Jacksonville Bancorp Inc. (JAXB)

[Enterprising Investor]

Jacksonville Bancorp Announces 2015 First Quarter Results (5/05/15)

JACKSONVILLE, FLA., May 5, 2015/ -- Jacksonville Bancorp, Inc. (the “Company”) (NASDAQ: JAXB), holding company for The Jacksonville Bank (the “Bank”), announced today net income for the three months ended March 31, 2015 of $914 thousand compared to net income of $26 thousand for the three months ended March 31, 2014. Book value and tangible book value per common share as of March 31, 2015 were $6.61 and $6.52, respectively.

Balance Sheet Overview

Total assets were $491.1 million as of March 31, 2015, compared to $488.6 million as of December 31, 2014. The increase in total assets was due to an increase in cash and cash equivalents in the amount of $8.7 million. This amount was offset by a decrease in securities available-for-sale of $4.3 million and net loans of $1.5 million during the three months ended March 31, 2015.

Total deposits were $423.1 million as of March 31, 2015, an increase of $7.4 million compared to total deposits of $415.8 million as of December 31, 2014. The increase in total deposits when compared to December 31, 2014 was driven primarily by:

· Non-interest bearing deposits increased $1.3 million, or 1.3%. This represents 25.8% of total deposits as of March 31, 2015;

· Money market, NOW and savings deposits increased $12.5 million, or 7.2%, due to natural fluctuations in account balances; and

· The time deposit portfolio decreased $6.5 million, or 4.9%, driven primarily by a $5.9 million reduction in brokered CDs. The remaining variance was due to a net decrease in local and national CDs when compared to the year ended December 31, 2014.

Total shareholders’ equity increased $1.2 million to $38.3 million as of March 31, 2015 compared to $37.1 million as of December 31, 2014. This increase was attributable to an increase in accumulated comprehensive income of $262 thousand and net income during the three months ended March 31, 2015 of $914 thousand.

Asset Quality

As of March 31, 2015, nonperforming assets decreased to $13.0 million, or 2.64% of total assets, compared to $13.2 million, or 2.71% of total assets, as of December 31, 2014.

[tables deleted]

Nonperforming loans remained relatively flat with a slight decrease of $207 thousand to $9.0 million as of March 31, 2015, from $9.2 million as of December 31, 2014. Total loans past due 30-89 days, still accruing interest, were $946 thousand as of March 31, 2015 compared to $6.8 million as of December 31, 2014. This decrease was primarily due to one large commercial real estate loan that was between 30-59 days past due as of December 31, 2014 which became current at the beginning of 2015, as well as continued general improvements in asset quality during the three months ended March 31, 2015.

Operating Results

Total interest income remained relatively flat at $5.1 million for the three months ended March 31, 2015 and 2014. There was a decrease in average loan balances of $2.5 million offset by an increase in the average yield on loans to 5.08% for the three months ended March 31, 2015 compared to 5.03% for the three months ended March 31, 2014. The increase in the loan yield was driven by the decrease in nonperforming loans as well as an increase in accretion recognized on acquired loans of approximately $33 thousand when compared to the same period in the prior year.

Interest expense decreased by $110 thousand to $742 thousand for the three months ended March 31, 2015, when compared to $852 thousand for the three months ended March 31, 2014. The average cost of interest-bearing liabilities decreased 7 basis points to 0.88% for the three months ended March 31, 2015 compared to 0.95% for the same period in 2014. The overall decrease in the average cost of interest-bearing deposits reflects an ongoing reduction in interest rates paid on deposits as a result of the re-pricing activities in the current low interest rate environment.

There was no provision for loan loss expense for the three months ended March 31, 2015 or 2014. The Company recorded net charge-offs of $6 thousand for the three months ended March 31, 2015, compared to $0.7 million for the three months ended March 31, 2014. Although the Company’s overall asset quality, as well as the economy in the markets served, is moving in a positive direction, management does not yet view this as a trend and will continue to monitor these metrics until such time as the trends are considered to be sustainable.

Noninterest income remained relatively flat at $373 thousand for the three months ended March 31, 2015, compared to $377 thousand for the three months ended March 31, 2014.

Noninterest expense decreased to $3.8 million for the three months ended March 31, 2015, compared to $4.6 million for the three months ended March 31, 2014. This decrease was largely due to a decrease in salaries and employee benefits of $569 thousand, mainly due to the two reductions in the workforce that occurred as a result of the Company’s re-engineering efforts in 2014 during the second and fourth quarters. In addition, there was a decrease of $92 thousand for occupancy and equipment, $22 thousand for director fees and $163 thousand for loan expenses as a result of the Company’s continued execution of its ongoing strategy to reduce problem assets. The remainder of the components of noninterest expense remained relatively flat period-over-period.

Income tax expense increased to $14 thousand for the three months ended March 31, 2015 compared to none in the same period of the prior year. This was the result of Alternative Minimum Taxes. The Company recorded a full valuation allowance against its deferred taxes as of December 31, 2011. Based on an analysis performed as of March 31, 2015, it was determined that the need for a full valuation allowance still existed.

On a per common share basis, the Company had earnings per share of $0.16 for the three months ended March 31, 2015, compared to earnings per share of $0.00 for the same period in the prior year.

“Our talented and dedicated employees have endured difficult challenges in recent years but they have continued to serve our customers and community in an extraordinary manner,” stated Kendall L. Spencer, President and CEO of the Company. Mr. Spencer went on to say, “The first quarter results are reflective of executing our loan and deposit growth strategies, as well as the ongoing improvement in asset quality and the benefits reaped from our 2014 re-engineering initiatives.”

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 $491.1 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.

http://www.sec.gov/Archives/edgar/data/1071264/000114036115017693/ex99_1.htm