pab bankshares, inc. - SNL Financial

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Our directors and executive officers own a significant portion of our common stock. Our directors and executive officers, as a group, beneficially owned approximately 29% of our outstanding common stock as of February 28, 2010. As a result of their ownership, the directors and executive officers will have the ability, by voting their shares in concert, to significantly influence the outcome of all matters submitted to our shareholders for approval, including the election of directors. Our common stock trading volume has been low compared with larger bank holding companies The trading volume in our common stock on the NASDAQ Global Select Market has generally been lower than other similarly sized bank holding companies since our shares trading on the NASDAQ Global Select Market. Furthermore, this trading volume does not compare with more seasoned companies listed on other stock exchanges. Thus, the market in our common stock is somewhat limited in scope relative to some other companies, and a more active and liquid trading market for our common stock may not develop in the future. As a result, it may be more difficult for you to sell a substantial number of shares for the same price at which you could sell a smaller number of shares. Sales of substantial amounts of common stock in the market, or the potential for large amounts of sales in the market, may cause the price of our common stock to decline or impair our future ability to raise capital through sales of our common stock. The price of our common stock may fluctuate significantly, which may make it difficult for you to resell common stock at times or at prices you find favorable. Our stock price has been volatile in the past, and several factors could cause the price to fluctuate substantially in the future. These factors include: • actual or anticipated variations in earnings; • changes in analysts’ recommendations or projections; • our announcements of developments related to our businesses; • operating and stock performance of other companies deemed to be peers; • actions by government regulators; • new technology used or services offered by traditional and non-traditional competitors; and • news reports of trends, concerns and other issues related to the financial services industry. Our stock price may fluctuate significantly in the future, and these fluctuations may be unrelated to our performance. General market price declines or market volatility in the future could adversely affect the price of our common stock, and the current market price of our common stock may not be indicative of future market prices. In addition, in recent months, the stock market in general has experienced extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies and particularly those in the financial services and banking sector, including for reasons unrelated to their operating performance. These broad market fluctuations may adversely affect our stock price, notwithstanding our operating results. 22
If we fail to continue to meet all applicable continued listing requirements of the NASDAQ Global Select Market and NASDAQ determines to delist our common stock, the market liquidity and market price of our common stock could decline, and our ability to access the capital markets could be negatively affected. Our common stock is listed on the NASDAQ Global Select Market. To maintain that listing, we must satisfy minimum financial and other continued listing requirements. For example, NASDAQ rules require that we maintain a minimum bid price of $1.00 per share for our common stock. Our common stock has recently traded near this minimum bid price requirement, and it may fall below the requirement in the future. If our stock price falls below $1.00 or we fail to meet other requirements for continued listing on the NASDAQ Global Select Market, and we are unable to cure the events of noncompliance in a timely or effective manner, our common stock could be delisted from the NASDAQ Global Select Market. If our common stock were threatened with delisting from the NASDAQ Global Select Market, we may, depending on the circumstances, seek to extend the period for regaining compliance with NASDAQ listing requirements by moving our common stock to the NASDAQ Capital Market. If our common stock is not eligible for quotation on another market or exchange, trading of our common stock could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink OTC Markets or the OTC Bulletin Board. In that event, it could become more difficult to dispose of, or obtain accurate quotations for the price of, our common stock, and there would likely also be a reduction in our coverage by the news media, which could cause the price of our common stock to decline further. In addition, the delisting of our common stock from a national exchange could materially adversely affect our access to the capital markets, and any limitation on market liquidity or reduction in the price of our common stock as a result of that delisting could adversely affect our ability to raise capital, if needed, on terms acceptable to us or at all. We suspended payment of dividends during the third quarter of 2008 and currently are not permitted to declare or pay any dividend without the prior written approval of our regulators. As a result, capital appreciation, if any, of our common stock may be your sole opportunity for gains on your investment for the foreseeable future. In the third quarter of 2008, we suspended payment of dividends on our common stock. In addition, as a result of the Written Agreement, we are not permitted to declare or pay any dividend without the prior written approval of our regulators. As a result, we currently cannot declare a dividend on our common shares. We do not expect to be granted a waiver or be released from this restriction until our financial performance improves significantly. Assuming our regulators permit us to pay dividends in the future, our ability to pay dividends will be limited by regulatory restrictions and the need to maintain sufficient consolidated capital. Holders of our common stock are only entitled to receive the dividends that our board of directors declares out of funds legally available for those payments. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 2. PROPERTIES We currently operate 18 bank branches, an operations center, an administrative office suite and an administrative office. With the exception of our Ocala, Florida branch and our Stockbridge, Georgia branch, we own all of the real property and/or buildings in which our bank branch offices are located. The Ocala office is under a five-year operating lease that expires in December 2013. The Stockbridge office is under a six-year operating lease that expires in June 2014. We own the real property where our Snellville, Georgia loan production office was located prior to its closure January 30, 2009, although this property is now being used as an administrative condo while it is marketed for sale. The 4,300 square-foot administrative office suite in McDonough, Georgia is located in leased office space. In addition, we own a three-story, 10,000 square-foot administrative building, which houses our corporate offices, and a 12,000 square-foot operations center in Valdosta, Georgia. All of the properties are in a good state of repair and are designed for the purposes for which they are used. We also currently own two parcels of land that we were holding for potential future expansion in Valdosta, Lowndes County, Georgia. The two lots in Valdosta include land behind our main office building and a lot near the initial Park Avenue Bank location. On February 23, 2010, we entered into a Purchase and Assumption Agreement whereby we agreed to sell our branches located in Adel, Statesboro, Baxley, and Hazlehurst to HeritageBank of the South. The closing of the transaction is subject to regulatory approval and other customary closing conditions and is expected to be completed in the second quarter of 2010. 23
Page 1 and 2: 2009 Annual Report
Page 3 and 4: UNITED STATES SECURITIES AND EXCHAN
Page 5 and 6: TABLE OF CONTENTS Item Page Caution
Page 7 and 8: PART I ITEM 1. BUSINESS General PAB
Page 9 and 10: North Georgia During the fourth qua
Page 11 and 12: Supervision and Regulation The bank
Page 13 and 14: Payment of Dividends PAB is a legal
Page 15 and 16: An institution that is categorized
Page 17 and 18: USA Patriot Act of 2001 In October
Page 19 and 20: If our allowance for loan losses is
Page 21 and 22: Our net interest income could be ne
Page 23: We may need to raise additional cap
Page 27 and 28: Performance Graph The following gra
Page 29 and 30: GAAP Reconciliation and Management
Page 31 and 32: The three primary reasons for this
Page 33 and 34: At December 31, 2009, commercial re
Page 35 and 36: Average Balances, Interest and Yiel
Page 37 and 38: Loan Portfolio We make both secured
Page 39 and 40: A summary of loans from each market
Page 41 and 42: The following table summarizes our
Page 43 and 44: The first component of the allowanc
Page 45 and 46: Summary of Loan Loss Experience The
Page 47 and 48: The following table summarizes our
Page 49 and 50: On September 4, 2009, the Company b
Page 51 and 52: Provision for Loan Losses The provi
Page 53 and 54: Income Taxes The provision for inco
Page 55 and 56: We have reduced the level of asset-
Page 57 and 58: MANAGEMENT’S REPORT ON INTERNAL C
Page 59 and 60: Because of its inherent limitations
Page 61 and 62: PAB BANKSHARES, INC. AND SUBSIDIARI
Page 69 and 70: NOTES TO CONSOLIDATED FINANCIAL STA
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NOTES TO CONSOLIDATED FINANCIAL STA
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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
Page 117 and 118:
Compensation Benchmarks and Use of
Page 119 and 120:
The following table summarizes in t
Page 121 and 122:
Base Salaries The Company’s philo
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(1) The listed stock option grants
Page 127 and 128:
Potential Payments Upon Termination
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(5) Includes 1,659,310 shares owned
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All related party transactions set
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10.5 Rescission Agreement, dated De
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SIGNATURES Pursuant to the requirem
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Shareholder Information Corporate O
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pab bankshares, inc. - SNL Financial

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