Jacksonville Bancorp Announces Third Quarter Results

JACKSONVILLE, Fla., Oct. 23 /PRNewswire-FirstCall/ -- Jacksonville
Bancorp, Inc. (Nasdaq: JAXB), holding company for The Jacksonville Bank,
reported net income for the third quarter of $266 thousand, compared to net
income of $781 thousand for the same period in 2007. On a per diluted share
basis, the net income was $0.15 for the 2008 quarter, compared to net income
of $0.43 for the third quarter of 2007.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020410/JAXBLOGO )
Total assets were $434 million at September 30, 2008, compared to $392
million at December 31, 2007 and $384 million at September 30, 2007. Period
end loans increased by $37 million, or 11% (15% annualized), for the
nine-month period from December 31, 2007, and by $43 million, or 13%, from
September 30, 2007. Total deposits increased $51 million, compared to
September 30, 2007. Noninterest bearing deposits increased by $10 million to
$44.7 million, or 29%.
Jacksonville Bancorp, Inc. President and CEO Gilbert J. Pomar, III stated,
"We remain committed to profitable and controlled growth through a balanced
focus on sound lending, and attracting and retaining low-cost deposits."
Nonperforming assets declined to $7.8 million from $8.8 million in the
second quarter of 2008 to 1.80% of assets. The nonperforming assets relate
primarily to two loans secured by real estate. During the third quarter, the
Bank recorded $665 thousand in provision for loan losses, increasing the loan
loss reserve to 1.14% from 1.12% in the second quarter and .91% a year
earlier. The provision expense was necessitated primarily by an increase in
net charge-offs and the Bank's aggressive efforts to identify any potential
losses in the portfolio. The Company had net loan charge-offs of $541
thousand during the quarter compared to $20 thousand during the same period in
the prior year. Of the charge-offs recorded during the third quarter, $466
thousand had been identified and were reserved during the prior quarter. "We
continue to closely monitor our loan portfolio for early warning signs and
remain committed to the timely recognition of losses while continuing to build
appropriate reserves to absorb any potential future losses," Mr. Pomar went on
to say.
The Company remains well capitalized with total risk-based capital, Tier 1
risk-based capital and Tier 1 leverage capital at 11.79%, 9.18% and 8.24% at
September 30, 2008. "Our capital strength will provide us with the ability to
take advantage of growth opportunities in our local market while continuing to
cope with current economic conditions," stated Mr. Pomar. At September 30,
the Company had $6.9 million in excess capital above regulatory well
capitalized levels.
For the first nine months of 2008, Jacksonville Bancorp, Inc. reported a
net loss per share of $0.02, compared to net income of $1.11 per diluted share
for the same period in 2007. Without the expenses related to the termination
of the Agreement and Plan of Merger with Heritage Bancshares, Inc., the
Company would have reported a net income of $231 thousand, or $0.13 per
diluted share.
Net interest income for the third quarter of 2008 declined slightly to
$3.0 million compared to the $3.2 million earned in the third quarter of 2007.
Interest income for the quarter declined $677 thousand when compared to the
prior year as a result of the ongoing reduction in short-term rates by the
Federal Reserve and the increase in nonperforming assets from 12 months ago;
this was offset by average earning asset growth of $49.6 million from the same
period in the prior year. Interest expense declined by $523 thousand as a
result of the reduction in short-term rates offset by a transition from
low-cost core deposits into more expensive time deposits and wholesale funding
required to support the Company's earning asset growth. The net interest
margin was 2.94% and 3.07% for the quarter and year, respectively, compared to
3.50% and 3.59% for the comparable periods in 2007, and 2.93% and 3.14% in the
second quarter of 2008.
Noninterest income increased 6% over the third quarter 2007 and declined
6% for the nine months ended September 30, 2008 compared to the same period in
the previous year. The quarterly increase was driven in part by income earned
on an additional $3.5 million BOLI contract entered into by the Bank during
the second quarter; this was offset by a decline in Mortgage Origination
referral income, due to the slowing real estate market, which is also driving
the nine-month period decline. Noninterest expense was $2.3 million for the
quarter ended September 30, 2008, up 2% over the comparable period in the
prior year. For the nine months ended September 30, noninterest expense was
$7.5 million, an increase of 18% over the same period in 2007. The Company
absorbed $430 thousand in merger related expenses as a result of the
termination of the merger agreement with Heritage Bancshares, Inc. in the
second quarter of 2008. Additionally, the Company absorbed additional
expenses related to data processing, and legal and professional (primarily
related to increased audit fees). Excluding the one-time charge resulting
from the termination of the merger agreement, the Company would have
experienced an 11% increase.
"We remain diligent with our management of asset quality as we work
through this business cycle. Our experienced bankers and strong capital
position will provide us the strength to navigate through these economic
times. We are optimistic about the remainder of the year and 2009," said Mr.
Pomar.
Jacksonville Bancorp, Inc., a bank holding company, is the parent of The
Jacksonville Bank, a Florida state-chartered bank focusing on the Northeast
Florida market with five full-service banking offices. The Jacksonville Bank
opened for business on May 28, 1999 and provides a variety of community
banking services to businesses and individuals in Jacksonville, Florida. More
information is available at its website at www.jaxbank.com.
The statements contained in this press release, other than historical
information, are forward-looking statements, which involve risks, assumptions
and uncertainties. The risks, uncertainties and factors affecting actual
results include but are not limited to: our relatively limited operating
history; economic and political conditions, especially in North Florida;
competitive circumstances; bank regulation, legislation, accounting principles
and monetary policies; the interest rate environment; success in minimizing
credit risk and nonperforming assets; and technological changes. The
Company's actual results may differ significantly from the results discussed
in forward-looking statements. Investors are cautioned not to place undue
reliance on forward-looking statements, which speak only as of the date
hereof. The Company does not undertake, and specifically disclaims, any
obligation to publicly release any revisions to these forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events. Additional information
regarding risk factors can be found in the Company's filings with the
Securities and Exchange Commission.

JACKSONVILLE BANCORP, INC.
(Unaudited)
(Dollars in thousands except per share data)

Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
------------------------ ------------------------
2008 2007 2008 2007
-------- -------- -------- --------

Earnings Summary
----------------
Total interest
income $ 6,457 $ 7,134 $ 19,459 $ 19,789
Total interest
expense 3,409 3,931 10,259 10,665
-------- -------- -------- --------
Net interest
income 3,048 3,203 9,200 9,124
Provision for
loan losses 665 32 2,783 480
-------- -------- -------- --------
Net interest
income after
provision for
loan losses 2,383 3,171 6,417 8,644
Noninterest income 300 284 812 861
Noninterest expense 2,339 2,288 7,477 6,344
-------- -------- -------- --------

Income (loss)
before income
tax 344 1,167 (248) 3,161
Income tax provision
(benefit) 77 386 (212) 1,143
-------- -------- -------- --------
Net income
(loss) $ 266 $ 781 $ (36) $ 2,018
======== ======== ======== ========

Summary Average Balance Sheet
-----------------------------
Loans, gross $ 379,742 $ 330,949 $ 367,001 $ 310,169
Securities 31,766 30,816 31,798 29,177
Other earning
assets 962 1,098 1,778 885
-------- -------- -------- --------

Total earning
assets 412,470 362,863 400,577 340,231
Other assets 17,337 13,042 16,442 13,716
-------- -------- -------- --------
Total assets $ 429,807 $ 375,905 $ 417,019 $ 353,947
======== ======== ======== ========

Interest bearing
liabilities $ 359,918 $ 315,106 $ 347,890 $ 294,073
Other liabilities 43,356 36,140 42,133 35,867
Shareholders'
equity 26,533 24,659 26,996 24,007
-------- -------- -------- --------
Total liabilities
and shareholders'
equity $ 429,807 $ 375,905 $ 417,019 $ 353,947
======== ======== ======== ========

Per Share Data
--------------
Basic earnings
(loss) per
share $ 0.15 $ 0.45 $ (0.02) $ 1.16
Diluted earnings
(loss) per
share $ 0.15 $ 0.43 $ (0.02) $ 1.11
Basic weighted
average shares
outstanding 1,748,567 1,745,143 1,748,183 1,743,585
Diluted weighted
average shares
outstanding 1,777,292 1,815,584 1,748,183 1,819,637
Book value per
basic share at
end of period 15.13 14.56 15.13 14.56
Total shares
outstanding at
end of period 1,747,899 1,747,981 1,747,899 1,747,981
Closing market
price per share $ 11.72 $ 27.75 $ 11.72 $ 27.75

Selected Ratios
---------------
Return on average
assets 0.25% 0.82% (0.01%) 0.76%
Return on average
equity 3.99% 12.56% (0.18%) 11.24%
Average equity to
average assets 6.17% 6.56% 6.47% 6.78%
Interest rate spread 2.46% 2.85% 2.55% 2.93%
Net interest margin 2.94% 3.50% 3.07% 3.59%
Allowance for loan
losses as a
percentage of
total loans 1.14% 0.91% 1.14% 0.91%
Net charged off loans
as a percentage of
average loans
(annualized) 0.57% 0.03% 0.57% 0.02%
Efficiency ratio 69.87% 65.62% 74.68% 63.54%
Nonperforming
assets $ 7.829 $ 522 $ 7.829 $ 522
Nonperforming
assets (as a
percentage of
total assets) 1.80% .14% 1.80% .14%

Sept. 30,
---------------------
Summary Balance Sheet 2008 2007
--------------------- -------- --------
Cash and cash equivalents $ 8,599 $ 5,092
Securities 28,974 32,846
Loans, net 376,344 333,677
All other assets 20,108 12,676
-------- --------

Total assets $434,025 $384,291
======== ========
Deposit accounts $350,816 $299,506
All other liabilities 56,758 59,328
Shareholders' equity 26,451 25,457
-------- --------

Total liabilities and shareholders' equity $434,025 $384,291
======== ========

SOURCE Jacksonville Bancorp, Inc.

Valerie Kendall, Jacksonville Bancorp, Inc., +1-904-421-3051