pab bankshares, inc. - SNL Financial

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(2) The reported amounts include the Company’s contributions to a Profit Sharing Plan, a Section 401(k) Plan and an Employee and Director Stock Purchase Program (the “SPP”), life insurance premiums paid by the Company for the named executive officers and perquisites and other personal benefits (such as auto allowance, cell phone allowance and an $8,524 temporary living allowance for Mr. Hammond in 2009) that may confer a direct or indirect benefit with a personal aspect, without regard to whether it may be provided for some business reason or for the convenience of the Company. All Other Compensation does not include any perquisites and other personal benefits which are integrally and directly related to the performance of the executive’s duties. Detail of these amounts follow: Officer Name Year Contribution to a Profit Sharing Plan Contribution to a 401(k) Plan Contribution to a SPP Life Insurance Premiums Employment Contract Termination Payments Perquisites and other personal benefits ($) ($) ($) ($) ($) ($) ($) Total Donald J. Torbert, Jr. 3 2009 - 7,777 1,000 900 - 9,439 19,116 2008 - 10,350 1,000 900 - 8,731 20,981 2007 6,750 10,125 1,000 900 - 4,766 23,541 Nicole S. Stokes 4 2009 - 4,741 1,000 571 - 5,204 11,516 R. Wesley Fuller 2009 - 7,775 1,000 900 - 7,381 17,056 2008 - 10,350 1,000 900 - 8,695 20,945 2007 6,750 10,125 1,000 900 - 5,312 24,087 David H. Hammond 5 2009 - 2,545 565 612 - 9,004 12,726 George D. Henderson 2009 - - 1,000 857 - 3,045 4,902 2008 - - 1,000 837 - 4,311 6,148 2007 5,554 - 1,000 695 - 4,495 11,744 M. Burke Welsh, Jr. 6 2009 - 3,700 - 225 730,000 790 734,715 2008 - 10,350 1,000 900 - 2,939 15,189 2007 6,750 10,125 1,000 900 - 2,638 21,413 (3) Mr. Torbert was appointed to serve as the President and Interim Chief Executive Officer of the Company and the Bank in April 2009 with his appointment as the Chief Executive Officer made permanent in July 2009. (4) Ms. Stokes was appointed as Chief Financial Officer on April 6, 2009. The amounts reported for 2009 reflect compensation for the entire year of 2009. (5) Mr. Hammond was appointed as Chief Credit Officer on October 1, 2009. The amounts reported for 2009 reflect compensation for the entire year of 2009. (6) Mr. Welsh retired from the Company on April 6, 2009. Under the terms of the Employment Termination Agreement, the Company agreed to pay Mr. Burke $730,000 as a severance payment related to his termination of employment with the Company; however, prior to making any such payment we must receive permission from our regulators, which has not been granted at this time. 118
Base Salaries The Company’s philosophy provides each member of executive management with a level of assured cash compensation in the form of base salary that is competitive in nature and reflects the officer’s professional status and accomplishments. Below is a summary of the peer analysis conducted by Blanchard Chase and presented the Compensation Committee during 2009. Note that the information gathered for the analysis was derived from 2008 information, but it is being compared to the Company’s executive officers’ 2009 base salaries. As discussed below, the Company’s executive officers’ 2009 base salaries were the same as their 2008 base salaries. 2008 and 2009 Base Salary 2008 Benchmark Peer Average Name Title Variance (Dollars In Thousands) Torbert Chief Executive Officer $172.8 $331.4 -47.8% Stokes EVP – Chief Financial Officer $105.0 $184.0 -42.9% Fuller EVP - Chief Administrative Officer $172.8 $258.5 -33.1% Hammond EVP - Chief Credit Officer $113.0 $173.0 -34.6% Henderson EVP - Chief Banking Officer $148.6 $200.7 -25.9% Welsh Former Chief Executive Officer $309.8 $331.4 -6.5% In December 2007, upon the recommendation of the Compensation Committee, the Board of Directors decided not to increase the base salaries of the named executive officers for 2008. The Compensation Committee made this recommendation due to lower Company performance in 2007 and continued earnings pressure expected in 2008. In December 2008, upon the recommendation of the Compensation Committee, the Board of Directors decided not to increase the base salaries of the named executive officers for 2009. The Compensation Committee made this recommendation due to the continued deteriorating economy, the level of nonperforming assets at the Bank and the Company’s earnings outlook for 2009. Bonuses The Company’s practice has been to award cash bonuses to management based upon various performance evaluations. In recent years for executive management, the practice has been to subjectively assess the performance of the officer and the performance of the Company relative to annual budgeted expectations, long-term strategic objectives and peer benchmarks. In December 2007, the Compensation Committee reviewed the performance of each executive officer to determine their recommendation for cash bonuses. Although the Company’s net income for 2007 would not compare to the record earnings from 2006 or 2005, the Compensation Committee determined that executive management continued to make progress towards certain strategic (non-financial) objectives. In addition, the Compensation Committee determined that executive management had performed extremely well to date in managing the Company’s risk in a difficult operating environment. On the recommendation of the Compensation Committee, the Board of Directors approved a bonus equal to 39% of the base salary for Mr. Welsh and bonuses equal to 31-35% of the base salary for each of the other named executive officers in 2007. These cash bonuses were less than the prior year’s cash bonuses and were in proportion to the decrease in earnings in 2007 as compared to 2006. In December 2008, on the recommendation of the Compensation Committee, the Board of Directors decided not to pay bonuses to executive management due to the deteriorating economy and net loss recorded for the Company in 2008. In December 2009, on the recommendation of the Compensation Committee, the Board of Directors decided not to pay bonuses to executive management due to the deteriorating economy and net loss recorded for the Company in 2009. 119
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2009 Annual Report
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UNITED STATES SECURITIES AND EXCHAN
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TABLE OF CONTENTS Item Page Caution
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PART I ITEM 1. BUSINESS General PAB
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North Georgia During the fourth qua
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Supervision and Regulation The bank
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Payment of Dividends PAB is a legal
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An institution that is categorized
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USA Patriot Act of 2001 In October
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If our allowance for loan losses is
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Our net interest income could be ne
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We may need to raise additional cap
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If we fail to continue to meet all
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Performance Graph The following gra
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GAAP Reconciliation and Management
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The three primary reasons for this
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At December 31, 2009, commercial re
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Average Balances, Interest and Yiel
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Loan Portfolio We make both secured
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A summary of loans from each market
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The following table summarizes our
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The first component of the allowanc
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Summary of Loan Loss Experience The
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The following table summarizes our
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On September 4, 2009, the Company b
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Provision for Loan Losses The provi
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Income Taxes The provision for inco
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We have reduced the level of asset-
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MANAGEMENT’S REPORT ON INTERNAL C
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Because of its inherent limitations
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PAB BANKSHARES, INC. AND SUBSIDIARI
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Page 69 and 70: NOTES TO CONSOLIDATED FINANCIAL STA
Page 109 and 110: JAMES W. GODBEE, JR Certified Publi
Page 111 and 112: KENNITH D. MCLEOD Certified Public
Page 113 and 114: The Audit Committee is a separately
Page 115 and 116: SECTION 16(a) BENEFICIAL OWNERSHIP
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Page 119: The following table summarizes in t
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Page 125 and 126: (1) The listed stock option grants
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Page 131 and 132: (5) Includes 1,659,310 shares owned
Page 133 and 134: All related party transactions set
Page 135 and 136: 10.5 Rescission Agreement, dated De
Page 137 and 138: SIGNATURES Pursuant to the requirem
Page 139 and 140: Shareholder Information Corporate O
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