Capital Raise

Stock Purchase. On December 31, 2012, Jacksonville Bancorp, Inc. (the "Company") entered into an Amended and Restated Stock Purchase Agreement (the "Restated Stock Purchase Agreement") with its largest shareholder, CapGen Capital Group IV LP ("CapGen"), and 19 other accredited investors (together with CapGen, the "Investors"), for the purchase by the Investors of an aggregate of approximately 50,000 shares of the Company's Mandatorily Convertible, Noncumulative, Nonvoting Perpetual Preferred Stock, Series A, liquidation preference $1,000 per share (the "Series A Preferred Stock"), at a purchase price of $1,000 per share, subject to the terms and conditions contained in the Restated Stock Purchase Agreement (the "Stock Purchase"). Included in the approximately 50,000 shares of Series A Preferred Stock are the shares issued to CapGen in the Exchange and the shares purchased through the Subscriptions (each described below). In addition to CapGen, eight of the other Investors are current shareholders of the Company, and two of the Investors are affiliates of CapGen. The Restated Stock Purchase Agreement replaced the Stock Purchase Agreement dated August 22, 2012 by and between the Company and CapGen. The Stock Purchase closed on December 31, 2012.

The Series A Preferred Stock has the terms set forth in the articles of amendment to the Company's amended and restated articles of incorporation, as amended (the "Articles"), designating the Series A Preferred Stock (the "Series A Designation"), which was filed with the Florida Secretary of State on December 27, 2012 and a copy of which is filed as Exhibit 3.2 to this report. Pursuant to the Series A Designation, the Series A Preferred Stock will be mandatorily convertible into shares of the Company's common stock, par value $0.01 per share (the "Common Stock"), and shares of the Company's to-be-authorized new class of nonvoting common stock, par value $0.01 per share (the "Nonvoting Common Stock"), subject to and in accordance with the terms and conditions of the Series A Designation, upon approval by the Company's shareholders of the issuance of the Common Stock and Nonvoting Common Stock in connection with the conversion and the approval of an amendment to the Articles increasing the number of authorized shares of Common Stock and authorizing the new class of Nonvoting Common Stock. The Restated Stock Purchase Agreement and the Series A Designation generally require the Company to seek shareholder approval as promptly as reasonably practicable and by not later than 50 days following the closing of the Stock Purchase. The initial Conversion Price (as defined in the Series A Designation) is $0.50 per share, and each share of Series A Preferred Stock is expected to convert into an aggregate of approximately 2,000 shares of Common Stock and/or Nonvoting Common Stock, subject to adjustment as provided in the Series A Designation. Accordingly, the Company expects an aggregate of approximately 100 million shares of Common Stock and Nonvoting Common Stock to be issued upon conversion of the Series A Preferred Stock. The Conversion Price and Conversion Rate, which are set forth in the Series A Designation, were approved by a special pricing committee of the Company's board of directors comprised solely of disinterested directors, and ratified by the entire board.

Immediately after the conversion of the Series A Preferred Stock and as a result of their investments in the private placement (and/or the investments of investors managed by such entities or investments by affiliates of such entities), the Company expects CapGen, Sandler O'Neill Asset Management, LLC and Wellington Management Company to remain beneficial owners of at least 5% of our Common Stock, and the Company expects Sutherland Asset I, LLC to become the beneficial owner of at least 5% of our Common Stock.

Under the Restated Stock Purchase Agreement and except as set forth below, the Investors have preemptive rights with respect to public or private offerings of Common Stock (or rights to purchase, or securities convertible into or exercisable for, Common Stock) during a 24-month period after the closing of the Stock Purchase to enable the Investors to maintain their percentage interests of Common Stock beneficially owned. The Investors' preemptive rights will not apply to a public offering, including any rights offering, of up to $10 million that commences within six months of the closing of the Stock Purchase.

On December 31, 2012, the Bank completed the Asset Sale. The information regarding the Asset Sale set forth under Item 1.01 is incorporated by reference into this Item 2.01.

The information regarding the Stock Purchase, the Exchange and the Subscriptions set forth under Item 1.01 is incorporated by reference into this Item 3.02. The issuance of securities pursuant to the Stock Purchase, the Exchange and the Subscriptions is a private placement to "accredited investors" (as that term is defined under Rule 501 of Regulation D), and is exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), in reliance upon
Section 4(a)(2) of the Securities Act, as a transaction by an issuer not involving a public offering.

The information regarding the Series B Designation Amendment in Item 5.03 is incorporated by reference into this Item 3.03.

On December 31, 2012, the Company, the Bank and Stephen C. Green entered into Amendment No. 1 (the "Green Amendment") to the Executive Employment Agreement for Mr. Green. The Green Amendment provides that Mr. Green, upon the occurrence of certain conditions described below and upon further action of the Compensation Committee, will receive an option award exercisable for shares of Common Stock equal to 2% of the shares of Common Stock and Nonvoting Common Stock to be issued in the conversion of the Series A Preferred Stock. If granted, the option award would vest 40% on the date of grant, 20% on the first anniversary of the date of grant and 40% on the second anniversary of the date of grant, and the exercise price for the option would be the fair market value of the Common Stock on the date of grant. The option award is contingent upon, among other things, the conversion of the Series A Preferred Stock and the receipt of certain shareholder approvals. The option award replaces the award of restricted stock described in Mr. Green's original employment agreement.

Under the Green Amendment, if Mr. Green's employment is terminated (other than as a result of non-renewal), Mr. Green will be entitled to receive his base salary for a period of 18 months following his termination date. Upon such early termination of employment, any unvested equity

The foregoing description of the Green Amendment does not purport to be complete, and is qualified in its entirety by reference to such agreement, which is filed as Exhibit 10.6 hereto, and is incorporated herein by reference.

On December 27, 2012, the Company amended its Articles (the "Series B Designation Amendment") to amend and restate the Series B Preferred Stock designation previously filed with the Florida Secretary of State on September 27, 2012 (the "Series B Designation"). The Series B Designation Amendment amended the Series B Designation primarily to (i) reduce the total number of authorized shares of Series B Preferred Stock from 10,000 shares to 5,000 shares, (ii) provide that no dividends will accrue or be payable on the Series B Preferred Stock prior to June 1, 2013 for any purpose, and (iii) reduce the redemption price of the Series B Preferred Stock from 105% to 100% of the liquidation preference. The Series B Designation Amendment became effective upon filing.

Also on December 27, 2012, the Company filed with the Florida Secretary of State the Series A Designation as an amendment to the Articles establishing the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations and restrictions applicable to the Series A Preferred Stock. The Company authorized for issuance 50,000 shares of Series A Preferred Stock in the Series A Designation. The description of the Series A Designation and the Series A Preferred Stock set forth under Item 1.01 is incorporated by reference into this Item 5.03. The Series A Designation became effective upon filing.

The foregoing descriptions of the Series B Designation Amendment and the Series A Designation do not purport to be complete, and are qualified in their entirety by reference to such documents, copies of which are filed as Exhibits 3.1 and 3.2 hereto, respectively, and are incorporated herein by reference.

This document may be deemed to be solicitation material in respect of the issuance of Common Stock and Nonvoting Common Stock in connection with the conversion of the Series A Preferred Stock, the increase of authorized shares of Common Stock and the authorization of a new class of Nonvoting Common Stock, as well as other matters described herein. In connection with those matters, the Company will file with the SEC a separate proxy statement. Shareholders of the Company are encouraged to read the proxy statement and any other relevant documents filed with the SEC because they will contain important information about the proposed transactions. The final proxy statement will be mailed to shareholders of the Company. Investors and security holders will be able to obtain copies of the documents free of charge at the SEC's website, www.sec.gov. In addition, the documents may also be obtained, free of charge, from the Company by contacting Valerie A. Kendall, Chief Financial Officer, Jacksonville Bancorp, Inc., 100 North Laura Street, Suite 1000, Jacksonville, Florida 32202.

Additional information regarding the interests of those participants and other persons who may be deemed participants in the proxy solicitation may be obtained by reading the proxy statement regarding the proposed transactions when it becomes available. Shareholders of the Company may obtain free copies of this document as described above.

The information presented above may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements about the expected shareholder meeting and conversion of the Series A Preferred Stock; (ii) statements about Mr. Green's compensation; (iii) statements about the Company's plans, objectives, expectations and intentions and other statements that are not historical facts; and (iv) other statements identified by words such as "will," "expect," "may," "believe," "intend," "propose," "anticipated," and similar words.

Forward-looking statements, which are statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. The Company does not undertake to update any forward-looking statements.

All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in the Company's annual report on Form 10-K for the year ended December 31, 2011, and otherwise in its respective subsequent SEC reports and filings.

Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, without limitation, the following: the results of the special meeting of our shareholders; our ability to continue disposing of substandard assets and the disposition prices thereof; economic and political conditions, especially in North Florida; real estate prices and sales in the Company's markets; competitive circumstances; bank regulation, legislation, accounting principles and monetary policies; the interest rate environment; efforts to increase our capital and reduce our nonperforming assets; and technological changes.

Item 9.01 Exhibits.


(d) Exhibits



Exhibit
  No.                                       Exhibit

 3.1         Jacksonville Bancorp, Inc. Articles of Amendment to the Amended and
             Restated Articles of Incorporation Designating Noncumulative,
             Nonvoting Perpetual Preferred Stock, Series B, effective as of
             December 27, 2012 (incorporated herein by reference to Exhibit 3.1 to
             Form 8-K filed January 3, 2013, File No. 000-30248)

 3.2         Jacksonville Bancorp, Inc. Articles of Amendment to the Amended and
             Restated Articles of Incorporation Designating Mandatorily
             Convertible, Noncumulative, Nonvoting, Perpetual Preferred Stock,
             Series A, effective as of December 27, 2012 (incorporated herein by
             reference to Exhibit 3.2 to Form 8-K filed January 3, 2013, File
             No. 000-30248)

10.1         Amended and Restated Stock Purchase Agreement by and among
             Jacksonville Bancorp, Inc., CapGen Capital Group IV LP and the other
             investors named therein, dated as of December 31, 2012 (incorporated
             herein by reference to Exhibit 10.1 to Form 8-K filed January 3, 2013,
             File No. 000-30248)

10.2         Amended and Restated Registration Rights Agreement by and among
             Jacksonville Bancorp, Inc., CapGen Capital Group IV LP and the other
             investors named therein, dated as of December 31, 2012 (incorporated
             herein by reference to Exhibit 10.2 to Form 8-K filed January 3, 2013,
             File No. 000-30248)

10.3         Amended and Restated Exchange Agreement by and between Jacksonville
             Bancorp, Inc. and CapGen Capital Group IV LP, dated as of December 31,
             2012 (incorporated herein by reference to Exhibit 10.3 to Form 8-K
             filed January 3, 2013, File No. 000-30248)

10.4         Form of Subscription Agreement by and between Jacksonville Bancorp,
             Inc. and each of certain of its executive officers, directors or other
             related parties (incorporated herein by reference to Exhibit 10.4 to
             Form 8-K filed January 3, 2013, File No. 000-30248)

10.5         Form of Asset Purchase Agreement (incorporated herein by reference to
             Exhibit 10.5 to Form 8-K filed January 3, 2013, File No. 000-30248)

10.6         Amendment No. 1 to Executive Employment Agreement by and among
             Jacksonville Bancorp, Inc., The Jacksonville Bank and Stephen C.
             Green, dated as of December 31, 2012 (incorporated herein by reference
             to Exhibit 10.6 to Form 8-K filed January 3, 2013, File No. 000-30248)