Investor Relations

Press Release

Park National Corporation reports financial results for first quarter 2019

Company Release - 4/19/2019 2:15 PM ET

NEWARK, Ohio, April 19, 2019 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the first quarter 2019 (three months ended March 31, 2019). Park's board of directors declared a quarterly cash dividend of $1.01 per common share, payable on June 10, 2019 to common shareholders of record as of May 17, 2019.

Park’s net income for the first quarter of 2019 was $25.5 million, an 18.2 percent decrease from $31.1 million for the first quarter of 2018. First quarter 2019 net income per diluted common share was $1.62, compared to $2.02 in the first quarter of 2018. The first quarter of 2018 included income related to asset recoveries at its Southeast Property Holdings subsidiary.

Park's community-banking subsidiary, The Park National Bank, reported net income of $26.7 million for the first quarter of 2019, a 0.2 percent decrease from $26.7 million reported for the first quarter of 2018. Commercial loans grew $51.7 million over last quarter and the bank’s consumer loans increased $9.1 million compared to the previous quarter.

“This year has begun with great momentum as we deepen our partnership with two excellent banking divisions in the Carolinas and also see the results of our hard work in Ohio and Kentucky,” said Park Chief Executive Officer David L. Trautman. “Our people deliver extraordinary service that has helped us grow loans, deposits, and investment services in a number of areas. And, our commitment to local leadership and non-profit support is helping our communities thrive.”

On April 1, 2019 Park closed its merger transaction with CAB Financial Corporation, officially adding Carolina Alliance Bank as a division of Park’s banking subsidiary The Park National Bank.

Headquartered in Newark, Ohio, Park National Corporation had $7.9 billion in total assets (as of March 31, 2019). The Park organization consists of community bank divisions, specialty finance companies, and a non-bank subsidiary. Park's 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, United Bank, N.A. Division, Second National Bank Division, Security National Bank Division, Unity National Bank Division, The Park National Bank of Southwest Ohio & Northern Kentucky Division, NewDominion Bank Division and Carolina Alliance Bank. Park also includes Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance), 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

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' inability to meet credit and other obligations and the possible impairment of collectability of loans; changes in interest rates and prices may adversely impact prepayment penalty income, mortgage banking income, 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 tax reform legislation, 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; the adequacy of our internal controls and risk management program in the event of changes in the market, economic, operational, asset/liability repricing, legal, compliance and strategic, cybersecurity, liquidity, credit and interest rate risks associated with Park's business; disruption in the liquidity and other functioning of U.S. financial markets; 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, customer acquisition and retention, changes to third-party relationships and our ability to attract, develop and retain qualified banking professionals; customers could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding; uncertainty regarding the nature, timing, cost 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, rent regulation and housing, financial accounting and reporting, environmental protection, insurance, 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 Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve Board, to implement the Dodd-Frank Act's provisions, and the Basel III regulatory capital reforms; the effects of easing restrictions on participants in the financial services industry; 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 current presidential administration and uncertainty or speculation pending the enactment of such changes; 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 impact of our ability to anticipate and respond to technological changes on our ability to respond to customer needs and meet competitive demands; operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Park and our subsidiaries are highly dependent; 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, resulting in failures or disruptions in customer account management, general ledger, deposit, loan, or other systems, including as a result of cyber attacks; the existence or exacerbation of general geopolitical instability and uncertainty; the effect of trade policies (including the impact of potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations), monetary and other fiscal policies (including the impact of money supply and interest rate policies to the Federal Reserve Board) and other governmental policies of the U.S. federal government; 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 the costs and effects of any adverse developments in legal proceedings or other claims and the costs and effects of unfavorable resolution of regulatory and other governmental examinations or other inquiries; continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; 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 and on us or our counterparties specifically; the effect of healthcare laws in the U.S. and potential changes for such laws which may increase our healthcare and other costs and negatively impact our operations and financial results; Park's ability to integrate recent acquisitions (including CAB Financial Corporation ("CAB")) as well as any future acquisitions, which may be unsuccessful, or may be more difficult, time-consuming or costly than expected; expected revenue synergies and cost savings from the merger of Park and CAB may not be fully realized or realized within the expected time frame; revenues following the merger of Park and CAB may be lower than expected; customer and employee relationships and business operations may be disrupted by the merger of Park and CAB; Park issued equity securities in the acquisitions of NewDominion Bank and CAB and may issue equity securities in connection with future acquisitions, which could cause ownership and economic dilution to Park's current shareholders; the discontinuation of LIBOR and other reference rates which may result in increased expenses and litigation, and adversely impact the effectiveness of hedging strategies; 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, 2018. 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 March 31, 2019, December 31, 2018, and March 31, 2018     
       
 201920182018 Percent change vs.
(in thousands, except share and per share data)1st QTR4th QTR1st QTR 4Q '181Q '18
INCOME STATEMENT:      
Net interest income$67,776 $69,630 $64,850  (2.7) %4.5%
Provision for loan losses2,498 3,359 260  (25.6) %N.M.
Other income22,025 26,892 26,903  (18.1) %(18.1) %
Other expense56,827 62,597 54,308  (9.2) %4.6%
Income before income taxes$30,476 $30,566 $37,185  (0.3)%(18.0) %
Income taxes5,021 4,305 6,062  16.6%(17.2) %
Net income$25,455 $26,261 $31,123  (3.1)%(18.2) %
       
MARKET DATA:      
Earnings per common share - basic (b)$1.63 $1.67 $2.04  (2.4)%(20.1)%
Earnings per common share - diluted (b)1.62 1.67 2.02  (3.0)%(19.8)%
Cash dividends declared per common share1.21 0.96 0.94  26.0%28.7%
Book value per common share at period end54.06 53.03 49.20  1.9%9.9%
Market price per common share at period end94.75 84.95 103.76  11.5%(8.7)%
Market capitalization at period end1,480,990 1,333,560 1,587,642  11.1%(6.7)%
       
Weighted average common shares - basic (a)15,651,541 15,695,522 15,288,332  (0.3)%2.4%
Weighted average common shares - diluted (a)15,744,777 15,764,548 15,431,328  (0.1)%2.0%
Common shares outstanding at period end15,630,499 15,698,178 15,301,103  (0.4)%2.2%
       
PERFORMANCE RATIOS: (annualized)      
Return on average assets (a)(b)1.32%1.34%1.69% (1.5) %(21.9) %
Return on average shareholders' equity (a)(b)12.31%12.70%16.84% (3.1) %(26.9) %
Yield on loans5.14%5.10%4.94% 0.8%4.0%
Yield on investment securities2.82%2.74%2.62% 2.9%7.6%
Yield on money market instruments2.76%2.46%1.63% 12.2%69.3%
Yield on interest earning assets4.66%4.61%4.40% 1.1%5.9%
Cost of interest bearing deposits0.97%0.85%0.54% 14.1%79.6%
Cost of borrowings2.01%1.88%1.72% 6.9%16.9%
Cost of paying interest bearing liabilities1.10%0.97%0.71% 13.4%54.9%
Net interest margin (g)3.86%3.91%3.87% (1.3) %(0.3) %
Efficiency ratio (g)62.77%64.36%58.74% (2.5) %6.9%
       
OTHER RATIOS (NON - GAAP):      
Annualized return on average tangible assets (a)(b)(e)1.34%1.36%1.71% (1.5)%(21.6)%
Annualized return on average tangible equity (a)(b)(c)14.36%14.87%18.64% (3.4)%(23.0)%
Tangible book value per share (d)$46.42 $45.41 $44.47  2.2%4.4%
       
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)
As of or for the three months ended March 31, 2019, December 31, 2018, and March 31, 2018     
       
     Percent change vs.
BALANCE SHEET:March 31,
2019
December 31,
2018
March 31,
2018
 4Q '181Q '18
       
Investment securities$1,382,301 $1,411,080 $1,464,356  (2.0) %(5.6) %
Loans5,740,760 5,692,132 5,292,349  0.9%8.5%
Allowance for loan losses53,368 51,512 48,969  3.6%9.0%
Goodwill and other intangibles119,421 119,710 72,334  (0.2) %65.1%
Other real estate owned (OREO)4,629 4,303 9,055  7.6%(48.9) %
Total assets7,852,246 7,804,308 7,518,970  0.6%4.4%
Total deposits6,325,212 6,260,860 6,084,294  1.0%4.0%
Borrowings602,569 636,966 624,090  (5.4) %(3.4) %
Total shareholders' equity845,044 832,506 752,774  1.5%12.3%
Tangible equity (d)725,623 712,796 680,440  1.8%6.6%
Total nonperforming loans86,471 85,370 86,205  1.3%0.3%
Total nonperforming assets94,596 93,137 99,117  1.6%(4.6) %
       
ASSET QUALITY RATIOS:      
Loans as a % of period end total assets73.11%72.94%70.39% 0.2%3.9%
Total nonperforming loans as a % of period end loans1.51%1.50%1.63% 0.7%(7.4) %
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets1.65%1.63%1.87% 1.2%(11.8) %
Allowance for loan losses as a % of period end loans0.93%0.90%0.93% 3.3%%
Net loan charge-offs$642 $2,093 $1,279  (69.3) %(49.8) %
Annualized net loan charge-offs as a % of average loans (a)0.05%0.15%0.10% (66.7) %(50.0) %
       
CAPITAL & LIQUIDITY:      
Total shareholders' equity / Period end total assets10.76%10.67%10.01% 0.8%7.5%
Tangible equity (d) / Tangible assets (f)9.38%9.28%9.14% 1.1%2.6%
Average shareholders' equity / Average assets (a)10.71%10.56%10.06% 1.4%6.5%
Average shareholders' equity / Average loans (a)14.74%14.56%14.14% 1.2%4.2%
Average loans / Average deposits (a)90.78%90.06%89.39% 0.8%1.6%
       


 
PARK NATIONAL CORPORATION
Financial Highlights (continued)
 
(a) Averages are for the three months ended March 31, 2019, December 31, 2018 and March 31, 2018.
(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 and other intangibles during the applicable period.
 
RECONCILIATION OF AVERAGE SHAREHOLDERS' EQUITY TO AVERAGE TANGIBLE EQUITY:
 THREE MONTHS ENDED
 March 31,
2019
December 31,
2018
March 31,
2018
AVERAGE SHAREHOLDERS' EQUITY$838,723 $820,445 $749,627 
Less: Average goodwill and other intangibles119,611 119,899 72,334 
AVERAGE TANGIBLE EQUITY$719,112 $700,546 $677,293 
    
(d) Tangible equity divided by common shares outstanding at period end. Tangible equity equals total shareholders' equity less goodwill and other intangibles, in each case at the end of the period.
    
RECONCILIATION OF TOTAL SHAREHOLDERS' EQUITY TO TANGIBLE EQUITY:
 March 31,
2019
December 31,
2018
March 31,
2018
TOTAL SHAREHOLDERS' EQUITY$845,044 $832,506 $752,774 
Less: Goodwill and other intangibles119,421 119,710 72,334 
TANGIBLE EQUITY$725,623 $712,796 $680,440 
    
(e) Net income for each period divided by average tangible assets during the period. Average tangible assets equals average assets less average goodwill and other intangibles, in each case during the applicable period.
    
RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS:
 THREE MONTHS ENDED
 March 31,
2019
December 31,
2018
March 31,
2018
AVERAGE ASSETS$7,832,397 $7,770,140 $7,455,065 
Less: Average goodwill and other intangibles119,611 119,899 72,334 
AVERAGE TANGIBLE ASSETS$7,712,786 $7,650,241 $7,382,731 
    
(f) Tangible equity divided by tangible assets. Tangible assets equals total assets less goodwill and other intangibles, in each case at the end of the period.
    
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:
 March 31,
2019
December 31,
2018
March 31,
2018
TOTAL ASSETS$7,852,246 $7,804,308 $7,518,970 
Less: Goodwill and other intangibles119,421 119,710 72,334 
TANGIBLE ASSETS$7,732,825 $7,684,598 $7,446,636 
    
(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 21% corporate federal income 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
 March 31,
2019
December 31,
2018
March 31,
2018
Interest income$81,856 $82,167 $73,714 
Fully taxable equivalent adjustment734 736 701 
Fully taxable equivalent interest income$82,590 $82,903 $74,415 
Interest expense14,080 12,537 8,864 
Fully taxable equivalent net interest income$68,510 $70,366 $65,551 
    


    
PARK NATIONAL CORPORATION
Consolidated Statements of Income
    
 Three Months Ended
 March 31,
(in thousands, except share and per share data)2019 2018
    
Interest income:   
Interest and fees on loans$72,003  $64,402 
Interest on:   
Obligations of U.S. Government, its agencies   
and other securities - taxable6,995  6,767 
Obligations of states and political subdivisions - tax-exempt2,217  2,174 
Other interest income641  371 
Total interest income81,856  73,714 
    
Interest expense:   
Interest on deposits:   
Demand and savings deposits7,093  3,290 
Time deposits3,777  2,551 
Interest on borrowings3,210  3,023 
Total interest expense14,080  8,864 
    
Net interest income67,776  64,850 
    
Provision for loan losses2,498  260 
    
Net interest income after provision for loan losses65,278  64,590 
    
Other income22,025  26,903 
    
Other expense56,827  54,308 
    
Income before income taxes30,476  37,185 
    
Income taxes5,021  6,062 
    
Net income$25,455  $31,123 
    
Per Common Share:   
Net income  - basic$1.63  $2.04 
Net income  - diluted$1.62  $2.02 
    
Weighted average shares - basic15,651,541  15,288,332 
Weighted average shares - diluted15,744,777  15,431,328 
    
Cash dividends declared$1.21  $0.94 
    


 
PARK NATIONAL CORPORATION
Consolidated Balance Sheets
   
(in thousands, except share data)March 31, 2019December 31, 2018
   
Assets  
   
Cash and due from banks$116,870 $141,890 
Money market instruments70,609 25,324 
Investment securities1,382,301 1,411,080 
Loans5,740,760 5,692,132 
Allowance for loan losses(53,368)(51,512)
Loans, net5,687,392 5,640,620 
Bank premises and equipment, net60,506 59,771 
Goodwill and other intangibles119,421 119,710 
Other real estate owned4,629 4,303 
Other assets410,518 401,610 
Total assets$7,852,246 $7,804,308 
   
Liabilities and Shareholders' Equity  
   
Deposits:  
Noninterest bearing$1,767,596 $1,804,881 
Interest bearing4,557,616 4,455,979 
Total deposits6,325,212 6,260,860 
Borrowings602,569 636,966 
Other liabilities79,421 73,976 
Total liabilities$7,007,202 $6,971,802 
   
   
Shareholders' Equity:  
Preferred shares (200,000 shares authorized; no shares outstanding at March 31, 2019 and December 31, 2018)

$ $ 
Common shares (No par value; 20,000,000 shares authorized in 2019 and 2018; 16,586,153 shares issued at March 31, 2019 and 16,586,165 shares issued at December 31, 2018)357,475 358,598 
Accumulated other comprehensive loss, net of taxes(35,453)(49,788)
Retained earnings619,971 614,069 
Treasury shares (955,654 shares at March 31, 2019 and 887,987 shares at December 31, 2018)(96,949)(90,373)
Total shareholders' equity$845,044 $832,506 
Total liabilities and shareholders' equity$7,852,246 $7,804,308 
 


 
PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
   
 Three Months Ended
 March 31,
(in thousands)20192018
   
Assets  
   
Cash and due from banks$117,803 $118,248 
Money market instruments94,262 92,533 
Investment securities1,389,842 1,450,116 
Loans5,689,173 5,302,648 
Allowance for loan losses(52,390)(50,590)
Loans, net5,636,783 5,252,058 
Bank premises and equipment, net60,847 56,506 
Goodwill and other intangibles119,611 72,334 
Other real estate owned4,373 13,537 
Other assets408,876 399,733 
Total assets$7,832,397 $7,455,065 
   
   
Liabilities and Shareholders' Equity  
   
Deposits:  
Noninterest bearing$1,730,224 $1,569,072 
Interest bearing4,536,501 4,363,287 
Total deposits6,266,725 5,932,359 
Borrowings647,658 711,044 
Other liabilities79,291 62,035 
Total liabilities$6,993,674 $6,705,438 
   
Shareholders' Equity:  
Preferred shares$ $ 
Common shares358,633 307,740 
Accumulated other comprehensive loss, net of taxes(46,539)(41,677)
Retained earnings621,568 570,629 
Treasury shares(94,939)(87,065)
Total shareholders' equity$838,723 $749,627 
Total liabilities and shareholders' equity$7,832,397 $7,455,065 
 


 
PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters
      
 20192018201820182018
(in thousands, except per share data)1st QTR4th QTR3rd QTR2nd QTR1st QTR
      
Interest income:     
Interest and fees on loans$72,003 $72,342 $69,905 $64,496 $64,402 
Interest on:     
Obligations of U.S. Government, its agencies and other securities - taxable6,995 7,275 7,691 7,746 6,767 
Obligations of states and political subdivisions - tax-exempt2,217 2,213 2,205 2,178 2,174 
Other interest income641 337 428 271 371 
Total interest income81,856 82,167 80,229 74,691 73,714 
      
Interest expense:     
Interest on deposits:     
Demand and savings deposits7,093 6,006 6,412 4,107 3,290 
Time deposits3,777 3,610 3,328 2,886 2,551 
Interest on borrowings3,210 2,921 2,813 2,956 3,023 
Total interest expense14,080 12,537 12,553 9,949 8,864 
      
Net interest income67,776 69,630 67,676 64,742 64,850 
      
Provision for loan losses2,498 3,359 2,940 1,386 260 
      
Net interest income after provision for loan losses65,278 66,271 64,736 63,356 64,590 
      
Other income22,025 26,892 24,064 23,242 26,903 
      
Other expense56,827 62,597 59,316 52,534 54,308 
      
Income before income taxes30,476 30,566 29,484 34,064 37,185 
      
Income taxes5,021 4,305 4,722 5,823 6,062 
      
Net income$25,455 $26,261 $24,762 $28,241 $31,123 
      
Per Common Share:     
Net income - basic$1.63 $1.67 $1.58 $1.85 $2.04 
Net income - diluted$1.62 $1.67 $1.56 $1.83 $2.02 
 


 
PARK NATIONAL CORPORATION
Detail of other income and other expense - Linked Quarters
      
 20192018201820182018
(in thousands)1st QTR4th QTR3rd QTR2nd QTR1st QTR
      
Other income:     
Income from fiduciary activities$6,723 $6,814 $6,418 $6,666 $6,395 
Service charges on deposits2,559 2,852 2,861 2,826 2,922 
Other service income2,818 3,279 3,246 3,472 4,172 
Debit card fee income4,369 4,581 4,352 4,382 4,002 
Bank owned life insurance income1,006 2,190 2,585 1,031 1,009 
ATM fees440 444 500 510 524 
OREO valuation adjustments(27)(93)(77)(114)(207)
(Loss) gain on the sale of OREO, net(12)142 (81)(147)4,321 
Net loss on the sale of investment securities    (2,271)
Unrealized gain (loss) on equity securities121 (254)(326)304 3,489 
Other components of net periodic benefit income1,183 1,705 1,705 1,705 1,705 
Gain on the sale of loans 2,826    
Miscellaneous2,845 2,406 2,881 2,607 842 
Total other income$22,025 $26,892 $24,064 $23,242 $26,903 
      
Other expense:     
Salaries$25,805 $27,103 $27,229 $24,103 $25,320 
Employee benefits8,430 7,977 7,653 7,630 7,029 
Occupancy expense3,011 2,769 2,976 2,570 2,936 
Furniture and equipment expense4,150 4,170 3,807 4,013 4,149 
Data processing fees2,133 2,222 2,580 1,902 1,773 
Professional fees and services6,006 8,516 8,065 6,123 6,190 
Marketing1,226 1,377 1,364 1,185 1,218 
Insurance1,156 1,277 1,388 1,196 1,428 
Communication1,333 1,335 1,207 1,189 1,250 
State tax expense1,005 750 1,000 958 1,105 
Amortization of intangibles289 289 289   
Miscellaneous2,283 4,812 1,758 1,665 1,910 
Total other expense$56,827 $62,597 $59,316 $52,534 $54,308 
 


PARK NATIONAL CORPORATION
Asset Quality Information
      
  Year ended December 31,
(in thousands, except ratios)March 31,
2019
2018201720162015
      
Allowance for loan losses:     
Allowance for loan losses, beginning of period$51,512 $49,988 $50,624 $56,494 $54,352 
Charge-offs2,987 13,552 19,403 20,799 14,290 
Recoveries2,345 7,131 10,210 20,030 11,442 
Net charge-offs642 6,421 9,193 769 2,848 
Provision for (recovery of) loan losses2,498 7,945 8,557 (5,101)4,990 
Allowance for loan losses, end of period$53,368 $51,512 $49,988 $50,624 $56,494 
      
      
General reserve trends:     
Allowance for loan losses, end of period$53,368 $51,512 $49,988 $50,624 $56,494 
Specific reserves2,468 2,273 684 548 4,191 
General reserves$50,900 $49,239 $49,304 $50,076 $52,303 
      
Total loans$5,740,760 $5,692,132 $5,372,483 $5,271,857 $5,068,085 
Impaired commercial loans50,881 48,135 56,545 70,415 80,599 
Total loans less impaired commercial loans$5,689,879 $5,643,997 $5,315,938 $5,201,442 $4,987,486 
      
      
Asset Quality Ratios:     
Net charge-offs as a % of average loans (annualized)0.05%0.12%0.17%0.02%0.06%
Allowance for loan losses as a % of period end loans0.93%0.90%0.93%0.96%1.11%
General reserves as a % of total loans less impaired commercial loans0.89%0.87%0.93%0.96%1.05%
General reserves as a % of total loans less impaired commercial loans (excluding acquired loans)0.93%0.91%N.A.N.A.N.A.
      
Nonperforming assets - Park National Corporation:     
Nonaccrual loans$69,175 $67,954 $72,056 $87,822 $95,887 
Accruing troubled debt restructurings15,757 15,173 20,111 18,175 24,979 
Loans past due 90 days or more1,539 2,243 1,792 2,086 1,921 
Total nonperforming loans$86,471 $85,370 $93,959 $108,083 $122,787 
Other real estate owned - Park National Bank3,114 2,788 6,524 6,025 7,456 
Other real estate owned - SEPH1,515 1,515 7,666 7,901 11,195 
Other nonperforming assets - Park National Bank3,496 3,464 4,849   
Total nonperforming assets$94,596 $93,137 $112,998 $122,009 $141,438 
Percentage of nonaccrual loans to period end loans1.20%1.19%1.34%1.67%1.89%
Percentage of nonperforming loans to period end loans1.51%1.50%1.75%2.05%2.42%
Percentage of nonperforming assets to period end loans1.65%1.64%2.10%2.31%2.79%
Percentage of nonperforming assets to period end total assets1.20%1.19%1.50%1.63%1.93%
      
      
PARK NATIONAL CORPORATION
Asset Quality Information (continued)
      
  Year ended December 31,
(in thousands, except ratios)March 31,
2019
2018201720162015
      
Nonperforming assets - Park National Bank and Guardian:     
Nonaccrual loans$67,540 $66,319 $61,753 $76,084 $81,468 
Accruing troubled debt restructurings15,757 15,173 20,111 18,175 24,979 
Loans past due 90 days or more1,539 2,243 1,792 2,086 1,921 
Total nonperforming loans$84,836 $83,735 $83,656 $96,345 $108,368 
Other real estate owned - Park National Bank3,114 2,788 6,524 6,025 7,456 
Other nonperforming assets - Park National Bank3,496 3,464 4,849   
Total nonperforming assets$91,446 $89,987 $95,029 $102,370 $115,824 
Percentage of nonaccrual loans to period end loans1.18%1.17%1.15%1.45%1.61%
Percentage of nonperforming loans to period end loans1.48%1.47%1.56%1.83%2.14%
Percentage of nonperforming assets to period end loans1.59%1.58%1.77%1.95%2.29%
Percentage of nonperforming assets to period end total assets1.17%1.16%1.27%1.38%1.60%
      
Nonperforming assets - SEPH/Vision Bank (retained portfolio):     
Nonaccrual loans$1,635 $1,635 $10,303 $11,738 $14,419 
Accruing troubled debt restructurings     
Loans past due 90 days or more     
Total nonperforming loans$1,635 $1,635 $10,303 $11,738 $14,419 
Other real estate owned - SEPH1,515 1,515 7,666 7,901 11,195 
Total nonperforming assets$3,150 $3,150 $17,969 $19,639 $25,614 
      
New nonaccrual loan information - Park National Corporation     
Nonaccrual loans, beginning of period$67,954 $72,056 $87,822 $95,887 $100,393 
New nonaccrual loans12,484 76,611 58,753 74,786 80,791 
Resolved nonaccrual loans11,263 80,713 74,519 82,851 85,297 
Nonaccrual loans, end of period$69,175 $67,954 $72,056 $87,822 $95,887 
      
New nonaccrual loan information - Park National Bank and Guardian     
Nonaccrual loans, beginning of period$66,319 $61,753 $76,084 $81,468 $77,477 
New nonaccrual loans12,484 74,976 58,753 74,663 80,791 
Resolved nonaccrual loans11,263 70,410 73,084 80,047 76,800 
Nonaccrual loans, end of period$67,540 $66,319 $61,753 $76,084 $81,468 
      
New nonaccrual loan information - SEPH/Vision Bank (retained portfolio)     
Nonaccrual loans, beginning of period$1,635 $10,303 $11,738 $14,419 $22,916 
New nonaccrual loans 1,635  123  
Resolved nonaccrual loans 10,303 1,435 2,804 8,497 
Nonaccrual loans, end of period$1,635 $1,635 $10,303 $11,738 $14,419 
      
Impaired commercial loan portfolio information (period end):     
Unpaid principal balance$61,838 $59,381 $66,585 $95,358 $109,304 
Prior charge-offs10,957 11,246 10,040 24,943 28,705 
Remaining principal balance50,881 48,135 56,545 70,415 80,599 
Specific reserves2,468 2,273 684 548 4,191 
Book value, after specific reserves$48,413 $45,862 $55,861 $69,867 $76,408 

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Source: Park National Corporation

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