16:36:41 EDT Thu 28 Mar 2024
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Park National Corporation reports 2017 financial results and declares quarterly cash dividend

2018-01-22 16:20 ET - News Release

NEWARK, Ohio, Jan. 22, 2018 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE American:PRK) today reported deposit and loan growth as part of its financial results for the fourth quarter and the year ended 2017 (three and twelve months ended December 31, 2017). Park’s board of directors also declared a quarterly cash dividend of $0.94 per common share, payable on March 9, 2018 to common shareholders of record as of February 16, 2018.

“We planted many seeds in 2017 – new deposit accounts, enhanced mobile app features, extended hours for quick loan approvals, and a 24/7 customer care center. They are already bearing fruit, and we have great momentum for the new year,” said Park Chief Executive Officer David Trautman. “Our local bankers continue to listen, respond and serve their communities with excellence and dedication. We are ready to welcome new clients in 2018.” 

Park’s net income for the fourth quarter of 2017 was $22.8 million, a 14.1 percent rise from $20.0 million for the fourth quarter of 2016. Fourth quarter 2017 net income per diluted common share was $1.48, compared to $1.30 in the fourth quarter of 2016.

Net income for the 2017 year was $84.2 million, a 2.2 percent decrease from $86.1 million for the same period in 2016. Net income per diluted common share for the 2017 year was $5.47, compared to $5.59 for the 2016 year. 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 $24.4 million for the fourth quarter of 2017, compared to $16.1 million for the fourth quarter of 2016. The bank’s full-year net income for 2017 was $87.3 million, compared to $84.5 million for the same period in 2016. The bank’s total assets were $7.5 billion at December 31, 2017, rising from $7.4 billion at December 31, 2016.

The bank’s total loans were $5.34 billion at December 31, 2017, a $104.4 million (2.0 percent) increase over $5.23 billion at December 31, 2016. In 2017, the bank grew consumer loans by $118.0 million (10.5 percent increase) and commercial loans by $51.7 million (1.9 percent increase). The bank also reported increased deposits for personal and business clients in the 2017 year. Total deposit balances rose $266 million, a 4.73 percent increase in deposits compared to the 2016 year.

Headquartered in Newark, Ohio, Park National Corporation had $7.5 billion in total assets (as of December 31, 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 the newly enacted tax 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; 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, 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, including the recently enacted Tax Cuts and Jobs Act, and uncertainty or speculation pending the enactment of such changes; uncertainties in Park's preliminary review of, and additional analysis of, the Tax Cuts and Jobs Act; 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 December 31, 2017, September 30, 2017, and December 31, 2016     
       
 201720172016 Percent change vs.
(in thousands, except share and per share data)4th QTR3rd QTR4th QTR 3Q '174Q '16
INCOME STATEMENT:      
Net interest income$63,478 $61,551 $62,249  3.1%2.0%
(Recovery of) provision for loan losses(183)3,283 (1,282) N.M.N.M.
Other income21,788 22,089 22,071  (1.4) %(1.3) %
Other expense51,989 49,811 57,062  4.4%(8.9) %
Income before income taxes$33,460 $30,546 $28,540  9.5%17.2%
Federal income taxes10,629 8,434 8,538  26.0%24.5%
Net income$22,831 $22,112 $20,002  3.3%14.1%
       
MARKET DATA:      
Earnings per common share - basic (b)$1.49 $1.45 $1.30  2.8%14.6%
Earnings per common share - diluted (b)1.48 1.44 1.30  2.8%13.8%
Cash dividends per common share0.94 0.94 0.94  %%
Book value per common share at period end49.46 49.71 48.38  (0.5)%2.2%
Market price per common share at period end104.00 107.99 119.66  (3.7)%(13.1)%
Market capitalization at period end1,589,972 1,649,770 1,835,670  (3.6)%(13.4)%
       
Weighted average common shares - basic (a)15,285,174 15,287,974 15,337,806  %(0.3)%
Weighted average common shares - diluted (a)15,378,825 15,351,590 15,415,132  0.2%(0.2)%
Common shares outstanding at period end15,288,194 15,277,061 15,340,718  0.1%(0.3)%
       
PERFORMANCE RATIOS: (annualized)      
Return on average assets (a)(b)1.17%1.11%1.07% 5.4%9.3%
Return on average shareholders' equity (a)(b)11.85%11.52%10.62% 2.9%11.6%
Yield on loans4.79%4.71%4.87% 1.7%(1.6) %
Yield on investment securities2.55%2.48%2.29% 2.8%11.4%
Yield on money markets1.29%1.28%0.53% 0.8%143.4%
Yield on earning assets4.19%4.03%4.23% 4.0%(0.9) %
Cost of interest bearing deposits0.48%0.48%0.34% %41.2%
Cost of borrowings2.15%2.37%2.40% (9.3) %(10.4) %
Cost of paying liabilities0.79%0.83%0.74% (4.8) %6.8%
Net interest margin (g)3.61%3.40%3.68% 6.2%(1.9) %
Efficiency ratio (g)59.98%58.65%67.04% 2.3%(10.5) %
       
OTHER RATIOS (NON - GAAP):      
Annualized return on average tangible assets (a)(b)(e)1.18%1.12%1.08% 5.4%9.3%
Annualized return on average tangible equity (a)(b)(c)13.09%12.73%11.76% 2.8%11.3%
Tangible book value per share (d)$44.73 $44.97 $43.67  (0.5)%2.4%
       
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)
Three months ended December 31, 2017, September 30, 2017, and December 31, 2016     
       
     Percent change vs.
BALANCE SHEET:December 31, 2017September 30, 2017December 31, 2016 3Q '174Q '16
       
Investment securities$1,512,824 $1,571,038 $1,579,783  (3.7) %(4.2) %
Loans5,372,483 5,365,877 5,271,857  0.1%1.9%
Allowance for loan losses49,988 55,232 50,624  (9.5) %(1.3) %
Goodwill72,334 72,334 72,334  %%
Other real estate owned (OREO)14,190 14,366 13,926  (1.2) %1.9%
Total assets7,537,620 7,862,695 7,467,586  (4.1) %0.9%
Total deposits5,817,326 5,974,322 5,521,956  (2.6) %5.3%
Borrowings906,289 1,056,888 1,134,076  (14.2) %(20.1) %
Total shareholders' equity756,101 759,367 742,240  (0.4) %1.9%
Tangible equity (d)683,767 687,033 669,906  (0.5) %2.1%
Nonperforming loans93,959 111,949 108,083  (16.1) %(13.1) %
Nonperforming assets112,998 126,315 122,009  (10.5) %(7.4) %
       
ASSET QUALITY RATIOS:      
Loans as a % of period end total assets71.28%68.24%70.60% 4.5%1.0%
Nonperforming loans as a % of period end loans1.75%2.09%2.05% (16.3) %(14.6) %
Nonperforming assets as a % of period end loans + OREO + other nonperforming assets2.10%2.35%2.31% (10.6) %(9.1) %
Allowance for loan losses as a % of period end loans0.93%1.03%0.96% (9.7) %(3.1) %
Net loan charge-offs$5,061 $1,873 $1,656  N.M.N.M.
Annualized net loan charge-offs as a % of average loans (a)0.37%0.14%0.13% N.M.N.M.
       
CAPITAL & LIQUIDITY:      
Total shareholders' equity / Period end total assets10.03%9.66%9.94% 3.8%0.9%
Tangible equity (d) / Tangible assets (f)9.16%8.82%9.06% 3.9%1.1%
Average shareholders' equity / Average assets (a)9.88%9.60%10.11% 2.9%(2.3) %
Average shareholders' equity / Average loans (a)14.24%14.27%14.36% (0.2) %(0.8) %
Average loans / Average deposits (a)90.73%88.37%93.54% 2.7%(3.0) %
       


PARK NATIONAL CORPORATION
Financial Highlights
Twelve months ended December 31, 2017 and 2016    
      
      
(in thousands, except share and per share data)20172016 Percent change vs 2016 
INCOME STATEMENT:     
Net interest income$243,759 $238,086  2.4% 
Provision for (recovery of) loan losses8,557 (5,101) N.M. 
Other income80,635 78,731  2.4% 
Other expense197,368 199,023  (0.8) % 
Income before income taxes$118,469 $122,895  (3.6)% 
Federal income taxes34,227 36,760  (6.9)% 
Net income$84,242 $86,135  (2.2)% 
      
MARKET DATA:     
Earnings per common share - basic (b)$5.51 $5.62  (2.0)% 
Earnings per common share - diluted (b)5.47 5.59  (2.1)% 
Cash dividends per common share3.76 3.76  % 
      
Weighted average common shares - basic (a)15,295,573 15,332,553  (0.2)% 
Weighted average common shares - diluted (a)15,390,352 15,405,160  (0.1)% 
      
PERFORMANCE RATIOS: (annualized)     
Return on average assets (a)(b)1.09%1.16% (6.0) % 
Return on average shareholders' equity (a)(b)11.15%11.68% (4.5) % 
Yield on loans4.69%4.74% (1.1) % 
Yield on investment securities2.47%2.30% 7.4% 
Yield on earning assets4.08%4.08% % 
Cost of interest bearing deposits0.44%0.32% 37.5% 
Cost of borrowings2.32%2.43% (4.5) % 
Cost of paying liabilities0.80%0.74% 8.1% 
Net interest margin (g)3.48%3.52% (1.1) % 
Efficiency ratio (g)59.93%62.34% (3.9) % 
      
ASSET QUALITY RATIOS:     
Net loan charge-offs9,193 769  N.M. 
Annualized net loan charge-offs as a % of average loans (a)0.17%0.02% N.M. 
      
CAPITAL & LIQUIDITY:     
Average shareholders' equity / Average assets (a)9.76%9.95% (1.9) % 
Average shareholders' equity / Average loans (a)14.19%14.40% (1.5) % 
Average loans / Average deposits (a)90.40%91.79% (1.5) % 
      
OTHER RATIOS (NON - GAAP):     
Annualized return on average tangible assets (a)(b)(e)1.10%1.17% (6.0)% 
Annualized return on average tangible equity (a)(b)(c)12.33%12.94% (4.7)% 
      
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 December 31, 2017, September 30, 2017 and December 31, 2016 or for the twelve months ended December 31, 2017 and December 31, 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   TWELVE MONTHS ENDED
 December 31, 2017September 30, 2017December 31, 2016   December 31, 2017
     December 31, 2016
AVERAGE SHAREHOLDERS' EQUITY$764,211 $761,448 $749,053    $ 755,839       $737,737 
Less: Average goodwill72,334 72,334 72,334    72,334     72,334 
AVERAGE TANGIBLE EQUITY$691,877 $689,114 $676,719    $ 683,505       $665,403 
         
(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:     
 December 31, 2017September 30, 2017December 31, 2016     
TOTAL SHAREHOLDERS' EQUITY$756,101 $759,367 $742,240      
Less: Goodwill72,334 72,334 72,334      
TANGIBLE EQUITY$683,767 $687,033 $669,906      
         
(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   TWELVE MONTHS ENDED
 December 31, 2017September 30, 2017December 31, 2016   December 31, 2017
     December 31, 2016
AVERAGE ASSETS$7,734,844 $7,928,766 $7,408,109    $ 7,741,043       $7,416,519 
Less: Average goodwill72,334 72,334 72,334    72,334     72,334 
AVERAGE TANGIBLE ASSETS$7,662,510 $7,856,432 $7,335,775    $ 7,668,709       $7,344,185 
         
(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:
 December 31, 2017September 30, 2017December 31, 2016     
TOTAL ASSETS$7,537,620 $7,862,695 $7,467,586      
Less: Goodwill72,334 72,334 72,334      
TANGIBLE ASSETS$7,465,286 $7,790,361 $7,395,252      
         
(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   TWELVE MONTHS ENDED
 December 31, 2017September 30, 2017December 31, 2016   December 31, 2017
     December 31, 2016
Interest income$73,969 $73,224 $71,697    $ 286,424       $276,258 
Fully taxable equivalent adjustment1,413 1,291 799    4,953     2,417 
Fully taxable equivalent interest income$75,382 $74,515 $72,496    $ 291,377       $278,675 
Interest expense10,491 11,673 9,448    42,665     38,172 
Fully taxable equivalent net interest income$64,891 $62,842 $63,048    $ 248,712       $240,503 
         


PARK NATIONAL CORPORATION    
Consolidated Statements of Income    
         
  Three Months Ended Twelve Months Ended
  December 31, December 31,
(in thousands, except share and per share data) 2017 2016 2017 2016
         
Interest income:        
  Interest and fees on loans $64,447  $63,633  $248,687  $241,979 
  Interest on:        
  Obligations of U.S. Government, its agencies        
  and other securities 6,653  6,909  27,440  30,627 
  Obligations of states and political subdivisions 2,112  979  7,210  2,632 
  Other interest income 757  176  3,087  1,020 
  Total interest income 73,969  71,697  286,424  276,258 
         
Interest expense:        
  Interest on deposits:        
  Demand and savings deposits 2,677  1,228  9,464  4,079 
  Time deposits 2,490  2,209  9,629  9,337 
  Interest on borrowings 5,324  6,011  23,572  24,756 
  Total interest expense 10,491  9,448  42,665  38,172 
         
  Net interest income 63,478  62,249  243,759  238,086 
         
(Recovery of) provision for loan losses (183) (1,282) 8,557  (5,101)
         
  Net interest income after (recovery of) provision for loan losses 63,661  63,531  235,202  243,187 
         
Other income 21,788  22,071  80,635  78,731 
         
Other expense 51,989  57,062  197,368  199,023 
         
  Income before income taxes 33,460  28,540  118,469  122,895 
         
Federal income taxes 10,629  8,538  34,227  36,760 
         
  Net income $22,831  $20,002  $84,242  $86,135 
         
Per Common Share:        
  Net income  - basic $1.49  $1.30  $5.51  $5.62 
  Net income  - diluted $1.48  $1.30  $5.47  $5.59 
         
  Weighted average shares - basic 15,285,174  15,337,806  15,295,573  15,332,553 
  Weighted average shares - diluted 15,378,825  15,415,132  15,390,352  15,405,160 
         
  Cash Dividends Declared $0.94  $0.94  $3.76  $3.76 
         


 
PARK NATIONAL CORPORATION
Consolidated Balance Sheets
   
(in thousands, except share data)December 31, 2017December 31, 2016
   
Assets  
   
Cash and due from banks$131,946 $122,811 
Money market instruments37,166 23,635 
Investment securities1,512,824 1,579,783 
Loans5,372,483 5,271,857 
Allowance for loan losses(49,988)(50,624)
Loans, net5,322,495 5,221,233 
Bank premises and equipment, net55,901 57,971 
Goodwill72,334 72,334 
Other real estate owned14,190 13,926 
Other assets390,764 375,893 
Total assets$7,537,620 $7,467,586 
   
Liabilities and Shareholders' Equity  
   
Deposits:  
Noninterest bearing$1,633,941 $1,523,417 
Interest bearing4,183,385 3,998,539 
Total deposits5,817,326 5,521,956 
Borrowings906,289 1,134,076 
Other liabilities57,904 69,314 
Total liabilities$6,781,519 $6,725,346 
   
   
Shareholders' Equity:  
Preferred shares (200,000 shares authorized; no shares outstanding at December 31, 2017 and December 31, 2016)$ $ 
Common shares (No par value; 20,000,000 shares authorized in 2017 and 2016; 16,150,752 shares issued at December 31, 2017 and 16,150,807 shares issued at December 31, 2016)307,726 305,826 
Accumulated other comprehensive loss, net of taxes(26,454)(17,745)
Retained earnings561,908 535,631 
Treasury shares (862,558 shares at December 31, 2017 and 810,089 shares at December 31, 2016)(87,079)(81,472)
Total shareholders' equity$756,101 $742,240 
   
Total liabilities and shareholders' equity$7,537,620 $7,467,586 


    
PARK NATIONAL CORPORATION   
Consolidated Average Balance Sheets   
      
 Three Months Ended Twelve Months Ended
 December 31, December 31,
(in thousands)20172016 20172016
      
Assets     
      
Cash and due from banks$113,355 $116,349  $113,882 $115,779 
Money market instruments233,384 131,890  262,100 198,197 
Investment securities1,542,367 1,475,097  1,557,815 1,520,118 
Loans5,366,100 5,217,313  5,327,507 5,122,862 
Allowance for loan losses(55,397)(54,077) (52,688)(56,890)
Loans, net5,310,703 5,163,236  5,274,819 5,065,972 
Bank premises and equipment, net56,345 58,664  56,910 59,104 
Goodwill72,334 72,334  72,334 72,334 
Other real estate owned14,315 14,404  14,262 16,871 
Other assets392,041 376,135  388,921 368,144 
Total assets$7,734,844 $7,408,109  $7,741,043 $7,416,519 
      
      
Liabilities and Shareholders' Equity     
      
Deposits:     
Noninterest bearing$1,610,815 $1,499,367  $1,544,986 $1,414,885 
Interest bearing4,303,732 4,078,333  4,348,110 4,165,919 
Total deposits5,914,547 5,577,700  5,893,096 5,580,804 
Borrowings982,245 995,320  1,017,684 1,016,922 
Other liabilities73,841 86,036  74,424 81,056 
Total liabilities$6,970,633 $6,659,056  $6,985,204 $6,678,782 
      
Shareholders' Equity:     
Preferred shares$ $  $ $ 
Common shares307,173 305,299  306,371 304,663 
Accumulated other comprehensive loss, net of taxes(14,641)(7,460) (14,384)(5,307)
Retained earnings559,064 532,980  550,136 520,676 
Treasury shares(87,385)(81,766) (86,284)(82,295)
Total shareholders' equity$764,211 $749,053  $755,839 $737,737 
      
Total liabilities and shareholders' equity$7,734,844 $7,408,109  $7,741,043 $7,416,519 


 
PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters
      
 20172017201720172016
(in thousands, except per share data)4th QTR3rd QTR2nd QTR1st QTR4th QTR
      
Interest income:     
Interest and fees on loans$64,447 $63,110 $61,222 $59,908 $63,633 
Interest on:     
Obligations of U.S. Government, its agencies and other securities6,653 6,757 6,892 7,138 6,909 
Obligations of states and political subdivisions2,112 1,974 1,664 1,460 979 
Other interest income757 1,383 698 249 176 
Total interest income73,969 73,224 70,476 68,755 71,697 
      
Interest expense:     
Interest on deposits:     
Demand and savings deposits2,677 2,882 2,291 1,614 1,228 
Time deposits2,490 2,521 2,457 2,161 2,209 
Interest on borrowings5,324 6,270 5,950 6,028 6,011 
Total interest expense10,491 11,673 10,698 9,803 9,448 
      
Net interest income63,478 61,551 59,778 58,952 62,249 
      
(Recovery of) provision for loan losses(183)3,283 4,581 876 (1,282)
      
Net interest income after (recovery of) provision for loan losses63,661 58,268 55,197 58,076 63,531 
      
Other income21,788 22,089 19,251 17,507 22,071 
      
Other expense51,989 49,811 48,106 47,462 57,062 
      
Income before income taxes33,460 30,546 26,342 28,121 28,540 
      
Federal income taxes10,629 8,434 7,310 7,854 8,538 
      
Net income$22,831 $22,112 $19,032 $20,267 $20,002 
      
Per Common Share:     
Net income - basic$1.49 $1.45 $1.24 $1.32 $1.30 
Net income - diluted$1.48 $1.44 $1.24 $1.31 $1.30 


 
PARK NATIONAL CORPORATION
Detail of other income and other expense - Linked Quarters
      
 20172017201720172016
(in thousands)4th QTR3rd QTR2nd QTR1st QTR4th QTR
      
Other income:     
Income from fiduciary activities$6,264 $5,932 $6,025 $5,514 $5,534 
Service charges on deposits3,142 3,216 3,156 3,139 3,461 
Other service income3,554 3,357 3,447 2,804 4,854 
Checkcard fee income4,023 3,974 4,040 3,761 3,877 
Bank owned life insurance income1,068 1,573 1,114 1,103 1,054 
ATM fees545 605 561 542 534 
OREO valuation adjustments(91)(22)(272)(73)(29)
Gain on the sale of OREO, net47 51 53 100 244 
Miscellaneous3,236 3,403 1,127 617 2,542 
Total other income$21,788 $22,089 $19,251 $17,507 $22,071 
      
Other expense:     
Salaries$23,157 $23,302 $23,001 $22,717 $22,140 
Employee benefits5,162 4,656 4,919 5,181 4,522 
Occupancy expense2,442 2,559 2,565 2,635 2,546 
Furniture and equipment expense4,198 3,868 3,640 3,618 3,470 
Data processing fees1,690 1,919 1,676 1,965 1,568 
Professional fees and services7,886 6,100 6,018 4,829 8,757 
Marketing1,112 1,122 1,084 1,056 1,277 
Insurance1,768 1,499 1,517 1,570 1,553 
Communication1,228 1,110 1,155 1,333 1,257 
State tax expense665 912 943 1,063 941 
Debt prepayment penalty    5,554 
Miscellaneous2,681 2,764 1,588 1,495 3,477 
Total other expense$51,989 $49,811 $48,106 $47,462 $57,062 


PARK NATIONAL CORPORATION
Asset Quality Information
       
 Year ended December 31,
(in thousands, except ratios)2017201620152014 2013
       
Allowance for loan losses:      
Allowance for loan losses, beginning of period$50,624 $56,494 $54,352 $59,468  $55,537 
Charge-offs19,403 20,799 14,290 24,780 (A)19,153 
Recoveries10,210 20,030 11,442 26,997  19,669 
Net charge-offs (recoveries)9,193 769 2,848 (2,217) (516)
Provision for (recovery of) loan losses8,557 (5,101)4,990 (7,333) 3,415 
Allowance for loan losses, end of period$49,988 $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$49,988 $50,624 $56,494 $54,352  $59,468 
Specific reserves684 548 4,191 3,660  10,451 
General reserves$49,304 $50,076 $52,303 $50,692  $49,017 
       
Total loans$5,372,483 $5,271,857 $5,068,085 $4,829,682  $4,620,505 
Impaired commercial loans56,545 70,415 80,599 73,676  112,304 
Total loans less impaired commercial loans$5,315,938 $5,201,442 $4,987,486 $4,756,006  $4,508,201 
       
       
Asset Quality Ratios:      
Net charge-offs (recoveries) as a % of average loans0.17%0.02%0.06%(0.05) % (0.01) %
Allowance for loan losses as a % of period end loans0.93%0.96%1.11%1.13% 1.29%
General reserves as a % of total loans less impaired commercial loans0.93%0.96%1.05%1.07% 1.09%
       
Nonperforming Assets - Park National Corporation:      
Nonaccrual loans$72,056 $87,822 $95,887 $100,393  $135,216 
Accruing troubled debt restructuring20,111 18,175 24,979 16,254  18,747 
Loans past due 90 days or more1,792 2,086 1,921 2,641  1,677 
Total nonperforming loans$93,959 $108,083 $122,787 $119,288  $155,640 
Other real estate owned - Park National Bank6,524 6,025 7,456 10,687  11,412 
Other real estate owned - SEPH7,666 7,901 11,195 11,918  23,224 
Other nonperforming assets - Park National Bank4,849      
Total nonperforming assets$112,998 $122,009 $141,438 $141,893  $190,276 
Percentage of nonaccrual loans to period end loans1.34%1.67%1.89%2.08% 2.93%
Percentage of nonperforming loans to period end loans1.75%2.05%2.42%2.47% 3.37%
Percentage of nonperforming assets to period end loans2.10%2.31%2.79%2.94% 4.12%
Percentage of nonperforming assets to period end total assets1.50%1.63%1.93%2.03% 2.87%
       
       
PARK NATIONAL CORPORATION
Asset Quality Information (continued)
       
 Year ended December 31,
(in thousands, except ratios)2017201620152014 2013
       
Nonperforming Assets - Park National Bank and Guardian:      
Nonaccrual loans$61,753 $76,084 $81,468 $77,477  $99,108 
Accruing troubled debt restructuring20,111 18,175 24,979 16,157  18,747 
Loans past due 90 days or more1,792 2,086 1,921 2,641  1,677 
Total nonperforming loans$83,656 $96,345 $108,368 $96,275  $119,532 
Other real estate owned - Park National Bank6,524 6,025 7,456 10,687  11,412 
Other nonperforming assets - Park National Bank4,849      
Total nonperforming assets$95,029 $102,370 $115,824 $106,962  $130,944 
Percentage of nonaccrual loans to period end loans1.15%1.45%1.61%1.61% 2.16%
Percentage of nonperforming loans to period end loans1.56%1.83%2.14%2.00% 2.61%
Percentage of nonperforming assets to period end loans1.77%1.95%2.29%2.23% 2.86%
Percentage of nonperforming assets to period end total assets1.27%1.38%1.60%1.55% 2.01%
       
Nonperforming Assets - SEPH/Vision Bank (retained portfolio):
Nonaccrual loans$10,303 $11,738 $14,419 $22,916  $36,108 
Accruing troubled debt restructuring   97   
Loans past due 90 days or more      
Total nonperforming loans$10,303 $11,738 $14,419 $23,013  $36,108 
Other real estate owned - SEPH7,666 7,901 11,195 11,918  23,224 
Total nonperforming assets$17,969 $19,639 $25,614 $34,931  $59,332 
       
New nonaccrual loan information - Park National Corporation      
Nonaccrual loans, beginning of period$87,822 $95,887 $100,393 $135,216  $155,536 
New nonaccrual loans58,753 74,786 80,791 70,059  67,398 
Resolved nonaccrual loans74,519 82,851 85,165 86,384  87,718 
Sale of nonaccrual loans held for sale  132 18,498   
Nonaccrual loans, end of period$72,056 $87,822 $95,887 $100,393  $135,216 
       
New nonaccrual loan information - Park National Bank and Guardian      
Nonaccrual loans, beginning of period$76,084 $81,468 $77,477 $99,108  $100,244 
New nonaccrual loans - Ohio-based operations58,753 74,663 80,791 69,389  66,197 
Resolved nonaccrual loans73,084 80,047 76,800 78,288  67,333 
Sale of nonaccrual loans held for sale   12,732   
Nonaccrual loans, end of period$61,753 $76,084 $81,468 $77,477  $99,108 
       
New nonaccrual loan information - SEPH/Vision Bank
Nonaccrual loans, beginning of period$11,738 $14,419 $22,916 $36,108  $55,292 
New nonaccrual loans - SEPH/Vision Bank 123  670  1,201 
Resolved nonaccrual loans1,435 2,804 8,365 8,096  20,385 
Sale of nonaccrual loans held for sale  132 5,766   
Nonaccrual loans, end of period$10,303 $11,738 $14,419 $22,916  $36,108 
       
Impaired Commercial Loan Portfolio Information (period end):      
Unpaid principal balance$66,585 $95,358 $109,304 $106,156  $175,576 
Prior charge-offs10,040 24,943 28,705 32,480  63,272 
Remaining principal balance56,545 70,415 80,599 73,676  112,304 
Specific reserves684 548 4,191 3,660  10,451 
Book value, after specific reserve$55,861 $69,867 $76,408 $70,016  $101,853 
       
   

 

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