pab bankshares, inc. - SNL Financial

STATISTICAL DISCLOSURES
Distribution of Assets, Liabilities and Stockholders’ Equity; Interest Rates and Interest Differential
From September 2007 to December 2008, the Federal Open Market Committee of the Federal Reserve (“FOMC”) reduced
the federal funds rate 10 times, in various increments, from 5.25% to 0.25%. Being in an asset-sensitive interest rate
position on our balance sheet (our earning assets reprice more frequently than our rate-sensitive liabilities), we benefited
during the period of rising interest rates from June 2004 to June 2006. Conversely, our earnings decreased in the recent
declining interest rate environment. We discuss our interest rate risk in further detail in Item 7A. Below, we have
summarized the impact that changes in interest rates and changes in our balance sheet have had on our earnings over the
past three years.
Rate / Volume Analysis
The following table shows a summary of the changes in interest income and interest expense on a fully taxable equivalent
basis resulting from changes in volume and changes in rates for each category of interest-earning assets and interestbearing
liabilities. The change in interest attributable to rate has been determined by applying the change in rate between
years to average balances outstanding in the later year. The change in interest due to volume has been determined by
applying the rate from the earlier year to the change in average balances outstanding between years. Thus, changes that
are not solely due to volume have been consistently attributed to rate.
For the Years Ended December 31, 2009 vs. 2008 2008 vs. 2007
Increase Changes Due To Increase Changes Due To
(Decrease) Rate Volume (Decrease) Rate Volume
(Dollars In Thousands)
Increase (decrease) in
income from interest-earning assets:
Loans $ (9,379) $ (6,823) $ (2,556) $ (12,374) $ (18,404) $ 6,030
Taxable investment securities (1,056) (763) (293) (532) 105 (637)
Nontaxable investment securities (994) 33 (1,027) 93 (5) 98
Other short-term investments (2) (1,084) 1,082 (865) (1,255) 390
Total interest income (11,431) (8,637) (2,794) (13,678) (19,559) 5,881
Increase (decrease) in
expense from interest-bearing liabilities:
Demand deposits (4,048) (2,878) (1,170) (5,811) (4,469) (1,342)
Savings deposits (115) (118) 3 (360) (332) (28)
Time deposits (858) (5,396) 4,538 598 (4,569) 5,167
FHLB advances 195 139 56 (113) (637) 524
Notes payable 424 (506) 930 (187) (187) -
Other short-term borrowings (245) (144) (101) (118) (195) 77
Total interest expense (4,647) (8,903) 4,256 (5,991) (10,389) 4,398
Net interest income $ (6,784) $ 266 $ (7,050) $ (7,687) $ (9,170) $ 1,483
During 2009, we had an average investment in impaired loans of $68.2 million. If these impaired loans had remained
current and on accrual status during 2009, we would have recorded an additional $6.0 million of interest income. This is
compared to $3.6 million of lost interest income on an average investment of $38.8 million of impaired loans during 2008.
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