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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q**

**Quarterly      Report Pursuant to Section 13 or 15(d) of the**

**Securities      Exchange Act of 1934**

**PAB      BANKSHARES, INC.**

**3250      North Valdosta Road, Valdosta, Georgia 31602**

**Telephone      Number: (229) 241-2775**

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TABLE      OF CONTENTS

|                   |                                             | Page                                                                                                                      |
|------------------------|--------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|
| PART                I  | FINANCIAL                INFORMATION             |                                                                                                                      |
| Item                1. | Consolidated                Financial Statements |                                                                                                                      |
|                   |                                             | Statements                of Condition                                                                                    | 1 |
|                   |                                             | Statements                of Income                                                                                       | 2 |
|                   |                                             | Statements                of Comprehensive Income                                                                         | 3 |
|                   |                                             | Statements                of Stockholders’ Equity                                                                   | 4 |
|                   |                                             | Statements                of Cash Flows                                                                                   | 5 |
|                   |                                             | Notes                to Consolidated Financial                Statements                                                  | 7 |
| Item                2. |                                             | Management’s                Discussion and Analysis of Financial Condition                and Results of Operations | 10 |
| Item                3. |                                             | Quantitative                and Qualitative Disclosures About Market                Risk                                  | 20 |
| Item                4. |                                             | Controls                and Procedures                                                                                    | 21 |
|                   |                                             |                                                                                                                      |   |
| PART                II | OTHER                INFORMATION                 |                                                                                                                      |
| Item                1. |                                             | Legal                Proceedings                                                                                          | 21 |
| Item                2. |                                             | Unregistered                Sales of Equity Securities and Use of                Proceeds                                 | 21 |
| Item                3. |                                             | Defaults                Upon Senior Securities                                                                            | 22 |
| Item                4. |                                             | Submissions                of Matters to a Vote of Security                Holders                                        | 22 |
| Item                5. |                                             | Other                Information                                                                                          | 22 |
| Item                6. |                                             | Exhibits                                                                                                                  | 22 |
|                   |                                             |                                                                                                                      |   |
| SIGNATURES             | 23                                               |

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**PART      I. FINANCIAL INFORMATION**

| **Item                  1.** | **Consolidated                    Financial                    Statements** |
|------------------------------|-----------------------------------------------------------------------------|

| **PAB                BANKSHARES, INC. AND                SUBSIDIARIES**                                                                                      |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **CONSOLIDATED                STATEMENTS OF CONDITION**                                                                                                      |   |
| **AS                OF SEPTEMBER 30, 2005 AND DECEMBER 31, 2004**                                                                                            |   |
|                                                                                                                                                         |   |
|                                                                                                                                                         |   | **September                30,****2005** |   | **December                31,****2004** |   |
|                                                                                                                                                         |   | **(Unaudited)** |   |   |   |
| **ASSETS**                                                                                                                                                   |   |   |   |   |   |
| Cash                and due from banks                                                                                                                       |   | $ | 20,719,547 |   | $ | 22,976,924 |   |
| Interest-bearing                deposits in other banks                                                                                                      |   |   | 3,162,479 |   |   | 984,737 |   |
| Federal                funds sold                                                                                                                            |   |   | 49,491,967 |   |   | 32,616,121 |   |
| Investment                securities                                                                                                                         |   |   | 148,226,445 |   |   | 128,683,829 |   |
|                                                                                                                                                         |   |   |   |   |   |   |   |
| Loans                                                                                                                                                        |   |   | 731,544,913 |   |   | 646,149,340 |   |
| Allowance                for loan losses                                                                                                                     |   |   | (10,767,637 | ) |   | (9,066,566 | ) |
| Net                loans                                                                                                                                     |   |   | 720,777,276 |   |   | 637,082,774 |   |
|                                                                                                                                                         |   |   |   |   |   |   |   |
| Premises                and equipment, net                                                                                                                   |   |   | 18,395,148 |   |   | 18,812,209 |   |
| Goodwill                                                                                                                                                     |   |   | 5,984,604 |   |   | 5,984,604 |   |
| Cash                value of bank-owned life insurance policies                                                                                              |   |   | 10,983,220 |   |   | 10,737,204 |   |
| Foreclosed                assets                                                                                                                             |   |   | 38,274 |   |   | 30,216 |   |
| Other                assets                                                                                                                                  |   |   | 13,331,612 |   |   | 11,066,368 |   |
|                                                                                                                                                         |   |   |   |   |   |   |   |
| Total                assets                                                                                                                                  |   | $ | 991,110,572 |   | $ | 868,974,986 |   |
|                                                                                                                                                         |   |   |   |   |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS' EQUITY**                                                                                                      |   |   |   |   |   |   |   |
| Deposits:                                                                                                                                                    |   |   |   |   |   |   |   |
| Noninterest-bearing                demand                                                                                                                    |   | $ | 101,964,242 |   | $ | 99,627,825 |   |
| Interest-bearing                demand and savings                                                                                                           |   |   | 261,873,126 |   |   | 224,836,339 |   |
| Time                                                                                                                                                         |   |   | 423,826,254 |   |   | 333,086,272 |   |
| Total                deposits                                                                                                                                |   |   | 787,663,622 |   |   | 657,550,436 |   |
|                                                                                                                                                         |   |   |   |   |   |   |   |
| Federal                funds purchased and securities sold under agreements to                repurchase                                                     |   |   | 7,517,254 |   |   | 14,168,098 |   |
| Advances                from the Federal Home Loan Bank of Atlanta                                                                                           |   |   | 90,243,150 |   |   | 99,001,125 |   |
| Guaranteed                preferred beneficial interests in debentures (trust preferred                securities)                                           |   |   | 10,310,000 |   |   | 10,310,000 |   |
| Other                liabilities                                                                                                                             |   |   | 8,168,413 |   |   | 6,945,443 |   |
| Total                liabilities                                                                                                                             |   |   | 903,902,439 |   |   | 787,975,102 |   |
|                                                                                                                                                         |   |   |   |   |   |   |   |
| **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; 9,534,408 and                9,495,320                shares issued and outstanding |   |   | 1,217,065 |   |   | 1,217,065 |   |
| Additional                paid-in capital                                                                                                                    |   |   | 29,307,192 |   |   | 29,143,017 |   |
| Retained                earnings                                                                                                                             |   |   | 56,727,189 |   |   | 50,938,254 |   |
| Accumulated                other comprehensive loss                                                                                                          |   |   | (43,313 | ) |   | (298,452 | ) |
| Total                stockholders' equity                                                                                                                    |   |   | 87,208,133 |   |   | 80,999,884 |   |
|                                                                                                                                                         |   |   |   |   |   |   |   |
| Total                liabilities and stockholders' equity                                                                                                    |   | $ | 991,110,572 |   | $ | 868,974,986 |   |
|                                                                                                                                                         |   |   |   |   |   |   |   |
| See                accompanying notes to consolidated financial statements.                                                                                  |   |   |   |   |   |   |   |

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| **PAB                  BANKSHARES, INC. AND                  SUBSIDIARIES**                          |   |
|------------------------------------------------------------------------------------------------------|--------|
| **CONSOLIDATED                  STATEMENTS OF INCOME**                                               |   |
| **THREE                  MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND                  2004** |   |
| **(UNAUDITED)**                                                                                      |   |
|                                                                                                 |   | **Three                  Months Ended September 30,** |   | **Nine                  Months Ended September 30,** |   |
|                                                                                                 |   | **2005** |   | **2004** |   | **2005** |   | **2004** |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |
| **Interest                  income**                                                                 |   |   |   |   |   |   |   |   |   |
| Interest                  and fees on loans                                                          |   | $ | 13,811,241 |   | $ | 8,879,111 |   | $ | 37,120,694 |   | $ | 25,490,912 |   |
| Interest                  and dividends on investment securities:                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                              |   |   | 1,375,150 |   |   | 1,345,486 |   |   | 4,001,454 |   |   | 3,661,634 |   |
| Nontaxable                                                                                           |   |   | 110,562 |   |   | 83,842 |   |   | 285,881 |   |   | 255,372 |   |
| Other                  interest income                                                               |   |   | 486,525 |   |   | 20,159 |   |   | 1,022,712 |   |   | 59,840 |   |
| Total                  interest income                                                               |   |   | 15,783,478 |   |   | 10,328,598 |   |   | 42,430,741 |   |   | 29,467,758 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Interest                  expense**                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  on deposits                                                                |   |   | 4,510,934 |   |   | 1,943,460 |   |   | 11,129,205 |   |   | 5,785,417 |   |
| Interest                  on Federal Home Loan Bank advances                                         |   |   | 817,497 |   |   | 430,823 |   |   | 2,269,721 |   |   | 960,034 |   |
| Interest                  on other borrowings                                                        |   |   | 227,909 |   |   | 237,141 |   |   | 632,181 |   |   | 677,002 |   |
| Total                  interest expense                                                              |   |   | 5,556,340 |   |   | 2,611,424 |   |   | 14,031,107 |   |   | 7,422,453 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  interest income                                                                 |   |   | 10,227,138 |   |   | 7,717,174 |   |   | 28,399,634 |   |   | 22,045,305 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Provision                  for loan losses**                                                       |   |   | 275,000 |   |   | - |   |   | 888,600 |   |   | - |   |
| Net                  interest income after provision for loan losses                                 |   |   | 9,952,138 |   |   | 7,717,174 |   |   | 27,511,034 |   |   | 22,045,305 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Other                  income**                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service                  charges on deposit accounts                                                 |   |   | 1,069,117 |   |   | 1,157,557 |   |   | 3,010,227 |   |   | 3,317,728 |   |
| Other                  fee income                                                                    |   |   | 366,737 |   |   | 307,204 |   |   | 969,211 |   |   | 976,713 |   |
| Securities                  transactions, net                                                        |   |   | 38 |   |   | 5,535 |   |   | (1,204 | ) |   | 6,111 |   |
| Other                  noninterest income                                                            |   |   | 134,140 |   |   | 143,294 |   |   | 397,201 |   |   | 609,069 |   |
| Total                  other income                                                                  |   |   | 1,570,032 |   |   | 1,613,590 |   |   | 4,375,435 |   |   | 4,909,621 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Other                  expenses**                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries                  and employee benefits                                                      |   |   | 3,827,996 |   |   | 4,139,622 |   |   | 11,204,516 |   |   | 11,053,589 |   |
| Occupancy                  expense of premises                                                       |   |   | 496,119 |   |   | 491,289 |   |   | 1,453,167 |   |   | 1,392,828 |   |
| Furniture                  and equipment expense                                                     |   |   | 535,675 |   |   | 531,878 |   |   | 1,565,226 |   |   | 1,581,787 |   |
| Other                  noninterest expense                                                           |   |   | 1,399,573 |   |   | 1,124,102 |   |   | 4,029,397 |   |   | 3,597,386 |   |
| Total                  other expenses                                                                |   |   | 6,259,363 |   |   | 6,286,891 |   |   | 18,252,306 |   |   | 17,625,590 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  before income tax expense                                                    |   |   | 5,262,807 |   |   | 3,043,873 |   |   | 13,634,163 |   |   | 9,329,336 |   |
| **Income                  tax expense**                                                              |   |   | 1,744,407 |   |   | 982,530 |   |   | 4,510,057 |   |   | 3,021,923 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income                                                                          |   | $ | 3,518,400 |   | $ | 2,061,343 |   | $ | 9,124,106 |   | $ | 6,307,413 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Earnings                  per common share**                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                |   | $ | 0.37 |   | $ | 0.21 |   | $ | 0.96 |   | $ | 0.66 |   |
| Diluted                                                                                              |   | $ | 0.36 |   | $ | 0.21 |   | $ | 0.94 |   | $ | 0.65 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                  accompanying notes to consolidated financial statements.                        |   |   |   |   |   |   |   |   |   |   |   |   |   |

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| **PAB                BANKSHARES, INC. AND                SUBSIDIARIES**                                                                                                                                                                                |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **CONSOLIDATED                STATEMENTS OF COMPREHENSIVE INCOME**                                                                                                                                                                                     |   |
| **THREE                MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND                2004**                                                                                                                                                       |   |
| **(UNAUDITED)**                                                                                                                                                                                                                                        |   |
|                                                                                                                                                                                                                                                   |   | **Three                Months Ended September 30,** |   | **Nine                Months Ended September 30,** |   |
|                                                                                                                                                                                                                                                   |   | **2005** |   | **2004** |   | **2005** |   | **2004** |   |
|                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| Net                income                                                                                                                                                                                                                              |   | $ | 3,518,400 |   | $ | 2,061,343 |   | $ | 9,124,106 |   | $ | 6,307,413 |   |
|                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                comprehensive income (loss):                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized                holding gains (losses) arising during the period, net of tax (benefit)                of                $106,504 and ($280,720) for the quarter and $131,026 and $182,849                for the                year to date |   |   | 206,743 |   |   | (544,924 | ) |   | 254,344 |   |   | 354,945 |   |
| Reclassification                adjustment for (gains) losses included in net income, net of tax                (benefit)                of $13 and $1,882 for the quarter and ($409) and $2,078 for the year                to                date    |   |   | (25 | ) |   | (3,653 | ) |   | 795 |   |   | (4,033 | ) |
|                                                                                                                                                                                                                                                   |   |   | 206,718 |   |   | (548,577 | ) |   | 255,139 |   |   | 350,912 |   |
|                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive                income                                                                                                                                                                                                                    |   | $ | 3,725,118 |   | $ | 1,512,766 |   | $ | 9,379,245 |   | $ | 6,658,325 |   |
|                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to consolidated financial statements.                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |

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| **PAB                BANKSHARES, INC. AND                SUBSIDIARIES**                                                            |   |
|------------------------------------------------------------------------------------------------------------------------------------|--------|
| **CONSOLIDATED                STATEMENTS OF STOCKHOLDERS’ EQUITY**                                                           |   |
| **NINE                MONTHS ENDED SEPTEMBER 30, 2005 (UNAUDITED) AND YEAR ENDED DECEMBER                31,                2004** |   |
|                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                               |   |   |   |   |   |   |   |   |   | **Accumulated** |   |   |   |
|                                                                                                                               |   |   |   |   |   | **Additional** |   |   |   | **Other** |   |   |   |
|                                                                                                                               |   | **Common                Stock** |   | **Paid-in** |   | **Retained** |   | **Comprehensive** |   |   |   |
|                                                                                                                               |   | **Shares** |   | **Par                Value** |   | **Capital** |   | **Earnings** |   | **Loss** |   | **Total** |   |
|                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                December 31, 2003**                                                                                      |   |   | 9,484,660 |   | $ | 1,217,065 |   | $ | 29,314,700 |   | $ | 45,651,500 |   | $ | (121,099 | ) | $ | 76,062,166 |   |
| Net                income                                                                                                          |   |   | - |   |   | - |   |   | - |   |   | 8,518,085 |   |   | - |   |   | 8,518,085 |   |
| Other                comprehensive loss                                                                                            |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (177,353 | ) |   | (177,353 | ) |
| Cash                dividends declared, $0.34 per share                                                                            |   |   | - |   |   | - |   |   | - |   |   | (3,231,331 | ) |   | - |   |   | (3,231,331 | ) |
| Stock                acquired and cancelled under stock repurchase plan                                                            |   |   | (46,300 | ) |   | - |   |   | (576,198 | ) |   | - |   |   | - |   |   | (576,198 | ) |
| Stock                options exercised                                                                                             |   |   | 56,960 |   |   | - |   |   | 404,515 |   |   | - |   |   | - |   |   | 404,515 |   |
| **Balance,                December 31, 2004**                                                                                      |   |   | 9,495,320 |   |   | 1,217,065 |   |   | 29,143,017 |   |   | 50,938,254 |   |   | (298,452 | ) |   | 80,999,884 |   |
| Net                income                                                                                                          |   |   | - |   |   | - |   |   | - |   |   | 9,124,106 |   |   | - |   |   | 9,124,106 |   |
| Other                comprehensive income                                                                                          |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 255,139 |   |   | 255,139 |   |
| Cash                dividends declared, $0.35 per share                                                                            |   |   | - |   |   | - |   |   | - |   |   | (3,335,171 | ) |   | - |   |   | (3,335,171 | ) |
| Stock                acquired and cancelled under stock repurchase plan                                                            |   |   | (17,692 | ) |   | - |   |   | (249,988 | ) |   | - |   |   | - |   |   | (249,988 | ) |
| Stock                options exercised                                                                                             |   |   | 56,780 |   |   | - |   |   | 414,163 |   |   | - |   |   | - |   |   | 414,163 |   |
| **Balance,                September 30, 2005**                                                                                     |   |   | 9,534,408 |   | $ | 1,217,065 |   | $ | 29,307,192 |   | $ | 56,727,189 |   | $ | (43,313 | ) | $ | 87,208,133 |   |
|                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to consolidated financial statements.                                                        |   |   |   |   |   |   |   |   |   |   |   |   |

----

| **PAB                BANKSHARES, INC. AND                SUBSIDIARIES**                                               |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|
| **CONSOLIDATED                STATEMENTS OF CASH FLOWS**                                                              |   |
| **NINE                MONTHS ENDED SEPTEMBER 30, 2005 AND 2004**                                                      |   |
| **(UNAUDITED)**                                                                                                       |   |
|                                                                                                                  |   | **Nine                Months Ended September 30,** |   |
|                                                                                                                  |   | **2005** |   | **2004** |   |
|                                                                                                                  |   |   |   |   |   |
| **CASH                FLOWS FROM OPERATING ACTIVITIES**                                                               |   |   |   |   |   |
| Net                income                                                                                             |   | $ | 9,124,106 |   | $ | 6,307,413 |   |
| Adjustments                to reconcile net income to net cash provided by operating                activities:       |   |   |   |   |   |   |   |
| Depreciation,                amortization and accretion, net                                                          |   |   | 1,670,545 |   |   | 1,963,190 |   |
| Provision                for loan losses                                                                              |   |   | 888,600 |   |   | - |   |
| Net                realized (gain) loss on securities transactions                                                    |   |   | 1,204 |   |   | (6,111 | ) |
| (Gain)                loss on disposal of assets                                                                      |   |   | 22,599 |   |   | (27,484 | ) |
| Increase                in cash value of bank-owned life insurance                                                    |   |   | (246,016 | ) |   | (230,052 | ) |
| Decrease                in deferred compensation accrual                                                              |   |   | (11,045 | ) |   | (8,894 | ) |
| Increase                (decrease) in retirement accruals                                                             |   |   | (257,401 | ) |   | 370,458 |   |
| Net                change in taxes receivable and taxes payable                                                       |   |   | (1,051,083 | ) |   | (112,171 | ) |
| Increase                in interest receivable                                                                        |   |   | (1,023,420 | ) |   | (100,093 | ) |
| Increase                in interest payable                                                                           |   |   | 670,303 |   |   | 175,649 |   |
| Net                increase in prepaid expenses and other assets                                                      |   |   | (373,851 | ) |   | (420,695 | ) |
| Net                decrease in accrued expenses and other liabilities                                                 |   |   | 634,516 |   |   | 32,686 |   |
| Net                cash provided by operating activities                                                              |   |   | 10,049,057 |   |   | 7,943,896 |   |
|                                                                                                                  |   |   |   |   |   |   |   |
| **CASH                FLOWS FROM INVESTING ACTIVITIES**                                                               |   |   |   |   |   |   |   |
| Increase                in interest-bearing deposits in other banks                                                   |   |   | (2,177,742 | ) |   | (71,661 | ) |
| (Increase)                decrease in federal funds sold                                                              |   |   | (16,875,846 | ) |   | 330,187 |   |
| Purchase                of debt securities                                                                            |   |   | (41,525,494 | ) |   | (34,315,808 | ) |
| Proceeds                from sales and calls of debt securities                                                       |   |   | 9,092,792 |   |   | 14,612,355 |   |
| Proceeds                from maturities and paydowns of debt securities                                               |   |   | 12,840,922 |   |   | 14,260,827 |   |
| Purchase                of restricted equity investments                                                              |   |   | (302,300 | ) |   | (2,116,700 | ) |
| Redemption                of restricted equity investments                                                            |   |   | 418,800 |   |   | 600 |   |
| Net                increase in loans                                                                                  |   |   | (84,745,254 | ) |   | (62,983,895 | ) |
| Purchase                of premises and equipment                                                                     |   |   | (912,575 | ) |   | (632,277 | ) |
| Proceeds                from disposal of assets                                                                       |   |   | 160,295 |   |   | 1,717,899 |   |
| Net                cash used in investing activities                                                                  |   |   | (124,026,402 | ) |   | (69,198,473 | ) |
|                                                                                                                  |   |   |   |   |   |   |   |
| **CASH                FLOWS FROM FINANCING ACTIVITIES**                                                               |   |   |   |   |   |   |   |
| Net                increase in deposits                                                                               |   |   | 130,113,186 |   |   | 18,858,132 |   |
| Net                decrease in federal funds purchased and securities sold under repurchase                agreements |   |   | (6,650,844 | ) |   | (526,111 | ) |
| Advances                from the Federal Home Loan Bank                                                               |   |   | 38,318,600 |   |   | 42,848,400 |   |
| Payments                on Federal Home Loan Bank advances                                                            |   |   | (47,076,575 | ) |   | (296,142 | ) |
| Dividends                paid                                                                                         |   |   | (3,140,574 | ) |   | (1,995,235 | ) |
| Proceeds                from the exercise of stock options                                                            |   |   | 414,163 |   |   | 363,715 |   |
| Acquisition                of stock under stock repurchase plans                                                      |   |   | (249,988 | ) |   | (432,658 | ) |
| Repurchase                of preferred stock in REIT subsidiaries                                                     |   |   | (8,000 | ) |   | (2,000 | ) |
| Net                cash provided by financing activities                                                              |   |   | 111,719,968 |   |   | 58,818,101 |   |

----

| **PAB                BANKSHARES, INC. AND SUBSIDIARIES**                     |   |
|------------------------------------------------------------------------------|--------|
| **CONSOLIDATED                STATEMENTS OF CASH FLOWS (CONTINUED)**         |   |
| **NINE                MONTHS ENDED SEPTEMBER 30, 2005 AND 2004**             |   |
| **(UNAUDITED)**                                                              |   |
|                                                                         |   | **Nine                Months Ended September 30,** |   |
|                                                                         |   | **2005** |   | **2004** |   |
|                                                                         |   |   |   |   |   |
| Net                decrease in cash and due from banks                       |   | $ | (2,257,377 | ) | $ | (2,436,476 | ) |
|                                                                         |   |   |   |   |   |   |   |
| Cash                and due from banks at beginning of period                |   |   | 22,976,924 |   |   | 22,920,218 |   |
|                                                                         |   |   |   |   |   |   |   |
| Cash                and due from banks at end of period                      |   | $ | 20,719,547 |   | $ | 20,483,742 |   |
|                                                                         |   |   |   |   |   |   |   |
|                                                                         |   |   |   |   |   |   |   |
| **SUPPLEMENTAL                DISCLOSURES OF CASH FLOW INFORMATION**         |   |   |   |   |   |   |   |
|                                                                         |   |   |   |   |   |   |   |
| Cash                paid during the period for:                              |   |   |   |   |   |   |   |
| Interest                                                                     |   | $ | 13,360,804 |   | $ | 7,246,804 |   |
| Taxes                                                                        |   | $ | 5,561,140 |   | $ | 3,134,094 |   |
|                                                                         |   |   |   |   |   |   |   |
|                                                                         |   |   |   |   |   |   |   |
| **NONCASH                INVESTING AND FINANCING TRANSACTIONS**              |   |   |   |   |   |   |   |
|                                                                         |   |   |   |   |   |   |   |
| Increase                in unrealized gains on securities available for sale |   | $ | 386,575 |   | $ | 531,683 |   |
|                                                                         |   |   |   |   |   |   |   |
| Transfer                of loans to foreclosed assets                        |   | $ | 162,152 |   | $ | 600,858 |   |
|                                                                         |   |   |   |   |   |   |   |
| See                accompanying notes to consolidated financial statements.  |   |   |   |   |   |   |   |

----

**PAB      BANKSHARES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED)**

----

| **NOTE                1.** | **NATURE                OF BUSINESS** |
|----------------------------|---------------------------------------|

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

*Consolidation      of Variable Interest Entities*

----

**PAB      BANKSHARES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED)**

----

| **NOTE                2.** | **BASIS                OF PRESENTATION** |
|----------------------------|------------------------------------------|

| **NOTE                3.** | **EARNINGS                PER COMMON SHARE** |
|----------------------------|----------------------------------------------|

|                                                              |   | **Three                Months Ended September 30,** |      | **Nine                Months Ended September 30,** |   |
|-------------------------------------------------------------------|--------|-----------------------------------------------------|-----------|----------------------------------------------------|--------|
|                                                              |   | **2005**                                            |      | **2004**                                           |   | **2005** |   | **2004** |   |
| Basic                earnings per share:                          |   |                                                |      |                                               |   |   |   |   |   |
| Net                income                                         |   | $                                                   | 3,518,400 |                                               | $      | 2,061,343 |   | $ | 9,124,106 |   | $ | 6,307,413 |   |
|                                                              |   |                                                |      |                                               |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares outstanding         |   |                                                | 9,530,712 |                                               |   | 9,491,439 |   |   | 9,518,797 |   |   | 9,502,263 |   |
|                                                              |   |                                                |      |                                               |   |   |   |   |   |   |   |   |   |
| Earnings                per common share                          |   | $                                                   | 0.37      |                                               | $      | 0.21 |   | $ | 0.96 |   | $ | 0.66 |   |
|                                                              |   |                                                |      |                                               |   |   |   |   |   |   |   |   |   |
| Diluted                earnings per share:                        |   |                                                |      |                                               |   |   |   |   |   |   |   |   |   |
| Net                income                                         |   | $                                                   | 3,518,400 |                                               | $      | 2,061,343 |   | $ | 9,124,106 |   | $ | 6,307,413 |   |
|                                                              |   |                                                |      |                                               |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares outstanding         |   |                                                | 9,530,712 |                                               |   | 9,491,439 |   |   | 9,518,797 |   |   | 9,502,263 |   |
| Effect                of dilutive stock options                   |   |                                                | 179,107   |                                               |   | 116,921 |   |   | 161,177 |   |   | 144,120 |   |
|                                                              |   |                                                |      |                                               |   |   |   |   |   |   |   |   |   |
| Weighted                average diluted common shares outstanding |   |                                                | 9,709,819 |                                               |   | 9,608,360 |   |   | 9,679,974 |   |   | 9,646,383 |   |
|                                                              |   |                                                |      |                                               |   |   |   |   |   |   |   |   |   |
| Earnings                per common share                          |   | $                                                   | 0.36      |                                               | $      | 0.21 |   | $ | 0.94 |   | $ | 0.65 |   |

----

**PAB      BANKSHARES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED)**

----

| **NOTE                4.** | **STOCK-BASED                EMPLOYEE COMPENSATION** |
|----------------------------|------------------------------------------------------|

*Accounting      for Stock Issued to Employees*
*Accounting      for Stock-Based Compensation*

|                                                                                                                                                              |   | **Three                Months Ended September 30,** |      | **Nine                Months Ended September 30,** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|-----------|----------------------------------------------------|--------|
|                                                                                                                                                              |   | **2005**                                            |      | **2004**                                           |   | **2005** |   | **2004** |   |
|                                                                                                                                                              |   |                                                |      |                                               |   |   |   |   |   |
| Net                income, as reported                                                                                                                            |   | $                                                   | 3,518,400 |                                               | $      | 2,061,343 |   | $ | 9,124,106 |   | $ | 6,307,413 |   |
| Deduct:                                                                                                                                                           |   |                                                |      |                                               |   |   |   |   |   |   |   |   |   |
| Total                stock-based employee compensation expense determined under fair value                based method for all awards, net of related tax effects |   |                                                | (65,740   | )                                                  |   | (54,005 | ) |   | (188,853 | ) |   | (168,176 | ) |
| Pro                forma net income                                                                                                                               |   | $                                                   | 3,452,660 |                                               | $      | 2,007,338 |   | $ | 8,935,253 |   | $ | 6,139,237 |   |
|                                                                                                                                                              |   |                                                |      |                                               |   |   |   |   |   |   |   |   |   |
| Earnings                per share:                                                                                                                                |   |                                                |      |                                               |   |   |   |   |   |   |   |   |   |
| Basic                - as reported                                                                                                                                |   | $                                                   | 0.37      |                                               | $      | 0.21 |   | $ | 0.96 |   | $ | 0.66 |   |
| Basic                - pro forma                                                                                                                                  |   | $                                                   | 0.36      |                                               | $      | 0.21 |   | $ | 0.94 |   | $ | 0.65 |   |
| Diluted                - as reported                                                                                                                              |   | $                                                   | 0.36      |                                               | $      | 0.21 |   | $ | 0.94 |   | $ | 0.65 |   |
| Diluted                - pro forma                                                                                                                                |   | $                                                   | 0.36      |                                               | $      | 0.21 |   | $ | 0.93 |   | $ | 0.64 |   |

----

**CAUTIONARY      NOTICE REGARDING FORWARD-LOOKING STATEMENTS**

*Management’s      Discussion and Analysis of Financial Condition and Results of      Operation*

| **ITEM                2.** | **MANAGEMENT’S                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF                OPERATION** |
|----------------------------|------------------------------------------------------------------------------------------------------------------------------|

----

**FINANCIAL      CONDITION**

| As                  of Quarter End                                  |   | Sep-05                                  |    | Jun-05 |   | Mar-05  |   | Dec-04 |    | Sep-04 |   |
|---------------------------------------------------------------------|--------|-----------------------------------------|---------|--------|--------|---------|--------|--------|---------|--------|--------|
|                                                                |   | (Dollars                  In Thousands) |    |
| Commercial                  and financial                           |   | $                                       | 55,536  |   | $      | 60,127  |   | $      | 54,512  |   | $      | 59,703 |   | $ | 54,472 |   |
| Agricultural                  (including loans secured by farmland) |   |                                    | 45,759  |   |   | 32,475  |   |   | 27,237  |   |   | 26,704 |   |   | 30,076 |   |
| Real                  estate - construction                         |   |                                    | 257,522 |   |   | 228,539 |   |   | 198,815 |   |   | 166,854 |   |   | 142,744 |   |
| Real                  estate - mortgage (commercial)                |   |                                    | 206,910 |   |   | 227,079 |   |   | 232,672 |   |   | 226,449 |   |   | 199,158 |   |
| Real                  estate - mortgage (residential)               |   |                                    | 145,395 |   |   | 151,033 |   |   | 147,508 |   |   | 148,773 |   |   | 152,389 |   |
| Installment                  loans to individuals and other loans   |   |                                    | 22,239  |   |   | 22,663  |   |   | 20,585  |   |   | 19,552 |   |   | 22,366 |   |
|                                                                |   |                                    | 733,361 |   |   | 721,916 |   |   | 681,329 |   |   | 648,035 |   |   | 601,205 |   |
| Deferred                  loan fees and unearned interest, net      |   |                                    | (1,816  | )      |   | (2,282  | )      |   | (1,721  | )      |   | (1,886 | ) |   | (755 | ) |
|                                                                |   |                                    | 731,545 |   |   | 719,634 |   |   | 679,608 |   |   | 646,149 |   |   | 600,450 |   |
| Allowance                  for loan losses                          |   |                                    | (10,768 | )      |   | (10,460 | )      |   | (9,867  | )      |   | (9,066 | ) |   | (9,562 | ) |
|                                                                |   | $                                       | 720,777 |   | $      | 709,174 |   | $      | 669,741 |   | $      | 637,083 |   | $ | 590,888 |   |

----

| **As                of September 30, 2005**                       |   | **South****Georgia**                  |    | **North****Georgia** |   | **Florida** |   | **Treasury** |    | **Total** |   |
|-------------------------------------------------------------------|--------|---------------------------------------|---------|----------------------|--------|-------------|--------|--------------|---------|-----------|--------|
|                                                              |   | (Dollars                in Thousands) |    |
| **Loans**                                                         |   |                                  |    |                 |   |        |   |         |    |      |   |
| Commercial                and financial                           |   | $                                     | 34,925  |                 | $      | 10,281      |   | $            | 8,649   |      | $      | 1,681 |   | $ | 55,536 |   |
| Agricultural                (including loans secured by farmland) |   |                                  | 40,950  |                 |   | 3,866       |   |         | 943     |      |   | - |   |   | 45,759 |   |
| Real                estate - construction                         |   |                                  | 39,508  |                 |   | 184,696     |   |         | 32,222  |      |   | 1,096 |   |   | 257,522 |   |
| Real                estate - mortgage (commercial)                |   |                                  | 78,353  |                 |   | 106,960     |   |         | 7,758   |      |   | 13,839 |   |   | 206,910 |   |
| Real                estate - mortgage (residential)               |   |                                  | 106,868 |                 |   | 31,311      |   |         | 4,950   |      |   | 2,266 |   |   | 145,395 |   |
| Installment                loans to individuals and other loans   |   |                                  | 19,148  |                 |   | 1,963       |   |         | 311     |      |   | 817 |   |   | 22,239 |   |
|                                                              |   |                                  | 319,752 |                 |   | 339,077     |   |         | 54,833  |      |   | 19,699 |   |   | 733,361 |   |
| Deferred                loan fees and unearned interest, net      |   |                                  | (79     | )                    |   | (811        | )      |         | (917    | )         |   | (9 | ) |   | (1,816 | ) |
| Total                loans                                        |   | $                                     | 319,673 |                 | $      | 338,266     |   | $            | 53,916  |      | $      | 19,690 |   | $ | 731,545 |   |
|                                                              |   |                                  |    |                 |   |        |   |         |    |      |   |   |   |   |   |   |
| **Deposits**                                                      |   |                                  |    |                 |   |        |   |         |    |      |   |   |   |   |   |   |
| Noninterest-bearing                demand                         |   | $                                     | 78,081  |                 | $      | 12,846      |   | $            | 7,424   |      | $      | 3,613 |   | $ | 101,964 |   |
| Interest-bearing                demand and savings                |   |                                  | 201,354 |                 |   | 32,416      |   |         | 27,076  |      |   | 1,027 |   |   | 261,873 |   |
| Time                                                              |   |                                  | 237,407 |                 |   | 47,911      |   |         | 87,751  |      |   | 50,758 |   |   | 423,827 |   |
| Total                deposits                                     |   | $                                     | 516,842 |                 | $      | 93,173      |   | $            | 122,251 |      | $      | 55,398 |   | $ | 787,664 |   |

**RESULTS      OF OPERATIONS**

----

*Net      Interest Income*

----

| For                the Three Months Ended September 30, |   | 2005                                  |    |                   |   |              |           | 2004   |                   |   |              |
|---------------------------------------------------------|--------|---------------------------------------|---------|------------------------|--------|-------------------|----------------|--------|------------------------|--------|-------------------|
|                                                    |   | AverageBalance                        |    | InterestIncome/Expense |   | AverageYield/Rate | AverageBalance |   | InterestIncome/Expense |   | AverageYield/Rate |
|                                                    |   | (Dollars                In Thousands) |    |
| Interest-earning                assets:                 |   |                                  |    |                   |   |              |           |   |                   |   |              |   |   |
| Loans                                                   |   | $                                     | 722,410 |                   | $      | 13,811            |           |   | 7.58                   | %      | $                 | 572,102 |   | $ | 8,879 |   |   | 6.17 | % |
| Investment                securities:                   |   |                                  |    |                   |   |              |           |   |                   |   |              |   |   |   |   |   |   |   |   |
| Taxable                                                 |   |                                  | 125,352 |                   |   | 1,375             |           |   | 4.35                   | %      |              | 123,586 |   |   | 1,345 |   |   | 4.33 | % |
| Nontaxable                                              |   |                                  | 11,547  |                   |   | 167               |           |   | 5.76                   | %      |              | 8,603 |   |   | 127 |   |   | 5.87 | % |
| Other                short-term investments             |   |                                  | 56,692  |                   |   | 487               |           |   | 3.40                   | %      |              | 6,117 |   |   | 20 |   |   | 1.31 | % |
| Total                interest-earning assets            |   | $                                     | 916,001 |                   | $      | 15,840            |           |   | 6.86                   | %      | $                 | 710,408 |   | $ | 10,371 |   |   | 5.81 | % |
| Interest-bearing                liabilities:            |   |                                  |    |                   |   |              |           |   |                   |   |              |   |   |   |   |   |   |   |   |
| Demand                deposits                          |   | $                                     | 203,036 |                   | $      | 880               |           |   | 1.72                   | %      | $                 | 177,918 |   | $ | 312 |   |   | 0.70 | % |
| Savings                deposits                         |   |                                  | 42,062  |                   |   | 82                |           |   | 0.77                   | %      |              | 43,432 |   |   | 60 |   |   | 0.55 | % |
| Time                deposits                            |   |                                  | 406,891 |                   |   | 3,549             |           |   | 3.44                   | %      |              | 252,464 |   |   | 1,571 |   |   | 2.48 | % |
| FHLB                advances                            |   |                                  | 98,151  |                   |   | 817               |           |   | 3.30                   | %      |              | 76,533 |   |   | 431 |   |   | 2.24 | % |
| Notes                payable                            |   |                                  | 10,310  |                   |   | 193               |           |   | 7.43                   | %      |              | 10,310 |   |   | 147 |   |   | 5.67 | % |
| Other                short-term borrowings              |   |                                  | 7,904   |                   |   | 35                |           |   | 1.74                   | %      |              | 26,699 |   |   | 90 |   |   | 1.34 | % |
| Total                interest-bearing liabilities       |   | $                                     | 768,354 |                   | $      | 5,556             |           |   | 2.86                   | %      | $                 | 587,356 |   | $ | 2,611 |   |   | 1.77 | % |
|                                                    |   |                                  |    |                   |   |              |           |   |                   |   |              |   |   |   |   |   |   |   |   |
| Interest                rate spread                     |   |                                  |    |                   |   |              |           |   | 4.00                   | %      |              |   |   |   |   |   |   | 4.04 | % |
| Net                interest income                      |   |                                  |    |                   | $      | 10,284            |           |   |                   |   |              |   |   | $ | 7,760 |   |   |   |   |
| Net                interest margin                      |   |                                  |    |                   |   |              |           |   | 4.45                   | %      |              |   |   |   |   |   |   | 4.35 | % |

| For                the Nine Months Ended September 30, |   |                                  |    | 2005                   |   |              |   |           |   | 2004                   |   |              |   |
|--------------------------------------------------------|--------|---------------------------------------|---------|------------------------|--------|-------------------|--------|----------------|--------|------------------------|--------|-------------------|--------|
|                                                   |   | AverageBalance                        |    | InterestIncome/Expense |   | AverageYield/Rate |   | AverageBalance |   | InterestIncome/Expense |   | AverageYield/Rate |   |
|                                                   |   | (Dollars                In Thousands) |    |
| Interest-earning                assets:                |   |                                  |    |                   |   |              |   |           |   |                   |   |              |   |
| Loans                                                  |   | $                                     | 694,072 |                   | $      | 37,121            |   |           | 7.15%  |                   | $      | 556,197           |   | $ | 25,491 |   |   | 6.12% |   |
| Investment                securities:                  |   |                                  |    |                   |   |              |   |           |   |                   |   |              |   |   |   |   |   |   |   |
| Taxable                                                |   |                                  | 121,100 |                   |   | 4,001             |   |           | 4.42%  |                   |   | 113,459           |   |   | 3,661 |   |   | 4.31% |   |
| Nontaxable                                             |   |                                  | 9,859   |                   |   | 433               |   |           | 5.87%  |                   |   | 8,672             |   |   | 387 |   |   | 5.96% |   |
| Other                short-term investments            |   |                                  | 45,568  |                   |   | 1,023             |   |           | 3.00%  |                   |   | 7,941             |   |   | 60 |   |   | 1.01% |   |
| Total                interest-earning assets           |   | $                                     | 870,599 |                   | $      | 42,578            |   |           | 6.54%  |                   | $      | 686,269           |   | $ | 29,599 |   |   | 5.76% |   |
| Interest-bearing                liabilities:           |   |                                  |    |                   |   |              |   |           |   |                   |   |              |   |   |   |   |   |   |   |
| Demand                deposits                         |   | $                                     | 198,131 |                   | $      | 2,065             |   |           | 1.39%  |                   | $      | 170,967           |   | $ | 822 |   |   | 0.64% |   |
| Savings                deposits                        |   |                                  | 42,690  |                   |   | 219               |   |           | 0.69%  |                   |   | 42,189            |   |   | 172 |   |   | 0.54% |   |
| Time                deposits                           |   |                                  | 372,581 |                   |   | 8,845             |   |           | 3.17%  |                   |   | 253,552           |   |   | 4,791 |   |   | 2.52% |   |
| FHLB                advances                           |   |                                  | 98,588  |                   |   | 2,270             |   |           | 3.08%  |                   |   | 59,402            |   |   | 960 |   |   | 2.16% |   |
| Notes                payable                           |   |                                  | 10,310  |                   |   | 537               |   |           | 6.97%  |                   |   | 10,310            |   |   | 413 |   |   | 5.36% |   |
| Other                short-term borrowings             |   |                                  | 8,173   |                   |   | 95                |   |           | 1.55%  |                   |   | 29,235            |   |   | 264 |   |   | 1.20% |   |
| Total                interest-bearing liabilities      |   | $                                     | 730,473 |                   | $      | 14,031            |   |           | 2.57%  |                   | $      | 565,655           |   | $ | 7,422 |   |   | 1.75% |   |
|                                                   |   |                                  |    |                   |   |              |   |           |   |                   |   |              |   |   |   |   |   |   |  |
| Interest                rate spread                    |   |                                  |    |                   |   |              |   |           | 3.97%  |                   |   |              |   |   |   |   |   | 4.01% |   |
| Net                interest income                     |   |                                  |    |                   | $      | 28,547            |   |           |   |                   |   |              |   | $ | 22,177 |   |   |   |   |
| Net                interest margin                     |   |                                  |    |                   |   |              |   |           | 4.38%  |                   |   |              |   |   |   |   |   | 4.32% |   |

----

*Provision      for Loan Losses*

|   | · | 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. |
|--------|--------|----------------------------------------------------------------------------|

| As                of Quarter End                                                                                                                  |   | Sep-05                                |   | Jun-05 |   | Mar-05 |   | Dec-04 |   | Sep-04 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                                                                              |   | (Dollars                In Thousands) |   |
| Loans                accounted for on a nonaccrual basis                                                                                          |   | $                                     | 7,446  |   | $      | 7,534  |   | $      | 6,531  |   | $      | 1,417 |   | $ | 3,857 |   |
| Accruing                loans which are contractually past due 90 days or more as to principal                or                interest payments |   |                                  | 20     |   |   | 9      |   |   | 6      |   |   | 11 |   |   | 10 |   |
| Troubled                debt restructurings not included above                                                                                    |   |                                  | -      |   |   | -      |   |   | -      |   |   | 2,045 |   |   | 2,170 |   |
| Total                nonperforming loans                                                                                                          |   | $                                     | 7,466  |   | $      | 7,543  |   | $      | 6,537  |   | $      | 3,473 |   | $ | 6,037 |   |
| Total                nonperforming loans as a percentage of total loans                                                                           |   |                                  | 1.02   | %      |   | 0.91   | %      |   | 0.96   | %      |   | 0.54 | % |   | 1.00 | % |

----

*Other      Income*

|                                                                             |   | Three                Months EndedSeptember                30, |   |   |   | Nine                Months EndedSeptember                30, |   |   |   |
|----------------------------------------------------------------------------------|--------|---------------------------------------------------------------|--------|--------|--------|--------------------------------------------------------------|--------|--------|--------|
|                                                                             |   | 2005                                                          |   | 2004   |   | Pct.                Chg.                                     | 2005   |   | 2004   |   | Pct.                Chg. |
|                                                                             |   | (Dollars                in Thousands)                         |   |
| Noninterest                income:                                               |   |                                                          |   |   |   |                                                         |   |   |   |   |   |   |   |
| Service                charges on deposit accounts                               |   | $                                                             | 1,069  |   | $      | 1,158                                                        |   |   | -7.7   | % | $ | 3,010 |   | $ | 3,318 |   |   | -9.3 | % |
| Mortgage                origination fees                                         |   |                                                          | 189    |   |   | 143                                                          |   |   | 32.2   | % |   | 424 |   |   | 379 |   |   | 11.9 | % |
| Securities                transactions, net                                      |   |                                                          | -      |   |   | 6                                                            |   |   | -100.0 | % |   | (1 | ) |   | 6 |   |   | -116.7 | % |
| Gain                on sale of financial services operation                      |   |                                                          | -      |   |   | -                                                            |   |   | 0.0    | % |   | - |   |   | 200 |   |   | -100.0 | % |
| Earnings                on bank-owned life insurance                             |   |                                                          | 83     |   |   | 86                                                           |   |   | -3.5   | % |   | 246 |   |   | 230 |   |   | 7.0 | % |
| Gain                (loss) on disposal of assets                                 |   |                                                          | (1     | )      |   | 7                                                            |   |   | -114.3 | % |   | (23 | ) |   | 28 |   |   | -182.1 | % |
| Brokerage                fee income                                              |   |                                                          | 6      |   |   | 2                                                            |   |   | 200.0  | % |   | 11 |   |   | 119 |   |   | -90.8 | % |
| Other                noninterest income                                          |   |                                                          | 224    |   |   | 212                                                          |   |   | 5.7    | % |   | 708 |   |   | 630 |   |   | 12.4 | % |
| Total                noninterest income                                          |   | $                                                             | 1,570  |   | $      | 1,614                                                        |   |   | -2.7   | % | $ | 4,375 |   | $ | 4,910 |   |   | -10.9 | % |
|                                                                             |   |                                                          |   |   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest                income as a percentage of average assets (annualized) |   |                                                          | 0.64   | %      |   | 0.83                                                         | %      |   |   |   |   | 0.63 | % |   | 0.88 | % |   |   |   |

*Other      Expenses*

|                                                                                   |   | Three                Months EndedSeptember                30, |   |   |   | Nine                Months EndedSeptember                30, |   |   |   |
|----------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|--------|--------|--------|--------------------------------------------------------------|--------|--------|--------|
|                                                                                   |   | 2005                                                          |   | 2004   |   | Pct.                Chg.                                     | 2005   |   | 2004   |   | Pct.                Chg. |
|                                                                                   |   | (Dollars                in Thousands)                         |   |
| Noninterest                expenses:                                                   |   |                                                          |   |   |   |                                                         |   |   |   |   |   |   |   |
| Salaries                and wages                                                      |   | $                                                             | 3,442  |   | $      | 3,649                                                        |   |   | -5.7   | % | $ | 10,007 |   | $ | 9,357 |   |   | 6.9 | % |
| Deferred                loan cost                                                      |   |                                                          | (410   | )      |   | (189                                                         | )      |   | 116.9  | % |   | (1,178 | ) |   | (543 | ) |   | 116.9 | % |
| Employee                benefits                                                       |   |                                                          | 796    |   |   | 679                                                          |   |   | 17.2   | % |   | 2,375 |   |   | 2,240 |   |   | 6.0 | % |
| Net                occupancy expense of premises                                       |   |                                                          | 496    |   |   | 491                                                          |   |   | 1.0    | % |   | 1,453 |   |   | 1,393 |   |   | 4.3 | % |
| Furniture                and equipment expense                                         |   |                                                          | 536    |   |   | 532                                                          |   |   | 0.8    | % |   | 1,565 |   |   | 1,582 |   |   | -1.1 | % |
| Advertising                and business development                                    |   |                                                          | 145    |   |   | 101                                                          |   |   | 43.6   | % |   | 403 |   |   | 313 |   |   | 28.8 | % |
| Supplies                and printing                                                   |   |                                                          | 135    |   |   | 94                                                           |   |   | 43.6   | % |   | 374 |   |   | 314 |   |   | 19.1 | % |
| Telephone                and internet charges                                          |   |                                                          | 92     |   |   | 88                                                           |   |   | 4.5    | % |   | 266 |   |   | 255 |   |   | 4.3 | % |
| Postage                and courier                                                     |   |                                                          | 145    |   |   | 144                                                          |   |   | 0.7    | % |   | 456 |   |   | 425 |   |   | 7.3 | % |
| Legal                and accounting fees                                               |   |                                                          | 83     |   |   | 66                                                           |   |   | 25.8   | % |   | 293 |   |   | 231 |   |   | 26.8 | % |
| Other                noninterest expense                                               |   |                                                          | 799    |   |   | 632                                                          |   |   | 26.4   | % |   | 2,238 |   |   | 2,059 |   |   | 8.7 | % |
| Total                noninterest expense                                               |   | $                                                             | 6,259  |   | $      | 6,287                                                        |   |   | -0.4   | % | $ | 18,252 |   | $ | 17,626 |   |   | 3.6 | % |
|                                                                                   |   |                                                          |   |   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest expense                as a percentage of average assets (annualized) |   |                                                          | 2.55   | %      |   | 3.24                                                         | %      |   |   |   |   | 2.63 | % |   | 3.16 | % |   |   |   |

----

*Income      Tax Expense*

**LIQUIDITY      AND CAPITAL RESOURCES**

*Contractual      Obligations*

|  Contractual                Obligations                           |   |  Total                           |    | Less                than1                year |   | 1                to 3years |   | 3                to 5years |   | More                than5                years |   |
|------------------------------------------------------------------------|--------|---------------------------------------|---------|-----------------------------------------------|--------|----------------------------|--------|----------------------------|--------|------------------------------------------------|--------|
|                                                                   |   | (Dollars                In Thousands) |    |
| Federal                Home Loan Bank of Atlanta Advances              |   | $                                     | 90,244  |                                          | $      | 12,904                     |   | $                          | 1,208  |                                           | $      | 5,485 |   | $ | 70,647 |   |
| Operating                Lease Obligations                             |   |                                  | 616     |                                          |   | 208                        |   |                       | 364    |                                           |   | 44 |   |   | - |   |
| Guaranteed                Preferred Beneficial Interests in Debentures |   |                                  | 10,310  |                                          |   | -                          |   |                       | -      |                                           |   | - |   |   | 10,310 |   |
|                                                                   |   | $                                     | 101,170 |                                          | $      | 13,112                     |   | $                          | 1,572  |                                           | $      | 5,529 |   | $ | 80,957 |   |

----

*Off      Balance Sheet Arrangements*

|                                        |   | Sep-05 |        | Dec-04 |   |
|---------------------------------------------|--------|--------|-------------|--------|--------|
| Commitments                to extend credit |   | $      | 138,505,000 |   | $      | 118,155,000 |   |
| Standby                letters of credit    |   | $      | 11,253,000  |   | $      | 5,735,000 |   |

*Stockholders’      Equity*

|                                                             |   | CompanyConsolidated |   | Bank |   | MinimumRegulatoryRequirement |   |
|------------------------------------------------------------------|--------|---------------------|--------|------|--------|------------------------------|--------|
| Total                Capital to Risk Weighted Assets             |   |                | 12.7   | %    |   | 12.5                         | %      |   | 8.0 | % |
| Tier                1 Capital to Risk Weighted Assets            |   |                | 11.4   | %    |   | 11.2                         | %      |   | 4.0 | % |
| Tier                1 Capital to Average Assets (Leverage Ratio) |   |                | 9.4    | %    |   | 9.3                          | %      |   | 4.0 | % |

----

**CRITICAL      ACCOUNTING ESTIMATES**

*Allowance      for Loan Losses *

*Estimates      of Fair Value *

**Recent      Accounting Pronouncements**

----

| **ITEM                3.** | **QUANTITATIVE                AND QUALITATIVE DISCLOSURES ABOUT MARKET                RISK** |
|----------------------------|----------------------------------------------------------------------------------------------|

|                                            |   | 3-Month                               |    | 6-Month |   | 1-Year  |   |
|-------------------------------------------------|--------|---------------------------------------|---------|---------|--------|---------|--------|
|                                            |   | (Dollars                In Thousands) |    |
| *Regulatory                Defined*             |   |                                  |    |    |   |    |   |
| Rate                Sensitive Assets (RSA)      |   | $                                     | 583,749 |    | $      | 604,201 |   | $ | 664,984 |   |
| Rate                Sensitive Liabilities (RSL) |   |                                  | 375,427 |    |   | 440,519 |   |   | 565,233 |   |
| RSA                minus RSL (Gap)              |   | $                                     | 208,322 |    | $      | 163,682 |   | $ | 99,751 |   |
|                                            |   |                                  |    |    |   |    |   |   |   |   |
| Gap                Ratio (RSA/RSL)              |   |                                  | 1.55    |    |   | 1.37    |   |   | 1.18 |   |
|                                            |   |                                  |    |    |   |    |   |   |   |   |
| *Management-Adjusted*                           |   |                                  |    |    |   |    |   |   |   |   |
| Rate                Sensitive Assets (RSA)      |   | $                                     | 597,839 |    | $      | 632,382 |   | $ | 716,158 |   |
| Rate                Sensitive Liabilities (RSL) |   |                                  | 189,167 |    |   | 254,259 |   |   | 440,521 |   |
| RSA                minus RSL (Gap)              |   | $                                     | 408,672 |    | $      | 378,123 |   | $ | 275,637 |   |
|                                            |   |                                  |    |    |   |    |   |   |   |   |
| Gap                Ratio (RSA/RSL)              |   |                                  | 3.16    |    |   | 2.49    |   |   | 1.63 |   |

----

| MarketRate                  Change | Effect                  on Net Interest Income |
|------------------------------------|------------------------------------------------|
| Gradual                            | Immediate                                      |
| +300                  bps          | 15.43%                                         | 24.59% |
| +200                  bps          | 12.93%                                         | 14.96% |
| +100                  bps          | 7.31%                                          | 7.64% |
| -100                  bps          | -7.14%                                         | -7.51% |
| -200                  bps          | -13.05%                                        | -15.97% |

| **ITEM                4.** | **CONTROLS                AND PROCEDURES** |
|----------------------------|--------------------------------------------|

| **PART                II.** | **OTHER                INFORMATION** |
|-----------------------------|--------------------------------------|

| **ITEM                1.** | **LEGAL                PROCEEDINGS** |
|----------------------------|--------------------------------------|

**ITEM      2.           UNREGISTERED      SALE OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY      SECURITIES**

|      |   | Total                numberof                sharespurchased |   | Averageprice                paidper                share |   | Number                of sharespurchased                as part ofpublicly                announcedplans                or programs |   | Maximum                number ofshares                that may yet bepurchased                under theplans                or programs1 |   |
|-----------|--------|--------------------------------------------------------------|--------|----------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------|--------|
| July      |   |                                                         | -      |                                                     |   | -                                                                                                                                   |   |                                                                                                                                     | -      |   |   | - |   |
| August    |   |                                                         | -      |                                                     |   | -                                                                                                                                   |   |                                                                                                                                     | -      |   |   | - |   |
| September |   |                                                         | -      |                                                     |   | -                                                                                                                                   |   |                                                                                                                                     | -      |   |   | - |   |
| Total     |   |                                                         | -      |                                                     | $      | -                                                                                                                                   |   |                                                                                                                                     | -      |   |   | 400,000 |   |

| 1 | On                May 24, 2005, the Company renewed its annual plan to repurchase up                to                400,000 shares of the Company's common stock over the next twelve                month                period. No shares were purchased under this plan during the third                quarter. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **ITEM                3.** | **DEFAULTS                UPON SENIOR SECURITIES** |
|----------------------------|----------------------------------------------------|

| **ITEM                4.** | **SUBMISSION                OF MATTERS TO A VOTE OF SECURITY                HOLDERS** |
|----------------------------|---------------------------------------------------------------------------------------|

| **ITEM                5.** | **OTHER                INFORMATION** |
|----------------------------|--------------------------------------|

| **ITEM                6.** | **EXHIBITS** |
|----------------------------|--------------|

| 31.1   |   | Rule                  13a-14(a) Certification of CEO |   |
|--------|--------|------------------------------------------------------|--------|
|   |   |                                                 |   |
| 31.2   |   | Rule                  13a-14(a) Certification of CFO |   |
|   |   |                                                 |   |
| 32.1   |   | Section                  1350 Certification of CEO   |   |
|   |   |                                                 |   |
| 32.2   |   | Section                  1350 Certification of CFO   |   |

----

**SIGNATURES**

| **PAB                BANKSHARES, INC.** |   |                                  |   |
|-----------------------------------------|--------|---------------------------------------|--------|
| Registrant                              |   |                                  |   |
|                                    |   |                                  |   |   |   |
|                                    | Date:  | ***November                9, 2005*** | By:    | ***/s/                M. Burke Welsh, Jr.*** |   |
|                                    |   |                                  |   | M.                Burke Welsh, Jr. |   |
|                                    |   |                                  |   | President                and Chief Executive Officer |
|                                    |   |                                  |   | (principal                executive officer of the registrant) |
|                                    |   |                                  |   |   |   |
|                                    |   |                                  |   |   |   |
|                                    | Date:  | ***November                9, 2005*** | By:    | ***/s/                Donald J. Torbert, Jr.*** |   |
|                                    |   |                                  |   | Donald                J. Torbert, Jr. |   |
|                                    |   |                                  |   | Executive                Vice President and Chief Financial Officer |
|                                    |   |                                  |   | (principal                financial officer of the                registrant) |

----