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| Title of each class             | Name of exchange on which      registered |
|---------------------------------|-------------------------------------------|
| Common      Stock, no par value | The      NASDAQ Stock Market LLC          |
|                            | (NASDAQ      Global Select Market)        |

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TABLE 

| Item                                                        | Page   |
|-------------------------------------------------------------|--------|
|                                                        |   |   |   |
| Cautionary Notice Regarding Forward-Looking      Statements | 3      |
|                                                        |   |   |   |
| PART      I                                                 |   |
| 1.                                                          |   | BUSINESS |   |
|                                                        |   | General | 3 |
|                                                        |   | Supervision and Regulation | 8 |
| 1A.                                                         |   | RISK FACTORS | 13 |
| 1B.                                                         |   | UNRESOLVED STAFF COMMENTS | 19 |
| 2.                                                          |   | PROPERTIES | 19 |
| 3.                                                          |   | LEGAL PROCEEDINGS | 20 |
| 4.                                                          |   | SUBMISSION OF MATTERS TO A VOTE OF SECURITY      HOLDERS | 20 |
|                                                        |   |   |   |
| PART      II                                                |   |
| 5.                                                          |   | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER      MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES | 20 |
| 6.                                                          |   | SELECTED FINANCIAL DATA | 22 |
| 7.                                                          |   | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND      RESULTS OF OPERATIONS |   |
|                                                        |   | Overview of Key Financial, Strategic and Performance      Factors | 23 |
|                                                        |   | Statistical Disclosures | 26 |
|                                                        |   | Liquidity and Capital Resources | 39 |
|                                                        |   | Results of Operations | 42 |
| 7A.                                                         |   | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET      RISK | 46 |
|        8.                                              |   | FINANCIAL      STATEMENTS AND SUPPLEMENTARY DATA Quarterly Financial Summary for      2008 and 2007 | 48 |
|                                                        |   | Management’s Report On Internal Control Over Financial      Reporting | 49 |
|                                                        |   | Auditor’s Attestation Report | 50 |
|                                                        |   | Reports of Independent Registered Public Accounting      Firm | 52 |
|                                                        |   | Consolidated Balance Sheets at December 31, 2008 and      2007 | 53 |
|                                                        |   | Consolidated Statements of Income (Loss) for the Three Years      Ended December 31, 2008 | 54 |
|                                                        |   | Consolidated Statements of Comprehensive Income (Loss) for the      Three Years Ended December 31, 2008 | 55 |
|                                                        |   | Consolidated Statements of Stockholders’ Equity for the Three      Years Ended December 31, 2008 | 56 |
|                                                        |   | Consolidated Statements of Cash Flows for the Three Years Ended      December 31, 2008 | 57 |
|                                                        |   | Notes to Consolidated Financial    Statements | 59 |
| 9.                                                          |   | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND      FINANCIAL DISCLOSURE | 89 |
| 9A.                                                         |   | CONTROLS AND PROCEDURES | 89 |
| 9B.                                                         |   | OTHER INFORMATION | 89 |
|                                                        |   |   |   |
| PART      III                                               |   |
| 10.                                                         |   | DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE      GOVERNANCE | 90 |
| 11.                                                         |   | EXECUTIVE COMPENSATION | 90 |
| 12.                                                         |   | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT      AND RELATED STOCKHOLDER MATTERS | 90 |
| 13.                                                         |   | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR      INDEPENDENCE | 90 |
| 14.                                                         |   | PRINCIPAL ACCOUNTANT FEES AND SERVICES | 90 |
|                                                        |   |   |   |
| PART      IV                                                |   |
| 15.                                                         |   | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES | 91 |
|                                                        |   |   |   |
| SIGNATURES                                                  | 93     |

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CAUTIONARY 

ITEM 

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| Market/               |   | Number      of |   |   | Total  |   |    | Total     |   |   | Market          |   |   |        |   |   | Population       |   |    | Employment       |   |   | Unemployment   |   |
|-----------------------|--------|----------------|--------|--------|--------|--------|---------|-----------|--------|--------|-----------------|--------|--------|-------------|--------|--------|------------------|--------|---------|------------------|--------|--------|----------------|--------|
| County                |   | Offices        |   |   | Loans3 |   |    | Deposits3 |   |   | Share      (%)4 |   |   | Population5 |   |   | Growth      (%)6 |   |    | Growth      (%)7 |   |   | Rate      (%)8 |   |
|                  |   |           |   |   |   |   |    |      |   |   |            |   |   |        |   |   |             |   |    |             |   |   |           |   |
| South      Georgia    |   |           |   |   |   |   |    |      |   |   |            |   |   |        |   |   |             |   |    |             |   |   |           |   |
| Lowndes               |   |           | 4      |   |   | $      | 247,806 |      |   | $      | 292,399         |   |   |        | 19.4   |   |             |   | 101,790 |             |   |   | 10.5           |   |   |   | (0.4 | ) |   |   | 5.8 |   |
| Cook                  |   |           | 1      |   |   |   | 12,902  |      |   |   | 50,160          |   |   |        | 26.2   |   |             |   | 16,432  |             |   |   | 4.2            |   |   |   | (2.3 | ) |   |   | 8.0 |   |
| Decatur               |   |           | 3      |   |   |   | 48,101  |      |   |   | 113,593         |   |   |        | 32.2   |   |             |   | 28,544  |             |   |   | 1.1            |   |   |   | (2.8 | ) |   |   | 8.1 |   |
| Grady                 |   |           | 1      |   |   |   | 12,521  |      |   |   | 26,378          |   |   |        | 6.7    |   |             |   | 25,042  |             |   |   | 5.8            |   |   |   | (2.9 | ) |   |   | 6.4 |   |
| Appling               |   |           | 1      |   |   |   | 16,587  |      |   |   | 40,359          |   |   |        | 16.0   |   |             |   | 17,946  |             |   |   | 3.0            |   |   |   | (0.2 | ) |   |   | 7.6 |   |
| Jeff      Davis       |   |           | 1      |   |   |   | 10,857  |      |   |   | 51,479          |   |   |        | 28.0   |   |             |   | 13,291  |             |   |   | 4.8            |   |   |   | (4.0 | ) |   |   | 10.5 |   |
| Bulloch               |   |           | 2      |   |   |   | 40,311  |      |   |   | 58,533          |   |   |        | 4.6    |   |             |   | 66,176  |             |   |   | 18.2           |   |   |   | 0.4 |   |   |   | 6.4 |   |
|                  |   |           | 13     |   |   | $      | 389,085 |      |   | $      | 632,901         |   |   |        |   |   |             |   |    |             |   |   |           |   |   |   |   |   |   |   |   |   |
| North      Georgia    |   |           |   |   |   |   |    |      |   |   |            |   |   |        |   |   |             |   |    |             |   |   |           |   |   |   |   |   |   |   |   |   |
| Henry                 |   |           | 2      |   |   | $      | 237,895 |      |   | $      | 68,006          |   |   |        | 3.5    |   |             |   | 186,037 |             |   |   | 55.9           |   |   |   | 0.9 |   |   |   | 6.3 |   |
| Hall                  |   |           | 1      |   |   |   | 93,814  |      |   |   | 24,819          |   |   |        | 1.0    |   |             |   | 180,175 |             |   |   | 29.3           |   |   |   | 1.0 |   |   |   | 5.5 |   |
| Oconee                |   |           | 1      |   |   |   | 50,472  |      |   |   | 14,605          |   |   |        | 1.8    |   |             |   | 31,367  |             |   |   | 19.6           |   |   |   | 1.2 |   |   |   | 4.3 |   |
| Forsyth               |   |           | 1      |   |   |   | 58,319  |      |   |   | 13,628          |   |   |        | -      |   |             |   | 158,914 |             |   |   | 61.5           |   |   |   | 0.9 |   |   |   | 5.0 |   |
|                  |   |           | 5      |   |   | $      | 440,500 |      |   | $      | 121,058         |   |   |        |   |   |             |   |    |             |   |   |           |   |   |   |   |   |   |   |   |   |
| State      of Georgia |   |           |   |   |   |   |    |      |   |   |            |   |   |        |   |   |             |   |    |             |   |   | 16.6           |   |   |   | 0.5 |   |   |   | 6.4 |   |
|                  |   |           |   |   |   |   |    |      |   |   |            |   |   |        |   |   |             |   |    |             |   |   |           |   |   |   |   |   |   |   |   |   |
| Florida               |   |           |   |   |   |   |    |      |   |   |            |   |   |        |   |   |             |   |    |             |   |   |           |   |   |   |   |   |   |   |   |   |
| Marion                |   |           | 1      |   |   | $      | 31,429  |      |   | $      | 153,078         |   |   |        | 3.4    |   |             |   | 324,857 |             |   |   | 25.5           |   |   |   | 0.0 |   |   |   | 8.4 |   |
| St.      Johns        |   |           | 1      |   |   |   | 70,013  |      |   |   | 6,112           |   |   |        | -      |   |             |   | 175,446 |             |   |   | 42.5           |   |   |   | 0.3 |   |   |   | 5.6 |   |
|                  |   |           | 2      |   |   | $      | 101,442 |      |   | $      | 159,190         |   |   |        |   |   |             |   |    |             |   |   |           |   |   |   |   |   |   |   |   |   |
| State      of Florida |   |           |   |   |   |   |    |      |   |   |            |   |   |        |   |   |             |   |    |             |   |   | 14.2           |   |   |   | -0.1 |   |   |   | 6.8 |   |
| National      Total   |   |           |   |   |   |   |    |      |   |   |            |   |   |        |   |   |             |   |    |             |   |   | 7.2            |   |   |   | -0.1 |   |   |   | 6.0 |   |

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| 3 | Dollar      amounts are presented in thousands as of December 31,      2008.  Amounts exclude $25.7 million in loans and $210.6 million      in deposits assigned to the “Treasury” that are not allocated to any      particular market (i.e. participation loans, employee and director      accounts, brokered deposits, official checks,  etc.). |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Based      on the FDIC/OTS Summary of Deposits report as of June 30,      2008. |
|---|---------------------------------------------------------------------------------|

| 5 | Estimated      July 1, 2007 population provided by the U.S. Census  Bureau. |
|---|-----------------------------------------------------------------------------|

| 6 | Estimated      percentage population change from 2000 to 2007 provided by the U.S. Census      Bureau. |
|---|--------------------------------------------------------------------------------------------------------|

| 7 | Total      employment growth (not seasonally adjusted) for the Third Quarter 2008      Year-To-Date percentage change from the prior year’s Year-To-Date data      provided by the Bureau of Labor Statistics Household    Survey. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8 | Unemployment      rate (not seasonally adjusted) for the Third Quarter 2008 provided by the      Bureau of Labor Statistics. |
|---|------------------------------------------------------------------------------------------------------------------------------|

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Supervision 

|   | · | How,      when and where we may expandgeographically; |
|--------|--------|-------------------------------------------------------|

|   | · | Into      what product or service market we mayenter; |
|--------|--------|-------------------------------------------------------|

|   | · | How      we must manage our assets; and |
|--------|--------|-----------------------------------------|

|   | · | Under      what circumstances money may or must flow between the parent bank holding      company and the subsidiary bank. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------|

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|   | · | may      restrict the ability of a bank or financial services holding company from      paying dividends on any class of capital stock or any other Tier 1 capital      instrument if the holding company is not deemed to have a strong capital      position, |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | states      that a holding company should reduce or eliminate dividends      when |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | the      holding company’s net income available to shareholders for the past four      quarters, net of dividends previously paid during that period, is not      sufficient to fully fund thedividends; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      holding company’s prospective rate of earnings retention is not consistent      with the holding company’s capital needs and overall current and      prospective financial condition; or |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      holding company will not meet, or is in danger of not meeting, its minimum      regulatory capital adequacy ratios. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------|

|   | · | requires      that a holding company must inform the Federal Reserve in advance of      declaring or paying a dividend that exceeds earnings for the period (e.g.,      quarter) for which the dividend is being paid or that could result in a      material adverse change to the organization’s capital structure. Declaring      or paying a dividend in either circumstance could raise supervisory      concerns. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | § | On      October 3, 2008, President Bush signed into law the EESA      pursuant to which, the Department of the Treasury (the “Treasury      Department”) has the authority to, among other things, purchase up to      $700 billion of mortgages, mortgage-backed securities and certain      other financial instruments from financial institutions under TARP      for the purpose of stabilizing and providing liquidity to the U.S.      financial markets. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | On      November 21, 2008, the FDIC adopted a Final Rule with respect to its      Temporary Liquidity Guarantee Program pursuant to which the FDIC will      guarantee certain “newly-issued unsecured debt” of banks and certain      holding companies and also guarantee, on an unlimited basis, non-interest      bearing bank transaction accounts. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | On      February 10, 1009, the Treasury Department announced the Financial      Stability Plan under the EESA, which is intended to further stabilize      financial institutions and stimulate lending across a broad range of      economic sectors. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | On      February 18, 2009, President Obama signed the ARRA, a broad economic      stimulus package that included additional restrictions on, and potential      additional regulation of, financial  institutions. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 5. | MARKET      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER      PURCHASES OF EQUITY SECURITIES |
|---------|------------------------------------------------------------------------------------------------------------------------------|

|                 |   | Sales      Price |   |   |   |   |   |      |   |
|----------------------|--------|------------------|--------|--------|--------|--------|--------|-----------|--------|
| Calendar      Period |   | High             |   |   | Low    |   |   | Dividends |   |   | Earnings |   |
| 2007                 |   |             |   |   |   |   |   |      |   |   |   |   |
| First      Quarter   |   | $                | 22.04  |   |   | $      | 17.40  |      |   | $ | 0.142 |   |   | $ | 0.32 |   |
| Second      Quarter  |   |             | 20.04  |   |   |   | 17.30  |      |   |   | 0.142 |   |   |   | 0.33 |   |
| Third      Quarter   |   |             | 18.63  |   |   |   | 15.29  |      |   |   | 0.142 |   |   |   | 0.29 |   |
| Fourth      Quarter  |   |             | 17.06  |   |   |   | 12.20  |      |   |   | 0.142 |   |   |   | 0.17 |   |
| 2008                 |   |             |   |   |   |   |   |      |   |   |   |   |   |   |   |   |
| First      Quarter   |   | $                | 14.02  |   |   | $      | 11.59  |      |   | $ | 0.142 |   |   | $ | 0.14 |   |
| Second      Quarter  |   |             | 14.40  |   |   |   | 8.33   |      |   |   | 0.093 | * |   |   | 0.15 |   |
| Third      Quarter   |   |             | 9.02   |   |   |   | 6.66   |      |   |   | - |   |   |   | (0.32 | ) |
| Fourth      Quarter  |   |             | 6.95   |   |   |   | 3.87   |      |   |   | - |   |   |   | (0.60 | ) |

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|                          | Period      Ending |     |
|-------------------------------|--------------------|----------|
| Index                         |               | 12/31/03 |   |   | 12/31/04 |   |   | 12/31/05 |   |   | 12/31/06 |   |   | 12/31/07 |   |   | 12/31/08 |   |
| PAB      Bankshares, Inc.     |               |     | 100.00 |   |   |   | 86.64 |   |   |   | 124.27 |   |   |   | 149.20 |   |   |   | 90.22 |   |   |   | 33.23 |   |
| NASDAQ      Composite Index   |               |     | 100.00 |   |   |   | 108.59 |   |   |   | 110.08 |   |   |   | 120.56 |   |   |   | 132.39 |   |   |   | 78.72 |   |
| SNL      Southeast Bank Index |               |     | 100.00 |   |   |   | 118.59 |   |   |   | 121.39 |   |   |   | 142.34 |   |   |   | 107.23 |   |   |   | 43.41 |   |

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| (In      thousands, except per share and other data)   |   | 2008   |      |   | 2007   |   |      | 2006   |   |   | 2005      |   |   | 2004   |      |
|--------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|
| Summary      of Operations:                            |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |
| Interest      income                                   |   | $      | 70,984    |   |   | $      | 84,676    |   |   | $      | 77,566    |   |   | $      | 59,371    |   |   | $ | 40,597 |   |
| Interest      expense                                  |   |   | 36,218    |   |   |   | 42,210    |   |   |   | 33,555    |   |   |   | 20,398    |   |   |   | 10,624 |   |
| Net      interest income                               |   |   | 34,766    |   |   |   | 42,466    |   |   |   | 44,011    |   |   |   | 38,973    |   |   |   | 29,973 |   |
| Provision      for loan losses                         |   |   | 18,050    |   |   |   | 2,400     |   |   |   | -         |   |   |   | 1,189     |   |   |   | 600 |   |
| Other      income                                      |   |   | 4,403     |   |   |   | 5,991     |   |   |   | 5,380     |   |   |   | 5,813     |   |   |   | 6,344 |   |
| Other      expense                                     |   |   | 30,584    |   |   |   | 29,590    |   |   |   | 28,167    |   |   |   | 24,778    |   |   |   | 23,055 |   |
| Income      before income tax expense                  |   |   | (9,465    | )      |   |   | 16,467    |   |   |   | 21,224    |   |   |   | 18,819    |   |   |   | 12,662 |   |
| Income      tax expense                                |   |   | (3,554    | )      |   |   | 5,681     |   |   |   | 7,488     |   |   |   | 6,366     |   |   |   | 4,144 |   |
| Net      income                                        |   | $      | (5,911    | )      |   | $      | 10,786    |   |   | $      | 13,736    |   |   | $      | 12,453    |   |   | $ | 8,518 |   |
| Net      interest income on a taxable-equivalent basis |   | $      | 35,432    |   |   | $      | 43,120    |   |   | $      | 44,507    |   |   | $      | 39,195    |   |   | $ | 30,148 |   |
| Selected      Average Balances:                        |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Total      assets                                      |   | $      | 1,238,875 |   |   | $      | 1,165,307 |   |   | $      | 1,067,362 |   |   | $      | 948,457   |   |   | $ | 765,016 |   |
| Earning      assets                                    |   |   | 1,165,625 |   |   |   | 1,096,918 |   |   |   | 1,004,981 |   |   |   | 890,337   |   |   |   | 704,345 |   |
| Loans                                                  |   |   | 955,253   |   |   |   | 883,334   |   |   |   | 792,278   |   |   |   | 706,052   |   |   |   | 569,858 |   |
| Deposits                                               |   |   | 1,011,596 |   |   |   | 948,613   |   |   |   | 859,216   |   |   |   | 741,409   |   |   |   | 575,767 |   |
| Stockholders’      equity                        |   |   | 96,877    |   |   |   | 98,055    |   |   |   | 91,611    |   |   |   | 85,431    |   |   |   | 79,499 |   |
| Selected      Year End Balances:                       |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Total      assets                                      |   | $      | 1,350,103 |   |   | $      | 1,198,671 |   |   | $      | 1,120,804 |   |   | $      | 1,017,326 |   |   | $ | 868,975 |   |
| Earning      assets                                    |   |   | 1,259,495 |   |   |   | 1,116,776 |   |   |   | 1,048,239 |   |   |   | 957,918   |   |   |   | 808,886 |   |
| Loans                                                  |   |   | 956,687   |   |   |   | 921,349   |   |   |   | 820,304   |   |   |   | 752,938   |   |   |   | 646,149 |   |
| Allowance      for loan losses                         |   |   | 19,374    |   |   |   | 12,906    |   |   |   | 11,006    |   |   |   | 11,079    |   |   |   | 9,066 |   |
| Deposits                                               |   |   | 1,123,703 |   |   |   | 980,149   |   |   |   | 908,483   |   |   |   | 815,681   |   |   |   | 657,550 |   |
| Stockholders’      equity                        |   |   | 91,601    |   |   |   | 97,676    |   |   |   | 95,316    |   |   |   | 87,001    |   |   |   | 81,000 |   |
| Common      Share Data:                                |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Outstanding      at year end**                         |   |   | 9,324,407 |   |   |   | 9,406,956 |   |   |   | 9,688,708 |   |   |   | 9,652,756 |   |   |   | 9,679,059 |   |
| Weighted      average outstanding**                    |   |   | 9,335,376 |   |   |   | 9,602,535 |   |   |   | 9,683,173 |   |   |   | 9,698,514 |   |   |   | 9,683,448 |   |
| Diluted      weighted average outstanding**            |   |   | 9,335,376 |   |   |   | 9,744,063 |   |   |   | 9,890,728 |   |   |   | 9,870,633 |   |   |   | 9,825,804 |   |
| Per      Share Ratios:                                 |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Net      income – basic**                        |   | $      | (0.63     | )      |   | $      | 1.12      |   |   | $      | 1.42      |   |   | $      | 1.28      |   |   | $ | 0.88 |   |
| Net      income – diluted**                      |   |   | (0.63     | )      |   |   | 1.11      |   |   |   | 1.39      |   |   |   | 1.26      |   |   |   | 0.87 |   |
| Dividends      declared**                              |   |   | 0.24      |   |   |   | 0.568     |   |   |   | 0.529     |   |   |   | 0.466     |   |   |   | 0.333 |   |
| Book      value**                                      |   |   | 9.82      |   |   |   | 10.38     |   |   |   | 9.84      |   |   |   | 9.01      |   |   |   | 8.37 |   |
| Tangible      book value**                             |   |   | 9.18      |   |   |   | 9.75      |   |   |   | 9.22      |   |   |   | 8.39      |   |   |   | 7.75 |   |
| Profitability      Ratios:                             |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Return      on average assets                          |   |   | -0.48     | %      |   |   | 0.93      | %      |   |   | 1.29      | %      |   |   | 1.31      | % |   |   | 1.11 | % |
| Return      on average equity                          |   |   | -6.10     | %      |   |   | 11.00     | %      |   |   | 14.99     | %      |   |   | 14.58     | % |   |   | 10.71 | % |
| Net      interest margin                               |   |   | 3.04      | %      |   |   | 3.93      | %      |   |   | 4.43      | %      |   |   | 4.40      | % |   |   | 4.28 | % |
| Efficiency      ratio                                  |   |   | 70.01     | %      |   |   | 60.74     | %      |   |   | 55.88     | %      |   |   | 54.94     | % |   |   | 63.18 | % |
| Liquidity      Ratios:                                 |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Total      loans to total deposits                     |   |   | 85.14     | %      |   |   | 94.00     | %      |   |   | 90.29     | %      |   |   | 92.31     | % |   |   | 98.27 | % |
| Average      loans to average earning assets           |   |   | 81.95     | %      |   |   | 80.53     | %      |   |   | 78.84     | %      |   |   | 79.30     | % |   |   | 80.91 | % |
| Noninterest-bearing      deposits to total deposits    |   |   | 8.11      | %      |   |   | 9.12      | %      |   |   | 11.11     | %      |   |   | 13.23     | % |   |   | 15.15 | % |
| Capital      Adequacy Ratios:                          |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Average      equity to average assets                  |   |   | 7.82      | %      |   |   | 8.41      | %      |   |   | 8.58      | %      |   |   | 9.01      | % |   |   | 10.39 | % |
| Dividend      payout ratio                             |   |   | -37.16    | %      |   |   | 50.43     | %      |   |   | 37.36     | %      |   |   | 36.29     | % |   |   | 37.93 | % |
| Asset      Quality Ratios:                             |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Net      charge-offs to average loans                  |   |   | 1.21      | %      |   |   | 0.06      | %      |   |   | 0.01      | %      |   |   | -0.12     | % |   |   | 0.29 | % |
| Nonperforming      loans to total loans                |   |   | 5.79      | %      |   |   | 1.24      | %      |   |   | 0.49      | %      |   |   | 1.04      | % |   |   | 0.54 | % |
| Nonperforming      assets to total assets              |   |   | 5.98      | %      |   |   | 1.49      | %      |   |   | 0.45      | %      |   |   | 0.78      | % |   |   | 0.40 | % |
| Allowance      for loan losses to total loans          |   |   | 2.03      | %      |   |   | 1.40      | %      |   |   | 1.34      | %      |   |   | 1.47      | % |   |   | 1.40 | % |
| Allowance      for loan losses to nonperforming loans  |   |   | 34.96     | %      |   |   | 112.79    | %      |   |   | 271.95    | %      |   |   | 140.98    | % |   |   | 261.04 | % |

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Table of Contents

|                                         |   | 2008   |   |   | 2007   |   |   | 2006   |   |   | 2005 |   |   | 2004   |   |
|----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|------|--------|--------|--------|--------|
| Book      value per common share**           |   | $      | 9.82   |   |   | $      | 10.38  |   |   | $      | 9.84 |   |   | $      | 9.01   |   |   | $ | 8.37 |   |
| Effect      of intangible assets per share** |   |   | 0.64   |   |   |   | 0.63   |   |   |   | 0.62 |   |   |   | 0.62   |   |   |   | 0.62 |   |
| Tangible      book value per common share**  |   | $      | 9.18   |   |   | $      | 9.75   |   |   | $      | 9.22 |   |   | $      | 8.39   |   |   | $ | 7.75 |   |

| ITEM 7. | MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS |
|---------|-------------------------------------------------------------------------------------------------------|

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Table of Contents

| Year   |   | Net      Income (loss) |   |   | EPS**  |   |   | ROA    |   |   | ROE    |   |
|--------|--------|------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|   |   | (In      Thousands)    |   |   |   |   |   |   |   |   |   |   |
| 2004   |   |                   | 8,518  |   |   |   | 0.87   |   |   |   | 1.11   | %      |   |   | 10.71 | % |
| 2005   |   |                   | 12,453 |   |   |   | 1.26   |   |   |   | 1.31   | %      |   |   | 14.58 | % |
| 2006   |   |                   | 13,736 |   |   |   | 1.39   |   |   |   | 1.29   | %      |   |   | 14.99 | % |
| 2007   |   |                   | 10,786 |   |   |   | 1.11   |   |   |   | 0.93   | %      |   |   | 11.00 | % |
| 2008   |   |                   | (5,911 | )      |   |   | -0.63  |   |   |   | -0.48  | %      |   |   | -6.10 | % |

| Market/               |   | Number      of |   |   | Total      Loans            |   |    |   |   |   | Total      Deposits |   |   |   |   |
|-----------------------|--------|----------------|--------|--------|-----------------------------|--------|---------|--------|--------|--------|---------------------|--------|--------|--------|--------|
| County                |   | Offices        |   |   | 2008                        |   |    | 2007   |   |   | %      Chg          |   |   | 2008   |   |   | 2007 |   |   | %      Chg |   |
|                  |   |           |   |   | (Dollars      in Thousands) |   |
|                  |   |           |   |   |                        |   |    |   |   |   |                |   |   |   |   |   |   |   |   |   |   |
| South      Georgia    |   |           | 13     |   |                        | $      | 389,085 |   |   | $      | 369,110             |   |   |   | 5.4    |   |   | $ | 632,901 |   |   | $ | 605,070 |   |   |   | 4.6 |   |
| Percent      of Total |   |           |   |   |                        |   | 40.7    |   |   |   | 40.1                |   |   |   |   |   |   |   | 56.3 |   |   |   | 61.7 |   |   |   |   |   |
|                  |   |           |   |   |                        |   |    |   |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| North      Georgia    |   |           | 5      |   |                        | $      | 440,500 |   |   | $      | 438,767             |   |   |   | 0.4    |   |   | $ | 121,058 |   |   | $ | 159,723 |   |   |   | (24.2 | ) |
| Percent      of Total |   |           |   |   |                        |   | 46.0    |   |   |   | 47.6                |   |   |   |   |   |   |   | 10.8 |   |   |   | 16.3 |   |   |   |   |   |
|                  |   |           |   |   |                        |   |    |   |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Florida               |   |           | 2      |   |                        | $      | 101,442 |   |   | $      | 97,617              |   |   |   | 3.9    |   |   | $ | 159,190 |   |   | $ | 173,487 |   |   |   | (8.2 | ) |
| Percent      of Total |   |           |   |   |                        |   | 10.6    |   |   |   | 10.6                |   |   |   |   |   |   |   | 14.2 |   |   |   | 17.7 |   |   |   |   |   |
|                  |   |           |   |   |                        |   |    |   |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Treasury              |   |           | -      |   |                        | $      | 25,661  |   |   | $      | 15,855              |   |   |   | 61.8   |   |   | $ | 210,554 |   |   | $ | 41,869 |   |   |   | 402.9 |   |
| Percent      of Total |   |           |   |   |                        |   | 2.7     |   |   |   | 1.7                 |   |   |   |   |   |   |   | 18.7 |   |   |   | 4.3 |   |   |   |   |   |
|                  |   |           |   |   |                        |   |    |   |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                 |   |           |   |   |                        | $      | 956,688 |   |   | $      | 921,349             |   |   |   | 3.8    |   |   | $ | 1,123,703 |   |   | $ | 980,149 |   |   |   | 14.6 |   |

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Table of Contents

|                                                    |   | 2008                        |      |   | 2007   |   |    | Percentage      Change |   |
|---------------------------------------------------------|--------|-----------------------------|-----------|--------|--------|--------|---------|------------------------|--------|
|                                                    |   | (Dollars      in Thousands) |      |
| Loans                                                   |   |                        |      |   |   |   |    |                   |   |
| Commercial      and financial                           |   | $                           | 87,530    |   |   | $      | 78,730  |                   |   |   | 11.2 |   |
| Agricultural      (including loans secured by farmland) |   |                        | 48,647    |   |   |   | 41,861  |                   |   |   | 16.2 |   |
| Real      estate - construction and development         |   |                        | 315,786   |   |   |   | 352,732 |                   |   |   | (10.5 | ) |
| Real      estate - commercial                           |   |                        | 276,645   |   |   |   | 248,272 |                   |   |   | 11.4 |   |
| Real      estate - residential                          |   |                        | 196,306   |   |   |   | 174,157 |                   |   |   | 12.7 |   |
| Installment      loans to individuals and others        |   |                        | 32,084    |   |   |   | 26,011  |                   |   |   | 23.4 |   |
|                                                    |   |                        | 956,998   |   |   |   | 921,763 |                   |   |   | 3.8 |   |
| Deferred      loan fees and unearned interest, net      |   |                        | (310      | )      |   |   | (414    | )                      |   |   | (25.1 | ) |
| Total      loans                                        |   |                        | 956,688   |   |   |   | 921,349 |                   |   |   | 3.8 |   |
| Allowance      for loan losses                          |   |                        | (19,374   | )      |   |   | (12,906 | )                      |   |   | 50.1 |   |
| Net      loans                                          |   | $                           | 937,314   |   |   | $      | 908,443 |                   |   |   | 3.2 |   |
|                                                    |   |                        |      |   |   |   |    |                   |   |   |   |   |
| Deposits                                                |   |                        |      |   |   |   |    |                   |   |   |   |   |
| Noninterest-bearing      demand                         |   | $                           | 91,114    |   |   | $      | 89,423  |                   |   |   | 1.9 |   |
| Interest-bearing      demand and savings                |   |                        | 252,122   |   |   |   | 354,743 |                   |   |   | (28.9 | ) |
| Time      less than $100,000                            |   |                        | 328,329   |   |   |   | 312,722 |                   |   |   | 5.0 |   |
| Time      greater than or equal to $100,000             |   |                        | 198,845   |   |   |   | 187,662 |                   |   |   | 6.0 |   |
| Retail      time placed in CDARS program                |   |                        | 46,690    |   |   |   | -       |                   |   |   | 100.0 |   |
| Brokered                                                |   |                        | 206,603   |   |   |   | 35,599  |                   |   |   | 480.4 |   |
| Total      deposits                                     |   | $                           | 1,123,703 |   |   | $      | 980,149 |                   |   |   | 14.6 |   |

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Table of Contents

| For      the Quarter Ended            | Dec-08                         | Dec-07 | Dec-06 | Dec-05 |
|---------------------------------------|--------------------------------|--------|--------|--------|
|                                  | (Number      of Months Supply) |
| Housing Inventory:                    |                           |
| Henry      County                     | 14.0                           | 11.5   | 9.1    | 8.3    |
| Clayton      County                   | 15.1                           | 9.5    | 12.2   | 7.1    |
| Newton      County                    | 14.5                           | 11.1   | 7.4    | 8.3    |
| South      Fulton County              | 9.5                            | 8.0    | 7.8    | 7.9    |
|                                  |                           |   |   |   |
| Vacant Developed Lots      Inventory: |                           |   |   |   |
| Henry      County                     | 291.0                          | 86.0   | 27.0   | 25.0   |
| Clayton      County                   | 169.0                          | 53.0   | 26.0   | 23.0   |
| Newton      County                    | 326.0                          | 64.0   | 24.0   | 24.0   |
| South      Fulton County              | 126.0                          | 57.0   | 23.0   | 22.0   |

| For      the Year Ended | Dec-08                                                | Dec-07 | Dec-06 | Dec-05 |
|-------------------------|-------------------------------------------------------|--------|--------|--------|
|                    | (Number      of Single Family Housing Permits Issued) |
| Housing Permits:        |                                                  |
| Henry      County       | 492                                                   | 1,650  | 2,992  | 3,697  |
| Clayton      County     | 403                                                   | 1,238  | 2,226  | 2,103  |
| Newton      County      | 188                                                   | 952    | 1,678  | 2,115  |

STATISTICAL 

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Table of Contents

| For      the Years Ended December 31,                                  |   | 2008      vs. 2007          |    |   | 2007      vs. 2006  |   |
|------------------------------------------------------------------------|--------|-----------------------------|---------|--------|---------------------|--------|
|                                                                   |   | Increase                    |    |   | Changes      Due To |   |   | Increase |   |   | Changes      Due To |   |
|                                                                   |   | (Decrease)                  |    |   | Rate                |   |   | Volume |   |   | (Decrease) |   |   | Rate |   |   | Volume |   |
|                                                                   |   | (Dollars      In Thousands) |    |
| Increase      (decrease) in income from interest-earning assets:       |   |                        |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                  |   | $                           | (12,374 | )      |                | $      | (18,404 | ) |   | $ | 6,030 |   |   | $ | 6,706 |   |   | $ | (1,035 | ) |   | $ | 7,741 |   |
| Taxable      investment securities                                     |   |                        | (532    | )      |                |   | 105 |   |   |   | (637 | ) |   |   | 492 |   |   |   | 321 |   |   |   | 171 |   |
| Nontaxable      investment securities                                  |   |                        | 93      |   |                |   | (5 | ) |   |   | 98 |   |   |   | 450 |   |   |   | 44 |   |   |   | 406 |   |
| Other      short-term investments                                      |   |                        | (865    | )      |                |   | (1,255 | ) |   |   | 390 |   |   |   | (381 | ) |   |   | 76 |   |   |   | (457 | ) |
| Total      interest income                                             |   |                        | (13,678 | )      |                |   | (19,559 | ) |   |   | 5,881 |   |   |   | 7,267 |   |   |   | (594 | ) |   |   | 7,861 |   |
|                                                                   |   |                        |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase      (decrease) in expense from interest-bearing liabilities: |   |                        |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand      deposits                                                   |   |                        | (5,811  | )      |                |   | (4,469 | ) |   |   | (1,342 | ) |   |   | 2,828 |   |   |   | 1,511 |   |   |   | 1,317 |   |
| Savings      deposits                                                  |   |                        | (360    | )      |                |   | (332 | ) |   |   | (28 | ) |   |   | 38 |   |   |   | 67 |   |   |   | (29 | ) |
| Time      deposits                                                     |   |                        | 598     |   |                |   | (4,569 | ) |   |   | 5,167 |   |   |   | 5,566 |   |   |   | 3,353 |   |   |   | 2,213 |   |
| FHLB      advances                                                     |   |                        | (113    | )      |                |   | (637 | ) |   |   | 524 |   |   |   | 221 |   |   |   | 287 |   |   |   | (66 | ) |
| Notes      payable                                                     |   |                        | (187    | )      |                |   | (187 | ) |   |   | - |   |   |   | (294 | ) |   |   | (142 | ) |   |   | (152 | ) |
| Other      short-term borrowings                                       |   |                        | (118    | )      |                |   | (195 | ) |   |   | 77 |   |   |   | 295 |   |   |   | 107 |   |   |   | 188 |   |
| Total      interest expense                                            |   |                        | (5,991  | )      |                |   | (10,389 | ) |   |   | 4,398 |   |   |   | 8,654 |   |   |   | 5,183 |   |   |   | 3,471 |   |
|                                                                   |   |                        |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      interest income                                               |   | $                           | (7,687  | )      |                | $      | (9,170 | ) |   | $ | 1,483 |   |   | $ | (1,387 | ) |   | $ | (5,777 | ) |   | $ | 4,390 |   |

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Table of Contents

| For      the Years Ended                                       |   |                        |      |   |     |   |   |    |   |   |    |   |   |     |      |   |    |   |   |    |   |   |     |   |   |
|----------------------------------------------------------------|--------|-----------------------------|-----------|--------|----------|--------|--------|---------|--------|--------|---------|--------|--------|----------|-----------|--------|---------|--------|--------|---------|--------|--------|----------|--------|--------|
| December      31,                                              |   | 2008                        |      |   | 2007     |   |   | 2006    |   |
|                                                           |   |                        |      |   | Interest |   |   | Average |   |   |    |   |   | Interest |      |   | Average |   |   |    |   |   | Interest |   |   | Average |   |
|                                                           |   | Average                     |      |   | Income/  |   |   | Yield/  |   |   | Average |   |   | Income/  |      |   | Yield/  |   |   | Average |   |   | Income/  |   |   | Yield/ |   |
|                                                           |   | Balance                     |      |   | Expense  |   |   | Rate    |   |   | Balance |   |   | Expense  |      |   | Rate    |   |   | Balance |   |   | Expense  |   |   | Rate |   |
|                                                           |   | (Dollars      In Thousands) |      |
| ASSETS                                                         |   |                        |      |   |     |   |   |    |   |   |    |   |   |     |      |   |    |   |   |    |   |   |     |   |   |   |   |
| Interest-earning      assets:                                  |   |                        |      |   |     |   |   |    |   |   |    |   |   |     |      |   |    |   |   |    |   |   |     |   |   |   |   |
| Loans                                                          |   | $                           | 955,253   |   |     | $      | 61,686 |    |   |   | 6.46    | %      |   | $        | 883,334   |   |    | $      | 74,060 |    |   |   | 8.38     | %      |   | $ | 792,278 |   |   | $ | 67,354 |   |   |   | 8.50 | % |
| Investment      securities:                                    |   |                        |      |   |     |   |   |    |   |   |    |   |   |     |      |   |    |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                        |   |                        | 147,125   |   |     |   | 7,679  |    |   |   | 5.22    | %      |   |     | 159,510   |   |    |   | 8,211  |    |   |   | 5.15     | %      |   |   | 156,059 |   |   |   | 7,719 |   |   |   | 4.95 | % |
| Nontaxable                                                     |   |                        | 32,616    |   |     |   | 1,961  |    |   |   | 6.01    | %      |   |     | 30,998    |   |    |   | 1,868  |    |   |   | 6.03     | %      |   |   | 24,104 |   |   |   | 1,419 |   |   |   | 5.89 | % |
| Other      short-term investments                              |   |                        | 30,631    |   |     |   | 326    |    |   |   | 1.06    | %      |   |     | 23,076    |   |    |   | 1,191  |    |   |   | 5.16     | %      |   |   | 32,540 |   |   |   | 1,571 |   |   |   | 4.83 | % |
| Total      interest-earning assets                             |   |                        | 1,165,625 |   |     |   | 71,652 |    |   |   | 6.15    | %      |   |     | 1,096,918 |   |    |   | 85,330 |    |   |   | 7.78     | %      |   |   | 1,004,981 |   |   |   | 78,063 |   |   |   | 7.77 | % |
|                                                           |   |                        |      |   |     |   |   |    |   |   |    |   |   |     |      |   |    |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-earning      assets:                               |   |                        |      |   |     |   |   |    |   |   |    |   |   |     |      |   |    |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                                                           |   |                        | 18,412    |   |     |   |   |    |   |   |    |   |   |     | 20,534    |   |    |   |   |    |   |   |     |   |   |   | 20,927 |   |   |   |   |   |   |   |   |   |
| Allowance      for loan losses                                 |   |                        | (15,670   | )      |     |   |   |    |   |   |    |   |   |     | (11,264   | )      |    |   |   |    |   |   |     |   |   |   | (10,966 | ) |   |   |   |   |   |   |   |   |
| Unrealized      gain (loss) on securities available for sale   |   |                        | (323      | )      |     |   |   |    |   |   |    |   |   |     | (1,993    | )      |    |   |   |    |   |   |     |   |   |   | (2,818 | ) |   |   |   |   |   |   |   |   |
| Other      assets                                              |   |                        | 70,831    |   |     |   |   |    |   |   |    |   |   |     | 61,112    |   |    |   |   |    |   |   |     |   |   |   | 55,238 |   |   |   |   |   |   |   |   |   |
| Total      assets                                              |   | $                           | 1,238,875 |   |     |   |   |    |   |   |    |   |   | $        | 1,165,307 |   |    |   |   |    |   |   |     |   |   | $ | 1,067,362 |   |   |   |   |   |   |   |   |   |
|                                                           |   |                        |      |   |     |   |   |    |   |   |    |   |   |     |      |   |    |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                      |   |                        |      |   |     |   |   |    |   |   |    |   |   |     |      |   |    |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      liabilities:                             |   |                        |      |   |     |   |   |    |   |   |    |   |   |     |      |   |    |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand      deposits                                           |   | $                           | 271,498   |   |     | $      | 5,238  |    |   |   | 1.93    | %      |   | $        | 309,037   |   |    | $      | 11,049 |    |   |   | 3.58     | %      |   | $ | 266,374 |   |   | $ | 8,221 |   |   |   | 3.09 | % |
| Savings      deposits                                          |   |                        | 35,381    |   |     |   | 204    |    |   |   | 0.58    | %      |   |     | 37,231    |   |    |   | 564    |    |   |   | 1.51     | %      |   |   | 39,366 |   |   |   | 526 |   |   |   | 1.34 | % |
| Time      deposits                                             |   |                        | 606,878   |   |     |   | 25,873 |    |   |   | 4.26    | %      |   |     | 503,870   |   |    |   | 25,275 |    |   |   | 5.02     | %      |   |   | 453,004 |   |   |   | 19,708 |   |   |   | 4.35 | % |
| FHLB      advances                                             |   |                        | 99,975    |   |     |   | 3,956  |    |   |   | 3.96    | %      |   |     | 88,569    |   |    |   | 4,069  |    |   |   | 4.59     | %      |   |   | 90,115 |   |   |   | 3,848 |   |   |   | 4.27 | % |
| Notes      payable                                             |   |                        | 10,310    |   |     |   | 540    |    |   |   | 5.24    | %      |   |     | 10,310    |   |    |   | 727    |    |   |   | 7.05     | %      |   |   | 12,118 |   |   |   | 1,021 |   |   |   | 8.42 | % |
| Other      short-term borrowings                               |   |                        | 14,199    |   |     |   | 408    |    |   |   | 2.88    | %      |   |     | 12,392    |   |    |   | 526    |    |   |   | 4.25     | %      |   |   | 6,843 |   |   |   | 232 |   |   |   | 3.39 | % |
| Total      interest-bearing liabilities                        |   |                        | 1,038,241 |   |     |   | 36,219 |    |   |   | 3.49    | %      |   |     | 961,409   |   |    |   | 42,210 |    |   |   | 4.39     | %      |   |   | 867,820 |   |   |   | 33,556 |   |   |   | 3.87 | % |
|                                                           |   |                        |      |   |     |   |   |    |   |   |    |   |   |     |      |   |    |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing      liabilities and stockholders' equity: |   |                        |      |   |     |   |   |    |   |   |    |   |   |     |      |   |    |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand      deposits                                           |   |                        | 97,839    |   |     |   |   |    |   |   |    |   |   |     | 98,475    |   |    |   |   |    |   |   |     |   |   |   | 100,472 |   |   |   |   |   |   |   |   |   |
| Other      liabilities                                         |   |                        | 5,918     |   |     |   |   |    |   |   |    |   |   |     | 7,368     |   |    |   |   |    |   |   |     |   |   |   | 7,459 |   |   |   |   |   |   |   |   |   |
| Stockholders'      equity                                      |   |                        | 96,877    |   |     |   |   |    |   |   |    |   |   |     | 98,055    |   |    |   |   |    |   |   |     |   |   |   | 91,611 |   |   |   |   |   |   |   |   |   |
| Total      liabilities and stockholders equity                 |   | $                           | 1,238,875 |   |     |   |   |    |   |   |    |   |   | $        | 1,165,307 |   |    |   |   |    |   |   |     |   |   | $ | 1,067,362 |   |   |   |   |   |   |   |   |   |
|                                                           |   |                        |      |   |     |   |   |    |   |   |    |   |   |     |      |   |    |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      rate spread                                      |   |                        |      |   |     |   |   |    |   |   | 2.66    | %      |   |     |      |   |    |   |   |    |   |   | 3.39     | %      |   |   |   |   |   |   |   |   |   |   | 3.90 | % |
|                                                           |   |                        |      |   |     |   |   |    |   |   |    |   |   |     |      |   |    |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      interest income                                       |   |                        |      |   |     | $      | 35,433 |    |   |   |    |   |   |     |      |   |    | $      | 43,120 |    |   |   |     |   |   |   |   |   |   | $ | 44,507 |   |   |   |   |   |
|                                                           |   |                        |      |   |     |   |   |    |   |   |    |   |   |     |      |   |    |   |   |    |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      interest margin                                       |   |                        |      |   |     |   |   |    |   |   | 3.04    | %      |   |     |      |   |    |   |   |    |   |   | 3.93     | %      |   |   |   |   |   |   |   |   |   |   | 4.43 | % |

----

Table of Contents

| As      of December 31,                                |   | 2008                        |    |   | 2007            |   |   | 2006          |   |
|--------------------------------------------------------|--------|-----------------------------|---------|--------|-----------------|--------|--------|---------------|--------|
|                                                   |   | $      Amount               |    |   | %      to Total |   |   | $      Amount |   |   | %      to Total |   |   | $      Amount |   |   | %      to Total |   |
|                                                   |   | (Dollars      in Thousands) |    |   |            |   |
| U.      S. Government agency securities                |   | $                           | 35,303  |   |            |   | 19.0   | %             |   | $ | 70,235 |   |   |   | 36.1 | % |   | $ | 82,294 |   |   |   | 44.7 | % |
| State      and municipal securities                    |   |                        | 30,361  |   |            |   | 16.3   | %             |   |   | 32,332 |   |   |   | 16.6 | % |   |   | 28,892 |   |   |   | 15.7 | % |
| Mortgage-backed      securities                        |   |                        | 103,413 |   |            |   | 55.7   | %             |   |   | 77,201 |   |   |   | 39.6 | % |   |   | 58,875 |   |   |   | 32.0 | % |
| Corporate      debt securities                         |   |                        | 6,965   |   |            |   | 3.8    | %             |   |   | 6,507 |   |   |   | 3.3 | % |   |   | 4,528 |   |   |   | 2.5 | % |
| Equity      securities                                 |   |                        | 9,731   |   |            |   | 5.2    | %             |   |   | 8,519 |   |   |   | 4.4 | % |   |   | 9,504 |   |   |   | 5.1 | % |
| Total      investments                                 |   | $                           | 185,773 |   |            |   | 100.0  | %             |   | $ | 194,794 |   |   |   | 100.0 | % |   | $ | 184,093 |   |   |   | 100.0 | % |
| Total      investments as a percentage of total assets |   |                        | 13.8    | %      |            |   |   |          |   |   | 16.3 | % |   |   |   |   |   |   | 16.4 | % |   |   |   |   |

| As      of December 31, 2008                 |   | $      Amount               |   |   | %      to Total |   |
|----------------------------------------------|--------|-----------------------------|--------|--------|-----------------|--------|
|                                         |   | (Dollars      in Thousands) |   |
| XL      Capital Assurance Inc. (XLCA)        |   | $                           | 6,055  |   |            |   | 20.0 | % |
| Financial      Security Assurance Inc. (FSA) |   |                        | 5,101  |   |            |   | 16.8 | % |
| MBIA      Corporation (MBIA)                 |   |                        | 3,592  |   |            |   | 11.8 | % |
| Ambac      Assurance Corp (AMBAC)            |   |                        | 3,529  |   |            |   | 11.6 | % |
| Other                                        |   |                        | 4,085  |   |            |   | 13.5 | % |
| Uninsured                                    |   |                        | 7,999  |   |            |   | 26.3 | % |
| Total      state and municipal securities    |   | $                           | 30,361 |   |            |   | 100.00 | % |

|                                        |   | U.S.      Government        |   |   | State      and Municipal |   |   | Mortgage-Backed |   |   | Corporate      Debt |   |
|---------------------------------------------|--------|-----------------------------|--------|--------|--------------------------|--------|--------|-----------------|--------|--------|---------------------|--------|
|                                        |   | Agency      Securities      |   |   | Securities               |   |   | Securities      |   |   | Securities          |   |
| As      of December 31, 2008                |   | Amount                      |   |   | Yield                    |   |   | Amount          |   |   | Yield               |   |   | Amount |   |   | Yield |   |   | Amount |   |   | Yield |   |
|                                        |   | (Dollars      in Thousands) |   |
| Due      in one year or less                |   | $                           | -      |   |                     |   | -      |            |   | $      | 1,006               |   |   |   | 3.17 | % |   | $ | - |   |   |   | - |   |   | $ | - |   |   |   | - |   |
| Due      after one year through five years  |   |                        | 524    |   |                     |   | 4.33   | %               |   |   | 1,853               |   |   |   | 3.57 | % |   |   | - |   |   |   | - |   |   |   | 3,310 |   |   |   | 6.46 | % |
| Due      after five years through ten years |   |                        | 21,560 |   |                     |   | 5.29   | %               |   |   | 4,562               |   |   |   | 3.83 | % |   |   | 10,142 |   |   |   | 4.71 | % |   |   | 817 |   |   |   | 5.55 | % |
| Due      after ten years                    |   |                        | 13,219 |   |                     |   | 5.63   | %               |   |   | 22,940              |   |   |   | 4.07 | % |   |   | 93,271 |   |   |   | 5.39 | % |   |   | 2,838 |   |   |   | 7.00 | % |
| Total                                       |   | $                           | 35,303 |   |                     |   | 5.40   | %               |   | $      | 30,361              |   |   |   | 3.97 | % |   | $ | 103,413 |   |   |   | 5.32 | % |   | $ | 6,965 |   |   |   | 6.57 | % |

----

Table of Contents

| As      of December 31,                                         |   | 2008                        |    |   | 2007   |   |    | 2006   |   |   | 2005    |   |   | 2004   |    |
|-----------------------------------------------------------------|--------|-----------------------------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
|                                                            |   | (Dollars      in Thousands) |    |
| Commercial      and financial                                   |   | $                           | 87,530  |   |   | $      | 78,730  |   |   | $      | 66,376  |   |   | $      | 50,860  |   |   | $ | 59,703 |   |
| Agricultural      (including loans secured by farmland)         |   |                        | 48,647  |   |   |   | 41,861  |   |   |   | 43,302  |   |   |   | 55,830  |   |   |   | 26,704 |   |
| Real      estate –      construction and development |   |                        | 315,786 |   |   |   | 352,732 |   |   |   | 295,246 |   |   |   | 268,629 |   |   |   | 166,854 |   |
| Real      estate –      commercial                   |   |                        | 276,645 |   |   |   | 248,272 |   |   |   | 255,462 |   |   |   | 231,601 |   |   |   | 239,032 |   |
| Real      estate –      residential                  |   |                        | 196,306 |   |   |   | 174,157 |   |   |   | 142,501 |   |   |   | 127,326 |   |   |   | 136,190 |   |
| Installment      loans to individuals and other                 |   |                        | 32,084  |   |   |   | 26,011  |   |   |   | 18,414  |   |   |   | 20,380  |   |   |   | 19,552 |   |
|                                                            |   |                        | 956,998 |   |   |   | 921,763 |   |   |   | 821,301 |   |   |   | 754,626 |   |   |   | 648,035 |   |
| Deferred      loan fees and unearned interest, net              |   |                        | (310    | )      |   |   | (414    | )      |   |   | (997    | )      |   |   | (1,688  | ) |   |   | (1,886 | ) |
|                                                            |   |                        | 956,688 |   |   |   | 921,349 |   |   |   | 820,304 |   |   |   | 752,938 |   |   |   | 646,149 |   |
| Allowance      for loans losses                                 |   |                        | (19,374 | )      |   |   | (12,906 | )      |   |   | (11,006 | )      |   |   | (11,079 | ) |   |   | (9,066 | ) |
| Loans,      net                                                 |   | $                           | 937,314 |   |   | $      | 908,443 |   |   | $      | 809,298 |   |   | $      | 741,859 |   |   | $ | 637,083 |   |

| As      of December 31,                                         |   | 2008   |   |   | 2007   |   |   | 2006 |   |   | 2005   |   |   | 2004   |   |
|-----------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|------|--------|--------|--------|--------|--------|--------|--------|
|                                                            |   |   |   |
| Commercial      and financial                                   |   |   | 9.15   | %      |   |   | 8.55   | %    |   |   | 8.09   | %      |   |   | 6.75   | % |   |   | 9.24 | % |
| Agricultural      (including loans secured by farmland)         |   |   | 5.08   | %      |   |   | 4.54   | %    |   |   | 5.28   | %      |   |   | 7.41   | % |   |   | 4.13 | % |
| Real      estate –      construction and development |   |   | 33.01  | %      |   |   | 38.28  | %    |   |   | 35.99  | %      |   |   | 35.68  | % |   |   | 25.82 | % |
| Real      estate –      commercial                   |   |   | 28.92  | %      |   |   | 26.95  | %    |   |   | 31.14  | %      |   |   | 30.76  | % |   |   | 36.99 | % |
| Real      estate –      residential                  |   |   | 20.52  | %      |   |   | 18.90  | %    |   |   | 17.37  | %      |   |   | 16.91  | % |   |   | 21.08 | % |
| Installment      loans to individuals and other                 |   |   | 3.35   | %      |   |   | 2.82   | %    |   |   | 2.24   | %      |   |   | 2.71   | % |   |   | 3.03 | % |
|                                                            |   |   | 100.03 | %      |   |   | 100.04 | %    |   |   | 100.12 | %      |   |   | 100.22 | % |   |   | 100.29 | % |
| Deferred      loan fees and unearned interest, net              |   |   | -0.03  | %      |   |   | -0.04  | %    |   |   | -0.12  | %      |   |   | -0.22  | % |   |   | -0.29 | % |
|                                                            |   |   | 100.00 | %      |   |   | 100.00 | %    |   |   | 100.00 | %      |   |   | 100.00 | % |   |   | 100.00 | % |
| Allowance      for loans losses                                 |   |   | -2.03  | %      |   |   | -1.40  | %    |   |   | -1.34  | %      |   |   | -1.47  | % |   |   | -1.40 | % |
| Loans,      net                                                 |   |   | 97.97  | %      |   |   | 98.60  | %    |   |   | 98.66  | %      |   |   | 98.53  | % |   |   | 98.60 | % |

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Table of Contents

|                                          |   | 2008                        |    |   | 2007            |   |   | 2006          |   |
|-----------------------------------------------|--------|-----------------------------|---------|--------|-----------------|--------|--------|---------------|--------|
|                                          |   | $      Amount               |    |   | %      to Total |   |   | $      Amount |   |   | %      to Total |   |   | $      Amount |   |   | %      to Total |   |
|                                          |   | (Dollars      in Thousands) |    |
| Construction and    development:              |   |                        |    |   |            |   |   |          |   |   |   |   |   |   |   |   |   |   |
| Acquisition      and development:             |   |                        |    |   |            |   |   |          |   |   |   |   |   |   |   |   |   |   |
| 1-4      family residential                   |   | $                           | 129,412 |   |            |   | 41.0   | %             |   | $ | 130,097 |   |   |   | 36.9 | % |   | $ | 134,559 |   |   |   | 45.6 | % |
| Commercial      and multi-family              |   |                        | 95,934  |   |            |   | 30.4   | %             |   |   | 105,718 |   |   |   | 30.0 | % |   |   | 78,611 |   |   |   | 26.6 | % |
| Construction                                  |   |                        |    |   |            |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1-4      family residential spec              |   |                        | 19,182  |   |            |   | 6.1    | %             |   |   | 40,392 |   |   |   | 11.4 | % |   |   | 34,347 |   |   |   | 11.6 | % |
| 1-4      family residential pre-sold          |   |                        | 112     |   |            |   | 0.1    | %             |   |   | 1,604 |   |   |   | 0.4 | % |   |   | 1,930 |   |   |   | 0.6 | % |
| 1-4      family residential other             |   |                        | 23,423  |   |            |   | 7.4    | %             |   |   | 26,694 |   |   |   | 7.6 | % |   |   | 7,273 |   |   |   | 2.5 | % |
| Commercial      owner-occupied                |   |                        | 3,340   |   |            |   | 1.0    | %             |   |   | 5,685 |   |   |   | 1.6 | % |   |   | 6,685 |   |   |   | 2.3 | % |
| Commercial      not owner-occupied            |   |                        | 27,038  |   |            |   | 8.5    | %             |   |   | 17,497 |   |   |   | 5.0 | % |   |   | 8,831 |   |   |   | 3.0 | % |
| Hotel/motel                                   |   |                        | 7,949   |   |            |   | 2.5    | %             |   |   | 12,909 |   |   |   | 3.7 | % |   |   | 7,683 |   |   |   | 2.6 | % |
| Industrial                                    |   |                        | -       |   |            |   | 0.0    | %             |   |   | - |   |   |   | 0.0 | % |   |   | - |   |   |   | 0.0 | % |
| Multi-family      properties                  |   |                        | 6,538   |   |            |   | 2.1    | %             |   |   | 7,789 |   |   |   | 2.2 | % |   |   | 10,362 |   |   |   | 3.5 | % |
| Special      purpose property                 |   |                        | 2,858   |   |            |   | 0.9    | %             |   |   | 2,337 |   |   |   | 0.6 | % |   |   | 1,050 |   |   |   | 0.4 | % |
| Other                                         |   |                        | -       |   |            |   | 0.0    | %             |   |   | 2,010 |   |   |   | 0.6 | % |   |   | 3,915 |   |   |   | 1.3 | % |
| Total      construction and development loans |   | $                           | 315,786 |   |            |   | 100.0  | %             |   | $ | 352,732 |   |   |   | 100.0 | % |   | $ | 295,246 |   |   |   | 100.0 | % |
| %      of total loans                         |   |                        | 33.0    | %      |            |   |   |          |   |   | 38.3 | % |   |   |   |   |   |   | 36.0 | % |   |   |   |   |

|                                    |   | 2008          |    |   | 2007            |   |   | 2006          |   |
|-----------------------------------------|--------|---------------|---------|--------|-----------------|--------|--------|---------------|--------|
|                                    |   | $      Amount |    |   | %      to Total |   |   | $      Amount |   |   | %      to Total |   |   | $      Amount |   |   | %      to Total |   |
| Commercial real estate:                 |   |          |    |   |            |   |   |          |   |   |   |   |   |   |   |   |   |   |
| Owner-occupied:                         |   |          |    |   |            |   |   |          |   |   |   |   |   |   |   |   |   |   |
| Office                                  |   | $             | 41,617  |   |            |   | 15.0   | %             |   | $ | 34,291 |   |   |   | 13.8 | % |   | $ | 31,210 |   |   |   | 12.2 | % |
| Retail                                  |   |          | 21,062  |   |            |   | 7.6    | %             |   |   | 22,114 |   |   |   | 8.9 | % |   |   | 23,117 |   |   |   | 9.1 | % |
| Other                                   |   |          | 40,413  |   |            |   | 14.6   | %             |   |   | 34,263 |   |   |   | 13.8 | % |   |   | 38,151 |   |   |   | 14.9 | % |
| Not      owner-occupied:                |   |          |    |   |            |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Office                                  |   |          | 25,425  |   |            |   | 9.2    | %             |   |   | 29,210 |   |   |   | 11.8 | % |   |   | 28,686 |   |   |   | 11.2 | % |
| Retail                                  |   |          | 36,085  |   |            |   | 13.1   | %             |   |   | 36,780 |   |   |   | 14.8 | % |   |   | 31,503 |   |   |   | 12.3 | % |
| Other                                   |   |          | 24,656  |   |            |   | 8.9    | %             |   |   | 27,418 |   |   |   | 11.0 | % |   |   | 26,072 |   |   |   | 10.2 | % |
| Other:                                  |   |          |    |   |            |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hotel/motel                             |   |          | 15,812  |   |            |   | 5.7    | %             |   |   | 11,399 |   |   |   | 4.6 | % |   |   | 16,131 |   |   |   | 6.3 | % |
| Industrial                              |   |          | 4,677   |   |            |   | 1.7    | %             |   |   | 2,626 |   |   |   | 1.1 | % |   |   | 3,246 |   |   |   | 1.3 | % |
| Multi-family      properties            |   |          | 22,685  |   |            |   | 8.2    | %             |   |   | 14,894 |   |   |   | 6.0 | % |   |   | 19,379 |   |   |   | 7.6 | % |
| Special      purpose property           |   |          | 39,240  |   |            |   | 14.2   | %             |   |   | 34,876 |   |   |   | 14.0 | % |   |   | 37,938 |   |   |   | 14.9 | % |
| Other                                   |   |          | 4,973   |   |            |   | 1.8    | %             |   |   | 401 |   |   |   | 0.2 | % |   |   | 29 |   |   |   | 0.0 | % |
| Total      commercial real estate loans |   | $             | 276,645 |   |            |   | 100.0  | %             |   | $ | 248,272 |   |   |   | 100.0 | % |   | $ | 255,462 |   |   |   | 100.0 | % |
| %      of total loans                   |   |          | 28.9    | %      |            |   |   |          |   |   | 26.9 | % |   |   |   |   |   |   | 31.1 | % |   |   |   |   |

----

Table of Contents

|                                                            |   | South      Georgia          |    |   | North      Georgia |   |    | Florida |   |   |     |   |   |   |   |
|-----------------------------------------------------------------|--------|-----------------------------|---------|--------|--------------------|--------|---------|---------|--------|--------|----------|--------|--------|--------|--------|
|                                                            |   | Market                      |    |   | Market             |   |    | Market  |   |   | Treasury |   |   | Total  |   |
|                                                            |   | (Dollars      in Thousands) |    |
| Commercial      and financial                                   |   | $                           | 34,588  |   |               | $      | 50,631  |    |   | $      | 2,292    |   |   | $      | 19     |   |   | $ | 87,530 |   |
| Agricultural      (including loans secured by farmland)         |   |                        | 35,484  |   |               |   | 6,804   |    |   |   | 6,359    |   |   |   | -      |   |   |   | 48,647 |   |
| Real      estate –      construction and development |   |                        | 74,174  |   |               |   | 181,858 |    |   |   | 58,454   |   |   |   | 1,300  |   |   |   | 315,786 |   |
| Real      estate –      commercial                   |   |                        | 92,639  |   |               |   | 151,998 |    |   |   | 25,445   |   |   |   | 6,563  |   |   |   | 276,645 |   |
| Real      estate –      residential                  |   |                        | 138,832 |   |               |   | 43,562  |    |   |   | 8,974    |   |   |   | 4,938  |   |   |   | 196,306 |   |
| Installment      loans to individuals and others                |   |                        | 13,229  |   |               |   | 5,824   |    |   |   | 154      |   |   |   | 12,877 |   |   |   | 32,084 |   |
|                                                            |   |                        | 388,946 |   |               |   | 440,677 |    |   |   | 101,678  |   |   |   | 25,697 |   |   |   | 956,998 |   |
| Deferred      loan fees and unearned interest, net              |   |                        | 139     |   |               |   | (177    | )       |   |   | (236     | )      |   |   | (36    | ) |   |   | (310 | ) |
|                                                            |   |                        | 389,085 |   |               |   | 440,500 |    |   |   | 101,442  |   |   |   | 25,661 |   |   |   | 956,688 |   |
| Allowance      for loan losses                                  |   |                        | (4,730  | )      |               |   | (10,131 | )       |   |   | (2,740   | )      |   |   | (1,773 | ) |   |   | (19,374 | ) |
|                                                            |   | $                           | 384,355 |   |               | $      | 430,369 |    |   | $      | 98,702   |   |   | $      | 23,888 |   |   | $ | 937,314 |   |

|                                             |   | Commercial                  |   |   |         |   |   | Real      Estate - |   |   | Real      Estate - |   |   | Real      Estate - |    |   | All      Other |   |    |   |   |
|--------------------------------------------------|--------|-----------------------------|--------|--------|--------------|--------|--------|--------------------|--------|--------|--------------------|--------|--------|--------------------|---------|--------|----------------|--------|---------|--------|--------|
| As      of December 31, 2008                     |   | &      Financial        |   |   | Agricultural |   |   | Construction       |   |   | Commercial         |   |   | Residential        |    |   | Loans          |   |    | Total  |   |
|                                             |   | (Dollars      in Thousands) |   |   |         |   |   |               |   |
| Due      in one year or less                     |   | $                           | 59,506 |   |         | $      | 30,053 |               |   | $      | 275,889            |   |   | $                  | 78,877  |   |           | $      | 47,618  |   |   | $ | 17,598 |   |   | $ | 509,541 |   |
| Due      after one year through five years       |   |                        | 27,085 |   |         |   | 17,961 |               |   |   | 37,859             |   |   |               | 145,981 |   |           |   | 93,675  |   |   |   | 6,598 |   |   |   | 329,159 |   |
| Due      after five years                        |   |                        | 939    |   |         |   | 633    |               |   |   | 2,038              |   |   |               | 51,787  |   |           |   | 55,013  |   |   |   | 7,888 |   |   |   | 118,298 |   |
| Total                                            |   | $                           | 87,530 |   |         | $      | 48,647 |               |   | $      | 315,786            |   |   | $                  | 276,645 |   |           | $      | 196,306 |   |   | $ | 32,084 |   |   | $ | 956,998 |   |
|                                             |   |                        |   |   |         |   |   |               |   |   |               |   |   |               |    |   |           |   |    |   |   |   |   |   |   |   |   |   |
| Of      the above loans maturing after one year, |   |                        |   |   |         |   |   |               |   |   |               |   |   |               |    |   |           |   |    |   |   |   |   |   |   |   |   |   |
| those      with predetermined fixed rates        |   | $                           | 13,879 |   |         | $      | 10,797 |               |   | $      | 17,966             |   |   | $                  | 154,154 |   |           | $      | 113,118 |   |   | $ | 5,649 |   |   | $ | 315,563 |   |
| those      with floating or adjustable rates     |   |                        | 14,145 |   |         |   | 7,797  |               |   |   | 21,931             |   |   |               | 43,614  |   |           |   | 35,570  |   |   |   | 8,837 |   |   |   | 131,894 |   |
| Total      maturing after one year               |   | $                           | 28,024 |   |         | $      | 18,594 |               |   | $      | 39,897             |   |   | $                  | 197,768 |   |           | $      | 148,688 |   |   | $ | 14,486 |   |   | $ | 447,457 |   |

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|  Category                    |   | Net      CarryingValue * |   |  Collateral Description                          |   | Average      CarryingValue/ Unit |
|-----------------------------------|--------|--------------------------|--------|-------------------------------------------------------|--------|----------------------------------|
| Construction      and Development |   | $9.3      million        |   | 7      parcels of undeveloped land totaling 738 acres |   | $12,600      per acre            |
| Construction      and Development |   | $14.0      million       |   | 506      residential lots                             |   | $27,700      per lot             |
| 1-4      Family Residential       |   | $8.3      million        |   | 80      houses                                        |   | $104,000      per house          |
| Commercial      Real Estate       |   | $8.3      million        |   | 17      commercial properties                         |   | $488,000      per property       |
| Commercial      and Industrial    |   | $2.8      million        |   | Non-real      estate collateral                       |   | $404,000      per loan           |
| Multi-Family      Residential     |   | $8.6      million        |   | 9      condominium units                              |   | $950,000      per unit           |
| Consumer                          |   | $97,000                  |   | Non-real      estate collateral                       |   | $5,700      per loan             |

| As      of December 31,                                                                                        |   | 2008                        |   |   | 2007   |   |   | 2006   |   |   | 2005   |   |   | 2004   |   |
|----------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                                           |   | (Dollars      in Thousands) |   |
| Loans      accounted for on a nonaccrual basis                                                                 |   | $                           | 54,903 |   |   | $      | 11,405 |   |   | $      | 4,013  |   |   | $      | 7,856  |   |   | $ | 1,417 |   |
| Accruing      loans which are contractually past due 90 days or more as to principal or      interest payments |   |                        | 206    |   |   |   | 37     |   |   |   | 34     |   |   |   | 2      |   |   |   | 11 |   |
| Troubled      debt restructurings not included above                                                           |   |                        | 311    |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 2,045 |   |
| Total      nonperforming loans                                                                                 |   | $                           | 55,420 |   |   | $      | 11,442 |   |   | $      | 4,047  |   |   | $      | 7,858  |   |   | $ | 3,473 |   |
|                                                                                                           |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio      of nonperforming loans to total loans (%)                                                           |   |                        | 5.79   |   |   |   | 1.24   |   |   |   | 0.49   |   |   |   | 1.04   |   |   |   | 0.54 |   |
|                                                                                                           |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reserves      allocated to nonperforming loans:                                                                |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Specific      Reserves (FAS 114)                                                                               |   | $                           | 2,888  |   |   | $      | 1,577  |   |   | $      | -      |   |   | $      | 1,155  |   |   | $ | 304 |   |
| General      Reserves (FAS 5)                                                                                  |   |                        | 1,188  |   |   |   | 397    |   |   |   | 602    |   |   |   | 80     |   |   |   | 206 |   |
| Total      reserves allocated to nonperforming loans                                                           |   | $                           | 4,076  |   |   | $      | 1,974  |   |   | $      | 602    |   |   | $      | 1,235  |   |   | $ | 510 |   |
|                                                                                                           |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      reserves allocated as a percentage of nonperforming loans                                           |   |                        | 7.35   | %      |   |   | 17.25  | %      |   |   | 14.86  | %      |   |   | 15.71  | % |   |   | 14.67 | % |

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Table of Contents

|                                                                                                           |   | North      Georgia          |   |   | South      Georgia |   |   | Florida |   |   | Treasury |   |   | Total  |   |
|----------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|--------|--------------------|--------|--------|---------|--------|--------|----------|--------|--------|--------|--------|
|                                                                                                           |   | (Dollars      In Thousands) |   |
| Loans      accounted for on a nonaccrual basis                                                                 |   | $                           | 42,666 |   |               | $      | 7,519  |    |   | $      | 4,718    |   |   | $      | -      |   |   | $ | 54,903 |   |
| Accruing      loans which are contractually past due 90 days or more as to principal or      interest payments |   |                        | 195    |   |               |   | -      |    |   |   | -        |   |   |   | 11     |   |   |   | 206 |   |
| Troubled      debt restructurings not included above                                                           |   |                        | 311    |   |               |   | -      |    |   |   | -        |   |   |   | -      |   |   |   | 311 |   |
| Foreclosed      assets                                                                                         |   |                        | 23,021 |   |               |   | 1,088  |    |   |   | 1,160    |   |   |   | -      |   |   |   | 25,269 |   |
| Total      nonperforming assets                                                                                |   | $                           | 66,193 |   |               | $      | 8,607  |    |   | $      | 5,878    |   |   | $      | 11     |   |   | $ | 80,689 |   |

| Category                          |   | Book Value        |   | Description                                           |   | Average Value/ Unit       |
|-----------------------------------|--------|-------------------|--------|-------------------------------------------------------|--------|---------------------------|
| Construction      and Development |   | $4.4      million |   | 5      parcels of undeveloped land totaling 582 acres |   | $7,500      per acre      |
| Construction      and Development |   | $6.3      million |   | 267      residential lots                             |   | $24,000      per lot      |
| 1-4      Family Residential       |   | $9.7      million |   | 54      houses                                        |   | $180,000      per house   |
| Commercial      Real Estate       |   | $4.9      million |   | 19      commercial properties                         |   | $258,000      perproperty |

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Table of Contents

|   | · | lending      policies and procedures, including changes in underwriting standards and      collection, charge-off and recoverypractices: |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes      in international, national, regional and local economic and business      conditions that affect the collectibility of the  portfolio; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes      in the nature and volume of the loanportfolio; |
|--------|--------|-------------------------------------------------------------|

|   | · | experience,      ability, and depth of lending management and other relevant      staff; |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | levels      of and trends in delinquencies and impaired  loans; |
|--------|--------|-----------------------------------------------------------------|

|   | · | changes      in the quality of our loan reviewsystem; |
|--------|--------|-------------------------------------------------------|

|   | · | value      of underlying collateral for collateral-dependent  loans; |
|--------|--------|----------------------------------------------------------------------|

|   | · | existence      and effect of any concentrations of credit, and changes in the level of      such concentrations; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

|   | · | other      external factors such as competition and legal and regulatory      requirements. |
|--------|--------|---------------------------------------------------------------------------------------------|

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| As      of December 31,                                 |   | 2008                        |   |   | 2007               |   |   | 2006   |   |   | 2005               |   |   | 2004   |   |
|---------------------------------------------------------|--------|-----------------------------|--------|--------|--------------------|--------|--------|--------|--------|--------|--------------------|--------|--------|--------|--------|
|                                                    |   |                        |   |   | Percentage      of |   |   |   |   |   | Percentage      of |   |   |   |   |   | Percentage      of |   |   |   |   |   | Percentage      of |   |   |   |   |   | Percentage      of |   |
|                                                    |   |                        |   |   | Loans      in      |   |   |   |   |   | Loans      in      |   |   |   |   |   | Loans      in |   |   |   |   |   | Loans      in |   |   |   |   |   | Loans      in |   |
|                                                    |   |                        |   |   | Category           |   |   |   |   |   | Category           |   |   |   |   |   | Category |   |   |   |   |   | Category |   |   |   |   |   | Category |   |
|                                                    |   |                        |   |   | to      Total      |   |   |   |   |   | to      Total      |   |   |   |   |   | to      Total |   |   |   |   |   | to      Total |   |   |   |   |   | to      Total |   |
|                                                    |   | Amount                      |   |   | Loans              |   |   | Amount |   |   | Loans              |   |   | Amount |   |   | Loans |   |   | Amount |   |   | Loans |   |   | Amount |   |   | Loans |   |
|                                                    |   | (Dollars      in Thousands) |   |
| Commercial      and financial                           |   | $                           | 1,382  |   |               |   | 9.1    | %      |   | $      | 229                |   |   |   | 8.6    | % |   | $ | 972 |   |   |   | 8.1 | % |   | $ | 2,670 |   |   |   | 6.7 | % |   | $ | 1,167 |   |   |   | 8.9 | % |
| Agricultural      (including loans secured by farmland) |   |                        | 112    |   |               |   | 5.1    | %      |   |   | 1,029              |   |   |   | 4.5    | % |   |   | 1,184 |   |   |   | 5.3 | % |   |   | 323 |   |   |   | 7.4 | % |   |   | 490 |   |   |   | 4.2 | % |
| Real      estate - construction                         |   |                        | 11,950 |   |               |   | 33.0   | %      |   |   | 8,383              |   |   |   | 38.2   | % |   |   | 4,875 |   |   |   | 35.9 | % |   |   | 4,427 |   |   |   | 35.5 | % |   |   | 2,211 |   |   |   | 25.8 | % |
| Real      estate – commercial                     |   |                        | 2,552  |   |               |   | 28.9   | %      |   |   | 2,008              |   |   |   | 27.0   | % |   |   | 2,276 |   |   |   | 31.1 | % |   |   | 2,280 |   |   |   | 30.8 | % |   |   | 3,514 |   |   |   | 37.0 | % |
| Real      estate - residential                          |   |                        | 2,417  |   |               |   | 20.5   | %      |   |   | 815                |   |   |   | 18.9   | % |   |   | 547 |   |   |   | 17.4 | % |   |   | 208 |   |   |   | 16.9 | % |   |   | 1,337 |   |   |   | 21.1 | % |
| Consumer      and other loans                           |   |                        | 176    |   |               |   | 3.4    | %      |   |   | 215                |   |   |   | 2.8    | % |   |   | 255 |   |   |   | 2.2 | % |   |   | 512 |   |   |   | 2.7 | % |   |   | 335 |   |   |   | 3.0 | % |
| Unallocated                                             |   |                        | 785    |   |               |   | N/A    |   |   |   | 227                |   |   |   | N/A    |   |   |   | 897 |   |   |   | N/A |   |   |   | 659 |   |   |   | N/A |   |   |   | 12 |   |   |   | N/A |   |
| Total                                                   |   | $                           | 19,374 |   |               |   | 100.0  | %      |   | $      | 12,906             |   |   |   | 100.0  | % |   | $ | 11,006 |   |   |   | 100.0 | % |   | $ | 11,079 |   |   |   | 100.0 | % |   | $ | 9,066 |   |   |   | 100.0 | % |

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| For      the Years Ended December 31,                                                                            |   | 2008                        |    |   | 2007   |   |    | 2006   |   |   | 2005    |   |   | 2004   |    |
|------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
|                                                                                                             |   | (Dollars      in Thousands) |    |
| Balance      at beginning of year                                                                                |   | $                           | 12,906  |   |   | $      | 11,006  |   |   | $      | 11,079  |   |   | $      | 9,066   |   |   | $ | 10,139 |   |
| Charge-offs:                                                                                                     |   |                        |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Commercial      and financial                                                                                    |   |                        | 709     |   |   |   | 66      |   |   |   | 115     |   |   |   | 31      |   |   |   | 511 |   |
| Agricultural      (including loans secured by farmland)                                                          |   |                        | -       |   |   |   | 10      |   |   |   | -       |   |   |   | -       |   |   |   | 24 |   |
| Real      estate - construction and development                                                                  |   |                        | 8,023   |   |   |   | 324     |   |   |   | 24      |   |   |   | -       |   |   |   | - |   |
| Real      estate - commercial                                                                                    |   |                        | 25      |   |   |   | 257     |   |   |   | 314     |   |   |   | 7       |   |   |   | 1,228 |   |
| Real      estate - residential                                                                                   |   |                        | 3,188   |   |   |   | 65      |   |   |   | 208     |   |   |   | 43      |   |   |   | 467 |   |
| Installment      loans to individuals and other loans                                                            |   |                        | 183     |   |   |   | 146     |   |   |   | 160     |   |   |   | 200     |   |   |   | 343 |   |
|                                                                                                             |   |                        | 12,128  |   |   |   | 868     |   |   |   | 821     |   |   |   | 281     |   |   |   | 2,573 |   |
| Recoveries:                                                                                                      |   |                        |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Commercial      and financial                                                                                    |   |                        | 38      |   |   |   | 55      |   |   |   | 118     |   |   |   | 111     |   |   |   | 117 |   |
| Agricultural      (including loans secured by farmland)                                                          |   |                        | 38      |   |   |   | 56      |   |   |   | 41      |   |   |   | 247     |   |   |   | 151 |   |
| Real      estate - construction and development                                                                  |   |                        | 2       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Real      estate - commercial                                                                                    |   |                        | 340     |   |   |   | 28      |   |   |   | 335     |   |   |   | 394     |   |   |   | 268 |   |
| Real      estate - residential                                                                                   |   |                        | 33      |   |   |   | 108     |   |   |   | 87      |   |   |   | 148     |   |   |   | 52 |   |
| Installment      loans to individuals and other loans                                                            |   |                        | 94      |   |   |   | 121     |   |   |   | 167     |   |   |   | 205     |   |   |   | 312 |   |
|                                                                                                             |   |                        | 545     |   |   |   | 368     |   |   |   | 748     |   |   |   | 1,105   |   |   |   | 900 |   |
| Net      charge-offs (recoveries)                                                                                |   |                        | 11,583  |   |   |   | 500     |   |   |   | 73      |   |   |   | (824    | ) |   |   | 1,673 |   |
| Additions      provided to the allowance charged to operations                                                   |   |                        | 18,050  |   |   |   | 2,400   |   |   |   | -       |   |   |   | 1,189   |   |   |   | 600 |   |
| Balance      at end of year                                                                                      |   | $                           | 19,373  |   |   | $      | 12,906  |   |   | $      | 11,006  |   |   | $      | 11,079  |   |   | $ | 9,066 |   |
|                                                                                                             |   |                        |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Average      balance of loans outstanding                                                                        |   | $                           | 955,253 |   |   | $      | 883,334 |   |   | $      | 792,278 |   |   | $      | 706,052 |   |   | $ | 569,858 |   |
|                                                                                                             |   |                        |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Ratio      of net charge-offs (recoveries) during the year to average loans      outstanding during the year (%) |   |                        | 1.21    |   |   |   | 0.06    |   |   |   | 0.01    |   |   |   | (0.12   | ) |   |   | 0.29 |   |

| As      of December 31,                     |   | 2008                        |      |   | 2007   |   |    | 2006   |   |   | 2005    |   |   | 2004   |    |
|---------------------------------------------|--------|-----------------------------|-----------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
|                                        |   | (Dollars      in Thousands) |      |
| Noninterest-bearing      demand             |   | $                           | 91,114    |   |   | $      | 89,423  |   |   | $      | 100,911 |   |   | $      | 107,917 |   |   | $ | 99,628 |   |
| Interest-bearing      demand and savings    |   |                        | 252,122   |   |   |   | 354,743 |   |   |   | 328,828 |   |   |   | 284,126 |   |   |   | 224,836 |   |
| Time      less than $100,000                |   |                        | 328,329   |   |   |   | 312,722 |   |   |   | 279,936 |   |   |   | 250,250 |   |   |   | 187,208 |   |
| Time      greater than or equal to $100,000 |   |                        | 198,845   |   |   |   | 187,662 |   |   |   | 161,054 |   |   |   | 131,279 |   |   |   | 98,875 |   |
| Retail      time placed in CDARS program    |   |                        | 46,690    |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Brokered                                    |   |                        | 206,603   |   |   |   | 35,599  |   |   |   | 37,754  |   |   |   | 42,109  |   |   |   | 47,003 |   |
| Total      deposits                         |   | $                           | 1,123,703 |   |   | $      | 980,149 |   |   | $      | 908,483 |   |   | $      | 815,681 |   |   | $ | 657,550 |   |

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Table of Contents

| As      of December 31,                     |   | 2008   |   |   | 2007   |   |   | 2006 |   |   | 2005   |   |   | 2004   |   |
|---------------------------------------------|--------|--------|--------|--------|--------|--------|--------|------|--------|--------|--------|--------|--------|--------|--------|
|                                        |   |   |   |
| Noninterest-bearing      demand             |   |   | 8.11   | %      |   |   | 9.12   | %    |   |   | 11.11  | %      |   |   | 13.23  | % |   |   | 15.15 | % |
| Interest-bearing      demand and savings    |   |   | 22.44  | %      |   |   | 36.19  | %    |   |   | 36.19  | %      |   |   | 34.83  | % |   |   | 34.19 | % |
| Time      less than $100,000                |   |   | 29.22  | %      |   |   | 31.91  | %    |   |   | 30.81  | %      |   |   | 30.68  | % |   |   | 28.47 | % |
| Time      greater than or equal to $100,000 |   |   | 17.69  | %      |   |   | 19.15  | %    |   |   | 17.73  | %      |   |   | 16.10  | % |   |   | 15.04 | % |
| Retail      time placed in CDARS program    |   |   | 4.15   | %      |   |   | 0.00   | %    |   |   | 0.00   | %      |   |   | 0.00   | % |   |   | 0.00 | % |
| Brokered                                    |   |   | 18.39  | %      |   |   | 3.63   | %    |   |   | 4.16   | %      |   |   | 5.16   | % |   |   | 7.15 | % |
| Total      deposits                         |   |   | 100.00 | %      |   |   | 100.00 | %    |   |   | 100.00 | %      |   |   | 100.00 | % |   |   | 100.00 | % |

| For      the Year Ended December 31,              |   | 2008                        |      |   | 2007   |   |   | 2006                 |   |
|---------------------------------------------------|--------|-----------------------------|-----------|--------|--------|--------|--------|----------------------|--------|
|                                              |   | Average      Balance        |      |   | Rate   |   |   | Average      Balance |   |   | Rate |   |   | Average      Balance |   |   | Rate |   |
|                                              |   | (Dollars      in Thousands) |      |
| Noninterest-bearing      demand                   |   | $                           | 97,839    |   |   |   | -      |                 |   | $ | 98,475 |   |   |   | - |   |   | $ | 100,472 |   |   |   | - |   |
| Interest-bearing      demand                      |   |                        | 271,498   |   |   |   | 1.93   | %                    |   |   | 309,037 |   |   |   | 3.58 | % |   |   | 266,374 |   |   |   | 3.09 | % |
| Savings                                           |   |                        | 35,381    |   |   |   | 0.58   | %                    |   |   | 37,231 |   |   |   | 1.51 | % |   |   | 39,366 |   |   |   | 1.34 | % |
| Retail      time deposits < $100,000           |   |                        | 307,170   |   |   |   | 4.47   | %                    |   |   | 300,618 |   |   |   | 5.06 | % |   |   | 265,627 |   |   |   | 4.37 | % |
| Retail      time deposits >      $100,000      |   |                        | 183,151   |   |   |   | 4.05   | %                    |   |   | 168,842 |   |   |   | 4.94 | % |   |   | 147,193 |   |   |   | 4.30 | % |
| Retail      time deposits placed in CDARs program |   |                        | 8,973     |   |   |   | 3.17   | %                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Brokered      time deposits >      $100,000    |   |                        | 107,584   |   |   |   | 4.12   | %                    |   |   | 34,410 |   |   |   | 5.03 | % |   |   | 40,184 |   |   |   | 4.42 | % |
| Total                                             |   | $                           | 1,011,596 |   |   |   | 3.10   | %                    |   | $ | 948,613 |   |   |   | 3.89 | % |   | $ | 859,216 |   |   |   | 3.31 | % |

|                                       |   | Retail      time deposits<      $100,000 |    |   | Retail      time deposits> $100,000 |   |    | Retail      time deposits placed in CDARs program |   |   | Brokered      time deposits > $100,000 |   |   | Total      time deposits |    |
|--------------------------------------------|--------|---------------------------------------------|---------|--------|----------------------------------------|--------|---------|---------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|--------------------------|---------|
|                                       |   |                                        |    |   | (Dollars      in Thousands)            |   |
| Three      months or less                  |   | $                                           | 60,945  |   |                                   | $      | 27,535  |                                              |   | $      | 22,563                                         |   |   | $                        | 24,475  |   |   | $ | 135,518 |   |
| Over      three through six months         |   |                                        | 61,710  |   |                                   |   | 34,867  |                                              |   |   | 10,624                                         |   |   |                     | 21,093  |   |   |   | 128,294 |   |
| Over      six months through twelve months |   |                                        | 110,926 |   |                                   |   | 61,999  |                                              |   |   | 13,611                                         |   |   |                     | 40,171  |   |   |   | 226,707 |   |
| Over      twelve months                    |   |                                        | 117,239 |   |                                   |   | 51,845  |                                              |   |   | -                                              |   |   |                     | 120,864 |   |   |   | 289,948 |   |
| Total                                      |   | $                                           | 350,820 |   |                                   | $      | 176,246 |                                              |   | $      | 46,798                                         |   |   | $                        | 206,603 |   |   | $ | 780,467 |   |

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Table of Contents

|                                        |   | South      Georgia          |    |   | North      Georgia |   |    | Florida |   |   |     |   |   |   |    |
|---------------------------------------------|--------|-----------------------------|---------|--------|--------------------|--------|---------|---------|--------|--------|----------|--------|--------|--------|---------|
|                                        |   | Market                      |    |   | Market             |   |    | Market  |   |   | Treasury |   |   | Total  |    |
|                                        |   | (Dollars      in Thousands) |    |
| Noninterest-bearing      demand             |   | $                           | 70,305  |   |               | $      | 14,922  |    |   | $      | 3,154    |   |   | $      | 2,733   |   |   | $ | 91,114 |   |
| Interest-bearing      demand and savings    |   |                        | 204,670 |   |               |   | 23,742  |    |   |   | 23,100   |   |   |   | 610     |   |   |   | 252,122 |   |
| Time      less than $100,000                |   |                        | 189,925 |   |               |   | 46,541  |    |   |   | 91,462   |   |   |   | 401     |   |   |   | 328,329 |   |
| Time      greater than or equal to $100,000 |   |                        | 128,457 |   |               |   | 28,707  |    |   |   | 41,474   |   |   |   | 207     |   |   |   | 198,845 |   |
| Retail      time placed in CDARs program    |   |                        | 39,544  |   |               |   | 7,146   |    |   |   | -        |   |   |   | -       |   |   |   | 46,690 |   |
| Brokered                                    |   |                        | -       |   |               |   | -       |    |   |   | -        |   |   |   | 206,603 |   |   |   | 206,603 |   |
| Total      deposits                         |   | $                           | 632,901 |   |               | $      | 121,058 |    |   | $      | 159,190  |   |   | $      | 210,554 |   |   | $ | 1,123,703 |   |

LIQUIDITY 

| As      of December 31, 2008                |   | Contractual      Maturities |    |   | Expected      Cash Flows |   |    | Difference |   |
|---------------------------------------------|--------|-----------------------------|---------|--------|--------------------------|--------|---------|------------|--------|
|                                        |   | (Dollars      in Thousands) |    |
| Due      in one year or less                |   | $                           | 1,006   |   |                     | $      | 46,532  |       |   | $ | 45,526 |   |
| Due      after one year through five years  |   |                        | 5,687   |   |                     |   | 81,034  |       |   |   | 75,347 |   |
| Due      after five years through ten years |   |                        | 37,081  |   |                     |   | 24,510  |       |   |   | (12,571 | ) |
| Due      after ten years                    |   |                        | 132,268 |   |                     |   | 23,966  |       |   |   | (108,302 | ) |
| Total                                       |   | $                           | 176,042 |   |                     | $      | 176,042 |       |   | $ | - |   |

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Table of Contents

|                                                         |   |                        |    |   | 1      year  |   |   | Over      1     |   |   | Over      3     |   |   | More      than |   |
|--------------------------------------------------------------|--------|-----------------------------|---------|--------|--------------|--------|--------|-----------------|--------|--------|-----------------|--------|--------|----------------|--------|
| Contractual      Obligations                                 |   | Total                       |    |   | or      less |   |   | to      3 years |   |   | to      5 years |   |   | 5      years   |   |
|                                                         |   | (Dollars      in Thousands) |    |
| FHLB      Advances                                           |   | $                           | 109,704 |   |         | $      | 19,565 |            |   | $      | 35,921          |   |   | $              | 31,686 |   |   | $ | 22,532 |   |
| Operating      Lease Obligations                             |   |                        | 1,747   |   |         |   | 347    |            |   |   | 654             |   |   |           | 386    |   |   |   | 360 |   |
| Guaranteed      Preferred Beneficial Interests in Debentures |   |                        | 10,310  |   |         |   | -      |            |   |   | -               |   |   |           | -      |   |   |   | 10,310 |   |
|                                                         |   | $                           | 121,761 |   |         | $      | 19,912 |            |   | $      | 36,575          |   |   | $              | 32,072 |   |   | $ | 33,202 |   |

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|                                                   |   |   |   |   |   |   |   |   |   |   | Minimum     |   |
|--------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-------------|--------|
|                                                   |   |   |   |   |   |   |   |   |   |   | Regulatory  |   |
|                                                   |   | 2008   |   |   | 2007   |   |   | 2006   |   |   | Requirement |   |
| Total      Capital to Risk Weighted Assets             |   |   | 10.3   | %      |   |   | 11.3   | %      |   |   | 12.3        | %      |   |   | 8.0 | % |
| Tier      1 Capital to Risk Weighted Assets            |   |   | 9.0    | %      |   |   | 10.0   | %      |   |   | 11.1        | %      |   |   | 4.0 | % |
| Tier      1 Capital to Average Assets (Leverage Ratio) |   |   | 7.0    | %      |   |   | 8.5    | %      |   |   | 9.1         | %      |   |   | 4.0 | % |

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RESULTS 

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| For      the Year Ended December 31,                |   | 2008                        |   |   |               |   |    | 2007   |   |   |               |   |   | 2006   |   |
|-----------------------------------------------------|--------|-----------------------------|--------|--------|--------------------|--------|---------|--------|--------|--------|--------------------|--------|--------|--------|--------|
|                                                |   |                        |   |   | Percentage         |   |    |   |   |   | Percentage         |   |   |   |   |
|                                                |   |                        |   |   | Change             |   |    |   |   |   | Change             |   |   |   |   |
|                                                |   | Amount                      |   |   | 2008      vs. 2007 |   |    | Amount |   |   | 2007      vs. 2006 |   |   | Amount |   |
|                                                |   | (Dollars      In Thousands) |   |
| Service      charges on deposit accounts            |   | $                           | 3,683  |   |               |   | 1.8     | %      |   | $      | 3,617              |   |   |   | -6.7   | % |   | $ | 3,875 |   |
| Mortgage      origination fees                      |   |                        | 709    |   |               |   | 75.1    | %      |   |   | 405                |   |   |   | -18.8  | % |   |   | 499 |   |
| Brokerage      commissions and fees                 |   |                        | 17     |   |               |   | 30.8    | %      |   |   | 13                 |   |   |   | 30.0   | % |   |   | 10 |   |
| ATM      / debit card fee income                    |   |                        | 737    |   |               |   | 14.6    | %      |   |   | 643                |   |   |   | 14.6   | % |   |   | 561 |   |
| Other      commissions and fees                     |   |                        | 207    |   |               |   | -6.3    | %      |   |   | 221                |   |   |   | -10.2  | % |   |   | 246 |   |
| Securities      transactions, net                   |   |                        | 225    |   |               |   | -28.1   | %      |   |   | 313                |   |   |   | -157.7 | % |   |   | (542 | ) |
| Earnings      of bank-owned life insurance          |   |                        | 421    |   |               |   | 3.7     | %      |   |   | 406                |   |   |   | 3.0    | % |   |   | 394 |   |
| Gain      (loss) on disposal / write-down of assets |   |                        | (1,853 | )      |               |   | -2387.7 | %      |   |   | 81                 |   |   |   | 252.2  | % |   |   | 23 |   |
| Other      noninterest income                       |   |                        | 257    |   |               |   | -12.0   | %      |   |   | 292                |   |   |   | -7.0   | % |   |   | 314 |   |
| Total      Noninterest Income                       |   | $                           | 4,403  |   |               |   | -26.5   | %      |   | $      | 5,991              |   |   |   | 11.4   | % |   | $ | 5,380 |   |
|                                                |   |                        |   |   |               |   |    |   |   |   |               |   |   |   |   |   |   |   |   |   |

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| For      the Year Ended December 31,       |   | 2008                        |   |   |               |   |   | 2007   |   |   |               |   |   | 2006   |   |
|--------------------------------------------|--------|-----------------------------|--------|--------|--------------------|--------|--------|--------|--------|--------|--------------------|--------|--------|--------|--------|
|                                       |   |                        |   |   | Percentage         |   |   |   |   |   | Percentage         |   |   |   |   |
|                                       |   |                        |   |   | Change             |   |   |   |   |   | Change             |   |   |   |   |
|                                       |   | Amount                      |   |   | 2008      vs. 2007 |   |   | Amount |   |   | 2007      vs. 2006 |   |   | Amount |   |
|                                       |   | (Dollars      In Thousands) |   |
| Salaries      and wages                    |   | $                           | 15,940 |   |               |   | -3.0   | %      |   | $      | 16,431             |   |   |   | 6.7    | % |   | $ | 15,396 |   |
| Deferred      loan cost                    |   |                        | (1,635 | )      |               |   | -17.0  | %      |   |   | (1,969             | )      |   |   | 11.0   | % |   |   | (1,774 | ) |
| Employee      benefits                     |   |                        | 3,806  |   |               |   | -7.6   | %      |   |   | 4,119              |   |   |   | -6.3   | % |   |   | 4,396 |   |
| Net      occupancy expense of premises     |   |                        | 3,290  |   |               |   | 38.6   | %      |   |   | 2,374              |   |   |   | 18.4   | % |   |   | 2,005 |   |
| Furniture      and equipment expense       |   |                        | 2,023  |   |               |   | -11.2  | %      |   |   | 2,279              |   |   |   | 3.4    | % |   |   | 2,203 |   |
| Advertising      and business development  |   |                        | 582    |   |               |   | -7.0   | %      |   |   | 626                |   |   |   | 9.2    | % |   |   | 573 |   |
| Supplies      and printing                 |   |                        | 390    |   |               |   | -15.8  | %      |   |   | 463                |   |   |   | -6.7   | % |   |   | 496 |   |
| Telephone      and internet charges        |   |                        | 777    |   |               |   | 22.4   | %      |   |   | 635                |   |   |   | 34.8   | % |   |   | 471 |   |
| Postage      and courier                   |   |                        | 573    |   |               |   | -11.2  | %      |   |   | 645                |   |   |   | 13.4   | % |   |   | 569 |   |
| Legal      and accounting fees             |   |                        | 463    |   |               |   | -17.2  | %      |   |   | 559                |   |   |   | 25.1   | % |   |   | 447 |   |
| Consulting      fees                       |   |                        | 57     |   |               |   | -72.7  | %      |   |   | 209                |   |   |   | -31.9  | % |   |   | 307 |   |
| Director      fees and expenses            |   |                        | 625    |   |               |   | 57.0   | %      |   |   | 398                |   |   |   | -8.5   | % |   |   | 435 |   |
| Service      charges and fees              |   |                        | 595    |   |               |   | -4.3   | %      |   |   | 622                |   |   |   | 23.4   | % |   |   | 504 |   |
| Foreclosure      and repossession expenses |   |                        | 956    |   |               |   | 380.4  | %      |   |   | 199                |   |   |   | 165.3  | % |   |   | 75 |   |
| Other      noninterest expense             |   |                        | 2,142  |   |               |   | 7.1    | %      |   |   | 2,000              |   |   |   | -3.1   | % |   |   | 2,064 |   |
| Total      Noninterest Expense             |   | $                           | 30,584 |   |               |   | 3.4    | %      |   | $      | 29,590             |   |   |   | 5.1    | % |   | $ | 28,167 |   |

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ITEM 

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Table of Contents

| Cumulative      Maturity Gap Analysis |   |                        |    |   |    |   |    |   |   |   |    |   |   |   |    |
|---------------------------------------|--------|-----------------------------|---------|--------|---------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
|                                  |   | 3-Month                     |    |   | 6-Month |   |    | 1-Year |   |   | 3-Year  |   |   | Total  |    |
|                                  |   | (Dollars      in Thousands) |    |
| Regulatory Defined                    |   |                        |    |   |    |   |    |   |   |   |    |   |   |   |    |
| Rate      Sensitive Assets (RSA)      |   | $                           | 241,252 |   |    | $      | 365,619 |   |   | $      | 558,039 |   |   | $      | 818,280 |   |   | $ | 1,350,103 |   |
| Rate Sensitive Liabilities      (RSL) |   |                        | 145,458 |   |    |   | 274,687 |   |   |   | 522,317 |   |   |   | 799,802 |   |   |   | 1,350,103 |   |
| RSA      minus RSL (Gap)              |   | $                           | 95,794  |   |    | $      | 90,932  |   |   | $      | 35,722  |   |   | $      | 18,478  |   |   | $ | - |   |
|                                  |   |                        |    |   |    |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Maturity      Gap Ratio (RSA/RSL)     |   |                        | 1.66    |   |    |   | 1.33    |   |   |   | 1.07    |   |   |   | 1.02    |   |   |   | 1.00 |   |

| Cumulative      Repricing Gap Analysis |   |                        |    |   |    |   |    |   |   |   |    |   |   |   |      |
|----------------------------------------|--------|-----------------------------|---------|--------|---------|--------|---------|--------|--------|--------|---------|--------|--------|--------|-----------|
|                                   |   | 3-Month                     |    |   | 6-Month |   |    | 1-Year |   |   | 3-Year  |   |   | Total  |      |
|                                   |   | (Dollars      in Thousands) |    |
| Regulatory Defined                     |   |                        |    |   |    |   |    |   |   |   |    |   |   |   |      |
| Rate      Sensitive Assets (RSA)       |   | $                           | 681,014 |   |    | $      | 726,508 |   |   | $      | 809,576 |   |   | $      | 999,901   |   |   | $ | 1,350,103 |   |
| Rate Sensitive Liabilities      (RSL)  |   |                        | 435,235 |   |    |   | 564,464 |   |   |   | 808,152 |   |   |   | 1,082,164 |   |   |   | 1,350,103 |   |
| RSA      minus RSL (Gap)               |   | $                           | 245,779 |   |    | $      | 162,044 |   |   | $      | 1,424   |   |   | $      | (82,263   | ) |   | $ | - |   |
|                                   |   |                        |    |   |    |   |    |   |   |   |    |   |   |   |      |   |   |   |   |   |
| Repricing      Gap Ratio (RSA/RSL)     |   |                        | 1.56    |   |    |   | 1.29    |   |   |   | 1.00    |   |   |   | 0.92      |   |   |   | 1.00 |   |
|                                   |   |                        |    |   |    |   |    |   |   |   |    |   |   |   |      |   |   |   |   |   |
| Management-Adjusted                    |   |                        |    |   |    |   |    |   |   |   |    |   |   |   |      |   |   |   |   |   |
| Rate      Sensitive Assets (RSA)       |   | $                           | 684,983 |   |    | $      | 733,040 |   |   | $      | 818,965 |   |   | $      | 1,015,281 |   |   | $ | 1,350,103 |   |
| Rate Sensitive Liabilities      (RSL)  |   |                        | 442,882 |   |    |   | 579,099 |   |   |   | 834,999 |   |   |   | 1,140,726 |   |   |   | 1,350,103 |   |
| RSA      minus RSL (Gap)               |   | $                           | 242,101 |   |    | $      | 153,941 |   |   | $      | (16,034 | )      |   | $      | (125,445  | ) |   | $ | - |   |
|                                   |   |                        |    |   |    |   |    |   |   |   |    |   |   |   |      |   |   |   |   |   |
| Repricing      Gap Ratio (RSA/RSL)     |   |                        | 1.55    |   |    |   | 1.27    |   |   |   | 0.98    |   |   |   | 0.89      |   |   |   | 1.00 |   |

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| Market           | Effect      on Net Interest Income |
|------------------|------------------------------------|
| Rate      Change | Gradual                            | Immediate |
| +300      bps    | 19.03%                             | 31.63% |
| +200      bps    | 16.74%                             | 21.08% |
| +100      bps    | 9.84%                              | 10.88% |
| -25      bps     | -1.09%                             | -1.09% |

ITEM 

|                                                     |   | Quarterly      Period Ended |   |
|----------------------------------------------------------|--------|-----------------------------|--------|
|                                                     |   | March      31               |   |   | June      30 |   |   | September      30 |   |   | December      31 |   |
| Year      ended December 31, 2008:                       |   |                        |   |   |   |   |   |   |   |   |   |   |
| Interest      income                                     |   | $                           | 19,030 |   |   | $ | 17,460 |   |   | $ | 17,680 |   |   | $ | 16,814 |   |
| Interest      expense                                    |   |                        | 9,685  |   |   |   | 8,598 |   |   |   | 8,460 |   |   |   | 9,476 |   |
| Net      interest income                                 |   |                        | 9,345  |   |   |   | 8,862 |   |   |   | 9,220 |   |   |   | 7,338 |   |
| Provision      for loan losses                           |   |                        | 1,200  |   |   |   | 1,050 |   |   |   | 7,300 |   |   |   | 8,500 |   |
| Net      interest income after provision for loan losses |   |                        | 8,145  |   |   |   | 7,812 |   |   |   | 1,920 |   |   |   | (1,162 | ) |
| Other      income                                        |   |                        | 1,643  |   |   |   | 1,572 |   |   |   | 1,081 |   |   |   | 107 |   |
| Other      expenses                                      |   |                        | 7,829  |   |   |   | 7,191 |   |   |   | 7,510 |   |   |   | 8,053 |   |
| Income      before income taxes                          |   |                        | 1,959  |   |   |   | 2,193 |   |   |   | (4,509 | ) |   |   | (9,108 | ) |
| Income      tax                                          |   |                        | 662    |   |   |   | 730 |   |   |   | (1,649 | ) |   |   | (3,297 | ) |
| Net      income                                          |   | $                           | 1,297  |   |   | $ | 1,463 |   |   | $ | (2,860 | ) |   | $ | (5,811 | ) |
|                                                     |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      earnings per share                            |   | $                           | 0.14   |   |   | $ | 0.16 |   |   | $ | (0.31 | ) |   | $ | (0.62 | ) |
| Diluted      earnings per share                          |   | $                           | 0.14   |   |   | $ | 0.15 |   |   | $ | (0.32 | ) |   | $ | (0.60 | ) |
|                                                     |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                     |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Year      ended December 31, 2007:                       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      income                                     |   | $                           | 20,451 |   |   | $ | 21,345 |   |   | $ | 21,866 |   |   | $ | 21,013 |   |
| Interest      expense                                    |   |                        | 9,783  |   |   |   | 10,386 |   |   |   | 11,084 |   |   |   | 10,956 |   |
| Net      interest income                                 |   |                        | 10,668 |   |   |   | 10,959 |   |   |   | 10,782 |   |   |   | 10,057 |   |
| Provision      for loan losses                           |   |                        | -      |   |   |   | 200 |   |   |   | 400 |   |   |   | 1,800 |   |
| Net      interest income after provision for loan losses |   |                        | 10,668 |   |   |   | 10,759 |   |   |   | 10,382 |   |   |   | 8,257 |   |
| Other      income                                        |   |                        | 1,478  |   |   |   | 1,359 |   |   |   | 1,471 |   |   |   | 1,682 |   |
| Other      expenses                                      |   |                        | 7,470  |   |   |   | 7,209 |   |   |   | 7,471 |   |   |   | 7,440 |   |
| Income      before income taxes                          |   |                        | 4,676  |   |   |   | 4,909 |   |   |   | 4,382 |   |   |   | 2,499 |   |
| Income      tax                                          |   |                        | 1,612  |   |   |   | 1,688 |   |   |   | 1,523 |   |   |   | 858 |   |
| Net      income                                          |   | $                           | 3,064  |   |   | $ | 3,221 |   |   | $ | 2,859 |   |   | $ | 1,641 |   |
|                                                     |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      earnings per share                            |   | $                           | 0.32   |   |   | $ | 0.34 |   |   | $ | 0.29 |   |   | $ | 0.17 |   |
| Diluted      earnings per share                          |   | $                           | 0.32   |   |   | $ | 0.33 |   |   | $ | 0.29 |   |   | $ | 0.17 |   |

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MANAGEMENT’S 

----

| PAB      BANKSHARES, INC.    |                              |
|------------------------------|-----------------------------------|
|                         |                              |
| /s/ M. Burke Welsh, Jr       | /s/ Donald J. Torbert,  Jr.       |
| M.      Burke Welsh, Jr.     | Donald      J. Torbert, Jr.       |
| President      and           | Executive      Vice President and |
| Chief      Executive Officer | Chief      Financial Officer      |
|                         |                              |
| March 9, 2009                | March 9, 2009                     |
| Date                         | Date                              |

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Certified 

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Certified 

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Table of Contents

| PAB      BANKSHARES, INC. AND SUBSIDIARIES                                                                                |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED      BALANCE SHEETS                                                                                          |   |
| DECEMBER      31, 2008 AND 2007                                                                                           |   |
|                                                                                                                      |   |   |   |   |   |   |
|                                                                                                                      |   |   |   |   |   |   |
|                                                                                                                      |   | 2008 |   |   | 2007 |   |
|                                                                                                                      |   |   |   |   |   |   |
| ASSETS                                                                                                                    |   |   |   |   |   |   |
| Cash      and balances due from banks                                                                                     |   | $ | 18,104,521 |   |   | $ | 29,451,700 |   |
| Interest-bearing      deposits in other banks                                                                             |   |   | 118,244,771 |   |   |   | 393,276 |   |
| Federal      funds sold                                                                                                   |   |   | 1,054,719 |   |   |   | 559,444 |   |
| Investment      securities                                                                                                |   |   | 185,773,315 |   |   |   | 194,794,481 |   |
|                                                                                                                      |   |   |   |   |   |   |   |   |
| Loans                                                                                                                     |   |   | 956,687,391 |   |   |   | 921,348,906 |   |
| Allowance      for loan losses                                                                                            |   |   | (19,373,625 | ) |   |   | (12,905,938 | ) |
| Net      loans                                                                                                            |   |   | 937,313,766 |   |   |   | 908,442,968 |   |
|                                                                                                                      |   |   |   |   |   |   |   |   |
| Premises      and equipment, net                                                                                          |   |   | 19,984,288 |   |   |   | 20,177,671 |   |
| Goodwill                                                                                                                  |   |   | 5,984,604 |   |   |   | 5,984,604 |   |
| Cash      value of bank-owned life insurance policies                                                                     |   |   | 12,302,586 |   |   |   | 11,881,384 |   |
| Foreclosed      assets                                                                                                    |   |   | 25,268,901 |   |   |   | 6,360,258 |   |
| Other      assets                                                                                                         |   |   | 26,071,460 |   |   |   | 20,625,156 |   |
|                                                                                                                      |   |   |   |   |   |   |   |   |
| Total      assets                                                                                                         |   | $ | 1,350,102,931 |   |   | $ | 1,198,670,942 |   |
|                                                                                                                      |   |   |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                                                 |   |   |   |   |   |   |   |   |
| Deposits:                                                                                                                 |   |   |   |   |   |   |   |   |
| Noninterest-bearing      demand                                                                                           |   | $ | 91,114,337 |   |   | $ | 89,423,571 |   |
| Interest-bearing      demand and savings                                                                                  |   |   | 252,122,046 |   |   |   | 354,742,862 |   |
| Time                                                                                                                      |   |   | 780,466,875 |   |   |   | 535,982,585 |   |
| Total      deposits                                                                                                       |   |   | 1,123,703,258 |   |   |   | 980,149,018 |   |
|                                                                                                                      |   |   |   |   |   |   |   |   |
| Federal      funds purchased and securities sold under agreements to      repurchase                                      |   |   | 8,954,253 |   |   |   | 16,175,370 |   |
| Advances      from the Federal Home Loan Bank of Atlanta                                                                  |   |   | 109,703,917 |   |   |   | 86,297,705 |   |
| Guaranteed      preferred beneficial interests in debentures (trust preferred      securities)                            |   |   | 10,310,000 |   |   |   | 10,310,000 |   |
| Other      liabilities                                                                                                    |   |   | 5,830,761 |   |   |   | 8,062,877 |   |
| Total      liabilities                                                                                                    |   |   | 1,258,502,189 |   |   |   | 1,100,994,970 |   |
|                                                                                                                      |   |   |   |   |   |   |   |   |
| Commitments      and contingencies                                                                                        |   |   |   |   |   |   |   |   |
|                                                                                                                      |   |   |   |   |   |   |   |   |
| Stockholders'      equity:                                                                                                |   |   |   |   |   |   |   |   |
| Preferred      stock, no par value; 1,500,000 shares authorized; no shares      issued                                    |   |   | - |   |   |   | - |   |
| Common      stock, no par value; 98,500,000 shares authorized; 9,324,407 and 9,223,217      shares issued and outstanding |   |   | 1,217,065 |   |   |   | 1,217,065 |   |
| Additional      paid-in capital                                                                                           |   |   | 24,225,407 |   |   |   | 22,792,940 |   |
| Retained      earnings                                                                                                    |   |   | 62,467,000 |   |   |   | 72,822,852 |   |
| Accumulated      other comprehensive income                                                                               |   |   | 3,691,270 |   |   |   | 843,115 |   |
| Total      stockholders' equity                                                                                           |   |   | 91,600,742 |   |   |   | 97,675,972 |   |
|                                                                                                                      |   |   |   |   |   |   |   |   |
| Total      liabilities and stockholders' equity                                                                           |   | $ | 1,350,102,931 |   |   | $ | 1,198,670,942 |   |

----

Table of Contents

| PAB BANKSHARES, INC. AND SUBSIDIARIES                    |   |
|----------------------------------------------------------|--------|
| CONSOLIDATED      STATEMENTS OF INCOME (LOSS)            |   |
| YEARS      ENDED DECEMBER 31, 2008, 2007 AND 2006        |   |
|                                                     |   |
|                                                     |   |   |   |   |   |   |   |   |   |
|                                                     |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                     |   |   |   |   |   |   |   |   |   |
| Interest      income:                                    |   |   |   |   |   |   |   |   |   |
| Interest      and fees on loans                          |   | $ | 61,686,147 |   |   | $ | 74,060,094 |   |   | $ | 67,353,896 |   |
| Interest      and dividends on investment securities:    |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                  |   |   | 7,678,742 |   |   |   | 8,210,696 |   |   |   | 7,718,646 |   |
| Nontaxable                                               |   |   | 1,294,165 |   |   |   | 1,214,213 |   |   |   | 922,097 |   |
| Other      interest income                               |   |   | 325,028 |   |   |   | 1,190,678 |   |   |   | 1,571,446 |   |
| Total      interest income                               |   |   | 70,984,082 |   |   |   | 84,675,681 |   |   |   | 77,566,085 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense:                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      on deposits                                |   |   | 31,314,422 |   |   |   | 36,887,599 |   |   |   | 28,455,480 |   |
| Interest      on Federal Home Loan Bank advances         |   |   | 3,955,870 |   |   |   | 4,068,962 |   |   |   | 3,847,529 |   |
| Interest      on other borrowings                        |   |   | 948,152 |   |   |   | 1,253,271 |   |   |   | 1,252,427 |   |
| Total      interest expense                              |   |   | 36,218,444 |   |   |   | 42,209,832 |   |   |   | 33,555,436 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      interest income                                 |   |   | 34,765,638 |   |   |   | 42,465,849 |   |   |   | 44,010,649 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision      for loan losses                           |   |   | 18,050,000 |   |   |   | 2,400,000 |   |   |   | - |   |
| Net      interest income after provision for loan losses |   |   | 16,715,638 |   |   |   | 40,065,849 |   |   |   | 44,010,649 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      income:                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Service      charges on deposit accounts                 |   |   | 3,682,866 |   |   |   | 3,616,552 |   |   |   | 3,874,908 |   |
| Other      fee income                                    |   |   | 1,671,688 |   |   |   | 1,282,167 |   |   |   | 1,315,441 |   |
| Securities      transactions, net                        |   |   | 225,168 |   |   |   | 312,988 |   |   |   | (542,253 | ) |
| Gain      (loss) on sale and write-down of other assets  |   |   | (1,853,261 | ) |   |   | 80,851 |   |   |   | 22,616 |   |
| Other      noninterest income                            |   |   | 676,369 |   |   |   | 698,709 |   |   |   | 708,928 |   |
| Total      other income                                  |   |   | 4,402,830 |   |   |   | 5,991,267 |   |   |   | 5,379,640 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      expenses:                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries      and employee benefits                      |   |   | 18,110,278 |   |   |   | 18,581,881 |   |   |   | 18,017,713 |   |
| Occupancy      expense of premises                       |   |   | 3,289,742 |   |   |   | 2,373,917 |   |   |   | 2,004,599 |   |
| Furniture      and equipment expense                     |   |   | 2,023,117 |   |   |   | 2,278,600 |   |   |   | 2,202,592 |   |
| Other      noninterest expense                           |   |   | 7,160,931 |   |   |   | 6,355,767 |   |   |   | 5,942,224 |   |
| Total      other expenses                                |   |   | 30,584,068 |   |   |   | 29,590,165 |   |   |   | 28,167,128 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      (loss) before income tax expense             |   |   | (9,465,600 | ) |   |   | 16,466,951 |   |   |   | 21,223,161 |   |
| Income      tax expense (benefit)                        |   |   | (3,554,335 | ) |   |   | 5,681,236 |   |   |   | 7,487,944 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income (loss)                                   |   | $ | (5,911,265 | ) |   | $ | 10,785,715 |   |   | $ | 13,735,217 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      (loss) per common share:                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                    |   | $ | (0.63 | ) |   | $ | 1.12 |   |   | $ | 1.42 |   |
| Diluted                                                  |   | $ | (0.63 | ) |   | $ | 1.11 |   |   | $ | 1.39 |   |

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Table of Contents

| PAB BANKSHARES, INC. AND SUBSIDIARIES                                                                                                                                            |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED      STATEMENTS OF COMPREHENSIVE INCOME (LOSS)                                                                                                                      |   |
| YEARS      ENDED DECEMBER 31, 2008 2007 AND 2006                                                                                                                                 |   |
|                                                                                                                                                                             |   |
|                                                                                                                                                                             |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                             |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                             |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                                                                                                                             |   |   |   |   |   |   |   |   |   |
| Net      income (loss)                                                                                                                                                           |   | $ | (5,911,265 | ) |   | $ | 10,785,715 |   |   | $ | 13,735,217 |   |
|                                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      comprehensive income :                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized      gain on cash flow hedge during the period, net of tax of $784,099;      $281,360; and $60,703                                                                    |   |   | 1,550,818 |   |   |   | 506,137 |   |   |   | 129,124 |   |
| Reclassification      adjustment for losses on cash flow hedge included in income during the      period, net of tax benefit of $5,444; $0; and $0                               |   |   | 10,567 |   |   |   | - |   |   |   | - |   |
| Unrealized      holding gains (losses) on securities available for sale arising during the      period, net of tax (benefit) of $734,845; $809,190; and      ($123,554)          |   |   | 1,435,381 |   |   |   | 1,502,781 |   |   |   | (229,456 | ) |
| Reclassification      adjustment for (gains) losses on securities available for sale included in      net income, net of tax (benefit) of $76,557; $109,546; and      ($189,789) |   |   | (148,611 | ) |   |   | (203,442 | ) |   |   | 352,464 |   |
|                                                                                                                                                                             |   |   | 2,848,155 |   |   |   | 1,805,476 |   |   |   | 252,132 |   |
|                                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      income (loss)                                                                                                                                                 |   | $ | (3,063,110 | ) |   | $ | 12,591,191 |   |   | $ | 13,987,349 |   |

----

Table of Contents

| PAB BANKSHARES, INC. AND SUBSIDIARIES                         |   |
|---------------------------------------------------------------|--------|
| CONSOLIDATED      STATEMENTS OF STOCKHOLDERS’ EQUITY    |   |
| YEARS      ENDED DECEMBER 31, 2008, 2007 AND 2006             |   |
|                                                          |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |
|                                                          |   |   |   |   |   |   |   | Additional |   |   |   |   |   | Other |   |   |   |   |
|                                                          |   | Common      Stock |   |   | Paid-in |   |   | Retained |   |   | Comprehensive |   |   |   |   |
|                                                          |   | Shares |   |   | Stated      Value |   |   | Capital |   |   | Earnings |   |   | Income      (Loss) |   |   | Total |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2005                               |   |   | 9,469,017 |   |   | $ | 1,217,065 |   |   | $ | 28,126,032 |   |   | $ | 58,872,179 |   |   | $ | (1,214,493 | ) |   |   | 87,000,783 |   |
| Net      income                                               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 13,735,217 |   |   |   | - |   |   |   | 13,735,217 |   |
| Other      comprehensive income                               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 252,132 |   |   |   | 252,132 |   |
| Cash      dividends declared, $.54 per share                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (5,131,218 | ) |   |   | - |   |   |   | (5,131,218 | ) |
| Stock      acquired and cancelled under stock repurchase plan |   |   | (124,559 | ) |   |   | - |   |   |   | (2,503,298 | ) |   |   | - |   |   |   | - |   |   |   | (2,503,298 | ) |
| Stock-based      compensation                                 |   |   | - |   |   |   | - |   |   |   | 290,245 |   |   |   | - |   |   |   | - |   |   |   | 290,245 |   |
| Stock      options exercised                                  |   |   | 160,511 |   |   |   | - |   |   |   | 1,671,873 |   |   |   | - |   |   |   | - |   |   |   | 1,671,873 |   |
| Balance,      December 31, 2006                               |   |   | 9,504,969 |   |   |   | 1,217,065 |   |   |   | 27,584,852 |   |   |   | 67,476,178 |   |   |   | (962,361 | ) |   |   | 95,315,734 |   |
| Net      income                                               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 10,785,715 |   |   |   | - |   |   |   | 10,785,715 |   |
| Other      comprehensive income                               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,805,476 |   |   |   | 1,805,476 |   |
| Cash      dividends declared, $.58 per share                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (5,439,041 | ) |   |   | - |   |   |   | (5,439,041 | ) |
| Stock      acquired and cancelled under stock repurchase plan |   |   | (344,492 | ) |   |   | - |   |   |   | (5,894,104 | ) |   |   | - |   |   |   | - |   |   |   | (5,894,104 | ) |
| Stock-based      compensation                                 |   |   | - |   |   |   | - |   |   |   | 410,851 |   |   |   | - |   |   |   |   |   |   |   | 410,851 |   |
| Stock      options exercised                                  |   |   | 62,740 |   |   |   | - |   |   |   | 691,341 |   |   |   | - |   |   |   | - |   |   |   | 691,341 |   |
| Balance,      December 31, 2007                               |   |   | 9,223,217 |   |   |   | 1,217,065 |   |   |   | 22,792,940 |   |   |   | 72,822,852 |   |   |   | 843,115 |   |   |   | 97,675,972 |   |
| Net      loss                                                 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (5,911,265 | ) |   |   | - |   |   |   | (5,911,265 | ) |
| Other      comprehensive income                               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,848,155 |   |   |   | 2,848,155 |   |
| Cash      dividends declared, $.24 per share                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,195,622 | ) |   |   | - |   |   |   | (2,195,622 | ) |
| 2%      stock dividend declared                               |   |   | 183,739 |   |   |   | - |   |   |   | 2,248,965 |   |   |   | (2,248,965 | ) |   |   | - |   |   |   | - |   |
| Stock      acquired and cancelled under stock repurchase plan |   |   | (86,065 | ) |   |   | - |   |   |   | (1,162,521 | ) |   |   | - |   |   |   | - |   |   |   | (1,162,521 | ) |
| Stock-based      compensation                                 |   |   | - |   |   |   | - |   |   |   | 310,043 |   |   |   | - |   |   |   |   |   |   |   | 310,043 |   |
| Stock      options exercised                                  |   |   | 3,516 |   |   |   | - |   |   |   | 35,980 |   |   |   | - |   |   |   | - |   |   |   | 35,980 |   |
| Balance,      December 31, 2008                               |   |   | 9,324,407 |   |   | $ | 1,217,065 |   |   | $ | 24,225,407 |   |   | $ | 62,467,000 |   |   | $ | 3,691,270 |   |   | $ | 91,600,742 |   |

----

Table of Contents

| PAB BANKSHARES, INC. AND SUBSIDIARIES                                                                                    |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED      STATEMENTS OF CASH FLOWS                                                                               |   |
| YEARS      ENDED DECEMBER 31, 2008, 2007 AND 2006                                                                        |   |
|                                                                                                                     |   |
|                                                                                                                     |   |   |   |   |   |   |   |   |   |
|                                                                                                                     |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                                                                     |   |   |   |   |   |   |   |   |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES                                                                                |   |   |   |   |   |   |   |   |   |
| Net      income (loss)                                                                                                   |   | $ | (5,911,265 | ) |   | $ | 10,785,715 |   |   | $ | 13,735,217 |   |
| Adjustments      to reconcile net income (loss) to net cash provided by operating      activities:                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation,      amortization and accretion, net                                                                       |   |   | 1,713,629 |   |   |   | 1,716,530 |   |   |   | 1,668,092 |   |
| Provision      for loan losses                                                                                           |   |   | 18,050,000 |   |   |   | 2,400,000 |   |   |   | - |   |
| Provision      for deferred taxes                                                                                        |   |   | (2,671,456 | ) |   |   | (644,268 | ) |   |   | 303,268 |   |
| Net      realized (gain) loss on securities transactions                                                                 |   |   | (225,168 | ) |   |   | (312,988 | ) |   |   | 542,253 |   |
| Net      (gain) loss on disposal or write down of assets                                                                 |   |   | 1,853,261 |   |   |   | (70,860 | ) |   |   | (26,048 | ) |
| Net      loss on derivative instruments                                                                                  |   |   | 16,011 |   |   |   | - |   |   |   | - |   |
| Stock-based      compensation expense                                                                                    |   |   | 310,043 |   |   |   | 410,851 |   |   |   | 290,245 |   |
| Increase      in cash value of bank-owned life insurance                                                                 |   |   | (421,202 | ) |   |   | (406,420 | ) |   |   | (394,242 | ) |
| Increase      (decrease) in deferred compensation accrual                                                                |   |   | (235,904 | ) |   |   | (226,951 | ) |   |   | 223,709 |   |
| Decrease      in retirement and severance accruals                                                                       |   |   | - |   |   |   | (159,799 | ) |   |   | (232,441 | ) |
| (Increase)      decrease in interest receivable                                                                          |   |   | 1,684,196 |   |   |   | 8,761 |   |   |   | (1,372,405 | ) |
| Increase      in interest payable                                                                                        |   |   | 133,993 |   |   |   | 78,775 |   |   |   | 397,514 |   |
| Increase      in taxes receivable                                                                                        |   |   | (2,512,780 | ) |   |   | (957,764 | ) |   |   | (730,032 | ) |
| Net      change in other assets and other liabilities                                                                    |   |   | (1,539,556 | ) |   |   | (485,914 | ) |   |   | 254,635 |   |
| Net      cash provided by operating activities                                                                           |   |   | 10,243,802 |   |   |   | 12,135,668 |   |   |   | 14,659,765 |   |
|                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| (Increase)      decrease in interest-bearing deposits in other banks                                                     |   |   | (117,851,495 | ) |   |   | 157,031 |   |   |   | 2,527,593 |   |
| (Increase)      decrease in federal funds sold                                                                           |   |   | (495,275 | ) |   |   | 41,053,284 |   |   |   | 966,121 |   |
| Purchase      of debt securities                                                                                         |   |   | (57,790,529 | ) |   |   | (43,392,095 | ) |   |   | (69,673,261 | ) |
| Proceeds      from sales of debt securities                                                                              |   |   | 36,459,026 |   |   |   | 19,540,964 |   |   |   | 21,045,135 |   |
| Proceeds      from calls of debt securities                                                                              |   |   | 21,182,927 |   |   |   | 2,996,778 |   |   |   | 1,757,253 |   |
| Proceeds      from maturities and paydowns of debt securities                                                            |   |   | 12,693,713 |   |   |   | 11,734,367 |   |   |   | 20,456,192 |   |
| Purchase      of equity securities                                                                                       |   |   | (1,664,593 | ) |   |   | (65,858 | ) |   |   | (887,783 | ) |
| Redemption      of equity securities                                                                                     |   |   | 452,100 |   |   |   | 886,151 |   |   |   | 338,600 |   |
| Net      increase in loans                                                                                               |   |   | (70,519,785 | ) |   |   | (108,962,052 | ) |   |   | (74,742,227 | ) |
| Purchase      of premises and equipment                                                                                  |   |   | (2,341,941 | ) |   |   | (1,243,446 | ) |   |   | (5,344,196 | ) |
| Proceeds      from disposal of fixed assets and foreclosed assets                                                        |   |   | 3,991,067 |   |   |   | 2,234,053 |   |   |   | 6,398,818 |   |
| Net      cash used in investing activities                                                                               |   |   | (175,884,785 | ) |   |   | (75,060,823 | ) |   |   | (97,157,755 | ) |
|                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      increase in deposits                                                                                            |   |   | 143,554,240 |   |   |   | 71,666,026 |   |   |   | 92,802,250 |   |
|   Net      increase (decrease) in federal funds purchased and securities sold under      repurchase agreements |   |   | (7,221,117 | ) |   |   | 8,526,706 |   |   |   | 1,331,529 |   |
| Advances      from Federal Home Loan Bank                                                                                |   |   | 41,000,000 |   |   |   | 47,500,000 |   |   |   | 45,000,000 |   |
| Payments      on advances from Federal Home Loan Bank                                                                    |   |   | (17,593,788 | ) |   |   | (51,392,997 | ) |   |   | (44,852,896 | ) |
| Dividends      paid                                                                                                      |   |   | (3,532,990 | ) |   |   | (5,432,369 | ) |   |   | (4,984,149 | ) |
| Proceeds      from the exercise of stock options                                                                         |   |   | 35,980 |   |   |   | 691,341 |   |   |   | 1,671,873 |   |
| Proceeds      from the issuance of trust preferred securities                                                            |   |   | - |   |   |   | - |   |   |   | 10,000,000 |   |
| Redemption      of trust preferred securities                                                                            |   |   | - |   |   |   | - |   |   |   | (10,000,000 | ) |
| Purchase      of cash flow hedge derivative instrument                                                                   |   |   | (786,000 | ) |   |   | - |   |   |   | (451,250 | ) |
| Acquisition      of stock under stock repurchase plans                                                                   |   |   | (1,162,521 | ) |   |   | (5,894,104 | ) |   |   | (2,503,298 | ) |
| Net      cash provided by financing activities                                                                           |   |   | 154,293,804 |   |   |   | 65,664,603 |   |   |   | 88,014,059 |   |

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| PAB      BANKSHARES, INC. AND SUBSIDIARIES                                    |   |
|-------------------------------------------------------------------------------|--------|
| CONSOLIDATED      STATEMENTS OF CASH FLOWS                                    |   |
| YEARS      ENDED DECEMBER 31, 2008, 2007 AND 2006                             |   |
|                                                                          |   |
|                                                                          |   |   |   |   |   |   |   |   |   |
|                                                                          |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                          |   |   |   |   |   |   |   |   |   |
|                                                                          |   |   |   |   |   |   |   |   |   |
|                                                                          |   |   |   |   |   |   |   |   |   |
| Net      increase (decrease) in cash and balances due from banks              |   | $ | (11,347,179 | ) |   | $ | 2,739,448 |   |   | $ | 5,516,069 |   |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and balances due from banks at beginning of period                  |   |   | 29,451,700 |   |   |   | 26,712,252 |   |   |   | 21,196,183 |   |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and balances due from banks at end of period                        |   | $ | 18,104,521 |   |   | $ | 29,451,700 |   |   | $ | 26,712,252 |   |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL      DISCLOSURES OF CASH FLOW INFORMATION                        |   |   |   |   |   |   |   |   |   |
| Cash      paid during the period for:                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                                                                      |   | $ | 36,084,451 |   |   | $ | 42,131,057 |   |   | $ | 33,157,922 |   |
| Taxes                                                                         |   | $ | 2,044,000 |   |   | $ | 5,770,337 |   |   | $ | 7,532,047 |   |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| NONCASH      INVESTING AND FINANCING TRANSACTIONS                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase  in      unrealized gains on securities available for sale |   | $ | 1,945,058 |   |   | $ | 1,998,983 |   |   | $ | 189,243 |   |
| Increase      in unrealized gain on cash flow hedge                           |   | $ | 2,350,929 |   |   | $ | 787,496 |   |   | $ | 189,827 |   |
| Transfer      of loans to foreclosed assets                                   |   | $ | 23,598,987 |   |   | $ | 7,417,079 |   |   | $ | 7,303,184 |   |

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PAB 

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| Banking Locations                    |   | Number of Offices                           |
|--------------------------------------|--------|---------------------------------------------|
| South      Georgia Market:           |   |                                        |
| Valdosta,      Lowndes County        |   | 3      (including the main office)          |
| Lake      Park, Lowndes County       |   | 1                                           |
| Adel,      Cook County               |   | 1                                           |
| Bainbridge,      Decatur County      |   | 3                                           |
| Cairo,      Grady County             |   | 1                                           |
| Statesboro,      Bulloch County      |   | 2                                           |
| Baxley,      Appling County          |   | 1                                           |
| Hazlehurst,      Jeff Davis County   |   | 1                                           |
| North      Georgia Market:           |   |                                        |
| McDonough,      Henry County         |   | 1                                           |
| Stockbridge,      Henry County       |   | 1                                           |
| Oakwood,      Hall County            |   | 1                                           |
| Athens,      Oconee County           |   | 1                                           |
| Snellville,      Gwinnett County     |   | 2      (including a loan production office) |
| Cumming,      Forsyth County         |   | 1      (loan production office)             |
| Florida      Market:                 |   |                                        |
| Ocala,      Marion County            |   | 1                                           |
| St.      Augustine, St. Johns County |   | 1      (loan production office)             |
| Jacksonville,      Duval County      |   | 1                                           |

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| NOTE      1. | SUMMARY      OF SIGNIFICANT ACCOUNTING POLICIES(Continued) |
|--------------|------------------------------------------------------------|

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| NOTE      1. | SUMMARY      OF SIGNIFICANT ACCOUNTING POLICIES(Continued) |
|--------------|------------------------------------------------------------|

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| NOTE      2. | RESTRICTIONS      ON CASH AND BALANCES DUE FROM BANKS |
|--------------|-------------------------------------------------------|

| NOTE      3. | INVESTMENT      SECURITIES |
|--------------|----------------------------|

|                                    |   | Amortized Cost |        |   | GrossUnrealizedGains |   |      | GrossUnrealizedLosses |   |   | FairValue  |   |
|-----------------------------------------|--------|---------------------|-------------|--------|----------------------|--------|-----------|-----------------------|--------|--------|------------|--------|
| December      31, 2008                  |   |                |        |   |                 |   |      |                  |   |   |       |   |
| U.S.      Government sponsored agencies |   | $                   | 34,425,092  |   |                 | $      | 878,996   |                  |   | $      | (947       | )      |   | $ | 35,303,141 |   |
| State      and municipal securities     |   |                | 31,591,669  |   |                 |   | 151,276   |                  |   |   | (1,381,782 | )      |   |   | 30,361,163 |   |
| Mortgage-backed      securities         |   |                | 100,306,541 |   |                 |   | 3,196,157 |                  |   |   | (89,246    | )      |   |   | 103,413,452 |   |
| Corporate      debt securities          |   |                | 7,456,382   |   |                 |   | 69,975    |                  |   |   | (561,857   | )      |   |   | 6,964,500 |   |
| Equity      securities                  |   |                | 9,728,798   |   |                 |   | 2,261     |                  |   |   | -          |   |   |   | 9,731,059 |   |
|                                    |   | $                   | 183,508,482 |   |                 | $      | 4,298,665 |                  |   | $      | (2,033,832 | )      |   | $ | 185,773,315 |   |
|                                    |   |                |        |   |                 |   |      |                  |   |   |       |   |   |   |   |   |
| December      31, 2007                  |   |                |        |   |                 |   |      |                  |   |   |       |   |   |   |   |   |
| U.S.      Government sponsored agencies |   | $                   | 69,787,616  |   |                 | $      | 512,362   |                  |   | $      | (64,692    | )      |   | $ | 70,235,286 |   |
| State      and municipal securities     |   |                | 32,480,766  |   |                 |   | 204,241   |                  |   |   | (352,938   | )      |   |   | 32,332,069 |   |
| Mortgage-backed      securities         |   |                | 77,152,178  |   |                 |   | 379,068   |                  |   |   | (330,401   | )      |   |   | 77,200,845 |   |
| Corporate      debt securities          |   |                | 6,537,841   |   |                 |   | 10,655    |                  |   |   | (41,123    | )      |   |   | 6,507,373 |   |
| Equity      securities                  |   |                | 8,516,305   |   |                 |   | 2,603     |                  |   |   | -          |   |   |   | 8,518,908 |   |
|                                    |   | $                   | 194,474,706 |   |                 | $      | 1,108,929 |                  |   | $      | (789,154   | )      |   | $ | 194,794,481 |   |

|                            |   | AmortizedCost |        |   | FairValue |   |
|---------------------------------|--------|---------------|-------------|--------|-----------|--------|
| Due      in one year or less    |   | $             | 1,001,600   |   |      | $      | 1,005,905 |   |
| Due      from one to five years |   |          | 5,715,307   |   |      |   | 5,686,195 |   |
| Due      from five to ten years |   |          | 26,652,931  |   |      |   | 26,939,470 |   |
| Due      after ten years        |   |          | 40,103,305  |   |      |   | 38,997,234 |   |
| Mortgage-backed      securities |   |          | 100,306,541 |   |      |   | 103,413,452 |   |
| Equity      securities          |   |          | 9,728,798   |   |      |   | 9,731,059 |   |
|                            |   | $             | 183,508,482 |   |      | $      | 185,773,315 |   |

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| NOTE      3. | INVESTMENT      SECURITIES (Continued) |
|--------------|----------------------------------------|

|                                                          |   | 2008   |     |   | 2007   |   |     | 2006   |   |
|---------------------------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|
| Gross      gains on securities transactions                   |   | $      | 338,853  |   |   | $      | 434,217  |   |   | $ | 167,187 |   |
| Gross      losses on securities transactions                  |   |   | (113,685 | )      |   |   | (121,229 | )      |   |   | (709,440 | ) |
| Net      realized gain (loss) on securities      transactions |   | $      | 225,168  |   |   | $      | 312,988  |   |   | $ | (542,253 | ) |

|                                       |   | Less      than Twelve Months |       |   | Twelve      Months or Longer |   |
|--------------------------------------------|--------|------------------------------|------------|--------|------------------------------|--------|
| December      31, 2008                     |   | FairValue                    |       |   | UnrealizedLosses             |   |   | FairValue |   |   | UnrealizedLosses |   |
| U.S.      Government sponsored agencies    |   | $                            | 3,019,053  |   |                         | $      | 947 |   |   | $ | - |   |   | $ | - |   |
| State      and municipal securities        |   |                         | 18,905,887 |   |                         |   | 1,298,823 |   |   |   | 875,407 |   |   |   | 82,959 |   |
| Mortgage-backed      securities            |   |                         | 2,176,031  |   |                         |   | 8,209 |   |   |   | 1,606,997 |   |   |   | 81,037 |   |
| Corporate      debt securities             |   |                         | 2,491,548  |   |                         |   | 534,776 |   |   |   | 470,462 |   |   |   | 27,081 |   |
| Equity      securities                     |   |                         | -          |   |                         |   | - |   |   |   | - |   |   |   | - |   |
| Total      temporarily impaired securities |   | $                            | 26,592,519 |   |                         | $      | 1,842,755 |   |   | $ | 2,952,866 |   |   | $ | 191,077 |   |
|                                       |   |                         |       |   |                         |   |
| December      31, 2007                     |   |                         |       |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| U.S.      Government sponsored agencies    |   | $                            | 11,293,466 |   |                         | $      | 23,169 |   |   | $ | 11,444,150 |   |   | $ | 41,523 |   |
| State      and municipal securities        |   |                         | 7,933,083  |   |                         |   | 53,094 |   |   |   | 10,007,484 |   |   |   | 299,844 |   |
| Mortgage-backed      securities            |   |                         | 10,618,640 |   |                         |   | 7,273 |   |   |   | 26,792,785 |   |   |   | 323,128 |   |
| Corporate      debt securities             |   |                         | 968,300    |   |                         |   | 31,606 |   |   |   | 526,950 |   |   |   | 9,517 |   |
| Equity      securities                     |   |                         | -          |   |                         |   | - |   |   |   | - |   |   |   | - |   |
| Total      temporarily impaired securities |   | $                            | 30,813,489 |   |                         | $      | 115,142 |   |   | $ | 48,771,369 |   |   | $ | 674,012 |   |

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|                                               |   | 2008   |        |   | 2007   |   |
|----------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Commercial      and financial                      |   | $      | 87,529,469  |   |   | $      | 78,729,774 |   |
| Agricultural                                       |   |   | 48,646,715  |   |   |   | 41,860,681 |   |
| Real      estate – construction              |   |   | 315,786,248 |   |   |   | 352,731,985 |   |
| Real      estate – commercial                |   |   | 276,644,846 |   |   |   | 248,271,663 |   |
| Real      estate – residential               |   |   | 196,306,153 |   |   |   | 174,157,534 |   |
| Installment      loans to individuals and others   |   |   | 31,616,134  |   |   |   | 25,825,467 |   |
| Overdrafts                                         |   |   | 467,958     |   |   |   | 186,155 |   |
|                                               |   |   | 956,997,523 |   |   |   | 921,763,259 |   |
| Deferred      loan fees and unearned interest, net |   |   | (310,132    | )      |   |   | (414,353 | ) |
|                                               |   |   | 956,687,391 |   |   |   | 921,348,906 |   |
| Allowance      for loan losses                     |   |   | (19,373,625 | )      |   |   | (12,905,938 | ) |
|                                               |   | $      | 937,313,766 |   |   | $      | 908,442,968 |   |

|                                 |   | 2008   |        |   | 2007   |   |       | 2006   |   |
|--------------------------------------|--------|--------|-------------|--------|--------|--------|------------|--------|--------|
| Balance,      beginning of year      |   | $      | 12,905,938  |   |   | $      | 11,006,097 |   |   | $ | 11,079,193 |   |
| Provision      charged to operations |   |   | 18,050,000  |   |   |   | 2,400,000  |   |   |   | - |   |
| Loans      charged-off               |   |   | (12,127,445 | )      |   |   | (868,201   | )      |   |   | (821,214 | ) |
| Recoveries                           |   |   | 545,132     |   |   |   | 368,042    |   |   |   | 748,118 |   |
| Balance,      end of year            |   | $      | 19,373,625  |   |   | $      | 12,905,938 |   |   | $ | 11,006,097 |   |

|                                                   |   | 2008   |       |   | 2007   |   |
|--------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Loans      accounted for on a nonaccrual basis         |   | $      | 54,902,747 |   |   | $      | 11,404,832 |   |
| Troubled      debt restructurings not included above   |   |   | 311,051    |   |   |   | - |   |
| Loans      past due 90 days or more and still accruing |   |   | 206,442    |   |   |   | 37,378 |   |
| Total      impaired loans                              |   | $      | 55,420,240 |   |   | $      | 11,442,210 |   |
| Valuation      allowance related to impaired loans     |   | $      | 4,075,879  |   |   | $      | 1,965,439 |   |

|                                                                                                                                              |   | 2008 |       |   | 2007   |   |      | 2006   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|------|------------|--------|--------|--------|-----------|--------|--------|
| Average      recorded investment in impaired loans                                                                                                |   | $    | 38,784,878 |   |   | $      | 4,883,934 |   |   | $ | 4,081,837 |   |
| Approximate      amount of interest income that would have been recorded if the impaired      loans had remained current and on an accrual status |   | $    | 3,592,700  |   |   | $      | 753,000   |   |   | $ | 261,600 |   |
| Interest      income recognized on a cash basis on impaired loans                                                                                 |   | $    | 64,785     |   |   | $      | 33,658    |   |   | $ | 52,377 |   |

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| Balance,      beginning of year                     |   | $      | 30,245,159  |   |
|-----------------------------------------------------|--------|--------|-------------|--------|
| Advances                                            |   |   | 22,440,814  |   |
| Repayments                                          |   |   | (14,740,056 | )      |
| Transactions      due to changes in related parties |   |   | 2,858       |   |
| Balance,      end of year                           |   | $      | 37,948,775  |   |

|                                   |   | 2008   |        |   | 2007   |   |
|----------------------------------------|--------|--------|-------------|--------|--------|--------|
| Land                                   |   | $      | 6,201,540   |   |   | $      | 6,201,540 |   |
| Buildings      and improvements        |   |   | 18,075,242  |   |   |   | 18,489,560 |   |
| Furniture,      fixtures and equipment |   |   | 10,656,603  |   |   |   | 9,935,865 |   |
|                                   |   |   | 34,933,385  |   |   |   | 34,626,965 |   |
| Less      accumulated depreciation     |   |   | (14,949,097 | )      |   |   | (14,449,294 | ) |
|                                   |   | $      | 19,984,288  |   |   | $      | 20,177,671 |   |

| Year   |   | Amount |      |
|--------|--------|--------|-----------|
| 2009   |   |   | 347,297   |   |
| 2010   |   |   | 334,917   |   |
| 2011   |   |   | 319,094   |   |
| 2012   |   |   | 194,222   |   |
| 2013   |   |   | 191,987   |   |
| Later  |   |   | 359,619   |   |
|   |   | $      | 1,747,136 |   |

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|                         |   | 2008   |          |   | 2007   |   |
|------------------------------|--------|--------|---------------|--------|--------|--------|
| Interest-bearing      demand |   | $      | 219,167,480   |   |   | $      | 319,512,641 |   |
| Savings                      |   |   | 32,954,566    |   |   |   | 35,230,221 |   |
| Time,      $100,000 and over |   |   | 361,431,146   |   |   |   | 223,260,805 |   |
| Other      time              |   |   | 419,035,729   |   |   |   | 312,721,780 |   |
|                         |   | $      | 1,032,588,921 |   |   | $      | 890,725,447 |   |

|                         |   |   |       |   |   |   |       |   |   |
|------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                         |   | 2008   |       |   | 2007   |   |       | 2006   |   |
| Interest-bearing      demand |   | $      | 5,238,099  |   |   | $      | 11,049,142 |   |   | $ | 8,221,174 |   |
| Savings                      |   |   | 203,947    |   |   |   | 563,840    |   |   |   | 525,973 |   |
| Time,      $100,000 and over |   |   | 11,857,118 |   |   |   | 10,064,962 |   |   |   | 8,111,150 |   |
| Other      time              |   |   | 14,015,258 |   |   |   | 15,209,655 |   |   |   | 11,597,183 |   |
|                         |   | $      | 31,314,422 |   |   | $      | 36,887,599 |   |   | $ | 28,455,480 |   |

| Year   |   | Amount |        |
|--------|--------|--------|-------------|
| 2009   |   | $      | 490,519,238 |   |
| 2010   |   |   | 186,979,366 |   |
| 2011   |   |   | 57,427,549  |   |
| 2012   |   |   | 30,411,550  |   |
| 2013   |   |   | 15,118,787  |   |
| Later  |   |   | 10,385      |   |
|   |   | $      | 780,466,875 |   |

| NOTE      7. | FEDERAL      FUNDS PURCHASED AND SECURITIES SOLD UNDER AGREEMENTS TO      REPURCHASE |
|--------------|--------------------------------------------------------------------------------------|

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|                                                                                                                                          |   | 2008   |        |   | 2007   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Adjustable      rate advances due at various dates through September 30, 2009 with a      weighted-average rate of 2.02% at December 31, 2008 |   | $      | 3,941,580   |   |   | $      | 10,941,580 |   |
| Fixed      rate advances due at various dates through February 26, 2024 with a      weighted-average rate of 3.88% at December 31, 2008  |   |   | 39,762,337  |   |   |   | 14,356,125 |   |
| Convertible      advances due at various dates through May 19, 2015 with a      weighted-average rate of 4.14% at December 31, 2008      |   |   | 66,000,000  |   |   |   | 61,000,000 |   |
|                                                                                                                                          |   | $      | 109,703,917 |   |   | $      | 86,297,705 |   |

| Year   |   | Amount |        |
|--------|--------|--------|-------------|
| 2009   |   |   | 19,564,416  |   |
| 2010   |   |   | 20,657,456  |   |
| 2011   |   |   | 15,263,803  |   |
| 2012   |   |   | 25,481,174  |   |
| 2013   |   |   | 6,204,983   |   |
| Later  |   |   | 22,532,085  |   |
|   |   | $      | 109,703,917 |   |

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| 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 3.09%).  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. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| On      November 28, 2001, PAB Bankshares Capital Trust I (“PAB Trust I”) issued      $10 million of Floating Rate Capital Securities (“trust preferred      securities”).  The Company formed PAB Trust I, 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 “Trust I      Debentures”) issued by the Company.  The interest rates on both      the trust preferred securities and the Trust I Debentures were reset      semi-annually at LIBOR plus 3.75% with a rate cap of 11.0% through      December 8, 2006.  The Company entered into agreements which,      taken collectively, fully, irrevocably and unconditionally guaranteed, on      a subordinated basis, all of PAB Trust I’s obligations under the trust      preferred securities.  PAB Trust I’s sole asset was the Trust I      Debentures issued by the Company.  The Trust I Debentures were      scheduled to mature on December 8, 2031, but were callable at par by the      Company in whole or in part anytime after December 8, 2006.  The      Company exercised its call option on the Trust I Debentures and redeemed      the Trust I Debentures and the trust preferred securities on December 8,      2006. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 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 I and II.  The      Company recorded $310,000 in other assets in the consolidated balance      sheet at December 31, 2008 and 2007, respectively, for common capital      securities issued by the issuertrusts. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|     |   |   |       |   |   |   |      |   |   |
|----------|--------|--------|------------|--------|--------|--------|-----------|--------|--------|
|     |   | 2008   |       |   | 2007   |   |      | 2006   |   |
| Current  |   | $      | (882,879   | )      |   | $      | 6,325,504 |   |   | $ | 7,184,676 |   |
| Deferred |   |   | (2,671,456 | )      |   |   | (644,268  | )      |   |   | 303,268 |   |
|     |   | $      | (3,554,335 | )      |   | $      | 5,681,236 |   |   | $ | 7,487,944 |   |

|                                                                   |   | 2008   |       |   | 2007   |   |      | 2006   |   |
|------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|-----------|--------|--------|
| Tax      (benefit) at statutory rate                                   |   | $      | (3,218,304 | )      |   | $      | 5,763,433 |   |   | $ | 7,428,106 |   |
| Increase      (decrease) resulting from:                               |   |   |       |   |   |   |      |   |   |   |   |   |
| State      income tax, net of federal      tax benefit                 |   |   | 192        |   |   |   | 96,846    |   |   |   | 352,316 |   |
| Amortization      of investment tax credits                            |   |   | -          |   |   |   | 288,600   |   |   |   | 167,422 |   |
| Tax      exempt income, net                                            |   |   | (400,398   | )      |   |   | (370,499  | )      |   |   | (290,545 | ) |
| Increase      in cash value of bank-owned      life insurance policies |   |   | (143,230   | )      |   |   | (142,247  | )      |   |   | (137,985 | ) |
| Deferred      tax adjustment                                           |   |   | -          |   |   |   | -         |   |   |   | (3 | ) |
| Stock      based compensation                                          |   |   | 66,109     |   |   |   | 35,493    |   |   |   | (47,686 | ) |
| Other      items, net                                                  |   |   | 141,296    |   |   |   | 9,610     |   |   |   | 16,319 |   |
| Income      tax expense (benefit)                                      |   | $      | (3,554,335 | )      |   | $      | 5,681,236 |   |   | $ | 7,487,944 |   |

|                                                          |   | 2008   |       |   | 2007   |   |
|---------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Deferred      tax assets and (liabilities):                   |   |   |       |   |   |   |
| Accrued      severance payable                                |   | $      | 36,425     |   |   | $      | - |   |
| Allowance      for loan losses                                |   |   | 6,587,033  |   |   |   | 4,517,078 |   |
| Deferred      compensation                                    |   |   | 609,929    |   |   |   | 710,434 |   |
| Deferred      loan origination cost                           |   |   | (505,136   | )      |   |   | (520,786 | ) |
| Deferred      loan origination fees                           |   |   | 599,691    |   |   |   | 665,893 |   |
| Impaired      loan interest                                   |   |   | 454,508    |   |   |   | 231,431 |   |
| Other      real estate owned                                  |   |   | 262,062    |   |   |   | - |   |
| Accrued      lease payable                                    |   |   | 255,239    |   |   |   | - |   |
| Excess      charitable contributions                          |   |   | 29,558     |   |   |   | - |   |
| Other      assets                                             |   |   | 9,657      |   |   |   | 21,179 |   |
| Premises      and equipment                                   |   |   | (602,306   | )      |   |   | (525,574 | ) |
| Nonqualified      stock options                               |   |   | 111,288    |   |   |   | 76,837 |   |
| Unrealized      gain on cash flow hedge derivative instrument |   |   | (1,131,607 | )      |   |   | (342,063 | ) |
| Unrealized      gain on securities available for sale         |   |   | (770,210   | )      |   |   | (111,921 | ) |
| Net      deferred tax assets                                  |   | $      | 5,946,131  |   |   | $      | 4,722,508 |   |

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| Year      of projected availability: |   | Amount |      |
|--------------------------------------|--------|--------|-----------|
|                                 |   |   |      |
| 2009                                 |   | $      | 797,521   |   |
| 2010                                 |   |   | 797,521   |   |
| 2011                                 |   |   | 797,521   |   |
| 2012                                 |   |   | 797,521   |   |
| 2013                                 |   |   | 797,521   |   |
| Later                                |   |   | 1,592,947 |   |
| Total                                |   | $      | 5,580,552 |   |

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|                                |   | 2008   |      |   | 2007   |   |      | 2006   |   |
|-------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Mortgage      origination fees      |   | $      | 709,489   |   |   | $      | 404,749   |   |   | $ | 498,727 |   |
| Brokerage      commissions and fees |   |   | 17,199    |   |   |   | 13,487    |   |   |   | 9,831 |   |
| ATM      and debit card fee income  |   |   | 737,368   |   |   |   | 642,685   |   |   |   | 560,906 |   |
| Insurance      premiums             |   |   | 28,405    |   |   |   | 29,215    |   |   |   | 38,793 |   |
| Other      fee income               |   |   | 179,227   |   |   |   | 192,031   |   |   |   | 207,184 |   |
| Total      other fee income         |   | $      | 1,671,688 |   |   | $      | 1,282,167 |   |   | $ | 1,315,441 |   |

|                                       |   | 2008   |    |   | 2007   |   |    | 2006   |   |
|--------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Earnings      on bank-owned life insurance |   | $      | 421,264 |   |   | $      | 406,419 |   |   | $ | 394,242 |   |
| Check      order revenue                   |   |   | 200,538 |   |   |   | 217,778 |   |   |   | 230,606 |   |
| Other      noninterest income              |   |   | 54,567  |   |   |   | 74,512  |   |   |   | 84,080 |   |
| Total      other noninterest income        |   | $      | 676,369 |   |   | $      | 698,709 |   |   | $ | 708,928 |   |

|                                       |   | 2008   |      |   | 2007   |   |      | 2006   |   |
|--------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Advertising      and business development  |   | $      | 581,694   |   |   | $      | 625,765   |   |   | $ | 573,368 |   |
| Supplies      and printing                 |   |   | 390,273   |   |   |   | 463,113   |   |   |   | 495,840 |   |
| Telephone      and internet charges        |   |   | 777,049   |   |   |   | 634,445   |   |   |   | 471,124 |   |
| Postage      and courier                   |   |   | 572,640   |   |   |   | 644,774   |   |   |   | 569,309 |   |
| Legal      and accounting fees             |   |   | 463,040   |   |   |   | 559,417   |   |   |   | 446,842 |   |
| Director      fees and expenses            |   |   | 625,236   |   |   |   | 398,078   |   |   |   | 434,797 |   |
| Service      charges and fees              |   |   | 594,930   |   |   |   | 621,923   |   |   |   | 504,045 |   |
| Foreclosure      and repossession expenses |   |   | 956,405   |   |   |   | 199,447   |   |   |   | 74,704 |   |
| Other      noninterest expenses            |   |   | 2,199,664 |   |   |   | 2,208,805 |   |   |   | 2,372,195 |   |
| Total      other noninterest expense       |   | $      | 7,160,931 |   |   | $      | 6,355,767 |   |   | $ | 5,942,224 |   |

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|                                                    |   | 2008   |       |   | 2007   |   |       | 2006   |   |
|---------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Basic      earnings (loss) per share:                   |   |   |       |   |   |   |       |   |   |
| Net      income (loss)                                  |   | $      | (5,911,265 | )      |   | $      | 10,785,715 |   |   | $ | 13,735,217 |   |
|                                                    |   |   |       |   |   |   |       |   |   |   |   |   |
| Weighted      average common shares outstanding         |   |   | 9,335,376  |   |   |   | 9,602,535  |   |   |   | 9,683,173 |   |
|                                                    |   |   |       |   |   |   |       |   |   |   |   |   |
| Earnings      (loss) per common share                   |   | $      | (0.63      | )      |   | $      | 1.12       |   |   | $ | 1.42 |   |
|                                                    |   |   |       |   |   |   |       |   |   |   |   |   |
| Diluted      earnings (loss) per share:                 |   |   |       |   |   |   |       |   |   |   |   |   |
| Net      income (loss)                                  |   | $      | (5,911,265 | )      |   | $      | 10,785,715 |   |   | $ | 13,735,217 |   |
|                                                    |   |   |       |   |   |   |       |   |   |   |   |   |
| Weighted      average common shares outstanding         |   |   | 9,335,376  |   |   |   | 9,602,535  |   |   |   | 9,683,173 |   |
| Effect      of dilutive stock options                   |   |   | -          |   |   |   | 141,528    |   |   |   | 207,555 |   |
| Weighted      average diluted common shares outstanding |   |   | 9,335,376  |   |   |   | 9,744,063  |   |   |   | 9,890,728 |   |
|                                                    |   |   |       |   |   |   |       |   |   |   |   |   |
| Earnings      (loss) per common share                   |   | $      | (0.63      | )      |   | $      | 1.11       |   |   | $ | 1.39 |   |

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|                                                                       |   | 2008   |    |   | 2007                                  |   |    | 2006   |   |
|----------------------------------------------------------------------------|--------|--------|---------|--------|---------------------------------------|--------|---------|--------|--------|
|                                                                       |   | Number |    |   | Weighted-      Average Exercise Price |   |    | Number |   |   | Weighted-      Average Exercise Price |   |   | Number |   |   | Weighted-      Average Exercise Price |   |
| Under      option, beginning of year                                       |   |   | 708,641 |   |                                  | $      | 14.20   |   |   |   | 672,474 |   |   | $ | 13.58 |   |   |   | 717,669 |   |   | $ | 11.68 |   |
| Granted                                                                    |   |   | 61,381  |   |                                  |   | 11.55   |   |   |   | 110,670 |   |   |   | 16.17 |   |   |   | 123,930 |   |   |   | 20.14 |   |
| Exercised                                                                  |   |   | (3,586  | )      |                                  |   | 10.03   |   |   |   | (63,997 | ) |   |   | 10.80 |   |   |   | (163,719 | ) |   |   | 10.21 |   |
| Forfeited                                                                  |   |   | (56,304 | )      |                                  |   | 15.91   |   |   |   | (10,506 | ) |   |   | 16.22 |   |   |   | (5,406 | ) |   |   | 13.32 |   |
| Expired                                                                    |   |   | (10,914 | )      |                                  |   | 15.37   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Under      option, end of year                                             |   |   | 699,218 |   |                                  | $      | 13.83   |   |   |   | 708,641 |   |   | $ | 14.20 |   |   |   | 672,474 |   |   | $ | 13.58 |   |
|                                                                       |   |   |    |   |                                  |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercisable      at end of year                                            |   |   | 482,491 |   |                                  | $      | 12.95   |   |   |   | 436,097 |   |   | $ | 12.51 |   |   |   | 411,558 |   |   | $ | 11.84 |   |
|                                                                       |   |   |    |   |                                  |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average      fair value per option of options granted during year |   |   |    |   |                                  | $      | 2.46    |   |   |   |   |   |   | $ | 4.55 |   |   |   |   |   |   | $ | 6.19 |   |
| Total      grant-date fair value of options vested during the year         |   |   |    |   |                                  | $      | 300,000 |   |   |   |   |   |   | $ | 433,000 |   |   |   |   |   |   | $ | 321,000 |   |
| Total      intrinsic value of options exercised during the year            |   |   |    |   |                                  | $      | 8,500   |   |   |   |   |   |   | $ | 468,000 |   |   |   |   |   |   | $ | 1,520,000 |   |

|                                                 |   | Year      endedDecember      31, 2008 |    |   | Year      endedDecember      31, 2007 |   |
|------------------------------------------------------|--------|---------------------------------------|---------|--------|---------------------------------------|--------|
| Stock      options vested and expected to vest:      |   |                                  |    |   |                                  |   |
| Number                                               |   |                                  | 673,120 |   |                                  |   | 665,069 |   |
| Weighted      average exercise price                 |   | $                                     | 13.76   |   |                                  | $      | 14.03 |   |
| Aggregate      intrinsic value                       |   | $                                     | -       |   |                                  | $      | 645,000 |   |
| Weighted      average contractual term of options    |   | 4.69      years                       |    |   | 5.52      years                       |   |
|                                                 |   |                                  |    |   |                                  |   |   |   |
| Stock      options vested and currently exercisable: |   |                                  |    |   |                                  |   |   |   |
| Number                                               |   |                                  | 482,491 |   |                                  |   | 436,097 |   |
| Weighted      average exercise price                 |   | $                                     | 12.95   |   |                                  | $      | 12.51 |   |
| Aggregate      intrinsic value                       |   | $                                     | -       |   |                                  | $      | 631,000 |   |
| Weighted      average contractual term of options    |   | 3.36      years                       |    |   | 4.04      years                       |   |

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|                          |                  |   | Options      Outstanding |   |    | Options      Exercisable                         |   |
|-------------------------------|-----------------------|--------|--------------------------|--------|---------|--------------------------------------------------|--------|
| Range      of Exercise Prices |                  |   | Number                   |   |    | Weighted-      Average Contractual Life in Years |   |   | Weighted-AverageExercisePrice |   |   | Number |   |   | Weighted-AverageExercisePrice |   |
| $                             | 6.01      - 7.94 |   |                     |   | 72,666  |                                             |   |   | 3.95 |   |   | $ | 7.58 |   |   |   | 69,666 |   |   | $ | 7.65 |   |
|                          | 8.25      - 9.81 |   |                     |   | 70,518  |                                             |   |   | 3.37 |   |   |   | 9.27 |   |   |   | 61,097 |   |   |   | 9.38 |   |
|                          | 10.00      - 10.50    |   |                     |   | 71,026  |                                             |   |   | 2.71 |   |   |   | 10.39 |   |   |   | 71,026 |   |   |   | 10.39 |   |
|                          | 10.59      - 13.05    |   |                     |   | 94,350  |                                             |   |   | 4.47 |   |   |   | 12.44 |   |   |   | 62,832 |   |   |   | 12.51 |   |
|                          | 13.40      - 13.48    |   |                     |   | 74,817  |                                             |   |   | 8.45 |   |   |   | 13.45 |   |   |   | 15,147 |   |   |   | 13.47 |   |
|                          | 13.67      - 15.24    |   |                     |   | 75,990  |                                             |   |   | 5.92 |   |   |   | 14.10 |   |   |   | 49,266 |   |   |   | 14.19 |   |
|                          | 15.93      - 15.93    |   |                     |   | 73,440  |                                             |   |   | 0.80 |   |   |   | 15.93 |   |   |   | 73,440 |   |   |   | 15.93 |   |
|                          | 16.66      - 20.90    |   |                     |   | 84,914  |                                             |   |   | 5.50 |   |   |   | 18.78 |   |   |   | 48,194 |   |   |   | 18.22 |   |
|                          | 20.93      - 20.93    |   |                     |   | 70,277  |                                             |   |   | 7.69 |   |   |   | 20.93 |   |   |   | 29,579 |   |   |   | 20.93 |   |
|                          | 21.27      - 21.77    |   |                     |   | 11,220  |                                             |   |   | 8.05 |   |   |   | 21.59 |   |   |   | 2,244 |   |   |   | 21.59 |   |
|                          |                  |   |                     |   | 699,218 |                                             |   |   | 4.83 |   |   | $ | 13.83 |   |   |   | 482,491 |   |   | $ | 12.95 |   |

|                                                                                        | 2008                 |   | 2007                 |   | 2006                 |
|---------------------------------------------------------------------------------------------|----------------------|--------|----------------------|--------|----------------------|
|                                                                                        |                 |   |                 |   |                 |
| Risk-free      interest rate                                                                | 2.77%      - 4.03%   |   | 4.39%      - 4.68%   |   | 4.39%      - 4.86%   |
| Expected      life of the options                                                           | 7 -      10 years    |   | 7 -      10 years    |   | 7 -      10 years    |
| Expected      dividends (as a percent of the fair value of the stock)                       | 0.00%      - 4.66%   |   | 2.63%      - 3.50%   |   | 2.73%      - 2.82%   |
| Weighted      average expected dividends (as a percent of the fair value of the      stock) | 4.12%                |   | 3.20%                |   | 2.80%                |
| Expected      volatility                                                                    | 25.83%      - 32.53% |   | 26.62%      - 31.62% |   | 30.73%      - 32.19% |
| Weighted-average      expected volatility                                                   | 28.96%               |   | 28.23%               |   | 31.00%               |

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|                                                        |   |           |        |   | Weighted-Average |   |   |          |   |   |                    |   |
|-------------------------------------------------------------|--------|----------------|-------------|--------|------------------|--------|--------|---------------|--------|--------|-------------------------|--------|
| December      31, 2008                                      |   | Notionalamount |        |   | Floor      rate  |   |   | Cap      rate |   |   | Maturity      in months |   |   | Estimated      fair value at December 31, 2008 |   |   | Net      unrealized gains (losses) |   |
|                                                        |   |           |        |   |             |   |   |          |   |   |                    |   |   |   |   |   |   |   |
| Derivatives      Designated as Cash Flow Hedges:            |   |           |        |   |             |   |   |          |   |   |                    |   |   |   |   |   |   |   |
| Hedging      cash flows on prime- based floating rate loans |   | $              | 100,000,000 |   |             |   | 7.06   | %             |   |   | 6.88                    | %      |   |   | 22 |   |   | $ | 3,952,000 |   |   | $ | 3,611,000 |   |
| Hedging      cash flows on floating rate deposit accounts   |   |           | 25,000,000  |   |             |   | -      |          |   |   | 2.98                    | %      |   |   | 27 |   |   |   | 41,000 |   |   |   | (283,000 | ) |
| Total      Derivative Instruments                           |   | $              | 125,000,000 |   |             |   | 7.06   | %             |   |   | 5.58                    | %      |   |   | 23 |   |   | $ | 3,993,000 |   |   | $ | 3,328,000 |   |

|                                                        |   |           |       |   | Weighted-Average |   |   |          |   |   |                    |   |
|-------------------------------------------------------------|--------|----------------|------------|--------|------------------|--------|--------|---------------|--------|--------|-------------------------|--------|
| December      31, 2007                                      |   | Notionalamount |       |   | Floor      rate  |   |   | Cap      rate |   |   | Maturity      in months |   |   | Estimated      fair value at December 31, 2007 |   |   | Net      unrealized gains |   |
|                                                        |   |           |       |   |             |   |   |          |   |   |                    |   |   |   |   |   |   |   |
| Derivatives      Designated as Cash Flow Hedges:            |   |           |       |   |             |   |   |          |   |   |                    |   |   |   |   |   |   |   |
| Hedging      cash flows on prime- based floating rate loans |   | $              | 50,000,000 |   |             |   | 8.25   | %             |   |   | -                       |   |   |   | 18 |   |   | $ | 1,307,000 |   |   | $ | 977,000 |   |
| Total      Derivative Instruments                           |   | $              | 50,000,000 |   |             |   | 8.25   | %             |   |   | -                       |   |   |   | 18 |   |   | $ | 1,307,000 |   |   | $ | 977,000 |   |

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|                              |   | 2008 |        |   | 2007   |   |
|-----------------------------------|--------|------|-------------|--------|--------|--------|
| Commitments      to extend credit |   | $    | 147,187,000 |   |   | $      | 154,113,000 |   |
| Standby      letters of credit    |   | $    | 4,134,000   |   |   | $      | 4,239,000 |   |

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|                                         |   | Actual |        |   | For      Capital Adequacy Purposes |   |   | To      Be Well Capitalized Under Prompt Corrective Action    Provisions |   |
|----------------------------------------------|--------|--------|-------------|--------|------------------------------------|--------|--------|--------------------------------------------------------------------------|--------|
| As      of December 31, 2008:                |   |   |        |   |                               |   |   |                                                                     |   |   |   |   |   |   |   |   |   |   |
| Total      Capital to Risk Weighted Assets:  |   |   |        |   |                               |   |   |                                                                     |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                 |   | $      | 104,718,000 |   |                               |   | 10.3   | %                                                                        |   | $ | 81,103,000 |   |   |   | 8.0 | % |   |   | -      N/A - |   |   |   |   |
| Bank                                         |   | $      | 104,700,000 |   |                               |   | 10.3   | %                                                                        |   | $ | 81,019,000 |   |   |   | 8.0 | % |   | $ | 101,274,000 |   |   |   | 10.0 | % |
| Tier      1 Capital to Risk Weighted Assets: |   |   |        |   |                               |   |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                 |   | $      | 91,962,000  |   |                               |   | 9.0    | %                                                                        |   | $ | 40,551,000 |   |   |   | 4.0 | % |   |   | -      N/A - |   |   |   |   |   |
| Bank                                         |   | $      | 91,957,000  |   |                               |   | 9.0    | %                                                                        |   | $ | 40,510,000 |   |   |   | 4.0 | % |   | $ | 60,764,000 |   |   |   | 6.0 | % |
| Tier      1 Capital to Average Assets:       |   |   |        |   |                               |   |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                 |   | $      | 91,962,000  |   |                               |   | 7.0    | %                                                                        |   | $ | 52,223,000 |   |   |   | 4.0 | % |   |   | -      N/A - |   |   |   |   |   |
| Bank                                         |   | $      | 91,957,000  |   |                               |   | 7.0    | %                                                                        |   | $ | 52,181,000 |   |   |   | 4.0 | % |   | $ | 65,226,000 |   |   |   | 5.0 | % |
|                                         |   |   |        |   |                               |   |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As      of December 31, 2007:                |   |   |        |   |                               |   |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Capital to Risk Weighted Assets:  |   |   |        |   |                               |   |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                 |   | $      | 113,471,000 |   |                               |   | 11.3   | %                                                                        |   | $ | 80,515,000 |   |   |   | 8.0 | % |   |   | -      N/A - |   |   |   |   |   |
| Bank                                         |   | $      | 112,073,000 |   |                               |   | 11.2   | %                                                                        |   | $ | 80,429,000 |   |   |   | 8.0 | % |   | $ | 100,536,000 |   |   |   | 10.0 | % |
| Tier      1 Capital to Risk Weighted Assets: |   |   |        |   |                               |   |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                 |   | $      | 100,885,000 |   |                               |   | 10.0   | %                                                                        |   | $ | 40,258,000 |   |   |   | 4.0 | % |   |   | -      N/A - |   |   |   |   |   |
| Bank                                         |   | $      | 99,501,000  |   |                               |   | 9.9    | %                                                                        |   | $ | 40,214,000 |   |   |   | 4.0 | % |   | $ | 60,322,000 |   |   |   | 6.0 | % |
| Tier      1 Capital to Average Assets:       |   |   |        |   |                               |   |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                 |   | $      | 100,885,000 |   |                               |   | 8.5    | %                                                                        |   | $ | 47,550,000 |   |   |   | 4.0 | % |   |   | -      N/A - |   |   |   |   |   |
| Bank                                         |   | $      | 99,501,000  |   |                               |   | 8.4    | %                                                                        |   | $ | 47,500,000 |   |   |   | 4.0 | % |   | $ | 59,375,000 |   |   |   | 5.0 | % |

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|                                                 |   | Quoted      Prices in Active Markets for Identical Assets(Level      1) |    |   | Significant      Other Observable Inputs(Level      2) |   |        |  Significant      Unobservable Inputs(Level      3) |   |   |     Total |   |
|------------------------------------------------------|--------|-------------------------------------------------------------------------|---------|--------|--------------------------------------------------------|--------|-------------|----------------------------------------------------------|--------|--------|-------------------------------|--------|
| Assets                                               |   |                                                                    |    |   |                                                   |   |        |                                                     |   |   |                          |   |
| Investment      securities available-for-sale        |   | $                                                                       | 571,156 |   |                                                   | $      | 185,202,159 |                                                     |   | $      | -                             |   |   | $ | 185,773,315 |   |
| Derivative      financial instruments                |   |                                                                    | -       |   |                                                   |   | 3,992,797   |                                                     |   |   | -                             |   |   | $ | 3,992,797 |   |
| Total      fair value of assets on a recurring basis |   | $                                                                       | 571,156 |   |                                                   | $      | 189,194,956 |                                                     |   | $      | -                             |   |   | $ | 189,766,112 |   |

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|                                                    |   | Carrying      value at December 31, 2008                                |   |   |                                                   |   |
|---------------------------------------------------------|--------|-------------------------------------------------------------------------|--------|--------|--------------------------------------------------------|--------|
|                                                    |   | Quoted      Prices in Active Markets for Identical Assets(Level      1) |   |   | Significant      Other Observable Inputs(Level      2) |   |   | Significant      Unobservable Inputs(Level      3) |   |   | Total |   |   | Total      gains (losses) for the Year Ended December 31, 2008 |   |
|                                                    |   |                                                                    |   |   |                                                   |   |   |   |   |   |   |   |   |   |   |
| Impaired      loans                                     |   | $                                                                       | -      |   |                                                   | $      | - |   |   | $ | 51,344,361 |   |   | $ | 51,344,361 |   |   | $ | - |   |
| Foreclosed      assets                                  |   |                                                                    | -      |   |                                                   |   | 6,251,652 |   |   |   | 19,017,249 |   |   |   | 25,268,901 |   |   |   | (1,284,931 | ) |
| Total      fair value of assets on a nonrecurring basis |   | $                                                                       | -      |   |                                                   | $      | 6,251,652 |   |   | $ | 75,462,175 |   |   | $ | 81,713,827 |   |   | $ | (1,284,931 | ) |

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|                                                                                                          |   | 2008                 |          |   | 2007            |   |
|---------------------------------------------------------------------------------------------------------------|--------|----------------------|---------------|--------|-----------------|--------|
|                                                                                                          |   | Carrying      Amount |          |   | Fair      Value |   |   | Carrying      Amount |   |   | Fair      Value |   |
| Cash      and balances due from banks, interest-bearing deposits with other banks      and federal funds sold |   | $                    | 137,404,000   |   |            | $      | 137,404,000 |   |   | $ | 30,404,000 |   |   | $ | 30,404,000 |   |
| Investment      securities                                                                                    |   |                 | 185,773,000   |   |            |   | 185,773,000 |   |   |   | 194,794,000 |   |   |   | 194,794,000 |   |
| Loans,      net                                                                                               |   |                 | 937,314,000   |   |            |   | 940,533,000 |   |   |   | 908,443,000 |   |   |   | 908,164,000 |   |
| Cash      flow hedge derivative instrument                                                                    |   |                 | 3,993,000     |   |            |   | 3,993,000 |   |   |   | 1,307,000 |   |   |   | 1,307,000 |   |
| Deposits                                                                                                      |   |                 | 1,123,703,000 |   |            |   | 1,134,568,000 |   |   |   | 980,149,000 |   |   |   | 988,098,000 |   |
| Federal      funds purchased and securities sold under agreements to      repurchase                          |   |                 | 8,954,000     |   |            |   | 8,954,000 |   |   |   | 16,175,000 |   |   |   | 16,175,000 |   |
| Advances      from the FHLB                                                                                   |   |                 | 109,704,000   |   |            |   | 106,847,000 |   |   |   | 86,298,000 |   |   |   | 85,422,000 |   |
| Beneficial      interest in debentures                                                                        |   |                 | 10,310,000    |   |            |   | 10,310,000 |   |   |   | 10,310,000 |   |   |   | 10,310,000 |   |

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| NOTE      24. | CONDENSED      FINANCIAL INFORMATION OF PAB BANKSHARES, INC. (PARENT COMPANY      ONLY) |
|---------------|-----------------------------------------------------------------------------------------|

| PAB      BANKSHARES, INC.                                                                      |   |
|------------------------------------------------------------------------------------------------|--------|
| CONDENSED      BALANCE SHEETS                                                                  |   |
| DECEMBER      31, 2008 AND 2007                                                                |   |
|                                                                                           |   |   |   |   |   |   |
|                                                                                           |   | 2008 |   |   | 2007 |   |
| ASSETS                                                                                         |   |   |   |   |   |   |
| Cash      on deposit with subsidiary bank                                                      |   | $ | 1,101,389 |   |   | $ | 4,060,144 |   |
| Investment      in subsidiary                                                                  |   |   | 101,905,733 |   |   |   | 106,601,746 |   |
| Other      assets                                                                              |   |   | 775,580 |   |   |   | 825,703 |   |
| Total      assets                                                                              |   | $ | 103,782,702 |   |   | $ | 111,487,593 |   |
|                                                                                           |   |   |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                      |   |   |   |   |   |   |   |   |
| Guaranteed      preferred beneficial interests in debentures (trust preferred      securities) |   | $ | 10,310,000 |   |   | $ | 10,310,000 |   |
| Dividends      payable                                                                         |   |   | - |   |   |   | 1,337,368 |   |
| Other      liabilities                                                                         |   |   | 1,871,960 |   |   |   | 2,164,253 |   |
| Total      liabilities                                                                         |   |   | 12,181,960 |   |   |   | 13,811,621 |   |
|                                                                                           |   |   |   |   |   |   |   |   |
| Stockholders'      equity                                                                      |   |   | 91,600,742 |   |   |   | 97,675,972 |   |
|                                                                                           |   |   |   |   |   |   |   |   |
| Total      liabilities and stockholders' equity                                                |   | $ | 103,782,702 |   |   | $ | 111,487,593 |   |

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| NOTE      24. | CONDENSED      FINANCIAL INFORMATION OF PAB BANKSHARES, INC.(PARENT      COMPANY ONLY) (Continued) |
|---------------|----------------------------------------------------------------------------------------------------|

| PAB      BANKSHARES, INC.                                                                                      |   |
|----------------------------------------------------------------------------------------------------------------|--------|
| CONDENSED      STATEMENTS OF INCOME (LOSS)                                                                     |   |
| YEARS      ENDED DECEMBER 31, 2008, 2007 AND 2006                                                              |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |
|                                                                                                           |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |
| Income                                                                                                         |   |   |   |   |   |   |   |   |   |
| Dividends      from subsidiaries                                                                               |   | $ | 2,450,000 |   |   | $ | 12,445,000 |   |   | $ | 6,640,000 |   |
| Interest      and dividends on investment securities                                                           |   |   | 16,234 |   |   |   | 21,862 |   |   |   | 118,500 |   |
| Securities      transactions, net                                                                              |   |   | - |   |   |   | 371,606 |   |   |   | 166,954 |   |
| Other      income                                                                                              |   |   | - |   |   |   | 1,040 |   |   |   | - |   |
| Total      income                                                                                              |   |   | 2,466,234 |   |   |   | 12,839,508 |   |   |   | 6,925,454 |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                                                                                                       |   |   | 1,135,975 |   |   |   | 1,605,380 |   |   |   | 2,134,953 |   |
| Income      before income tax benefit and equity in undistributed earnings of      subsidiaries                |   |   | 1,330,259 |   |   |   | 11,234,128 |   |   |   | 4,790,501 |   |
| Income      tax benefit                                                                                        |   |   | 302,644 |   |   |   | 388,311 |   |   |   | 695,010 |   |
| Income      before equity in undistributed earnings (distributions in excess of      earnings) of subsidiaries |   |   | 1,632,903 |   |   |   | 11,622,439 |   |   |   | 5,485,511 |   |
| Equity      in undistributed earnings (distributions in excess of earnings) of      subsidiaries               |   |   | (7,544,168 | ) |   |   | (836,724 | ) |   |   | 8,249,706 |   |
| Net      income (loss)                                                                                         |   | $ | (5,911,265 | ) |   | $ | 10,785,715 |   |   | $ | 13,735,217 |   |

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| NOTE      24. | CONDENSED      FINANCIAL INFORMATION OF PAB BANKSHARES, INC.(PARENT      COMPANY ONLY) (Continued) |
|---------------|----------------------------------------------------------------------------------------------------|

| PAB      BANKSHARES, INC.                                                                          |   |
|----------------------------------------------------------------------------------------------------|--------|
| CONDENSED      STATEMENTS OF CASH FLOW                                                             |   |
| YEARS      ENDED DECEMBER 31, 2008, 2007 AND 2006                                                  |   |
|                                                                                               |   |   |   |   |   |   |   |   |   |
|                                                                                               |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                                               |   |   |   |   |   |   |   |   |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES                                                          |   |   |   |   |   |   |   |   |   |
| Net      Income (loss)                                                                             |   | $ | (5,911,265 | ) |   | $ | 10,785,715 |   |   | $ | 13,735,217 |   |
| Adjustments      to reconcile net income (loss) to net cash provided by operating      activities: |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      and  (accretion)                                                       |   |   | - |   |   |   | - |   |   |   | (24,650 | ) |
| Deferred      tax provision                                                                        |   |   | 66,054 |   |   |   | 4,852 |   |   |   | (30,815 | ) |
| Net      realized gain on securities transactions                                                  |   |   | - |   |   |   | (371,606 | ) |   |   | (166,954 | ) |
| Distributions      in excess of earnings (undistributed earnings) of    subsidiaries               |   |   | 7,544,168 |   |   |   | 836,724 |   |   |   | (8,249,705 | ) |
| Increase      (decrease) in deferred compensation accrual                                          |   |   | (235,904 | ) |   |   | (133,699 | ) |   |   | 223,708 |   |
| Stock-based      compensation expense                                                              |   |   | 310,043 |   |   |   | 410,851 |   |   |   | 290,245 |   |
| Net      change in other assets and liabilities                                                    |   |   | (72,320 | ) |   |   | (24,721 | ) |   |   | (179,269 | ) |
| Net      cash provided by operating activities                                                     |   |   | 1,700,776 |   |   |   | 11,508,116 |   |   |   | 5,597,777 |   |
|                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase      of debt securities                                                                   |   |   | - |   |   |   | - |   |   |   | (9,999,191 | ) |
| Proceeds      from maturities of debt securities                                                   |   |   | - |   |   |   | - |   |   |   | 10,087,000 |   |
| Redemption      of equity securities                                                               |   |   | - |   |   |   | 641,551 |   |   |   | 246,954 |   |
| Net      cash provided by investing activities                                                     |   |   | - |   |   |   | 641,551 |   |   |   | 334,763 |   |
|                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends      paid                                                                                |   |   | (3,532,990 | ) |   |   | (5,432,369 | ) |   |   | (4,984,149 | ) |
| Proceeds      from the issuance of trust preferred securities                                      |   |   | - |   |   |   | - |   |   |   | 10,000,000 |   |
| Redemption      of trust preferred securities                                                      |   |   | - |   |   |   | - |   |   |   | (10,000,000 | ) |
| Proceeds      from the exercise of stock options                                                   |   |   | 35,980 |   |   |   | 691,341 |   |   |   | 1,671,873 |   |
| Acquisition      of stock under stock repurchase plans                                             |   |   | (1,162,521 | ) |   |   | (5,894,104 | ) |   |   | (2,503,298 | ) |
| Net      cash used in financing activities                                                         |   |   | (4,659,531 | ) |   |   | (10,635,132 | ) |   |   | (5,815,574 | ) |
|                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      increase (decrease) in cash                                                               |   |   | (2,958,755 | ) |   |   | 1,514,535 |   |   |   | 116,966 |   |
|                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      at beginning of period                                                                   |   |   | 4,060,144 |   |   |   | 2,545,609 |   |   |   | 2,428,643 |   |
|                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      at end of period                                                                         |   | $ | 1,101,389 |   |   | $ | 4,060,144 |   |   | $ | 2,545,609 |   |

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|                              |   | South      Georgia  |    |   | North      Georgia |   |    | Florida |   |   | Treasury |   |   | Total  |    |
|-----------------------------------|--------|---------------------|---------|--------|--------------------|--------|---------|---------|--------|--------|----------|--------|--------|--------|---------|
|                              |   | (In      thousands) |    |
| 2008                              |   |                |    |   |               |   |    |    |   |   |     |   |   |   |    |
| Net      interest income          |   | $                   | 18,398  |   |               | $      | 12,288  |    |   | $      | 3,633    |   |   | $      | 447     |   |   | $ | 34,766 |   |
| Provision      for loan losses    |   |                | 985     |   |               |   | 12,369  |    |   |   | 1,855    |   |   |   | 2,841   |   |   |   | 18,050 |   |
| Noninterest      income           |   |                | 3,981   |   |               |   | (1,191  | )       |   |   | (24      | )      |   |   | 1,637   |   |   |   | 4,403 |   |
| Noninterest      expense          |   |                | 9,469   |   |               |   | 6,337   |    |   |   | 2,270    |   |   |   | 12,508  |   |   |   | 30,584 |   |
| Income      tax (benefit) expense |   |                | 4,055   |   |               |   | (2,587  | )       |   |   | (175     | )      |   |   | (4,846  | ) |   |   | (3,554 | ) |
| Net      (loss) income            |   |                | 7,871   |   |               |   | (5,022  | )       |   |   | (341     | )      |   |   | (8,419  | ) |   |   | (5,911 | ) |
| Total      assets                 |   |                | 406,708 |   |               |   | 464,949 |    |   |   | 106,029  |   |   |   | 372,417 |   |   |   | 1,350,103 |   |
|                              |   |                |    |   |               |   |    |    |   |   |     |   |   |   |    |   |   |   |   |   |
| 2007                              |   |                |    |   |               |   |    |    |   |   |     |   |   |   |    |   |   |   |   |   |
| Net      interest income          |   | $                   | 20,858  |   |               | $      | 16,035  |    |   | $      | 4,052    |   |   | $      | 1,521   |   |   | $ | 42,466 |   |
| Provision      for loan losses    |   |                | 269     |   |               |   | 3,145   |    |   |   | 373      |   |   |   | (1,387  | ) |   |   | 2,400 |   |
| Noninterest      income           |   |                | 3,842   |   |               |   | 413     |    |   |   | 162      |   |   |   | 1,574   |   |   |   | 5,991 |   |
| Noninterest      expense          |   |                | 9,154   |   |               |   | 5,692   |    |   |   | 2,021    |   |   |   | 12,723  |   |   |   | 29,590 |   |
| Income      tax (benefit) expense |   |                | 5,347   |   |               |   | 2,664   |    |   |   | 637      |   |   |   | (2,967  | ) |   |   | 5,681 |   |
| Net      (loss) income            |   |                | 9,930   |   |               |   | 4,947   |    |   |   | 1,183    |   |   |   | (5,274  | ) |   |   | 10,786 |   |
| Total      assets                 |   |                | 388,016 |   |               |   | 446,516 |    |   |   | 103,037  |   |   |   | 261,102 |   |   |   | 1,198,671 |   |
|                              |   |                |    |   |               |   |    |    |   |   |     |   |   |   |    |   |   |   |   |   |
| 2006                              |   |                |    |   |               |   |    |    |   |   |     |   |   |   |    |   |   |   |   |   |
| Net      interest income          |   | $                   | 22,346  |   |               | $      | 14,452  |    |   | $      | 5,221    |   |   | $      | 1,992   |   |   | $ | 44,011 |   |
| Provision      for loan losses    |   |                | (393    | )      |               |   | 426     |    |   |   | 47       |   |   |   | (80     | ) |   |   | - |   |
| Noninterest      income           |   |                | 4,254   |   |               |   | 377     |    |   |   | 100      |   |   |   | 648     |   |   |   | 5,379 |   |
| Noninterest      expense          |   |                | 9,194   |   |               |   | 4,492   |    |   |   | 1,592    |   |   |   | 12,889  |   |   |   | 28,167 |   |
| Income      tax (benefit) expense |   |                | 6,230   |   |               |   | 3,468   |    |   |   | 1,289    |   |   |   | (3,499  | ) |   |   | 7,488 |   |
| Net      (loss) income            |   |                | 11,569  |   |               |   | 6,443   |    |   |   | 2,393    |   |   |   | (6,670  | ) |   |   | 13,735 |   |
| Total      assets                 |   |                | 360,967 |   |               |   | 401,943 |    |   |   | 72,204   |   |   |   | 72,204  |   |   |   | 1,120,804 |   |

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| ITEM 9. | CHANGES      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL      DISCLOSURES |
|---------|-------------------------------------------------------------------------------------------------|

ITEM 

ITEM 

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ITEM 

ITEM 

| ITEM 12. | SECURITY      OWNERSHIP OF CERTAIN BENEFICIAL OWNERSAND      MANAGEMENT AND RELATED STOCKHOLDERMATTERS |
|----------|--------------------------------------------------------------------------------------------------------|

| Plan      Category                                       | Number      of Securities to be Issued Upon Exercise of Outstanding Options, Warrants      and Rights | Weighted-Average      Exercise Price of Outstanding Options, Warrants and Rights | Number      of Securities Remaining Available for Future Issuance under Equity      Compensation Plans* |
|----------------------------------------------------------|-------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|
| Equity      Compensation Plans                           |                                                                                                  |                                                                             |                                                                                                    |
| Approved      by Security Holders                        | 699,218                                                                                               | $13.83                                                                           | 636,977                                                                                                 |
|                                                     |                                                                                                  |                                                                             |                                                                                                    |
| Equity      Compensation Plans Not                       |                                                                                                  |                                                                             |                                                                                                    |
| Approved      by Security Holders                        | n/a                                                                                                   | n/a                                                                              | n/a                                                                                                     |
|                                                     |                                                                                                  |                                                                             |                                                                                                    |
| *excluding      securities reflected in the first column |                                                                                                  |                                                                             |

| ITEM 13. | CERTAIN      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORINDEPENDENCE |
|----------|-------------------------------------------------------------------------------|

ITEM 

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ITEM 

|   | 1. | Financial      Statements. |
|--------|----|----------------------------|

|   | 2. | Financial      Statement Schedules. |
|--------|----|-------------------------------------|

|   | 3. | Exhibits. |
|--------|----|-----------|

| Exhibit      No. | Description |
|------------------|-------------|

|   | 3.1 | Amended      and Restated Articles of Incorporation (incorporated by reference to      Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q for the      fiscal quarter ended September 30,2008). |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.2 | Amended      and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the      Registrant’s Current Report on Form 8-K dated November 25,      2008). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.1 | Amended      and Restated Trust Agreement among PAB Bankshares, Inc., as Depositor,      Wilmington Trust Company, as Property Trustee and Delaware Trustee, and      the Administrative Trustees named therein dated as of October 5, 2006      (incorporated by reference to Exhibit 4.1 to the Registrant’s Current      Report on Form 8-K dated October 6,2006). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.2 | Junior      Subordinated Indenture between PAB Bankshares, Inc. and Wilmington Trust      Company, as Trustee dated as of October 5, 2006 (incorporated by reference      to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated      October 6, 2006). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.3 | Guarantee      Agreement between PAB Bankshares, Inc., as Guarantor, and Wilmington Trust      Company, as Guarantee Trustee dated as of October 5, 2006 (incorporated by      reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K      dated October 6, 2006). |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.1 | PAB      Bankshares, Inc. Fourth Amended and Restated Dividend Reinvestment and      Common Stock Purchase Plan. |
|--------|------|------------------------------------------------------------------------------------------------------------------|

|   | 10.2 | PAB      Bankshares, Inc. 1994 Employee Stock Option Plan, as amended (incorporated      by reference to Exhibit 10.3 to the Registrant's Annual Report on Form      10-K for the fiscal year ended December 31,  1998). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.3 | Form      of Executive Salary Continuation Agreement, with attached Schedule of      Terms (incorporated by reference to Exhibit 10.5 to the Registrant's      Annual Report on Form 10-K for the fiscal year ended December 31,      1998). |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.4 | PAB      Bankshares, Inc. 1999 Stock Option Plan, as amended and restated      (incorporated by reference to Exhibit 10.1 to the Registrant's      Registration Statement on Form S-8 (No. 333-137316) filed with the      Commission on September 14,2006). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.5 | Employee      Contract Termination Agreement, dated September 1, 2001, by and between C.      Larry Wilkinson and the Registrant (incorporated by reference to Exhibit      10.7 to the Registrant’s Annual Report on Form 10-K for the fiscal year      ended December 31, 2001). |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.6 | Rescission      Agreement, dated December 31, 2001, by and between R. Bradford Burnette      and the Registrant (incorporated by reference to Exhibit 10.10 to the      Registrant’s Annual Report on Form 10-K for the fiscal year ended December      31, 2001). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

|   | 10.7 | PAB      Bankshares, Inc. Employee and Director Stock Purchase Program, dated July      1, 2002 and amended March 25, 2003 (incorporated by reference to Exhibit      10.9 to the Registrant’s Annual Report on Form 10-K for the fiscal year      ended December 31, 2002). |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.8 | Employment      Agreement, dated January 1, 2003, by and between Michael E. Ricketson, the      Registrant, and the Bank (incorporated by reference to Exhibit 10.10 to      the Registrant’s Annual Report on Form 10-K for the fiscal year ended      December 31, 2002). |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.8.1 | First      Amendment to Employment Agreement, dated August 25, 2003, by and between      Michael E. Ricketson, the Registrant, and the Bank (incorporated by      reference to Exhibit 10.14 to the Registrant’s Quarterly Report on Form      10-Q for the fiscal quarter ended September 30,  2003). |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.9 | Employment      Agreement, dated May 1, 2008, by and between M. Burke Welsh, Jr., the Bank      and the Registrant (incorporated by reference to Exhibit 10.9 to the      Registrant’s Current Report on Form 8-K dated May 1,  2008). |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.10 | Employment      Agreement, dated January 1, 2003, by and between R. Wesley Fuller and the      Bank (incorporated by reference to Exhibit 10.12 to the Registrant’s      Annual Report on Form 10-K for the fiscal year ended December 31,      2002). |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.10.1 | First      Amendment to Employment Agreement, dated May 1, 2008, by and between R.      Wesley Fuller and the Bank (incorporated by reference to Exhibit 10.10.1      to the Registrant’s Current Report on Form 8-K dated May 1,      2008). |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.11 | Employment      Agreement, dated January 1, 2003, by and between Donald J. Torbert, Jr.      and the Bank (incorporated by reference to Exhibit 10.13 to the      Registrant’s Annual Report on Form 10-K for the fiscal year ended December      31, 2002). |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.11.1 | First      Amendment to Employment Agreement, dated August 26, 2003, by and between      Donald J. Torbert, Jr. and the Bank (incorporated by reference to Exhibit      10.15 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal      quarter ended September 30,2003). |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.11.2 | Second      Amendment to Employment Agreement, dated May 1, 2008, by and between      Donald J. Torbert, Jr. and the Bank (incorporated by reference to Exhibit      10.11.2 to the Registrant’s Current Report on Form 8-K dated May 1,      2008). |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.12 | Employment      Contract Termination Agreement, dated August 9, 2004, by and between      Michael E. Ricketson, the Registrant, and the Bank (incorporated by      reference to Exhibit 10.12 to the Registrant’s Quarterly Report on Form      10-Q for the fiscal quarter ended September 30,  2004). |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.13 | Employment      Agreement, dated May 1, 2008, by and between David H. Gould, Jr., the Bank      and the Registrant (incorporated by reference to Exhibit 10.13 to the      Registrant’s Current Report on Form 8-K dated May 1,  2008). |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.14 | Employment      Agreement, dated May 1, 2008, by and between William L. Kane, the Bank and      the Registrant (incorporated by reference to Exhibit 10.14 to the      Registrant’s Current Report on Form 8-K dated May 1,  2008). |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.15 | Employment      Agreement, dated May 1, 2008, by and between George D. Henderson, the Bank      and the Registrant (incorporated by reference to Exhibit 10.14 to the      Registrant’s Current Report on Form 8-K dated May 1,  2008). |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 21.1 | Subsidiaries      of the Registrant. |
|--------|------|--------------------------------------|

|   | 23.1 | Consent      of Mauldin & Jenkins,LLC. |
|--------|------|--------------------------------------------|

|   | 31.1 | Rule      13a-14(a) Certification of Chief Executive  Officer. |
|--------|------|----------------------------------------------------------------|

|   | 31.2 | Rule      13a-14(a) Certification of Chief Financial  Officer. |
|--------|------|----------------------------------------------------------------|

|   | 32.1 | Section      1350 Certification of Chief ExecutiveOfficer. |
|--------|------|------------------------------------------------------------|

|   | 32.2 | Section      1350 Certification of Chief FinancialOfficer. |
|--------|------|------------------------------------------------------------|

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Table of Contents

SIGNATURES

|                           | PAB      BANKSHARES, INC. |                                       |
|--------------------------------|---------------------------|--------------------------------------------|
| Date:      March      11, 2009 |                      |                                       |   |
|                           | By:                       | /s/ M. Burke Welsh, Jr.                    |   |
|                           |                      | M.      Burke Welsh, Jr.                   |   |
|                           |                      | President      and Chief Executive Officer |   |

| Signature                        |   |   | Title                                   |   | Date                      |
|----------------------------------|--------|--------|-----------------------------------------|--------|---------------------------|
|                             |   |   |                                    |   |                      |
| /s/ R. Bradford Burnette         |   |   | Director                                |   | March 11, 2009            |
| R.      Bradford Burnette        |   |   |                                    |   |                      |
|                             |   |   |                                    |   |                      |
| /s/ Walter W. Carroll II         |   |   | Director                                |   | March 11, 2009            |
| Walter      W. Carroll II        |   |   |                                    |   |                      |
|                             |   |   |                                    |   |                      |
| /s/ James L. Dewar, Jr.          |   |   | Director,      Chairman                 |   | March      11, 2009  |
| James      L. Dewar, Jr.         |   |   |                                    |   |                      |
|                             |   |   |                                    |   |                      |
| /s/ James W. Godbee, Jr.         |   |   | Director                                |   | March 11, 2009            |
| James      W. Godbee, Jr., CPA   |   |   |                                    |   |                      |
|                             |   |   |                                    |   |                      |
| /s/ Michael H. Godwin            |   |   | Director                                |   | March 11, 2009            |
| Michael      H. Godwin           |   |   |                                    |   |                      |
|                             |   |   |                                    |   |                      |
| /s/ James B. Lanier, Jr.         |   |   | Director                                |   | March 11, 2009            |
| James      B. Lanier, Jr.        |   |   |                                    |   |                      |
|                             |   |   |                                    |   |                      |
| /s/ John E. Mansfield, Jr.       |   |   | Director                                |   | March 11, 2009            |
| John      E. Mansfield, Jr.      |   |   |                                    |   |                      |
|                             |   |   |                                    |   |                      |
| /s/ Kennith D. McLeod            |   |   | Director                                |   | March 11, 2009            |
| Kennith      D. McLeod, CPA      |   |   |                                    |   |                      |
|                             |   |   |                                    |   |                      |
| /s/ Douglas W. McNeill           |   |   | Director,      Vice Chairman            |   | March 11, 2009            |
| Douglas      W. McNeill          |   |   |                                    |   |                      |
|                             |   |   |                                    |   |                      |
| /s/ Paul E. Parker               |   |   | Director                                |   | March 11, 2009            |
| Paul      E. Parker              |   |   |                                    |   |                      |
|                             |   |   |                                    |   |                      |
| /s/ F. Ferrell Scruggs, Sr.      |   |   | Director                                |   | March 11, 2009            |
| F.      Ferrell Scruggs, Sr.     |   |   |                                    |   |                      |
|                             |   |   |                                    |   |                      |
| /s/ Joe P. Singletary, Jr.       |   |   | Director                                |   | March 11, 2009            |
| Joe      P. Singletary, Jr.      |   |   |                                    |   |                      |
|                             |   |   |                                    |   |                      |
| /s/ Donald J. Torbert, Jr.       |   |   | Executive      Vice President and       |   | March 11, 2009            |
| Donald      J. Torbert, Jr., CPA |   |   | Chief      Financial Officer (Principal |   |                      |
|                             |   |   | Financial      and Accounting Officer)  |   |                      |
|                             |   |   |                                    |   |                      |
| /s/ M. Burke Welsh, Jr.          |   |   | Director,      President and            |   | March 11, 2009            |
| M.      Burke Welsh, Jr.         |   |   | Chief      Executive Officer            |   |                      |
|                             |   |   | (Principal      Executive Officer)      |   |                      |
|                             |   |   |                                    |   |                      |
| /s/ David K. Williams            |   |   | Director                                |   | March 11, 2009            |
| David      K. Williams           |   |   |                                    |   |                      |

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