VALDOSTA, Ga., Aug. 16, 2010 (GLOBE NEWSWIRE) -- PAB Bankshares, Inc. (Nasdaq:PABK), the parent company for The Park Avenue Bank, today announced its consolidated financial results for the three and six months ended June 30, 2010 and provided a progress report on the following key strategic initiatives:
- identify, isolate and measure the distressed assets on the Bank's balance sheet;
- continue to serve the core deposit customer base and maintain a strong liquidity position;
- shrink the balance sheet to reduce the pressure on the Bank's capital base;
- continue to implement operating efficiencies to reduce operating losses; and
- raise capital to support the Bank during this process.
After providing an additional $15.1 million to the allowance for loan losses and absorbing $4.5 million in losses and $2.0 million in carrying costs on other real estate owned, the Company posted a net loss of $21.1 million for the second quarter of 2010. "Cleaning up the problem assets on our balance sheet continued to weigh on the Company's performance during the second quarter. However, we believe that we have identified and isolated the problem assets on our balance sheet, and we have devoted substantial resources to resolve those problems," stated Company President and CEO Jay Torbert. "We are encouraged by the progress with our plans to eliminate the problem assets from our balance sheet. We are also encouraged that the level of problem assets appears to have stabilized over the last quarter. Despite the distressed market conditions, we expect continued improvement in the aggregate level of our problem assets over the next few quarters."
The aggregate balance of problem assets decreased $1.7 million during the second quarter of 2010 to $233.0 million. During the second quarter of 2010, the Company placed $23.8 million of loans on nonaccrual status, a continued improvement compared to $62.9 million and $95.4 million of loans placed on nonaccrual status during the first quarter of 2010 and the fourth quarter of 2009, respectively. Also during the second quarter, the Company sold approximately $9.1 million of foreclosed assets, an improvement compared to sales of $6.0 million and $3.9 million during the first quarter of 2010 and the fourth quarter of 2009, respectively. Furthermore, the level of loans past due 30 to 89 days, but still accruing interest, decreased $3.9 million during the second quarter to $22.1 million. "We do not expect the level of continued migration into the nonperforming loan category as we have experienced over the last four quarters," noted Torbert.
The Company continues to maintain a strong liquidity position to meet its expected funding needs. At June 30, 2010, approximately 32% of the Bank's balance sheet was in liquid assets. By comparison, at December 31, 2009, approximately 25% of the Bank's balance sheet was in liquid assets. It is the Bank's policy to maintain at least 15% of its balance sheet in liquid assets. Unfortunately, given the current low interest rate environment, carrying this additional $193 million in excess liquidity had a detrimental impact on the Company's earnings. It is estimated that this additional liquidity lowered the Company's net interest margin by 24 basis points and net interest income by $651,000 during the second quarter of 2010.
Over the last twelve months, the Company has shrunk the balance sheet to alleviate pressure on its capital levels. Since June 30, 2009, the Company has reduced its total assets by $166 million, or 13%, and total risk-weighted assets (regulatory defined) by $232 million, or 24%. The Company intends to continue to shrink its balance sheet, primarily through the liquidation of problem assets, over the next several quarters.
During the second quarter of 2010, the Company sold five branches to HeritageBank of the South, a subsidiary of Albany-based Heritage Financial Group (Nasdaq:HBOS). The sale resulted in the transfer of approximately $52 million in loans, $75 million in demand deposits, savings and money market accounts and $22 million in certificates of deposit. Excluding the branch sale, total deposits decreased $17 million and total loans decreased $51 million during the second quarter of 2010. As a result of this transaction, the Bank recorded a $693,000 gain on the sale of the five branches.
Since December 31, 2008, the Company has sold or closed ten of its 23 banking offices (43%). Since June 30, 2008, the Company has reduced its workforce by 35% (111 employees) and its "controllable" operating expenses by 23% (or a reduction of $1.5 million in the second quarter of 2010 compared to the second quarter of 2008, or $5.9 million on an annualized basis). The Company defines "controllable" operating expenses as its noninterest expenses exclusive of legal and accounting fees, foreclosure and repossession expenses and other noninterest expenses. With the recent sale of five branch locations in May and plans for further asset reductions, the Company expects to realize even greater cost savings going forward.
As of June 30, 2010, the Bank was considered "significantly undercapitalized" under applicable regulatory guidelines due to its leverage ratio of 2.98%. As discussed above, the Company continues to pursue various strategic alternatives to improve the capital ratios of the Bank and to reduce the level of its nonperforming assets. As a significantly undercapitalized institution, the Bank is subject to additional regulatory requirements and if the Company is unsuccessful in executing on its strategic initiatives, the Bank's capital position could further deteriorate and subject the Bank to further regulatory restrictions.
Additional information regarding the Company's financial results is provided in the tables accompanying this press release.
Non-GAAP Financial Measures
This press release, including the attached selected unaudited financial tables, which are a part of this release, contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles ("GAAP"). Management uses the non-GAAP measure of "net interest margin as adjusted for the impact of nonperforming loans and excess liquidity" in its analysis of the Company's performance. This measure, as used by the Company, adjusts net interest income to exclude the effects of nonperforming loans and excess liquidity carried on the balance sheet. Because certain of these items and their impact on the Company's performance are difficult to predict and unusual during these extraordinary economic times, management believes presentation of financial measures excluding the impact of those items provides useful supplemental information in evaluating the operating results of the Company's core business and assessing trends in the Company's core operations reflected in the current quarter and year-to-date results. These disclosures should not be viewed as a substitute for net interest margin as determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Please refer to the "Reconciliation of Non-GAAP Measures" in the attached tables for a more detailed analysis of this non-GAAP measure and the most directly comparable GAAP measures.
About PAB
The Company is a $1.11 billion bank holding company headquartered in Valdosta, Georgia, and its sole operating subsidiary is The Park Avenue Bank. Founded in 1956, the Bank operates through 13 branch offices in seven counties in Georgia and Florida. Additional information on the Bank's locations and the products and services offered by the Bank is available on the Internet at www.parkavebank.com. The Company's common stock is listed on the NASDAQ Global Select Market under the symbol PABK. More information on the Company is available on the Internet at www.pabbankshares.com.
Cautionary Note to Investors Regarding Forward-Looking Statements
Certain matters set forth in this news release are "forward-looking statements" within the meaning of the federal securities laws, including, without limitation, statements regarding our plans regarding our nonperforming assets, our outlook on asset quality and the adequacy of our capital and loan loss reserves, the impact of our nonperforming assets on our capital position, our liquidity position, the interest rate environment and economic conditions in general, and are based upon management's beliefs as well as assumptions made based on data currently available to management. When words like "believe", "anticipate", "intend", "plan", "expect", "estimate", "could", "should", "will" and similar expressions are used, you should consider them as identifying forward-looking statements. These forward-looking statements are not guarantees of future performance, and a variety of factors could cause the Company's actual results to differ materially from the anticipated or expected results expressed in these forward-looking statements. The following list, which is not intended to be an all-encompassing list of risks and uncertainties affecting the Company, summarizes several factors that could cause the Company's actual results to differ materially from those anticipated or expected in these forward-looking statements: (1) general economic conditions (both generally and in our markets) may continue to be less favorable than expected, resulting in, among other things, a further deterioration in credit quality and/or a reduction in demand for credit; (2) continued weakness in the real estate market has adversely affected us and may continue to adversely affect us, leading to higher loan charge-offs or an increase in our provision for loan losses; (3) the possibility that we may fail to comply with our Written Agreement with the Federal Reserve Bank of Atlanta and the Georgia Department of Banking and Finance, which could result in significant enforcement actions against us of increasing severity, up to and including a regulatory takeover of our bank subsidiary; (4) competitive pressures among depository and other financial institutions may increase significantly; (5) changes in the interest rate environment may reduce margins or the volumes or values of loans made by The Park Avenue Bank; (6) legislative or regulatory changes, including changes in accounting standards and compliance requirements, may adversely affect the businesses in which we are engaged; (7) competitors may have greater financial resources and develop products that enable such competitors to compete more successfully than we can; (8) our ability to attract and retain key personnel can be affected by the increased competition for experienced employees in the banking industry; (9) adverse changes may continue to occur in the bond and equity markets; (10) our ability to raise capital to protect against further deterioration in our loan portfolio may be limited due to unfavorable conditions in the equity markets; (11) war or terrorist activities may cause further deterioration in the economy or cause instability in credit markets; (12) restrictions or conditions imposed by our regulators on our operations may make it more difficult for us to achieve our goals; (13) economic, governmental or other factors may prevent the projected population, residential and commercial growth in the markets in which we operate; and (14) the risk factors discussed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2009. The Company undertakes no obligation to revise these statements following the date of this press release.
| PAB BANKSHARES, INC. | Period Ended | ||||
| SELECTED QUARTERLY FINANCIAL DATA | 06/30/10 | 03/31/10 | 12/31/09 | 09/30/09 | 06/30/09 |
| (Dollars in thousands except per share and other data) | |||||
| Summary of Operations: | |||||
| Interest income | $ 10,916 | $ 10,931 | $ 12,824 | $ 14,816 | $ 16,090 |
| Interest expense | 5,939 | 6,328 | 6,946 | 7,562 | 8,104 |
| Net interest income | 4,977 | 4,603 | 5,878 | 7,254 | 7,986 |
| Provision for loan losses | 15,114 | 2,000 | 16,000 | 31,438 | 2,000 |
| Other income | (1,477) | 206 | (946) | 889 | 2,487 |
| Other expense | 9,384 | 8,140 | 17,061 | 7,284 | 8,102 |
| Income (loss) before income tax expense (benefit) | (20,998) | (5,331) | (28,129) | (30,579) | 371 |
| Income tax expense (benefit) | 95 | -- | 3,133 | (10,623) | 29 |
| Net income (loss) | $ (21,093) | $ (5,331) | $ (31,262) | $ (19,956) | $ 342 |
| Net interest income on a tax-equivalent basis | $ 5,024 | $ 4,654 | $ 5,937 | $ 7,321 | $ 8,065 |
| Net charge-offs | $ 11,125 | $ 785 | $ 26,686 | $ 11,157 | $ 2,684 |
| Per Share Ratios: | |||||
| Net income - basic | $ (1.53) | $ (0.39) | $ (2.27) | $ (1.93) | $ 0.04 |
| Net income - diluted | (1.53) | (0.39) | (2.27) | (1.93) | 0.04 |
| Dividends declared for period | -- | -- | -- | -- | -- |
| Dividend payout ratio | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Book value at end of period | $ 1.86 | $ 3.34 | $ 3.67 | $ 6.03 | $ 9.48 |
| Common Share Data: | |||||
| Outstanding at period end | 13,795,040 | 13,795,040 | 13,795,040 | 13,795,040 | 9,324,407 |
| Weighted average outstanding | 13,795,040 | 13,795,040 | 13,795,040 | 10,344,878 | 9,324,407 |
| Diluted weighted average outstanding | 13,795,040 | 13,795,040 | 13,795,040 | 10,344,878 | 9,324,407 |
| Selected Average Balances: | |||||
| Total assets | $ 1,194,534 | $ 1,240,787 | $ 1,264,999 | $ 1,283,374 | $ 1,310,819 |
| Earning assets | 1,068,472 | 1,101,266 | 1,151,341 | 1,183,823 | 1,221,385 |
| Loans | 720,845 | 783,524 | 871,674 | 914,699 | 930,131 |
| Deposits | 1,019,491 | 1,057,529 | 1,044,674 | 1,042,085 | 1,069,685 |
| Stockholders' equity | 43,736 | 49,721 | 82,778 | 91,670 | 90,552 |
| Selected Period End Balances: | |||||
| Total assets | $ 1,111,082 | $ 1,249,684 | $ 1,231,945 | $ 1,251,219 | $ 1,277,016 |
| Earning assets | 996,958 | 1,113,021 | 1,095,456 | 1,152,966 | 1,186,897 |
| Loans | 654,525 | 757,732 | 805,314 | 891,981 | 919,698 |
| Allowance for loan losses | 34,518 | 30,529 | 29,314 | 40,000 | 19,719 |
| Goodwill | -- | -- | -- | 5,985 | 5,985 |
| Deposits | 953,414 | 1,067,207 | 1,045,215 | 1,029,638 | 1,036,382 |
| Stockholders' equity | 25,601 | 46,020 | 50,587 | 83,239 | 88,413 |
| Tier 1 regulatory capital | 33,664 | 54,647 | 59,861 | 79,409 | 92,159 |
| Performance Ratios: | |||||
| Return on average assets | -7.08% | -1.74% | -9.80% | -6.17% | 0.10% |
| Return on average stockholders' equity | -193.44% | -43.48% | -149.84% | -86.37% | 1.51% |
| Net interest margin | 1.89% | 1.71% | 2.05% | 2.45% | 2.65% |
| Net interest margin, adjusted for impact of nonperforming loans & excess liquidity | 2.96% | 2.96% | 3.08% | 3.06% | 3.13% |
| Efficiency ratio (excluding the following items): | 140.83% | 131.90% | 146.92% | 82.11% | 79.50% |
| Securities gains (losses) included in other income | $ 686 | $ 145 | $ 1,191 | $ 93 | $ 756 |
| Other gains (losses) included in other income | (3,802) | (1,456) | (3,738) | (755) | (394) |
| Goodwill impairment | -- | -- | 5,985 | -- | -- |
| Selected Asset Quality Factors: | |||||
| Nonaccrual loans | $ 136,239 | $ 138,290 | $ 92,272 | $ 64,808 | $ 70,232 |
| Loans 90 days or more past due and still accruing | 206 | -- | 15 | 4 | 190 |
| Other impaired loans (troubled-debt restructurings) | -- | 880 | 881 | -- | 84 |
| Other real estate and repossessions | 96,528 | 95,493 | 92,117 | 55,195 | 37,417 |
| Asset Quality Ratios: | |||||
| Net charge-offs to average loans (annualized YTD) | 3.19% | 0.41% | 4.50% | 2.09% | 0.73% |
| Nonperforming loans to total loans | 20.85% | 18.37% | 11.57% | 7.27% | 7.67% |
| Nonperforming assets to total assets | 20.97% | 18.78% | 15.04% | 9.59% | 8.45% |
| Allowance for loan losses to total loans | 5.27% | 4.03% | 3.64% | 4.48% | 2.14% |
| Allowance for loan losses to nonperforming loans | 25.30% | 21.94% | 31.46% | 61.72% | 27.97% |
| Other Selected Ratios and Nonfinancial Data: | |||||
| Average loans to average earning assets | 67.47% | 71.15% | 75.71% | 77.27% | 76.15% |
| Average loans to average deposits | 70.71% | 74.09% | 83.44% | 87.78% | 86.95% |
| Average stockholders' equity to average assets | 3.66% | 4.01% | 6.54% | 7.14% | 6.91% |
| Full-time equivalent employees | 209 | 264 | 270 | 266 | 269 |
| Bank branch offices | 13 | 18 | 18 | 18 | 18 |
| Bank ATMs | 22 | 27 | 27 | 26 | 26 |
| PAB BANKSHARES, INC. | Period Ended | ||||
| SELECTED YEAR-TO-DATE FINANCIAL DATA | 06/30/10 | 03/31/10 | 12/31/09 | 09/30/09 | 06/30/09 |
| (Dollars in thousands except per share and other data) | |||||
| Summary of Operations: | |||||
| Interest income | $ 21,847 | $ 10,931 | $ 59,881 | $ 47,057 | $ 32,241 |
| Interest expense | 12,267 | 6,328 | 31,571 | 24,625 | 17,062 |
| Net interest income | 9,580 | 4,603 | 28,310 | 22,432 | 15,179 |
| Provision for loan losses | 17,114 | 2,000 | 51,188 | 35,188 | 3,750 |
| Other income | (1,271) | 206 | 4,535 | 5,481 | 4,592 |
| Other expense | 17,524 | 8,140 | 40,573 | 23,512 | 16,227 |
| Income (loss) before income tax expense (benefit) | (26,329) | (5,331) | (58,916) | (30,787) | (206) |
| Income tax expense (benefit) | 95 | -- | (7,744) | (10,876) | (254) |
| Net income (loss) | $ (26,424) | $ (5,331) | $ (51,172) | $ (19,911) | $ 48 |
| Net interest income on a tax-equivalent basis | $ 9,678 | $ 4,654 | $ 28,634 | $ 22,697 | $ 15,376 |
| Net charge-offs | $ 11,910 | $ 785 | $ 41,247 | $ 14,562 | $ 3,405 |
| Per Share Ratios: | |||||
| Net income - basic | $ (1.92) | $ (0.39) | $ (4.78) | $ (2.06) | $ 0.01 |
| Net income - diluted | (1.92) | (0.39) | (4.78) | (2.06) | 0.01 |
| Dividends declared for the period | -- | -- | -- | -- | -- |
| Dividend payout ratio | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Common Share Data: | |||||
| Weighted average outstanding | 13,795,040 | 13,795,040 | 10,708,466 | 9,668,302 | 9,324,407 |
| Diluted weighted average outstanding | 13,795,040 | 13,795,040 | 10,708,466 | 9,668,302 | 9,324,407 |
| Selected Average Balances: | |||||
| Total assets | $ 1,217,532 | $ 1,240,787 | $ 1,307,027 | $ 1,317,180 | $ 1,334,363 |
| Earning assets | 1,084,778 | 1,101,266 | 1,205,340 | 1,223,538 | 1,243,724 |
| Loans | 752,011 | 783,524 | 915,674 | 930,502 | 938,534 |
| Deposits | 1,038,405 | 1,057,529 | 1,069,352 | 1,077,668 | 1,095,755 |
| Stockholders' equity | 46,712 | 49,721 | 89,140 | 91,285 | 91,089 |
| Performance Ratios: | |||||
| Return on average assets | -4.38% | -1.74% | -3.92% | -2.02% | 0.01% |
| Return on average stockholders' equity | -114.07% | -43.48% | -57.41% | -29.16% | 0.10% |
| Net interest margin | 1.80% | 1.71% | 2.38% | 2.48% | 2.49% |
| Net interest margin, adjusted for impact of nonperforming loans and excess liquidity | 2.96% | 2.96% | 3.02% | 3.00% | 2.98% |
| Efficiency ratio (excluding the following items): | 136.53% | 131.90% | 95.74% | 82.24% | 82.30% |
| Securities gains (losses) included in other income | $ 830 | $ 145 | $ 2,056 | $ 865 | $ 773 |
| Other gains (losses) included in other income | (5,258) | (1,456) | (5,015) | (1,276) | (522) |
| Goodwill impairment | -- | -- | 5,985 | -- | -- |
| Other Selected Ratios: | |||||
| Average loans to average earning assets | 69.32% | 71.15% | 75.97% | 76.05% | 75.46% |
| Average loans to average deposits | 72.42% | 74.09% | 85.63% | 86.34% | 85.65% |
| Average stockholders' equity to average assets | 3.84% | 4.01% | 6.82% | 6.93% | 6.83% |
| PAB BANKSHARES, INC. | |||||
| LOAN AND DEPOSIT | |||||
| PORTFOLIO BY MARKET | South Georgia | North Georgia | Florida | ||
| As of June 30, 2010 | Market | Market | Market | Treasury | Total |
| (Dollars in Thousands) | |||||
| Loans | |||||
| Commercial and financial | $ 25,152 | $ 34,766 | $ 1,713 | $ 16,243 | $ 77,874 |
| Agricultural (including loans secured by farmland) | 31,305 | 1,847 | 5,286 | -- | 38,438 |
| Real estate - construction and development | 57,767 | 71,346 | 24,632 | 270 | 154,015 |
| Real estate - commercial | 74,851 | 134,912 | 21,241 | 6,002 | 237,006 |
| Real estate - residential | 82,459 | 36,382 | 11,094 | 6,161 | 136,096 |
| Installment loans to individuals and others | 6,679 | 447 | 250 | 3,858 | 11,234 |
| 278,213 | 279,700 | 64,216 | 32,534 | 654,663 | |
| Deferred loan fees and unearned interest, net | 87 | (95) | (114) | (16) | (138) |
| Total loans | 278,300 | 279,605 | 64,102 | 32,518 | 654,525 |
| Allowance for loan losses | (9,135) | (13,837) | (2,636) | (8,910) | (34,518) |
| Net loans | $ 269,165 | $ 265,768 | $ 61,466 | $ 23,608 | $ 620,007 |
| Percentage of total | 43.4% | 42.9% | 9.9% | 3.8% | 100.0% |
| Deposits | |||||
| Noninterest-bearing demand | $ 62,543 | $ 16,827 | $ 2,822 | $ 4,342 | $ 86,534 |
| Interest-bearing demand and savings | 127,463 | 25,355 | 28,244 | 468 | 181,530 |
| Time less than $100,000 | 142,793 | 43,776 | 93,985 | 510 | 281,064 |
| Time greater than or equal to $100,000 | 101,676 | 33,433 | 47,864 | -- | 182,973 |
| Retail placed in CDARs program | 6,207 | 642 | -- | -- | 6,849 |
| Brokered time | -- | -- | -- | 97,120 | 97,120 |
| Internet time | -- | -- | -- | 117,344 | 117,344 |
| Total deposits | $ 440,682 | $ 120,033 | $ 172,915 | $ 219,784 | $ 953,414 |
| Percentage of total | 46.2% | 12.6% | 18.1% | 23.1% | 100.0% |
| PAB BANKSHARES, INC. | |||||||||
| LOAN PORTFOLIO | |||||||||
| SUMMARY | |||||||||
| The amount of loans outstanding at the indicated dates is presented in the following table according to type of loan: | |||||||||
| Period Ended | |||||||||
| 06/30/10 | 03/31/10 | 12/31/09 | 09/30/09 | 06/30/09 | |||||
| (Dollars In Thousands) | |||||||||
| Commercial and financial | $ 77,874 | $ 78,395 | $ 84,771 | $ 88,863 | $ 84,599 | ||||
|
Agricultural (including loans secured by farmland) |
38,438 | 42,396 | 40,215 | 44,470 | 45,774 | ||||
|
Real estate - construction and development |
154,015 | 181,318 | 204,663 | 269,804 | 290,949 | ||||
| Real estate - commercial | 237,006 | 264,341 | 275,927 | 283,404 | 285,731 | ||||
| Real estate - residential | 136,096 | 171,843 | 174,879 | 181,048 | 183,074 | ||||
|
Installment loans to individuals and other loans |
11,234 | 19,542 | 24,949 | 24,561 | 29,790 | ||||
| 654,663 | 757,835 | 805,404 | 892,150 | 919,917 | |||||
|
Deferred loan fees and unearned interest, net |
(138) | (103) | (90) | (169) | (219) | ||||
| Total loans | 654,525 | 757,732 | 805,314 | 891,981 | 919,698 | ||||
| Allowance for loan losses | (34,518) | (30,529) | (29,314) | (40,000) | (19,719) | ||||
| Net loans | $ 620,007 | $ 727,203 | $ 776,000 | $ 851,981 | $ 899,979 | ||||
| The percentage of loans outstanding at the indicated dates is presented in the following table according to type of loan: | |||||||||
| Period Ended | |||||||||
| 06/30/10 | 03/31/10 | 12/31/09 | 09/30/09 | 06/30/09 | |||||
| Commercial and financial | 11.90% | 10.35% | 10.53% | 9.96% | 9.20% | ||||
|
Agricultural (including loans secured by farmland) |
5.87% | 5.59% | 4.99% | 4.99% | 4.98% | ||||
|
Real estate - construction and development |
23.53% | 23.93% | 25.41% | 30.25% | 31.63% | ||||
| Real estate - commercial | 36.21% | 34.88% | 34.26% | 31.77% | 31.07% | ||||
| Real estate - residential | 20.79% | 22.68% | 21.72% | 20.30% | 19.90% | ||||
|
Installment loans to individuals and other loans |
1.72% | 2.58% | 3.10% | 2.75% | 3.24% | ||||
| 100.02% | 100.01% | 100.01% | 100.02% | 100.02% | |||||
|
Deferred loan fees and unearned interest, net |
-0.02% | -0.01% | -0.01% | -0.02% | -0.02% | ||||
| Total loans | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | ||||
| Allowance for loan losses | -5.27% | -4.03% | -3.64% | -4.48% | -2.14% | ||||
| Net loans | 94.73% | 95.97% | 96.36% | 95.52% | 97.86% | ||||
| PAB BANKSHARES, INC. | |||||||||
| DEPOSIT PORTFOLIO | |||||||||
| SUMMARY | |||||||||
| The amounts on deposit at the indicated dates are presented in the following table according to type of deposit account: | |||||||||
| Period Ended | |||||||||
| 06/30/10 | 03/31/10 | 12/31/09 | 09/30/09 | 06/30/09 | |||||
| (Dollars In Thousands) | |||||||||
| Noninterest-bearing demand | $ 86,534 | $ 95,228 | $ 100,458 | $ 106,573 | $ 108,973 | ||||
| Interest-bearing demand and savings | 181,530 | 252,662 | 250,232 | 241,073 | 245,459 | ||||
| Time less than $100,000 | 281,064 | 302,125 | 305,381 | 317,403 | 320,834 | ||||
| Time greater than or equal to $100,000 | 182,973 | 191,579 | 179,325 | 184,339 | 191,852 | ||||
| Retail placed in CDARs program | 6,849 | 12,819 | 29,532 | 41,799 | 35,190 | ||||
| Brokered time | 97,120 | 113,701 | 133,012 | 119,237 | 134,074 | ||||
| Internet time | 117,344 | 99,093 | 47,275 | 19,214 | -- | ||||
| Total deposits | $ 953,414 | $ 1,067,207 | $ 1,045,215 | $ 1,029,638 | $ 1,036,382 | ||||
| The percentage of total deposits at the indicated dates is presented in the following table according to type of deposit account: | |||||||||
| Period Ended | |||||||||
| 06/30/10 | 03/31/10 | 12/31/09 | 09/30/09 | 06/30/09 | |||||
| Noninterest-bearing demand | 9.07% | 8.92% | 9.61% | 10.35% | 10.51% | ||||
| Interest-bearing demand and savings | 19.04% | 23.68% | 23.94% | 23.41% | 23.68% | ||||
| Time less than $100,000 | 29.48% | 28.31% | 29.22% | 30.83% | 30.96% | ||||
| Time greater than or equal to $100,000 | 19.19% | 17.95% | 17.15% | 17.90% | 18.51% | ||||
| Retail placed in CDARs program | 0.72% | 1.20% | 2.83% | 4.06% | 3.40% | ||||
| Brokered time | 10.19% | 10.65% | 12.73% | 11.58% | 12.94% | ||||
| Internet time | 12.31% | 9.29% | 4.52% | 1.87% | 0.00% | ||||
| Total deposits | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | ||||
| PAB BANKSHARES, INC. | |||||||||||||
| YIELD ANALYSIS | |||||||||||||
| The following tables detail the average balances of interest-earning assets and interest-bearing liabilities, the amount of interest earned and paid, and the average yields and rates for the three months and six months ended June 30, 2010 and 2009. Federally tax-exempt income is presented on a taxable-equivalent basis assuming a 34% Federal tax rate. Loan average balances include loans on nonaccrual status. | |||||||||||||
|
For the Three Months Ended June 30, |
2010 |
2009 |
|||||||||||
|
Average Balance |
Interest Income/ Expense |
Average Yield/ Rate |
Average Balance |
Interest Income/ Expense |
Average Yield/ Rate |
||||||||
| (Dollars In Thousands) | |||||||||||||
| Interest-earning assets: | |||||||||||||
| Loans | $ 720,845 | $ 9,239 | 5.14% | $ 930,131 | $ 14,029 | 6.05% | |||||||
| Investment securities: | |||||||||||||
| Taxable | 156,055 | 1,470 | 3.78% | 156,453 | 1,835 | 4.70% | |||||||
| Nontaxable | 9,044 | 139 | 6.16% | 15,245 | 236 | 6.22% | |||||||
| Other short-term investments | 182,528 | 115 | 2.50% | 119,556 | 73 | 0.24% | |||||||
| Total interest-earning assets | $ 1,068,472 | $ 10,963 | 4.12% | $ 1,221,385 | $ 16,173 | 5.31% | |||||||
| Interest-bearing liabilities: | |||||||||||||
| Demand deposits | $ 189,442 | $ 308 | 0.65% | $ 215,201 | $ 294 | 0.55% | |||||||
| Savings deposits | 34,245 | 21 | 0.25% | 36,467 | 23 | 0.25% | |||||||
| Time deposits | 701,053 | 4,488 | 2.57% | 706,348 | 6,409 | 3.64% | |||||||
| FHLB advances | 89,897 | 866 | 3.86% | 105,532 | 1,074 | 4.08% | |||||||
| Notes payable | 30,310 | 247 | 3.27% | 30,310 | 270 | 3.58% | |||||||
| Other short-term borrowings | 5,041 | 9 | 0.74% | 8,889 | 34 | 1.53% | |||||||
| Total interest-bearing liabilities | $ 1,049,988 | $ 5,939 | 2.27% | $ 1,102,747 | $ 8,104 | 2.95% | |||||||
| Interest rate spread | 1.85% | 2.36% | |||||||||||
| Net interest income | $ 5,024 | $ 8,069 | |||||||||||
| Net interest margin | 1.89% | 2.65% | |||||||||||
| For the Six Months Ended June 30, |
2010 |
2009 |
|||||||||||
|
Average Balance |
Interest Income/ Expense |
Average Yield/ Rate |
Average Balance |
Interest Income/ Expense |
Average Yield/ Rate |
||||||||
| (Dollars In Thousands) | |||||||||||||
| Interest-earning assets: | |||||||||||||
| Loans | $ 752,011 | $ 18,787 | 5.04% | $ 938,534 | $ 27,979 | 6.01% | |||||||
| Investment securities: | |||||||||||||
| Taxable | 138,668 | 2,665 | 3.88% | 153,156 | 3,726 | 4.91% | |||||||
| Nontaxable | 9,414 | 290 | 6.22% | 19,279 | 590 | 6.08% | |||||||
| Other short-term investments | 184,686 | 204 | 0.22% | 132,754 | 153 | 0.23% | |||||||
| Total interest-earning assets | $ 1,084,779 | $ 21,946 | 4.08% | $ 1,243,723 | $ 32,448 | 5.26% | |||||||
| Interest-bearing liabilities: | |||||||||||||
| Demand deposits | $ 203,913 | $ 628 | 0.62% | $ 214,837 | $ 585 | 0.55% | |||||||
| Savings deposits | 35,843 | 44 | 0.25% | 35,340 | 44 | 0.25% | |||||||
| Time deposits | 701,598 | 9,358 | 2.69% | 737,995 | 13,758 | 3.76% | |||||||
| FHLB advances | 89,811 | 1,725 | 3.87% | 107,110 | 2,152 | 4.05% | |||||||
| Notes payable | 30,310 | 489 | 3.25% | 25,780 | 453 | 3.55% | |||||||
| Other short-term borrowings | 6,446 | 24 | 0.75% | 8,910 | 71 | 1.61% | |||||||
| Total interest-bearing liabilities | $ 1,067,921 | $ 12,268 | 2.32% | $ 1,129,972 | $ 17,063 | 3.05% | |||||||
| Interest rate spread | 1.76% | 2.21% | |||||||||||
| Net interest income | $ 9,678 | $ 15,385 | |||||||||||
| Net interest margin | 1.80% | 2.49% | |||||||||||
| PAB BANKSHARES, INC. | |||||
| NONPERFORMING ASSETS | |||||
| The nonperforming loans consisted of: | |||||
| Category | Net Carrying Value* |
Collateral Description |
Average Carrying Value/Unit |
||
|
Construction & Development: undeveloped land |
$50.7 million | 31 parcels of undeveloped land totaling 4,832 acres |
$8,500 per residential acre $12,400 per commercial acre |
||
|
Construction & Development: developed lots |
$6.6 million | 230 residential lots | $28,700 per lot | ||
| 1-4 Family Residential | $14.4 million | 103 houses | $139,800 per house | ||
| Commercial Real Estate | $41.5 million | 39 commercial properties | $1.1 million per property | ||
| Agriculture | $6.8 million | 6 parcels of farm land totaling 1,272 acres | $5,300 per acre | ||
| Multi-Family Residential | $1.7 million | 7 condominium units | $243,000 per unit | ||
| Commercial and Industrial | $2.1 million | Non-real estate collateral | $66,100 per loan | ||
| Consumer | $136,000 | Non-real estate collateral | $6,800 per loan | ||
| Total | $123.9 million | ||||
| * The term "net carrying value" represents the book value of the loan less any allocated allowance for loan losses. | |||||
| Foreclosed real estate consists of: | |||||
| Category | Book Value | Collateral Description | Average Carrying Value/Unit | ||
|
Construction & Development: undeveloped land |
$57.1 million | 54 parcels of undeveloped land totaling 1,795 acres |
$14,200 per residential acre $85,000 per commercial acre |
||
|
Construction & Development: developed lots |
$17.5 million | 862 residential lots | $20,300 per lot | ||
| 1-4 Family Residential | $8.6 million | 59 houses | $145,500 per house | ||
| Commercial Real Estate | $7.2 million | 19 commercial properties | $378,000 per property | ||
| Multi-Family Residential | $5.2 million | 13 condominium units | $402,000 per unit | ||
| Total | $95.6 million | ||||
| PAB BANKSHARES, INC. | ||||||||
| CREDIT QUALITY | ||||||||
| Information on our NPAs for the previous three quarters follow: | ||||||||
| Second Quarter 2010 | First Quarter 2010 | |||||||
| (in thousands) |
Non-performing Loans |
Foreclosed Properties |
Total NPAs |
Non-performing Loans |
Foreclosed Properties |
Total NPAs |
||
| NPAs by Category: | ||||||||
|
Construction & Development: undeveloped land |
$ 55,589 | $ 57,057 | $ 112,646 | $ 63,005 | $ 43,339 | $ 106,344 | ||
|
Construction & Development: developed lots |
7,419 | 17,535 | 24,954 | 9,537 | 17,847 | 27,384 | ||
| 1-4 Family Residential | 16,746 | 8,587 | 25,333 | 17,696 | 9,279 | 26,975 | ||
| Commercial Real Estate | 43,657 | 7,184 | 50,841 | 36,081 | 19,130 | 55,211 | ||
| Agriculture | 8,497 | -- | 8,497 | 9,666 | -- | 9,666 | ||
| Multi-Family Residential | 1,793 | 5,223 | 7,016 | 1,455 | 4,975 | 6,430 | ||
| Total Real Estate | 133,701 | 95,586 | 229,287 | 137,440 | 94,570 | 232,010 | ||
| Commercial and Industrial | 2,589 | 924 | 3,513 | 1,343 | 868 | 2,211 | ||
| Consumer | 155 | 18 | 173 | 387 | 55 | 442 | ||
| Total Non-Real Estate | 2,744 | 942 | 3,686 | 1,730 | 923 | 2,653 | ||
| Total NPAs | $ 136,445 | $ 96,528 | $ 232,973 | $ 139,170 | $ 95,493 | $ 234,663 | ||
| NPAs by Market: | ||||||||
| South Georgia | $ 30,810 | $ 5,733 | $ 36,543 | $ 38,307 | $ 3,237 | $ 41,544 | ||
| North Georgia | 67,421 | 74,697 | 142,118 | 68,310 | 75,108 | 143,418 | ||
| Florida | 38,208 | 16,098 | 54,306 | 32,553 | 17,148 | 49,701 | ||
| Treasury | 6 | -- | 6 | -- | -- | -- | ||
| Total NPAs | $ 136,445 | $ 96,528 | $ 232,973 | $ 139,170 | $ 95,493 | $ 234,663 | ||
| NPA Activity | ||||||||
| Beginning Balance | $ 139,170 | $ 95,493 | $ 234,663 | $ 93,168 | $ 92,117 | $ 185,285 | ||
| Loans placed on nonaccrual | 23,774 | 23,774 | 62,911 | 62,911 | ||||
| Payments Received | (2,221) | (2,221) | (6,295) | (6,295) | ||||
| Loan charge-offs | (10,972) | (10,972) | (434) | (434) | ||||
| Foreclosures | (13,306) | 13,505 | 199 | (10,180) | 10,456 | 276 | ||
| Capitalized costs | -- | -- | -- | -- | -- | -- | ||
| Property sales | -- | (9,137) | (9,137) | -- | (5,966) | (5,966) | ||
| Write downs | -- | (3,333) | (3,333) | -- | (1,114) | (1,114) | ||
| Ending Balance | $ 136,445 | $ 96,528 | $ 232,973 | $ 139,170 | $ 95,493 | $ 234,663 | ||
| Fourth Quarter 2009 | |||
| (in thousands) |
Non-performing Loans |
Foreclosed Properties |
Total NPAs |
| NPAs by Category: | |||
|
Construction & Development: undeveloped land |
$ 39,673 | $ 39,340 | $ 79,013 |
|
Construction & Development: developed lots |
5,559 | 17,797 | 23,356 |
| 1-4 Family Residential | 11,621 | 8,595 | 20,216 |
| Commercial Real Estate | 31,381 | 19,081 | 50,462 |
| Agriculture | 1,857 | -- | 1,857 |
| Multi-Family Residential | 2,260 | 6,400 | 8,660 |
| Total Real Estate | 92,351 | 91,213 | 183,564 |
| Commercial and Industrial | 439 | 868 | 1,307 |
| Consumer | 378 | 36 | 414 |
| Total Non-Real Estate | 817 | 904 | 1,721 |
| Total NPAs | $ 93,168 | $ 92,117 | $ 185,285 |
| NPAs by Market: | |||
| South Georgia | $ 29,525 | $ 2,882 | $ 32,407 |
| North Georgia | 37,721 | 72,000 | 109,721 |
| Florida | 25,907 | 17,235 | 43,142 |
| Treasury | 15 | -- | 15 |
| Total NPAs | $ 93,168 | $ 92,117 | $ 185,285 |
| NPA Activity | |||
| Beginning Balance | $ 64,812 | $ 55,195 | $ 120,007 |
| Loans placed on nonaccrual | 95,390 | -- | 95,390 |
| Payments Received | (2,449) | -- | (2,449) |
| Loan charge-offs | (22,226) | -- | (22,226) |
| Foreclosures | (42,359) | 44,304 | 1,945 |
| Capitalized costs | -- | 1 | 1 |
| Property sales | -- | (3,870) | (3,870) |
| Write downs | -- | (3,513) | (3,513) |
| Ending Balance | $ 93,168 | $ 92,117 | $ 185,285 |
| PAB BANKSHARES, INC. | |||||
| RECONCILIATION OF NON-GAAP MEASURE | |||||
| The reconciliation of net interest margin to net interest margin, as adjusted for the impact of nonperforming loans and excess liquidity follows: | |||||
| 06/30/10 | 03/31/10 | 12/31/09 | 09/30/09 | 06/30/09 | |
| SELECTED QUARTERLY FINANCIAL DATA: | |||||
| Net interest margin: | 1.89% | 1.71% | 2.05% | 2.45% | 2.65% |
| Impact of nonperforming loans | 0.83% | 1.03% | 0.88% | 0.47% | 0.34% |
| Impact of excess liquidity | 0.24% | 0.22% | 0.15% | 0.14% | 0.14% |
|
Net interest margin, as adjusted for impact of nonperforming loans and excess liquidity |
2.96% | 2.96% | 3.08% | 3.06% | 3.13% |
| SELECTED YEAR-TO-DATE FINANCIAL DATA: | |||||
| Net interest margin: | 1.80% | 1.71% | 2.38% | 2.48% | 2.49% |
| Impact of nonperforming loans | 0.93% | 1.03% | 0.49% | 0.37% | 0.33% |
| Impact of excess liquidity | 0.23% | 0.22% | 0.15% | 0.15% | 0.16% |
|
Net interest margin, as adjusted for impact of nonperforming loans and excess liquidity |
2.96% | 2.96% | 3.02% | 3.00% | 2.98% |