================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                  _____________

                                    FORM 10-K

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

  For the Fiscal Year Ended December 31, 2001 - Commission File Number 1-11823

                                  _____________

                              PAB BANKSHARES, INC.
                             (A Georgia Corporation)
                 IRS Employer Identification Number: 58-1473302

                3250 NORTH VALDOSTA ROAD, VALDOSTA, GEORGIA 31602
                        TELEPHONE NUMBER: (229) 241-2775



           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

        TITLE OF EACH CLASS            NAME OF EACH EXCHANGE ON WHICH REGISTERED

     Common Stock, no par value                American Stock Exchange
     --------------------------                -----------------------


        SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:   None.

Indicate by check mark whether the registrant (1) has filed all reports required
to  be  filed  by  Section  13  or 15 (d) of the Securities Exchange Act of 1934
during  the  preceding 12 months (or for such shorter period that the registrant
was  required  to  file  such  reports), and (2) has been subject to such filing
requirements  for  the  past  90  days.
Yes  [X]  No  [ ]

Indicate  by  check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of  the  registrant's  knowledge,  in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form  10-K.  [ ]

The  aggregate  market  value  of the voting stock held by non-affiliates of the
registrant  as of March 1, 2002 was $73,926,376 based on a closing trading price
of  $10.35  per  share.

The  number  of  shares outstanding of the registrant's common stock at March 1,
2002  was  9,421,913  shares.


                      DOCUMENTS INCORPORATED BY REFERENCE

Portions  of  the  registrant's  definitive  Proxy Statement for the 2002 Annual
Meeting  of Shareholders to be filed with the Securities and Exchange Commission
within 120 days of the registrant's fiscal year end is incorporated by reference
in  answer  to  Part  III  of  this  Form  10-K.

================================================================================


<PAGE>
<TABLE>
<CAPTION>
                                             TABLE OF CONTENTS

                                                                                             Page
                                                                                             ----
<S>                                                                                          <C>
PART I
     1.  BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3
          General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3
          Supervision and Regulation. . . . . . . . . . . . . . . . . . . . . . . . . . . .     6
     2.  PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    11
     3.  LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    11
     4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. . . . . . . . . . . . . . . .    11
PART II
     5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    12
     6.  SELECTED FINANCIAL DATA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    13
     7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . .    14
          Statistical Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    14
          Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . .    21
          Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    22
     7A. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . . . . . . . . . . . .    27
     8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
          Quarterly Financial Summary for 2001 and 2000 . . . . . . . . . . . . . . . . . .    28
          Management's Responsibility For Financial Reporting . . . . . . . . . . . . . . .    29
          Report of Independent Public Accountants. . . . . . . . . . . . . . . . . . . . .    30
          Consolidated Balance Sheets at December 31, 2001 and 2000 . . . . . . . . . . . .    32
          Consolidated Statements of Income for the Three Years Ended December 31, 2001 . .    33
          Consolidated Statements of Comprehensive Income (Loss) for the Three Years Ended
           December 31, 2001. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    34
          Consolidated Statements of Stockholders' Equity for the Three Years Ended
           December 31, 2001. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    35
          Consolidated Statements of Cash Flows for the Three Years Ended December 31, 2001    36
          Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . .    38
     9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
          AND FINANCIAL DISCLOSURES . . . . . . . . . . . . . . . . . . . . . . . . . . . .    64
PART III
     10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT . . . . . . . . . . . . . . . .    64
     11. EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    64
     12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT . . . . . . . . . .    64
     13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . . . . . . . . . . .    64
PART IV
     14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K . . . . . . . . .    65
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    67
EXHIBIT INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    68
</TABLE>


<PAGE>
PART I

CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements in this Report, including, without limitation, matters
discussed under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operation," as well as oral statements made by PAB
Bankshares, Inc. ("PAB", and also referred to in this Report as "we", "us", or
"our") or the officers, directors, or employees of PAB may constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act").  Forward-looking statements
include statements about the competitiveness of the banking industry, potential
regulatory obligations, our charter consolidation plan, our entrance and
expansion into higher growth markets, our other business strategies and other
statements that are not historical facts.  When we use words like "anticipate,"
"believe," "intend," "expect," "estimate," "could," "should," "will" and similar
expressions, you should consider them as identifying forward-looking statements.
These forward-looking statements involve risks and uncertainties and are based
on our beliefs and assumptions, and on the information available to us at the
time that these disclosures were prepared.  Factors that may cause actual
results to differ materially from those expressed or implied by such
forward-looking statements include, among others, the following possibilities:
(1) competitive pressures among depository and other financial institutions may
increase significantly; (2) changes in the interest rate environment may reduce
margins; (3) general economic conditions may be less favorable than expected,
resulting in, among other things, a deterioration in credit quality and/or a
reduction in demand for credit; (4) legislative or regulatory changes, including
changes in accounting standards, may adversely affect the businesses in which we
are engaged; (5) costs or difficulties related to the integration of our
businesses and our merger partners may be greater than expected; (6) expected
cost savings associated with mergers may not be fully realized or realized
within the expected time frame; (7) deposit attrition, customer loss or revenue
loss following mergers may be greater than expected; (8) competitors may have
greater financial resources and develop products that enable such competitors to
compete more successfully than us; and (9) adverse changes may occur in the bond
and equity markets.  Many of such factors are beyond our ability to control or
predict, and readers are cautioned not to put undue reliance on such
forward-looking statements.  We disclaim any obligation to update or revise any
forward-looking statements contained in this Report, whether as a result of new
information, future events or otherwise.


ITEM 1.  BUSINESS

GENERAL

PAB is a bank holding company headquartered in Valdosta, Georgia.  PAB was
organized and incorporated in 1982 under the laws of the State of Georgia as a
holding company for The Park Avenue Bank ("Park Avenue").  Park Avenue became a
state-chartered commercial bank in 1971.  In 2001, Park Avenue became a state
member bank of the Federal Reserve System.  Since our incorporation in 1982, we
acquired five other Georgia financial institutions and one Florida financial
institution.  In addition, we formed PAB Financial Services, LLC ("PAB
Financial"), an investment advisory services firm, in 1999.  PAB Financial has
offices in Valdosta, Georgia and Ocala, Florida.

Through our banking offices, we provide a broad array of products and services
to commercial and consumer customers in the communities we serve.  Our product
line includes loans to small- and medium-sized businesses, residential mortgage
loans, home equity loans, construction and development loans, commercial real
estate loans, consumer loans, and a variety of commercial and consumer deposit
products.  We also offer Internet banking, cash management, electronic bill
payment services, safe deposit box rentals, telephone banking, credit and debit
card services, and the availability of a network of ATMs to our customers.
Through PAB Financial, we are able to offer a complete line of financial and
investment products and services to our customers.

Our focus is on community banking.  Over the past two years, we have upgraded
and invested heavily in systems and support to provide a product line that is
comparable to the larger regional banks and gives us a competitive edge over
many of the smaller financial institutions in our local markets.  When it comes
to competing with the larger financial institutions in our markets, we believe
that our people make the difference.  Our experience and strong community
relationships in our local markets allow us to deliver a higher level of
customer service to the small- to mid-sized commercial and individual consumer
accounts.


                                        3
<PAGE>
The table below provides basic information on our wholly-owned subsidiary banks
as of December 31, 2001.  See "Markets and Competition" for additional
demographic information on each of our markets.

<TABLE>
<CAPTION>
BANK SUBSIDIARY AND        YEAR        PROXIMITY TO       TOTAL       TOTAL
LOCATION OF MAIN OFFICE  CHARTERED     VALDOSTA, GA      LOANS(1)  DEPOSITS(1)
-----------------------  ---------  -------------------  --------  -----------
<S>                      <C>        <C>                  <C>       <C>
The Park Avenue Bank          1971                  --   $351,049  $   406,184
Valdosta, Georgia

First Community Bank of       1934        90 miles west   116,123      135,253
  Southwest Georgia
Bainbridge, Georgia

Eagle Bank and Trust(2)       1991  155 miles northeast    78,355       82,517
Statesboro, Georgia

Baxley Federal Bank(3)        1934   90 miles northeast    92,299       96,443
Baxley, Georgia

<FN>
    (1)   Dollars in thousands as of December 31, 2001.

    (2)   Eagle Bank & Trust was subsequently merged into Park Avenue on January
          11, 2002. See "Charter Consolidation Plan".

    (3)   Baxley Federal Bank was subsequently merged into Park Avenue on March
          8, 2002. See "Charter Consolidation Plan".
</TABLE>

On November 30, 2001, we sold our 50% equity interest in Empire Financial
Services, LLC of Milledgeville, Georgia ("Empire") to a third party for $1.8
million.  Empire is a commercial mortgage origination and servicing organization
that serves numerous financial institutions throughout the Southeastern United
States, including our subsidiary banks.

Charter Consolidation Plan
In September 2001, we announced a plan to consolidate the bank charters of each
of our separate subsidiary banks into our lead bank, Park Avenue, through a
series of mergers.  We have received regulatory approval to proceed with our
plan.  Under the plan, the merged banks will continue to operate under their
previous trade names and to be managed by their community presidents and local
advisory boards.  The consolidation process should increase economies of scale
in our back office loan and deposit operations, systems, and support teams, and
improve efficiencies in our delivery of products and services to our customers.
As a consolidated bank, we will also be able to offer a more competitive product
line, while still maintaining the level of service that only community banks can
deliver.  Because of the nature of the mergers and the requisite change in
computer and banking practices that mergers entail, we believe that such mergers
need to occur one at a time and with sufficient time in between, so that the
high quality of customer service and sound banking practices of the banks may be
preserved.

The charter consolidation process began with the merger of Friendship Community
Bank of Ocala, Marion County, Florida into Park Avenue on June 22, 2001.  We had
previously acquired Friendship in a purchase transaction on December 29, 2000.
On December 7, 2001, we merged Farmers & Merchants Bank of Adel, Cook County,
Georgia into Park Avenue.  On January 11, 2002, we merged Eagle Bank and Trust
of Statesboro, Bulloch County, Georgia into Park Avenue.  On March 8, 2002, we
merged Baxley Federal Bank of Baxley, Appling County, Georgia into Park Avenue.
We plan to merge First Community Bank of Southwest Georgia of Bainbridge,
Decatur County, Georgia, into Park Avenue during the second quarter of this
year.


                                        4
<PAGE>
Markets and Competition
The financial services industry is highly competitive.  In our markets, we
primarily face competitive pressures from both larger regional banks and smaller
community banks in attracting and retaining commercial and consumer accounts.
The principal factors in competing for such accounts include interest rates, fee
structures, the range of products and services offered, convenience of office
and ATM locations, and flexible office hours.  Other competition for such
accounts comes from credit unions, retail brokerage firms, mortgage companies,
and consumer finance offices.  Other investment alternatives such as stocks and
mutual funds made readily accessible by the Internet have also had an effect on
our ability to grow deposits in our markets.

With the opening of our de novo branch in McDonough, Henry County, Georgia in
the fourth quarter of 2000, we implemented a strategic plan to enter into higher
growth markets that would complement our stable position in existing markets.
Since expanding into Henry County, we have also entered into markets in Ocala,
Marion County, Florida, and Gainesville, Hall County, Georgia.  Once
established, these offices should serve as the anchor points in any future
branch expansion plans.  With the right people and the right timing, we plan to
continue this strategy to pursue opportunities for growth in other markets as
well.  The potential for double-digit growth in our core markets in South
Georgia has been maximized over the past several years.  However, opportunities
to grow quality market share and improve profitability still exist in these core
markets, which will continue to build shareholder value.

The table below provides summary demographic data on each of our market
locations.

<TABLE>
<CAPTION>
     MARKET                                    MKT SHARE(1)
-----------------                            ----------------   # OF                     PCT
COUNTY      STATE     BANK OR TRADE NAME     PCT      RANK     OFFICES  POPULATION(2) CHANGE(3)
----------  -----  ------------------------  ----  ----------  -------  ------------  --------
<S>         <C>    <C>                       <C>   <C>         <C>      <C>           <C>
Lowndes     GA     The Park Avenue Bank      22.6   1st of 11        4        92,115      21.2
Henry       GA     The Park Avenue Bank       1.9  13th of 15        1       119,341     103.2
Marion      FL     The Park Avenue Bank       2.2  12th of 20        2       258,916      32.9
Hall        GA     The Park Avenue Bank(4)      -           -        1       139,277      45.9
Cook        GA     Farmers & Merchants Bank  29.8    2nd of 4        1        15,771      17.2
Bulloch     GA     Eagle Bank & Trust        15.0    4th of 7        2        55,983      29.8
Bryan       GA     The Richmond Hill Bank(5)  1.7    3rd of 4        1        23,417      51.7
Decatur     GA     First Community Bank of   47.9    1st of 5        3        28,240      10.7
                   Southwest Georgia
Grady       GA     Bank of Grady County       6.2    5th of 5        1        23,659      16.7
Appling     GA     Baxley Federal Bank       27.7    2nd of 4        1        17,419      10.6
Jeff Davis  GA     Baxley Federal Bank       30.6    2nd of 4        1        12,684       5.4

<FN>
    (1)   Based on FDIC/OTS Summary of Deposits data as of June 30, 2001. Market
          share data only includes FDIC insured depository institutions. Credit
          unions, retail brokerage firms, mortgage companies, and consumer
          finance offices are not included.

    (2)   County populations are based on 2000 U.S. Census Bureau data.

    (3)   Percentage change in county populations from 1990 to 2000 is based on
          U.S. Census Bureau data.

    (4)   Park Avenue has operated a loan production office in this market since
          October 2001. During the first quarter of 2002, we applied for and
          received approval from our federal and state regulators to open a full
          service branch office in Oakwood, Hall County, Georgia, about 50 miles
          northeast of downtown Atlanta, Fulton County, Georgia along the
          I-85/I-985 corridor. We expect to open the Oakwood branch office
          during the second quarter of 2002 and simultaneously close the loan
          production office.

    (5)   Park Avenue subsequently sold this branch location along with
          approximately $10.4 million in loans and $4.3 million in deposits to
          another Georgia financial institution on January 31, 2002.
</TABLE>


                                        5
<PAGE>
Nonbanking Services and Operations
Through PAB Financial, we provide agency transactional services for customer
investments as permitted under the regulations of the Federal Reserve.  PAB
Financial provides its customers with securities brokerage services, including
securities execution services on national securities exchanges.  PAB Financial's
brokerage activities are restricted to buying and selling securities solely as
an agent for the account of its customers, and do not include underwriting or
dealing in securities.  In addition, PAB Financial is permitted to act as an
agent for the private placement of securities in accordance with federal
securities laws.  PAB Financial also provides investment advisory services to
its customers, such as furnishing general economic information and investment
advice, and providing instructional materials for customers on individual
financial management matters.

Although we provide products and services under two distinct regulatory-defined
operations (i.e. banking and nonbanking), our nonbanking operations do not meet
the minimum materiality requirements for separate segment reporting under the
provisions of Statement of Financial Accounting Standards ("SFAS") No. 131.

Employees
As of March 1, 2002, we had a total of 284 full-time and 35 part-time employees
on our payroll.

SUPERVISION AND REGULATION

The banking industry is heavily regulated at both the federal and state levels.
Legislation and regulations authorized by legislation influence, among other
things:

     -    How, when and where we may expand geographically;
     -    Into what product or service market we may enter;
     -    How we must manage our assets; and
     -    Under what circumstances money may or must flow between and among the
          parent bank holding company and the subsidiary banks.

Set forth below is an explanation of the major pieces of legislation affecting
our industry and how that legislation affects our actions.

General
PAB is a bank holding company registered with the Board of Governors of the
Federal Reserve System (the "Federal Reserve") and the Georgia Department of
Banking and Finance (the "Georgia Department") under the Bank Holding Company
Act of 1956, as amended (the "BHC Act") and the Financial Institutions Code of
Georgia (the "FICG"), respectively.  PAB has also qualified as a financial
holding company under the provisions of the Gramm-Leach-Bliley Act (the "GLB
Act").  As such, we are subject to the supervision, examination and reporting
requirements of the BHC Act and the regulations of the Federal Reserve, and the
FICG and the regulations of the Georgia Department.

Our subsidiary banks are members of the Federal Deposit Insurance Corporation
("FDIC"), and as such, our deposits are insured by the FDIC to the maximum
extent provided by law.  We are also subject to numerous state and federal
statutes and regulations that affect our business, activities, and operations,
and we are supervised and examined by one or more state or federal bank
regulatory agencies on a periodic basis.

Park Avenue is a state member bank of the Federal Reserve and it is subject to
regulation, supervision, and examination by the Federal Reserve and the Georgia
Department.  The other subsidiary banks have been approved by the Federal
Reserve and the Georgia Department to be merged into Park Avenue during 2002.
These regulatory agencies regularly examine our operations and are given
authority to approve or disapprove mergers, consolidations, the establishment of
branches, and similar corporate actions.  The agencies also have the power to
prevent the continuance or development of unsafe or unsound banking practices or
other violations of law.

Acquisitions
The BHC Act requires every bank holding company to obtain the prior approval of
the Federal Reserve before:  (i) it may acquire direct or indirect ownership or
control of any voting shares of any bank if, after such acquisition, the bank
holding company will directly or indirectly own or control more than 5% of the
voting shares of the bank; (ii) it or any of its subsidiaries, other than a
bank, may acquire all or substantially all of the assets of any bank; or (iii)
it may merge or consolidate with any other bank holding company.


                                        6
<PAGE>
The BHC Act further provides that the Federal Reserve may not approve any
transaction that would result in a monopoly or would be in furtherance of any
combination or conspiracy to monopolize or attempt to monopolize the business of
banking in any section of the United States, or the effect of which may be
substantially to lessen competition or to tend to create a monopoly in any
section of the country, or that in any other manner would be in restraint of
trade, unless the anticompetitive effects of the proposed transaction are
clearly outweighed by the public interest in meeting the convenience and needs
of the communities to be served.  The Federal Reserve is also required to
consider the financial and managerial resources and future prospects of the bank
holding companies and banks involved and the convenience and needs of the
communities to be served.  Consideration of financial resources generally
focuses on capital adequacy, and consideration of convenience and needs issues
generally focuses on the parties' performance under the Community Reinvestment
Act of 1977.

Under the Riegle-Neal Interstate Banking and Branching Efficiency Act, the
restrictions on interstate acquisitions of banks by bank holding companies were
repealed.  As a result, PAB, and any other bank holding company located in
Georgia is able to acquire a bank located in any other state, and a bank holding
company located outside of Georgia can acquire any Georgia-based bank, in either
case subject to certain deposit percentage and other restrictions.  The
legislation provides that unless an individual state has elected to prohibit
out-of-state banks from operating interstate branches within its territory,
adequately capitalized and managed bank holding companies are able to
consolidate their multistate banking operations into a single bank subsidiary
and to branch interstate through acquisitions.  De novo branching by an
out-of-state bank is permitted only if it is expressly permitted by the laws of
the host state.  Georgia does not permit de novo branching by an out-of-state
bank.  Therefore, the only method by which an out-of-state bank or bank holding
company may enter Georgia is through an acquisition.  Georgia has adopted an
interstate banking statute that removes the existing restrictions on the ability
of banks to branch interstate through mergers, consolidations and acquisitions.
However, Georgia law prohibits a bank holding company from acquiring control of
a financial institution until the target financial institution has been
incorporated five years.

Activities
The BHC Act has generally prohibited a bank holding company from engaging in
activities other than banking or managing or controlling banks or other
permissible subsidiaries and from acquiring or retaining direct or indirect
control of any company engaged in any activities other than those determined by
the Federal Reserve to be closely related to banking or managing or controlling
banks as to be a proper incident thereto.  Provisions of the Gramm-Leach-Bliley
Act, discussed below, have expanded the permissible activities of a bank holding
company, such as PAB, that qualifies as a financial holding company.  In
determining whether a particular activity is permissible, the Federal Reserve
must consider whether the performance of such an activity can be reasonably
expected to produce benefits to the public, such as a greater convenience,
increased competition, or gains in efficiency, that outweigh possible adverse
effects such as undue concentration of resources, decreased or unfair
competition, conflicts of interest, or unsound banking practices.

Gramm-Leach-Bliley Act
The GLB Act implemented major changes to the statutory framework for providing
banking and other financial services in the United States.  The GLB Act, among
other things, eliminated many of the restrictions on affiliations among banks
and securities firms, insurance firms, and other financial service providers.  A
bank holding company that qualifies as a financial holding company will be
permitted to engage in activities that are financial in nature or incidental or
complimentary to a financial activity.  The GLB Act specifies certain activities
that are deemed to be financial in nature, including underwriting and selling
insurance, providing financial and investment advisory services, underwriting,
dealing in, or making a market in securities, limited merchant banking
activities, and any activity currently permitted for bank holding companies
under Section 4(c)(8) of the BHC Act.

To become eligible for these expanded activities, a bank holding company must
qualify as a financial holding company.  To qualify as a financial holding
company, each insured depository institution controlled by the bank holding
company must be well-capitalized, well-managed, and have at least a satisfactory
rating under the Community Reinvestment Act.  In addition, the bank holding
company must file declaration with the Federal Reserve of its intention to
become a financial holding company.  In November 2001, we filed a declaration to
qualify as a financial holding company.

The GLB Act designates the Federal Reserve as the overall umbrella supervisor of
the new financial services holding companies.  The GLB Act adopts a system of
functional regulation where the primary regulator is determined by the nature of
activity rather than the type of institution.  Under this principle, securities
activities are regulated by the SEC and other securities regulators, insurance
activities by the state insurance authorities, and banking activities by the
appropriate banking regulator.  As a result, to the extent that we engage in
non-banking activities permitted under the GLB Act, we will be subject to the
regulatory authority of the SEC or state insurance authority, as applicable.


                                        7
<PAGE>
Payment of Dividends
PAB is a legal entity separate and distinct from our subsidiaries.  Our
principal source of cash flow is dividends from our subsidiary banks.  There are
statutory and regulatory limitations on the payment of dividends by these
subsidiary banks to us, as well as by us to our stockholders.

If, in the opinion of the federal banking regulators, a depository institution
under its jurisdiction is engaged in or is about to engage in an unsafe or
unsound practice (which, depending on the financial condition of the depository
institution, could include the payment of dividends), such authority may
require, after notice and hearing, that such institution cease and desist from
such practice.  The federal banking agencies have indicated that paying
dividends that deplete a depository institution's capital base to an inadequate
level would be an unsafe and unsound banking practice.  Under the Federal
Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"), a depository
institution may not pay any dividend if payment would cause it to become
undercapitalized or if it already is undercapitalized.  See "Prompt Corrective
Action".  Moreover, the federal agencies have issued policy statements that
provide that bank holding companies and insured banks should generally only pay
dividends out of current operating earnings.

At December 31, 2001, pursuant to dividend restrictions imposed under federal
and state laws, our subsidiary banks, without obtaining governmental approvals,
could declare aggregate dividends to us of approximately $2.7 million.  The
decline in available dividends is due to a net loss at our lead bank, Park
Avenue, in 2001.  As a result, our Board of Directors is considering various
options, including a reduction or suspension of the dividends paid to our
stockholders until the profitability of our subsidiary banks is re-established.

Capital Adequacy
We are required to comply with the capital adequacy standards established by the
federal banking agencies.  There are two basic measures of capital adequacy for
bank holding companies that have been promulgated by the Federal Reserve: a
risk-based measure and a leverage measure.  All applicable capital standards
must be satisfied for a bank holding company to be considered in compliance.

The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profiles among banks and bank
holding companies, to account for off-balance-sheet exposure, and to minimize
disincentives for holding liquid assets.  Assets and off-balance-sheet items are
assigned to broad risk categories, each with appropriate weights.  The resulting
capital ratios represent capital as a percentage of total risk-weighted assets
and off-balance-sheet items.

The minimum guideline for the ratio of Total Capital to risk-weighted assets
(including certain off-balance-sheet items, such as standby letters of credit)
is 8.0%.  Total Capital consists of Tier 1 Capital, which is comprised of common
stock, undivided profits, minority interests in the equity accounts of
consolidated subsidiaries and noncumulative perpetual preferred stock, less
goodwill and certain other intangible assets, and Tier 2 Capital, which consists
of subordinated debt, other preferred stock, and a limited amount of loan loss
reserves.  At December 31, 2001, our consolidated Total Capital Ratio and our
Tier 1 Capital Ratio were 12.0% and 10.8%, respectively.

In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies.  These guidelines provide for a minimum
ratio (the "Leverage Ratio") of Tier 1 Capital to average assets, less goodwill
and certain other intangible assets, of 3.0% for bank holding companies that
meet certain specified criteria, including those having the highest regulatory
rating.  All other bank holding companies generally are required to maintain a
Leverage Ratio of at least 3.0%, plus an additional cushion of 100 to 200 basis
points.  Our Leverage Ratio at December 31, 2001 was 8.0%.  The guidelines also
provide that bank holding companies experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels without significant reliance on intangible
assets.  Furthermore, the Federal Reserve has indicated that it will consider a
"tangible Tier 1 Capital Leverage Ratio" (deducting all intangibles) and other
indicators of capital strength in evaluating proposals for expansion or new
activities.

Our subsidiary banks are subject to risk-based and leverage capital requirements
adopted by their respective federal banking regulators, which are substantially
similar to those adopted by the Federal Reserve for bank holding companies.
Each of our subsidiary banks was in compliance with all applicable minimum
capital requirements as of December 31, 2001.  Neither PAB nor any of its
subsidiary banks have been advised by any federal banking agency of any specific
minimum capital ratio requirement applicable to it.


                                        8
<PAGE>
Failure to meet capital guidelines could subject a bank or bank holding company
to a variety of enforcement remedies, including issuance of a capital directive,
the termination of deposit insurance by the FDIC, a prohibition on the taking of
brokered deposits, and certain other restrictions on its business.  As described
below, substantial additional restrictions can be imposed upon FDIC-insured
depository institutions that fail to meet applicable capital requirements.  See
"Prompt Corrective Action".

The federal bank regulators continue to indicate their desire to raise capital
requirements applicable to banking organizations beyond their current levels.
In this regard, the Federal Reserve and the FDIC have, pursuant to FDICIA,
recently adopted final regulations requiring regulators to consider interest
rate risk (when the interest rate sensitivity of an institution's assets does
not match the sensitivity of its liabilities or its off-balance-sheet position)
in the evaluation of a bank's capital adequacy.  The bank regulatory agencies
have concurrently proposed a methodology for evaluating interest rate risk that
would require banks with excessive interest rate risk exposure to hold
additional amounts of capital against such exposures.

Support of Subsidiary Institutions
Under Federal Reserve policy, we are expected to act as a source of financial
strength for, and to commit resources to support, each of our subsidiary banks.
This support may be required at times when, absent such Federal Reserve policy,
we may not be inclined to provide such support.  In addition, any capital loans
by a bank holding company to any of its banking subsidiaries are subordinate in
right of payment to deposits and to certain other indebtedness of such
subsidiary banks.  In the event of a bank holding company's bankruptcy, any
commitment by a bank holding company to a federal bank regulatory agency to
maintain the capital of a banking subsidiary will be assumed by the bankruptcy
trustee and entitled to a priority of payment.

Under the Federal Deposit Insurance Act ("FDIA"), a depository institution
insured by the FDIC can be held liable for any loss incurred by, or reasonably
expected to be incurred by, the FDIC, in connection with (i) the default of a
commonly controlled FDIC-insured depository institution or (ii) any assistance
provided by the FDIC to any commonly controlled FDIC-insured depository
institution in danger of default.  The FDIC's claim for damages is superior to
claims of shareholders of the insured depository institution or its holding
company, but is subordinate to claims of depositors, secured creditors, and
holders of subordinated debt (other than affiliates) of the commonly controlled
insured depository institution.  Our subsidiary banks are subject to these
cross-guarantee provisions.  As a result, any loss suffered by the FDIC in
respect of any of our banks would likely result in assertion of the
cross-guarantee provisions, the assessment of such estimated losses against the
depository institution's banking affiliates, and a potential loss of our
investment in such other subsidiary banks.

Prompt Corrective Action
FDICIA established a system of prompt corrective action to resolve the problems
of undercapitalized institutions.  Under this system, the federal banking
regulators have established five capital categories (well capitalized,
adequately capitalized, undercapitalized, significantly undercapitalized and
critically undercapitalized), and are required to take certain mandatory
supervisory actions, and are authorized to take other discretionary actions,
with respect to institutions in the three undercapitalized categories.  The
severity of the action will depend upon the capital category in which the
institution is placed.  Generally, subject to a narrow exception, the banking
regulator must appoint a receiver or conservator for an institution that is
critically undercapitalized.  The federal banking agencies have specified by
regulation the relevant capital level for each category.

An institution that is categorized as undercapitalized, significantly
undercapitalized, or critically undercapitalized is required to submit an
acceptable capital restoration plan to its appropriate federal banking agency.
A bank holding company must guarantee that a subsidiary depository institution
meets its capital restoration plan, subject to certain limitations.  The
controlling holding company's obligation to fund a capital restoration plan is
limited to the lesser of 5.0% of an undercapitalized subsidiary's assets or the
amount required to meet regulatory capital requirements.  An undercapitalized
institution is also generally prohibited from increasing its average total
assets, making acquisitions, establishing any branches or engaging in any new
line of business, except under an accepted capital restoration plan or with FDIC
approval.  In addition, the appropriate federal banking agency may test an
undercapitalized institution in the same manner as it treats a significantly
undercapitalized institution if it determines that those actions are necessary.

At December 31, 2001, Park Avenue had the requisite capital level to qualify as
"adequately capitalized" under the regulatory framework for prompt corrective
action.  Each of our other subsidiary banks had the capital to qualify as "well
capitalized".  Through the merger of charters (see "Charter Consolidation Plan"
in Item 1 of this Report), Park Avenue will have sufficient capital to again
qualify as "well capitalized" by the end of the first quarter of 2002.


                                        9
<PAGE>
FDIC Insurance Assessments
The FDIC has adopted a risk-based assessment system for insured depository
institutions that takes into account the risks attributable to different
categories and concentrations of assets and liabilities.  The system assigns an
institution to one of three capital categories: (i) well capitalized; (ii)
adequately capitalized; and (iii) undercapitalized.  These three categories are
substantially similar to the prompt corrective action categories described
above, with the "undercapitalized" category including institutions that are
undercapitalized, significantly undercapitalized, and critically
undercapitalized for prompt corrective action purposes.  The FDIC also assigns
an institution to one of three supervisory subgroups within each capital group.
The supervisory subgroup to which an institution is assigned is based on a
supervisory evaluation that the institution's primary federal regulator provides
to the FDIC and information that the FDIC determines to be relevant to the
institution's financial condition and the risk posed to the deposit insurance
funds.  The FDIC then determines an institution's insurance assessment rate
based on the institution's capital category and supervisory category.  Under the
risk-based assessment system, there are nine combinations of capital groups and
supervisory subgroups to which different assessment rates are applied.
Assessments range from 0 to 27 cents per $100 of deposits, depending on the
institution's capital group and supervisory subgroup.

The FDIC may terminate its insurance of deposits if it finds that the
institution has engaged in unsafe and unsound practices, is in an unsafe or
unsound condition to continue operations or has violated any applicable law,
regulation, rule, order or condition imposed by the FDIC.

Safety and Soundness Standards
The FDIA, as amended by the FDICIA and the Riegle Community Development and
Regulatory Improvement Act of 1994, requires the federal bank regulatory
agencies to prescribe standards, by regulations or guidelines, relating to
internal controls, information systems and internal audit systems, loan
documentation, credit underwriting, interest rate risk exposure, asset growth,
asset quality, earnings, stock valuation and compensation, fees and benefits,
and such other operational and managerial standards as the agencies deem
appropriate.  The federal bank regulatory agencies have adopted a set of
guidelines prescribing safety and soundness standards pursuant to FDICIA, as
amended.  The guidelines establish general standards relating to internal
controls and information systems, internal audit systems, loan documentation,
credit underwriting, interest rate exposure, asset growth and compensation and
fees and benefits.  In general, the guidelines require, among other things,
appropriate systems and practices to identify and manage the risks and exposures
specified in the guidelines.  The guidelines prohibit excessive compensation as
an unsafe and unsound practice and describe compensation as excessive when the
amounts paid are unreasonable or disproportionate to the services performed by
an executive officer, employee, director, or principal shareholder.  In
addition, the agencies adopted regulations that authorize, but do not require,
an agency to order an institution that has been given notice by an agency that
it is not satisfying any of such safety and soundness standards to submit a
compliance plan.  If, after being so notified, an institution fails to submit an
acceptable compliance plan or fails in any material respect to implement an
acceptable compliance plan, the agency must issue an order directing action to
correct the deficiency and may issue an order directing other actions of the
types to which an undercapitalized institution is subject under the "prompt
corrective action" provisions of FDICIA.  See "Prompt Corrective Action".  If an
institution fails to comply with such an order, the agency may seek to enforce
such order in judicial proceedings and to impose civil money penalties.  The
federal regulatory agencies also proposed guidelines for asset quality and
earnings standards.

Community Reinvestment Act
Under the Community Reinvestment Act ("CRA") our subsidiary banks, as FDIC
insured institutions, have a continuing and affirmative obligation to help meet
the credit needs of their entire community, including low- and moderate-income
neighborhoods, consistent with safe and sound banking practices. The CRA
requires the appropriate federal regulator, in connection with its examination
of an insured institution, to assess the institution's record of meeting the
credit needs of its community and to take such record into account in its
evaluation of certain applications, such as applications for a merger or the
establishment of a branch.  An unsatisfactory rating may be used as the basis
for the denial of an application by the federal banking regulator.  Each of our
subsidiary banks received a satisfactory or better rating in their last CRA
examination.

Privacy
The GLB Act also modified laws related to financial privacy.  The new financial
privacy provisions generally prohibit a financial institution from disclosing
nonpublic personal financial information about consumers to third parties unless
consumers have the opportunity to "opt out" of the disclosure.  A financial
institution is also required to provide its privacy policy annually to its
customers.  Compliance with the implementing regulations was mandatory effective
July 1, 2001.  Each of our subsidiary banks implemented the required financial
privacy provisions by July 1, 2001.


                                       10
<PAGE>
Monetary Policy
The earnings of our subsidiary banks are affected by domestic and foreign
conditions, particularly by the monetary and fiscal policies of the United
States government and its agencies.  The Federal Reserve has had, and will
continue to have, an important impact on the operating results of commercial
banks through its power to implement monetary policy in order, among other
things, to mitigate recessionary and inflationary pressures by regulating the
national money supply.  The techniques used by the Federal Reserve include
setting the reserve requirements of member banks and establishing the discount
rate on member bank borrowings.  The Federal Reserve also conducts open market
transactions in United States government securities.



ITEM 2.  PROPERTIES

We operate 14 banking offices in Georgia and 2 in Florida.  With the exception
of one of our offices in Ocala, Florida, we own all of the real property and/or
buildings in which our offices are located.  The Ocala office is under a
five-year operating lease that expires in May 2003.  In addition, we own an
administrative building in Valdosta, Georgia for use as our corporate office.
All of the properties are in a good state of repair and are appropriately
designed for the purposes for which they are used.

Other than normal real estate and commercial lending activities of our
subsidiary banks, we generally does not invest in real estate, interests in real
estate, real estate mortgages, or securities of persons primarily engaged in
real estate activities.



ITEM 3.  LEGAL PROCEEDINGS

The nature of the business of PAB and the subsidiary banks ordinarily results in
a certain amount of litigation.  Accordingly, we are party to a limited number
of lawsuits incidental to our respective businesses.  In our opinion, the
ultimate disposition of these matters will not have a material adverse impact on
our consolidated financial position or results of operations.



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of our stockholders during the fourth
quarter of 2001.


                                       11
<PAGE>
PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
           STOCKHOLDER MATTERS

Our common stock has been listed for quotation on the American Stock Exchange
("AMEX") under the symbol "PAB" since July 9, 1996.  As of March 1, 2002, there
were 2,300 holders of record of our common stock.

Our ability to pay dividends is primarily dependent on earnings from operations,
the adequacy of capital and the availability of liquid assets for distribution.
Our ability to generate liquid assets for distribution is primarily dependent on
the ability of our subsidiary banks to pay dividends to us.  The payment of
dividends is an integral part of our goal to retain sufficient capital to
support future growth and to meet regulatory requirements while providing a
competitive return on investment to our stockholders.  For more information on
dividend restrictions see the "Payment of Dividends" section in Item 1 of this
Report.

The following table sets forth, for the indicated periods, the high and low
closing sales prices for our common stock as reported by AMEX, the cash
dividends declared, and the diluted earnings per share.

<TABLE>
<CAPTION>
                    Sales Price
                   -------------
  Calendar Period  High    Low    Dividends  Earnings
  ---------------  -----  ------  ---------  ---------
<S>                <C>    <C>     <C>        <C>

2000
  First Quarter   $15.00  $ 8.63  $  0.1050  $    0.22
  Second Quarter   12.13    9.50     0.1075       0.21
  Third Quarter    12.19    9.75     0.1100       0.23
  Fourth Quarter   10.81    8.69     0.1100      -0.06
2001
  First Quarter    13.00    9.38     0.1100       0.18
  Second Quarter   12.35   10.50     0.1100       0.19
  Third Quarter    11.99   10.28     0.1100       0.14
  Fourth Quarter   10.89    9.90     0.1100      -0.49
</TABLE>


                                       12
<PAGE>
ITEM 6.  SELECTED FINANCIAL DATA

The following table presents selected consolidated financial data for PAB.  This
selected financial data is derived in part from, and should be read in
conjunction with, the Consolidated Financial Statements and the Notes thereto
and Management's Discussion and Analysis of Financial Condition and Results of
Operations included elsewhere herein.

<TABLE>
<CAPTION>
(In thousands, except per share and other data)           2001         2000         1999         1998         1997
----------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>          <C>          <C>          <C>          <C>
Summary of Operations:
  Interest income                                      $   62,715   $   57,526   $   49,495   $   48,385   $   44,381
  Interest expense                                         35,600       28,674       22,906       23,439       21,225
  --------------------------------------------------------------------------------------------------------------------
    Net interest income                                    27,115       28,852       26,589       24,946       23,156
  Provision for loan losses                                12,220        4,099          985          903          793
  Other income                                             11,923        5,756        6,060        5,266        4,442
  Other expense                                            26,921       21,874       18,966       17,224       15,275
  --------------------------------------------------------------------------------------------------------------------
    Income (loss) before income tax expense                  (103)       8,635       12,698       12,085       11,530
  Income tax expense                                         (251)       2,909        4,005        4,098        4,022
  --------------------------------------------------------------------------------------------------------------------
    Net income                                         $      148   $    5,726   $    8,693   $    7,987   $    7,508
  ====================================================================================================================
  Net interest income (taxable-equivalent)             $   27,216   $   28,968   $   26,718   $   25,108   $   22,988
Selected Average Balances:
  Total assets                                         $  847,100   $  694,674   $  629,634   $  597,461   $  554,964
  Earning assets                                          780,120      640,889      576,729      554,127      501,734
  Loans                                                   616,156      534,340      467,149      425,210      390,496
  Deposits                                                694,219      548,276      500,582      488,322      462,302
  Stockholders' equity                                     72,268       70,706       68,161       62,913       58,271
Selected Year End Balances:
  Total assets                                         $  859,143   $  794,907   $  664,969   $  620,111   $  572,172
  Earning assets                                          790,546      722,490      606,464      569,291      525,897
  Loans                                                   637,825      580,737      494,417      440,515      409,905
  Allowance for loan losses                                15,765        8,185        5,037        5,172        4,996
  Deposits                                                720,398      637,180      516,204      504,087      472,556
  Stockholders' equity                                     65,372       70,780       69,611       66,063       59,763
Common Share Data:
  Outstanding at year end                               9,409,913    9,501,947    9,617,406    9,604,027    9,594,319
  Weighted average outstanding                          9,482,709    9,528,387    9,612,634    9,602,946    9,544,959
  Diluted weighted average outstanding                  9,550,080    9,598,790    9,749,162    9,813,825    9,627,669
Per Share Ratios:
  Net income - basic                                   $     0.02   $     0.60   $     0.90   $     0.83   $     0.79
  Net income - diluted                                       0.02         0.60         0.89         0.81         0.78
  Dividends declared                                         0.44         0.43         0.39         0.28         0.18
  Book value                                                 6.95         7.45         7.24         6.88         6.23
Profitability Ratios:
  Return on average assets (ROA)                             0.02%        0.82%        1.38%        1.34%        1.35%
  Return on average equity (ROE)                             0.20%        8.10%       12.75%       12.70%       12.88%
  Net interest margin                                        3.49%        4.52%        4.63%        4.53%        4.37%
  Efficiency ratio (excluding merger and
    conversion costs)                                       74.02%       60.39%       57.12%       55.06%       55.28%
Liquidity Ratios:
  Total loans to total deposits                             88.54%       91.14%       95.78%       87.39%       86.74%
  Average loans to average earning assets                   78.98%       83.37%       81.00%       76.74%       77.83%
  Noninterest-bearing deposits to total deposits            11.31%       11.09%       12.58%       14.30%       15.02%
Capital Adequacy Ratios:
  Average equity to average assets                           8.53%       10.18%       10.83%       10.53%       10.50%
  Dividend payout ratio                                   2855.42%       72.08%       43.54%       33.95%       22.44%
Asset Quality Ratios:
  Net charge-offs to average loans                           0.75%        0.26%        0.24%        0.17%        0.09%
  Nonperforming loans to total loans                         1.91%        1.27%        0.54%        0.40%        0.24%
  Nonperforming assets to total assets                       1.57%        0.99%        0.52%        0.37%        0.26%
  Allowance for loan losses to total loans                   2.47%        1.41%        1.02%        1.17%        1.22%
  Allowance for loan losses to nonperforming loans         129.44%      111.03%      188.79%      292.87%      498.11%
----------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       13
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATION

GENERAL

The following discussion and analysis of the consolidated financial condition
and results of operations of PAB should be read in conjunction with the
Consolidated Financial Statements and related Notes, and is qualified in its
entirety by the foregoing and other more detailed financial information
appearing elsewhere.  Historical results of operations and the percentage
relationships among any amounts included, and any trends which may appear to be
inferred, should not be taken as being necessarily indicative of trends in
operations or results of operations for any future periods.

We have made, and will continue to make, various forward-looking statements with
respect to financial and business matters.  Comments regarding our business
which are not historical facts are considered forward-looking statements that
involve inherent risks and uncertainties.  Actual results may differ materially
from those contained in these forward-looking statements.  For additional
information regarding our cautionary disclosures, see the "Cautionary Notice
Regarding Forward-Looking Statements" at the beginning of this Report.


STATISTICAL DISCLOSURES

DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY; INTEREST RATES AND
INTEREST DIFFERENTIAL

At December 31, 2001, our total assets were $859.1 million, a $64.2 million, or
8.1%, increase over total assets of $794.9 million at December 31, 2000.  The
majority of the increase in assets was in new loan growth.  Total loans
increased $57.1 million, or 9.8%, in 2001.  This loan growth was funded with
bank deposits.  Total deposits increased $83.2 million, or 13.1%, from $637.2
million at December 31, 2000 to $720.4 million one year later.  Most of the
funds raised through deposit growth not used to fund new loans were used to pay
off advances from the Federal Home Loan Bank of Atlanta (the "FHLB").  We paid
off $21.2 million in higher-rate FHLB advances as they came due during 2001.
Total stockholders' equity decreased $5.4 million, from $70.8 million at
December 31, 2000 to $65.4 million at year end.  With our net income for 2001
only contributing $147,000, the decrease in equity resulted primarily from the
payment of $4.2 million in dividends to our stockholders and the planned
buy-back of $1.3 million of our common stock.

During 2001, we saw the federal funds interest rate cut to its lowest level in
forty years.  In an effort to stimulate a slowing economy, the Federal Reserve
lowered this benchmark short-term interest rate eleven times during 2001 from
6.50% at the end of 2000 to 1.75% by the end of 2001.  These actions had a
profound negative impact on our net interest income for 2001.  An unbalanced
combination of shorter-term and adjustable rate earning assets with longer-term
and fixed-rate interest-bearing liabilities recorded on the books of our six
different subsidiary banks prevented us from being able to adjust our balance
sheet fast enough to compensate for the rapid reduction in short-term interest
rates during the year.  We have taken several actions to help manage our
interest rate risk and prepare for such interest rate volatility in the future.
These actions, designed around our charter consolidation plan, include the
installation of a new asset-liability management software package, the
designation of an officer responsible for the measurement and reporting of our
asset-liability position, the adoption of a comprehensive and updated risk
management policy, and the formation of a risk management committee charged with
managing interest rate risk and other risk elements.

The next two tables illustrate the effects of the decline in rates, despite an
increase in volume, on our net interest income during 2001.


                                       14
<PAGE>
Average Balances, Interest and Yields
The following table details the average balance of interest-earning assets and
interest-bearing liabilities, the amount of interest earned and paid, and the
average yields and rates realized for each of the last three fiscal years ended
December 31.  Federally tax-exempt income is presented on a taxable-equivalent
basis assuming a 34% Federal tax rate.  Loan average balances include loans on
nonaccrual status.

<TABLE>
<CAPTION>
For the Years Ended
December 31,                                    2001                              2000                         1999
------------------------------------------------------------------------------------------------------------------------------
                                              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)
<S>                               <C>        <C>         <C>        <C>        <C>       <C>       <C>       <C>       <C>
ASSETS
Interest-earning assets:
  Loans                           $616,156   $  54,163       8.79%  $ 534,340  $ 51,045     9.55%  $467,149  $ 43,166    9.24%
  Investment securities:
  Taxable                           93,377       5,468       5.86%     68,702     4,028     5.86%    81,341     4,849    5.96%
  Nontaxable                         4,607         299       6.49%      5,009       344     6.86%     6,677       378    5.66%
  Other short-term
    investments                     65,980       2,886       4.37%     32,838     2,225     6.78%    21,562     1,231    5.71%
                                  ---------  ----------             ---------  --------            --------  --------
      Total interest-
        earning assets             780,120      62,816       8.05%    640,889    57,642     8.99%   576,729    49,624    8.60%

Noninterest-earning assets:
  Cash                              23,329                             25,170                        26,292
  Allowance for loan
    losses                          (8,429)                            (5,650)                       (5,189)
  Unrealized gain (loss)
    on securities
    available for sale               2,340                               (240)                          909
  Other assets                      49,740                             34,505                        30,893
                                  ---------                         ---------                      --------
        Total assets              $847,100                          $ 694,674                      $629,634
                                  =========                         =========                      ========

LIABILITIES AND
  STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
  Demand deposits                 $141,314   $   3,624       2.56%  $ 116,661  $  3,357     2.88%  $111,642  $  2,978    2.67%
  Savings deposits                  34,535         732       2.12%     28,723       725     2.52%    30,267       805    2.66%
  Time deposits                    443,486      27,012       6.09%    335,935    20,128     5.99%   294,673    16,131    5.47%
  FHLB advances                     51,248       3,213       6.27%     56,674     3,796     6.70%    44,376     2,507    5.65%
  Notes payable                      7,930         468       5.90%          -         -        -          -
  Other short-term
  borrowings                        13,958         551       3.95%     13,717       668     4.87%    11,421       485    4.25%
                                  ---------  ----------             ---------  --------            --------  --------
    Total interest-
      bearing liabilities          692,471      35,600       5.14%    551,710    28,674     5.20%   492,379    22,906    4.65%

Noninterest-bearing liabilities
  and stockholders' equity:
    Demand deposits                 74,884                             66,957                        64,000
    Other liabilities                7,477                              5,301                         5,094
    Stockholders' equity            72,268                             70,706                        68,161
                                  ---------                         ---------                      --------
        Total liabilities and
        stockholders'
        equity                    $847,100                          $ 694,674                      $629,634
                                  =========                         =========                      ========
Interest rate spread                                         2.91%                          3.79%                        3.95%
                                                         =========                       ========                      =======
Net interest income                          $  27,216                         $ 28,968                      $ 26,718
                                             ==========                        ========                      ========
Net interest margin                                          3.49%                          4.52%                        4.63%
                                                         =========                       ========                      =======
</TABLE>


                                       15
<PAGE>
Rate / Volume Analysis
The following table shows a summary of the changes in interest income and
interest expense on a fully taxable equivalent basis resulting from changes in
volume and changes in rates for each category of interest-earning assets and
interest-bearing liabilities.  The change in interest attributable to rate has
been determined by applying the change in rate between years to average balances
outstanding in the later year.  The change in interest due to volume has been
determined by applying the rate from the earlier year to the change in average
balances outstanding between years.  Thus, changes that are not solely due to
volume have been consistently attributed to rate.

<TABLE>
<CAPTION>
For the Years Ended December 31,            2001 vs. 2000                    2000 vs. 1999
----------------------------------------------------------------------------------------------------
                                                     Changes Due To                  Changes Due To
                                      Increase    ------------------   Increase     ----------------
                                     (Decrease)     Rate     Volume   (Decrease)    Rate     Volume
----------------------------------------------------------------------------------------------------
                                                         (Dollars In Thousands)
<S>                                  <C>          <C>       <C>       <C>          <C>      <C>
Increase (decrease) in:
  Income from earning assets:
    Loans                            $    3,118   $(4,698)  $ 7,816   $    7,879   $1,670   $ 6,209
    Taxable securities                    1,440        (7)    1,447         (821)     (68)     (753)
    Nontaxable securities                   (45)      (17)      (28)         (34)      60       (94)
    Other short-term investments            661    (1,585)    2,246          994      350       644
----------------------------------------------------------------------------------------------------
      Total interest income               5,174    (6,307)   11,481        8,018    2,012     6,006
----------------------------------------------------------------------------------------------------

  Expense from interest-bearing
    liabilities:
      Demand deposits                       267      (442)      709          379      245       134
      Savings deposits                        7      (140)      147          (80)     (39)      (41)
      Time deposits                       6,884       440     6,444        3,997    1,738     2,259
      FHLB advances                        (583)     (220)     (363)       1,289      594       695
      Notes payable                         468         -       468            -        -         -
      Other short-term borrowings          (117)     (129)       12          183       85        98
----------------------------------------------------------------------------------------------------
        Total interest expense            6,926      (491)    7,417        5,768    2,623     3,145
----------------------------------------------------------------------------------------------------

        Net interest income          $   (1,752)  $(5,816)  $ 4,064   $    2,250   $ (611)  $ 2,861
====================================================================================================
</TABLE>

INVESTMENT PORTFOLIO

The carrying values of investment securities at the indicated dates are
presented below.  Changes in the mix of our investment portfolio will vary over
time given changes in market conditions and liquidity needs of our subsidiary
banks.
<TABLE>
<CAPTION>
  As of December 31,                         2001     2000     1999
---------------------------------------------------------------------
                                             (Dollars in Thousands)
<S>                                        <C>       <C>      <C>
  U. S. Government and agency securities   $ 56,504  $51,031  $45,158
  State and municipal securities              4,999    4,967    5,486
  Mortgage-backed securities                 32,199   21,127   21,117
  Corporate debt securities                   8,389        -        -
  Marketable equity securities                4,827    2,817    2,499
  Restricted and other equity securities      6,536    4,983    4,666
---------------------------------------------------------------------
    Total                                  $113,454  $84,925  $78,926
=====================================================================
</TABLE>

The following table shows the contractual maturities of non-equity investment
securities at December 31, 2001 and the weighted-average yields (for all
obligations on a fully taxable basis assuming a 34% tax rate) on such
securities.  Actual maturities usually differ from contractual maturities
because certain security issuers have the right to call or prepay obligations
with or without call or prepayment penalties.

<TABLE>
<CAPTION>
                                           U.S. Government   State, County,     Corporate        Mortgage-
                                             and Agency      and Municipal         Debt           backed
                                             Securities       Securities        Securities       Securities
As of December 31, 2001                    Amount    Yield  Amount    Yield  Amount    Yield  Amount    Yield
-------------------------------------------------------------------------------------------------------------
                                                                (Dollars In Thousands)
<S>                                        <C>      <C>     <C>      <C>     <C>      <C>     <C>      <C>

  Due in one year or less                  $ 9,386   5.52%  $ 1,691   6.52%  $ 8,389   2.55%  $   564   6.20%
  Due after one year through five years     19,947   5.65%    1,419   6.84%        -      -     1,469   6.24%
  Due after five years through ten years    27,171   5.82%      104   6.27%        -      -     4,963   5.38%
  Due after ten years                            -      -     1,785   6.68%        -      -    25,203   5.62%
-------------------------------------------------------------------------------------------------------------
    Total                                  $56,504   5.71%  $ 4,999   6.66%  $ 8,389   2.55%  $32,199   5.62%
-------------------------------------------------------------------------------------------------------------
</TABLE>


                                       16
<PAGE>
The estimated fair market value of our investment portfolio at December 31,
2001, was approximately $878,000 above amortized cost; however, market values
vary significantly as interest rates change.  Of the investments maturing after
one year, approximately $27.3 million are potentially callable at par value or
more within one year.

Our investment portfolio policy stresses quality and liquidity.  Approximately
95% of the investment portfolio is rated "A" or better by Standard and Poor's or
Moody's Investors Service, Inc.  Non-rated securities are principally issued by
various political subdivisions within the states of Georgia and Florida.  The
portfolio is monitored to assure there is no unreasonable concentration of
securities in the obligations of a single debtor.

LOAN PORTFOLIO

Early in 2001, we engaged an outside consulting firm to perform an assessment of
our subsidiary banks' credit risk management practices and credit process.  As a
result of this engagement, we developed and adopted a new comprehensive loan
policy during the fourth quarter of 2001.  A well-drafted loan policy will help
us maintain soundness and profitability while obtaining planned growth.  We
recognize that a policy is only one segment in pursuit of loan portfolio
soundness.  Equally important is the employment of capable, skilled and
experienced personnel to market and administer selected financial and fiduciary
services to our target customer base in our defined market areas.  The new
policy is more structured and conservative, and it will take some time to orient
our lending personnel to the new lending philosophy.

We make both secured and unsecured loans to individuals, corporations, and other
entities with the goals of safety, soundness, profitability and responsiveness
to community needs.  The loan portfolio contains no foreign or energy-related
loans or significant concentrations in any one industry or loan type, with the
exception of loans secured by residential and commercial real estate in our
market areas.

Types of Loans
The amount of loans outstanding at the indicated dates is presented in the
following table according to type of loan.

<TABLE>
<CAPTION>
  As of December 31,                             2001       2000       1999       1998       1997
----------------------------------------------------------------------------------------------------
                                                                (Dollars in Thousands)
<S>                                            <C>        <C>        <C>        <C>        <C>
  Commercial and financial                     $ 80,493   $ 72,942   $ 59,328   $ 56,531   $ 71,355
  Agricultural                                   26,428     23,064      8,197      6,759      7,340
  Real estate - construction                     63,486     40,130     31,858     22,567     19,519
  Real estate - mortgage                        402,988    376,000    332,008    298,211    262,041
  Installment loans to individuals and other     64,806     68,880     63,424     56,825     50,143
----------------------------------------------------------------------------------------------------
                                                638,201    581,016    494,815    440,893    410,398
  Unearned income, net                             (376)      (279)      (398)      (378)      (493)
----------------------------------------------------------------------------------------------------
                                                637,825    580,737    494,417    440,515    409,905
  Allowance for loan losses                     (15,765)    (8,185)    (5,037)    (5,172)    (4,996)
----------------------------------------------------------------------------------------------------
      Loans, net                               $622,060   $572,552   $489,380   $435,343   $404,909
====================================================================================================

The  percentage  of loans outstanding at the indicated dates is presented in the
following  table  according  to  type  of  loan.

  As of December 31,                               2001       2000       1999       1998       1997
----------------------------------------------------------------------------------------------------
                                                                (Dollars in Thousands)
  Commercial and financial                        12.62%     12.56%     12.00%     12.83%     17.41%
  Agricultural                                     4.15%      3.97%      1.66%      1.54%      1.79%
  Real estate - construction                       9.95%      6.91%      6.44%      5.12%      4.76%
  Real estate - mortgage                          63.18%     64.75%     67.15%     67.70%     63.93%
  Installment loans to individuals and other      10.16%     11.86%     12.83%     12.90%     12.23%
----------------------------------------------------------------------------------------------------
                                                 100.06%    100.05%    100.08%    100.09%    100.12%
  Unearned income, net                            -0.06%     -0.05%     -0.08%     -0.09%     -0.12%
----------------------------------------------------------------------------------------------------
                                                 100.00%    100.00%    100.00%    100.00%    100.00%
  Allowance for loan losses                       -2.47%     -1.41%     -1.02%     -1.17%     -1.22%
----------------------------------------------------------------------------------------------------
      Loans, net                                  97.53%     98.59%     98.98%     98.83%     98.78%
====================================================================================================
</TABLE>


                                       17
<PAGE>
Maturities and Sensitivities of Loans to Changes in Interest Rates
A schedule of loans maturing, based on contractual terms, is presented in the
following table for selected loan types.

<TABLE>
<CAPTION>
                                                 Commercial                   Real Estate -
As of December 31, 2001                         & Financial    Agricultural   Construction
-------------------------------------------------------------------------------------------
                                                          (Dollars in Thousands)
<S>                                             <C>           <C>             <C>
  Due in one year or less                       $     43,361  $       15,525  $      41,287
  Due after one year through five years               29,287           9,931         12,274
  Due after five years                                 7,845             972          9,925
-------------------------------------------------------------------------------------------
        Total                                   $     80,493  $       26,428  $      63,486
===========================================================================================

  Of the above loans maturing after one year,
    those with predetermined fixed rates        $     18,692  $        6,567  $      12,261
    those with floating or adjustable rates           18,440           4,336          9,938
-------------------------------------------------------------------------------------------
        Total maturing after one year           $     37,132  $       10,903  $      22,199
===========================================================================================
</TABLE>

Nonperforming Loans
The amount of nonperforming loans outstanding at the indicated dates is
presented in the following table by category.

<TABLE>
<CAPTION>
As of December 31,                                   2001     2000    1999    1998    1997
-------------------------------------------------------------------------------------------
                                                            (Dollars in Thousands)
<S>                                                 <C>      <C>     <C>     <C>     <C>
Loans accounted for on a nonaccrual basis           $10,581  $2,430  $2,395  $1,567  $  825
Accruing loans which are contractually past due
  90 days or more as to principal or interest
  payments                                            1,598     509     273     199     178
Loans not included above which are "troubled
  debt restructurings" as defined in SFAS No. 15          -       -       -       -       -
Other impaired loans                                      -   4,433       -       -       -
--------------------------------------------------  -------  ------  ------  ------  ------
      Total nonperforming loans                     $12,179  $7,372  $2,668  $1,766  $1,003
==================================================  =======  ======  ======  ======  ======
</TABLE>

Total nonperforming loans increased $4.8 million, or 65.2%, since 2000.  More
than half of this increase is on a commercial real estate development line with
a remaining balance of $2.7 million.  This line was placed on nonaccrual status
in September due to its delinquent status.  In the fourth quarter of 2001, we
took a $2 million write-down on the line due to a potential collateral
deficiency.  The liquidation of the underlying collateral is our primary source
of repayment at this juncture.

Included in the schedule of nonperforming loans at December 31, 2000, were loans
to one borrower categorized as "other impaired loans" with a net principal
balance outstanding of approximately $4.4 million.  These loans are
conditionally guaranteed by the U. S. Department of Agriculture.  However, these
loans are considered by us to be impaired loans as defined in SFAS No. 114.
During the fourth quarter of 2000, we charged-off the unguaranteed balances and
established a reserve for interest accrued but uncollected through year end.
Unable to come to resolution with the USDA during 2001, we foreclosed on the
property, wrote the property down to fair value, placed the balance of the loans
on nonaccrual status, and charged-off an additional $1 million leaving a
remaining principal balance of $3.0 million at December 31, 2001.  We have
directed legal counsel to evaluate our position and submit a formal claim
seeking final resolution with the USDA in 2002.

For the year ended December 31, 2001, the gross interest income that would have
been recorded in the period had the above nonperforming loans been current in
accordance with their original terms and had been outstanding throughout the
year was approximately $1,109,000.  The amount of interest income on the above
nonperforming loans that was included in net income for the year ended December
31, 2001 was approximately $59,500.

The accrual of interest on loans is discontinued when, in our judgment, the
borrower may be unable to meet payments as they become due, unless the loan is
well-secured.  All interest accrued but not collected for loans that are placed
on nonaccrual status or charged off is reversed against interest income.
Interest income on nonaccrual loans is subsequently recognized only to the
extent cash payments are received unless and until the loan is returned to
accrual status.

A potential problem loan is any loan which is not disclosed above as
nonperforming, but where known information about possible credit problems of the
borrower causes management to have serious doubts as to the ability of such
borrower to comply with the present loan repayment terms.  As of December 31,
2001, there were approximately $1.7 million in loans not classified as
nonperforming that management considered as potential problem loans.


                                       18
<PAGE>
SUMMARY OF LOAN LOSS EXPERIENCE

Analysis of the Allowance for Loan Losses
The following table summarizes the activity in the allowance for loan losses,
the average balance of loans outstanding, and the ratio of net losses
experienced for each of the last five years.

<TABLE>
<CAPTION>
For the Years Ended December 31,                          2001       2000       1999       1998       1997
-------------------------------------------------------------------------------------------------------------
                                                                        (Dollars in Thousands)
<S>                                                     <C>        <C>        <C>        <C>        <C>
Balance at beginning of year                            $  8,185   $  5,037   $  5,172   $  4,996   $  4,570
Charge-offs:
  Commercial, financial and agricultural                   1,619        680        444        207         97
  Real estate - construction                               2,001        110         13          -          -
  Real estate - mortgage (commercial and residential)        538        393        191         45         36
  Installment loans to individuals and other loans           675        401        568        571        314
-------------------------------------------------------------------------------------------------------------
                                                           4,833      1,584      1,216        823        447
-------------------------------------------------------------------------------------------------------------
Recoveries:
  Commercial, financial and agricultural                      55         59         10         16         14
  Real estate - construction                                   -          -          -          -          -
  Real estate - mortgage (commercial and residential)         72         72          -         22         16
  Installment loans to individuals and other loans            66         51         86         58         50
-------------------------------------------------------------------------------------------------------------
                                                             193        182         96         96         80
-------------------------------------------------------------------------------------------------------------
  Net charge-offs                                          4,640      1,402      1,120        727        367
-------------------------------------------------------------------------------------------------------------
Additions provided to the allowance
  charged to operations                                   12,220      4,099        985        903        793
Allowance for loan losses of acquired bank                     -        451          -          -          -
-------------------------------------------------------------------------------------------------------------
Balance at end of year                                  $ 15,765   $  8,185   $  5,037   $  5,172   $  4,996
=============================================================================================================

Average balance of loans outstanding                    $616,156   $534,340   $467,149   $425,210   $390,496
=============================================================================================================

Ratio of net charge-offs during the year to average
  loans outstanding during the year                         0.75%      0.26%      0.24%      0.17%      0.09%
=============================================================================================================
</TABLE>

Upon adoption of the new loan policy mentioned above, we began an intensive
review of our loan portfolio to identify problem credits and potential problem
credits not previously detected.  To assist us in this process, we engaged an
experienced, independent loan review team.  At the same time, we had our annual
examinations by our external auditors and the Federal Reserve, our primary
federal regulatory agency.  In the end, varying degrees of weakness in a
significant amount of loans in our portfolio were discovered, and we recorded
approximately $10.2 million in additional provisions in the fourth quarter to
bring our allowance for loan losses to an adequate level.  Approximately $7.2
million of that additional fourth quarter provision was required by the Federal
Reserve.

The allowance for loan losses as a percentage of nonperforming loans was 129.44%
at December 31, 2001, compared to 111.03% at December 31, 2000.  We consider the
current level of the allowance for loan losses adequate to absorb losses from
loans in the portfolio.  With the new loan policy, we have begun a more
comprehensive methodology in determining the adequacy of our allowance for loan
losses.  This new methodology is in line with SEC Staff Accounting Bulletin No.
102 and generally accepted accounting principles.  This methodology includes an
assessment for specific valuations on larger loan lines and nonperforming loans,
and an assessment based more on environmental factors applied to other smaller
homogenous groups of otherwise performing loans.  The environmental factors
considered in developing our loss measurements include:

     -    levels of and trends in delinquencies and impaired loans;
     -    levels of and trends in charge-offs and recoveries;
     -    trends in volume and terms of loans;
     -    effects of any changes in risk selection and underwriting standards
          and other changes in lending policies, procedures, and practices;
     -    experience, ability, and depth of lending management and other
          relevant staff;
     -    national and local economic trends and conditions;
     -    industry conditions; and
     -    effects of changes in credit concentrations.

Changes in the factors we use to determine the adequacy of the allowance, or the
availability of new information, could cause the allowance for loan losses to be
increased or decreased in future periods.


                                       19
<PAGE>
Allocation of the Allowance for Loan Losses
We have allocated the allowance for credit losses according to the amount deemed
to be reasonably necessary at each year end to provide for the possibility of
losses being incurred within the categories of loans set forth in the table
below.  The allocation of the allowance to each category is not necessarily
indicative of future losses and does not restrict the use of the allowance to
absorb losses in any other category.

The components of the allowance for credit losses for each of the past five
years are presented below.

<TABLE>
<CAPTION>
As of December 31,           2001             2000             1999             1998             1997
-----------------------------------------------------------------------------------------------------------
                             Percent of        Percent of        Percent of      Percent of      Percent 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)
<S>                     <C>      <C>     <C>      <C>      <C>      <C>     <C>      <C>     <C>      <C>
Commercial, financial
  and agricultural      $ 2,823   16.7%  $ 1,203   16.5%  $   687   13.7%  $   742   14.3%  $   958   19.2%
Real estate -
  construction            1,572    9.9%      973    6.9%      324    6.4%      265    5.1%      237    4.7%
Real estate -
  mortgage                9,244   63.2%    4,779   64.7%    3,380   67.1%    3,498   67.7%    3,190   63.9%
Installment loans to
  Individuals             2,126   10.2%    1,230   11.9%      646   12.8%      667   12.9%      611   12.2%
Unallocated                   -                -                -                -                -
-----------------------------------------------------------------------------------------------------------
  Total                 $15,765  100.0%  $ 8,185  100.0%  $ 5,037  100.0%  $ 5,172  100.0%  $ 4,996  100.0%
===========================================================================================================
</TABLE>

DEPOSITS

The following table summarizes average deposits and related weighted average
rates of interest paid for each of the three years presented.

<TABLE>
<CAPTION>
  For the Year Ended December 31,          2001               2000              1999
-----------------------------------------------------------------------------------------
                                     Amount    Rate     Amount    Rate     Amount   Rate
-----------------------------------------------------------------------------------------
                                                     (Dollars In Thousands)
<S>                                 <C>       <C>      <C>       <C>      <C>       <C>
  Noninterest-bearing demand        $ 74,884       -   $ 66,957       -   $ 64,000     -
  Interest-bearing demand            141,314    2.56%   116,661    2.88%   111,642  2.67%
  Savings                             34,535    2.12%    28,723    2.52%    30,267  2.66%
  Time                               443,486    6.09%   335,935    5.99%   294,673  5.47%
----------------------------------  --------  -------  --------  -------  --------  -----
      Total                         $694,219    4.52%  $548,276    4.44%  $500,582  3.98%
----------------------------------  --------  -------  --------  -------  --------  -----
</TABLE>

The maturities of time deposits of $100,000 or more as of December 31, 2001 are
summarized below.

<TABLE>
<CAPTION>
                                   Amount (in thousands)
  ------------------------------------------------------
<S>                               <C>
  Three months or less            $               45,612
  Over three through six months                   32,793
  Over six through twelve months                  51,200
  Over twelve months                              27,795
  ------------------------------------------------------
      Total                       $              157,400
  ======================================================
</TABLE>


                                       20
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

Liquidity is an important factor in our financial condition and affects our
ability to meet borrowing needs and deposit withdrawal requirements of our
customers.  Assets, consisting principally of loans and investment securities,
are funded by customer deposits, borrowed funds, and retained earnings.
Maturities in the investment and loan portfolios also provide a steady flow of
funds for reinvestment.  In addition, our liquidity continues to be enhanced by
a relatively stable core deposit base and the availability of additional funding
sources.

At December 31, 2001, our liquidity ratio was 17.3% and our dependency ratio was
12.1%, compared to 20.1% and 12.9%, respectively, at December 31, 2000.  The
decrease in our liquidity ratio from year to year is the result of our
intentions during the second half of 2001 to reduce excess liquidity as interest
rates declined.  We are aware of no trends or events likely to result in a
material change in our liquidity from year end.

Monitoring our loan-to-deposit ratio is another tool we use to assess our
liquidity levels.  For 2001 our average loan-to-deposit ratio was 88.8% compared
to 97.5% in 2000.  The decrease in this ratio is attributed to a 26.6% increase
in average deposits compared to only a 15.3% increase in average loans.

Borrowings
We will often utilize external funding sources to fund growth and operations.
We utilize deposits, federal funds lines of credit with our correspondent banks,
and customer repurchase agreements to provide liquidity and short-term funding,
while long-term funding needs are met through advances from the FHLB and other
borrowing arrangements.  Our FHLB advances outstanding averaged $51.2 million
during 2001.  The advances outstanding at December 31, 2001 totaled $38.2
million with a weighted-average stated interest rate of 5.56%.  Using our excess
liquidity, we retired $21.1 million in FHLB advances as they came due during
2001.

On November 28, 2001, PAB Bankshares Capital Trust I ("PAB Trust") issued $10
million of Floating Rate Capital Securities, also referred to as "trust
preferred securities".  We formed PAB Trust, a statutory business trust created
under the laws of the State of Delaware, for the sole purpose of issuing the
Capital Securities and investing the proceeds in Floating Rate Junior
Subordinated Debentures issued by us.  The interest rates on both the Capital
Securities and the Debentures are reset semi-annually at LIBOR plus 3.75%
(currently 6.007%) with a rate cap of 11.0% through December 8, 2006.  We
entered into agreements which, taken collectively, fully, irrevocably and
unconditionally guarantee, on a subordinated basis, all of PAB Trust's
obligations under the Capital Securities.  PAB Trust's sole asset is the
Debentures issued by us.  The Debentures will mature on December 8, 2031, but
are callable at par at our option in whole or in part anytime after December 8,
2006.  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.

We used the proceeds of the trust preferred securities to retire $7.7 million on
a line of credit with The Bankers Bank of Atlanta, Georgia.  Another $345,000
paid issuance costs, and the remaining $1.9 million of the proceeds was
contributed in the form of capital to Park Avenue.

Investment Portfolio
The investment portfolio is another primary source of liquidity.  Maturities of
securities provide a constant flow of funds that are available for cash needs.
Contractual investment securities that mature within one year total $20.0
million.  However, mortgage-backed securities and securities with call
provisions create cash flows earlier than the contractual maturities.  Estimates
of prepayments on mortgage-backed securities and call provisions on Federal
agency and state and municipals increase the forecasted cash flow from the
investment portfolio.

Our liquidity from investments is somewhat limited since we pledge certain
investments to secure public deposits, certain borrowing arrangements, and for
other purposes.  At December 31, 2001, approximately 50.4% of our $113.5 million
investment portfolio was pledged as collateral to others.


                                       21
<PAGE>
Commitments of Capital
Our financial statements do not reflect various commitments and contingent
liabilities that arise in the normal course of business.  These off-balance
sheet financial instruments include commitments to extend credit and standby
letters of credit.  These financial instruments are included in the financial
statements when funds are distributed or the instruments become payable.  We use
the same credit policies in making commitments as we do for on-balance sheet
instruments.  Our exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend credit,
standby letters of credit and credit card commitments is represented by the
contractual amount of those instruments.  At December 31, 2001, we had
outstanding commitments to extend credit through open lines of credit of
approximately $61.7 million and outstanding standby letters of credit of
approximately $4.2 million.

At December 31, 2001, we had an outstanding commitment to complete the
construction of a $1.4 million operations center in Valdosta, Georgia.  In
addition, we intend to build a branch office in Hall County, Georgia during
2001.  The estimated cost for this facility is approximately $1.5 million.  Our
plan is to fund both of these projects with cash provided from operations in
2002.  Our cash flow from operations for the past three years has ranged between
$9.5 and $11.3 million per year.  In addition to cash flows from operations, we
will have approximately $8 million in cash proceeds from the sale of our
Richmond Hill office in January 2002 that could be used to fund these projects.
There are no other binding commitments for material cash expenditures
outstanding.

Stockholders' Equity
We strive to maintain a ratio of stockholders' equity to total assets that is
adequate relative to industry standards.  Our ratio of stockholders' equity to
total assets was 7.6% at December 31, 2001, compared to 8.9% at December 31,
2000.  The decrease in capital is the combined result of asset growth, a
reduction in earnings, the payment of dividends, and a stock buyback plan.  We
are required to comply with capital adequacy standards established by our
regulatory agencies.  See the section titled "Capital Adequacy" under
Supervision and Regulation in Item 1 of this document for more information on
the regulatory capital adequacy standards.

The following table summarizes our regulatory capital ratios at December 31,
2001, 2000, and 1999.

<TABLE>
<CAPTION>
                                                                             Minimum
                                                                          Regulatory
                                                   2001   2000   1999    Requirement
------------------------------------------------------------------------------------
<S>                                                <C>    <C>    <C>    <C>
Total Capital to Risk Weighted Assets              12.0%  12.5%  15.0%          8.0%
Tier 1 Capital to Risk Weighted Assets             10.8%  11.1%  14.0%          4.0%
Tier 1 Capital to Average Assets (Leverage Ratio)   8.0%   8.7%  11.8%          4.0%
------------------------------------------------------------------------------------
</TABLE>

RESULTS OF OPERATIONS

NET INTEREST INCOME

The primary component of a financial institution's profitability is net interest
income, or the difference between the interest income earned on assets,
primarily loans and investments, and interest paid on liabilities, primarily
deposits and other borrowed funds.  Our net interest income for 2001, on a tax
equivalent basis, decreased $1.7 million, or 6.0%, from 2000.  Total interest
income for 2001, on a tax equivalent basis, increased $5.2 million, or 8.9%,
from 2000.  The increase in interest income is the net result of a $139.2
million, or 21.7%, increase in the volume of average earning assets held during
2001, offset by a 94 basis point drop in average yield earned on those assets.
Total interest expense for 2001 increased $6.9 million, or 24.2%, from 2000.
The increase in interest expense is the net result of a $140.8 million, or
25.5%, increase in the volume of average interest-bearing liabilities
outstanding during 2001, offset slightly by a 6 basis point drop in the average
rate paid on those liabilities.  The increase in volume is primarily from the
purchase acquisition of the Ocala offices and growth from loan demand and
deposit generation in our markets.  The decline in rates is the effect of eleven
separate interest rate cuts totaling 475 basis points perpetuated by the Federal
Reserve during 2001 in setting their monetary policy.

The net interest margin is net interest income expressed as a percentage of
average earning assets.   Our net interest margin decreased from 4.52% in 2000
to 3.49% in 2001, a 103 basis point difference.  For the year, our yield on
average earning assets fell from 8.99% in 2000 to 8.05% in 2001, a 94 basis
point drop.  With most of our loan pricing based on the Prime Rate, the decrease
in the yield on earning assets can be attributed to the Prime Rate falling in
step with the short-term rates set by the Federal Reserve from 9.50% at December
31, 2000 to 4.75% at December 31, 2001.  The impact of the interest rate cuts is


                                       22
<PAGE>
most notable when comparing yields earned during the fourth quarters of 2001 and
2000.  Our yield on earning assets for the fourth quarter fell from 9.12% in
2000 to 7.20% in 2001.  Another factor affecting our net interest margin was our
inability to reprice our fixed rate deposits and other borrowings as often as
our earning assets repriced during much of 2001.  This kept our cost of funds up
during the falling rate environment.  The average rate paid on interest-bearing
liabilities only decreased by 6 basis points during 2001.  Fortunately, if
interest rates stabilize, approximately $127.5 million, or 29.6%, of our time
deposits will either reprice at the lower market rates or roll off during the
first quarter of 2002.

Net interest income for 2000, on a tax equivalent basis increased $2.3 million,
or 8.4%, from 1999.  This increase can be attributed to the $67.2 million, or
14.4%, increase in average loans outstanding.  The average balance sheet for
2000 grew $65.0 million due to strong loan demand.  We funded this loan growth
by liquidating investments, offering promotional rate time deposits, and
borrowing short-term advances from the FHLB.  During 2000, our cost of funds
increased by 55 basis points.

Net interest income for 1999, on a tax equivalent basis increased $1.6 million,
or 6.4% from 1998.  This increase can be attributed to the $22.6 million, or
4.1%, increase in average interest earning assets.  The average balance sheet
for 1999 grew $32.2 million, or 5.4%, due to loan demand.  The net interest
margin increased as our cost of funds decreased.

The table below illustrates the changes in the net interest margin over the past
three fiscal years.

<TABLE>
<CAPTION>
For the Year Ended December 31,                 2001                     2000                    1999
---------------------------------------------------------------------------------------------------------------
                                        Interest   Percent of    Interest   Percent of   Interest   Percent of
                                         Income/    Earning       Income/     Earning     Income/     Earning
                                         Expense     Assets       Expense     Assets      Expense     Assets
---------------------------------------------------------------------------------------------------------------
                                                                    (Dollars In Thousands)
<S>                                     <C>        <C>           <C>        <C>          <C>        <C>
  Interest income                       $  62,715         8.04%  $  57,526        8.98%  $  49,495        8.58%
  Tax-equivalent adjustment                   101         0.01%        116        0.01%        129        0.02%
---------------------------------------------------------------------------------------------------------------
  Interest income, taxable equivalent      62,816         8.05%     57,642        8.99%     49,624        8.60%
  Interest expense                         35,600         4.56%     28,674        4.47%     22,906        3.97%
---------------------------------------------------------------------------------------------------------------
  Net interest income,
    taxable equivalent                  $  27,216         3.49%  $  28,968        4.52%  $  26,718        4.63%
===============================================================================================================

  Average Earning Assets                $ 780,120                $ 640,889               $ 576,729
===============================================================================================================
</TABLE>

PROVISION FOR LOAN LOSSES

The provision for loan losses is the charge to operating earnings necessary to
maintain an adequate allowance for loan losses.  Through the provision, we
maintain an allowance for loan losses that we believe is adequate to absorb
losses inherent in our loan portfolio.  However, future additions to the
allowance may be necessary based on changes in economic conditions.  In
addition, various regulatory agencies, as an integral part of their examination
procedures, periodically review our allowance for loan losses.  Based on their
judgments about information available to them at the time of their examination,
such agencies may require us to recognize additions to the allowance for loan
losses.

On a quarterly basis, we analyze the allowance for loan losses, nonperforming
loans, and net charge-offs to assess the adequacy of the allowance.  At December
31, 2001, the allowance as a percent of total loans was 2.47%, compared to 1.41%
at December 31, 2000.  The ratio of nonperforming loans to total loans was 1.91%
and 1.27% at December 31, 2001 and 2000, respectively.  Net charge-offs as a
percent of average loans were at 0.75% and 0.26% for the years ended December
31, 2001 and 2000, respectively.

The provision for loan losses increased $8.1 million, or 198%, in 2001, from
$4.1 million to $12.2 million.  Of the increase, $3.0 million was provided to
replenish the allowance after write-downs were taken on some impaired loans in
the fourth quarter.  An additional $7.2 million was required to be recorded in
2001 by the examiners for the Federal Reserve after its initial examination of
Park Avenue.  Park Avenue became a member of the Federal Reserve System during
the third quarter of 2001.  The increased provisions were necessary to cover the
rise in nonperforming loans, to keep pace with an increase in charge-offs, and
to reserve for other weaknesses identified in the loan portfolio.


                                       23
<PAGE>
NONINTEREST INCOME

The following table summarizes noninterest income during the last three fiscal
years.

<TABLE>
<CAPTION>
For the Year Ended December 31,            2001                     2000                      1999
------------------------------------------------------------------------------------------------------
                                                       Percent                 Percent
                                                        Change                  Change
                                          Amount    2001 vs. 2000   Amount    2000 vs. 1999   Amount
------------------------------------------------------------------------------------------------------
                                                             (Dollars In Thousands)
<S>                                       <C>       <C>             <C>       <C>             <C>

  Service charges on deposit accounts     $ 5,575         43.6%     $ 3,881          6.9%     $ 3,630
  Mortgage origination fees                   702         59.9%         439        -22.8%         569
  Insurance commissions and fees              161        -46.7%         302         37.3%         220
  Brokerage commissions and fees              306        144.8%         125            -            -
  Other commissions and fees                  355         49.2%         238         88.9%         126
  Securities transactions, net              1,741      7,354.2%         (24)        29.4%         (34)
  Equity in earnings of Empire                590          4.8%         563        -17.3%         681
  Gain (loss) on disposal of assets           (24)        84.4%        (154)     -1500.0%          11
  Earnings on bank-owned life insurance       532        280.0%         140        -74.1%         541
  Gain (loss) on sale of Empire             1,462            -            -                         -
  Other                                       523        112.6%         246        -22.2%         316
------------------------------------------------------------------------------------------------------
      Total Noninterest Income            $11,923        107.1%     $ 5,756         -5.0%     $ 6,060
======================================================================================================
</TABLE>

Noninterest income increased 107% in 2001, from $5.8 million to $11.9 million.
As a percentage of average assets, noninterest income, excluding securities
transactions and other non-recurring gains and losses, has been approximately
1.03%, 0.85%, and 0.97% for each of the last three fiscal years, respectively.
Approximately $371,000, or 6%, of the overall increase is due to income
generated in new markets during 2001.  We consider our operations in McDonough,
Richmond Hill, and Gainesville, Georgia and Ocala, Florida as new markets for
2001.

Service charges on deposit accounts increased 44% due primarily to fee income
generated from an overdraft privilege product  ("ODP") introduced in March 2001.
ODP fees generated approximately $1.4 million additional income in 2001.  This
income is net of ODP losses of approximately $1.1 million.  We do not anticipate
generating as much ODP fee income or incurring as many losses in 2002 due to the
implementation of more conservative limitations on the use of the product.
Service charges on deposit accounts in the new markets amounted to $312,000 in
2001.

Mortgage origination fees increased nearly 60% in 2001 due to a rise in
refinancing activity as interest rates fell during the year.  If the demand for
refinancing slows during 2002, we expect our mortgage origination fee income to
decline as well.

Brokerage commissions increased nearly 145% in 2001 to $306,000.  This is gross
fee income generated through PAB Financial.  PAB Financial began operations in
late 1999, and although this operation is not independently profitable at this
point, we do expect PAB Financial to generate more fee income going forward.

The increase in income in 2001 from securities transactions is primarily due to
a gain of $1.7 million on the sale of stock in the Federal Home Loan Mortgage
Corporation ("FHLMC") held by one of our subsidiary banks.

Our equity in the earnings of Empire increased approximately 5% in 2001.
However, due to the sale of our 50% equity interest in Empire on November 30,
2001, there will be no further income contributed from this unconsolidated
subsidiary.  We recorded a gain of nearly $1.5 million on the sale.

Earnings on bank-owned life insurance increased 280% in 2001, from $140,000 to
$532,000.  The increase is due to the additional purchase of $6.3 million in
bank-owned life insurance policies in December 2000.


                                       24
<PAGE>
NONINTEREST EXPENSE

The following table summarizes noninterest expenses during the last three fiscal
years.

<TABLE>
<CAPTION>
For the Year Ended December 31,           2001                     2000                      1999
---------------------------------------------------------------------------------------------------
                                                      Percent                 Percent
                                                       Change                  Change
                                         Amount    2001 vs. 2000   Amount   2000 vs. 1999   Amount
---------------------------------------------------------------------------------------------------
                                                             (Dollars In Thousands)
<S>                                      <C>      <C>             <C>      <C>             <C>
  Salaries and wages                     $12,648       36.6%      $ 9,259       11.8%      $ 8,278
  Employee benefits                        2,716       20.4%        2,256        1.7%        2,219
  Net occupancy expense of premises        1,580       35.6%        1,165       18.5%          983
  Furniture and equipment expense          2,553       47.4%        1,732       20.2%        1,441
  Amortization of intangible assets          409       13.6%          360        0.8%          357
  Advertising and business development       601       14.3%          526       37.1%          384
  Supplies and printing                      953       51.0%          631       23.2%          512
  Postage and courier                        613       33.6%          459       -1.7%          467
  Legal and accounting fees                  437       -7.0%          470        9.9%          427
  Outside consulting fees                    346      -20.8%          437       90.8%          229
  Director and committee fees                423      -25.5%          568       18.2%          481
  Merger and acquisition costs                 7      -85.7%           49      -90.8%          535
  Conversion costs                           313      -62.4%          833          -             -
  Other                                    3,723       18.9%        3,129       17.9%        2,653
--------------------------------------------------------------------------------------------------
    Total Noninterest Expense            $27,322       24.9%      $21,874       15.3%      $18,966
==================================================================================================
</TABLE>

Noninterest expense increased 25% in 2001, from $21.9 million to $27.3 million.
As a percentage of average assets, noninterest expense, excluding merger and
acquisition costs, conversion costs, and other non-recurring charges discussed
below, has been approximately 2.91%, 3.02%, and 2.93% for each of the last three
fiscal years, respectively.  Approximately $2.8 million, or 52%, of the overall
increase is due to costs incurred in new markets during 2001.  We consider our
operations in McDonough, Richmond Hill, and Gainesville, Georgia and Ocala,
Florida as new markets for 2001.

Salaries and employee benefits increased 33% in 2001, from $11.5 million to
$15.4 million.  Approximately $1.4 million of the increase is directly
attributable to personnel costs in the new markets.  Additional one-time charges
amounting to $2.2 million related to the cancellation of two executives'
employment agreements are also included in 2001.  Other increases are the result
of annual raises, promotions, health insurance premium increases, etc.

Occupancy and equipment expense increased nearly 43% in 2001, from $2.9 million
to $4.1 million.  Approximately $412,000 of the increase is directly
attributable to the costs of maintaining premises and equipment in the new
markets.  Depreciation expense increased $601,000 in 2001 as a result of the
$10.8 million in premises and equipment acquired in 2000 and 2001.

INCOME TAXES

Our pre-tax operating loss for 2001 of $103,000 resulted in a net tax benefit of
$251,000.  The net tax benefit is comprised of current taxes of $3.1 million
offset by a $3.3 million deferred tax benefit.  The deferred tax benefit results
primarily from the timing difference between periods when the provision for loan
losses is recorded on the books and when the actual loss is recorded and the tax
deduction is allowed.  No valuation allowance was recorded against these
deferred tax assets as we expect to use their benefits within a reasonable
period of time.

FOURTH QUARTER RESULTS

We had a net loss of $4.7 million, or $0.49 per share, for the fourth quarter of
2001, compared to a $0.06 loss per share in the fourth quarter of 2000.  An
$11.2 million provision for loan losses and one-time charges totaling $2.2
million in canceling two executive officers' employment contracts were the
primary contributors to our operating loss during the quarter.  These charges
were offset by gains of $1.5 million on the sale of Empire and $1.7 million on
the sale of FHLMC stock.

The net interest margin was 3.32% compared to 4.22% in 2000.  The average yield
on earning assets fell from 9.12% in 2000 to 7.20% in 2001.  However, the
average rate on interest-bearing liabilities improved from 5.60% in 2000 to
4.41% in 2001 as we continued to reprice or retire higher rate time deposits and
FHLB advances.


                                       25
<PAGE>
IMPACT  OF  INFLATION

Inflation impacts the growth in total assets in the banking industry and causes
a need to increase equity capital at higher than normal rates to meet capital
adequacy requirements.  We cope with the effects of inflation through managing
our interest rate sensitivity gap position, by periodically reviewing and
adjusting our pricing of services to consider current costs, and through
managing our dividend payout policy relative to our level of income.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities, effective for
fiscal years beginning after June 15, 2000.  This Statement establishes
accounting and reporting standards for derivative instruments and hedging
activities, including certain derivative instruments embedded in other
contracts, and requires that an entity recognize all derivatives as assets or
liabilities in the balance sheet and measure them at fair value.  If certain
conditions are met, an entity may elect to designate a derivative as follows:
(a) a hedge of the exposure to changes in the fair value of a recognized asset
or liability or an unrecognized firm commitment, (b) a hedge of the exposure to
variable cash flows of a forecasted transaction, or (c) a hedge of the foreign
currency exposure of an unrecognized firm commitment, an available-for-sale
security, a foreign currency denominated forecasted transaction, or a net
investment in a foreign operation.  The Statement generally provides for
matching the timing of the recognition of the gain or loss on derivatives
designated as hedging instruments with the recognition of the changes in the
fair value of the item being hedged.  Depending on the type of hedge, such
recognition will be in either net income or other comprehensive income.  For a
derivative not designated as a hedging instrument, changes in fair value will be
recognized in net income in the period of change.  We adopted SFAS No. 133 on
January 1, 2001, with no material impact on our financial condition or results
of operations.

DELAYED ADOPTION OF FASB STATEMENT

In June 2001, the FASB issued SFAS No. 141, Business Combinations, and SFAS No.
142, Goodwill and Other Intangible Assets.  SFAS No. 141 requires that all
business combinations consummated after June 30, 2001 be accounted for by the
purchase method unless the combination was initiated on or prior to that date
and it meets the conditions to be accounted for by the pooling-of-interests
method in accordance with AFB Opinion No. 16, Business Combinations.  SFAS No.
142 is required to be applied in years beginning after December 15, 2001.  Under
SFAS No. 142, goodwill and intangible assets that management concludes has
indefinite useful lives will no longer be amortized, but will be subject to
impairment tests performed at least annually.  Also, upon initial application,
we are required to perform a transitional impairment test of all previously
recognized goodwill and to assign all recognized assets and liabilities to
reporting units.  Other intangible assets will continue to be amortized over
their useful lives as determined at the date of initial application.

We will adopt SFAS No. 142 beginning in the first quarter of 2002.  Application
of the nonamortization provisions of SFAS No. 142 is expected to result in an
increase in net income of $409,000 ($.04 per basic and diluted share) per year.
During 2002, we will perform the first of the required impairment tests of
goodwill and indefinite lived intangible assets, but we have not yet determined
what effect those test will have on our financial condition or results of
operations.


                                       26
<PAGE>
ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to exposure to U.S. dollar interest rate changes and accordingly,
we manage our exposure by considering the possible changes in the net interest
margin.  We do not engage in trading activity nor do we classify any portion of
the investment portfolio as held for trading.  We do not engage in any hedging
activities or enter into any derivative instruments with a higher degree of risk
than mortgage-backed securities, which are commonly held pass through
securities.  Finally, we have no material direct exposure to foreign currency
exchange rate risk, commodity price risk, and other market risks.

Interest rates play a major part in the net interest income of a financial
institution.  The sensitivity to rate changes is known as "interest rate risk."
The repricing of interest earning assets and interest-bearing liabilities can
influence the changes in net interest income.  As part of our asset/liability
management program, the timing of repriced assets and liabilities is referred to
as gap management.  It is our policy to maintain a gap ratio in the one-year
time horizon between 0.80 and 1.20.  The table below has two measures of gap;
regulatory and management-adjusted.  The regulatory gap considers only
contractual maturities or repricings.  The management-adjusted gap includes
assumptions regarding prepayment speeds on certain rate sensitive assets, the
repricing frequency of interest-bearing demand and savings accounts, and the
stability of core deposit levels, all of which are adjusted periodically as
market conditions change.  The management-adjusted gap indicates that we are
highly asset sensitive in relation to changes in market interest rates in the
short-term.  Being asset sensitive would result in net interest income
increasing in a rising rate environment and decreasing in a declining rate
environment.  At December 31, 2001, our one-year management-adjusted gap ratio
of 1.47 was outside of our policy guidelines, however, this exception to policy
was mitigated by our strategy to position our balance sheet to benefit from an
increase in interest rates.  Also, our assumptions on prepayments speeds, based
in part on the Mortgage Bankers Association's Refinancing Index that reached
record high levels during the fourth quarter of 2001, may not be sustainable
throughout the next twelve months.

We use simulation analysis to monitor changes in net interest income due to
changes in market interest rates.  The simulation of rising, declining, and flat
interest rate scenarios allows us to monitor and adjust interest rate
sensitivity to minimize the impact of market interest rate swings.  The analysis
of the impact on net interest income over a twelve-month period is subjected to
an immediate 200 basis point increase or decrease in market rates on net
interest income and is monitored on a quarterly basis.  As of year end, the
simulation model projected net interest income would increase 19.3% over the
next twelve months if market rates immediately rose by 200 basis points.  On the
other hand, the model projected net interest income to decrease 14.4% over the
next twelve months if market rates immediately fell by 200 basis points.  The
high volatility in our results is due primarily to our asset-sensitive balance
sheet mix.  Our policy states that net interest income cannot be reduced by more
than 10% using this analysis, and technically, we were outside of policy
guidelines at year end.  However, this exception was mitigated because a further
200 basis point drop was not realistic given that the federal funds rate stood
at 1.75%.  If market rates fell by only 100 basis points, a more plausible
scenario, our model projected net interest income to decrease 9.3% over the next
twelve months.

<TABLE>
<CAPTION>
  CUMULATIVE GAP ANALYSIS
                                     3-Month    6-Month    1-Year
--------------------------------------------------------------------
                                       (Dollars in Thousands)
<S>                                 <C>        <C>        <C>
  Regulatory Defined

  Rate Sensitive Assets (RSA)       $341,470   $382,333   $ 435,167
  Rate Sensitive Liabilities (RSL)   345,652    432,855     568,891
--------------------------------------------------------------------
  RSA minus RSL (Gap)               $ (4,182)  $(50,522)  $(133,724)

  Gap Ratio (RSA/RSL)                   0.99       0.88        0.76


  Management-Adjusted

  Rate Sensitive Assets (RSA)       $633,842   $703,298   $ 720,330
  Rate Sensitive Liabilities (RSL)   158,458    261,261     490,893
--------------------------------------------------------------------
  RSA minus RSL (Gap)               $475,384   $442,037   $ 229,437

  Gap Ratio (RSA/RSL)                   4.00       2.69        1.47
</TABLE>


                                       27
<PAGE>
ITEM 8.  FINANCIAL STATEMENT AND SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
QUARTERLY FINANCIAL SUMMARY FOR 2001 AND 2000

                                                  Quarterly Period Ended
                                       March 31   June 30   September 30   December 31
----------------------------------------------------------------------------------------
                                            (In Thousands, Except Per Share Data)
<S>                                    <C>        <C>       <C>            <C>
Year Ended December 31, 2001:
  Interest income                      $  16,359  $ 16,410  $      15,453  $     14,492
  Interest expense                         9,412     9,479          8,876         7,833
----------------------------------------------------------------------------------------
    Net interest income                    6,947     6,931          6,577         6,659
  Provision for loan losses                  280       301            488        11,151
----------------------------------------------------------------------------------------
    Net interest income (loss)
      after provision for
      loan losses                          6,667     6,630          6,089        (4,492)
  Other income                             1,912     2,445          2,199         5,367
  Other expenses                           6,178     6,382          6,451         7,909
----------------------------------------------------------------------------------------
    Income (loss) before
      income taxes                         2,401     2,693          1,837        (7,034)
    Income tax (benefit)                     721       854            526        (2,352)
----------------------------------------------------------------------------------------
      Net income (loss)                $   1,680  $  1,839  $       1,311  $     (4,682)
========================================================================================

    Basic earnings (loss) per share    $    0.18  $   0.19  $        0.14  $      (0.49)
    Diluted earnings (loss) per share  $    0.18  $   0.19  $        0.14  $      (0.49)

  Year Ended December 31, 2000:
    Interest income                    $  13,473  $ 13,882  $      14,673  $     15,498
    Interest expense                       6,223     6,569          7,544         8,338
----------------------------------------------------------------------------------------
      Net interest income                  7,250     7,313          7,129         7,160
    Provision for loan losses                391       337            367         3,004
----------------------------------------------------------------------------------------
      Net interest income
        after provision for
        loan losses                        6,859     6,976          6,762         4,156
  Other income                             1,340     1,328          1,576         1,512
  Other expenses                           5,036     5,261          4,991         6,586
----------------------------------------------------------------------------------------
    Income (loss) before
      income taxes                         3,163     3,043          3,347          (918)
    Income tax (benefit)                   1,038     1,034          1,172          (335)
----------------------------------------------------------------------------------------
      Net income (loss)                $   2,125  $  2,009  $       2,175  $       (583)
========================================================================================

  Basic earnings (loss) per share      $    0.22  $   0.21  $        0.23  $      (0.06)
  Diluted earnings (loss) per share    $    0.22  $   0.21  $        0.23  $      (0.06)
</TABLE>


                                       28
<PAGE>
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

We are responsible for the preparation of the financial statements, related
financial data and other information in this Annual Report on Form 10-K.  The
financial statements are prepared in accordance with generally accepted
accounting principles and include amounts based on management's estimates and
judgment where appropriate.  Financial information appearing throughout this
Report is consistent with the financial statements.

Our accounting system, which records, summarizes and reports financial
transactions, is supported by an internal control structure which provides
reasonable assurance that assets are safeguarded and that transactions are
recorded in accordance with our policies and established accounting procedures.
As an integral part of the internal control structure, we maintain a
professional staff of internal auditors who monitor compliance with and assess
the effectiveness of the internal control structure.

The Audit Committee of the Board of Directors, composed solely of outside
directors, meets regularly with management, internal auditors and independent
public accountants to review matters relating to financial reporting, internal
control structure and the nature, extent and results of the audit effort.  The
independent public accountants and the internal auditors have access to the
Audit Committee with or without management present.

The financial statements have been audited by Mauldin & Jenkins, LLC,
independent public accountants, who rendered an independent opinion on our
financial statements.  Their appointment was recommended by the Audit Committee
and approved by the Board of Directors.  Their examination provides an objective
assessment of the degree to which we meet our responsibility for financial
reporting.  Their opinion on the financial statements is based on auditing
procedures, which include reviewing the internal control structure to determine
the timing and scope of audit procedures and performing selected tests of
transactions and records as they deem appropriated.  These auditing procedures
are designed to provide a reasonable level of assurance that the financial
statements are fairly presented in all material respects.

   Michael E. Ricketson        Donald J. Torbert, Jr.      Laura A. Hancock
   President and               Senior Vice President and   Vice President and
   Chief Executive Officer     Chief Financial Officer     Controller


                                       29
<PAGE>
                          INDEPENDENT AUDITOR'S REPORT

================================================================================

To the Board of Directors
PAB Bankshares, Inc.
Valdosta, Georgia

          We  have  audited  the  accompanying consolidated balance sheet of PAB
Bankshares,  Inc.  and  Subsidiaries  as  of  December 31, 2001, and the related
statements of income, comprehensive income (loss), stockholders' equity and cash
flows  for  the  year  then  ended.  These  financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion  on  these  financial  statements  based  on  our  audit.  The financial
statements of PAB Bankshares, Inc. and Subsidiaries for each of the two years in
the  period ended December 31, 2000 were audited by other auditors, whose report
dated  January  26,  2001  expressed an unqualified opinion on those statements.

          We conducted our audit in accordance with auditing standards generally
accepted  in  the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audit  provides  a
reasonable  basis  for  our  opinion.

          In  our  opinion,  the  2001  financial  statements  referred to above
present  fairly,  in  all  material  respects,  the  financial  position  of PAB
Bankshares,  Inc.  and Subsidiaries, as of December 31, 2001, and the results of
their operations and their cash flows for the year then ended in conformity with
accounting  principles  generally  accepted  in  the  United  States of America.


                                        /s/  MAULDIN  &  JENKINS,  LLC




Albany,  Georgia
April  3,  2002


                                       30
<PAGE>

                          INDEPENDENT AUDITOR'S REPORT



Board of Directors and Stockholders
PAB Bankshares, Inc. and Subsidiaries

We  have  audited  the  accompanying consolidated statements of condition of PAB
Bankshares,  Inc. and its Subsidiaries as of December 31, 2000 and 1999, and the
related  consolidated  statements of income, comprehensive income, stockholders'
equity  and  cash  flows for the years then ended.  These consolidated financial
statements  are  the  responsibility  of  the  Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements  based on our audits.  We did not audit the statement of condition as
of  December  31,  2000  of Friendship Community Bank, a wholly-owned subsidiary
which statement reflects total assets constituting 6.2% as of December 31, 2000,
of  the  related consolidated total assets.  That statement was audited by other
auditors  whose  report has been furnished to us, and our opinion, insofar as it
relates  to  the amounts included for Friendship Community Bank, is based solely
on  the  report  of  the  other  auditors.

We conducted our audit in accordance with generally accepted auditing standards.
Those  standards require that we plan and perform the audit to obtain reasonable
assurance  about  whether  the  consolidated  financial  statements  are free of
material  misstatement.  As  audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An  audit also includes assessing the accounting principles used and significant
estimates  made  by  management,  as  well  as  evaluating the overall financial
statement  presentation.  We believe that our audits and the report of the other
auditors  provide  a  reasonable  basis  for  our  opinion.

In  our  opinion,  based on our audits and the report of the other auditors, the
consolidated  financial  statements  referred  to  above  present fairly, in all
material  respects,  the  financial  position  of  PAB  Bankshares, Inc. and its
Subsidiaries  as  of  December  31,  2000  and  1999,  and  the results of their
operations  and  their  cash  flows  for the years then ended in conformity with
generally  accepted  accounting  principles.

We  previously  audited  and  reported on the consolidated statements of income,
comprehensive  income,  stockholders'  equity  and cash flows of PAB Bankshares,
Inc.  and  its Subsidiaries for the year ended December 31, 1998, prior to their
restatement  for  the  1999  pooling  of  interests.  The  contribution  of  PAB
Bankshares,  Inc. and Subsidiaries to revenues and net income for the year ended
December  31,  1998  represented  84% and 83% of the respective restated totals.
Separate  financial  statements  of  the  other  companies  included in the 1998
restated  consolidated statements of income, comprehensive income, stockholders'
equity,  and  cash  flows  were  audited  and  reported  on  separately by other
auditors.  We  also  audited  the  combination  of the accompanying consolidated
statements  of  income,  retained  earnings,  and  cash flows for the year ended
December  31, 1998, after restatement for the 1999 pooling of interests.  In our
opinion,  such  consolidated statements have been properly combined on the basis
described  in  Note  1  of  the  notes to the consolidated financial statements.




/s/ Stewart, Fowler & Stalvey, P.C.
-----------------------------------


Valdosta, Georgia
January 26, 2001


                                       31
<PAGE>
<TABLE>
<CAPTION>
                              PAB BANKSHARES, INC. AND SUBSIDIARIES
                                  CONSOLIDATED BALANCE SHEETS
                                   DECEMBER 31, 2001 AND 2000

-----------------------------------------------------------------------------------------------

                                                                       2001           2000
                                                                   -------------  -------------
<S>                                                                <C>            <C>
ASSETS
  Cash and due from banks                                          $ 28,188,779   $ 29,697,335
  Interest-bearing deposits in other banks                           15,940,115     13,414,020
  Federal funds sold                                                 24,205,000     43,415,000
  Investment securities, at fair value                              113,454,135     84,924,830

  Loans                                                             637,825,571    580,736,533
  Allowance for loan losses                                         (15,765,373)    (8,184,641)
                                                                   -------------  -------------
      Net loans                                                     622,060,198    572,551,892
                                                                   -------------  -------------

  Premises and equipment                                             23,508,083     22,380,725
  Goodwill and other intangible assets                                5,984,604      6,450,742
  Investment in unconsolidated subsidiary                                     -         57,639
  Cash value of bank-owned life insurance policies                    9,471,936      9,041,355
  Foreclosed assets                                                   1,311,933        566,518
  Other assets                                                       15,018,471     12,406,513
                                                                   -------------  -------------

       Total assets                                                $859,143,254   $794,906,569
                                                                   =============  =============

LIABILITIES AND STOCKHOLDERS' EQUITY
  Deposits:
    Noninterest-bearing                                            $ 81,493,517   $ 70,679,023
    Interest-bearing                                                638,904,142    566,500,715
                                                                   -------------  -------------
      Total deposits                                                720,397,659    637,179,738
                                                                   -------------  -------------

  Federal funds purchased and securities sold under
    agreements to repurchase                                         15,708,621     12,165,591
  Advances from the Federal Home Loan Bank                           38,228,478     58,701,282
  Guaranteed preferred beneficial interests in debentures (trust
    preferred securities)                                            10,000,000              -
  Other borrowings                                                            -      7,667,280
  Other liabilities                                                   9,436,613      8,412,198
                                                                   -------------  -------------
      Total liabilities                                             793,771,371    724,126,089
                                                                   -------------  -------------

  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,
      9,409,913 and 9,501,947 shares issued                           1,217,065      1,217,065
  Additional paid-in capital                                         28,657,351     29,754,284
  Retained earnings                                                  34,917,898     38,939,722
  Accumulated other comprehensive income                                579,569        869,409
                                                                   -------------  -------------
      Total stockholders' equity                                     65,371,883     70,780,480
                                                                   -------------  -------------

      Total liabilities and stockholders' equity                   $859,143,254   $794,906,569
                                                                   =============  =============
</TABLE>

See accompanying notes to consolidated financial statements.


                                       32
<PAGE>
<TABLE>
<CAPTION>
                                PAB BANKSHARES, INC. AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENTS OF INCOME
                            YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999

----------------------------------------------------------------------------------------------------

                                                                2001          2000          1999
                                                            ------------  ------------  ------------
<S>                                                         <C>           <C>           <C>
INTEREST INCOME
  Interest and fees on loans                                $54,162,805   $51,045,640   $43,165,734
  Interest and dividends on investment securities:
    Taxable                                                   5,468,147     4,028,030     4,849,344
    Nontaxable                                                  197,206       226,732       249,259
  Other interest income                                       2,886,541     2,225,325     1,230,786
                                                            ------------  ------------  ------------
      Total interest income                                  62,714,699    57,525,727    49,495,123
                                                            ------------  ------------  ------------

INTEREST EXPENSE
  Interest on deposits                                       31,368,578    24,209,959    19,914,138
  Interest on federal funds purchased and securities sold
    under agreements to repurchase                              550,840       668,246       484,993
  Interest on Federal Home Loan Bank advances                 3,212,932     3,796,126     2,507,423
  Other interest expense                                        468,029             -             -
                                                            ------------  ------------  ------------
      Total interest expense                                 35,600,379    28,674,331    22,906,554
                                                            ------------  ------------  ------------

      Net interest income                                    27,114,320    28,851,396    26,588,569

Provision for loan losses                                    12,220,250     4,098,663       985,188
                                                            ------------  ------------  ------------
      Net interest income after provision for loan losses    14,894,070    24,752,733    25,603,381
                                                            ------------  ------------  ------------

OTHER INCOME
  Service charges on deposit accounts                         5,574,871     3,880,560     3,629,687
  Other fee income                                            1,524,909     1,105,167       914,987
  Securities transactions, net                                1,740,720       (23,630)      (33,629)
  Equity in earnings of unconsolidated subsidiary               590,370       562,979       680,578
  Other noninterest income                                    2,492,190       231,290       868,477
                                                            ------------  ------------  ------------
      Total other income                                     11,923,060     5,756,366     6,060,100
                                                            ------------  ------------  ------------

OTHER EXPENSES
  Salaries and employee benefits                             15,364,051    11,515,415    10,496,961
  Occupancy expense of premises                               1,579,803     1,164,663       982,977
  Furniture and equipment expense                             2,552,914     1,731,930     1,440,998
  Amortization of goodwill and other intangibles                408,635       359,520       356,664
  Other noninterest expense                                   7,015,193     7,102,166     5,687,951
                                                            ------------  ------------  ------------
      Total other expenses                                   26,920,596    21,873,694    18,965,551
                                                            ------------  ------------  ------------

      Income (loss) before income tax expense (benefit)        (103,466)    8,635,405    12,697,930
Income tax expense (benefit)                                   (250,626)    2,908,808     4,005,054
                                                            ------------  ------------  ------------

      Net income                                            $   147,160   $ 5,726,597   $ 8,692,876
                                                            ============  ============  ============

EARNINGS PER COMMON SHARE:
  Basic                                                     $      0.02   $      0.60   $      0.90
                                                            ============  ============  ============
  Diluted                                                   $      0.02   $      0.60   $      0.89
                                                            ============  ============  ============
</TABLE>

See accompanying notes to consolidated financial statements.


                                       33
<PAGE>
<TABLE>
<CAPTION>
                                PAB BANKSHARES, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                            YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999

-------------------------------------------------------------------------------------------

                                                         2001         2000         1999
                                                     ------------  ----------  ------------
<S>                                                  <C>           <C>         <C>
Net income                                           $   147,160   $5,726,597  $ 8,692,876

Other comprehensive income (loss):
  Unrealized holding gains (losses) arising during
    the period, net of tax (benefit) of $442,595;
    $531,975; and ($979,902)                             859,035    1,032,658   (1,616,553)
Reclassification adjustment for (gains) losses
  included in net income, net of (tax) benefit of
  ($591,845); $8,034; and $12,692                     (1,148,875)      15,596       20,937
                                                     ------------  ----------  ------------
                                                        (289,840)   1,048,254   (1,595,616)
                                                     ------------  ----------  ------------

        Comprehensive income (loss)                  $  (142,680)  $6,774,851  $ 7,097,260
                                                     ============  ==========  ============
</TABLE>

See accompanying notes to consolidated financial statements.


                                       34
<PAGE>
<TABLE>
<CAPTION>
                                        PAB BANKSHARES, INC. AND SUBSIDIARIES
                                   CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                    YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999

---------------------------------------------------------------------------------------------------------------------

                                                                                          ACCUMULATED
                                          COMMON STOCK         ADDITIONAL                    OTHER
                                     ----------------------    PAID-IN       RETAINED    COMPREHENSIVE
                                       SHARES    PAR VALUE     CAPITAL       EARNINGS    INCOME (LOSS)      TOTAL
                                     ----------  ----------  ------------  ------------  --------------  ------------
<S>                                  <C>         <C>         <C>           <C>           <C>             <C>

BALANCE, DECEMBER 31, 1998           9,604,027   $1,217,065  $31,095,359   $32,334,269   $   1,416,771   $66,063,464
  Net income                                 -            -            -     8,692,876               -     8,692,876
  Other comprehensive loss                   -            -            -             -      (1,595,616)   (1,595,616)
  Cash dividends declared, $.3875
    per share                                -            -            -    (3,339,028)              -    (3,339,028)
  Cash dividends declared by
    pooled companies                         -            -            -      (341,918)              -      (341,918)
  Dividends on preferred stock of
    subsidiaries                             -            -            -       (10,080)              -       (10,080)
  Stock issued to directors in lieu
    of fees                              9,503            -      114,630             -               -       114,630
  Stock options exercised                3,876            -       26,932             -               -        26,932
                                     ----------  ----------  ------------  ------------  --------------  ------------
BALANCE, DECEMBER 31, 1999           9,617,406    1,217,065   31,236,921    37,336,119        (178,845)   69,611,260
  Net income                                 -            -            -     5,726,597               -     5,726,597
  Other comprehensive income                 -            -            -             -       1,048,254     1,048,254
  Cash dividends declared, $.4325
    per share                                -            -            -    (4,122,994)              -    (4,122,994)
  Stock acquired and cancelled
    under stock repurchase plan       (119,616)           -   (1,512,152)            -               -    (1,512,152)
  Stock options exercised                4,157            -       29,515             -               -        29,515
                                     ----------  ----------  ------------  ------------  --------------  ------------
BALANCE, DECEMBER 31, 2000           9,501,947    1,217,065   29,754,284    38,939,722         869,409    70,780,480
  Net income                                 -            -            -       147,160               -       147,160
  Other comprehensive loss                   -            -            -             -        (289,840)     (289,840)
  Cash dividends declared, $.4400
    per share                                -            -            -    (4,168,984)              -    (4,168,984)
  Stock acquired and cancelled
    under stock repurchase plan       (123,534)           -   (1,293,808)            -               -    (1,293,808)
  Stock options exercised               31,500            -      196,875             -               -       196,875
                                     ----------  ----------  ------------  ------------  --------------  ------------
BALANCE, DECEMBER 31, 2001           9,409,913   $1,217,065  $28,657,351   $34,917,898   $     579,569   $65,371,883
                                     ==========  ==========  ============  ============  ==============  ============
</TABLE>

See accompanying notes to consolidated financial statements.


                                       35
<PAGE>
<TABLE>
<CAPTION>
                                   PAB BANKSHARES, INC. AND SUBSIDIARIES
                                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                               YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999

----------------------------------------------------------------------------------------------------------

                                                                   2001           2000           1999
                                                               -------------  -------------  -------------
<S>                                                            <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                   $    147,160   $  5,726,597   $  8,692,876
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation, amortization and accretion, net                 2,674,847      2,019,426      1,842,249
    Provision for loan losses                                    12,220,250      4,098,663        985,188
    Provision for deferred taxes                                 (3,343,255)      (968,127)      (184,024)
    Net realized (gain) loss on securities transactions          (1,740,720)        23,630         33,629
    Net (gain) loss on disposal of assets                               839        153,817        (10,889)
    Gain on sale of interest in unconsolidated subsidiary        (1,461,739)             -              -
    Equity in earnings of unconsolidated subsidiary                (590,370)      (562,979)      (680,578)
    Dividends received from unconsolidated subsidiary               350,000        500,000        675,000
    Increase in cash value of bank-owned life insurance            (491,579)      (139,958)      (540,695)
    Increase in deferred compensation accrual                     1,156,175        176,877        381,764
    Increase in retirement and severance accruals                 1,436,388              -              -
    (Increase) decrease in interest receivable                      443,054       (969,909)      (604,525)
    Increase in interest payable                                     80,769        774,898        251,976
    (Increase) decrease in taxes receivable                         144,270       (892,703)       207,543
    Increase (decrease) in taxes payable                                  -       (340,497)       340,497
    Net change in other assets and other liabilities             (1,574,011)     1,679,617       (645,976)
                                                               -------------  -------------  -------------

      Net cash provided by operating activities                   9,452,078     11,279,352     10,744,035
                                                               -------------  -------------  -------------

CASH FLOWS FROM INVESTING ACTIVITIES
  (Increase) decrease in interest-bearing deposits
    in other banks                                               (2,526,095)    (1,477,548)       197,536
  (Increase) decrease in federal funds sold                      19,210,000    (11,935,000)    (5,000,000)
  Activities on securities available for sale:
    Purchases                                                   (72,833,848)    (4,003,944)   (16,350,094)
    Proceeds from sales and calls                                16,468,305        103,933     12,842,700
    Proceeds from maturities and paydowns                        30,620,307     11,707,704     22,714,619
  Purchase of restricted and other equity securities             (1,637,600)      (163,500)      (345,800)
  Proceeds from redemption of restricted and
    other equity securities                                          85,000        456,200              -
  Net increase in loans                                         (63,674,464)   (65,053,345)   (55,344,190)
  Purchase of premises and equipment                             (3,332,730)    (7,437,686)    (2,343,484)
  Proceeds from disposal of assets                                1,799,167        924,785         16,318
  Proceeds from sale of interest in unconsolidated subsidiary     1,800,000              -              -
  Purchase of bank-owned life insurance polices                           -     (6,265,261)             -
  Proceeds from redemption of life insurance policies                60,998        511,031              -
  Net cash received in purchase acquisition of Friendship                 -      1,526,565              -
                                                               -------------  -------------  -------------

      Net cash used in investing activities                     (73,960,960)   (81,106,066)   (43,612,395)
                                                               -------------  -------------  -------------
</TABLE>


                                       36
<PAGE>
<TABLE>
<CAPTION>
                                    PAB BANKSHARES, INC. AND SUBSIDIARIES
                                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999

------------------------------------------------------------------------------------------------------------

                                                                     2001           2000           1999
                                                                 -------------  -------------  -------------
<S>                                                              <C>            <C>            <C>
CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase in deposits                                       $ 83,217,921   $ 76,610,058   $ 12,116,855
  Net increase (decrease) in federal funds purchased
    and securities sold under repurchase agreements                 3,543,030     (1,662,503)     7,664,829
  Advances from the Federal Home Loan Bank                            700,000     27,770,000     33,027,000
  Payments on Federal Home Loan Bank advances                     (21,172,804)   (29,180,958)   (11,972,483)
  Cash paid to former stockholders on acquisition of Friendship    (7,667,280)             -              -
  Proceeds on issuance of guaranteed preferred beneficial
    interests in debentures                                        10,000,000              -              -
  Dividends paid                                                   (4,179,108)    (4,054,117)    (3,367,049)
  Dividends paid by pooled companies                                        -              -       (452,214)
  Proceeds from the exercise of stock options                         196,875         29,515         26,932
  Acquisition of stock under stock repurchase plans                (1,293,808)    (1,512,152)             -
  Proceeds from the issuance of preferred stock in
    REIT subsidiaries                                                       -              -        126,000
  Costs capitalized on issuance of guaranteed preferred
    beneficial interest in debentures                                (344,500)             -              -
                                                                 -------------  -------------  -------------

      Net cash provided by financing activities                    63,000,326     67,999,843     37,169,870
                                                                 -------------  -------------  -------------

Net increase (decrease) in cash and due from banks                 (1,508,556)    (1,826,871)     4,301,510

Cash and due from banks at beginning of period                     29,697,335     31,524,206     27,222,696
                                                                 -------------  -------------  -------------

Cash and due from banks at end of period                         $ 28,188,779   $ 29,697,335   $ 31,524,206
                                                                 =============  =============  =============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
  INFORMATION
  Cash paid during the period for:
    Interest                                                     $ 35,519,610   $ 27,899,433   $ 22,654,578
                                                                 =============  =============  =============

    Taxes                                                        $  2,948,358   $  4,626,725   $  4,262,579
                                                                 =============  =============  =============

NONCASH INVESTING AND FINANCING TRANSACTIONS
  Increase (decrease) in unrealized gains on securities
    available for sale                                           $   (438,972)  $  1,597,178   $ (2,514,112)
                                                                 =============  =============  =============

  Purchase price and debt incurred on acquisition of Friendship  $          -   $  7,667,280   $          -
                                                                 =============  =============  =============

  Stock issued to directors in lieu of fees                      $          -   $          -   $    114,630
                                                                 =============  =============  =============
</TABLE>

See accompanying notes to consolidated financial statements.


                                       37
<PAGE>
                      PAB BANKSHARES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         NATURE  OF  BUSINESS

          PAB  Bankshares,  Inc,  (the  Company)  is a financial holding company
          whose  business  is primarily conducted by its wholly-owned commercial
          bank  subsidiaries  (the  Banks)  listed below. Through the Banks, the
          Company  offers  a  broad  range  of  commercial  and consumer banking
          products  and  services to customers located in the local market areas
          served  by  the  Banks.  The  Company and the Banks are subject to the
          regulations of certain federal and state agencies and are periodically
          examined  by those regulatory agencies. Certain bank subsidiaries have
          been  consolidated  into the lead subsidiary, The Park Avenue Bank, in
          2001  through  a charter consolidation plan. The Company also plans to
          consolidate  the remaining charters into The Park Avenue Bank in 2002.

     BANK SUBSIDIARY               BANKING LOCATIONS(# OF OFFICES)
     ---------------               -------------------------------

     The Park Avenue Bank          Valdosta, Lowndes County, Georgia (3)
                                   Lake Park, Lowndes County, Georgia (1)
                                   McDonough, Henry County, Georgia (1)
                                   Ocala, Marion County, Florida (2)
                                   Richmond Hill, Bryan County, Georgia (1)
                                   Adel, Cook County, Georgia (1)
                                   Gainesville, Hall County, Georgia (1 - a loan
                                     production office)
     First Community Bank of       Bainbridge, Decatur County,
     Southwest Georgia             Georgia (3)
                                   Cairo, Grady County, Georgia (1)
     Eagle Bank and Trust          Statesboro, Bulloch County, Georgia (2)
     Baxley Federal Bank           Baxley, Appling County, Georgia (1)
                                   Hazlehurst, Jeff Davis County, Georgia (1)

          In  addition  to  the  Banks,  the Company owns an investment advisory
          services  subsidiary, PAB Financial Services, LLC (PAB Financial). PAB
          Financial  offers  brokerage,  insurance,  annuity,  and  investment
          planning  services  to  its  customers  from  its offices in Valdosta,
          Georgia  and  Ocala,  Florida.

         BASIS  OF  PRESENTATION

          The  consolidated  financial  statements  include  the accounts of the
          Company  and  its  subsidiaries. Significant intercompany transactions
          and  balances  are  eliminated  in  consolidation.

          The  preparation  of financial statements in conformity with generally
          accepted  accounting  principles requires management to make estimates
          and  assumptions  that  affect  the  reported  amounts  of  assets and
          liabilities  as  of the balance sheet date and the reported amounts of
          revenues  and  expenses  during  the  reporting period. Actual results
          could  differ  from  those  estimates.  Material  estimates  that  are
          particularly susceptible to significant change in the near term relate
          to  the  determination of the allowance for loan losses, the valuation
          of  foreclosed  real  estate,  and  deferred  taxes.


                                       38
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         BASIS  OF  PRESENTATION  (CONTINUED)

          Certain  items  in the consolidated financial statements as of and for
          the  years  ended  December  31, 2000 and 1999 have been reclassified,
          with no net effect on total assets, total stockholders' equity, or net
          income,  in  order  to  be consistent with the classifications adopted
          with  the  current  year  presentation.

          The  principles  that  significantly  affect  the  determination  of
          financial  position,  results  of  operations  and  cash  flows  are
          summarized  below.

         CASH  AND  DUE  FROM  BANKS

          For purposes of reporting cash flows, cash and due from banks includes
          cash on hand, cash items in process of collection and amounts due from
          banks.  Cash  flows  from  loans,  federal  funds  sold, federal funds
          purchased  and  securities  sold  under  repurchase  agreements,  and
          deposits  are  reported  net.

          The  Company  maintains  amounts  due  from banks which, at times, may
          exceed  federally  insured limits. The Company has not experienced any
          losses  in  such  accounts.

         INVESTMENT  SECURITIES

          Securities  are classified based on management's intention on the date
          of purchase. Securities which management has the intent and ability to
          hold  to  maturity  are classified as held to maturity and reported at
          amortized  cost.  All  other  debt  and equity securities with readily
          determinable  fair  values  are  classified  as available for sale and
          carried  at  fair value with unrealized gains and losses excluded from
          earnings  and  reported  in  other  comprehensive  income, net of tax.
          Restricted  and other equity securities without a readily determinable
          fair  value  are  carried  at  cost  and  periodically  evaluated  for
          impairment.  Included  in  restricted equity securities are the Banks'
          investments  in  Federal Reserve Bank stock and Federal Home Loan Bank
          stock.

          Interest  and  dividends,  including  amortization  of  premiums  and
          accretion  of  discounts, are recognized in interest income. Gains and
          losses  on  the  sale  or  call of securities are determined using the
          specific  identification  method.  Declines  in  the  fair  value  of
          securities below their cost that are deemed to be other than temporary
          are  reflected  in  earnings  as  realized  losses.

         LOANS

          Loans  are  reported  at  their  outstanding  principal  balances less
          unearned  income,  including  deferred  fees  and  costs on originated
          loans,  and  the allowance for loan losses. Interest income is accrued
          on  the  unpaid  balance. Loan origination fees, net of certain direct
          loan  origination  costs, are deferred and recognized as an adjustment
          of  the  related  loan  yield  over  the  life  of  the  loan.

          The accrual of interest on loans is discontinued when, in management's
          opinion,  the  borrower  may be unable to meet payments as they become
          due,  unless  the  loan  is well-secured. All interest accrued but not
          collected  for  loans  that are placed on nonaccrual status or charged
          off is reversed against interest income. Interest income on nonaccrual
          loans  is subsequently recognized only to the extent cash payments are
          received  until  the  loan  is  returned  to  accrual  status.


                                       39
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         LOANS  (CONTINUED)

          The  allowance  for loan losses is established through a provision for
          loan  losses  charged  to expense. Loan losses are charged against the
          allowance when management believes the collectibility of the principal
          is  unlikely.  Subsequent  recoveries  are  credited to the allowance.

          The  allowance  is an amount that management believes will be adequate
          to  absorb  estimated  losses in the loan portfolio. The allowance for
          loan losses is evaluated on a regular basis by management and is based
          upon  management's  periodic review of the collectibility of the loans
          in  light  of historical experience, the nature and volume of the loan
          portfolio,  adverse  situations that may affect the borrower's ability
          to  repay, estimated value of any underlying collateral and prevailing
          economic  conditions.  This  evaluation is inherently subjective as it
          requires  estimates  that  are  susceptible to significant revision as
          more  information becomes available. In addition, regulatory agencies,
          as  an integral part of their examination process, periodically review
          the  Company's  allowance for loan losses, and may require the Company
          to  make  additions  to  the  allowance  based on their judgment about
          information  available  to  them  at  the  time of their examinations.

          A  loan is considered impaired when it is probable the Company will be
          unable  to  collect  all  principal  and  interest  payments  due  in
          accordance  with the contractual terms of the loan agreement. Impaired
          loans are measured by either the present value of expected future cash
          flows  discounted  at  the  loan's effective interest rate, the loan's
          obtainable  market  price,  or the fair value of the collateral if the
          loan  is  collateral  dependent. The amount of impairment, if any, and
          any  subsequent changes are included in the allowance for loan losses.

         PREMISES  AND  EQUIPMENT

          Land  is carried at cost. Buildings and equipment are carried at cost,
          less  accumulated  depreciation  computed  on the straight-line method
          over  the  estimated  useful  lives.

                                                             YEARS
                                                             -----

          Buildings  and  improvements                       10-39
          Furniture,  fixtures  and  equipment                 3-7


         INVESTMENT IN UNCONSOLIDATED SUBSIDIARY

          First  Community Bank of Southwest Georgia owned a 50% equity interest
          in Empire Financial Services, Inc. of Milledgeville, Georgia (Empire),
          a  commercial  mortgage  origination  and  servicing organization that
          serves  various  financial  institutions  throughout  the southeastern
          United  States, including the Banks. This investment was accounted for
          under  the  equity  method. On November 30, 2001, the Company sold its
          entire  interest  in  Empire  to  a  third  party  for  $1.8  million.

         FORECLOSED  ASSETS

          Foreclosed  assets  represent  other  real  estate  owned  and  other
          repossessions  acquired  through,  or  in lieu of, loan foreclosure or
          other proceedings. Foreclosed assets are held for sale and are carried
          at  the lower of cost or fair value less estimated disposal costs. Any
          write-down  to fair value at the time of transfer to foreclosed assets
          is charged to the allowance for loan losses. Revenue and expenses from
          operations  and changes in the valuation allowance are included in net
          expenses  from  foreclosed  assets.


                                       40
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         INCOME  TAXES

          Deferred  income  tax  assets and liabilities are determined using the
          balance sheet method. Under this method, the net deferred tax asset or
          liability  is  determined  based  on  the tax effects of the temporary
          differences  between  the  book  and  tax bases of the various balance
          sheet  assets and liabilities and gives current recognition to changes
          in  tax  rates  and  laws.

         REAL  ESTATE  INVESTMENT  TRUSTS

          In 1999, the Company formed two real estate investment trusts (REIT's)
          and  two  intermediate  REIT  holding companies as subsidiaries of The
          Park  Avenue  Bank  and First Community Bank of Southwest Georgia. The
          REIT's  were  established  to realize state income tax benefits and to
          provide  the  two  banks  with  ready  access  to  capital  markets if
          additional  capital  were  needed.  The  REIT  holding  companies were
          established to provide assistance in managing the Company's investment
          in  the REIT's. To comply with Federal tax law, a minority interest in
          the non-voting, cumulative preferred stock of the REIT's was issued to
          certain directors, officers and employees of the Company. The $500 par
          value  preferred  stock pays an 8% annual dividend. The total minority
          interest  of  the REIT's included in other liabilities was $126,000 as
          of  December  31,  2001  and  2000.

         STOCK  COMPENSATION  PLANS

          Statement of Financial Accounting Standards (SFAS) No. 123, Accounting
          for  Stock-Based Compensation, encourages all entities to adopt a fair
          value  based  method  of  accounting  for  employee stock compensation
          plans,  whereby  compensation cost is measured at the grant date based
          on  the  value of the award and is recognized over the service period,
          which is usually the vesting period. However, it also allows an entity
          to  continue  to  measure  compensation cost for those plans using the
          intrinsic  value  based  method of accounting prescribed by Accounting
          Principles  Board  Opinion  No.  25,  Accounting  for  Stock Issued to
          Employees,  whereby  compensation  cost  is the excess, if any, of the
          quoted  market price of the stock at the grant date over the amount an
          employee must pay to acquire the stock. Stock options issued under the
          Company's stock option plan have no intrinsic value at the grant date,
          and  under Opinion No. 25 no compensation cost is recognized for them.
          The Company has elected to continue with the accounting methodology in
          Opinion No. 25 and, as a result, has provided pro forma disclosures of
          net  income  and  earnings  per share and other disclosures, as if the
          fair  value  based  method  of  accounting  had  been  applied.

         INCOME  AND  EXPENSE  RECOGNITION

          Items  of  income  and  expense  (including  advertising  costs)  are
          recognized  using  the  accrual  basis  of accounting, except for some
          immaterial  amounts  that  are  recognized  when  received  or  paid.

         EARNINGS  PER  SHARE

          Basic  earnings  per  share are computed by dividing net income by the
          weighted-average number of shares of common stock outstanding. Diluted
          earnings  per  share are computed by dividing net income by the sum of
          the  weighted-average number of shares of common stock outstanding and
          potential  common  shares.  Potential  common  shares consist of stock
          options.


                                       41
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         COMPREHENSIVE  INCOME  (LOSS)

          Accounting  principles  generally  require  that  recognized  revenue,
          expenses, gains and losses be included in net income. Although certain
          changes in assets and liabilities, such as unrealized gains and losses
          on available-for-sale securities, are reported as a separate component
          of the equity section of the balance sheet, such items, along with net
          income,  are  components  of  comprehensive  income.

         RECENT  ACCOUNTING  DEVELOPMENTS

          In  June  1998, the Financial Accounting Standards Board (FASB) issued
          SFAS  No.  133,  Accounting  for  Derivative  Instruments  and Hedging
          Activities,  effective for fiscal years beginning after June 15, 2000.
          This  Statement  establishes  accounting  and  reporting standards for
          derivative  instruments  and  hedging  activities,  including  certain
          derivative  instruments embedded in other contracts, and requires that
          an  entity  recognize  all derivatives as assets or liabilities in the
          balance  sheet  and  measure them at fair value. If certain conditions
          are met, an entity may elect to designate a derivative as follows: (a)
          a  hedge  of the exposure to changes in the fair value of a recognized
          asset  or liability or an unrecognized firm commitment, (b) a hedge of
          the  exposure  to  variable cash flows of a forecasted transaction, or
          (c)  a  hedge of the foreign currency exposure of an unrecognized firm
          commitment,  an  available-for-sale  security,  a  foreign  currency
          denominated  forecasted  transaction, or a net investment in a foreign
          operation. The Statement generally provides for matching the timing of
          the  recognition  of  the  gain  or  loss on derivatives designated as
          hedging  instruments  with  the recognition of the changes in the fair
          value  of  the item being hedged. Depending on the type of hedge, such
          recognition  will  be  in  either  net  income  or other comprehensive
          income.  For  a  derivative  not  designated  as a hedging instrument,
          changes  in  fair value will be recognized in net income in the period
          of change. Management adopted SFAS No. 133 on January 1, 2001, with no
          material  impact  on  the  Company's financial condition or results of
          operations.

         DELAYED  ADOPTION  OF  FASB  STATEMENT

          In June 2001, the FASB issued SFAS No. 141, Business Combinations, and
          SFAS  No.  142,  Goodwill  and  Other  Intangible Assets. SFAS No. 141
          requires  that  all  business  combinations consummated after June 30,
          2001  be  accounted  for by the purchase method unless the combination
          was  initiated on or prior to that date and it meets the conditions to
          be accounted for by the pooling-of-interests method in accordance with
          APB Opinion No. 16, Business Combinations. SFAS No. 142 is required to
          be  applied in years beginning after December 15, 2001. Under SFAS No.
          142,  goodwill  and  intangible  assets  that management concludes has
          indefinite  useful  lives  will  no  longer  be amortized, but will be
          subject  to  impairment  tests performed at least annually. Also, upon
          initial application, the Company is required to perform a transitional
          impairment  test  of  all previously recognized goodwill and to assign
          all  recognized  assets  and  liabilities  to  reporting  units. Other
          intangible  assets  will  continue  to  be amortized over their useful
          lives  as  determined  at  the  date  of  initial  application.

          The Company will adopt SFAS No., 142 beginning in the first quarter of
          2002. Application of the nonamortization provisions of SFAS No. 142 is
          expected  to result in an increase in net income of $408,635 ($.04 per
          basic  and  diluted  share)  per  year.  During 2002, the Company will
          perform  the  first  of  the required impairment tests of goodwill and
          indefinite  lived  intangible  assets, but has not yet determined what
          effect  those test will have on the earnings and financial position of
          the  Company.


                                       42
<PAGE>
     NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

--------------------------------------------------------------------------------

NOTE 2.  BUSINESS  COMBINATIONS

          At the close of business on December 29, 2000, the Company consummated
          its  merger  with  Friendship  Community  Bank  (Friendship).  This
          transaction  was accounted for under the purchase method of accounting
          for  business  combinations.  In  an all cash transaction, the Company
          acquired 100% of Friendship's outstanding common stock for $7,667,280.
          The excess cost over the net assets acquired of Friendship amounted to
          $4,407,434.

          Following  is a summary of the assets acquired and liabilities assumed
          in  connection  with  the  Friendship  business  combination.

<TABLE>
<CAPTION>
<S>                                           <C>
  Cash and due from banks                     $ 1,526,565
  Interest-bearing deposits with other banks      220,844
  Federal funds sold                           10,075,000
  Investment securities                        12,596,913
  Loans, net                                   22,020,968
  Other assets                                  2,223,554
  Deposits                                     44,365,697
  Other liabilities                             1,038,301
</TABLE>

          Since this transaction became effective after the last business day of
          the  year,  none  of  the  results  of  operations  for Friendship are
          included  in  the  Company's consolidated statements of income for the
          years  ended  December  31,  2000  and  1999.  The following unaudited
          summary information presents the consolidated results of operations of
          the  Company  on a pro forma basis, as if Friendship had been acquired
          on  January  1,  2000.  The  pro  forma  summary  information does not
          necessarily  reflect  the  results  of  operations  that  would  have
          occurred,  if  the  acquisitions  had occurred at the beginning of the
          period  presented,  or  of  the results which may occur in the future.

<TABLE>
<CAPTION>
<S>                              <C>
  Interest income                $60,672,394
  Interest expense                30,060,828
                                 -----------
  Net interest income             30,611,566
  Provision for loan losses        4,134,663
  Noninterest income               6,030,674
  Noninterest expense             23,545,687
                                 -----------
  Income before income taxes       8,961,890
  Income tax expense               3,034,476
                                 -----------
  Net income                     $ 5,927,414
                                 ===========

  Net income per share           $      0.62
                                 ===========
  Net income per share, diluted  $      0.62
                                 ===========
</TABLE>

          In  2001,  Friendship's  Florida  bank  charter  was  surrendered  and
          Friendship  became  a  Florida  branch  of  The  Park  Avenue  Bank.


                                       43
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 3.  INVESTMENT  SECURITIES

          The  amortized  cost  and  approximate  fair  values of the investment
          portfolio  are  summarized  as  follows:

<TABLE>
<CAPTION>
                                                    GROSS       GROSS
                                     AMORTIZED    UNREALIZED  UNREALIZED     FAIR
                                        COST        GAINS       LOSSES       VALUE
                                    ------------  ----------  ----------  ------------
<S>                                 <C>           <C>         <C>         <C>
  December 31, 2001:
    U. S. Government and
      agency securities             $ 55,463,937  $1,062,488  $ (22,541)  $ 56,503,884
    State and municipal securities     4,994,307      61,087    (55,659)     4,999,735
    Mortgage-backed securities        32,270,575     222,102   (293,656)    32,199,021
    Corporate debt securities          8,398,990       2,399    (12,593)     8,388,796
    Marketable equity securities       4,912,193     121,763   (207,036)     4,826,920
    Restricted and other equity
      securities                       6,535,779           -          -      6,535,779
                                    ------------  ----------  ----------  ------------
                                    $112,575,781  $1,469,839  $(591,485)  $113,454,135
                                    ============  ==========  ==========  ============
December 31, 2000:
  U. S. Government and
    agency securities               $ 51,246,474  $   44,522  $(260,411)  $ 51,030,585
  State and municipal securities       4,964,322      21,610    (18,410)     4,967,522
  Mortgage-backed securities          21,274,968      72,954   (220,961)    21,126,961
  Marketable equity securities         1,138,561   1,881,268   (203,246)     2,816,583
  Restricted and other equity
    securities                         4,983,179           -          -      4,983,179
                                    ------------  ----------  ----------  ------------
                                    $ 83,607,504  $2,020,354  $(703,028)  $ 84,924,830
                                    ============  ==========  ==========  ============
</TABLE>

          Included  in  restricted  and  other equity securities at December 31,
          2001 and 2000, are the Banks' holdings of stock in the Federal Reserve
          Bank  of  Atlanta  and  the  Federal  Home  Loan  Bank  of  Atlanta of
          $4,374,800  and  $3,822,200,  respectively.

          The  amortized  cost  and fair value of debt securities as of December
          31,  2001  by  contractual  maturity  are  shown below. Maturities may
          differ  from  contractual  maturities  in  mortgage-backed  securities
          because  the  mortgages  underlying  the  securities  may be called or
          repaid  without any penalties. Equity securities have a perpetual life
          and no stated maturity. Therefore these securities are not included in
          the  maturity  categories  in  the  following  maturity  summary.

<TABLE>
<CAPTION>
                                              AMORTIZED       FAIR
                                                COST         VALUE
                                            ------------  ------------
<S>                                         <C>           <C>
    Due in one year or less                 $ 19,325,299  $ 19,466,691
    Due from one year to five years           20,827,427    21,365,868
    Due from five to ten years                26,865,135    27,274,715
    Due after ten years                        1,839,373     1,785,141
    Mortgage-backed securities                32,270,575    32,199,021
    Marketable equity securities               4,912,193     4,826,920
    Restricted and other equity securities     6,535,779     6,535,779
                                            ------------  ------------
                                            $112,575,781  $113,454,135
                                            ============  ============
</TABLE>

Securities with a carrying value of approximately $57,160,000 and $51,976,000 at
December  31,  2001  and  2000,  respectively,  were  pledged  to  secure public
deposits,  certain  borrowing  arrangements,  and  for  other  purposes.


                                       44
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE  3. INVESTMENT  SECURITIES  (CONTINUED)

          Gains  and  losses on sales and calls of securities available for sale
          for  the  years ended December 31, 2001, 2000, and 1999 consist of the
          following:

<TABLE>
<CAPTION>
                                              2001        2000       1999
                                           -----------  ---------  ---------
<S>                                        <C>          <C>        <C>
  Gross gains on securities transactions   $1,740,846   $  2,886   $  7,827
  Gross losses on securities transactions        (126)   (26,516)   (41,456)
                                           -----------  ---------  ---------
    Net realized gain (loss) on
      securities transactions              $1,740,720   $(23,630)  $(33,629)
                                           ===========  =========  =========
</TABLE>

NOTE  4. LOANS  AND  ALLOWANCE  FOR  LOAN  LOSSES

          The composition of the loan portfolio as of December 31, 2001 and 2000
          is  summarized  as  follows:

<TABLE>
<CAPTION>
                                                           2001           2000
                                                       -------------  -------------
<S>                                                    <C>            <C>
  Commercial and financial                             $ 80,492,791   $ 72,942,398
  Agricultural                                           26,428,296     23,063,510
  Real estate - construction                             63,486,438     40,129,922
  Real estate - mortgage (commercial and residential)   402,988,101    376,000,100
  Installment loans to individuals and other loans       64,212,067     68,544,419
  Overdrafts                                                593,604        335,019
                                                       -------------  -------------
                                                        638,201,297    581,015,368
  Unearned income, net                                     (375,726)      (278,835)
                                                       -------------  -------------
                                                        637,825,571    580,736,533
  Allowance for loan losses                             (15,765,373)    (8,184,641)
                                                       -------------  -------------
                                                       $622,060,198   $572,551,892
                                                       =============  =============
</TABLE>

          Changes  in the allowance for loan losses for the years ended December
          31,  2001,  2000  and  1999  are  as  follows:

<TABLE>
<CAPTION>
                                          2001          2000          1999
                                      ------------  ------------  ------------
<S>                                   <C>           <C>           <C>
Balance, beginning of year            $ 8,184,641   $ 5,037,074   $ 5,171,905
  Provision charged to operations      12,220,250     4,098,663       985,188
  Loans charged-off                    (4,832,799)   (1,583,833)   (1,216,662)
  Recoveries                              193,281       182,292        96,643
  Purchase acquisition of Friendship            -       450,445             -
                                      ------------  ------------  ------------
Balance, end of year                  $15,765,373   $ 8,184,641   $ 5,037,074
                                      ============  ============  ============
</TABLE>

          At  December  31,  2001  and  2000,  the  total recorded investment in
          impaired  loans  amounted to approximately $10,581,000 and $6,451,000,
          respectively.  These  loans had a related allowance for loan losses of
          approximately $4,819,000 and $1,303,000 at December 31, 2001 and 2000,
          respectively. The average recorded investment in impaired loans during
          2001,  2000  and  1999  was  approximately $8,839,000, $2,486,000, and
          $1,981,000, respectively. Interest income recognized on impaired loans
          for  cash  payments received in 2001, 2000, and 1999 was approximately
          $59,500,  $115,000,  and  $117,000,  respectively.


                                       45
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE  4. LOANS  AND  ALLOWANCE  FOR  LOAN  LOSSES  (CONTINUED)

          In  the  ordinary course of business, the Company has granted loans to
          certain  related  parties, including executive officers, directors and
          their affiliates. The interest rates on these loans were substantially
          the  same  as  rates  prevailing  at  the  time of the transaction and
          repayment terms are customary for the type of loan. Changes in related
          party  loans  for  the  year  ended  December 31, 2001 are as follows:

<TABLE>
<CAPTION>
<S>                                               <C>
Balance, beginning of year                        $ 19,108,106
  Advances                                           6,199,184
  Repayments                                        (1,247,224)
  Transactions due to changes in related parties   (11,137,272)
                                                  -------------
Balance, end of year                              $ 12,922,794
                                                  =============
</TABLE>

NOTE  5. PREMISES  AND  EQUIPMENT

          Premises and equipment as of December 31, 2001 and 2000 are summarized
          as  follows:

<TABLE>
<CAPTION>
                                         2001          2000
                                     ------------  ------------
<S>                                  <C>           <C>
  Land                               $ 4,572,447   $ 4,610,555
  Buildings and improvements          16,636,114    14,407,290
  Furniture, fixtures and equipment   11,106,285     9,648,889
  Construction in progress               158,862       486,236
                                     ------------  ------------
                                      32,473,708    29,152,970
  Less accumulated depreciation       (8,965,625)   (6,772,245)
                                     ------------  ------------
                                     $23,508,083   $22,380,725
                                     ============  ============
</TABLE>

          Depreciation  expense  amounted  to  $2,190,192,  $1,588,796,  and
          $1,412,249,  for  the  years  ended December 31, 2001, 2000, and 1999,
          respectively.

          With  the  exception of the main banking office in Ocala, Florida, the
          Company owns and operates all of its banking offices. The leased Ocala
          office is under a five-year agreement for a base amount plus an annual
          indexed adjustment. During 2002, the Company will pay $86,820 to lease
          the  property.  The  agreement  will  expire  at  the end of May 2003.

          At  December  31,  2001,  the Company had an operations building under
          construction  in  Valdosta,  Georgia.  The  Company  is  committed  to
          complete  this  project  during 2002 for a total cost of approximately
          $1,355,000.


                                       46
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE  6.  DEPOSITS

          Interest-bearing  deposits  as  of  December  31,  2001  and  2000 are
          summarized  as  follows:

<TABLE>
<CAPTION>
                               2001          2000
                           ------------  ------------
<S>                        <C>           <C>
  Interest-bearing demand  $171,769,563  $125,714,275
  Savings                    36,284,941    32,859,370
  Time, $100,000 and over   157,400,594   136,786,504
  Other time                273,449,044   271,140,566
                           ------------  ------------
                           $638,904,142  $566,500,715
                           ============  ============
</TABLE>

          Interest  expense  on  deposits for the years ended December 31, 2001,
          2000  and  1999  are  summarized  as  follows:

<TABLE>
<CAPTION>
                              2001         2000         1999
                           -----------  -----------  -----------
<S>                        <C>          <C>          <C>
  Interest-bearing demand  $ 3,623,765  $ 3,357,422  $ 2,977,692
  Savings                      732,517      724,968      805,384
  Time, $100,000 and over    8,875,059    6,872,195    4,707,018
  Other time                18,137,237   13,255,374   11,424,044
                           -----------  -----------  -----------
                           $31,368,578  $24,209,959  $19,914,138
                           ===========  ===========  ===========
</TABLE>

          The  scheduled maturities of time deposits at December 31, 2001 are as
          follows:

<TABLE>
<CAPTION>
YEAR                             AMOUNT
----                          ------------
<S>                           <C>
2002                          $350,419,590
2003                            50,505,195
2004                            10,418,195
2005                            15,461,688
2006                             3,322,053
Thereafter                         722,917
                              ------------
                               430,849,638
                              ============
</TABLE>


                                       47
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 7.  SECURITIES  SOLD  UNDER  REPURCHASE  AGREEMENTS

          Securities  sold  under  repurchase  agreements,  which  are  secured
          borrowings,  generally  mature  within  one  day  to  a  week from the
          transaction  date.  Securities  sold  under  repurchase agreements are
          reflected  at  the  amount  of  cash  received  in connection with the
          transactions.  The  Company  may  be  required  to  provide additional
          collateral  based  on the fair value of the underlying securities. The
          Company  monitors  the  fair  value  of the underlying securities on a
          daily  basis.  Securities sold under repurchase agreements at December
          31,  2001  and  2000  were  $15,708,621 and $12,165,591, respectively.


NOTE 8.  ADVANCES  FROM  THE  FEDERAL  HOME  LOAN  BANK

          Listed  below  is a summary of the advances from the Federal Home Loan
          Bank  of  Atlanta  (FHLB)  as  of  December  31,  2001  and  2000.

<TABLE>
<CAPTION>
                                                                2001         2000
                                                             -----------  -----------
<S>                                                          <C>          <C>
  Advances with interest at adjustable rates,
    ranging from 1.91% to 2.17% at December 31, 2001,
    due at various dates from May 2003 to
    September 2009.                                          $ 5,541,580  $ 5,541,580
  Amortizing advances with interest at fixed rates,
    ranging from 5.20% to 7.24% at December 31, 2001,
    due in varying amounts and at various intervals through
    August 2010.                                               3,536,898    5,239,702
  Advances with interest at fixed rates, ranging from 5.74%
    to 6.51% at December 31, 2001, due at various dates
    from February 2002 to February 2006.                       2,050,000   20,820,000
  Advances with interest at fixed rates, ranging from 5.46%
    to 6.77% at December 31, 2001, convertible to
    variable rates at the option of the FHLB, due at
    various dates from March 2003 to March 2010.              27,100,000   27,100,000
                                                             -----------  -----------
                                                             $38,228,478  $58,701,282
                                                             ===========  ===========
</TABLE>

          The  Banks  have  pledged  qualifying residential real estate mortgage
          loans  as  collateral  on  the  advances  from  the  FHLB.

          Contractual  maturities  of the advances from the FHLB at December 31,
          2001  are  as  follows:

<TABLE>
<CAPTION>
YEAR                             AMOUNT
----                          -----------
<S>                           <C>
2002                          $ 2,283,071
2003                           12,756,503
2004                              505,059
2005                            3,030,288
2006                            1,038,771
Thereafter                     18,614,786
                              -----------
                               38,228,478
                              ===========
</TABLE>


                                       48
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 9.  GUARANTEED  PREFERRED  BENEFICIAL  INTERESTS  IN  DEBENTURES

          On  November  28,  2001,  PAB  Bankshares  Capital Trust I (PAB Trust)
          issued  $10 million of Floating Rate Capital Securities, also referred
          to  as  "trust  preferred securities". The Company formed PAB Trust, a
          statutory  business  trust  created  under  the  laws  of the State of
          Delaware,  for  the sole purpose of issuing the Capital Securities and
          investing the proceeds in Floating Rate Junior Subordinated Debentures
          issued  by  the  Company.  The  interest  rate  on  both  the  Capital
          Securities  and  the  Debentures  is reset semi-annually at LIBOR plus
          3.75%  (currently 6.007%) with a rate cap of 11.0% through December 8,
          2006.  The  Company entered into agreements which, taken collectively,
          fully,  irrevocably  and  unconditionally guarantee, on a subordinated
          basis,  all  of  PAB Trust's obligations under the Capital Securities.
          PAB  Trust's  sole  asset is the Debentures issued by the Company. The
          Debentures will mature on December 8, 2031, but are callable at par by
          the  Company  in  whole or in part anytime after December 8, 2006. The
          proceeds from the issuance of these Capital Securities qualify as Tier
          1  capital  under the risk-based capital guidelines established by the
          Federal  Reserve.


NOTE 10. OTHER  BORROWINGS

          At  December  31,  2000,  the  Company  owed  $7,667,280 to the former
          stockholders of Friendship (see Note 2). During 2001, the Company used
          the  line  of  credit  described  below  to  finance  100%  of  this
          acquisition.

          On August 31, 2000, the Company obtained a 3-year, $15 million line of
          credit  with  The Bankers Bank of Atlanta, Georgia, for the purpose of
          providing  operating  capital  and  to  finance  potential  purchase
          acquisitions. The Company had not drawn on the line of credit prior to
          the  acquisition of Friendship. On November 28, 2001, the Company paid
          off  and  closed  this  line  of  credit  with  the  proceeds from the
          Debentures  described  in  Note  9.

NOTE 11. INCOME  TAXES

          The  components of income tax expense for the years ended December 31,
          2001,  2000  and  1999  are  as  follows:

<TABLE>
<CAPTION>
                2001         2000         1999
            ------------  -----------  -----------
<S>         <C>           <C>          <C>
  Current   $ 3,092,629   $3,876,935   $4,189,078
  Deferred   (3,343,255)    (968,127)    (184,024)
            ------------  -----------  -----------
            $  (250,626)  $2,908,808   $4,005,054
            ============  ===========  ===========
</TABLE>


                                       49
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 11. INCOME  TAXES  (CONTINUED)

          The  Company's income tax expense differs from the amounts computed by
          applying  the  Federal  income  tax  statutory  rates to income before
          income  taxes. A reconciliation of the differences for the years ended
          December  31,  2001,  2000  and  1999  follows.

<TABLE>
<CAPTION>
                                             2001        2000         1999
                                          ----------  -----------  -----------
<S>                                       <C>         <C>          <C>

  Tax at statutory rate                   $ (35,178)  $2,936,038   $4,317,296
    Increase (decrease) resulting from:
      State income tax, net of
        Federal tax benefit                       -            -      172,459
      Tax exempt interest and dividend
        exclusion                          (229,875)    (270,909)    (358,884)
      Amortization of goodwill              118,681       43,755       43,746
      Increase in cash value of bank-
        owned life insurance policies      (162,369)     (46,177)    (196,283)
      Deferred tax adjustment               (36,847)     159,422            -
      Prior year accrual differences         61,459      123,174            -
      Other items, net                       33,503      (36,495)      26,720
                                          ----------  -----------  -----------
        Income tax expense (benefit)      $(250,626)  $2,908,808   $4,005,054
                                          ==========  ===========  ===========
</TABLE>

          The  components of deferred income taxes at December 31, 2001 and 2000
          are  as  follows:

<TABLE>
<CAPTION>
                                                       2001        2000
                                                    ----------  ----------
<S>                                                 <C>         <C>
  Deferred tax assets:
    Allowance for loan losses                       $5,257,913  $2,524,297
    Purchase accounting adjustments                    390,779     525,954
    Deferred compensation                              620,439     218,788
    Accrued severance payable                          505,372           -
    Reserve for uncollectible interest                 225,375     109,820
                                                    ----------  ----------
                                                     6,999,878   3,378,859
                                                    ----------  ----------
  Deferred tax liabilities:
    Premises and equipment                             740,118     577,652
    Deferred loan origination cost                     322,229     187,965
    Unrealized gain on securities available for sale   298,639     447,889
    Core deposit intangible                                  -       6,520
    Other                                                    -      12,446
                                                    ----------  ----------
                                                     1,360,986   1,232,472
                                                    ----------  ----------

        Net deferred tax assets                     $5,638,892  $2,146,387
                                                    ==========  ==========
</TABLE>


                                       50
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 12. EMPLOYEE  BENEFIT  PLANS

          The  Company  provides  an  employee  401(k)  profit  sharing plan for
          qualified  employees.  The 401(k) plan allows a participant to defer a
          portion of his compensation and provides that the Company will match a
          portion  of  the  deferred  compensation.  The  plan also provides for
          nonelective  and discretionary profit sharing contributions to be made
          at  the  sole discretion of the Board of Directors. Approximately 3.5%
          of  the  participants'  eligible  compensation  was  accrued  as  the
          discretionary  profit  sharing contributions for 2001, 2000, and 1999.
          All  full-time  and part-time employees are eligible to participate in
          the  plan  provided  they  have  met  the  eligibility  requirements.
          Generally,  a  participant  must  have  completed  twelve  months  of
          employment  with a minimum of 1,000 hours. Aggregate expense under the
          plan  charged  to  operations  during 2001, 2000, and 1999 amounted to
          approximately  $553,000,  $595,000,  and  $433,000,  respectively.


NOTE 13. DEFERRED  COMPENSATION  AND  RETIREMENT  PLANS

          In  years  past,  the  Company  and  the  Banks  entered into separate
          deferred  compensation  arrangements  with certain officers. The plans
          called for the deferred compensation to be payable over a fifteen-year
          period  beginning  at  the  earlier of age 65, death, or disability of
          each officer. The estimated present value of the deferred compensation
          has been accrued over each officer's remaining expected term of active
          employment.  The  Banks  purchased  life  insurance policies that they
          intend to use to finance this liability. The accrued liability related
          to deferred compensation plans was $1,824,000 and $644,000 at December
          31,  2001  and  2000,  respectively.  In  2001, the Board of Directors
          elected to terminate these plans. At that time, the Company incurred a
          one-time  cost  of  approximately $898,000 to fully fund the remaining
          liability  covering  two executive officers that retired at the end of
          the  year.  Aggregate  expense  under  the deferred compensation plans
          charged  to  salaries and employee benefits expense were approximately
          $1,156,000  (including  the  $898,000  expense  for  the  two retiring
          executive officers), $177,000 and $382,000 during 2001, 2000 and 1999,
          respectively.

          In  2001, the Company entered into separate retirement agreements with
          two  executive  officers  that  effectively  terminated their existing
          employment  agreements  and  committed  to  pay  each officer a 3-year
          severance  package  beginning  in  January  2002.  The Company accrued
          approximately  $1,291,000  representing the net present value of these
          future  obligations with the expense included in salaries and employee
          benefits  for  the  year  ended  December  31,  2001.


                                       51
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 14. OTHER  INCOME  AND  EXPENSES

          Other  fee income for the years ended December 31, 2001, 2000 and 1999
          are  summarized  as  follows:

<TABLE>
<CAPTION>
                                     2001        2000       1999
                                  ----------  ----------  --------
<S>                               <C>         <C>         <C>
  Mortgage origination fees       $  702,329  $  439,327  $569,121
  Insurance commissions and fees     161,015     302,277   219,893
  Brokerage commissions and fees     306,322     125,241         -
  Other fee income                   355,243     238,322   125,973
                                  ----------  ----------  --------
    Total other fee income        $1,524,909  $1,105,167  $914,987
                                  ==========  ==========  ========
</TABLE>

          Other  noninterest  income for the years ended December 31, 2001, 2000
          and  1999  are  summarized  as  follows:

<TABLE>
<CAPTION>
                                                  2001         2000       1999
                                               -----------  ----------  --------
<S>                                            <C>          <C>         <C>
  Earnings on bank-owned life insurance        $  525,181   $ 139,958   $540,695
  Gain (loss) on disposal of assets                  (839)   (153,817)    10,889
  Gain on sale of interest in unconsolidated
    subsidiary (Empire)                         1,461,739           -          -
  Other noninterest income                        506,109     245,149    316,893
                                               -----------  ----------  --------
     Total other noninterest income            $2,492,190   $ 231,290   $868,477
                                               ===========  ==========  ========
</TABLE>

          Other  noninterest expense for the years ended December 31, 2001, 2000
          and  1999  are  summarized  as  follows:

<TABLE>
<CAPTION>
                                           2001        2000        1999
                                        ----------  ----------  ----------
<S>                                     <C>         <C>         <C>
  Advertising and business development  $  601,045  $  526,016  $  383,687
  Supplies and printing                    953,385     630,892     512,247
  Postage and courier                      613,213     459,059     467,113
  Legal and accounting fees                436,915     469,549     427,428
  Outside consulting fees                  346,324     436,647     228,875
  Director and committee fees              422,560     568,296     480,640
  Merger and acquisition costs               7,494      49,292     534,523
  Conversion and consolidation costs       312,933     833,139           -
  Other noninterest expenses             3,321,324   3,129,276   2,653,438
                                        ----------  ----------  ----------
    Total other noninterest expense     $7,015,193  $7,102,166  $5,687,951
                                        ==========  ==========  ==========
</TABLE>


                                       52
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 15. EARNINGS  PER  COMMON  SHARE

          The  components used to calculate basic and diluted earnings per share
          for the years ended December 31, 2001, 2000 and 1999 are summarized as
          follows:

<TABLE>
<CAPTION>
                                              2001        2000        1999
                                           ----------  ----------  ----------
<S>                                        <C>         <C>         <C>
  Basic earnings per share:
    Net income                             $  147,160  $5,726,597  $8,692,876
                                           ----------  ----------  ----------
    Weighted average common shares
      outstanding                           9,482,709   9,528,387   9,612,634
                                           ----------  ----------  ----------

    Earnings per common share              $     0.02  $     0.60  $     0.90
                                           ==========  ==========  ==========

  Diluted earnings per share:
    Net income                             $  147,160  $5,726,597  $8,692,876
                                           ----------  ----------  ----------
    Weighted average common shares
      outstanding                           9,482,709   9,528,387   9,612,634
    Effect of dilutive stock options           67,371      70,403     136,528
                                           ----------  ----------  ----------
    Weighted average diluted common
      shares outstanding                    9,550,080   9,598,790   9,749,162
                                           ----------  ----------  ----------

    Earnings per common share              $     0.02  $     0.60  $     0.89
                                           ==========  ==========  ==========
</TABLE>

NOTE 16. DIRECTORS  DEFERRED  STOCK  PURCHASE  PLAN

          In  1994,  the  Company's stockholders approved the Directors Deferred
          Stock  Purchase  Plan  (the  Director  Plan),  which  provides  that a
          director  of the Company or any subsidiary may elect to receive shares
          of  common  stock  of  the  Company  in  lieu of the cash compensation
          otherwise payable as director's fees for services rendered as a member
          of  the Board of Directors or any committee thereof. The Director Plan
          expired  in  January  1999.


NOTE 17. DIVIDEND  REINVESTMENT  AND  COMMON  STOCK  PURCHASE  PLAN

          In  1993,  the Board of Directors approved a dividend reinvestment and
          common  stock  purchase  plan.  The  plan  is  designed  to  provide
          stockholders  with  a  simple  and  convenient  means to reinvest cash
          dividends  and  make additional cash purchases of the Company's common
          stock.  The  Company  acquires  shares in the open market as needed to
          fill  orders for dividend reinvestment and stock purchases in the plan
          rather  than  issuing  additional  shares  of  common  stock.


                                       53
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 18. STOCK  OPTION  PLANS

          The  Company  has  two  fixed  stock  option  plans under which it has
          granted  options  to  its  employees  and directors to purchase common
          stock  at  the  fair  market  price  on  the date of grant. Both plans
          provide  for  "incentive  stock  options"  and  "non-qualified  stock
          options".  The  incentive  stock options are intended to qualify under
          Section  422 of the Internal Revenue Code for favorable tax treatment.
          Under  the 1994 Employee Stock Option Plan, the Company's stockholders
          authorized the Board of Directors to grant up to 399,750 stock options
          to  employees  of  the Company as part of an incentive plan to attract
          and  retain  key personnel in the Company. Under the 1999 Stock Option
          Plan,  the Company's stockholders authorized the Board of Directors to
          grant up to 600,000 stock options to directors, employees, consultants
          and  advisors  of  the  Company.

          A  summary  of the status of the two fixed plans at December 31, 2001,
          2000, and 1999 and changes during the years ended on those dates is as
          follows:

<TABLE>
<CAPTION>
                                       2001                   2000                  1999
                               ---------------------  ---------------------  --------------------
                                           WEIGHTED-              WEIGHTED-             WEIGHTED-
                                             AVERAGE                AVERAGE               AVERAGE
                                            EXERCISE               EXERCISE              EXERCISE
                                  NUMBER       PRICE     NUMBER       PRICE     NUMBER      PRICE
                               ---------  ----------  ---------  ----------  --------  ----------
<S>                            <C>        <C>         <C>        <C>         <C>       <C>
Under option, beginning
  of year                       523,650   $    11.58   440,157   $    11.19  347,103   $     8.76
  Granted                       288,750        10.19    88,950        13.40  121,750        16.84
  Exercised                     (31,500)        6.25    (4,157)        7.10   (3,876)        6.95
  Forfeited                     (49,265)       12.25    (1,300)       16.09  (24,820)        9.21
                               ---------  ----------  ---------  ----------  --------  ----------
Under option, end of year       731,635   $    11.22   523,650   $    11.58  440,157   $    11.19
                               =========  ==========  =========  ==========  ========  ==========

Exercisable at end of year      355,290   $    11.13   305,929   $    10.68  246,959   $    10.62
                               =========  ==========  =========  ==========  ========  ==========

Weighted-average fair value
  per option of options
  granted during year                     $     2.69             $     4.53            $     6.59
                                          ==========             ==========            ==========
</TABLE>

          A  further  summary of the options outstanding at December 31, 2001 is
          as  follows:

<TABLE>
<CAPTION>
                        OPTIONS  OUTSTANDING        OPTIONS EXERCISABLE
                  --------------------------------  -------------------
                             WEIGHTED-    WEIGHTED-           WEIGHTED-
                              AVERAGE     AVERAGE              AVERAGE
    RANGE OF                CONTRACTUAL   EXERCISE            EXERCISE
EXERCISE PRICES    NUMBER  LIFE IN YEARS   PRICE     NUMBER    PRICE
----------------  --------------------------------  -------------------
<S>               <C>      <C>            <C>       <C>      <C>
$   6.25 - 9.38   184,700           6.47  $   7.74   98,500  $     6.31
    9.63 - 10.20  129,200           5.16     10.06  112,674       10.06
   10.60 - 10.60  155,305           9.74     10.60        -           -
   10.71 - 15.88  146,680           7.23     12.80   51,976       12.78
   16.25 - 23.13  115,750           7.52     16.93   92,140       16.66
                  -------                           -------
                  731,635           7.25     11.22  355,290       11.13
                  =======                           =======
</TABLE>


                                       54
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 18.  STOCK  OPTION  PLANS  (CONTINUED)

          The  Company  applies  Opinion  25  and  related  Interpretations  in
          accounting  for  the  stock  option plan. Accordingly, no compensation
          cost  has  been recognized. Had compensation cost for the stock option
          plan  been  determined  based on the fair value at the grant dates for
          awards  under  the  plan consistent with the method prescribed by SFAS
          No. 123, net income and earnings per share would have been adjusted to
          the  pro  forma  amounts  indicated below for the years ended December
          31, 2001, 2000 and 1999.

<TABLE>
<CAPTION>
                                   2001                      2000                      1999
                        -------------------------  ------------------------  ------------------------
                                         BASIC                    BASIC                      BASIC
                             NET        EARNINGS       NET       EARNINGS       NET        EARNINGS
                           INCOME      PER SHARE     INCOME      PER SHARE     INCOME      PER SHARE
                        ------------  -----------  -----------  -----------  -----------  -----------
<S>                     <C>           <C>          <C>          <C>          <C>          <C>

As reported             $   147,160   $     0.02   $5,726,597   $     0.60   $8,692,876   $     0.90
  Stock based
    compensation, net of
    related tax effect     (324,816)       (0.04)    (287,254)       (0.03)    (741,218)       (0.07)
                        ------------  -----------  -----------  -----------  -----------  -----------
  As adjusted           $  (177,656)  $    (0.02)  $5,439,343   $     0.57   $7,951,658   $     0.83
                        ============  ===========  ===========  ===========  ===========  ===========


                                   2001                      2000                      1999
                        -------------------------  ------------------------  ------------------------
                                        DILUTED                  DILUTED                   DILUTED
                             NET        EARNINGS       NET       EARNINGS       NET        EARNINGS
                           INCOME      PER SHARE     INCOME      PER SHARE     INCOME      PER SHARE
                        ------------  -----------  -----------  -----------  -----------  -----------

As reported             $   147,160   $     0.02   $5,726,597   $     0.60   $8,692,876   $     0.89
  Stock based
    compensation, net of
    related tax effect     (324,816)       (0.04)    (287,254)       (0.03)    (741,218)       (0.07)
                        ------------  -----------  -----------  -----------  -----------  -----------
  As adjusted           $  (177,656)  $    (0.02)  $5,439,343   $     0.57   $7,951,658   $     0.82
                        ============  ===========  ===========  ===========  ===========  ===========
</TABLE>

          The  fair value of each option grant is estimated on the date of grant
          using  the  Black-Scholes  option-pricing  model  with  the  following
          assumptions:

<TABLE>
<CAPTION>
                                       2001       2000       1999
                                     ---------  ---------  ---------
<S>                                  <C>        <C>        <C>
  Risk-free interest rate                5.01%      5.24%      5.39%
  Expected life of the options       10 years   10 years   10 years
  Expected dividends (as a percent
    of the fair value of the stock)      4.40%      4.69%      2.50%
  Expected volatility                   32.56%     45.62%     34.20%
</TABLE>


                                       55
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 19. STOCK  REPURCHASE  PLAN

          In  June 1999, the Board of Directors approved a stock repurchase plan
          whereby  management was authorized to buy back and cancel up to 75,000
          shares  of  the  Company's common stock from the open market. In March
          2000,  the  Board approved to buy back and cancel an additional 50,000
          shares  of  the  Company's  common  stock.  In January 2001, the Board
          approved  to  buy back and cancel another additional 125,000 shares of
          the  Company's  common  stock.  During  2000, the Company acquired and
          canceled  119,616  shares  of  common  stock  for  a  total  cost  of
          $1,512,152.  During  2001,  the  Company acquired and canceled 123,534
          shares  of  common  stock for a total cost of $1,293,808. A balance of
          6,850  shares  remained  available  from  the  plans for repurchase at
          December  31,  2001.


NOTE 20. COMMITMENTS  AND  CONTINGENT  LIABILITIES

          The Company is a party to financial instruments with off-balance sheet
          risk  in  the normal course of business to meet the financing needs of
          its  customers.  These  financial  instruments  include commitments to
          extend  credit, standby letters of credit and credit card commitments.
          Such  commitments involve, to varying degrees, elements of credit risk
          and  interest  rate  risk  in  excess  of the amount recognized in the
          balance  sheets.

          The  Company's  exposure to credit loss in the event of nonperformance
          by  the  other  party  to  the financial instrument for commitments to
          extend  credit,  standby letters of credit and credit card commitments
          is  represented  by  the  contractual amount of those instruments. The
          Company uses the same credit policies in making commitments as it does
          for  on-balance  sheet  instruments.  A  summary  of  the  Company's
          commitments  as  of  December  31,  2001  and  2000  are  as  follows:

<TABLE>
<CAPTION>
                                   2001         2000
                                -----------  -----------
<S>                             <C>          <C>
  Commitments to extend credit  $61,674,000  $58,371,000
  Standby letters of credit     $ 4,189,000  $ 1,083,000
</TABLE>

          Commitments  to  extend credit are agreements to lend to a customer as
          long  as  there  is  no  violation of any condition established in the
          contract. Since many of the commitments are expected to expire without
          being  drawn  upon,  the  total  commitment amounts do not necessarily
          represent future cash requirements. The amount of collateral obtained,
          if  deemed necessary by the Company upon extension of credit, is based
          on  management's  credit  evaluation  of  the  customer.

          Standby  letters  of  credit are conditional commitments issued by the
          Company  to  guarantee the performance of a customer to a third party.
          Those  letters  of  credit  are primarily issued to support public and
          private  borrowing  arrangements.  The credit risk involved in issuing
          letters  of  credit  is  essentially  the  same  as  that  involved in
          extending  loans  to  customers.  Collateral  is required in instances
          which  the  Company  deems  necessary.

          In  the  normal course of business, the Company is involved in various
          legal  proceedings.  In  the  opinion  of  management,  any  liability
          resulting  from  such  proceedings would not have a material effect on
          the  Company's  financial  statements.


                                       56
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE  21. CONCENTRATIONS  OF  CREDIT

          The  Company  originates  commercial,  agricultural,  residential, and
          consumer loans to customers primarily in southern Georgia, south-metro
          Atlanta,  and  central  Florida.  The  ability  of the majority of the
          Company's  customers  to  honor  their  contractual  obligations  is
          dependent  on  the local economies in the geographical areas served by
          the  Company.

          As  of  December  31,  2001,  approximately  73% of the Company's loan
          portfolio  is  concentrated  in  loans  secured  by  real  estate.  A
          substantial portion of these loans are in the Company's primary market
          areas.  In  addition,  a  substantial portion of the other real estate
          owned  is  located  in  those  same markets. Accordingly, the ultimate
          collectibility of the Company's loan portfolio and the recovery of the
          carrying  amount of other real estate owned are susceptible to changes
          in  market  conditions  in  the  Company's  market  areas.  The  other
          significant  concentrations of credit by type of loan are set forth in
          Note  4.


NOTE 22. REGULATORY  MATTERS

          The  Banks  are  subject  to  certain  restrictions  on  the amount of
          dividends  that  may be declared without prior regulatory approval. At
          December  31,  2001,  approximately  $2,736,000 of the Banks' retained
          earnings  were  available  for dividend declaration without regulatory
          approval.

          The  Company  and  the Banks are subject to various regulatory capital
          requirements  administered by the federal banking agencies. Failure to
          meet  minimum capital requirements can initiate certain mandatory, and
          possibly  additional  discretionary,  actions  by  regulators that, if
          undertaken,  could  have  a  direct  material  effect on the financial
          statements.  Under  capital  adequacy  guidelines  and  the regulatory
          framework for prompt corrective action, the Company and the Banks must
          meet specific capital guidelines that involve quantitative measures of
          the  assets,  liabilities,  and  certain  off-balance  sheet  items as
          calculated  under  regulatory  accounting practices. The Company's and
          the  Banks'  capital  amounts  and  classification are also subject to
          qualitative  judgments  by  the  regulators  about  components,  risk
          weightings, and other factors. Prompt corrective action provisions are
          not  applicable  to  bank  holding  companies.

          Quantitative  measures  established  by  regulation  to ensure capital
          adequacy require the Company and the Banks to maintain minimum amounts
          and  ratios of total and Tier I capital to risk-weighted assets and of
          Tier  I  capital  to  average  assets as set forth in the table below.
          Management  believes,  as  of  December  31, 2001, the Company and the
          Banks  meet  all  capital  adequacy  requirements  to  which  they are
          subject.

          As of March 31, 2002, the most recent notification from the regulatory
          authorities  categorized  the  Banks  as  well  capitalized  under the
          regulatory  framework  for prompt corrective action. To be categorized
          as well capitalized, the Banks must maintain minimum Total risk-based,
          Tier  I  risk-based,  and  Tier  I leverage ratios as set forth in the
          following  table.  There  are  no  conditions  or  events  since  that
          notification  that  management  believes  have  changed  the  Banks'
          category.


                                       57
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 22. REGULATORY  MATTERS  (CONTINUED)

          The  actual  capital  amounts  and ratios for the Company and its lead
          bank,  The Park Avenue Bank, are presented in the following table. All
          amounts  have  been  rounded  to  the  nearest  thousand.

<TABLE>
<CAPTION>
                                                                         TO BE WELL
                                                                      CAPITALIZED UNDER
                                                     FOR  CAPITAL     PROMPT  CORRECTIVE
                                   ACTUAL         ADEQUACY  PURPOSES  ACTION  PROVISIONS
                            -------------------  -------------------  -------------------
                              AMOUNT     RATIO     AMOUNT     RATIO     AMOUNT     RATIO
                            -----------  ------  -----------  ------  -----------  ------
<S>                         <C>          <C>     <C>          <C>     <C>          <C>
As of December 31, 2001:
  Total Capital
  to Risk Weighted Assets:
    Consolidated            $76,954,000   12.0%  $51,265,000    8.0%      - N/A -
    The Park Avenue Bank    $34,247,000    9.2%  $29,853,000    8.0%  $37,316,000   10.0%

  Tier 1 Capital
  to Risk Weighted Assets:
    Consolidated            $68,848,000   10.7%  $25,632,000    4.0%      - N/A -
    The Park Avenue Bank    $29,493,000    7.9%  $14,927,000    4.0%  $22,390,000    6.0%

  Tier 1 Capital
  to Average Assets:
    Consolidated            $68,848,000    8.0%  $34,453,000    4.0%      - N/A -
    The Park Avenue Bank    $29,493,000    6.2%  $18,877,000    4.0%  $23,596,000    5.0%

As of December 31, 2000:
  Total Capital
  to Risk Weighted Assets:
    Consolidated            $71,496,000   12.5%  $45,753,000    8.0%      - N/A -
    The Park Avenue Bank    $22,965,000   10.4%  $17,661,000    8.0%  $22,076,000   10.0%

  Tier 1 Capital
  to Risk Weighted Assets:
    Consolidated            $63,592,000   11.1%  $22,877,000    4.0%      - N/A -
    The Park Avenue Bank    $20,425,000    9.3%  $ 8,830,000    4.0%  $13,246,000    6.0%

  Tier 1 Capital
  to Average Assets:
    Consolidated            $63,592,000    8.7%  $29,250,000    4.0%      - N/A -
    The Park Avenue Bank    $20,425,000    7.2%  $11,294,000    4.0%  $14,118,000    5.0%
</TABLE>


                                       58
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 23. FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

          The  fair  value  of a financial instrument is the current amount that
          would  be  exchanged  between  willing parties, other than in a forced
          liquidation.  Fair  value  is best determined based upon quoted market
          prices.  However, in many instances, there are no quoted market prices
          for the Company's various financial instruments. In cases where quoted
          market  prices  are  not available, fair values are based on estimates
          using  present  value  or other valuation techniques. Those techniques
          are  significantly  affected  by  the  assumptions used, including the
          discount  rate  and  estimates  of future cash flows. Accordingly, the
          fair value estimates may not be realized in an immediate settlement of
          the  instrument.  SFAS  No.  107,  Disclosures  about  Fair  Value  of
          Financial  Instruments, excludes certain financial instruments and all
          nonfinancial  instruments  from  its  disclosure  requirements.
          Accordingly,  the  aggregate  fair  value  amounts  presented  may not
          necessarily  represent  the  underlying  fair  value  of  the Company.

          The  following  methods  and  assumptions  were used by the Company in
          estimating  its  fair  value  disclosures  for  financial instruments.

          CASH,  DUE  FROM  BANKS,  INTEREST BEARING DEPOSITS, AND FEDERAL FUNDS
          SOLD
            The  carrying  amounts  of  cash,  due  from banks, interest-bearing
            deposits  in  other  banks, and federal funds sold approximate their
            fair  value.

          INVESTMENT  SECURITIES
            Fair  values  for  securities  are  based on available quoted market
            prices.  The  carrying  values  of equity securities with no readily
            determinable  fair  value  approximate  fair  values.

          LOANS
            For  variable-rate  loans  that  reprice  frequently  and  have  no
            significant change in credit risk, fair values are based on carrying
            values.  For  other  loans,  the  fair  values  are  estimated using
            discounted  cash flow analyses, using interest rates currently being
            offered  for loans with similar terms to borrowers of similar credit
            quality.  Fair  values  for  impaired  loans  are  estimated  using
            discounted cash flow analyses or underlying collateral values, where
            applicable.

          DEPOSITS
            The  carrying  amounts  of  demand  deposits  and  savings  deposits
            approximate  their  fair  values.  Fair  values  for  fixed-rate
            certificates  of  deposit are estimated using a discounted cash flow
            calculation  that  applies interest rates currently being offered on
            certificates to a schedule of aggregated expected monthly maturities
            on  time  deposits.

          FEDERAL  FUNDS  PURCHASED  AND  SECURITIES  SOLD  UNDER  AGREEMENTS TO
          REPURCHASE
            The  carrying amounts of federal funds purchased and securities sold
            under  agreements  to  repurchase  approximate  their  fair  value.

          ADVANCES  FROM  THE  FHLB,  OTHER  BORROWINGS,  AND  DEBENTURES
            For  variable-rate  borrowings  that reprice frequently, fair values
            are  based  on  carrying values. For fixed-rate borrowings, the fair
            values  are  estimated  using  discounted  cash  flow  models, using
            interest  rates  currently being offered for borrowings with similar
            terms.

          OFF-BALANCE  SHEET  INSTRUMENTS
            Fair values of the Company's off-balance sheet financial instruments
            are  based  on  fees  currently  charged  to  enter  into  similar
            agreements.  Since  the  majority of the Company's off-balance sheet
            instruments  consist of nonfee-producing, variable-rate commitments,
            the  Company  has determined they do not have a distinguishable fair
            value.


                                       59
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 23. FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS  (CONTINUED)

          The  carrying  amounts  and  estimated  fair  value  of  the Company's
          financial  instruments as of December 31, 2001 and 2000 are summarized
          below.  All  amounts  have  been  rounded  to  the  nearest  thousand.

<TABLE>
<CAPTION>
                                                 2001                        2000
                                      --------------------------  --------------------------
                                        CARRYING       FAIR         CARRYING        FAIR
                                         AMOUNT        VALUE         AMOUNT        VALUE
                                      ------------  ------------  ------------  ------------
<S>                                   <C>           <C>           <C>           <C>
Cash and due from banks, interest-
  bearing deposits with other banks,
  and federal funds sold              $ 68,334,000  $ 68,334,000  $ 86,526,000  $ 86,526,000
Investment securities                  113,454,000   113,454,000    84,925,000    84,925,000
Loans, net                             622,060,000   638,321,000   572,552,000   566,383,000
Deposits                               720,398,000   727,185,000   637,180,000   638,990,000
Federal funds purchased and
  securities sold under agreements
  to repurchase                         15,709,000    15,709,000    12,166,000    12,166,000
Advances from the FHLB                  38,228,000    38,879,000    58,701,000    58,127,000
Other borrowings                                 -             -     7,667,000     7,667,000
Beneficial interest in debentures       10,000,000    10,000,000             -             -
</TABLE>

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

          The  following information presents the condensed financial statements
          for  PAB  Bankshares,  Inc.

<TABLE>
<CAPTION>
                                 PAB BANKSHARES, INC.
                          CONDENDSED STATEMENTS OF CONDITION
                              DECEMBER 31, 2001 AND 2000

                                                                2001         2000
                                                             -----------  -----------
<S>                                                          <C>          <C>
  Assets:
    Cash on deposit with subsidiary banks                    $ 2,826,599  $ 6,503,960
    Investment securities                                      1,349,945      349,945
    Investment in subsidiaries                                70,218,251   66,470,737
    Premises and equipment                                     4,399,715    4,309,587
    Other assets                                               1,632,549    2,607,148
                                                             -----------  -----------
      Total assets                                           $80,427,059  $80,241,377
                                                             ===========  ===========

  Liabilities and stockholders' equity:
    Other borrowings                                         $         -  $ 7,667,280
    Guaranteed preferred beneficial
      interests in debentures (trust preferred securities)    10,000,000            -
    Dividends payable                                          1,035,090    1,045,214
    Other liabilities                                          4,020,086      748,403
                                                             -----------  -----------
       Total liabilities                                      15,055,176    9,460,897
                                                             -----------  -----------

    Stockholders' equity                                      65,371,883   70,780,480
                                                             -----------  -----------

      Total liabilities and stockholders' equity             $80,427,059  $80,241,377
                                                             ===========  ===========
</TABLE>


                                       60
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

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

<TABLE>
<CAPTION>
                              PAB BANKSHARES, INC.
                        CONDENDSED STATEMENTS OF INCOME
                  YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999

                                                 2001         2000         1999
                                             ------------  ----------  ------------
<S>                                          <C>           <C>         <C>
Income:
  Dividends from subsidiaries                $ 3,914,630   $4,930,706  $13,844,725
  Interest income                                 60,747      103,820       14,132
  Management and service fees                  1,866,933    1,279,967    1,256,033
  Other income                                   179,389       92,504       36,032
                                             ------------  ----------  ------------
    Total income                               6,021,699    6,406,997   15,150,922
                                             ------------  ----------  ------------

Expenses                                       8,591,404    4,800,038    3,131,068
                                             ------------  ----------  ------------
  Income (loss) before income tax benefit
    and equity in undistributed earnings
    (distributions in excess of earnings)
    of subsidiaries                           (2,569,705)   1,606,959   12,019,854
  Income tax benefit                           2,196,385    1,258,615      680,336
                                             ------------  ----------  ------------
    Income (loss) before equity in
      undistributed earnings (distributions in
      excess of earnings) of subsidiaries       (373,320)   2,865,574   12,700,190
  Equity in undistributed earnings
    (distributions in excess of earnings)
    of subsidiaries                              520,480    2,861,023   (4,007,314)
                                             ------------  ----------  ------------
        Net income                           $   147,160   $5,726,597  $ 8,692,876
                                             ============  ==========  ============
</TABLE>


                                       61
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

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

<TABLE>
<CAPTION>
                                      PAB BANKSHARES, INC.
                              CONDENDSED STATEMENTS OF CASH FLOWS
                          YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999

                                                           2001          2000          1999
                                                       ------------  ------------  ------------
<S>                                                    <C>           <C>           <C>
  Cash flows from operating activities:
    Net income                                         $   147,160   $ 5,726,597   $ 8,692,876
    Adjustments to reconcile net income to
      net cash provided by operating activities:
      Depreciation and amortization                        874,739       422,579       267,321
      Deferred tax provision                               788,607        78,065        (9,150)
      Gain on disposal of assets                           (10,590)       (3,634)            -
      Distributions in excess of earnings
        (undistributed earnings) of subsidiaries          (520,480)   (2,861,023)    4,007,314
      Increase in cash value of life insurance              (6,859)      (66,159)       (7,988)
      Increase in deferred compensation accrual          1,113,578       133,703             -
      Increase in retirement accrual                     1,291,388             -             -
      Net change in other assets and liabilities           748,918      (898,101)      125,442
                                                       ------------  ------------  ------------
        Net cash provided by operating activities        4,426,461     2,532,027    13,075,815
                                                       ------------  ------------  ------------

  Cash flows from investing activities:
    Purchase of securities available for sale           (1,000,000)            -      (349,945)
    Purchase of premises and equipment                    (969,592)   (3,501,165)     (924,171)
    Proceeds from disposal of assets                       609,467         9,494             -
    Redemption of life insurance policies                   60,998             -             -
    Investment in subsidiary                            (3,516,874)      (50,000)      (50,000)
                                                       ------------  ------------  ------------
      Net cash used in investing activities             (4,816,001)   (3,541,671)   (1,324,116)
                                                       ------------  ------------  ------------

  Cash flows from financing activities:
    Cash paid to former stockholders on
      acquisition of Friendship                         (7,667,280)            -             -
    Proceeds on issuance of guaranteed preferred
      beneficial interests in debentures                10,000,000             -             -
    Dividends paid                                      (4,179,108)   (4,054,117)   (3,025,131)
    Proceeds from the exercise of stock options            196,875        29,515        26,932
    Acquisition of stock under the stock repurchase
      plans                                             (1,293,808)   (1,512,152)            -
    Costs capitalized on issuance of guaranteed
      preferred beneficial interests in debentures        (344,500)            -             -
                                                       ------------  ------------  ------------
        Net cash used in financing activities           (3,287,821)   (5,536,754)   (2,998,199)
                                                       ------------  ------------  ------------

  Net increase (decrease) in cash                       (3,677,361)   (6,546,398)    8,753,500

  Cash at beginning of year                              6,503,960    13,050,358     4,296,858
                                                       ------------  ------------  ------------

  Cash at end of year                                  $ 2,826,599   $ 6,503,960   $13,050,358
                                                       ============  ============  ============
</TABLE>


                                       62
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE 25.  FOURTH  QUARTER  RESULTS  OF  OPERATIONS

          The  Company's  unaudited results of operations for the fourth quarter
          ended  2001 discloses a net loss of $4.7 million. The net loss for the
          fourth  quarter  included  provision  for loan losses of $11.2 million
          before  income  tax  benefits, of which $7.2 million before income tax
          benefits  resulted  from  an  examination  adjustment  by  the Federal
          Reserve.  Also  included  in  the unaudited results of operations were
          non-recurring  gains before income taxes on the sale of Empire of $1.5
          million  and  sale  of Federal Home Loan Mortgage Corporation stock of
          $1.7  million.


                                       63
<PAGE>
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURE

On May 29, 2001, our board of directors voted to engage Mauldin & Jenkins, LLC
as PAB's independent auditors for the year ending December 31, 2001.  On May 30,
2001, we notified Stewart, Fowler & Stalvey, P.C., our previous independent
auditors, that they would not be engaged for the audit of fiscal year 2001.  The
determination to engage Mauldin & Jenkins, LLC was the result of a competitive
bid process.

As required by securities laws, we filed a Current Report on Form 8-K, dated May
29, 2001 and filed with the Securities and Exchange Commission on May 31, 2001,
announcing our change in accountants.  In that Form 8-K, we disclosed that the
report of Stewart, Fowler & Stalvey, P.C.'s on PAB's consolidated financial
statements for the fiscal years ended December 31, 1999 and 2000 contained no
adverse opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles.  We also disclosed that
during the years ended December 31, 1999 and 2000 and for the interim period
from December 31, 2000 to May 29, 2001, there were no disagreements between us
and Stewart, Fowler & Stalvey, P.C. as to accounting principles or practices,
financial statement disclosure or audit scope or procedure.  A letter from
Stewart, Fowler & Stalvey, P.C., dated May 30, 2001, stating that they agreed
with the disclosures we made in our Form 8-K regarding the changes of auditors
was filed as Exhibit 16 to that Form 8-K.



PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information appearing under the headings "Proposal One: Election of
Directors," "Executive Officers" and "Section 16(a) Beneficial Ownership
Reporting Compliance" in the definitive Proxy Statement (the "2002 Proxy
Statement") relating to the annual meeting of shareholders of PAB, is
incorporated herein by reference.



ITEM 11.  EXECUTIVE COMPENSATION

The information appearing under the heading "Executive Compensation" in the 2002
Proxy Statement is incorporated herein by reference.



ITEM 12.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS
            AND MANAGEMENT

The information appearing under the heading "Principal Shareholders" in the 2002
Proxy Statement is incorporated herein by reference.



ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information appearing under the headings "Executive Compensation -
Compensation Committee Interlocks and Insider Participation" and "Certain
Relationships and Related Transactions" in the 2002 Proxy Statement is
incorporated herein by reference.


                                       64
<PAGE>
PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
            REPORTS ON FORM 8-K

     (a)  1.    FINANCIAL STATEMENTS.

The consolidated financial statements, notes thereto and auditor's report
thereon, filed as part hereof, are listed in the Index to Item 8 of this
Report.

          2.    FINANCIAL STATEMENT SCHEDULES.

All schedules are omitted as the required information is inapplicable or the
information is presented in the financial statements or related notes.

           3.   EXHIBITS.

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

2.1            Agreement  and  Plan  of Merger, dated as of June 3, 1999, by and
               between  Baxley  Federal  Savings  Bank  and  the Registrant, and
               joined into as of November 2, 1999 by PAB Interim Association No.
               1  (incorporated by reference to Exhibit 2(a) to the Registrant's
               Registration  Statement No. 333-83907 on Form S-4 (No. 333-83907)
               filed  with  the  Commission  on  July  28,  1999).

2.2            Agreement  and Plan of Merger, dated as of September 15, 2000, by
               and  between  Friendship  Community  Bank and the Registrant, and
               joined  into  by  FCB  Interim Bank (incorporated by reference to
               Exhibit  2.2  to  the Registrant's Annual Report on Form 10-K for
               the  fiscal  year  ended  December  31,  2000).

2.3            Agreement  and  Plan  of  Merger,  dated  March  23, 2001, by and
               between  the  Registrant,  The  Park  Avenue  Bank and Friendship
               Community  Bank.

2.4            Agreement  and  Plan  of  Merger,  dated  August 15, 2001, by and
               between  the  Registrant,  The  Park  Avenue  Bank  and Farmers &
               Merchants  Bank.

2.5            Agreement  and  Plan  of Merger, dated September 26, 2001, by and
               between  the  Registrant, The Park Avenue Bank and Eagle Bank and
               Trust.

2.6            Agreement  and  Plan  of Merger, dated September 26, 2001, by and
               between  the  Registrant, The Park Avenue Bank and Baxley Federal
               Bank.

2.7            Agreement  and  Plan  of Merger, dated September 26, 2001, by and
               between  the Registrant, The Park Avenue Bank and First Community
               Bank  of  Southwest  Georgia.

3.1            Amended  and  Restated Articles of Incorporation (incorporated by
               reference  to  Exhibit  3(a)  to  the  Registrant's  Registration
               Statement  on  Form S-4 (No. 333-83907) filed with the Commission
               on  October  14,  1999).

3.2            Amended and Restated Bylaws (incorporated by reference to Exhibit
               4.2  to  the Registrant's Registration Statement on Form S-8 (No.
               333-74819)  filed  with  the  Commission  on  March  22,  1999).

4.1            Indenture  Agreement, dated November 28, 2001, by and between the
               Registrant  and  Wilmington  Trust  Company  for  the issuance of
               Floating  Rate  Junior  Subordinated  Debt  Securities  due 2031.

10.1           Form  of  Employment Agreement with Schedule of Parties and Terms
               (incorporated  by  reference  to Exhibit 10.1 to the Registrant's
               Annual Report on Form 10-K for the fiscal year ended December 31,
               1999).


                                       65
<PAGE>
10.2.1         PAB  Bankshares,  Inc.  First  Amendment to  First  Restated  and
               Amended  Dividend  Reinvestment  and  Common  Stock Purchase Plan
               (incorporated  by  reference  to Exhibit 28.2 to the Registrant's
               Registration  Statement on Form S-3 (No. 33-74080) filed with the
               Commission  on  April  8,  1997).

10.2.2         PAB  Bankshares,  Inc.  Third  Amended  and  Restated  Dividend
               Reinvestment  and  Common  Stock  Purchase  Plan (incorporated by
               reference  to  Exhibit  28.1  to  the  Registrant's  Registration
               Statement on Form S-3 (No. 33-74080) filed with the Commission on
               September  1,  1998).

10.3           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).

10.4           PAB  Bankshares, Inc. 1994 Directors Deferred Stock Purchase Plan
               (incorporated  by  reference  to Exhibit 10.4 to the Registrant's
               Annual Report on Form 10-K for the fiscal year ended December 31,
               1998).

10.5           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).

10.6           PAB  Bankshares,  Inc.  1999  Stock  Option Plan (incorporated by
               reference  to  Exhibit  99  to  the  Registrant's  Registration
               Statement  on  Form S-8 (No. 333-89527) filed with the Commission
               on  March  22,  1999).

10.7           Employee Contract Termination Agreement, dated September 1, 2001,
               by  and  between  C.  Larry  Wilkinson  and  the  Registrant.

10.8           Employment  Agreement, dated October 24, 2001, by and between Jay
               Torbert,  the  Registrant,  and  The  Park  Avenue  Bank.

10.9           Employment  Agreement,  dated  August 30, 2000, by and between M.
               Burke  Welsh,  Jr.  and  the  Registrant.

10.10          Rescission Agreement, dated December 31, 2001, by and between R.
               Bradford  Burnette  and  the  Registrant.

16             Letter  re:  change  in  certifying  accountant  (incorporated by
               reference  to  Exhibit  16  to the Registrant's Current Report on
               Form  8-K  dated  May  29,  2001).

21.1           Subsidiaries  of  the  Registrant.

23.1           Consent  of  Stewart,  Fowler  &  Stalvey,  P.C.

23.3           Consent  of  Mauldin  &  Jenkins,  LLC.

(b)  REPORTS ON FORM 8-K.

     None.


                                       66
<PAGE>
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                  PAB BANKSHARES, INC.

Date: April 15, 2002
                                  By:  /s/  Michael E. Ricketson
                                       -------------------------
                                       Michael E. Ricketson,
                                       President and Chief Executive Officer


Signature                    Title                      Date
---------                    -----                      ----

/s/ R. Bradford Burnette     Director, Chairman         April 15, 2002
---------------------------
R. Bradford Burnette

/s/ Walter W. Carroll, II    Director                   April 15, 2002
---------------------------
Walter W. Carroll, II

                             Director Emeritus
---------------------------
James L. Dewar, Sr.

/s/ James L. Dewar, Jr.      Director                   April 15, 2002
---------------------------
James L. Dewar, Jr.

                             Director
---------------------------
Bill J. Jones

/s/ Thompson Kurrie, Jr.     Director                   April 15, 2002
---------------------------
Thompson Kurrie, Jr.

/s/ James B. Lanier, Jr.     Director                   April 15, 2002
---------------------------
James B. Lanier, Jr.

/s/ Kennith D. McLeod        Director                   April 15, 2002
---------------------------
Kennith D. McLeod

/s/ Paul E. Parker           Director                   April 15, 2002
---------------------------
Paul E. Parker

/s/ Michael E. Ricketson     Director, President and    April 15, 2002
---------------------------  Chief Executive Officer
Michael E. Ricketson

/s/ F. Ferrell Scruggs, Sr.  Director                   April 15, 2002
---------------------------
F. Ferrell Scruggs, Sr.

/s/ John M. Simmons          Director                   April 15, 2002
---------------------------
John M. Simmons

/s/ Joe P. Singletary, Jr.   Director                   April 15, 2002
---------------------------
Joe P. Singletary, Jr.

/s/ Donald J. Torbert, Jr.   Senior Vice President and  April 15, 2002
---------------------------  Chief Financial Officer
Donald J. Torbert, Jr


                                       67
<PAGE>
                                  EXHIBIT INDEX
                                  -------------

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

2.3            Agreement  and  Plan  of  Merger,  dated  March  23, 2001, by and
               between  the  Registrant,  The  Park  Avenue  Bank and Friendship
               Community  Bank.

2.4            Agreement  and  Plan  of  Merger,  dated  August 15, 2001, by and
               between  the  Registrant,  The  Park  Avenue  Bank  and Farmers &
               Merchants  Bank.

2.5            Agreement  and  Plan  of Merger, dated September 26, 2001, by and
               between  the  Registrant, The Park Avenue Bank and Eagle Bank and
               Trust.

2.6            Agreement  and  Plan  of Merger, dated September 26, 2001, by and
               between  the  Registrant, The Park Avenue Bank and Baxley Federal
               Bank.

2.7            Agreement  and  Plan  of Merger, dated September 26, 2001, by and
               between  the Registrant, The Park Avenue Bank and First Community
               Bank  of  Southwest  Georgia.

4.1            Indenture  Agreement, dated November 28, 2001, by and between the
               Registrant  and  Wilmington  Trust  Company  for  the issuance of
               Floating  Rate  Junior  Subordinated  Debt  Securities  due 2031.

10.1           Form  of  Employment Agreement with Schedule of Parties and Terms

10.7           Employee Contract Termination Agreement, dated September 1, 2001,
               by  and  between  C.  Larry  Wilkinson  and  the  Registrant.

10.8           Employment  Agreement, dated October 24, 2001, by and between Jay
               Torbert,  the  Registrant,  and  The  Park  Avenue  Bank.

10.9           Employment  Agreement,  dated  August 30, 2000, by and between M.
               Burke  Welsh,  Jr.  and  the  Registrant.

10.10          Rescission Agreement, dated December 31, 2001, by and between R.
               Bradford  Burnette  and  the  Registrant.

21.1           Subsidiaries  of  the  Registrant.

23.1           Consent  of  Stewart,  Fowler  &  Stalvey,  P.C.

23.3           Consent  of  Mauldin  &  Jenkins,  LLC.


                                       68
<PAGE>