pab bankshares, inc. - SNL Financial

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Nonaccrual, Past Due and Restructured Loans Our nonperforming loans increased $37.8 million, from $55.4 million at December 31, 2008 to $93.2 million at December 31, 2009, due primarily to the adverse economic and real estate market conditions in our North Georgia and Florida markets. As a percentage of total loans, nonperforming loans as a percentage of total loans increased 578 basis points to 11.57% at December 31, 2009 from 5.79% at December 31, 2008. Approximately 55% of nonperforming loans at December 31, 2009 were construction and development loans, and these loans represented approximately 25% of our total portfolio of construction and development loans. A schedule of our nonperforming loans at December 31, 2009 is presented in the following table. Net Carrying Category Value * Collateral Description Average Carrying Value/ Unit Construction and Development $30.5 million 24 parcels of undeveloped land totaling 2,813 acres $9,400 per residential acre $14,900 per commercial acre Construction and Development $5.1 million 310 residential lots $16,500 per lot 1-4 Family Residential $10.8 million 82 houses $132,000 per house Commercial Real Estate $29.5 million 33 commercial properties $892,200 per property Agriculture $2.0 million 3 parcels of farm land totaling 373 acres $5,400 per acre Commercial and Industrial $357,000 Non-real estate collateral $35,700 per loan Multi-Family Residential $2.1 million 9 condominium units $232,700 per unit Consumer $373,000 Non-real estate collateral $53,000 per loan Total $80.7 million * The term “net carrying value” represents the book value of the loan less any allocated allowance for loan losses. The table below summarizes our levels of nonperforming loans and the level of reserves allocated to those loans at the indicated dates. As of December 31, 2009 2008 2007 2006 2005 (Dollars in Thousands) Loans accounted for on a nonaccrual basis $ 92,272 $ 54,903 $ 11,405 $ 4,013 $ 7,856 Accruing loans which are contractually past due 90 days or more as to principal or interest payments 15 206 37 34 2 Troubled debt restructurings not included above 881 311 - - - Total nonperforming loans $ 93,168 $ 55,420 $ 11,442 $ 4,047 $ 7,858 Ratio of nonperforming loans to total loans (%) 11.57 5.79 1.24 0.49 1.04 Reserves allocated to nonperforming loans: Specific Reserves (FAS 114) $ 12,056 $ 2,888 $ 1,577 $ - $ 1,155 General Reserves (FAS 5) 388 1,188 397 602 80 Total reserves allocated to nonperforming loans $ 12,444 $ 4,076 $ 1,974 $ 602 $ 1,235 Total reserves allocated as a percentage of nonperforming loans 13.36% 7.35% 17.25% 14.86% 15.71% 38
The following table summarizes our nonperforming assets by type and market as of December 31, 2009. North Georgia South Georgia Florida Treasury Total (Dollars In Thousands) Loans accounted for on a nonaccrual basis $ 36,840 $ 29,525 $ 25,907 $ - $ 92,272 Accruing loans which are contractually past due 90 days or more as to principal or interest payments - - - 15 15 Troubled debt restructurings not included above 881 - - - 881 Foreclosed assets 71,999 2,882 17,236 - 92,117 Total nonperforming assets $ 109,720 $ 32,407 $ 43,143 $ 15 $ 185,285 The accrual of interest on loans is discontinued when, in our judgment, the borrower may be unable to meet payments as they become due, unless the loan is well secured. All interest accrued for loans that are placed on nonaccrual status is reversed against interest income. Interest income on nonaccrual loans is subsequently recognized only to the extent cash payments are received or until the loan is returned to accrual status. For the year ended December 31, 2009, the gross interest income that would have been recorded if our nonperforming loans had been current in accordance with their original terms was approximately $6.0 million. The amount of interest income on the above nonperforming loans that was included in net income for the year ended December 31, 2009 was approximately $104,000. The allowance for loan losses related to our nonperforming loans amounted to approximately $12.4 million and $4.1 million at December 31, 2009 and 2008, respectively. Potential Problem Loans In addition to our nonperforming loans discussed above, we have identified $28.9 million in potential problem loans as of December 31, 2009. These are construction and land development loans that were past due 30 to 89 days at year-end. Potential problem loans are loans where known credit problems of the borrowers causes management doubt the ability of such borrowers to comply with the present repayment terms. This may result in disclosure of such loans as nonperforming in future periods. At December 31, 2009, we had $57.3 million in total delinquent loans (loans past due 30 days or more) and still accruing interest, or 7.11% of total loans, representing an increase from 2.25% of total loans at December 31, 2008. Other real estate owned Our foreclosed assets increased $66.8 million in 2009, from $25.3 million at December 31, 2008 to $92.1 million at December 31, 2009. Due to economic conditions primarily in the Atlanta area, some builders and developers have been unable to satisfy their obligations to us and we have foreclosed on their collateral. However, we have decided to select certain parcels of foreclosed assets to hold rather than to force distressed sales of these properties in this market. A schedule of the foreclosed real estate held at December 31, 2009 is presented in the following table. In addition to the real estate listed in the table, we also own $904,000 in foreclosed non-real estate collateral at December 31, 2009. Category Book Value Description Average Value/ Unit Construction and Development $39.3 million 33 parcels of undeveloped $11,300 per residential acre land totaling 1,773 acres $72,300 per commercial acre Construction and Development $17.8 million 794 residential lots $22,400 per lot 1-4 Family Residential $8.6 million 69 houses $132,200 per house Commercial Real Estate $19.1 million 28 commercial properties $681,500 per property Multi-Family Residential $6.4 million 8 condominium units $800,000 per unit Total $91.2 million 39
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 and 24: We may need to raise additional cap
Page 25 and 26: If we fail to continue to meet all
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: A summary of loans from each market
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
Page 91 and 92:
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
Page 123 and 124:
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(1) The listed stock option grants
Page 127 and 128:
Potential Payments Upon Termination
Page 129 and 130:
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(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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