Jacksonville Bancorp Stays Profitable on Cost Cuts, Credit Quality

Jacksonville Bancorp (JAXB) in Florida reported its third consecutive quarterly profit as lowered its expenses and its loan-loss provision.

The $520 million-asset company earned $147,000 in the third quarter, compared with a loss of $10.7 million in the third quarter of 2012, it announced Friday.

Eugene Ludwig, the founder of consultancy Promontory Financial and a former comptroller of the currency, is one of Jacksonville Bancorp's primary backers. He has invested about $24 million in the bank, and CapGen, a private-equity firm he founded, is its largest shareholder.

Jacksonville Bancorp's net interest income fell 3%, to $4.6 million, as its net interest margin contracted by 29 basis points, to 3.66%. Its loan portfolio also shrunk, with gross loans dropping 15%, to $373 million.

But a cleaner balance sheet made up for the lower lending revenue. Jacksonville's provision for loan losses was $367,000, compared with $6 million in the third quarter of 2012. The company purged its balance sheet late last year by selling more than $25 million in soured loans, plus other assets, for $11.7 million.

Noninterest expenses dropped 54%, to $4.8 million, as real estate and other costs declined. Its noninterest income grew by 138%, to $761,000, as service charges doubled, to $800,000.

In the third quarter, Jacksonville Bancorp raised about $5 million through a public offering and rights offering, which it plans to use for general operating expenses. In October, it implemented a 1-for-20 reverse stock split, in order to raise its share price above the Nasdaq's $1 minimum-bid requirement.

Its shares closed at $10.53 Friday.