 million during the same
period in 2004.  This  decrease was  primarily  due to the decrease in full-time
equivalents through the first nine months of 2005.

             Income Taxes

             The Company  recorded  income tax expense of $267  thousand for the
three months ended September 30,
2005,  compared to $200 thousand for the same period in 2004. Income tax expense
for the nine months ended September 30, 2005, was $646 thousand compared to $525
thousand during the same period in 2004.


<PAGE>


             Liquidity and Capital Resources

             The  Company  utilizes  a  funds   management   process  to  assist
management in maintaining  net interest income during times of rising or falling
interest rates and in maintaining  sufficient  liquidity.  Principal  sources of
liquidity  for the  Company  are asset cash  flows,  customer  deposits  and the
ability to borrow against investment securities and loans.  Secondary sources of
liquidity  include the sale of investment  and loan assets along with  unsecured
federal funds lines with  correspondent  banks.  All components of liquidity are
reviewed and analyzed on a monthly basis.

             The Company has established a liquidity  contingency  plan to guide
the Bank in the event of a  liquidity  crisis.  The plan  describes  the  normal
operating  environment,  prioritizes  funding  options and  outlines  management
responsibilities and board notification procedures.

             The Company's cash and cash  equivalents  increased $4.3 million to
$10.9 million at September 30, 2005, from $6.6 million at December 31, 2004. The
increase is primarily due to additional  cash made  available in the branches to
adequately  respond to the needs of evacuees to cash checks  distributed  by the
Red Cross,  FEMA and local  insurance  agencies.  Cash provided by operating and
financing  activities  during  this year was $4.0  million  and  $18.8  million,
respectively, while investing activities used $18.5 million in cash.

             The Company has unsecured  federal  funds lines with  correspondent
banks and  maintains  the ability to draw on its line of credit with the Federal
Home  Loan  Bank  in  the  amounts  of   approximately   $36  and  $13  million,
respectively.  Management  believes  it  maintains  adequate  liquidity  for the
Company's current needs.

             In the  ordinary  course  of  business,  the  Company  enters  into
commitments to extend credit to its customers.  See Note E, "Loan  Commitments,"
to the  Consolidated  Financial  Statements  for a discussion  of the  Company's
commitments to extend credit as of September 30, 2005.

             The  Company's  liquidity and capital  resources are  substantially
dependent  on the  ability of the Bank to  transfer  funds to the Company in the
form of dividends, loans and advances. Certain restrictions exist on the ability
of the Bank to transfer such funds to the Company.  Federal Reserve  regulations
limit  the  amount  the Bank may  loan to the  Company  unless  such  loans  are
collateralized  by specific  obligations.  At September  30,  2005,  the maximum
amount  available for transfer from the Bank to the Company in the form of loans
on a secured basis was $1.9 million.  There were no loans  outstanding  from the
Bank to the Company at September 30, 2005.

                 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

         This 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",   "believe",   "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  market  conditions,  availability  or  cost  of
capital,  employee  workforce  factors,  costs  and other  effects  of legal and
administrative  proceedings,  and changes in federal, state or local legislative
requirements.  The  Company  undertakes  no  obligation  to update or revise any
forward-looking  statements,  whether as a result of changes in actual  results,
changes in assumptions or other factors affecting such statements.




Item 3.      Quantitative and Qualitative Disclosures About Market Risk

             Market risk reflects the potential risk of economic loss that would
result from adverse  changes in interest  rates and market  prices.  The risk is
usually seen in either reduced  market value of financial  assets or reduced net
interest income in future periods.

<PAGE>

             The  Company  utilizes  an   asset/liability   committee   ("ALCO")
comprised of four outside directors,  the Bank's Chief Executive Officer and its
Chief Financial  Officer,  who acts as chairman of the committee.  The committee
meets  monthly or more often as needed,  and its primary  responsibility  is the
management  of the  assets and  liabilities  of the Bank to produce a stable and
evenly rising flow of net interest income, an appropriate level of capital and a
level of liquidity  adequate to respond to the needs of depositors and borrowers
and to earnings' enhancement  opportunities.  The committee manages the interest
rate  risk  inherent  in  the  loan,  investment,  deposit  and  borrowed  funds
portfolios.  Further,  the committee manages the risk profile of the Company and
determines strategies to maintain interest rate sensitivity at a low level.

             The Company  utilizes an  electronically  based financial  modeling
system.  After  supplying the system with an interest rate scenario and a set of
projections,  the ALCO and  Board of  Directors  receive  a  standard  reporting
package  showing  the current  and future  impact of changes in interest  rates,
strategies and tactics and tracking information against budgets, other forecasts
and actual performance.

             The  Company   models   Economic   Value  of  Equity  (EVE)  as  an
asset/liability  management tool to measure market risk. At least  annually,  an
EVE analysis is performed to determine the effect of the Bank's  franchise value
under different rate scenarios.  This value is calculated by subtracting the net
present  value  of the  bank's  liabilities  from the net  present  value of its
assets.  The difference is referred to as "net  portfolio  value" with the value
calculated under each rate scenario  measured as a percentage change to the base
portfolio value.  The latest analysis at June 30, 2005,  showed that in a rising
rate scenario as rates moved up by 200 basis points, the value of the Bank's net
portfolio value would decline by less than 15%. The committee as reported to the
Board of Directors agreed that this was well within acceptable limits.

             The  Company's   investment   portfolio  includes  securities  from
tax-free  municipals from across the State of  Mississippi.  Included in Table 6
are municipal  securities  from the  Mississippi  Gulf Coast that suffered major
damage during Hurricane Katrina. The Jackson County, Mississippi School District
General  Obligation,  issued in August 2004, is insured and initially  carried a
Moody's rating of Aaa. They have not been placed on negative watch at this time.
The Gulfport, Mississippi School District General Obligation, issued in December
1998, is also insured with an original  Moody's  rating of Aaa and was placed on
negative  watch on September 8, 2005.  The City of Biloxi,  Mississippi  General
Obligation,  issued in December 2003, is not insured and carried an original S&P
rating of A. It was  placed on  negative  watch on August 29,  2005.  Currently,
these Bonds carry their  original  ratings and it is not  expected  they will be
downgraded;  however,  this could  change in the  future.  The  Company  expects
Congress to approve pending aid packages to help these debtors make their future
interest payments and does not expect any losses from these securities.

<TABLE>
<CAPTION>

             Name                       Cusip #        Amount         Next Interest Date     Last Interest Date
------------------------------         ---------      --------       ------------------     ------------------
<S>                                    <C>            <C>            <C>                    <C>
Jackson County School District         467232FN9      $250,000         December 2005           June 2005
Gulfport School District               402702CU6       200,000         April 2006              October 2005
City of Biloxi                         090221X31       510,000         December 2005           June 2005

</TABLE>

Item 4.      Controls and Procedures

             As of the end of the  period  covered by this  quarterly  report on
Form 10-Q, the Company carried out an evaluation, under the supervision and with
the  participation of our principal  executive  officer and principal  financial
officer,  of the  effectiveness  of the design and  operation of our  disclosure
controls and  procedures,  as defined in Rule 13a-15(e) and Rule 15d-15(e) under
the Securities Exchange Act of 1934, as amended.  Based on this evaluation,  our
principal  executive officer and principal  financial officer concluded that our
disclosure  controls and  procedures  are  effective in timely  alerting them to
material information required to be included in our periodic SEC reports.  There
has been no change in the Company's  internal  control over financial  reporting
that  occurred  during  the  Company's  most  recent  fiscal  quarter  that  has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.

<PAGE>


PART II.  OTHER INFORMATION

Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds

             The  Company's  ability to pay  dividends  to its  shareholders  is
substantially  dependent  on the  ability of the Bank to  transfer  funds to the
Company  in the form of  dividends,  loans and  advances.  Federal  law  imposes
limitations  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 to the Company is also limited by
prudence, statutory and regulatory guidelines and a variety of other factors. At
September 30, 2005,  retained  earnings  available for payment of cash dividends
under applicable dividend regulations exceed $3.4 million.

             Certain  restrictions  also  exist  on the  ability  of the Bank to
transfer  such  funds to the  Company  in the  form of  loans.  Federal  Reserve
regulations  limit the amount the Bank may loan to the Company unless such loans
are collateralized by specific  obligations.  At September 30, 2005, the maximum
amount  available for transfer from the Bank to the Company in the form of loans
on a secured basis was $1.9 million.  There were no loans  outstanding  from the
Bank to the Company at September 30, 2005.


Item 6.    Exhibits

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*         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.

 31.1          Certifications  of  the  Chief  Executive  Officer,  as  required
               pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 31.2          Certifications  of  the  Chief  Financial  Officer,  as  required
               pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 32.1          Certifications  of  the  Chief  Executive  Officer,  as  required
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 32.2          Certifications  of  the  Chief  Financial  Officer,  as  required
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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


<PAGE>

                                   SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.









                                            BRITTON & KOONTZ CAPITAL CORPORATION




Date:     November 11, 2005                 /s/ W. Page Ogden
                                            ____________________________________
                                            W. Page Ogden
                                            Chairman and Chief Executive Officer




Date:     November 11, 2005                 /s/ William M. Salters
                                            ____________________________________
                                            William M. Salters
                                            Chief Financial Officer


<PAGE>


                                  EXHIBIT INDEX

Exhibit           Description of Exhibit

31.1              Certifications  of the Chief  Executive  Officer,  as required
                  pursuant  to Section  302 of the Sarbanes-Oxley Act of 2002

31.2              Certifications  of the Chief  Financial  Officer,  as required
                  pursuant  to Section  302 of the Sarbanes-Oxley Act of 2002

32.1              Certifications  of the Chief  Executive  Officer,  as required
                  pursuant  to Section  906 of the Sarbanes-Oxley Act of 2002

32.2              Certifications  of the Chief  Financial  Officer,  as required
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



<PAGE>




                                  EXHIBIT 31.1

             SECTION 302 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER


<PAGE>


                                                                    EXHIBIT 31.1



                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER


         I, W. Page Ogden, certify that:



         1. I have  reviewed  this  quarterly  report on Form 10-Q of  Britton &
         Koontz Capital Corporation;

         2. Based on my  knowledge,  this  report  does not  contain  any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances  under which
         such  statements  were made, not misleading  with respect to the period
         covered by this report;

         3. Based on my knowledge, the financial statements, and other financial
         information  included in this  report,  fairly  present in all material
         respects the financial condition,  results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

         4. The registrant's  other certifying officer and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for  the
         registrant and have:

         a) designed such  disclosure  controls and  procedures,  or caused such
         disclosure   controls  and   procedures   to  be  designed   under  our
         supervision,  to  ensure  that  material  information  relating  to the
         registrant,  including its consolidated subsidiaries,  is made known to
         us by others within those entities,  particularly  during the period in
         which this report is being prepared;

         b) evaluated the effectiveness of the registrant's  disclosure controls
         and procedures and presented in this report our  conclusions  about the
         effectiveness of the disclosure controls and procedures,  as of the end
         of the period covered by this report based on such evaluation; and

         c)  disclosed  in this report any change in the  registrant's  internal
         control over financial  reporting that occurred during the registrant's
         most recent fiscal quarter (the  registrant's  fourth fiscal quarter in
         the case of an  annual  report)  that has  materially  affected,  or is
         reasonably  likely to  materially  affect,  the  registrant's  internal
         control over financial reporting; and

         5. The  registrant's  other  certifying  officer and I have  disclosed,
         based on our most recent  evaluation of internal control over financial
         reporting,  to the registrant's auditors and the audit committee of the
         registrant's  board of directors (or persons  performing the equivalent
         functions):

         a) all significant  deficiencies and material  weaknesses in the design
         or operation of internal  control over  financial  reporting  which are
         reasonably  likely to  adversely  affect  the  registrant's  ability to
         record, process, summarize and report financial information; and

         b) any fraud,  whether or not  material,  that  involves  management or
         other  employees  who  have a  significant  role  in  the  registrant's
         internal control over financial reporting.






Date: November 11, 2005                           /s/ W. Page Ogden
                                                  ______________________________
                                                  W. Page Ogden
                                                  Chief Executive Officer




<PAGE>


                                  EXHIBIT 31.2

             SECTION 302 - CERTIFICATION OF CHIEF FINANCIAL OFFICER



<PAGE>


                                                                    EXHIBIT 31.2



                    CERTIFICATION OF CHIEF FINANCIAL OFFICER


         I, William M. Salters, certify that:



         1. I have  reviewed  this  quarterly  report on Form 10-Q of  Britton &
         Koontz Capital Corporation;

         2. Based on my  knowledge,  this  report  does not  contain  any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances  under which
         such  statements  were made, not misleading  with respect to the period
         covered by this report;

         3. Based on my knowledge, the financial statements, and other financial
         information  included in this  report,  fairly  present in all material
         respects the financial condition,  results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

         4. The registrant's  other certifying officer and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for  the
         registrant and have:

         a) designed such  disclosure  controls and  procedures,  or caused such
         disclosure   controls  and   procedures   to  be  designed   under  our
         supervision,  to  ensure  that  material  information  relating  to the
         registrant,  including its consolidated subsidiaries,  is made known to
         us by others within those entities,  particularly  during the period in
         which this report is being prepared;

         b) evaluated the effectiveness of the registrant's  disclosure controls
         and procedures and presented in this report our  conclusions  about the
         effectiveness of the disclosure controls and procedures,  as of the end
         of the period covered by this report based on such evaluation; and

         c)  disclosed  in this report any change in the  registrant's  internal
         control over financial  reporting that occurred during the registrant's
         most recent fiscal quarter (the  registrant's  fourth fiscal quarter in
         the case of an  annual  report)  that has  materially  affected,  or is
         reasonably  likely to  materially  affect,  the  registrant's  internal
         control over financial reporting; and

         5. The  registrant's  other  certifying  officer and I have  disclosed,
         based on our most recent  evaluation of internal control over financial
         reporting,  to the registrant's auditors and the audit committee of the
         registrant's  board of directors (or persons  performing the equivalent
         functions):

         a) all significant  deficiencies and material  weaknesses in the design
         or operation of internal  control over  financial  reporting  which are
         reasonably  likely to  adversely  affect  the  registrant's  ability to
         record, process, summarize and report financial information; and

         b) any fraud,  whether or not  material,  that  involves  management or
         other  employees  who  have a  significant  role  in  the  registrant's
         internal control over financial reporting.







Date: November 11, 2005                           /s/ William M. Salters
                                                  ______________________________
                                                  William M. Salters
                                                  Chief Financial Officer



<PAGE>



                                  EXHIBIT 32.1

             SECTION 906 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER


<PAGE>


                                                                    EXHIBIT 32.1



                    Certification of Chief Executive Officer
                         Pursuant to 18 U.S.C. ss. 1350
                 (Section 906 of the Sarbanes-Oxley Act of 2002)


         In connection  with the  Quarterly  Report on Form 10-Q for the quarter
ended  September  30,  2005,  of  Britton  &  Koontz  Capital  Corporation  (the
"Company"),  as filed with the Securities Exchange Commission on the date hereof
(the  "Quarterly  Report"),  I, W. Page Ogden,  Chief  Executive  Officer of the
Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:


(1)      the Quarterly  Report fully  complies with the  requirements of Section
         13(a) or 15(d) of the  Securities Exchange Act of 1934, as amended; and

(2)      the  information  contained  in the  Quarterly  Report fairly presents,
         in  all  material  respects,  the  financial  condition  and results of
         operations of the Company.







Date: November 11, 2005           /s/ W. Page Ogden
                                  ______________________________________________
                                  W. Page Ogden
                                  Chief Executive Officer


<PAGE>




                                  EXHIBIT 32.2

             SECTION 906 - CERTIFICATION OF CHIEF FINANCIAL OFFICER







<PAGE>


                                                                    EXHIBIT 32.2





                    Certification of Chief Financial Officer
                         Pursuant to 18 U.S.C. ss. 1350
                 (Section 906 of the Sarbanes-Oxley Act of 2002)


         In connection  with the  Quarterly  Report on Form 10-Q for the quarter
ended  September  30,  2005,  of  Britton  &  Koontz  Capital  Corporation  (the
"Company"),  as filed with the Securities Exchange Commission on the date hereof
(the "Quarterly Report"), I, William M. Salters,  Chief Financial Officer of the
Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:


(1)      the Quarterly  Report fully  complies with the  requirements of Section
         13(a) or 15(d) of the  Securities Exchange Act of 1934, as amended; and

(2)      the  information  contained  in the  Quarterly  Report fairly presents,
         in  all  material  respects,  the  financial  condition  and results of
         operations of the Company.








Date: November 11, 2005           /s/ William M. Salters
                                  ______________________________________________
                                  William M. Salters
                                  Chief Financial Officer