pab bankshares, inc. - SNL Financial

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 10. ADVANCES FROM THE FEDERAL HOME LOAN BANK Listed below is a summary of the advances from the Federal Home Loan Bank of Atlanta (the “FHLB”) as of December 31, 2009 and 2008. 2009 2008 Adjustable rate advances due at various dates through December 18, 2014 with a weighted-average rate of 3.06% at December 31, 2009 $ 15,000,000 $ 3,941,580 Fixed rate advances due at various dates through February 26, 2024 with a weighted-average rate of 4.23% at December 31, 2009 24,139,501 39,762,337 Convertible advances due at various dates through May 19, 2015 with a weighted-average rate of 3.97% at December 31, 2009 51,000,000 66,000,000 $ 90,139,501 $ 109,703,917 The Bank has provided a blanket lien on its portfolio of qualifying residential and commercial real estate mortgage loans and has pledged an additional $51,324,485 in investment securities as collateral on the advances from the FHLB. Contractual maturities of the advances from the FHLB at December 31, 2009 follow. Actual maturities may differ from contractual maturities because of the conversion option of the convertible advances. Year Amount 2010 $ 5,657,456 2011 15,263,803 2012 25,481,174 2013 13,704,982 2014 10,665,812 Later 19,366,274 $ 90,139,501 80
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 11. GUARANTEED PREFERRED BENEFICIAL INTERESTS IN DEBENTURES On October 5, 2006, PAB Bankshares Capital Trust II (“PAB Trust II”) issued $10 million of Floating Rate Capital Securities (“trust preferred securities”). The Company formed PAB Trust II, a statutory business trust created under the laws of the State of Delaware, for the sole purpose of issuing the trust preferred securities and investing the proceeds in Floating Rate Junior Subordinated Debentures (the “Debentures”) issued by the Company. The interest rates on both the trust preferred securities and the Debentures are reset quarterly at the three-month London Interbank Offered Rate (“LIBOR”) plus 1.63% (currently 1.88%). The Company entered into agreements which, taken collectively, fully, irrevocably and unconditionally guarantee, on a subordinated basis, all of PAB Trust II’s obligations under the trust preferred securities. PAB Trust II’s sole asset is the Debentures issued by the Company. The Debentures will mature on December 31, 2036, but are callable at par by the Company in whole or in part anytime after December 31, 2011. The proceeds from the issuance of these trust preferred securities qualify as Tier 1 capital under the risk-based capital guidelines established by the Federal Reserve. As discussed in Note 1, the Company adopted FASB Interpretation No. 46R (Revised December 2003), Consolidation of Variable Interest Entities, during the first quarter of 2004. This interpretation addresses consolidation by business entities of variable interest entities and when such entities are subject to consolidation under the provisions of this interpretation. The Company determined that the revised provisions required deconsolidation of PAB Trust II. The Company recorded $310,000 in other assets in the consolidated balance sheet at December 31, 2009 and 2008, respectively, for common capital securities issued by the issuer trusts. On September 4, 2009, the Company began exercising its right to defer quarterly interest payments for its Debentures. We have provided notice of our deferral of the two interest payments from September 30, 2009 to December 31, 2009. We expect to defer the interest payments into the foreseeable future. Under the terms of the agreements, the Company can defer the payment of interest for a period of up to twenty (20) consecutive quarterly interest payment periods. During this period of deferral, the Company is precluded from repurchasing shares of common stock and from paying dividends on outstanding common stock. We will continue to accrue for the interest payable after the deferral period in our consolidated statement of <strong>inc</strong>ome(loss). 81
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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
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 81: 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 125 and 126: (1) The listed stock option grants
Page 127 and 128: Potential Payments Upon Termination
Page 131 and 132: (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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