pab bankshares, inc. - SNL Financial

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 4. INVESTMENT SECURITIES (Continued) Corporate bonds. The unrealized losses for twelve months or longer on investment in one corporate bond relates to an investment in a company within the financial services sector. The unrealized losses are primarily caused by recent decreases in profitability and profit forecasts by industry analysts. The contractual terms of those investments do not permit the Company to settle the security at a price less than the par value of the investments. The Company currently does not believe it is probable that it will be unable to collect all amounts due according to the contractual terms of the investments. Because the Company does not intend to sell the investment and it is not more likely than not that the Company will be required to sell the investments before recovery of its par value, which may be maturity, it does not consider these investments to be other-than-temporarily impaired at December 31, 2009. State and municipal securities. The unrealized losses for twelve months or longer relates to 11 municipal securities. The unrealized losses are primarily caused by securities no longer being insured and/or ratings being withdrawn given the current economic environment. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at December 31, 2009. NOTE 5. RESTRICTED EQUITY SECURITIES Restricted equity securities consists of the following: December 31, 2009 2008 Federal Reserve Bank stock $ 2,182,500 $ 1,800,000 Federal Home Loan Bank stock 7,277,100 7,099,100 Silverton Financial Services, Inc. - 260,804 $ 9,459,600 $ 9,159,904 NOTE 6. LOANS AND ALLOWANCE FOR LOAN LOSSES The composition of the loan portfolio as of December 31, 2009 and 2008 follows. 2009 2008 Commercial and financial $ 84,770,651 $ 87,529,469 Agricultural 40,214,621 48,646,715 Real estate – construction 204,662,668 315,786,248 Real estate – commercial 275,927,260 276,644,846 Real estate – residential 174,879,077 196,306,153 Installment loans to individuals and others 24,854,249 31,616,134 Overdrafts 94,835 467,958 805,403,361 956,997,523 Deferred loan fees and unearned interest, net (89,674) (310,132) 805,313,687 956,687,391 Allowance for loan losses (29,314,145) (19,373,625) $ 775,999,542 $ 937,313,766 76
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 6. LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued) Changes in the allowance for loan losses for the years ended December 31, 2009, 2008 and 2007 follows. 2009 2008 2007 Balance, beginning of year $ 19,373,625 $ 12,905,938 $ 11,006,097 Provision charged to operations 51,187,987 18,050,000 2,400,000 Loans charged-off (41,748,277) (12,127,445) (868,201) Recoveries 500,810 545,132 368,042 Balance, end of year $ 29,314,145 $ 19,373,625 $ 12,905,938 A summary of information pertaining to impaired loans as of December 31, 2009 and 2008 follows. 2009 2008 Loans accounted for on a nonaccrual basis $ 92,271,684 $ 54,902,747 Troubled debt restructurings not included above 881,189 311,051 Loans past due 90 days or more and still accruing 14,987 206,442 Total impaired loans $ 93,167,860 $ 55,420,240 Valuation allowance related to impaired loans $ 12,444,230 $ 4,075,879 Additional information on impaired loans for the years ended December 31, 2009, 2008 and 2007 follows. 2009 2008 2007 Average recorded investment in impaired loans $ 68,180,885 $ 38,784,878 $ 4,883,934 Approximate amount of interest income that would have been recorded if the impaired loans had remained current and on an accrual status $ 5,950,857 $ 3,592,700 $ 753,000 Interest income recognized on a cash basis on impaired loans $ 104,166 $ 64,785 $ 33,658 In the ordinary course of business, the Company has granted loans to certain related parties, including executive officers, directors and their affiliates. The interest rates on these loans were substantially the same as rates prevailing at the time of the transaction and repayment terms are customary for the type of loan. Changes in related party loans for the year ended December 31, 2009 follows. Balance, beginning of year $ 37,948,775 Advances 21,348,906 Repayments (30,557,864) Transactions due to changes in related parties (13,116,069) Balance, end of year $ 15,623,748 77
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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
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
Page 77: 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
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: The following table summarizes in t
Page 125 and 126: (1) The listed stock option grants
Page 127 and 128: Potential Payments Upon Termination
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The following table summarizes in t
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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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