Posts Record Annual Earnings and Earnings Per Share
Announces the Opening of a Forsyth County Office
VALDOSTA, Ga., Jan. 31, 2007 (PRIME NEWSWIRE) -- PAB Bankshares, Inc. (Nasdaq:PABK) today announced the fourth quarter and full-year 2006 financial results for the Company. For the three months ended December 31, 2006, the Company reported net income of $3.3 million, or $0.34 per diluted share, which was comparable to the $3.3 million, or $0.34 per diluted share, reported for the same period in 2005. For the twelve months ended December 31, 2006, the Company reported record annual net income of $13.7 million, or $1.41 per diluted share, a 10% increase compared to $12.5 million, or $1.28 per diluted share, in 2005.
"We are proud to close the books on another record year in earnings for the Company. However, a decline in loan volume, an increase in overhead for facilities and personnel and narrower spreads for new loan business contributed to our relatively flat results for the fourth quarter. Although we are optimistic about our future, we expect that these factors will continue to impact us during the first half of 2007," stated President and CEO M. Burke Welsh, Jr. "A significant portion of our business is in residential construction and development lending to borrowers in our markets. In recent months, we have seen a slowdown of activity in this segment of our business as many of our borrowers are re-evaluating market conditions before entering into new projects. We believe that this slowdown is healthy and maybe even overdue for some markets. Based on the favorable demographic projections for our markets, we believe that this slowdown will be temporary, and barring an unexpected shock to the economy, we believe market conditions should improve at some point in 2007," added Welsh.
At December 31, 2006, the Company reported $1.12 billion in total assets, a $103.5 million, or 10%, increase since December 31, 2005. Total loans increased $67.4 million, or 9%, to $820.3 million, and total deposits increased $92.8 million, or 11%, to $908.5 million during 2006. The increase in assets and deposits includes $24.2 million in public funds temporarily deposited in December 2006. Excluding these public fund deposits, total assets and total deposits each increased 8% during 2006.
For the three months ended December 31, 2006, the Company's return on average assets ("ROA") was 1.18% and its return on average equity ("ROE") was 13.76%, compared to a 1.31% ROA and a 15.03% ROE for the same period in 2005. The net income for the year ended December 31, 2006 resulted in a 14.99% ROE and a 1.29% ROA, compared to a 14.58% ROE and a 1.31% ROA for the year ended December 31, 2005.
Office Expansion
"I am pleased to announce the hiring of two experienced commercial lenders to open an office for us in one of the fastest growing counties in the nation," reported Welsh. The Company has hired Tommy Heydet and Dottie Williams to open a loan production office in Cumming, Forsyth County, Georgia. "We have been looking for someone to lead our entrance into this market on the north side of Atlanta for several years. These seasoned professionals came to us having recently been through a series of mergers and acquisitions with another Atlanta institution, looking for some stability and opportunity to continue to bank their customers," added Welsh.
"Within a four-month span, we will have opened three branches and a loan production office. While we do not expect the investments that we are making in these communities to be profitable in 2007, we do expect these investments to grow and generate profitable opportunities for us and our shareholders for many years to follow," stated Welsh. In October 2006, the Company opened its newly constructed Athens branch in Oconee County, Georgia. In December, the Company opened a full-service branch in Jacksonville, Duval County, Florida. This is the first branch that the Company has opened in Florida since its acquisition of a small community bank in Ocala at the end of 2000. In early February, the Company will open a full-service branch in Snellville, Gwinnett County, Georgia to augment the loan production office opened in that market in December 2005.
Net Interest Margin
The Company's net interest margin was 4.09% for the fourth quarter of 2006, a 36 basis point decline compared to the 4.45% net interest margin in the fourth quarter of 2005 and a 39 basis point decline compared to the net interest margin for the third quarter of 2006 of 4.48%. "The decline in our net interest margin is the combined result of a decline in loan volume, narrower spreads due to an inverted interest rate curve and the continued upward repricing of our deposits and other borrowings. The decline in loan volume also resulted in a decline in the generation of loan fee income," stated Welsh. The Company's net interest margin for 2006 was 4.43%, a three basis point improvement compared to the 4.40% net interest margin for 2005.
Asset Quality
At December 31, 2006, the Company's allowance for loan losses represented 1.34% of total loans, compared to 1.47% at the end of 2005. The decrease in the level of the allowance is reflective of the overall condition of the Company's asset quality. At December 31, 2006, the Company reported total nonperforming assets of $5.0 million, or 0.45% of total assets, a $2.9 million decrease compared to total nonperforming assets of $7.9 million, or 0.78% of total assets, as of December 31, 2005. The Company reported $2.3 million in loans past due more than 29 days and still accruing interest, representing 0.21% of total assets, at December 31, 2006, which is a $1.0 million increase compared to $1.3 million in loans past due more than 29 days and still accruing interest, representing 0.13% of total assets, as of December 31, 2005. The Company recovered $320,000, or 0.16% of its average loans outstanding, in previously charged-off loans during the fourth quarter of 2006. For the year, the Company reported net charge-offs of $73,000, or 0.01% of average loans outstanding.
Conference Call
Management will host a conference call and webcast to discuss the Company's quarterly and annual results at 10:00 AM Eastern on Monday, February 5, 2007. The conference call will be broadcast by Vcall via the Internet using Windows Media Player. The webcast URL is http://www.vcall.com/IC/CEPage.asp?ID=113051. A link to the webcast is posted on the "Investor Relations" section of the Company's website at www.pabbankshares.com. Interested shareholders, industry analysts and members of the news media and the investment community wanting to participate in the live question and answer session following management's presentation may access the conference call by dialing (toll free) 877-407-8033 or (international) 201-689-8033. Shortly following the call and at any time for at least 30 days thereafter, interested parties may access an archived version of the webcast on the "Investor Relations" section of the Company's website or by dialing (toll free) 877-660-6853 or (International) 201-612-7415. The following replay passcodes will be required for playback access: the account number is 286 and the conference identification number is 227970.
About PAB
The Company's sole operating subsidiary is The Park Avenue Bank. Both the Company and the Bank are headquartered in Valdosta, Georgia. The Bank was established in 1956 by Mr. James L. Dewar, Sr. in a small office at the corner of Park Avenue and Ashley Street in Valdosta. With the opening of the new branch in early February, the Bank will have 20 branch offices and four loan production offices in 16 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. Prior to November 1, 2005, the Company's common stock was listed on the American Stock Exchange under the symbol PAB. 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 outlook on asset quality, projected growth, economic conditions and branch expansion, and are based upon management's beliefs as well as assumptions made based on data currently available to management. When words like "anticipate", "believe", "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) competitive pressures among depository and other financial institutions may increase significantly; (2) changes in the interest rate environment may reduce margins or the volumes or values of loans made by The Park Avenue Bank; (3) general economic conditions (both generally and in our markets) may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduction in demand for credit; (4) legislative or regulatory changes, including changes in accounting standards and compliance requirements, may adversely affect the businesses in which we are engaged; (5) competitors may have greater financial resources and develop products that enable such competitors to compete more successfully than we can; (6) our ability to attract and retain key personnel can be affected by the increased competition for experienced employees in the banking industry; (7) adverse changes may occur in the bond and equity markets; (8) war or terrorist activities may cause further deterioration in the economy or cause instability in credit markets; (9) restrictions or conditions imposed by our regulators on our operations may make it more difficult for us to achieve our goals; (10) economic, governmental or other factors may prevent the projected population, residential and commercial growth in the markets in which we operate; and (11) the risk factors discussed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to revise these statements following the date of this press release.
PAB BANKSHARES, INC.
SELECTED QUARTERLY FINANCIAL DATA
(Dollars in thousands except per share and other data)
Period Ended
------------------------------------------------------
12/31/06 09/30/06 06/30/06 03/31/06 12/31/05
---------------------------------------------------------------------
Summary of
Operations:
Interest
income $ 20,239 $ 20,173 $ 19,306 $ 17,848 $ 16,940
Interest
expense 9,658 8,936 8,006 6,956 6,367
---------------------------------------------------------------------
Net interest
income 10,581 11,237 11,300 10,892 10,573
---------------------------------------------------------------------
Provision for
loan losses -- -- -- -- 300
Other income 1,578 1,204 1,557 1,041 1,437
Other expense 7,230 7,000 7,182 6,756 6,526
---------------------------------------------------------------------
Income before
income tax
expense 4,929 5,441 5,675 5,177 5,184
Income tax
expense 1,632 1,908 2,083 1,865 1,856
---------------------------------------------------------------------
Net income $ 3,297 $ 3,533 $ 3,592 $ 3,312 $ 3,328
=====================================================================
Net interest
income on a
tax-equivalent
basis $ 10,732 $ 11,378 $ 11,422 $ 10,975 $ 10,648
Per Share Ratios:
Net income
- basic $ 0.35 $ 0.37 $ 0.38 $ 0.35 $ 0.35
Net income
- diluted 0.34 0.36 0.37 0.34 0.34
Dividends de-
clared for
period 0.140 0.140 0.135 0.125 0.125
Dividend payout
ratio 40.35% 37.62% 35.70% 35.91% 35.56%
Book value at
end of period $ 10.03 $ 9.84 $ 9.36 $ 9.35 $ 9.19
Common Share
Data:
Outstanding at
period end 9,504,969 9,493,763 9,498,026 9,512,767 9,469,017
Weighted
average
outstanding 9,500,837 9,500,742 9,511,395 9,484,570 9,502,842
Diluted
weighted
average
outstanding 9,701,593 9,684,451 9,722,097 9,712,633 9,707,068
Selected
Average
Balances:
Total assets $1,106,404 $1,070,920 $1,055,955 $1,035,348 $1,007,109
Earning assets 1,041,359 1,007,917 994,173 975,699 948,882
Loans 813,435 805,732 787,332 761,900 741,600
Deposits 887,028 863,212 851,937 834,062 803,978
Stockholders'
equity 95,091 91,821 90,433 89,030 87,842
Selected Period
End Balances:
Total assets $1,120,804 $1,095,836 $1,060,046 $1,059,167 $1,017,326
Earning assets 1,048,239 1,032,261 994,386 998,639 957,918
Loans 820,304 806,636 803,035 764,090 752,938
Allowance for
loan losses 11,006 10,686 10,903 11,186 11,079
Deposits 908,483 883,701 856,778 855,224 815,681
Stockholders'
equity 95,316 93,440 88,917 88,974 87,001
Tier 1
regulatory
capital 100,330 98,183 96,398 94,686 92,267
Performance
Ratios:
Return on
average assets 1.18% 1.31% 1.36% 1.30% 1.31%
Return on
average
stockholders'
equity 13.76% 15.27% 15.93% 15.08% 15.03%
Net interest
margin 4.09% 4.48% 4.61% 4.56% 4.45%
Efficiency ratio
(excluding the
following items): 59.51% 54.50% 55.37% 54.29% 53.70%
Securities
gains (losses)
included in
other
income $ 166 $ (278)$ (1) (430) (10)
Other gains
(losses)
included in
other income (4) 17 8 2 (57)
Selected Asset
Quality Factors:
Nonaccrual
loans $ 4,013 $ 1,928 $ 412 $ 7,760 $ 7,856
Loans 90 days
or more past
due and still
accruing 34 40 23 17 2
Other impaired
loans (troubled-
debt restruc-
turings) -- -- -- -- --
Other real
estate and
repossessions 988 813 976 212 42
Asset Quality
Ratios:
Net charge-offs
to average loans
(annualized YTD) 0.01% 0.07% 0.05% -0.06% -0.12%
Nonperforming
loans to total
loans 0.49% 0.24% 0.05% 1.02% 1.04%
Nonperforming
assets to total
assets 0.45% 0.25% 0.13% 0.75% 0.78%
Allowance for
loan losses to
total loans 1.34% 1.32% 1.36% 1.46% 1.47%
Allowance for
loan losses to
nonperforming
loans 271.95% 542.93% 2510.11% 143.82% 140.98%
Other Selected
Ratios and Non-
financial Data:
Average loans to
average earning
assets 78.11% 79.94% 79.19% 78.09% 78.16%
Average loans to
average deposits 91.70% 93.34% 92.42% 91.35% 92.24%
Average stockholders'
equity to average
assets 8.59% 8.57% 8.56% 8.60% 8.72%
Full-time equivalent
employees 321 309 314 305 300
Bank branch offices 19 17 17 17 17
Bank loan
production offices 3 5 5 4 4
Bank ATMs 23 20 20 20 20
PAB BANKSHARES, INC.
SELECTED YEAR-TO-DATE FINANCIAL DATA
(Dollars in thousands except per share and other data)
Period Ended
------------------------------------------------------
12/31/06 09/30/06 06/30/06 03/31/06 12/31/05
---------------------------------------------------------------------
Summary of
Operations:
Interest
income $ 77,566 $ 57,327 $ 37,154 $ 17,848 $ 59,371
Interest
expense 33,555 23,898 14,962 6,956 20,398
---------------------------------------------------------------------
Net interest
income 44,011 33,429 22,192 10,892 38,973
---------------------------------------------------------------------
Provision for
loan losses -- -- -- -- 1,189
Other income 5,380 3,802 2,598 1,041 5,813
Other expense 28,167 20,937 13,938 6,756 24,778
---------------------------------------------------------------------
Income before
income tax
expense 21,224 16,294 10,852 5,177 18,819
Income tax
expense 7,488 5,856 3,948 1,865 6,366
---------------------------------------------------------------------
Net income $ 13,736 $ 10,438 $ 6,904 $ 3,312 $ 12,453
=====================================================================
Net interest
income on a
tax-equivalent
basis $ 44,507 $ 33,775 $ 22,397 $ 10,975 $ 39,195
Per Share Ratios:
Net income
- basic $ 1.45 $ 1.10 $ 0.73 $ 0.35 $ 1.31
Net income
- diluted 1.41 1.07 0.71 0.34 1.28
Dividends declared
for the period 0.540 0.400 0.260 0.125 0.475
Dividend payout
ratio 37.36% 36.41% 35.80% 35.91% 36.29%
Common Share Data:
Weighted average
outstanding 9,499,434 9,498,962 9,498,057 9,484,570 9,514,775
Diluted weighted
average
outstanding 9,706,989 9,707,786 9,719,638 9,712,633 9,686,894
Selected Average
Balances:
Total assets $1,067,362 $1,054,205 $1,045,708 $1,035,348 $ 948,457
Earning assets 1,004,981 992,719 984,994 975,699 890,336
Loans 792,278 785,148 774,686 761,900 706,052
Deposits 859,216 849,844 843,049 834,062 741,409
Stockholders'
equity 91,611 90,438 89,735 89,030 85,431
Performance
Ratios:
Return on
average assets 1.29% 1.32% 1.33% 1.30% 1.31%
Return on
average stock-
holders' equity 14.99% 15.43% 15.51% 15.08% 14.58%
Net interest
margin 4.43% 4.55% 4.59% 4.56% 4.40%
Efficiency ratio
(excluding the
following items): 55.88% 54.73% 54.84% 54.29% 54.94%
Securities gains
(losses) in-
cluded in other
income $ (542) $ (708)$ (430) $ (430) $ (11)
Other gains
(losses) in-
cluded in
other income 23 27 10 2 (79)
Other Selected
Ratios:
Average loans to
average earning
assets 78.84% 79.09% 78.65% 78.09% 79.30%
Average loans to
average deposits 92.21% 92.39% 91.89% 91.35% 95.23%
Average stock-
holders' equity
to average
assets 8.58% 8.58% 8.58% 8.60% 9.01%
PAB BANKSHARES, INC.
LOAN AND DEPOSIT
PORTFOLIO BY MARKET
As of December 31, 2006
South North
Georgia Georgia Florida
Market Market Market Treasury Total
-----------------------------------------------
(Dollars in Thousands)
Loans
Commercial and
financial $ 32,066 $ 33,810 $ 448 $ 52 $ 66,376
Agricultural (including
loans secured by
farmland) 37,735 4,581 986 -- 43,302
Real estate
- Construction 69,616 190,644 34,954 32 295,246
Real estate
- commercial 79,574 145,969 24,448 5,471 255,462
Real estate
- residential 109,065 24,908 6,219 2,309 142,501
Installment loans to
individuals and
others 15,692 1,312 87 1,323 18,414
-----------------------------------------------
343,748 401,224 67,142 9,187 821,301
Deferred loan fees
and unearned interest,
net 96 (608) (498) 13 (997)
-----------------------------------------------
Total loans 343,844 400,616 66,644 9,200 820,304
Allowance for
loan losses (4,338) (5,443) (896) (329) (11,006)
-----------------------------------------------
Net Loans $339,506 $395,173 $ 65,748 $ 8,871 $809,298
===============================================
Percent of Total 41.95% 48.83% 8.12% 1.10% 100.00%
===============================================
Deposits
Noninterest-bearing
demand $ 74,716 $ 13,508 $ 5,941 $ 6,746 $100,911
Interest-bearing demand
and savings 262,970 40,803 24,542 513 328,828
Time 253,996 77,596 108,711 38,441 478,744
-----------------------------------------------
Total Deposits $591,682 $131,907 $139,194 $45,700 $908,483
===============================================
Percent of Total 65.13% 14.52% 15.32% 5.03% 100.00%
===============================================
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
------------------------------------------------
12/31/06 09/30/06 06/30/06 03/31/06 12/31/05
------------------------------------------------
(Dollars In Thousands)
Commercial and
financial $ 66,376 $ 60,413 $ 53,185 $ 47,164 $ 50,860
Agricultural
(including loans
secured by farmland) 43,302 44,716 47,754 53,368 55,830
Real estate
- construction 295,246 297,026 304,387 290,863 268,629
Real estate
- commercial 255,462 253,586 251,966 229,236 231,601
Real estate
- residential 142,501 133,983 127,020 123,902 127,326
Installment loans to
individuals and
other loans 18,414 18,211 19,966 20,836 20,380
-------- -------- -------- -------- --------
821,301 807,935 804,278 765,369 754,626
Deferred loan fees
and unearned
interest, net (997) (1,299) (1,243) (1,279) (1,688)
-------- -------- -------- -------- --------
Total loans 820,304 806,636 803,035 764,090 752,938
Allowance for
loan losses (11,006) (10,686) (10,903) (11,186) (11,079)
-------- -------- -------- -------- --------
Net loans $809,298 $795,950 $792,132 $752,904 $741,859
======== ======== ======== ======== ========
The percentage of loans outstanding at the indicated dates is
presented in the following table according to type of loan:
Period Ended
------------------------------------------------
12/31/06 09/30/06 06/30/06 03/31/06 12/31/05
------------------------------------------------
Commercial and
financial 8.09% 7.49% 6.62% 6.17% 6.75%
Agricultural
(including loans
secured by farmland) 5.28% 5.54% 5.95% 6.98% 7.41%
Real estate
- construction 35.99% 36.82% 37.89% 38.07% 35.68%
Real estate
- commercial 31.14% 31.44% 31.38% 30.00% 30.76%
Real estate
- residential 17.37% 16.61% 15.82% 16.22% 16.91%
Installment loans
to individuals and
other loans 2.25% 2.26% 2.49% 2.73% 2.71%
------------------------------------------------
100.12% 100.16% 100.15% 100.17% 100.22%
Deferred loan fees
and unearned
interest, net -0.12% -0.16% -0.15% -0.17% -0.22%
------------------------------------------------
Total loans 100.00% 100.00% 100.00% 100.00% 100.00%
Allowance for
loan losses -1.34% -1.32% -1.36% -1.46% -1.47%
------------------------------------------------
Net loans 98.66% 98.68% 98.64% 98.54% 98.53%
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