Maryland | 6712 | Being applied for |
(State or Other Jurisdiction of | (Primary Standard Industrial | (I.R.S. Employer |
Incorporation or Organization) | Classification Code Number) | Identification Number) |
Title
of each class of
securities
to be registered
|
Amount
to be
registered
|
Proposed
maximum
offering
price per share
|
Proposed
maximum
aggregate
offering price
|
Amount
of registration fee
|
Common
Stock, $0.01 par value per share
|
2,873,515
shares
|
$10.00
|
$28,735,150
(1)
|
$2,049
|
Participation
interests
|
625,979
interests
|
(2)
|
(1)
|
Estimated
solely for the purpose of calculating the registration
fee.
|
(2)
|
The
securities of Jacksonville Bancorp, Inc. to be purchased by Jacksonville
Savings Bank 401(k) Profit Sharing Plan are included in the amount shown
for the common stock. Accordingly, no separate fee is required for the
participation interests. In accordance with Rule 457(h) of the Securities
Act of 1933, as amended, the registration fee has been calculated on the
basis of the number of shares of common stock that may be purchased with
the current assets of such plan.
|
THE
OFFERING
|
|
Securities
Offered
|
Jacksonville
Bancorp-Maryland is offering participation interests in shares of common
stock of Jacksonville Bancorp-Maryland (“Jacksonville Bancorp-Maryland
Common Stock”) acquired by the Jacksonville Savings Bank 401(k) Profit
Sharing Plan (the “Plan”). The participation interests
represent your indirect ownership of shares of Jacksonville
Bancorp-Maryland Common Stock through the Plan. At the purchase
price of $10.00 per share, the Plan may acquire up to 625,979 shares of
Jacksonville Bancorp-Maryland Common Stock in the stock offering, based on
the fair market value of the Plan’s assets as of December 31,
2009.
Only
employees of Jacksonville Savings Bank may become participants in the Plan
and only participants may purchase participation interests in shares of
Jacksonville Bancorp-Maryland Common Stock. Your investment in
shares of Jacksonville Bancorp-Maryland Common Stock in connection with
the stock offering is subject to the purchase priorities listed
below.
Information
with regard to the Plan is contained in this prospectus supplement and
information with regard to the financial condition, results of operations
and business of Jacksonville Bancorp-Maryland and Jacksonville Savings
Bank is contained in the accompanying prospectus. The address
of the principal executive office of Jacksonville Bancorp-Maryland and
Jacksonville Savings Bank is 1211 West Morton Avenue, P.O. Box 880,
Jacksonville, IL 62651-0880. Jacksonville Savings Bank’s
telephone number at this address is (217) 245-4111.
|
Election
to Purchase
Common
Stock
|
In
connection with the stock offering, you may elect to transfer all or part
of your account balances in the Plan to be used to purchase shares of
Jacksonville Bancorp-Maryland Common Stock sold in the stock
offering. The trustee of the Plan will purchase Jacksonville
Bancorp-Maryland Common Stock in accordance with your directions. However,
such directions are subject to purchase priorities and purchase
limitations, as described below. Following the stock offering,
the Trustee will then transfer your purchased shares of Jacksonville
Bancorp-Maryland Common Stock to a brokerage account that is set up within
the Plan on your behalf.
Shares
of Jacksonville Bancorp-Maryland Common Stock being sold in the stock
offering are different from the current common stock held by the Plan,
which are shares of common stock of Jacksonville Bancorp-Federal, the
mid-tier holding company of Jacksonville Savings Bank that will be
eliminated in the reorganization of Jacksonville Bancorp, MHC into
Jacksonville Bancorp-Maryland, the newly formed stock holding company of
Jacksonville Savings Bank. At the close of the reorganization
and offering, shares of common stock of Jacksonville Bancorp-Federal held
in the Plan will be exchanged for shares of Jacksonville Bancorp-Maryland
Common Stock pursuant to the exchange ratio (discussed in greater detail
in the accompanying prospectus).
|
Purchase
Priorities
|
All
Plan participants are eligible to purchase participation interests in
Jacksonville Bancorp-Maryland Common Stock sold in the
offering. The shares of Jacksonville Bancorp-Maryland Common
Stock are being offered at $10.00 per share in a subscription offering and
community offering in the following descending order of
priority:
Subscription
Offering:
(1)
Depositors of Jacksonville Savings Bank with $50 or more on deposit as of
the close of business on December 31, 2008, get first
priority.
(2)
Jacksonville Savings Bank’s tax-qualified plans, including the
employee stock ownership plan, get second priority.
(3)
Depositors of Jacksonville Savings Bank with $50 or more on deposit as of
the close of business on March 31, 2010, get third priority.
(4)
Depositors of Jacksonville Savings Bank as of ____________ get fourth
priority.
Community
Offering:
(5)
Residents of the Illinois counties of Cass, Greene, Macoupin, Montgomery,
Morgan, Pike, Sangamon and Scott get fifth priority.
(6)
Public stockholders of Jacksonville Bancorp-Federal as of _____________
get sixth priority.
If
you fall into subscription offering
categories (1), (3)
or (4), you have subscription rights to purchase Jacksonville
Bancorp-Maryland Common Stock in the subscription offering and you may use
funds in the Plan to pay for the shares of Jacksonville Bancorp-Maryland
Common Stock. You may also be able to purchase shares of
Jacksonville Bancorp-Maryland Common Stock in the subscription offering
even though you are ineligible to purchase through subscription offering
categories (1), (3) or (4) if Jacksonville Bancorp-Maryland determines to
allow the Plan to purchase stock through subscription offering category
(2), reserved for its tax-qualified employee plans. If the Plan
is not included in category (2), then any order for shares of Jacksonville
Bancorp-Maryland Common Stock placed by those ineligible to subscribe in
categories (1), (3), and (4) will be considered an order placed in the
community offering to members of the general
public. Subscription offering orders, however, will have
preference over orders placed in a community offering.
|
The
trustee of the Plan will purchase shares of Jacksonville Bancorp-Maryland
Common Stock sold in the stock offering in accordance with your
directions. No later than the end of the subscription and
community offering period, the amount that you elect to transfer from your
existing account balances for the purchase of shares of Jacksonville
Bancorp-Maryland Common Stock in connection with the stock offering will
be removed from your existing accounts and transferred to an
interest-bearing savings account maintained by Jacksonville Savings Bank,
pending the closing of the stock offering. Following the
offering period, we will determine whether all, or any portion of, your
order will be filled (if the offering is oversubscribed, you may not
receive any, or all of, your order, depending on your purchase priority,
as described above, and whether the Plan will purchase through category
2). The amount that can be used toward your order will be
applied to the purchase of shares of Jacksonville Bancorp-Maryland Common
Stock.
In
the event the offering is oversubscribed,
i.e.
, there are more
orders for Jacksonville Bancorp-Maryland Common Stock than shares
available for sale in the offering, and the trustee is unable to use the
full amount allocated by you to purchase participation interests in
Jacksonville Bancorp-Maryland Common Stock in the offering, the amount
that cannot be invested in Jacksonville Bancorp-Maryland Common Stock, and
any interest earned on such amount, will be transferred from the
interest-bearing savings account maintained by Jacksonville Savings Bank
and reinvested in the existing funds of the Plan, in accordance with your
then existing investment election (in proportion to your investment
direction for future contributions). The prospectus describes
the allocation procedures in the event of an
oversubscription. If you choose not to direct the investment of
your account balances towards the purchase of any participation
interests
in Jacksonville Bancorp-Maryland
Common Stock sold in the offering, your account balances will remain in
the investment options of the Plan as previously directed by
you.
|
Minimum
and Maximum
Investment
|
In
connection with the stock offering, the Plan will permit you to direct the
trustee to transfer all, or part of, your assets in the Plan to be used to
purchase participation interests in Jacksonville Bancorp-Maryland Common
Stock sold in the offering. The trustee of the Plan will then
subscribe for shares of Jacksonville Bancorp-Maryland Common Stock offered
for sale in the offering, in accordance with each participant’s
direction. The trustee will pay $10.00 per share, which will be
the same price paid by all other persons who purchase shares in the
subscription and community offerings. In order to purchase participation
interests in Jacksonville Bancorp-Maryland Common Stock through the Plan,
the minimum investment is $250, which will purchase 25
shares. The maximum investment any individual can make through
the Plan and outside the Plan is $250,000, which will purchase 25,000
shares.
|
Value
of Plan Assets
|
As
of December 31, 2009, the market value of the assets of the Plan was
approximately $6,259,793, which is eligible to purchase Jacksonville
Bancorp-Maryland Common Stock in the offering. The Plan administrator
informed each participant of the value of his or her account balance under
the Plan as of December 31, 2009.
|
How
to Order
|
Enclosed
is a Special Investment Election Form on which you can elect to purchase
participation interests in Jacksonville Bancorp-Maryland Common Stock sold
in the offering. Please note the following stipulations
concerning this election:
·
You can direct all or a portion of your current account to purchase
Jacksonville Bancorp-Maryland Common Stock in increments of
$10.00.
·
Your election is subject to a minimum purchase of 25 shares, which
equals $250.
·
Your election, plus any order you placed outside the Plan, are
together subject to a maximum purchase of 25,000 shares, which equals
$250,000.
·
The election period opens ______________, 2010 and closes
__________________ p.m., ____________ Time, on ______________________,
2010.
·
During the stock offering period, you will not be permitted to
change the investment amounts that you designated to be used to purchase
shares of Jacksonville Bancorp-Maryland Common Stock on your Special
Investment Election Form.
|
|
·
After the election period ends, the dollar amounts you designated
will be transferred to an interest-bearing savings account maintained by
Jacksonville Savings Bank. If you elect to transfer a dollar
amount from a particular investment option under the Plan and, at the time
that the transfer is made, you do
not
have a sufficient dollar amount in that investment option to process your
entire election due to market fluctuation, the trustee will withdraw up to
100% of your balance in that investment option (rounded down to the
nearest $10.00 increment) and apply only the amount withdrawn to the
purchase of shares of Jacksonville Bancorp-Maryland Common Stock for your
account.
·
The amount transferred to the interest-bearing savings account
maintained by Jacksonville Savings Bank will be held separately until the
offering closes. Therefore, this money is not available for
distributions, loans, or withdrawals until the transaction is completed,
which is after the closing of the subscription offering
period.
If
you wish to use all or part of your account balance in the Plan to
purchase participation interests in shares of Jacksonville
Bancorp-Maryland Common Stock issued in the stock offering, you should
indicate that decision on the Special Investment Election
Form.
If you
do not wish to make an election, you should check the box at the bottom of
the Special Investment Election Form and return the form to _Diana Tone,
Chief Financial Officer, at Jacksonville Savings Bank, 1211 West Morton
Avenue, P.O. Box 880, Jacksonville, Illinois 62651-0880 or by faxing it to
(217)- 245-2010, by no later than ________ p.m., ____________
Central Time, on ___________.
|
Order
Deadline
|
If
you wish to purchase participation interests in shares of Jacksonville
Bancorp-Maryland Common Stock with all or a part of your Plan account
balance,
you must return
your Special Investment Election Form to Diana Tone, Chief Financial
Officer, at Jacksonville Savings Bank,
1211 West Morton Avenue, P.O.
Box 880, Jacksonville, Illinois 62651-0880 or by faxing it to
(217)-245-2010, by no later than _______ p.m. ____________ , Central Time,
on _________, 2010. You may return your Special Investment
Election Form by hand delivery, mail or by faxing itso long as it is
returned by the time specified.
|
Irrevocability
of Transfer Direction
|
Once you make an election to
transfer amounts in your Plan account to purchase shares of Jacksonville
Bancorp-Maryland Common Stock in connection with the stock offering, you
may not change your election
.
Your
election is irrevocable until after the stock offering has
concluded. You will, however, continue to have the ability to
transfer amounts not directed towards the purchase of participation
interests in shares of Jacksonville Bancorp-Maryland Common Stock
among all of the other investment
options on a daily basis.
|
Future
Direction to Purchase Common Stock
|
You
will be able to purchase participation interests in shares of Jacksonville
Bancorp-Maryland Common Stock through your established brokerage account
within the Plan
after
the offering.
You may elect to transfer your future contributions or your account
balance in the Plan to your brokerage account to be used to purchase
shares of Jacksonville Bancorp-Maryland Common Stock. After the
offering, to the extent that shares are available, the trustee of the Plan
will acquire shares of Jacksonville Bancorp-Maryland Common Stock at your
election through your established brokerage account in open market
transactions at the prevailing price, which may be less than or more than
$10.00 per share. You may change your investment allocation on
a daily basis. Special restrictions may apply to purchasing
shares of Jacksonville Bancorp-Maryland Common Stock by the participants
who are subject to the provisions of Section 16(b) of the Securities
Exchange Act of 1934, as amended, relating to the purchase and sale of
securities by officers, directors and principal stockholders of
Jacksonville Bancorp-Maryland.
|
Voting
Rights of Common Stock
|
The
Plan provides that you may direct the trustee as to how to vote any shares
of Jacksonville Bancorp-Maryland Common Stock held by the Plan, and the
interest in such shares that is credited to your account. If
the trustee does not receive your voting instructions, the Plan
administrator will exercise these rights as it determines in its
discretion and will direct the trustee accordingly. All voting
instructions will be kept
confidential.
|
|
1.
|
Jacksonville
Savings Bank Certificate of Deposit
(CD)
|
|
2.
|
The
Bond Fund of America
|
|
3.
|
American
Balanced Fund
|
|
4.
|
The
Income Fund of America
|
|
5.
|
Capital
World Growth and Income Fund
|
|
6.
|
Fundamental
Investors
|
|
7.
|
The
Investment Company of America
|
|
8.
|
Washington
Mutual Investors Fund
|
|
9.
|
AMCAP
Fund
|
|
10.
|
New
Perspective Fund
|
|
11.
|
SMALLCAP
World Fund
|
|
12.
|
The
Growth Fund of America
|
|
13.
|
American
Funds Target Date Retirement 2010
|
|
14.
|
American
Funds Target Date Retirement 2015
|
|
15.
|
American
Funds Target Date Retirement 2020
|
|
16.
|
American
Funds Target Date Retirement 2025
|
|
17.
|
American
Funds Target Date Retirement 2030
|
|
18.
|
American
Funds Target Date Retirement 2035
|
|
19.
|
American
Funds Target Date Retirement 2040
|
|
20.
|
American
Funds Target Date Retirement 2045
|
|
21.
|
American
Funds Target Date Retirement 2050
|
|
22.
|
Jacksonville
Bancorp-Federal Common Stock
|
Fund
|
Performance
as
of December 31, 2009
|
|||||||||
Total
Return
YTD
1
|
Total
Return
1
Yr
1
|
Total
Return
Annualized
3
Yrs
1
|
Total
Return
Annualized
5
Yrs
1
|
Total
Return
Annualized
10
Yrs
1
|
||||||
Jacksonville
Savings Bank CD
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
|||||
American
Balanced Fund
|
21.08%
|
21.08%
|
-1.40%
|
2.02%
|
5.68%
|
|||||
The
Income Fund of America
|
24.51%
|
24.51%
|
-2.77%
|
2.72%
|
6.01%
|
|||||
Capital
World Growth and Income Fund
|
32.25%
|
32.25%
|
-1.43%
|
6.10%
|
7.16%
|
|||||
Fundamental
Investors
|
33.36%
|
33.36%
|
-2.98%
|
3.99%
|
3.61%
|
|||||
The
Investment Company of America
|
27.18%
|
27.18%
|
-4.19%
|
1.73%
|
2.50%
|
|||||
Washington
Mutual Investors Fund
|
18.99%
|
18.99%
|
-6.11%
|
0.23%
|
2.81%
|
|||||
AMCAP
Fund
|
39.21%
|
39.21%
|
-2.30%
|
1.62%
|
2.51%
|
|||||
New
Perspective Fund
|
37.43%
|
37.43%
|
-0.29%
|
5.75%
|
3.97%
|
|||||
SMALLCAP
World Fund
|
53.49%
|
53.49%
|
-3.10%
|
5.45%
|
2.28%
|
|||||
The
Growth Fund of America
|
34.48%
|
34.48%
|
-3.13%
|
2.87%
|
2.34%
|
|||||
American
Funds 2010 Target Date
|
23.34%
|
23.34%
|
n/a
|
n/a
|
n/a
|
|||||
American
Funds 2015 Target Date
|
24.59%
|
24.59%
|
n/a
|
n/a
|
n/a
|
|||||
American
Funds 2020 Target Date
|
26.79%
|
26.79%
|
n/a
|
n/a
|
n/a
|
|||||
American
Funds 2025 Target Date
|
29.44%
|
29.44%
|
n/a
|
n/a
|
n/a
|
|||||
American
Funds 2030 Target Date
|
31.07%
|
31.07%
|
n/a
|
n/a
|
n/a
|
|||||
American
Funds 2035 Target Date
|
31.34%
|
31.34%
|
n/a
|
n/a
|
n/a
|
|||||
American
Funds 2040 Target Date
|
31.55%
|
31.55%
|
n/a
|
n/a
|
n/a
|
|||||
American
Funds 2045 Target Date
|
31.56%
|
31.56%
|
n/a
|
n/a
|
n/a
|
|||||
American
Funds 2050 Target Date
|
31.63%
|
31.63%
|
n/a
|
n/a
|
n/a
|
|||||
Jacksonville
Bancorp-Federal Common Stock
|
29.00%
2
|
29.00%
2
|
-4.00%
2
|
-5.00%
2
|
-5.50%
2
|
|
(1)
|
the
sponsoring employer is allowed an immediate tax deduction for the amount
contributed to the Plan each year;
|
|
(2)
|
participants
pay no current income tax on amounts contributed by the employer on their
behalf; and
|
|
(3)
|
earnings
of the Plan are tax-deferred, thereby permitting the tax-free accumulation
of income and gains on investments.
|
●
|
You
may have priority rights to purchase shares of common
stock.
|
●
|
Each
of your shares of common stock will be exchanged at the conclusion of the
offering for between 0.9615 and 1.3009 shares (subject to adjustment to up
to 1.4960 shares) of common stock of Jacksonville
Bancorp-Maryland.
|
●
|
Your
percentage ownership will remain the same as your current percentage
ownership interest in Jacksonville Bancorp-Federal, exclusive of
additional shares that you may purchase in the offering and your receipt
of cash in lieu of fractional exchange
shares.
|
●
|
You
may have the opportunity to purchase additional shares of common stock in
the offering after priority orders are
filled.
|
●
|
You
may have the opportunity to purchase shares of common stock after priority
orders are filled.
|
Minimum
|
Midpoint
|
Maximum
|
Adjusted
Maximum
|
|||||||||||||
Number
of shares:
|
998,750 | 1,175,000 | 1,351,250 | 1,553,938 | ||||||||||||
Gross
offering proceeds:
|
$ | 9,987,500 | $ | 11,750,000 | $ | 13,512,500 | $ | 15,539,375 | ||||||||
Estimated
offering expenses, excluding
selling
agent commissions and expenses:
|
$ | 912,500 | $ | 912,500 | $ | 912,500 | $ | 912,500 | ||||||||
Selling
agent commissions and expenses (1):
|
$ | 328,679 | $ | 373,888 | $ | 419,096 | $ | 471,085 | ||||||||
Estimated
net proceeds:
|
$ | 8,746,321 | $ | 10,463,613 | $ | 12,180,904 | $ | 14,155,790 | ||||||||
Estimated
net proceeds per share:
|
$ | 8.76 | $ | 8.91 | $ | 9.01 | $ | 9.11 |
(1)
|
For
information regarding compensation to be received by Keefe, Bruyette &
Woods, Inc. and the other broker-dealers that may participate in the
syndicated community offering, including the assumptions regarding the
number of shares that may be sold in the subscription and community
offerings and the syndicated community offering to determine the estimated
offering expenses, see “Pro Forma Data” on page ___ and “The Conversion
and Offering—Marketing Arrangements” on page
____.
|
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|
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|
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|
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34
|
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38
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59
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97
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156
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||
F-1
|
●
|
remaining
a community-oriented financial
institution;
|
●
|
increasing
our commercial and agricultural real estate
lending;
|
●
|
operating
our business profitability while managing
risks;
|
●
|
increasing
our share of lower-cost deposits;
and
|
●
|
increasing
and diversifying our sources of non-interest
income.
|
●
|
to
increase our capital to support internal growth through lending in the
communities we serve;
|
●
|
to
enhance existing products and services and support the development of new
products and services;
|
●
|
to
facilitate growth through branch and whole bank acquisitions, as
opportunities arise;
|
●
|
to
improve our overall competitive position;
and
|
●
|
to
improve the liquidity of our shares of common stock and enhance
stockholder returns through more flexible capital management
strategies.
|
(i)
|
First,
to depositors with accounts at Jacksonville Savings Bank with aggregate
balances of at least $50.00 at the close of business on December 31,
2008.
|
(ii)
|
Second,
to Jacksonville Savings Bank’s tax-qualified employee benefit plans,
including our employee stock ownership plan and 401(k) plan, who will
receive, without payment therefor, nontransferable subscription rights to
purchase in the aggregate up to 10% of the shares of common stock sold in
the offering. Our employee stock ownership plan currently intends to
purchase up to 4% of the shares of common stock sold in the offering, with
the remaining shares in this purchase priority allocated to our 401(k)
plan and any other tax-qualified employee benefit
plan.
|
(iii)
|
Third,
to depositors with accounts at Jacksonville Savings Bank with aggregate
balances of at least $50.00 at the close of business on March 31,
2010.
|
(iv)
|
Fourth,
to depositors of Jacksonville Savings Bank at the close of business on
[OMRD].
|
Company
Name and Ticker Symbol
|
Exchange
|
Headquarters
|
Total
Assets
|
|||||
(in
millions)
|
||||||||
Citizens
Community Bancorp, Inc. (CZWI)
|
NASDAQ
|
Eau
Claire, WI
|
$ | 567 | ||||
FFD
Financial Corp. (FFDF)
|
NASDAQ
|
Dover,
OH
|
198 | |||||
First
Capital, Inc. (FCAP)
|
NASDAQ
|
Corydon,
IN
|
457 | |||||
First
Savings Financial Group (FSFG)
|
NASDAQ
|
Clarksville,
IN
|
491 | |||||
HopFed
Bancorp, Inc. (HFBC)
|
NASDAQ
|
Hopkinsville,
KY
|
1,022 | |||||
Liberty
Bancorp, Inc. (LBCP)
|
NASDAQ
|
Liberty,
MO
|
406 | |||||
LSB
Financial Corp. (LSBI)
|
NASDAQ
|
Lafayette,
IN
|
364 | |||||
River
Valley Bancorp (RIVR)
|
NASDAQ
|
Madison,
IN
|
385 | |||||
Wayne
Savings Bancshares (WAYN)
|
NASDAQ
|
Wooster,
OH
|
403 | |||||
WVS
Financial Corp. (WVFC)
|
NASDAQ
|
Pittsburgh,
PA
|
392 |
●
|
average
assets of $469 million;
|
●
|
average
non-performing assets of 1.72% of total
assets;
|
●
|
average
loans of 68.2% of total assets;
|
●
|
average
equity of 9.15% of total assets;
and
|
●
|
average
net income of 0.27% of average
assets.
|
Price-to-
earnings
multiple
(1)
|
Price-to-book
value
ratio
|
Price-to-tangible
book
value ratio
|
||||||||||
Jacksonville
Bancorp-Maryland (on a pro forma basis, assuming completion of the
conversion)
|
||||||||||||
Adjusted
Maximum
|
25.36x | 72.52 | % | 77.88 | % | |||||||
Maximum
|
22.61x | 66.23 | % | 71.38 | % | |||||||
Midpoint
|
20.09x | 60.20 | % | 65.15 | % | |||||||
Minimum
|
17.47x | 53.65 | % | 58.28 | % | |||||||
Valuation
of peer group companies, all of which are fully converted (on an
historical basis)
|
||||||||||||
Averages
|
18.92x | 63.46 | % | 66.79 | % | |||||||
Medians
|
17.70x | 62.98 | % | 65.09 | % |
(1)
|
Price-to-earnings
multiples calculated by RP Financial, LC. in the independent appraisal are
based on an estimate of “core,” or recurring, earnings. These
ratios are different than those presented in “Pro Forma
Data.”
|
|
||||||||||||||||||||||||
Dilution
Resulting
From
Issuance
of
Shares
for
Stock-Based
Benefit
plans
(3)
|
||||||||||||||||||||||||
Number
of Shares to be Granted or Purchased (1)
|
||||||||||||||||||||||||
As
a
Percentage
of
Common
Stock
to be
Sold
in the
Offering
|
Value of Grants, in Thousands (2) | |||||||||||||||||||||||
At
Minimum
of
Offering
Range
|
At
Maximum
as
adjusted
of
Offering
Range
|
At
Minimum
of
Offering
Range
|
At
Maximum,
as
adjusted,
of
Offering
Range
|
|||||||||||||||||||||
Employee
stock ownership plan
|
39,950 | 62,158 | 4.0 | % | 0.00 | % | $ | 400 | $ | 622 | ||||||||||||||
Stock options
|
99,875 | 155,394 | 10.0 | 5.13 | % | 222 | 345 | |||||||||||||||||
Total
|
139,825 | 217,552 | 14.0 | % | 5.13 | % | $ | 622 | $ | 967 |
(1)
|
The
table assumes that the stock-based benefit plan awards a number of options
equal to 10% of the shares of common stock sold in the offering as if the
plan is implemented within one year after the completion of the conversion
and offering. If the stock-based benefit plan is implemented
more than 12 months after the completion of the conversion and offering,
grants of options may exceed these percentage
limitations.
|
(2)
|
For
purposes of this table, fair value for stock awards is assumed to be the
same as the offering price of $10.00 per share. The fair value
of stock options has been estimated at $2.22 per option using the
Black-Scholes option pricing model, adjusted for the exchange ratio, with
the following assumptions: a grant-date share price and option
exercise price of $10.00; an expected option life of ten years; a dividend
yield of 3.0%; a risk-free interest rate of 3.85%; and a volatility rate
of 21.42%. The actual value of option grants will be determined by the
grant-date fair value of the options, which will depend on a number of
factors, including the valuation assumptions used in the option pricing
model ultimately adopted.
|
(3)
|
Represents
the dilution of stock ownership interest. No dilution is
reflected for the employee stock ownership plan because such shares are
assumed to be purchased in the
offering.
|
Existing
and New Stock Benefit Plans
|
Participants
|
Shares
at Maximum
of
Offering Range
|
Estimated
Value of
Shares
|
Percentage
of
Shares
Outstanding
After
the
Conversion
|
||||||||||
Employee
Stock Ownership Plan:
|
Employees
|
|||||||||||||
Shares
purchased in 1995 offering (1)
|
87,031 | (2) | $ | 870,310 | 3.5 | % | ||||||||
Shares
to be purchased in this offering
|
54,050 | 540,500 | 2.2 | |||||||||||
Total
employee stock ownership plan shares
|
141,081 | $ | 1,410,810 | 5.7 | % | |||||||||
Restricted
Stock Awards:
|
Directors
and Officers
|
|||||||||||||
1996
Recognition and Retention Plan(1)
|
43,515 | (3) | $ | 435,150 | (4) | 1.7 | % | |||||||
Total
shares of restricted stock
|
43,515 | $ | 435,150 | 1.7 | % | |||||||||
Stock
Options:
|
Directors
and Officers
|
|||||||||||||
1996 Stock Option
Plan (1)
|
108,787 | (5) | $ | 1,087,870 | 4.4 | % | ||||||||
2001 Stock Option
Plan (1)
|
111,877 | (6) | 1,118,770 | 4.5 | ||||||||||
New stock
options
|
135,125 | $ | 1,351,250 | (7) | 5.4 | |||||||||
Total stock
options
|
355,789 | $ | 3,557,890 | 14.3 | % (8) | |||||||||
Total
of stock benefit plans
|
540,385 | $ | 5,403,850 | 21.7 | % |
(2)
|
As
of December 31, 2009, all of these shares, or 66,901 shares prior to
adjustment for the exchange, have been
allocated.
|
(3)
|
As
of December 31, 2009, all of these shares, or 33,450 shares prior to
adjustment for the exchange, have been awarded, and all of the shares
prior to adjustment for the exchange, have
vested.
|
(4)
|
The
value of restricted stock awards is determined based on their fair value
as of the date grants are made. For purposes of this table, the
fair value of awards under the new stock-based benefit plan is assumed to
be the same as the offering price of $10.00 per
share.
|
(5)
|
As
of December 31, 2009, options to purchase 108,787 of these shares, or
83,625 shares prior to adjustment for the exchange, have been awarded, and
no options remain available for future grants. At December 31,
2009, 4,500 unexercised and fully vested options were outstanding under
this plan prior to adjustment for the
exchange.
|
(6)
|
As
of December 31, 2009, options to purchase 111,877 of these shares, or
86,000 shares prior to adjustment for the exchange, have been awarded, and
options to purchase 1,430 of these shares, or 1,100 shares prior to
adjustment for the exchange, remain available for future grants. At
December 31, 2009, 28,845 unexercised and fully vested options were
outstanding under this plan prior to adjustment for the
exchange.
|
(7)
|
The
weighted-average fair value of stock options has been estimated at $2.22
per option, adjusted for the exchange rate, using the Black-Scholes option
pricing model. The fair value of stock options uses the
Black-Scholes option pricing model with the following assumptions:
exercise price, $10.00; trading price on date of grant, $10.00; dividend
yield, 3.00%; expected life, 10 years; expected volatility, 21.42%; and
risk-free interest rate, 3.85%.
|
(8)
|
The
number of stock options set forth in the table would exceed regulatory
limits if a stock-based benefit plan was adopted within one year of the
completion of the conversion. Accordingly, the number of new
stock options set forth in the table would have to be reduced such that
the aggregate amount of stock options would be 10% or less, unless we
obtain a waiver from the Office of Thrift Supervision, or we implement the
plan after twelve months following the completion of the
conversion. Our current intention is to implement a new
stock-based benefit plan no earlier than twelve months after completion of
the conversion.
|
Exercise Price |
Grant-Date
Fair
Value
Per Option
|
99,875
Options
at
Minimum
of Range
|
117,500
Options
at
Midpoint
of Range
|
135,125
Options
at
Maximum
of Range
|
155,394
Options
at
Maximum
of
Range,
As Adjusted
|
|||||||||||||||||
$ |
8.00
|
$ | 1.78 | $ | 177,778 | $ | 209,150 | $ | 240,523 | $ | 276,601 | |||||||||||
10.00
|
2.22 | 221,723 | 260,850 | 299,978 | 344,975 | |||||||||||||||||
12.00
|
2.66 | 265,668 | 312,550 | 359,433 | 413,348 | |||||||||||||||||
14.00
|
3.11 | 310,611 | 365,425 | 420,239 | 483,275 |
Shares
to be Sold in This
Offering
|
Shares
of Jacksonville Bancorp-
Maryland
to be Issued for
Shares
of Jacksonville Bancorp-
Federal
|
Total
Shares of
Common
Stock
to
be Issued in
Conversion
and
Offering
|
Exchange Ratio |
Equivalent
Value of Shares
Based Upon
Current
Market
Price
(1)
|
Shares
to be
Received
for
100
Existing
Shares
|
||||||||||||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||||||||||||||||||||
Minimum
|
998,750 | 54.08 | % | 848,122 | 45.92 | % | 1,846,872 | 0.9615 | $ | 9.62 | 96 | ||||||||||||||||||||||
Midpoint
|
1,175,000 | 54.08 | 997,790 | 45.92 | 2,172,790 | 1.1312 | 11.31 | 113 | |||||||||||||||||||||||||
Maximum
|
1,351,250 | 54.08 | 1,147,459 | 45.92 | 2,498,709 | 1.3009 | 13.01 | 130 | |||||||||||||||||||||||||
15%
above Maximum
|
1,553,938 | 54.08 | 1,319,578 | 45.92 | 2,873,515 | 1.4960 | 14.96 | 149 |
●
|
your
spouse or relatives of you or your spouse living in your
house;
|
●
|
most
companies, trusts or other entities in which you are a trustee, have a
substantial beneficial interest or hold a senior position;
or
|
●
|
other
persons who may be your associates or persons acting in concert with
you.
|
(i)
|
personal
check, bank check or money order made payable directly to Jacksonville
Bancorp, Inc.; or
|
(ii)
|
authorizing
us to withdraw funds from Jacksonville Savings Bank savings and
certificate of deposit accounts (not checking accounts) designated on the
stock order form.
|
|
(i)
|
increase
the purchase and ownership
limitations;
|
|
(ii)
|
seek
regulatory approval to extend the offering beyond the [extension date]
expiration date, provided that any such extension will require us to
resolicit subscriptions received in the offering;
and/or
|
(iii)
|
Increase
the purchase of shares by the employee stock ownership
plan.
|
●
|
The
plan of conversion and reorganization is approved by at least
a
majority of votes eligible
to be cast by members of Jacksonville
Bancorp, MHC;
|
●
|
The
plan of conversion and reorganization is approved by at least
two-thirds
of the outstanding
shares of common stock of Jacksonville
Bancorp-Federal as of _______________, including shares held by
Jacksonville Bancorp, MHC. (Because Jacksonville Bancorp, MHC owns 54.1%
of the outstanding shares of Jacksonville Bancorp-Federal common stock,
Jacksonville Bancorp, MHC will significantly influence the outcome of this
vote);
|
●
|
The
plan of conversion and reorganization is approved by at least
a
majority of the outstanding
shares of common stock of Jacksonville
Bancorp-Federal as of _______________, excluding those shares held by
Jacksonville Bancorp, MHC;
|
●
|
We
sell at least the minimum number of shares of common stock offered;
and
|
●
|
We
receive the final approval of the Office of Thrift Supervision to complete
the conversion and offering.
|
●
|
demand
for our products and services may
decline;
|
●
|
loan
delinquencies, problem assets and foreclosures may
increase;
|
●
|
collateral
for our loans may continue to decline in value;
and
|
●
|
the
amount of our low-cost or non-interest bearing deposits may
decrease.
|
●
|
Office of
Thrift Supervision Regulations
.
Office of
Thrift Supervision regulations prohibit, for three years following the
completion of a conversion, the direct or indirect acquisition of more
than 10% of any class of equity security of a savings and loan holding
company regulated by the Office of Thrift Supervision without the prior
approval of the Office of Thrift
Supervision.
|
●
|
Articles of
incorporation of Jacksonville Bancorp-Maryland and statutory
provisions.
Provisions of the
articles of incorporation and bylaws of Jacksonville Bancorp-Maryland and
Maryland law may make it more difficult and expensive to pursue a takeover
attempt that management opposes, even if the takeover is favored by a
majority of our stockholders. These provisions also would make
it more difficult to remove our current board of directors or management,
or to elect new directors. Specifically, under Maryland law,
any person who acquires more than 10% of the common stock of Jacksonville
Bancorp-Maryland without the prior approval of its board of directors
would be prohibited from engaging in any type of business combination with
Jacksonville Bancorp-Maryland for a five-year period. Any business
combination after the five year prohibition would be subject to
super-majority stockholder approval or minimum price requirements.
Additional provisions include limitations on voting rights of beneficial
owners of more than 10% of our common stock, the election of directors to
staggered terms of three years and not permitting cumulative voting in the
election of directors. Our bylaws also contain provisions
regarding the timing and content of stockholder proposals and nominations
and qualification for service on the board of
directors.
|
●
|
Articles of
incorporation of Jacksonville Savings Bank.
The articles
of incorporation of Jacksonville Savings Bank will provide that for a
period of five years from the closing of the conversion and offering, no
person other than Jacksonville Bancorp-Maryland may offer directly or
indirectly to acquire the beneficial ownership of more than 10% of any
class of equity security of Jacksonville Savings Bank. This
provision will not apply to any tax-qualified employee benefit plan of
Jacksonville Savings Bank or Jacksonville Bancorp-Maryland or to an
underwriter or member of an underwriting or selling group involving the
public sale or resale of securities of Jacksonville Bancorp-Maryland or
any of its subsidiaries, so long as after the sale or resale, no
underwriter or member of the selling group is a beneficial owner, directly
or indirectly, of more than 10% of any class of equity securities of
Jacksonville Savings Bank. In addition, during this five-year
period, all shares owned over the 10% limit may not be voted on any matter
submitted to stockholders for a
vote.
|
●
|
Issuance of
stock options
.
We also
intend to grant stock options to key employees and directors that will
require payments to these persons in the event of a change in control of
Jacksonville Bancorp-Maryland. These payments may have the effect of
increasing the costs of acquiring Jacksonville Bancorp-Maryland, thereby
discouraging future takeover
attempts.
|
●
|
Employment
and change in control agreements
.
Jacksonville
Bancorp-Federal has employment agreements with certain of its executive
officers that will remain in effect following the stock offering.
Jacksonville Bancorp-Maryland intends to enter into a change in control
agreement with its Chief Financial Officer following the stock
offering. These agreements may have the effect of increasing
the costs of acquiring Jacksonville Bancorp-Maryland, thereby discouraging
future takeover attempts.
|
At
December 31,
|
||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Selected
Financial Condition Data:
|
||||||||||||||||||||
Total
assets
|
$ | 288,846 | $ | 288,275 | $ | 288,489 | $ | 267,372 | $ | 253,946 | ||||||||||
Cash
and cash equivalents
|
15,696 | 7,145 | 12,175 | 9,331 | 6,681 | |||||||||||||||
Investment
securities
|
38,455 | 50,988 | 66,295 | 79,978 | 80,821 | |||||||||||||||
Mortgage-backed
securities
|
40,984 | 27,795 | 15,415 | 8,210 | 8,646 | |||||||||||||||
Loans,
net
(1)
|
174,497 | 184,337 | 177,728 | 155,264 | 142,771 | |||||||||||||||
Federal
Home Loan Bank of Chicago stock, at cost
|
1,109 | 1,109 | 1,109 | 1,109 | 1,539 | |||||||||||||||
Foreclosed
assets, net
|
383 | 769 | 364 | 152 | 456 | |||||||||||||||
Bank
owned life insurance
|
4,095 | 3,907 | 3,186 | 334 | 311 | |||||||||||||||
Deposits
|
254,700 | 238,151 | 245,721 | 232,913 | 218,370 | |||||||||||||||
Federal
Home Loan Bank of Chicago advances
|
— | 13,500 | 10,000 | 4,000 | 8,000 | |||||||||||||||
Short-term
borrowings
|
3,789 | 7,633 | 4,936 | 5,035 | 3,350 | |||||||||||||||
Stockholders’
equity
|
25,263 | 24,259 | 22,618 | 21,145 | 20,103 |
For
the Years Ended December 31,
|
||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
(In
thousands, except per share amounts)
|
||||||||||||||||||||
Selected
Operating Data:
|
||||||||||||||||||||
Interest
income
|
$ | 14,420 | $ | 15,908 | $ | 15,609 | $ | 13,978 | $ | 12,423 | ||||||||||
Interest
expense
|
5,432 | 7,716 | 9,056 | 7,031 | 4,986 | |||||||||||||||
Net
interest income
|
8,988 | 8,192 | 6,553 | 6,947 | 7,437 | |||||||||||||||
Provision
for loan losses
|
2,575 | 310 | 155 | 60 | 245 | |||||||||||||||
Net
interest income after provision for loan losses
|
6,413 | 7,882 | 6,398 | 6,887 | 7,192 | |||||||||||||||
Noninterest
income
|
4,209 | 3,161 | 2,492 | 2,235 | 2,174 | |||||||||||||||
Noninterest
expense
|
9,126 | 9,221 | 8,261 | 7,893 | 8,054 | |||||||||||||||
Income
before income tax
|
1,497 | 1,822 | 629 | 1,229 | 1,312 | |||||||||||||||
Provision
for income taxes
|
101 | 304 | 10 | 334 | 412 | |||||||||||||||
Net
income
|
$ | 1,396 | $ | 1,518 | $ | 619 | $ | 895 | $ | 900 | ||||||||||
Earnings
per share:
|
||||||||||||||||||||
Basic
|
$ | 0.72 | $ | 0.76 | $ | 0.31 | $ | 0.45 | $ | 0.46 | ||||||||||
Diluted
|
$ | 0.72 | $ | 0.76 | $ | 0.31 | $ | 0.45 | $ | 0.45 | ||||||||||
Dividends
per share
|
$ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 |
(1)
|
Includes
loans held for sale of $814,000, $1.4 million, $1.9 million, $426,000 and
$499,000 at December 31, 2009, 2008, 2007, 2006 and 2005,
respectively.
|
At
or For the Years Ended December 31,
|
||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
Selected
Financial Ratios and Other Data:
|
||||||||||||||||||||
Performance
Ratios:
|
||||||||||||||||||||
Return
on average assets (ratio of net income to average total
assets)
|
0.47 | % | 0.52 | % | 0.22 | % | 0.35 | % | 0.36 | % | ||||||||||
Return
on average equity (ratio of net income to average equity)
|
5.69 | % | 6.59 | % | 2.86 | % | 4.37 | % | 4.44 | % | ||||||||||
Interest
rate spread
(1)
|
3.08 | % | 2.70 | % | 2.15 | % | 2.48 | % | 2.99 | % | ||||||||||
Net
interest margin
(2)
|
3.30 | % | 3.01 | % | 2.53 | % | 2.85 | % | 3.18 | % | ||||||||||
Efficiency
ratio
(3)
|
69.15 | % | 81.22 | % | 91.33 | % | 85.97 | % | 83.80 | % | ||||||||||
Dividend
pay-out ratio
(4)
|
18.96 | % | 18.75 | % | 45.94 | % | 31.69 | % | 30.98 | % | ||||||||||
Non-interest
expense to average total assets
|
3.10 | % | 3.14 | % | 2.95 | % | 3.05 | % | 3.19 | % | ||||||||||
Average
interest-earning assets to average
interest-bearing
liabilities
|
111.14 | % | 110.66 | % | 110.69 | % | 112.81 | % | 109.07 | % | ||||||||||
Average
equity to average total assets
|
8.33 | % | 7.85 | % | 7.79 | % | 7.90 | % | 8.03 | % | ||||||||||
Asset
Quality Ratios:
|
||||||||||||||||||||
Non-performing
assets to total assets
|
0.81 | % | 0.68 | % | 0.51 | % | 0.56 | % | 0.65 | % | ||||||||||
Non-performing
loans to total loans
|
1.11 | % | 0.64 | % | 0.61 | % | 0.86 | % | 0.82 | % | ||||||||||
Allowance
for loan losses to non-performing loans
|
117.20 | % | 162.47 | % | 161.90 | % | 137.90 | % | 156.75 | % | ||||||||||
Allowance
for loan losses to gross loans
(5)
|
1.29 | % | 1.04 | % | 0.98 | % | 1.19 | % | 1.28 | % | ||||||||||
Capital
Ratios:
|
||||||||||||||||||||
Total
capital (to risk-weighted assets)
|
11.83 | % | 10.94 | % | 11.32 | % | 12.34 | % | 12.83 | % | ||||||||||
Tier
I capital (to risk-weighted assets)
|
10.70 | % | 10.02 | % | 10.38 | % | 11.25 | % | 11.66 | % | ||||||||||
Tier
I capital (to total assets)
|
7.44 | % | 7.30 | % | 7.02 | % | 7.45 | % | 7.31 | % | ||||||||||
Other
Data:
|
||||||||||||||||||||
Number
of full service offices
|
7 | 7 | 7 | 7 | 7 | |||||||||||||||
Full
time equivalent employees
|
110 | 110 | 114 | 115 | 116 |
(1)
|
The
interest rate spread represents the difference between the
weighted-average yield on interest-earning assets and the weighted-
average cost of interest-bearing liabilities for the
period.
|
(2)
|
The
net interest margin represents net interest income as a percent of average
interest-earning assets for the
period.
|
(3)
|
The
efficiency ratio represents non-interest expense divided by the sum of net
interest income and non-interest
income.
|
(4)
|
The
dividend payout ratio represents dividends declared per share divided by
net income per share. The following table sets forth aggregate
cash dividends paid per year, which is calculated by multiplying the
dividends declared per share by the number of shares outstanding as of the
applicable record date:
|
For
the Year Ended December 31
|
||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
(In
Thousands)
|
||||||||||||||||||||
Dividends
paid to public stockholders
|
$ | 265 | $ | 285 | $ | 284 | $ | 284 | $ | 279 | ||||||||||
Dividends
paid to Jacksonville Bancorp, MHC
|
— | — | — | — | — | |||||||||||||||
Total
dividends paid
|
$ | 265 | $ | 285 | $ | 284 | $ | 284 | $ | 279 |
(5)
|
Gross
loans include loans held for sale.
|
●
|
statements
of our goals, intentions and
expectations;
|
●
|
statements
regarding our business plans, prospects, growth and operating
strategies;
|
●
|
statements
regarding the asset quality of our loan and investment portfolios;
and
|
●
|
estimates
of our risks and future costs and
benefits.
|
●
|
general
economic conditions, either nationally or in our market areas, that are
worse than expected;
|
●
|
competition
among depository and other financial
institutions;
|
●
|
changes
in the interest rate environment that reduce our margins or reduce the
fair value of financial
instruments;
|
●
|
adverse
changes in the securities markets;
|
●
|
changes
in laws or government regulations or policies affecting financial
institutions, including changes in regulatory fees and capital
requirements;
|
●
|
our
ability to enter new markets successfully and capitalize on growth
opportunities;
|
●
|
our
ability to successfully integrate acquired
entities;
|
●
|
changes
in consumer spending, borrowing and savings
habits;
|
●
|
changes
in accounting policies and practices, as may be adopted by the bank
regulatory agencies and the Financial Accounting Standards Board;
and
|
●
|
changes
in our organization, compensation and benefit
plans.
|
Based
Upon the Sale at $10.00 Per Share of
|
||||||||||||||||||||||||||||||||
998,750
Shares
|
1,175,000
Shares
|
1,351,250
Shares
|
1,553,938
Shares
(1)
|
|||||||||||||||||||||||||||||
Amount
|
Percent
of Net Proceeds |
Amount
|
Percent
of Net Proceeds |
Amount
|
Percent
of Net Proceeds |
Amount
|
Percent
of Net Proceeds |
|||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||
Offering
proceeds
|
$ | 9,988 | $ | 11,750 | $ | 13,513 | $ | 15,539 | ||||||||||||||||||||||||
Less
offering expenses
|
1,241 | 1,286 | 1,332 | 1,384 | ||||||||||||||||||||||||||||
Net
offering proceeds
|
$ | 8,746 | 100.0 | % | $ | 10,464 | 100.0 | % | $ | 12,181 | 100.0 | % | $ | 14,156 | 100.0 | % | ||||||||||||||||
Distribution
of net proceeds:
|
||||||||||||||||||||||||||||||||
To
Jacksonville Savings Bank
|
$ | 4,373 | 50.0 | % | $ | 5,232 | 50.0 | % | $ | 6,090 | 50.0 | % | $ | 7,078 | 50.0 | % | ||||||||||||||||
To
fund loan to employee stock ownership plan
|
$ | 400 | 4.6 | % | $ | 470 | 4.5 | % | $ | 541 | 4.4 | % | $ | 622 | 4.4 | % | ||||||||||||||||
Retained
by Jacksonville Bancorp-Maryland
|
$ | 3,974 | 45.4 | % | $ | 4,762 | 45.5 | % | $ | 5,550 | 45.6 | % | $ | 6,456 | 45.6 | % |
(1)
|
As
adjusted to give effect to an increase in the number of shares, which
could occur due to a 15% increase in the offering range to reflect demand
for the shares, changes in market or general financial conditions
following the commencement of the offering, or regulatory
considerations.
|
●
|
to
fund a loan to the employee stock ownership plan to purchase up to 4% of
the shares of common stock sold in the offering (between $400,000 and
$541,000, or $622,000 if the offering is increased by
15%);
|
●
|
to
pay cash dividends to stockholders;
|
●
|
to
repurchase shares of our common
stock;
|
●
|
to
invest in securities;
|
●
|
to
finance the acquisition of financial institutions, or other financial
services companies as opportunities arise, although we do not currently
have any agreements or understandings regarding any specific acquisition
transaction; and
|
●
|
for
other general corporate purposes.
|
●
|
to
fund new loans, including one- to four-family residential mortgage loans,
commercial and agricultural real estate loans, commercial and agricultural
business loans and consumer loans;
|
●
|
to
enhance existing products and services and to support the development of
new products and services;
|
●
|
to
reduce wholesale funding;
|
●
|
to
invest in securities;
|
●
|
to
expand its retail banking franchise by acquiring new branches or by
acquiring other financial institutions, or other financial services
companies as opportunities arise, although we do not currently have any
agreements to acquire a financial institution or other entity;
and
|
●
|
for
other general corporate purposes.
|
Price
Per Share
|
Cash
|
|||||||||||
High
|
Low
|
Dividend
Declared
|
||||||||||
2010
|
||||||||||||
Second
quarter (through _______________)
|
$ | $ | $ | |||||||||
First
quarter
|
||||||||||||
2009
|
||||||||||||
Fourth
quarter
|
$ | 10.38 | $ | 8.14 | $ | 0.075 | ||||||
Third
quarter
|
11.48 | 8.12 | 0.075 | |||||||||
Second
quarter
|
11.49 | 7.84 | 0.075 | |||||||||
First
quarter
|
9.75 | 7.01 | 0.075 | |||||||||
2008
|
||||||||||||
Fourth
quarter
|
$ | 10.00 | $ | 7.80 | $ | 0.075 | ||||||
Third
quarter
|
10.15 | 9.03 | 0.075 | |||||||||
Second
quarter
|
12.60 | 10.15 | 0.075 | |||||||||
First
quarter
|
13.25 | 9.00 | 0.075 |
Pro Forma at December 31, 2009, Based Upon the Sale in the Offering of | ||||||||||||||||||||||||||||||||||||||||
Jacksonville Savings
Bank Historical at December 31, 2009 |
998,750
Shares
|
1,175,000
Shares
|
1,351,250
Shares
|
1,553,938
Shares (1)
|
||||||||||||||||||||||||||||||||||||
Amount
|
Percent
of Assets (2) |
Amount
|
Percent
of Assets (2) |
Amount
|
Percent
of Assets (2) |
Amount
|
Percent
of Assets (2) |
Amount
|
Percent
of Assets (2) |
|||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
Equity
capital
|
$ | 25,024 | 8.67 | % | $ | 29,821 | 10.18 | % | $ | 30,610 | 10.42 | % | $ | 31,397 | 10.66 | % | $ | 32,304 | 10.93 | % | ||||||||||||||||||||
Tier
1 risk-based capital(4)(5)
|
$ | 21,601 | 10.70 | % | $ | 26,398 | 13.02 | % | $ | 27,187 | 13.40 | % | $ | 27,974 | 13.78 | % | $ | 28,881 | 14.21 | % | ||||||||||||||||||||
Tier
1 risk-based requirement(3)
|
8,073 | 4.00 | 8,108 | 4.00 | 8,115 | 4.00 | 8,122 | 4.00 | 8,130 | 4.00 | ||||||||||||||||||||||||||||||
Excess
|
$ | 13,528 | 6.70 | % | $ | 18,290 | 9.02 | % | $ | 19,072 | 9.40 | % | $ | 19,852 | 9.78 | % | $ | 20,751 | 10.21 | |||||||||||||||||||||
Core
(leverage) capital(5)
|
$ | 21,601 | 7.44 | % | $ | 26,398 | 8.96 | % | $ | 27,187 | 9.20 | % | $ | 27,974 | 9.44 | % | $ | 28,881 | 9.71 | % | ||||||||||||||||||||
Core
(leverage) requirement (3)
|
11,611 | 4.00 | 11,786 | 4.00 | 11,820 | 4.00 | 11,854 | 4.00 | 11,894 | 4.00 | ||||||||||||||||||||||||||||||
Excess
|
$ | 9,990 | 3.44 | % | $ | 14,612 | 4.96 | % | $ | 15,367 | 5.20 | % | $ | 16,120 | 5.44 | % | $ | 16,987 | 5.71 | % | ||||||||||||||||||||
Total
risk-based
capital
(4)(5)
|
$ | 23,891 | 11.83 | % | $ | 28,688 | 14.15 | % | $ | 29,477 | 14.53 | % | $ | 30,264 | 14.91 | % | $ | 31,171 | 15.34 | % | ||||||||||||||||||||
Risk-based
requirement
|
16,146 | 8.00 | 16,216 | 8.00 | 16,230 | 8.00 | 16,243 | 8.00 | 16,259 | 8.00 | ||||||||||||||||||||||||||||||
Excess
|
$ | 7,745 | 3.83 | % | $ | 12,472 | 6.15 | % | $ | 13,247 | 6.53 | % | $ | 14,021 | 6.91 | % | $ | 14,912 | 7.34 | % | ||||||||||||||||||||
Net
Proceeds Infused
|
$ | 4,373 | $ | 5,232 | $ | 6,090 | $ | 7,078 | ||||||||||||||||||||||||||||||||
MHC
capital contribution
|
824 | 824 | 824 | 824 | ||||||||||||||||||||||||||||||||||||
Less:
ESOP
|
(400 | ) | (470 | ) | (541 | ) | (622 | ) | ||||||||||||||||||||||||||||||||
Pro
Forma Increase
|
$ | 4,797 | $ | 5,586 | $ | 6,373 | $ | 7,280 |
(1) |
As
adjusted to give effect to an increase in the number of shares that could
occur due to a 15% increase in the offering range to reflect demand for
the shares, changes in market or general financial conditions following
the commencement of the offering, or regulatory
considerations.
|
(2) |
Tangible
and core capital levels are shown as a percentage of total adjusted
assets. Risk-based capital levels are shown as a percentage of
risk-weighted assets.
|
(3) |
The
current core capital requirement for financial institutions is 3% of total
adjusted assets for financial institutions that receive the highest
supervisory rating for safety and soundness and a 4% to 5% core capital
ratio requirement for all other financial institutions. In
addition, the Federal Deposit Insurance Corporation requires a Tier 1
risk-based capital ratio of 4% or greater.
|
(4) |
Pro
forma amounts and percentages assume net proceeds are invested in assets
that carry a 20% risk weighting.
|
(5) |
Pro
forma capital levels assume that the employee stock ownership plan
purchases 4.0% of the shares of common stock to be outstanding immediately
following the stock offering with funds we lend. Pro forma GAAP
and regulatory capital have been reduced by the amount required to fund
this plan. See “Management” for a discussion of the employee
stock ownership plan.
|
Pro Forma at December 31, 2009, Based upon the Sale in the Offering of | ||||||||||||||||||||
Jacksonville
Bancorp-Federal Historical at December 31, 2009 |
Minimum
998,750 Shares at $10.00 per Share |
Midpoint
1,175,000 Shares at $10.00 per Share |
Maximum
1,351,250 Shares at $10.00 per Share |
Maximum
as
adjusted 1,553,938 Shares at $10.00 per Share (1) |
||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||
Deposits
(2)
|
$ | 254,700 | $ | 253,890 | $ | 253,890 | $ | 253,890 | $ | 253,890 | ||||||||||
Borrowed
funds
|
3,789 | 3,789 | 3,789 | 3,789 | 3,789 | |||||||||||||||
Total deposits and borrowed funds
|
$ | 258,489 | $ | 257,679 | $ | 257,679 | $ | 257,679 | $ | 257,679 | ||||||||||
Stockholders’
equity:
|
||||||||||||||||||||
Preferred
stock, $.01 par value, 10,000,000 shares authorized (post-conversion)
(3)
|
— | — | — | — | — | |||||||||||||||
Common
stock, $.01 par value, 25,000,000 shares authorized (post-conversion);
shares to be issued as reflected (3) (4)
|
20 | 18 | 22 | 25 | 29 | |||||||||||||||
Additional
paid-in capital (3)
|
6,634 | 15,383 | 17,096 | 18,810 | 20,781 | |||||||||||||||
MHC
capital contribution (3)
|
— | 824 | 824 | 824 | 824 | |||||||||||||||
Retained
earnings (5)
|
18,399 | 18,399 | 18,399 | 18,399 | 18,399 | |||||||||||||||
Accumulated
other comprehensive income
|
696 | 696 | 696 | 696 | 696 | |||||||||||||||
Less:
|
||||||||||||||||||||
Treasury
stock
|
(486 | ) | (486 | ) | (486 | ) | (486 | ) | (486 | ) | ||||||||||
Common
stock held by employee stock ownership plan (6)
|
— | (400 | ) | (470 | ) | (541 | ) | (622 | ) | |||||||||||
Total
stockholders’ equity
|
$ | 25,263 | $ | 34,434 | $ | 36,081 | $ | 37,727 | $ | 39,621 | ||||||||||
Pro Forma Shares
Outstanding
|
||||||||||||||||||||
Total shares outstanding
|
1,920,817 | 1,846,872 | 2,172,790 | 2,498,709 | 2,873,515 | |||||||||||||||
Exchange shares issued
|
— | 848,122 | 997,790 | 1,147,459 | 1,319,578 | |||||||||||||||
Shares offered for sale
|
— | 998,750 | 1,175,000 | 1,351,250 | 1,553,938 | |||||||||||||||
Total
stockholders’ equity as a percentage of total assets (2)
|
8.75 | % | 11.92 | % | 12.49 | % | 13.06 | % | 13.72 | % | ||||||||||
Tangible
equity ratio
|
7.80 | % | 10.98 | % | 11.55 | % | 12.12 | % | 12.77 | % |
(1)
|
As
adjusted to give effect to an increase in the number of shares of common
stock that could occur due to a 15% increase in the offering range to
reflect demand for shares, changes in market or general financial
conditions following the commencement of the subscription and community
offerings, or regulatory
considerations.
|
(2)
|
Does
not reflect withdrawals from deposit accounts for the purchase of shares
of common stock in the conversion and offering. These withdrawals would
reduce pro forma deposits and assets by the amount of the
withdrawals. On a pro forma basis, reflects elimination of
$810,000 of cash in Jacksonville Bancorp, MHC held as deposits of
Jacksonville Savings Bank.
|
(3)
|
Jacksonville
Bancorp-Federal currently has 10.0 million authorized shares of preferred
stock and 20.0 million authorized shares of common stock, par value $0.01
per share. On a pro forma basis, Jacksonville Bancorp-Maryland
common stock and additional paid-in capital have been revised to reflect
the number of shares of Jacksonville Bancorp-Maryland common stock to be
outstanding, which is 1,846,872 shares, 2,172,790 shares, 2,498,709 shares
and 2,873,515 shares at the minimum, midpoint, maximum and adjusted
maximum of the offering range, respectively. On a pro forma
basis, reflects transfer to equity of $824,000 of net assets in
Jacksonville Bancorp, MHC.
|
(4)
|
No
effect has been given to the issuance of additional shares of Jacksonville
Bancorp-Maryland common stock pursuant to the exercise of options under a
stock-based benefit plan. If this plan is implemented within the first
year after the closing of the offering, an amount up to 10% of the shares
of Jacksonville Bancorp-Maryland common stock sold in the offering will be
reserved for issuance upon the exercise of options under the
plan. No effect has been given to the exercise of options
currently outstanding. See
“Management.”
|
(5)
|
The
retained earnings of Jacksonville Savings Bank will be substantially
restricted after the conversion. See “The Conversion and
Offering—Liquidation Rights” and “Supervision and Regulation—Federal
Banking Regulation.”
|
(6)
|
Assumes
that 4.0
%
of the
shares sold in the offering will be acquired by the employee stock
ownership plan financed by a loan from Jacksonville
Bancorp-Maryland. The loan will be repaid principally from
Jacksonville Savings Bank’s contributions to the employee stock ownership
plan. Since Jacksonville Bancorp-Maryland will finance the
employee stock ownership plan debt, this debt will be eliminated through
consolidation and no liability will be reflected on Jacksonville
Bancorp-Maryland’s consolidated financial
statements. Accordingly, the amount of shares of common stock
acquired by the employee stock ownership plan is shown in this table as a
reduction of total stockholders’
equity.
|
(i)
|
100,000
shares of common stock will be purchased by our executive officers and
directors, and their associates;
|
(ii)
|
our
employee stock ownership plan will purchase 4.0% of the shares of common
stock sold in the offering, with a loan from Jacksonville
Bancorp-Maryland. The loan will be repaid in substantially
equal payments of principal and interest over a period of 20
years;
|
(iii)
|
Keefe,
Bruyette & Woods, Inc. will receive a fee equal to 1.5% of the dollar
amount of shares of common stock sold in the subscription offering, 2.5%
of the dollar amount of shares of common stock sold in the community
offering and 6.0% of the dollar amount of shares sold in the syndicated
offering and 75%
of the total
shares will be subscribed for in the subscription offering. No
fee will be paid with respect to shares of common stock purchased by our
qualified and non-qualified employee stock benefit plans, or stock
purchased by our officers, directors and employees, and their immediate
families; and
|
(iv)
|
total
expenses of the offering, including the marketing fees to be paid to
Keefe, Bruyette & Woods, Inc., will be between $1.2 million at the
minimum of the offering range and $1.4 million at the maximum of the
offering range, as adjusted.
|
●
|
withdrawals
from deposit accounts for the purpose of purchasing shares of common stock
in the stock offering;
|
●
|
our
results of operations after the stock offering;
or
|
●
|
changes
in the market price of the shares of common stock after the stock
offering.
|
At
or for the Fiscal Year Ended December 31, 2009
Based
upon the Sale at $10.00 Per Share of
|
||||||||||||||||
998,750
Shares
|
1,175,000
Shares
|
1,351,250
Shares
|
1,553,938
Shares
(1)
|
|||||||||||||
(Dollars
in thousands, except per share amounts)
|
||||||||||||||||
Gross
proceeds of offering
|
9,988 | 11,750 | 13,513 | 15,539 | ||||||||||||
Less: Expenses
|
$ | 1,241 | $ | 1,286 | $ | 1,332 | $ | 1,384 | ||||||||
Estimated
Net Proceeds
|
8,746 | 10,464 | 12,181 | 14,156 | ||||||||||||
Less:
Common stock purchased by employee stock ownership plan
|
(400 | ) | (470 | ) | (541 | ) | (622 | ) | ||||||||
Estimated
net proceeds, as adjusted
|
$ | 8,347 | $ | 9,994 | $ | 11,640 | $ | 13,534 | ||||||||
For the Year Ended December 31,
2009
|
||||||||||||||||
Consolidated
net income:
|
||||||||||||||||
Historical
|
$ | 1,396 | $ | 1,396 | $ | 1,396 | $ | 1,396 | ||||||||
Pro
forma adjustments:
|
||||||||||||||||
Income
on adjusted net proceeds
|
169 | 202 | 235 | 273 | ||||||||||||
Employee
stock ownership plan (2)
|
(12 | ) | (14 | ) | (17 | ) | (19 | ) | ||||||||
Options
granted under the stock-based benefit plan (3)
|
(40 | ) | (47 | ) | (54 | ) | (62 | ) | ||||||||
Pro
forma net income
|
$ | 1,512 | 1,536 | $ | 1,560 | $ | 1,588 | |||||||||
Net
income per share (4):
|
||||||||||||||||
Historical
|
$ | 0.78 | $ | 0.66 | $ | 0.57 | $ | 0.49 | ||||||||
Pro
form adjustments:
|
||||||||||||||||
Income
on adjusted net proceeds
|
0.09 | 0.09 | 0.10 | 0.10 | ||||||||||||
Employee
stock ownership plan (2)
|
(0.01 | ) | (0.01 | ) | (0.01 | ) | (0.01 | ) | ||||||||
Options
granted under the stock-based benefit plan (3)
|
(0.02 | ) | (0.02 | ) | (0.02 | ) | (0.02 | ) | ||||||||
Pro
forma net income per share (4) (5)
|
$ | 0.84 | $ | 0.72 | $ | 0.64 | $ | 0.56 | ||||||||
Offering
price to pro forma net income per share
|
11.90 | x | 13.89 | x | 15.63 | x | 17.86 | x | ||||||||
Number
of shares used in net income per share calculations (4)
|
1,808,919 | 2,128,140 | 2,447,361 | 2,814,466 | ||||||||||||
At December 31, 2009
|
||||||||||||||||
Stockholders’
equity:
|
||||||||||||||||
Historical
|
$ | 25,263 | $ | 25,263 | $ | 25,263 | $ | 25,263 | ||||||||
Estimated
net proceeds
|
8,746 | 10,464 | 12,181 | 14,156 | ||||||||||||
Equity
increase from MHC
|
824 | 824 | 824 | 824 | ||||||||||||
Less: Common
stock acquired by employee stock ownership plan (2)
|
(400 | ) | (470 | ) | (541 | ) | (622 | ) | ||||||||
Pro
forma stockholders’ equity
|
34,434 | 36,081 | 37,727 | 39,621 | ||||||||||||
Less: Intangible
assets
|
(2,727 | ) | (2,727 | ) | (2,727 | ) | (2,727 | ) | ||||||||
Pro
forma tangible stockholders’ equity
|
$ | 31,707 | $ | 33,354 | $ | 35,000 | $ | 36,894 | ||||||||
Stockholders’
equity per share:(6)
|
||||||||||||||||
Historical
|
$ | 13.67 | $ | 11.63 | $ | 10.12 | $ | 8.79 | ||||||||
Estimated
net proceeds
|
4.74 | 4.82 | 4.87 | 4.93 | ||||||||||||
Plus: Assets
received from the MHC
|
0.45 | 0.38 | 0.33 | 0.29 | ||||||||||||
Less: Common
stock acquired by employee stock ownership plan
|
(0.22 | ) | (0.22 | ) | (0.22 | ) | (0.22 | ) | ||||||||
Pro
forma stockholders’ equity per share (5) (6)
|
$ | 18.64 | $ | 16.61 | $ | 15.10 | $ | 13.79 | ||||||||
Intangible
assets per share
|
$ | (1.48 | ) | $ | (1.26 | ) | $ | (1.09 | ) | $ | (0.95 | ) | ||||
Pro
forma tangible stockholders’ equity per share (5) (6)
|
$ | 17.16 | $ | 15.35 | $ | 14.01 | $ | 12.84 | ||||||||
Offering price as percentage of pro forma stockholders’ equity per
share
|
53.65 | % | 60.20 | % | 66.23 | % | 72.52 | % | ||||||||
Offering price as percentage of pro forma tangible stockholders’ equity
per share
|
58.28 | % | 65.15 | % | 71.38 | % | 77.88 | % | ||||||||
Number of shares outstanding for pro forma book value per share
calculations
|
1,846,872 | 2,172,790 | 2,498,709 | 2,873,515 |
(1)
|
As
adjusted to give effect to an increase in the number of shares that could
occur due to a 15% increase in the offering range to reflect demand for
the shares, changes in market and financial conditions following the
commencement of the offering, or regulatory
considerations.
|
(2)
|
Assumes
that 4.0% of shares of common stock sold in the offering will be purchased
by the employee stock ownership plan. For purposes of this
table, the funds used to acquire these shares are assumed to have been
borrowed by the employee stock ownership plan from Jacksonville
Bancorp-Maryland. Jacksonville Savings Bank intends to make
annual contributions to the employee stock ownership plan in an amount at
least equal to the required principal and interest payments on the
debt. Jacksonville Savings Bank’s total annual payments on the
employee stock ownership plan debt are based upon
20 equal annual
installments of principal and interest. ASC 7-18 requires that
an employer record compensation expense in an amount equal to the fair
value of the shares committed to be released to employees. The
pro forma adjustments assume that the employee stock ownership plan shares
are allocated in equal annual installments based on the number of loan
repayment installments assumed to be paid by Jacksonville Savings Bank,
the fair value of the common stock remains equal to the subscription price
and the employee stock ownership plan expense reflects an effective
combined federal and state tax rate of 38.82%. The unallocated
employee stock ownership plan shares are reflected as a reduction of
stockholders’ equity. No reinvestment is assumed on proceeds
contributed to fund the employee stock ownership plan. The pro
forma net income further assumes that 1,998, 2,350, 2,703 and 3,108 shares
were committed to be released during the period at the minimum, midpoint,
maximum, and adjusted maximum of the offering range, respectively, and in
accordance with ASC 7-18, only the employee stock ownership plan shares
committed to be released during the period were considered outstanding for
purposes of net income per share
calculations.
|
(3)
|
If
approved by Jacksonville Bancorp-Maryland’s stockholders, the stock-based
benefit plan may grant options to acquire an aggregate number of shares of
common stock equal to 10% of the shares to be sold in the
offering. If the plan is implemented more than one year after
completion of the conversion, the number of options may exceed 10% of the
shares sold in the offering, and the plan may include stock or equity
awards in addition to options. Stockholder approval of
the stock-based benefit plan may not occur earlier than six months after
the completion of the conversion. In calculating the pro forma
effect of the stock-based benefit plan, it is assumed that the exercise
price of the stock options and the trading price of the common stock at
the date of grant were $10.00 per share, the estimated grant-date fair
value determined using the Black-Scholes option pricing model was $2.22
for each option, the aggregate grant-date fair value of the stock options
was amortized to expense on a straight-line basis over a five-year vesting
period of the options, and that 25% of the amortization expense (or the
assumed portion relating to options granted to directors) resulted in a
tax benefit using an assumed tax rate of 38.82%. The actual
expense of the stock-based benefit plan will be determined by the
grant-date fair value of the options, which will depend on a number of
factors, including the valuation assumptions used in the option pricing
model ultimately adopted. Under the above assumptions, the
adoption of the stock-based benefit plan will result in no additional
shares under the treasury stock method for purposes of calculating
earnings per share. There can be no assurance that the actual
exercise price of the stock options will be equal to the $10.00 price per
share. If a portion of the shares to satisfy the exercise of
options under the stock-based benefit plan is obtained from the issuance
of authorized but unissued shares, our net income per share and
stockholders’ equity per share would decrease. The issuance of
authorized but unissued shares of common stock pursuant to the exercise of
options under such plan would dilute stockholders’ ownership and voting
interests by approximately 5.13% at the maximum of the offering
range.
|
(4)
|
Per
share figures include publicly held shares of Jacksonville Bancorp-Federal
common stock that will be exchanged for shares of Jacksonville
Bancorp-Maryland common stock in the conversion. See “The
Conversion and Offering—Share Exchange Ratio for Current
Stockholders.” Net income per share computations are determined
by taking the number of shares assumed to be sold in the offering and the
number of new shares assumed to be issued in exchange for publicly held
shares and, in accordance with ASC 7-18, subtracting the employee stock
ownership plan shares which have not been committed for release during the
respective periods. See note 2. The number of shares of
common stock actually sold and the corresponding number of exchange shares
may be more or less than the assumed amounts. Pro forma net
income per share has been annualized for purposes of calculating the
offering price to pro forma net earnings per
share.
|
(5)
|
The
retained earnings of Jacksonville Savings Bank will be substantially
restricted after the conversion. See “Our Dividend Policy,” “The
Conversion and Offering—Liquidation Rights” and “Supervision and
Regulation—Federal Banking Regulation—Capital
Distributions.”
|
(6)
|
Per
share figures include publicly held shares of Jacksonville Bancorp-Federal
common stock that will be exchanged for shares of Jacksonville
Bancorp-Maryland common stock in the conversion. Stockholders’ equity per
share calculations are based upon the sum of (i) the number of
subscription shares assumed to be sold in the offering and (ii)
shares to be issued in exchange for publicly held shares at the minimum,
midpoint, maximum and adjusted maximum of the offering range,
respectively. The exchange shares reflect an exchange ratio of 0.9615,
1.1312, 1.3009 and 1.4960 at the minimum, midpoint, maximum and adjusted
maximum of the offering range, respectively. The number of subscription
shares actually sold and the corresponding number of exchange shares may
be more or less than the assumed
amounts.
|
(i)
|
the
employee stock ownership plan will acquire 62,158 shares of common stock
with a $622,000 loan that is expected to be repaid over 20 years,
resulting in an annual pre-tax expense of approximately $31,100 (assuming
that the shares of common stock maintain a value of $10.00 per share);
and
|
(ii)
|
the
new stock-based benefit plan would award options to purchase a number of
shares equal to 10% of the shares sold in the offering, or 155,394 shares,
to eligible participants, and such options would be expensed as the
options vest. Assuming all options are awarded under the
stock-based benefit plan at a price of $10.00 per share, and that the
options vest over a minimum of five years, the corresponding annual
pre-tax expense associated with options awarded under the stock-based
benefit plan would be approximately $68,995 (assuming a grant-date fair
value of $2.22 per option, using the Black-Scholes option valuation
methodology).
|
At
December 31, 2009 |
||||||||||||||||||||||||||||||||||||||||
For
the Years Ended December 31,
|
||||||||||||||||||||||||||||||||||||||||
2009
|
2008
|
2007
|
||||||||||||||||||||||||||||||||||||||
Yield/
Rate |
Average
Outstanding Balance |
Interest
|
Yield/
Rate |
Average
Outstanding Balance |
Interest
|
Yield/
Rate |
Average
Outstanding Balance |
Interest
|
Yield/
Rate |
|||||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||||||||||||||||||
Loans
(1)
|
6.23 | % | $ | 182,813 | $ | 11,592 | 6.34 | % | $ | 177,963 | $ | 12,026 | 6.76 | % | $ | 165,715 | $ | 11,736 | 7.08 | % | ||||||||||||||||||||
Investment
securities
(2)
|
3.91 | 40,732 | 1,554 | 3.81 | (6) | 53,392 | 2,072 | 3.88 | (6) | 79,630 | 3,189 | 4.00 | (6) | |||||||||||||||||||||||||||
Mortgage-backed
securities
|
4.05 | 40,381 | 1,262 | 3.13 | 31,921 | 1,580 | 4.95 | 12,282 | 596 | 4.85 | ||||||||||||||||||||||||||||||
Cash
and cash equivalents
|
0.04 | 8,231 | 12 | 0.15 | 9,313 | 230 | 2.47 | 1,838 | 88 | 4.83 | ||||||||||||||||||||||||||||||
Total
interest-earning assets
|
5.50 | 272,157 | 14,420 | 5.30 | 272,589 | 15,908 | 5.83 | 259,465 | 15,609 | 6.02 | ||||||||||||||||||||||||||||||
Non-interest-earning
assets
|
22,626 | 20,642 | 18,169 | |||||||||||||||||||||||||||||||||||||
Total
assets
|
$ | 294,783 | $ | 293,231 | $ | 277,634 | ||||||||||||||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||||||||||||||||||
Interest
bearing checking
|
0.32 | % | $ | 29,009 | $ | 94 | 0.32 | % | $ | 28,572 | $ | 199 | 0.70 | % | $ | 25,820 | $ | 302 | 1.17 | % | ||||||||||||||||||||
Savings
accounts
|
0.86 | 24,849 | 218 | 0.88 | 22,677 | 224 | 0.99 | 22,774 | 227 | 1.00 | ||||||||||||||||||||||||||||||
Certificates
of deposit
|
2.65 | 149,124 | 4,586 | 3.08 | 147,891 | 6,112 | 4.13 | 145,325 | 6,846 | 4.71 | ||||||||||||||||||||||||||||||
Money
market savings
|
1.02 | 26,750 | 378 | 1.41 | 24,442 | 584 | 2.39 | 22,502 | 989 | 4.40 | ||||||||||||||||||||||||||||||
Money
market deposits
|
0.85 | 4,616 | 40 | 0.86 | 4,700 | 50 | 1.06 | 4,957 | 70 | 1.41 | ||||||||||||||||||||||||||||||
Total
interest-bearing deposits
|
1.92 | 234,348 | 5,316 | 2.27 | 228,282 | 7,169 | 3.14 | 221,378 | 8,434 | 3.81 | ||||||||||||||||||||||||||||||
Federal
Home Loan Bank
advances
|
5,359 | 104 | 1.94 | 12,018 | 469 | 3.91 | 8,598 | 433 | 5.04 | |||||||||||||||||||||||||||||||
Short-term
borrowings
|
0.19 | 5,168 | 12 | 0.94 | 6,028 | 78 | 1.29 | 4,438 | 189 | 4.26 | ||||||||||||||||||||||||||||||
Total
borrowings
|
0.19 | 10,527 | 116 | 1.10 | 18,046 | 548 | 3.04 | 13,036 | 622 | 4.78 | ||||||||||||||||||||||||||||||
Total
interest-bearing liabilities
|
1.89 | 244,875 | 5,432 | 2.22 | % | 246,328 | 7,716 | 3.13 | % | 234,414 | 9,056 | 3.86 | % | |||||||||||||||||||||||||||
Non-interest-bearing
liabilities
(7)
|
25,360 | 23,881 | 21,586 | |||||||||||||||||||||||||||||||||||||
Total
liabilities
|
270,235 | 270,209 | 256,000 | |||||||||||||||||||||||||||||||||||||
Stockholders’
equity
|
24,548 | 23,022 | 21,634 | |||||||||||||||||||||||||||||||||||||
Total
liabilities and stockholders’ equity
|
$ | 294,783 | $ | 293,231 | $ | 277,634 | ||||||||||||||||||||||||||||||||||
Net
interest income
|
$ | 8,988 | $ | 8,192 | $ | 6,553 | ||||||||||||||||||||||||||||||||||
Net
interest rate spread
(3)
|
3.61 | % | 3.08 | % | 2.70 | % | 2.15 | % | ||||||||||||||||||||||||||||||||
Net
interest-earning assets
(4)
|
$ | 27,282 | $ | 26,261 | $ | 25,051 | ||||||||||||||||||||||||||||||||||
Net
interest margin
(5)
|
3.30 | % | 3.01 | % | 2.53 | % | ||||||||||||||||||||||||||||||||||
Average
interest-earning assets to average interest-bearing
liabilities
|
111.14 | % | 110.66 | % | 110.69 | % |
(1)
|
Includes
non-accrual loans and loans held for sale and fees of $110,000 for 2009,
$54,000 for 2008 and $93,000 for
2007.
|
(2)
|
Includes
Federal Home Loan Bank stock and U.S. Agency
securities.
|
(3)
|
Net
interest rate spread represents the difference between the yield on
average interest-earning assets and the cost of average interest-bearing
liabilities.
|
(4)
|
Net
interest-earning assets represents total interest-earning assets less
total interest-bearing liabilities.
|
(5)
|
Net
interest margin represents net interest income divided by average total
interest-earning assets.
|
(6)
|
We
used an assumed 34% tax rate in computing tax equivalent adjustments. The
tax equivalent yield of investment securities was 5.14%, 4.82%, and 4.26%
for the years ended December 31, 2009, 2008 and 2007,
respectively. Tax equivalent adjustments to income on
investment securities was $542,000, $503,000 and $203,000 for the years
ended December 31, 2009, 2008 and 2007,
respectively.
|
(7)
|
Includes
non-interest bearing deposits of $19.8 million, $18.5 million and $16.2
million for the years ended December 31, 2009, 2008 and 2007,
respectively.
|
Years
Ended December 31,
2009
vs 2008
|
Years
Ended December 31,
2008
vs 2007
|
|||||||||||||||||||||||
Increase
(Decrease)
Due to |
Total
Increase (Decrease) |
Increase
(Decrease)
Due to |
Total
Increase (Decrease) |
|||||||||||||||||||||
Rate
|
Volume
|
Rate
|
Volume
|
|||||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||
Loans
|
$ | (756 | ) | $ | 322 | $ | (434 | ) | $ | (553 | ) | $ | 843 | $ | 290 | |||||||||
Investment
securities
|
(34 | ) | (484 | ) | (518 | ) | (96 | ) | (1,021 | ) | (1,117 | ) | ||||||||||||
Mortgage-backed
securities
|
(672 | ) | 354 | (318 | ) | 12 | 972 | 984 | ||||||||||||||||
Cash
and cash equivalents
|
(194 | ) | (24 | ) | (218 | ) | (62 | ) | 204 | 142 | ||||||||||||||
Total
interest-earning assets
|
$ | (1,656 | ) | $ | 168 | $ | (1,488 | ) | $ | (699 | ) | $ | 998 | $ | 299 | |||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||
Interest
bearing checking
|
$ | (108 | ) | $ | 3 | $ | (105 | ) | $ | (132 | ) | $ | 29 | $ | (103 | ) | ||||||||
Savings
accounts
|
(26 | ) | 20 | (6 | ) | (2 | ) | (1 | ) | (3 | ) | |||||||||||||
Certificates
of deposit
|
(1,577 | ) | 51 | (1,526 | ) | (853 | ) | 119 | (734 | ) | ||||||||||||||
Money
market savings
|
(257 | ) | 51 | (206 | ) | (484 | ) | 79 | (405 | ) | ||||||||||||||
Money
market deposits
|
(9 | ) | (1 | ) | (10 | ) | (16 | ) | (4 | ) | (20 | ) | ||||||||||||
Total
interest-bearing deposits
|
(1,977 | ) | 124 | (1,853 | ) | (1,487 | ) | 222 | (1,265 | ) | ||||||||||||||
Federal
Home Loan Bank advances
|
(174 | ) | (192 | ) | (366 | ) | (111 | ) | 147 | 36 | ||||||||||||||
Short-term
borrowings
|
(56 | ) | (9 | ) | (65 | ) | (163 | ) | 52 | (111 | ) | |||||||||||||
(230 | ) | (202 | ) | (431 | ) | (274 | ) | 199 | (75 | ) | ||||||||||||||
Total
interest-bearing liabilities
|
(2,207 | ) | (77 | ) | (2,284 | ) | (1,761 | ) | 421 | (1,340 | ) | |||||||||||||
Change
in net interest income
|
$ | 551 | $ | 245 | $ | 796 | $ | 1,062 | $ | 577 | $ | 1,639 |
Change
in Net Interest Income
|
|||||||||||||||||
December
31, 2009
|
December
31, 2008
|
ALCO
Benchmark |
|||||||||||||||
Rate
Shock
|
$
Change
|
%
Change
|
$
Change
|
%
Change
|
|||||||||||||
(Dollars
in thousands)
|
|||||||||||||||||
+300
basis points
|
174 | 1.71 | (143 | ) | (1.46 | ) |
>(20.00)%
|
||||||||||
+200
basis points
|
220 | 2.16 | (68 | ) | (0.69 | ) |
>(20.00)%
|
||||||||||
+100
basis points
|
184 | 1.80 | 33 | 0.34 |
>(12.50)%
|
||||||||||||
(100)
basis points
|
(271 | ) | (2.66 | ) | 95 | 0.97 |
>(12.50)%
|
||||||||||
(200)
basis points
|
(412 | ) | (4.05 | ) | (12 | ) | (0.12 | ) |
>(20.00)%
|
||||||||
(300)
basis points
|
(589 | ) | (5.78 | ) | (205 | ) | (2.10 | ) |
>(20.00)%
|
December
31, 2009
|
December
31, 2008
|
|||||||
(In
thousands)
|
||||||||
Commitments
to fund loans
|
$ | 36,946 | $ | 50,723 | ||||
Standby
letters of credit
|
488 | 774 |
Minimum
Required
|
December
31, 2009
Actual
|
December
31, 2008
Actual
|
||||||||||
Tier
1 Capital to Average Assets
|
4.00 | % | 7.44 | % | 7.30 | % | ||||||
Tier
1 Capital to Risk-Weighted Assets
|
4.00 | % | 10.70 | % | 10.02 | % | ||||||
Total
Capital to Risk-Weighted Assets
|
8.00 | % | 11.83 | % | 10.94 | % |
At
December 31,
|
||||||||||||||||||||||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||||||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||||||||||||||||||||||||||
Real
estate loans:
|
||||||||||||||||||||||||||||||||||||||||
One-
to four-family residential
(1)
|
$ | 38,581 | 22.2 | % | $ | 46,807 | 25.6 | % | $ | 50,459 | 28.7 | % | $ | 40,635 | 26.2 | % | $ | 40,126 | 28.2 | % | ||||||||||||||||||||
Commercial
and agricultural
(2)
|
56,650 | 32.6 | 56,516 | 30.9 | 44,100 | 25.1 | 39,592 | 25.6 | 33,859 | 23.8 | ||||||||||||||||||||||||||||||
Multi-family
residential
|
4,344 | 2.5 | 4,518 | 2.5 | 4,741 | 2.7 | 5,877 | 3.8 | 6,010 | 4.2 | ||||||||||||||||||||||||||||||
Total
real estate loans
|
99,575 | 57.3 | 107,841 | 59.0 | 99,300 | 56.5 | 86,104 | 55.6 | 79,995 | 56.2 | ||||||||||||||||||||||||||||||
Commercial
and agricultural business loans
|
34,393 | 19.8 | 35,356 | 19.3 | 36,539 | 20.8 | 32,837 | 21.2 | 28,679 | 20.2 | ||||||||||||||||||||||||||||||
Consumer
loans:
|
||||||||||||||||||||||||||||||||||||||||
Home
equity/home improvement
(3)
|
28,119 | 16.2 | 30,002 | 16.4 | 30,087 | 17.1 | 27,202 | 17.6 | 26,382 | 18.5 | ||||||||||||||||||||||||||||||
Automobile
|
6,118 | 3.5 | 5,842 | 3.2 | 5,334 | 3.0 | 5,275 | 3.4 | 4,580 | 3.2 | ||||||||||||||||||||||||||||||
Other
|
7,837 | 4.5 | 5,950 | 3.2 | 6,402 | 3.6 | 5,313 | 3.4 | 4,657 | 3.3 | ||||||||||||||||||||||||||||||
Total
consumer loans
|
42,074 | 24.2 | 41,794 | 22.8 | 41,823 | 23.7 | 37,790 | 24.4 | 35,619 | 25.0 | ||||||||||||||||||||||||||||||
Total
loans receivable
|
176,042 | 101.3 | 184,991 | 101.1 | 177,662 | 101.0 | 156,731 | 101.2 | 144,293 | 101.4 | ||||||||||||||||||||||||||||||
Less:
|
||||||||||||||||||||||||||||||||||||||||
Unearned
premium on purchased loans,
unearned
discount and deferred loan
fees,
net
|
69 | — | 109 | — | 29 | — | 29 | — | 175 | 0.1 | ||||||||||||||||||||||||||||||
Allowance
for loan losses
|
2,290 | 1.3 | 1,934 | 1.1 | 1,766 | 1.0 | 1,864 | 1.2 | 1,846 | 1.3 | ||||||||||||||||||||||||||||||
Total
loans receivable, net
|
$ | 173,683 | 100.0 | % | $ | 182,948 | 100.0 | % | $ | 175,867 | 100.0 | % | $ | 154,838 | 100.0 | % | $ | 142,272 | 100.0 | % |
(1)
|
Includes
one- to four-family real estate construction loans of $54,000, $596,000,
$352,000, $183,000 and $546,000
for the years ended
December 31, 2009, 2008, 2007, 2006 and 2005,
respectively.
|
(2)
|
Includes
commercial and agricultural real estate construction loans of $4.2
million, $2.5 million, $472,000, $0 and $193,000
for the years ended
December 31, 2009, 2008, 2007, 2006 and 2005,
respectively.
|
(3)
|
Includes
real estate construction loans of $3.6 million, $1.1 million, $1.4
million, $370,000 and $1.9 million
for the years ended
December 31, 2009, 2008, 2007, 2006 and 2005,
respectively.
|
One-
to Four-Family Real
Estate
|
Commercial
and
Agricultural
Real Estate
|
Multi-Family
Real Estate
|
Commercial
and
Agricultural
Business
|
|||||||||||||||||||||||||||||
Amount
|
Weighted
Average
Rate
|
Amount
|
Weighted
Average
Rate
|
Amount
|
Weighted
Average
Rate
|
Amount
|
Weighted
Average
Rate
|
|||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||
Due During the Years
Ending
December 31,
|
||||||||||||||||||||||||||||||||
2010
|
$ | 3,748 | 7.51 | % | $ | 11,647 | 6.06 | % | $ | 15 | 9.50 | % | $ | 14,906 | 5.72 | % | ||||||||||||||||
2011
|
5,071 | 7.23 | 5,192 | 4.77 | 356 | 6.84 | 2,032 | 6.42 | ||||||||||||||||||||||||
2012
|
4,051 | 7.27 | 1,809 | 6.23 | 167 | 6.50 | 3,462 | 5.54 | ||||||||||||||||||||||||
2013 to 2014
|
3,689 | 7.10 | 1,694 | 6.21 | 106 | 6.00 | 9,364 | 5.85 | ||||||||||||||||||||||||
2015 to 2019
|
3,641 | 5.67 | 2,515 | 5.98 | 37 | 6.50 | 1,717 | 5.62 | ||||||||||||||||||||||||
2020 to 2024
|
3,592 | 6.35 | 8,575 | 5.34 | — | — | 1,225 | 5.66 | ||||||||||||||||||||||||
2025 and beyond
|
14,789 | 6.22 | 25,218 | 5.78 | 3,663 | 5.69 | 1,687 | 6.64 | ||||||||||||||||||||||||
Total
|
$ | 38,581 | 6.63 | % | $ | 56,650 | 5.71 | % | $ | 4,344 | 5.84 | % | $ | 34,393 | 5.82 | % |
Home
Equity/Home
Improvement
|
Automobile
|
Other
Consumer
|
Total
|
|||||||||||||||||||||||||||||
Amount
|
Weighted
Average
Rate
|
Amount
|
Weighted
Average
Rate
|
Amount
|
Weighted
Average
Rate
|
Amount
|
Weighted
Average
Rate
|
|||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||
Due During the Years
Ending
December 31,
|
||||||||||||||||||||||||||||||||
2010
|
$ | 4,730 | 6.74 | % | $ | 368 | 8.84 | % | $ | 2,451 | 6.08 | % | $ | 37,865 | 6.16 | % | ||||||||||||||||
2011
|
3,577 | 7.37 | 1,060 | 8.28 | 888 | 7.61 | 18,176 | 6.53 | ||||||||||||||||||||||||
2012
|
4,217 | 7.46 | 1,502 | 7.62 | 833 | 8.10 | 16,041 | 6.88 | ||||||||||||||||||||||||
2013 to 2014
|
5,921 | 6.88 | 3,114 | 7.25 | 1,006 | 7.84 | 24,894 | 6.55 | ||||||||||||||||||||||||
2015 to 2019
|
7,359 | 5.69 | 74 | 8.72 | 551 | 7.40 | 15,894 | 5.80 | ||||||||||||||||||||||||
2020 to 2024
|
1,620 | 7.15 | — | — | 894 | 8.12 | 15,906 | 5.94 | ||||||||||||||||||||||||
2025 and beyond
|
695 | 6.77 | — | — | 1,214 | 9.43 | 47,266 | 6.04 | ||||||||||||||||||||||||
Total
|
$ | 28,119 | 6.71 | % | $ | 6,118 | 7.63 | % | $ | 7,837 | 7.54 | % | $ | 176,042 | 6.23 | % |
Due
after December 31, 2010
|
||||||||||||
Fixed
|
Adjustable
|
Total
|
||||||||||
(In
Thousands)
|
||||||||||||
Real
estate loans:
|
||||||||||||
One-
to four-family
residential
|
$ | 25,829 | $ | 9,003 | $ | 34,832 | ||||||
Commercial
and
agricultural
|
5,497 | 39,507 | 45,004 | |||||||||
Multi-family
residential
|
629 | 3,700 | 4,329 | |||||||||
Commercial
and agricultural business loans
|
13,186 | 6,301 | 19,487 | |||||||||
Consumer
loans
|
||||||||||||
Home
equity/home improvement
|
14,180 | 9,210 | 23,390 | |||||||||
Automobile
|
5,750 | — | 5,750 | |||||||||
Other
|
4,803 | 582 | 5,385 | |||||||||
Total
loans
|
$ | 69,874 | $ | 68,303 | $ | 138,177 |
For
the Years Ended December 31,
|
||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
(In
Thousands)
|
||||||||||||||||||||
Total
loans receivable at beginning of year
|
$ | 184,991 | $ | 177,662 | $ | 156,731 | $ | 144,293 | $ | 127,855 | ||||||||||
Originations:
|
||||||||||||||||||||
Real
estate loans:
|
||||||||||||||||||||
One- to four-family
residential
|
72,109 | 38,717 | 30,104 | 25,708 | 31,551 | |||||||||||||||
Commercial and
agricultural
|
9,163 | 23,038 | 8,897 | 10,808 | 16,826 | |||||||||||||||
Multi-family
residential
|
— | — | — | 1,862 | 5,076 | |||||||||||||||
Commercial
and agricultural business loans
|
27,295 | 31,027 | 29,404 | 31,510 | 19,532 | |||||||||||||||
Consumer
loans:
|
||||||||||||||||||||
Home equity/home
improvement
|
11,698 | 20,133 | 19,309 | 17,874 | 19,021 | |||||||||||||||
Automobile
|
4,017 | 4,188 | 3,777 | 4,336 | 3,697 | |||||||||||||||
Other
|
7,206 | 5,072 | 6,360 | 4,916 | 4,560 | |||||||||||||||
Total originations
|
131,488 | 122,175 | 97,851 | 97,014 | 100,263 | |||||||||||||||
Participation loans
purchased
|
2,113 | 11,569 | 6,231 | 3,736 | 4,634 | |||||||||||||||
Transfer
of mortgage loans to foreclosed real estate owned
|
308 | 667 | 819 | 329 | 933 | |||||||||||||||
Repayments
|
75,542 | 95,671 | 72,176 | 71,422 | 66,258 | |||||||||||||||
Loan sales to
secondary market
|
66,700 | 30,077 | 10,156 | 16,561 | 21,268 | |||||||||||||||
Total loans receivable at end of year
|
$ | 176,042 | $ | 184,991 | $ | 177,662 | $ | 156,731 | $ | 144,293 |
At
December 31,
|
||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||
Non-accrual
loans:
|
||||||||||||||||||||
Real
estate loans:
|
||||||||||||||||||||
One-
to four-family residential
|
$ | 484 | $ | 445 | $ | 310 | $ | 435 | $ | 624 | ||||||||||
Commercial
and agricultural
|
98 | 34 | 218 | 100 | — | |||||||||||||||
Multi-family residential
|
132 | 152 | — | — | — | |||||||||||||||
Commercial
and agricultural business loans
|
416 | 48 | 82 | 704 | 290 | |||||||||||||||
Consumer
loans:
|
||||||||||||||||||||
Home
equity/home improvement
|
407 | 318 | 89 | 100 | 222 | |||||||||||||||
Automobile
|
8 | 3 | 12 | 1 | 1 | |||||||||||||||
Other
|
52 | 5 | 12 | 8 | 20 | |||||||||||||||
Total
non-accrual loans
|
1,597 | 1,005 | 723 | 1,348 | 1,157 | |||||||||||||||
Loans
delinquent 90 days or greater and still accruing:
|
||||||||||||||||||||
Real
estate loans:
|
||||||||||||||||||||
One-
to four-family residential
|
349 | 163 | 203 | — | 2 | |||||||||||||||
Commercial
and agricultural
|
— | — | 156 | — | — | |||||||||||||||
Multi-family residential
|
— | — | — | — | — | |||||||||||||||
Commercial
and agricultural business loans
|
— | — | — | — | — | |||||||||||||||
Consumer
loans:
|
||||||||||||||||||||
Home
equity/home improvement
|
— | — | — | — | — | |||||||||||||||
Automobile
|
3 | 18 | — | — | 17 | |||||||||||||||
Other
|
5 | 5 | 9 | 4 | 2 | |||||||||||||||
Total
loans delinquent 90 days or greater and still accruing
|
357 | 186 | 368 | 4 | 21 | |||||||||||||||
Total
non-performing loans
|
1,954 | 1,191 | 1,091 | 1,352 | 1,178 | |||||||||||||||
Other
real estate owned and foreclosed assets:
|
||||||||||||||||||||
Real
estate loans:
|
||||||||||||||||||||
One-
to four-family residential
|
324 | 565 | 115 | 37 | 276 | |||||||||||||||
Commercial
and agricultural
|
59 | 204 | 249 | 115 | 180 | |||||||||||||||
Multi-family residential
|
— | — | — | — | — | |||||||||||||||
Commercial
and agricultural business loans
|
— | — | — | — | — | |||||||||||||||
Consumer
loans:
|
||||||||||||||||||||
Home
equity/home improvement
|
— | — | — | — | — | |||||||||||||||
Automobile
|
— | 9 | 23 | — | 15 | |||||||||||||||
Other
|
— | — | — | — | — | |||||||||||||||
Total other
real estate owned and foreclosed assets
|
383 | 778 | 387 | 152 | 471 | |||||||||||||||
Total
non-performing assets
|
$ | 2,337 | $ | 1,969 | $ | 1,478 | $ | 1,504 | $ | 1,649 | ||||||||||
Ratios:
|
||||||||||||||||||||
Non-performing loans to total loans
|
1.11 | % | 0.64 | % | 0.61 | % | 0.86 | % | 0.82 | % | ||||||||||
Non-performing
assets to total
assets
|
0.81 | 0.68 | 0.51 | 0.56 | 0.65 |
Loans
Delinquent For
|
||||||||||||||||||||||||
60-89
Days
|
90
Days and Over
|
Total
|
||||||||||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
Number
|
Amount
|
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
At
December 31, 2009
|
||||||||||||||||||||||||
Real
estate loans:
|
||||||||||||||||||||||||
One-
to four-family residential
|
6 | $ | 215 | 13 | $ | 907 | 19 | $ | 1,122 | |||||||||||||||
Commercial
and agricultural
|
3 | 668 | 2 | 75 | 5 | 743 | ||||||||||||||||||
Multi-family residential
|
— | — | — | — | — | — | ||||||||||||||||||
Commercial
and agricultural business loans
|
1 | 14 | 2 | 109 | 3 | 123 | ||||||||||||||||||
Consumer
loans:
|
||||||||||||||||||||||||
Home
equity/home improvement
|
4 | 43 | 11 | 203 | 15 | 246 | ||||||||||||||||||
Automobile
|
2 | 7 | 2 | 4 | 4 | 11 | ||||||||||||||||||
Other
|
3 | 1 | 7 | 31 | 10 | 32 | ||||||||||||||||||
Total loans
|
19 | $ | 948 | 37 | $ | 1,329 | 56 | $ | 2,277 | |||||||||||||||
At
December 31, 2008
|
||||||||||||||||||||||||
Real
estate loans:
|
||||||||||||||||||||||||
One-
to four-family residential
|
4 | $ | 436 | 15 | $ | 695 | 19 | $ | 1,131 | |||||||||||||||
Commercial
and agricultural
|
— | — | — | — | — | — | ||||||||||||||||||
Multi-family residential
|
— | — | — | — | — | — | ||||||||||||||||||
Commercial
and agricultural business loans
|
— | — | — | — | — | — | ||||||||||||||||||
Consumer
loans:
|
||||||||||||||||||||||||
Home
equity/home improvement
|
7 | 102 | 9 | 188 | 16 | 290 | ||||||||||||||||||
Automobile
|
5 | 22 | 5 | 18 | 10 | 40 | ||||||||||||||||||
Other
|
9 | 32 | 7 | 6 | 16 | 38 | ||||||||||||||||||
Total loans
|
25 | $ | 592 | 36 | $ | 907 | 61 | $ | 1,499 | |||||||||||||||
At
December 31, 2007
|
||||||||||||||||||||||||
Real
estate loans:
|
||||||||||||||||||||||||
One-
to four-family residential
|
1 | $ | 79 | 12 | $ | 610 | 13 | $ | 689 | |||||||||||||||
Commercial
and agricultural
|
— | — | 1 | 102 | 1 | 102 | ||||||||||||||||||
Multi-family residential
|
— | — | — | — | — | — | ||||||||||||||||||
Commercial
and agricultural business loans
|
— | — | 2 | 115 | 2 | 115 | ||||||||||||||||||
Consumer
loans:
|
||||||||||||||||||||||||
Home
equity/home improvement
|
5 | 76 | 4 | 78 | 9 | 154 | ||||||||||||||||||
Automobile
|
4 | 21 | 3 | 15 | 7 | 36 | ||||||||||||||||||
Other
|
3 | 23 | 4 | 6 | 7 | 29 | ||||||||||||||||||
Total loans
|
13 | $ | 199 | 26 | $ | 926 | 39 | $ | 1,125 |
Loans
Delinquent For
|
||||||||||||||||||||||||
|
60-89
Days
|
90
Days and Over
|
Total
|
|||||||||||||||||||||
Number | Amount | Number | Amount | Number | Amount | |||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
At
December 31, 2006
|
||||||||||||||||||||||||
Real
estate loans:
|
||||||||||||||||||||||||
One-
to four-family residential
|
9 | $ | 323 | 6 | $ | 270 | 15 | $ | 593 | |||||||||||||||
Commercial
and agricultural
|
— | — | 2 | 145 | 2 | 145 | ||||||||||||||||||
Multi-family residential
|
— | — | — | — | — | — | ||||||||||||||||||
Commercial
and agricultural business loans
|
— | — | 1 | 659 | 1 | 659 | ||||||||||||||||||
Consumer
loans:
|
||||||||||||||||||||||||
Home
equity/home improvement
|
7 | 146 | 5 | 191 | 12 | 337 | ||||||||||||||||||
Automobile
|
2 | 1 | 1 | 1 | 3 | 2 | ||||||||||||||||||
Other
|
2 | 7 | 2 | 7 | 4 | 14 | ||||||||||||||||||
Total loans
|
20 | $ | 477 | 17 | $ | 1,273 | 37 | $ | 1,750 | |||||||||||||||
At
December 31, 2005
|
||||||||||||||||||||||||
Real
estate loans:
|
||||||||||||||||||||||||
One-
to four-family residential
|
6 | $ | 155 | 9 | $ | 465 | 15 | $ | 620 | |||||||||||||||
Commercial
and agricultural
|
— | — | 3 | 260 | 3 | 260 | ||||||||||||||||||
Multi-family residential
|
— | — | — | — | — | — | ||||||||||||||||||
Commercial
and agricultural business loans
|
2 | 5 | — | — | 2 | 5 | ||||||||||||||||||
Consumer
loans:
|
||||||||||||||||||||||||
Home
equity/home improvement
|
6 | 134 | 5 | 213 | 11 | 347 | ||||||||||||||||||
Automobile
|
4 | 13 | 3 | 18 | 7 | 31 | ||||||||||||||||||
Other
|
3 | 12 | 3 | 30 | 6 | 42 | ||||||||||||||||||
Total loans
|
21 | $ | 319 | 23 | $ | 986 | 44 | $ | 1,305 |
12/31/09
|
12/31/08
|
|||||||
(In
thousands)
|
||||||||
Special
Mention loans
|
$ | 6,489 | $ | 7,369 | ||||
Substandard
loans
|
4,865 | 2,388 | ||||||
Total
Special Mention and Substandard loans
|
$ | 11,354 | $ | 9,757 |
●
|
changes
in lending policies and procedures, including underwriting standards and
collection practices;
|
●
|
changes
in national and local economic and business conditions and developments,
including the condition of various market
segments;
|
●
|
changes
in the nature and volume of the loan
portfolio;
|
●
|
changes
in the experience, ability and depth of management and the lending
staff;
|
●
|
changes
in the trend of the volume and severity of the past due, nonaccrual, and
classified loans;
|
●
|
changes
in the quality of our loan review system and the degree of oversight by
the board of directors;
|
●
|
the
existence of any concentrations of credit, and changes in the level of
such concentrations; and
|
●
|
the
effect of external factors, such as competition and legal and regulatory
requirements on the level of estimated credit losses in our current
portfolio.
|
For
the Years Ended December 31,
|
||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||
Balance
at beginning of
year
|
$ | 1,934 | $ | 1,766 | $ | 1,864 | $ | 1,846 | $ | 1,888 | ||||||||||
Charge-offs:
|
||||||||||||||||||||
One- to four-family
residential
|
147 | 149 | 165 | 55 | 161 | |||||||||||||||
Commercial and
agricultural real estate
|
112 | — | 38 | 30 | 53 | |||||||||||||||
Commercial and
agricultural business
|
1,883 | — | 35 | 16 | 8 | |||||||||||||||
Home equity/home
improvement
|
58 | 46 | 18 | 101 | 145 | |||||||||||||||
Automobile
|
20 | 8 | — | 2 | 30 | |||||||||||||||
Other
consumer
|
23 | 3 | 45 | 14 | 36 | |||||||||||||||
Total
charge-offs
|
2,243 | 206 | 301 | 218 | 433 | |||||||||||||||
Recoveries:
|
||||||||||||||||||||
One- to four-family
residential
|
1 | 14 | 5 | 78 | 14 | |||||||||||||||
Commercial and
agricultural real estate
|
4 | 15 | 6 | 8 | — | |||||||||||||||
Commercial and
agricultural business
|
— | 16 | — | — | — | |||||||||||||||
Home equity/home
improvement
|
4 | 4 | 3 | 34 | 98 | |||||||||||||||
Automobile
|
7 | 5 | 13 | 17 | 17 | |||||||||||||||
Other
consumer
|
8 | 10 | 21 | 39 | 17 | |||||||||||||||
Total recoveries
|
24 | 64 | 48 | 176 | 146 | |||||||||||||||
Net
loans
charge-offs
|
2,219 | 142 | 253 | 42 | 287 | |||||||||||||||
Additions
charged to
operations
|
2,575 | 310 | 155 | 60 | 245 | |||||||||||||||
Balance
at end of
year
|
$ | 2,290 | $ | 1,934 | $ | 1,766 | $ | 1,864 | $ | 1,846 | ||||||||||
Total
loans
outstanding
|
$ | 176,042 | $ | 184,991 | $ | 177,662 | $ | 156,731 | $ | 144,293 | ||||||||||
Average
net loans
outstanding
|
$ | 182,813 | $ | 177,963 | $ | 165,715 | $ | 149,238 | $ | 137,740 | ||||||||||
Allowance
for loan losses as a percentage of total loans at end of
year
|
1.29 | % | 1.05 | % | 0.99 | % | 1.19 | % | 1.28 | % | ||||||||||
Net
loans charged off as a percent of average net loans
outstanding
|
1.21 | % | 0.08 | % | 0.15 | % | 0.03 | % | 0.21 | % | ||||||||||
Allowance
for loan losses to non-performing loans
|
117.20 | % | 162.47 | % | 161.90 | % | 137.90 | % | 156.75 | % | ||||||||||
Allowance
for loan losses to total non-performing assets at end of
year
|
97.99 | % | 98.22 | % | 119.49 | % | 123.94 | % | 111.95 | % |
At
December 31,
|
||||||||||||||||||||||||
2009
|
2008
|
2007
|
||||||||||||||||||||||
Amount
|
Percent
of
Loans
in Each
Category
to
Total
Loans
|
Amount
|
Percent
of
Loans
in Each
Category
to
Total
Loans
|
Amount
|
Percent
of
Loans
in Each
Category
to
Total
Loans
|
|||||||||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||||||||||
One- to four-family
residential
|
$ | 392 | 21.9 | % | $ | 510 | 25.3 | % | $ | 595 | 28.4 | % | ||||||||||||
Commercial
and agricultural real estate
|
739 | 32.2 | 537 | 30.6 | 346 | 24.8 | ||||||||||||||||||
Multi-family
residential
|
73 | 2.5 | 12 | 2.4 | 28 | 2.7 | ||||||||||||||||||
Commercial
and agricultural business
|
653 | 19.5 | 304 | 19.1 | 146 | 20.6 | ||||||||||||||||||
Home
equity/home improvement
|
249 | 16.0 | 301 | 16.2 | 465 | 16.9 | ||||||||||||||||||
Automobile
|
26 | 3.5 | 33 | 3.2 | 74 | 3.0 | ||||||||||||||||||
Other consumer
|
62 | 4.4 | 52 | 3.2 | 112 | 3.6 | ||||||||||||||||||
Unallocated
|
96 | — | 185 | — | — | — | ||||||||||||||||||
Total
|
$ | 2,290 | 100 | % | $ | 1,934 | 100 | % | $ | 1,766 | 100 | % |
At
December 31,
|
||||||||||||||||
2006
|
2005
|
|||||||||||||||
Amount
|
Percent of
Loans
in Each
Category
to
Total
Loans
|
Amount
|
Percent
of
Loans
in Each
Category
to
Total
Loans
|
|||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||
One- to four-family
residential
|
$ | 512 | 25.9 | % | $ | 448 | 27.8 | % | ||||||||
Commercial
and agricultural real estate
|
244 | 25.3 | 199 | 23.4 | ||||||||||||
Multi-family
residential
|
37 | 3.7 | 40 | 4.2 | ||||||||||||
Commercial
and agricultural business
|
275 | 21.0 | 129 | 19.9 | ||||||||||||
Home
equity/home improvement
|
561 | 17.3 | 785 | 18.3 | ||||||||||||
Automobile
|
96 | 3.4 | 110 | 3.2 | ||||||||||||
Other consumer
|
139 | 3.4 | 135 | 3.2 | ||||||||||||
Total
|
$ | 1,864 | 100 | % | $ | 1,846 | 100 | % |
At
December 31,
|
||||||||||||||||||||||||
2009
|
2008
|
2007
|
||||||||||||||||||||||
Amortized
Cost |
Fair
Value
|
Amortized
Cost |
Fair
Value
|
Amortized
Cost |
Fair
Value
|
|||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||
Mortgage-backed
securities:
|
||||||||||||||||||||||||
Fannie
Mae
|
$ | 10,646 | $ | 10,855 | $ | 14,422 | $ | 14,654 | $ | 7,439 | $ | 7,433 | ||||||||||||
Freddie
Mac
|
6,938 | 7,096 | 6,085 | 6,192 | 4,561 | 4,536 | ||||||||||||||||||
Ginnie
Mae
|
22,844 | 23,034 | 6,877 | 6,949 | 3,495 | 3,446 | ||||||||||||||||||
Total
mortgage-backed securities
|
40,428 | 40,985 | 27,384 | 27,795 | 15,495 | 15,415 | ||||||||||||||||||
U.S.
government and agencies
|
9,037 | 9,080 | 19,472 | 19,834 | 50,107 | 49,962 | ||||||||||||||||||
Municipal
bonds
|
27,661 | 28,116 | 30,067 | 29,805 | 14,796 | 14,933 | ||||||||||||||||||
Total
|
$ | 77,126 | $ | 78,181 | $ | 76,923 | $ | 77,434 | $ | 80,398 | $ | 80,310 |
One
Year or Less
|
More
than One Year
through Five Years |
More
than Five Years
through Ten Years |
More
than Ten Years
|
Total
Securities
|
||||||||||||||||||||||||||||||||||||||||
Amortized
Cost |
Weighted
Average Yield |
Amortized
Cost |
Weighted
Average Yield |
Amortized
Cost |
Weighted
Average Yield |
Amortized
Cost |
Weighted
Average Yield |
Amortized
Cost |
Fair
Value
|
Weighted
Average Yield |
||||||||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed
securities:
|
||||||||||||||||||||||||||||||||||||||||||||
Fannie
Mae
|
$ | — | — | % | $ | — | — | % | $ | — | — | % | $ | 10,646 | 4.30 | % | $ | 10,646 | $ | 10,855 | 4.30 | % | ||||||||||||||||||||||
FreddieMac
|
— | — | — | — | — | — | 6,938 | 4.34 | 6,938 | 7,096 | 4.34 | |||||||||||||||||||||||||||||||||
Ginnie
Mae
|
— | — | — | — | — | — | 22,844 | 4.13 | 22,844 | 23,034 | 4.13 | |||||||||||||||||||||||||||||||||
Total
mortgage-backed securities
|
— | — | — | — | — | — | 40,428 | 4.21 | 40,428 | 40,985 | 4.21 | |||||||||||||||||||||||||||||||||
U.S.
government and agencies
|
— | — | 1,000 | 4.25 | 5,481 | 4.35 | 2,556 | 3.84 | 9,037 | 9,080 | 4.20 | |||||||||||||||||||||||||||||||||
Municipal bonds
(1)
|
270 | 3.31 | 2,627 | 3.30 | 13,137 | 3.56 | 11,627 | 4.16 | 27,661 | 28,116 | 3.80 | |||||||||||||||||||||||||||||||||
Total
|
$ | 270 | 3.31 | % | $ | 3,627 | 3.59 | % | $ | 18,618 | 3.79 | % | $ | 54,611 | 4.18 | % | $ | 77,126 | $ | 78,181 | 4.06 | % |
(1)
|
We
used an assumed 34% tax rate in computing tax equivalent adjustments. The
tax equivalent yield of municipal bonds was 5.01% for maturities of one
year or less, 5.00% for maturities of more than one year through five
years, 5.40% for maturities for more than five years through ten years,
6.31% for maturities of more than 10 years and 5.76% for the total
municipal bonds securities portfolio at December 31, 2009. The tax
equivalent adjustments to interest income of municipal bonds was $5,000
for maturities of one year or less, $45,000 for maturities of more than
one year through five years, $242,000 for maturities for more than five
years through ten years, $250,000 for maturities of more than 10 years and
$542,000 for the total municipal bonds securities portfolio for the year
ended December 31, 2009.
|
For
the Years Ended December 31,
|
||||||||||||||||||||||||||||||||||||
2009
|
2008
|
2007
|
||||||||||||||||||||||||||||||||||
Average
Balance |
Percent
|
Weighted
Average Rate |
Average
Balance |
Percent
|
Weighted
Average Rate |
Average
Balance |
Percent
|
Weighted
Average Rate |
||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||
Deposit
type:
|
||||||||||||||||||||||||||||||||||||
Non-interest
bearing checking
|
$ | 19,791 | 7.8 | % | — | % | $ | 18,479 | 7.5 | % | — | % | $ | 16,214 | 6.8 | % | — | % | ||||||||||||||||||
Interest-bearing
checking
|
29,009 | 11.4 | 0.32 | % | 28,572 | 11.6 | 0.70 | % | 25,820 | 10.9 | 1.17 | % | ||||||||||||||||||||||||
Savings
accounts
|
24,849 | 9.8 | 0.88 | % | 22,677 | 9.2 | 0.99 | % | 22,774 | 9.6 | 1.00 | % | ||||||||||||||||||||||||
Money
market deposits
|
4,616 | 1.8 | 0.86 | % | 4,700 | 1.9 | 1.06 | % | 4,957 | 2.1 | 1.41 | % | ||||||||||||||||||||||||
Money
market savings
|
26,750 | 10.5 | 1.41 | % | 24,442 | 9.9 | 2.39 | % | 22,502 | 9.4 | 4.40 | % | ||||||||||||||||||||||||
Certificates
of deposit
|
149,124 | 58.7 | 3.08 | % | 147,891 | 59.9 | 4.13 | % | 145,325 | 61.2 | 4.71 | % | ||||||||||||||||||||||||
Total
deposits
|
$ | 254,139 | 100.00 | % | 2.09 | % | $ | 246,761 | 100.00 | % | 2.90 | % | $ | 237,592 | 100.00 | % | 3.55 | % |
At
December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(In
thousands)
|
||||||||||||
Interest
Rate:
|
||||||||||||
Less
than 2.00%
|
$ | 51,683 | $ | 1,006 | $ | 129 | ||||||
2.00%
to 2.99%
|
40,734 | 36,001 | 5,618 | |||||||||
3.00%
to 3.99%
|
37,674 | 67,714 | 23,208 | |||||||||
4.00%
to 4.99%
|
6,677 | 17,269 | 40,876 | |||||||||
5.00%
to 5.99%
|
8,852 | 18,420 | 80,414 | |||||||||
6.00%
to 6.99%
|
— | 86 | 88 | |||||||||
Total
|
$ | 145,620 | $ | 140,496 | $ | 150,333 |
At December 31, 2009 | ||||||||||||||||||||||||
Period to Maturity | ||||||||||||||||||||||||
Less
Than or
Equal to One Year |
More
Than
One to Two Years |
More
Than
Two to Three Years |
More
Than
Three Years |
Total
|
Percent
of
Total |
|||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Interest
Rate Range:
|
||||||||||||||||||||||||
Less
than 2.00%
|
$ | 44,055 | $ | 7,622 | $ | — | $ | 6 | $ | 51,683 | 35.5 | % | ||||||||||||
2.00%
to 2.99%
|
29,580 | 9,000 | 1,686 | 468 | 40,734 | 27.9 | ||||||||||||||||||
3.00%
to 3.99%
|
24,513 | 5,624 | 1,825 | 5,712 | 37,674 | 25.9 | ||||||||||||||||||
4.00%
to 4.99%
|
3,686 | 1,780 | 954 | 257 | 6,677 | 4.6 | ||||||||||||||||||
5.00%
to 5.99%
|
6,265 | 1,633 | 526 | 428 | 8,852 | 6.1 | ||||||||||||||||||
6.00%
to 6.99%
|
— | — | — | — | — | — | ||||||||||||||||||
Total
|
$ | 108,099 | $ | 25,659 | $ | 4,991 | $ | 6,871 | $ | 145,620 | 100.00 | % |
At
December 31, 2009
|
||||
(In
Thousands)
|
||||
Three
months or less
|
$ | 11,961 | ||
Over
three months through six months
|
12,937 | |||
Over
six months through one year
|
21,889 | |||
Over
one year to three years
|
7,677 | |||
Over
three years
|
3,662 | |||
Total
|
$ | 58,126 |
At
or For the Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(Dollars
in thousands)
|
||||||||||||
Balance
at end of period
|
$ | — | $ | 13,500 | $ | 10,000 | ||||||
Average
balance during period
|
$ | 5,349 | $ | 12,029 | $ | 8,629 | ||||||
Maximum
outstanding at any month end
|
$ | 10,000 | $ | 21,000 | $ | 18,000 | ||||||
Weighted
average interest rate at end of period
|
— | % | 2.59 | % | 4.98 | % | ||||||
Average
interest rate during period
|
1.94 | % | 3.91 | % | 5.02 | % |
At
or For the Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
(Dollars
in thousands)
|
||||||||||||
Balance
at end of period
|
$ | 3,789 | $ | 7,633 | $ | 4,936 | ||||||
Average
balance during period
|
$ | 5,160 | $ | 6,031 | $ | 4,665 | ||||||
Maximum
outstanding at any month end
|
$ | 6,920 | $ | 7,633 | $ | 5,838 | ||||||
Weighted
average interest rate at end of period
|
0.24 | % | 0.03 | % | 2.89 | % | ||||||
Average
interest rate during period
|
0.19 | % | 1.29 | % | 4.26 | % |
Net
|
|||||||||
Book
Value
|
|||||||||
Year
|
at
December 31,
|
||||||||
Location
|
Occupied
|
2009
|
|||||||
(In
Thousands)
|
|||||||||
Main
Office
|
|||||||||
1211
West Morton Avenue
|
|||||||||
Jacksonville,
Illinois
|
1994 | $ | 3,727 | ||||||
Branch Office
(1)
|
|||||||||
211
West State Street
|
|||||||||
Jacksonville,
Illinois
|
1961 | 603 | |||||||
Branch Office
(1)
|
|||||||||
903
South Main
|
|||||||||
Jacksonville,
Illinois
|
1989 | 184 | |||||||
Branch
Office
|
|||||||||
501
North State Street
|
|||||||||
Litchfield,
Illinois
|
1997 | 573 | |||||||
Branch
Office
|
|||||||||
100
North Dye
|
|||||||||
Virden,
Illinois
|
1986 | 185 | |||||||
Branch
Office
|
|||||||||
510
Superior
|
|||||||||
Chapin,
Illinois
|
2000 | 465 | |||||||
Branch Office
(1)
|
|||||||||
202
State
|
|||||||||
Concord,
Illinois
|
2000 | 29 |
|
(i)
|
be
made on terms that are substantially the same as, and follow credit
underwriting procedures that are not less stringent than, those prevailing
for comparable transactions with unaffiliated persons and that do not
involve more than the normal risk of repayment or present other
unfavorable features, and
|
|
(ii)
|
not
exceed certain limitations on the amount of credit extended to such
persons, individually and in the aggregate, which limits are based, in
part, on the amount of Jacksonville Savings Bank’s
capital.
|
●
|
Truth-In-Lending
Act, governing disclosures of credit terms to consumer
borrowers;
|
●
|
Home
Mortgage Disclosure Act, requiring financial institutions to provide
information to enable the public and public officials to determine whether
a financial institution is fulfilling its obligation to help meet the
housing needs of the community it
serves;
|
●
|
Equal
Credit Opportunity Act, prohibiting discrimination on the basis of race,
creed or other prohibited factors in extending
credit;
|
●
|
Fair
Credit Reporting Act, governing the use and provision of information to
credit reporting agencies;
|
●
|
Fair
Debt Collection Act, governing the manner in which consumer debts may be
collected by collection agencies;
|
●
|
Truth
in Savings Act;
|
●
|
Illinois
High Risk Home Loan Act, which protects borrowers who enter into high risk
home loans;
|
●
|
Illinois
Predatory Lending Database Program, which helps provide counseling for
homebuyers in connection with certain loans;
and
|
●
|
rules
and regulations of the various federal and state agencies charged with the
responsibility of implementing such
laws.
|
●
|
Right
to Financial Privacy Act, which imposes a duty to maintain confidentiality
of consumer financial records and prescribes procedures for complying with
administrative subpoenas of financial
records;
|
●
|
Electronic
Funds Transfer Act and Regulation E promulgated thereunder, which govern
automatic deposits to and withdrawals from deposit accounts and customers’
rights and liabilities arising from the use of automated teller machines
and other electronic banking
services;
|
●
|
Check Clearing for
the 21
st
Century Act (also known as “Check 21”), which gives “substitute checks,”
such as digital check images and copies made from that image, the same
legal standing as the original paper
check;
|
●
|
The
USA PATRIOT Act, which requires savings banks operating to, among other
things, establish broadened anti-money laundering compliance programs, due
diligence policies and controls to ensure the detection and reporting of
money laundering. Such required compliance programs are intended to
supplement existing compliance requirements, also applicable to financial
institutions, under the Bank Secrecy Act and the Office of Foreign Assets
Control regulations; and
|
●
|
The
Gramm-Leach-Bliley Act, which places limitations on the sharing of
consumer financial information by financial institutions with unaffiliated
third parties. Specifically, the Gramm-Leach-Bliley Act requires all
financial institutions offering financial products or services to retail
customers to provide such customers with the financial institution’s
privacy policy and provide such customers the opportunity to “opt out” of
the sharing of certain personal financial information with unaffiliated
third parties.
|
|
(i)
|
the
approval of interstate supervisory acquisitions by savings and loan
holding companies; and
|
|
(ii)
|
the
acquisition of a savings institution in another state if the laws of the
state of the target savings institution specifically permit such
acquisition.
|
Name
|
Age
|
Position
|
||
Andrew
F. Applebee
|
60
|
Chairman
of the Board of Directors
|
||
Richard
A. Foss
|
59
|
President,
Chief Executive Officer and Director
|
||
Diana
S. Tone
|
41
|
Chief
Financial Officer
|
||
John
C. Williams
|
60
|
Senior
Vice President, Trust Officer and Director
|
||
John
D. Eilering
|
47
|
Vice
President of Operations and Secretary
|
||
Laura
A. Marks
|
51
|
Senior
Vice President of Retail Banking
|
||
Chris
A. Royal
|
54
|
Vice
President and Chief Lending Officer
|
Name(1)
|
Position(s)
Held With
Jacksonville
Bancorp-
Maryland |
Age
|
Director
Since
|
Current
Term
Expires
|
||||
Andrew
F. Applebee
|
Chairman
of the Board of Directors
|
60
|
1982
|
2013
|
||||
Emily
J. Osburn
|
Director
|
68
|
1982
|
2013
|
||||
Dean
H. Hess
|
Director
|
61
|
2000
|
2011
|
||||
John
C. Williams
|
Director,
Senior Vice
President and Trust Officer |
60
|
2000
|
2011
|
||||
Harmon
B. Deal, III
|
Director
|
49
|
2003
|
2011
|
||||
John
L. Eyth
|
Director
|
58
|
2005
|
2012
|
||||
Richard
A. Foss
|
President,
Chief Executive
Officer and Director |
59
|
1993
|
2012
|
||||
John
M. Buchanan
|
Director
|
58
|
2009
|
2012
|
Nominating
|
Compensation
|
Audit
|
||||||||||
Emily
J. Osburn
|
X | X | ||||||||||
Dean
H. Hess
|
X* | X | X | |||||||||
Harmon
B. Deal, III
|
X | X* | ||||||||||
John
L. Eyth
|
X | X | X* | |||||||||
John
M. Buchanan
|
X | X | X | |||||||||
Meetings
in Fiscal 2009
|
1 | 1 | 4 |
*
|
Denotes
committee chair as of December 31,
2009.
|
Summary
Compensation Table (3)
|
||||||||||||||||||||||||
Name
and
Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Change
in pension value and non-qualified deferred compensation earnings
(1)
($)
|
All
other compensation (2) ($)
|
Total
($)
|
||||||||||||||||||
Richard
A. Foss,
President and Chief Executive Officer |
2009
2008
|
185,016
156,000
|
12,900
12,000
|
42,529
37,902 |
24,986
23,379
|
265,430
229,281
|
||||||||||||||||||
John
C. Williams
Senior
Vice President
and Trust Officer |
2009
2008
|
104,520
100,750
|
7,200
6,700
|
41,733
39,056 |
13,604
13,464
|
167,057
159,970
|
||||||||||||||||||
Chris
A. Royal
Vice
President and
Chief Lending Officer |
2009
2008
|
114,348
108,914 |
9,000
8,600
|
12,943
12,192 |
5,031
2,732
|
141,322
132,438
|
|
(1)
|
Amounts
reported include the change in pension value for Messrs. Foss, Williams
and Royal of $28,152, $32,251, and $12,943, respectively, for 2009 and
$26,516, $30,378, and $12,192, respectively, for 2008 under the
Jacksonville Savings Bank Salary Continuation Plan 1. Mr.
Williams also received a change in pension value of $8,899 for 2009 and
$8,216for 2008 under his deferred compensation agreements with Chapin
State Bank that were assumed by Jacksonville Bancorp-Federal in the
acquisition of Chapin State Bank on July 3, 2000. In
addition, amounts reported for Messrs. Foss and Williams include
non-qualified deferred compensation earnings of $14,377 and $583,
respectively, for 2009 and $11,386 and $462, respectively, for 2008 under
the Jacksonville Savings Bank Long-Term Deferred Compensation
Plan.
|
|
(2)
|
All
other compensation in 2009 consisted of our matching contributions under
the 401(k) Profit Sharing Plan and life insurance premiums paid by
Jacksonville Bancorp-Federal. This amounted to $9,134, $4,604,
and $5,031 for Messrs. Foss, Williams and Royal,
respectively. All other compensation in 2009 for Messrs. Foss
and Williams also included board fees from Jacksonville Bancorp-Federal
totaling $10,500 and $9,000, respectively. In addition,
in 2009 Mr. Foss was reimbursed $5,352 to pay for family health
insurance coverage. .All other compensation in 2008 consisted
of our matching contributions under the 401(k) Profit Sharing Plan and
life insurance premiums paid by Jacksonville
Bancorp-Federal. This amounted to $8,076, $4,464, and $2,732
for Mr. Foss, Mr. Williams and Mr. Royal, respectively. All
other compensation in 2008 for Messrs. Foss and Williams also included
board fees from Jacksonville Bancorp-Federal totaling $10,500 and $9,000,
respectively. In addition, in 2008 Mr. Foss was reimbursed
$4,803 to pay for family health insurance
coverage.
|
|
(3)
|
During
the year ended December 31, 2009 no stock or option awards were granted to
the named executive officers in
2009.
|
(1)
|
the
failure to elect or reelect or appoint or reappoint the executive to his
current position with Jacksonville Bancorp-Federal and Jacksonville
Savings Bank, or for Mr. Applebee, the failure to elect or reelect the
executive as the Chairman of the
Board;
|
(2)
|
a
material change in the executive’s duties that are in effect as of the
effective date of the agreement that would cause the executive’s position
to become one of lesser responsibility or importance or a material
reduction in the benefits and perquisites being provided to the
executive;
|
(3)
|
a
relocation of the executive’s principal place of employment by more than
30 miles from his current location;
|
(4)
|
liquidation
or dissolution of Jacksonville Bancorp-Federal or Jacksonville Savings
Bank other than liquidations or dissolutions that are caused by
reorganizations that do not affect the status of the executive;
or
|
(5)
|
any
breach of the employment agreement.
|
(1)
|
the
failure to elect or reelect or appoint or reappoint the executive to his
current position with Jacksonville Savings
Bank;
|
(2)
|
a
material change in the executive’s duties that are in effect as of the
effective date of the agreement that would cause the executive’s position
to become one of lesser responsibility or
importance;
|
(3)
|
liquidation
or dissolution of Jacksonville Bancorp-Federal or Jacksonville Savings
Bank other than liquidations or dissolutions that are caused by
reorganizations that do not affect the status of the executive;
or
|
(4)
|
any
breach of the employment agreement.
|
Outstanding
Equity Awards at Fiscal Year-End (2)
|
||||||||||||||||||||
Option
awards
|
||||||||||||||||||||
Name
|
Number
of
securities underlying unexercised options (#) exercisable (1) |
Number
of
securities underlying unexercised options (#) unexercisable |
Equity
incentive plan awards: number of securities underlying unexercised earned options (#) |
Option
exercise price ($) |
Option
expiration Date |
|||||||||||||||
|
||||||||||||||||||||
Richard
A. Foss,
President and Chief Executive Officer |
— | — | — | — | — | |||||||||||||||
|
||||||||||||||||||||
John
C. Williams
Senior Vice President
and Trust Officer |
4,383 | — | — | 10.00 |
04/30/2011
|
|||||||||||||||
|
||||||||||||||||||||
Chris
A. Royal
Vice President and Chief Lending Officer |
— | — | — | — | — |
(1) |
Represents
options granted under the Jacksonville Savings Bank 2001 Stock Option
Plan.
|
|
(2) |
There
are no outstanding unvested stock awards under the Jacksonville Savings
Bank and Jacksonville Bancorp, MHC 1996 Recognition and Retention
Plan.
|
Director
Compensation(3)(4)
|
||||||||||||||||
Name
|
Fees
earned
or paid in cash
($)
|
Change
in pension
value and non- qualified deferred compensation earnings (1) ($) |
All
other
compensation (2) ($) |
Total
($) |
||||||||||||
Andrew
F. Applebee
|
10,500 | 48,916 | 52,952 | 112,368 | ||||||||||||
John
M. Buchanan
|
9,150 | — | — | 9,150 | ||||||||||||
Harmon
B. Deal, III
|
10,615 | — | — | 10,615 | ||||||||||||
John
L. Eyth
|
11,105 | — | — | 11,105 | ||||||||||||
Dean
H. Hess
|
10,775 | 8,576 | — | 19,351 | ||||||||||||
Emily
J. Osburn
|
9,725 | — | — | 9,725 |
|
(1)
|
Amounts
reported in 2009 consisted of a $26,375 change in pension value for Mr.
Applebee under the Salary Continuation Plan 1 and $22,541 in above market
earnings on his deferred compensation under the Long-Term Deferred
Compensation Plan. Mr. Hess also received a change in pension
value under his deferred compensation agreements with Chapin State Bank
that were assumed by Jacksonville Bancorp-Federal in the acquisition of
Chapin State Bank on July 3, 2000.
|
|
(2)
|
All
other compensation for Mr. Applebee includes salary of $42,016, bonus of
$3,200 under his employment agreement, and matching contributions of
$1,943 under our 401(k) Plan, health insurance premiums of $5,351 and life
insurance premiums of $442. Please see descriptions of the
employment agreement and 401(k) Plan under the “Executive Compensation
-Summary Compensation Table” for further
details.
|
|
(3)
|
No
stock awards, option grants or non-equity incentive plan compensation
awards was made to the directors during
2009.
|
|
(4)
|
As
of December 31, 2009, the directors have the following outstanding equity
awards: Mr. Deal has 1,200 option awards and Ms. Osburn has 1,200 option
awards.
|
●
|
non-employee
directors in the aggregate may not receive more than 30% of the options
and restricted stock awards authorized under the
plan;
|
●
|
any
one non-employee director may not receive more than 5% of the options and
restricted stock awards authorized under the
plan;
|
●
|
any
officer or employee may not receive more than 25% of the options and
restricted stock awards authorized under the
plan;
|
●
|
any
tax-qualified employee stock benefit plans and management stock benefit
plans, in the aggregate, may not hold more than 10% of the shares sold in
the offering, unless Jacksonville Savings Bank has tangible capital of 10%
or more, in which case any tax-qualified employee stock benefit plans and
management stock benefit plans, may be increased to up to 12% of the
shares sold in the offering;
|
●
|
the
options and restricted stock awards may not vest more rapidly than 20% per
year, beginning on the first anniversary of stockholder approval of the
plan;
|
●
|
accelerated
vesting is not permitted except for death, disability or upon a change in
control of Jacksonville Savings Bank or Jacksonville Bancorp-Maryland;
and
|
●
|
our
executive officers or directors must exercise or forfeit their options in
the event that Jacksonville Savings Bank becomes critically
undercapitalized, is subject to enforcement action or receives a capital
directive.
|
Name
of Beneficial Owner
|
Total
Shares
Beneficially Owned (1) |
Percent
of
All Common Stock Outstanding |
||||||
Directors:
|
||||||||
Andrew
F. Applebee
|
67,332 | (2) | 3.5 | % | ||||
Emily
J. Osburn
|
11,600 | (3) | * | |||||
Dean
H. Hess
|
29,000 | (4) | 1.5 | % | ||||
John
C. Williams
|
14,397 | (5) | * | |||||
Harmon
B. Deal, III
|
22,550 | (6) | 1.2 | % | ||||
John
L. Eyth
|
4,011 | (7) | * | |||||
Richard
A. Foss
|
59,843 | (8) | 3.1 | % | ||||
John
M. Buchanan
|
1,000 | (9) | * | |||||
Executive
Officers Other
Than
Directors:
|
||||||||
John
D. Eilering
|
11,835 | (10) | * | |||||
Diana
S. Tone
|
3,701 | (11) | * | |||||
Laura
A Marks
|
1,101 | (12) | * | |||||
Chris
A. Royal
|
— | — | ||||||
All
directors and executive officers as a group (12 persons)
|
226,369 | 11.8 | % | |||||
Jacksonville
Bancorp, MHC
1211
West Morton Avenue,
Jacksonville,
Illinois 62650
|
1,038,738 | 54.1 | % | |||||
Jacksonville
Bancorp, MHC and all directors and executive officers as a
group
|
1,265,107 | 65.9 | % |
(*)
|
Less
than 1%.
|
|
(1)
|
Shares
of common stock are held directly unless indicated
otherwise.
|
|
(2)
|
Mr.
Applebee has shared voting and investment power over 24,163 shares and
sole voting and investment power over 43,169 shares; includes 5,100 shares
awarded pursuant to our restricted stock plan.
|
|
(3)
|
Ms.
Osburn has sole voting and investment power over 11,600 shares; includes
600 shares awarded pursuant to our restricted stock
plan.
|
|
(4)
|
Mr.
Hess has shared voting and investment power over 11,480 shares of common
stock and sole voting power over 17,520 shares.
|
|
(5)
|
Mr.
Williams has sole voting and investment power over 14,397 shares of common
stock, including options to purchase 4,383 shares of common
stock.
|
|
(6)
|
Mr.
Deal has sole voting and investment power over 22,550 shares of common
stock, including options to purchase 1,200 shares of common
stock.
|
|
(7)
|
Mr.
Eyth has sole voting and investment power over 4,011 shares of common
stock.
|
|
(8)
|
Mr.
Foss has shared voting and investment power over 16,600 shares and sole
voting and investment power over 43,243 shares; includes 4,800 shares
awarded pursuant to our restricted stock plan.
|
|
(9)
|
Mr.
Buchanan has sole voting and investment power over 1,000
shares.
|
(10)
|
Mr.
Eilering has sole voting and investment power over 11,835 shares of common
stock, including options to purchase 3,000 shares of common
stock.
|
|
(11)
|
Ms.
Tone has sole voting and investment power over 3,701 shares of common
stock, including options to purchase 1,100 shares of common
stock.
|
|
(12)
|
Ms.
Marks has sole voting and investment power over 1,101 shares of common
stock.
|
(i)
|
the
number of exchange shares to be held upon consummation of the conversion,
based upon their beneficial ownership of Jacksonville Bancorp-Federal
common stock as of [stockholder record
date];
|
(ii)
|
the
proposed purchases of subscription shares, assuming sufficient shares of
common stock are available to satisfy their subscriptions;
and
|
(iii)
|
the
total amount of Jacksonville Bancorp-Maryland common stock to be held upon
consummation of the conversion.
|
*
|
Less
than 1%.
|
(1)
|
Includes
proposed subscriptions, if any, by
associates.
|
(2)
|
Based
on information presented in “Beneficial Ownership of Common Stock”
assuming an exchange ratio of 1.1312 at the midpoint of the offering
range.
|
(3)
|
Based
upon 2,172,790 total shares outstanding at the midpoint of the offering
range.
|
(i)
|
Natural
persons residing in the counties of Cass, Greene, Macoupin, Montgomery,
Morgan, Pike, Sangamon and Scott, Illinois;
and
|
(ii)
|
Jacksonville
Bancorp-Federal’s public stockholders as of [stockholder record
date].
|
●
|
to
increase our capital to support internal growth through lending in the
communities we serve;
|
●
|
to
enhance existing products and services and support the development of new
products and services;
|
●
|
to
facilitate growth through branch and whole bank acquisitions, as
opportunities arise;
|
●
|
to
improve our overall competitive position;
and
|
●
|
to
improve the liquidity of our shares of common stock and enhance
stockholder returns through more flexible capital management
strategies.
|
Shares
of Jacksonville Bancorp-
Maryland to be Issued for Shares of Jacksonville Bancorp- Federal |
Total
Shares of
Common Stock to be Issued in Conversion and Offering |
Equivalent
Value of Shares Based Upon Current Market Price (1) |
Shares
to be
Received for 100 Existing Shares |
|||||||||||||||||||||||||||||
Shares
to be Sold in This
Offering |
||||||||||||||||||||||||||||||||
Exchange
Ratio |
||||||||||||||||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||||||||||||
Minimum
|
998,750 | 54.08 | % | 848,122 | 45.92 | % | 1,846,872 | 0.9615 | $ | 9.62 | 96 | |||||||||||||||||||||
Midpoint
|
1,175,000 | 54.08 | 997,790 | 45.92 | 2,172,790 | 1.1312 | 11.31 | 113 | ||||||||||||||||||||||||
Maximum
|
1,351,250 | 54.08 | 1,147,459 | 45.92 | 2,498,709 | 1.3009 | 13.01 | 130 | ||||||||||||||||||||||||
15%
above Maximum
|
1,553,938 | 54.08 | 1,319,578 | 45.92 | 2,873,515 | 1.4960 | 14.96 | 149 |
(1)
|
Represents
the value of shares of Jacksonville Bancorp-Maryland common stock received
in the conversion by a holder of one share of Jacksonville
Bancorp-Federal, at the exchange ratio, assuming the market price of
$10.00 per share.
|
●
|
the
present results and financial condition of Jacksonville Bancorp-Federal
and the projected results and financial condition of Jacksonville
Bancorp-Maryland;
|
●
|
the
economic and demographic conditions in Jacksonville Bancorp-Federal’s
existing market area;
|
●
|
certain
historical, financial and other information relating to Jacksonville
Bancorp-Federal;
|
●
|
a
comparative evaluation of the operating and financial characteristics of
Jacksonville Bancorp-Federal with those of other similarly situated
publicly traded savings institutions located in Illinois and other states
in the Midwestern United States;
|
●
|
the
aggregate size of the offering of the shares of common
stock;
|
●
|
the
impact of the conversion and offering on Jacksonville Bancorp-Federal’s
stockholders’ equity and earnings
potential;
|
●
|
the
proposed dividend policy of Jacksonville Bancorp-Maryland;
and
|
●
|
the
trading market for securities of comparable institutions and general
conditions in the market for such
securities.
|
●
|
Jacksonville
Bancorp-Federal’s financial condition and results of
operations;
|
●
|
comparison
of financial performance ratios of Jacksonville Bancorp-Federal to those
of other financial institutions of similar
size;
|
●
|
market
conditions generally and in particular for financial institutions;
and
|
●
|
the
historical trading price of the publicly held shares of Jacksonville
Bancorp-Federal common stock.
|
(i)
|
Natural
persons residing in the counties of Cass, Greene, Macoupin, Montgomery,
Morgan, Pike, Sangamon and Scott,
Illinois;
|
(ii)
|
Jacksonville
Bancorp-Federal’s public stockholders as of [stockholder record date];
and
|
(iii)
|
Other
members of the general public.
|
(i)
|
No
person may purchase fewer than 25 shares of common stock or more than
25,000 shares ($250,000);
|
(ii)
|
Tax
qualified employee benefit plans, including our employee stock ownership
plan and 401(k) plan, may purchase in the aggregate up to 10% of the
shares of common stock issued in the offering, including shares issued in
the event of an increase in the offering range of up to
15%;
|
(iii)
|
Except
for the employee stock ownership plan and 401(k) plan, as described above,
no person or entity, together with associates or persons acting in concert
with such person or entity, may purchase more than 50,000 shares
($500,000) in all categories of the offering
combined;
|
(iv)
|
Current
stockholders of Jacksonville Bancorp-Federal are subject to an ownership
limitation. As previously described, current stockholders of
Jacksonville Bancorp-Federal will receive shares of Jacksonville
Bancorp-Maryland common stock in exchange for their existing shares of
Jacksonville Bancorp-Federal common stock. The number of shares of common
stock that a stockholder may purchase in the offering, together with
associates or persons acting in concert with such stockholder, when
combined with the shares that the stockholder and his or her associates
will receive in exchange for existing Jacksonville Bancorp-Federal common
stock, may not exceed 5% of the shares of common stock of Jacksonville
Bancorp-Maryland to be issued and outstanding at the completion of the
conversion; and
|
(v)
|
The
maximum number of shares of common stock that may be purchased in all
categories of the offering by senior officers and directors of
Jacksonville Savings Bank and their associates, in the aggregate, when
combined with shares of common stock issued in exchange for existing
shares, may not exceed 30% of the shares issued in the
conversion.
|
(i)
|
to
fill the subscriptions of our tax-qualified employee benefit plans,
including the employee stock ownership plan, for up to 10% of the total
number of shares of common stock issued in the
offering;
|
(ii)
|
in
the event that there is an oversubscription at the Eligible Account
Holder, Supplemental Eligible Account Holder or Other Depositor levels, to
fill unfilled subscriptions of these subscribers according to their
respective priorities; and
|
(iii)
|
to
fill unfilled subscriptions in the community offering, with preference
given first to natural persons residing in the counties of Cass, Greene,
Macoupin, Montgomery, Morgan, Pike, Sangamon and Scott, Illinois, then to
Jacksonville Bancorp-Federal’s public stockholders as of [stockholder
record date] and then to members of the general
public.
|
(i)
|
any
corporation or organization, other than Jacksonville Bancorp-Federal,
Jacksonville Savings Bank or a majority-owned subsidiary of Jacksonville
Savings Bank, of which the person is a senior officer, partner
or 10% beneficial stockholder;
|
(ii)
|
any
trust or other estate in which the person has a substantial beneficial
interest or serves as a trustee or in a similar fiduciary capacity;
provided, however, it does not include any employee stock benefit plan in
which the person has a substantial beneficial interest or serves as
trustee or in a similar fiduciary capacity;
and
|
(iii)
|
any
blood or marriage relative of the person, who either has the same home as
the person or who is a director or officer of Jacksonville Bancorp-Federal
or Jacksonville Savings Bank.
|
(i)
|
knowing
participation in a joint activity or interdependent conscious parallel
action towards a common goal whether or not pursuant to an express
agreement; or
|
(ii)
|
a
combination or pooling of voting or other interests in the securities of
an issuer for a common purpose pursuant to any contract, understanding,
relationship, agreement or other arrangement, whether written or
otherwise.
|
●
|
provide
advice on the financial and securities market implications of the plan of
conversion and reorganization and related corporate documents, including
our business plan;
|
●
|
assist
in structuring our stock offering, including developing and assisting in
implementing a market strategy for the stock
offering;
|
●
|
review
all offering documents, including this prospectus, stock order forms and
related offering materials (we are responsible for the preparation and
filing of such documents);
|
●
|
assist
us in preparing for and scheduling meetings with potential investors and
broker-dealers, as necessary;
|
●
|
assist
us in analyzing proposals from outside vendors retained in connection with
the stock offering, including printers, transfer agents and appraisal
firms;
|
●
|
assist
us in the drafting and distribution of press releases as required or
appropriate in connection with the stock
offering;
|
●
|
meet
with the board of directors and management to discuss any of these
services; and
|
●
|
provide
such other financial advisory and investment banking services in
connection with the stock offering as may be agreed upon by Keefe,
Bruyette & Woods, Inc. and us.
|
●
|
consolidate
accounts and develop a central
file;
|
●
|
prepare
proxy forms and proxy materials;
|
●
|
tabulate
proxies and ballots;
|
●
|
act
as inspector of election at the special meeting of
members;
|
●
|
assist
us in establishing and managing the Stock Information
Center;
|
●
|
assist
our financial printer with labeling of stock offering
materials;
|
●
|
process
stock order forms and certification forms and produce daily reports and
analysis;
|
●
|
assist
our transfer agent with the generation and mailing of stock
certificates;
|
●
|
advise
us on interest and refund calculations;
and
|
●
|
create
tax forms for interest reporting.
|
(i)
|
personal
check, bank check or money order, made payable to Jacksonville Bancorp,
Inc.; or
|
(ii)
|
authorizing
us to withdraw funds from Jacksonville Savings Bank savings and
certificate of deposit accounts (not checking accounts) designated on the
stock order form.
|
1. |
The
merger of Jacksonville Bancorp, MHC with and into Jacksonville
Bancorp-Federal will qualify as a tax-free reorganization within the
meaning of Section 368(a)(1)(A) of the Internal Revenue
Code.
|
2. |
The
constructive exchange of Eligible Account Holders’ and Supplemental
Eligible Account Holders’ liquidation interests in Jacksonville Bancorp,
MHC for liquidation interests in Jacksonville Bancorp-Federal will satisfy
the continuity of interest requirement of Section 1.368-1(b) of the
Federal Income Tax Regulations.
|
3. |
None
of Jacksonville Bancorp, MHC, Jacksonville Bancorp-Federal, Eligible
Account Holders nor Supplemental Eligible Account Holders, will recognize
any gain or loss on the transfer of the assets of Jacksonville Bancorp,
MHC to Jacksonville Bancorp-Federal in constructive exchange for a
liquidation interest established in Jacksonville Bancorp-Federal for the
benefit of such persons who remain depositors of Jacksonville Savings
Bank.
|
4. |
The
basis of the assets of Jacksonville Bancorp, MHC and the holding period of
such assets to be received by Jacksonville Bancorp-Federal will be the
same as the basis and holding period in such assets in the hands of
Jacksonville Bancorp, MHC immediately before the exchange. (Sections
362(b) and 1223(2) of the Internal Revenue Code.)
|
5. |
The
merger of Jacksonville Bancorp-Federal with and into Jacksonville
Bancorp-Maryland will constitute a mere change in identity, form or place
of organization within the meaning of Section 368(a)(1)(F) of the Code and
therefore will qualify as a tax-free reorganization within the meaning of
Section 368(a)(1)(F) of the Code. Neither Jacksonville Bancorp-Federal nor
Jacksonville Bancorp-Maryland will recognize gain or loss as a result of
such merger. (Sections 361(a) and 1032(a) of the Internal Revenue
Code).
|
6. | The basis of the assets of Jacksonville Bancorp-Federal and the holding period of such assets to be received by Jacksonville Bancorp-Maryland will be the same as the basis and holding period in such assets in the hands of Jacksonville Bancorp-Federal immediately before the exchange. (Sections 362(b) and 1223(2) of the Internal Revenue Code.) |
7. |
Current
stockholders of Jacksonville Bancorp-Federal will not recognize any gain
or loss upon their exchange of Jacksonville Bancorp-Federal common stock
for Jacksonville Bancorp-Maryland common stock.
|
8.
|
Eligible
Account Holders and Supplemental Eligible Account Holders will not
recognize any gain or loss upon their constructive exchange of their
liquidation interests in Jacksonville Bancorp-Federal for the liquidation
accounts in Jacksonville Bancorp-Maryland.
|
9. |
The
constructive exchange of the Eligible Account Holders and Supplemental
Eligible Account Holders liquidation interests in Jacksonville
Bancorp-Federal for interests in a liquidation account established in
Jacksonville Bancorp-Maryland will satisfy the continuity of interest
requirement of Section 1.368-1(b) of the Federal Income Tax
Regulations.
|
10. |
Each
stockholder’s aggregate basis in shares of Jacksonville Bancorp-Maryland
common stock (including fractional share interests) received in the
exchange will be the same as the aggregate basis of Jacksonville
Bancorp-Federal common stock surrendered in the
exchange.
|
11. |
Each
stockholder’s holding period in his or her Jacksonville Bancorp-Maryland
common stock received in the exchange will include the period during which
the Jacksonville Bancorp-Federal common stock surrendered was held,
provided that the Jacksonville Bancorp-Federal common stock surrendered is
a capital asset in the hands of the stockholder on the date of the
exchange.
|
12. |
Cash
received by any current stockholder of Jacksonville Bancorp-Federal in
lieu of a fractional share interest in shares of Jacksonville
Bancorp-Maryland common stock will be treated as having been received as a
distribution in full payment in exchange for a fractional share interest
of Jacksonville Bancorp-Maryland common stock, which such stockholder
would otherwise be entitled to receive. Accordingly, a stockholder will
recognize gain or loss equal to the difference between the cash received
and the basis of the fractional share. If the common stock is held by the
stockholder as a capital asset, the gain or loss will be capital gain or
loss.
|
13. |
It
is more likely than not that the fair market value of the nontransferable
subscription rights to purchase Jacksonville Bancorp-Maryland common stock
is zero. Accordingly, no gain or loss will be recognized by Eligible
Account Holders, Supplemental Eligible Account Holders or Other Depositors
upon distribution to them of nontransferable subscription rights to
purchase shares of Jacksonville Bancorp-Maryland common stock. Eligible
Account Holders, Supplemental Eligible Account Holders and Other
Depositors will not realize any taxable income as the result of the
exercise by them of the nontransferable subscriptions
rights.
|
14. |
It
is more likely than not that the fair market value of the benefit provided
by the liquidation account of Jacksonville Savings Bank supporting the
payment of the Jacksonville Bancorp-Maryland liquidation account in the
event Jacksonville Bancorp-Maryland lacks sufficient net assets is
zero. Accordingly, it is more likely than not that no gain or
loss will be recognized by Eligible Account Holders and Supplemental
Eligible Account Holders upon the constructive distribution to them of
such rights in the Jacksonville Savings Bank liquidation account as of the
effective date of the merger of Jacksonville Bancorp-Federal with and into
Jacksonville Bancorp-Maryland. (Section 356(a) of the
Code.)
|
15. |
It
is more likely than not that the basis of the shares of Jacksonville
Bancorp-Maryland common stock purchased in the offering by the exercise of
nontransferable subscription rights will be the purchase price. The
holding period of the Jacksonville Bancorp-Maryland common stock purchased
pursuant to the exercise of nontransferable subscription rights will
commence on the date on which the right to acquire such stock was
exercised.
|
16. |
No
gain or loss will be recognized by Jacksonville Bancorp-Maryland on the
receipt of money in exchange for Jacksonville Bancorp-Maryland common
stock sold in the
offering.
|
(i)
|
it
does not involve an interim savings
institution;
|
(ii)
|
Jacksonville
Bancorp-Federal’s federal stock charter is not
changed;
|
(iii)
|
each
share of Jacksonville Bancorp-Federal’s stock outstanding immediately
prior to the effective date of the transaction will be an identical
outstanding share or a treasury share of Jacksonville Bancorp-Federal
after such effective date; and
|
(iv)
|
either:
|
(a)
|
no
shares of voting stock of Jacksonville Bancorp-Federal and no securities
convertible into such stock are to be issued or delivered under the plan
of combination; or
|
(b)
|
the
authorized but unissued shares or the treasury shares of voting stock of
Jacksonville Bancorp-Federal to be issued or delivered under the plan of
combination, plus those initially issuable upon conversion of any
securities to be issued or delivered under such plan, do not exceed 15% of
the total shares of voting stock of Jacksonville Bancorp-Federal
outstanding immediately prior to the effective date of the
transaction.
|
●
|
the
economic effect, both immediate and long-term, upon Jacksonville
Bancorp-Maryland’s stockholders, including stockholders, if any, who do
not participate in the transaction;
|
●
|
the
social and economic effect on the present and future employees, creditors
and customers of, and others dealing with, Jacksonville Bancorp-Maryland
and its subsidiaries and on the communities in which Jacksonville
Bancorp-Maryland and its subsidiaries operate or are
located;
|
●
|
whether
the proposal is acceptable based on the historical, current or projected
future operating results or financial condition of Jacksonville
Bancorp-Maryland;
|
●
|
whether
a more favorable price could be obtained for Jacksonville
Bancorp-Maryland’s stock or other securities in the
future;
|
●
|
the
reputation and business practices of the other entity to be involved in
the transaction and its management and affiliates as they would affect the
employees of Jacksonville Bancorp-Maryland and its
subsidiaries;
|
●
|
the
future value of the stock or any other securities of Jacksonville
Bancorp-Maryland or the other entity to be involved in the proposed
transaction;
|
●
|
any
antitrust or other legal and regulatory issues that are raised by the
proposal;
|
●
|
the
business and historical, current or expected future financial condition or
operating results of the other entity to be involved in the transaction,
including, but not limited to, debt service and other existing financial
obligations, financial obligations to be incurred in connection with the
proposed transaction, and other likely financial obligations of the other
entity to be involved in the proposed transaction;
and
|
●
|
the
ability of Jacksonville Bancorp-Maryland to fulfill its objectives as a
financial institution holding company and on the ability of its subsidiary
financial institution(s) to fulfill the objectives of a federally insured
financial institution under applicable statutes and
regulations.
|
(i) |
The
limitation on voting rights of persons who directly or indirectly
beneficially own more than 10% of the outstanding shares of common
stock;
|
|
(ii) |
The
division of the board of directors into three staggered
classes;
|
|
(iii) |
The
ability of the board of directors to fill vacancies on the
board;
|
|
(iv) |
The
requirement that directors may only be removed for cause and by the
affirmative vote of at least a majority of the votes eligible to be cast
by stockholders;
|
|
(v)
|
The
ability of the board of directors to amend and repeal the
bylaws;
|
|
(vi) |
The
ability of the board of directors to evaluate a variety of factors in
evaluating offers to purchase or otherwise acquire Jacksonville
Bancorp-Maryland;
|
|
(vii) |
The
authority of the board of directors to provide for the issuance of
preferred stock;
|
|
(viii) |
The
validity and effectiveness of any action lawfully authorized by the
affirmative vote of the holders of a majority of the total number of
outstanding shares of common stock;
|
|
(ix) |
The
number of stockholders constituting a quorum or required for stockholder
consent;
|
|
(x) |
The
indemnification of current and former directors and officers, as well as
employees and other agents, by Jacksonville
Bancorp-Maryland;
|
|
(xi) |
The
limitation of liability of officers and directors to Jacksonville
Bancorp-Maryland for money damages;
|
|
(xii) |
The
inability of stockholders to cumulate their votes in the election of
directors;
|
|
(xiii) | The advance notice requirements for stockholder proposals and nominations; and |
|
(xiv)
|
The
provisions of the articles of incorporation relating to amendments and
requiring approval of at least 80% of the outstanding voting stock to
amend the provisions of the articles of incorporation provided in (i)
through (xiii) of this list.
|
●
|
the
acquisition would result in a monopoly or substantially lessen
competition;
|
●
|
the
financial condition of the acquiring person might jeopardize the financial
stability of the institution;
|
●
|
the
competence, experience or integrity of the acquiring person indicates that
it would not be in the interest of the depositors or the public to permit
the acquisition of control by such person;
or
|
●
|
the
acquisition would have an adverse effect on the Deposit Insurance
Fund.
|
F-2
|
|
Consolidated
Financial Statements
|
|
F-3
|
|
F-5
|
|
F-7
|
|
F-9
|
|
F-11
|
2009
|
2008
|
|||||||
Cash
and due from banks
|
$ | 4,412,988 | $ | 6,292,590 | ||||
Federal
funds sold
|
9,925,855 | 460,194 | ||||||
Interest-bearing
demand deposits in banks
|
1,357,631 | 392,504 | ||||||
Cash
and cash equivalents
|
15,696,474 | 7,145,288 | ||||||
Available-for-sale
securities:
|
||||||||
Investment
securities
|
37,196,298 | 49,638,933 | ||||||
Mortgage-backed
securities
|
40,984,395 | 27,795,119 | ||||||
Other
investments
|
149,902 | 240,321 | ||||||
Loans
held for sale
|
814,074 | 1,388,284 | ||||||
Loans,
net of allowance for loan losses of $2,290,001 and $1,934,072 at December
31, 2009 and 2008
|
173,683,310 | 182,948,292 | ||||||
Premises
and equipment
|
5,766,858 | 6,106,746 | ||||||
Federal
Home Loan Bank stock
|
1,108,606 | 1,108,606 | ||||||
Foreclosed
assets held for sale, net
|
382,879 | 769,467 | ||||||
Cash
surrender value of life insurance
|
4,094,663 | 3,907,339 | ||||||
Interest
receivable
|
1,988,394 | 2,344,502 | ||||||
Deferred
income taxes
|
724,139 | 891,731 | ||||||
Mortgage
servicing rights, net of valuation allowance of $156,442 and $428,030 as
of December 31, 2009 and 2008
|
850,313 | 545,494 | ||||||
Goodwill
|
2,726,567 | 2,726,567 | ||||||
Other
assets
|
2,679,600 | 718,645 | ||||||
Total
assets
|
$ | 288,846,472 | $ | 288,275,334 |
2009
|
2008
|
|||||||
Liabilities
|
||||||||
Deposits
|
||||||||
Demand
|
$ | 20,668,169 | $ | 19,526,137 | ||||
Savings,
NOW and money market
|
88,412,078 | 78,129,554 | ||||||
Time
|
145,619,976 | 140,495,537 | ||||||
Total
deposits
|
254,700,223 | 238,151,228 | ||||||
Short-term
borrowings
|
3,789,453 | 7,633,079 | ||||||
Federal
Home Loan Bank advances
|
— | 13,500,000 | ||||||
Deferred
compensation
|
2,826,227 | 2,576,290 | ||||||
Advances
from borrowers for taxes and insurance
|
508,356 | 445,077 | ||||||
Interest
payable
|
734,903 | 925,661 | ||||||
Other
liabilities
|
1,023,890 | 784,559 | ||||||
Total
liabilities
|
263,583,052 | 264,015,894 | ||||||
Stockholders’
Equity
|
||||||||
Preferred stock, $.01 par value, authorized 10,000,000
shares;
none issued and outstanding |
— | — | ||||||
Common
stock, $.01 par value; authorized 20,000,000 shares; issued 1,987,904
shares
|
19,879 | 19,879 | ||||||
Additional
paid-in capital
|
6,634,591 | 6,634,108 | ||||||
Retained
earnings – substantially restricted
|
18,399,506 | 17,268,043 | ||||||
Accumulated
other comprehensive income
|
695,825 | 337,410 | ||||||
Treasury
stock, at cost
Common;
2009 – 67,087 shares
|
(486,381 | ) | — | |||||
Total
stockholders’ equity
|
25,263,420 | 24,259,440 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 288,846,472 | $ | 288,275,334 |
2009
|
2008
|
|||||||
Interest
and Fee Income
|
||||||||
Loans,
including fees
|
$ | 11,591,716 | $ | 12,026,500 | ||||
Debt
securities
|
||||||||
Taxable
|
503,211 | 1,094,248 | ||||||
Tax-exempt
|
1,050,667 | 977,332 | ||||||
Mortgage-backed
securities
|
1,262,357 | 1,579,923 | ||||||
Other
|
11,966 | 230,333 | ||||||
Total
interest income
|
14,419,917 | 15,908,336 | ||||||
Interest
Expense
|
||||||||
Deposits
|
5,315,273 | 7,168,601 | ||||||
Short-term
borrowings
|
12,452 | 78,045 | ||||||
Federal
Home Loan Bank advances
|
103,803 | 469,771 | ||||||
Total
interest expense
|
5,431,528 | 7,716,417 | ||||||
Net
Interest Income
|
8,988,389 | 8,191,919 | ||||||
Provision
for Loan Losses
|
2,575,000 | 310,000 | ||||||
Net
Interest Income After Provision for Loan Losses
|
6,413,389 | 7,881,919 | ||||||
Noninterest
Income
|
||||||||
Fiduciary
activities
|
166,138 | 220,542 | ||||||
Commission
income
|
869,368 | 1,021,228 | ||||||
Service
charges on deposit accounts
|
895,264 | 792,940 | ||||||
Mortgage
banking operations, net
|
736,681 | 195,743 | ||||||
Net
realized gains on sales of available-for-sale securities
|
588,959 | 33,324 | ||||||
Loan
servicing fees
|
359,813 | 352,477 | ||||||
Increase
in cash surrender value of life insurance
|
178,676 | 162,827 | ||||||
Other
|
414,195 | 381,842 | ||||||
Total
noninterest income
|
4,209,094 | 3,160,923 |
2009
|
2008
|
|||||||
Noninterest
Expense
|
||||||||
Salaries
and employee benefits
|
$ | 5,579,322 | $ | 5,525,628 | ||||
Occupancy
and equipment
|
1,075,728 | 1,101,671 | ||||||
Data
processing
|
356,666 | 427,838 | ||||||
Professional
|
230,699 | 179,517 | ||||||
Marketing
|
112,273 | 124,321 | ||||||
Postage
and office supplies
|
287,671 | 310,119 | ||||||
Deposit
insurance premium
|
555,223 | 46,943 | ||||||
Impairment
(recovery) on mortgage servicing rights asset
|
(122,790 | ) | 428,030 | |||||
Other
|
1,050,935 | 1,076,670 | ||||||
Total
noninterest expense
|
9,125,727 | 9,220,737 | ||||||
Income
Before Income Taxes
|
1,496,756 | 1,822,105 | ||||||
Provision
for Income Taxes
|
100,589 | 304,183 | ||||||
Net
Income
|
$ | 1,396,167 | $ | 1,517,922 | ||||
Basic
Earnings Per Share
|
$ | 0.72 | $ | 0.76 | ||||
Diluted
Earnings Per Share
|
$ | 0.72 | $ | 0.76 | ||||
Cash
Dividends Per Share
|
$ | 0.30 | $ | 0.30 |
Additional
|
||||||||||||
Issued
Common Stock
|
Paid-in
|
|||||||||||
Shares
|
Amount
|
Capital
|
||||||||||
Balance,
January 1, 2008
|
1,986,804 | $ | 19,868 | $ | 6,621,359 | |||||||
Comprehensive
income
|
||||||||||||
Net
income
|
— | — | — | |||||||||
Change
in unrealized appreciation on available-for-sale securities, net of
taxes
|
— | — | — | |||||||||
Total
comprehensive income
|
||||||||||||
Stock
option compensation expense
|
— | — | 1,760 | |||||||||
Dividends
on common stock, $.30 per share
|
— | — | — | |||||||||
Stock
options exercised
|
1,100 | 11 | 10,989 | |||||||||
Balance,
December 31, 2008
|
1,987,904 | 19,879 | 6,634,108 | |||||||||
Comprehensive
income
|
||||||||||||
Net
income
|
— | — | — | |||||||||
Change
in unrealized appreciation on available-for-sale securities, net of
taxes
|
— | — | — | |||||||||
Total
comprehensive income
|
||||||||||||
Purchase
of treasury stock (67,087 shares)
|
— | — | — | |||||||||
Stock
option compensation expense
|
— | — | 483 | |||||||||
Dividends
on common stock, $.30 per share
|
— | — | — | |||||||||
Balance,
December 31, 2009
|
1,987,904 | $ | 19,879 | $ | 6,634,591 |
Accumulated
|
||||||||||||||||
Other
|
||||||||||||||||
Retained
|
Comprehensive
|
Treasury
|
||||||||||||||
Earnings
|
Income
(Loss)
|
Stock
|
Total
|
|||||||||||||
Balance,
January 1, 2008
|
$ | 16,034,800 | $ | (58,136 | ) | $ | — | $ | 22,617,891 | |||||||
Comprehensive
income
|
||||||||||||||||
Net
income
|
1,517,922 | — | — | 1,517,922 | ||||||||||||
Change
in unrealized appreciation on available-for-sale securities, net of
taxes
|
— | 395,546 | — | 395,546 | ||||||||||||
Total
comprehensive income
|
1,913,468 | |||||||||||||||
Stock
option compensation expense
|
— | — | — | 1,760 | ||||||||||||
Dividends
on common stock, $.30 per share
|
(284,679 | ) | — | — | (284,679 | ) | ||||||||||
Stock
options exercised
|
— | — | — | 11,000 | ||||||||||||
Balance,
December 31, 2008
|
17,268,043 | 337,410 | — | 24,259,440 | ||||||||||||
Comprehensive
income
|
||||||||||||||||
Net
income
|
1,396,167 | — | — | 1,396,167 | ||||||||||||
Change
in unrealized appreciation on available-for-sale securities, net of
taxes
|
— | 358,415 | — | 358,415 | ||||||||||||
Total
comprehensive income
|
1,754,582 | |||||||||||||||
Purchase
of treasury stock (67,087 shares)
|
— | — | (486,381 | ) | (486,381 | ) | ||||||||||
Stock
option compensation expense
|
— | — | — | 483 | ||||||||||||
Dividends
on common stock, $.30 per share
|
(264,704 | ) | — | — | (264,704 | ) | ||||||||||
Balance,
December 31, 2009
|
$ | 18,399,506 | $ | 695,825 | $ | (486,381 | ) | $ | 25,263,420 |
2009
|
2008
|
|||||||
Operating
Activities
|
||||||||
Net
income
|
$ | 1,396,167 | $ | 1,517,922 | ||||
Items
not requiring (providing) cash
|
||||||||
Depreciation
and amortization
|
406,469 | 431,697 | ||||||
Provision
for loan losses
|
2,575,000 | 310,000 | ||||||
Amortization
of premiums and discounts on securities
|
955,364 | 83,720 | ||||||
Amortization
of core deposit intangibles
|
— | 39,862 | ||||||
Deferred
income taxes
|
(17,047 | ) | (290,430 | ) | ||||
Net
realized gains on available-for-sale securities
|
(588,959 | ) | (33,324 | ) | ||||
Amortization
of mortgage servicing rights
|
507,313 | 196,403 | ||||||
Impairment
(recovery) of mortgage servicing rights asset
|
(122,790 | ) | 428,030 | |||||
Increase
in cash surrender value of life insurance
|
(187,324 | ) | (171,476 | ) | ||||
Gains
on sales of foreclosed assets
|
(11,701 | ) | (18,242 | ) | ||||
Gain
on sale of premises and equipment
|
— | (6,517 | ) | |||||
Stock
option compensation expense
|
483 | 1,760 | ||||||
Tax
benefit relating to stock options exercised
|
— | — | ||||||
Changes
in
|
||||||||
Interest
receivable
|
356,108 | (239,408 | ) | |||||
Other
assets
|
(1,990,045 | ) | (354,574 | ) | ||||
Interest
payable
|
(190,758 | ) | (322,685 | ) | ||||
Other
liabilities
|
523,316 | (212,431 | ) | |||||
Origination
of loans held for sale
|
(66,814,834 | ) | (29,807,986 | ) | ||||
Proceeds
from sales of loans held for sale
|
66,699,701 | 30,076,869 | ||||||
Net
cash provided by operating activities
|
3,496,463 | 1,629,190 | ||||||
Investing
Activities
|
||||||||
Purchases
of available-for-sale securities
|
(101,825,114 | ) | (69,456,634 | ) | ||||
Proceeds
from maturities of available-for-sale securities
|
43,966,667 | 50,922,663 | ||||||
Proceeds
from the sales of available-for-sale investments and other
investments
|
57,378,873 | 22,009,669 | ||||||
Net
change in loans
|
6,600,703 | (7,901,707 | ) | |||||
Purchase
of premises and equipment
|
(66,581 | ) | (295,828 | ) | ||||
Proceeds
from sales of premises and equipment
|
— | 32,795 | ||||||
Proceeds
from the sale of foreclosed assets
|
487,568 | 201,880 | ||||||
Purchase
of bank-owned life insurance
|
— | (549,635 | ) | |||||
Net
cash provided by (used in) investing activities
|
6,542,116 | (5,036,797 | ) |
2009
|
2008
|
|||||||
Financing
Activities
|
||||||||
Net
increase in demand deposits, money market, NOW and savings
accounts
|
$ | 11,424,556 | $ | 2,267,974 | ||||
Net
increase (decrease) in certificates of deposit
|
5,124,439 | (9,837,497 | ) | |||||
Net
increase (decrease) in short-term borrowings
|
(3,843,626 | ) | 2,697,045 | |||||
Proceeds
from Federal Home Loan Bank advances
|
— | 8,500,000 | ||||||
Repayment
of Federal Home Loan Bank advances
|
(13,500,000 | ) | (5,000,000 | ) | ||||
Net
increase in advances from borrowers for taxes and
insurance
|
63,279 | 23,588 | ||||||
Proceeds
from stock options exercised
|
— | 11,000 | ||||||
Purchase
and retirement of common stock
|
— | — | ||||||
Purchase
of treasury stock
|
(486,381 | ) | — | |||||
Dividends
paid
|
(269,660 | ) | (284,679 | ) | ||||
Net
cash provided by (used in) financing activities
|
(1,487,393 | ) | (1,622,569 | ) | ||||
Increase
(Decrease) in Cash and Cash Equivalents
|
8,551,186 | (5,030,176 | ) | |||||
Cash
and Cash Equivalents, Beginning of Year
|
7,145,288 | 12,175,464 | ||||||
Cash
and Cash Equivalents, End of Year
|
$ | 15,696,474 | $ | 7,145,288 | ||||
Supplemental
Cash Flows Information
|
||||||||
Interest
paid
|
$ | 5,622,286 | $ | 8,039,102 | ||||
Income
taxes paid
|
$ | 559,000 | $ | 551,600 | ||||
Sale
and financing of foreclosed assets
|
$ | 218,636 | $ | 156,890 | ||||
Real
estate acquired in settlement of loans
|
$ | 307,915 | $ | 666,822 | ||||
Dividends
declared not paid
|
$ | 66,157 | $ | 71,113 | ||||
Loans
held for sale transferred to loans
|
$ | — | $ | — |
Note
1:
|
Nature of Operations
and Summary of Significant Accounting Policies
|
|
Principles
of Consolidation and Financial Statement
Presentation
|
Buildings
and improvements
|
35-40
years
|
Equipment
|
3-5
years
|
Note
2:
|
Restriction
on Cash and Due From Banks
|
Note
3:
|
Securities
|
Amortized
Cost |
Gross
Unrealized Gains |
Gross
Unrealized Losses |
Fair
Value
|
|||||||||||||
Available-for-sale
Securities
|
||||||||||||||||
December
31, 2009:
|
||||||||||||||||
U.S.
Government and agencies
|
$ | 9,036,752 | $ | 70,820 | $ | (27,556 | ) | $ | 9,080,016 | |||||||
Mortgage-backed
securities (Government-sponsored enterprises -
residential)
|
40,428,279 | 610,634 | (54,518 | ) | 40,984,395 | |||||||||||
Municipal
bonds
|
27,661,381 | 531,363 | (76,462 | ) | 28,116,282 | |||||||||||
$ | 77,126,412 | $ | 1,212,817 | $ | (158,536 | ) | $ | 78,180,693 | ||||||||
December
31, 2008:
|
||||||||||||||||
U.S.
Government and agencies
|
$ | 19,472,065 | $ | 361,545 | $ | — | $ | 19,833,610 | ||||||||
Mortgage-backed
securities (Government-sponsored enterprises -
residential)
|
27,384,188 | 410,931 | — | 27,795,119 | ||||||||||||
Municipal
bonds
|
30,066,572 | 283,150 | (544,399 | ) | 29,805,323 | |||||||||||
$ | 76,922,825 | $ | 1,055,626 | $ | (544,399 | ) | $ | 77,434,052 |
Available-for-sale
|
||||||||
Amortized
Cost
|
Fair
Value
|
|||||||
Within
one year
|
$ | 270,508 | $ | 271,451 | ||||
One
to five years
|
3,627,155 | 3,758,162 | ||||||
Five
to ten years
|
18,617,963 | 18,862,007 | ||||||
After
ten years
|
14,182,507 | 14,304,678 | ||||||
36,698,133 | 37,196,298 | |||||||
Mortgage-backed
securities
|
40,428,279 | 40,984,395 | ||||||
Totals
|
$ | 77,126,412 | $ | 78,180,693 |
December
31, 2009
|
||||||||||||||||||||||||
Less
than 12 Months
|
12
Months or More
|
Total
|
||||||||||||||||||||||
Description
of
Securities
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
Available-for-sale
Securities
|
||||||||||||||||||||||||
U.S.
Government and agencies
|
$ | 2,477,539 | $ | (27,556 | ) | $ | — | $ | — | $ | 2,477,539 | $ | (27,556 | ) | ||||||||||
Mortgage-backed
securities (Government-sponsored enterprises -
residential)
|
7,435,781 | (54,518 | ) | — | — | 7,435,781 | (54,518 | ) | ||||||||||||||||
Municipal
bonds
|
7,525,639 | (76,462 | ) | — | — | 7,525,639 | (76,462 | ) | ||||||||||||||||
Total
temporarily impaired securities
|
$ | 17,438,959 | $ | (158,536 | ) | $ |
—
|
$ |
—
|
$ | 17,438,959 | $ | (158,536 | ) |
December
31, 2008
|
||||||||||||||||||||||||
Less
than 12 Months
|
12
Months or More
|
Total
|
||||||||||||||||||||||
Description
of
Securities
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
Available-for-sale
Securities
|
||||||||||||||||||||||||
U.S.
Government and agencies
|
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Mortgage-backed
securities (Government-sponsored enterprises -
residential)
|
— | — | — | — | — | — | ||||||||||||||||||
Municipal
bonds
|
13,971,751 | (544,399 | ) | — | — | 13,971,751 | (544,399 | ) | ||||||||||||||||
Total
temporarily impaired securities
|
$ | 13,971,751 | $ | (544,399 | ) | $ |
—
|
$ |
—
|
$ | 13,971,751 | $ | (544,399 | ) |
Note
4:
|
Loans
and Allowance for Loan Losses
|
2009
|
2008
|
|||||||
Mortgage
loans on real estate
|
||||||||
Residential
1-4 family
|
$ | 38,580,967 | $ | 46,806,391 | ||||
Commercial
and agricultural
|
60,993,795 | 61,034,537 | ||||||
Second
mortgages
|
28,119,373 | 30,001,775 | ||||||
Total
mortgage loans on real estate
|
127,694,135 | 137,842,703 | ||||||
Commercial
loans, including agricultural
|
34,393,456 | 35,356,098 | ||||||
Consumer
|
6,117,802 | 5,841,659 | ||||||
Other
|
7,836,674 | 5,950,391 | ||||||
176,042,067 | 184,990,851 | |||||||
Less
|
||||||||
Net
deferred loan fees
|
68,756 | 108,487 | ||||||
Allowance
for loan losses
|
2,290,001 | 1,934,072 | ||||||
Net
loans
|
$ | 173,683,310 | $ | 182,948,292 |
2009
|
2008
|
|||||||
Balance,
beginning of year
|
$ | 1,934,072 | $ | 1,766,229 | ||||
Provision
charged to expense
|
2,575,000 | 310,000 | ||||||
Losses
charged off, net of recoveries of $24,042 for 2009 and $64,025 for
2008
|
(2,219,071 | ) | (142,157 | ) | ||||
Balance,
end of year
|
$ | 2,290,001 | $ | 1,934,072 |
2009
|
2008
|
|||||||
Impaired
loans without a valuation allowance
|
$ | — | $ | 206,446 | ||||
Impaired
loans with a valuation allowance
|
3,713,484 | 1,147,702 | ||||||
Total
impaired loans
|
$ | 3,713,484 | $ | 1,354,148 | ||||
Valuation
allowance related to impaired loans
|
$ | 559,481 | $ | 174,905 | ||||
Total
nonaccrual loans
|
$ | 1,597,027 | $ | 1,004,881 | ||||
Total
loans past due 90 days or more and still accruing
|
$ | 356,534 | $ | 185,502 |
2009
|
2008
|
|||||||
Average
investment in impaired loans
|
$ | 5,205,308 | $ | 489,211 | ||||
Interest
income recognized on impaired loans
|
$ | 226,821 | $ | 114,520 | ||||
Interest
income recognized on a cash basis on impaired loans
|
$ | 219,969 | $ | 96,459 |
Note
5:
|
Premises
and Equipment
|
2009
|
2008
|
|||||||
Land
|
$ | 983,276 | $ | 983,276 | ||||
Buildings
and improvements
|
7,542,073 | 7,522,011 | ||||||
Equipment
|
4,440,594 | 4,401,113 | ||||||
12,965,943 | 12,906,400 | |||||||
Less
accumulated depreciation
|
(7,199,085 | ) | (6,799,654 | ) | ||||
Net
premises and equipment
|
$ | 5,766,858 | $ | 6,106,746 |
Note
6:
|
Loan
Servicing
|
2009
|
2008
|
|||||||
Mortgage
servicing rights
|
||||||||
Balance,
beginning of year
|
$ | 973,524 | $ | 965,679 | ||||
Additions
|
391,746 | 204,248 | ||||||
Amortization
|
(358,515 | ) | (196,403 | ) | ||||
Balance
at end of year
|
1,006,755 | 973,524 | ||||||
Valuation
allowances
|
||||||||
Balance
at beginning of year
|
428,030 | — | ||||||
Additions
|
— | 428,030 | ||||||
Reduction
due to increases in market value
|
(122,790 | ) | — | |||||
Reduction
due to payoff of loans
|
(148,798 | ) | — | |||||
Balances
at end of year
|
156,442 | 428,030 | ||||||
Mortgage
servicing assets, net
|
$ | 850,313 | $ | 545,494 | ||||
Fair
value disclosures
|
||||||||
Fair
value as of the beginning of the period
|
$ | 545,494 | $ | 1,040,899 | ||||
Fair
value as of the end of the period
|
$ | 1,083,576 | $ | 545,494 |
Note
7:
|
Deposits
|
December
31,
|
||||||||
2009
|
2008
|
|||||||
Savings,
NOW and Money Market
|
$ | 729,009 | $ | 1,056,335 | ||||
Certificates
of deposit
|
4,586,264 | 6,112,266 | ||||||
Total
deposit interest expense
|
$ | 5,315,273 | $ | 7,168,601 |
2010
|
$ | 108,098,457 | ||
2011
|
25,659,323 | |||
2012
|
4,990,759 | |||
2013
|
2,171,590 | |||
2014
|
4,684,766 | |||
Thereafter
|
15,081 | |||
$ | 145,619,976 |
Note
8:
|
Short-term
Borrowings
|
Note
9:
|
Federal
Home Loan Bank Advances
|
Note
10:
|
Income
Taxes
|
2009
|
2008
|
|||||||
Taxes
currently payable
|
||||||||
Federal
|
$ | 117,636 | $ | 594,613 | ||||
State
|
— | — | ||||||
Deferred
income taxes
|
(17,047 | ) | (290,430 | ) | ||||
Income
tax expense
|
$ | 100,589 | $ | 304,183 |
2009
|
2008
|
|||||||
Computed
at the statutory rate (34%)
|
$ | 508,897 | $ | 619,515 | ||||
Increase
(decrease) resulting from
|
||||||||
Tax
exempt interest
|
(354,497 | ) | (283,936 | ) | ||||
Graduated
tax rates
|
(14,968 | ) | (18,221 | ) | ||||
State
income taxes, net
|
58,345 | 58,144 | ||||||
Increase
in cash surrender value
|
(60,750 | ) | (55,361 | ) | ||||
Other
|
(36,438 | ) | (15,958 | ) | ||||
Actual
tax expense
|
$ | 100,589 | $ | 304,183 | ||||
Tax
expense as a percentage of pre-tax income
|
6.72 | % | 16.69 | % |
2009
|
2008
|
|||||||
Deferred
tax assets
|
||||||||
Allowance
for loan losses
|
$ | 763,554 | $ | 625,389 | ||||
Deferred
compensation
|
1,097,085 | 1,000,064 | ||||||
State
net operating loss carryforward
|
160,488 | 220,325 | ||||||
2,021,127 | 1,845,778 | |||||||
Deferred
tax liabilities
|
||||||||
Unrealized
gains on available-for-sale securities
|
(358,456 | ) | (173,817 | ) | ||||
Depreciation
|
(360,916 | ) | (337,862 | ) | ||||
Federal
Home Loan Bank stock dividends
|
(146,736 | ) | (146,736 | ) | ||||
Prepaid
expenses
|
(68,875 | ) | (46,695 | ) | ||||
Mortgage
servicing rights
|
(330,075 | ) | (211,750 | ) | ||||
Other
|
(31,930 | ) | (37,187 | ) | ||||
(1,296,988 | ) | (954,047 | ) | |||||
Net
deferred tax asset
|
$ | 724,139 | $ | 891,731 |
Note
11:
|
Comprehensive
Income
|
2009
|
2008
|
|||||||
Net
unrealized gain (loss) on available-for-sale securities
|
$ | 1,132,013 | $ | 632,636 | ||||
Less
reclassification adjustment for realized gains included in
income
|
588,959 | 33,324 | ||||||
Other
comprehensive income, before tax effect
|
543,054 | 599,312 | ||||||
Less
tax expense
|
184,639 | 203,766 | ||||||
Other
comprehensive income
|
$ | 358,415 | $ | 395,546 |
2009
|
2008
|
|||||||
Net
unrealized gain (loss) on securities available-for-sale
|
$ | 1,054,281 | $ | 511,227 | ||||
Tax
effect
|
(358,456 | ) | (173,817 | ) | ||||
Net-of-tax
amount
|
$ | 695,825 | $ | 337,410 |
Note
12:
|
Regulatory
Matters
|
Actual
|
Minimum
Capital
Requirement |
Minimum
to Be Well
Capitalized Under Prompt Corrective Action Provisions |
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
As
of December 31, 2009
|
||||||||||||||||||||||||
Total
risk-based capital
(to
risk-weighted assets)
|
$ | 23,891 | 11.83 | % | $ | 16,146 | 8.0 | % | $ | 20,183 | 10.0 | % | ||||||||||||
Tier
I capital
(to
risk-weighted assets)
|
21,601 | 10.70 | 8,073 | 4.0 | 12,110 | 6.0 | ||||||||||||||||||
Tier
I capital
(to
average assets)
|
21,601 | 7.44 | 11,611 | 4.0 | 14,514 | 5.0 | ||||||||||||||||||
Tangible
capital
(to
adjusted tangible assets)
|
21,601 | 7.44 | 4,354 | 1.5 | — | N/A | ||||||||||||||||||
As
of December 31, 2008
|
||||||||||||||||||||||||
Total
risk-based capital
(to
risk-weighted assets)
|
$ | 22,816 | 10.94 | % | $ | 16,677 | 8.0 | % | $ | 20,846 | 10.0 | % | ||||||||||||
Tier
I capital
(to
risk-weighted assets)
|
20,882 | 10.02 | 8,338 | 4.0 | 12,508 | 6.0 | ||||||||||||||||||
Tier
I capital
(to
average assets)
|
20,882 | 7.30 | 11,436 | 4.0 | 14,295 | 5.0 | ||||||||||||||||||
Tangible
capital
(to
adjusted tangible assets)
|
20,882 | 7.30 | 4,289 | 1.5 | — | N/A |
2009
|
2008
|
|||||||
Bank
equity
|
$ | 25,024 | $ | 24,001 | ||||
Less
net unrealized gain
|
696 | 337 | ||||||
Less
disallowed goodwill
|
2,727 | 2,727 | ||||||
Less
disallowed servicing amounts
|
— | 55 | ||||||
Tier
1 capital
|
21,601 | 20,882 | ||||||
Plus
allowance for loan losses
|
2,290 | 1,934 | ||||||
Total
risked-based capital
|
$ | 23,891 | $ | 22,816 |
Year
ended December 31, 2000
|
$ | 77,905 | ||
Year
ended December 31, 2001
|
311,621 | |||
Year
ended December 31, 2002
|
311,622 | |||
Year
ended December 31, 2003
|
311,621 | |||
Year
ended December 31, 2004
|
311,622 | |||
Year
ended December 31, 2005
|
311,621 | |||
Year
ended December 31, 2006
|
311,622 | |||
Year
ended December 31, 2007
|
311,621 | |||
Year
ended December 31, 2008
|
311,622 | |||
Year
ended December 31, 2009
|
311,621 | |||
$ | 2,882,498 |
Note
13:
|
Related
Party Transactions
|
2009
|
2008
|
|||||||
Balance
beginning of year
|
$ | 979,776 | $ | 944,569 | ||||
Additions
|
2,657,615 | 2,402,371 | ||||||
Repayments
|
(1,855,537 | ) | (2,311,845 | ) | ||||
Change
in related parties
|
2,394,038 | (55,319 | ) | |||||
Balance,
end of year
|
$ | 4,175,892 | $ | 979,776 |
Note
14:
|
Employee
Benefits
|
Note
15:
|
Stock
Options Plan
|
2009
|
||||||||||||||||
Shares
|
Weighted-
Average Exercise Price |
Weighted-
Average Remaining Contractual Term |
Aggregate
Intrinsic Value |
|||||||||||||
Outstanding,
beginning of year
|
34,445 | $ | 10.65 | |||||||||||||
Granted
|
— | — | ||||||||||||||
Exercised
|
— | — | ||||||||||||||
Forfeited
or expired
|
(1,100 | ) | 14.00 | |||||||||||||
Outstanding,
end of year
|
33,345 | $ | 10.54 | 2.40 | $ | 0 | ||||||||||
Exercisable,
end of year
|
33,345 | $ | 10.54 | 2.40 | $ | 0 |
2008
|
||||||||||||||||
Shares
|
Weighted-
Average Exercise Price |
Weighted-
Average Remaining Contractual Term |
Aggregate
Intrinsic Value |
|||||||||||||
Outstanding,
beginning of year
|
35,545 | $ | 10.63 | |||||||||||||
Granted
|
— | — | ||||||||||||||
Exercised
|
(1,100 | ) | 10.00 | |||||||||||||
Forfeited
or expired
|
— | — | ||||||||||||||
Outstanding,
end of year
|
34,445 | $ | 10.65 | 3.49 | $ | 0 | ||||||||||
Exercisable,
end of year
|
34,205 | $ | 10.63 | 3.46 | $ | 0 |
Note
16:
|
Earnings
Per Share
|
Year
Ended December 31, 2009
|
||||||||||||
Income
|
Weighted-
Average Shares |
Per
Share
Amount |
||||||||||
Net
income
|
$ | 1,396,167 | ||||||||||
Basic
earnings per share
|
||||||||||||
Income
available to common stockholders
|
1,927,250 | $ | 0.72 | |||||||||
Effect
of dilutive securities
|
||||||||||||
Stock
options
|
— | — | ||||||||||
Diluted
earnings per share
|
||||||||||||
Income
available to common stockholders
|
$ | 1,396,167 | 1,927,250 | $ | 0.72 |
Year
Ended December 31, 2008
|
||||||||||||
Income
|
Weighted-
Average Shares |
Per
Share
Amount |
||||||||||
Net
income
|
$ | 1,517,922 | ||||||||||
Basic
earnings per share
|
1,987,712 | |||||||||||
Income
available to common stockholders
|
$ | .76 | ||||||||||
Effect
of dilutive securities
|
||||||||||||
Stock
options
|
— | — | ||||||||||
Diluted
earnings per share
|
||||||||||||
Income
available to common stockholders
|
$ | 1,517,922 | 1,987,712 | $ | .76 |
Note
17:
|
Disclosures
about Fair Value of Assets and
Liabilities
|
|
Level
1
|
Quoted
prices in active markets for identical assets or
liabilities
|
|
Level
2
|
Observable
inputs other than Level 1 prices, such as quoted prices for similar assets
or liabilities; quoted prices in markets that are not active; or other
inputs that are observable or can be corroborated by observable market
data for substantially the full term of the assets or
liabilities
|
|
Level
3
|
Unobservable
inputs that are supported by little or no market activity and that are
significant to the fair value of the assets or
liabilities
|
2009
|
||||||||||||||||
Fair
Value Measurements Using
|
||||||||||||||||
Fair
Value
|
Quoted
Prices
in Active Markets for Identical Assets (Level 1) |
Significant
Other Observable Inputs (Level 2) |
Significant
Unobservable Inputs (Level 3) |
|||||||||||||
U.S.
Government and agencies
|
$ | 9,080,016 | $ | — | $ | 9,080,016 | $ | — | ||||||||
Mortgage-backed
securities (Government-sponsored enterprises -
residential)
|
40,984,395 | — | 40,984,395 | — | ||||||||||||
Municipal
bonds
|
28,116,282 | — | 28,116,282 | — |
2008
|
||||||||||||||||
Fair
Value Measurements Using
|
||||||||||||||||
Fair
Value
|
Quoted
Prices
in Active Markets for Identical Assets (Level 1) |
Significant
Other Observable Inputs (Level 2) |
Significant
Unobservable Inputs (Level 3) |
|||||||||||||
U.S.
Government and agencies
|
$ | 19,833,610 | $ | — | $ | 19,833,610 | $ | — | ||||||||
Mortgage-backed
securities (Government-sponsored enterprises -residential)
|
27,795,119 | — | 27,795,119 | — | ||||||||||||
Municipal
bonds
|
29,805,323 | — | 29,805,323 | — |
2009
|
||||||||||||||||
Fair
Value Measurements Using
|
||||||||||||||||
Fair
Value
|
Quoted
Prices
in Active Markets for Identical Assets (Level 1) |
Significant
Other Observable Inputs (Level 2) |
Significant
Unobservable Inputs (Level 3) |
|||||||||||||
Impaired
loans (collateral dependent)
|
$ | 3,154,003 | $ | — | $ | — | $ | 3,154,003 | ||||||||
Mortgage
servicing rights
|
850,313 | — | — | 850,313 |
2008
|
||||||||||||||||
Fair
Value Measurements Using
|
||||||||||||||||
Fair
Value
|
Quoted
Prices
in Active Markets for Identical Assets (Level 1) |
Significant
Other Observable Inputs (Level 2) |
Significant
Unobservable Inputs (Level 3) |
|||||||||||||
Impaired
loans (collateral dependent)
|
$ | 972,797 | $ | — | $ | — | $ | 972,797 | ||||||||
Mortgage
servicing rights
|
545,494 | — | — | 545,494 |
December
31, 2009
|
December
31, 2008
|
|||||||||||||||
Carrying
Amount |
Fair
Value
|
Carrying
Amount |
Fair
Value
|
|||||||||||||
Financial
assets
|
||||||||||||||||
Cash
and cash equivalents
|
$ | 15,696,474 | $ | 15,696,474 | $ | 7,145,288 | $ | 7,145,288 | ||||||||
Available-for-sale
securities
|
78,180,693 | 78,180,693 | 77,434,052 | 77,434,052 | ||||||||||||
Other
investments
|
149,902 | 149,902 | 240,321 | 240,321 | ||||||||||||
Loans
held for sale
|
814,074 | 814,074 | 1,388,284 | 1,388,284 | ||||||||||||
Loans,
net of allowance for loan losses
|
173,683,310 | 171,479,887 | 182,948,292 | 181,308,061 | ||||||||||||
Federal
Home Loan Bank stock
|
1,108,606 | 1,108,606 | 1,108,606 | 1,108,606 | ||||||||||||
Interest
receivable
|
1,988,394 | 1,988,394 | 2,344,502 | 2,344,502 | ||||||||||||
Financial
liabilities
|
||||||||||||||||
Deposits
|
254,700,223 | 257,948,804 | 238,151,228 | 240,721,801 | ||||||||||||
Short-term
borrowings
|
3,789,453 | 3,789,453 | 7,633,079 | 7,633,079 | ||||||||||||
Federal
Home Loan Bank advances
|
— | — | 13,500,000 | 13,593,469 | ||||||||||||
Advances
from borrowers for taxes and insurance
|
508,356 | 508,356 | 445,077 | 445,077 | ||||||||||||
Interest
payable
|
734,903 | 734,903 | 925,661 | 925,661 | ||||||||||||
Unrecognized
financial instruments (net of contract amount)
|
||||||||||||||||
Commitments
to originate loans
|
— | — | — | — | ||||||||||||
Letters
of credit
|
— | — | — | — | ||||||||||||
Lines
of credit
|
— | — | — | — |
Note
18:
|
Significant
Estimates and Concentrations
|
Note
19:
|
Commitments
and Credit Risk
|
Note
20:
|
Plan
of Conversion
|
Note
21:
|
Quarterly
Results of Operations (Unaudited)
|
Year
Ended December 31, 2009
|
||||||||||||||||
Three
Months Ended
|
||||||||||||||||
December
31
|
September
30
|
June
30
|
March
31
|
|||||||||||||
Interest
income
|
$ | 3,387,087 | $ | 3,649,444 | $ | 3,609,769 | $ | 3,773,617 | ||||||||
Interest
expense
|
1,204,502 | 1,314,222 | 1,421,744 | 1,491,060 | ||||||||||||
Net
interest income
|
2,182,585 | 2,335,222 | 2,188,025 | 2,282,557 | ||||||||||||
Provision
for loan losses
|
425,000 | 250,000 | 1,550,000 | 350,000 | ||||||||||||
Net
interest income after provision for loan losses
|
1,757,585 | 2,085,222 | 638,025 | 1,932,557 | ||||||||||||
Other
income
|
1,184,528 | 871,823 | 1,247,162 | 905,581 | ||||||||||||
Other
expense
|
2,419,836 | 2,270,706 | 2,219,603 | 2,215,582 | ||||||||||||
Income
before income taxes
|
522,277 | 686,339 | (334,416 | ) | 622,556 | |||||||||||
Income
tax expense (benefit)
|
91,752 | 149,123 | (261,592 | ) | 121,306 | |||||||||||
Net
income (loss)
|
$ | 430,525 | $ | 537,216 | $ | (72,824 | ) | $ | 501,250 | |||||||
Basic
earnings (loss) per share
|
$ | 0.22 | $ | 0.28 | $ | (0.04 | ) | $ | 0.26 | |||||||
Diluted
earnings (loss) per share
|
$ | 0.22 | $ | 0.28 | $ | (0.04 | ) | $ | 0.26 |
Year
Ended December 31, 2008
|
||||||||||||||||
Three
Months Ended
|
||||||||||||||||
December
31
|
September
30
|
June
30
|
March
31
|
|||||||||||||
Interest
income
|
$ | 3,946,895 | $ | 3,972,057 | $ | 3,933,463 | $ | 4,055,921 | ||||||||
Interest
expense
|
1,615,858 | 1,856,923 | 2,023,898 | 2,219,738 | ||||||||||||
Net
interest income
|
2,331,037 | 2,115,134 | 1,909,565 | 1,836,183 | ||||||||||||
Provision
for loan losses
|
145,000 | 105,000 | 30,000 | 30,000 | ||||||||||||
Net
interest income after provision for loan losses
|
2,186,037 | 2,010,134 | 1,879,565 | 1,806,183 | ||||||||||||
Other
income
|
718,730 | 844,964 | 800,069 | 797,160 | ||||||||||||
Other
expense
|
2,713,605 | 2,206,700 | 2,160,897 | 2,139,535 | ||||||||||||
Income
before income taxes
|
191,162 | 648,398 | 518,737 | 463,808 | ||||||||||||
Income
tax expense (benefit)
|
(40,813 | ) | 149,601 | 94,956 | 100,439 | |||||||||||
Net
income
|
$ | 231,975 | $ | 498,797 | $ | 423,781 | $ | 363,369 | ||||||||
Basic
earnings per share
|
$ | 0.12 | $ | 0.25 | $ | 0.21 | $ | 0.18 | ||||||||
Diluted
earnings per share
|
$ | 0.12 | $ | 0.25 | $ | 0.21 | $ | 0.18 |
Note
22:
|
Condensed
Financial Information (Parent Company
Only)
|
December
31,
|
||||||||
2009
|
2008
|
|||||||
Assets
|
||||||||
Cash
and due from banks
|
$ | 146,663 | $ | 203,417 | ||||
Investment
in common stock of subsidiary
|
25,023,244 | 24,000,219 | ||||||
Other
assets
|
190,588 | 149,388 | ||||||
Total
assets
|
$ | 25,360,495 | $ | 24,353,024 | ||||
Liabilities
|
||||||||
Other
liabilities
|
$ | 97,075 | $ | 93,584 | ||||
Total
liabilities
|
97,075 | 93,584 | ||||||
Stockholders’
Equity
|
25,263,420 | 24,259,440 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 25,360,495 | $ | 24,353,024 |
Year
Ending December 31,
|
||||||||
2009
|
2008
|
|||||||
Income
|
||||||||
Dividends
from subsidiary
|
$ | 864,624 | $ | 384,749 | ||||
Other
income
|
746 | 854 | ||||||
Total
income
|
865,370 | 385,603 | ||||||
Expenses
|
||||||||
Other
expenses
|
218,720 | 151,222 | ||||||
Total
expenses
|
218,720 | 151,222 | ||||||
Income
Before Income Tax and Equity in Undistributed Income of
Subsidiary
|
646,650 | 234,381 | ||||||
Income
Tax Benefit
|
(84,908 | ) | (58,702 | ) | ||||
Income
Before Equity in Undistributed Income of Subsidiary
|
731,558 | 293,083 | ||||||
Equity
in Undistributed Income of Subsidiary
|
664,609 | 1,224,839 | ||||||
Net
Income
|
$ | 1,396,167 | $ | 1,517,922 |
Year
Ending December 31,
|
||||||||
2009
|
2008
|
|||||||
Operating
Activities
|
||||||||
Net
income
|
$ | 1,396,167 | $ | 1,517,922 | ||||
Items
not providing cash, net
|
(664,126 | ) | (1,223,081 | ) | ||||
Change
in other assets and liabilities, net
|
(37,710 | ) | (7,439 | ) | ||||
Net
cash provided by operating activities
|
694,331 | 287,402 | ||||||
Financing
Activities
|
||||||||
Dividends
paid
|
(264,704 | ) | (284,679 | ) | ||||
Purchase
and retirement of common stock
|
— | — | ||||||
Purchase
of treasury stock
|
(486,381 | ) | — | |||||
Exercise
of stock options
|
— | 11,000 | ||||||
Net
cash used in financing activities
|
(751,085 | ) | (273,679 | ) | ||||
Net
Change in Cash and Cash Equivalents
|
(56,754 | ) | 13,723 | |||||
Cash
and Cash Equivalents at Beginning of Year
|
203,417 | 189,694 | ||||||
Cash
and Cash Equivalents at End of Year
|
$ | 146,663 | $ | 203,417 |
1.
|
The
approval of a plan of conversion and reorganization (the “Plan”) whereby:
(a) Jacksonville Bancorp, MHC and Jacksonville Bancorp, Inc., a Federal
Corporation (“Jacksonville Bancorp-Federal”) will convert and reorganize
from the mutual holding company structure to the stock holding company
structure; (b) Jacksonville Bancorp, Inc., a Maryland corporation
(“Jacksonville Bancorp-Maryland”), will become the new stock holding
company of Jacksonville Savings Bank; (c) the outstanding shares of
Jacksonville Bancorp-Federal other than those held by Jacksonville
Bancorp, MHC, will be converted into shares of common stock of
Jacksonville Bancorp-Maryland; and (d) Jacksonville Bancorp-Maryland will
offer shares of its common stock for sale in a subscription offering,
community offering and, possibly, a syndicated community
offering;
|
||
2.
|
The
approval of the adjournment of the special meeting, if necessary, to
solicit additional proxies in the event that there are not sufficient
votes at the time of the special meeting to approve the plan of conversion
and reorganization;
|
||
3.
|
The
following informational proposals:
|
||
3a.
|
Approval
of a provision in Jacksonville Bancorp-Maryland’s articles of
incorporation requiring a super-majority vote to approve certain
amendments to Jacksonville Bancorp-Maryland’s articles of
incorporation;
|
||
3b.
|
Approval
of a provision in Jacksonville Bancorp-Maryland’s articles of
incorporation requiring a super-majority vote of stockholders to approve
stockholder-proposed amendments to Jacksonville Bancorp-Maryland’s
bylaws;
|
||
3c.
|
Approval
of a provision in Jacksonville Bancorp-Maryland’s articles of
incorporation to limit the voting rights of shares beneficially owned in
excess of 10% of Jacksonville Bancorp-Maryland’s outstanding voting stock;
and
|
||
4.
|
Such
other business that may properly come before the
meeting.
|
BY
ORDER OF THE BOARD OF DIRECTORS
|
||
John
D. Eilering
|
||
Corporate
Secretary
|
QUESTIONS
AND ANSWERS FOR STOCKHOLDERS OF JACKSONVILLE BANCORP-FEDERAL REGARDING THE
PLAN OF CONVERSION AND REORGANIZATION
|
1
|
SUMMARY
|
6
|
RISK
FACTORS
|
12
|
PROPOSAL
1 — APPROVAL OF THE PLAN OF CONVERSION AND REORGANIZATION
|
17
|
PROPOSAL
2 — ADJOURNMENT OF THE SPECIAL MEETING
|
20
|
PROPOSALS
3a THROUGH 3c — INFORMATIONAL PROPOSALS RELATED TO THE ARTICLES
OF INCORPORATION AND BYLAWS OF JACKSONVILLE
BANCORP-MARYLAND
|
21
|
SELECTED
CONSOLIDATED FINANCIAL AND OTHER DATA
|
25
|
FORWARD-LOOKING
STATEMENTS
|
26
|
HOW
WE INTEND TO USE THE PROCEEDS FROM THE OFFERING
|
27
|
OUR
DIVIDEND POLICY
|
27
|
MARKET
FOR THE COMMON STOCK
|
27
|
HISTORICAL
AND PRO FORMA REGULATORY CAPITAL COMPLIANCE
|
28
|
CAPITALIZATION
|
29
|
PRO
FORMA DATA
|
30
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
31
|
BUSINESS
OF JACKSONVILLE BANCORP-MARYLAND
|
32
|
BUSINESS
OF JACKSONVILLE BANCORP-FEDERAL AND JACKSONVILLE SAVINGS
BANK
|
32
|
SUPERVISION
AND REGULATION
|
33
|
TAXATION
|
33
|
MANAGEMENT
|
34
|
BENEFICIAL
OWNERSHIP OF COMMON STOCK
|
35
|
SUBSCRIPTIONS
BY DIRECTORS AND EXECUTIVE OFFICERS
|
35
|
COMPARISON
OF STOCKHOLDERS’ RIGHTS FOR EXISTING STOCKHOLDERS OF
JACKSONVILLE BANCORP-FEDERAL
|
36
|
RESTRICTIONS
ON ACQUISITION OF JACKSONVILLE BANCORP-MARYLAND
|
37
|
DESCRIPTION OF CAPITAL STOCK OF JACKSONVILLE
BANCORP-MARYLAND FOLLOWING THE CONVERSIO
N
|
38
|
TRANSFER
AGENT
|
38
|
EXPERTS
|
38
|
LEGAL
MATTERS
|
38
|
WHERE YOU CAN FIND ADDITIONAL
INFORMATIO
N
|
38
|
OTHER
MATTERS
|
38
|
JACKSONVILLE BANCORP-FEDERAL
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
F-1
|
Q.
|
WHAT
ARE STOCKHOLDERS BEING ASKED TO APPROVE?
|
|
A.
|
Jacksonville
Bancorp-Federal stockholders as of [stockholder record date] are being
asked to vote to approve the plan of conversion pursuant to which
Jacksonville Bancorp, MHC will convert from the mutual to the stock form
of organization. As part of the conversion, a newly formed Maryland
corporation, Jacksonville Bancorp-Maryland is offering its common stock to
eligible depositors of Jacksonville Savings Bank, to Jacksonville Savings
Bank’s tax qualified benefit plans, to stockholders of Jacksonville
Bancorp-Federal as of [stockholder record date] and to the public. The
shares offered represent Jacksonville Bancorp, MHC’s current 54.1%
ownership interest in Jacksonville Bancorp-Federal. Voting for approval of
the plan of conversion will also include approval of the exchange ratio
and the articles of incorporation and bylaws of Jacksonville
Bancorp-Maryland (including the anti-takeover provisions and provisions
limiting stockholder rights).
Your vote is important. Without
sufficient votes “FOR” its approval, we cannot implement the plan of
conversion.
|
|
In
addition, Jacksonville Bancorp-Federal stockholders are being asked to
approve the adjournment of the special meeting, if necessary, to solicit
additional proxies in the event that there are not sufficient votes at the
time of the special meeting to approve the plan of
conversion.
|
||
Stockholders
also are asked to vote on the following informational proposals with
respect to the articles of incorporation and bylaws of Jacksonville
Bancorp-Maryland:
|
||
·
|
Approval
of a provision in Jacksonville Bancorp-Maryland’s articles of
incorporation requiring a super-majority vote to approve certain
amendments to Jacksonville Bancorp-Maryland’s articles of
incorporation;
|
|
·
|
Approval
of a provision in Jacksonville Bancorp-Maryland’s articles of
incorporation requiring a super-majority vote of stockholders to approve
stockholder-proposed amendments to Jacksonville Bancorp-Maryland’s bylaws;
and
|
|
·
|
Approval
of a provision in Jacksonville Bancorp-Maryland’s articles of
incorporation to limit the voting rights of shares beneficially owned in
excess of 10% of Jacksonville Bancorp-Maryland’s outstanding voting
stock.
|
|
The
provisions of Jacksonville Bancorp-Maryland’s articles of incorporation
that are included as informational proposals were approved as part of the
process in which our Board of Directors approved the plan of conversion.
These proposals are informational in nature only, because the Office of
Thrift Supervision’s regulations governing mutual-to-stock conversions do
not provide for votes on matters other than the plan of
conversion. While we are asking you to vote with respect to
each of the informational proposals listed above, the proposed provisions
for which an informational vote is requested will become effective if
stockholders approve the plan of conversion, regardless of whether
stockholders vote to approve any or all of the informational
proposals. The provisions of Jacksonville Bancorp-Maryland’s
articles of incorporation which are summarized above as informational
proposals may have the effect of deterring, or rendering more difficult,
attempts by third parties to obtain control of Jacksonville
Bancorp-Maryland if such attempts are not approved by the Board of
Directors, or may make the removal of the Board of Directors or
management, or the appointment of new directors, more
difficult.
|
Your
vote is important. Without sufficient votes “FOR” approval of the plan of
conversion, we cannot implement the plan of conversion and the related
stock offering.
|
||
Q.
|
WHAT
ARE THE REASONS FOR THE CONVERSION AND RELATED
OFFERING?
|
|
A.
|
Our
primary reasons for converting and raising additional capital through the
offering are:
|
|
·
|
to
increase our capital to support internal growth through lending in the
communities we serve;
|
|
·
|
to
enhance existing products and services and support the development of new
products and services;
|
|
·
|
to
facilitate growth through branch and whole bank acquisitions, as
opportunities arise;
|
|
·
|
to
improve our overall competitive position; and
|
|
·
|
to
improve the liquidity of our shares of common stock and enhance
stockholder returns through more flexible capital management
strategies.
|
|
As
a fully converted stock holding company, we will have greater flexibility
in structuring mergers and acquisitions, including the form of
consideration that we can use to pay for an acquisition. Our
current mutual holding company structure limits our ability to offer
shares of our common stock as consideration in a merger or acquisition
since Jacksonville Bancorp, MHC is required to own a majority of
Jacksonville Bancorp-Federal’s outstanding shares of common
stock. Potential sellers often want stock for at least part of
the purchase price. Our new stock holding company structure
will enable us to offer stock or cash consideration, or a combination of
stock and cash, and therefore will enhance our ability to compete with
other bidders when acquisition opportunities arise. We
currently have no arrangements or understandings regarding any specific
acquisition.
|
||
Q.
|
WHAT
WILL STOCKHOLDERS RECEIVE FOR THEIR EXISTING JACKSONVILLE BANCORP-FEDERAL
SHARES?
|
|
A.
|
As
more fully described in “Proposal 1 — Approval of the Plan of
Conversion and Reorganization — Share Exchange Ratio,” depending on the
number of shares sold in the offering, each share of common stock that you
own at the time of the completion of the conversion will be exchanged for
between 848,122 shares at the minimum and 1,147,459 shares at the maximum
of the offering range (or 1,319,578 at the adjusted maximum of the
offering range) of Jacksonville Bancorp-Maryland common stock (cash will
be paid in lieu of any fractional shares).
For example, if
you own 100 shares of Jacksonville Bancorp-Federal common stock, and the
exchange ratio is 1.1312 (at the midpoint of the offering range), after
the conversion you will receive 113 shares of Jacksonville Bancorp-Federal
common stock and $0.12 in cash, the value of the fractional share, based
on the $10.00 per share purchase price of stock in the
offering.
|
If
you own shares of Jacksonville Bancorp-Federal common stock in a brokerage
account in “street name,” your shares will be automatically exchanged, and
you do not need to take any action to exchange your shares of common
stock. If you own shares in the form of Jacksonville
Bancorp-Federal stock certificates after the completion of the conversion
and stock offering, our exchange agent will mail to you a transmittal form
with instructions to surrender your stock certificates. New certificates
of Jacksonville Bancorp-Maryland common stock will be mailed to you within
five business days after the exchange agent receives properly executed
transmittal forms and your Jacksonville Bancorp-Federal stock
certificates.
You should not
submit a stock certificate until you receive a transmittal
form.
|
Q.
|
WHY
WILL THE SHARES THAT I RECEIVE BE BASED ON A PRICE OF $10.00 PER SHARE
RATHER THAN THE TRADING PRICE OF THE COMMON STOCK PRIOR TO COMPLETION OF
THE CONVERSION?
|
A.
|
The
$10.00 per share price was selected primarily because it is a commonly
selected per share price for mutual-to-stock conversion
offerings. The amount of common stock Jacksonville
Bancorp-Maryland will issue at $10.00 per share in the offering and the
exchange is based on an independent appraisal of the estimated market
value of Jacksonville Bancorp-Maryland, assuming the conversion and
offering are completed. RP Financial, LC., an appraisal firm
experienced in appraisal of financial institutions, has estimated that, as
of February 19, 2010, this market value ranged from $18.5 million to $25.0
million, with a midpoint of $21.7 million. Based on this
valuation, the number of shares of common stock of Jacksonville
Bancorp-Maryland that existing public stockholders of Jacksonville
Bancorp-Federal will receive in exchange for their shares of Jacksonville
Bancorp-Federal common stock will range from 848,122 to 1,147,459, with a
midpoint of 997,790 shares (with a value of approximately $8.5 million to
$11.5 million, with a midpoint of $10.0 million, at $10.00 per
share). If market conditions so warrant, the appraised value
can be increased to $28.7 million, the adjusted maximum of the appraisal,
and the number of shares issued in the exchange for existing shares of
Jacksonville Bancorp-Federal can be increased to 1,319,578 (a value of
$13.2 million, at $10.00 per share). The number of shares
received by the existing public stockholders of Jacksonville
Bancorp-Federal is intended to maintain their existing 45.9% ownership in
our organization (excluding any new shares purchased by them in the
offering and their receipt of cash in lieu of fractional exchange shares).
The independent appraisal is based in part on Jacksonville
Bancorp-Federal’s financial condition and results of operations, the pro
forma impact of the additional capital raised by the sale of shares of
common stock in the offering, and an analysis of a peer group of ten
publicly traded savings bank and thrift holding companies that RP
Financial, LC. considered comparable to Jacksonville
Bancorp-Federal.
|
Q.
|
DOES
THE EXCHANGE RATIO DEPEND ON THE TRADING PRICE OF JACKSONVILLE
BANCORP-FEDERAL COMMON STOCK?
|
A.
|
No,
the exchange ratio will not be based on the market price of Jacksonville
Bancorp-Federal common stock. Therefore, changes in the price of
Jacksonville Bancorp-Federal common stock between now and the completion
of the conversion and offering will not affect the calculation of the
exchange ratio.
|
Q.
|
WHY
DOESN’T JACKSONVILLE BANCORP-FEDERAL WAIT TO CONDUCT THE CONVERSION AND
OFFERING UNTIL THE STOCK MARKET IMPROVES SO THAT CURRENT STOCKHOLDERS CAN
RECEIVE A HIGHER EXCHANGE RATIO?
|
A.
|
The
Board of Directors believes that because the stock holding company form of
organization and the capital raised in the conversion offer important
advantages and that it is in the best interest of our stockholders to
complete the conversion and offering sooner rather than later. There is no
way to know when market conditions will change, when regulations governing
conversion to stock form will change, or how they might change, or how
changes in market conditions might affect stock prices for financial
institutions. The Board of Directors concluded that it would be better to
complete the conversion and offering now, under existing Office of Thrift
Supervision conversion regulations and under a valuation that offers a
fair exchange ratio to existing stockholders and an attractive price to
new investors, rather than wait an indefinite amount of time for
potentially better market conditions.
|
Q.
|
SHOULD
I SUBMIT MY STOCK CERTIFICATES NOW?
|
A.
|
No. If
you hold stock certificate(s), instructions for exchanging the
certificates will be sent to you by our exchange agent
after
completion of the
conversion. If your shares are held in “street name” (
e.g.,
in a brokerage
account) rather than in certificate form, the share exchange will be
reflected automatically in your account upon completion of the
conversion.
|
Q.
|
HOW
DO I VOTE?
|
A.
|
Mark
your vote, sign each proxy card enclosed and return the card(s) to us, in
the enclosed proxy reply envelope. If you prefer, you may vote
by using the telephone or Internet. For information on
submitting your proxy or voting by telephone or Internet, please refer to
instructions on the enclosed proxy card.
YOUR VOTE IS
IMPORTANT. PLEASE VOTE PROMPTLY.
|
Q.
|
IF
MY SHARES ARE HELD IN STREET NAME, WILL MY BROKER, BANK OR OTHER NOMINEE
AUTOMATICALLY VOTE ON THE PLAN ON MY BEHALF?
|
A.
|
No. Your
broker, bank or other nominee will not be able to vote your shares without
instructions from you. You should instruct your broker, bank or
other nominee to vote your shares, using the directions that they provide
to you.
|
Q.
|
WHAT
HAPPENS IF I DON’T VOTE?
|
A.
|
Your vote is very
important. Not voting all the proxy card(s) you receive will
have the same effect as voting
“against”
the plan of conversion.
Without sufficient favorable votes
“for”
the plan of
conversion, we will not proceed with the conversion and
offering.
|
Q.
|
WHAT
IF I DO NOT GIVE VOTING INSTRUCTIONS TO MY BROKER, BANK OR OTHER
NOMINEE?
|
A.
|
Your
vote is important. If you do not instruct your broker, bank or
other nominee to vote your shares, the unvoted proxy will have the same
effect as a vote
“against”
the plan of
conversion.
|
Q.
|
MAY
I PLACE AN ORDER TO PURCHASE SHARES IN THE OFFERING, IN ADDITION TO THE
SHARES THAT I WILL RECEIVE IN THE EXCHANGE?
|
A.
|
Yes.
If you would like to receive a prospectus and stock order form, you must
call our Stock Information Center at 1-___-________, Monday through Friday
between 9:00 a.m. and 5:00 p.m., Central Time. The Stock
Information Center is closed weekends and bank
holidays.
|
Eligible
depositors of Jacksonville Savings Bank have priority subscription rights
allowing them to purchase common stock in a subscription
offering. Shares not purchased in the subscription offering may
be available for sale to the public in a community offering, as described
herein. In the event orders for Jacksonville Bancorp-Maryland
common stock in a community offering exceed the number of shares available
for sale, shares may be allocated (to the extent shares remain available)
first to cover orders of natural persons residing in the Illinois counties
of Cass, Greene, Macoupin, Montgomery, Morgan, Pike, Sangamon and Scott;
second to cover orders of Jacksonville Bancorp-Federal stockholders as of
[voting record date]; and thereafter to cover orders of the general
public. Stockholders of Jacksonville Bancorp-Federal are subject to an
ownership limitation.
|
|
Shares
of common stock purchased in the offering by a stockholder and his or her
associates or individuals acting in concert with the stockholder,
plus
any shares a
stockholder and these individuals receive in the exchange for existing
shares of Jacksonville Bancorp-Federal common stock, may not exceed 5% of
the total shares of common stock of Jacksonville Bancorp-Maryland to be
issued and outstanding after the completion of the
conversion.
|
|
Q.
|
WILL
THE CONVERSION HAVE ANY EFFECT ON DEPOSIT AND LOAN ACCOUNTS AT
JACKSONVILLE SAVINGS BANK?
|
A.
|
No. The
account number, amount, interest rate and withdrawal rights of deposit
accounts will remain unchanged. Deposits will continue to be
federally insured by the Federal Deposit Insurance Corporation up to the
legal limit. Loans and rights of borrowers will not be
affected. Depositors will no longer have voting rights in the
mutual holding company, which will cease to exist, after the conversion
and offering. Only stockholders of Jacksonville
Bancorp-Maryland will have voting rights after the conversion and
offering.
|
|
1.
|
The
approval of a plan of conversion and reorganization (the “Plan”) whereby:
(a) Jacksonville Bancorp, MHC and Jacksonville Bancorp, Inc., a Federal
Corporation (“Jacksonville Bancorp-Federal”) will convert and reorganize
from the mutual holding company structure to the stock holding company
structure; (b) Jacksonville Bancorp, Inc., a Maryland corporation
(“Jacksonville Bancorp-Maryland”), will become the new stock holding
company of Jacksonville Savings Bank; (c) the outstanding shares of
Jacksonville Bancorp-Federal other than those held by Jacksonville
Bancorp, MHC, will be converted into shares of common stock of
Jacksonville Bancorp-Maryland; and (d) Jacksonville Bancorp-Maryland will
offer shares of its common stock for sale in a subscription offering,
community offering and, possibly, a syndicated community
offering;
|
|
2.
|
The
approval of the adjournment of the special meeting, if necessary, to
solicit additional proxies in the event that there are not sufficient
votes at the time of the special meeting to approve the plan of conversion
and reorganization;
|
|
3.
|
The
following informational proposals:
|
|
3a.
|
Approval
of a provision in Jacksonville Bancorp-Maryland’s articles of
incorporation requiring a super-majority vote to approve certain
amendments to Jacksonville Bancorp-Maryland’s articles of
incorporation;
|
|
3b
|
Approval
of a provision in Jacksonville Bancorp-Maryland’s articles of
incorporation requiring a super-majority vote of stockholders to approve
stockholder-proposed amendments to Jacksonville Bancorp-Maryland’s
bylaws;
|
|
3c.
|
Approval
of a provision in Jacksonville Bancorp-Maryland’s articles of
incorporation to limit the voting rights of shares beneficially owned in
excess of 10% of Jacksonville Bancorp-Maryland’s outstanding voting stock;
and
|
(i)
|
First,
to depositors with accounts at Jacksonville Savings Bank with aggregate
balances of at least $50.00 at the close of business on December 31,
2008.
|
(ii)
|
Second,
to our tax-qualified employee benefit plans, including our employee stock
ownership plan and 401(k) plan, which will receive nontransferable
subscription rights to purchase in the aggregate up to 10.0% of the shares
of common stock sold in the offering. Our employee stock ownership plan
currently intends to purchase up to 4% of the shares of common stock sold
in the offering, with the remaining shares in this purchase priority
allocated to our 401(k) plan and any other tax-qualified employee benefit
plan.
|
|
(iii)
|
Third,
to depositors with accounts at Jacksonville Savings Bank with aggregate
balances of at least $50.00 at the close of business on March 31,
2010.
|
|
(iv)
|
Fourth,
to depositors of Jacksonville Savings Bank at the close of business on
[depositor record date].
|
●
|
the
purchase of shares by underwriters in connection with a public offering;
or
|
|
●
|
the
purchase of shares by any employee benefit plans of Jacksonville
Bancorp-Federal or any subsidiary.
|
PART
II:
|
INFORMATION
NOT REQUIRED IN PROSPECTUS
|
Item
13.
|
Other
Expenses of Issuance and
Distribution
|
Amount
(1)
|
||||||
*
|
Registrant’s
Legal Fees and Expenses
|
$
|
500,000
|
|||
*
|
Registrant’s
Accounting Fees and Expenses
|
50,000
|
||||
*
|
Conversion
Agent and Data Processing Fees
|
30,000
|
||||
*
|
Marketing
Agent Fees (1)
|
383,585
|
||||
*
|
Marketing
Agent Expenses (Including Legal Fees and Expenses)
|
57,500
|
||||
*
|
Appraisal
Fees and Expenses
|
40,000
|
||||
*
|
Printing,
Postage, Mailing and EDGAR Fees
|
204,000
|
||||
*
|
Filing
Fees (OTS, Nasdaq, FINRA, IDFPR and SEC)
|
25,923
|
||||
*
|
Transfer
Fees and Expenses
|
5,000
|
||||
*
|
Business
Plan Fees and Expenses
|
32,000
|
||||
*
|
Other
|
55,577
|
||||
*
|
Total
|
$
|
1,383,585
|
*
|
Estimated
|
|
(1)
|
Jacksonville
Bancorp, Inc. has retained Keefe Bruyette & Woods, Inc. to assist in
the sale of common stock on a best efforts basis in the
offerings. Fees are estimated at the adjusted maximum of the
offering range.
|
Item
14.
|
Indemnification
of Directors and Officers
|
Item
15.
|
Recent
Sales of Unregistered Securities
|
Item
16.
|
Exhibits
and Financial Statement
Schedules:
|
The
exhibits and financial statement schedules filed as part of this
registration statement are as follows:
|
||
(a)
|
List
of Exhibits
|
|
*
|
To
be filed supplementally
|
|
**
|
Supporting
financial schedules filed in paper format only pursuant to Rule 202 of
Regulation S-T. Available for inspection during business hours at the
principal offices of the SEC in Washington, D.C.
|
|
(1)
|
Incorporated
by reference to the Annual Report on Form 10-K filed with the Securities
and Exchange Commission on March 20, 2009 (File No.
000-49792).
|
|
(2)
|
Incorporated
by reference to the Current Report on Form 8-K filed with the Securities
and Exchange Commission on September 4, 2008 (File No.
000-49792).
|
|
(3)
|
Incorporated
by reference to the registration statement on Form S-8 filed with the
Securities and Exchange Commission on February 2, 2004 (File No.
333-112420).
|
(b)
|
Financial
Statement
Schedules
|
Item
17.
|
Undertakings
|
JACKSONVILLE BANCORP, INC. | |||
|
By:
|
/s/ Richard A. Foss | |
Richard A. Foss | |||
President and Chief Executive Officer | |||
(Duly Authorized Representative) |
Signatures |
|
Title
|
|
Date
|
|
|||||
/s/ Richard A. Foss
|
President,
Chief Executive Officer and Director (Principal Executive
Officer)
|
March
12, 2010
|
||||||||
Richard
A. Foss
|
||||||||||
/s/ Diana S. Tone
|
Chief
Financial Officer (Principal Financial and Accounting
Officer)
|
March
12, 2010
|
||||||||
Diana S. Tone | ||||||||||
/s/ Andrew F. Applebee
|
Chairman
of the Board
|
March
12, 2010
|
||||||||
Andrew F. Applebee | ||||||||||
/s/ Dean H. Hess
|
Director
|
March
12, 2010
|
||||||||
Dean H. Hess | ||||||||||
/s/ John L. Eyth
|
Director
|
March
12, 2010
|
||||||||
John L. Eyth | ||||||||||
/s/ Emily J. Osburn
|
Director
|
March
12, 2010
|
||||||||
Emily J. Osburn | ||||||||||
/s/ Harmon B. Deal, III
|
Director
|
March
12, 2010
|
||||||||
Harmon B. Deal, III | ||||||||||
/s/ John C. Williams
|
Director
|
March
12, 2010
|
||||||||
John
C. Williams
|
||||||||||
/s/ John M. Buchanan
|
Director
|
March
12, 2010
|
||||||||
John
M. Buchanan
|
*
|
To
be filed supplementally
|
|
**
|
Supporting
financial schedules filed in paper format only pursuant to Rule 202 of
Regulation S-T. Available for inspection during business hours at the
principal offices of the SEC in Washington, D.C.
|
|
(1)
|
Incorporated
by reference to the Annual Report on Form 10-K filed with the Securities
and Exchange Commission on March 20, 2009 (File No.
000-49792).
|
|
(2)
|
Incorporated
by reference to the Current Report on Form 8-K filed with the Securities
and Exchange Commission on September 4, 2008 (File No.
000-49792).
|
|
(3)
|
Incorporated
by reference to the registration statement on Form S-8 filed with the
Securities and Exchange Commission on February 2, 2004 (File No.
333-112420).
|
1.
|
Provide
advice on the financial and securities market implications of the Plan of
Conversion and any related corporate documents, including the Company’s
Business Plan;
|
2.
|
Assist
in structuring the Offerings, including developing and assisting in
implementing a marketing strategy for the
Offerings;
|
3.
|
Reviewing
all offering documents, including the Prospectus, stock order forms,
letters, brochures and other related offering materials (it being
understood that preparation and filing of such documents will be the
responsibility of the Company and its
counsel);
|
4.
|
Assisting
the Company in preparing for and scheduling meetings with potential
investors and broker-dealers, as
necessary;
|
5.
|
Assist
the Company in analyzing proposals from outside vendors retained in
connection with the Offerings, including printers, transfer agents and
appraisal firms;
|
6.
|
Assist
the Company in the drafting and distribution of press releases as required
or appropriate in connection with the
Offerings;
|
7.
|
Meet
with the Board of Directors and/or management of the Company to discuss
any of the above services; and
|
8.
|
such
other financial advisory and investment banking services in connection
with the Offerings as may be agreed upon by KBW and the
Company.
|
|
(a)
|
Management
Fee:
A Management Fee of
$30,000
payable
in four consecutive monthly installments of
$
7,500 commencing with the first month following the execution of
this engagement letter. Such fees shall be deemed to have been
earned when due. Should the Offering be terminated for any
reason not attributable to the action or inaction of KBW, KBW shall have
earned and be entitled to be paid fees accruing through the stage at which
point the termination
occurred.
|
|
(b)
|
Success
Fee:
A Success Fee of
1.50%
shall be paid based on the aggregate Purchase Price of Common
Stock sold in the
Subscription
Offering excluding shares purchased by the
Company’
s
officers, directors, or employees (or members of their immediate family)
plus any ESOP, tax-qualified or stock based compensation plans (except
IRA’s) or similar plan created by the
Company
for some or all of their directors or employees,
or
any charitable foundation established by the Company (or any shares
contributed to such a foundation). In addition, a Success Fee of 2.5%
shall be paid on the aggregate Purchase Price of Common Stock sold in the
Direct Community Offering. The minimum Success Fee will be
$150,000.
The Management Fee described in 5(a)
will be credited against any Success Fee paid pursuant to this
paragraph.
|
(c)
|
Syndicated
Community Offering
: If any shares of the
Company’s
stock remain available after the Subscription Offering and Direct
Community Offering, at the request of the
Company
,
KBW will seek to form a syndicate of registered broker-dealers to assist
in the sale of such common stock on a best efforts basis, subject to the
terms and conditions set forth in a selected dealers agreement to be
entered into between the Company and KBW. KBW will endeavor to
distribute the common stock among dealers in a fashion which best meets
the distribution objectives of the
Company
and the Plan. KBW will be paid a fee not to exceed
6.0%
of the aggregate Purchase Price of the shares of common stock
sold in the Syndicated Community Offering. From this fee, KBW
will pass onto selected broker-dealers, who assist in the syndicated
community, an amount competitive with gross underwriting discounts charged
at such time for comparable amounts of stock sold at a comparable price
per share in a similar market environment. Fees with respect to
purchases affected with the assistance of a broker/dealer other than KBW
shall be transmitted by KBW to such broker/dealer. (The
decision to utilize selected broker-dealers will be made by the
Company
upon consultation with
KBW.)
|
By: |
/s/
Harold
T. Hanley III
|
|
|||
Harold
T. Hanley III
|
|
||||
Managing
Director
|
|
By: |
/s/
Richard A. Foss
|
Date: |
12-10-09
|
||
Name: Richard
A. Foss
|
|
||||
Title: President
& CEO
|
|
1.
|
Consolidation
of Accounts and Development of a Central File, including, but not limited
to the following:
|
●
|
Consolidate
accounts having the same ownership and separate the consolidated file
information into necessary groupings to satisfy mailing
requirements;
|
●
|
Create
the master file of account holders as of key record dates;
and
|
●
|
Provide
software for the operation of the Bank’s Stock Information Center,
including subscription management and proxy solicitation
efforts
|
2.
|
Preparation
of Proxy Forms; Proxy Solicitation and Special Meeting Services,
including, but not limited to the
following:
|
●
|
Assist
the Bank’s financial printer with labeling of proxy materials for voting
and subscribing for stock;
|
●
|
Provide
support for any follow-up mailings to members, as needed, including proxy
grams and additional solicitation
materials;
|
●
|
Proxy
and ballot tabulation; and
|
●
|
Act
as Inspector of Election for the Bank’s special meeting of members, if
requested, and the election is not
contested
|
3.
|
Subscription
Services, including, but not limited to the
following:
|
●
|
Assist
the Bank’s financial printer with labeling of stock offering materials for
subscribing for stock;
|
●
|
Provide
support for any follow-up mailings to members, as needed, including proxy
grams and additional solicitation
materials;
|
●
|
Stock
order form processing and production of daily reports and
analysis;
|
●
|
Provide
supporting account information to the Bank’s legal counsel for ‘blue sky’
research and applicable
registration;
|
●
|
Assist
the Bank’s transfer agent with the generation and mailing of stock
certificates;
|
●
|
Perform
interest and refund calculations and provide a file to enable the Bank to
generate interest and refund
checks;
|
●
|
Create
1099-INT forms for interest reporting, as well as magnetic media reporting
to the IRS, for subscribers paid $10 or more in interest for subscriptions
paid by check.
|
By:
|
/s/ Harold T. Hanley III | |||
Harold
T. Hanley III
|
||||
Managing
Director
|
||||
JACKSONVILLE
BANCORP, INC.
|
||||
By:
|
/s/ Diana S. Tone |
Date:
|
2/17/10 | |
Name:
Diana S. Tone
|
||||
|
Title:
CFO
|
|||
JACKSONVILLE
SAVINGS BANK
|
||||
By:
|
/s/ Diana S. Tone |
Date:
|
2/17/10 | |
Name:
Diana S. Tone
|
||||
Title:
CFO
|
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27
|
EXHIBIT
A
|
FORM
OF AGREEMENT OF MERGER BETWEEN JACKSONVILLE BANCORP, MHC AND JACKSONVILLE
BANCORP, INC.
|
EXHIBIT
B
|
FORM
OF AGREEMENT OF MERGER BETWEEN JACKSONVILLE BANCORP, INC. (FEDERAL) AND
JACKSONVILLE BANCORP, INC.
(MARYLAND)
|
EXHIBIT
C
|
FORM
OF ARTICLES OF INCORPORATION OF THE HOLDING
COMPANY
|
EXHIBIT
D
|
FORM
OF BYLAWS OF THE HOLDING COMPANY
|
1.
|
2.
|
(1)
|
The
Holding Company will be organized as a first-tier stock subsidiary of the
Mid-Tier Holding Company.
|
(2)
|
The
Mutual Holding Company will merge with and into the Mid-Tier Holding
Company with the Mid-Tier Holding Company as the resulting entity (the
“MHC Merger”) pursuant to the Agreement of Merger attached hereto as
Exhibit A, whereby the shares of Mid-Tier Holding Company common stock
held by the Mutual Holding Company will be canceled and Members of the
Mutual Holding Company will constructively receive liquidation interests
in the Mid-Tier Holding Company in exchange for their ownership interests
in the Mutual Holding Company.
|
(3)
|
Immediately
after the MHC Merger, the Mid-Tier Holding Company will merge with the
Holding Company with the Holding Company as the resulting entity (the
“Mid-Tier Merger”) pursuant to the Agreement of Merger attached hereto as
Exhibit B, whereby the Bank will become the wholly-owned subsidiary of the
Holding Company. As part of the Mid-Tier Merger, the
liquidation interests in Mid-Tier Holding Company constructively received
by the Members of the Mutual Holding Company as part of the MHC Merger
will automatically, without further action on the part of the holders
thereof, be exchanged for an interest in the Liquidation Account, and each
of the Minority Shares shall automatically, without further action on the
part of the holders thereof, be converted into and become the right to
receive Holding Company Common Stock based upon the Exchange
Ratio.
|
(4)
|
Immediately
after the Mid-Tier Merger, the Holding Company will offer for sale the
Holding Company Common Stock in the
Offering.
|
(5)
|
The
Holding Company will contribute at least 50% of the net proceeds of the
Offering to the Bank in constructive exchange for additional shares of
common stock of the Bank and in exchange for the Bank Liquidation
Account.
|
(1)
|
Any
exchange of such shares in connection with a merger or acquisition
involving the Bank or the Holding Company, as the case may be, which has
been approved by the appropriate federal regulatory agency;
and
|
(2)
|
Any
disposition of such shares following the death of the person to whom such
shares were initially sold under the terms of the
Plan.
|
(1)
|
Each
certificate representing shares restricted by this section shall bear a
legend prominently stamped on its face giving notice of the
restriction;
|
(2)
|
Instructions
shall be issued to the stock transfer agent for the Holding Company not to
recognize or effect any transfer of any certificate or record of ownership
of any such shares in violation of the restriction on transfer;
and
|
(3)
|
Any
shares of capital stock of the Holding Company issued with respect to a
stock dividend, stock split, or otherwise with respect to ownership of
outstanding Subscription Shares subject to the restriction on transfer
hereunder shall be subject to the same restriction as is applicable to
such Subscription Shares.
|
A.
|
(1) |
The
charter of the Bank may contain a provision stipulating that no person,
except the Holding Company, for a period of five years following the
closing date of the Conversion, may directly or indirectly acquire or
offer to acquire the beneficial ownership of more than 10% of any class of
equity security of the Bank, without the prior written approval of the
Illinois Department. In addition, such charter may also provide
that for a period of five years following the closing date of the
Conversion, shares beneficially owned in violation of the above-described
charter provision shall not be entitled to vote and shall not be voted by
any person or counted as voting stock in connection with any matter
submitted to stockholders for a vote. In addition, special
meetings of the stockholders relating to changes in control or amendment
of the charter may only be called by the Board of Directors, and
shareholders shall not be permitted to cumulate their votes for the
election of Directors.
|
|
(2)
|
For
a period of three years from the date of consummation of the Conversion,
no person, other than the Holding Company, shall directly or indirectly
offer to acquire or acquire the beneficial ownership of more than 10% of
any class of equity security of the Bank without the prior written consent
of the OTS and the Illinois
Department.
|
(1)
|
The
term “person” includes an individual, a firm, a corporation or other
entity;
|
(2)
|
The
term “offer” includes every offer to buy or acquire, solicitation of an
offer to sell, tender offer for, or request or invitation for tenders of,
a security or interest in a security for
value;
|
(3)
|
The
term “acquire” includes every type of acquisition, whether effected by
purchase, exchange, operation of law or otherwise;
and
|
(4)
|
The
term “security” includes non-transferable subscription rights issued
pursuant to a plan of conversion as well as a “security” as defined in 15
U.S.C. § 77b(a)(1).
|
34.
|
Jacksonville Bancorp, Inc. | ||||
(a federal corporation) | ||||
ATTEST: | ||||
|
By: |
|
||
John
D. Eilering, Secretary
|
Richard
A. Foss
|
|||
|
President
and Chief Executive Officer
|
Jacksonville Bancorp, MHC | ||||
(a federal mutual holding company) | ||||
ATTEST: | ||||
|
By: |
|
||
John
D. Eilering, Secretary
|
Richard
A. Foss
|
|||
|
President
and Chief Executive Officer
|
Jacksonville Bancorp, Inc. | ||||
(a federal corporation) | ||||
ATTEST: | ||||
|
By: |
|
||
John
D. Eilering, Secretary
|
Richard
A. Foss
|
|||
|
President
and Chief Executive Officer
|
Jacksonville Bancorp, Inc. | ||||
(a Maryland corporation) | ||||
ATTEST: | ||||
|
By: |
|
||
John
D. Eilering, Secretary
|
Richard
A. Foss
|
|||
|
President
and Chief Executive Officer
|
|
(a)
|
An
“affiliate” of a specified Person shall mean a Person that directly, or
indirectly through one or more intermediaries, controls, or is controlled
by, or is under common control with, the Person
specified.
|
|
(b)
|
“Beneficial
ownership” shall be determined pursuant to Rule 13d-3 of the General Rules
and Regulations under the Securities Exchange Act of 1934 (or any
successor rule or statutory provision), or, if said Rule 13d-3 shall be
rescinded and there shall be no successor rule or statutory provision
thereto, pursuant to said Rule 13d-3 as in effect on December 31, 2009;
provided, however, that a Person shall, in any event, also be deemed the
“beneficial owner” of any Common
Stock:
|
|
(1)
|
that
such Person or any of its affiliates beneficially owns, directly or
indirectly; or
|
|
(2)
|
that
such Person or any of its affiliates has (i) the right to acquire (whether
such right is exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding (but shall not be
deemed to be the beneficial owner of any voting shares solely by reason of
an agreement, contract, or other arrangement with the Corporation to
effect any transaction of the type described in clause (i) or (ii) of the
first sentence of Article 9 hereof) or upon the exercise of
conversion rights, exchange rights, warrants, or options or otherwise, or
(ii) sole or shared voting or investment power with respect thereto
pursuant to any agreement, arrangement, understanding, relationship or
otherwise (but shall not be deemed to be the beneficial owner of any
voting shares solely by reason of a revocable proxy granted for a
particular meeting of stockholders, pursuant to a public solicitation of
proxies for such meeting, with respect to shares of which neither such
Person nor any such affiliate is otherwise deemed the beneficial owner);
or
|
|
(3)
|
that
are beneficially owned, directly or indirectly, by any other Person with
which such first mentioned Person or any of its affiliates acts as a
partnership, limited partnership, syndicate or other group pursuant to any
agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock of the
Corporation; and provided further, however, that (i) no director or
officer of the Corporation (or any affiliate of any such director or
officer) shall, solely by reason of any or all of such directors or
officers acting in their capacities as such, be deemed, for any purposes
hereof, to beneficially own any Common Stock beneficially owned by any
other such director or officer (or any affiliate thereof), and (ii)
neither any employee stock ownership or similar plan of the Corporation or
any subsidiary of the Corporation nor any trustee with respect thereto (or
any affiliate of such trustee) shall, solely by reason of such capacity of
such trustee, be deemed, for any purposes hereof, to beneficially own any
Common Stock held under any such plan. For purposes of
computing the percentage of beneficial ownership of Common Stock of a
Person, the outstanding Common Stock shall include shares deemed owned by
such Person through application of this subsection but shall not include
any other shares of Common Stock that may be issuable by the Corporation
pursuant to any agreement, or upon exercise of conversion rights, warrants
or options, or otherwise. For all other purposes, the
outstanding Common Stock shall include only Common Stock then outstanding
and shall not include any Common Stock that may be issuable by the
Corporation pursuant to any agreement, or upon the exercise of conversion
rights, warrants or options, or
otherwise.
|
|
(c)
|
A
“Person” shall mean any individual, firm, corporation, or other
entity.
|
|
(d)
|
The
Board of Directors shall have the power to construe and apply the
provisions of this Section D and to make all determinations necessary
or desirable to implement such provisions including, but not limited to,
matters with respect to (i) the number of shares of Common Stock
beneficially owned by any Person, (ii) whether a Person is an affiliate of
another, (iii) whether a Person has an agreement, arrangement, or
understanding with another as to the matters referred to in the definition
of beneficial ownership, (iv) the application of any other definition
or operative provision of this Section D to the given facts, or (v)
any other matter relating to the applicability or effect of this Section
D.
|
Class
I Directors:
|
Term
to Expire in
|
Dean
H. Hess
|
2011
|
John
C. Williams
|
2011
|
Harmon
B. Deal, III
|
2011
|
Class II
Directors
:
|
Term
to Expire in
|
John
L. Eyth
|
2012
|
Richard
A. Foss
|
2012
|
John
M. Buchanan
|
2012
|
Class III
Directors
:
|
Term
to Expire in
|
Andrew
F. Applebee
|
2013
|
Emily
J. Osburn
|
2013
|
/s/ Alan Schick | ||
Alan Schick, Incorporator |
Section
1.
|
Annual
Meeting
|
Section
2.
|
Special
Meetings
|
Section
3.
|
Notice
of Meetings; Adjournment
|
Section
4.
|
Quorum
|
Section
5.
|
Organization
and Conduct of Business
|
Section 6.
|
Advance
Notice Provisions for Business to be Transacted at Annual Meetings and
Elections of Directors
|
Section
7.
|
Proxies
and Voting
|
Section
8.
|
Conduct
of Voting
|
Section
9.
|
Control
Share Acquisition Act
|
Section
1.
|
General
Powers, Number and Term of Office
|
Section
2.
|
Vacancies
and Newly Created Directorships
|
Section
3.
|
Regular
Meetings
|
Section
4.
|
Special
Meetings
|
Section
5.
|
Quorum
|
Section
6.
|
Participation
in Meetings By Conference Telephone
|
Section
7.
|
Conduct
of Business
|
Section
8.
|
Powers
|
|
(i)
|
To
declare dividends from time to time in accordance with
law;
|
|
(ii)
|
To
purchase or otherwise acquire any property, rights or privileges on such
terms as it shall determine;
|
|
(iii)
|
To
authorize the creation, making and issuance, in such form as it may
determine, of written obligations of every kind, negotiable or
non-negotiable, secured or unsecured, and to do all things necessary in
connection therewith;
|
|
(iv)
|
To
remove any officer of the Corporation with or without cause, and from time
to time to devolve the powers and duties of any officer upon any other
person for the time being;
|
|
(v)
|
To
confer upon any officer of the Corporation the power to appoint, remove
and suspend subordinate officers, employees and
agents;
|
|
(vi)
|
To
adopt from time to time such stock, option, stock purchase, bonus or other
compensation plans for directors, officers, employees and agents of the
Corporation and its subsidiaries as it may
determine;
|
|
(vii)
|
To
adopt from time to time such insurance, retirement, and other benefit
plans for directors, officers, employees and agents of the Corporation and
its subsidiaries as it may determine;
and
|
|
(viii)
|
To
adopt from time to time regulations, not inconsistent with these Bylaws,
for the management of the Corporation’s business and
affairs.
|
Section
9.
|
Compensation
of Directors
|
Section
10.
|
Resignation
|
Section
11.
|
Presumption
of Assent
|
Section
12.
|
Director
Qualifications
|
Section 13.
|
Attendance
at Board Meetings
|
Section
1.
|
Committees
of the Board of Directors
|
Section
2.
|
Conduct
of Business
|
Section
1.
|
Generally
|
Section
2.
|
Chairman
of the Board of Directors
|
Section
3.
|
Chief
Executive Officer
|
Section
4.
|
President
|
Section
5.
|
Vice
President
|
Section
6.
|
Secretary
|
Section
7.
|
Chief
Financial Officer/Treasurer
|
Section
8.
|
Other
Officers
|
Section
9.
|
Action
with Respect to Securities of Other
Corporations
|
Section
1.
|
Certificates
of Stock
|
Section
2.
|
Transfers
of Stock
|
Section
3.
|
Record
Dates or Closing of Transfer Books
|
Section
4.
|
Lost,
Stolen or Destroyed Certificates
|
Section
5.
|
Stock
Ledger
|
Section
6.
|
Regulations
|
Section
1.
|
Facsimile
Signatures
|
Section
2.
|
Corporate
Seal
|
Section
3.
|
Books
and Records
|
Section
4.
|
Reliance
upon Books, Reports and Records
|
Section
5.
|
Fiscal
Year
|
Section
6.
|
Time
Periods
|
Section
7.
|
Checks,
Drafts, Etc.
|
Section
8.
|
Mail
|
Section
9.
|
Contracts
and Agreements
|
No.
|
|
Shares
|
||
JACKSONVILLE
BANCORP, INC.
|
||||
THIS CERTIFIES that | is the owner of |
By:
|
|
[SEAL]
|
By:
|
|
JOHN
D. EILERING
|
RICHARD
A. FOSS
|
|||
CORPORATE
SECRETARY
|
PRESIDENT
AND CHIEF EXECUTIVE
|
|||
OFFICER
|
|
(please
print or typewrite name and address including postal zip code of
assignee)
|
In
the presence of
|
Signature:
|
|
Re: | Jacksonville Bancorp, Inc. (a Maryland corporation) | |
Common Stock, Par Value $0.01 Per Share |
(1) |
The
Mid-Tier Holding Company will establish the Holding Company as a
first-tier Maryland-chartered stock holding company
subsidiary.
|
|
(2) |
The
Mutual Holding Company will merge with and into the Mid-Tier Holding
Company with the Mid-Tier Holding Company as the resulting entity (the
“MHC Merger”) whereby the shares of Mid-Tier Holding Company held by the
Mutual Holding Company will be cancelled and the owners of the Mutual
Holding Company (e.g., the depositors of the Bank) will automatically,
without any further action on the part of the holders thereof,
constructively receive liquidation interests in Mid-Tier Holding Company
in exchange for their liquidation interests in the Mutual Holding
Company.
|
|
(3) |
Immediately
after the MHC Merger, the Mid-Tier Holding Company will merge with and
into the Holding Company (the “Mid-Tier Merger”), with the Holding Company
as the resulting entity. As part of the Mid-Tier Merger,
the liquidation interests in Mid-Tier Holding Company constructively
received by the former owners of Mutual Holding Company immediately prior
to Conversion will automatically, without further action on the part of
the holders thereof, be exchanged for an interest in the Liquidation
Account and the Minority Shares shall be converted into and become the
right to receive Holding Company Common Stock based on the Exchange
Ratio.
|
|
(4) |
Immediately
after the Mid-Tier Merger, the Holding Company will offer for sale its
Common Stock in the Offering.
|
|
(5)
|
The
Holding Company will contribute at least 50% of the net proceeds of the
Offering to the Bank in
constructive
exchange for common stock of the Bank and the Bank Liquidation
Account.
|
JACKSONVILLE
BANCORP, INC.
|
||||
Witnessed
by:
|
||||
|
By:
|
|
1.
|
By
adding the following new Section 9.1(c) to the 1996
Plan:
|
“(c)
Relinquishment of
Rights
. Notwithstanding
anything in the Plan to the contrary, effective as of December 29, 2005,
the Committee shall not grant any new Awards of Limited Rights to any
Employees or Directors. With respect to outstanding Awards of
Limited Rights granted prior to December 29, 2005, the Board of Directors
shall take such action as it determines to be necessary and appropriate to
obtain the consent of Participants to relinquish their rights to such
outstanding Limited Rights prior to December 31,
2005. Outstanding Awards of Limited Rights that are
relinquished by Participants pursuant to the foregoing shall be evidenced
by a written consent form signed and dated by the affected Participant in
accordance with Section 18 of the Plan, provided, however, that nothing in
the consent form shall (i) affect the Participant’s other rights under his
outstanding Options, or (ii) restrict the ability of the Company, in its
sole discretion, or any third party to make a cash payment to the
Participant in exchange for the termination or cancellation of the
Participant’s Options. Limited Rights for which no Participant
consent form is received by the Company shall remain subject to the
relevant terms and provisions of the Plan.”
|
|
2.
|
By
adding the following sentence at the end of Section 12 of the 1996
Plan:
|
“Notwithstanding
anything in the Plan to the contrary, no provision of the Plan shall
operate to require the cash settlement of a stock option under any
circumstance that is not within the sole discretion of the
Company.”
|
JACKSONVILLE
BANCORP, INC.
|
|||
By
|
/s/ Richard A. Foss | ||
Its
|
President / CEO |
JACKSONVILLE
BANCORP, INC.
|
||||
Witnessed
by:
|
||||
|
By:
|
1.
|
By
adding the following new Section 9(c) to the 2001 Plan:
|
“(c)
Relinquishment of
Rights
. Notwithstanding anything in the Plan
to the contrary, effective as of December 29, 2005, the Committee shall
not grant any new Awards of Limited Rights to any Employees or
Directors. With respect to outstanding Awards of Limited Rights
granted prior to December 29, 2005, the Board of Directors shall take such
action as it determines to be necessary and appropriate to obtain the
consent of Participants to relinquish their rights to such outstanding
Limited Rights prior to December 31, 2005. Outstanding Awards
of Limited Rights that are relinquished by Participants pursuant to the
foregoing shall be evidenced by a written consent form signed and dated by
the affected Participant in accordance with Section 20 of the Plan,
provided, however, that nothing in the consent form shall (i) affect the
Participant’s other rights under his outstanding Options, or (ii) restrict
the ability of the Company, in its sole discretion, or any third party to
make a cash payment to the Participant in exchange for the termination or
cancellation of the Participant’s Options. Limited Rights for
which no Participant consent form is received by the Company shall remain
subject to the relevant terms and provisions of the
Plan.”
|
|
2.
|
By
adding the following sentence at the end of Section 15 of the 2001
Plan:
|
“Notwithstanding
anything in the Plan to the contrary, no provision of the Plan shall
operate to require the cash settlement of a stock option under any
circumstance that is not within the sole discretion of the
Company.”
|
|
3.
|
By
substituting the following for Section 18(a) of the 2001
Plan:
|
“(a) provide
that such Options shall be assumed, or equivalent options shall be
substituted (“Substitute Options”) by the acquiring or succeeding
corporation (or an affiliate thereof), provided that: (A) any such
Substitute Options exchanged for Incentive Stock Options shall meet the
requirements of Section 424(a) of the Code, and (B) the shares of stock
issuable upon the exercise of such Substitute Options shall constitute
securities registered in accordance with the Securities Act of 1933, as
amended (“1933 Act”) or such securities shall be exempt from such
registration in accordance with Sections 3(a)(2) or 3(a)(5) of the 1933
Act, (collectively, “Registered Securities”), or in the alternative, and
in the sole discretion of the Company, if the securities issuable upon the
exercise of such Substitute Options shall not constitute Registered
Securities, then the Participant will receive upon consummation of the
Change in Control a cash payment for each Option surrendered equal to the
difference between the (1) Fair Market Value of the consideration to be
received for each share of Common Stock in the Change in Control times the
number of shares of Common Stock subject to such surrendered Options, and
(2) the aggregate exercise price of all such surrendered Options,
or”
|
JACKSONVILLE
BANCORP, INC.
|
|||
By
|
/s/ Richard A. Foss | ||
Its
|
President / CEO |
©
2008 Clark Consulting
|
JACKSONVILLE
SAVINGS BANK
|
Supplemental
Life Insurance Plan
|
1.1
|
“
Bank’s
Interest
” means the benefit set forth in Section
3.1.
|
1.2
|
“
Beneficiary
”
means each designated person, or the estate of a deceased Participant,
entitled to benefits, if any, upon the death of a
Participant.
|
1.3
|
“
Beneficiary
Designation Form
” means the form established from time to time by
the Plan Administrator that a Participant completes, signs and returns to
the Plan Administrator to designate one or more
Beneficiaries.
|
1.4
|
“
Board
” means
the Board of Directors of the Bank as from time to time
constituted.
|
1.5
|
“
Code
” means the
Internal Revenue Code of 1986, as amended.
|
1.6
|
“
Election Form
”
means the form required by the Plan Administrator of an eligible Employee
to indicate acceptance of participation in this Plan.
|
1.7
|
“
Employee
” means
an active employee of the Bank.
|
1.8
|
“
Insured
” means
the individual Participant whose life is insured.
|
1.9
|
“
Insurer
” means
the insurance company issuing the Policy on the life of the
Insured.
|
1.10
|
“
Net Death
Proceeds
” means the total death proceeds of the Participant’s
Policy or Policies minus the greater of (i) cash surrender value or (ii)
the aggregate premiums paid.
|
1.11
|
“
Participant
”
means an Employee (i) who is selected to participate in the Plan, (ii) who
elects to participate in the Plan, (iii) who signs an Election Form and a
Beneficiary Designation Form, (iv) whose signed Election Form and
Beneficiary Designation Form are accepted by the Plan Administrator, (v)
who commences participation in the Plan, and
(vi)
whose Participation has not
terminated.
|
JACKSONVILLE
SAVINGS BANK
|
Supplemental
Life Insurance Plan
|
1.12
|
“
Participant’s
Interest
” means the benefit set forth in Section
3.2.
|
1.13
|
“
Plan
Administrator
” means the plan administrator described in Article
13.
|
1.14
|
“
Policy
” or “
Policies
” means the
individual life insurance policy or policies adopted by the Plan
Administrator for purposes of insuring a Participant’s life under this
Plan.
|
1.15
|
“
Separation from
Service
” means termination of the Participant’s employment with the
Bank for reasons other than death. Whether a termination of employment has
occurred is determined based on whether the facts and circumstances
indicate that the Bank and the Participant reasonably anticipated that no
further services would be performed after a certain date or that the level
of bona fide services the Participant would perform after such date
(whether as an employee or as an independent contractor) would permanently
decrease to no more than twenty percent (20%) of the average level of bona
fide services performed (whether as an employee or an independent
contractor) over the immediately preceding thirty-six (36) month period
(or the full period of services to the Bank if the Participant has been
providing services to the Bank less than thirty-six (36)
months).
|
2.1
|
Selection by Plan
Administrator
. Participation in the Plan shall be limited to those
Employees of the Bank selected by the Plan Administrator, in its sole
discretion, to participate in the Plan.
|
2.2
|
Enrollment
Requirements
. As a condition to participation, each selected
Employee shall complete, execute and return to the Plan Administrator (i)
an Election Form, and (ii) a Beneficiary Designation Form. In addition,
the Plan Administrator shall establish from time to time such other
enrollment requirements as it determines in its sole discretion are
necessary.
|
2.3
|
Eligibility;
Commencement of Participation
. Provided an Employee selected to
participate in the Plan has met all enrollment requirements set forth in
this Plan and required by the Plan Administrator, and provided that the
Policy or Policies on a such Employee have been issued by the Insurer(s),
that Employee will become a Participant, be covered by the Plan and will
be eligible to receive benefits at the time and in the manner provided
hereunder, subject to the provisions of the Plan. A Participant’s
participation is limited to only issued Policies where the Participant is
the Insured.
|
2.4
|
Termination of
Participation
. A Participant’s rights under this Plan shall
automatically cease and his or her participation in this Plan shall
automatically terminate if the Plan or any Participant’s rights under the
Plan are terminated in accordance with Section 3.2.2, Article 6 or Article
11. In the event that the Bank decides to maintain the Policy after the
Participant’s
termination of participation in the Plan, the Bank shall be the direct
beneficiary of the entire death proceeds of the
Policy.
|
JACKSONVILLE
SAVINGS BANK
Supplemental
Life Insurance Plan
|
|
Article
3
|
|
Policy
Ownership/Interests
|
JACKSONVILLE
SAVINGS BANK
Supplemental
Life Insurance Plan
|
|
Article
5
|
|
Comparable
Coverage
|
|
5.1
|
Insurance
Policies
. The Bank may provide such benefit through the Policies
purchased at the commencement of this Plan, or, if later, the
Participant’s commencement of participation in the Plan, or may provide
comparable insurance coverage to the Participant through whatever means
the Bank deems appropriate. If the Participant waives or forfeits his or
her right to the insurance benefit, the Bank shall choose to cancel the
Policy or Policies on the Participant, or may continue such coverage and
become the direct beneficiary of the entire death
proceeds.
|
5.2
|
Offer to
Purchase
. If the Bank discontinues a Policy on a Participant who is
employed by the Bank at the date of discontinuance, the Bank shall give
the Participant at least thirty (30) days to purchase such Policy. The
purchase price shall be the fair market value of the Policy, as determined
under Treasury Reg. §1.61-22(g)(2) or any subsequent applicable authority.
Such notification shall be in writing.
|
Article
6
|
|
General
Limitations
|
|
6.1
|
Termination for
Cause
. Notwithstanding any provision of this Plan to the contrary,
the Participant shall forfeit any right to a benefit under this Plan if
the Bank terminates the Participant’s employment for cause. Termination of
the Participant’s employment for “Cause” shall mean termination because of
personal dishonesty, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order or
material breach of any provision of the Plan. For purposes of this
paragraph, no act or failure to act on the Participant’s part shall be
considered “willful” unless done, or omitted to be done, by the
Participant not in good faith and without reasonable belief that the
Participant’s action or omission was in the best interest of the
Bank.
|
6.2
|
Removal
.
Notwithstanding any provision of this Plan to the contrary, the
Participant’s rights in the Plan shall terminate if the Participant is
subject to a final removal or prohibition order issued by an appropriate
federal banking agency pursuant to Section 8(e) of the Federal Deposit
Insurance Act (“FDIA”).
|
6.3
|
Suicide or
Misstatement
. No benefits shall be payable if the Participant
commits suicide within two years after the date of this Plan, or if the
insurance company denies coverage (i) for material misstatements of fact
made by the Participant on any application for life insurance purchased by
the Bank, or (ii) for any other reason; provided, however that the Bank
shall evaluate the reason for the denial, and upon advice of legal counsel
and in its sole discretion, consider judicially challenging any
denial.
|
JACKSONVILLE
SAVINGS BANK
Supplemental
Life Insurance Plan
|
|
Article
7
|
|
Beneficiaries
|
|
7.1
|
Beneficiary
.
Each Participant shall have the right, at any time, to designate a
Beneficiary to receive any benefits payable under the Plan upon the death
of a Participant. The Beneficiary designated under this Plan may be the
same as or different from the beneficiary designated under any other plan
of the Bank in which the Participant participates.
|
7.2
|
Beneficiary
Designation; Change; Spousal Consent
. A Participant shall designate
a Beneficiary by completing and signing the Beneficiary Designation Form,
and delivering it to the Plan Administrator or its designated agent. If
the Participant names someone other than his or her spouse as a
Beneficiary, a spousal consent, in the form designated by the Plan
Administrator, must be signed by the Participant’s spouse and returned to
the Plan Administrator. The Participant’s beneficiary designation shall be
deemed automatically revoked if the Beneficiary predeceases the
Participant or if the Participant names a spouse as Beneficiary and the
marriage is subsequently dissolved. A Participant shall have the right to
change a Beneficiary by completing, signing and otherwise complying with
the terms of the Beneficiary Designation Form and the Plan Administrator’s
rules and procedures, as in effect from time to time. Upon the acceptance
by the Plan Administrator of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be cancelled. The Plan
Administrator shall be entitled to rely on the last Beneficiary
Designation Form filed by the Participant and accepted by the Plan
Administrator prior to the Participant’s death.
|
7.3
|
Acknowledgment
.
No designation or change in designation of a Beneficiary shall be
effective until received, accepted and acknowledged in writing by the Plan
Administrator or its designated agent.
|
7.4
|
No Beneficiary
Designation
. If the Participant dies without a valid designation of
beneficiary, or if all designated Beneficiaries predecease the
Participant, then the Participant’s surviving spouse shall be the
designated Beneficiary. If the Participant has no surviving spouse, the
benefits shall be made payable to the personal representative of the
Participant’s estate.
|
7.5
|
Facility of
Payment
. If the Plan Administrator determines in its discretion
that a benefit is to be paid to a minor, to a person declared incompetent,
or to a person incapable of handling the disposition of that person’s
property, the Plan Administrator may direct payment of such benefit to the
guardian, legal representative or person having the care or custody of
such minor; incompetent person or incapable person. The Plan Administrator
may require proof of incompetence, minority or guardianship as it may deem
appropriate prior to distribution of the benefit. Any payment of a benefit
shall be a payment for the account of the Participant and the
Participant’s Beneficiary, as the case may be, and shall be a complete
discharge of any liability under the Plan for such payment
amount.
|
JACKSONVILLE
SAVINGS RANK
|
Supplemental
Life Insurance Plan
|
10.1
|
Claims
Procedure
. A Participant or Beneficiary (“claimant”) who has not
received benefits under the Plan that he or she believes should be paid
shall make a claim for such benefits as follows:
|
|
10.1.1
|
Initiation
–
Written
Claim
. The claimant initiates a claim by submitting to the Plan
Administrator a written claim for the benefits. If such a claim relates to
the contents of a notice received by the claimant, the claim must be made
within sixty (60) days after such notice was received by the claimant. All
other claims must be made within one hundred eighty (180) days of the date
on which the event that caused the claim to arise occurred. The claim must
state with particularity the determination desired by the
claimant.
|
|
10.1.2
|
Timing of Plan
Administrator Response
. The Plan Administrator shall respond to
such claimant within 90 days after receiving the claim. If the Plan
Administrator determines that special circumstances require additional
time for processing the claim, the Plan Administrator can extend the
response period by an additional 90 days by notifying the claimant in
writing, prior to the end of the initial 90-day period, that an additional
period is required. The notice of extension must set forth the special
circumstances and the date by which the Plan Administrator expects to
render its decision.
|
|
10.1.3
|
Notice of
Decision
. If the Plan Administrator denies part or all of the
claim, the Plan Administrator shall notify the claimant in writing of such
denial. The Plan Administrator shall write the notification in a manner
calculated to be understood
by
the claimant. The notification shall set
forth:
|
JACKSONVILLE
SAVINGS BANK
|
Supplemental
Life Insurance Plan
|
(a)
|
The
specific reasons for the denial;
|
|
(b)
|
A
reference to the specific provisions of the Plan on which the denial is
based:
|
|
(c)
|
A
description of any additional information or material necessary for the
claimant to perfect the claim and an explanation of why it is
needed:
|
|
(d)
|
An
explanation of the Plan’s review procedures and the time limits applicable
to such procedures; and
|
|
(e)
|
A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on
review.
|
10.2
|
Review
Procedure
. If the Plan Administrator denies part or all of the
claim, the claimant shall have the opportunity for a full and fair review
by the Plan Administrator of the denial, as follows:
|
|
10.2.1
|
Initiation – Written
Request
. To initiate the review, the claimant, within 60 days after
receiving the Plan Administrator’s notice of denial, must file with the
Plan Administrator a written request for review.
|
|
10.2.2
|
Additional Submissions
– Information Access
. The claimant shall then have the opportunity
to submit written comments, documents, records and other information
relating to the claim. The Plan Administrator shall also provide the
claimant, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant (as
defined in applicable ERISA regulations) to the claimant’s claim for
benefits.
|
|
10.2.3
|
Considerations on
Review
. In considering the review, the Plan Administrator shall
take into account all materials and information the claimant submits
relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit
determination.
|
|
10.2.4
|
Timing of Plan
Administrator’s Response
. The Plan Administrator shall respond in
writing to such claimant within 60 days after receiving the request for
review. If the Plan Administrator determines that special circumstances
require additional time for processing the claim, the Plan Administrator
can extend the response period by an additional 60 days by notifying the
claimant in writing, prior to the end of the initial 60-day period, that
an additional period is required. The notice of extension must set forth
the special circumstances and the date by which the Plan Administrator
expects to render its decision.
|
JACKSONVILLLE
SAVINGS BANK
|
Supplemental
Life Insurance Plan
|
10.2.5
|
Notice of
Decision
. The Plan Administrator shall notify the claimant in
writing of its decision on review. The Plan Administrator shall write the
notification in a manner calculated to be understood by the claimant. The
notification shall set forth:
|
||
(a)
|
The
specific reasons for the denial;
|
||
(b)
|
A
reference to the specific provisions of the Plan on which the denial is
based;
|
||
(c)
|
A
statement that the claimant is entitled to receive, upon request and free
of charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations) to
the claimant’s claim for benefits: and
|
||
(d)
|
A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a).
|
12.1
|
Plan Administrator
Duties
. This Plan shall be administered by a Plan Administrator
which shall consist of the Board, or such committee or persons as the
Board may choose. The Plan Administrator shall also have the discretion
and authority to (i) make, amend, interpret and enforce all appropriate
rules and regulations for the administration of this Plan and (ii) decide
or resolve any and all questions including interpretations of this Plan,
as may arise in connection with the Plan.
|
12.2
|
Agents
. In the
administration of this Plan, the Plan Administrator may employ agents and
delegate to them such administrative duties as it sees fit, (including
acting through a duly appointed representative), and may from time to time
consult with counsel who may be counsel to the Bank.
|
12.3
|
Binding Effect of
Decisions
. The decision or action of the Plan Administrator with
respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules
and regulations promulgated
hereunder
shall be final and conclusive and binding upon all persons having any
interest in the Plan.
|
JACKSONVILLE
SAVINGS BANK
|
Supplemental
Life Insurance Plan
|
12.4
|
Indemnity of Plan
Administrator
. The Bank shall indemnify and hold harmless the
members of the Plan Administrator against any and all claims, losses,
damages, expenses or liabilities arising from any action or failure to act
with respect to this Plan, except in the case of willful misconduct by the
Plan Administrator or any of its members.
|
12.5
|
Information
. To
enable the Plan Administrator to perform its functions, the Bank shall
supply full and timely information to the Plan Administrator on all
matters relating to the its Participants, the date and circumstances of
the retirement or Separation from Service of its Participants, and such
other pertinent information as the Plan Administrator may reasonably
require.
|
Article
13
|
|
Miscellaneous
|
|
13.1
|
Binding Effect
.
This Plan shall bind each Participant and the Bank, their beneficiaries,
survivors, executors, administrators and transferees and any
Beneficiary.
|
13.2
|
No Guarantee of
Employment
. This Plan is not an employment policy or contract. It
does not give a Participant the right to remain an Employee of the Bank,
nor does it interfere with the Bank’s right to discharge a Participant. It
also does not require a Participant to remain an Employee nor interfere
with a Participant’s right to terminate employment at any
time.
|
13.3
|
Applicable Law
.
The Plan and all rights hereunder shall be governed by and construed
according to the laws of the State of Illinois, except to the extent
preempted by the laws of the United States of America.
|
13.4
|
Reorganization
.
The Bank shall not merge or consolidate into or with another company, or
reorganize, or sell substantially all of its assets to another company,
firm or person unless such succeeding or continuing company, firm or
person agrees to assume and discharge the obligations of the Bank under
this Plan. Upon the occurrence of such event, the term “Bank’’ as used in
this Plan shall be deemed to refer to the successor or survivor
company.
|
JACKSONVILLE
SAVINGS BANK
|
Supplemental
Life Insurance Plan
|
13.5
|
Notice
. Any
notice or filing required or permitted to be given to the Plan
Administrator under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail. to the address
below:
|
Such notice shall be deemed given as of the date of delivery or. if delivery is made by mail, as of the date shown on the postmark or the receipt for registration or certification. | |
Any
notice or filing required or permitted to be given to a Participant under
this Plan shall be sufficient if in writing and hand-delivered, or sent by
mail, to the last known address of the Participant.
|
|
13.6
|
Entire
Agreement
. This Plan, along with a Participant’s Election Form,
Beneficiary Designation Form and any agreement in writing between the Bank
and any Participant, constitute the entire agreement between the Bank and
the Participant as to the subject matter hereof. No rights are granted to
the Participant under this Plan other than those specifically set forth
herein.
|
IN
WITNESS WHEREOF, the Bank executes this Plan as of the date indicated
above.
|
JACKSONVILLE SAVINGS
BANK
|
|||
By
|
/s/ Richard A. Foss |
PRESIDENT/CEO
|
Appropriate Account Balance
|
Payout Period
|
|
Less than $10,000
|
1 Year
|
|
$10,000 but less than $50,000
|
3 Years
|
|
More than $50,000
|
5 Years
|
JACKSONVILLE SAVINGS BANK
|
|||
By:
|
/s/ Andrew F. Applebee
|
||
Chairman
|
|||
By:
|
/s/ Rosa McKinney
|
||
Secretary
|
|||
Dated:
|
December 18, 1996
|
ATTEST:
|
JACKSONVILLE SAVINGS BANK
|
|||
/s/ Rosa L. McKinney
|
By:
|
/s/ Richard A. Foss
|
||
President
|
|
(a)
|
Proportionate
Benefit
– Director’s benefits beginning under Paragraph 1 and the
beneficiary’s benefits under Paragraph 2 above will be in direct
proportion to the number of months as it relates to 100 percent of 60
months. For example, if the Director serves only 30 months, the
Director will be entitled to $489 or 50 percent of the compensation stated
in Paragraph 1 or the beneficiary will be entitled to $309 or 50 percent
of the compensation stated in Paragraph 2;
or
|
|
(b)
|
Payment of Deferred
Fee
– Bank, within 90 days of the termination of service by
Director, shall pay the Director a lump sum payment equal to the total
amount of fees deferred pursuant to this Paragraph 3 plus ____ percent per
annum thereon from the date of deferral until so
paid.
|
CHAPIN STATE BANK | |||
(SEAL) | By: | /s/ Dean Hess, Director | |
Title | |||
/s/ John C. Williams | |||
John C. Williams, Director |
CHAPIN STATE BANK
|
||||
(SEAL)
|
By:
|
/s/ Roy Halstenberg
|
||
/s/ Patty Jo Crews
|
/s/ John C. Williams
|
(SEAL)
|
||
Witness
|
JOHN C. WILLIAMS, DIRECTOR
|
Date: August 3, 1987 |
(a)
|
Proportionate
Benefit
– Director’s benefits beginning under Paragraph 1 and the
beneficiary’s benefits under Paragraph 2 above will be in direct
proportion to the number of months as it relates to 100 percent of 60
months. For example, if the Director serves only 30 months, the
Director will be entitled to $440 or 50 percent of the compensation stated
in Paragraph 1 or the beneficiary will be entitled to $295 or 50 percent
of the compensation stated in Paragraph 2; or
|
|
(b)
|
Payment of Deferred
Fee
– Bank, within 90 days of the termination of service by
Director, shall pay the Director a lump sum payment equal to the total
amount of fees deferred pursuant to this Paragraph 3 plus ____ percent per
annum thereon from the date of deferral until so
paid.
|
CHAPIN
STATE BANK
|
||||
(SEAL)
|
By:
|
/s/ John Williams,
President
|
||
Title
|
||||
/s/ Dean H. Hess | ||||
Dean
H. Hess, Director
|
/s/ John Williams
|
/s/ Dean H. Hess
|
||
Witness
|
Dean
H. Hess, Director
|
CHAPIN STATE BANK | |||||
(SEAL) | By: | /s/ John C. Williams | |||
JOHN C. WILLIAMS, PRESIDENT | |||||
/s/ Patty Jo Crews | /s/ Dean H. Hess | (SEAL) | |||
Witness | DEAN H. HESS, DIRECTOR |
Jacksonville Savings Bank | 100% owned by Jacksonville Bancorp, Inc. |
Financial Resources Group, Inc. | 100% ownership by Jacksonville Savings Bank |
RP ® FINANCIAL, LC. |
|
Serving the Financial Services Industry Since 1988 |
Sincerely, | |||
|
|
/s/ RP F inancial , LC. | |
RP FINANCIAL, LC. |
Washington
Headquarters
|
|
Three
Ballston Plaza
|
Telephone:
(703) 528-1700
|
1100
North Glebe Road, Suite 1100
|
Fax
No.: (703) 528-1788
|
Arlington,
VA 22201
|
Toll-Free
No.: (866) 723-0594
|
www.rpfinancial.com
|
E-Mail:
mail@rpfinancial.com
|
RP ® FINANCIAL, LC. |
|
Serving the Financial Services Industry Since 1988 |
●
|
$5,000
upon execution of the letter of agreement engaging RP Financial’s
appraisal services;
|
●
|
$20,000
upon delivery of the completed original appraisal report;
and
|
●
|
$5,000
upon delivery of each subsequent appraisal update report. There
will be at least one appraisal update report, to be filed upon completion
of the reorganization and stock
offering.
|
Sincerely, | ||||
|
/s/
William
E. Pommerening
|
|||
|
William
E. Pommerening
|
|||
|
Chief
Executive Officer and
Managing Director
|
Upon
Authorization by the Board of Directors For:
|
Jacksonville
Savings Bank, subsidiary of
Jacksonville Bancorp, MHC
Jacksonville,
Illinois
|
Prepared By: | ||
RP ® Financial, LC. | ||
1100 North Glebe Road | ||
Suite 1100 | ||
Arlington, Virginia 22201 | ||
RP ® FINANCIAL, LC. | |
Serving
the Financial Services Industry Since 1988
|
Washington
Headquarters
|
|
Three Ballston Plaza | Telephone: (703) 528-1700 |
1100 North Glebe Road, Suite 1100 | Fax No.: (703) 528-1788 |
Arlington, VA 22201 | Toll-Free No.: (866) 723-0594 |
www.rpfinancial.com | E-Mail: mail@rpfinancial.com |
Exchange
Shares
|
||||||||||||||||
Offering
|
Issued
to the
|
Exchange
|
||||||||||||||
Total
Shares
|
Shares
|
Public
Shareholders
|
Ratio
|
|||||||||||||
Shares
|
(x)
|
|||||||||||||||
Super
Maximum
|
2,873,516 | 1,553,938 | 1,319,578 | 1.4960 | ||||||||||||
Maximum
|
2,498,709 | 1,351,250 | 1,147,459 | 1.3009 | ||||||||||||
Midpoint
|
2,172,790 | 1,175,000 | 997,790 | 1.1312 | ||||||||||||
Minimum
|
1,846,872 | 998,750 | 848,122 | 0.9615 | ||||||||||||
Distribution
of Shares
|
||||||||||||||||
Super
Maximum
|
100.00 | % | 54.08 | % | 45.92 | % | ||||||||||
Maximum
|
100.00 | % | 54.08 | % | 45.92 | % | ||||||||||
Midpoint
|
100.00 | % | 54.08 | % | 45.92 | % | ||||||||||
Minimum
|
100.00 | % | 54.08 | % | 45.92 | % | ||||||||||
Aggregate
Market Value(1)
|
||||||||||||||||
Super
Maximum
|
$ | 28,735,160 | $ | 15,539,380 | $ | 13,195,780 | ||||||||||
Maximum
|
$ | 24,987,090 | $ | 13,512,500 | $ | 11,474,590 | ||||||||||
Midpoint
|
$ | 21,727,900 | $ | 11,750,000 | $ | 9,977,900 | ||||||||||
Minimum
|
$ | 18,468,720 | $ | 9,987,500 | $ | 8,481,220 |
Respectfully submitted, | |||
RP ® FINANCIAL, LC. | |||
/s/ William E. Pommerening | |||
William E. Pommerening | |||
Chief Executive
Officer and
Managing Director |
|||
/s/ James P. Hennessey | |||
James P. Hennessey | |||
Director |
RP
®
Financial, LC.
|
TABLE
OF CONTENTS
|
i
|
RP
®
Financial, LC.
|
TABLE
OF CONTENTS
|
ii
|
PAGE
|
||||||||||
DESCRIPTION
|
|
NUMBER
|
||||||||
CHAPTER FOUR
|
VALUATION
ANALYSIS
|
|||||||||
Introduction
|
IV.1
|
|||||||||
Appraisal
Guidelines
|
IV.1
|
|||||||||
RP
Financial Approach to the Valuation
|
IV.1
|
|||||||||
Valuation
Analysis
|
IV.2
|
|||||||||
1.
|
Financial
Condition
|
IV.3
|
||||||||
2.
|
Profitability,
Growth and Viability of Earnings
|
IV.4
|
||||||||
3.
|
Asset
Growth
|
IV.5
|
||||||||
4.
|
Primary
Market Area
|
IV.6
|
||||||||
5.
|
Dividends
|
IV.7
|
||||||||
6.
|
Liquidity
of the Shares
|
IV.7
|
||||||||
7.
|
Marketing
of the Issue
|
IV.8
|
||||||||
A.
|
The
Public Market
|
IV.8
|
||||||||
B.
|
The
New Issue Market
|
IV.12
|
||||||||
C.
|
The
Acquisition Market
|
IV.16
|
||||||||
D.
|
Trading
in Jacksonville Bancorp’s Stock
|
IV.16
|
||||||||
8.
|
Management
|
IV.17
|
||||||||
9.
|
Effect
of Government Regulation and Regulatory Reform
|
IV.17
|
||||||||
Summary
of Adjustments
|
IV.17
|
|||||||||
Valuation
Approaches
|
IV.18
|
|||||||||
1.
|
Price-to-Earnings
(“P/E”)
|
IV.20
|
||||||||
2.
|
Price-to-Book
(“P/B”)
|
IV.21
|
||||||||
3.
|
Price-to-Assets
(“P/A”)
|
IV.21
|
||||||||
Comparison
to Recent Offerings
|
IV.23
|
|||||||||
Valuation
Conclusion
|
IV.23
|
|||||||||
Establishment
of the Exchange Ratio
|
IV.24
|
RP
®
Financial, LC.
|
LIST
OF TABLES
|
iii
|
TABLE
|
||||||||
NUMBER
|
DESCRIPTION
|
PAGE
|
||||||
1.1
|
Historical
Balance Sheets
|
I.7
|
||||||
1.2
|
Historical
Income Statements
|
I.11
|
||||||
2.1
|
Map
of Branch Locations
|
II.2
|
||||||
2.2
|
Summary
Demographic Data
|
II.5
|
||||||
2.3
|
Primary
Market Area Employment Sectors
|
II.6
|
||||||
2.4
|
Unemployment
Trends
|
II.7
|
||||||
2.5
|
Deposit
Summary
|
II.8
|
||||||
2.6
|
Market
Area Deposit Competitors
|
II.9
|
||||||
3.1
|
Peer
Group of Publicly-Traded Thrifts
|
III.3
|
||||||
3.2
|
Balance
Sheet Composition and Growth Rates
|
III.8
|
||||||
3.3
|
Income
as a % of Average Assets and Yields, Costs, Spreads
|
III.12
|
||||||
3.4
|
Loan
Portfolio Composition and Related Information
|
III.15
|
||||||
3.5
|
Credit
Risk Measures and Related Information
|
III.17
|
||||||
3.6
|
Interest
Rate Risk Measures and Net Interest Income Volatility
|
III.18
|
||||||
4.1
|
Pricing
Characteristics. Recent Conversions Completed
|
IV.14
|
||||||
4.2
|
Market
Pricing Comparatives – Recent Conversions
|
IV.15
|
||||||
4.3
|
Public
Market Pricing
|
IV.22
|
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.1 |
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.2 |
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.3 |
●
|
The
Company.
The Company is expected to retain up to 50% of
the net conversion proceeds. At present, Company funds, net of
the loan to the ESOP, are expected to be invested initially into high
quality investment securities with short- to intermediate-term maturities,
generally consistent with the current investment mix. Over
time, Company funds are anticipated to be utilized for various corporate
purposes, possibly including acquisitions, infusing additional equity into
the Bank, repurchases of common stock, and the payment of regular and/or
special cash dividends.
|
●
|
The
Bank.
The balance of the net offering proceeds will be
infused into the Bank. Cash proceeds (i.e., net proceeds less
deposits withdrawn to fund stock purchases) infused into the Bank are
anticipated to become part of general operating funds, and are expected to
initially be invested in short-term investments pending longer term
deployment, i.e., funding lending activities, general corporate purposes
and/or expansion and
diversification.
|
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.4 |
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.5 |
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.6 |
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.7 |
12/31/05-
12/31/2009
Annual
Growth
Rate
|
||||||||||||||||||||||||||||
At
Fiscal Year Ended December 31,
|
||||||||||||||||||||||||||||
2005
|
2006
|
2007
|
2008
|
2009
|
||||||||||||||||||||||||
Amount
|
Pct(1)
|
Amount
|
Pct(1)
|
Amount
|
Pct(1)
|
Amount
|
Pct(1)
|
Amount
|
Pct(1)
|
Pct
|
||||||||||||||||||
($000)
|
(%)
|
($000)
|
(%)
|
($000)
|
(%)
|
($000)
|
(%)
|
($000)
|
(%)
|
(%)
|
||||||||||||||||||
Total
Amount of:
|
||||||||||||||||||||||||||||
Assets
|
$
|
253,946
|
100.00
|
%
|
$
|
267,372
|
100.00
|
%
|
$
|
288,489
|
100.00
|
%
|
$
|
288,275
|
100.00
|
%
|
$
|
288,846
|
100.00
|
%
|
3.27
|
%
|
||||||
Loans
receivable, net
|
142,771
|
56.22
|
%
|
155,264
|
58.07
|
%
|
177,728
|
61.61
|
%
|
184,337
|
63.94
|
%
|
174,497
|
60.41
|
%
|
5.14
|
%
|
|||||||||||
Investment
securities AFS
|
80,821
|
31.83
|
%
|
79,978
|
29.91
|
%
|
66,295
|
22.98
|
%
|
49,639
|
17.22
|
%
|
37,196
|
12.88
|
%
|
-17.63
|
%
|
|||||||||||
Mortgage-backed
securities AFS
|
8,646
|
3.40
|
%
|
8,210
|
3.07
|
%
|
15,415
|
5.34
|
%
|
27,795
|
9.64
|
%
|
40,984
|
14.19
|
%
|
47.55
|
%
|
|||||||||||
Cash
and cash equivalents
|
6,681
|
2.63
|
%
|
9,331
|
3.49
|
%
|
12,175
|
4.22
|
%
|
7,145
|
2.48
|
%
|
15,696
|
5.43
|
%
|
23.80
|
%
|
|||||||||||
Goodwill
|
2,727
|
1.07
|
%
|
2,727
|
1.02
|
%
|
2,727
|
0.95
|
%
|
2,727
|
0.95
|
%
|
2,727
|
0.94
|
%
|
0.00
|
%
|
|||||||||||
FHLB
Stock
|
1,539
|
0.61
|
%
|
1,109
|
0.41
|
%
|
1,109
|
0.38
|
%
|
1,109
|
0.38
|
%
|
1,109
|
0.38
|
%
|
-7.87
|
%
|
|||||||||||
Bank-Owned
Life Insurance
|
—
|
0.00
|
%
|
334
|
0.12
|
%
|
3,186
|
1.10
|
%
|
3,907
|
1.36
|
%
|
4,095
|
1.42
|
%
|
NM
|
||||||||||||
Deposits
|
$
|
218,370
|
85.99
|
%
|
$
|
232,913
|
87.11
|
%
|
$
|
245,721
|
85.18
|
%
|
$
|
238,151
|
82.61
|
%
|
$
|
254,700
|
88.18
|
%
|
3.92
|
%
|
||||||
Borrowings
|
11,350
|
4.47
|
%
|
9,035
|
3.38
|
%
|
14,936
|
5.18
|
%
|
21,133
|
7.33
|
%
|
3,789
|
1.31
|
%
|
-23.99
|
%
|
|||||||||||
Stockholders’
equity
|
$
|
20,103
|
7.92
|
%
|
$
|
21,145
|
7.91
|
%
|
$
|
22,618
|
7.84
|
%
|
$
|
24,259
|
8.42
|
%
|
$
|
25,263
|
8.75
|
%
|
5.88
|
%
|
||||||
Tangible
stockholders’ equity
|
$
|
17,376
|
6.84
|
%
|
$
|
18,418
|
6.89
|
%
|
$
|
19,891
|
6.89
|
%
|
$
|
21,532
|
7.47
|
%
|
$
|
22,536
|
7.80
|
%
|
6.72
|
%
|
||||||
Loans/Deposits
|
65.38
|
%
|
66.66
|
%
|
72.33
|
%
|
77.40
|
%
|
68.51
|
%
|
||||||||||||||||||
Banking
offices (2)
|
7
|
7
|
7
|
7
|
7
|
(1)
|
Ratios
are as a percent of ending assets.
|
(2)
|
Figures
include four full service offices and three transactional
facilities.
|
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.8 |
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.9 |
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.10 |
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.11 |
For
the Fiscal Year Ended December 31,
|
||||||||||||||||||||||||||
2005
|
2006
|
2007
|
2008
|
2009
|
||||||||||||||||||||||
Amount
|
Pct(1)
|
Amount
|
Pct(1)
|
Amount
|
Pct(1)
|
Amount
|
Pct(1)
|
Amount
|
Pct(1)
|
|||||||||||||||||
($000)
|
(%)
|
($000)
|
(%)
|
($000)
|
(%)
|
($000)
|
(%)
|
($000)
|
(%)
|
|||||||||||||||||
Interest
income
|
$
|
12,423
|
4.97
|
%
|
$
|
13,978
|
5.47
|
%
|
$
|
15,610
|
5.55
|
%
|
$
|
15,908
|
5.45
|
%
|
$
|
14,420
|
4.85
|
%
|
||||||
Interest
expense
|
(4,987
|
)
|
-1.99
|
%
|
(7,031
|
)
|
-2.75
|
%
|
(9,056
|
)
|
-3.22
|
%
|
(7,716
|
)
|
-2.64
|
%
|
(5,432
|
)
|
-1.83
|
%
|
||||||
Net
interest income
|
$
|
7,437
|
2.97
|
%
|
$
|
6,947
|
2.72
|
%
|
$
|
6,553
|
2.33
|
%
|
$
|
8,192
|
2.81
|
%
|
$
|
8,988
|
3.02
|
%
|
||||||
Provision
for loan losses
|
(245
|
)
|
-0.10
|
%
|
(60
|
)
|
-0.02
|
%
|
(155
|
)
|
-0.06
|
%
|
(310
|
)
|
-0.11
|
%
|
(2,575
|
)
|
-0.87
|
%
|
||||||
Net
interest income after provisions
|
$
|
7,192
|
2.88
|
%
|
$
|
6,887
|
2.69
|
%
|
$
|
6,398
|
2.27
|
%
|
$
|
7,882
|
2.70
|
%
|
$
|
6,413
|
2.16
|
%
|
||||||
Other
operating income
|
$
|
1,375
|
0.55
|
%
|
$
|
1,400
|
0.55
|
%
|
$
|
1,646
|
0.58
|
%
|
$
|
1,911
|
0.65
|
%
|
$
|
2,014
|
0.68
|
%
|
||||||
Commission
income
|
684
|
0.27
|
%
|
782
|
0.31
|
%
|
846
|
0.30
|
%
|
1,021
|
0.35
|
%
|
869
|
0.29
|
%
|
|||||||||||
Mortgage
banking income
|
98
|
0.04
|
%
|
74
|
0.03
|
%
|
(5
|
)
|
0.00
|
%
|
196
|
0.07
|
%
|
737
|
0.25
|
%
|
||||||||||
Operating
expense
|
(8,054
|
)
|
-3.22
|
%
|
(7,893
|
)
|
-3.09
|
%
|
(8,261
|
)
|
-2.94
|
%
|
(8,793
|
)
|
-3.01
|
%
|
(9,249
|
)
|
-3.11
|
%
|
||||||
Net
operating income
|
$
|
1,295
|
0.52
|
%
|
$
|
1,249
|
0.49
|
%
|
$
|
624
|
0.22
|
%
|
$
|
2,217
|
0.76
|
%
|
$
|
785
|
0.26
|
%
|
||||||
Non-Operating
Income
|
||||||||||||||||||||||||||
Gain(loss)
on sale of investment securities
|
17
|
0.01
|
%
|
(21
|
)
|
-0.01
|
%
|
5
|
0.00
|
%
|
33
|
0.01
|
%
|
589
|
0.20
|
%
|
||||||||||
Impairment
charge on mortgage servicing asset
|
0
|
0.00
|
%
|
0
|
0.00
|
%
|
0
|
0.00
|
%
|
(428
|
)
|
-0.15
|
%
|
123
|
0.04
|
%
|
||||||||||
Net
non-operating income
|
$
|
17
|
0.01
|
%
|
($
|
21
|
)
|
-0.01
|
%
|
$
|
5
|
0.00
|
%
|
($
|
395
|
)
|
-0.14
|
%
|
$
|
712
|
0.24
|
%
|
||||
Net
income before tax
|
$
|
1,312
|
0.52
|
%
|
$
|
1,229
|
0.48
|
%
|
$
|
629
|
0.22
|
%
|
$
|
1,822
|
0.62
|
%
|
$
|
1,497
|
0.50
|
%
|
||||||
Income
tax provision
|
(412
|
)
|
-0.16
|
%
|
(333
|
)
|
-0.13
|
%
|
(10
|
)
|
0.00
|
%
|
(304
|
)
|
-0.10
|
%
|
(101
|
)
|
-0.03
|
%
|
||||||
Net
income (loss)
|
$
|
900
|
0.36
|
%
|
$
|
895
|
0.35
|
%
|
$
|
619
|
0.22
|
%
|
$
|
1,518
|
0.52
|
%
|
$
|
1,396
|
0.47
|
%
|
||||||
Adjusted
Earnings
|
||||||||||||||||||||||||||
Net
income
|
$
|
900
|
0.36
|
%
|
$
|
895
|
0.35
|
%
|
$
|
619
|
0.22
|
%
|
$
|
1,518
|
0.52
|
%
|
$
|
1,396
|
0.47
|
%
|
||||||
Add(Deduct):
Net gain/(loss) on sale
|
(17
|
)
|
-0.01
|
%
|
21
|
0.01
|
%
|
(5
|
)
|
0.00
|
%
|
395
|
0.14
|
%
|
(712
|
)
|
-0.24
|
%
|
||||||||
Tax
effect (2)
|
6
|
0.00
|
%
|
(7
|
)
|
0.00
|
%
|
2
|
0.00
|
%
|
(134
|
)
|
-0.05
|
%
|
256
|
0.09
|
%
|
|||||||||
Adjusted
earnings
|
$
|
889
|
0.36
|
%
|
$
|
909
|
0.36
|
%
|
$
|
616
|
0.22
|
%
|
$
|
1,779
|
0.61
|
%
|
$
|
941
|
0.32
|
%
|
||||||
Expense
Coverage Ratio (3)
|
92.3
|
%
|
88.0
|
%
|
79.3
|
%
|
93.2
|
%
|
97.2
|
%
|
||||||||||||||||
Efficiency
Ratio (4)
|
83.9
|
%
|
85.8
|
%
|
91.4
|
%
|
77.7
|
%
|
73.4
|
%
|
||||||||||||||||
Average
Tax Rate
|
31.4
|
%
|
27.1
|
%
|
1.6
|
%
|
16.7
|
%
|
6.7
|
%
|
(1)
|
Ratios
are as a percent of average assets.
|
(2)
|
Assumes
a 34.0% effective tax rate.
|
(3)
|
Expense
coverage ratio calculated as net interest income before provisions for
loan losses divided by operating expenses.
|
(4)
|
Efficiency
ratio calculated as operating expenses divided by the sum of net interest
income before provisions for loan losses plus other income (excluding net
gains).
|
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.12 |
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.13 |
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.14 |
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.15 |
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.16 |
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.17 |
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.18 |
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I.19 |
RP ® Financial, LC. | OVERVIEW AND FINANCIAL ANALYSIS |
I. 20 |
OVERVIEW AND FINANCIAL ANALYSIS | |
RP ® Financial, LC. | I.21 |
RP ® Financial, LC. | MARKET AREA |
II.1 |
RP ® Financial, LC. | MARKET AREA |
II.2 |
RP ® Financial, LC. | MARKET AREA |
II.3 |
RP ® Financial, LC. | MARKET AREA |
II.4 |
RP ® Financial, LC. | MARKET AREA |
II.5 |
Year |
Growth
Rate
|
|||||||||||||||||||
2000
|
2009
|
2014
|
2000-2009 | 2009-2014 | ||||||||||||||||
Population
(000)
|
||||||||||||||||||||
United
States
|
281,422 | 309,732 | 324,063 | 1.1 | % | 0.9 | % | |||||||||||||
Illinois
|
12,419 | 13,115 | 13,412 | 0.6 | % | 0.4 | % | |||||||||||||
Morgan
County
|
36,616 | 35,641 | 34,864 | -0.3 | % | -0.4 | % | |||||||||||||
Montgomery
County
|
30,652 | 30,197 | 29,856 | -0.2 | % | -0.2 | % | |||||||||||||
Macoupin
County
|
49,019 | 48,614 | 48,132 | -0.1 | % | -0.2 | % | |||||||||||||
Households
(000)
|
||||||||||||||||||||
United
States
|
105,480 | 116,523 | 122,109 | 1.1 | % | 0.9 | % | |||||||||||||
Illinois
|
4,592 | 4,844 | 4,951 | 0.6 | % | 0.4 | % | |||||||||||||
Morgan
County
|
14,039 | 13,851 | 13,580 | -0.1 | % | -0.4 | % | |||||||||||||
Montgomery
County
|
11,507 | 11,502 | 11,418 | 0.0 | % | -0.1 | % | |||||||||||||
Macoupin
County
|
19,253 | 19,328 | 19,218 | 0.0 | % | -0.1 | % | |||||||||||||
Median
Household Income ($)
|
||||||||||||||||||||
United
States
|
$ | 42,164 | $ | 54,719 | $ | 56,938 | 2.9 | % | 0.8 | % | ||||||||||
Illinois
|
46,635 | 60,823 | 63,631 | 3.0 | % | 0.9 | % | |||||||||||||
Morgan
County
|
36,917 | 46,644 | 50,311 | 2.6 | % | 1.5 | % | |||||||||||||
Montgomery
County
|
33,247 | 40,791 | 41,922 | 2.3 | % | 0.5 | % | |||||||||||||
Macoupin
County
|
36,258 | 45,635 | 48,684 | 2.6 | % | 1.3 | % | |||||||||||||
Per
Capita Income ($)
|
||||||||||||||||||||
United
States
|
$ | 21,587 | $ | 27,277 | $ | 28,494 | 2.6 | % | 0.9 | % | ||||||||||
Illinois
|
23,104 | 28,587 | 29,827 | 2.4 | % | 0.9 | % | |||||||||||||
Morgan
County
|
18,205 | 23,074 | 23,976 | 2.7 | % | 0.8 | % | |||||||||||||
Montgomery
County
|
16,272 | 19,958 | 20,717 | 2.3 | % | 0.7 | % | |||||||||||||
Macoupin
County
|
17,298 | 21,633 | 22,435 | 2.5 | % | 0.7 | % | |||||||||||||
Less
Than
|
$ | 25,000 | to | $ | 50,000 | to | ||||||||||||||
2009
HH Income Dist. (%)
|
$ | 25,000 | 50,000 | 100,000 | $ | 100,000 | + | |||||||||||||
United
States
|
20.9 | % | 24.5 | % | 35.3 | % | 19.3 | % | ||||||||||||
Illinois
|
18.2 | % | 22.2 | % | 39.3 | % | 20.3 | % | ||||||||||||
Morgan
County
|
22.9 | % | 29.4 | % | 39.4 | % | 8.3 | % |
RP ® Financial, LC. | MARKET AREA |
II.6 |
Location | |||||||||||||||||
Employment
Sector
|
|
Illinois
|
Morgan
County
|
Montgomery
County
|
Macoupin
County
|
||||||||||||
(% of Total Employment) | |||||||||||||||||
Services
|
38.4 | % | 33.0 | % | 31.5 | % | 14.6 | % | |||||||||
Wholesale/Retail
Trade
|
14.5 | % | 14.5 | % | 18.6 | % | 17.2 | % | |||||||||
Manufacturing
|
9.2 | % | 13.1 | % | 6.6 | % | 5.1 | % | |||||||||
Government
|
11.8 | % | 12.4 | % | 13.5 | % | 14.8 | % | |||||||||
Construction
|
5.4 | % | 4.9 | % | 5.6 | % | 8.1 | % | |||||||||
Finance/Insurance/Real
Esate
|
9.7 | % | 7.4 | % | 7.2 | % | 6.7 | % | |||||||||
Arts/Entertainment/Rec.
|
2.0 | % | 1.3 | % | 1.2 | % | 1.5 | % | |||||||||
Agriculture
|
1.2 | % | 4.6 | % | 7.7 | % | 7.6 | % | |||||||||
Transportation/Utility
|
4.4 | % | 4.1 | % | 0.0 | % | 4.5 | % | |||||||||
Other
|
3.4 | % | 4.6 | % | 8.1 | % | 19.9 | % | |||||||||
Total
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
RP ® Financial, LC. | MARKET AREA |
II.7 |
Region |
December 2008
Unemployment |
December 2009
Unemployment |
||||||
United States | 7.2 | % | 10.0 | % | ||||
Ilinois | 7.4 | % | 10.8 | % | ||||
Morgan County | 7.4 | % | 9.5 | % | ||||
Montgomery County | 10.9 | % | 14.1 | % | ||||
Macoupin County | 8.5 | % | 11.1 | % | ||||
Source: U.S. Bureau of Labor Statistics. |
RP ® Financial, LC. | MARKET AREA |
II.8 |
As of June 30, |
Deposit
Growth Rate 2005-2009 |
|||||||||||||||||||||||||||
2005 |
2009
|
|||||||||||||||||||||||||||
Deposits
|
Market
Share |
Number
of
Branches |
Deposits
|
Market
Share
|
No.
of
Branches
|
|||||||||||||||||||||||
(Dollars In Thousands) | (%) | |||||||||||||||||||||||||||
Deposit
Summary
|
||||||||||||||||||||||||||||
State
of Illinois
|
$ | 303,650,917 | 100.0 | % | 4,646 | $ | 360,684,791 | 100.0 | % | 4,989 | 4.4 | % | ||||||||||||||||
Commercial
Banks
|
269,105,481 | 88.6 | % | 4,074 | 336,479,307 | 93.3 | % | 4,703 | 5.7 | % | ||||||||||||||||||
Savings
Institutions
|
34,545,436 | 11.4 | % | 572 | 24,205,484 | 6.7 | % | 286 | -8.5 | % | ||||||||||||||||||
Montgomery
County
|
$ | 577,465 | 100.0 | % | 24 | $ | 687,948 | 100.0 | % | 24 | 4.5 | % | ||||||||||||||||
Commercial
Banks
|
538,632 | 93.3 | % | 22 | 643,124 | 93.5 | % | 22 | 4.5 | % | ||||||||||||||||||
Savings
Institutions
|
38,833 | 6.7 | % | 2 | 44,824 | 6.5 | % | 2 | 3.7 | % | ||||||||||||||||||
Jacksonville
Bancorp
|
21,491 | 3.7 | % | 1 | 26,906 | 3.9 | % | 1 | 5.8 | % | ||||||||||||||||||
Morgan
County
|
$ | 655,850 | 100.0 | % | 23 | $ | 817,502 | 100.0 | % | 22 | 5.7 | % | ||||||||||||||||
Commercial
Banks
|
478,015 | 72.9 | % | 17 | 603,605 | 73.8 | % | 17 | 6.0 | % | ||||||||||||||||||
Savings
Institutions
|
177,835 | 27.1 | % | 6 | 213,897 | 26.2 | % | 5 | 4.7 | % | ||||||||||||||||||
Jacksonville
Bancorp
|
177,835 | 27.1 | % | 6 | 213,897 | 26.2 | % | 5 | 4.7 | % | ||||||||||||||||||
Macoupin
County
|
$ | 728,716 | 100.0 | % | 28 | $ | 794,059 | 100.0 | % | 28 | 2.2 | % | ||||||||||||||||
Commercial
Banks
|
711,874 | 97.7 | % | 27 | 777,483 | 97.9 | % | 27 | 2.2 | % | ||||||||||||||||||
Savings
Institutions
|
16,842 | 2.3 | % | 1 | 16,576 | 2.1 | % | 1 | -0.4 | % | ||||||||||||||||||
Jacksonville
Bancorp
|
16,842 | 2.3 | % | 1 | 16,576 | 2.1 | % | 1 | -0.4 | % | ||||||||||||||||||
Source:
FDIC.
|
RP ® Financial, LC. | MARKET AREA |
II.9 |
Location
|
|
Name
|
|
||
Morgan
County
|
Farmers
State B&T (18.53%)
|
||||
Premier
Bank of Jacksonville (10.02%)
|
|||||
National
City Bank (8.50%)
|
|||||
Jacksonville
Bancorp
(26.18%)
|
|||||
Montgomery
County
|
Bank
& Trust Co. (22.31%)
|
||||
National
Bank (11.28%)
|
|||||
Litchfield
National Bank (10.28%)
|
|||||
Jacksonville
Bancorp
(3.91%)
|
|||||
Macoupin
County
|
First
NB in Staunton (20.80%)
|
||||
Carlinville
National Bank (16.56%)
|
|||||
United
Community Bank (9.82%)
|
|||||
Jacksonville
Bancorp
(2.09%)
|
|||||
Source:
FDIC
|
RP ® Financial, LC. | PEER GROUP ANALYSIS |
III. 1 |
RP ® Financial, LC. | PEER GROUP ANALYSIS |
III. 2 |
●
|
Screen
#1 Midwest institutions with assets between $150 million and
$1.0 billion (rounded) and breakeven to positive core
earnings.
A total of nine institutions met the foregoing
criteria and all were included in the Peer Group. Exhibit III-2
provides financial and public market pricing characteristics of all
publicly-traded Midwest
thrifts.
|
●
|
HopFed
Bancorp, Inc. of KY
.
HopFed
Bancorp is the largest company in the Peer Group and operates through a
total of 19 offices in south-central Kentucky and north-central
Tennessee. Accordingly, the nature of HopFed’s banking markets
outside of major metropolitan areas is similar to the Company’s
markets. HopFed Bancorp
maintains
a broadly diversified asset base funded primarily by deposits and, to a
lesser extent, borrowed funds. Loan portfolio diversification
is slightly greater in the area of commercial mortgage lending relative to
the Peer Group average. Earnings were impacted by a goodwill
impairment charge and were thus, only modestly above
breakeven.
At September 30, 2009, HopFed Bancorp
reported total assets of $1.0 billion, deposits of $794.1 million and a
tangible equity-to-assets ratio of 7.8%. For the twelve months
ended September 30, 2009, HopFed Bancorp reported earnings of $475,000 for
a return on average assets of 0.05%. HopFed Bancorp had a
market capitalization of $39 million at February 19,
2010.
|
RP ® Financial, LC. | PEER GROUP ANALYSIS |
III. 3 |
Ticker
|
Financial
Institution
|
Exchange
|
Primary
Market
|
Operating
Strategy(1)
|
Total
Assets(2)
|
Offices
|
Fiscal
Year
|
Conv.
Date
|
Stock
Price
|
Market
Value
|
||||||||||||||||||||||
($)
|
($Mil)
|
|||||||||||||||||||||||||||||||
HFBC
|
HopFed
Bancorp, Inc. of KY
|
NASDAQ
|
Hopkinsville,
KY
|
Thrift
|
$ | 1,022 | $ | 19 | 12-31 | 02/98 | $ | 10.98 | $ | 39 | ||||||||||||||||||
CZWI
|
Citizens
Community Bancorp Inc. of WI
|
NASDAQ
|
Eau
Claire, WI
|
Thrift
|
$ | 567 | 27 | 09-30 | 11/06 | $ | 4.00 | $ | 20 | |||||||||||||||||||
FSFG
|
First
Savings Financial Group of IN
|
NASDAQ
|
Clarksville,
IN
|
Thrift
|
$ | 491 | 14 | 09-30 | 12/08 | $ | 10.40 | $ | 25 | |||||||||||||||||||
FCAP
|
First
Capital, Inc. of IN
|
NASDAQ
|
Corydon,
IN
|
Thrift
|
$ | 457 | $ | 12 | 12-31 | 01/99 | $ | 14.34 | $ | 40 | ||||||||||||||||||
LBCP
|
Liberty
Bancorp, Inc. of MO
|
NASDAQ
|
Liberty,
MO
|
Thrift
|
$ | 406 | 10 | 09-30 | 07/06 | $ | 7.75 | $ | 28 | |||||||||||||||||||
WAYN
|
Wayne
Savings Bancshares of OH
|
NASDAQ
|
Wooster,
OH
|
Thrift
|
$ | 403 | 11 | 03-31 | 01/03 | $ | 6.30 | $ | 19 | |||||||||||||||||||
WVFC
|
WVS
Financial Corp. of PA
|
NASDAQ
|
Pittsburgh,
PA
|
Thrift
|
$ | 392 | 6 | 06-30 | 11/93 | $ | 13.96 | $ | 29 | |||||||||||||||||||
RIVR
|
River
Valley Bancorp of IN
|
NASDAQ
|
Madison,
IN
|
Thrift
|
$ | 385 | $ | 10 | 12-31 | 12/96 | $ | 12.42 | $ | 19 | ||||||||||||||||||
LSBI
|
LSB
Financial Corp. of Lafayette IN
|
NASDAQ
|
Lafayette,
IN
|
Thrift
|
$ | 364 | $ | 5 | 12-31 | 02/95 | $ | 10.00 | $ | 16 | ||||||||||||||||||
FFDF
|
FFD
Financial Corp. of Dover OH
|
NASDAQ
|
Dover,
OH
|
Thrift
|
$ | 198 | 5 | 06-30 | 04/96 | $ | 13.25 | $ | 13 |
NOTES:
|
(1)
|
Operating
strategies are: Thrift=Traditional Thrift, M.B.=Mortgage Banker, R.E.=Real
Estate Developer, Div.=Diversified and Ret.=Retail
Banking.
|
(2)
|
Most
recent quarter end available (E=Estimated and P=Pro
Forma).
|
RP ® Financial, LC. | PEER GROUP ANALYSIS |
III. 4 |
●
|
Citizens
Community Bancorp of WI.
Citizens Community Bancorp
operates through a total of 27 offices in Wisconsin and
Minnesota. Also reflecting its status as a former credit union,
Citizens Community Bancorp’s loan portfolio has the largest proportion of
consumer loan in comparison to any of the Peer Group companies although
permanent 1-4 family mortgage loans comprise the largest segment of
lending. Asset quality ratios are slightly more favorable in relation to
the Peer Group average while trailing twelve month losses reported by
Citizens Community Bancorp are attributable to credit related market value
declines in the investment portfolio. At December 31, 2009,
Citizens Community Bancorp had total assets of $566.6 million, deposits of
$445.2 million and a tangible equity-to-assets ratio of
9.1%. For the twelve months ended December 31, 2009, Citizens
Community Bancorp reported a net loss equal to $3.3 million owing to a
$7.2 million pre-tax loss on securities. Citizens Community
Bancorp had a market capitalization of $20 million at February 19,
2010.
|
●
|
First
Savings Financial Group of Indiana
operates 14 branch offices in
southern Indiana, including 7 newly-acquired offices with an acquisition
completed in September 2009. First Savings Financial Group,
Inc. maintains loans and deposits/assets ratios which are comparable to
the Peer Group averages while the loan portfolio composition reflects a
higher proportion of residential mortgage loans. The ROA
modestly exceeds the Peer Group average with the higher earnings in the
most recent quarter reflecting the benefit of the September 2009
acquisition. In terms of asset quality, the NPA/Assets ratio
fell between the Peer Group average and median while reserve coverage was
also relatively comparable to the Peer Group. At December 31,
2009, First Savings Financial Group had total assets of $491.4 million,
deposits of $353.9 million and a tangible equity-to-assets ratio of
9.0%. For the twelve months ended December 31, 2009, First
Savings Financial Group reported earnings of $1.6 million for a return on
average assets of 0.46%. First Savings Financial Group had a
market capitalization of $25 million at February 19,
2010.
|
●
|
First
Capital, Inc. of IN
operates 12 offices in southern Indiana. First
Capital’s asset mixture reflects a comparable ratio of loans/assets in
comparison to the Peer Group with the loan portfolio possessing a higher
proportion of residential mortgage loans. First Capital’s ROA
measure fell between the Peer Group median and average as loan loss
provisions offset the benefit of First Capital’s stronger net interest
margin and higher non-interest fee income in relation to the valuation
Peer Group. In addition to higher loan loss provision, other
asset quality measures were less favorable for First Capital compared to
the Peer Group, both respect to the level of NPAs and reserves as a
percent of NPAs. At December 31, 2009, First Capital had total
assets of $456.6 million, deposits of $368.6 million and a tangible
equity-to-assets ratio of 9.0%. For the twelve months ended
December 31, 2009, First Capital reported earnings of $1.4 million for a
return on average assets of 0.31%. First Capital had a market
capitalization of $40 million at February 19,
2010.
|
RP ® Financial, LC. | PEER GROUP ANALYSIS |
III. 5 |
●
|
Liberty
Bancorp, Inc. of MO
operates through a total of 10 branch offices
in western Missouri, a portion of which are in the Kansas City
metropolitan area. The balance sheet composition is relatively
similar to the Peer Group in broad terms (i.e., loans and deposits as a
percent of assets) while the loan portfolio is more heavily weighted
toward commercial mortgage and construction loans. Liberty
Bancorp’s ROA is higher than the Peer Group average as the yield benefit
of the greater high risk-weight lending more than offset a higher
operating expense ratio in comparison to the Peer Group. NPAs
are above the Peer Group average and median ratios while reserve coverage
in relation to NPAs and NPLs is lower. At December 31, 2009,
Liberty Bancorp had total assets of $406.3 million, deposits of $288.3
million and a tangible equity-to-assets ratio of 10.4%. For the twelve
months ended December 31, 2009, Liberty Bancorp reported net income of
$2.2 million for a return on average assets of 0.56%. Liberty
Bancorp had a market capitalization of $28 million at February 19,
2010.
|
●
|
Wayne
Savings Bancshares of OH
operates 11 branches in central
Ohio. The asset structure reflects a relatively lower
proportion of loans/assets, with the majority of loans invested in 1-4
family loans inclusive of an investment in MBS. In comparison
to the Peer Group average, deposits funded a greater proportion of the
balance sheet and borrowed funds were employed to a lesser
extent. Wayne Savings Bancshares maintained a ratio of NPAs
which was modestly below the average and median for the Peer Group which
facilitated an above average ROA. At December 31, 2009, Wayne
Savings Bancshares had total assets of $403.3 million, deposits of $309.0
million and a tangible equity-to-assets ratio of 8.6%. For the
twelve months ended December 31, 2009, Wayne Savings Bancshares reported
net income equal to $2.0 million for a return on average assets of
0.49%. Wayne Savings Bancshares had a market capitalization of
$19 million at February 19,
2010.
|
●
|
WVS
Financial Corp. of PA
operates through a total of 6 branches in the
North Hills suburbs of the Pittsburgh metropolitan area. The
balance sheet reflects a significant wholesale element, as MBS and
investments constitute the majority of assets while borrowed funds
comprise the largest segment of liabilities. WVS Financial
operates with a low risk-weighted asset ratio and limited credit risk
exposure as a result of significant investment in securities and
MBS. While the wholesale strategy has provided for relatively
strong asset quality, WVS Financial Corp.’s ROA falls between the Peer
Group average and median owing to thin spreads and margins and
notwithstanding the benefit of a very low operating expense
ratio. At December 31, 2009, WVS Financial Corp. reported total
assets of $391.6 million, deposits of $144.6 million and a tangible
equity-to-assets ratio of 7.8%. For the twelve months ended
December 31, 2009, WVS Financial Corp. reported earnings of $1.4 million
for a return on average assets of 0.34%. WVS Financial Corp.
had a market capitalization of $29 million at February 19,
2010.
|
●
|
River
Valley Bancorp of IN.
River Valley Bancorp is a savings
and loan holding company operating 10
branch offices in southern Indiana. River Valley Bancorp
maintains a broadly diversified loan portfolio primarily focused on
mortgage loans (both residential and commercial) and funds operations with
deposits which are supplemented with borrowings at levels above the Peer
Group average. Asset quality is comparatively weaker in
comparison to the Peer Group average, both with respect to the NPA/Assets
ratio as well as reserve coverage in relation to total loans, NPLs and
NPAs. River Valley Bancorp’s ROA is above the Peer Group
average and median, notwithstanding relatively high loan loss provisions,
as River Valley Bancorp benefits from a high level of non-interest income
and a favorable operating expense ratio in comparison to the Peer Group
average.
At December 31, 2009, River Valley Bancorp
reported total assets of $385.3 million, deposits of $267.9 million and a
tangible equity-to-assets ratio of 6.6%. For the twelve months
ended December 31, 2009, River Valley Bancorp reported earnings of $1.6
million for a return on average assets of 0.42%. River Valley
Bancorp had a market capitalization of $19 million at February 19,
2010.
|
RP ® Financial, LC. | PEER GROUP ANALYSIS |
III. 6 |
●
|
LSB
Bancorp, Inc. of IN
operates through a total of 5 branches in and
near Lafayette, Indiana, which is situated in western
Indiana. The asset investment strategy is directed toward whole
mortgage loans as balances of cash, investments and MBS are limited in
comparison to the Peer Group. The loan portfolio reflects the
most significant investment in commercial mortgage loans of any Peer Group
company followed by residential mortgage loans which were also in excess
of the Peer Group average. Notwithstanding the significant
investment in high risk-weight loans and the associated strong asset
yields, LSB Bancorp’s ROA is below the Peer Group average as a result of
its (1) funding costs, (2) loan loss provisions and (3) operating expense
ratio, all of which are above the Peer Group average. Asset
quality ratios are generally less favorable for LSB Bancorp, both in terms
of the level of NPAs and reserve coverage as a percent of NPLs and NPAs –
all were key factors in the LSB Bancorp’s higher loan loss
provisions. At September 30, 2010, LSB Bancorp reported total
assets of $363.6 million, deposits of $268.5 million and a tangible
equity-to-assets ratio of 9.4%. For the twelve months ended
December 31, 2009, LSB Bancorp reported earnings of $950,000 for a return
on average assets of 0.25%. LSB Bancorp had a market
capitalization of $16 million at February 19,
2010.
|
●
|
FFD
Financial Corp. of OH
operates through five retail banking offices
in eastern Ohio. The balance sheet reflects a retail
orientation as whole loans and deposits comprise a high proportion of
interest-earning assets and interest-bearing liabilities in comparison to
the Peer Group. Lending efforts are directed primarily toward
mortgages, including both residential and commercial mortgage loans, both
of which exceed the Peer Group’s average investment in relation to total
assets. FFD Financial’s ROA is only modestly above the Peer
Group average and median as the various components of core earnings
tracked relatively closely to those of the Peer Group. Asset
quality ratios for FFD Financial Corp. were generally more favorable than
the Peer Group average, both in terms of the level of NPAs and the
coverage ratios. At December 31, 2009, FFD Financial had total
assets of $197.7 million, deposits of $164.0 million and a tangible
equity-to-assets ratio of 9.1%. For the twelve months ended
December 31, 2009, FFD Financial reported earnings of $783,000 for a
return on average assets of 0.41%. FFD Financial had a market
capitalization of $13 million at February 19,
2010.
|
RP ® Financial, LC. | PEER GROUP ANALYSIS |
III. 7 |
All
|
||||||||
Publicly-Traded
|
Peer
Group
|
|||||||
Financial
Characteristics (Averages)
|
||||||||
Assets
($Mil)
|
$ | 3,022 | $ | 469 | ||||
Market
Capitalization ($Mil)
|
$ | 348 | $ | 25 | ||||
Tangible
Equity/Assets (%)
|
10.00 | % | 8.67 | % | ||||
Core
Return on Average Assets (%)
|
(0.27 | %) | 0.28 | % | ||||
Core
Return on Average Equity (%)
|
(1.69 | %) | 2.90 | % | ||||
Pricing
Ratios (Averages)
(1)
|
||||||||
Price/Core
Earnings (x)
|
18.45 | x | 18.92 | x | ||||
Price/Tangible
Book (%)
|
77.76 | % | 66.79 | % | ||||
Price/Assets
(%)
|
8.00 | % | 5.61 | % |
RP ® Financial, LC. | PEER GROUP ANALYSIS |
III. 8 |
Balance
Sheet as a Percent of Assets
|
Balance Sheet Annual Growth Rates | Regulatory Capital | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash
&
Equivalents
|
MBS
&
Invest
|
BOLI | Loans | Deposits |
Borrowed
Funds
|
Subd.
Debt
|
Net
Worth
|
Goodwill
&
Intang
|
Tng
Net
Worth
|
Assets
|
MBS,
Cash &
Investments
|
Loans | Deposits |
Borrow
s.
&Subdebt
|
Net
Worth
|
Tng
Net
Worth
|
Tangible
|
Core
|
Reg.Cap. | ||||||||||||||||||||||||||||||||||||||||||
Jacksonville
Bancorp, Inc.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December
31, 2009
|
5.4 | % | 27.5 | % | 1.4 | % | 60.4 | % | 88.2 | % | 1.3 | % | 0.0 | % | 8.8 | % | 0.9 | % | 7.8 | % | 0.20 | % | 10.85 | % | -5.34 | % | 6.95 | % | -82.07 | % | 4.14 | % | 4.66 | % | 7.44 | % | 7.44 | % | 11.83 | % | |||||||||||||||||||||
All
Public Companies
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Averages
|
4.6 | % | 20.5 | % | 1.4 | % | 68.7 | % | 70.8 | % | 16.1 | % | 0.5 | % | 11.5 | % | 0.8 | % | 10.7 | % | 5.86 | % | 14.50 | % | 3.10 | % | 13.11 | % | -15.29 | % | 3.52 | % | 3.93 | % | 10.03 | % | 9.92 | % | 16.39 | % | |||||||||||||||||||||
Medians
|
3.6 | % | 18.4 | % | 1.4 | % | 69.9 | % | 71.7 | % | 14.5 | % | 0.0 | % | 10.3 | % | 0.0 | % | 9.4 | % | 3.77 | % | 8.90 | % | 1.30 | % | 10.15 | % | -14.95 | % | 1.10 | % | 1.01 | % | 9.25 | % | 9.18 | % | 13.90 | % | |||||||||||||||||||||
State
of IL
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Averages
|
6.3 | % | 18.4 | % | 1.6 | % | 68.2 | % | 76.0 | % | 9.9 | % | 0.2 | % | 12.6 | % | 1.2 | % | 11.4 | % | 8.37 | % | 23.67 | % | 7.52 | % | 16.07 | % | -22.26 | % | -0.06 | % | -0.43 | % | 11.00 | % | 11.00 | % | 16.65 | % | |||||||||||||||||||||
Medians
|
6.8 | % | 17.7 | % | 1.3 | % | 66.6 | % | 75.4 | % | 8.2 | % | 0.0 | % | 12.4 | % | 1.3 | % | 11.3 | % | 4.40 | % | 10.44 | % | 1.58 | % | 11.92 | % | -21.50 | % | -2.09 | % | -2.56 | % | 10.42 | % | 10.42 | % | 18.60 | % | |||||||||||||||||||||
Comparable
Group
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Averages
|
4.2 | % | 22.7 | % | 1.1 | % | 68.2 | % | 71.1 | % | 18.5 | % | 0.3 | % | 9.2 | % | 0.5 | % | 8.6 | % | 4.93 | % | 17.30 | % | 12.62 | % | 10.59 | % | -12.52 | % | 3.71 | % | -2.45 | % | 8.67 | % | 8.67 | % | 12.87 | % | |||||||||||||||||||||
Medians
|
3.5 | % | 18.9 | % | 1.0 | % | 71.9 | % | 73.5 | % | 15.8 | % | 0.0 | % | 9.3 | % | 0.3 | % | 8.8 | % | 4.80 | % | 7.67 | % | 4.19 | % | 10.15 | % | -13.83 | % | 0.62 | % | 0.15 | % | 8.48 | % | 8.48 | % | 13.02 | % | |||||||||||||||||||||
Comparable
Group
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CZWI |
Citizens
Community Bancorp Inc. of WI
|
6.0 | % | 10.0 | % | 0.0 | % | 78.6 | % | 71.6 | % | 17.9 | % | 0.0 | % | 9.7 | % | 1.2 | % | 8.6 | % | 16.22 | % | 7.67 | % | 16.44 | % | 28.58 | % | -1.05 | % | -15.40 | % | -16.68 | % | 9.70 | % | 9.70 | % | 10.80 | % | ||||||||||||||||||||
FFDF |
FFD
Financial Corp. of Dover OH
|
4.8 | % | 6.4 | % | 0.0 | % | 85.8 | % | 82.9 | % | 7.1 | % | 0.0 | % | 9.1 | % | 0.0 | % | 9.1 | % | 7.50 | % | 4.17 | % | 6.80 | % | 12.86 | % | -24.22 | % | 0.15 | % | 0.15 | % | 9.00 | % | 9.00 | % | 12.20 | % | ||||||||||||||||||||
FCAP |
First
Capital, Inc. of IN (1)
|
3.7 | % | 20.2 | % | 1.2 | % | 70.1 | % | 80.7 | % | 8.5 | % | 0.0 | % | 10.2 | % | 1.2 | % | 9.0 | % | 2.52 | % | 18.61 | % | -1.94 | % | 10.15 | % | -37.04 | % | 0.73 | % | 1.01 | % | 8.66 | % | 8.66 | % | 13.99 | % | ||||||||||||||||||||
FSFG |
First
Savings Financial Group of IN
|
2.8 | % | 18.1 | % | 0.8 | % | 72.0 | % | 73.3 | % | 15.6 | % | 0.0 | % | 10.7 | % | 1.7 | % | 9.0 | % | NM | NM | 95.38 | % | NM | NM | 1.89 | % | -14.66 | % | 7.61 | % | 7.61 | % | 12.94 | % | ||||||||||||||||||||||||
HFBC |
HopFed
Bancorp, Inc. of KY (1)
|
1.8 | % | 30.3 | % | 0.8 | % | 63.4 | % | 74.9 | % | 15.5 | % | 1.0 | % | 7.9 | % | 0.1 | % | 7.8 | % | 21.19 | % | 92.69 | % | 4.27 | % | 18.35 | % | 25.52 | % | 42.94 | % | NM | 8.30 | % | 8.30 | % | 13.83 | % | |||||||||||||||||||||
LSBI |
LSB
Financial Corp. of Lafayette IN (1)
|
2.1 | % | 4.7 | % | 1.8 | % | 88.0 | % | 73.8 | % | 15.9 | % | 0.0 | % | 9.4 | % | 0.0 | % | 9.4 | % | -1.01 | % | -2.36 | % | -0.91 | % | 5.60 | % | -24.44 | % | 0.52 | % | 0.52 | % | 9.40 | % | 9.40 | % | 12.80 | % | ||||||||||||||||||||
LBCP |
Liberty
Bancorp, Inc. of MO
|
9.3 | % | 9.0 | % | 2.2 | % | 74.3 | % | 71.0 | % | 16.2 | % | 0.0 | % | 10.9 | % | 0.5 | % | 10.4 | % | 4.80 | % | 14.59 | % | 4.71 | % | 8.20 | % | -13.61 | % | 1.99 | % | 2.56 | % | 9.80 | % | 9.80 | % | 13.10 | % | ||||||||||||||||||||
RIVR |
River
Valley Bancorp of IN (1)
|
3.2 | % | 19.8 | % | 2.1 | % | 71.9 | % | 69.5 | % | 20.8 | % | 1.9 | % | 6.6 | % | 0.0 | % | 6.6 | % | 5.59 | % | 34.72 | % | -0.91 | % | 14.01 | % | -13.83 | % | -0.14 | % | -0.15 | % | 8.20 | % | 8.20 | % | 12.06 | % | ||||||||||||||||||||
WVFC |
WVS
Financial Corp. of PA
|
4.4 | % | 78.9 | % | 0.0 | % | 15.3 | % | 36.9 | % | 54.3 | % | 0.0 | % | 7.8 | % | 0.0 | % | 7.8 | % | -11.96 | % | -14.92 | % | 4.10 | % | -1.85 | % | -19.01 | % | -3.05 | % | -3.05 | % | 8.04 | % | 8.04 | % | 13.10 | % | ||||||||||||||||||||
WAYN |
Wayne
Savings Bancshares of OH
|
3.4 | % | 29.2 | % | 1.6 | % | 62.1 | % | 76.6 | % | 13.2 | % | 0.0 | % | 9.1 | % | 0.5 | % | 8.6 | % | -0.52 | % | 0.53 | % | -1.78 | % | -0.57 | % | -5.02 | % | 7.43 | % | 8.26 | % | 8.00 | % | 8.00 | % | 13.90 | % |
RP ® Financial, LC. | PEER GROUP ANALYSIS |
III. 9 |
RP ® Financial, LC. | PEER GROUP ANALYSIS |
III. 10 |
RP
®
Financial, LC.
|
PEER
GROUP ANALYSIS
|
III.12
|
Net
Interest Income
|
Other
Income
|
G&A/Other Exp. | Non-Op. Items | Yields, Costs, and Spreads | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net
Income |
Income
|
Expense
|
NII
|
Loss
Provis. on IEA |
NII
After Provis. |
Loan
Fees |
R.E.
Oper. |
Other
Income |
Total
Other Income |
G&A
Expense |
Goodwill
Amort. |
Net
Gains |
Extrao.
Items |
Yield
On Assets |
Cost
Of Funds |
Yld-Cost
Spread |
MEMO:
Assets/ FTE Emp. |
MEMO:
Effective
Tax Rate |
||||||||||||||||||||||||||||||||||||||||
Jacksonville
Bancorp, Inc.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December
31, 2009
|
0.47 | % | 4.85 | % | 1.83 | % | 3.02 | % | 0.87 | % | 2.16 | % | 0.00 | % | 0.00 | % | 1.22 | % | 1.22 | % | 3.11 | % | 0.00 | % | 0.24 | % | 0.00 | % | 5.30 | % | 2.22 | % | 3.08 | % | $ | 2,650 | 6.75 | % | ||||||||||||||||||||
All
Public Companies
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Averages
|
-0.08 | % | 4.99 | % | 2.09 | % | 2.90 | % | 0.83 | % | 2.07 | % | 0.02 | % | -0.06 | % | 0.79 | % | 0.76 | % | 2.70 | % | 0.11 | % | -0.07 | % | 0.03 | % | 5.30 | % | 2.41 | % | 2.89 | % | $ | 6,084 | 31.69 | % | ||||||||||||||||||||
Medians
|
0.28 | % | 5.00 | % | 2.04 | % | 2.91 | % | 0.44 | % | 2.37 | % | 0.00 | % | 0.00 | % | 0.58 | % | 0.57 | % | 2.69 | % | 0.00 | % | 0.00 | % | 0.00 | % | 5.29 | % | 2.42 | % | 2.92 | % | $ | 4,789 | 32.16 | % | ||||||||||||||||||||
State
of IL
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Averages
|
-0.35 | % | 4.88 | % | 2.00 | % | 2.88 | % | 0.45 | % | 2.43 | % | 0.03 | % | -0.14 | % | 0.71 | % | 0.61 | % | 2.98 | % | 0.44 | % | -0.05 | % | 0.00 | % | 5.27 | % | 2.32 | % | 2.94 | % | $ | 4,998 | 11.21 | % | ||||||||||||||||||||
Medians
|
-0.35 | % | 4.84 | % | 2.07 | % | 2.87 | % | 0.43 | % | 2.32 | % | 0.00 | % | -0.03 | % | 0.69 | % | 0.64 | % | 3.24 | % | 0.06 | % | -0.03 | % | 0.00 | % | 5.28 | % | 2.38 | % | 2.88 | % | $ | 4,006 | 11.21 | % | ||||||||||||||||||||
Comparable
Group
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Averages
|
0.26 | % | 5.09 | % | 2.17 | % | 2.92 | % | 0.43 | % | 2.48 | % | 0.01 | % | -0.05 | % | 0.59 | % | 0.55 | % | 2.56 | % | 0.08 | % | -0.04 | % | 0.00 | % | 5.36 | % | 2.42 | % | 2.94 | % | $ | 4,566 | 24.81 | % | ||||||||||||||||||||
Medians
|
0.38 | % | 5.20 | % | 2.15 | % | 3.24 | % | 0.44 | % | 2.64 | % | 0.00 | % | 0.00 | % | 0.65 | % | 0.54 | % | 2.77 | % | 0.02 | % | 0.09 | % | 0.00 | % | 5.50 | % | 2.38 | % | 3.17 | % | $ | 3,660 | 27.19 | % | ||||||||||||||||||||
Comparable
Group
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CZWI
Citizens Community Bancorp Inc. of WI
|
-0.61 | % | 5.91 | % | 2.62 | % | 3.29 | % | 0.35 | % | 2.94 | % | 0.07 | % | 0.00 | % | 0.37 | % | 0.44 | % | 2.79 | % | 0.06 | % | -1.50 | % | 0.00 | % | 6.20 | % | 2.97 | % | 3.24 | % | $ | 2,891 | 41.80 | % | ||||||||||||||||||||
FFDF
FFD Financial Corp. of Dover OH
|
0.41 | % | 5.34 | % | 2.13 | % | 3.21 | % | 0.21 | % | 3.00 | % | 0.00 | % | -0.01 | % | 0.16 | % | 0.16 | % | 2.75 | % | 0.00 | % | 0.26 | % | 0.00 | % | 5.48 | % | 2.38 | % | 3.10 | % | $ | 3,660 | 32.03 | % | ||||||||||||||||||||
FCAP
First Capital, Inc. of IN (1)
|
0.31 | % | 5.19 | % | 1.92 | % | 3.27 | % | 0.79 | % | 2.47 | % | 0.00 | % | 0.00 | % | 0.70 | % | 0.70 | % | 2.89 | % | 0.02 | % | 0.05 | % | 0.00 | % | 5.52 | % | 2.16 | % | 3.36 | % |
NM
|
NM
|
||||||||||||||||||||||
FSFG
First Savings Financial Group of IN
|
0.46 | % | 4.87 | % | 1.43 | % | 3.44 | % | 0.33 | % | 3.11 | % | 0.00 | % | -0.02 | % | 0.56 | % | 0.54 | % | 2.94 | % | 0.02 | % | -0.02 | % | 0.00 | % | 5.19 | % | 1.73 | % | 3.46 | % | $ | 3,460 | 26.36 | % | ||||||||||||||||||||
HFBC
HopFed Bancorp, Inc. of KY (1)
|
0.05 | % | 5.44 | % | 2.80 | % | 2.64 | % | 0.42 | % | 2.22 | % | 0.00 | % | 0.00 | % | 0.79 | % | 0.79 | % | 2.48 | % | 0.60 | % | 0.14 | % | 0.00 | % | 5.73 | % | 3.06 | % | 2.68 | % |
NM
|
NM
|
||||||||||||||||||||||
LSBI
LSB Financial Corp. of Lafayette IN (1)
|
0.25 | % | 5.40 | % | 2.72 | % | 2.68 | % | 0.56 | % | 2.12 | % | 0.00 | % | -0.08 | % | 0.90 | % | 0.82 | % | 2.83 | % | 0.00 | % | 0.28 | % | 0.00 | % | 5.69 | % | 3.02 | % | 2.67 | % | $ | 4,132 | 23.11 | % | ||||||||||||||||||||
LBCP Liberty
Bancorp, Inc. of MO
|
0.56 | % | 5.20 | % | 1.57 | % | 3.63 | % | 0.48 | % | 3.14 | % | 0.03 | % | -0.38 | % | 0.85 | % | 0.50 | % | 2.96 | % | 0.05 | % | 0.21 | % | 0.00 | % | 5.66 | % | 1.79 | % | 3.87 | % | $ | 4,146 | 28.00 | % | ||||||||||||||||||||
RIVR
River Valley Bancorp of IN (1)
|
0.42 | % | 5.12 | % | 2.54 | % | 2.58 | % | 0.79 | % | 1.78 | % | 0.00 | % | 0.00 | % | 0.82 | % | 0.82 | % | 2.36 | % | 0.00 | % | 0.23 | % | 0.00 | % | 5.40 | % | 2.75 | % | 2.65 | % |
NM
|
0.90 | % | |||||||||||||||||||||
WVFC
WVS Financial Corp. of PA
|
0.34 | % | 3.36 | % | 2.17 | % | 1.17 | % | -0.08 | % | 1.25 | % | 0.00 | % | 0.00 | % | 0.17 | % | 0.17 | % | 0.86 | % | 0.00 | % | -0.04 | % | 0.00 | % | 3.38 | % | 2.37 | % | 1.00 | % | $ | 10,040 | 28.25 | % | ||||||||||||||||||||
WAYN
Wayne Savings Bancshares of OH
|
0.49 | % | 5.06 | % | 1.80 | % | 3.26 | % | 0.46 | % | 2.81 | % | 0.00 | % | -0.06 | % | 0.59 | % | 0.53 | % | 2.69 | % | 0.02 | % | 0.03 | % | 0.00 | % | 5.32 | % | 1.99 | % | 3.33 | % | $ | 3,633 | 18.05 | % |
Source: | SNL Financial, LC. and RP ® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information. |
RP
®
Financial, LC.
|
PEER
GROUP ANALYSIS
|
III.13
|
RP
®
Financial, LC.
|
PEER
GROUP ANALYSIS
|
III.14
|
RP
®
Financial, LC.
|
PEER
GROUP ANALYSIS
|
III.15
|
Portfolio Composition as a Percent of Assets | |||||||||||||||||||||||||||||||||||||||
Institution
|
|
MBS
|
1-4
Family
|
Constr.
&
Land
|
5+Unit
Comm
RE
|
Commerc.
Business
|
Consumer
|
RWA/
Assets
|
Serviced
For
Others
|
Servicing
Assets
|
|||||||||||||||||||||||||||||
(%)
|
(%)
|
(%)
|
(%)
|
(%)
|
(%)
|
(%)
|
($000)
|
($000)
|
|||||||||||||||||||||||||||||||
Jacksonville
Bancorp, Inc.
|
14.19 | % | 20.63 | % | 2.74 | % | 19.80 | % | 11.91 | % | 4.83 | % | 69.97 | % | $ | 147,962 | $ | 850 | |||||||||||||||||||||
All
Public Companies
|
|||||||||||||||||||||||||||||||||||||||
Averages
|
12.62 | % | 35.15 | % | 5.41 | % | 22.14 | % | 4.64 | % | 2.40 | % | 66.10 | % | $ | 605,349 | $ | 5,591 | |||||||||||||||||||||
Medians
|
10.44 | % | 35.37 | % | 4.11 | % | 20.03 | % | 3.48 | % | 0.66 | % | 66.52 | % | $ | 43,890 | $ | 125 | |||||||||||||||||||||
State
of IL
|
|||||||||||||||||||||||||||||||||||||||
Averages
|
6.85 | % | 28.26 | % | 3.81 | % | 25.70 | % | 8.30 | % | 1.38 | % | 70.65 | % | $ | 122,813 | $ | 823 | |||||||||||||||||||||
Medians
|
5.01 | % | 23.68 | % | 2.87 | % | 22.46 | % | 8.51 | % | 0.41 | % | 70.11 | % | $ | 108,540 | $ | 792 | |||||||||||||||||||||
Comparable
Group
|
|||||||||||||||||||||||||||||||||||||||
Averages
|
10.77 | % | 30.43 | % | 5.62 | % | 22.12 | % | 5.13 | % | 5.37 | % | 68.16 | % | $ | 40,553 | $ | 253 | |||||||||||||||||||||
Medians
|
8.07 | % | 34.13 | % | 4.83 | % | 21.88 | % | 5.41 | % | 1.55 | % | 69.10 | % | $ | 24,620 | $ | 1 | |||||||||||||||||||||
Comparable
Group
|
|||||||||||||||||||||||||||||||||||||||
CZWI |
Citizens
Community Bancorp Inc. of WI
|
8.97 | % | 43.80 | % | 0.00 | % | 0.03 | % | 0.00 | % | 34.91 | % | 91.00 | % | $ | 0 | $ | 0 | ||||||||||||||||||||
FFDF |
FFD
Financial Corp. of Dover OH
|
0.14 | % | 32.63 | % | 3.20 | % | 37.18 | % | 10.27 | % | 3.13 | % | 79.03 | % | $ | 92,290 | $ | 603 | ||||||||||||||||||||
FCAP |
First
Capital, Inc. of IN (1)
|
5.67 | % | 38.78 | % | 4.70 | % | 14.65 | % | 5.35 | % | 5.34 | % | 63.74 | % | $ | 310 | $ | 1 | ||||||||||||||||||||
FSFG |
First
Savings Financial Group of IN
|
9.05 | % | 39.30 | % | 1.84 | % | 20.87 | % | 5.49 | % | 5.26 | % | 28.40 | % | $ | 670 | $ | 0 | ||||||||||||||||||||
HFBC |
HopFed
Bancorp, Inc. of KY (1)
|
12.99 | % | 23.61 | % | 9.10 | % | 22.89 | % | 6.11 | % | 2.05 | % | 65.57 | % | $ | 42,970 | $ | 0 | ||||||||||||||||||||
LSBI |
LSB
Financial Corp. of Lafayette IN (1)
|
0.91 | % | 35.37 | % | 7.10 | % | 41.91 | % | 4.57 | % | 0.42 | % | 78.92 | % | $ | 128,030 | $ | 1,154 | ||||||||||||||||||||
LBCP |
Liberty
Bancorp, Inc. of MO
|
2.20 | % | 16.51 | % | 17.36 | % | 35.35 | % | 5.48 | % | 0.53 | % | 80.14 | % | $ | 18,400 | $ | 0 | ||||||||||||||||||||
RIVR |
River
Valley Bancorp of IN (1)
|
7.18 | % | 33.17 | % | 7.68 | % | 26.11 | % | 4.33 | % | 1.06 | % | 72.64 | % | $ | 92,020 | $ | 505 | ||||||||||||||||||||
WVFC |
WVS
Financial Corp. of PA
|
38.88 | % | 6.01 | % | 4.95 | % | 3.29 | % | 1.00 | % | 0.28 | % | 61.24 | % | $ | 0 | $ | 0 | ||||||||||||||||||||
WAYN |
Wayne
Savings Bancshares of OH
|
21.76 | % | 35.08 | % | 0.32 | % | 18.87 | % | 8.71 | % | 0.71 | % | 60.95 | % | $ | 30,840 | $ | 265 |
Source: | SNL Financial LC. and RP ® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information. |
RP
®
Financial, LC.
|
PEER
GROUP ANALYSIS
|
III.16
|
RP
®
Financial, LC.
|
PEER
GROUP ANALYSIS
|
III.17
|
Institution
|
|
REO/
Assets
|
NPAs
&
90+Del/
Assets
|
NPLs/
Loans
|
Rsrves/
Loans
|
Rsrves/
NPLs
|
Rsrves/
NPAs
&
90+Del
|
Net
Loan
Chargoffs
|
NLCs/
Loans
|
||||||||||||||||||||||||||
(%) |
(%)
|
(%)
|
(%)
|
(%)
|
(%)
|
($000)
|
(%)
|
||||||||||||||||||||||||||||
Jacksonville
Bancorp, Inc.
|
0.13 | % | 0.81 | % | 1.10 | % | 1.29 | % | 117.20 | % | 97.99 | % | $ | 2,219 | 1.26 | % | |||||||||||||||||||
All
Public Companies
|
|||||||||||||||||||||||||||||||||||
Averages
|
0.43 | % | 3.16 | % | 3.37 | % | 1.50 | % | 67.54 | % | 50.08 | % | $ | 1,404 | 0.62 | % | |||||||||||||||||||
Medians
|
0.17 | % | 2.33 | % | 2.78 | % | 1.28 | % | 53.91 | % | 41.00 | % | $ | 388 | 0.17 | % | |||||||||||||||||||
State
of IL
|
|||||||||||||||||||||||||||||||||||
Averages
|
0.24 | % | 2.97 | % | 4.75 | % | 1.12 | % | 28.93 | % | 26.38 | % | $ | 522 | 0.07 | % | |||||||||||||||||||
Medians
|
0.11 | % | 2.77 | % | 3.63 | % | 1.25 | % | 34.32 | % | 31.16 | % | $ | 354 | 0.05 | % | |||||||||||||||||||
Comparable
Group
|
|||||||||||||||||||||||||||||||||||
Averages
|
0.17 | % | 1.72 | % | 2.20 | % | 1.12 | % | 62.98 | % | 54.26 | % | $ | 529 | 0.64 | % | |||||||||||||||||||
Medians
|
0.19 | % | 1.43 | % | 1.84 | % | 1.12 | % | 60.29 | % | 50.37 | % | $ | 179 | 0.23 | % | |||||||||||||||||||
Comparable
Group
|
|||||||||||||||||||||||||||||||||||
CZWI |
Citizens
Community Bancorp Inc. of WI
|
0.00 | % | 1.12 | % | 1.31 | % | 0.51 | % | 33.25 | % | 29.96 | % | $ | 398 | 0.36 | % | ||||||||||||||||||
FFDF |
FFD
Financial Corp. of Dover OH
|
0.08 | % | 0.69 | % | 0.79 | % | 1.05 | % | 132.69 | % | 130.58 | % | $ | 9 | 0.02 | % | ||||||||||||||||||
FCAP |
First
Capital, Inc. of IN (1)
|
0.19 | % | 2.28 | % | 2.64 | % | 1.55 | % | 58.88 | % | 47.56 | % | $ | 166 | 0.21 | % | ||||||||||||||||||
FSFG |
First
Savings Financial Group of IN
|
0.19 | % | 1.44 | % | 1.32 | % | 1.10 | % | 78.09 | % | 53.34 | % | $ | 119 | 0.13 | % | ||||||||||||||||||
HFBC |
HopFed
Bancorp, Inc. of KY (1)
|
0.19 | % | 1.28 | % | 1.74 | % | 1.36 | % | 78.33 | % | 67.05 | % | $ | 462 | 0.28 | % | ||||||||||||||||||
LSBI |
LSB
Financial Corp. of Lafayette IN (1)
|
0.31 | % | 3.60 | % | 3.70 | % | 1.14 | % | 30.70 | % | 28.08 | % | $ | 1,272 | 1.57 | % | ||||||||||||||||||
LBCP |
Liberty
Bancorp, Inc. of MO
|
0.50 | % | 1.83 | % | 1.72 | % | 1.31 | % | 76.05 | % | 53.95 | % | $ | 192 | -0.04 | % | ||||||||||||||||||
RIVR |
River
Valley Bancorp of IN (1)
|
0.00 | % | 3.13 | % | 4.16 | % | 0.92 | % | 40.79 | % | 39.59 | % | $ | 2,521 | 3.60 | % | ||||||||||||||||||
WVFC |
WVS
Financial Corp. of PA
|
0.00 | % | 0.42 | % | 2.72 | % | 1.07 | % | 39.30 | % | 39.30 | % | $ | 0 | 0.00 | % | ||||||||||||||||||
WAYN |
Wayne
Savings Bancshares of OH
|
0.20 | % | 1.41 | % | 1.94 | % | 1.19 | % | 61.70 | % | 53.18 | % | $ | 155 | 0.24 | % |
Source: | Audited and unaudited financial statements, corporate reports and offering circulars, and RP ® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information. |
RP
®
Financial, LC.
|
PEER
GROUP ANALYSIS
|
III.18
|
Balance
Sheet Measures
|
|||||||||||||||||||||||||||||||||||||||
Tang.
Equity/
Assets
|
IEA/
IBL
|
Non-Earn.
Assets/
Assets
|
|||||||||||||||||||||||||||||||||||||
Quarterly
Change in Net Interest Income
|
|||||||||||||||||||||||||||||||||||||||
Institution |
|
12/31/2009
|
9/30/2009
|
6/30/2009
|
3/31/2009
|
12/31/2008
|
9/30/2008
|
||||||||||||||||||||||||||||||||
(%)
|
(%)
|
(%)
|
(change
in net interest income is annualized in basis points)
|
||||||||||||||||||||||||||||||||||||
Jacksonville
Bancorp, Inc.
|
7.8 | % | 104.3 | % | 6.3 | % | -17 | 21 | -17 | -8 | 33 | 28 | |||||||||||||||||||||||||||
All
Public Companies
|
10.5 | % | 106.8 | % | 6.1 | % | 6 | 8 | 1 | -4 | -3 | 10 | |||||||||||||||||||||||||||
State
of IL
|
11.4 | % | 108.0 | % | 7.2 | % |
NA
|
7 | -10 | -18 | 18 | 10 | |||||||||||||||||||||||||||
Comparable
Group
|
|||||||||||||||||||||||||||||||||||||||
Averages
|
8.6 | % | 105.7 | % | 5.0 | % | -1 | 6 | 7 | -10 | 0 | 2 | |||||||||||||||||||||||||||
Medians
|
8.8 | % | 105.6 | % | 5.2 | % | -3 | 8 | 7 | -3 | -5 | 3 | |||||||||||||||||||||||||||
Comparable
Group
|
|||||||||||||||||||||||||||||||||||||||
CZWI |
Citizens
Community Bancorp Inc. of WI
|
8.6 | % | 105.6 | % | 5.4 | % | 18 | 6 | 23 | 6 | -4 | 19 | ||||||||||||||||||||||||||
FFDF |
FFD
Financial Corp. of Dover OH
|
9.1 | % | 107.7 | % | 3.1 | % | -3 | 1 | 0 | -37 | -10 | -2 | ||||||||||||||||||||||||||
FCAP |
First
Capital, Inc. of IN (1)
|
9.0 | % | 105.4 | % | 6.0 | % |
NA
|
8 | -6 | -5 | -17 | 14 | ||||||||||||||||||||||||||
FSFG |
First
Savings Financial Group of IN
|
9.0 | % | 104.7 | % | 7.0 | % |
NA
|
NA
|
20 | 12 | 33 | -9 | ||||||||||||||||||||||||||
HFBC |
HopFed
Bancorp, Inc. of KY (1)
|
7.8 | % | 104.5 | % | 4.5 | % |
NA
|
8 | 2 | 10 | -34 | 0 | ||||||||||||||||||||||||||
LSBI |
LSB
Financial Corp. of Lafayette IN (1)
|
9.4 | % | 105.7 | % | 5.1 | % |
NA
|
15 | 15 | -12 | -7 | -24 | ||||||||||||||||||||||||||
LBCP |
Liberty
Bancorp, Inc. of MO
|
10.4 | % | 106.3 | % | 7.3 | % | -25 | 25 | 33 | 13 | -2 | -19 | ||||||||||||||||||||||||||
RIVR |
River
Valley Bancorp of IN (1)
|
6.6 | % | 102.9 | % | 5.1 | % |
NA
|
10 | -14 | -7 | -6 | 12 | ||||||||||||||||||||||||||
WVFC |
WVS
Financial Corp. of PA
|
7.8 | % | 108.2 | % | 1.3 | % | -3 | -26 | -16 | -77 | 42 | 6 | ||||||||||||||||||||||||||
WAYN |
Wayne
Savings Bancshares of OH
|
8.6 | % | 105.5 | % | 5.2 | % | 11 | 10 | 11 | -1 | 5 | 22 |
Source: | SNL Financial LC. and RP ® Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information. |
RP
®
Financial, LC.
|
PEER
GROUP ANALYSIS
|
III.19
|
RP
®
Financial, LC.
|
VALUATION ANALYSIS
|
IV.1
|
RP
®
Financial, LC.
|
VALUATION ANALYSIS
|
IV.2
|
RP
®
Financial, LC.
|
VALUATION ANALYSIS
|
IV.3
|
●
|
Overall
A/L Composition
. Loans and investments funded by retail
deposits were the primary components of the Company’s and Peer Group’s
balance sheets. The Company’s interest-earning asset
composition exhibited a lower concentration of loans overall with a lower
proportion of mortgage loans, including both residential and commercial
mortgage loans, while non-mortgage commercial lending was modestly higher
for Jacksonville Bancorp. Overall, in comparison to the Peer
Group, the Company’s interest-earning asset composition provided for a
lower level of net interest income, the impact of which was offset by a
favorable funding mix which provided for a relatively favorable cost of
funds in comparison to the Peer Group. The Company maintained a
lower IEA/IBL ratio of 104.7%, versus 106.0% for the Peer Group on
average. The anticipated use of proceeds should improve the
Company’s IEA/IBL ratio.
|
●
|
Credit
Quality
. The Company’s ratios of non-performing assets
and non-performing loans were more favorable than the comparable Peer
Group ratios. Loss reserves as a percent of total loans
exceeded the Peer Group average and median values as did the reserve
coverage ratios in relation to non-performing loans and
NPAs. The one shortfall in the Company’s asset quality in
comparison to the Peer Group was the recent history of loan chargeoffs
which exceeded the Peer Group average. The higher chargeoffs
are related to several specific assets where there was borrower fraud and
management expects that the level of loan chargeoffs may be lower in the
future.
|
●
|
Balance
Sheet Liquidity
. For the most recent period, the Company
maintained a higher level of cash and investment securities relative to
the Peer Group. Following the infusion of stock proceeds, the
Company’s cash and investments ratio is expected to increase as a portion
of the proceeds will be initially retained in cash equivalent instruments
as well as investment securities with laddered maturities pending the
longer term deployment into loans. The Company’s future
borrowing capacity was considered to be greater than the Peer Group’s
capacity based on its current lower utilization of borrowings in
comparison to the Peer
Group.
|
RP
®
Financial, LC.
|
VALUATION ANALYSIS
|
IV.4
|
●
|
Funding
Liabilities
. The Company’s interest-bearing funding
composition reflected a higher concentration of deposits and a lower
concentration of borrowings relative to the comparable Peer Group ratios,
which translated into a lower cost of funds for the
Company. Total interest-bearing liabilities as a percent of
assets was lower for the Company in comparison to the Peer Group and the
IBL ratio should improve following the
Offering.
|
●
|
Equity
. The
Company currently operates with a lower equity-to-assets ratio than the
Peer Group. However, following the stock offering, Jacksonville
Bancorp’s pro forma capital position will exceed the Peer Group's
equity-to-assets ratio based on completion of the transaction at the
valuation range set forth herein. The Company’s increased pro
forma equity will enhance the leverage capacity to levels approximating
the Peer Group’s ability while the anticipated reduction in the IBL ratio
will enhance Jacksonville Bancorp’s comparability to the Peer
Group.
|
●
|
Reported
Earnings
. The Company reported higher
earnings than the Peer Group based on an average return on average assets
(“ROAA”) basis (0.47% of average assets versus 0.26% and 0.38% for the
Peer Group based on the average and median,
respectively). Jacksonville Bancorp’s higher operating returns
reflect the benefit of the high level of non-interest income and low tax
rate which are partially mitigated by the Company’s higher operating
expenses. Jacksonville Bancorp’s net income was also supported
by a relatively high level of non-operating gains on
sale.
|
●
|
Core
Earnings
. As referenced above, the Company’s earnings
were impacted by non-operating gains on sale to a greater extent than the
Peer Group’s earnings (the Peer Group reported net non-operating losses
equal to 4 basis points on average assets). Excluding
non-operating gains and losses from earnings for both the Company and the
Peer Group provides for ROA measures which compared relatively
closely. At the same time, we have considered management’s
expectation that the Company’s loan loss provisions may be lower in the
future based on the current levels of NPAs, reserve coverage in relation
to the Peer Group which could improve Jacksonville Bancorp’s core earnings
levels.
|
RP
®
Financial, LC.
|
VALUATION ANALYSIS
|
IV.5
|
●
|
Interest
Rate Risk
. Quarterly changes in the Company’s and the
Peer Group’s net interest income to average assets ratios indicated
slightly greater volatility for the Company relative to the Peer Group
average but the indicated changes were within the range of the Peer Group
companies individually. Other measures of interest rate risk
such as the capital and the IEA/IBL ratio were less favorable for the
Company, thereby indicating that the Company maintained a higher
dependence on the yield-cost spread to sustain net interest
income. On a pro forma basis, the Company’s capital position
and IEA/IBL ratio will be enhanced by the infusion of stock proceeds and,
thus, diminish the Peer Group’s relative advantage in this
regard.
|
●
|
Credit
Risk
. Loan loss provisions were a more significant
factor in the Company’s earnings in comparison to the Peer Group with the
higher provisions relative to historical levels related to both to
borrower fraud and a recessionary economic environment. In
terms of the future exposure to credit-related losses, objective measures
of the Company’s credit risk reflect comparatively lesser exposure
relative to the Peer Group based on its lower ratio of NPAs and higher
ratio of reserves in relation to NPLs and
NPAs.
|
●
|
Earnings
Growth Potential
. Several factors were considered in
assessing earnings growth potential. First, the infusion of
stock proceeds will increase the Company’s earnings growth potential with
respect to increasing earnings through leverage. Secondly, the
Company has demonstrated momentum for core earnings growth as its net
interest margin has expanded over the last several years albeit net income
has not realized the full benefit as core earnings growth has been offset
by increased loan loss provisions. To the extent that the
economy stabilizes and/or loan loss provisions diminish as anticipated by
management, net income may be subject to increase (i.e., for this factor
as well as the earnings benefit related to reinvestment of the conversion
proceeds).
|
●
|
Return
on Equity
. The Company’s pro forma return on equity
based on core earnings (excluding net non-operating expenses but including
trailing twelve month loan loss provisions) are lower than the Peer Group
average and median. The ROE may be subject to increase over the
near term given the momentum for core earnings growth as noted
above.
|
RP
®
Financial, LC.
|
VALUATION ANALYSIS
|
IV.6
|
RP
®
Financial, LC.
|
VALUATION ANALYSIS
|
IV.7
|
RP
®
Financial, LC.
|
VALUATION ANALYSIS
|
IV.8
|
RP
®
Financial, LC.
|
VALUATION ANALYSIS
|
IV.9
|
RP
®
Financial, LC.
|
VALUATION ANALYSIS
|
IV.10
|
RP
®
Financial, LC.
|
VALUATION ANALYSIS
|
IV.11
|
RP
®
Financial, LC.
|
VALUATION ANALYSIS
|
IV.12
|
RP
®
Financial, LC.
|
VALUATION ANALYSIS
|
IV.13
|
RP
®
Financial, LC.
|
VALUATION
ANALYSIS
|
IV.14
|
Institutional
Information
|
Pre-Conversion
Data
|
Offering
Information
|
Contribution
to
|
Insider
Purchases
|
|||||||||||||||||||||||||||||||||
Financial
Info.
|
Asset
Quality
|
Charitable
Found
|
%
Off Incl. Fdn.
|
||||||||||||||||||||||||||||||||||
Benefit
Plans
|
|||||||||||||||||||||||||||||||||||||
Initial
|
|||||||||||||||||||||||||||||||||||||
Conver. |
Equity/
|
NPAs/
|
Res.
|
Gross
|
%
|
%
of
|
Exp./
|
%
of
|
Recog
|
Stk
|
Mgmt.& |
Dividend
|
|||||||||||||||||||||||||
Institution
|
Date
|
Ticker |
Assets
|
Assets
|
Assets
|
Cov.
|
Proc.
|
Offered
|
Mid.
|
Proc.
|
Form
|
Offering
|
ESOP
|
Plans
|
Option
|
Dirs.
|
Yield
|
||||||||||||||||||||
|
|
|
($Mil)
|
(%)
|
(%)
|
(%)
|
($Mil.)
|
(%)
|
(%)
|
(%)
|
(%)
|
(%)
|
(%)
|
(%)
|
(%)(2)
|
(%)
|
|||||||||||||||||||||
Standard
Conversions
|
|||||||||||||||||||||||||||||||||||||
OBA
Financial Services, Inc., MD*
|
1/22/10
|
OBAF-NASDAQ
|
$ | 358 | 10.90 | % | 0.62 | % | 67 | % | $ | 46.3 | 100 | % | 132 | % | 3.1 | % |
N.A.
|
N.A.
|
8.0 | % | 4.0 | % | 10.0 | % | 3.8 | % | 0.00 | % | |||||||
OmniAmerican
Bancorp, Inc., TX*
|
1/21/10
|
OABC-NASDAQ
|
$ | 1,006 | 9.08 | % | 1.47 | % | 158 | % | $ | 119.0 | 100 | % | 132 | % | 2.5 | % |
N.A.
|
N.A.
|
8.0 | % | 4.0 | % | 10.0 | % | 0.3 | % | 0.00 | % | |||||||
Versailles
Financial Corp., OH
|
1/13/10
|
VERF-OTCBB
|
$ | 43 | 17.89 | % | 0.77 | % | 83 | % | $ | 4.3 | 100 | % | 132 | % | 14.0 | % |
N.A.
|
N.A.
|
8.0 | % | 4.0 | % | 10.0 | % | 23.7 | % | 0.00 | % | |||||||
Athens
Bancshares, Inc., TN
|
1/7/10
|
AFCB-NASDAQ
|
$ | 246 | 10.50 | % | 1.04 | % | 151 | % | $ | 26.8 | 100 | % | 134 | % | 4.4 | % |
N.A.
|
N.A.
|
8.0 | % | 4.0 | % | 10.0 | % | 11.1 | % | 0.00 | % | |||||||
Averages - Standard Conversions: | $ | 413 | 12.09 | % | 0.98 | % | 115 | % | $ | 49.1 | 100 | % | 133 | % | 6.0 | % |
N.A.
|
N.A.
|
8.0 | % | 4.0 | % | 10.0 | % | 9.7 | % | 0.00 | % | |||||||||
Medians - Standard Conversions: | $ | 302 | 10.70 | % | 0.91 | % | 117 | % | $ | 36.5 | 100 | % | 132 | % | 3.7 | % |
N.A.
|
N.A.
|
8.0 | % | 4.0 | % | 10.0 | % | 7.4 | % | 0.00 | % | |||||||||
Second
Step Conversions
|
|||||||||||||||||||||||||||||||||||||
Ocean
Shore Holding Co., NJ*
|
12/21/09
|
OSHC-NASDAQ
|
$ | 743 | 9.08 | % | 0.36 | % | 138 | % | $ | 33.5 | 57 | % | 85 | % | 7.5 | % |
N.A.
|
N.A.
|
6.8 | % | 3.4 | % | 8.5 | % | 1.3 | % | 2.50 | % | |||||||
Northwest
Bancshares, Inc.*
|
12/18/09
|
NWBI-NASDAQ
|
$ | 7,134 | 9.18 | % | 1.95 | % | 54 | % | $ | 688.8 | 62 | % | 108 | % | 3.8 | % | C/S | 2.0% | 4.0 | % | 4.0 | % | 10.2 | % | 0.1 | % | 3.91 | % | |||||||
Averages - Second Step onversions: | $ | 3,938 | 9.13 | % | 1.16 | % | 96 | % | $ | 361.1 | 60 | % | 97 | % | 5.6 | % |
N.A.
|
N.A.
|
5.4 | % | 3.7 | % | 9.3 | % | 0.7 | % | 3.21 | % | |||||||||
Medians - Second StepConversions: | $ | 3,938 | 9.13 | % | 1.16 | % | 96 | % | $ | 361.1 | 60 | % | 97 | % | 5.6 | % |
N.A.
|
N.A.
|
5.4 | % | 3.7 | % | 9.3 | % | 0.7 | % | 3.21 | % | |||||||||
Mutual
Holding Company Conversions
|
|||||||||||||||||||||||||||||||||||||
Averages - Mutual Holding Company Conversions: | |||||||||||||||||||||||||||||||||||||
Medians - Mutual Holding Company Conversions: | |||||||||||||||||||||||||||||||||||||
Averages - All Conversions: | $ | 1,588 | 11.11 | % | 1.04 | % | 109 | % | $ | 153.1 | 87 | % | 121 | % | 5.9 | % |
NA
|
NA
|
7.1 | % | 3.9 | % | 9.8 | % | 6.7 | % | 1.07 | % | |||||||||
Medians - All Conversions: | $ | 550 | 9.84 | % | 0.91 | % | 110 | % | $ | 39.9 | 100 | % | 132 | % | 4.1 | % |
NA
|
NA
|
8.0 | % | 4.0 | % | 10.0 | % | 2.5 | % | 0.00 | % |
Institutional Information |
|
|||||||||||||||||||||||||||||||||||||||
Pro Forma Data | Post-IPO Pricing Trends | |||||||||||||||||||||||||||||||||||||||
Pricing Ratios(3 ) | Financial Charac. | Closing Price: | ||||||||||||||||||||||||||||||||||||||
First
|
After
|
After
|
||||||||||||||||||||||||||||||||||||||
Conver. |
Core
|
Core
|
Core
|
IPO
|
Trading
|
%
|
First
|
%
|
First
|
%
|
Thru
|
%
|
||||||||||||||||||||||||||||
Institution | Date | Ticker |
P/TB
|
P/E
|
P/A
|
ROA
|
TE/A
|
ROE
|
Price
|
Day
|
Change |
Week(4)
|
Change
|
Month(5)
|
Change
|
2/19/10
|
Change
|
|||||||||||||||||||||||
(%) |
(x)
|
(%)
|
(%)
|
(%)
|
(%)
|
($)
|
($)
|
(%)
|
($)
|
(%)
|
($)
|
(%)
|
($)
|
(%)
|
||||||||||||||||||||||||||
Standard
Conversions
|
||||||||||||||||||||||||||||||||||||||||
OBA
Financial Services, Inc., MD*
|
1/22/10
|
OBAF-NASDAQ
|
59.1 | % |
NM
|
11.7 | % | -0.1 | % | 19.7 | % | -0.5 | % | $ | 10.00 | $ | 10.39 | 3.9 | % | $ | 10.11 | 1.1 | % | $ | 10.30 | 3.0 | % | $ | 10.30 | 3.0 | % | |||||||||
OmniAmerican
Bancorp, Inc., TX*
|
1/21/10
|
OABC-NASDAQ
|
61.7 | % |
NM
|
10.7 | % | -0.3 | % | 17.4 | % | -1.7 | % | $ | 10.00 | $ | 11.85 | 18.5 | % | $ | 11.32 | 13.2 | % | $ | 10.99 | 9.9 | % | $ | 10.99 | 9.9 | % | |||||||||
Versailles
Financial Corp., OH
|
1/13/10
|
VERF-OTCBB
|
40.3 | % | 30.12 | 9.6 | % | 0.3 | % | 23.7 | % | 1.1 | % | $ | 10.00 | $ | 10.00 | 0.0 | % | $ | 10.00 | 0.0 | % | $ | 10.00 | 0.0 | % | $ | 10.00 | 0.0 | % | |||||||||
Athens
Bancshares, Inc., TN
|
1/7/10
|
AFCB-NASDAQ
|
57.4 | % | 18.40 | 10.3 | % | 0.6 | % | 18.0 | % | 3.1 | % | $ | 10.00 | $ | 11.60 | 16.0 | % | $ | 11.39 | 13.9 | % | $ | 11.06 | 10.6 | % | $ | 10.92 | 9.2 | % | |||||||||
Averages - Standard Conversions: | 54.6 | % | 24.26 | 10.6 | % | 0.1 | % | 19.7 | % | 0.5 | % | $ | 10.00 | $ | 10.96 | 9.6 | % | $ | 10.71 | 7.05 | % | $ | 10.59 | 5.88 | % | $ | 10.55 | 5.53 | % | |||||||||||
Medians - Standard Conversions: | 58.3 | % | 24.26 | 10.5 | % | 0.1 | % | 18.9 | % | 0.3 | % | $ | 10.00 | $ | 11.00 | 10.0 | % | $ | 10.72 | 7.15 | % | $ | 10.65 | 6.45 | % | $ | 10.61 | 6.10 | % | |||||||||||
Second
Step Conversions
|
||||||||||||||||||||||||||||||||||||||||
Ocean
Shore Holding Co., NJ*
|
12/21/09
|
OSHC-NASDAQ
|
61.5 | % | 11.11 | 7.6 | % | 0.7 | % | 12.3 | % | 5.5 | % | $ | 8.00 | $ | 8.60 | 7.5 | % | $ | 8.98 | 12.3 | % | $ | 9.05 | 13.1 | % | $ | 9.81 | 22.6 | % | |||||||||
Northwest
Bancshares, Inc.*
|
12/18/09
|
NWBI-NASDAQ
|
101.5 | % | 20.3 | 14.3 | % | 0.7 | % | 14.4 | % | 4.3 | % | $ | 10.00 | $ | 11.35 | 13.5 | % | $ | 11.30 | 13.0 | % | $ | 11.40 | 14.0 | % | $ | 11.89 | 18.9 | % | |||||||||
Averages - Second Step Conversions: | 81.5 | % | 15.7 | x | 10.9 | % | 0.7 | % | 13.4 | % | 4.9 | % | $ | 9.00 | $ | 9.98 | 10.5 | % | $ | 10.14 | 12.6 | % | $ | 10.23 | 13.6 | % | $ | 10.85 | 20.8 | % | ||||||||||
Medians - Second Step Conversions: | 81.5 | % | 15.7 | x | 10.9 | % | 0.7 | % | 13.4 | % | 4.9 | % | $ | 9.00 | $ | 9.98 | 10.5 | % | $ | 10.14 | 12.6 | % | $ | 10.23 | 13.6 | % | $ | 10.85 | 20.8 | % | ||||||||||
Mutual
Holding Company Conversions
|
||||||||||||||||||||||||||||||||||||||||
Averages - Mutual Holding Company Conversions: | ||||||||||||||||||||||||||||||||||||||||
Medians - Mutual Holding Company Conversions: | ||||||||||||||||||||||||||||||||||||||||
Averages - All Conversions: | 63.6 | % | $ 19.98 | 10.7 | % | 0.3 | % | 17.6 | % | 2.0 | % | $ | 9.67 | $ | 10.63 | 9.9 | % | $ | 10.52 | 8.9 | % | $ | 10.47 | 8.4 | % | $ | 10.65 | 10.6 | % | |||||||||||
Medians - All Conversions: | 60.3 | % | $ 19.35 | 10.5 | % | 0.4 | % | 17.7 | % | 2.1 | % | $ | 10.00 | $ | 10.87 | 10.5 | % | $ | 10.71 | 12.6 | % | $ | 10.65 | 10.3 | % | $ | 10.61 | 9.6 | % |
RP
®
Financial, LC.
|
VALUATION
ANALYSIS
|
IV.15
|
Market
|
Per
Share Data
|
||||||||||||||||||||||||||||||
Capitalization
|
Core
|
Book
|
|||||||||||||||||||||||||||||
Price/
|
Market
|
12
Month
|
Value/
|
Pricing
Ratios(3)
|
|||||||||||||||||||||||||||
Financial
Institution
|
Share(1)
|
Value
|
EPS(2)
|
Share
|
P/E
|
P/B
|
P/A
|
P/TB
|
P/Core
|
||||||||||||||||||||||
($)
|
($Mil)
|
($)
|
($)
|
(x)
|
(%)
|
(%)
|
(%)
|
(x)
|
|||||||||||||||||||||||
All
Public Companies
|
$
|
9.51
|
$
|
287.53
|
($
|
0.14
|
)
|
$
|
12.19
|
17.96
|
x
|
81.45
|
%
|
9.88
|
%
|
89.82
|
%
|
19.58
|
x
|
||||||||||||
Converted
Last 3 Months (no MHC)
|
$
|
10.78
|
$
|
319.21
|
$
|
0.25
|
$
|
15.09
|
25.59
|
x
|
73.33
|
%
|
12.16
|
%
|
76.41
|
%
|
21.99
|
x
|
|||||||||||||
Converted
Last 3 Months (no MHC)
|
|||||||||||||||||||||||||||||||
AFCB
|
Athens
Bancshares, Inc. of TN
|
$
|
10.92
|
$
|
30.34
|
$
|
0.54
|
$
|
17.42
|
20.22
|
x
|
62.69
|
%
|
11.29
|
%
|
62.69
|
%
|
20.22
|
x
|
||||||||||||
NWBI
|
Northwest
Bancshares Inc. of PA
|
$
|
11.89
|
$
|
1,315.53
|
$
|
0.37
|
$
|
11.90
|
39.63
|
x
|
99.92
|
%
|
16.39
|
%
|
115.32
|
%
|
32.14
|
x
|
||||||||||||
OBAF
|
OBA
Financial Serv. Inc. of MD
|
$
|
10.30
|
$
|
47.68
|
($
|
0.09
|
)
|
$
|
16.92
|
NM
|
60.87
|
%
|
12.00
|
%
|
60.87
|
%
|
NM
|
|||||||||||||
OSHC
|
Ocean
Shore Holding Co. of NJ
|
$
|
9.81
|
$
|
71.69
|
$
|
0.72
|
$
|
13.01
|
16.91
|
x
|
75.40
|
%
|
9.31
|
%
|
75.40
|
%
|
13.63
|
x
|
||||||||||||
OABC
|
OmniAmerican
Bancorp Inc. of TX
|
$
|
10.99
|
$
|
130.81
|
($
|
0.28
|
)
|
$
|
16.22
|
NM
|
67.76
|
%
|
11.81
|
%
|
67.76
|
%
|
NM
|
Dividends(4)
|
Financial
Characteristics(6)
|
||||||||||||||||||||||||||||||||||||
Amount/
|
Payout
|
Total
|
Equity/
|
Tang
Eq/
|
NPAs/
|
Reported
|
Core
|
||||||||||||||||||||||||||||||
Financial
Institution
|
Share
|
Yield
|
Ratio(5)
|
Assets
|
Assets
|
Assets
|
Assets
|
ROA
|
ROE
|
ROA
|
ROE
|
||||||||||||||||||||||||||
($)
|
(%)
|
(%)
|
($Mil)
|
(%)
|
(%)
|
(%)
|
(%)
|
(%)
|
(%)
|
(%)
|
|||||||||||||||||||||||||||
All
Public Companies
|
$
|
0.25
|
2.18
|
%
|
32.57
|
%
|
$
|
2,649
|
11.27
|
%
|
10.52
|
%
|
3.16
|
%
|
-0.16
|
%
|
-0.34
|
%
|
-0.14
|
%
|
-0.84
|
%
|
|||||||||||||||
Converted
Last 3 Months (no MHC)
|
$
|
0.13
|
1.16
|
%
|
20.69
|
%
|
$
|
2,114
|
6.47
|
%
|
6.09
|
%
|
1.03
|
%
|
0.24
|
%
|
3.61
|
%
|
0.28
|
%
|
3.52
|
%
|
|||||||||||||||
Converted
Last 3 Months (no MHC)
|
|||||||||||||||||||||||||||||||||||||
AFCB
|
Athens
Bancshares, Inc. of TN
|
$
|
0.00
|
0.00
|
%
|
0.00
|
%
|
$
|
269
|
0.00
|
%
|
0.00
|
%
|
NA
|
0.56
|
%
|
NM
|
0.56
|
%
|
NM
|
|||||||||||||||||
NWBI
|
Northwest
Bancshares Inc. of PA
|
$
|
0.40
|
3.36
|
%
|
NM
|
$
|
8,025
|
16.41
|
%
|
14.53
|
%
|
1.81
|
%
|
0.46
|
%
|
4.32
|
%
|
0.57
|
%
|
5.33
|
%
|
|||||||||||||||
OBAF
|
OBA
Financial Serv. Inc. of MD
|
$
|
0.00
|
0.00
|
%
|
NM
|
$
|
397
|
0.00
|
%
|
0.00
|
%
|
NA
|
-0.30
|
%
|
NM
|
-0.10
|
%
|
NM
|
||||||||||||||||||
OSHC
|
Ocean
Shore Holding Co. of NJ
|
$
|
0.24
|
2.45
|
%
|
41.38
|
%
|
$
|
770
|
7.69
|
%
|
7.69
|
%
|
0.25
|
%
|
0.55
|
%
|
7.15
|
%
|
0.68
|
%
|
8.88
|
%
|
||||||||||||||
OABC
|
OmniAmerican
Bancorp Inc. of TX
|
$
|
0.00
|
0.00
|
%
|
NM
|
$
|
1,108
|
8.23
|
%
|
8.23
|
%
|
NA
|
-0.05
|
%
|
-0.65
|
%
|
-0.30
|
%
|
-3.66
|
%
|
(1)
|
Average
of High/Low or Bid/Ask price per share.
|
(2)
|
EPS
(estimate core basis) is based on actual trailing 12 month data, adjusted
to omit non-operating items on a tax-effected basis.
|
(3)
|
P/E
= Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB =
Price to tangible book value; and P/Core = Price to core
earnings.
|
(4)
|
Indicated
12 month dividend, based on last quarterly dividend
declared.
|
(5)
|
Indicated
12 month dividend as a percent of trailing 12 month estimated core
earnings.
|
(6)
|
ROA
(return on assets) and ROE (return on equity) are indicated ratios based
on trailing 12 month common earnings and average common equity and total
assets balances.
|
(7)
|
Excludes
from averages and medians those companies the subject of actual or rumored
acquisition activities or unusual operating
characteristics.
|
Source:
|
SNL
Financial, LC. and RP
®
Financial, LC. calculations. The information provided in this report has
been obtained from sources we believe are reliable, but we cannot
guarantee the accuracy or completeness of such
information.
|
RP ® Financial, LC. | VALUATION ANALYSIS |
IV.
16
|
RP ® Financial, LC. | VALUATION ANALYSIS |
IV.
17
|
RP ® Financial, LC. | VALUATION ANALYSIS |
IV.
18
|
Key Valuation Parameters
:
|
|
Valuation Adjustment
|
|
|
Financial
Condition
|
Slight
Upward
|
|||
Profitability,
Growth and Viability of Earnings
|
Slight
Upward
|
|||
Asset
Growth
|
No
Adjustment
|
|||
Primary
Market Area
|
No
Adjustment
|
|||
Dividends
|
No
Adjustment
|
|||
Liquidity
of the Shares
|
No
Adjustment
|
|||
Marketing
of the Issue
|
Slight
Downward
|
|||
Management
|
No
Adjustment
|
|||
Effect
of Govt. Regulations and Regulatory Reform
|
No
Adjustment
|
§
|
P/E
Approach
. The P/E approach is generally the best
indicator of long-term value for a stock and we have given it the most
significant weight among the valuation approaches. Given
certain similarities between the Company’s and the Peer Group’s earnings
composition and overall financial condition, the P/E approach was
carefully considered in this valuation. At the same time,
recognizing that (1) the earnings multiples will be evaluated on a pro
forma basis for the Company; and (2) the Peer Group on average has had the
opportunity to realize the benefit of reinvesting and leveraging the
offering proceeds, we also gave weight to the other valuation
approaches.
|
§
|
P/B
Approach
. P/B ratios have generally served as a useful
benchmark in the valuation of thrift stocks, particularly in the context
of an initial public offering, as the earnings approach involves
assumptions regarding the use of proceeds. RP Financial
considered the P/B approach to be a valuable indicator of pro forma value
taking into account the pricing ratios under the P/E and P/A
approaches. We have also modified the P/B approach to exclude
the impact of intangible assets (i.e., price/tangible book value or
“P/TB”), in that the investment community frequently makes this adjustment
in its evaluation of this pricing
approach.
|
RP ® Financial, LC. | VALUATION ANALYSIS |
IV.
19
|
§
|
P/A
Approach
. P/A ratios are generally a less reliable
indicator of market value, as investors typically assign less weight to
assets and attribute greater weight to book value and
earnings. Furthermore, this approach as set forth in the
regulatory valuation guidelines does not take into account the amount of
stock purchases funded by deposit withdrawals, thus understating the pro
forma P/A ratio. At the same time, the P/A ratio is an
indicator of franchise value, and, in the case of highly capitalized
institutions, high P/A ratios may limit the investment community’s
willingness to pay market multiples for earnings or book value when ROE is
expected to be low.
|
§
|
Trading of JXSB
stock
. Converting institutions generally do not have
stock outstanding. Jacksonville, however, has public shares
outstanding due to the mutual holding company form of
ownership. Since Jacksonville is currently traded on the
NASDAQ, it is an indicator of investor interest in the Company’s
conversion stock and therefore received some weight in our
valuation. Based on the February 19, 2010, stock price of
$11.89 per share and the 1,920,817 shares of Jacksonville stock
outstanding, the Company’s implied market value of $22.8 million was
considered in the valuation process. However, since the
conversion stock will have different characteristics than the Company’s
shares, and since pro forma information has not been publicly disseminated
to date, the current trading price of Jacksonville Bancorp’s stock was
somewhat discounted herein but will become more important towards the
closing of the offering.
|
RP ® Financial, LC. | VALUATION ANALYSIS |
IV.
20
|
Amount
|
||||
($000 | ) | |||
Net
income(loss)
|
$ | 1,396 | ||
Deduct:
Gain on sale of investment securities
|
(589 | ) | ||
Deduct:
Recovery of value of servicing assets
|
(123 | ) | ||
Tax
Effect @ 34.00% rate
|
256 | |||
Core
earnings estimate
|
$ | 941 |
RP ® Financial, LC. | VALUATION ANALYSIS |
IV.
21
|
RP
®
Financial, LC.
|
VALUATION
ANALYSIS
|
IV.22
|
Market | Per Share Data |
|
|||||||||||||||||||||||||||||||||||||
Capitalization
|
Core | Book | Dividends(4) | ||||||||||||||||||||||||||||||||||||
Price/ | Market | 12 Month | Value/ | Pricing Ratios(3) | Amount/ | Payout | |||||||||||||||||||||||||||||||||
Share(1)
|
Value |
EPS(2)
|
Share
|
P/E | P/B | P/A | P/TB | P/Core | Share | Yield | Ratio(5) | ||||||||||||||||||||||||||||
($)
|
($Mil)
|
($)
|
($)
|
(x)
|
(%)
|
(%)
|
(%)
|
(x)
|
($)
|
(%)
|
(%)
|
||||||||||||||||||||||||||||
Jacksonville
Bancorp, Inc.
|
|||||||||||||||||||||||||||||||||||||||
Superrange
|
$
|
10.00
|
$
|
28.74
|
$
|
0.39
|
$
|
13.79
|
18.10
|
x
|
72.52
|
%
|
9.48
|
%
|
77.88
|
%
|
25.36
|
x
|
$
|
0.20
|
2.01
|
%
|
50.86
|
%
|
|||||||||||||||
Maximum
|
$
|
10.00
|
$
|
24.99
|
$
|
0.44
|
$
|
15.10
|
16.01
|
x
|
66.23
|
%
|
8.29
|
%
|
71.38
|
%
|
22.61
|
x
|
$
|
0.23
|
2.31
|
%
|
52.13
|
%
|
|||||||||||||||
Midpoint
|
$
|
10.00
|
$
|
21.73
|
$
|
0.50
|
$
|
16.61
|
14.14
|
x
|
60.20
|
%
|
7.25
|
%
|
65.15
|
%
|
20.09
|
x
|
$
|
0.27
|
2.65
|
%
|
53.29
|
%
|
|||||||||||||||
Minimum
|
$
|
10.00
|
$
|
18.47
|
$
|
0.57
|
$
|
18.64
|
12.21
|
x
|
53.65
|
%
|
6.20
|
%
|
58.28
|
%
|
17.47
|
x
|
$
|
0.31
|
3.12
|
%
|
54.50
|
%
|
|||||||||||||||
All
Non-MHC Public Companies (7)
|
|||||||||||||||||||||||||||||||||||||||
Averages
|
$
|
9.63
|
$
|
348.32
|
($
|
0.24
|
)
|
$
|
13.72
|
17.34
|
x
|
69.21
|
%
|
8.00
|
%
|
77.76
|
%
|
18.45
|
x
|
$
|
0.25
|
2.17
|
%
|
32.88
|
%
|
||||||||||||||
Medians
|
$
|
9.33
|
$
|
49.86
|
$
|
0.09
|
$
|
13.01
|
15.75
|
x
|
68.52
|
%
|
6.38
|
%
|
74.84
|
%
|
16.25
|
x
|
$
|
0.20
|
1.90
|
%
|
0.00
|
%
|
|||||||||||||||
All
Non-MHC Public Companies - State of Illinois (7)
|
|||||||||||||||||||||||||||||||||||||||
Averages
|
$
|
6.92
|
$
|
90.23
|
($
|
0.72
|
)
|
$
|
14.59
|
24.12
|
x
|
55.61
|
%
|
8.22
|
%
|
63.01
|
%
|
23.00
|
x
|
$
|
0.17
|
2.14
|
%
|
68.29
|
%
|
||||||||||||||
Medians
|
$
|
6.67
|
$
|
53.87
|
($
|
0.81
|
)
|
$
|
12.43
|
24.12
|
x
|
67.72
|
%
|
8.94
|
%
|
80.85
|
%
|
23.00
|
x
|
$
|
0.24
|
2.83
|
%
|
0.00
|
%
|
||||||||||||||
Comparable
Group Averages
|
|||||||||||||||||||||||||||||||||||||||
Averages
|
$
|
10.34
|
$
|
24.80
|
$
|
0.36
|
$
|
16.30
|
16.59
|
x
|
63.46
|
%
|
5.61
|
%
|
66.79
|
%
|
18.92
|
x
|
$
|
0.42
|
3.53
|
%
|
23.72
|
%
|
|||||||||||||||
Medians
|
$
|
10.69
|
$
|
22.79
|
$
|
0.45
|
$
|
16.93
|
16.20
|
x
|
62.98
|
%
|
4.98
|
%
|
65.09
|
%
|
17.70
|
x
|
$
|
0.49
|
4.48
|
%
|
23.72
|
%
|
|||||||||||||||
Comparable
Group
|
|||||||||||||||||||||||||||||||||||||||
CZWI
|
Citizens
Comm Bncorp Inc of WI
|
$
|
4.00
|
$
|
20.45
|
$
|
0.40
|
$
|
10.80
|
NM
|
37.04
|
%
|
3.61
|
%
|
42.11
|
%
|
10.00
|
x
|
$
|
0.00
|
0.00
|
%
|
NM
|
||||||||||||||||
FFDF
|
FFD
Financial Corp of Dover OH
|
$
|
13.25
|
$
|
13.40
|
$
|
0.45
|
$
|
17.71
|
17.21
|
74.82
|
%
|
6.78
|
%
|
74.82
|
%
|
29.44
|
x
|
$
|
0.68
|
5.13
|
%
|
NM
|
||||||||||||||||
FCAP
|
First
Capital, Inc. of IN
|
$
|
14.34
|
$
|
39.55
|
$
|
0.45
|
$
|
16.91
|
28.12
|
84.80
|
%
|
8.66
|
%
|
96.37
|
%
|
31.87
|
x
|
$
|
0.72
|
5.02
|
%
|
NM
|
||||||||||||||||
FSFG
|
First
Savings Fin. Grp. of IN
|
$
|
10.40
|
$
|
25.12
|
($
|
0.02
|
)
|
$
|
21.80
|
16.00
|
47.71
|
%
|
5.11
|
%
|
56.96
|
%
|
15.52
|
x
|
$
|
0.00
|
0.00
|
%
|
NM
|
|||||||||||||||
HFBC
|
HopFed
Bancorp, Inc. of KY
|
$
|
10.98
|
$
|
39.47
|
($
|
0.34
|
)
|
$
|
17.46
|
NM
|
62.89
|
%
|
3.86
|
%
|
64.17
|
%
|
NM
|
$
|
0.48
|
4.37
|
%
|
NM
|
||||||||||||||||
LSBI
|
LSB
Fin. Corp. of Lafayette IN
|
$
|
10.00
|
$
|
15.54
|
$
|
0.17
|
$
|
22.06
|
16.39
|
45.33
|
%
|
4.27
|
%
|
45.33
|
%
|
NM
|
$
|
0.50
|
5.00
|
%
|
NM
|
|||||||||||||||||
LBCP
|
Liberty
Bancorp, Inc. of MO
|
$
|
7.75
|
$
|
27.98
|
$
|
0.46
|
$
|
12.29
|
12.92
|
63.06
|
%
|
6.89
|
%
|
66.01
|
%
|
16.85
|
x
|
$
|
0.10
|
1.29
|
%
|
16.67
|
%
|
|||||||||||||||
RIVR
|
River
Valley Bancorp of IN
|
$
|
12.42
|
$
|
18.68
|
$
|
0.67
|
$
|
16.94
|
11.83
|
73.32
|
%
|
4.85
|
%
|
73.40
|
%
|
18.54
|
x
|
$
|
0.84
|
6.76
|
%
|
NM
|
||||||||||||||||
WVFC
|
WVS
Financial Corp. of PA
|
$
|
13.96
|
$
|
28.84
|
$
|
0.73
|
$
|
14.86
|
20.53
|
93.94
|
%
|
7.37
|
%
|
93.94
|
%
|
19.12
|
x
|
$
|
0.64
|
4.58
|
%
|
NM
|
||||||||||||||||
WAYN
|
Wayne
Savings Bancshares of OH
|
$
|
6.30
|
$
|
18.93
|
$
|
0.63
|
$
|
12.19
|
9.69
|
51.68
|
%
|
4.69
|
%
|
54.83
|
%
|
10.00
|
x
|
$
|
0.20
|
3.17
|
%
|
30.77
|
%
|
Financial
Characteristics(6)
|
2nd
Step
Offering
Amount
|
||||||||||||||||||||||||||||||||
Total
Assets
|
Equity/
Assets
|
Tang
Eq/
Assets
|
NPAs/
Assets
|
Reported
|
Core
|
Exchange
Ratio
|
|||||||||||||||||||||||||||
ROA
|
ROE
|
ROA
|
ROE
|
||||||||||||||||||||||||||||||
($Mil)
|
(%)
|
(%)
|
(%)
|
(%)
|
(%)
|
(%)
|
(%)
|
($Mil)
|
|||||||||||||||||||||||||
Jacksonville
Bancorp, Inc.
|
|||||||||||||||||||||||||||||||||
Superrange
|
$
|
303
|
13.07
|
%
|
12.28
|
%
|
0.77
|
%
|
0.52
|
%
|
4.01
|
%
|
0.37
|
%
|
2.86
|
%
|
1.4960
|
$
|
15.54
|
||||||||||||||
Maximum
|
$
|
301
|
12.52
|
%
|
11.72
|
%
|
0.78
|
%
|
0.52
|
%
|
4.14
|
%
|
0.37
|
%
|
2.93
|
%
|
1.3009
|
$
|
13.51
|
||||||||||||||
Midpoint
|
$
|
300
|
12.04
|
%
|
11.23
|
%
|
0.78
|
%
|
0.51
|
%
|
4.26
|
%
|
0.36
|
%
|
3.00
|
%
|
1.1312
|
$
|
11.75
|
||||||||||||||
Minimum
|
$
|
298
|
11.55
|
%
|
10.74
|
%
|
0.78
|
%
|
0.51
|
%
|
4.39
|
%
|
0.35
|
%
|
3.07
|
%
|
0.9615
|
$
|
9.99
|
||||||||||||||
All
Non-MHC Public Companies (7)
|
|||||||||||||||||||||||||||||||||
Averages
|
$
|
3,022
|
10.81
|
%
|
10.00
|
%
|
3.40
|
%
|
-0.25
|
%
|
-0.58
|
%
|
-0.27
|
%
|
-1.69
|
%
|
|||||||||||||||||
Medians
|
$
|
903
|
9.23
|
%
|
8.63
|
%
|
2.66
|
%
|
0.19
|
%
|
2.09
|
%
|
0.09
|
%
|
1.12
|
%
|
|||||||||||||||||
All
Non-MHC Public Companies - State of Illinois (7)
|
|||||||||||||||||||||||||||||||||
Averages
|
$
|
800
|
13.89
|
%
|
12.77
|
%
|
3.69
|
%
|
-0.60
|
%
|
-5.01
|
%
|
-0.48
|
%
|
-4.04
|
%
|
|||||||||||||||||
Medians
|
$
|
603
|
13.19
|
%
|
11.55
|
%
|
2.79
|
%
|
-1.11
|
%
|
-7.69
|
%
|
-0.95
|
%
|
-7.60
|
%
|
|||||||||||||||||
Comparable
Group Averages
|
|||||||||||||||||||||||||||||||||
Averages
|
$
|
469
|
9.15
|
%
|
8.67
|
%
|
1.72
|
%
|
0.27
|
%
|
2.95
|
%
|
0.28
|
%
|
2.90
|
%
|
|||||||||||||||||
Medians
|
$
|
405
|
9.26
|
%
|
8.87
|
%
|
1.43
|
%
|
0.37
|
%
|
3.68
|
%
|
0.31
|
%
|
3.29
|
%
|
|||||||||||||||||
Comparable
Group
|
|||||||||||||||||||||||||||||||||
CZWI
|
Citizens
Comm Bncorp Inc of WI
|
$
|
567
|
9.75
|
%
|
8.67
|
%
|
1.12
|
%
|
-0.61
|
%
|
-5.57
|
%
|
0.38
|
%
|
3.48
|
%
|
||||||||||||||||
FFDF
|
FFD
Financial Corp of Dover OH
|
$
|
198
|
9.06
|
%
|
9.06
|
%
|
0.69
|
%
|
0.41
|
%
|
4.35
|
%
|
0.24
|
%
|
2.54
|
%
|
||||||||||||||||
FCAP
|
First
Capital, Inc. of IN
|
$
|
457
|
10.23
|
%
|
9.12
|
%
|
2.28
|
%
|
0.31
|
%
|
2.99
|
%
|
0.27
|
%
|
2.64
|
%
|
||||||||||||||||
FSFG
|
First
Savings Fin. Grp. of IN
|
$
|
491
|
10.71
|
%
|
9.13
|
%
|
1.44
|
%
|
0.47
|
%
|
3.00
|
%
|
0.48
|
%
|
3.10
|
%
|
||||||||||||||||
HFBC
|
HopFed
Bancorp, Inc. of KY
|
$
|
1,022
|
7.90
|
%
|
7.78
|
%
|
1.28
|
%
|
0.05
|
%
|
0.62
|
%
|
-0.13
|
%
|
-1.63
|
%
|
||||||||||||||||
LSBI
|
LSB
Fin. Corp. of Lafayette IN
|
$
|
364
|
9.43
|
%
|
9.43
|
%
|
3.60
|
%
|
0.25
|
%
|
2.77
|
%
|
0.07
|
%
|
0.77
|
%
|
||||||||||||||||
LBCP
|
Liberty
Bancorp, Inc. of MO
|
$
|
406
|
10.92
|
%
|
10.48
|
%
|
1.83
|
%
|
0.56
|
%
|
4.95
|
%
|
0.43
|
%
|
3.80
|
%
|
||||||||||||||||
RIVR
|
River
Valley Bancorp of IN
|
$
|
385
|
6.61
|
%
|
6.61
|
%
|
3.13
|
%
|
0.42
|
%
|
6.33
|
%
|
0.27
|
%
|
4.04
|
%
|
||||||||||||||||
WVFC
|
WVS
Financial Corp. of PA
|
$
|
392
|
7.84
|
%
|
7.84
|
%
|
0.42
|
%
|
0.34
|
%
|
4.52
|
%
|
0.36
|
%
|
4.85
|
%
|
||||||||||||||||
WAYN
|
Wayne
Savings Bancshares of OH
|
$
|
403
|
9.08
|
%
|
8.60
|
%
|
1.41
|
%
|
0.48
|
%
|
5.53
|
%
|
0.47
|
%
|
5.36
|
%
|
(1)
|
Average
of High/Low or Bid/Ask price per share.
|
(2)
|
EPS
(estimate core basis) is based on actual trailing 12 month data, adjusted
to omit non-operating items on a tax-effected basis, and is shown on a pro
forma basis where appropriate.
|
(3)
|
P/E
= Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB =
Price to tangible book value; and P/Core = Price to core
earnings.
|
(4)
|
Indicated
12 month dividend, based on last quarterly dividend
declared.
|
(5)
|
Indicated
12 month dividend as a percent of trailing 12 month estimated core
earnings.
|
(6)
|
ROA
(return on assets) and ROE (return on equity) are indicated ratios based
on trailing 12 month common earnings and average common equity and total
assets balances.
|
(7)
|
Excludes
from averages and medians those companies the subject of actual or rumored
acquisition activities or unusual operating
characteristics.
|
Source: | Corporate reports, offering circulars, and RP Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information. |
RP ® Financial, LC. | VALUATION ANALYSIS |
IV.
23
|
RP ® Financial, LC. | VALUATION ANALYSIS |
IV.
24
|
Exchange
Shares
|
||||||||||||||||
Offering
|
Issued
to the
|
Exchange
|
||||||||||||||
Total
Shares
|
Shares
|
Public
Shareholders
|
Ratio
|
|||||||||||||
Shares
|
(x)
|
|||||||||||||||
Super
Maximum
|
2,873,516 | 1,553,938 | 1,319,578 | 1.4960 | ||||||||||||
Maximum
|
2,498,709 | 1,351,250 | 1,147,459 | 1.3009 | ||||||||||||
Midpoint
|
2,172,790 | 1,175,000 | 997,790 | 1.1312 | ||||||||||||
Minimum
|
1,846,872 | 998,750 | 848,122 | 0.9615 | ||||||||||||
Distribution
of Shares
|
||||||||||||||||
Super
Maximum
|
100.00 | % | 54.08 | % | 45.92 | % | ||||||||||
Maximum
|
100.00 | % | 54.08 | % | 45.92 | % | ||||||||||
Midpoint
|
100.00 | % | 54.08 | % | 45.92 | % | ||||||||||
Minimum
|
100.00 | % | 54.08 | % | 45.92 | % | ||||||||||
Aggregate
Market Value(1)
|
||||||||||||||||
Super
Maximum
|
$ | 28,735,160 | $ | 15,539,380 | $ | 13,195,780 | ||||||||||
Maximum
|
$ | 24,987,090 | $ | 13,512,500 | $ | 11,474,590 | ||||||||||
Midpoint
|
$ | 21,727,900 | $ | 11,750,000 | $ | 9,977,900 | ||||||||||
Minimum
|
$ | 18,468,720 | $ | 9,987,500 | $ | 8,481,220 |
(1) |
Based
on offering price of $10.00 per
share.
|
RP ® FINANCIAL, LC. |
|
Serving the Financial Services Industry Since 1988 |
|
(1)
|
the
subscription rights will have no ascertainable market value;
and,
|
|
(2)
|
the
price at which the subscription rights are exercisable will not be more or
less than the pro forma market value of the shares upon
issuance.
|
Sincerely, | ||
|
/s/ RP Financial, LC. | |
RP Financial, LC. |
Washington
Headquarters
|
|
Three
Ballston Plaza
|
Telephone:
(703) 528-1700
|
1100
North Glebe Road, Suite1100
|
Fax
No.: (703) 528-1788
|
Arlington,
VA 22201
|
Toll-Free
No.: (866) 723-0594
|
www.rpfinancial.com
|
E-Mail:
mail@rpfinancial.com
|
RP ® FINANCIAL, LC. |
|
Serving the Financial Services Industry Since 1988 |
Washington
Headquarters
|
|
Three
Ballston Plaza
|
Telephone:
(703) 528-1700
|
1100
North Glebe Road, Suite1100
|
Fax
No.: (703) 528-1788
|
Arlington,
VA 22201
|
Toll-Free
No.: (866) 723-0594
|
www.rpfinancial.com
|
E-Mail:
mail@rpfinancial.com
|
Sincerely, | ||
|
/s/ RP Financial, LC. | |
RP Financial, LC. |
Ø
|
Your
deposit accounts will continue to be insured up to the maximum legal limit
by the Federal Deposit Insurance Corporation
(“FDIC”).
|
Ø
|
There
will be no change in the balance, interest rate or maturity of any deposit
account or loan because of the
conversion.
|
|
PROSPECTUS
: This
document provides detailed information about the operations of
Jacksonville Savings Bank, the proposed conversion and reorganization, and
the offering of Jacksonville Bancorp, Inc. common
stock.
|
|
STOCK
ORDER AND CERTIFICATION FORM
: This form can be used to purchase
stock by returning it with your payment in the enclosed business reply
envelope. Your order must be received by 12:00 p.m., Central Time, on
____________.
|
Ø
|
Your
deposit accounts will continue to be insured up to the maximum legal limit
by the Federal Deposit Insurance Corporation
(“FDIC”).
|
Ø
|
There
will be no change in the balance, interest rate or maturity of any deposit
account or loan because of the
reorganization.
|
Ø
|
Members
have a right, but not an obligation, to buy Jacksonville Bancorp, Inc.
common stock and may do so without the payment of a commission or fee
before shares are offered to the general
public.
|
Ø
|
Like
all stock, shares of Jacksonville Bancorp, Inc. common stock issued in
this offering will not be insured by the
FDIC.
|
|
PROSPECTUS
: This
document provides detailed information about the operations of
Jacksonville Savings Bank, the proposed conversion and reorganization, and
the offering of Jacksonville Bancorp, Inc. common
stock.
|
|
STOCK
ORDER AND CERTIFICATION FORM
: This form can be used to purchase
stock by returning it with your payment in the enclosed business reply
envelope. Your order must be received by 12:00 p.m., Central Time, on
____________.
|
[BANK
LOGO HERE]
|
PROXY
GRAM
|
PLEASE
VOTE TODAY
|
We
recently sent you a proxy statement and other materials related to the
“second step” conversion of Jacksonville Bancorp, MHC from the mutual to
the stock form of organization.
|
Your
vote on the Plan of Conversion and Reorganization has not yet been
received.
|
Voting
for the reorganization
does not obligate you
to
purchase stock and will not affect your accounts or FDIC Insurance
Coverage.
|
Not
Returning Your Proxy Card has the Same Effect as Voting “Against” the
Conversion and Reorganization.
Your
Board of Directors Unanimously Recommends a Vote “FOR” the Conversion and
Reorganization.
|
Your Vote Is Important To
Us!
|
Please
sign the enclosed proxy card and return it in the postage-paid envelope
provided
TODAY
!
If you received more
than one proxy card, please be sure to sign, date and return all cards you
received.
|
Thank
you,
|
Richard
A. Foss
|
President,
Chief Executive Officer and Director
|
Jacksonville
Bancorp, MHC
|
If
you have already mailed your proxy card(s), please accept our thanks and
disregard this notice.
|
For
further information, call (877)
860-2070
|
[BANK
LOGO HERE]
|
|
PROXY
GRAM II
|
|
PLEASE
VOTE TODAY
|
|
We
recently sent you a proxy statement and other materials related to the
“second step” conversion of Jacksonville Bancorp, MHC from the mutual to
the stock form of organization.
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Your
vote on the Plan of Conversion and Reorganization has not yet been
received.
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Voting
for the conversion
does not obligate
you
to purchase stock and will not affect your accounts or FDIC
Insurance Coverage.
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Not
Returning Your Proxy Card has the Same Effect as Voting “Against” the
Conversion and Reorganization.
Your
Board of Directors Unanimously Recommends a Vote “FOR” the Conversion and
Reorganization.
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Our Reasons for the Corporate
Change
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Our primary reasons for converting and raising
additional capital through the offering are:
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●
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to
support internal growth through lending in the communities we
serve
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●
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to
enhance existing products and services and support the development of new
products and services
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●
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to
facilitate growth through branch and whole bank acquisitions, as
opportunities arise
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●
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to
improve our overall competitive position
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●
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to
improve the liquidity of our shares of common stock and enhance
stockholder returns through more flexible capital management
strategies
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Your Vote Is Important To
Us!
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Please
sign the enclosed proxy card and return it in the postage-paid envelope
provided
TODAY
!
If you received more
than one proxy card, please be sure to sign, date and return all cards you
received.
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Thank
you,
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Richard
A. Foss
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President,
Chief Executive Officer and Director
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Jacksonville
Bancorp, MHC
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If
you have already mailed your proxy card(s), please accept our thanks and
disregard this notice.
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For
further information, call (877)
860-2070.
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•
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Know the Rules
By law,
accountholders cannot sell or transfer their priority subscription rights,
or the stock itself, prior to the completion of a financial institution’s
conversion. Moreover, accountholders cannot enter into agreements or
arrangements to sell or transfer either their subscription rights or the
underlying conversion stock.
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•
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“Neither a Borrower nor a
Lender Be”
If someone offers to
lend you money so that you can participate
or participate more
fully
in a
conversion, be extremely wary. Be even more
wary
if the source of the
money is someone you do not know. The loan agreement may make you unable
to certify truthfully that you are the true holder of the subscription
rights and the true purchaser of the stock and that you have no agreements
regarding the sale or transfer of the
stock.
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•
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Watch Out for Opportunists
The opportunist may tell you that he or she is a lawyer or a
consultant or a professional investor or some similarly impressive tale
who has experience with similar mutual conversion transactions. The
opportunist may go to extreme lengths to assure you that the arrangement
you are entering into is legitimate. They might tell you that they have
done scores of these transactions and that this is simply how they work.
Or they might downplay the warnings or restrictions in the prospectus or
order form, telling you that “everyone” enters into such agreements or
that the deal they are offering is legitimate. They may also tell you that
you have no risk in the transaction. The cold, hard truth is that these
are lies, and if you participate, you are breaking the
law.
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•
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Get the Facts from the Source
If you have any questions about the securities offering, ask the
savings bank or savings association for more information. If you have any
doubts about a transaction proposed to you by someone else, ask the
financial institution whether the proposed arrangement is proper. You may
be able to find helpful resources on the institution’s website or by
visiting a branch office.
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JACKSONVILLE
BANCORP
LOGO
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SEND OVERNIGHT PACKAGES TO:
Jacksonville
Bancorp, Inc.
Stock
Order Processing Center
10
South Wacker, Suite 3400
Chicago,
IL 60606
(877)
860-2070
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||||||||
(1)
Number of Shares
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Price
Per Share
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(2)
Total Amount Due
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ORDER
DEADLINE:
The Subscription Offering ends at 12:00 p.m., Central
Time, on ___________, 2010. Your original Stock Order and Certification
Form, properly executed and with the correct payment, must be received
(not postmarked) at the address on the top of this form by the deadline or
it will be considered void. Orders will be accepted at the address on the
top of this form, the PO Box address on the business reply envelope
provided, or by delivering your order in person at any one of Jacksonville
Savings Bank’s branch offices.
Faxes
or copies of this form will not be accepted. Jacksonville Bancorp, Inc.
reserves the right to accept or reject improper order
forms.
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x
$10.00 =
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$ .00
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||||||||
Minimum
Number of Shares: 25 ($250). Maximum Number of Shares: 25,000 ($250,000),
and no person together with his or her associates or group of persons
acting in concert may purchase more than 50,000 shares ($500,000). Current
shareholders, either alone or together with associates or persons
acting in
concert, may not purchase shares in an amount that when combined with
shares received in exchange for currently outstanding shares of common
stock of Jacksonville Bancorp, Inc. is greater than 5% of the shares to be
issued and outstanding at the completion of the
conversion.
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(3a)
Method of Payment- Check or Money Order
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(4)
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Purchaser
Information
(check
one)
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||||||||
Enclosed
is a personal check, bank check or money order made payable to
Jacksonville Bancorp,
Inc.
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$
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.00
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a.
o
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Eligible
Account Holder
- Check here if you were a depositor with at least
$50 on deposit with Jacksonville Savings Bank as of December 31, 2008.
Enter information in Section 9 for all deposit accounts that you had at
Jacksonville Savings Bank on December 31, 2008.
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||||||
(3b)
Method of Payment- Deposit Account Withdrawal
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||||||||||
Jacksonville
Savings Bank Deposit Account Number(s)
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Withdrawal
Amount(s)
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|||||||||
b.
o
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Supplemental
Eligible Account Holder
- Check here if you were a depositor with
at least $50 on deposit with Jacksonville Savings Bank as of March 31,
2010 but were not an Eligible Account Holder. Enter information in Section
9 for all deposit accounts that you had at Jacksonville Savings Bank as of
March 31, 2010.
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|||||||||
MARK
THE
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Savings
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o
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||||||||
ACCOUNT
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||||||||||
TYPE
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CD
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o
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$
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.00
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||||||
MARK
THE
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Savings
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o | ||||||||
ACCOUNT
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c.
o
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Other
Depositors -
Check here if you were a depositor of Jacksonville
Savings Bank as of
_______________
, who were not able to subscribe
for shares under the Eligible or Supplemental Eligible Account Holder
categories.
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||||||||
TYPE
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CD
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o
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$
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.00
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||||||
MARK
THE
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Savings
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o
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||||||||
ACCOUNT
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||||||||||
TYPE
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CD
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o
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$
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.00 |
d.
o
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Local
Community – Natural persons residing in the Illinois counties of Cass,
Greene, Macoupin, Montgomery, Morgan, Pike, Sangamon and Scott will
receive preference in a community offering.
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||||
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Total
Withdrawal
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$ | .00 | |||||||
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e.
o
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Jacksonville
Bancorp, Inc. public stockholders as of ___________
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f.
o
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General
Public
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||||||
(5)
Check if you (or a household family member) are a:
o
Director
or Officer of Jacksonville Savings Bank or Jacksonville Bancorp, Inc.
o
Employee
of Jacksonville Savings Bank or Jacksonville Bancorp,
Inc.
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||||||||||
(6)
Maximum Purchaser Identification:
o
Check here
if you, individually or together with others (see section 7), are
subscribing for the maximum purchase allowed and are interested in
purchasing more shares if the two maximum purchase limitations are
increased. See Section 1 of the Stock Order Form Instructions
provided.
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(7)
Associates/Acting in Concert:
o
Check here
if you, or any associates or persons acting in concert with you, have
submitted other orders for shares. If you check this box, list below all
other orders submitted by you or your associates or by persons acting in
concert with you. See reverse side of this form for further
details.
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Name(s)
listed in Section 8 on other Order Forms
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Number
of Shares Ordered
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Name(s)
listed in Section 8 on other Order Forms
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Number
of Shares Ordered
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o
Individual
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o
Individual
Retirement Account
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o
Corporation
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o
Joint
Tenants
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o
Uniform Transfer
to Minors Act
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o
Partnership
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o
Tenants in
Common
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o
Uniform Gift to
Minors Act
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o
Trust - Under
Agreement Dated __________
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Name
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SS#
or Tax ID
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Name
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SS#
or Tax ID
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Address
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Daytime
Telephone #
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City
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State
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Zip
Code
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County
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Evening
Telephone #
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NAMES
ON ACCOUNTS
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ACCOUNT
NUMBER
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Signature
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Date
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Signature
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Date
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For
Internal Use Only
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REC’D
________ CHECK# _______ $______ CHECK#________ $________ BATCH # ________
ORDER # ________ CATEGORY _____
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1)
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Any
corporation or organization, other than Jacksonville Bancorp, Inc.,
Jacksonville Savings Bank, or a majority-owned subsidiary of Jacksonville
Savings Bank, of which the person is a senior officer, partner or 10%
beneficial stockholder;
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2)
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Any
trust or other estate in which the person has a substantial beneficial
interest or serves as a trustee or in a similar fiduciary capacity;
provided, however, it does not include any employee stock benefit plan in
which the person has a substantial beneficial interest or serves as
trustee or in a similar fiduciary capacity; and
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3)
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Any
blood or marriage relative of the person, who either lives in the same
home as the person or who is a director or officer of Jacksonville
Bancorp, Inc. or Jacksonville Savings
Bank.
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1)
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Knowing
participation in a joint activity or interdependent conscious parallel
action towards a common goal whether or not pursuant to an express
agreement; or
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2)
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A
combination or pooling of voting or other interests in the securities of
an issuer for a common purpose pursuant to any contract, understanding,
relationship, agreement or other arrangement, whether written or
otherwise.
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1.
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INSERT
FINAL RISK FACTORS HERE
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JACKSONVILLE
BANCORP, INC.
Stock
Order Form Instructions
Stock
Information Center: (877)
860-2070
|
Stock Order Form Instructions –
All subscription orders are subject to the provisions of the stock
offering.
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JACKSONVILLE
BANCORP, INC.
Stock
Ownership Guide
Stock
Information Center: (877)
860-2070
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Stock
Ownership Guide
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Registration
for IRA’s:
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On
Name Line 1 - list the name of the broker or trust department followed by
CUST or TRUSTEE.
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On
Name Line 2 - FBO (for benefit of) YOUR NAME [IRA a/c
#______].
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Address
will be that of the broker / trust department to where the stock
certificate will be sent.
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The
Social Security / Tax I.D. number(s) will be either yours or your
trustee’s,
as the trustee
directs
.
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Please
list
your
phone
numbers,
not
the
phone numbers of your broker / trust
department.
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Registration
for UTMA:
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On
Name Line 1 – print the name of the custodian followed by the abbreviation
“CUST”
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On
Name Line 2 – FBO (for benefit of) followed by the name of the minor,
followed by UTMA-IL
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(or
your state’s abbreviation)
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List
only the minor’s social security number on the
form.
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FOR
|
AGAINST
|
ABSTAIN
|
||||
1. | The approval of a plan of conversion and reorganization (the “Plan”) whereby: (a) Jacksonville Bancorp, MHC and Jacksonville Bancorp, Inc., a Federal Corporation (“Jacksonville Bancorp-Federal”) will convert and reorganize from the mutual holding company structure to the stock holding company structure; (b) Jacksonville Bancorp, Inc., a Maryland corporation (“Jacksonville Bancorp-Maryland”), will become the new stock holding company of Jacksonville Savings Bank; (c) the outstanding shares of Jacksonville Bancorp-Federal other than those held by Jacksonville Bancorp, MHC, will be converted into shares of common stock of Jacksonville Bancorp-Maryland; and (d) Jacksonville Bancorp-Maryland will offer shares of its common stock for sale in a subscription offering, community offering and, possibly, a syndicated community offering; |
o
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o
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o
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2. | The approval of the adjournment of the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to approve the plan of conversion and reorganization; |
o
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o
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o
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3. | The following informational proposals: | |||||
3a. |
Approval
of a provision in Jacksonville Bancorp-Maryland’s articles of
incorporation requiring a super-majority vote to approve certain
amendments to Jacksonville Bancorp-Maryland’s articles of
incorporation;
|
o
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o
|
o
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3b. |
Approval
of a provision in Jacksonville Bancorp-Maryland’s articles of
incorporation requiring a super-majority vote of stockholders to approve
stockholder-proposed amendments to Jacksonville Bancorp-Maryland’s bylaws;
and
|
o
|
o
|
o
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3c. |
Approval
of a provision in Jacksonville Bancorp-Maryland’s articles of
incorporation to limit the voting rights of shares beneficially owned in
excess of 10% of Jacksonville Bancorp-Maryland’s outstanding voting
stock.
|
o
|
o
|
o
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Dated:
_________________, 2010
|
o
Check
Box if You Plan to Attend the Special
Meeting
|
PRINT NAME OF STOCKHOLDER | PRINT NAME OF STOCKHOLDER | ||
SIGNATURE OF STOCKHOLDER | SIGNATURE OF STOCKHOLDER |