JXSB Jacksonville Bancorp Inc. (delisted)

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

SCHEDULE 14A 
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant

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Filed by a Party other than the Registrant

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Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material Pursuant to §240.14a-12

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Jacksonville Bancorp, Inc.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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No fee required.

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

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Title of each class of securities to which transaction applies:

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Common stock, par value $0.01 per share, of Jacksonville Bancorp, Inc. (which we refer to as “Company Common Stock”)

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Aggregate number of securities to which transaction applies:

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1,843,938

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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

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Calculated solely for the purpose of determining the filing fee:    In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying 0.0001245 by the proposed maximum aggregate value of the transaction. The proposed maximum aggregate value of the transaction was calculated as the sum of (a) 1,814,467 shares of Company Common Stock multiplied by $33.70 (which represents the maximum possible amount of the per share merger consideration) and (b) 29,471 shares of Company Common Stock subject to outstanding Company stock options, multiplied by the difference between $33.70 and $15.65 (which represents the weighted average exercise price per share of Company Common Stock subject to outstanding Company stock options).

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Proposed maximum aggregate value of transaction:

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$61,679,489.45

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Total fee paid:

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$7,679.10

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Fee paid previously with preliminary materials.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

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Amount Previously Paid:

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N/A

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Form, Schedule or Registration Statement No.:

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Filing Party:

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Date Filed:

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[Letterhead of Jacksonville Bancorp, Inc.]

MERGER PROPOSED — YOUR VOTE IS VERY IMPORTANT

Dear Fellow Stockholder:

We cordially invite you to attend a special meeting of stockholders of Jacksonville Bancorp, Inc. (“Jacksonville Bancorp”). The special meeting will be held at the headquarters of Jacksonville Bancorp located at 1211 West Morton Avenue, Jacksonville, Illinois, on [Meeting Date], at [•]:00 [•].m., local time.

On January 17, 2018, Jacksonville Bancorp entered into an Agreement and Plan of Merger with CNB Bank Shares, Inc. (“CNB Bank Shares”) and CNB Acquisition, Inc., a newly formed subsidiary of CNB Bank Shares, pursuant to which CNB Acquisition, Inc. will merge with and into Jacksonville Bancorp, with Jacksonville Bancorp as the surviving corporation. If the merger is completed, at the closing your shares of Jacksonville Bancorp common stock will be converted into the right to receive $33.70 in cash for each share. Upon completion of the merger, you will no longer own any stock or have any other interest in Jacksonville Bancorp.

At the special meeting, you will be asked to approve: (1) the Agreement and Plan of Merger, dated as of January 17, 2018, among CNB Bank Shares, Inc., Jacksonville Bancorp, Inc. and CNB Acquisition, Inc. (the “Merger Agreement”), and the merger; (2) a non-binding advisory proposal regarding the compensation to be paid to the named executive officers of Jacksonville Bancorp in connection with the transactions contemplated by the Merger Agreement (the “Merger-Related Compensation”); and (3) any adjournment or postponement of the special meeting, if deemed necessary or appropriate, to solicit additional proxies if there are not sufficient votes represented in person or by proxy at the time of the special meeting to approve the Merger Agreement and the merger (the “Adjournment Proposal”). A majority of the shares of Jacksonville Bancorp common stock outstanding must vote in favor of the Merger Agreement and the merger for the merger to be completed. If the Merger Agreement and the merger are approved, and all other conditions described in the Merger Agreement have been met or waived, the merger is expected to close during the second quarter of 2018.

Your exchange of shares of Jacksonville Bancorp common stock for cash generally will cause you to recognize income or loss for federal, and possibly state, local and foreign, income tax purposes. You should consult your personal tax advisor for a full understanding of the income tax consequences of the merger to you.

Our Board of Directors unanimously recommends that you vote “FOR” approval of the Merger Agreement and the merger, the Merger-Related Compensation proposal and the Adjournment Proposal, because we believe that the merger is advisable and in the best interests of Jacksonville Bancorp’s stockholders.

This proxy statement provides you with detailed information about the proposed merger and includes, as Appendix A, a copy of the Merger Agreement. We urge you to read the enclosed materials carefully for a complete description of the merger.

Your vote is important .   Whether or not you plan to attend the special meeting, please complete, date and sign the enclosed proxy card and return it promptly in the postage-paid envelope we have provided. If your shares are held in an account at a bank, broker or other nominee, you should instruct your bank, broker or nominee how to vote your shares using the separate voting instruction form furnished by your bank, broker or nominee. Failing to vote will have the same effect as voting “AGAINST” the Merger Agreement and the merger.

If you have any questions concerning the merger or need assistance in voting, please contact Jacksonville Bancorp’s proxy solicitor, Laurel Hill Advisory Group, LLC. Banks and brokers can call (516) 933-3100, and all others can call, toll-free, (888) 742-1305.

On behalf of the Board, we thank you for your prompt attention to this important matter.

This proxy statement is dated [•], 2018 and is first being mailed to stockholders on or about [•], 2018.

Jacksonville Bancorp, Inc.
1211 West Morton Avenue
Jacksonville, Illinois 62650
(217) 245-4111

The Jacksonville Bancorp Board of Directors has unanimously approved the Merger Agreement and the merger and unanimously recommends that Jacksonville Bancorp stockholders vote “FOR” approval of the Merger Agreement and the merger, “FOR” the Merger-Related Compensation proposal and “FOR” the Adjournment Proposal.

By Order of the Board of Directors

John D. Eilering
Corporate Secretary

Jacksonville, Illinois
[•], 2018

Important: The prompt return of proxies will save Jacksonville Bancorp the expense of further requests for proxies to ensure a quorum at the meeting. Please complete, sign and date the enclosed proxy card or voting instruction card and promptly mail it in the enclosed envelope. You may revoke your proxy in the manner described in the proxy statement at any time before it is voted.

TABLE OF CONTENTS

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JACKSONVILLE BANCORP
PROXY STATEMENT FOR SPECIAL MEETING OF STOCKHOLDERS
SUMMARY TERM SHEET

This is a summary of selected key terms of the transaction between Jacksonville Bancorp and CNB Bank Shares. It may not contain all of the information that is important to you. We urge you to read carefully this entire document, including the appendices, and the other documents to which we refer, to fully understand the merger. Each item in this summary refers to the page of this document on which the subject is discussed in more detail.

In the Merger, Jacksonville Bancorp Stockholders Will Have a Right to Receive $33.70 Per Share of Jacksonville Bancorp Common Stock (page   )

If the merger occurs, each stockholder of Jacksonville Bancorp will receive, for each share owned, the right to receive $33.70 in cash at closing. See the discussion under the caption “Proposal 1 — Approval of the Merger Agreement and the Merger — Terms of The Merger Agreement” for more information.

Jacksonville Bancorp’s Reasons for the Merger and Recommendation of the Board of Directors that Jacksonville Bancorp Stockholders Vote “FOR” Approval of the Merger Agreement and the Merger (page   )

The merger cannot occur unless Jacksonville Bancorp’s stockholders approve the Merger Agreement and the merger by the affirmative vote of a majority of the outstanding shares of Jacksonville Bancorp common stock, all regulatory and other approvals necessary to complete the merger are obtained and other conditions to the merger are satisfied or waived. See the discussion under the caption “Proposal 1 —  Approval of the Merger Agreement and the Merger — Conditions to Complete the Merger” for more information. The Board of Directors of Jacksonville Bancorp has unanimously approved the Merger Agreement and the merger and unanimously recommends that Jacksonville Bancorp’s stockholders vote “FOR” the Merger Agreement and the merger. In reaching its decision, the Jacksonville Bancorp Board of Directors considered a number of factors, which are described in the section captioned “Proposal 1 —  Approval of the Merger Agreement and the Merger — Jacksonville Bancorp’s Reasons for the Merger and Recommendation of the Board of Directors that Jacksonville Bancorp Stockholders Vote “FOR” Approval of the Merger Agreement and the Merger.”

The Jacksonville Bancorp Board of Directors also unanimously recommends that the Jacksonville Bancorp stockholders vote “FOR” the approval of the non-binding, advisory proposal regarding the Merger-Related Compensation and “FOR” the Adjournment Proposal.

Jacksonville Bancorp’s Financial Advisor Has Provided an Opinion to the Jacksonville Bancorp Board of Directors Regarding the Merger Consideration (page   and Appendix B)

In connection with the merger, Jacksonville Bancorp’s financial advisor, D.A. Davidson & Co. (“D.A. Davidson”), delivered a written opinion, dated January 17, 2018, as to the fairness, from a financial point of view, to the holders of Jacksonville Bancorp common stock of the consideration to be paid in the proposed merger. The full text of the opinion, which describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by D.A. Davidson in preparing the opinion, is attached as Appendix B to this proxy statement. The opinion was directed to the Jacksonville Bancorp Board of Directors (in its capacity as such) in connection with its consideration of the financial terms of the merger. The opinion did not address the underlying decision of Jacksonville Bancorp to engage in the merger or constitute a recommendation to the Jacksonville Bancorp Board of Directors in connection with the merger, and it does not constitute a recommendation to any holder of Jacksonville Bancorp common stock or any stockholder of any other entity as to how to vote in connection with the merger or any other matter.

Both Jacksonville Bancorp and CNB Bank Shares have Agreed to Pay a Termination Fee in Certain Circumstances and Jacksonville Bancorp has Agreed to Non-Solicitation Restrictions (pages   and   )

Under certain circumstances described in the Merger Agreement, in connection with a termination of the Merger Agreement, either Jacksonville Bancorp or CNB Bank Shares is required to pay the other a $2.25 million termination fee (plus up to $400,000 in out-of-pocket expenses related to the merger). See the discussion under the caption “Proposal 1 — Approval of the Merger Agreement and the Merger —  Termination Fee” for more information.

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In general, Jacksonville Bancorp has agreed that it will not seek or encourage a competing transaction to acquire Jacksonville Bancorp except in very limited situations in which an unsolicited offer is made. See the discussion under the caption “Proposal 1 — Approval of the Merger Agreement and the Merger —  Agreement Not to Solicit Other Offers” for more information.

Jacksonville Bancorp’s Executive Officers and Directors Have Financial Interests in the Merger That Differ From Your Interests (page   )

In considering the recommendation of the Board of Directors of Jacksonville Bancorp to approve the Merger Agreement and the merger, you should be aware that certain interests of executive officers and directors of Jacksonville Bancorp and Jacksonville Savings Bank in the merger are somewhat different from, or in addition to, your interests as Jacksonville Bancorp stockholders. These interests include the following:

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severance benefits payable to Jacksonville Savings Bank’s Chairman of the Board, Andrew F. Applebee, President and Chief Executive Officer, Richard A. Foss, and Senior Vice President and Trust Officer, John C. Williams, under their employment agreements;

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the appointment of Mr. Foss to the Board of Directors of CNB Bank, effective upon the bank merger;

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CNB Bank Shares’ interest in retaining Chris A. Royal, Executive Vice President and Chief Lending Officer, and Diana S. Tone, Executive Vice President and Chief Financial Officer, and assuming their existing change in control agreements;

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the cash payment to holders of outstanding stock options previously granted by Jacksonville Bancorp equal to the difference between the option exercise price and $33.70;

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CNB Bank Shares’ agreement to honor and assume Jacksonville Savings Bank’s non-qualified deferred compensation and supplemental retirement arrangements, which for certain executive officers provide for accelerated and enhanced retirement benefits in connection with a change in control, such as the merger;

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additional allocations under Jacksonville Savings Bank’s ESOP of a pro-rata portion of the excess assets in the plan’s suspense account after the ESOP loan is repaid, the ESOP is terminated and the shares in the ESOP are exchanged for the merger consideration; and

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the rights of officers and directors of Jacksonville Bancorp and its subsidiaries to continued indemnification coverage and continued coverage under directors’ and officers’ liability insurance policies.

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See the discussion under the caption “Proposal 1 — Approval of The Merger Agreement and the Merger — Financial Interests of Directors and Executive Officers in the Merger” for more information.

Approval of the Non-Binding Proposal Regarding the Merger-Related Compensation Requires the Affirmative Vote of a Majority of the Votes Cast at the Special Meeting (page   )

Approval by the Jacksonville Bancorp stockholders of the non-binding proposal regarding the Merger-Related Compensation is determined by a majority of the votes cast at the special meeting, without regard to broker non-votes or proxies marked “abstain.” It is an advisory vote and is not binding on Jacksonville Bancorp, Jacksonville Bancorp’s Board of Directors, or CNB Bank Shares. Further, the underlying plans and arrangements are contractual in nature and not, by their terms, subject to stockholder approval. Regardless of the outcome of the non-binding, advisory vote, if the merger is consummated, Jacksonville Bancorp’s named executive officers will receive various payments and benefits in accordance with the terms and conditions applicable to those arrangements, subject to any regulatory limitations.

What Holders of Jacksonville Bancorp Stock Options Will Receive (page   )

Pursuant to the Merger Agreement, each outstanding stock option granted by Jacksonville Bancorp under its 2012 Stock Option Plan, whether vested or unvested, with an exercise price that is less than $33.70 that is outstanding immediately before the effective date of the merger will be canceled and converted automatically into the right to receive a cash payment equal to the stock option consideration as described

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further under the caption “Proposal 1 — Approval of the Merger Agreement and the Merger — Treatment of Jacksonville Bancorp Stock Options.”

At the effective time of the merger, each share of common stock held by the ESOP and the 401(k) Plan will be converted into the right to receive $33.70 in cash at closing.

There are Conditions That Must Be Satisfied or Waived for the Merger to Occur (page   )

Currently, we expect to complete the merger during the second quarter of 2018. As more fully described in this proxy statement and in the Merger Agreement, the completion of the merger depends on a number of conditions being satisfied or, where legally permissible, waived. These conditions include, among others:

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obtaining the consents and approvals required to consummate the merger, including the approval of the Merger Agreement and the transactions contemplated thereby by Jacksonville Bancorp’s stockholders, the receipt of required regulatory approvals and the expiration of applicable waiting periods;

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since the date of the Merger Agreement, there must not have been commenced or threatened against Jacksonville Bancorp or CNB Bank Shares any proceeding or order that would reasonably be expected to have a material adverse effect on the other party’s rights under the Merger Agreement or to make the consummation of the merger illegal;

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as of the closing date of the merger, there must not be any outstanding enforcement actions issued or threatened against Jacksonville Bancorp or Jacksonville Savings Bank;

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the accuracy of the representations and warranties of the parties in the Merger Agreement as of the closing date of the merger, subject to the materiality standards provided in the Merger Agreement, and the performance of the parties in all material respects of all obligations required to be performed by each of them at or before the effective time of the merger under the Merger Agreement;

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Jacksonville Bancorp’s total consolidated stockholders’ equity on the last day of the month preceding the month in which the closing of the merger occurs must not be less than $50 million (for purposes of this closing condition, the calculation of total consolidated stockholders’ equity excludes the effect of certain items, including expenses and certain other costs related to the merger, changes to the valuation of Jacksonville Bancorp’s deferred tax asset resulting from U.S. tax law reform and changes to Jacksonville Bancorp’s accumulated other comprehensive income);

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no known material unauthorized access to, or misappropriation of, confidential customer information maintained by Jacksonville Bancorp or Jacksonville Savings Bank; and

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delivery by each of CNB Bank Shares and Jacksonville Bancorp of its portion of the merger consideration to Hickory Point Bank and Trust, Decatur, Illinois (the “Paying Agent”) no later than the business day before the merger closing date.

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We cannot be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed.

There are Regulatory Approvals That Must Be Received for the Merger to Occur (page   )

Under the terms of the Merger Agreement, the merger cannot be completed unless it is first approved by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), the Office of the Comptroller of the Currency (the “OCC”) and the Illinois Department of Financial and Professional Regulation (the “IDFPR”). CNB Bank Shares and CNB Bank have filed the required regulatory applications with the Federal Reserve Board, the OCC and the IDFPR. Additionally, Jacksonville Savings Bank has filed a regulatory application with the IDFPR regarding paying a dividend to Jacksonville Bancorp to fund the portion of the merger consideration that is to be paid by Jacksonville Bancorp. Although we do not know of any reason why the regulatory approvals would not be obtained in a timely manner, we cannot be certain when or if such approvals will be obtained.

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The Merger Will Be Taxable to Jacksonville Bancorp Stockholders for U.S. Federal Income Tax Purposes (page   )

The receipt of the merger consideration in exchange for shares of Jacksonville Bancorp common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes (and may be a taxable transaction under applicable state, local and foreign income or other tax laws). For U.S. federal income tax purposes, each Jacksonville Bancorp stockholder generally will recognize gain or loss at the effective time of the merger equal to the per share difference, if any, between: (1) $33.70 and (2) the stockholder’s adjusted tax basis in each share of Jacksonville Bancorp common stock exchanged in the merger. The federal income tax consequences described above may not apply to all holders of Jacksonville Bancorp common stock. Your tax consequences will depend on your individual situation. Accordingly, you should consult your tax advisor for a full understanding of the particular tax consequences of the merger to you.

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(1)

Includes loans held for sale of  $179,000, $503,000, $539,000, $236,000 and $262,000 at December 31, 2017, 2016, 2015, 2014 and 2013, respectively.

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The interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the year.

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The net interest margin represents net interest income as a percent of average interest-earning assets for the year.

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The efficiency ratio represents non-interest expense divided by the sum of net interest income and non-interest income.

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Gross loans include loans held for sale.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

This proxy statement, and the documents that we refer to in this proxy statement, contain forward-looking statements intended to be covered by the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, among other things, information concerning possible or assumed future results of operations of Jacksonville Bancorp or CNB Bank Shares, the expected completion and timing of the merger and other information relating to the merger. Forward-looking statements are typically identified by words such as “believes,” “plans,” “expects,” “anticipates,” “intends,” “continues,” “remains,” “will,” “should,” “may,” “estimates” or other similar expressions. You should be aware that forward-looking statements involve known and unknown risks and uncertainties. These forward-looking statements reflect our current expectations and forecasts, and we cannot assure you that the actual results or developments we anticipate will be realized, or even if realized, that they will have the expected effects on the business or operations of Jacksonville Bancorp. In addition to other factors and matters discussed in this document or discussed and identified in other public filings we make with the Securities and Exchange Commission, we believe the following risks could cause actual results to differ materially from those discussed in the forward-looking statements:

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the risk that the merger will not be consummated timely, if at all;

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conditions to the closing of the merger may not be satisfied or the Merger Agreement may be terminated before closing;

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the impact that potential litigation related to the merger may have on the ability to consummate the merger;

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difficulties in obtaining required stockholder and regulatory approvals of the merger;

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the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events;

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the anticipated cost savings and other synergies of the merger may take longer to be realized or may not be achieved in their entirety;

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attrition in key client, partner and other relationships relating to the merger may be greater than expected;

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increases in competitive pressure among financial institutions or from non-financial institutions;

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changes in the interest rate environment;

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changes in deposit flows, loan demand, asset quality or real estate values;

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changes in accounting principles, policies or guidelines;

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changes in laws or regulations;

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governmental and public policy changes, including changes that could subject the parties to additional regulatory oversight, which may result in increased compliance costs;

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changes in general economic conditions or conditions in securities markets or the banking industry;

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materially adverse changes in the financial condition of Jacksonville Bancorp, Jacksonville Savings Bank, CNB Bank Shares or CNB Bank;

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risks related to domestic or international military or terrorist activities or conflicts;

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difficulties related to the completion of the merger; and

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other economic, competitive, governmental, regulatory, geopolitical and technological factors affecting operations, pricing and services.

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You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this document and attributable to Jacksonville Bancorp or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable law or regulation, Jacksonville Bancorp undertakes no obligation to update revised forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events.

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THE SPECIAL MEETING

This section contains information about the special meeting of Jacksonville Bancorp stockholders that has been called to consider and approve the Merger Agreement and the merger.

Place, Date and Time

The special meeting will be held at the headquarters of Jacksonville Bancorp located at 1211 West Morton Avenue, Jacksonville, Illinois, on [Meeting Date], commencing at [•]:00 [•].m., local time.

Purpose of the Meeting

At the special meeting, our stockholders will be asked to consider and vote on:

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a proposal to approve the Agreement and Plan of Merger, dated as of January 17, 2018, among CNB Bank Shares, Jacksonville Bancorp, and CNB Acquisition, Inc., and the merger;

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the Merger-Related Compensation proposal; and

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the Adjournment Proposal.

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How to Vote

Mark, sign and date the enclosed proxy card and return it in the enclosed postage-paid envelope. All properly executed proxies received by Jacksonville Bancorp will be voted in accordance with the instructions marked on the proxy card. If you return an executed and dated proxy card without marking your instructions, your executed proxy will be voted “FOR” the proposals identified in the preceding Notice of Special Meeting of Stockholders. Returning a proxy card will not prevent you from voting in person if you attend the special meeting.

Alternatively, you may attend the special meeting and vote in person. If you are a stockholder whose shares are not registered in your own name, you will need an assignment of voting rights or a proxy from the stockholder of record to vote personally at the special meeting.

Record Date; Vote Required

Only our stockholders of record at the close of business on [Record Date] are entitled to notice of and to vote at the special meeting or any adjournment of the meeting. As of  [Record Date], there were 1,814,467 shares of our common stock outstanding.

If your shares are held in “street name” by your bank, broker or other nominee you should instruct your bank, broker or other nominee how to vote your shares using the instructions provided by your bank, broker or other nominee. If you have not received these voting instructions or require further information regarding these voting instructions, please contact your bank, broker or other nominee to obtain directions on how to vote your shares. Brokers who hold shares in “street name” for customers may not exercise their voting discretion with respect to the approval of non-routine matters such as the merger proposal and thus, absent specific instructions from the beneficial owner of the shares, brokers are not empowered to vote the shares with respect to the approval of the Merger Agreement and the merger (i.e., “broker non-votes”). Shares of Jacksonville Bancorp common stock held by persons attending the special meeting but not voting, or shares for which we have received proxies with respect to which holders have abstained from voting, will be considered abstentions.

At the special meeting, our stockholders will be entitled to cast one vote per share of common stock owned on [Record Date]. Such vote may be exercised in person or by properly executed proxy. The presence, in person or by properly executed proxy, of a majority of our outstanding shares of common stock entitled to vote is necessary to constitute a quorum. Abstentions and broker non-votes will be treated as shares present at the special meeting in determining the presence of a quorum.

The affirmative vote of a majority of the outstanding shares of Jacksonville Bancorp common stock is required to approve the Merger Agreement and the merger. As a result, abstentions and broker non-votes will have the same effect as votes “AGAINST” the approval of the Merger Agreement and the merger.

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Approval of the Merger-Related Compensation proposal and the Adjournment Proposal will require the affirmative vote of a majority of the votes cast at the special meeting. Broker non-votes and abstentions from voting will have no effect on the outcome of the vote on either proposal.

Approval of the Merger Agreement by our stockholders is a condition to completion of the merger. See “Proposal 1 — Approval of the Merger Agreement and the Merger — Conditions to Complete the Merger.”

Beneficial Ownership of Jacksonville Bancorp Common Stock

As of  [Record Date], our directors and executive officers and their affiliates beneficially owned in the aggregate [•] shares of our common stock, excluding stock options, or [•]% of our outstanding shares of common stock. The Jacksonville Bancorp directors and certain executive officers, solely in their capacity as Jacksonville Bancorp stockholders, have each entered into a separate voting agreement with CNB Bank Shares, pursuant to which each such director and executive officer has agreed to vote all shares of Jacksonville Bancorp common stock over which he or she exercises sole or shared dispositive or voting rights in favor of the approval of the Merger Agreement and the merger and certain related matters and against alternative transactions. As of  [Record Date], the Jacksonville Bancorp directors and executive officers that are party to these voting agreements exercised sole or shared dispositive or voting rights with respect to [•] shares of our common stock, representing [•]% of the outstanding shares of our common stock.

Proxies; Revocation

Shares of our common stock represented by properly executed proxies received before or at the special meeting will, unless such proxies have been revoked, be voted at the special meeting and any adjournments or postponements of the special meeting in accordance with the instructions indicated in the proxies. If no instructions are indicated on a properly executed and dated proxy, the shares will be voted “FOR” the approval of the Merger Agreement and the merger, “FOR” the non-binding proposal to approve the Merger-Related Compensation and “FOR” the Adjournment Proposal.

Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before it is voted in the following manner: (1) by delivering to the Secretary of Jacksonville Bancorp, before the taking of the vote at the special meeting, a written notice of revocation bearing a later date than the proxy; (2) by duly executing a later-dated proxy relating to the same shares of common stock and delivering it to the Secretary at or before the special meeting; or (3) by attending the special meeting and voting in person (attendance at the special meeting will not by itself constitute a revocation of a proxy).

Written notices of revocation and other communications regarding the revocation of your proxy should be addressed to:

Jacksonville Bancorp, Inc.
1211 West Morton Avenue
Jacksonville, Illinois 62650
Attention: John D. Eilering
                   Corporate Secretary

If you have instructed your bank, broker or other nominee to vote your shares, the options for revoking your proxy described in the paragraphs above do not apply and instead you must follow the directions provided by your bank, broker or other nominee to change those instructions.

You are requested to complete, date and sign the accompanying proxy card and to return it promptly in the enclosed postage-paid envelope.

Do not forward stock certificates with your proxy cards.

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Solicitation

Jacksonville Bancorp will bear the cost of soliciting proxies. In addition to soliciting by mail, our directors, officers and employees may solicit proxies from our stockholders personally, by telephone or by other forms of communication. Our directors, officers and employees will not receive additional compensation for such services. Brokerage houses, nominees, fiduciaries and other custodians will be requested to forward soliciting materials to beneficial owners and will be reimbursed for their reasonable expenses incurred in sending proxy materials to beneficial owners. In addition, we have retained Laurel Hill Advisory Group, LLC to solicit proxies on behalf of the Board of Directors. Laurel Hill Advisory Group, LLC will receive a fee of  $6,000 for these services, plus reimbursement for its expenses.

Recommendation of the Jacksonville Bancorp Board of Directors Relating to the Merger Agreement and the Merger

The Jacksonville Bancorp Board of Directors has unanimously approved the Merger Agreement and transactions related to the Merger Agreement, including the merger. The Jacksonville Bancorp Board of Directors unanimously determined that the merger, the Merger Agreement and the transactions related to the Merger Agreement are advisable and in the best interests of Jacksonville Bancorp and its stockholders and unanimously recommends that you vote “FOR” approval of the Merger Agreement and the merger. See “The Merger — Jacksonville Bancorp’s Reasons for the Merger and Recommendation of the Board of Directors that Jacksonville Bancorp Stockholders Vote “FOR” Approval of the Merger Agreement and the Merger” for a more detailed discussion of the Jacksonville Bancorp Board of Directors’ recommendation.

Attending the Jacksonville Bancorp Special Meeting

All stockholders are invited to attend the special meeting. Stockholders of record can vote in person at the special meeting. If you want to vote your shares of Jacksonville Bancorp common stock held in street name in person at the special meeting, you will have to get a written proxy in your name from the bank, broker or other nominee who holds your shares.

Participants in Jacksonville Bancorp Benefit Plans

If you are a participant in the 401(k) Plan or the ESOP, you will have received voting instruction forms that reflect all shares you may vote under these plans. Under the terms of these plans, the trustee votes all shares held by the plan, but each participant may provide instructions to the trustee how to vote the shares of Jacksonville Bancorp common stock allocated to his or her plan account. The trustee will vote your shares in accordance with your instructions and will vote the unallocated shares and the allocated unvoted shares in the same proportion as the instructions received from participants. The deadline for returning your voting instructions is [•], 2018.

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On January 17, 2018, the last trading day before the public announcement that CNB Bank Shares and Jacksonville Bancorp had entered into the Merger Agreement, the closing trading price of Jacksonville Bancorp common stock was $32.02 per share. On [•], 2018, which is the last practicable date before the printing of this proxy statement, the closing price of Jacksonville Bancorp common stock was $[•] per share.

As of the record date, there were approximately [•] holders of record of Jacksonville Bancorp common stock. This number does not reflect the number of persons or entities who may hold their common stock in nominee or “street” name through brokerage firms.

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INFORMATION ABOUT THE COMPANIES

CNB Bank Shares, Inc. CNB Bank Shares, an Illinois corporation, is the parent company of CNB Bank. At December 31, 2017, CNB Bank Shares had total consolidated assets of  $945.9 million, total deposits of  $820.7 million and stockholders’ equity of  $83.7 million. The principal executive office of CNB Bank Shares is located at 450 W. Side Square, Carlinville, Illinois 62626, and its telephone number at that address is (217) 854-2674. From 1996 to 2009, CNB Bank Shares acquired four banks in west central Illinois, which were merged to one bank under the CNB Bank charter in 2011.

CNB Bank & Trust, N.A. CNB Bank & Trust, N.A., a wholly-owned subsidiary of CNB Bank Shares, is a national bank headquartered in Carlinville, Illinois. It conducts its business from its main office and twelve branches, nine of which are located in communities in west central Illinois, two are located in southern Cook County, Illinois, and one is located in Clayton, Missouri. CNB Bank was established in 1888 as an Illinois-chartered commercial bank and changed its charter to a national bank in 1890. CNB Bank’s website is www.cnbil.com . Information contained on CNB Bank’s website is not and should not be considered a part of this proxy statement.

CNB Bank is a community-oriented commercial bank engaged primarily in the business of attracting retail deposits from the general public and businesses in its market area and using such funds, together with borrowings and funds from other sources, to originate commercial and agricultural business loans, mortgage loans secured by one- to four-family residential real estate, commercial and agricultural real estate, and home equity loans, and consumer loans. Additionally, it invests in United States Government agency securities, bank-qualified, general obligation municipal issues, and mortgage-backed securities issued or guaranteed by the United States Government or enterprises thereof.

CNB Bank’s principal sources of funds are customer deposits, proceeds from the sale of loans, short-term borrowings, funds received from the repayment and prepayment of loans and mortgage-backed securities, and the sale, call, or maturity of investment securities. Principal sources of income are interest income on loans and investments, sales of loans and securities, fiduciary fees, service charges, commissions, card interchange income and other fees. Its principal expenses are interest paid on deposits, employee compensation and benefits, occupancy and equipment expense, and data processing and telecommunications expense.

Jacksonville Bancorp, Inc. Jacksonville Bancorp, a Maryland corporation, is the holding company for Jacksonville Savings Bank. At December 31, 2017, Jacksonville Bancorp had total consolidated assets of $325.0 million, total deposits of  $252.7 million, and total stockholders’ equity of  $48.8 million. The principal executive office of Jacksonville Bancorp is located at 1211 West Morton Avenue, Jacksonville, Illinois 62650, and its telephone number at that address is (217) 245-4111.

Jacksonville Savings Bank. Jacksonville Savings Bank is an Illinois-chartered savings bank headquartered in Jacksonville, Illinois. It conducts its business from its main office and five branches, two of which are located in Jacksonville and one of which is located in the Illinois communities of Virden, Litchfield, and Chapin. Jacksonville Savings Bank was chartered in 1916 as an Illinois-chartered mutual savings and loan association and converted to a mutual savings bank in 1992. In 1995, Jacksonville Savings Bank converted to a stock savings bank and reorganized into the mutual holding company form of organization.

Jacksonville Savings Bank is a community-oriented savings bank engaged primarily in the business of attracting retail deposits from the general public in its market area and using such funds, together with borrowings and funds from other sources, to originate mortgage loans secured by one- to four-family residential real estate, commercial and agricultural real estate, and home equity loans. It also originates commercial and agricultural business loans and consumer loans. Additionally, it invests in United States Government agency securities, bank-qualified, general obligation municipal issues, and mortgage-backed securities issued or guaranteed by the United States Government or enterprises thereof.

Jacksonville Savings Bank’s principal sources of funds are customer deposits, proceeds from the sale of loans, short-term borrowings, funds received from the repayment and prepayment of loans and mortgage-backed securities, and the sale, call, or maturity of investment securities. Principal sources of

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income are interest income on loans and investments, sales of loans and securities, service charges, commissions, card interchange income and other fees. Its principal expenses are interest paid on deposits, employee compensation and benefits, occupancy and equipment expense, and data processing and telecommunications expense.

Jacksonville Savings Bank operates an investment center at its main office. The investment center is operated through Financial Resources Group, Inc., Jacksonville Savings Bank’s wholly-owned subsidiary.

Jacksonville Savings Bank’s principal executive office is located at 1211 West Morton, Jacksonville, Illinois, and its telephone number at that address is (217) 245-4111. Its website address is www.jacksonvillesavings.com . Information on Jacksonville Savings Bank’s website is not and should not be considered to be a part of this proxy statement.

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Jacksonville Bancorp stockholders would receive $31.00 per share and agree to maintain Jacksonville Savings Bank as a separate bank under Company B’s holding company structure. Under this arrangement, Jacksonville Savings Bank would continue to be supervised by its existing Board of Directors. In April 2016, Company B provided Jacksonville Bancorp with a draft merger agreement. However, negotiations and merger agreement discussions ended in May 2016.

In August 2016, a representative of D.A. Davidson arranged a meeting between Messrs. Applebee and Foss and the chief executive officer and chief financial officer of another bank holding company (“Company C”). The D.A. Davidson representative also attended the meeting. The parties discussed their franchises and business cultures and philosophies. The parties also discussed the possibility of a business combination and the possible structure and synergies that could be achieved through a business combination. Later in August 2016, Jacksonville Bancorp and Company C entered into a non-disclosure agreement. In September 2016, the parties discussed pricing expectations before Company C verbally offered to acquire Jacksonville Bancorp for between $30.00 and $31.00 per share in a transaction that consisted of 60% stock and 40% cash. Later in September 2016, the Jacksonville Bancorp Board determined that that offer was not in the best interests of its stockholders and terminated further negotiations.

In October 2016, Messrs. Applebee and Foss met with the chief executive officer and chief financial officer of another bank holding company (“Company D”) in a meeting that had been arranged by an investment banking firm. At the meeting the senior officers of Company D offered to acquire Jacksonville Bancorp for $33.00 per share in an all-cash transaction. In November 2016, Jacksonville Bancorp and Company D entered into a non-disclosure agreement and Company D began to conduct due diligence.

On December 22, 2016, Mr. Foss, Diana S. Tone, Chief Financial Officer of Jacksonville Bancorp, and Chris A. Royal, Chief Lending Officer of Jacksonville Savings Bank, met with the chairman of the board, president and chief executive officer, and the chief financial officer of Company D to discuss the operations of both banks.

On January 10, 2017, the president and chief executive officer of Company C called Mr. Foss to inform him that Company C was now willing to offer to acquire Jacksonville Bancorp for $35.00 per shares in a transaction consisting of 80% stock and 20% cash. However, on January 20, 2017, Company C informed Messrs. Foss and Applebee that it had been presented with a different strategic opportunity, which it planned to pursue instead of negotiating a transaction with Jacksonville Bancorp.

On February 2, 2017, the chief executive officer of Company D called Mr. Foss to inform him that its Board of Directors had decided not to proceed with the transaction.

On July 21, 2017, Messrs. Applebee and Foss met with Messrs. Ashworth and Davis and a representative of Keefe, Bruyette & Woods, Inc. (“KBW”), CNB Bank Shares’ financial advisor. There was discussion regarding the structure and benefits of a possible transaction; however, no specific transaction terms were discussed.

On July 26, 2017, Jacksonville Bancorp and CNB Bank entered in a non-disclosure agreement.

On August 9, 2017, Messrs. Ashworth, Davis and Walden, and a representative of KBW, met with the Jacksonville Bancorp Board of Directors to further discuss the transaction and the resulting institution. Following the meeting, Mr. Ashworth sent an e-mail to Mr. Foss summarizing the parameters of the terms CNB Bank Shares expected to include in a letter of intent.

Throughout August 2017, representatives of Luse Gorman, P.C., Jacksonville Bancorp’s legal counsel, Messrs. Applebee and Foss and a representative of D.A. Davidson discussed the directors’ fiduciary duties, specifically in the context of a change of control. It was noted that as the consideration being proposed to Jacksonville Bancorp stockholders in the transaction consisted only of cash, to exercise its fiduciary duties, the Board of Directors should conduct additional diligence regarding the price being offered. The Board of Directors recommended that D.A. Davidson contact certain other institutions to gauge their interest in acquiring Jacksonville Bancorp. As a result, D.A. Davidson worked with management to compile a list of proposed candidates to contact. The institutions were chosen based on their capacity to provide financial terms at least as favorable as those being offered by CNB Bank Shares. Further, each of the parties to be

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contacted had either previously expressed interest in Jacksonville Bancorp or in Jacksonville Bancorp’s market area. The representatives of D.A. Davidson outlined the process for contacting the institutions, including providing each institution (after it had signed a confidentiality agreement) a confidential information memorandum summarizing the business, financial condition, results of operation, properties and employees of Jacksonville Bancorp and Jacksonville Savings Bank. Members of D.A. Davidson worked with senior management of Jacksonville Bancorp to complete the confidential information memorandum.

On August 15, 2017, the Board of Directors of Jacksonville Bancorp met to consider the expected offer from CNB Bank Shares. After a discussion of the expected terms, the Board voted to move forward with further exploration of a possible transaction and authorized management to engage D.A. Davidson as Jacksonville Bancorp’s financial advisor. The Board of Directors also discussed the recommendation of Jacksonville Bancorp’s legal and financial advisors that the Jacksonville Bancorp Board of Directors authorize D.A. Davidson to contact a limited number of banks to gauge their interest in a transaction with Jacksonville Bancorp. The purpose of the process would be to confirm that the transaction with CNB Bank Shares was in the best interests of Jacksonville Bancorp’s stockholders.

On August 30, 2017, CNB Bank Shares submitted a written non-binding indication of interest letter, which offered a value of between $33.00 and $34.00 per share to stockholders of Jacksonville Bancorp for each share of Jacksonville Bancorp common stock. The offer noted that CNB would be required to raise capital to complete the transaction.

On August 30, 2017, D.A. Davidson was retained as Jacksonville Bancorp’s financial advisor.

On August 30, 2017, a data room containing diligence materials relating to Jacksonville Bancorp was made available.

On September 5, 2017, a representative of D.A. Davidson contacted a representative of KBW to confirm and further explain the specifics and timing of the process that Jacksonville Bancorp was expected to undertake to contact other banks. There was also discussion regarding the steps and timing involved in moving towards a definitive agreement with CNB Bank Shares if the results of the contacts with other banks did not present Jacksonville Bancorp with another opportunity. Also, the representative of D.A. Davidson informed the KBW representative that if the discussions with other banks did not present Jacksonville Bancorp with more favorable opportunities, it was willing to enter into an exclusivity agreement with CNB Bank Shares.

On September 6, 2017, D.A. Davidson began contacting the five banks identified by senior management, which included Company A, Company B and Company C. Of the five banks contacted, four of the banks signed and returned a confidentiality agreement. Each of the four banks was then provided with the confidential information memorandum, which included instructions on the contents of the indications of interest they were to submit. The banks contacted were requested to submit the letters by September 25, 2017.

On September 19, 2017, Jacksonville Bancorp held a regularly scheduled meeting of the Board of Directors. Mr. Foss summarized the merger-related activities with CNB Bank Shares since the August board meeting.

On September 25, 2017, a call was held with Messrs. Applebee and Foss and representatives of D.A. Davidson and Luse Gorman. Representatives of D.A. Davidson provided a summary of the conversations they had with various executive officers and financial advisors from the five banks contacted. D.A. Davidson indicated that none of the banks submitted a written indication of interest; however, one bank still remained interested (“Company E”).

On September 26, 2017, CNB Bank Shares submitted a written non-binding indication of interest letter, which offered a value of  $33.60 per share in cash to stockholders of Jacksonville Bancorp for each share of Jacksonville Bancorp common stock. The indication of interest also invited one member of the Jacksonville Bancorp Board of Directors to join the CNB Bank Board of Directors.

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On September 27, 2017, Mr. Foss had lunch with the chairman of the board of Company E. They discussed their franchises and business cultures and philosophies, and the possibility of a business combination. They also discussed the possible structure and the synergies that could be achieved through a business combination. The chairman of Company E requested additional time with which to provide an indication of interest.

On September 29, 2017, Company E indicated it was not interested in making an offer.

On October 5, 2017, the Board of Directors of Jacksonville Bancorp met. Representatives of D.A. Davidson and Luse Gorman also participated in the meeting. A representative from D.A. Davidson discussed and reviewed its presentation materials, a copy of which had been previously provided to the Board of Directors. The D.A. Davidson representative discussed the recent overall and bank stock market performance and presented a summary of financial and pricing information for comparable merger and acquisition transactions. The D.A. Davidson representative summarized the results of the process of contacting other banks to gauge their interest in acquiring Jacksonville Bancorp. He summarized his conversations with each of the banks and reasons for their ultimate lack of interest. The D.A. Davidson representative discussed in detail the September 26, 2017 indication of interest letter that had been delivered by CNB Bank Shares, noting that CNB Bank Shares would need to raise capital to finance the transaction and the process and risks associated with such an endeavor. He then presented a model of the transaction between CNB Bank Shares and Jacksonville Bancorp noting the assumptions utilized to prepare the analysis and the pricing metrics of the transaction and the financial information about the pro forma company, emphasizing the level of capital following both the proposed capital raise by CNB Bank Shares and the merger transaction. The D.A. Davidson representative also addressed a typical timeline for this type of transaction.

Representatives of Luse Gorman then reviewed a memorandum that they had prepared (and previously distributed to the Board), summarizing a director’s fiduciary duties, with an emphasis on the role of the Board in a change in control scenario.

After the completion of discussion, the Board voted to: (1) proceed with the negotiation of a definitive agreement with CNB Bank Shares substantially consistent with the terms outlined in the indication of interest letter for presentation to and consideration by the Board of Directors at the earliest practicable date; (2) take all necessary and appropriate action on behalf of Jacksonville Bancorp toward such end, including, in consultation with the Jacksonville Bancorp’s legal and financial advisors, conducting a due diligence investigation of CNB Bank Shares; and (3) allow CNB Bank Shares to continue to conduct its due diligence investigation of Jacksonville Bancorp. The Board of Directors also instructed the D.A. Davidson representative to contact CNB Bank Shares’ financial advisor in an effort to increase CNB Bank Shares’ offered price per share.

Following conversations between the parties’ financial advisors, on October 11, 2017, CNB Bank Shares submitted a revised written non-binding indication of interest letter, which increased its offer to $33.70 per share to stockholders of Jacksonville Bancorp for each share of Jacksonville Bancorp common stock. The revised indication of interest also contained a provision whereby Jacksonville Bancorp would agree to negotiate exclusively with CNB Bank Shares for a period of 60 days from the date of the indication of interest.

On October 30, 2017, representatives from Castle Creek Partners VI, L.P., the party making the capital investment with CNB Bank Shares, conducted its loan review of the Jacksonville Bancorp loan portfolio.

During November 2017, representatives of the management teams of CNB Bank Shares and Jacksonville Bancorp met and talked several times to discuss the merger, the operations and business of the two companies and certain logistical issues, such as the pending vendor contract renewals.

On November 20, 2017, Barack Ferrazzano Kirschbaum & Nagelberg LLP, the legal counsel for CNB Bank Shares, provided Luse Gorman with a draft of the Merger Agreement. Continuing through early January 2018, the parties, with the assistance of their respective legal counsel and financial advisors, continued to review and negotiate the Merger Agreement, along with various other ancillary documents.

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On November 21, 2017, Jacksonville Bancorp held a regularly scheduled meeting of the Board of Directors. Mr. Foss summarized the merger-related activities with CNB Bank Shares since the October board meeting.

In December 2017, a data room containing diligence materials requested by Jacksonville Bancorp relating to CNB Bank Shares was made available to Jacksonville Bancorp management and its legal and financial advisors.

On December 12, 2017, Jacksonville Bancorp held a regularly scheduled meeting of the Board of Directors. Mr. Foss summarized the merger-related activities with CNB Bank Shares since the November meeting, including the status of the negotiation of the Merger Agreement.

On January 16, 2018, a meeting of the Jacksonville Bancorp Board of Directors was convened. Representatives of Jacksonville Bancorp’s senior management and legal and financial advisors participated in the meeting. A copy of the Merger Agreement that had been negotiated to date, as well as certain ancillary documents, had been provided to the members of the Board of Directors on January 13, 2018. Representatives of Luse Gorman began the meeting by summarizing the fiduciary duties of each director, with an emphasis on the role of the Board in a change in control scenario. The Luse Gorman representatives reviewed in detail the terms of the Merger Agreement and the voting agreements to be entered into by the directors and senior management. Representatives of Luse Gorman also discussed the proposed resolutions that the Board would be requested to approve in connection with the merger. D.A. Davidson made a presentation, a copy of which had been sent in advance to the directors. The D.A. Davidson representative began by summarizing the process to date. He presented several key transaction multiples and compared the stock price performance of Jacksonville Bancorp against certain stock indices and indicated the trading volume of Jacksonville Bancorp’s stock over various periods during the past year. The D.A. Davidson representative compared the financial metrics for the proposed transaction against the financial metrics of transactions for certain selected peer group companies. He also summarized the results of a discounted cash flow analysis D.A. Davidson performed on Jacksonville Bancorp. He noted the discount rate used and other assumptions used in his analysis. The D.A. Davidson representative provided financial information with respect to the pro forma company, focusing on the pro forma capital ratios. He concluded his presentation by noting that a draft of his firm’s written fairness opinion was included in the materials provided to the Board and that he was currently in a position to opine that the consideration to be offered by CNB Bank Shares was fair, from a financial point of view, to Jacksonville Bancorp’s stockholders.

On January 16, 2018, the CNB Bank Shares Board of Directors held a special meeting to discuss the proposed transaction and to review the final terms of the Merger Agreement. Representatives of Barack Ferrazzano reviewed in detail the terms of the Merger Agreement and also discussed a possible timetable for the transaction based on final approval of the Merger Agreement, as well as other legal issues including the Board’s fiduciary duties owed to the CNB Bank Shares’ stockholders. Management also reported to the Board the results of CNB Bank Shares’ due diligence investigation of Jacksonville Bancorp and Jacksonville Savings Bank. The Board discussed the advantages and rationales for proceeding with the transaction and determined that it was in the best interests of CNB Bank Shares’ stockholders to proceed with the transaction on the terms provided in the Merger Agreement. Based on this and its previous discussions, the CNB Bank Shares Board of Directors unanimously approved the Merger Agreement.

Following the close of the market on January 17, 2018, Jacksonville Bancorp convened a meeting of the Board of Directors. Legal counsel noted that no material changes to the Merger Agreement or the ancillary documents had been made since the drafts that were discussed with the Board on January 16, 2018. A representative of D.A. Davidson indicated that since January 16, 2018, there were no trades in Jacksonville Bancorp stock and no material changes in the market or in the bank indices referenced in its presentation. The D.A. Davidson representative concluded that the proposed merger consideration being paid by CNB Bank Shares to Jacksonville Bancorp stockholders was fair from a financial point of view. He noted that D.A. Davidson’s written opinion, dated January 17, 2018, would be delivered to the Board following the meeting.

Following these presentations and discussions and review and discussion among the members of the Jacksonville Bancorp Board of Directors, including consideration of the factors described under “— Jacksonville Bancorp’s Reasons for the Merger and Recommendation of the Board of Directors that

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the Jacksonville Bancorp Stockholders Vote “FOR” Approval of the Merger Agreement and Merger,” the Jacksonville Bancorp Board of Directors determined that the Merger Agreement and the transactions contemplated thereby, including the merger of Jacksonville Bancorp and CNB Bank Shares, were advisable and in the best interests of Jacksonville Bancorp and its stockholders and the directors unanimously voted to approve the Merger Agreement and the related transactions and recommended that Jacksonville Bancorp’s stockholders approve the Merger Agreement and the merger.

Following the completion of the Jacksonville Bancorp and CNB Bank Shares’ board meetings, the Merger Agreement and ancillary documents were executed and delivered. Before the opening of the market on January 18, 2018, CNB Bank Shares and Jacksonville Bancorp issued a joint press release announcing the execution of the Merger Agreement.

Jacksonville Bancorp’s Reasons for the Merger and Recommendation of the Board of Directors that Jacksonville Bancorp Stockholders Vote “FOR” Approval of the Merger Agreement and the Merger

The Jacksonville Bancorp Board of Directors reviewed and discussed the proposed merger with management and Jacksonville Bancorp’s financial and legal advisors in unanimously determining that the proposed merger is in the best interests of Jacksonville Bancorp and its stockholders. In reaching its determination to approve the Merger Agreement and the merger, the Board of Directors considered a number of factors affecting the business, operations, financial condition, earnings and future prospects of Jacksonville Bancorp. The material factors considered by the Board of Directors included:

•

The business strategy and strategic plan of Jacksonville Bancorp, its prospects for the future, and its projected financial results.

​

•

The consideration offered by CNB Bank Shares, which represents: 160.6% of Jacksonville Bancorp’s core tangible book value (which assumes a tangible equity to tangible assets ratio of 8%); 25.1x of Jacksonville Bancorp’s trailing twelve-month earnings; and a 7.0% core deposit premium.

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•

The understanding of Jacksonville Bancorp’s Board of Directors of the strategic options available to Jacksonville Bancorp and the Board of Directors’ assessment of those options with respect to the prospects and estimated results of the execution by Jacksonville Bancorp of its business plan as an independent entity under various scenarios and the determination that none of those options or the execution of the business plan was more likely to create greater present value for Jacksonville Bancorp’s stockholders than the value to be paid by CNB Bank Shares.

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•

The challenges facing Jacksonville Bancorp’s management to grow Jacksonville Bancorp’s franchise and enhance stockholder value given current market conditions, including increased operating costs resulting from regulatory and compliance mandates, continued pressure on net interest margins from the current interest rate environment and competition.

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•

The merger consideration offered by CNB Bank Shares equaled or exceeded the consideration that could reasonably be expected from other potential acquirers with apparent ability to consummate an acquisition of Jacksonville Bancorp.

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•

The financial presentation of D.A. Davidson to the Jacksonville Bancorp Board of Directors and the opinion, dated January 17, 2018, of D.A. Davidson to the Jacksonville Bancorp Board of Directors as to the fairness, from a financial point of view, as of the date of the opinion, of the merger consideration to the holders of Jacksonville Bancorp common stock, as more fully described below under “— Opinion of Jacksonville Bancorp’s Financial Advisor.”

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•

The form and amount of the merger consideration, including the reduced volatility provided by cash consideration.

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•

The ability of CNB Bank Shares to execute a merger transaction from a financial and regulatory perspective.

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•

The prospects of profitably deploying Jacksonville Bancorp’s excess capital in a reasonable period of time.

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•

The continued participation of Jacksonville Bancorp’s directors and management in the combined company, which enhances the likelihood that the expected benefits of the merger will be realized, in particular that:

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◦

Jacksonville Bancorp’s current Chief Financial Officer will become the Chief Financial Officer of CNB Bank Shares after the bank merger;

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Jacksonville Savings Bank’s current Chief Lending Officer will become a Market President of CNB Bank after the bank merger; and

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One Jacksonville Bancorp director will join the CNB Bank Board of Directors.

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•

The prospects for Jacksonville Bancorp’s employees within the combined company.

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•

The similarities between the corporate cultures of the two organizations, along with a greater legal lending limit and more products and services that could benefit Jacksonville Bancorp’s customers.

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•

CNB Bank Shares’ emphasis on customer service and its commitment to its communities.

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•

CNB Bank Shares’ covenant to honor Jacksonville Bancorp’s commitments to certain community organizations.

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•

CNB Bank Shares’ historically strong financial condition and results of operations.

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•

That the merger would combine two established banking franchises to create a well-positioned community bank with nearly $1.25 billion in total assets.

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•

The geographic fit and increased customer convenience of the branch networks of the combined company.

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•

The effects of the merger on Jacksonville Savings Bank’s customers.

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•

The scale, scope, strength and diversity of operations, product lines and delivery systems that could be achieved by the combined company.

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•

The likelihood of successful integration and operation of the combined company.

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•

The likelihood of obtaining the stockholder and regulatory approvals needed to complete the transaction.

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•

The analyses presented by Luse Gorman, PC as to the structure of the merger, the Merger Agreement, the fiduciary and legal obligations applicable to directors when considering a sale or merger of a company, and the process that Jacksonville Bancorp (including its Board of Directors) followed in considering potential strategic alternatives, including the merger with CNB Bank Shares.

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•

The results of the solicitation process conducted by Jacksonville Bancorp, with the advice and assistance of its advisors.

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•

Certain structural protections included in the Merger Agreement, including:

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◦

that the Merger Agreement does not preclude a third party from making an unsolicited acquisition proposal to Jacksonville Bancorp and that, under certain circumstances more fully described under “— Agreement Not to Solicit Other Offers,” Jacksonville Bancorp may furnish non-public information to and enter into discussions with such a third party regarding an acquisition proposal;

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◦

the ability of the Jacksonville Bancorp Board of Directors to withdraw, modify or amend its recommendation to stockholders regarding approval of the Merger Agreement and the merger; and

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◦

the ability of Jacksonville Bancorp to terminate the Merger Agreement to enter into a definitive agreement with a third party provided that certain requirements are met, including

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the payment of a termination fee by Jacksonville Bancorp of  $2.25 million (plus up to $400,000 in out-of-pocket expenses related to the merger), an amount that was negotiated at arm’s-length and was determined by the Jacksonville Bancorp Board of Directors to be reasonable.

The Jacksonville Bancorp Board of Directors also considered a number of potential risks and uncertainties in connection with its consideration of the proposed merger, including, without limitation, the following:

•

The potential risk of diverting management attention and resources from the operation of Jacksonville Bancorp’s business and towards the completion of the merger.

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•

The restrictions on the conduct of Jacksonville Bancorp’s business before the completion of the merger, which are customary for public company merger agreements involving financial institutions, but which, subject to specific exceptions, could delay or prevent Jacksonville Bancorp from undertaking business opportunities that may arise or any other action it would otherwise take with respect to the operations of Jacksonville Bancorp absent the pending merger.

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•

That the interests of certain of Jacksonville Bancorp’s directors and executive officers may be different from, or in addition to, the interests of Jacksonville Bancorp’s other stockholders as described under the heading “— Financial Interests of Directors and Executive Officers in the Merger.”

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•

The risk that the conditions to the parties’ obligations to complete the Merger Agreement may not be satisfied, including the risk that necessary regulatory approvals or the Jacksonville Bancorp stockholder approval might not be obtained and, as a result, the merger may not be consummated.

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•

The risk of potential employee attrition and/or adverse effects on business and customer relationships as a result of the pending merger.

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•

That: (1) Jacksonville Bancorp would be prohibited from affirmatively soliciting acquisition proposals after execution of the Merger Agreement; and (2) Jacksonville Bancorp would be obligated to pay to CNB Bank Shares a termination fee if the Merger Agreement is terminated under certain circumstances, which may discourage other parties potentially interested in a strategic transaction with Jacksonville Bancorp from pursuing such a transaction.

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•

The challenges of integrating Jacksonville Bancorp’s business, operations and employees with those of CNB Bank Shares.

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•

The potential costs associated with executing the Merger Agreement, including change in control payments and related costs, as well as estimated advisor fees.

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•

The possibility of litigation in connection with the merger.

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The Board of Directors evaluated the factors described above and reached a unanimous determination that the merger was in the best interests of Jacksonville Bancorp and its stockholders. In reaching its determination to approve and recommend the transaction, Jacksonville Bancorp’s Board of Directors looked at the totality of the information presented to it and did not assign any relative or specific weights to any of the individual factors considered, and individual directors may have given different weights to different factors. The Board of Directors considered these factors as a whole, including the potential risks, uncertainties and disadvantages associated with the merger, and considered the benefits of the merger overall to be favorable and outweigh the potential risks, uncertainties and disadvantages of the merger. It should be noted that this explanation of the Board of Directors’ reasoning and certain other information presented in this section are forward-looking in nature and, therefore, should be read in light of the factors discussed under “Cautionary Statement Concerning Forward-Looking Information.” The foregoing discussion of the information and factors considered by the Board of Directors is not intended to be exhaustive, but constitutes the material factors considered by the Board. The terms of the Merger Agreement were the product of arm’s-length negotiations between representatives of Jacksonville Bancorp and CNB Bank Shares.

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The Board of Directors unanimously recommends that Jacksonville Bancorp stockholders vote “FOR” approval of the Merger Agreement and the merger.

Opinion of Jacksonville Bancorp’s Financial Advisor

On August 30, 2017, Jacksonville Bancorp engaged D.A. Davidson to render financial advisory and investment banking services to Jacksonville Bancorp. As part of its engagement, D.A. Davidson agreed to assist Jacksonville Bancorp in analyzing, structuring, negotiating and, if appropriate, effecting a transaction between Jacksonville Bancorp and another corporation or business entity. D.A. Davidson also agreed to provide Jacksonville Bancorp’s Board of Directors with an opinion as to the fairness, from a financial point of view, to the holders of Jacksonville Bancorp common stock of the consideration to be paid to the holders of Jacksonville Bancorp common stock in the proposed merger. D.A. Davidson is a nationally recognized investment banking firm with substantial experience in transactions similar to the merger and is familiar with Jacksonville Bancorp and its business. As part of its investment banking business, D.A. Davidson is continually engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.

On January 16, 2018, the Jacksonville Bancorp Board of Directors held a meeting to evaluate the proposed merger. At this meeting, D.A. Davidson reviewed the financial aspects of the proposed merger. On January 17, 2018, the Jacksonville Bancorp Board of Directors held a meeting at which D.A. Davidson rendered an opinion to the Jacksonville Bancorp Board of Directors that, as of such date and based upon and subject to assumptions made, procedures followed, matters considered and limitations on the review undertaken, the consideration to be paid to the holders of the Jacksonville Bancorp’s common stock in the proposed merger was fair, from a financial point of view, to Jacksonville Bancorp.

The full text of D.A. Davidson’s written opinion, dated January 17, 2018, is attached as Appendix B to this proxy statement and is incorporated herein by reference. The description of the opinion set forth herein is qualified in its entirety by reference to the full text of such opinion. Jacksonville Bancorp’s stockholders are urged to read the opinion in its entirety.

D.A. Davidson’s opinion speaks only as of the date of the opinion and D.A. Davidson undertakes no obligation to revise or update its opinion. The opinion is directed to the Jacksonville Bancorp Board of Directors and addresses only the fairness, from a financial point of view, to the holders of Jacksonville Bancorp common stock of the consideration to be paid to the holders of the Jacksonville Bancorp common stock in the proposed merger. The opinion does not address, and D.A. Davidson expresses no view or opinion with respect to (1) the underlying business decision of Jacksonville Bancorp to engage in or proceed with the merger, (2) the relative merits or effect of the merger as compared to any strategic alternatives or business strategies or combinations that may be or may have been available to or contemplated by Jacksonville Bancorp or Jacksonville Bancorp’s Board of Directors or (3) any legal, regulatory, accounting, tax or similar matters relating to Jacksonville Bancorp or its stockholders or relating to or arising out of the merger. The opinion expresses no view or opinion as to any terms or other aspects of the merger. Jacksonville Bancorp and CNB Bank Shares determined the consideration through the negotiation process. The opinion does not constitute a recommendation to any Jacksonville Bancorp stockholder as to how such stockholder should vote at the special meeting on the merger or any related matter. The opinion does not express any view as to the fairness of the amount or nature of the compensation to any of Jacksonville Bancorp’s or CNB Bank Shares’ officers, directors or employees, or any class of such persons, relative to the merger consideration. The opinion has been reviewed and approved by D.A. Davidson’s Fairness Opinion Committee in conformity with its policies and procedures established under the requirements of Rule 5150 of the Financial Industry Regulatory Authority.

D.A. Davidson has reviewed this proxy statement and has consented to the inclusion of its opinion to the Jacksonville Bancorp Board of Directors as Appendix B to this proxy statement and to the references to D.A. Davidson and its opinion contained herein.

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In connection with rendering its opinion, D.A. Davidson reviewed, analyzed and relied upon material bearing upon the merger and the financial and operating condition of Jacksonville Bancorp and CNB Bank Shares and the merger, including among other things, the following:

•

the draft Merger Agreement dated January 8, 2018;

​

•

certain financial statements and other historical financial and business information about Jacksonville Bancorp and CNB Bank Shares made available to us from published sources and/or from the internal records of Jacksonville Bancorp and CNB Bank Shares;

​

•

certain internal financial projections and other financial and operating data concerning the business, operations and prospects of Jacksonville Bancorp prepared by or at the direction of management of Jacksonville Bancorp, as approved for our use by Jacksonville Bancorp;

​

•

the current market environment generally and the banking environment in particular;

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•

the financial terms of certain other transactions in the financial institutions industry, to the extent publicly available;

​

•

the pro forma financial effects of the merger, taking into consideration the amounts and timing of transaction costs, earnings estimates, potential cost savings, equity and debt financing, and other financial and accounting considerations in connection with the merger;

​

•

discussions and negotiations among representatives of Jacksonville Bancorp and CNB Bank Shares, and their respective financial and legal advisors;

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•

the net present value of Jacksonville Bancorp with consideration of projected financial results through 2023;

​

•

the financial and operating performance of Jacksonville Bancorp with publicly available information concerning certain other companies that D.A. Davidson deemed relevant; and

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•

such other financial studies, analyses and investigations and financial, economic and market criteria and other information as D.A. Davidson considered relevant including discussions with management and other representatives and advisors of Jacksonville Bancorp and CNB Bank Shares concerning the business, financial condition, results of operations and prospects of Jacksonville Bancorp and CNB Bank Shares.

​

In arriving at its opinion, D.A. Davidson has assumed and relied upon the accuracy and completeness of all information supplied or otherwise made available to D.A. Davidson, discussed with or reviewed by or for D.A. Davidson, or publicly available, and D.A. Davidson has not assumed responsibility for independently verifying such information or undertaken an independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of Jacksonville Bancorp or CNB Bank Shares, nor did D.A. Davidson make an independent appraisal or analysis of Jacksonville Bancorp or CNB Bank Shares with respect to the merger. D.A. Davidson has further relied on the assurances of management of Jacksonville Bancorp and CNB Bank Shares that they are not aware of any facts or circumstances that would make any of such information inaccurate or misleading. In addition, D.A. Davidson has not assumed any obligation to conduct, nor has D.A. Davidson conducted any physical inspection of, the properties or facilities of Jacksonville Bancorp or CNB Bank Shares. D.A. Davidson did not make an independent evaluation or appraisal of the specific assets or liabilities including the amount of any fair value adjustments per FASB 141(R). D.A. Davidson did not make an independent evaluation of the adequacy of the allowance for loan losses of Jacksonville Bancorp or CNB Bank Shares, nor has D.A. Davidson reviewed any individual credit files relating to Jacksonville Bancorp or CNB Bank Shares. D.A. Davidson has assumed that the respective allowances for loan losses for both Jacksonville Bancorp and CNB Bank Shares are adequate to cover such losses and will be adequate on a pro forma basis for the combined entity. D.A. Davidson has assumed that there has been no material change in Jacksonville Bancorp’s or CNB Bank Shares’ assets, financial condition, results of operations, business or prospects since the date of the most recent financial statements provided to D.A. Davidson. D.A. Davidson has assumed in all respects material to its analysis that Jacksonville Bancorp and CNB Bank Shares will remain as going concerns for all periods relevant to its analysis. D.A. Davidson has also assumed in all respects

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material to its analysis that all of the representations and warranties contained in the Merger Agreement and all related agreements are true and correct, that each party to such agreements will perform all of the covenants required to be performed by such party under such agreements and that the conditions precedent in the Merger Agreement are not waived. D.A. Davidson has assumed that in the course of obtaining the necessary regulatory or other consents or approvals (contractual or otherwise) for the merger, no restrictions, including any divestiture requirements or amendments or modifications, will be imposed that will have a material adverse effect on the contemplated benefits of the merger. D.A. Davidson’s opinion is necessarily based upon information available to D.A. Davidson and economic, market, financial and other conditions as they exist and can be evaluated on the date the fairness opinion letter was delivered to Jacksonville Bancorp’s Board of Directors.

Set forth below is a summary of the material financial analyses performed by D.A. Davidson in connection with rendering its opinion. The summary of the analyses of D.A. Davidson set forth below is not a complete description of the analysis underlying its opinion, and the order in which these analyses are described below is not indicative of any relative weight or importance given to those analyses by D.A. Davidson. The following summaries of financial analyses include information presented in tabular format. You should read these tables together with the full text of the summary financial analyses, as the tables alone are not a complete description of the analyses.

Unless otherwise indicated, the following quantitative information, to the extent it is based on market data, is based on market data as of January 11, 2018, the last trading day prior to the date on which D.A. Davidson received approval from the Fairness Opinion Committee to deliver the fairness opinion letter to Jacksonville Bancorp’s Board of Directors, and is not necessarily indicative of market conditions after such date.

Summary of Proposal

D.A. Davidson reviewed the financial terms of the proposed merger. As described in the Merger Agreement, each outstanding share of Jacksonville Bancorp common stock will be converted into the right to receive $33.70 in cash. The terms and conditions of the merger are more fully described in the Merger Agreement. Based upon financial information as of or for the twelve month period ended December 31, 2017, D.A. Davidson calculated the following transaction ratios:

(1)

Tangible book premium/core deposits calculated by dividing the excess or deficit of the aggregate transaction value compared to tangible book value by core deposits

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(2)

Projections based on Jacksonville management’s forecast and D.A. Davidson & Co. assumptions

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Premium to Market Analysis

D.A. Davidson compared the premium in the merger to Jacksonville Bancorp’s stock price as of January 11, 2018 as calculated in the following ways: last round lot close, 52-week low, 52-week high, ten-day volume weighted average price (“VWAP”), 20-day VWAP, 60-day VWAP and 90-day VWAP.

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D.A. Davidson reviewed Jacksonville Bancorp’s stock price performance compared to the S&P 500 Index, SNL Bank Index and S&P Regional Bank Index over the following time periods: ten-day, 30-day, 60-day, 90-day, 180-day, last twelve months, and since the 2016 election. In addition, D.A. Davidson analyzed Jacksonville Bancorp’s trading volume over similar time periods.

Precedent Transactions Analysis

The “Thrifts” comparable transaction group included ten transactions where:

•

the transaction was announced between January 1, 2017 and January 11, 2018;

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•

the transaction involved thrifts headquartered nationwide; and

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•

the selling company’s total assets were between $100.0 million and $500.0 million.

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The “Overcapitalized Banks” comparable transaction group included eight transactions where:

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the transaction was announced between January 1, 2017 and January 11, 2018;

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•

the transaction involved banks headquartered nationwide;

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•

the selling company’s tangible common equity ratio were above 13.00%; and

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•

the selling company’s total assets were between $100.0 million and $500.0 million.

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The “Illinois Banks” comparable transaction group included 15 transactions where:

•

the transaction was announced between January 1, 2011 and January 11, 2018;

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•

the transaction involved banks and thrifts headquartered in Illinois;

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•

the selling company’s last twelve months ROAA were above 0.00%;

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•

the selling company’s total assets were between $100.0 million and $500.0 million; and

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•

the transaction was not a merger of equals.

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The following tables set forth the transactions included in “Thrifts,” “Overcapitalized Banks,” and “Illinois Banks,” and are sorted by announcement date:

Thrifts Comparable Transactions

*

Indicates the transaction was pending as of January 11, 2018

​

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Overcapitalized Banks Comparable Transactions

*

Indicates the transaction was pending as of January 11, 2018

​

Illinois Banks Comparable Transactions

*

Indicates the transaction was pending as of January 11, 2018

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For the “Thrifts,” “Overcapitalized Banks” and “Illinois Banks” transactions referred to above, D.A. Davidson compared the transaction ratios as of the last twelve months ended prior to their transaction announcement with the following implied ratios for Jacksonville Bancorp:

•

transaction price compared to net income for the twelve months ended December 31, 2017;

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•

transaction price compared to tangible book value as of December 31, 2017; and

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•

tangible book premium to core deposits as of December 31, 2017.

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As illustrated in the following table, D.A. Davidson compared the proposed merger multiples to the multiples of the comparable transaction groups and other operating financial data where relevant. The table below sets forth the data for the comparable transaction groups as of the last twelve months ended prior to the transaction announcement and Jacksonville Bancorp data for the last twelve months ended December 31, 2017.

prospective buyers of Jacksonville Bancorp’s common stock. In evaluating the discount rate, D.A. Davidson used industry standard methods of adding the current risk-free rate, which is based on the ten-year Treasury yield, plus the published Duff  & Phelps Industry Equity Risk Premium and the published Duff  & Phelps Size Premium.

At the January 16, 2018 Jacksonville Bancorp Board of Directors meeting, D.A. Davidson noted that the net present value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results.

As illustrated in the following tables, the analysis indicates an imputed range of aggregate values of Jacksonville Bancorp common stock of  $26.19 per share to $33.81 per share when applying the multiples of tangible book value to the financial forecasts and $16.58 per share to $24.08 per share when applying the price to earnings multiples to the financial forecasts.

Tangible Book Value Multiples

Pro Forma Modeling

D.A. Davidson analyzed the pro forma impact on the combined company’s capital ratios, factoring in the expected common equity and subordinated debt CNB Bank Shares is expected to raise, and analyzed the tangible common equity ratio, leverage ratio, common equity tier-1 ratio, tier-1 ratio, and the risk based capital ratio. The pro forma ratios were calculated to be the following: tangible common equity ratio —  7.53%; leverage ratio — 7.51%; common equity tier-1 ratio — 10.16%; tier-1 ratio — 10.16%; and risk based capital ratio — 12.18%.

D.A. Davidson prepared its analyses for purposes of providing its opinion to Jacksonville Bancorp’s Board of Directors as to the fairness, from a financial point of view, to the holders of Jacksonville Bancorp common stock of the consideration to be paid to the holders of the Jacksonville Bancorp common stock in the proposed merger and to assist Jacksonville Bancorp’s Board of Directors in analyzing the proposed merger. The analyses do not purport to be appraisals or necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than those suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties and their respective advisors, none of Jacksonville Bancorp, CNB Bank Shares or D.A. Davidson or any other person assumes responsibility if future results are materially different from those forecasted.

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D.A. Davidson’s opinion was one of many factors considered by the Jacksonville Bancorp’s Board of Directors in its evaluation of the merger and should not be viewed as determinative of the views of the Board of Directors of Jacksonville Bancorp or management with respect to the merger or the merger consideration.

D.A. Davidson and its affiliates, as part of their investment banking business, are continually engaged in performing financial analyses with respect to businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and other transactions. D.A. Davidson acted as financial advisor to Jacksonville Bancorp in connection with, and participated in certain of the negotiations leading to, the merger. D.A. Davidson is a full service securities firm engaged, either directly or through its affiliates, in securities trading, investment management, financial planning and benefits counseling, financing and brokerage activities for both companies and individuals. In the ordinary course of these activities, D.A. Davidson and its affiliates may provide such services to Jacksonville Bancorp, CNB Bank Shares and their respective affiliates, may actively trade the debt and equity securities (or related derivative securities) of Jacksonville Bancorp and CNB Bank Shares for their own account and for the accounts of their customers and may at any time hold long and short positions of such securities. Jacksonville Bancorp selected D.A. Davidson as its financial advisor because it is a recognized investment banking firm that has substantial experience in transactions similar to the merger. Pursuant to a letter agreement dated August 30, 2017, Jacksonville Bancorp engaged D.A. Davidson as its financial advisor in connection with the contemplated transaction. Pursuant to the terms of the engagement letter, Jacksonville Bancorp agreed to pay D.A. Davidson a cash fee of  $100,000 concurrently with the rendering of its opinion. Jacksonville Bancorp will pay to D.A. Davidson at the time of the closing of the merger a contingent cash fee equal to 0.70% of the aggregate consideration paid to Jacksonville Bancorp stockholders in the merger. Jacksonville Bancorp has also agreed to reimburse D.A. Davidson for all reasonable out-of-pocket expenses, including fees of legal counsel, and to indemnify D.A. Davidson and certain related persons against specified liabilities, including liabilities under the federal securities laws, relating to or arising out of its engagement.

During the two years preceding the date of this letter, D.A. Davidson has not provided investment banking and other financial services to Jacksonville Bancorp or CNB Bank Shares for which it received material compensation.

Certain Prospective Financial Information Provided by Jacksonville Bancorp

Jacksonville Bancorp does not, as a matter of course, publicly disclose forecasts or internal projections as to its future performance, earnings or other results due to, among other things, the inherent uncertainty of certain underlying assumptions and estimates. However, Jacksonville Bancorp provided D.A. Davidson with its internal financial forecast regarding net income for the year ended December 31, 2018. This forecast is included in this proxy statement because it was made available to D.A. Davidson in connection with its financial opinion analysis regarding the proposed merger.

The financial projection that Jacksonville Bancorp’s management provided to D.A. Davidson in connection with D.A. Davidson’s financial opinion analysis regarding the proposed merger provided for net income of  $3.1 million for the year ended December 31, 2018.

The financial forecast described above was not prepared with a view toward public disclosure or compliance with published guidelines of the Securities and Exchange Commission, the guidelines established by the American Institute of Certified Public Accountants for Prospective Financial Information, or generally accepted accounting principles (“GAAP”). The prospective financial information included in this proxy statement was prepared by, and is the responsibility of, Jacksonville Bancorp’s management. Jacksonville Bancorp’s independent auditor, BKD, LLP, did not examine, compile or perform any procedures with respect to the prospective financial information described above and, accordingly, such firm does not express an opinion or any other form of assurance with respect thereto.

The financial forecast described above is a forward-looking statement that is subject to risks and uncertainties that could cause actual results to differ materially from such estimate and should be read with caution. Although presented with numerical specificity, this estimate is based upon a variety of assumptions made by Jacksonville Bancorp’s management with respect to, among other things, industry performance,

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general economic, market, interest rate, and financial conditions, the timing and level of new loan originations and deposit generation, operating and other revenues and expenses, effective tax rates, capital expenditures, working capital and other matters. Some or all of the assumptions may not be realized, and as historical performance suggests, they are inherently subject to significant business, economic and competitive uncertainties and contingencies, all of which are difficult to predict and many of which are beyond the control of Jacksonville Bancorp. In addition, some of these assumptions, by their nature, are subjective in many respects.

Accordingly, the assumptions made in preparing this estimate may prove to be inaccurate and actual results may differ materially from this estimate. In addition, the forecast does not take into account any of the expense savings or charges expected to result from the proposed merger or any other matters contemplated by the Merger Agreement, including limitations imposed in the Merger Agreement on Jacksonville Bancorp’s ability to engage in certain activities pending completion of the merger without CNB Bank Shares’ consent.

For these reasons, the financial forecast in this proxy statement should not be regarded as an indication that it is necessarily predictive of actual future performance and it should not be relied on as such. No one has made, or makes, any representation regarding this estimate by its inclusion in this proxy statement and, except as may be required by applicable securities laws, Jacksonville Bancorp does not intend to update or otherwise revise the projection to reflect circumstances existing after the date when made or to reflect the occurrence of future events even if any or all of the assumptions underlying the projection are shown to be in error. For additional information on factors that may cause future financial results to materially vary from what is reflected in the projection prepared by Jacksonville Bancorp’s management, see the section entitled “Cautionary Statement Regarding Forward-Looking Information.”

Surrender of Shares; Payment of Merger Consideration

No later than the business day before the effective time of the merger, Jacksonville Bancorp will deposit $24.8 million in cash with the Paying Agent and CNB Bank Shares will deposit the remainder of the merger consideration in cash with the Paying Agent. The Paying Agent will facilitate the payment of the merger consideration to the holders of record of shares of Jacksonville Bancorp common stock.

Within five business days after the effective time of the merger, the Paying Agent will mail to each holder of record of Jacksonville Bancorp common stock a letter of transmittal with instructions on how to surrender certificates representing shares of Jacksonville Bancorp common stock for the merger consideration.

Please do not send in your Jacksonville Bancorp stock certificates until you receive the letter of transmittal and instructions from the Paying Agent. Do not return your stock certificates with the enclosed proxy card.

After you mail the letter of transmittal and surrender your Jacksonville Bancorp stock certificates in accordance with the instructions you will receive, you will receive the merger consideration that you are entitled to receive, after giving effect to any required tax withholdings. The shares you surrender will be canceled. You will not be entitled to receive interest on any portion of the merger consideration.

Any portion of the merger consideration that remains unclaimed by the stockholders of Jacksonville Bancorp for more than 180 days after the effective time of the merger will be repaid to CNB Bank Shares. If you have not complied with the exchange procedures described above within the time period previously described, you may only look to CNB Bank Shares for payment of the merger consideration you are entitled to receive in exchange for your shares of common stock, without any interest, and subject to applicable abandoned property, escheat and similar laws.

If your Jacksonville Bancorp stock certificates have been lost, stolen or destroyed, you will be required to sign an affidavit before you receive any consideration for your shares. The Paying Agent will send you instructions on how to complete such an affidavit. You may be required to post a bond in a reasonable amount as CNB Bank Shares or the Paying Agent may direct, as indemnity against any claim related to your common stock.

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CNB Bank Shares or the Paying Agent will be entitled to deduct and withhold from the merger consideration otherwise payable to any Jacksonville Bancorp stockholder the amounts CNB Bank Shares or the Paying Agent, as the case may be, are required to deduct and withhold under any applicable federal, state, local or foreign tax law. If CNB Bank Shares or the Paying Agent withholds any amounts, these amounts will be treated as having been paid to the stockholders from whom they were withheld.

Certain Federal Income Tax Consequences to U.S. Holders

The following is a discussion of certain federal income tax consequences of the merger to U.S. holders (as defined below) of Jacksonville Bancorp common stock whose shares are converted into the right to receive $33.70 in cash per share at closing. This discussion is based on the provisions of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable current and proposed U.S. Treasury Regulations, judicial authority, and administrative rulings and practice, all of which are subject to change, possibly on a retroactive basis. Any such change could alter the tax consequences described herein.

For purposes of this discussion, we use the term “U.S. holder” to mean a beneficial owner of shares of Jacksonville Bancorp common stock that is:

•

an individual citizen or resident of the United States;

​

•

a corporation (or other entity taxable as a corporation) created or organized under the laws of the United States or any state thereof  (or the District of Columbia);

​

•

a trust if it (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (2) has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person; or

​

•

an estate, the income of which is subject to U.S. federal income tax regardless of its source.

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This discussion assumes that the Jacksonville Bancorp common stock is held for investment purposes. This discussion does not address all aspects of U.S federal income tax that may be relevant to a Jacksonville Bancorp stockholder in light of its particular circumstances, or that may apply to a Jacksonville Bancorp stockholder that is subject to special treatment under the U.S. federal income tax laws (including but not limited to foreign persons (generally, a person that is not a citizen or resident of the United States, a U.S. domestic corporation, or a person that would otherwise be subject to U.S. federal income tax on a net income basis with respect to their Jacksonville Bancorp common stock), financial institutions, tax-exempt organizations, dealers in securities or foreign currencies, entities that are treated for federal income tax purposes as partnerships or other pass-through entities, insurance companies or employees who acquired the stock pursuant to the exercise of employee stock options or other compensation arrangements). This discussion is for general information only and is not tax advice . The U.S. federal income tax consequences described below are not intended to constitute a complete description of all tax consequences relating to the merger. Jacksonville Bancorp stockholders should consult their own tax advisors to determine the tax consequences to them of, including the application and effect of any U.S. federal, state, local and foreign income, estate, gift and other tax laws to, the receipt of the cash consideration in exchange for Jacksonville Bancorp common stock pursuant to the merger.

The receipt of the merger consideration by a U.S. holder in exchange for shares of Jacksonville Bancorp common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes (and may also be a taxable transaction under applicable state, local and foreign income or other tax laws). For U.S. federal income tax purposes, a U.S. holder of Jacksonville Bancorp common stock generally will recognize capital gain or loss at the effective time of the merger equal to the difference, if any, between:

•

$33.70 in cash received by the U.S. holder in exchange for such Jacksonville Bancorp common stock; and

​

•

the U.S. holder’s adjusted tax basis in such Jacksonville Bancorp common stock.

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Such gain or loss generally will be a long-term capital gain or loss if the U.S. holder’s holding period for the Jacksonville Bancorp common stock surrendered in the merger exceeds one year as of the date of the merger. In general, long-term capital gain of individuals currently is subject to U.S. federal income tax at a maximum rate of 20%. The deductibility of capital losses is subject to limitations under the Internal Revenue Code. The amount and character of gain or loss must be determined separately for each block of Jacksonville Bancorp common stock (i.e., shares acquired at the same cost in a single transaction) exchanged for the merger consideration in the merger.

Under the Internal Revenue Code, the merger consideration received in the merger by a U.S. holder may be subject to U.S. information reporting and backup withholding. Backup withholding (currently at a rate of 24%) will apply with respect to the amount of cash received by a non-corporate U.S. holder, unless the U.S. holder provides proof of an applicable exemption or a correct taxpayer identification number on an IRS Form W-9 (enclosed with the letter of transmittal sent by the Paying Agent), and otherwise complies with the applicable requirements of the backup withholding rules. Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules may be refunded or credited against a U.S. holder’s U.S. federal income tax liability, if any, provided that such U.S. holder furnishes the required information to the IRS in a timely manner.

The foregoing discussion does not claim to be a complete discussion of the potential tax consequences of the merger. Jacksonville Bancorp stockholders should consult their tax advisors as to the specific tax consequences to them of the merger, including the applicability and effect of U.S. Federal, state, local and foreign income, estate, gift and other tax laws in their particular circumstances. Nothing in this discussion is intended to be, or should be construed as, tax advice.

Certain Effects of the Merger

If the Merger Agreement and the merger are approved by Jacksonville Bancorp’s stockholders and certain other conditions to the closing of the merger are either satisfied or waived, CNB Acquisition, Inc., the merger subsidiary of CNB Bank Shares, will merge with and into Jacksonville Bancorp, with Jacksonville Bancorp as the surviving corporation. In addition, at a date to be determined following the merger, Jacksonville Savings Bank will merge with and into CNB Bank. As a result of the bank merger, the separate corporate existence of Jacksonville Savings Bank will cease, and CNB Bank will continue as the surviving entity.

When the merger is completed, each share of common stock of Jacksonville Bancorp (other than shares of common stock owned by Jacksonville Bancorp as treasury stock, shares of Jacksonville Bancorp common stock owned by CNB Bank Shares and any shares of common stock remitted by Jacksonville Bancorp prior to the effective time of the merger to repay the outstanding loan with the ESOP) will be converted into the right to receive $33.70 in cash at closing. At the effective time of the merger, Jacksonville Bancorp’s stockholders will cease to have ownership interests in Jacksonville Bancorp or rights as stockholders of Jacksonville Bancorp.

Jacksonville Bancorp’s shares of common stock are currently registered under the Securities Exchange Act of 1934, as amended, and are traded on the NASDAQ Capital Market under the symbol “JXSB.” As a result of the merger, Jacksonville Bancorp’s common shares will cease to be traded on the NASDAQ Capital Market. In addition, the registration of Jacksonville Bancorp common shares under the Securities Exchange Act of 1934, as amended, will be terminated, and Jacksonville Bancorp will no longer file periodic and other reports with the Securities and Exchange Commission.

Effects on Jacksonville Bancorp and Our Stockholders if the Merger is Not Completed

If the Merger Agreement is not approved by Jacksonville Bancorp’s stockholders or if the merger is not completed for any other reason, Jacksonville Bancorp’s stockholders will not receive any payment for their shares in connection with the merger. If the Merger Agreement is terminated under certain circumstances, either Jacksonville Bancorp or CNB Bank Shares will be required to pay the other a $2.25 million termination fee (plus up to $400,000 in out-of-pocket expenses related to the merger). For a description of the circumstances obligating payment of the termination fee, see “— Termination Fee.”

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Appraisal Rights

Under Jacksonville Bancorp’s Articles of Incorporation, Jacksonville Bancorp’s stockholders are not entitled to exercise any rights of an objecting stockholder provided under Title 3, Subtitle 2 of the Maryland General Corporation Law, unless the Board of Directors determines that such rights apply with respect to a transaction. The Board of Directors of Jacksonville Bancorp has not made such a determination with respect to the merger. Accordingly, the stockholders of Jacksonville Bancorp do not have appraisal rights with respect to the merger.

Financial Interests of Directors and Executive Officers in the Merger

As described below, certain of Jacksonville Bancorp’s executive officers and directors have interests in the merger that are in addition to, or different from, the interests of Jacksonville Bancorp’s stockholders generally. Jacksonville Bancorp’s Board of Directors was aware of these interests and took them into account in approving the merger. These interests include the following:

Stock Options.    Directors and executive officers hold outstanding Jacksonville Bancorp stock options. Under the terms of the Merger Agreement, outstanding and unexercised stock options to purchase shares of Jacksonville Bancorp common stock granted under Jacksonville Bancorp’s 2012 Stock Option Plan, whether or not vested, will be cancelled at closing in exchange for the right to receive a cash payment equal to the excess of the merger consideration over the exercise price per option multiplied by the number of stock options held, less applicable taxes required to be withheld. Set forth below is the number of outstanding and unexercised stock options held by each director and named executive officer and the cash payment each individual will be entitled to as a result of the merger with regard to such outstanding and unexercised stock options:

Employment Agreements.    Jacksonville Savings Bank is party to employment agreements with each of Andrew F. Applebee, Richard A. Foss and John C. Williams. Pursuant to the Merger Agreement, CNB Bank Shares has agreed to honor these employment agreements, which provide for severance benefits in the event the executive officer’s employment is terminated under specified circumstances and within a specified period of time following a change in control, such as the merger.

Each of the employment agreements with Messrs. Applebee and Foss provide for a three-year term and the employment agreement with Mr. Williams provides for a one-year term. Commencing on the anniversary date of each employment agreement and continuing each anniversary date thereafter, the Board of Directors may extend each employment agreement for an additional year unless written notice of nonrenewal is provided to the executive.

In the event of Messrs. Applebee’s, Foss’ or Williams’ termination of employment, whether voluntary or involuntary, following a change in control of Jacksonville Savings Bank or Jacksonville Bancorp during the term of the agreement, the executive will be entitled to receive a cash lump sum payment in an amount equal to the greater of  (a) the payments due under the remaining term of the employment agreement or (b) 2.99 times the average annual compensation received over the five years preceding the termination date,

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in the case of Messrs. Applebee and Foss, or one times the base salary, bonuses and other compensation paid during the preceding 12 months, in the case of Mr. Williams. In addition, Jacksonville Savings Bank would also continue each executive’s life insurance and non-taxable medical and dental coverage for the remaining term of his employment agreement for Messrs. Applebee and Foss, or for the remaining term of the employment agreement or 12 months, whichever is longer, for Mr. Williams. In the event any severance payment or benefit provided to the executive constitutes an “excess parachute payment” as defined in Section 280G of the Internal Revenue Code, the severance payment or benefits under each employment agreement will be reduced accordingly to avoid penalties.

For an estimate of the amounts payable to Mr. Foss under his employment agreement in connection with his qualifying termination of employment following the merger, see “— Merger-Related Compensation for Jacksonville Bancorp’s Named Executive Officers” below. Assuming the merger is completed and Messrs. Applebee and Williams experienced a qualifying termination of employment on March 6, 2018, the estimated amount of severance benefits that would be payable under the employment agreements is $155,596 and $158,601, respectively, which takes into consideration the estimated reductions necessary to avoid penalties under Sections 280G and 4999 of the Internal Revenue Code.

Continued Employment Offer to Certain Jacksonville Bancorp Named Executive Officers.    CNB Bank has offered continued employment to Mr. Royal and Ms. Tone pursuant to the terms and conditions set forth below. As a condition to accepting continued employment with CNB Bank, each executive has agreed to amend his or her existing change in control agreement with Jacksonville Savings Bank, which will be assumed by CNB Bank immediately following the consummation of merger. Each of Mr. Royal and Ms. Tone has agreed to an amendment to his or her change in control agreement with Jacksonville Savings Bank.

As amended, the term of each change in control agreement will automatically renew for a term of 24 months following the effective time of a change in control, after which time the change in control agreement will expire and be of no further force or effect. Each amendment provides that the merger will constitute a change in control under the terms of the amended change in control agreements. Neither Mr. Royal nor Ms. Tone will be entitled to any payment under his or her change in control agreement except as described below.

If, following the merger and before the end of the term of the change in control agreement, the executive’s employment with CNB Bank is terminated by CNB Bank without “cause” or voluntarily by the executive for “good reason,” as such terms are defined in each change in control agreement, CNB Bank must (a) pay to the executive a lump sum cash payment equal to two times the sum of the executive’s (i) annual cash compensation and (ii) annual benefits received pursuant to any employee benefit plans, and (b) provide, for 24 months following the executive’s termination, continued life insurance coverage and non-taxable medical and dental insurance coverage substantially identical to the executive’s then current coverage. The definition of  “good reason” in each change in control agreement was amended so that the failure of CBT Bank to appoint Mr. Royal as Market President of CBT Bank and Ms. Tone as Chief Financial Officer of CBT Bank immediately following the bank merger would constitute a “good reason” condition for purposes of each of their respective agreements.

Deferred Compensation Arrangements.    Jacksonville Savings Bank maintains, for the benefit of certain members of management, Salary Continuation Plan 1, Salary Continuation Plan 2 and the Long-Term-Deferred Compensation Plan, and previously assumed deferred compensation agreements with Mr. Williams (together the “Deferred Compensation Arrangements”). In accordance with the Merger Agreement, CNB Bank has agreed to assume and continue the Deferred Compensation Arrangements such that: (a) the benefits and earnings thereunder will continue to accrue in the normal course after the merger; and (b) the timing and manner of all benefit payments thereunder will not be accelerated without participant consent. Immediately prior to the effective time of the merger, all amounts payable under the Deferred Compensation Arrangements will be deposited into separate accounts within an irrevocable grantor trust and all payments due under the Deferred Compensation Arrangements will be made from such grantor trust. Each of the Deferred Compensation Arrangements is described further below.

•

Salary Continuation Plans .   On September 2, 2008, Jacksonville Savings Bank adopted Salary Continuation Plan 1 and Salary Continuation Plan 2 for a select group of management and highly

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compensated employees. The plans provide supplemental retirement benefits to a participant if he or she retires at age 65 or later, or dies while still employed with Jacksonville Savings Bank prior to attaining age 65, in an amount equal to the annual normal retirement benefit specified in the participant’s individual participation agreement. Upon termination of employment on or after attaining age 55 with 5 years of service but prior to attaining age 65, the participant will be paid an annual early retirement benefit equal to his or her accrued benefit as of the last day of the month preceding termination. In the event of a change in control, such as the merger, followed by the participant’s termination of employment prior to attaining age 65, the participant will be entitled to the change in control benefit equal to the full annual normal retirement benefit, provided, however that such benefit is limited so that it will not constitute an “excess parachute payment” subject to excise taxes under Section 280G of the Internal Revenue Code. All benefits under the plan will be paid in equal monthly installments for ten years. Messrs. Applebee, Foss, Williams and Royal are participants in the Salary Continuation Plan 1, and are eligible to receive a normal retirement benefit of  $30,000, $40,000, $30,000, and $35,000, respectively, payable for 10 years. Ms. Tone is a participant in the Salary Continuation Plan 2, and is eligible to receive a normal retirement benefit of  $35,000 payable for 10 years.

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Long-Term Deferred Compensation Plan .   Effective January 1, 1996, Jacksonville Savings Bank adopted the Long-Term Deferred Compensation Plan for a select group of management and highly compensated employees, as determined by the Board of Directors. The plan, a defined contribution plan, was frozen effective December 31, 2004, such that, with the exception of earnings as described below, no contributions were made to the plan thereafter. All amounts contributed to the plan were credited to a bookkeeping account established on behalf of each participant and, unless the participant elects an alternative investment option available under the plan, earn interest on a monthly basis at a rate equal to one percentage point greater than the annual yield of Moody’s Average Corporate Bond Yield Index for the preceding calendar month as published by Moody’s Investor Service, Inc. The participant’s account balance is payable following the earlier of the participant’s termination of employment, death, or disability in a lump sum or annual installments over a period not to exceed 15 years. Messrs. Applebee, Foss, and Williams are participants in the Long-Term Deferred Compensation Plan.

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Deferred Compensation Agreements with Mr. Williams .   Mr. Williams entered into a deferred compensation agreement and a director’s compensation agreement with Chapin State Bank on August 3, 1987 and July 1, 1982, respectively. The agreements were assumed by Jacksonville Bancorp in connection with the acquisition of Chapin State Bank on July 3, 2000. Mr. Williams is entitled to receive a retirement benefit of  $117,316 and $108,360, respectively, under each agreement. The retirement benefits under the agreements commenced upon Mr. Williams’ 65 th  birthday which occurred in 2013. As a result, Mr. Williams is currently receiving an aggregate monthly benefit of  $1,881 under his agreements.

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Employee Stock Ownership Plan.    The Jacksonville Savings Bank ESOP is a tax-qualified plan that covers substantially all of the employees of Jacksonville Savings Bank who have at least one year of service and have attained age 21. The ESOP received a loan from Jacksonville Bancorp, the proceeds of which were used to acquire shares of Jacksonville Bancorp common stock for the benefit of plan participants. The ESOP has pledged the shares acquired with the loan as collateral for the loan and holds them in a suspense account, releasing them to participants’ accounts as the loan is repaid, with contributions received from Jacksonville Savings Bank. One business day prior to the closing of the merger, the ESOP will be terminated, all participants’ accounts will be fully vested and the outstanding balance of the ESOP loan will be repaid by the ESOP by delivering a sufficient number of unallocated shares of Jacksonville Bancorp common stock to Jacksonville Bancorp (with each share equal to the merger consideration). All remaining shares of Jacksonville Bancorp common stock in the ESOP will be exchanged for the merger consideration. Any remaining assets in the suspense account after the repayment of the outstanding ESOP loan will be allocated to active plan participants pro-rata as earnings.

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As a result of the foregoing, Jacksonville Bancorp’s executive officers, as well as other employees who participate in the ESOP, will receive a benefit in connection with the ESOP’s termination to the extent that the merger consideration (on a per share basis) multiplied by the number of shares held in the suspense account exceeds the outstanding loan used to acquire those shares.

For an estimate of the additional benefits that Jacksonville Bancorp’s named executive officers would receive upon the effective time of the merger, see “— Merger-Related Compensation for Jacksonville Bancorp’s Named Executive Officers” below. Based on account levels as of December 31, 2017, the estimated value of the additional benefits that Messrs. Applebee and Williams would receive is $2,675 and $9,567, respectively.

Vacation Policy.    Jacksonville Savings Bank maintains a vacation policy that provides for time off with pay to full-time employees. The value of any paid time off accrued or earned under Jacksonville Bancorp’s vacation policy by any employee who does not become a continuing employee of CNB Bank Shares will be paid by CNB Bank Shares to the employee in a cash lump sum at the effective time of the merger. For an estimate of the foregoing benefits payable to Jacksonville Bancorp’s named executive officers at the effective time of the merger, see “— Merger-Related Compensation for Jacksonville Bancorp’s Named Executive Officers” below. The estimated benefits payable to Mr. Williams is $10,985.

Merger-Related Compensation for Jacksonville Bancorp’s Named Executive Officers.    The following table and related footnotes provide information about the compensation to be paid to Jacksonville Bancorp’s named executive officers that is based on or otherwise relates to the merger (the “Merger-Related Compensation”). The Merger-Related Compensation shown in the table and described in the footnotes below is subject to an advisory (non-binding) vote of Jacksonville Bancorp stockholders as more fully described in “Proposal 2 — Approval of the Merger-Related Compensation Arrangements.”

The table below sets forth the aggregate dollar value of the various elements of Merger-Related Compensation that each named executive officer of Jacksonville Bancorp would receive that is based on or otherwise relates to the merger, assuming the following:

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The estimated effective time of the merger is June 30, 2018;

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The employment of Mr. Foss is terminated by CNB Bank without cause at the effective time of the merger;

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Mr. Royal and Ms. Tone remain continuously employed with CNB Bank following the effective time of the merger; and

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As required by the Securities and Exchange Commission rules, all amounts below, as applicable, have been calculated based on a per share price of Jacksonville Bancorp common stock of  $33.70, which represents the mergers consideration on a per share basis.

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As a result of the foregoing assumptions, the actual amounts received by a named executive officer may materially differ from the amounts set forth below.

(1)

The amount in this column represents the cash severance payable to Mr. Foss under his employment agreement upon his qualifying termination of employment, which reflects an estimated reduction of $308,686 to avoid a penalty tax under Section 280G of the Internal Revenue Code. The severance amount payable to Mr. Foss under the employment agreement would be considered a “modified single

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trigger” payment since the amounts are payable upon Mr. Foss’ voluntary resignation (for any reason) following a change in control. See “— Financial Interests of Directors and Executive Officers in the Merger — Employment Agreements” for further details.

The above table does not reflect the potential severance payments to Mr. Royal and Ms. Tone under their change in control agreements because it is anticipated that each will continue in his or her employment following the effective time of the merger, and the timing of the payments, and whether any payments will be made, cannot be ascertained as of the date of this filing. The severance amount payable under the change in control agreements, if payable, would be considered “double trigger” payments since the amounts are payable upon a termination of employment following a change in control. See “— Financial Interests of Directors and Executive Officers in the Merger — Continued Employment Offer to Certain Jacksonville Bancorp Named Executive Officers” for further details.

(2)

The amounts in this column represents the cash payment related to the cancellation of stock options in an amount equal to the product of the number of shares of Jacksonville Bancorp common stock subject to such stock options multiplied by the excess, if any, of  (i) $33.70, over (ii) the exercise price per share of Jacksonville Bancorp common stock. These payments are single-trigger benefit because the payments are triggered upon the effective time of the merger.

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(3)

On a change in control, any unvested normal retirement benefits under the Jacksonville Savings Bank Salary Continuation Plan 1 and Jacksonville Savings Bank Salary Continuation Plan 2 will become vested. This results in an additional benefit with a present value of  $73,647 for Mr. Royal and $219,671 for Ms. Tone, using a discount rate of 4.75%. These additional pension benefits are single-trigger benefits because they become vested solely due to a change in control. Following the merger, the normal retirement benefits payable to Mr. Royal and Ms. Tone is an annual benefit of  $35,000, payable in monthly installments for 10 years, commencing on his or her date of termination. Mr. Foss is fully vested in his supplemental retirement benefits payable under the Jacksonville Savings Bank Salary Continuation Plan 1 and the Jacksonville Savings Bank Long-Term Deferred Compensation Plan, without regard to the merger.

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(4)

This amount represents the present value of the cash equivalent of the cost of providing continued life insurance coverage and non-taxable medical and dental coverage substantially identical to the coverage maintained by Jacksonville Savings Bank for Mr. Foss immediately prior to the merger. The present value was calculated using a discount rate equal to 120% of the applicable federal rate (compounded semi-annually) for January 2018, as published by the Internal Revenue Service. This benefit is payable pursuant to Mr. Foss’ employment agreement and constitutes a modified single benefit due to Mr. Foss’ right to the benefit upon termination for any reason after a change in control.

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(5)

The amounts in this column represent the additional benefit attributable to the ESOP as a result of its termination based on per share value for Jacksonville Bancorp common stock of  $33.70 (see “— Financial Interests of Directors and Executive Officers in the Merger — Employee Stock Ownership Plan” above for further details). For Mr. Foss, the amount in this column is attributable solely to the additional benefit under the ESOP as it is anticipated that all vacation time will be used before the effective time of the merger. For Mr. Royal and Ms. Tone, their amounts in this column are attributable solely to the additional benefit under the ESOP as it is anticipated that each will continue in his or her employment following the effective time of the merger.

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Indemnification.    Pursuant to the Merger Agreement, CNB Bank Shares has agreed that, for a period of six years following the effective time of the merger, it will indemnify and hold harmless each of the current and former directors, officers and employees of Jacksonville Bancorp and its subsidiaries, and any person who becomes an indemnified party between the date of the Merger Agreement and the effective time of the merger, against any costs or expenses (including reasonable attorneys’ fees and expenses), judgments, fines, losses, claims, damages, or liabilities and amounts paid in settlement incurred in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of matters existing or occurring at or prior to the effective time of the merger, whether asserted or claimed prior to, at or after the effective time of the merger, based in whole or in part on, or arising in whole or in part out of, or pertaining to (1) the fact that he or she is or was a director or officer of Jacksonville Bancorp or any of its subsidiaries, or was prior to the effective time of the merger

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serving at the request of any such party as a director, officer, employee, trustee or partner of another corporation, partnership, trust, joint venture, employee benefit plan or other entity, or (2) any matters arising in connection with the transactions related to the Merger Agreement, to the fullest extent such person would have been indemnified or have the right to advancement of expenses pursuant to Jacksonville Bancorp’s Articles of Incorporation and Bylaws as in effect on the date of the Merger Agreement and as permitted by applicable law. CNB Bank Shares will also advance expenses as incurred to the fullest extent permitted under applicable law, provided that the person to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined by a court of competent jurisdiction that such person is not entitled to indemnification.

Directors’ and Officers’ Insurance.    Prior to closing, Jacksonville Bancorp will cause to be acquired and maintained for a period of six years after the effective time of the merger under the current directors’ and officers’ liability insurance extended insurance coverage of acts or omissions occurring at or prior to the effective time of the merger with respect to the officers and directors of Jacksonville Bancorp. In obtaining this “tail” insurance coverage, Jacksonville Bancorp cannot spend, in the aggregate, more than 225% of the annual premiums currently paid by Jacksonville Bancorp for its insurance coverage.

Appointment of Director to the CNB Bank Board of Directors.    The Merger Agreement provides that one director of Jacksonville Bancorp’s Board of Directors will be appointed to CNB Bank’s Board of Directors at the time CNB Bank and Jacksonville Savings Bank merge. The parties have determined that Mr. Foss will be the individual appointed to the Board.

Regulatory Approvals

General.    Completion of the merger is subject to the receipt of all required approvals and consents from regulatory authorities. The merger is subject to approval by the Federal Reserve Board, the OCC and the IDFPR. Additionally, the dividend from Jacksonville Savings Bank to Jacksonville Bancorp to fund the portion of the merger consideration that is to be paid by Jacksonville Bancorp must be approved by the IDFPR. CNB Bank Shares and CNB Bank have filed the required regulatory applications with the Federal Reserve Board, the OCC and the IDFPR. Additionally, Jacksonville Savings Bank has filed a regulatory application with the IDFPR regarding paying a dividend to Jacksonville Bancorp to fund the portion of the merger consideration that is to be paid by Jacksonville Bancorp. Although we do not know of any reason why the regulatory approvals cannot be obtained timely, we cannot be certain when or if such approvals will be obtained.

Bank Merger.    The bank merger is subject to the approval of the OCC under the Bank Merger Act. In granting its approval under the Bank Merger Act, the OCC must consider the financial and managerial resources and future prospects of the existing and resulting institutions, the convenience and needs of the communities to be served, competitive factors, any risk to the stability of the United States banking or financial system and the effectiveness of the institutions involved in combating money laundering activities.

The bank merger is also subject to the approval of the IDFPR under the Illinois Savings Bank Act. In granting its approval under the Illinois Savings Bank Act, the IDFPR will consider, among other things, whether the bank merger agreement is fair to all persons affected and whether the resulting institution will be operated in a safe and sound manner.

Holding Company Merger.     The merger of Jacksonville Bancorp with and into CNB Bank Shares, through the merger of Jacksonville Bancorp with and into CNB Acquisition, Inc., with Jacksonville Bancorp as the surviving corporation, requires the approval or non-objection of the Federal Reserve Board.

In granting its approval or non-objection, the Federal Reserve Board will consider factors such as financial and managerial resources, future prospects, the convenience and needs of the community and competitive factors.

Dividend Approval.    As part of the Merger Agreement, Jacksonville Bancorp has agreed to provide $24.8 million of the merger consideration. In order to fund Jacksonville Bancorp’s portion of the merger consideration, we anticipate that Jacksonville Savings Bank will need to dividend approximately $22.0 million to Jacksonville Bancorp. This dividend must be approved by the IDFPR as it will exceed Jacksonville Savings Bank’s current year-to-date net income.

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In considering whether to approve the dividend, the IDFPR may consider a number of factors, including whether Jacksonville Savings Bank will be “well-capitalized” after the dividend is paid to Jacksonville Bancorp.

Our estimates show that Jacksonville Savings Bank will continue to be well-capitalized after this special dividend. Upon receipt of the dividend from Jacksonville Savings Bank, Jacksonville Bancorp will place its portion of the merger consideration into an escrow account with the Paying Agent, to be released and distributed to Jacksonville Bancorp’s stockholders on the closing date of the merger. This release and distribution to Jacksonville Bancorp’s stockholders is at all times subject to the completion of the merger. If the merger is not consummated, the funds in the escrow account will be returned to Jacksonville Bancorp and the amount provided to Jacksonville Bancorp by Jacksonville Savings Bank as a dividend will be returned to Jacksonville Savings Bank.

Accounting Treatment

CNB Bank Shares will account for the merger under the purchase method of accounting. This means that CNB Bank Shares and Jacksonville Bancorp will be treated as one company as of the date of the merger and CNB Bank Shares will record the fair value of Jacksonville Bancorp’s assets and liabilities on its financial statements on that date. CNB Bank Shares will record the excess of its purchase price over the fair value of Jacksonville Bancorp’s identifiable net assets as goodwill.

Terms of the Merger Agreement

The following describes the material provisions of the Merger Agreement. The following description of the Merger Agreement is subject, and qualified in its entirety by reference, to the Merger Agreement, which is attached to this document as Appendix A, and is incorporated by reference into this document. We encourage you to read the Merger Agreement carefully and in its entirety, as it is the legal document governing the merger.

General.    The Merger Agreement provides for the merger of CNB Acquisition, Inc., the merger subsidiary of CNB Bank Shares, with and into Jacksonville Bancorp, with Jacksonville Bancorp as the surviving corporation. In addition, it is expected that at a date to be determined following the closing of the merger, Jacksonville Savings Bank will merge with and into CNB Bank, with CNB Bank as the surviving bank.

Merger Consideration.    Each outstanding share of common stock of Jacksonville Bancorp, other than shares of common stock owned by Jacksonville Bancorp as treasury stock, shares of common stock owned by CNB Bank Shares and any shares of common stock remitted by Jacksonville Bancorp to repay the outstanding loan with the ESOP, will be converted into the right to receive $33.70 in cash at closing.

Surviving Corporation, Governing Documents and Directors

At the effective time of the merger, the articles of incorporation of CNB Acquisition, Inc. in effect immediately before the effective time of the merger will be the articles of incorporation of the surviving corporation after completion of the merger. The bylaws of CNB Acquisition, Inc. immediately before the effective time of the merger will be the bylaws of the surviving corporation after completion of the merger. At the effective time of the merger, the directors and officers of CNB Acquisition, Inc. immediately before the effective time of the merger will be the directors and officers of the surviving corporation after completion of the merger.

Appointment of Director to the CNB Bank Board of Directors

The Merger Agreement provides that one director of Jacksonville Bancorp’s Board of Directors will be appointed to the CNB Bank Board of Directors at the time CNB Bank and Jacksonville Savings Bank merge. The parties have determined that Mr. Foss will be the individual appointed to the Board of Directors of CNB Bank.

Treatment of Jacksonville Bancorp Stock Options

The directors and executive officers of Jacksonville Bancorp held options to purchase an aggregate of 18,256 shares of common stock exercisable within 60 days of  [Record Date].

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Pursuant to the Merger Agreement, at the effective time of the merger, each outstanding stock option granted by Jacksonville Bancorp under its 2012 Stock Option Plan, whether vested or unvested, will be canceled and the holder of a stock option will receive a cash payment equal to the product of  (1) the number of shares of Jacksonville Bancorp common stock subject to the stock option, and (2) the amount by which $33.70 exceeds the exercise price of such stock option, less applicable federal and state tax withholdings.

If the exercise price of a stock option equals or exceeds $33.70 per share, the holder of such stock option will not be entitled to any consideration in connection with the merger. Any Jacksonville Bancorp stock option that has not been exercised before the effective time of the merger will be cancelled at the effective time of the merger.

Closing and Effective Time of the Merger

The merger will be completed only if all conditions to complete the merger set forth in the Merger Agreement are either satisfied or waived. See “— Conditions to Complete the Merger.”

The merger of CNB Acquisition, Inc. and Jacksonville Bancorp will become effective when the articles of merger are filed with the Department of Assessments and Taxation of the State of Maryland. Unless extended by mutual agreement of the parties to the Merger Agreement, the completion of the merger will occur no later than ten business days after the later of: (1) the receipt of the last necessary regulatory approval and the expiration of any required waiting period; and (2) the satisfaction or waiver of the latest to occur of the conditions to the closing of the merger set forth in the Merger Agreement. The completion of the merger is currently anticipated to occur during the second quarter of 2018, but neither Jacksonville Bancorp nor CNB Bank Shares can guarantee when or if the merger will be completed.

Representations and Warranties

The representations and warranties described below and included in the Merger Agreement were made only for purposes of the Merger Agreement and as of specific dates, are solely for the benefit of CNB Bank Shares and Jacksonville Bancorp, may be subject to limitations, qualifications or exceptions agreed upon by the parties, including those included in disclosure schedules made for the purposes of, among other things, allocating contractual risk between CNB Bank Shares and Jacksonville Bancorp rather than establishing matters as facts, and may be subject to standards of materiality that differ from those standards relevant to investors. You should not rely on the representations, warranties, covenants or any description thereof as characterizations of the actual state of facts or condition of CNB Bank Shares, Jacksonville Bancorp or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in public disclosures by CNB Bank Shares or Jacksonville Bancorp. The representations and warranties and other provisions of the Merger Agreement should not be read alone, but instead should be read only in conjunction with the information provided elsewhere in this proxy statement. See “Where You Can Find More Information.”

The Merger Agreement contains customary representations and warranties of CNB Bank Shares and Jacksonville Bancorp relating to their respective businesses. The representations and warranties in the Merger Agreement do not survive the effective time of the merger.

The representations and warranties made by Jacksonville Bancorp to CNB Bank Shares relate to a number of matters, including the following:

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corporate matters, including the due organization of Jacksonville Bancorp and Jacksonville Savings Bank;

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authority relative to the execution and delivery of the Merger Agreement, and the absence of conflicts with, or violations of, organizational documents or other obligations as a result of the merger;

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capitalization;

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•

the filing of reports with the Securities and Exchange Commission and regulatory authorities, financial statements and internal controls over financial reporting;

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•

the books and records of Jacksonville Bancorp and Jacksonville Savings Bank;

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title to properties;

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loan matters, including the allowance for loan and lease losses;

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no undisclosed liabilities and the absence of a material adverse change on Jacksonville Bancorp or Jacksonville Savings Bank;

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tax matters;

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compliance with the Employee Retirement Income Security Act of 1974, as amended;

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compliance with applicable laws;

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legal proceedings and agreement with regulatory authorities;

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the absence of certain changes or events;

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properties, contracts and other agreements and employee benefit plans;

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no defaults on contracts;

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insurance;

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compliance with environmental laws;

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employee matters;

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indemnification;

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insider interests;

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broker’s fees payable in connection with the merger;

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no known delays in obtaining regulatory approval of the merger;

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no parachute payments under the Internal Revenue Code; and

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the accuracy of information supplied for inclusion in this proxy statement and applications filed with bank regulators.

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The representations and warranties made by CNB Bank Shares to Jacksonville Bancorp relate to a number of matters, including the following:

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corporate matters, including the due organization of CNB Bank Shares and CNB Acquisition, Inc.;

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authority relative to the execution and delivery of the Merger Agreement, and the absence of conflicts with, or violations of, organizational documents or other obligations as a result of the merger;

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the accuracy of information supplied for inclusion in this proxy statement and applications filed with bank regulators;

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no known delays in obtaining regulatory approval of the merger;

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the filing of reports with regulatory authorities;

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the books and records of CNB Bank Shares and CNB Bank;

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compliance with applicable laws;

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legal proceedings;

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availability of funds to pay the merger consideration; and

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•

employee benefit plans.

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Certain representations and warranties of CNB Bank Shares and Jacksonville Bancorp are qualified as to “materiality” or “material adverse effect.” For purposes of the Merger Agreement, a “material adverse effect,” when used in reference to CNB Bank Shares or Jacksonville Bancorp, as applicable, means any event, circumstance, change or effect (1) that is material and adverse to the assets, liabilities, capitalization, financial condition, operations, results of operations or business of such party and its subsidiaries, taken as a whole, or (2) that would materially impair the ability of such party to perform its obligations under the Merger Agreement or otherwise materially impair the ability of such party to consummate the transactions contemplated by the Merger Agreement.

With respect to clause (1) in the above paragraph, a “material adverse effect” does not include: (1) changes in banking laws and similar laws, rules and regulations of general applicability; (2) changes in GAAP or applicable regulatory accounting requirements; (3) any modifications or changes in valuation policies and practices or restructuring charges, in each case in connection with the transactions related to the Merger Agreement, taken in accordance with general accepted accounting principles and with CNB Bank Shares prior consent; (4) changes in global, national or regional political conditions or changes in general economic or capital market conditions affecting financial institutions or their market prices generally and not specifically relating to either party or its subsidiaries, including changes in levels of interest rates; (5) the effects of compliance with the Merger Agreement on the operating performance of Jacksonville Bancorp or Jacksonville Savings Bank, including the expenses incurred in consummating the transactions contemplated by the Merger Agreement; (6) the effects of any action or omission taken by one party with the prior consent of the other party or as otherwise expressly permitted by the Merger Agreement; (7) the impact of the Merger Agreement and the transactions contemplated by the Merger Agreement on relationships with customers and employees; and (8) failure, in and of itself, to meet earnings projections or internal financial forecasts. However, the events, circumstances, changes or effects set forth in clauses (1), (2) and (4) above will be taken into account in determining whether a material adverse effect has occurred only to the extent such events, circumstances, changes or effects have a material and disproportionate adverse impact on the party relative to other participants in the industries or markets in which such party operates.

Covenants and Agreements

Conduct of Businesses Prior to the Completion of the Merger.     Jacksonville Bancorp has agreed that, before the effective time of the merger (or the termination of the Merger Agreement), except as expressly contemplated or permitted by the Merger Agreement, required by law, or with the prior written consent of CNB Bank Shares, which cannot be unreasonably withheld, conditioned or delayed, it will, and will cause its subsidiaries to:

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conduct its business in the ordinary course and in compliance in all material respects with applicable laws and continue to pay normal expenditures and incur all regular expenses to continue Jacksonville Savings Bank’s business, consistent with past practice;

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use its best efforts to preserve intact its current business organization, keep available the services of its current officers, employees and agents and maintain the goodwill of its suppliers, customers, landlords, creditors, employees, agents and others who have business relationships with it;

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confer with CNB Bank Shares concerning operational matters of a material nature;

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only enter into loan transactions in accordance with its existing loan policy (which may be modified in the ordinary course of business);

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consistent with past practice, maintain an allowance for loan and lease losses in accordance in all material respects with the requirements of generally accepted accounting principles and applicable law and charge off any loans or leases that would be deemed uncollectible in accordance with generally accepted accounting principles and applicable law, and place on non-accrual any loans or leases that are past due greater than ninety days unless the obligations are both well-secured and in the process of collection;

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maintain all of its assets necessary for the conduct of its business in good operating condition and repair, reasonable wear and tear and damage by fire or unavoidable casualty excepted, and maintain insurance upon its assets and with respect to the conduct of its business and pay all premiums on such policies when due;

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buy or sell any security held, or intended to be held, for investment, only in accordance with the investment policy and reasonable banking standards and in the ordinary course of business;

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file in a timely manner all required filings with all regulatory authorities and cause such filings to be true and correct in all material respects;

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record and carry on its books and records the net realizable value of real estate owned, with such value to be supported by reasonable documentation;

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except for (A) regular salary or other earned compensation, fees, commissions, bonuses or (B) the cash dividends and distributions payable to Jacksonville Bancorp’s stockholders, not declare or pay any dividends or make any other similar distributions of cash or property to any directors, officers, employees or its stockholders;

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maintain its books, accounts and records in the ordinary course of business;

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materially comply with all legal requirements and contracts;

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take no action that is intended to or would reasonably be expected to adversely affect or materially delay the ability to obtain regulatory approvals, to perform its covenants and agreements under the Merger Agreement or to consummate the transactions contemplated by the Merger Agreement;

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provide notice to CNB Bank Shares of any material change to the Jacksonville Savings Bank’s loan policy within one business day after such change becomes effective;

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use its best efforts to obtain the cash necessary to fulfill its obligations to pay a portion of the merger consideration in a tax advantageous manner; and

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report periodically to CNB Bank Shares and CNB Bank concerning the status of its business, operations and finances.

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Jacksonville Bancorp has agreed that, before the effective time of the merger (or the termination of the Merger Agreement), except as previously disclosed to CNB Bank Shares, expressly contemplated or permitted by the Merger Agreement, required by law, taken in connection with any actions to obtain the cash necessary to pay its obligations to fund its portion of the merger consideration or with the prior written consent of CNB Bank Shares (which consent will not be unreasonably withheld, conditioned or delayed), Jacksonville Bancorp will not take the following actions:

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issue any shares of common stock, except for any shares of common stock issued pursuant to the exercise of outstanding stock options, or any security convertible into such capital stock;

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grant any registration rights or stock option or right to purchase shares of its capital stock;

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purchase, redeem, retire or otherwise acquire any shares of its common stock, except for shares acquired to satisfy tax withholding obligations upon the vesting of shares of restricted stock or shares tendered to pay the exercise price of outstanding stock options;

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declare or pay any dividend or other distribution, except for its regular cash dividends not to exceed $0.10 per share;

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amend its governing documents;

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pay or increase any bonus, salary or other compensation to any of its directors, officers or employees, except for normal increases in the ordinary course of business or in accordance with any then-existing employee benefit plan;

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enter into any employment, consulting, non-competition, change in control, severance or similar contract with any director, officer or employee, except for any such agreement or arrangement that is terminable at will or upon 30 days’ notice or less, without penalty or premium;

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adopt, amend (except for any amendment necessary to comply with applicable law), terminate or increase the payments to or benefits under, any employee benefit plan;

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enter into, terminate or extend any joint venture or similar agreement;

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enter into any new, or modify, amend, renew or extend the terms of any existing, lease, contract or license that has a term of more than one year or that involves the payment of more than $50,000 in the aggregate;

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make any loan other than in the ordinary course of business or renew, extend the term or increase the amount of any loan to any person on the “watch list” or similar internal report of Jacksonville Savings Bank or who has a loan that has been adversely classified by Jacksonville Savings Bank or a regulatory authority;

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incur any obligation or liability (fixed or contingent) other than in the ordinary course of business;

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except for certain exceptions permitted in the Merger Agreement or in the ordinary course of business, sell (other than any sale in the ordinary course of business, which includes the sale, transfer or disposal of real estate owned), lease or dispose of any of its assets or properties, or mortgage, pledge or impose any lien or other encumbrance on any of its material assets or properties;

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cancel or waive any claims or rights with a value in excess of  $50,000;

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make any capital investment greater than $50,000;

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except for the merger with CNB Bank Shares, merge or consolidate with or into any other person or entity, or acquire any stock, equity interest or business of any other person or entity;

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enter into any transaction for the borrowing or loaning of monies, or increase any outstanding indebtedness, other than in the ordinary course of business;

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make any material change in any policies and practices relating to liquidity management and cash flow planning, marketing, deposit origination, lending, budgeting, profit and tax planning, accounting or any other material aspect of its business or operations, except for changes required to respond to then current market or economic conditions, by any regulatory authorities or by applicable law;

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file any applications to open any new office or branch, close any current office or branch, or relocate operations from existing locations;

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discharge or satisfy any material lien or encumbrance on its assets or repay any material indebtedness for borrowed money, except for obligations incurred and repaid in the ordinary course of business;

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enter into any contract or agreement to buy, sell, exchange or otherwise deal in any assets or series of assets in a single transaction for more than $50,000 in the aggregate, except as otherwise incurred in the ordinary course of business, which includes sales of other real estate owned and other repossessed properties or accepting a deed in lieu of foreclosure;

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purchase or acquire any investments, direct or indirect, in any derivative securities, financial futures or commodities or enter into any interest rate swap, floors and option agreements, or other similar interest rate management agreements;

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hire any employee with an annual salary in excess of  $50,000, except for employees at will who are hired to replace employees who have resigned or whose employment has otherwise been terminated; or

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•

agree, whether oral or written, to do any of the foregoing.

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CNB Bank Shares has agreed and will not permit any of its subsidiaries to, take any action that is intended or reasonably expected to adversely affect or materially delay the ability of the parties to obtain regulatory approval, to perform its obligations under the Merger Agreement or to contemplate the transactions required under the Merger Agreement.

Regulatory Matters.     By no later than March 3, 2018, CNB Bank Shares will make all appropriate filings with regulatory authorities for approval of the merger. CNB Bank Shares has the primary responsibility for the preparation of the necessary applications for regulatory approval of the merger; however, CNB Bank Shares will provide Jacksonville Bancorp with a reasonable opportunity to review and comment on all its public, non-confidential substantive written filings contemplated under the Merger Agreement.

Cooperation; Best Efforts.    Jacksonville Bancorp and CNB Bank Shares have agreed to cooperate with each other in connection with any steps to be taken as part of their obligations under the Merger Agreement and to use their best efforts to satisfy the various covenants and closing conditions in the Merger Agreement and to consummate the transactions contemplated thereby as promptly as possible.

Employee Benefit Plans.    CNB Bank Shares will honor the terms of all Jacksonville Bancorp employment and change in control agreements, unless superseded by an agreement entered into with CNB Bank Shares or any of its subsidiaries. CNB Bank Shares will initially provide continuing employees with the same salary that was in effect for them immediately prior to the effective time of the merger and bonus opportunities that are comparable to similarly-situated employees of CNB Bank Shares and CNB Bank. CNB Bank Shares will offer to all continuing employees the same employee benefits as its makes available to its own similarly situated officers and employees, on substantially the same terms and conditions.

Continuing employees will receive credit for prior service with Jacksonville Savings Bank for purposes of  (1) eligibility and vesting under CNB Bank Shares’ employee benefit plans, and (2) for all other purposes with respect to any vacation or paid time off policy of CNB Bank Shares or CNB Bank, with any paid-time off accrued or earned under the paid time off policy of Jacksonville Bancorp or Jacksonville Savings Bank to be fully credited under the vacation or paid time off policy of CNB Bank Shares or CNB Bank for the remaining calendar year during which the closing of the merger occurs. Certain continuing employees will be entitled to a minimum of 25 days of paid time off under the paid time off policy of CNB Bank Shares or CNB Bank for each calendar year after the closing of the merger during which similarly situated executives of CNB Bank Shares or CNB Bank are provided with a similar paid time off benefit.

Neither CNB Bank Shares nor any of its affiliates will terminate the existing coverage of any continuing employee or his or her dependents under any Jacksonville Bancorp or Jacksonville Savings Bank health plans prior to the time such continuing employees and their dependents become eligible to participate in the health plans, programs and benefits common to all employees of CNB Bank Shares or CNB Bank and their dependents. Continuing employees who become covered under health and welfare programs and benefits of CNB Bank Shares or CNB Bank will receive credit for any co-payments or deductibles paid under Jacksonville Bancorp’s health and welfare plans for the plan year in which coverage commences under CNB Bank Shares’ health and welfare benefit plans, and CNB Bank Shares or CNB Bank, as the case may be, will use its best efforts to cause any preexisting condition limitations under such plans to be waived to the extent such conditions have been waived under any Jacksonville Bancorp or Jacksonville Savings Bank health and welfare plans.

Jacksonville Tax-Qualified Retirement Plans.    Pursuant to the terms of the Merger Agreement, Jacksonville Bancorp and Jacksonville Savings Bank will terminate the 401(k) Plan effective at least one day prior to the closing of the merger. As soon as practicable thereafter, the account balances of the 401(k) Plan will be distributed to participants or transferred to an eligible tax-qualified plan or individual retirement account. Continuing employees will be eligible to immediately participate in the CNB Bank Shares 401(k) plan. CNB Bank Shares will take all required actions to permit continuing employees to make rollover contributions to its 401(k) plan.

In accordance with the Merger Agreement, one business day prior to the closing of the merger, the ESOP will be terminated. As soon as practicable following the earlier of: (i) receipt of a favorable

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determination letter from the IRS regarding the qualified status of the ESOP upon its termination; or (ii) a participant’s qualifying termination event pursuant to the ESOP, the account balances in the ESOP will either be distributed to the participants or transferred to an eligible tax-qualified retirement plan (including CNB Bank’s 401(k) plan) or individual retirement account.

Severance Benefits.    Any employee of Jacksonville Savings Bank (other than an employee who is a party to an employment agreement, change in control agreement or similar agreement) who does not become a continuing employee, or any continuing employee who has a qualifying termination event (as such term is defined in the Merger Agreement) within 12 months after the effective time of the merger, will receive a cash severance payment from CNB Bank equal to two weeks’ salary for each full year of service to Jacksonville Savings Bank, subject to a minimum of four weeks’ salary and a maximum of 26 weeks’ salary. Such employees will also have the right to continued health coverage under group health plans of CNB Bank in accordance with the Internal Revenue Code. The value of any paid time off accrued or earned under Jacksonville Bancorp’s vacation policy by any employee who does not become a continuing employee of CNB Bank Shares will be paid by CNB Bank Shares to the employee in a cash lump sum at the effective time of the merger.

D&O Indemnification and Insurance.    CNB Bank Shares has agreed that it will indemnify current and former directors and officers of Jacksonville Bancorp and its subsidiaries for a period of six years following the completion of the merger, and, prior to closing, Jacksonville Bancorp will cause to be maintained for a period of six years after the effective time of the merger under the current directors’ and officers’ liability insurance extended insurance coverage of acts or omissions occurring at or prior to the effective time of the merger with respect to the officers and directors of Jacksonville Bancorp, subject to a limit on premium payments. See “— Approval of the Merger Agreement and the Merger — Financial Interests of Directors and Executive Officers in the Merger — Indemnification” and “— Approval of the Merger Agreement and the Merger — Financial Interests of Directors and Executive Officers in the Merger — Directors and Officers Insurance” above for a complete description.

Certain Additional Covenants.    The Merger Agreement also contains additional covenants, including covenants relating to the filing of this proxy statement, filing certain reports with the Securities and Exchange Commission, providing notice of a breach of a representation, warranty or agreement, obtaining required consents, access to information of the other company and public announcements with respect to the transactions contemplated by the Merger Agreement.

Jacksonville Bancorp’s Stockholder Meeting and Recommendation of Jacksonville Bancorp’s Board of Directors

Jacksonville Bancorp has agreed to hold a meeting of its stockholders to vote on approval of the Merger Agreement and the merger at the earliest practicable date. Jacksonville Bancorp and its Board of Directors will recommend the approval of the Merger Agreement and the merger and solicit the approval of the Merger Agreement and the merger by the Jacksonville Bancorp stockholders (subject to the provisions governing making a change in Jacksonville Bancorp’s recommendation as described below).

Jacksonville Bancorp’s Board of Directors has unanimously agreed to recommend that Jacksonville Bancorp’s stockholders vote in favor of approval of the Merger Agreement and the merger. However, the Board of Directors may withdraw, modify or change its recommendation if it determines, in good faith, after consultation with its legal counsel, that such action is reasonably necessary for it to comply with its fiduciary duties under applicable law.

Agreement Not to Solicit Other Offers

Jacksonville Bancorp has agreed that it will not directly or indirectly solicit, initiate or encourage any inquiries or proposals from, discuss or negotiate with, provide any non-public information to, or consider the merits of any unsolicited inquiries or proposals from, any person (other than CNB Bank Shares) relating to any acquisition transaction or a potential acquisition transaction involving Jacksonville Bancorp. Notwithstanding such foregoing restriction, Jacksonville Bancorp may provide information at the request of, or enter into negotiations with, a third party with respect to an acquisition transaction if the Jacksonville Bancorp Board of Directors determines, in good faith, after consultation with its legal counsel,

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that the taking of such actions is reasonably necessary for it to comply with its fiduciary duties under applicable law, and, provided further, that Jacksonville Bancorp may not provide to such third party any information that it has not provided (or does not simultaneously provide) to CNB Bank Shares.

Notwithstanding the foregoing paragraph, if at any time prior to the approval of the Merger Agreement by the Jacksonville Bancorp stockholders, Jacksonville Bancorp receives a bona fide , unsolicited written acquisition proposal that fulfills the requirements contained in, and does not result from a breach of, the Merger Agreement, Jacksonville Bancorp will provide a notice of such acquisition proposal to CNB Bank Shares. The Jacksonville Board of Directors may take any action otherwise prohibited with respect to such acquisition proposal if, after the fifth business day following the submission of such notice to CNB Bank Shares and after taking into account any adjusted, modified or amended terms provided by CNB Bank Shares in writing, the Board reasonably determines in good faith, after consultation with its legal counsel, that the taking of such actions is necessary to comply with its fiduciary duties under applicable law.

Jacksonville Bancorp must promptly notify CNB Bank Shares orally and in writing if it receives any inquiry or proposal and provide reasonable detail of all relevant facts relating to such inquiries.

For purposes of the Merger Agreement, an “acquisition proposal” means with respect to Jacksonville Bancorp any of the following: (1) a merger or consolidation, or any similar transaction (other than the merger with CNB Bank Shares) of any person with Jacksonville Bancorp; (2) a purchase, lease or other acquisition of all or substantially all the assets of Jacksonville Bancorp; (3) a purchase or other acquisition of  “beneficial ownership” by any “person” or “group” (as such terms are defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) that would cause such person or group to become the beneficial owner of securities representing 20% or more of the voting power of Jacksonville Bancorp; (4) a tender or exchange offer to acquire securities representing 20% or more of the voting power of Jacksonville Bancorp; (5) the filing of an application or notice with any regulatory authority (which application has been accepted for processing) seeking approval to engage in one or more of the transactions referenced in clauses (1) through (4) above; or (6) the making of a bona fide proposal to Jacksonville Bancorp or its stockholders, by public announcement or written communication, that is or becomes the subject of public disclosure, to engage in one or more of the transactions referenced in clauses (1) through (4) above.

For purposes of the Merger Agreement, an “acquisition proposal” means any proposal or offer, whether or not in writing, relating to an acquisition transaction.

Conditions to Complete the Merger

CNB Bank Shares’ and Jacksonville Bancorp’s respective obligations to complete the merger are subject to the fulfillment or waiver of the following conditions:

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obtaining the consents and approvals required to consummate the merger, including the approval of the Merger Agreement and the transactions contemplated thereby by Jacksonville Bancorp’s stockholders, the receipt of required regulatory approvals and the expiration of applicable waiting periods;

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since the date of the Merger Agreement, there must not have been commenced or threated against Jacksonville Bancorp or CNB Bank Shares any proceeding or order that would reasonably be expected to have a material adverse effect on the other party’s rights under the Merger Agreement or make the consummation of the merger illegal;

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from the date of the Merger Agreement to the closing, there must not have been any change in the financial condition, assets or business of Jacksonville Bancorp or Jacksonville Savings Bank that has had or would reasonably be expected to have a material adverse effect on Jacksonville Bancorp or on CNB Bank Shares rights under the Merger Agreement;

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the consummation of the merger must not, directly or indirectly, materially contravene or materially conflict with or result in a material violation of any applicable legal requirement or order;

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as of the closing date of the merger, there must be no outstanding enforcement actions issued or threatened against Jacksonville Bancorp or Jacksonville Savings Bank;

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the accuracy of the representations and warranties of the parties in the Merger Agreement as of the closing date of the merger, subject to the materiality standards provided in the Merger Agreement, and the performance of the parties in all material respects of all obligations required to be performed by each party at or before the effective time of the merger under the Merger Agreement;

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all proceedings, corporate or other, to be taken by the parties in connection with the transactions contemplated by the Merger Agreement, and all documents incident thereto, must be reasonably satisfactory in form and substance to the other party, and Jacksonville Bancorp must make available to CNB Bank Shares all reasonably requested records and documents relating to the business and affairs of Jacksonville Bancorp and Jacksonville Savings Bank;

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Jacksonville Bancorp must have paid all applicable expenses related to the merger prior to the closing;

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Jacksonville Bancorp’s total consolidated stockholders’ equity on the last day of the month preceding the month in which the closing of the merger occurs must not be less than $50 million (for purposes of this closing condition, the calculation of total consolidated stockholders’ equity excludes the effect of certain items, including expenses and certain other costs related to the merger, changes to the valuation of Jacksonville Bancorp’s deferred tax assets resulting from U.S. tax reform and changes to Jacksonville Bancorp’s accumulated other comprehensive income);

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no known material unauthorized access to, or misappropriation of, confidential customer information maintained by Jacksonville Bancorp or Jacksonville Savings Bank; and

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delivery by each of CNB Bank Shares and Jacksonville Bancorp of its portion of the merger consideration to the Paying Agent no later than the business day before the merger closing date.

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Neither Jacksonville Bancorp nor CNB Bank Shares can provide assurance as to when or if all of the conditions to the merger can or will be satisfied or will be waived by the appropriate party.

Termination of the Merger Agreement

The Merger Agreement can be terminated at any time before completion of the merger by mutual consent of the parties, or by either party in the following circumstances:

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if such party’s conditions to closing the merger has not been satisfied and cannot be satisfied or cured by September 17, 2018 following written notice to the party committing the breach, or satisfaction of such a condition is or becomes impossible as of the merger closing date;

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if the other party willfully breaches a representation or warranty or breaches a covenant or agreement that is not or cannot be cured within ten business days after its receipt of written demand for cure by the non-breaching party;

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if the Jacksonville Bancorp stockholders fail to approve the Merger Agreement; provided, Jacksonville Bancorp may only terminate under this item if it fulfilled its obligations related to the calling of the stockholders meeting; or

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if the merger is not consummated by September 17, 2018, or such later date to which the parties may agree; provided however, that this right is not available to any party who failed to use its best efforts to consummate the merger.

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CNB Bank Shares may terminate the Merger Agreement in the following circumstances:

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if the Jacksonville Bancorp Board of Directors, in the exercise of its fiduciary duties, withdraws, modifies or changes, in any manner adverse to CNB Bank Shares, its recommendation to approve the Merger Agreement (or publicly announces its intention to do so) or breaches its obligations relating to calling and holding the Jacksonville Bancorp stockholders meeting; or

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if a receiver or conservator is appointed for Jacksonville Bancorp or Jacksonville Bancorp files for voluntary liquidation.

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In addition, Jacksonville Bancorp may terminate the Merger Agreement to sign a merger agreement with a third party, but only if Jacksonville Bancorp has complied with its obligations under its no solicitation provisions and pays the termination fee discussed below.

Effect of Termination

If the Merger Agreement is terminated, it will become void, except that (1) any liability of either CNB Bank Shares or Jacksonville Bancorp for any willful breach of their respective representations, warranties, covenants or agreements under the Merger Agreement will survive the termination, and (2) designated provisions of the Merger Agreement will survive the termination, including those relating to payment of fees and expenses and the confidential treatment of information.

Termination Fee

If the Merger Agreement is terminated under certain circumstances, either Jacksonville Bancorp or CNB Bank Shares must pay the other in immediately available funds a termination fee of  $2.25 million (plus up to $400,000 in out-of-pocket expenses related to the merger).

Jacksonville Bancorp must pay the termination fee if:

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the Merger Agreement is terminated by CNB Bank Shares because of Jacksonville Bancorp’s inability to deliver its portion of the merger consideration;

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the Merger Agreement is terminated by CNB Bank Shares because Jacksonville Bancorp willfully breaches a representation or warranty or breaches a covenant or agreement that is not or cannot be cured within ten business days after its receipt of written demand for cure by CNB Bank Shares;

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the Merger Agreement is terminated by CNB Bank Shares because the Jacksonville Bancorp Board of Directors, in the exercise of its fiduciary duties, withdraws, modifies or changes, in any manner adverse to CNB Bank Shares, its recommendation to approve the Merger Agreement (or publicly announces its intention to do so) or breaches its obligations relating to calling and holding the Jacksonville Bancorp stockholders meeting; or

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the Merger Agreement is terminated by CNB Bank Shares or Jacksonville Bancorp because the Jacksonville Bancorp stockholders have failed to approve the Merger Agreement (provided, Jacksonville Bancorp may only terminate under this item if it fulfilled its obligations related to the calling of the stockholders meeting) and (1) prior to the stockholders meeting an acquisition transaction has been publicly announced, communicated or disclosed and (2) within 12 months following the termination of the Merger Agreement, an acquisition transaction is consummated (other than with CNB Bank Shares or any of its affiliates) or if Jacksonville Bancorp enters into a contract providing for an acquisition transaction (other than with CNB Bank Shares or any of its affiliates).

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CNB Bank Shares must pay the termination fee if:

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the Merger Agreement is terminated by Jacksonville Bancorp because CNB Bank Shares willfully breaches a representation or warranty or breaches a covenant or agreement that is not or cannot be cured within ten business days after its receipt of written demand for cure by Jacksonville Bancorp; or

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the Merger Agreement is terminated by Jacksonville Bancorp because of CNB Bank Shares’ inability to deliver its portion of the merger consideration.

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In addition, if the Merger Agreement is terminated by either party because the terminating party’s conditions to closing the merger cannot be satisfied because of the failure of the non-terminating party to satisfy its commitments under the Merger Agreement regarding the accuracy of its representations and

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warranties and its performance of all covenants and obligations (and such failure is not the result of a willful breach), then the non-terminating party must pay the terminating party the aggregate of the terminating party’s out-of-pocket expenses related to the merger, up to $400,000.

Amendment, Waiver and Extension of the Merger Agreement

The Merger Agreement may not be amended except by mutual written agreement. Without limiting the foregoing, the parties may by mutual written agreement: (1) extend the time for the performance of any of the obligations or other acts of the parties; (2) waive any inaccuracies in the representations or warranties contained in the Merger Agreement or in any document delivered pursuant to the Merger Agreement; and (3) waive compliance with or modify, amend or supplement any of the conditions, covenants, agreements, representations or warranties contained in the Merger Agreement or waive or modify performance of any of the obligations of any of the parties, which are for the benefit of the waiving party; provided, however, that no modification, amendment or supplement agreed to after approval of the Merger Agreement by the Jacksonville Bancorp stockholders will affect such stockholders’ rights in any manner that is materially adverse to them.

Expenses and Fees

Except as set forth above regarding the termination fee, all costs and expenses incurred in connection with the Merger Agreement and the related transactions will be paid by the party incurring such expense.

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