Jacksonville Bancorp (JAXB) 8-K Jacksonville Bancorp Announces Quarterly and Annual Earnings

JACKSONVILLE BANCORP ANNOUNCES QUARTERLY AND ANNUAL EARNINGS

JACKSONVILLE, FLA., February 18/PRNewswire-First Call/--Jacksonville Bancorp, Inc. (NASDAQ: JAXB) reported net income for the fourth quarter of 2009 of $256 thousand, or $.15 per diluted common share, compared to fourth quarter 2008 earnings of $71 thousand, or $.04 per diluted common share.  The Company also reported annual earnings for 2009 of $76 thousand, or $.04 per diluted common share, compared to $35 thousand, or $.02 per diluted common share, in 2008.  Book value per common share at the period end was $15.59.

Total assets were $438.8 million at year end, compared to $434.0 million at the end of 2008.  Net loans increased 2.4% to $384.0 million as of December 31, 2009, compared to $375.0 million as of December 31, 2008.  Total deposits increased 7.3% to $370.6 million, compared to $345.5 million as of December 31, 2008.

During the fourth quarter of 2009, the Company embarked on a deposit gathering campaign.  The “Built for Growth” campaign drove a net increase of $14.3 million in money market deposits.  Additionally, the Company launched its “Virtual Branch” in August 2009.  This, too, proved to be an excellent source of liquidity for the Company, attracting $20.0 million in deposits as of December 31, 2009.  Noninterest bearing deposits increased by $2.9 million to $43.7 million, or 6.9%, compared to the prior year.

The Company continued to exceed regulatory standards of being “well capitalized” with total risk-based capital, Tier 1 risk-based capital and Tier 1 leverage capital at 11.9%, 9.2% and 8.2%, respectively, at December 31, 2009.

Commenting on the year, Gilbert J. Pomar, III, Jacksonville Bancorp, Inc. President and Chief Executive Officer, stated, “2009 was certainly a challenging year for our Company and the banking industry in general.  Our employees have done a tremendous job in a difficult environment.  It was a year where we concentrated our efforts on the core fundamentals that have driven our success since the Company’s inception—namely, credit quality, new customer acquisition and capital preservation.  We’re also pleased our margins continue to improve.”

Nonperforming assets remained relatively flat at $12.8 million, or 2.9% of total assets, compared to $12.5 million, or 2.9% of total assets, compared to the prior year.  During the fourth quarter and year, the Bank recorded $1.1 million and $4.4 million, respectively, in provision for loan losses, increasing the loan loss reserve to 1.75% from 1.24% a year earlier.

		December 31,
		2009			2008
		(Dollars in thousands)
Nonaccruing loans		$	8,745		$	12,436
	Loans past due over 90 days still on accrual		--			--
	Total nonperforming loans		8,745			12,436
	Foreclosed assets, net		4,011			89
	Total nonperforming assets		12,756			12,525
	Allowance for loan losses	$	6,854		$	4,705
	Nonperforming loans and foreclosed assets as a percent of total assets		2.91	%		2.89	%
	Nonperforming loans as a percent of gross loans		2.24	%		3.28	%
	Loans past due 30-89 days, still accruing	$	5,308		$	1,797

The increase in loans past due 30-89 days (still accruing) is being driven primarily by one loan in the amount of $2.9 million, which continues to perform and is not anticipated to deteriorate to nonaccrual status.

The Company had net loan charge-offs of $648 thousand and $2.2 million during the quarter and year, respectively, compared to $419 thousand and $2.0 million during the same periods in the prior year.  Mr. Pomar went on to say, “The increase in our loan loss reserve was necessitated primarily by an increase in net charge-offs and the ongoing softening in real estate values in our market.”

Net interest income for the fourth quarter of 2009 increased to $3.7 million, compared to the $2.8 million earned in the fourth quarter of 2008.  Interest income for the quarter declined $287 thousand when compared to the prior year as a result of the repricing of our assets in this low interest rate environment along with the impact from nonperforming assets; this was offset by average earning asset growth of $6.1 million from the same period in the prior year.  Interest expense declined by $1.2 million, compared to the linked quarter, as a result of the low interest rate environment; this was offset somewhat by a transition from low-cost wholesale funding into more expensive time deposits.  The net interest margin was 3.47% and 3.23% for the quarter and year, respectively, compared to 2.70% and 2.97% for the comparable periods in 2008, and 3.59% in the third quarter of 2009.

Management expects the margin improvement to stabilize somewhat during 2010 as the strategic focus remains to provide liquidity through local core funding.  Brokered deposits were $35.7 million, or 9.6% of total deposits, at December 31, 2009, compared to $45.8 million, or 13.1% of total deposits, at December 31, 2008.

Noninterest income decreased from $1.2 million for the 12-month period in 2008 to $841 thousand for the same period in 2009.  This is primarily the result of recognizing a $132 thousand write-off in stock of Silverton Bank, N.A. due to its May 2009 failure along with a reduction in Corporate Analysis and NSF fees.

Noninterest expense increased $178 thousand, or 1.8%, for the year ended December 31, 2009, compared to 2008.  During 2008, the Company recorded $468 thousand in merger related expenses as a result of the termination of the merger agreement with Heritage Bancshares, Inc. “The Company remains focused on stringent cost controls during these very difficult times but remains cognizant of the importance of retaining adequate resources to mitigate risks and position ourselves for growth and profitability in the future,” added 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 approximately $438 million in assets and 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.

Contact Valerie Kendall at 904-421-3051 for additional information.

 JACKSONVILLE BANCORP, INC.

 (Unaudited)

 (Dollars in thousands except per share data)

	December 31,			September 30,			June 30,			March 31,			December 31,
	2009			2009			2009			2009			2009
Earnings Summary
Total interest income	$	5,817		$	6,081		$	5,625		$	5,681		$	6,104
Total interest expense		2,151			2,266			2,556			2,756			3,301
Net interest income		3,666			3,815			3,069			2,925			2,803
Provision for loan losses		1,046			1,070			1,307			938			787
Net interest income after provision for loan losses		2,620			2,745			1,762			1,987			2,016
Noninterest income		230			241			224			146			366
Noninterest expense		2,502			2,528			2,667			2,286			2,328
Income before income tax		348			458			(681	)		(153	)		54
Income tax provision		92			133			(285	)		(44	)		(17	)
Net income	$	256		$	325		$	(396	)	$	(109	)	$	71
Summary Average Balance Sheet
Loans, gross	$	392,219		$	395,133		$	387,232		$	382,071		$	380,203
Securities		26,033			26,083			26,321			30,344			31,809
Other earning assets		941			525			687			696			1,098
Total earning assets		419,193			421,741			414,240			413,111			413,110
Other assets		19,669			16,127			16,039			16,824			17,456
Total assets	$	438,862		$	437,868		$	430,279		$	429,935		$	430,566
Interest bearing liabilities	$	364,871		$	368,071		$	362,346		$	359,846		$	359,466
Other liabilities		46,919			42,968			40,894			42,986			44,470
Shareholders' equity		27,072			26,829			27,039			27,103			26,630
Total liabilities and shareholders' equity	$	438,862		$	437,868		$	430,279		$	429,935		$	430,566
Per Share Data
Basic earnings per share	$	0.15		$	0.19		$	(0.23	)	$	(0.06	)	$	0.04
Diluted earnings per share	$	0.15		$	0.19		$	(0.23	)	$	(0.06	)	$	0.04
Basic weighted average shares outstanding		1,749,280			1,748,586			1,748,214			1,748,647			1,748,630
Diluted weighted average shares outstanding		1,750,112			1,749,074			1,748,214			1,748,647			1,760,511
Book value per basic share at end of period	$	15.59		$	15.42		$	15.13		$	15.36		$	15.35
Total shares outstanding at end of period		1,749,243			1,748,854			1,747,599			1,748,799			1,748,599
Closing market price per share	$	9.49		$	10.75		$	10.50		$	8.00		$	11.10
Selected Ratios
Return on average assets		0.23	%		0.29	%		-0.37	%		-0.10	%		0.07	%
Return on average equity		3.75	%		4.81	%		-5.87	%		-1.63	%		1.06	%
Average equity to average assets		6.17	%		6.13	%		6.28	%		6.30	%		6.18	%
Tangible common equity to tangible assets		6.21	%		6.15	%		6.04	%		6.22	%		6.19	%
Interest rate spread		3.17	%		3.28	%		2.62	%		2.47	%		2.22	%
Net interest margin		3.47	%		3.59	%		2.97	%		2.87	%		2.70	%
Allowance for loan losses as a percentage of total loans		1.75	%		1.63	%		1.45	%		1.29	%		1.24	%
Allowance for loan losses as a percentage of NPL's		78.38	%		108.49	%		38.89	%		51.74	%		37.83	%
Ratio of net charge offs as a percentage of average loans		0.66	%		0.28	%		0.61	%		0.74	%		0.44	%
Efficiency Ratio		64.22	%		62.33	%		80.99	%		74.44	%		73.46	%

 JACKSONVILLE BANCORP, INC.

 (Unaudited)

 (Dollars in thousands except per share data)

Summary
Balance	December 31,		September 30,		June 30,		March 31,		December 31,
Sheet	2009		2009		2009		2009		2008
Cash and cash equivalents	$	5,647	$	5,496	$	9,345	$	6,847	$	10,148
Securities		25,371		26,955		25,571		29,035		31,724
Loans,net		384,133		389,082		384,817		378,755		374,993
All other assets		23,660		18,410		17,725		17,350		17,134
Total assets	$	438,811	$	439,943	$	437,458	$	431,987	$	433,999
	=		=		=		=		=
Deposit accounts	$	370,635	$	321,603	$	321,864	$	344,506	$	345,544
All other liabilities		40,908		91,380		89,161		60,626		61,610
Shareholders' equity		27,268		26,960		26,433		26,855		26,845
Total liabilities and shareholders' equity	$	438,811	$	439,943	$	437,458	$	431,987	$	433,999

 JACKSONVILLE BANCORP, INC.

 (Unaudited)

 (Dollars in thousands except per share data)

	Twelve Months Ended
	December 31,			December 31,
	2009			2008
Earnings Summary
Total interest income	$	23,204		$	25,563
Total interest expense		9,729			13,560
Net interest income		13,475			12,003
Provision for loan losses		4,361			3,570
Net interest income after provision for loan losses ....		9,114			8,433
Noninterest income		841			1,178
Noninterest expense		9,983			9,805
Income before income tax		(28	)		(194	)
Income tax provision		(104	)		(229	)
Net income	$	76		$	35
Summary Average Balance Sheet
Loans, gross	$	389,208		$	370,320
Securities		27,180			31,891
Other earning assets		712			1,607
Total earning assets		417,100			403,818
Other assets		17,170			16,606
Total assets	$	434,270		$	420,424
Interest bearing liabilities	$	363,809		$	350,800
Other liabilities		43,451			42,720
Shareholders' equity		27,010			26,904
Total liabilities and shareholders' equity	$	434,270		$	420,424
Per Share Data
Basic earnings per share	$	0.04		$	0.02
Diluted earnings per share	$	0.04		$	0.02
Basic weighted average shares outstanding		1,748,683			1,748,295
Diluted weighted average shares outstanding		1,749,165			1,791,342
Book value per basic share at end of period	$	15.59		$	15.35
Total shares outstanding at end of period		1,749,243			1,748,799
Closing market price per share	$	9.49		$	11.10
Selected Ratios
Return on average assets		0.02	%		0.01	%
Return on average equity		0.28	%		0.13	%
Average equity to average assets		6.22	%		6.40	%
Tangible common equity to tangible assets		6.21	%		6.19	%
Interest rate spread		2.89	%		2.46	%
Net interest margin		3.23	%		2.97	%
Allowance for loan losses as a percentage of total loans		1.75	%		1.24	%
Allowance for loan losses as a percentage of NPL's		78.38	%		37.83	%
Ratio of net charge offs as a percentage of average loans		0.57	%		0.44	%
Efficiency Ratio		69.73	%		74.39	%

 JACKSONVILLE BANCORP, INC.

 (Unaudited)

 (Dollars in thousands except per share data)

	December 31,		December 31,
Summary Balance Sheet	2009		2008
Cash and cash equivalents	$	5,647	$	10,148
Securities		25,371		31,724
Loans,net		384,133		374,993
All other assets		23,660		17,134
Total assets	$	438,811	$	433,999
Deposit accounts	$	370,635	$	345,544
All other liabilities		40,908		61,610
Shareholders' equity		27,268		26,845
Total liabilities and shareholders' equity	$	438,811	$	433,999