PAB Bankshares, Inc. is a bank holding company for The Park Avenue Bank (the Bank), which operates 13 branches located in seven counties in South Georgia; three branches and a loan production office located in three counties in North Georgia; and one branch and a loan production office located in two counties in Florida. At June 30, 2005, the company had total assets of $933.7 million. The company has offices in both smaller, rural communities as well as larger, metropolitan communities. The Bank's primary objective is to accept deposits and borrow additional funds as needed at low costs and invest those funds in a safe and sound manner in loans and investments at a higher yield in order to increase the return on its stockholders' investment. The Bank offers traditional banking products and services to commercial and individual customers. The product line includes, among other things, loans to small and medium-sized businesses, residential and commercial construction and development loans, commercial real estate loans, farmland and agricultural production loans, residential mortgage loans, home equity loans, consumer loans, and a variety of commercial and consumer demand, savings and time deposit products. It also offers Internet banking, on-line cash management, electronic bill payment services, safe deposit box rentals, telephone banking, credit and debit card services, and the availability of a network of ATMs. In addition, through an agreement with a third-party broker-dealer and investment advisory firm, the company is able to offer securities brokerage and investment advisory services. As of Dec. 31, 2004, apx. 86.8% of the Bank's loan portfolio was concentrated in loans secured by real estate. A substantial portion of these loans are in the Bank's primary market areas. In addition, a substantial portion of the other real estate owned is located in those same markets. Accordingly, the ultimate collectibility of the Bank's loan portfolio and the recovery of the carrying amount of other real estate owned are susceptible to changes in market conditions in the Bank's market areas.
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