<PAGE>   1
                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

(Mark One)

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

For the quarterly period ended         December 31, 1999
                               ------------------------------------------------

                                       or

[ ]                 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                         OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to
                               -------------------     ------------------------

Commission File Number 0-28070
                       -------

                             Jacksonville Bancorp, Inc.
-------------------------------------------------------------------------------
              (Exact name of registrant as specified in its charter)

             Texas                                     75-2632781
-------------------------------                      ---------------
(State of other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                         Identification Number)

Commerce at Neches
Jacksonville, Texas                                    75766
--------------------------                         -------------
(Address of principal                               (Zip Code)
executive office)

Registrant's telephone number, including area code:  (903) 586-9861

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
    ---                                       ---

As of February 8, 2000, the latest practicable date, 2,675,972 shares of the
registrant's common stock, $.01 par value, were issued and 2,086,712 shares were
outstanding.


<PAGE>   2

                   JACKSONVILLE BANCORP, INC. AND SUBSIDIARIES

                                      INDEX

<TABLE>
<CAPTION>
PART I.                 Financial Information
-------------------------------------------------------------------------------
                                                                            Page
                                                                            ----
<S>                  <C>                                                   <C>
Item 1.                Financial Statements

                       Consolidated Statements of Financial
                       Condition as of December 31, 1999
                       (Unaudited)and September 30, 1999(Audited)             3


                       Consolidated Statements of Earnings for the
                       Three Months Ended December 31, 1999
                       and 1998 (Unaudited)                                   4


                       Consolidated Statements of Cash Flows for
                       the Three Months Ended December 31, 1999 and
                       1998 (Unaudited)                                       5


                       Consolidated Statements of Changes in
                       Stockholders' Equity for the Three Months Ended
                       December 31, 1999 (Unaudited)                          6

                       Notes to Consolidated Financial Statements             7

Item 2.                Management's Discussion and Analysis of                9
                       Financial Condition and Results of Operations
                       for the Three Months Ended December 31, 1999

Item 3.                Quantitative and Qualitative Disclosures about
                       Market Risk                                           13

PART II.               Other Information
-------------------------------------------------------------------------------

Item 1.                Legal Proceedings                                     15
Item 2.                Changes in Securities                                 15
Item 3.                Defaults upon Senior Securities                       15
Item 4.                Submission of Matters to a Vote of Security Holders   15
Item 5.                Other Information                                     15
Item 6.                Exhibits and Reports on Form 8-K                      15
Signatures
</TABLE>


<PAGE>   3


                   JACKSONVILLE BANCORP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>


                                                           December 31,             September 30,
                                                           ------------             -------------
                                                               1999                     1999
                                                              ------                  --------
                                                            (Unaudited)              (Audited)
ASSETS
<S>                                                  <C>                      <C>

  Cash on hand and in banks                           $       2,999            $       2,996
  Interest-bearing deposits                                   4,491                    3,572
  Investment securities:
    Held-to-maturity, at cost                                 6,500                    6,999
    Available-for-sale, at estimated market value            11,636                   11,712
  Mortgage-backed certificates:
    Held-to-maturity, at cost                                 4,434                    4,658
    Available-for-sale, at estimated market value            32,240                   32,983
  Loans receivable, net                                     219,156                  216,267
  Accrued interest receivable                                 2,160                    2,254
  Foreclosed real estate, net                                   164                      346
  Premises and equipment, net                                 4,800                    4,583
  Stock in Federal Home Loan Bank of Dallas, at cost          2,002                    1,974
  Investment in real estate at cost                             880                      713
  Mortgage servicing rights                                     604                      588
  Other assets                                                  310                      747
                                                      -------------            -------------
        Total assets                                  $     292,376            $     290,392
                                                      =============            =============

LIABILITIES
  Deposits                                            $     217,045            $     215,209
  FHLB Advances                                              39,000                   35,000
  Advances from borrowers for taxes and insurance             1,368                    4,096
  Accrued expenses and other liabilities                      1,172                    1,722
                                                      -------------            -------------
        Total liabilities                                   258,585                  256,027

DEFERRED INCOME
  Gain on sale of real estate owned                              90                      146

STOCKHOLDERS' EQUITY
  Common stock, $.01 par value, 25,000,000
    shares authorized; 2,675,972 shares issued;                  27                       27
    2,106,712 and 2,180,212 shares outstanding at
    December 31, 1999 And September 30, 1999, respectively
    Additional paid in capital                               22,729                   22,723
    Retained earnings, substantially restricted              22,202                   21,507
  Less:
    Treasury shares, at cost                                 (8,880)                  (7,772)
    (569,260 & 495,760 shares, respectively)
    Shares acquired by Employee Stock Ownership Plan         (1,102)                  (1,117)
    Shares acquired by Management Recognition Plan             (306)                    (348)
   Accumulated other comprehensive income (loss)               (969)                    (801)
                                                   ----------------            --------------

        Total stockholders' equity                           33,701                   34,219
                                                      -------------            -------------
          Total liabilities and stockholders' equity  $     292,376            $     290,392
                                                      =============            =============

</TABLE>


                                      -3-
<PAGE>   4
                   JACKSONVILLE BANCORP, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                             (DOLLARS IN THOUSANDS)
                                    UNAUDITED

<TABLE>
<CAPTION>


                                                           THREE MONTHS ENDED
                                                               DECEMBER 31,
                                                         ----------------------
                                                            1999        1998
                                                         ----------  ----------
INTEREST INCOME
<S>                                                     <C>         <C>
  Loans receivable                                       $    4,569  $    4,062
  Mortgage-backed securities                                    613         480
  Investment securities                                         278         281
  Other                                                          55          93
                                                         ----------  ----------
    Total interest income                                     5,515       4,916

INTEREST EXPENSE
  Other                                                         500         198
  Deposits                                                    2,473       2,429
                                                         ----------  ----------
      Total interest expense                                  2,973       2,627
                                                         ----------  ----------
      Net interest income                                     2,542       2,289
PROVISION FOR LOSSES ON LOANS                                    15          15
                                                         ----------  ----------
  Net interest income after
    provision for losses on loans                             2,527       2,274

NONINTEREST INCOME
  Fees and deposit service charges                              388         346
  Real estate operations, net                                    48          45
  Other                                                          36          28
  Mortgage servicing rights                                      16          32
                                                         ----------  ----------
      Total noninterest income                                  488         451

NONINTEREST EXPENSE
  Compensation and benefits                                   1,029         929
  Occupancy and equipment                                       162         154
  Insurance expense                                              44          40
  Other                                                         361         298
                                                         ----------  ----------
      Total noninterest expense                               1,596       1,421

INCOME BEFORE TAXES ON INCOME                                 1,419       1,304

TAXES ON INCOME                                                 473         446
                                                         ----------  ----------

  Net earnings                                           $      946  $      858
                                                         ==========  ==========

EARNINGS PER SHARE
  Basic                                                  $      .46  $      .38
                                                         ==========  ==========

  Diluted                                                $      .45  $      .37
                                                         ==========  ==========

</TABLE>





                                      -4-
<PAGE>   5
                   JACKSONVILLE BANCORP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                    UNAUDITED

<TABLE>
<CAPTION>

                                                           THREE MONTHS ENDED
                                                               DECEMBER 31,
                                                         ----------------------
                                                             1999        1998
                                                         ----------  ----------
 CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                     <C>            <C>

  Net income                                             $      946         858
  Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation                                               70          63
      Amortization/Accretion of securities                        2           3
      Provision for losses on loans and real estate              15          15
      Loans originated for sale                              (5,532)     (8,877)
      Loans sold                                              5,532       8,877
      Gain on sale of other real estate                         (56)        (59)
      Gain on sale of loans                                     (16)        (32)
      Accrual of MRP awards                                      42          42
      Release of ESOP shares                                     21          67
      Change in assets and liabilities:
        (Increase) decrease in accrued interest receivable       94         101
        (Increase) decrease in prepaid expenses and
          other assets                                          437          59
        Decrease in accrued expenses and other liabilities     (551)       (180)
        Decrease in deferred income                             (56)        (25)
                                                         ----------  -----------
        Net cash provided by (used in) operating
             activities                                         948         912

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of investment securities                               -      (1,037)
  Proceeds on maturity of investment securities                 405       4,986
  Net principal payments (origination) on loans              (2,758)     (6,012)
  Proceeds from sale of foreclosed real estate                   92          16
  Purchase of mortgage-backed securities                       (569)          -
  Principal paydowns on mortgage-back securities              1,536       1,951
  Capital expenditures                                         (287)        (12)
  Purchase of stock in FHLB                                     (27)        (25)
  Investment in real estate                                    (167)          -
                                                         -----------  ---------
        Net cash (used in) provided by investing
            activities                                      (1,775)        (133)

CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase in deposits                                   1,836        1,768
  Net decrease in advances for taxes and insurance          (2,728)      (2,595)
  Dividends paid                                              (251)        (282)
  Advances from FHLB                                         8,000            -
  Payment on FHLB advances                                  (4,000)      (2,000)
  Proceeds from other borrowings                                 -            -
  Purchase of Treasury stock                                (1,108)        (376)
                                                         ----------   ----------
      Net cash provided by financing activities              1,749       (3,485)
                                                         ----------   ---------
      Net increase (decrease)in cash and cash equiv.           922       (2,706)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD             6,568       10,868
                                                        ----------   ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD              $    7,490   $    8,162
                                                        ==========   ==========
</TABLE>





                                      -5-
<PAGE>   6





                   JACKSONVILLE BANCORP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  FOR THE THREE MONTHS ENDED DECEMBER 31, 1999
                             (DOLLARS IN THOUSANDS)
                                    UNAUDITED

<TABLE>
<CAPTION>
                                                                       Total
                                                                   Stockholders'
                                                                       Equity
                                                                    ------------
<S>                                                    <C>          <C>

BALANCE AT SEPTEMBER 30, 1999                                        $   34,219

    Net earnings                                          946
    Other comprehensive income - net change in
    unrealized gain on securities available for sale    (168)
                                                        -----
  Comprehensive income                                                      778
  Accrual of MRP awards                                                      42
  Accrual of ESOP compensation                                               21
  Cash dividends                                                           (251)
  Treasury shares purchased                                              (1,108)

BALANCE AT DECEMBER 31, 1999                                          $   33,701
                                                                      ==========
</TABLE>


                                      -6-


                           JACKSONVILLE BANCORP, INC.
<PAGE>   7


                     NOTES TO UNAUDITED FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

NOTE 1 - BASIS OF PRESENTATION
  The unaudited financial statements were prepared in accordance with
  instructions for Form 10-Q and, therefore, do not include information or
  footnotes necessary for a complete presentation of financial position, results
  of operations, and cash flows in conformity with generally accepted accounting
  principles. However, all adjustments (consisting only of normal recurring
  adjustments) which, in the opinion of management, are necessary for a fair
  presentation of the financial statements have been included. The results of
  operations for the three-month periods ended December 31, 1999 and 1998 are
  not necessarily indicative of the results which may be expected for an entire
  fiscal year.

NOTE 2 - EARNINGS PER SHARE
  Basic earnings per share for the three month periods ended December 31, 1999
  and 1998 have been computed by dividing net earnings by the weighted average
  number of shares outstanding. Shares controlled by the ESOP are accounted for
  in accordance with Statement of Position 93-6 under which unallocated shares
  are not considered in the weighted average number of shares of common
  stock outstanding.  Diluted earnings per share have been computed, giving
  effect to outstanding stock purchase options by application of the treasury
  stock method.

  Following is a summary of shares used for calculating basic and diluted
  earnings per share:

<TABLE>
<CAPTION>


                                       Three Months Ended
                                          December 31,

                                    1999                   1998
                                    ----                   ----
<S>                             <C>                    <C>
  Basic EPS - Average
   shares outstanding            2,054,604              2,264,332

  Effect of dilutive
    stock options                   66,016                 75,360
                                ----------              ---------

  Diluted EPS - Average
    shares outstanding           2,120,620              2,339,692
                               ============            ==========

</TABLE>



NOTE 3 - RECLASSIFICATION OF PREVIOUS STATEMENTS
  Certain items previously reported have been reclassified to conform with the
  current period's reporting format.





                                      -7-
<PAGE>   8



      NOTE 4 -RECENT ACCOUNT PRONOUNCEMENTS

                  SFAS No. 133 "Accounting for Derivative Instruments and
      Hedging Activities" was adopted by FASB on June 30, 1998. This Statement
      is effective for all fiscal quarters of fiscal years beginning after June
      15, 1999. Among other things, it supersedes FASB Statements No. 80,
      "Accounting for Futures Contracts," No. 105, "Disclosure of Information
      about Financial Instruments with Off-Balance-Sheet Risk and Financial
      Instruments with Concentrations of Credit Risk," and No. 119, "Disclosure
      about Derivative Financial Instruments and Fair Value of Financial
      Instruments." It amends FASB Statement NO. 107, "Disclosures about Fair
      Value of Financial Instruments, " to include in Statement 107 the
      disclosure provisions about concentrations of credit risk from Statement
      105. The Statement establishes accounting and reporting standards for
      derivative instruments, including certain derivative instruments embedded
      in other contracts, (collectively referred to as derivatives) and for
      hedging activities. It requires that an entity recognize all derivatives
      as either assets or liabilities in the statement of financial position and
      measure those instruments at fair value. If certain conditions are met, a
      derivative may be specifically designated as (a) a hedge of the exposure
      to changes in the fair value of a recognized asset or liability or an
      unrecognized firm commitment, (b) a hedge of the exposure to variable cash
      flows of a forecasted transaction, or (c) a hedge of the foreign currency
      exposure of a net investment in a foreign operation, an unrecognized firm
      commitment, an available-for-sale security, or a
      foreign-currency-denominated forecasted transactions. This Statement
      precludes designating a nonderivative financial instrument as a hedge of
      an asset, liability, unrecognized firm commitment, or forecasted
      transaction except that a nonderivative instrument denominated in a
      foreign currency may be designated as a hedge of the foreign currency
      exposure of an unrecognized firm commitment denominated in a foreign
      currency or a net investment in a foreign operation.

          Statement No. 137 deferred the effective date of Statement No. 133 to
      all fiscal years beginning after June 15, 2000. The Statement may not be
      applied retroactively to financial statements of prior periods. The
      Statement's adoption is not expected to have a material impact on the
      Corporation's financial condition or result of operations.



                                      -8-
<PAGE>   9



                           JACKSONVILLE BANCORP, INC.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATION

Discussion of Changes in Financial Condition from September 30, 1999 to December
31, 1999.

            At December 31, 1999, the assets of Jacksonville totaled $292.4
million compared to $290.4 million at September 30, 1999, an increase of $2.0
million. This increase was primarily due to an increase in loans receivable, net
of $2.9 million and an increase in interest bearing deposits of $919,000; offset
by a decrease in investment and mortgage backed securities of $1.5 million and a
decrease in other assets of $437,000.

            Cash on hand remained at $3.0 million at December 31, 1999, the same
amount reported at September 30, 1999.

            The investment securities portfolios, held-to-maturity and
available-for-sale, declined during the quarter from a total of $18.7 million at
September 30, 1999 to $18.1 million at December 31,1999. The $575,000 decrease
was the result of maturities of securities in the portfolios.

            Mortgage-backed securities, held-to-maturity and available-for-sale,
decreased from $37.6 million at September 30, 1999 to $36.7 million at the end
of the quarter, primarily representing principal reductions for the period.

            Loans receivable, net increased by $2.9 million from $216.3 million
at September 30, 1999 to $219.2 million at December 31, 1999. The increase was
primarily funded with investment securities maturities, from payments in the
mortgage-backed securities portfolio, and advances from Federal Home Loan Bank.

            All remaining asset classifications for December 31, 1999 remained
relatively comparable to those numbers disclosed at September 30, 1999 with the
exception of other assets which reduced from $747,000 to $310,000 for the
quarter primarily as a result of timing of federal income tax payments.
Foreclosed real estate, net decreased $182,000 during the quarter while
investment in real estate at cost increased from $713,000 at September 30,1999
to $880,000 at December 31, 1999.

            At December 31, 1999 liabilities of the Company totaled $258.6
million compared to $256.0 million at September 30, 1999. Deposits grew $1.8
million for the quarter from $215.2 million to $217.0 million at December 31,
1999, principally as a result of interest credited to accounts and growth in
savings deposits for the period. FHLB advances increased from $35.0 million to
$39.0 million for the comparable periods.

            Advances from borrowers for taxes and insurance decreased from $4.1
million to $1.4 million for the quarter ended December 31, 1999. This decrease
is the result of the payment from customer's


                                      -9-
<PAGE>   10



escrow accounts all amounts due to taxing agencies for the year 1999.

            Accrued expenses and other liabilities decreased from $1.7 million
at September 30, 1999 to $1.2 million at December 31, 1999.

            Deferred income, gain on sale of real estate owned, decreased from
$146,000 at September 30, 1999 to $90,000 at December 31, 1999. This decrease
was primarily the result of the recognition of deferred profits from the sale of
real estate owned as payments were received on the related loans.

            Stockholder's equity decreased during the period by $518,000 from
$34.2 million to $33.7 million. Retained earnings increased from $21.5 million
at September 30, 1999 to $22.2 million at December 31, 1999 primarily as a
result of net income for the quarter after dividends. Treasury shares increased
for the quarter from $7.8 million to $8.9 million due to the repurchase of
73,500 shares during the period bringing total treasury shares to 569,260.

            Shares acquired by the Employee Stock Ownership Plan decreased by
$15,000 due to the release of ESOP shares during the quarter ended December 31,
1999. Shares acquired by the Management Recognition Plan decreased by $42,000
from $348,000 at September 30, 1999 to $306,000 at December 31, 1999, due
primarily to accrual of Management Recognition Plan awards.

            Net unrealized gain/loss on securities, available for sale,
increased from a $801,000 loss at September 30, 1999 to a $969,000 loss at
December 31, 1999. These losses were based on "marked-to-market" values of the
portfolios at the respective periods in accordance with FASB 115.

Comparison of Operating Results for the three month period ended December 31,
1999 to the three month period ended December 31, 1998.

            Jacksonville reported net earnings of $946,000 for the three months
ended December 31, 1999 compared to $858,000 for the three months ended December
31, 1998. The increase in net income of $88,000 was due to an increase in net
interest income after provision for losses on loans of $253,000; an increase of
$37,000 in noninterest income; partially offset by an increase in noninterest
expenses of $175,000 and an increase in Federal Income Tax of $27,000.

Net Interest Income

            Total interest income increased by $599,000 during the three months
ended December 31, 1999 compared to the same period in the prior year. Interest
income from loans receivable increased $507,000 due primarily to an increase in
the average balances of loans in the comparative periods. Interest on
mortgage-backed securities increased $133,000 from $480,000 for the quarter
ended December 31, 1998 to $613,000 for the quarter ended December 31, 1999 due
primarily to an increase in portfolio balances for the comparable periods.
Interest on investment securities decreased $3,000 from $281,000 for the quarter
ended December 31, 1998 to $278,000 at December 31, 1999 as the average balance
of the portfolio during the comparable quarters decreased as Jacksonville


                                      -10-
<PAGE>   11



shifted funds from investment securities to mortgage-backed certificates and
loan originations. Other interest income decreased from $93,000 for the three
month period ended December 31, 1998 to $55,000 for the comparable period ended
December 31, 1999.

            Total interest expense increased by $44,000 for the three months
ended December 31, 1999 compared to the same period in 1998 due primarily to an
increase in interest paid on FHLB advances of $302,000 and an increase of
$44,000 on deposits.

Provisions for Losses on Loans

            Jacksonville recorded $15,000 in provision for loan losses for the
quarter ended December 31, 1999 the same provision for the prior year. The
provision is consistent with management's estimate which takes into account the
adequacy of the allowance for loan losses for the loan portfolio by loan types.

Noninterest Income

            Total noninterest income increased from $451,000 for the three
months ended December 31, 1998 to $488,000 for the comparable period in 1999.
The $37,000 increase was the result of an increase of $42,000 in fees and
deposit service charges; an increase of $3,000 in real estate operations, net;
offset by a decrease in mortgage servicing rights and other non interest income
of $8,000.

Noninterest Expense

            For the three months ended December 31, 1999, noninterest expense
increased by $175,000 over the comparable period ended December 31, 1998. The
increase was primarily due to an increase in compensation and benefits of
$100,000 which included staffing of our second branch in Tyler, Texas; an
increase of $8,000 in occupancy and equipment; an increase of $63,000 in other
noninterest expense; and an increase in insurance expense of $4,000.

Income Tax Expense

            For the three months ended December 31, 1998 and December 31, 1999,
the provisions for income tax amounted to $446,000 and $473,000, respectively.
The higher provisions for income tax during the quarter ended December 31, 1999
was due to the higher taxes resulting from increased earnings during the
quarter.

Liquidity

            The State of Texas regulations require the Company's wholly owned
subsidiary, Jacksonville Savings Bank, SSB ("the Bank") to maintain liquidity in
an amount not less than 10% of an amount equal to its average daily deposits for
the most recently completed calendar quarter in cash and

                                      -11-
<PAGE>   12


readily marketable investments. For the quarter ended December 31, 1999 the
Bank's liquidity was $64.3 million with a liquidity ratio of 29.44%.

Regulatory Capital Requirements

            The Bank is required to maintain specified amounts of capital
pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of
1989 ("FIRREA") and regulations promulgated by the FDIC thereunder. The capital
standards generally require the maintenance of regulatory capital sufficient to
meet Tier 1 leveraged capital requirement, a Tier 1 risk-based capital
requirement and a total risk-based capital requirement. At December 31, 1999,
the Bank had Tier 1 leveraged capital, Tier 1 risk-based capital and total risk
based capital levels of 10.88%, 18.65% and 19.37%, respectively, which levels
exceed all current regulatory capital standards. These capital levels exceeded
the minimum requirements at that date by approximately $20.0 million, $24.8
million, and $19.2 million respectively.

"Safe Harbor" Statement

            In addition to historical information, forward-looking statements
are contained herein that are subject to risks and uncertainties that could
cause actual results to differ materially from those reflected in the
forward-looking statements. Factors that could cause future results to vary from
current expectations, include, but are not limited to, the impact of economic
conditions (both generally and more specifically in the markets in which
Jacksonville operates), the impact of competition for Jacksonville's customers
from other providers of financial services, the impact of government legislation
and regulation (which changes from time to time and over which Jacksonville has
no control), and other risks detailed in this Form 10-Q and in Jacksonville's
other Securities and Exchange Commission filings. Readers are cautioned not to
place undue reliance on these forward-looking statements, which reflect
management's analysis only as of the date hereof. Jacksonville undertakes no
obligation to publicly revise these forward-looking statements, to reflect
events or circumstances that arise after the date hereof. Readers should
carefully review the risk factors described in other documents Jacksonville
files from time to time with the Securities and Exchange Commission.

Year 2000 Statement

            Jacksonville has been actively working since 1996 to address the Y2K
impact on the Company. Management formed a Year 2000 compliance team which
developed a plan to correct any harmful impact of Year 2000 issues on its
operations.

            The Y2K project consisted of five phases: Awareness, Assessment,
Modification, Testing, and Implementation. The in-house data system, operated
and maintained by an in-house staff of five personnel, has completed all five
phases of the Year 2000 compliance project. A full system test was completed
successfully on November 6, 1998 and all internal programs have been implemented
and placed into production. Management believes the system is Year 2000
compliant and feels the possibility of failure in minute. However, Jacksonville
employs a staff of programmers to remedy any software problems that may occur.



                                      -12-
<PAGE>   13


            Jacksonville also has completed all five compliance phases for
software supplied by external vendors and this software has been determined to
be Y2K compliant.

            The cost of the Year 2000 is considered to be minimal to
Jacksonville since the in-house staff has been able to perform the majority of
the necessary steps toward Y2K compliance.

            Disruptions in the economy generally resulting from Year 2000 issues
outside our data system could adversely affect the Company. Jacksonville has
developed a contingency plan in the event that material Year 2000 situations
arise. This plan has been approved by regulatory authorities.

Quantitative and Qualitative Disclosures about Market Risk

            The Bank's interest rate risk and asset-liability management are the
responsibility of the Interest Rate Risk Committee which reports to the Board of
Directors and is comprised of members of the Bank's senior management. The
Committee is actively involved in formulating the economic projections used by
the Bank in its planning and budgeting process and establishes policies which
monitor and coordinate the Bank's sources, uses and pricing of funds.

            Interest rate risk, including mortgage prepayment risk, is the most
significant non-credit related risk to which the Bank is exposed. Net interest
income, the Bank's primary source of revenue, is affected by changes in interest
rates as well as fluctuations in the level and duration of assets and
l0iabilities on the Bank's balance sheet.

            Interest rate risk can be defined as the exposure of the Bank's net
interest income or financial position to adverse movements in interest rates. In
addition to directly impacting net interest income, changes in the level of
interest rates can also affect, (i) the amount of loans originated and sold by
the institution, (ii) the ability of borrowers to repay adjustable or variable
rate loans, (iii) the average maturity of loans, which tend to increase when new
loan rates are substantially higher than rates on existing loans and conversely,
decrease when rates on new loans are substantially lower than rates on existing
loans, (iv) the value of the Bank's mortgage loans and the resultant ability to
realize gains on the sale of such assets and (v) the carrying value of
investment securities classified as available-for-sale and the resultant
adjustments to shareholder's equity.

            The primary objective of the Bank's asset-liability management is to
maximize net interest income while maintaining acceptable levels of interest
rate sensitivity. To accomplish this the Bank monitors interest rate sensitivity
by use of a sophisticated simulation model which analyzes resulting net interest
income under various interest rate scenarios and anticipated levels of business
activity. Complicating management's efforts to measure interest rate risk is the
uncertainty of assumptions used for the maturity, repricing, and/or runoff
characteristics of some of the Bank's assets and liabilities.

            To cope with these uncertainties, management gives careful attention
to its assumptions. For example, certain of the Bank's interest-bearing deposit
products (NOW accounts, savings and money market deposits) have no contractual
maturity and based on historical experience have only a fractional sensitivity
to movements in market rates. Because management believes it has some control
with respect to the extent and timing of rates paid on non-maturity deposits,
certain


                                      -13-
<PAGE>   14


assumptions based on historical experience are built into the model.
Another major assumption built into the model involves the ability customers
have to prepay loans, often without penalty. The risk of prepayment tends to
increase when interest rates fall. Since future prepayment behavior of loan
customers is uncertain, the resultant interest rate sensitivity of loan assets
cannot be determined exactly. The Bank utilizes market consensus prepayment
assumptions related to residential mortgages.

            The Bank uses simulation analysis to measure the sensitivity of net
interest income over a specified time period (generally 1 year) under various
interest-rate scenarios using the assumptions discussed above. The Bank's policy
on interest rate risk specifies that if interest rates were to shift immediately
up or down 200 basis points, estimated net interest income should decline by
less than 20%. Management estimates, based on its simulation model, that an
instantaneous 200 basis point increase in interest rates at December 31, 1999,
would result in a 10.74% decrease in net interest income over the next twelve
months, while a 200 basis point decrease in rates would result in a 2.41%
increase in net interest income over the next twelve months. It should be
emphasized that the results are highly dependent on material assumptions such as
those discussed above. It should also be noted that the exposure of the Bank's
net interest income to gradual and/or modest changes in interest rates is
relatively small.

            At December 31, 1999, the Bank slightly exceeded the policy range
set forth in the Bank's Interest Rate Risk Policy. With an immediate 200 point
increase in interest rates the results would exceed policy limits of 25% by
2.3%. While we do not believe the 2.3% to be material, management and the Board
of Directors are reviewing the existing risk limits and may elect to either
revise these limits or adopt an acceptable plan for an orderly return to
compliance with the limits.




                                      -14-
<PAGE>   15





                           JACKSONVILLE BANCORP, INC.

PART II - OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

            The Jacksonville Bancorp, Inc., is involved only in
            routine legal proceedings occurring in the ordinary
            course of business which in the aggregate are believed
            by management to be immaterial to the financial
            condition of the Association.

ITEM 2.     CHANGES IN SECURITIES

               Not Applicable

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

               Not Applicable

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

               Not Applicable

ITEM 5.     OTHER INFORMATION

               Not Applicable

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

             (a)  Exhibit 27: Financial Data Schedule
             (b)  8K dated October 19, 1999 - Announces Branch Opening
                  8K dated November 1, 1999 - Announces Annual Earnings
                  8K dated December 15, 1999 - Declaration of Dividends



                                      -15-
<PAGE>   16



                                   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.


                                         JACKSONVILLE BANCORP, INC.


DATE:   February 8, 2000                 By:   Jerry Chancellor
       ------------------                     -----------------
                                               Jerry Chancellor, President

DATE:   February 8, 2000                 By:   Bill W. Taylor
       -----------------                      ---------------
                                               Bill W. Taylor
                                               Exec. Vice President
                                               Chief Financial Officer



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