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Jacksonville Sells Troubled Assets, Raises $50 Million

JAN 2, 2013 10:40am ET
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Jacksonville Bancorp in Florida has sold roughly $25.1 million of troubled assets and completed its previously announced $50 million capital raise.

The capital raise was led by CapGen Capital Group IV, which invested $5 million, the $552-million-asset Jacksonville said Monday. Other investors included directors and officers of the company. The company sold 50,000 preferred shares at $1,000 per share.

Immediately prior to the closing of the capital raise, Jacksonville Bank sold a portfolio that included classified assets, other loans and other real estate owned for roughly $11.7 million. The asset purchaser was also an investor in the capital raise.

In November, the company reported a third-quarter loss of $10.7 million, compared with a profit of $1.3 million a year earlier. The loss partially related to an increase in its provision for loan losses, a noncash goodwill impairment expense and costs related to other real estate owned.

Each share of preferred stock sold in the capital raise is expected to convert into roughly 2,000 shares of common stock at an initial conversion price of 50 cents per share for a total of about 100 million new shares. (Jacksonville's shares were trading at 86 cents late Monday.)

The issuance of the common stock is subject to approval by Jacksonville's shareholders. The company will hold a special shareholders meeting in early 2013 where investors will also be asked to approve an increase in the company's authorized shares and a new class of nonvoting common stock.

The company will use the funds from the capital raise to support the capital of Jacksonville Bank. The bank's core capital ratio stood at 5.25% at Sept. 30, down nearly 300 basis points from a year earlier, according to the Federal Deposit Insurance Corp. Jacksonville first announced the capital raise in a filing with the Securities and Exchange Commission in August.

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