Market Overview

Park National Corporation Reports Fourth Quarter and Year End 2012 Financial Results

NEWARK, Ohio, Jan. 28, 2013 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE MKT:PRK) today reported financial results for the three-months (fourth quarter) and year ended December 31, 2012. Park's Board of Directors also declared a $0.94 per common share quarterly cash dividend, payable on March 8, 2013 to common shareholders of record on February 22, 2013. Park's net income in 2012 reduced slightly compared to the previous year, and its community bank divisions located in Ohio generated increases in loans, deposits, and assets under management in their trust and investments departments.

Park National Corporation Results

Net income for the year ended December 31, 2012 was $78.6 million, a 4.3 percent decline from the $82.1 million in net income for 2011. Earnings per diluted common share were $4.88 for the year ended December 31, 2012, a 1.4 percent decrease from the $4.95 earnings per diluted common share reported for 2011.

Net income for the fourth quarter of 2012 was $16.3 million, a 53.8 percent increase from the $10.6 million in net income for the same period in 2011. Earnings per diluted common share were $1.06 for the fourth quarter of 2012, a 79.7 percent increase from the $0.59 earnings per diluted common share reported in the fourth quarter of 2011.

"Our associates' hard work resulted in several highlights for the year, including improved lending results and the sale of the Vision Bank business," said Park Chairman C. Daniel DeLawder. "The economic environment continues to challenge most banks' efforts to increase net interest income, and we're very proud of our successful growth, consistency, and overall performance."

Net income for the fourth quarter of 2011 and for the year ended December 31, 2011 included pre-tax gains of $3.4 million and $28.8 million, respectively, from the sale of investment securities. There were no securities gains in 2012. Net income for the year ended December 31, 2012 included a pre-tax gain of $22.2 million from the sale of substantially all of the performing loans, operating assets and the liabilities of Vision Bank. Excluding securities gains in 2011 and the gain from the sale of the Vision Bank business in 2012, net income for the years ended December 31, 2012 and 2011 would have been $64.2 million and $63.4 million, respectively.

The Park National Bank Results

Park's community-banking subsidiary in Ohio, The Park National Bank (PNB), reported net income of $87.1 million for the year ended December 31, 2012, compared to net income of $106.9 million ($91.5 million, excluding security gains) for the same period in 2011. PNB had total assets of $6.5 billion at December 31, 2012, compared to $6.3 billion at December 31, 2011. PNB's performance generated a return on average assets of 1.33 percent and 1.66 percent (1.42 percent, excluding security gains) in the years ended December 31, 2012 and 2011, respectively.

PNB experienced loan growth of $196.7 million (or 4.7 percent) during 2012, ending the year with total loans of $4.4 billion. PNB also reported deposit growth of $202.5 million (or 4.4 percent) in 2012, ending the year with total deposits of $4.8 billion.

"A key part of our strategy is to consistently make loans available to individuals and businesses," said Park President David L. Trautman. "Our local lenders' commitment to service excellence led to loan growth in 2012 in nearly all categories, including home loans, business and commercial loans."

Headquartered in Newark, Ohio, Park National Corporation has $6.64 billion in total assets (as of December 31, 2012). Park 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 & Savings Bank Division, United Bank Division, Second National Bank Division, Security National Bank Division, Unity National Bank Division, The Park National Bank of Southwest Ohio & Northern Kentucky Division; and Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance). Park also includes Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.

Complete financial tables are listed below…

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Park cautions that any forward-looking statements contained in this news release 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: deterioration in the asset value of Park's loan portfolio may be worse than expected due to a number of factors, such as adverse changes in economic conditions that impair the ability of borrowers to repay their loans, the underlying value of the collateral could prove less valuable than assumed and cash flows may be worse than expected; Park's ability to sell OREO properties at prices as favorable as anticipated; Park's ability to execute its business plan successfully and within the expected timeframe; general economic and financial market conditions, and weakening in the economy, specifically the real estate market and the credit market, either nationally or in the states in which Park and its subsidiaries do business, may be worse than expected which could decrease the demand for loan, deposit and other financial services and increase loan delinquencies and defaults; 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; changes in consumer spending, borrowing and saving habits; changes in unemployment; asset/liability repricing risks and liquidity risks; our liquidity requirements could be adversely affected by changes in our assets and liabilities; competitive factors among financial service organizations increase significantly, including product and pricing pressures and our ability to attract, develop and retain qualified bank professionals; the nature, timing and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and its subsidiaries, including changes in laws and regulations concerning taxes, accounting, banking, securities and other aspects of the financial services industry, specifically the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), as well as future regulations which will be adopted by the relevant regulatory agencies, including the Consumer Financial Protection Bureau, to implement the Dodd-Frank Act's provisions; 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; the effect of fiscal and governmental policies of the United States federal government; adequacy of our risk management program; 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; demand for loans in the respective market areas served by Park and its subsidiaries; and other risk factors relating to the banking industry as detailed from time to time in Park's reports filed with the Securities and Exchange Commission 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, 2011 and in "Item 1A. Risk Factors" of Part II of Park's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2012. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Park does not undertake, and specifically disclaims any obligation, to publicly release the result 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 is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

 

PARK NATIONAL CORPORATION
Financial Highlights
Three months ended December 31, 2012, September 30, 2012, and December 31, 2011
           
  2012 2012 2011 Percent change vs.
(in thousands, except share and per share data) 4th QTR 3rd QTR 4th QTR 3Q '12 4Q '11
INCOME STATEMENT:          
Net interest income $56,891 $58,016 $66,279 (1.9)% (14.2)%
Provision for loan losses 5,188 16,655 20,218 (68.9)% (74.3)%
Other income 17,196 18,079 17,886 (4.9)% (3.9)%
Gain on sale of securities 3,367 N.M. N.M.
Total other expense 48,011 45,683 49,365 5.1% (2.7)%
Income before income taxes $20,888 $13,757 $17,949 51.8% 16.4%
Income taxes 4,601 1,775 7,339 159.2% (37.3)%
Net income $16,287 $11,982 $10,610 35.9% 53.5%
Preferred stock dividends and accretion 1,464 N.M. (100.0)%
Net income available to common shareholders $16,287 $11,982 $9,146 35.9% 78.1%
           
MARKET DATA:          
Earnings per common share - basic (b) $1.06 $0.78 $0.59 35.9% 79.7%
Earnings per common share - diluted (b) 1.06 0.78 0.59 35.9% 79.7%
Cash dividends per common share 0.94 0.94 0.94
Common book value per common share at period end 42.20 42.78 41.82 (1.4)% 0.9%
Stock price per common share at period end 64.63 70.02 65.06 (7.7)% (0.7)%
Market capitalization at period end 996,077 1,078,720 1,002,309 (7.7)% (0.6)%
           
Weighted average common shares - basic (a) 15,410,606 15,405,894 15,403,861
Weighted average common shares - diluted (a) 15,410,606 15,405,894 15,403,861
Common shares outstanding at period end 15,411,998 15,405,887 15,405,912
           
PERFORMANCE RATIOS: (annualized)          
Return on average assets (a)(b) 0.97% 0.70% 0.51% 38.6% 90.2%
Return on average common equity (a)(b) 9.81% 7.19% 5.53% 36.4% 77.4%
Yield on loans 5.23% 5.31% 5.59% (1.5)% (6.4)%
Yield on investments 2.88% 3.04% 3.53% (5.3)% (18.4)%
Yield on money markets 0.24% 0.25% 0.25% (4.0)% (4.0)%
Yield on earning assets 4.49% 4.56% 4.93% (1.5)% (8.9)%
Cost of interest bearing deposits 0.42% 0.46% 0.60% (8.7)% (30.0)%
Cost of borrowings 2.66% 2.79% 2.68% (4.7)% (0.7)%
Cost of paying liabilities 0.97% 1.00% 1.07% (3.0)% (9.3)%
Net interest margin 3.72% 3.75% 4.08% (0.8)% (8.8)%
Efficiency ratio (g) 64.47% 59.71% 58.34% 8.0% 10.5%
           
OTHER RATIOS (NON GAAP):          
Annualized return on average tangible assets (a)(b)(e) 0.98% 0.71% 0.52% 38.0% 88.5%
Annualized return on average tangible common equity (a)(b)(c) 11.03% 8.07% 6.26% 36.7% 76.2%
Tangible common book value per common share (d)  $37.48 $38.06 $36.96 (1.5)% 1.4%

 

PARK NATIONAL CORPORATION  
Financial Highlights  
Three months ended December 31, 2012, September 30, 2012, and December 31, 2011          
           
     Percent change vs.      
BALANCE SHEET: December 31,2012 September 30, 2012 December 31, 2011 3Q '12 4Q '11
           
Investment securities $1,581,751 $1,653,381 $1,708,473 (4.3)% (7.4)%
Loans 4,450,322 4,400,510 4,317,099 1.1% 3.1%
Allowance for loan losses 55,537 55,565 68,444 (0.1)% (18.9)%
Goodwill and other intangibles 72,671 72,810 74,843 (0.2)% (2.9)%
Other real estate owned 35,718 35,633 42,272 0.2% (15.5)%
Total assets 6,642,803 6,752,938 6,972,245 (1.6)% (4.7)%
Total deposits 4,716,032 4,793,077 4,465,114 (1.6)% 5.6%
Borrowings 1,206,076 1,187,431 1,162,026 1.6% 3.8%
Stockholders' equity 650,366 659,127 742,364 (1.3)% (12.4)%
Common equity 650,366 659,127 644,218 (1.3)% 1.0%
Tangible common equity (d) 577,695 586,317 569,375 (1.5)% 1.5%
Nonperforming loans 185,336 191,432 223,713 (3.2)% (17.2)%
Nonperforming assets 221,054 227,065 265,985 (2.6)% (16.9)%
Past due 90 day loans and still accruing 2,970 2,076 3,489 43.1% (14.9)%
           
ASSET QUALITY RATIOS:          
Loans as a % of period end assets 66.99% 65.16% 61.92% 2.8% 8.2%
Nonperforming loans as a % of period end loans 4.16% 4.35% 5.18% (4.4)% (19.7)%
Past due 90 day loans as a % of period end loans 0.07% 0.05% 0.08% 40.0% (12.5)%
Nonperforming assets / Period end loans + OREO  4.93% 5.12% 6.10% (3.7)% (19.2)%
Allowance for loan losses as a % of period end loans 1.25% 1.26% 1.59% (0.8)% (21.4)%
Net loan charge-offs $5,216 $19,786 $45,764 (73.6)% (88.6)%
Annualized net loan charge-offs as a % of average loans (a) 0.47% 1.79% 3.88% (73.7)% (87.9)%
           
CAPITAL & LIQUIDITY:          
Total equity / Period end assets 9.79% 9.76% 10.65% 0.3% (8.1)%
Common equity / Period end assets 9.79% 9.76% 9.24% 0.3% 6.0%
Tangible common equity (d) / Tangible assets (f) 8.79% 8.78% 8.25% 0.1% 6.5%
Average stockholders' equity / Average assets (a) 9.87% 9.80% 10.63% 0.7% (7.1)%
Average stockholders' equity / Average loans (a) 14.97% 15.10% 16.13% (0.9)% (7.2)%
Average loans / Average deposits (a) 92.78% 90.46% 91.96% 2.6% 0.9%
           
N.M. - Not meaningful  

 

PARK NATIONAL CORPORATION      
Financial Highlights      
Years ended December 31, 2012 and 2011      
       
(in thousands, except share and per share data) 2012 2011 Percent change vs. 2011
INCOME STATEMENT:      
Net interest income $235,315 $273,234 (13.9)%
Provision for loan losses 35,419 63,272 (44.0)%
Gain on sale of Vision Bank 22,167 N.M.
Other income 70,236 66,081 6.3%
Gain on sale of securities 28,829 N.M.
Total other expense 187,968 188,317 (0.2)%
Income before income taxes $104,331 $116,555 (10.5)%
Income taxes 25,701 34,415 (25.3)%
Net income $78,630 $82,140 (4.3)%
Preferred stock dividends and accretion 3,425 5,856 (41.5)%
Net income available to common shareholders $75,205 $76,284 (1.4)%
       
MARKET DATA:      
Earnings per common share - basic (b) $4.88 $4.95 (1.4)%
Earnings per common share - diluted (b) 4.88 4.95 (1.4)%
Cash dividends per common share 3.76 3.76
       
Weighted average common shares - basic (a) 15,407,078 15,400,155
Weighted average common shares - diluted (a) 15,408,141 15,401,446
       
PERFORMANCE RATIOS: (Annualized)      
Return on average assets (a)(b) 1.11% 1.06% 4.7%
Return on average common equity (a)(b) 11.41% 11.81% (3.4)%
Yield on loans 5.35% 5.61% (4.6)%
Yield on investments 3.15% 3.76% (16.2)%
Yield on earning assets 4.64% 5.03% (7.8)%
Cost of interest bearing deposits 0.49% 0.66% (25.8)%
Cost of borrowings 2.74% 2.63% 4.2%
Cost of paying liabilities 1.02% 1.09% (6.4)%
Net interest margin (g) 3.83% 4.14% (7.5)%
Efficiency ratio (g) 57.07% 55.18% 3.4%
       
ASSET QUALITY RATIOS:      
Net loan charge-offs $48,326 $125,084 (61.4)%
Annualized net loan charge-offs as a % of average loans (a) 1.10% 2.65% (58.5)%
       
CAPITAL & LIQUIDITY:      
Average stockholders' equity / Average assets (a) 10.19% 10.32% (1.3)%
Average stockholders' equity / Average loans (a) 15.64% 15.78% (0.9)%
Average loans / Average deposits (a) 91.22% 90.78% 0.5%
       
OTHER RATIOS (NON GAAP):      
Annualized return on average tangible assets (a)(b)(e) 1.12% 1.07% 4.7%
Annualized return on average tangible common equity (a)(b)(c) 12.84% 13.40% (4.2)%
       

 

PARK NATIONAL CORPORATION
Financial Highlights (continued)            
             
(a) Averages are for the quarters ended December 31, 2012, September 30, 2012 and December 31, 2011, and the fiscal years ended December 31, 2012 and December 31, 2011, as appropriate.      
(b) Reported measure uses net income available to common shareholders.      
(c) Net income available to common shareholders for each period divided by average tangible common equity during the period. Average tangible common equity equals average stockholders' equity during the applicable period less (i) average preferred stock during the applicable period and (ii) average goodwill and other intangibles during the applicable period.
             
RECONCILIATION OF AVERAGE STOCKHOLDERS' EQUITY TO AVERAGE TANGIBLE COMMON EQUITY:
  THREE MONTHS ENDED   TWELVE MONTHS ENDED
  December 31, 2012 September 30, 2012 December 31, 2011   December 31, 2012 December 31, 2011
AVERAGE STOCKHOLDERS' EQUITY $660,416 $663,314 $754,168   $689,732 $743,865
Less: Average preferred stock 98,023   30,877 97,704
Less: Average goodwill and other intangibles 72,748 72,888 76,041   73,069 77,055
AVERAGE TANGIBLE COMMON EQUITY $587,668 $590,426 $580,104   $585,786 $569,106
             
(d) Tangible common equity at the end of each period divided by common shares outstanding at the end of each period. Tangible common equity equals ending stockholders' equity less preferred stock and goodwill and other intangibles, in each case at the end of the period.
             
RECONCILIATION OF STOCKHOLDERS' EQUITY TO TANGIBLE COMMON EQUITY:      
  December 31, 2012 September 30, 2012 December 31, 2011      
STOCKHOLDERS' EQUITY $650,366 $659,127 $742,364      
Less: Preferred stock 98,146      
Less: Goodwill and other intangibles 72,671 72,810 74,843      
TANGIBLE COMMON EQUITY $577,695 $586,317 $569,375      
             
(e) Net income available to common shareholders 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   TWELVE MONTHS ENDED
  December 31, 2012 September 30, 2012 December 31, 2011   December 31, 2012 December 31, 2011
AVERAGE ASSETS $6,689,321 $6,769,735 $7,092,437   $6,766,806 $7,206,163
Less: Average goodwill and other intangibles 72,748 72,888 76,041   73,069 77,055
AVERAGE TANGIBLE ASSETS $6,616,573 $6,696,847 $7,016,396   $6,693,737 $7,129,108
             
(f) Tangible common equity divided by tangible assets. Tangible assets equals total assets less goodwill and other intangibles.      
             
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:      
  December 31, 2012 September 30, 2012 December 31, 2011      
TOTAL ASSETS $6,642,803 $6,752,938 $6,972,245      
Less: Goodwill and other intangibles 72,671 72,810 74,843      
TANGIBLE ASSETS $6,570,132 $6,680,128 $6,897,402      
             
(g) Efficiency ratio is calculated by taking total other expense divided 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.
             
RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
  THREE MONTHS ENDED   TWELVE MONTHS ENDED
  December 31, 2012 September 30, 2012 December 31, 2011   December 31, 2012 December 31, 2011
Interest income $68,793 $70,618 $80,231   $285,735 $331,880
Fully taxable equivalent adjustment 382 408 456   1,623 1,938
Fully taxable equivalent interest income $69,175 $71,026 $80,687   $287,358 $333,818
Interest expense 11,902 12,602 13,952   50,420 58,646
Fully taxable equivalent net interest income $57,273 $58,424 $66,735   $236,938 $275,172

 

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) 2012 2011 2012 2011
         
Interest income:        
Interest and fees on loans $57,671 $65,497 $234,638 $262,458
Interest on:        
Obligations of U.S. Government, its agencies        
and other securities 10,984 14,571 50,549 68,873
Obligations of states and political subdivisions 19 61 140 371
Other interest income 119 102 408 178
Total interest income 68,793 80,231 285,735 331,880
         
Interest expense:        
Interest on deposits:        
Demand and savings deposits 491 894 2,483 3,812
Time deposits 3,404 5,247 15,921 23,842
Interest on borrowings 8,007 7,811 32,016 30,992
Total interest expense 11,902 13,952 50,420 58,646
         
Net interest income 56,891 66,279 235,315 273,234
         
Provision for loan losses 5,188 20,218 35,419 63,272
         
Net interest income after provision for loan losses 51,703 46,061 199,896 209,962
         
Gain on sale of Vision Bank 22,167
Other income 17,196 17,886 70,236 66,081
         
Gain on sale of securities 3,367 28,829
         
Total other expense 48,011 49,365 187,968 188,317
         
Income before income taxes 20,888 17,949 104,331 116,555
         
Income taxes 4,601 7,339 25,701 34,415
         
Net income $16,287 $10,610 $78,630 $82,140
         
Preferred stock dividends and accretion 1,464 3,425 5,856
         
Net income available to common shareholders $16,287 $9,146 $75,205 $76,284
         
Per Common Share:        
Net income - basic $1.06 $0.59 $4.88 $4.95
Net income - diluted $1.06 $0.59 $4.88 $4.95
         
Weighted average shares - basic 15,410,606 15,403,861 15,407,078 15,400,155
Weighted average shares - diluted 15,410,606 15,403,861 15,408,141 15,401,446
         
Cash Dividends Declared $0.94 $0.94 $3.76 $3.76
         

 

 
PARK NATIONAL CORPORATION 
Consolidated Balance Sheets
   
(in thousands, except share data) December 31, 2012 December 31, 2011
     
Assets    
     
Cash and due from banks $164,120 $137,770
Money market instruments 37,185 19,716
Investment securities 1,581,751 1,708,473
Loans 4,450,322 4,317,099
Allowance for loan losses 55,537 68,444
Loans, net 4,394,785 4,248,655
Bank premises and equipment, net 53,751 53,741
Goodwill and other intangibles 72,671 74,843
Other real estate owned 35,718 42,272
Other assets 302,822 304,313
Assets held for sale 382,462
Total assets $6,642,803 $6,972,245
     
Liabilities and Stockholders' Equity    
     
Deposits:    
Noninterest bearing $1,137,290 $995,733
Interest bearing 3,578,742 3,469,381
Total deposits 4,716,032 4,465,114
Borrowings 1,206,076 1,162,026
Other liabilities 70,329 66,555
Liabilities held for sale 536,186
Total liabilities $5,992,437 $6,229,881
     
     
Stockholders' Equity:    
Preferred Stock (200,000 shares authorized in 2012 and 2011; No shares issued at December 31, 2012 and 100,000 shares issued at December 31, 2011) $ $98,146
Common stock (No par value; 20,000,000 shares authorized in 2012 and 2011; 16,150,987 shares issued at December 31, 2012 and 16,151,021 shares issued at December 31, 2011) 302,654 301,202
Common stock warrants 4,297
Accumulated other comprehensive loss, net of taxes (17,518) (8,831)
Retained earnings 441,605 424,557
Treasury stock (738,989 shares at December 31, 2012 and 745,109 at December 31, 2011) (76,375) (77,007)
Total stockholders' equity $650,366 $742,364
     
Total liabilities and stockholders' equity $6,642,803 $6,972,245

 

     
PARK NATIONAL CORPORATION 
Consolidated Average Balance Sheets
         
  Three Months Ended Twelve Months Ended
  December 31, December 31,
(in thousands) 2012 2011 2012 2011
         
Assets        
         
Cash and due from banks $110,926 $126,235 $119,410 $124,649
Money market instruments 194,582 163,804 166,319 78,593
Investment securities  1,540,650 1,668,826 1,633,268 1,868,343
Loans 4,412,508 4,676,229 4,410,661 4,713,511
Allowance for loan losses 57,436 98,930 61,995 128,523
Loans, net 4,355,072 4,577,299 4,348,666 4,584,988
Bank premises and equipment, net 54,300 69,054 54,917 69,507
Goodwill and other intangibles 72,748 76,041 73,069 77,055
Other real estate owned 35,848 43,226 38,777 44,815
Other assets 325,195 367,952 332,380 358,213
         
Total assets $6,689,321 $7,092,437 $6,766,806 $7,206,163
         
         
Liabilities and Stockholders' Equity        
         
Deposits:        
Noninterest bearing $1,090,475 $1,047,491 $1,048,796 $999,085
Interest bearing 3,665,181 4,037,485 3,786,601 4,193,404
Total deposits 4,755,656 5,084,976 4,835,397 5,192,489
Borrowings 1,197,532 1,155,566 1,166,365 1,179,458
Other liabilities 75,717 97,727 75,312 90,351
Total liabilities $6,028,905 $6,338,269 $6,077,074 $6,462,298
         
Stockholders' Equity:        
Preferred stock $ $98,023 $30,877 $97,704
Common stock  302,654 301,203 302,159 301,203
Common stock warrants 4,382 1,444 4,429
Accumulated other comprehensive loss, net of taxes (8,035) (3,127) (7,915) (4,201)
Retained earnings 442,378 430,907 440,067 422,333
Treasury stock  (76,581) (77,220) (76,900) (77,603)
Total stockholders' equity $660,416 $754,168 $689,732 $743,865
         
Total liabilities and stockholders' equity $6,689,321 $7,092,437 $6,766,806 $7,206,163

 

 
PARK NATIONAL CORPORATION 
Consolidated Statements of Income - Linked Quarters
           
  2012 2012 2012 2012 2011
(in thousands, except per share data) 4th QTR 3rd QTR 2nd QTR 1st QTR 4th QTR
           
Interest income:          
Interest and fees on loans  $57,671 $58,269 $57,593 $61,105 $65,497
Interest on:          
Obligations of U.S. Government, its agencies and other securities 10,984 12,187 13,794 13,584 14,571
Obligations of states and political subdivisions 19 33 42 46 61
Other interest income 119 129 57 103 102
Total interest income 68,793 70,618 71,486 74,838 80,231
           
Interest expense:          
Interest on deposits:          
Demand and savings deposits 491 636 602 754 894
Time deposits 3,404 3,757 4,121 4,639 5,247
Interest on borrowings 8,007 8,209 8,083 7,717 7,811
Total interest expense 11,902 12,602 12,806 13,110 13,952
           
Net interest income 56,891 58,016 58,680 61,728 66,279
           
Provision for loan losses 5,188 16,655 5,238 8,338 20,218
           
Net interest income after provision for loan losses 51,703 41,361 53,442 53,390 46,061
           
Gain on sale of Vision business 22,167
Other income 17,196 18,079 17,508 17,453 17,886
           
Gain on sale of securities 3,367
           
Total other expense 48,011 45,683 45,804 48,470 49,365
           
Income before income taxes 20,888 13,757 25,146 44,540 17,949
           
Income taxes 4,601 1,775 6,260 13,065 7,339
           
Net income  $16,287 $11,982 $18,886 $31,475 $10,610
           
Preferred stock dividends and accretion 1,948 1,477 1,464
           
Net income available to common shareholders $16,287 $11,982 $16,938 $29,998 $9,146
           
Per Common Share:          
Net income - basic $1.06 $0.78 $1.10 $1.95 $0.59
Net income - diluted $1.06 $0.78 $1.10 $1.95 $0.59

 

 
PARK NATIONAL CORPORATION 
Detail of other income and other expense - Linked Quarters
           
  2012 2012 2012 2012 2011
(in thousands) 4th QTR 3rd QTR 2nd QTR 1st QTR 4th QTR
           
Other income:          
Income from fiduciary activities $4,056 $4,019 $4,044 $3,828 $3,699
Service charges on deposits 4,235 4,244 4,154 4,071 4,643
Other service income 3,463 4,017 3,417 2,734 2,484
Checkcard fee income 3,151 3,038 3,180 3,172 3,115
Bank owned life insurance income 1,184 1,184 1,184 1,202 1,403
ATM fees 650 565 536 608 641
           
OREO devaluations (2,440) (425) (2,648) (1,359) (1,742)
Gain/(loss) on the sale of OREO, net 1,028 138 2,203 1,045 619
Gain on sale of Vision Bank 22,167
Other 1,869 1,299 1,438 2,152 3,024
Total other income $17,196 $18,079 $17,508 $39,620 $17,886
           
Other expense:          
Salaries and employee benefits $24,086 $24,255 $22,813 $24,823 $25,952
Net occupancy expense 2,222 2,303 2,249 2,670 2,866
Furniture and equipment expense 2,774 2,666 2,727 2,621 2,643
Data processing fees 913 904 899 1,200 1,393
Professional fees and services 6,846 6,040 5,800 5,581 5,920
Amortization of intangibles 139 139 139 1,754 1,528
Marketing 1,002 924 705 843 852
Insurance 1,482 1,408 1,400 1,490 1,526
Communication 1,482 1,470 1,494 1,537 1,544
Loan put provision 346 2,701 662
Other 7,065 5,228 4,877 5,289 5,141
Total other expense $48,011 $45,683 $45,804 $48,470 $49,365

 

PARK NATIONAL CORPORATION 
Asset Quality Information
 
           
  Year ended December 31,
(in thousands, except ratios) 2012 2011 2010 2009 2008
           
Allowance for loan losses:          
Allowance for loan losses, beginning of period $68,444 $143,575 $116,717 $100,088 $87,102
Transfer of loans at fair value (219)
Transfer of allowance to held for sale (13,100)
Charge-offs 61,268 133,882 66,314 59,022 62,916
Recoveries 12,942 8,798 6,092 6,830 5,415
Net charge-offs 48,326 125,084 60,222 52,192 57,501
Provision for loan losses 35,419 63,272 87,080 68,821 70,487
Allowance for loan losses, end of period $55,537 $68,444 $143,575 $116,717 $100,088
(A) Includes the full charge-off of the Vision Bank ALLL of $12.1 million to bring the retained Vision Bank loan portfolio to fair value prior to the merger of Vision Bank (as constituted following the transaction with Centennial Bank and Home BancShares, Inc.) with and into SEPH, the non-bank subsidiary of Park, on February 16, 2012.
           
General reserve trends:          
Allowance for loan losses, end of period $55,537 $68,444 $143,575 $116,717 $100,088
Specific reserves 8,276 15,935 66,904 36,721 8,875
General reserves $47,261 $52,509 $76,671 $79,996 $91,213
           
Total loans $4,450,322 $4,317,099 $4,732,685 $4,640,432 $4,491,337
Impaired commercial loans 137,238 187,074 250,933 201,143 141,343
Non-impaired loans $4,313,084 $4,130,025 $4,481,752 $4,439,289 $4,349,994
           
           
Asset Quality Ratios:          
           
Net charge-offs as a % of average loans 1.10% 2.65% 1.30% 1.14% 1.32%
Allowance for loan losses as a % of period end loans 1.25% 1.59% 3.03% 2.52% 2.23%
General reserves as a % of non-impaired loans 1.10% 1.27% 1.71% 1.80% 2.10%
           
Nonperforming Assets - Park National Corporation:          
Nonaccrual loans $155,536 $195,106 $289,268 $233,544 $159,512
Accruing troubled debt restructuring 29,800 28,607  --  142 2,845
Loans past due 90 days or more 2,970 3,489 3,590 14,773 5,421
Total nonperforming loans $188,306 $227,202 $292,858 $248,459 $167,778
Other real estate owned - Park National Bank 14,715 13,240 8,385 6,037 6,149
Other real estate owned - SEPH 21,003 29,032      
Other real estate owned - Vision Bank     33,324 35,203 19,699
Total nonperforming assets $224,024 $269,474 $334,567 $289,699 $193,626
Percentage of nonaccrual loans to period end loans 3.49% 4.52% 6.11% 5.03% 3.55%
Percentage of nonperforming loans to period end loans 4.23% 5.26% 6.19% 5.35% 3.74%
Percentage of nonperforming assets to period end loans 5.03% 6.24% 7.07% 6.24% 4.31%
Percentage of nonperforming assets to period end assets 3.37% 3.86% 4.59% 4.11% 2.74%
           
 
 
PARK NATIONAL CORPORATION 
Asset Quality Information (continued)
           
  Year ended December 31,
(in thousands, except ratios) 2012 2011 2010 2009 2008
Nonperforming Assets - Park National Bank and Guardian:          
Nonaccrual loans $100,244 $96,113 $117,815 $85,197 $68,306
Accruing troubled debt restructuring 29,800 26,342   142  
Loans past due 90 days or more 2,970 3,367 3,226 3,496 4,777
Total nonperforming loans $133,014 $125,822 $121,041 $88,835 $73,083
Other real estate owned - Park National Bank 14,715 13,240 8,385 6,037 6,149
Total nonperforming assets $147,729 $139,062 $129,426 $94,872 $79,232
Percentage of nonaccrual loans to period end loans 2.28% 2.29% 2.88% 2.15% 1.80%
Percentage of nonperforming loans to period end loans 3.03% 3.00% 2.96% 2.24% 1.92%
Percentage of nonperforming assets to period end loans 3.36% 3.32% 3.16% 2.39% 2.08%
Percentage of nonperforming assets to period end assets 2.27% 2.21% 1.99% 1.53% 1.27%
           
Nonperforming Assets - SEPH/Vision Bank (retained portfolio as of December 31, 2012, and 2011):
Nonaccrual loans $55,292 $98,993 $171,453 $148,347 $91,206
Accruing troubled debt restructuring 2,265 2,845
Loans past due 90 days or more 122 364 11,277 644
Total nonperforming loans $55,292 $101,380 $171,817 $159,624 $94,695
Other real estate owned - Vision Bank 33,324 35,203 19,699
Other real estate owned - SEPH 21,003 29,032
Total nonperforming assets $76,295 $130,412 $205,141 $194,827 $114,394
Percentage of nonaccrual loans to period end loans N.M. N.M. 26.77% 21.91% 13.21%
Percentage of nonperforming loans to period end loans N.M. N.M. 26.82% 23.58% 13.71%
Percentage of nonperforming assets to period end loans N.M. N.M. 32.02% 28.78% 16.57%
Percentage of nonperforming assets to period end assets N.M. N.M. 25.90% 21.70% 12.47%
           
           
New nonaccrual loan information-Park National Corporation          
Nonaccrual loans, beginning of period $195,106 $289,268 $233,544 $159,512 $101,128
New nonaccrual loans 83,204 124,158 175,175 184,181 141,749
Resolved nonaccrual loans 122,774 218,320 119,451 110,149 83,365
Nonaccrual loans, end of period $155,536 $195,106 $289,268 $233,544 $159,512
           
New nonaccrual loan information-Ohio based operations          
Nonaccrual loans, beginning of period $96,113 $117,815 $85,197 $68,306 $38,113
New nonaccrual loans - Ohio-based operations 68,960 78,316 85,081 57,641 58,161
Resolved nonaccrual loans 64,829 100,018 52,463 40,750 27,968
Nonaccrual loans, end of period $100,244 $96,113 $117,815 $85,197 $68,306
           
New nonaccrual loan information-SEPH/Vision Bank (SEPH as of March 31, 2012)
Nonaccrual loans, beginning of period $98,993 $171,453 $148,347 $91,206 $63,015
New nonaccrual loans - SEPH/Vision Bank 14,243 45,842 90,094 126,540 83,588
Resolved nonaccrual loans 57,944 118,302 66,988 69,399 55,397
Nonaccrual loans, end of period $55,292 $98,993 $171,453 $148,347 $91,206
           
           
Impaired Commercial Loan Portfolio Information (period end):          
Unpaid principal balance $242,345 $290,908 $304,534 $245,092 $171,310
Prior charge-offs 105,107 103,834 53,601 43,949 29,967
Remaining principal balance 137,238 187,074 250,933 201,143 141,343
Specific reserves 8,276 15,935 66,904 36,721 8,875
Book value, after specific reserve $128,962 $171,139 $184,029 $164,422 $132,468
CONTACT: Media contact: Bethany Lewis 740.349.0421 blewis@parknationalbank.com Investor contact: Brady Burt 740-322-6844 bburt@parknationalbank.com
 

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