EX-99.1 2 ex99_1.htm EXHIBIT 99.1

Exhibit 99.1

JACKSONVILLE BANCORP ANNOUNCES

2013 RESULTS

JACKSONVILLE, FLA., March 14, 2014/ PRNewswire /-- Jacksonville Bancorp, Inc. (the “Company”) (NASDAQ: JAXB), holding company for The Jacksonville Bank (the “Bank”), announced today a net loss of $960 thousand for the year ended December 31, 2013, compared to a net loss of $43.0 million for the year ended December 31, 2012. Book value and tangible book value per common share as of December 31, 2013 were $5.86 and $5.71, respectively.

Balance Sheet Overview

Total assets were $507.3 million as of December 31, 2013, compared to $565.1 million as of December 31, 2012. The decrease in total assets was largely due to reductions in federal funds sold in the amount of $34.0 million, net loans of $23.2 million, and other real estate owned of $3.9 million.

Total deposits were $435.0 million as of December 31, 2013, a decrease of $55.0 million, compared to total deposits of $490.0 million as of December 31, 2012. The decrease in total deposits when compared to 2012 was driven primarily by a decrease in time deposits of $51.0 million due in large part to a reduction in national CDs (the Company’s overall strategy in 2013 was to not offer or renew national CDs). Money market, NOW and savings deposits also contributed $10.3 million to the overall decrease. These decreases were slightly offset by a $6.2 million increase in noninterest-bearing demand deposits.

Total shareholders’ equity increased $0.3 million to $33.9 million as of December 31, 2013 compared to $33.6 million as of December 31, 2012. This increase was primarily attributable to $4.2 million in additional equity issued in conjunction with the Company’s capital raise activities, principally the rights offering completed in the third and fourth quarters of 2013, offset by a decrease in accumulated comprehensive income of $2.9 million and a net loss for the year ended December 31, 2013 of $960 thousand. Please refer to the Recent Events section of this press release for additional information related to the Company’s capital raise activities.

Asset Quality

As of December 31, 2013, nonperforming assets were $20.1 million, or 3.95% of total assets, compared to $29.7 million, or 5.26% of total assets, as of December 31, 2012. The decrease in nonperforming assets was driven primarily by the Company’s execution of its overall strategy to accelerate the disposition of substandard assets on an individual customer basis to include: sales of OREO and the disposition of substandard assets via payoffs and short sales as well as troubled debt restructurings. Nonperforming assets as of December 31, 2012 were positively impacted by the disposition of substandard assets via the asset sale completed late in the fourth quarter of 2012.

All share and per share amounts have been retrospectively adjusted to reflect the common equity 1-for-20 reverse stock split completed in October 2013. Please refer to the Recent Events section of this press release and the Company’s Non-GAAP Reconciliations for additional information related to the reverse stock split.

The following table presents information concerning nonperforming assets as of the last five quarters:

	As of
(Dollars in thousands)	December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013			December 31, 2012
Nonperforming Assets
Total nonperforming loans⁽¹⁾	$	17,008		$	15,516		$	16,973		$	20,067		$	22,747
Other real estate owned, net		3,078			8,438			9,142			9,920			6,971
Total nonperforming assets	$	20,086		$	23,954		$	26,115		$	29,987		$	29,718

Allowance for loan losses	$	(15,760	)	$	(16,974	)	$	(17,303	)	$	(19,820	)	$	(20,198	)
Allowance for loan losses as a percentage of NPL's		92.66	%		109.40	%		101.94	%		98.77	%		88.79	%
Nonperforming loans as a percentage of gross loans		4.59	%		4.16	%		4.44	%		5.10	%		5.71	%
Total nonperforming assets as a percentage of total assets		3.95	%		4.66	%		5.00	%		5.76	%		5.26	%
Loans past due 30-89 days, still accruing interest	$	5,857		$	7,976		$	2,466		$	8,246		$	4,622

⁽¹⁾	Total nonperforming loans (“NPL’s”) include loans on nonaccrual and loans past due over 90 days still on accrual.

Nonperforming loans decreased $5.7 million to $17.0 million as of December 31, 2013, from $22.7 million as of December 31, 2012. The continued reduction of nonperforming loans was primarily driven by the Company’s overall strategy to accelerate the disposition of substandard assets. In addition, total loans past due 30-89 days, still accruing interest, increased $1.3 million to $5.9 million as of December 31, 2013 from $4.6 million as of December 31, 2012. This increase was primarily due to one large loan that was 30 days past due on December 31, 2013 and became current at the beginning of 2014.

Consistent with the Company’s reduction of nonperforming loans and general improvements in asset quality, the allowance for loan losses decreased in total and as a percentage of total loans. The allowance for loan losses was 4.25% of total loans as of December 31, 2013, compared to 5.07% as of December 31, 2012. The decrease in the allowance for loan losses as of December 31, 2013 compared to December 31, 2012 was driven primarily by a decrease in the amount of allowance needed on loans collectively evaluated for impairment as well as loans acquired with deteriorated credit quality. The decrease on loans collectively evaluated for impairment is due to an overall reduction in the respective loan balances and a decrease in net charge-offs that flow into the calculation. The decrease on loans acquired with deteriorated credit quality is the result of several of these loans modified as a troubled debt restructuring during the year ended December 31, 2013.

Operating Results

Total interest income decreased $3.3 million for the year ended December 31, 2013 when compared to 2012. This decrease was primarily driven by a decrease in average earning assets, in particular, average loan balances which declined by $63.9 million when compared to the prior year. The decrease in average loan balances was partially offset by an increase in the average yield on loans to 5.49% for the year ended December 31, 2013 compared to 5.41% for the year ended December 31, 2012. The increase in the loan yield was driven by an increase in the overall yield on accruing loans as well as a decrease in total nonperforming loans.

Interest expense decreased by $1.1 million for the year ended December 31, 2013, respectively, when compared to the prior year. This was partially due to a decrease in the average cost of interest-bearing liabilities to 1.08% for the year ended December 31, 2013 compared to 1.15% for the year ended December 31, 2012. The overall decrease is reflective of repricing activities in the current low interest rate environment coupled with a shift in the funding mix from interest-bearing to more noninterest-bearing deposits which further reduced overall funding costs.

A provision for loan loss expense of $815 thousand was recorded for the year ended December 31, 2013, compared to an expense of $38.0 million for 2012. In addition, the Company recorded net charge-offs of $5.3 million for the year ended December 31, 2013, compared to $30.8 million for 2012. The decrease in provision expense was primarily due to the overall run-off in the loan portfolio, the year-over-year change in net charge-offs, as well as improvements in our overall asset quality to include a general reduction in substandard assets.

Noninterest income increased to $1.8 million for the year ended December 31, 2013, compared to $1.5 million for 2012. Included in the current year other income were realized gains from the sale of investment securities of $437 thousand. Such realized gains did not occur during the prior year. Additionally, the Company recorded an impairment in the amount of $178 thousand for the stock it held in Independent Banker’s Bank. For the year ended December 31, 2013, there was no such impairment recognized during the same period in the prior year.

Noninterest expense decreased to $20.6 million for the year ended December 31, 2013, compared to $27.7 million for the year ended December 31, 2012. This decrease was primarily due to a decrease in nonrecurring goodwill impairment expense of $3.1 million in the prior year and a decrease in OREO expenses of $1.9 million, capital raise and asset sale-related expenses of $1.4 million and loan related expenses of $1.7 million when compared to the prior year. These amounts were offset by an increase in professional fees of $0.5 million and data processing of $0.5 million, while the remainder of the components of noninterest expense remained relatively flat period-over-period.

There was no income tax expense recorded during the year ended December 31, 2013, while there was an income tax benefit of $173 thousand for the year ended December 31, 2012. The Company recorded a full valuation allowance against its deferred taxes as of December 31, 2011. This was substantially due to the fact that it was more-likely-than-not that the benefit would not be realized in future periods due to Section 382 of the Internal Revenue Code. Based on an analysis performed as of December 31, 2013 and 2012, it was determined that the need for a full valuation allowance still existed. The calculation for the income tax provision or benefit generally does not consider the tax effects of changes in other comprehensive income (“OCI”), which is a component of shareholders’ equity on the balance sheet. However, an exception is provided in certain circumstances, such as when there is a full valuation allowance against the net deferred tax assets, there is a loss from continuing operations and income in other components of the financial statements. In such a case, income from other categories, such as changes in OCI, must be considered in determining a tax benefit to be allocated to the loss from continuing operations. During the years ended December 31, 2013 and 2012, this resulted in zero and $173 thousand, respectively, of income tax benefit allocated to continuing operations.

On a per common share basis, the Company had net loss available to common shareholders of $6.83 for the year ended December 31, 2013, compared to a net loss available to common shareholders of $146.16 for the prior year. The Company experienced a net loss per diluted common share for the year ended December 31, 2013 as a result of a net loss of $960 thousand and the $31.5 million noncash, implied preferred stock dividend recognized in conjunction with the conversion of the Company’s Series A Preferred Stock into an aggregate of 5.0 million shares of common stock and nonvoting common stock (the Conversion”) during the three months ended March 31, 2013. Please refer to the Recent Events section of this report for additional information related to the Conversion. As adjusted to reflect earnings (loss) per common share less the impact of the noncash, implied preferred stock dividend, the loss per common share was $0.20 for the year ended December 31, 2013. Please refer to the Company’s Non-GAAP Reconciliations for additional information related to this non-GAAP financial measure.

Recent Events

During the fourth quarter of 2012, the Company completed a $50.0 million capital raise through the private placement of 50,000 shares of the Company’s Series A preferred stock, at a purchase price of $1,000 per share. Consideration in the private placement included cash, the one-for-one exchange of Series B preferred stock sold in the $5.0 million bridge financing completed during the third quarter of 2012 and $1.8 million in the cancellation of outstanding debt under the Company’s revolving loan agreements held by certain purchasers in the private placement and/or their related interests. Net proceeds from the issuance of preferred stock in the amount of $45.1 million were used for general operating expenses, mainly for the subsidiary bank, to improve capital ratios and to support the Company’s business strategy going forward. On February 19, 2013, after receiving requisite shareholder approvals, all issued and outstanding shares of Series A Preferred Stock automatically converted into an aggregate of 2.4 million shares of common stock and 2.6 million shares of the Company’s newly authorized nonvoting common stock. Book value and tangible book value per common share as of December 31, 2012 were $51.06 and $46.78, respectively. Book value and tangible book value per common share as of December 31, 2012, adjusted for the Conversion, were $6.34 and $6.10, respectively. Please refer to the Company’s Non-GAAP Reconciliations for additional information related to these non-GAAP financial measures. In addition, on December 31, 2012, the Bank completed the sale of $25.1 million in assets, including non-accrual loans, loans with a history of being past due, and other loans that were part of an overall customer relationship of $24.6 million and OREO of $0.5 million, to a real estate investment firm, for a purchase price of $11.7 million.

On June 24, 2013, Stephen C. Green resigned as President and Chief Executive Officer of the Company, and as Chief Executive Officer of the Bank. On the same date, Mr. Green also resigned from the boards of directors of the Company and the Bank. The Company’s board of directors appointed Donald F. Glisson, Jr., the Chairman of the Board, as the Company’s interim principal executive officer. On December 10, 2013, Kendall L. Spencer was appointed as President and Chief Executive Officer of the Company. Mr. Spencer was also appointed as a director of the Company and will serve as the Chief Executive Officer and a director of the Bank. In conjunction with the appointment of Mr. Spencer, the Company also announced that Mr. Glisson was named Executive Chairman of the Company, effective as of the same date.

During the third quarter of 2013, the Company initiated concurrent offerings: (i) a rights offering to existing shareholders for nontransferable subscription rights to purchase shares of the Company’s common stock at a subscription price of $10.00 per share and (ii) a public offering of shares not subscribed for in the rights offering at an equal subscription price of $10.00 per share. The subscription period for the rights offering expired on September 20, 2013 and resulted in the sale of 104,131 shares of the Company’s common stock for aggregate proceeds of $1.0 million, or $0.9 million net of offering expenses. The public offering expired on October 4, 2013, whereby the Company sold 395,869 shares for an aggregate of $4.0 million, or $3.2 million net of offering expenses. Total net proceeds from the concurrent offerings will be used for general operating expenses.

In October 2013, Bancorp’s Board of Directors implemented a 1-for-20 reverse stock split of its outstanding shares of common stock and nonvoting common stock effective October 24, 2013. As a result of the reverse stock split, each 20 shares of issued and outstanding common stock and nonvoting common stock, par value $0.01 per share, respectively, were automatically and without any action on the part of the respective holders combined and reconstituted as one share of the respective class of common equity as of the effective date. Consequently, the aggregate par value of common stock and nonvoting common stock eliminated in the reverse stock split was reclassed on the Company’s consolidated balance sheets from the respective class of common equity to additional paid-in capital. Additional adjustments were made to the aforementioned accounts as a result of rounding to avoid the existence of fractional shares. All share and per share information in this earnings release have been retroactively adjusted to reflect the common equity 1-for-20 reverse stock split.

The Company

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 $507.3 million in assets and eight full-service branches in Jacksonville and Jacksonville Beach, Duval County, Florida, as well as our virtual branch. The Jacksonville Bank opened for business on May 28, 1999 and provides a variety of community banking services to businesses and individuals in the greater Jacksonville area of Northeast Florida. More information is available at its website at www.jaxbank.com.

This press release contains non-GAAP financial disclosures that are not in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Company uses certain non-GAAP financial measures to provide meaningful, supplemental information regarding its operational results and to enhance investors’ overall understanding of the Company’s financial performance. The limitations associated with these non-GAAP financial measures include the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might calculate these measures differently. In addition, these disclosures should not be considered an alternative to the Company’s GAAP results. Please refer to the table at the end of this release for a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

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 ability to dispose of substandard assets and the disposition prices thereof; economic and political conditions, especially in North Florida; real estate prices and sales in the Company’s markets; competitive circumstances; bank regulation, legislation, accounting principles and monetary policies; the interest rate environment; efforts to increase our capital and reduce our 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, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, which is incorporated herein by reference.

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

JACKSONVILLE BANCORP, INC.

(Unaudited)

(Dollars in thousands, except per share data)

	For the Three Months Ended
	December 31,			September 30,		June 30,			March 31,			December 31,
	2013			2013		2013			2013			2012
Consolidated Earnings Summary
Total interest income	$	5,169		$	5,605	$	5,797		$	6,362		$	6,466
Total interest expense		948			1,032		1,089			1,133			1,286
Net interest income		4,221			4,573		4,708			5,229			5,180
Provision for loan losses		715			367		(484	)		217			20,348
Net interest income (loss) after provision for loan losses		3,506			4,206		5,192			5,012			(15,168	)
Total noninterest income		198			761		377			424			420
Total noninterest expense		5,039			4,820		5,540			5,237			7,118
Income (loss) before income tax		(1,335	)		147		29			199			(21,866	)
Income tax benefit		-			-		-			-			(37	)
Net income (loss)	$	(1,335	)	$	147	$	29		$	199		$	(21,829	)
Noncash, implied preferred stock dividend		-			-		-			(31,464	)		-
Net income (loss) available to common shareholders	$	(1,335	)	$	147	$	29		$	(31,265	)	$	(21,829	)

	For the Three Months Ended
	December 31,		September 30,		June 30,		March 31,		December 31,
	2013		2013		2013		2013		2012
Summary Average Consolidated Balance Sheet
Loans, gross	$	369,718	$	377,563	$	390,265	$	395,589	$	425,813
Securities		89,424		84,602		92,157		91,186		88,931
Other earning assets		30,693		33,855		17,577		32,816		16,353
Total earning assets		489,835		496,020		499,999		519,591		531,097
Other assets		23,127		23,554		19,631		18,464		22,144
Total assets	$	512,962	$	519,574	$	519,630	$	538,055	$	553,241

Interest-bearing liabilities	$	376,129	$	385,932	$	387,026	$	412,753	$	442,426
Other liabilities		101,391		101,763		99,434		91,734		98,198
Shareholders' equity		35,442		31,879		33,170		33,568		12,617
Total liabilities and shareholders' equity	$	512,962	$	519,574	$	519,630	$	538,055	$	553,241

	For the Three Months Ended
	December 31,			September 30,		June 30,		March 31,			December 31,
	2013			2013		2013		2013			2012
Per Share Data
Basic (loss) earnings per common share	$	(0.23	)	$	0.03	$	0.01	$	(12.15	)	$	(74.11	)
Diluted (loss) earnings per common share	$	(0.23	)	$	0.03	$	0.01	$	(12.15	)	$	(74.11	)
Basic weighted average common shares outstanding		5,782,058			5,307,032		5,294,547		2,572,322			294,544
Diluted weighted average common shares outstanding		5,782,058			5,307,042		5,295,935		2,572,354			294,544
Total shares outstanding at end of period		5,795,095			5,398,713		5,294,582		5,294,544			294,544
Closing market price per share	$	12.60		$	9.90	$	9.60	$	30.00		$	16.00

JACKSONVILLE BANCORP, INC.

(Unaudited)

(Dollars in thousands, except per share data)

	For the Three Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2013			2013			2013			2013			2012
Selected ratios
Return on average assets		(1.03	)%		0.11	%		0.02	%		0.15	%		(15.70	)%
Return on average equity		(14.94	)%		1.83	%		0.35	%		2.40	%		(688.29	)%
Average equity to average assets		6.91	%		6.14	%		6.38	%		6.24	%		2.28	%
Tangible common equity to tangible assets		6.53	%		6.19	%		5.94	%		6.21	%		2.44	%
Interest rate spread		3.19	%		3.42	%		3.52	%		3.86	%		3.68	%
Net interest margin		3.42	%		3.66	%		3.78	%		4.08	%		3.88	%
Allowance for loan losses as a percentage of total loans		4.25	%		4.55	%		4.53	%		5.04	%		5.07	%
Allowance for loan losses as a percentage of NPL's		92.66	%		109.40	%		101.94	%		98.77	%		88.79	%
Ratio of net charge-offs as a percentage of average loans		2.07	%		0.82	%		2.09	%		0.61	%		17.05	%
Efficiency ratio		114.03	%		90.36	%		108.95	%		92.64	%		127.11	%

	As of
	December 31,			September 30,			June 30,			March 31,			December 31,
	2013			2013			2013			2013			2012
Summary Consolidated Balance Sheet
Cash and cash equivalents	$	40,325		$	35,926		$	42,799		$	23,961		$	72,079
Securities		84,771			88,203			83,234			91,262			83,985
Loans, gross		370,352			372,955			381,952			392,989			398,031
Allowance for loan losses		(15,760	)		(16,974	)		(17,303	)		(19,820	)		(20,198	)
Loans, net		354,592			355,981			364,649			373,169			377,833
Other intangible assets, net		849			938			1,045			1,153			1,260
All other assets		26,752			33,499			30,706			31,353			29,900
Total assets	$	507,289		$	514,547		$	522,433		$	520,898		$	565,057

Deposit accounts	$	434,966		$	440,354		$	449,254		$	446,235		$	490,021
All other liabilities		38,391			41,472			41,146			41,239			41,460
Shareholders' equity		33,932			32,721			32,033			33,424			33,576
Total liabilities and shareholders' equity	$	507,289		$	514,547		$	522,433		$	520,898		$	565,057

JACKSONVILLE BANCORP, INC.

Unaudited

(Dollars in thousands, except per share data)

	For the Year Ended
	December 31,			December 31,
	2013			2012
Consolidated Earnings Summary
Total interest income	$	22,933		$	26,252
Total interest expense		4,202			5,256
Net interest income		18,731			20,996
Provision for loan losses		815			37,994
Net interest income (loss) after provision for loan losses		17,916			(16,998	)
Total noninterest income		1,760			1,503
Total noninterest expense		20,636			27,726
Income (loss) before income tax		(960	)		(43,221	)
Income tax benefit		-			(173	)
Net income (loss)	$	(960	)	$	(43,048	)
Non-cash implied preferred stock dividend		(31,464	)		-
Net loss available to common shareholders	$	(32,424	)	$	(43,048	)

	For the Year Ended
	December 31,		December 31,
	2013		2012
Summary Average Consolidated Balance Sheet
Loans, gross	$	383,197	$	447,061
Securities		89,325		83,511
Other earning assets		28,743		13,604
Total earning assets		501,265		544,176
Other assets		21,213		25,708
Total assets	$	522,478	$	569,884

Interest-bearing liabilities	$	390,347	$	455,282
Noninterest-bearing liabilities		98,616		91,761
Shareholders' equity		33,515		22,841
Total liabilities and shareholders' equity	$	522,478	$	569,884

	For the Year Ended
	December 31,			December 31,
	2013			2012
Per Share Data
Basic earnings (loss) per share	$	(6.83	)	$	(146.16	)
Diluted earnings (loss) per share	$	(6.83	)	$	(146.16	)
Basic weighted average shares outstanding		4,749,340			294,522
Diluted weighted average shares outstanding		4,749,340			294,522
Total shares outstanding at end of period		5,795,095			294,544
Closing market price per share	$	12.60		$	16.00

JACKSONVILLE BANCORP, INC.

Unaudited

(Dollars in thousands, except per share data)

	For the Year Ended
	December 31,			December 31,
	2013			2012
Selected ratios
Return on average assets		(0.18	)%		(7.55	)%
Return on average equity		(2.86	)%		(188.47	)%
Average equity to average assets		6.41	%		4.01	%
Tangible common equity to tangible assets		6.53	%		2.44	%
Interest rate spread		3.50	%		3.67	%
Net interest margin		3.74	%		3.86	%
Allowance for loan losses as a percentage of total loans		4.25	%		5.07	%
Allowance for loan losses as a percentage of NPL's		92.66	%		88.79	%
Ratio of net charge-offs as a percentage of average loans		1.37	%		6.89	%
Efficiency ratio		100.71	%		123.23	%

	As of
	December 31,			December 31,
	2013			2012
Summary Consolidated Balance Sheet
Cash and cash equivalents	$	40,325		$	72,079
Securities		84,771			83,985
Loans, gross		370,352			398,031
Allowance for loan losses		( 15,760	)		(20,198	)
Loans, net		354,592			377,833
Other intangible assets, net		849			1,260
All other assets		26,752			29,900
Total assets	$	507,289		$	565,057

Deposit accounts	$	434,966		$	490,021
All other liabilities		38,391			41,460
Shareholders' equity		33,932			33,576
Total liabilities and shareholders' equity	$	507,289		$	565,057

JACKSONVILLE BANCORP, INC.

Non-GAAP Reconciliations

(Unaudited)

(Dollars in thousands, except share and per share data)

Impact of Common Equity1-for-20 Reverse Stock Split

	Pre-Split				Post-Split
	December 31, 2013		December 31, 2012		December 31, 2013		December 31, 2012
Book Value Per Common Share
Book value	$	33,932	$	15,040	$	33,932	$	15,040
Less: Goodwill and other intangible assets		849		1,260		849		1,260
Tangible book value	$	33,083	$	13,780	$	33,083	$	13,780

Shares outstanding		5,795,095		5,890,880		5,795,095		294,544

Book value per common share	$	5.86	$	2.55	$	5.86	$	51.06
Tangible book value per common share	$	5.71	$	2.34	$	5.71	$	46.78

	Pre-Split						Post-Split
	December 31, 2013			December 31, 2012			December 31, 2013			December 31, 2012
Year-to-Date Earnings (Loss) Per Common Share:
Net income	$	(960	)	$	(43,048	)	$	(960	)	$	(43,048	)
Less: Noncash implied preferred stock dividend		(31,464	)		-			(31,464	)		-
Net (loss) income available to common shareholders	$	(32,424	)	$	(43,048	)	$	(32,424	)	$	(43,048	)

Basic weighted average common shares outstanding		4,749,340			5,890,432			4,749,340			294,522
Diluted weighted average common shares outstanding		4,749,340			5,890,432			4,749,340			294,522

Basic (loss) earnings per common share	$	(6.83	)	$	(7.31	)	$	(6.83	)	$	(146.16	)
Diluted (loss) earnings per common share	$	(6.83	)	$	(7.31	)	$	(6.83	)	$	(146.16	)

JACKSONVILLE BANCORP, INC.

Non-GAAP Reconciliations (Continued)

(Unaudited)

(Dollars in thousands, except share and per share data)

	December 31, 2013 (as reported)			December 31, 2013 (as adjusted)⁽¹⁾

Year-to-Date Earnings (Loss) Per Common Share:
Net income	$	(960	)	$	(960	)
Less: Noncash implied preferred stock dividend		(31,464	)		-
Net (loss) income available to common shareholders	$	(32,424	)	$	(960	)

Basic weighted average common shares outstanding		4,749,340			4,749,340
Diluted weighted average common shares outstanding		4,749,340			4,749,340

Basic (loss) earnings per common share	$	(6.83	)	$	(0.20	)
Diluted (loss) earnings per common share	$	(6.83	)	$	(0.20	)

	December 31, 2012 (as reported)		Conversion Adjustments			December 31, 2012 (as adjusted)

Book Value Per Common Share:
Total Shareholders’ equity⁽²⁾	$	33,576	$	-		$	33,576
Less: Preferred stock⁽³⁾		18,536		(18,536	)		-
Book value	$	15,040		(18,536	)	$	33,576
Less: Goodwill and other intangible assets		1,260		-			1,260
Tangible book value	$	13,780	$	-		$	32,316

Shares outstanding⁽⁶⁾		294,544		5,000,000			5,294,544

Book value per common share^(4),(6)		51.06					6.34
Tangible book value per common share^(5),(6)		46.78					6.10

⁽¹⁾	Adjusted to reflect the calculation of earnings (loss) per common share less the impact of the noncash, implied preferred stock dividend recognized in conjunction with the Conversion during the year ended December 31, 2013.

⁽²⁾

Assumes the full Conversion of the Series A Preferred Stock into 5,000,000 shares of common stock and nonvoting common stock as of December 31, 2012, resulting in an additional $50.0 million in common equity, no preferred stock outstanding, and a noncash, implied dividend recognized as a reduction of retained earnings in conjunction with the discount on the Series A Preferred Stock beneficial conversion feature of $31.5 million. Total shareholders’ equity did not change as a result of this transaction.

⁽³⁾	Assumes no shares of preferred stock outstanding following the Conversion.

⁽⁴⁾	Calculated as book value divided by shares outstanding, where book value is calculated as shareholders’ equity less preferred stock equity (excluding proceeds allocated to common equity as a result of the beneficial conversion feature) as of the balance sheet date.

⁽⁵⁾	Calculated as tangible book value divided by shares outstanding, where tangible book value is calculated as book value less goodwill and other intangible assets as of the balance sheet date.

⁽⁶⁾	Share and per share amounts have been retrospectively adjusted to reflect the common equity 1-for-20 reverse stock split completed in October 2013. Please refer to the Recent Events section of this press release for additional information related to the reverse stock split.