Investor Relations

Press Release

Park National Corporation reports third quarter 2017 financial results

Company Release - 10/23/2017 4:15 PM ET

NEWARK, Ohio, Oct. 23, 2017 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE AMERICAN:PRK) today announced financial results for the third quarter and first nine months of 2017 (three and nine months ended September 30, 2017), including continued growth in deposit accounts, commercial loans and consumer loans. Park’s board of directors also declared a quarterly cash dividend of $0.94 per common share, payable on December 8, 2017 to common shareholders of record as of November 17, 2017.

Park’s third quarter of 2017 net income was $22.1 million, a 16.2 percent rise from $19.0 million in the second quarter 2017 and a 9.1 percent increase from the first quarter of 2017 net income results of $20.3 million.

Compared to the third quarter of 2016, Park’s third quarter net income this year is a 19.4 percent decrease from $27.4 million. Third quarter net income per diluted common share was $1.44, compared to $1.78 in the third quarter of 2016. Net income for the first nine months of 2017 was $61.4 million, a 7.1 percent decrease from $66.1 million for the same period in 2016. Net income per diluted common share for the first nine months of 2017 was $3.99, compared to $4.29 for the first nine months of 2016. Financial results in 2016 were influenced by significant recoveries from loans related to Park’s Southeast Property Holdings subsidiary and an overall reduction of the allowance for loan losses.

Park's community-banking subsidiary, The Park National Bank, reported net income of $21.3 million for the third quarter of 2017, compared to $25.5 million for the third quarter of 2016. The bank’s third quarter 2017 net income was a 5.6 percent rise from $20.2 million in the second quarter 2017 and a 0.9 percent decline from the first quarter of 2017 net income results of $21.5 million. Net income for the first nine months of 2017 was $62.9 million, compared to $68.3 million for the same period in 2016. The bank’s total assets were $7.8 billion at September 30, 2017, rising from $7.4 billion at December 31, 2016.

In the first nine months of 2017, the bank grew consumer loans by $116.2 million (13.8 percent annualized) and commercial loans by $21.9 million (1.1 percent annualized), offset by a reduction in home equity line of credit balances of $5.8 million (3.6 percent annualized) and residential loan balances of $33.7 million (3.7 percent annualized). The bank’s total loans were $5.33 billion at September 30, 2017, a $97.5 million (2.5 percent annualized) increase over $5.23 billion at December 31, 2016.

Headquartered in Newark, Ohio, Park National Corporation had $7.8 billion in total assets (as of September 30, 2017). The Park organization principally consists of 11 community bank divisions, a non-bank subsidiary and two specialty finance companies. Park's Ohio-based banking operations are conducted through Park subsidiary The Park National Bank and its divisions, which include Fairfield National Bank Division, Richland Bank Division, Century National Bank Division, First-Knox National Bank Division, Farmers Bank Division, United Bank, N.A. Division, Second National Bank Division, Security National Bank Division, Unity National Bank Division, and The Park National Bank of Southwest Ohio & Northern Kentucky Division; and Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance). The Park organization also includes Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.

Complete financial tables are listed below…

Media contact: Bethany Lewis, 740.349.0421, blewis@parknationalbank.com 
Investor contact: Brady Burt, 740.322.6844, bburt@parknationalbank.com

Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Park cautions that any forward-looking statements contained in this Current Report on Form 8-K or made by management of Park are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance.  The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties.  Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements.  Risks and uncertainties that could cause actual results to differ materially include, without limitation: Park's ability to execute our business plan successfully and within the expected timeframe; general economic and financial market conditions, specifically in the real estate markets and the credit markets, either nationally or in the states in which Park and our subsidiaries do business, may experience a slowing or reversal of the recent economic expansion in addition to continuing residual effects of recessionary conditions and an uneven spread of positive impacts of recovery on the economy and our counterparties, resulting in adverse impacts on the demand for loan, deposit and other financial services, delinquencies, defaults and counterparties' ability to meet credit and other obligations; changes in interest rates and prices may adversely impact the value of securities, loans, deposits and other financial instruments and the interest rate sensitivity of our consolidated balance sheet as well as reduce interest margins and impact loan demand; changes in consumer spending, borrowing and saving habits, whether due to changing business and economic conditions, legislative and regulatory initiatives, or other factors; changes in unemployment; changes in customers', suppliers', and other counterparties' performance and creditworthiness; asset/liability repricing risks and liquidity risks; our liquidity requirements could be adversely affected by changes to regulations governing bank and bank holding company capital and liquidity standards as well as by changes in our assets and liabilities; competitive factors among financial services organizations could increase significantly, including product and pricing pressures, changes to third-party relationships and our ability to attract, develop and retain qualified bank professionals; clients could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding; uncertainty regarding the nature, timing and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and our subsidiaries, including major reform of the regulatory oversight structure of the financial services industry and changes in laws and regulations concerning taxes, pensions, bankruptcy, consumer protection, accounting, bank products and services, bank capital and liquidity standards, fiduciary standards, securities and other aspects of the financial services industry, specifically the reforms provided for in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and the Basel III regulatory capital reforms, as well as regulations already adopted and which may be adopted in the future by the relevant regulatory agencies, including the Consumer Financial Protection Bureau, the OCC, the FDIC, and the Federal Reserve Board, to implement the Dodd-Frank Act's provisions, the Budget Control Act of 2011, the American Taxpayer Relief Act of 2012, the JOBS Act, the FAST Act and the Basel III regulatory capital reforms; the effect of changes in accounting policies and practices, as may be adopted by the Financial Accounting Standards Board, the SEC, the Public Company Accounting Oversight Board and other regulatory agencies, and the accuracy of our assumptions and estimates used to prepare our financial statements; changes in law and policy accompanying the new presidential administration and uncertainty or speculation pending the enactment of such changes; the effect of healthcare laws in the United States and potential changes for such laws which may increase our healthcare and other costs and negatively impact our operations and financial results; significant changes in the tax laws, which may adversely affect the fair values of net deferred tax assets and obligations of state and political subdivisions held in Park's investment securities portfolio; the effect of trade, monetary, fiscal and other governmental policies of the U.S. federal government, including money supply and interest rate policies of the Federal Reserve Board; disruption in the liquidity and other functioning of U.S. financial markets; the impact on financial markets and the economy of any changes in the credit ratings of the U.S. Treasury obligations and other U.S. government-backed debt, as well as issues surrounding the levels of U.S., European and Asian government debt and concerns regarding the creditworthiness of certain sovereign governments, supranationals and financial institutions in Europe and Asia; the uncertainty surrounding the actions to be taken to implement the referendum by United Kingdom voters to exit the European Union; our litigation and regulatory compliance exposure, including any adverse developments in legal proceedings or other claims and unfavorable resolution of regulatory and other governmental examinations or other inquiries; the adequacy of our risk management program; the impact of our ability to anticipate and respond to technological changes on our ability to respond to customer needs and meet competitive demands; the ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors and other service providers, including as a result of cyber attacks; fraud, scams and schemes of third parties; the impact of widespread natural and other disasters, pandemics, dislocations, civil unrest, terrorist activities or international hostilities on the economy and financial markets generally or on us or our counterparties specifically; demand for loans in the respective market areas served by Park and our subsidiaries; and other risk factors relating to the banking industry as detailed from time to time in Park's reports filed with the SEC including those described in "Item 1A. Risk Factors" of Part I of Park's Annual Report on Form 10-K for the fiscal year ended December 31, 2016. Park does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement was made, or reflect the occurrence of unanticipated events, except to the extent required by law.    


PARK NATIONAL CORPORATION
Financial Highlights
As of or for the three months ended September 30, 2017, June 30, 2017, and September 30, 2016     
       
 201720172016 Percent change vs.
(in thousands, except share and per share data)3rd QTR2nd QTR3rd QTR 2Q '173Q '16
INCOME STATEMENT:      
Net interest income$61,551  $59,778  $58,533  3.0% 5.2%
Provision for loan losses3,283  4,581  (7,366) N.M.  N.M. 
Other income22,089  19,251  20,535  14.7% 7.6%
Other expense49,811  48,106  46,756  3.5% 6.5%
Income before income taxes$30,546  $26,342  $39,678  16.0% (23.0) %
Income taxes8,434  7,310  12,229  15.4% (31.0) %
Net income$22,112  $19,032  $27,449  16.2% (19.4) %
       
MARKET DATA:      
Earnings per common share - basic (b)$1.45  $1.24  $1.79  16.9% (19.0)%
Earnings per common share - diluted (b)1.44  1.24  1.78  16.1% (19.1)%
Cash dividends per common share0.94  0.94  0.94  % %
Book value per common share at period end49.71  49.18  48.99  1.1% 1.5%
Market price per common share at period end107.99  103.72  96.00  4.1% 12.5%
Market capitalization at period end1,649,770  1,586,613  1,471,755  4.0% 12.1%
       
Weighted average common shares - basic (a)15,287,974  15,297,085  15,330,791  (0.1)% (0.3)%
Weighted average common shares - diluted (a)15,351,590  15,398,865  15,399,707  (0.3)% (0.3)%
Common shares outstanding at period end15,277,061  15,297,080  15,330,781  (0.1)% (0.4)%
       
PERFORMANCE RATIOS: (annualized)      
Return on average assets (a)(b)1.11% 0.99% 1.46% 12.1% (24.0) %
Return on average shareholders' equity (a)(b)11.52% 10.13% 14.67% 13.7% (21.5) %
Yield on loans4.71% 4.63% 4.66% 1.7% 1.1%
Yield on investment securities2.48% 2.44% 2.25% 1.6% 10.2%
Yield on money markets1.28% 1.05% 0.52% 21.9% 146.2%
Yield on earning assets4.03% 4.02% 3.99% 0.2% 1.0%
Cost of interest bearing deposits0.48% 0.44% 0.32% 9.1% 50.0%
Cost of borrowings2.37% 2.38% 2.49% (0.4) % (4.8) %
Cost of paying liabilities0.83% 0.80% 0.74% 3.8% 12.2%
Net interest margin (g)3.40% 3.42% 3.42% (0.6) % (0.6) %
Efficiency ratio (g)58.65% 59.97% 58.67% (2.2) % %
       
OTHER RATIOS (NON - GAAP):      
Annualized return on average tangible assets (a)(b)(e)1.12% 1.00% 1.48% 12.0% (24.3)%
Annualized return on average tangible equity (a)(b)(c)12.73% 11.21% 16.24% 13.6% (21.6)%
Tangible book value per share (d)$44.97  $44.45  $44.27  1.2% 1.6%
       
N.M. - Not meaningful        
Note: Explanations for footnotes (a) - (g) are included at the end of the financial highlights.      
       
       
       
       
       
PARK NATIONAL CORPORATION
Financial Highlights (continued)
Three months ended September 30, 2017, June 30, 2017, and September 30, 2016     
       
     Percent change vs.
BALANCE SHEET:September 30, 2017June 30, 2017September 30, 2016 2Q '173Q '16
       
Investment securities$1,571,038  $1,579,934  $1,478,255  (0.6) % 6.3%
Loans5,365,877  5,365,437  5,187,004  % 3.4%
Allowance for loan losses55,232  53,822  53,562  2.6% 3.1%
Goodwill72,334  72,334  72,334  % %
Other real estate owned (OREO)14,366  14,881  14,941  (3.5) % (3.8) %
Total assets7,862,695  7,832,092  7,364,092  0.4% 6.8%
Total deposits5,974,322  5,961,576  5,519,659  0.2% 8.2%
Borrowings1,056,888  1,046,176  1,005,937  1.0% 5.1%
Total shareholders' equity759,367  752,248  751,063  0.9% 1.1%
Tangible equity (d)687,033  679,914  678,729  1.0% 1.2%
Nonperforming loans111,949  110,904  116,864  0.9% (4.2) %
Nonperforming assets126,315  125,785  131,805  0.4% (4.2) %
       
ASSET QUALITY RATIOS:      
Loans as a % of period end total assets68.24% 68.51% 70.44% (0.4) % (3.1) %
Nonperforming loans as a % of period end loans2.09% 2.07% 2.25% 1.0% (7.1) %
Nonperforming assets as a % of period end loans + OREO2.35% 2.34% 2.53% 0.4% (7.1) %
Allowance for loan losses as a % of period end loans1.03% 1.00% 1.03% 3.0% %
Net loan charge-offs (recoveries)$1,873  $681  $(2,229) N.M.  N.M. 
Annualized net loan charge-offs (recoveries) as a % of average loans (a)0.14% 0.05% (0.17) % N.M.  N.M. 
       
CAPITAL & LIQUIDITY:      
Total shareholders' equity / Period end total assets9.66% 9.60% 10.20% 0.6% (5.3) %
Tangible equity (d) / Tangible assets (f)8.82% 8.76% 9.31% 0.7% (5.3) %
Average shareholders' equity / Average assets (a)9.60% 9.74% 9.97% (1.4) % (3.7) %
Average shareholders' equity / Average loans (a)14.27% 14.14% 14.49% 0.9% (1.5) %
Average loans / Average deposits (a)88.37% 90.21% 91.14% (2.0) % (3.0) %
       


PARK NATIONAL CORPORATION
Financial Highlights
Nine months ended September 30, 2017 and 2016   
     
 2017
 2016  
(in thousands, except share and per share data)YTD
 YTD     Percent change
vs. YTD
INCOME STATEMENT:    
Net interest income$180,281  $175,837  2.5%
Provision for (recovery of) loan losses8,740  (3,819) N.M. 
Other income58,847  56,660  3.9%
Other expense145,379  141,961  2.4%
Income before income taxes$85,009  $94,355  (9.9)%
Income taxes23,598  28,222  (16.4)%
Net income$61,411  $66,133  (7.1)%
     
MARKET DATA:    
Earnings per common share - basic (b)$4.01  $4.31  (7.0)%
Earnings per common share - diluted (b)3.99  4.29  (7.0)%
Cash dividends per common share2.82  2.82  %
     
Weighted average common shares - basic (a)15,299,039  15,330,802  (0.2)%
Weighted average common shares - diluted (a)15,394,199  15,401,825  %
     
PERFORMANCE RATIOS: (annualized)    
Return on average assets (a)(b)1.06% 1.19% (10.9) %
Return on average shareholders' equity (a)(b)10.90% 12.04% (9.5) %
Yield on loans4.66% 4.70% (0.9) %
Yield on investment securities2.45% 2.31% 6.1%
Yield on earning assets4.04% 4.03% 0.2%
Cost of interest bearing deposits0.43% 0.32% 34.4%
Cost of borrowings2.37% 2.44% (2.9) %
Cost of paying liabilities0.80% 0.74% 8.1%
Net interest margin (g)3.44% 3.47% (0.9) %
Efficiency ratio (g)59.91% 60.64% (1.2) %
     
ASSET QUALITY RATIOS:    
Net loan charge-offs (recoveries)4,132  (887)  N.M. 
Annualized net loan charge-offs (recoveries) as a % of average loans (a)0.10% (0.02)% N.M. 
     
CAPITAL & LIQUIDITY:    
Average shareholders' equity / Average assets (a)9.72% 9.89% (1.7) %
Average shareholders' equity / Average loans (a)14.17% 14.42% (1.7) %
Average loans / Average deposits (a)90.29% 91.21% (1.0) %
     
OTHER RATIOS (NON - GAAP):    
Annualized return on average tangible assets (a)(b)(e)1.07% 1.20% (10.8)%
Annualized return on average tangible equity (a)(b)(c)12.06% 13.35% (9.7)%
     
N.M. - Not meaningful    
Note: Explanations for footnotes (a) - (g) are included at the end of the financial highlights      .    
     


PARK NATIONAL CORPORATION   
Financial Highlights (continued)      
       
(a) Averages are for the three months ended September 30, 2017, June 30, 2017 and September 30, 2016 or for the nine months ended September 30,
2017 and September 30, 2016, as appropriate.
   
    
(b) Reported measure uses net income.   
    
(c) Net income for each period divided by average tangible equity during the period. Average tangible equity equals average shareholders' equity during
the applicable period less average goodwill during the applicable period.
   
       
RECONCILIATION OF AVERAGE SHAREHOLDERS' EQUITY TO AVERAGE TANGIBLE EQUITY:   
 THREE MONTHS ENDED NINE MONTHS ENDED
 September 30,
2017
June 30,
2017
September 30,
2016
   September 30, 2017September 30, 2016
AVERAGE SHAREHOLDERS' EQUITY$761,448 $753,373 $744,620 $753,017 $733,937 
Less: Average goodwill72,334 72,334 72,334 72,334 72,334 
AVERAGE TANGIBLE EQUITY$689,114 $681,039 $672,286 $680,683 $661,603 
       
(d) Tangible equity divided by common shares outstanding at period end. Tangible equity equals total shareholders' equity less goodwill, in each case at the end of the period.   
       
RECONCILIATION OF TOTAL SHAREHOLDERS' EQUITY TO TANGIBLE EQUITY:   
 September 30,
2017
June 30,
2017
September 30,
2016
   
TOTAL SHAREHOLDERS' EQUITY$759,367 $752,248 $751,063   
Less: Goodwill72,334 72,334 72,334   
TANGIBLE EQUITY$687,033 $679,914 $678,729   
       
(e) Net income for each period divided by average tangible assets during the period. Average tangible assets equals average assets less average goodwill,
in each case during the applicable period.
   
       
RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS:   
 THREE MONTHS ENDED NINE MONTHS ENDED
 September 30,
2017
June 30,
2017
September 30,
2016
 September 30, 2017September 30, 2016
AVERAGE ASSETS$7,928,766 $7,736,884 $7,468,439 $7,743,132 $7,419,342 
Less: Average goodwill72,334 72,334 72,334 72,334 72,334 
AVERAGE TANGIBLE ASSETS$7,856,432 $7,664,550 $7,396,105 $7,670,798 $7,347,008 
       
(f) Tangible equity divided by tangible assets. Tangible assets equals total assets less goodwill, in each case at the end of the period.   
       
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:   
 September 30,
2017
June 30,
2017
September 30,
2016
   
TOTAL ASSETS$7,862,695 $7,832,092 $7,364,092   
Less: Goodwill72,334 72,334 72,334   
TANGIBLE ASSETS$7,790,361 $7,759,758 $7,291,758   
       
(g) Efficiency ratio is calculated by dividing total other expense by the sum of fully taxable equivalent net interest income and other income. Fully taxable
equivalent net interest income reconciliation is shown below assuming a 35% tax rate. Additionally, net interest margin is calculated on a fully taxable
equivalent basis by dividing fully taxable equivalent net interest income by average interest earning assets.
   
       
RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME   
 THREE MONTHS ENDED NINE MONTHS ENDED
 September 30,
2017
June 30,
2017
September 30,
2016
 September 30, 2017September 30, 2016
Interest income$73,224 $70,476 $68,242 $212,455 $204,561 
Fully taxable equivalent adjustment1,291 1,185 619 3,540 1,618 
Fully taxable equivalent interest income$74,515 $71,661 $68,861 $215,995 $206,179 
Interest expense11,673 10,698 9,709 32,174 28,724 
Fully taxable equivalent net interest income$62,842 $60,963 $59,152 $183,821 $177,455 
       


PARK NATIONAL CORPORATION
Consolidated Statements of Income
         
  Three Months Ended Nine Months Ended
            September 30,     September 30,
(in thousands, except share and per share data) 2017   2016 2017   2016
         
Interest income:        
Interest and fees on loans $63,110  $59,893  $184,240  $178,346 
Interest on:        
Obligations of U.S. Government, its agencies and other securities 6,757  7,339  20,787  23,718 
Obligations of states and political subdivisions 1,974  689  5,098  1,653 
Other interest income 1,383  321  2,330  844 
  Total interest income 73,224  68,242  212,455  204,561 
         
Interest expense:        
Interest on deposits:        
Demand and savings deposits 2,882  1,094  6,787  2,851 
Time deposits 2,521  2,352  7,139  7,128 
Interest on borrowings 6,270  6,263  18,248  18,745 
  Total interest expense 11,673  9,709  32,174  28,724 
         
  Net interest income 61,551  58,533  180,281  175,837 
         
Provision for (recovery of) loan losses 3,283  (7,366) 8,740  (3,819)
         
  Net interest income after provision for (recovery of) loan losses      58,268  65,899  171,541  179,656 
         
Other income 22,089  20,535  58,847  56,660 
         
Other expense 49,811  46,756  145,379  141,961 
         
  Income before income taxes 30,546  39,678  85,009  94,355 
         
Income taxes 8,434  12,229  23,598  28,222 
         
  Net income $22,112  $27,449  $61,411  $66,133 
         
Per Common Share:        
  Net income  - basic $1.45  $1.79  $4.01  $4.31 
  Net income  - diluted $1.44  $1.78  $3.99  $4.29 
         
  Weighted average shares - basic 15,287,974  15,330,791  15,299,039  15,330,802 
  Weighted average shares - diluted 15,351,590  15,399,707  15,394,199  15,401,825 
         
  Cash Dividends Declared $0.94  $0.94  $2.82  $2.82 
         


PARK NATIONAL CORPORATION
Consolidated Balance Sheets
   
(in thousands, except share data)September 30, 2017
 December 31, 2016
   
Assets  
   
Cash and due from banks$118,884  $122,811 
Money market instruments331,468  23,635 
Investment securities1,571,038  1,579,783 
Loans5,365,877  5,271,857 
Allowance for loan losses(55,232) (50,624)
Loans, net5,310,645  5,221,233 
Bank premises and equipment, net56,179  57,971 
Goodwill72,334  72,334 
Other real estate owned14,366  13,926 
Other assets387,781  375,893 
Total assets$7,862,695  $7,467,586 
   
Liabilities and Shareholders' Equity  
   
Deposits:  
Noninterest bearing$1,568,177  $1,523,417 
Interest bearing4,406,145  3,998,539 
Total deposits5,974,322  5,521,956 
Borrowings1,056,888  1,134,076 
Other liabilities72,118  69,314 
Total liabilities$7,103,328  $6,725,346 
   
   
Shareholders' Equity:  
Preferred shares (200,000 shares authorized; no shares outstanding at September 30, 2017 and December 31, 2016)

$  $ 
Common shares (No par value; 20,000,000 shares authorized in 2016 and 2015; 16,150,769 shares issued at September 30, 2017 
and 16,150,807 shares issued at December 31, 2016)
307,143  305,826 
Accumulated other comprehensive loss, net of taxes(13,005) (17,745)
Retained earnings553,434  535,631 
Treasury shares (873,708 shares at September 30, 2017 and 810,089 shares at December 31, 2016)(88,205) (81,472)
Total shareholders' equity$759,367  $742,240 
   
Total liabilities and shareholders' equity$7,862,695  $7,467,586 


    
PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
       
  Three Months Ended Nine Months Ended
  September 30,     September 30,
(in thousands) 2017
 2016       2017 2016
                       
Assets      
       
Cash and due from banks $114,313  $116,069  $114,060    $115,588 
Money market instruments 427,157  247,475  271,778  220,461 
Investment securities 1,569,237  1,507,484  1,563,020  1,535,235 
Loans 5,337,206  5,139,781  5,314,501  5,091,148 
Allowance for loan losses (53,750) (59,470) (51,775) (57,835)
Loans, net 5,283,456  5,080,311  5,262,726  5,033,313 
Bank premises and equipment, net 56,497  58,890  57,100  59,252 
Goodwill 72,334  72,334  72,334  72,334 
Other real estate owned 14,522  17,374  14,245  17,700 
Other assets 391,250  368,502  387,869  365,459 
Total assets $7,928,766    $7,468,439  $7,743,132  $7,419,342 
       
       
Liabilities and Shareholders' Equity      
       
Deposits:      
Noninterest bearing $1,534,395  $1,401,201  $1,522,802  $1,386,518 
Interest bearing 4,505,040  4,238,301  4,363,065  4,195,328 
Total deposits 6,039,435  5,639,502  5,885,867  5,581,846 
Borrowings 1,050,524  1,001,761  1,029,627  1,024,175 
Other liabilities 77,359  82,556  74,621  79,384 
Total liabilities $7,167,318  $6,723,819  $6,990,115  $6,685,405 
       
Shareholders' Equity:      
Preferred shares $  $  $  $ 
Common shares 306,496  304,885  306,101  304,449 
Accumulated other comprehensive loss, net of taxes    (11,905) (350) (14,298) (4,584)
Retained earnings 553,746  522,558  547,127  516,545 
Treasury shares (86,889) (82,473) (85,913) (82,473)
Total shareholders' equity $761,448  $744,620  $753,017  $733,937 
       
Total liabilities and shareholders' equity   $7,928,766  $7,468,439  $7,743,132  $7,419,342 


 
PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters
      
 2017
 2017 2017 2016 2016
(in thousands, except per share data)3rd QTR
 2nd QTR 1st QTR 4th QTR 3rd QTR
      
Interest income:     
Interest and fees on loans$63,110 $61,222 $59,908 $63,633  $59,893 
Interest on:     
Obligations of U.S. Government, its agencies and other securities6,757 6,892 7,138 6,909  7,339 
Obligations of states and political subdivisions1,974 1,664 1,460 979  689 
Other interest income1,383 698 249 176  321 
Total interest income73,224 70,476 68,755 71,697  68,242 
      
Interest expense:     
Interest on deposits:     
Demand and savings deposits2,882 2,291 1,614 1,228  1,094 
Time deposits2,521 2,457 2,161 2,209  2,352 
Interest on borrowings6,270 5,950 6,028 6,011  6,263 
Total interest expense11,673 10,698 9,803 9,448  9,709 
      
Net interest income61,551 59,778 58,952 62,249  58,533 
      
Provision for (recovery of) loan losses3,283 4,581 876 (1,282) (7,366)
      
Net interest income after provision for (recovery of) loan losses 58,268 55,197 58,076 63,531  65,899 
      
Other income22,089 19,251 17,507 22,071  20,535 
      
Other expense49,811 48,106 47,462 57,062  46,756 
      
Income before income taxes30,546 26,342 28,121 28,540  39,678 
      
Income taxes8,434 7,310 7,854 8,538  12,229 
      
Net income$22,112 $19,032 $20,267 $20,002  $27,449 
      
Per Common Share:     
Net income - basic$1.45 $1.24 $1.32 $1.30  $1.79 
Net income - diluted$1.44 $1.24 $1.31 $1.30  $1.78 


 
PARK NATIONAL CORPORATION
Detail of other income and other expense - Linked Quarters
        
   2017
 2017 2017 2016 2016
(in thousands)                          3rd QTR
   2nd QTR   1st QTR   4th QTR   3rd QTR
        
Other income:       
Income from fiduciary activities  $5,932  $6,025  $5,514  $5,534  $5,315 
Service charges on deposits  3,216  3,156  3,139  3,461  3,800 
Other service income  3,357  3,447  2,804  4,854  3,640 
Checkcard fee income  3,974    4,040  3,761  3,877  3,780 
Bank owned life insurance income          1,573  1,114  1,103  1,054  1,038 
ATM fees  605  561  542  534  581 
OREO valuation adjustments  (22) (272) (73) (29) (233)
Gain on the sale of OREO, net  51  53  100  244  783 
Miscellaneous  3,403  1,127  617  2,542  1,831 
Total other income  $22,089  $19,251  $17,507  $22,071  $20,535 
        
Other expense:       
Salaries  $23,302  $23,001  $22,717  $22,140  $22,084 
Employee benefits  4,656  4,919  5,181  4,522  5,073 
Occupancy expense  2,559  2,565  2,635  2,546  2,506 
Furniture and equipment expense  3,868  3,640  3,618  3,470  3,437 
Data processing fees  1,919  1,676  1,965  1,568  1,450 
Professional fees and services  6,100  6,018  4,829  8,757  6,356 
Marketing  1,122  1,084  1,056  1,277  1,062 
Insurance  1,499  1,517  1,570  1,553  1,423 
Communication  1,110  1,155  1,333  1,257  1,154 
State tax expense  912  943  1,063  941  895 
Debt prepayment penalty        5,554   
Miscellaneous  2,764  1,588  1,495  3,477  1,316 
Total other expense              $49,811  $48,106  $47,462  $57,062  $46,756 


PARK NATIONAL CORPORATION
Asset Quality Information
         
    Year ended December 31,
(in thousands, except ratios)  September 30, 2017  June 30, 2017 March 31, 2017201620152014 2013
         
Allowance for loan losses:        
Allowance for loan losses, beginning of period$53,822 $49,922  $50,624  $56,494 $54,352 $59,468  $55,537 
Charge-offs4,377 3,046 3,708 20,799 14,290 24,780 (A)19,153 
Recoveries2,504 2,365 2,130 20,030 11,442 26,997  19,669 
Net charge-offs (recoveries)1,873 681 1,578 769 2,848 (2,217) (516)
Provision for (recovery of) loan losses3,283 4,581 876 (5,101)4,990 (7,333) 3,415 
Allowance for loan losses, end of period$55,232 $53,822  $49,922  $50,624 $56,494 $54,352  $59,468 
(A) Year ended December 31, 2014 included $4.3 million in charge-offs related to the transfer of $22.0 million of commercial loans to the held for sale portfolio.
         
General reserve trends:        
Allowance for loan losses, end of period$55,232 $53,822  $49,922  $50,624 $56,494 $54,352  $59,468 
Specific reserves5,102 4,145 1,091 548 4,191 3,660  10,451 
General reserves$50,130 $49,677  $48,831  $50,076 $52,303 $50,692  $49,017 
         
Total loans$5,365,877 $5,365,437  $5,313,641  $5,271,857 $5,068,085 $4,829,682  $4,620,505 
Impaired commercial loans73,550 73,095 70,099 70,415 80,599 73,676  112,304 
Total loans less impaired commercial loans$5,292,327 $5,292,342  $5,243,542 $5,201,442 $4,987,486 $4,756,006  $4,508,201 
         
         
Asset Quality Ratios:        
Net charge-offs (recoveries) as a % of average loans (annualized)0.14%0.05%0.12%0.02%0.06%(0.05) % (0.01) %
Allowance for loan losses as a % of period end loans1.03%1.00%0.94%0.96%1.11%1.13% 1.29%
General reserves as a % of total loans less impaired commercial loans0.95%0.94%0.93%0.96%1.05%1.07% 1.09%
         
Nonperforming Assets - Park National Corporation:       
Nonaccrual loans$90,568 $90,378  $84,294  $87,822 $95,887 $100,393  $135,216 
Accruing troubled debt restructuring19,401 18,631 21,153 18,175 24,979 16,254  18,747 
Loans past due 90 days or more1,980 1,895 1,837 2,086 1,921 2,641  1,677 
Total nonperforming loans$111,949 $110,904  $107,284  $108,083 $122,787 $119,288  $155,640 
Other real estate owned - Park National Bank6,701 7,108 5,792 6,025 7,456 10,687  11,412 
Other real estate owned - SEPH7,665 7,773 7,901 7,901 11,195 11,918  23,224 
Total nonperforming assets$126,315 $125,785  $120,977  $122,009 $141,438 $141,893  $190,276 
Percentage of nonaccrual loans to period end loans1.69%1.68%1.59%1.67%1.89%2.08% 2.93%
Percentage of nonperforming loans to period end loans2.09%2.07%2.02%2.05%2.42%2.47% 3.37%
Percentage of nonperforming assets to period end loans2.35%2.34%2.28%2.31%2.79%2.94% 4.12%
Percentage of nonperforming assets to period end total assets1.61%1.61%1.56%1.63%1.93%2.03% 2.87%
         
         
PARK NATIONAL CORPORATION
Asset Quality Information (continued)
         
    Year ended December 31,
(in thousands, except ratios)September 30, 2017June 30, 2017  March 31, 2017 201620152014 2013
         
Nonperforming Assets - Park National Bank and Guardian:       
Nonaccrual loans$80,424 $79,688  $72,780  $76,084 $81,468 $77,477  $99,108 
Accruing troubled debt restructuring19,401 18,631 21,153 18,175 24,979 16,157  18,747 
Loans past due 90 days or more1,980 1,895 1,837 2,086 1,921 2,641  1,677 
Total nonperforming loans$101,805 $100,214  $95,770  $96,345 $108,368 $96,275  $119,532 
Other real estate owned - Park National Bank6,701 7,108 5,792 6,025 7,456 10,687  11,412 
Total nonperforming assets$108,506 $107,322  $101,562  $102,370 $115,824 $106,962  $130,944 
Percentage of nonaccrual loans to period end loans1.50%1.49%1.37%1.45%1.611.61% 2.16%
Percentage of nonperforming loans to period end loans1.90%1.87%1.81%1.83%2.14%2.00% 2.61%
Percentage of nonperforming assets to period end loans2.03%2.00%1.92%1.95%2.29%2.23% 2.86%
Percentage of nonperforming assets to period end total assets1.39%1.38%1.32%1.38%1.60%1.55% 2.01%
         
Nonperforming Assets - SEPH/Vision Bank (retained portfolio):
Nonaccrual loans$10,144 $10,690  $11,514  $11,738 $14,419 $22,916  $36,108 
Accruing troubled debt restructuring     97   
Loans past due 90 days or more        
Total nonperforming loans$10,144 $10,690  $11,514  $11,738 $14,419 $23,013  $36,108 
Other real estate owned - SEPH7,665 7,773 7,901 7,901 11,195 11,918  23,224 
Total nonperforming assets$17,809 $18,463  $19,415  $19,639 $25,614 $34,931  $59,332 
         
New nonaccrual loan information - Park National Corporation       
Nonaccrual loans, beginning of period$90,378 $84,294  $87,822  $95,887 $100,393 $135,216  $155,536 
New nonaccrual loans15,323 21,562 11,733 74,786 80,791 70,059  67,398 
Resolved nonaccrual loans15,133 15,478 15,261 82,851 85,165 86,384  87,718 
Sale of nonaccrual loans held for sale    132 18,498   
Nonaccrual loans, end of period$90,568 $90,378  $84,294  $87,822 $95,887 $100,393  $135,216 
         
New nonaccrual loan information - Park National Bank and Guardian      
Nonaccrual loans, beginning of period$79,688 $72,780  $76,084  $81,468 $77,477 $99,108  $100,244 
New nonaccrual loans - Ohio-based operations15,323 21,562 11,733 74,663 80,791 69,389  66,197 
Resolved nonaccrual loans14,587 14,654 15,037 80,047 76,800 78,288  67,333 
Sale of nonaccrual loans held for sale     12,732   
Nonaccrual loans, end of period$80,424 $79,688  $72,780  $76,084 $81,468 $77,477  $99,108 
         
New nonaccrual loan information - SEPH/Vision Bank
Nonaccrual loans, beginning of period$10,690 $11,514  $11,738  $14,419 $22,916 $36,108  $55,292 
New nonaccrual loans - SEPH/Vision Bank   123  670  1,201 
Resolved nonaccrual loans546 824 224 2,804 8,365 8,096  20,385 
Sale of nonaccrual loans held for sale    132 5,766   
Nonaccrual loans, end of period$10,144 $10,690  $11,514  $11,738 $14,419 $22,916  $36,108 
         
Impaired Commercial Loan Portfolio Information (period end):      
Unpaid principal balance$83,496 $82,225  $93,830  $95,358 $109,304 $106,156  $175,576 
Prior charge-offs9,946 9,130 23,731 24,943 28,705 32,480  63,272 
Remaining principal balance73,550 73,095 70,099 70,415 80,599 73,676  112,304 
Specific reserves5,102 4,145 1,091 548 4,191 3,660  10,451 
Book value, after specific reserve$68,448 $68,950  $69,008  $69,867 $76,408 $70,016  $101,853 

 

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Source: Park National Corporation

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