Jacksonville Bancorp (JAXB) soldiers on despite another setback.
The $520 million-asset company, which had its stock delisted by the Nasdaq last month, disclosed Tuesday that Stephen Green had resigned as president and chief executive after a year on the job.
Upheaval seems to be a recurring theme in northeastern Florida. Earlier this month, a big shareholder ousted the CEO of Atlantic Coast Financial (ACFC). Two other banks in the area are being sold.
Such turmoil could benefit Jacksonville Bancorp, insists John Rose, a principal at CapGen Financial Group, the company's biggest investor. He downplayed Green's departure, saying the move had been planned "for some time."
"It wasn't a sudden thing," Rose says. "We needed a CEO to step in, on an emergency basis." Green "had a lot of industry experience, but he's 64 and he just wanted to go home."
Green became the company's CEO last June, moving from Orlando to succeed Price Schwenck.
Two years earlier, CapGen, a private equity fund created by Eugene Ludwig, former comptroller of the currency, made a large investment in the company. Ludwig, CEO of Promontory Financial Group, invested $24 million of his own money.
Individual investments by Ludwig and Rose are intertwined with the institutional investment, to the point that CapGen controls about 69% of the company.
Ludwig did not return a call seeking comment.
Green's departure prompted the company to name Donald Glisson interim principal executive. Glisson became chairman in April.
The switch is not a sign of problems, Rose says. While the company's "turnaround is always slower than you'd like it to be," he says that things are "going in the right direction."
Excluding $31 million in preferred stock dividends, Jacksonville Bancorp eked out a $199,000 profit in the first quarter.
"We've come back to a profitable position and we expect to be profitable for this year," Rose says.
Jacksonville Bancorp was hit hard by the real estate downturn that altered Florida's banking landscape. Nearly a tenth of the company's assets were nonperforming at the end of 2011. About 5.8% of total assets were nonperforming on March 31, reflecting successful efforts to sell $25 million in troubled assets.
CapGen is working on a $5 million rights offering and a reverse stock split. The offering should take place by early September. The split would soon follow.
"We previously raised $50 million from institutional investors at 50 cents a share," he says. "To be fair to all existing shareholders, we're offering them the opportunity to invest at that same price."
Once those moves are completed, the company should be ready to take advantage of the area's economic recovery, Rose says. It is one of Jacksonville's biggest community banks, holding 1.1% of local deposits, based on June 2012 data from the Federal Deposit Insurance Corp.
"There aren't that many local banks left in that market," says Bill Massey, a shareholder at Saltmarsh, Cleaveland & Gund.
"As the market improves, we'll grow stronger," Rose says. "Our position in the market is solid."