UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

 (Mark One)

     |X|           QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2006
                               ------------------

     |_|           TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                               OF THE EXCHANGE ACT

For the transition period from __________ to ____________.

Commission file number  000-30248

                           JACKSONVILLE BANCORP, INC.
                           --------------------------
             (Exact name of registrant as specified in its charter)

           Florida                                             59-3472981
           -------                                             ----------
 (State or other jurisdiction of                              (IRS Employer
incorporation or organization)                              Identification No.)

         100 North Laura Street, Suite 1000, Jacksonville, Florida 32202
         ---------------------------------------------------------------
                    (Address of principal executive offices)

                 (904) 421-3040 (Registrant's telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes  |X|          No  |_|

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of The
Exchange Act).

Large Accelerated Filer |_|   Accelerated Filer |_|   Non-accelerated Filer |X|


Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of The Exchange Act).

Yes  |_|          No  |X|

As  of  November  6,  2006,  the  latest  practicable  date,  1,742,872  of  the
Registrant's common shares, $.01 par value, were issued and outstanding.

<PAGE>

                           JACKSONVILLE BANCORP, INC.

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                           Page
<S>                                                                                                         <C>
PART I -FINANCIAL INFORMATION

        Item 1.    Consolidated Financial Statements (Unaudited)

              Consolidated Balance Sheets ............................................................      3

              Consolidated Statements of Income ......................................................      4

              Consolidated Statements of Changes in Shareholders' Equity..............................      5

              Consolidated Statements of Cash Flows ..................................................      6

              Notes to Consolidated Financial Statements .............................................      7

        Item 2.    Management's Discussion and Analysis of
                   Financial Condition and Results of Operation.......................................     13

        Item 3.    Quantitative and Qualitative Disclosures about Market Risk.........................     24

        Item 4.    Disclosure Controls and Procedures.................................................     24

PART II - OTHER INFORMATION

        Item 1.    Legal Proceedings..................................................................     25

        Item 1A.   Risk Factors.......................................................................     25

        Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds........................     25

        Item 3.    Defaults Upon Senior Securities....................................................     25

        Item 4.    Submission of Matters to a Vote of Security Holders................................     25

        Item 5.    Other Information..................................................................     25

        Item 6.    Exhibits...........................................................................     26

SIGNATURES ...........................................................................................     27

CERTIFICATIONS........................................................................................     28
</TABLE>

                                       2
<PAGE>

                           JACKSONVILLE BANCORP, INC.
                           CONSOLIDATED BALANCE SHEETS
                (Dollars in thousands, except per share amounts)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                            September 30,  December 31,
                                                                2006         2005
                                                                ----         ----
                                                             (Unaudited)
<S>                                                          <C>          <C>
ASSETS
Cash and due from banks                                      $   3,985    $   4,399
Federal funds sold                                               5,063          368
                                                             ---------    ---------
     Total cash and cash equivalents                             9,048        4,767
Securities available for sale                                   26,739       24,211
Securities held to maturity                                         50           50
Loans, net of allowance for loan losses
     of $2,514 at 2006 and $2,207 at 2005                      268,408      232,031
Premises and equipment, net                                      4,675        3,821
Bank-owned life insurance (BOLI)                                 4,791        4,635
Federal Home Loan Bank (FHLB) stock                              1,975        1,062
Accrued interest receivable                                      2,082        1,425
Other assets                                                     1,056        1,042
                                                             ---------    ---------

         Total assets                                        $ 318,824    $ 273,044
                                                             =========    =========

LIABILITIES
Deposits
     Noninterest bearing                                     $  30,750    $  40,582
     Money market, NOW and savings deposits                    143,861      127,425
     Time deposits                                              85,525       66,204
                                                             ---------    ---------
         Total deposits                                        260,136      234,211
FHLB advances                                                   31,750       13,650
Subordinated debt                                                4,000        4,000
Accrued expenses and other liabilities                             780        1,337
                                                             ---------    ---------
     Total liabilities                                         296,666      253,198

SHAREHOLDERS' EQUITY
Common stock, $.01 par value, 8,000,000 shares authorized,
  1,730,495 and 1,716,366 shares issued                             17           17
Additional paid-in capital                                      17,915       17,526
Retained earnings                                                4,592        2,718
Treasury stock, 1,650 and 1,650 shares                             (61)         (54)
Accumulated other comprehensive loss                              (305)        (361)
                                                             ---------    ---------
     Total shareholders' equity                                 22,158       19,846
                                                             ---------    ---------

         Total liabilities and shareholders' equity          $ 318,824    $ 273,044
                                                             =========    =========
</TABLE>

--------------------------------------------------------------------------------
                 See accompanying notes to financial statements.

                                       3
<PAGE>

                           JACKSONVILLE BANCORP, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                (Dollars in thousands, except per share amounts)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                        Three Months Ended         Nine Months Ended
                                                          September 30,              September 30,
                                                          -------------              -------------
                                                        2006          2005         2006         2005
                                                      ----------   ----------   ----------   ----------
<S>                                                   <C>          <C>          <C>          <C>
Interest and dividend income
     Loans, including fees                            $    5,457   $    3,926   $   14,961   $   10,405
     Securities                                              310          233          884          730
     Other                                                    15           16          148           36
                                                      ----------   ----------   ----------   ----------
         Total interest income                             5,782        4,175       15,993       11,171

Interest expense
     Deposits                                              2,454        1,590        6,931        4,173
     FHLB advances                                           354           77          646          196
     Subordinated debt                                        84           64          238          177
     Other                                                     6            2           12           12
                                                      ----------   ----------   ----------   ----------
         Total interest expense                            2,898        1,733        7,827        4,558
                                                      ----------   ----------   ----------   ----------

Net interest income                                        2,884        2,442        8,166        6,613
Provision for loan losses                                    138          141          406          369
                                                      ----------   ----------   ----------   ----------

Net interest income after provision for loan losses        2,746        2,301        7,760        6,244

Noninterest income
     Service charges on deposit accounts                     144          169          400          494
     Other income                                            146          106          377          245
                                                      ----------   ----------   ----------   ----------
         Total noninterest income                            290          275          777          739

Noninterest expense
     Salaries and employee benefits                          962          740        2,755        2,354
     Occupancy and equipment                                 395          278        1,133          861
     Other                                                   586          493        1,680        1,423
                                                      ----------   ----------   ----------   ----------
         Total noninterest expense                         1,943        1,511        5,568        4,638
                                                      ----------   ----------   ----------   ----------

Income before income taxes                                 1,093        1,065        2,969        2,345
Income tax expense                                           416          389        1,095          859
                                                      ----------   ----------   ----------   ----------

Net income                                            $      677   $      676   $    1,874   $    1,486
                                                      ==========   ==========   ==========   ==========

Weighted average:
     Common shares                                     1,725,494    1,712,236    1,721,965    1,710,306
     Dilutive stock options and warrants                  91,105       86,951       86,720       86,800
                                                      ----------   ----------   ----------   ----------
     Dilutive shares                                   1,816,599    1,799,187    1,808,685    1,797,106
                                                      ==========   ==========   ==========   ==========

Basic earnings per common share                       $      .39   $      .39   $     1.09   $      .87
                                                      ==========   ==========   ==========   ==========
Diluted earnings per common share                     $      .37   $      .38   $     1.04   $      .83
                                                      ==========   ==========   ==========   ==========
</TABLE>

--------------------------------------------------------------------------------
                 See accompanying notes to financial statements.

                                       4
<PAGE>

                           JACKSONVILLE BANCORP, INC.
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                   (Unaudited)
                             (Dollars in thousands)
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                            Common Stock      Additional                Treasury   Accumulated Other
                                             Outstanding      Paid-In      Retained      Stock      Comprehensive
                                           Shares    Amount    Capital     Earnings      Amount     Income (Loss)      Total
                                           ------    ------    -------     --------      ------     -------------      -----
<S>                <C>                   <C>            <C>    <C>           <C>         <C>             <C>          <C>
Balance at January 1, 2005               1,708,366      $17    $17,381       $546        $               $(140)       $17,804

Comprehensive income:
     Net income                                                             1,486                                       1,486
     Change in unrealized gain (loss)
     on securities available for
     sale, net of tax effects                                                                              (80)           (80)
                                                                                                                      -------
     Total comprehensive income                                                                                         1,406
Purchase of treasury stock                  (4,500)                                         (128)                        (128)
Issuance of treasury stock                   3,000                   1                        83                           84
Exercise of stock options,
     including tax benefits of $21           4,800                  69                                                     69
                                         ---------      ---    -------     ------           ----         -----        -------
Balance at September 30, 2005            1,711,666      $17    $17,451     $2,032           $(45)        $(220)       $19,235
                                         =========      ===    =======     ======           ====         =====        =======

Balance at January 1, 2006               1,714,716      $17    $17,526     $2,718           $(54)        $(361)       $19,846

Comprehensive income:
     Net income                                                             1,874                                       1,874
     Change in unrealized gain (loss)
     on securities available for
     sale, net of tax effects                                                                               56             56
                                                                                                                      -------
     Total comprehensive income                                                                                         1,930
Purchase of treasury stock                  (5,250)                                         (173)                        (173)
Issuance of treasury stock                   5,250                   6                       166                          172
Compensation expense and exercise
     of common stock options,
     including tax benefits of $112         14,129                 383                                                    383
                                         ---------      ---    -------     ------           ----         -----        -------
Balance at September 30, 2006            1,728,845      $17    $17,915     $4,592           $(61)        $(305)       $22,158
                                         =========      ===    =======     ======           ====-        =====        =======

Balance at July 1, 2005                  1,711,666      $17    $17,450     $1,356           $(43)        $(114)       $18,666

Comprehensive income:
     Net income                                                               676                                         676
     Change in unrealized gain (loss)
     on securities available for
     sale, net of tax effects                                                                             (106)          (106)
                                                                                                                      -------
     Total comprehensive income                                                                                           570
Purchase of treasury stock                  (1,500)                                          (45)                         (45)
Issuance of treasury stock                   1,500                   1                        43                           44

                                         ---------      ---    -------     ------           ----         -----        -------
Balance at September 30, 2005            1,711,666      $17    $17,451     $2,032           $(45)        $(220)       $19,235
                                         =========      ===    =======     ======           ====         =====        =======

Balance at July 1, 2006                  1,721,852      $17    $17,725     $3,915           $(54)        $(686)       $20,917

Comprehensive income:
     Net income                                                               677                                         677
     Change in unrealized gain (loss)
     on securities available for
     sale, net of tax effects                                                                              381            381
                                                                                                                      -------
     Total comprehensive income                                                                                         1,058
Purchase of treasury stock                  (1,650)                                          (61)                         (61)
Issuance of treasury stock                   1,800                   3                        54                           57
Compensation expense and exercise
     of common stock options,
     including tax benefits of $54           6,843                 187                                                    187
                                         ---------      ---    -------     ------           ----         -----        -------
Balance at September 30, 2006            1,728,845      $17    $17,915     $4,592           $(61)        $(305)       $22,158
                                         =========      ===    =======     ======           ====-        ======       =======
</TABLE>

--------------------------------------------------------------------------------
                 See accompanying notes to financial statements.


                                       5
<PAGE>

                           JACKSONVILLE BANCORP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                             (Dollars in thousands)

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         Nine Months Ended
                                                                           September 30,
                                                                         2006        2005
                                                                         ----        ----
<S>                                                                   <C>         <C>
Cash flows from operating activities
     Net income                                                       $  1,874    $  1,486
     Adjustments to reconcile net income to net cash from operating
       activities:
         Depreciation and amortization                                     384         314
         Net amortization of deferred loan fees                           (142)       (113)
         Provision for loan losses                                         406         369
         Premium amortization, net of accretion                             31          31
         Increase in cash surrender value of BOLI                         (156)        (82)
         Stock-based compensation                                          279         122
         Loss on disposal of assets                                          9          --
         Net change in accrued interest receivable and other assets       (761)       (668)
         Net change in accrued expenses and other liabilities             (559)         54
                                                                      --------    --------
              Net cash from operating activities                         1,365       1,513

Cash flows from investing activities
     Purchases of securities available for sale                         (5,203)     (5,422)
     Proceeds from maturities of securities available for sale           2,733       4,783
     Loan (originations) payments, net                                 (36,641)    (34,043)
     Purchase of BOLI                                                       --      (4,500)
     Additions to premises and equipment, net                           (1,188)       (275)
     Purchases of Federal Home Loan Bank stock                            (913)       (364)
                                                                      --------    --------
         Net cash from investing activities                            (41,212)    (39,821)

Cash flows from financing activities
     Net change in deposits                                             25,925      31,112
     Net change in short-term FHLB advances                             18,100       2,000
     Net change in Fed funds purchased                                      --         267
     Proceeds from long-term FHLB advances                                  --       3,000
     Proceeds from exercise of stock options                               164          48
     Excess tax benefits from stock-based payment arrangements             112          21
     Purchase of treasury stock                                           (173)       (128)
                                                                      --------    --------
         Net cash from financing activities                             44,128      36,320
                                                                      --------    --------

Net change in cash and cash equivalents                                  4,281      (1,988)
Cash and cash equivalents at beginning of period                         4,767       6,735
                                                                      --------    --------

Cash and cash equivalents at end of period                            $  9,048    $  4,747
                                                                      ========    ========

Supplemental disclosures of cash flow information
     Cash paid during the period for
         Interest                                                     $  7,708    $  4,545
         Income taxes                                                    1,722       1,069
</TABLE>
--------------------------------------------------------------------------------
                 See accompanying notes to financial statements.

                                       6
<PAGE>

                           JACKSONVILLE BANCORP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                (Dollars in thousands, except per share amounts)

--------------------------------------------------------------------------------
NOTE 1 - BASIS OF PRESENTATION
Jacksonville   Bancorp,   Inc.  is  a  bank  holding  company  headquartered  in
Jacksonville,   Florida.  Jacksonville  Bancorp,  Inc.  owns  and  operates  The
Jacksonville Bank, which has a total of five operating branches in Jacksonville,
Florida.

The  consolidated  financial  statements  include the  accounts of  Jacksonville
Bancorp,  Inc. and its wholly owned subsidiary,  The Jacksonville  Bank, and the
Bank's wholly owned subsidiary, Fountain Financial, Inc. The consolidated entity
is referred to as the "Company" and the Bank and its subsidiary is  collectively
referred to as the "Bank."  The  Company's  financial  condition  and  operating
results  principally  reflect those of the Bank. All  intercompany  balances and
amounts have been eliminated.  For further information refer to the consolidated
financial  statements and notes thereto  included in the Company's Annual Report
on Form 10-K for the year ended December 31, 2005.

The accounting and reporting  policies of the Company reflect  banking  industry
practice and conform to generally accepted  accounting  principles in the United
States  of  America.  In  preparing  the  consolidated   financial   statements,
management  is  required  to make  estimates  and  assumptions  that  affect the
reported  asset and liability  balances and revenue and expense  amounts and the
disclosure of contingent  assets and  liabilities.  Actual  results could differ
significantly from those estimates.

The consolidated financial information included herein as of and for the periods
ended  September  30,  2006 and 2005 is  unaudited;  however,  such  information
reflects all adjustments which are, in the opinion of management,  necessary for
a fair  statement  of results for the interim  periods.  The  December  31, 2005
consolidated  balance  sheet was derived  from the  Company's  December 31, 2005
audited consolidated financial statements.

NOTE 2 - STOCK-BASED COMPENSATION AND STOCK PLANS
Prior to January 1, 2006,  the  Company  followed  the  provisions  of SFAS 148,
Accounting for Stock-Based  Compensation--Transition  and Disclosure ("Statement
148"),  which  provides  transition  methods  to  and  enhances  the  disclosure
requirements of SFAS 123,  Accounting for Stock-Based  Compensation  ("Statement
123"). As permitted under Statement 123, the Company  followed the guidelines of
Accounting  Principles  Board  Opinion No. 25,  Accounting  for Stock  Issued to
Employees  ("Opinion  25") and  disclosed  pro  forma  compensation  expense  in
accordance  with  Statement 148. No  compensation  expense for stock options was
recorded in the financial statements prior to January 1, 2006.

On December 16, 2004, the Financial  Accounting  Standards Board ("FASB") issued
SFAS 123R (Revised 2004),  Share-Based Payment ("Statement 123(R)"),  which is a
revision of Statement 123.  Statement 123(R)  supersedes  Opinion 25. Generally,
the  approach  in  Statement  123(R) is similar  to the  approach  described  in
Statement 123.  However,  Statement 123(R) requires all share-based  payments to
employees,  including grants of employee stock options,  to be recognized in the
Statement  of Income  based on their fair  values.  Pro forma  disclosure  is no
longer an alternative method under Statement 123(R).

Statement  123(R) is effective for fiscal years  beginning  after June 15, 2005.
The Company adopted Statement 123(R) using the "modified  prospective" method in
which  compensation  cost is recognized  beginning  with the effective  date (a)
based on the  requirement  of  Statement  123(R)  for all  stock-based  payments
granted after the effective date and (b) based on the  requirements of Statement
123 for all awards granted to employees prior to the effective date of Statement
123(R) that remain unvested as of the effective date. Additionally, compensation
costs for the  portion  of  outstanding  awards for which  service  has not been
rendered  (such as  unvested  options)  that are  outstanding  as of the date of
adoption are  recognized  as the remaining  services are  rendered.  The Company
recognizes  the fair value of  stock-based  compensation  awards in salaries and
benefits in the condensed  consolidated  statement of income on a  straight-line
basis over the vesting period.
--------------------------------------------------------------------------------
                                       7
<PAGE>

                           JACKSONVILLE BANCORP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                (Dollars in thousands, except per share amounts)

--------------------------------------------------------------------------------

The Company  recorded  stock-based  compensation  expense for the periods  ended
September  30, 2006 and 2005 as  follows,  the  components  of which are further
discussed below:

<TABLE>
<CAPTION>
                                       For the Three Months    For the Nine Months
                                        Ended September 30,    Ended September 30,
                                        --------------------   -----------------
                                         2006       2005       2006       2005
                                         ----       ----       ----       ----
<S>                                      <C>        <C>        <C>        <C>
Stock Options                            $ 36       $ --       $ 98       $ --
Stock Issued for Director Compensation     57         44        172        122
Restricted Stock                            6         --          9
                                         ----       ----       ----       ----
Total                                    $ 99       $ 44       $279       $122
                                         ====       ====       ====       ====
</TABLE>

The recorded  amounts of stock-based  compensation  expense for stock options in
2006 represent  amortization  related to stock-based payments in accordance with
Statement  123(R).  The Company  recognized no tax benefits related to the above
stock option  expense,  as all stock options  expensed above are incentive stock
options. However, the Company recognized tax benefits of $54 and $112 related to
the exercise of stock options  during the three and nine months ended  September
30, 2006,  respectively.  In addition, the Company recognized tax benefits of $2
and $3 related to restricted stock expense for the three and nine month periods,
respectively.

SFAS 123R requires the recognition of stock-based compensation for the number of
awards that are  ultimately  expected  to vest.  As a result,  for most  awards,
recognized  stock  compensation was reduced for estimated  forfeitures  prior to
vesting  primarily based on historical  annual forfeiture rates of approximately
2.56%.  Estimated  forfeitures will be reassessed in subsequent  periods and may
change based on new facts and  circumstances.  Prior to January 1, 2006,  actual
forfeitures  were  accounted  for as they  occurred for purposes of required pro
forma stock compensation disclosures.

During 2005, the Company  accounted for stock-based  payments to employees using
Opinion 25's  intrinsic  value method and recognized no  compensation  costs for
employee stock options in prior years. Had the Company adopted  Statement 123(R)
in 2005,  the  impact of that  Standard  would have  approximated  the impact of
Statement  123 in the  disclosure of pro forma net income and earnings per share
described as follows:

<TABLE>
<CAPTION>
                                                      For the Three Months          For the Nine Months
                                                   Ended September 30, 2005      Ended September 30, 2005

<S>                                                       <C>                           <C>
         Net income as reported                           $           676               $         1,486
         Deduct:  Stock-based compensation
              expense determined under fair
              value based method                                       30                            89
                                                          ---------------               ---------------
         Pro forma net income                             $           646               $         1,397
                                                          ===============               ===============

              Basic--as reported                         $            .39               $           .87
              Basic--pro forma                           $            .38               $           .82

              Diluted--as reported                       $            .38               $           .83
              Diluted--pro forma                         $            .36               $           .78
</TABLE>

--------------------------------------------------------------------------------

                                       8
<PAGE>

                           JACKSONVILLE BANCORP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                (Dollars in thousands, except per share amounts)

--------------------------------------------------------------------------------

Following  approval by the shareholders at the 2003 Annual Meeting,  the Company
established the Directors' Stock Purchase Plan for non-employee directors. Under
this Stock Purchase Plan, Directors may elect to receive shares of the Company's
common stock as an alternative to the equivalent  amounts of cash for director's
fees.  A total of  100,000  shares  of the  Company's  common  stock  were  made
available for issuance,  all of which remained  available at September 30, 2006,
as all transactions  executed to date were open market purchases.  The Company's
expense  in  connection  with this Plan was $172 and $122,  for the nine  months
ended  September  30,  2006 and 2005,  respectively,  which is included in other
expenses in the Consolidated Statements of Income.

On April 25, 2006, the Company's shareholders approved the Jacksonville Bancorp,
Inc.  2006 Stock  Incentive  Plan (the "2006  Plan").  Under the 2006 Plan,  the
Compensation  Committee  of the  Board of  Directors,  or other  such  committee
appointed  by  the  Board,   consisting  of  only   "non-employee,   independent
directors," has full authority to select the eligible individuals to whom awards
will be granted, the types of awards granted, the number of shares subject to an
award,  the exercise  price,  and other terms and conditions of the award. Up to
20,000 shares of the Company's common stock,  par value of $.01 per share,  were
made  available  for  issuance  for awards  under the 2006 Plan,  in the form of
incentive stock options,  restricted stock, restricted stock units,  performance
grants,  and  stock  appreciation  rights.  Shares  subject  to an award  may be
authorized  and  unissued  shares,  treasury  shares,  or shares of common stock
purchased  on the open market.  Any award that  expires or is forfeited  for any
reason is returned to the 2006 Plan. On April 25, 2006, 904 shares of restricted
stock were granted under the 2006 Plan, with a vesting date of March 9, 2008; on
July 25, 2006, 1,200 shares of restricted stock were granted under the 2006 Plan
with a vesting date of July 25, 2009.

The 2006 Plan is a new plan and does not supersede the Company's  original Stock
Option Plan,  adopted by the  Company's  shareholders  on April 26, 2000,  which
continues to govern  awards made under it. Under the  Company's  original  Stock
Option  Plan,  options  to buy stock are  granted  to  directors,  officers  and
employees.  Options  available to be issued under the original Stock Option Plan
are equal to 15% of the total shares  outstanding.  At September  30, 2006,  the
original Stock Option Plan provided for the issuance of up to 259,327 shares, of
which 27,470 shares remain available for issuance.

Stock options are granted  under both stock option plans with an exercise  price
equal to or greater than the stock fair market  value at the date of grant.  All
stock options granted have ten-year lives, generally containing vesting terms of
three to five years. Certain grants have been made that vest immediately. Common
stock issued upon exercise of stock options are newly-issued shares.

The fair value of each option  award is estimated on the date of grant using the
Black Scholes-Merton  Closed-Form  ("Black-Scholes") option valuation model that
uses the assumptions  such as expected stock price  volatility,  expected option
life,  risk-free  interest rate, and dividend yield.  Expected  volatilities are
based on  historical  volatilities  of the  Company's  stock.  The Company  uses
historical data to estimate option  exercises and employee  terminations  within
the valuation model. The expected term of options granted is determined based on
guidance contained in Staff Accounting  Bulletin No. 107,  Share-based  Payment.
The  risk-free  rate for periods  within the  contractual  life of the option is
based on the U.S.  Treasury  yield  curve in effect  at the time of  grant.  The
dividend  yield is zero as the Company has not  historically  paid any dividends
and does not anticipate payment of dividends in the future.

--------------------------------------------------------------------------------

                                       9
<PAGE>

                           JACKSONVILLE BANCORP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                (Dollars in thousands, except per share amounts)

--------------------------------------------------------------------------------

The  Company  believes  that the use of the  Black-Scholes  model meets the fair
value  measurement  objectives of Statement  123(R) and reflects all substantive
characteristics  of the instruments  being valued. On July 25, 2006, the Company
granted 8,000  incentive  stock options at an exercise price of $32.50 under its
original Stock Option Plan. Likewise, on September 30, 2005, the Company granted
5,000  incentive stock options at an exercise price of $29.00 under its original
Stock Option Plan. The following table  represents the assumptions  used for the
Black-Scholes  option-pricing  model for options  granted  during the  following
periods:

                                              Nine months ended September 30,
                                                     2006                2005
                                                     ----                ----
      Dividend yield                                0.00%                0.00%
      Risk-free interest rate                       5.03%                3.49%
      Expected stock price volatility               27.22%              23.05%
      Expected option life                          7.50 years      8.65 years
      Weighted average grant date fair
        value options granted                       $14.01              $11.03

<PAGE>

The following table reports stock option activity for the three and nine months
ended September 30, 2006:
--------------------------------------------------------------------------------

                                       10
<PAGE>

                           JACKSONVILLE BANCORP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                (Dollars in thousands, except per share amounts)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                          Weighted
                                                       Weighted            Average
                                                        Average           Remaining      Aggregate       Weighted
                                    Number of           Exercise         Contractual      Intrinsic       Average
                                      Options             Price              Term           Value        Fair Value

<S>                    <C>             <C>            <C>                 <C>                  <C>      <C>
Outstanding at January 1, 2006         193,857        $    13.94                                        $      5.41
Granted                                     --                --                                --               --
Exercised                               (5,286)            10.00                               111             3.50
Forfeited                                   --                --                                --               --
                                    ------------------------------------------------------------------------------

Outstanding at March 31, 2006          188,571        $    14.05                                        $      5.46
Granted                                     --                --                                --               --
Exercised                               (2,000)            10.00                                43             4.32
Forfeited                                   --                --                                --               --
                                    ------------------------------------------------------------------------------

Outstanding at June 30, 2006           186,571        $    14.09                                        $      5.47
Granted                                  8,000             32.50                                20            14.01
Exercised                               (6,843)           13.32                                154             4.90
Forfeited                                   --                --                                --               --
                                    ------------------------------------------------------------------------------

Outstanding at September 30, 2006      187,728             14.91               5.00          3,772             5.86
Fully vested and expected to vest      179,050             14.60               5.50          3,652             5.74
                                    ------------------------------------------------------------------------------

Exercisable at September 30, 2006      135,828        $    12.01               4.45      $   3,112      $      4.69
                                    ==============================================================================
</TABLE>

As of September 30, 2006, there was $397 of total unrecognized compensation cost
related to unvested stock options granted. The cost is expected to be recognized
over a remaining weighted average period of 1.6 years.

The following table reports restricted stock activity during the nine months
ended September 30, 2006:
                                                                 Aggregate
                                            Number of            Intrinsic
                                             Shares                Value
                                            -----------       -------------
Unvested shares at January 1, 2006                   --
Shares granted                                    2,104
Shares vested and distributed                        --
Shares forfeited                                   (102)
                                            ------------      -------------
Unvested shares at September 30, 2006             2,002       $          70

NOTE 3 - CAPITAL ADEQUACY
Federal banking  regulators have established  certain capital adequacy standards
required  to be  maintained  by banks and bank  holding  companies.  The minimum
requirements  established in the  regulations  are set forth in the table below,
along with the actual ratios at September 30, 2006 and December 31, 2005:
--------------------------------------------------------------------------------
                                       11
<PAGE>

                           JACKSONVILLE BANCORP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                (Dollars in thousands, except per share amounts)

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                             Adequately
                                             Capitalized            September 30, 2006            December 31, 2005
                                             Requirement                     Actual                    Actual
                                           ---------------        ----------------------------       --------------
<S>                                                <C>                      <C>                       <C>
Tier 1 Capital (to Average Assets)
Consolidated                                      >4%                       8.55%                     9.06%
Bank                                              >4%                       8.44%                     8.34%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated                                      >4%                       9.55%                    10.05%
Bank                                              >4%                       9.30%                     9.25%

Total Capital (to Risk Weighted Assets)
Consolidated                                      >8%                      10.47%                    10.97%
Bank                                              >8%                      10.19%                    10.17%
</TABLE>

In addition,  under such standards,  a  well-capitalized  bank is one that has a
total risk-based capital ratio equal to or greater than 10%, a Tier 1 risk-based
capital  ratio equal to or greater than 6%, and a Tier 1 leverage  capital ratio
equal to or greater than 5%. Management believes, as of September 30, 2006, that
the Company and the Bank met all capital requirements to which they are subject.
The Company has included in Tier 1 Capital and Total Capital the trust preferred
securities that were issued in June 2004.

NOTE 4 - FHLB ADVANCES
FHLB advances at September 30, 2006 consisted of a $3,000 fixed rate advance and
a $28,750  overnight  advance.  The interest rate on the  overnight  advance was
5.61% at September 30, 2006. The interest rate on the fixed rate advance,  which
matures April 11, 2008, is 4.36%. The advances are  collateralized  by a blanket
lien on the Company's residential and commercial real estate loan portfolio. The
Company  had  $13,650 in  advances  outstanding  at  December  31,  2005,  which
consisted  of the  $3,000  fixed rate  advance  discussed  above and  $10,650 in
overnight advances.

--------------------------------------------------------------------------------

                                       12
<PAGE>


                           JACKSONVILLE BANCORP, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

--------------------------------------------------------------------------------
General

Jacksonville  Bancorp, Inc. ("Bancorp") was incorporated on October 24, 1997 and
was organized to conduct the operations of The  Jacksonville  Bank (the "Bank"),
collectively (the "Company").  The Bank is a Florida state-chartered  commercial
bank that opened for business on May 28,  1999,  and its deposits are insured by
the  Federal  Deposit  Insurance  Corporation.  The Bank  provides  a variety of
community  banking  services  to  businesses  and  individuals  in  the  greater
Jacksonville  area of Northeast  Florida.  During 2000, the Bank formed Fountain
Financial,  Inc., a wholly owned subsidiary.  The primary business activities of
Fountain  Financial,  Inc. consist of referral of our customers to third parties
for the sale of insurance products.

Forward Looking Statements

"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations" and  "Quantitative  and Qualitative  Disclosures  About Market Risk"
contain various forward-looking statements with respect to financial performance
and business  matters.  Such  statements  are  generally  contained in sentences
including  the words or phrases  "will likely  result,"  "are  expected to," "is
anticipated,"  or "estimate,"  "project" or "believe." The Company cautions that
these forward-looking statements are subject to numerous assumptions,  risks and
uncertainties,  including  changes  in local  economic  conditions,  changes  in
regulatory  requirements,  fluctuations in interest rates,  demand for products,
and competition,  and,  therefore,  actual results could differ  materially from
those contemplated by the forward-looking  statements.  In addition, the Company
assumes  no duty to  update  forward-looking  statements  to  reflect  events or
circumstances after the date of such statements.

Business Strategy

Our primary  business  segment is community  banking and consists of  attracting
deposits  from the general  public and using such  deposits and other sources of
funds to originate  commercial  business  loans,  commercial  real estate loans,
residential  mortgage loans and a variety of consumer  loans.  We also invest in
securities backed by the United States Government, and agencies thereof, as well
as municipal  tax-exempt bonds. Our  profitability  depends primarily on our net
interest income,  which is the difference between the income we receive from our
loan  and  securities  investment  portfolios  and  our  costs  incurred  on our
deposits,  FHLB advances,  and other sources of funding.  Net interest income is
also  affected  by  the  relative   amounts  of   interest-earning   assets  and
interest-bearing  liabilities.  Net interest income is generated as the relative
amounts of  interest-earning  assets grow in relation to the relative amounts of
interest-bearing  liabilities.  In  addition,  the level of  noninterest  income
earned and noninterest expenses incurred also affects profitability. Included in
noninterest income are service charges earned on deposit accounts,  increases in
cash  surrender  value  of Bank  Owned  Life  Insurance  ("BOLI")  and  mortgage
origination  fees.  Included  in  noninterest  expense  are costs  incurred  for
salaries and employee benefits,  occupancy and equipment expenses, marketing and
advertising   expenses,   federal  deposit  insurance  premiums  and  legal  and
professional fees.

Our goal is to sustain  profitable,  controlled growth by focusing on increasing
our loan and deposit market share in the Northeast  Florida market by developing
new financial products,  services and delivery channels; closely managing yields
on interest-earning assets and rates on interest-bearing  liabilities;  focusing
on  noninterest  income  opportunities;  controlling  the growth of  noninterest
expenses and  maintaining  strong asset quality.  We have initiated  programs to
expand our scope of services  and achieve  these  goals.  The Bank has adopted a
philosophy  of  seeking  out and  retaining  the best  available  personnel  for
positions of responsibility  which we believe will provide us with a competitive
edge in the local  banking  industry.  In  addition,  the Bank opened its fourth
location  in  February  2006 and  fifth  location  in June  2006 in key areas of
Jacksonville,  which provide additional  visibility and access to businesses and
individuals and will likely result in additional loan and deposit growth.

--------------------------------------------------------------------------------

                                       13
<PAGE>


                           JACKSONVILLE BANCORP, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

--------------------------------------------------------------------------------

Our operations  are influenced by the local economic  conditions and by policies
of financial institution regulatory authorities. Fluctuations in interest rates,
due to factors such as competing  financial  institutions as well as the Federal
Reserve, impact interest-earnings assets and our cost of funds, and thus our net
interest  margin.  In  addition,  the local  economy and real  estate  market of
Northeast  Florida and the demand for our products and loans impacts our margin.
The local economy and viability of local  businesses can also impact the ability
of our customers to make payments on loans,  thus impacting our loan  portfolio.
The Company  evaluates  these factors when valuing its allowance for loan losses
and believes that the local economy and real estate  market has  stabilized.  In
addition,  the Company  believes  its  underwriting  procedures  are  relatively
conservative and, as a result,  the Company should not be any more affected than
the overall market in the event of economic downturn.

As  stated  above,   fluctuations   in  interest   rates  impact  our  yield  on
interest-earning assets and our cost of funds, and thus our net interest margin.
Beginning in June 2004, the Federal Reserve implemented a tightening policy that
has resulted in 17 interest rate increases in the prime rate, which was 8.25% at
October 19, 2006.  These rate  increases  have improved our yield on our earning
assets,  but also serve to  increase  our cost of funds by  increasing  interest
rates paid on  deposits,  as well as rates  charged on FHLB  advances  and other
borrowings.

Introduction

In the  following  pages,  management  presents  an  analysis  of the  financial
condition of  Jacksonville  Bancorp,  Inc. as of September  30, 2006 compared to
December 31, 2005,  and the results of operations  for the three and nine months
ended September 30, 2006 compared with the same periods in 2005. This discussion
is designed to provide a more comprehensive  review of the operating results and
financial  position than could be obtained from an  examination of the financial
statements  alone.  This analysis should be read in conjunction with the interim
financial statements and related footnotes included herein.

Comparison of Financial Condition at September 30, 2006 and December 31, 2005

Total assets  increased  $45.8 million,  or 17%, from $273.0 million at December
31, 2005 to $318.8  million at September 30, 2006.  During the nine months ended
September 30, 2006, the Company experienced net loan growth of $36.4 million, or
16%. The increase in net loans was driven by increases in commercial real estate
loans of $32.6  million,  or 21%,  and  residential  real  estate  loans of $3.0
million,  or 5%. The Company  funded the increase in earning  assets  through an
increase in deposits of $25.9  million and an increase in Federal Home Loan Bank
advances of $18.1 million.

--------------------------------------------------------------------------------

                                       14
<PAGE>

                           JACKSONVILLE BANCORP, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

--------------------------------------------------------------------------------

Total deposits increased $25.9 million,  or 11%, from $234.2 million at December
31, 2005 to $260.1  million at September 30, 2006.  During the nine months ended
September 30, 2006, noninterest bearing deposits decreased $9.8 million to $30.8
million,  primarily due to the reallocation of deposits (by one large depositor)
into a money market account.  Money market,  NOW and savings deposits  increased
$16.4 million to $143.9 million.

Investment securities available for sale increased $2.5 million to $26.7 million
at September  30,  2006.  During the nine months ended  September  30, 2006,  we
purchased  $5.2 million of securities and received $2.7 million in proceeds from
maturities and principal repayments. Of the $5.2 million of securities purchased
in the current  year,  approximately  $2.0  million was  invested in  tax-exempt
municipal securities.

Total shareholders' equity increased by $2.3 million, or 12%, from $19.8 million
at December  31, 2005 to $22.2  million at September  30, 2006.  The increase is
mainly  attributable  to net income of $1.9 million.  At September 30, 2006, the
Company had 8,000,000 authorized shares of $.01 par value common stock, of which
1,730,495 shares were issued and 1,728,845 shares were outstanding. In addition,
the Company had 2,000,000  authorized  shares of $.01 par value preferred stock,
none of which were issued or outstanding at September 30, 2006.

Comparison of Operating Results for the Nine Months Ended September 30, 2006 and
2005

Net Income

Net income  increased  $388,000,  or 26%,  from $1.5 million for the nine months
ended September 30, 2005 to $1.9 million for the nine months ended September 30,
2006.  Diluted  earnings per share  increased $.21 from $.83 for the nine months
ended  September 30, 2005 to $1.04 for the nine months ended September 30, 2006.
This  increase  in net  income  and  diluted  earnings  per  share was due to an
increase in net interest income,  offset by an increase in noninterest  expenses
and income tax expense. Net interest income increased as a result of an increase
in interest-earning assets, as well as an increase in the average interest rates
earned on those assets. Salaries and employee benefits,  which accounted for the
largest portion of the increase in noninterest expenses, increased primarily due
to $107,000  incurred related to stock option expense resulting from adoption of
FAS 123(R) on January 1, 2006,  along with the costs associated with the opening
of two additional  branches during the first six months of 2006. The increase in
income tax expense was directly related to the increase in net income.

Net Interest Income

Net interest income, the difference between interest earned on  interest-earning
assets  and  interest  paid  on  interest-bearing  liabilities,  increased  $1.6
million, or 23.0% from $6.6 million for the nine months ended September 30, 2005
to $8.2 million for the nine months ended  September  30,  2006.  This  increase
resulted  from an  increase  in interest  income of $4.8  million,  offset by an
increase in interest  expense of $3.3 million.  The average net interest  margin
increased  two basis points from 3.81% for the nine months ended  September  30,
2005 to 3.83% for the nine months ended  September 30, 2006.  Refer to the table
and discussion on the following pages for a detailed analysis of the increase in
net interest income.

Average Balance Sheet; Interest Rates and Interest  Differential.  The following
table sets forth the average daily  balances for each major  category of assets,
liabilities  and  shareholders'  equity as well as the amounts and average rates
earned  or  paid  on  each  major  category  of   interest-earning   assets  and
interest-bearing liabilities.
--------------------------------------------------------------------------------


                                       15
<PAGE>

                           JACKSONVILLE BANCORP, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>


                                                                   Nine Months Ended September 30,
                                                             2006                                2005
                                                ------------------------------      ----------------------------
                                                  Average              Average         Average             Average
                                                  Balance    Interest   Rate           Balance   Interest   Rate
                                                                         (Dollars in thousands)
<S>                                             <C>          <C>         <C>        <C>          <C>        <C>
Interest-earning assets:
     Loans (1)                                  $   254,143  $ 14,961    7.87%      $   205,966  $ 10,405   6.75%
     Securities (2)                                  27,148       884    4.35            23,869       730   4.09
     Other interest-earning assets (3)                4,030       148    4.91             1,938        36   2.48
                                                -----------  --------               -----------  --------
         Total interest-earning assets              285,321    15,993    7.49           231,773    11,171   6.44
                                                             --------                            --------
     Noninterest-earning assets (4)                  13,597                              10,034
                                                -----------                         -----------

         Total assets                           $   298,918                         $   241,807
                                                ===========                         ===========

Interest-bearing liabilities:
     Savings and NOW deposits                   $    18,300  $    253    1.85       $    22,200  $    201   1.21
     Money market deposits                          135,385     4,464    4.41            84,921     2,268   3.57
     Time deposits                                   67,574     2,214    4.38            71,672     1,704   3.18
     FHLB advances                                   16,577       646    5.21             7,473       196   3.51
     Subordinated debt                                4,000       238    7.69             4,000       177   5.92
     Other interest-bearing liabilities (5)             272        12    5.90               523        12   3.07
                                                -----------  --------               -----------  --------
         Total interest-bearing liabilities         242,108     7,827    4.32           190,789     4,558   3.19
                                                             --------                            --------
     Noninterest-bearing liabilities                 36,124                              32,698
     Shareholders' equity                            20,686                              18,320
                                                -----------                         ------------
         Total liabilities and
           shareholders' equity                 $   298,918                         $   241,807
                                                ===========                         ===========

Net interest income                                          $  8,166                            $  6,613
                                                             ========                            ========

Interest rate spread (6)                                                 3.17%                              3.25%
                                                                         ====                               ====
Net interest margin (7)                                                  3.83%                              3.81%
                                                                         ====                               ====
</TABLE>

____________
(1)   Includes nonaccrual loans.

(2)   Due to immateriality, the interest income and yields related to certain
      tax exempt assets have not been adjusted to reflect a fully taxable
      equivalent yield.
(3)   Includes federal funds sold.
(4)   For presentation purposes, the BOLI acquired by the Bank has been included
      in noninterest-earning assets.
(5)   Includes federal funds purchased.
(6)   Interest rate spread represents the difference between the average yield
      on interest-earning assets and the average cost of interest-bearing
      liabilities.
(7)   Net interest margin is net interest income divided by average
      interest-earning assets.

Rate/Volume Analysis. The following table sets forth the effect of changes in
volumes, changes in rates, and changes in rate/volume on tax-equivalent interest
income, interest expense and net interest income.

--------------------------------------------------------------------------------

                                       16
<PAGE>
                           JACKSONVILLE BANCORP, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
--------------------------------------------------------------------------------


                                                      Nine Months Ended
                                                         September 30,
                                                     2006 Versus 2005 (1)
                                                     Increase (decrease)
                                                     due to changes in:
                                                                      Net
                                               Volume       Rate      Change
                                               -------     -------    -------

                                                     (Dollars in thousands)

Interest income:
    Loans                                      $ 2,670     $ 1,886    $ 4,556
    Securities                                     105          49        154
    Other interest-earning assets                   59          53        112
                                               -------     -------    -------
Total interest income                            2,834       1,988      4,822
                                               -------     -------    -------

Interest expense:
    Savings and NOW deposits                       (40)         92         52
    Money market deposits                        1,574         622      2,196
    Time deposits                                 (102)        612        510
    FHLB advances                                  322         128        450
    Subordinated debt                               --          61         61
    Other interest-bearing liabilities              (8)          8         --
                                               -------     -------    -------
Total interest expense                           1,746       1,523      3,269
                                               -------     -------    -------

Increase in net interest income                $ 1,088     $   465    $ 1,553
                                               =======     =======    =======

(1)   The change in interest  due to both rate and volume has been  allocated to
      the volume and rate  components in proportion to the  relationship  of the
      dollar amounts of the absolute change in each.

Volume Variance. When comparing the first nine months of 2006 to the same period
last year, the Company  experienced  substantial  growth in its loan  portfolio,
with the most  significant  impact  occurring  in  commercial  real  estate  and
residential  real estate  loans.  The Company  also  experienced  growth in core
deposit  products,  with the largest increase  occurring in money market deposit
accounts.

Although deposit growth contributed to the positive volume variance shown in the
table above, recent increases in short-term interest rates, coupled with local
market competition, has put pressure on the Bank's ability to continue to grow
these balances at rates historically experienced. Additionally, the Company
utilized overnight Federal Home Loan Bank advances, which further supported the
funding of interest-earning assets. The aggregate positive impact of the loan
and core deposit growth largely comprised the positive volume variance of $1.1
million.
--------------------------------------------------------------------------------

                                       17
<PAGE>

                           JACKSONVILLE BANCORP, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
--------------------------------------------------------------------------------

Rate Variance. The increase in short-term interest rates by the Federal Reserve,
which drove an increase in the Bank's prime  lending  rate,  contributed  to the
positive rate variance.  In addition,  the Bank's earnings also increased to the
extent that it was able to reinvest  cash flows from  short-term  securities  in
higher yielding securities of similar duration.

The increase in short-term  interest rates also drove the increase in the Bank's
cost of deposits and  borrowings.  The variance shown in the preceding table was
primarily  caused by the amount of deposits and borrowings that were impacted by
the change in short-term  interest  rates being less than the amount of interest
earning   assets   impacted.   The  average   rate  earned  by  the  Company  on
interest-earning  assets  increased  by 105  basis  points to 7.49% for the nine
months ended September 30, 2006,  whereas,  the average rate paid by the Company
on interest-bearing liabilities increased 113 basis points to 4.32% for the same
period driving the $465,000 positive rate variance.

Net  Interest  Margin.  Net interest  margin  increased by two basis points from
3.81% to 3.83% when  comparing  the first nine months of 2006 to the same period
last year. This increase is mainly the result of an increase in interest-earning
assets, and the positive impact from the increase in short-term  interest rates.
The Company  closely  monitors  its cost of funds and has taken action to reduce
such costs. Furthermore, variable rates adjust to increasing rates, and proceeds
from maturity,  amortization and prepayment of loans and securities  continue to
be  invested  at higher  rates,  mitigating  the rising  costs of core  funding.
Additionally,  management is currently implementing various strategies to impact
the rising cost of funding.

Critical Accounting Policies

A critical accounting policy is one that is both very important to the portrayal
of the Company's financial  condition and requires  management's most difficult,
subjective or complex  judgments.  The  circumstances  that make these judgments
difficult,  subjective  or  complex  have to do with the need to make  estimates
about  the  effect  of  matters  that are  inherently  uncertain.  Based on this
definition,   the  Company's   primary   critical   accounting   policy  is  the
establishment and maintenance of an allowance for loan loss.

The  allowance  for loan loss is  established  through a provision for loan loss
charged to expense.  Loans are charged  against the allowance for loan loss when
management  believes that the  collectibility of the principal is unlikely.  The
allowance  is an amount  that  management  believes  will be  adequate to absorb
inherent  losses  on  existing  loans  that may  become  uncollectible  based on
evaluations  of the  collectibility  of the  loans.  The  evaluations  take into
consideration  such objective factors as changes in the nature and volume of the
loan portfolio and historical  loss  experience.  The evaluation  also considers
certain subjective factors such as overall portfolio quality, review of specific
problem loans and current  economic  conditions  that may affect the  borrowers'
ability  to pay.  The  level of  allowance  for loan  loss is also  impacted  by
increases  and  decreases  in  loans  outstanding  because  either  more or less
allowance is required as the amount of the Company's credit exposure changes. To
the extent actual loan losses differ  materially from  management's  estimate of
these subjective factors,  loan growth/run-off  accelerates,  or the mix of loan
types changes,  the level of provision for loan loss, and related allowance can,
and will, fluctuate.

Additional information with regard to the Company's methodology and reporting of
the  allowance  for loan losses is  included  in the 2005 Annual  Report on Form
10-K.

--------------------------------------------------------------------------------

                                       18
<PAGE>
                    JACKSONVILLE BANCORP, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
--------------------------------------------------------------------------------

Asset Quality

The Company has identified certain assets as nonperforming. These assets include
nonaccruing  loans,  loans that are contractually past due 90 days or more as to
principal or interest  payments and still accruing,  and foreclosed real estate.
Loans are placed on nonaccrual status when management has concerns regarding its
ability to collect the  outstanding  loan  principal  and  interest  amounts and
typically  when such loans are more than 90 days past due.  These loans  present
more than the normal risk that the Company will be unable to eventually  collect
or realize their full carrying  value.  Loans are impaired when it is considered
probable that  management  will not collect the  outstanding  loan principal and
interest  amounts or realize the full carrying  value of the loan. The Company's
nonperforming assets at September 30, 2006 and December 31, 2005 are as follows:
<TABLE>
<CAPTION>

                                                                                   September 30,      December 31,
                                                                                       2006               2005
                                                                                       ----               ----
                                                                                        (Dollars in thousands)

<S>                                                                               <C>               <C>
     Nonaccruing loans                                                            $          445    $           319
     Loans past due over 90 days still on accrual (1)                                         --                447
                                                                                  --------------    ---------------
     Total nonperforming loans                                                               445                766
     Foreclosed assets, net                                                                   --                 --
                                                                                  --------------    ---------------
     Total nonperforming assets                                                   $          445    $           766
                                                                                  ==============    ===============

     Allowance for loan losses                                                    $        2,514    $         2,207

     Nonperforming loans and foreclosed assets as a percent of total assets                 .14%               .28%
     Nonperforming loans as a percent of gross loans                                        .16%               .33%
     Allowance for loan losses as a percent of nonperforming loans                       564.94%            288.12%
</TABLE>


(1)   The  $447,000  loans  past  due  over 90 days and  still  on  accrual  was
      comprised of one outstanding loan which was paid off on June 6, 2006.


Allowance and Provision for Loan Losses

The allowance  for loan losses grew by $307,000  during the first nine months of
2006,  amounting  to $2.5  million at  September  30,  2006 as  compared to $2.2
million at December 31, 2005. The allowance  represented  approximately .93% and
..94% of total loans at both dates, respectively. During the first nine months of
2006, the Company had charge-offs of $103,000, recoveries of $4,000 and recorded
a $406,000  provision for loan losses  compared to charge-offs  of $109,000,  no
recoveries and a provision for loan losses of $369,000 for the first nine months
of 2005. The larger provision for loan losses in 2006 resulted  primarily from a
continued loan growth and management's assessment of local and national economic
conditions.
--------------------------------------------------------------------------------

                                       19
<PAGE>





                           JACKSONVILLE BANCORP, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

--------------------------------------------------------------------------------

The allowance  for loan losses grew by $307,000  during the first nine months of
2006,  amounting  to $2.5  million at  September  30,  2006 as  compared to $2.2
million at December 31, 2005. The allowance  represented  approximately .93% and
..94% of total loans at both dates, respectively. During the first nine months of
2006, the Company had charge-offs of $103,000, recoveries of $4,000 and recorded
a $406,000  provision for loan losses  compared to charge-offs  of $109,000,  no
recoveries and a provision for loan losses of $369,000 for the first nine months
of 2005. The larger provision for loan losses in 2006 resulted  primarily from a
continued loan growth and management's assessment of local and national economic
conditions.

The allowance for loan losses is a valuation  allowance for credit losses in the
loan  portfolio.  Management has adopted a methodology  to properly  analyze and
determine  an  adequate  loan loss  allowance.  The  analysis is based on sound,
reliable and well documented information and is designed to support an allowance
that is adequate to absorb all estimated  incurred  losses in the Company's loan
and lease portfolio. Due to their similarities, the Company has grouped the loan
portfolio into three  components.  The components are  residential  real estate,
consumer   loans  and  commercial   loans.   The  Company  has  created  a  loan
classification  system to properly  calculate  the  allowance  for loan  losses.
Commercial  and  commercial  real estate loans are  individually  evaluated  for
impairment.  If a loan is impaired,  a portion of the  allowance is allocated so
that the loan is reported,  net, at the present  value of estimated  future cash
flows  using the  loan's  existing  rate or at the fair value of  collateral  if
repayment is expected  solely from the sale of the  collateral.  Large groups of
smaller balance  homogeneous loans, such as consumer and residential real estate
loans, are collectively evaluated for impairment and, accordingly,  they are not
separately identified for impairment disclosures.

In estimating the overall  exposure to loss on impaired  loans,  the Company has
considered a number of factors,  including  the  borrower's  character,  overall
financial  condition,  resources and payment  record,  the prospects for support
from any financially  responsible  guarantors,  and the realizable  value of any
collateral.  The Company also considers other internal and external factors when
determining the allowance for loan losses.  These factors  include,  but are not
limited  to,  changes in  national  and local  economic  conditions,  commercial
lending  staff  limitations,  impact from  lengthy  commercial  loan workout and
charge-off  period,  loan  portfolio  concentrations  and  trends  in  the  loan
portfolio.

Based on the results of the analysis  performed by  management  at September 30,
2006,  the  allowance  for loan  loss is  considered  to be  adequate  to absorb
estimated loan losses in the portfolio as of that date. As more fully  discussed
in the "Application of Critical Accounting  Policies" section of this discussion
and analysis of financial  condition and results of operations,  the process for
estimating credit losses and determining the allowance for loan losses as of any
balance  sheet date is  subjective  in nature and requires  material  estimates.
Actual results could differ significantly from these estimates.

The  amount  of future  charge-offs  and  provisions  for loan  losses  could be
affected by, among other things,  economic conditions in Jacksonville,  Florida,
and the  surrounding  communities.  Such  conditions  could affect the financial
strength  of the  Company's  borrowers  and do affect  the value of real  estate
collateral  securing the Company's  mortgage loans. Loans secured by real estate
represent  approximately  92%  of  the  Company's  total  loans  outstanding  at
September 30, 2006. In recent years, economic conditions in Jacksonville and the
surrounding communities have been strong and real estate values have appreciated
in a healthy  manner.  Presently,  economic  conditions  remain  healthy in this
market and real estate values appear to have  stabilized.  Conditions and values
could deteriorate in the future, and such deterioration could be substantial. If
this were to occur,  some of the  Company's  borrowers may be unable to make the
required  contractual  payments on their loans, and the Company may be unable to
realize the full  carrying  value of such loans  through  foreclosure.  However,
management  believes that the  Company's  underwriting  policies are  relatively
conservative and, as a result,  the Company should not be any more affected than
the overall market.
--------------------------------------------------------------------------------

                                       20
<PAGE>

                           JACKSONVILLE BANCORP, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

--------------------------------------------------------------------------------

Future  provisions  and  charge-offs  could also be  affected  by  environmental
impairment  of  properties  securing the  Company's  mortgage  loans.  Under the
Company's current policy, an environmental  audit is required on practically all
commercial-type  properties  that are  considered  for a mortgage  loan.  At the
present  time,  the Company is not aware of any existing  loans in the portfolio
where there is environmental pollution existing on the mortgaged properties that
would materially affect the value of the portfolio.

Noninterest Income, Noninterest Expense and Income Taxes

Noninterest  income was $777,000 for the nine months ended  September  30, 2006,
compared to $739,000 for the 2005 period.  The increase was  primarily due to an
increase in other income of $132,000  driven by the  increase in cash  surrender
value of the BOLI asset  recorded as tax-free  noninterest  income as well as an
increase in mortgage  origination  fees, offset by a decrease in service charges
on deposit  accounts.  The decrease in income from service charges was primarily
the result of a reduction in  insufficient  funds and return  check  charges and
maintenance and activity charges.

Noninterest  expense  increased  to $5.6  million  for  the  nine  months  ended
September  30, 2006,  from $4.6 million for the nine months ended  September 30,
2005.  Salaries and employee benefits and occupancy and equipment  accounted for
the majority of noninterest expense, increasing $673,000 over the same period of
2005. This increase is a result of the absorption of additional  staffing,  rent
and equipment expense related to the Company's two newest locations. The Company
opened its fourth location in February 2006 and its fifth location in June 2006.
Salaries and employee  benefits also  increased  due to $107,000 in  stock-based
compensation  expense  resulting  from the  adoption of FAS 123(R) on January 1,
2006.

Income taxes for the nine months ended  September 30, 2006 were  $1,095,000  (an
effective  rate of 36.88%)  compared to income  taxes of  $859,000  for the nine
months ended  September 30, 2005 (an  effective tax rate of 36.63%).  Income tax
expense increased due to the increase in net income. Likewise, the effective tax
rate increased due to the adoption of SFAS 123R, as the majority of the recorded
expense is related to the  vesting of  incentive  stock  options  and is not tax
deductible.

Comparison  of Operating  Results for the Three Months Ended  September 30, 2006
and 2005

Net income for the third  quarter of 2006 was $677,000,  a slight  increase over
the  $676,000  earned  for the same  quarter  last  year.  Net  income  remained
relatively  flat because,  while our net interest  income  increased by $442,000
over last year, this increase was offset by the $432,000 increase in noninterest
expenses and the $27,000  increase in income tax expense.  Diluted  earnings per
share  decreased  $0.01 to $.37 per  diluted  share  because of the  increase in
weighted average diluted shares  outstanding  associated with additional vesting
of outstanding stock grants.

As stated above,  net interest income  increased by $442,000,  or 18%, from $2.4
million for the third  quarter of 2005 to $2.9 million for the current  quarter.
The increase is primarily  comprised of a positive  volume  variance of $354,000
and a positive  rate  variance of $88,000.  The reasons for the positive  volume
variance and positive rate variance are the same as those  discussed  above with
respect to the nine-month periods.

The  increase in other  noninterest  income and  decrease in service  charges on
deposit accounts,  as well as the increase in salaries,  occupancy and equipment
expense,  and other operating expense are the same as those discussed above with
respect to the nine-month periods.

--------------------------------------------------------------------------------

                                       21
<PAGE>


                           JACKSONVILLE BANCORP, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

--------------------------------------------------------------------------------

Capital

The  Company's  capital  management  policy is  designed  to build and  maintain
capital levels that meet regulatory standards.  Under current regulatory capital
standards,  banks are classified as well capitalized,  adequately capitalized or
undercapitalized.  Under such standards, a well-capitalized bank is one that has
a total  risk-based  capital  ratio  equal  to or  greater  than  10%,  a Tier 1
risk-based  capital  ratio  equal to or  greater  than 6%, and a Tier 1 leverage
capital  ratio  equal to or greater  than 5%.  The  Company's  total  risk-based
capital,  Tier 1  risk-based  capital  and Tier 1 leverage  capital  ratios were
10.47%, 9.55% and 8.55%, respectively, at September 30, 2006.

Cash Flows and Liquidity

Cash Flows. The Company's primary sources of cash are deposit growth, maturities
and  amortization  of  investment  securities,  FHLB  advances and federal funds
purchased.  The  Company  uses cash from  these and other  sources  to fund loan
growth.  Any  remaining  cash is used  primarily  to  reduce  borrowings  and to
purchase  investment  securities.  During  the first  nine  months of 2006,  the
Company's  cash and cash  equivalent  position  increased by $4.3  million.  The
increase  in cash  mainly  resulted  from an  increase  in deposit  accounts  of
approximately  $25.9 million from $234.2  million at December 31, 2005 to $260.1
million at September 30, 2006, as well as FHLB advances of $18.1 million, offset
by net loan originations of $36.6 million.

Liquidity.  The Company has both  internal  and  external  sources of  near-term
liquidity that can be used to fund loan growth and accommodate deposit outflows.
The primary internal sources of liquidity are principal and interest payments on
loans;  proceeds  from  maturities  and  monthly  payments on the balance of the
investment securities  portfolio;  and its overnight position with federal funds
sold. At September 30, 2006, the Company had $31.8 million in federal funds sold
and available-for-sale securities not subject to pledge agreements.

The Company's  primary external  sources of liquidity are customer  deposits and
borrowings from other commercial  banks. The Company's  deposit base consists of
both core  deposits  from  businesses  and  consumers  in its local and national
market.  The Company can also borrow overnight federal funds and fixed-rate term
products under credit facilities established with the Federal Home Loan Bank and
other  commercial  banks.  These lines in the aggregate  amount of approximately
$85.2 million do not represent legal commitments to extend credit on the part of
the other banks.

Recent Accounting Pronouncements

In September 2006, the FASB issued Statement No. 158, Employers'  Accounting for
Defined Benefit Pension and Other  Postretirement  Plans -- An Amendment of FASB
Statements No. 87, 88, 106, and 132R. This new standard requires an employer to:
(a)  recognize  in its  statement  of  financial  position an asset for a plan's
overfunded status or a liability for a plan's underfunded  status; (b) measure a
plan's assets and its obligations that determine its funded status as of the end
of the  employer's  fiscal year (with  limited  exceptions);  and (c)  recognize
changes in the funded  status of a defined  benefit  postretirement  plan in the
year in which the changes occur. Those changes will be reported in comprehensive
income of a business  entity  and in  changes in net assets of a  not-for-profit
organization. Statement 158 applies to plan sponsors that are public and private
companies and nongovernmental  not-for-profit organizations.  The requirement to
recognize  the funded status of a benefit plan and the  disclosure  requirements
are  effective as of the end of the fiscal year ending after  December 15, 2006,
for entities  with  publicly  traded  equity  securities,  and at the end of the
fiscal year ending after June 15, 2007, for all other entities.  The requirement
to measure plan assets and benefit  obligations as of the date of the employer's
fiscal  year-end  statement of financial  position is effective for fiscal years
ending  after  December  15,  2008.  Adoption is not expected to have a material
impact on the financial  condition,  results of operations,  or liquidity of the
Company.
--------------------------------------------------------------------------------

                                       22
<PAGE>


                           JACKSONVILLE BANCORP, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

--------------------------------------------------------------------------------

In September 2006, FASB issued Statement No. 157, Fair Value Measurements.  This
new  standard  provides  guidance  for using fair  value to  measure  assets and
liabilities.  Under  Statement 157, fair value refers to the price that would be
received  to sell  an  asset  or paid to  transfer  a  liability  in an  orderly
transaction  between  market  participants  in the market in which the reporting
entity transacts.  In this standard,  the FASB clarifies the principle that fair
value  should be based on the  assumptions  market  participants  would use when
pricing the asset or  liability.  In support of this  principle,  Statement  157
establishes a fair value  hierarchy that  prioritizes  the  information  used to
develop those  assumptions.  The fair value hierarchy gives the highest priority
to quoted prices in active markets and the lowest priority to unobservable data.
Under the standard,  fair value  measurements  would be separately  disclosed by
level within the fair value  hierarchy.  The  provisions  of  Statement  157 are
effective  for  financial  statements  issued for fiscal years  beginning  after
November 15, 2007, and interim  periods within those fiscal years,  with earlier
application  encouraged.  The  Company  has not yet  determined  the  effect  of
adopting this Statement.

In September 2006, the Securities and Exchange  Commission  ("SEC") issued Staff
Accounting  Bulletin  No. 108 ("SAB 108").  Due to  diversity in practice  among
registrants,  SAB 108 expresses  SEC staff views  regarding the process by which
misstatements in financial  statements are evaluated for purposes of determining
whether financial  statement  restatement is necessary.  The Company has not yet
determined the effect of implementing this pronouncement, which is effective for
fiscal years ending after November 15, 2006.

In March 2006,  the FASB issued  Statement No. 156,  Accounting for Servicing of
Financial Assets--an Amendment to Statement No. 140 ("Statement 156"). Statement
156 requires an entity to recognize a servicing asset or servicing  liability if
certain criteria exist in the contract;  requires initial fair value measurement
of all  separately  identifiable  servicing  assets and  servicing  liabilities;
permits use of either the amortization  method or fair value measurement  method
for  each  class  of  separately   recognized   servicing  assets  or  servicing
liabilities;   permits  a  one-time   reclassification   of   available-for-sale
securities to trading securities for servicing assets and servicing liabilities;
and requires separate presentation of servicing assets and servicing liabilities
subsequently measured at fair value.  Statement 156 is effective in fiscal years
beginning after  September 15, 2006 (January 1, 2007).  Adoption is not expected
to have a material impact on the financial condition,  results of operations, or
liquidity of the Company.

In  July  2006,  the  FASB  released   Interpretation  No.  48,  Accounting  for
Uncertainty of Income Taxes." This interpretation  revises the recognition tests
for tax positions  taken in tax returns such that a tax benefit is recorded only
when it is more  likely  than not that the tax  position  will be  allowed  upon
examination by taxing authorities. The amount of such a tax benefit to record is
the largest amount that is more likely than not to be allowed.  Any reduction in
deferred  tax  assets  or  increase  in  tax  liabilities   upon  adoption  will
correspondingly reduce retained earnings. The Company has not yet determined the
effect of adopting this Interpretation, which is effective on January 1, 2007.
--------------------------------------------------------------------------------

                                       23
<PAGE>


                           JACKSONVILLE BANCORP, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

--------------------------------------------------------------------------------

Contractual Obligations,  Commitments,  Contingent Liabilities,  and Off-Balance
Sheet Arrangements. The Corporation has various financial obligations, including
contractual  obligations and commitments  that may require future cash payments.
Management   believes   that  there  have  been  no  material   changes  in  the
Corporation's  overall level of these financial  obligations  since December 31,
2005 and that any changes in the  Corporation's  obligations which have occurred
are routine for the industry.  Further  discussion of the nature of each type of
obligation  is  included  in   Management's   Discussion  and  Analysis  in  the
Corporation's  Annual  Report  on  Form  10-K  and  is  incorporated  herein  by
reference.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk that a financial  institution will be adversely impacted
by unfavorable changes in market prices.  These unfavorable changes could result
in a reduction in net interest income,  which is the difference between interest
earned  on  interest-earning   assets  and  interest  paid  on  interest-bearing
liabilities.

Interest rate risk is the  sensitivity of income to variations in interest rates
over both short-term and long-term  horizons.  The primary goal of interest rate
risk  management is to control this risk within limits approved by the Board and
narrower  guidelines  approved by ALCO. These limits and guidelines  reflect the
Bank's  tolerance for interest rate risk. The Bank attempts to control  interest
rate risk by identifying  and  quantifying  exposures.  The Bank  quantifies its
interest rate risk exposures using sophisticated simulation and valuation models
as well as simpler gap analyses performed by a third-party  vendor  specializing
in this activity.

The Bank's  internal  policy on interest  rate risk  specifies  that if interest
rates  were to shift  immediately  up or down 200 basis  points,  estimated  net
interest  income for the next 12 months should change by less than 15%. The most
current  simulation  projects  the Bank's net  interest  income to be within the
parameters  of its internal  policy and has not changed  significantly  from our
December 31, 2005  disclosures in Form 10-K. Such simulation  involves  numerous
assumptions  and estimates,  which are inherently  subjective and are subject to
substantial business and economic uncertainties. Accordingly, the actual effects
of an interest rate shift under actual future conditions may be expected to vary
significantly  from those  derived  from the  simulation  to the extent that the
assumptions used in the simulation differ from actual conditions.

Item 4. Controls and Procedures

a.    Evaluation of disclosure  controls and procedures.  The Company  maintains
      controls and procedures designed to ensure that information required to be
      disclosed  in the  reports  that the  Company  files or submits  under the
      Securities  Exchange Act of 1934 is recorded,  processed,  summarized  and
      reported  within the time periods  specified in the rules and forms of the
      Securities and Exchange  Commission.  Based upon their evaluation of those
      controls and  procedures  performed as of the end of the period covered by
      this report,  the chief executive and principal  financial  officer of the
      Company  concluded that the Company's  disclosure  controls and procedures
      were adequate.

b.    Changes in internal controls.  The Company made no changes in its internal
      control over financial  reporting  during its most recent quarter that has
      materially   affected  the  Company's   internal  control  over  financial
      reporting.
--------------------------------------------------------------------------------

                                       24
<PAGE>


                           PART II - OTHER INFORMATION
--------------------------------------------------------------------------------

Item 1.     Legal Proceedings

            There are no material  pending legal  proceedings  to which we are a
            party or to which any of our properties  are subject;  nor are there
            material  proceedings  known to be contemplated by any  governmental
            authority;  nor are  there  any  material  proceedings  known to us,
            pending or  contemplated,  in which any of our directors,  officers,
            affiliates or any principal  security  holders,  or any associate of
            any of the foregoing,  is a party or has an interest  adverse to us,
            except as set forth below.

            On April 11, 2006, The  Jacksonville  Bank was served with a Summons
            and a copy of the Complaint filed by Wells Fargo Financial  Leasing,
            Inc. in the Circuit Court of the Fourth Judicial  Circuit in and for
            Duval  County,  Florida.  The basis of the  Complaint  stems from an
            erroneous wire transfer that was made by Wells Fargo on February 16,
            2005  to  one of  our  customers,  offsetting  an  overdraft  in our
            customer's  account in the amount of  $33,143.95.  The Bank retained
            the amount and Wells Fargo is pursuing the refund plus  interest and
            costs.  The Bank does not  expect to incur  any  material  loss with
            regard to this matter.

            On  September  13,  2006,  The  Jacksonville  Bank was served with a
            Summons and a copy of a Complaint  filed by Harrell & Harrell,  P.A.
            in the Circuit Court of the Fourth Judicial Circuit in and for Duval
            County,  Florida.  The  Complaint  states  that the Bank  "cashed or
            otherwise converted  instruments of Harrell & Harrell,  P.A. for the
            benefit of parties who were not entitled to enforce the  instruments
            or receive  payment." The "parties"  referred to are Daniel J. Glary
            and  Jonathan B.  Israel,  local  attorneys  who are indebted to The
            Jacksonville  Bank. The action calls for damages that exceed the sum
            of $15,000, exclusive of costs, interest and attorneys' fees.

Item 1A.    Risk Factors
            There have been no material changes from the risk factors  disclosed
            in the Annual  Report on Form 10-K for the year ended  December  31,
            2005.

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds
            None

Item 3.     Defaults Upon Senior Securities
            None

Item 4.     Submission of Matters to a Vote of Security Holders
            None

Item 5.     Other Information
            None
--------------------------------------------------------------------------------

                                       25
<PAGE>


Item 6.    Exhibits

(a)      Exhibit No. 3.1: Articles of Incorporation of the Company (1)
         Exhibit No. 3.2: Amended and Restated Bylaws of the Company (2)
         Exhibit No. 3.3: Amendment to Amended and Restated Bylaws of the
         Company (3)
         Exhibit No. 31.1:   Certification of principal executive officer
                             required by Rule 13a-14(a)/15d-14(a) of the
                             Exchange Act
         Exhibit No. 31.2:   Certification of principal financial officer
                             required by Rule 13a-14(a)/15d-14(a) of the
                             Exchange Act
         Exhibit No. 32:     Certification pursuant to 18 U.S.C. Section 1350,
                             as adopted pursuant to Section 906 of the
                             Sarbanes-Oxley Act of 2002

(1)      Incorporated herein by reference to Exhibit No. 3.1 to Form
         SB-2, Registration Statement and amendments thereto,
         effective as of September 30, 1998, Registration No.
         333-64815.
(2)      Incorporated  herein by  reference to Exhibit No. 3.2 to Form 10-QSB
         for the quarter  ended June 30,  2002,  filed August 14, 2002.
(3)      Incorporated  herein by  reference to Exhibit No. 3.3 to Form 10-QSB
         for the quarter  ended June 30,  2005,  filed August 10, 2005.

--------------------------------------------------------------------------------

                                       26
<PAGE>


                           JACKSONVILLE BANCORP, INC.

                                   SIGNATURES

--------------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Date:  November 6, 2006           /s/ Gilbert J. Pomar, III
                                  ------------------------------------------
                                  Gilbert J. Pomar, III
                                  President and Chief Executive Officer

Date:  November 6, 2006           /s/ Valerie A. Kendall
                                  ------------------------------------------
                                  Valerie A. Kendall
                                  Executive Vice President
                                  and Chief Financial Officer
--------------------------------------------------------------------------------

                                       27