EXHIBIT 5 
                                                   
     
            [PHELPS DUNBAR LETTERHEAD]



                 January 29, 1997


 
Britton & Koontz Capital Corporation
500 Main Street
Natchez, Mississippi  39120

          Re:  Britton & Koontz Capital Corporation
               Registration Statement on Form S-8  

Ladies and Gentlemen:

     We have acted as counsel to Britton & Koontz Capital Corporation,
a Mississippi corporation (the "Company"), in connection with the
Company's filing of a Registration Statement on Form S-8 (the
"Registration Statement") with the Securities and Exchange Commission
(the "Commission"), pursuant to the Securities Act of 1933, as amended
(the "Act").  The Registration Statement relates to the registration by the
Company of an aggregate of 40,000 shares of its common stock, $10.00
par value (the "Shares"), to be offered and sold pursuant to the terms of
the Britton & Koontz Long-Term Incentive Plan (the "Plan").  

     As counsel to the Company, we have examined original,
photostatic or certified copies of the following documents: (i) the
Registration Statement, (ii) the Articles of Incorporation of the Company,
as amended, (iii) the By-laws of the Company, as amended, (iv) the
Plan, (v) certificates of the Company's officers and excerpts of
minutes of meetings of the Board of Directors, and (vi) such other
instruments, agreements, and certificates as we have deemed necessary or
appropriate.

     In performing our examination, we have assumed without inquiry
the genuineness of all signatures appearing on all documents, the legal
capacity of all persons signing such documents, the authenticity of all
documents submitted to us as originals, the conformity with originals of
all documents submitted to us as copies, the accuracy and completeness
of all corporate records made available to us by the Company, and the
truth and accuracy of all facts set forth in all certificates provided to or
examined by us.  We have also assumed that all Shares issued pursuant to the
Plan will be issued for consideration deemed to be adequate by the Company's
Board of Directors.  We have relied as to certain factual matters on
representations made to us by officers of the Company.  


     Based upon the foregoing and the further qualifications stated
below, we are of the opinion that the Shares have been duly authorized
and, when issued and sold pursuant to the terms and conditions of the
Plan, will be validly issued, fully paid and nonassessable.

     The foregoing opinion is limited to the laws of the State of
Mississippi and the federal laws of the United States of America.  We
express no opinion as to matters governed by the laws of any other
jurisdiction.  Furthermore, no opinion is expressed herein as to the effect
of any future acts of the Company or changes in existing law.  The
opinions expressed herein are rendered as of the date hereof, and we do
not undertake to advise you of any changes after the date hereof in the law
or the facts presently in effect that would alter the scope or substance of
the opinion herein expressed.

     This letter expresses our legal opinion as to the foregoing matters
based on our professional judgment at this time; it is not, however, to be
construed as a guaranty, or a warranty that a court considering such
matters would not rule in a manner contrary to the opinion set forth
above.

     We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement.  In giving this
consent, we do not admit that we are within the category of persons whose
consent is required under Section 7 of the Act or the General Rules and
Regulations of the Commission thereunder.

                              Very truly yours,


                              /s/ Phelps Dunbar, L.L.P.
                              PHELPS DUNBAR, L.L.P.