Park National Corporation reports financial results for third quarter and first nine months of 2020
26 Outubro 2020 - 5:15PM
Park National Corporation (Park) (NYSE American: PRK) today
reported financial results for the third quarter and first nine
months of 2020 (three and nine months ended September 30, 2020).
Park's board of directors declared a quarterly cash dividend of
$1.02 per common share, payable on December 10, 2020 to common
shareholders of record as of November 20, 2020.
Park’s net income for the third quarter of 2020 was $30.8
million, a 1.0 percent decrease from $31.1 million for the third
quarter of 2019. Third quarter 2020 net income per diluted common
share was $1.88, compared to $1.89 in the third quarter of 2019.
Park's net income for the first nine months of 2020 was $82.7
million, a 5.0 percent increase from $78.8 million for the first
nine months of 2019. Net income per diluted common share was $5.04
for the first nine months of 2020, compared to $4.84 for the first
nine months of 2019.
Park's community-banking subsidiary, The Park National Bank,
reported net income of $32.9 million for the third quarter of 2020,
a 6.3 percent increase compared to $30.9 million for the same
period of 2019. The bank reported net income of $89.5 million for
the first nine months of 2020, compared to $87.0 million for the
first nine months of 2019.
“Our results through the spring and summer reflect the
unwavering dedication our associates have to supporting customers
in the most reliable and compassionate ways. Our service style has
always included easy, direct access to local bankers, quick
responses, and flexibility to fit unique situations. The excellent
loan growth this year is absolutely connected to our bankers’
reputation for answering phones and providing solutions – even on
evenings and weekends,” Park Chief Executive Office David Trautman
explained.
“As our communities adapted to pandemic conditions, local
businesses needed swift access to funds as they adjusted and
persevered. Families needed fair financing for vehicles and
recreational equipment, and many needed guidance about low mortgage
rates. Everyone needed and deserves service in the quickest, safest
way possible. We are extremely proud of and grateful for our
associates, in every corner of our organization, who continue to
dedicate themselves to serving our communities and neighbors.”
Headquartered in Newark, Ohio, Park National Corporation has
$9.2 billion in total assets (as of September 30, 2020). Park's
banking operations are conducted through its subsidiary The Park
National Bank. Other Park subsidiaries are 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.
Category: Earnings
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995Park 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:
- the ever-changing effects of the novel coronavirus (COVID-19)
pandemic - - the duration, extent and severity of which are
impossible to predict, including the possibility of further
resurgence in the spread of COVID-19 - - on economies (local,
national and international) and markets, and on our customers,
counterparties, employees and third-party service providers, as
well as the effects of various responses of governmental and
nongovernmental authorities to the COVID-19 pandemic, including
public health actions directed toward the containment of the
COVID-19 pandemic, and the implementation of fiscal stimulus
packages;
- the impact of future governmental and regulatory actions upon
our participation in and execution of government programs related
to the COVID-19 pandemic;
- Park's ability to execute our business plan successfully and
within the expected timeframe as well as our ability to manage
strategic initiatives in light of the impact of the COVID-19
pandemic and the various responses to the COVID-19 pandemic;
- 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 weaker recovery than anticipated, in
addition to the continuing impact of the COVID-19 pandemic on our
customers’ operations and financial condition, either of which may
result 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;
- factors that can impact the performance of our loan portfolio,
including real estate values and liquidity in our primary market
areas, the financial health of our commercial borrowers and the
success of construction projects that we finance, including any
loans acquired in acquisition transactions;
- the effect of monetary and other fiscal policies (including the
impact of money supply and interest rate policies of the Federal
Reserve Board) as well as disruption in the liquidity and
functioning of U.S. financial markets, as a result of the COVID-19
pandemic and government policies implemented in response thereto,
may adversely impact prepayment penalty income, mortgage banking
income, income from fiduciary activities, the value of
securities, deposits and other financial instruments, in
addition to the loan demand and the performance of our loan
portfolio, and the interest rate sensitivity of our consolidated
balance sheet as well as reduce interest margins;
- changes in consumer spending, borrowing and saving habits,
whether due to changes in retail distribution strategies, consumer
preferences and behavior, changes in business and economic
conditions (including as a result of the COVID-19 pandemic and
reactions thereto), legislative and regulatory initiatives
(including those undertaken in response to the COVID-19 pandemic),
or other factors may be different than anticipated;
- changes in unemployment levels in the states in which Park and
our subsidiaries do business may be different than anticipated due
to the continuing impact of the COVID-19 pandemic;
- changes in customers', suppliers', and other counterparties'
performance and creditworthiness may be different than anticipated
due to the continuing impact of the COVID-19 pandemic;
- the adequacy of our internal controls and risk management
program in the event of changes in the market, economic,
operational (including those which may result from more of our
associates working remotely), asset/liability repricing, legal,
compliance, strategic, cybersecurity, liquidity, credit and
interest rate risks associated with Park's business;
- competitive pressures among financial services organizations
could increase significantly, including product and pricing
pressures (which could in turn impact our credit spreads), changes
to third-party relationships and revenues, changes in the manner of
providing services, customer acquisition and retention pressures,
and our ability to attract, develop and retain qualified banking
professionals;
- 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, FDIC insurance premium levels,
pensions, bankruptcy, consumer protection, rent regulation and
housing, financial accounting and reporting, environmental
protection, insurance, bank products and services, bank and bank
holding company capital and liquidity standards, fiduciary
standards, securities and other aspects of the financial services
industry, specifically the reforms provided for in the Coronavirus
Aid, Relief and Economic Security (CARES) Act, 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 provisions of the CARES
Act, the provisions of the Dodd-Frank Act, and the Basel III
regulatory capital reforms;
- the effect of changes in accounting policies and practices, as
may be adopted by the Financial Accounting Standards Board (the
"FASB"), the SEC, the Public Company Accounting Oversight Board and
other regulatory agencies, including the extent to which the new
current expected credit loss ("CECL") accounting standard issued by
the FASB in June 2016 and in accordance with the CARES Act, the
adoption of which can be deferred by Park (with retrospective
application as of January 1, 2020) until the earlier of: (1) the
interim reporting period during which the national emergency
concerning the COVID-19 outbreak terminates; or (2) December 31,
2020, may adversely affect Park's reported financial condition or
results of operations;
- Park's assumptions and estimates used in applying critical
accounting policies and modeling, including under the CECL model,
when adopted by Park, which may prove unreliable, inaccurate or not
predictive of actual 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 impact of Park's ability to anticipate and respond to
technological changes on Park's 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 Park's 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 as well as 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 and changes in
the relationship of the U.S. and its global trading partners);
- uncertainty regarding changes to the U.S. presidential
administration and Congress and the impact thereof on the
regulatory landscape, capital markets, and the response to and
management of the COVID-19 pandemic;
- 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 growth rates and financial stability of certain
sovereign governments, supranationals and financial institutions in
Europe and Asia and the risk they may face difficulties servicing
their sovereign debt;
- 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;
- the impact on Park's business, personnel, facilities or systems
of losses related to acts of fraud, scams and schemes of third
parties;
- the impact of widespread natural and other disasters, pandemics
(including the COVID-19 pandemic), dislocations, regional or
national protests and civil unrest, terrorist activities or
international hostilities on the economy and financial markets
generally and on us or our counterparties specifically;
- any of the foregoing factors, or other cascading effects of the
COVID-19 pandemic that are not currently foreseeable, could
materially affect our business, including our customers'
willingness to conduct banking transactions and their ability to
pay on existing obligations;
- the effect of healthcare laws in the U.S. and potential changes
for such laws, especially in light of the COVID-19 pandemic, which
may increase our healthcare and other costs and negatively impact
our operations and financial results;
- risk and uncertainties associated with Park's entry into new
geographic markets with our recent acquisitions, including expected
revenue synergies and cost savings from recent acquisitions not
being fully realized or realized within the expected time
frame;
- the discontinuation of the London Inter-Bank Offered Rate
(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, 2019 and in "Item 1A. Risk Factors" of Part II of
Park's Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2020.
Park does not undertake, and specifically disclaims any
obligation, to publicly release the results of any revisions that
may be made to update any forward-looking statement to reflect the
events or circumstances after the date on which the forward-looking
statement was made, or reflect the occurrence of unanticipated
events, except to the extent required by law.
PARK
NATIONAL CORPORATION |
Financial
Highlights |
As of or
for the three months ended September 30, 2020, June 30, 2020, and
September 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 |
2020 |
2019 |
|
Percent change vs. |
(in thousands,
except share and per share data) |
3rd QTR |
2nd QTR |
3rd QTR |
|
2Q '20 |
3Q '19 |
INCOME
STATEMENT: |
|
|
|
|
|
|
Net interest income |
$ |
83,840 |
|
$ |
81,186 |
|
$ |
77,101 |
|
|
3.3 |
|
% |
8.7 |
|
% |
Provision for loan losses |
13,836 |
|
12,224 |
|
1,967 |
|
|
13.2 |
|
% |
603.4 |
|
% |
Other income |
36,558 |
|
30,964 |
|
28,136 |
|
|
18.1 |
|
% |
29.9 |
|
% |
Other
expense |
69,859 |
|
64,799 |
|
65,738 |
|
|
7.8 |
|
% |
6.3 |
|
% |
Income before income
taxes |
$ |
36,703 |
|
$ |
35,127 |
|
$ |
37,532 |
|
|
4.5 |
|
% |
(2.2 |
) |
% |
Income
taxes |
5,857 |
|
5,622 |
|
6,386 |
|
|
4.2 |
|
% |
(8.3 |
) |
% |
Net
income |
$ |
30,846 |
|
$ |
29,505 |
|
$ |
31,146 |
|
|
4.5 |
|
% |
(1.0 |
) |
% |
|
|
|
|
|
|
|
MARKET
DATA: |
|
|
|
|
|
|
Earnings per common share -
basic (a) |
$ |
1.89 |
|
$ |
1.81 |
|
$ |
1.90 |
|
|
4.4 |
|
% |
(0.5 |
) |
% |
Earnings per common share -
diluted (a) |
1.88 |
|
1.80 |
|
1.89 |
|
|
4.4 |
|
% |
(0.5 |
) |
% |
Cash dividends declared per
common share |
1.02 |
|
1.02 |
|
1.01 |
|
|
— |
|
% |
1.0 |
|
% |
Book value per common share at
period end |
62.39 |
|
61.46 |
|
58.54 |
|
|
1.5 |
|
% |
6.6 |
|
% |
Market price per common share
at period end |
81.96 |
|
70.38 |
|
94.81 |
|
|
16.5 |
|
% |
(13.6 |
) |
% |
Market capitalization at
period end |
1,336,011 |
|
1,146,942 |
|
1,548,527 |
|
|
16.5 |
|
% |
(13.7 |
) |
% |
|
|
|
|
|
|
|
Weighted average common shares
- basic (b) |
16,300,720 |
|
16,296,427 |
|
16,382,798 |
|
|
— |
|
% |
(0.5 |
) |
% |
Weighted average common shares
- diluted (b) |
16,393,792 |
|
16,375,434 |
|
16,475,741 |
|
|
0.1 |
|
% |
(0.5 |
) |
% |
Common shares outstanding at
period end |
16,300,763 |
|
16,296,425 |
|
16,332,951 |
|
|
— |
|
% |
(0.2 |
) |
% |
|
|
|
|
|
|
|
PERFORMANCE RATIOS:
(annualized) |
|
|
|
|
|
|
Return on average assets
(a)(b) |
1.28 |
% |
1.26 |
% |
1.41 |
% |
|
1.6 |
|
% |
(9.2 |
) |
% |
Return on average
shareholders' equity (a)(b) |
12.03 |
% |
11.89 |
% |
13.07 |
% |
|
1.2 |
|
% |
(8.0 |
) |
% |
Yield on loans |
4.54 |
% |
4.63 |
% |
5.25 |
% |
|
(1.9 |
) |
% |
(13.5 |
) |
% |
Yield on investment
securities |
2.35 |
% |
2.76 |
% |
2.72 |
% |
|
(14.9 |
) |
% |
(13.6 |
) |
% |
Yield on money market
instruments |
0.11 |
% |
0.10 |
% |
2.43 |
% |
|
10.0 |
|
% |
(95.5 |
) |
% |
Yield on interest earning
assets |
4.12 |
% |
4.14 |
% |
4.73 |
% |
|
(0.5 |
) |
% |
(12.9 |
) |
% |
Cost of interest bearing
deposits |
0.26 |
% |
0.36 |
% |
1.08 |
% |
|
(27.8 |
) |
% |
(75.9 |
) |
% |
Cost of borrowings |
1.63 |
% |
1.33 |
% |
2.25 |
% |
|
22.6 |
|
% |
(27.6 |
) |
% |
Cost of paying interest
bearing liabilities |
0.39 |
% |
0.43 |
% |
1.19 |
% |
|
(9.3 |
) |
% |
(67.2 |
) |
% |
Net interest margin (g) |
3.85 |
% |
3.84 |
% |
3.86 |
% |
|
0.3 |
|
% |
(0.3 |
) |
% |
Efficiency ratio (g) |
57.69 |
% |
57.41 |
% |
62.03 |
% |
|
0.5 |
|
% |
(7.0 |
) |
% |
|
|
|
|
|
|
|
OTHER RATIOS
(NON-GAAP): |
|
|
|
|
|
|
Tangible book value per share
(d) |
$ |
52.00 |
|
$ |
51.04 |
|
$ |
47.92 |
|
|
1.9 |
|
% |
8.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Explanations for
footnotes (a) - (k) are included at the end of the financial tables
in the "Financial Reconciliations" section. |
|
|
|
|
|
|
|
|
|
|
|
|
|
PARK NATIONAL CORPORATION |
Financial Highlights
(continued) |
As of or
for the three months ended September 30, 2020, June 30, 2020, and
September 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change vs. |
(in thousands,
except ratios) |
September 30, 2020 |
June 30, 2020 |
September 30, 2019 |
|
2Q '20 |
3Q '19 |
BALANCE SHEET: |
|
|
|
|
|
|
Investment securities |
$ |
1,097,598 |
|
$ |
1,153,186 |
|
$ |
1,328,930 |
|
|
(4.8 |
) |
% |
(17.4 |
) |
% |
Loans |
7,278,546 |
|
7,204,445 |
|
6,403,647 |
|
|
1.0 |
|
% |
13.7 |
|
% |
Allowance for loan losses |
87,038 |
|
73,476 |
|
55,853 |
|
|
18.5 |
|
% |
55.8 |
|
% |
Goodwill and other intangible
assets |
169,380 |
|
169,905 |
|
173,489 |
|
|
(0.3 |
) |
% |
(2.4 |
) |
% |
Other real estate owned
(OREO) |
836 |
|
1,356 |
|
3,779 |
|
|
(38.3 |
) |
% |
(77.9 |
) |
% |
Total assets |
9,240,006 |
|
9,712,994 |
|
8,723,610 |
|
|
(4.9 |
) |
% |
5.9 |
|
% |
Total deposits |
7,475,829 |
|
8,161,900 |
|
7,168,259 |
|
|
(8.4 |
) |
% |
4.3 |
|
% |
Borrowings |
643,103 |
|
444,410 |
|
498,338 |
|
|
44.7 |
|
% |
29.0 |
|
% |
Total shareholders'
equity |
1,016,996 |
|
1,001,594 |
|
956,140 |
|
|
1.5 |
|
% |
6.4 |
|
% |
Tangible equity (d) |
847,616 |
|
831,689 |
|
782,651 |
|
|
1.9 |
|
% |
8.3 |
|
% |
Total nonperforming loans |
148,442 |
|
126,044 |
|
111,184 |
|
|
17.8 |
|
% |
33.5 |
|
% |
Total nonperforming
assets |
152,670 |
|
130,999 |
|
118,561 |
|
|
16.5 |
|
% |
28.8 |
|
% |
|
|
|
|
|
|
|
ASSET QUALITY
RATIOS: |
|
|
|
|
|
|
Loans as a % of period end
total assets |
78.77 |
% |
74.17 |
% |
73.41 |
% |
|
6.2 |
|
% |
7.3 |
|
% |
Total nonperforming loans as a
% of period end loans |
2.04 |
% |
1.75 |
% |
1.74 |
% |
|
16.6 |
|
% |
17.2 |
|
% |
Total nonperforming assets as
a % of period end loans + OREO + other nonperforming
assets |
2.10 |
% |
1.82 |
% |
1.85 |
% |
|
15.4 |
|
% |
13.5 |
|
% |
Allowance for loan losses as a
% of period end loans |
1.20 |
% |
1.02 |
% |
0.87 |
% |
|
17.6 |
|
% |
37.9 |
|
% |
Net loan charge-offs |
$ |
274 |
|
$ |
251 |
|
$ |
117 |
|
|
9.2 |
|
% |
134.2 |
|
% |
Annualized net loan
charge-offs as a % of average loans (b) |
0.02 |
% |
0.01 |
% |
0.01 |
% |
|
100.0 |
|
% |
100.0 |
|
% |
|
|
|
|
|
|
|
CAPITAL &
LIQUIDITY: |
|
|
|
|
|
|
Total shareholders' equity /
Period end total assets |
11.01 |
% |
10.31 |
% |
10.96 |
% |
|
6.8 |
|
% |
0.5 |
|
% |
Tangible equity (d) / Tangible
assets (f) |
9.34 |
% |
8.72 |
% |
9.15 |
% |
|
7.1 |
|
% |
2.1 |
|
% |
Average shareholders' equity /
Average assets (b) |
10.67 |
% |
10.61 |
% |
10.76 |
% |
|
0.6 |
|
% |
(0.8 |
) |
% |
Average shareholders' equity /
Average loans (b) |
14.08 |
% |
14.30 |
% |
14.83 |
% |
|
(1.5 |
) |
% |
(5.1 |
) |
% |
Average loans / Average
deposits (b) |
92.02 |
% |
88.59 |
% |
88.63 |
% |
|
3.9 |
|
% |
3.8 |
|
% |
|
|
|
|
|
|
|
Note:
Explanations for footnotes (a) - (k) are included at the end of the
financial tables in the "Financial Reconciliations" section. |
|
|
|
PARK
NATIONAL CORPORATION |
Financial
Highlights |
Nine
months ended September 30, 2020 and September 30,
2019 |
|
|
|
|
|
|
|
|
|
2020 |
2019 |
|
|
(in thousands,
except share and per share data and ratios) |
Nine months ended September 30 |
Nine months ended September 30 |
|
Percent change vs '19 |
INCOME
STATEMENT: |
|
|
|
|
Net interest income |
$ |
241,309 |
|
$ |
220,728 |
|
|
9.3 |
|
% |
Provision for loan losses |
31,213 |
|
6,384 |
|
|
388.9 |
|
% |
Other income |
90,008 |
|
72,969 |
|
|
23.4 |
|
% |
Other
expense |
200,934 |
|
192,757 |
|
|
4.2 |
|
% |
Income before income
taxes |
$ |
99,170 |
|
$ |
94,556 |
|
|
4.9 |
|
% |
Income
taxes |
16,447 |
|
15,792 |
|
|
4.1 |
|
% |
Net
income |
$ |
82,723 |
|
$ |
78,764 |
|
|
5.0 |
|
% |
|
|
|
|
|
MARKET
DATA: |
|
|
|
|
Earnings per common share -
basic (a) |
$ |
5.07 |
|
$ |
4.86 |
|
|
4.3 |
|
% |
Earnings per common share -
diluted (a) |
5.04 |
|
4.84 |
|
|
4.1 |
|
% |
Cash dividends declared per
common share |
3.26 |
|
3.23 |
|
|
0.9 |
|
% |
|
|
|
|
|
Weighted average common shares
- basic (b) |
16,300,250 |
|
16,198,294 |
|
|
0.6 |
|
% |
Weighted average common shares
- diluted (b) |
16,398,350 |
|
16,287,695 |
|
|
0.7 |
|
% |
|
|
|
|
|
PERFORMANCE RATIOS:
(annualized) |
|
|
|
|
Return on average assets
(a)(b) |
1.20 |
% |
1.25 |
% |
|
(4.0 |
) |
% |
Return on average
shareholders' equity (a)(b) |
11.05 |
% |
11.61 |
% |
|
(4.8 |
) |
% |
Yield on loans |
4.72 |
% |
5.21 |
% |
|
(9.4 |
) |
% |
Yield on investment
securities |
2.62 |
% |
2.77 |
% |
|
(5.4 |
) |
% |
Yield on money market
instruments |
0.31 |
% |
2.53 |
% |
|
(87.7 |
) |
% |
Yield on interest earning
assets |
4.27 |
% |
4.72 |
% |
|
(9.5 |
) |
% |
Cost of interest bearing
deposits |
0.47 |
% |
1.03 |
% |
|
(54.4 |
) |
% |
Cost of borrowings |
1.66 |
% |
2.13 |
% |
|
(22.1 |
) |
% |
Cost of paying interest
bearing liabilities |
0.57 |
% |
1.15 |
% |
|
(50.4 |
) |
% |
Net interest margin (g) |
3.88 |
% |
3.88 |
% |
|
— |
|
% |
Efficiency ratio (g) |
60.26 |
% |
65.14 |
% |
|
(7.5 |
) |
% |
|
|
|
|
|
ASSET QUALITY
RATIOS: |
|
|
|
|
Net loan charge-offs |
$ |
854 |
|
$ |
2,043 |
|
|
(58.2 |
) |
% |
Annualized net loan
charge-offs as a % of average loans (b) |
0.02 |
% |
0.04 |
% |
|
(50.0 |
) |
% |
|
|
|
|
|
CAPITAL &
LIQUIDITY: |
|
|
|
|
Average shareholders' equity /
Average assets (b) |
10.85 |
% |
10.80 |
% |
|
0.5 |
|
% |
Average shareholders' equity /
Average loans (b) |
14.49 |
% |
14.79 |
% |
|
(2.0 |
) |
% |
Average loans / Average
deposits (b) |
90.19 |
% |
90.10 |
% |
|
0.1 |
|
% |
|
|
|
|
|
|
|
|
|
|
Note: Explanations for
footnotes (a) - (k) are included at the end of the financial tables
in the "Financial Reconciliations" section. |
|
|
|
|
PARK NATIONAL CORPORATION |
|
|
|
|
Consolidated Statements of Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
(in thousands, except share and per share
data) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
Interest income: |
|
|
|
|
|
|
|
|
Interest and fees on loans |
|
$ |
82,617 |
|
|
$ |
84,213 |
|
|
$ |
243,459 |
|
|
$ |
238,687 |
|
Interest on: |
|
|
|
|
|
|
|
|
Obligations of U.S. Government, its agencies |
|
|
|
|
|
|
|
|
and other securities - taxable |
|
4,841 |
|
|
6,326 |
|
|
15,398 |
|
|
20,240 |
|
Obligations of states and political subdivisions - tax-exempt |
|
2,045 |
|
|
2,225 |
|
|
6,396 |
|
|
6,750 |
|
Other interest income |
|
63 |
|
|
1,825 |
|
|
667 |
|
|
2,994 |
|
Total
interest income |
|
89,566 |
|
|
94,589 |
|
|
265,920 |
|
|
268,671 |
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
Interest on deposits: |
|
|
|
|
|
|
|
|
Demand and savings deposits |
|
803 |
|
|
9,649 |
|
|
8,652 |
|
|
25,553 |
|
Time deposits |
|
2,662 |
|
|
4,694 |
|
|
10,293 |
|
|
12,828 |
|
Interest on borrowings |
|
2,261 |
|
|
3,145 |
|
|
5,666 |
|
|
9,562 |
|
Total interest
expense |
|
5,726 |
|
|
17,488 |
|
|
24,611 |
|
|
47,943 |
|
|
|
|
|
|
|
|
|
|
Net
interest income |
|
83,840 |
|
|
77,101 |
|
|
241,309 |
|
|
220,728 |
|
|
|
|
|
|
|
|
|
|
Provision for loan losses |
|
13,836 |
|
|
1,967 |
|
|
31,213 |
|
|
6,384 |
|
|
|
|
|
|
|
|
|
|
Net
interest income after provision for loan losses |
|
70,004 |
|
|
75,134 |
|
|
210,096 |
|
|
214,344 |
|
|
|
|
|
|
|
|
|
|
Other income |
|
36,558 |
|
|
28,136 |
|
|
90,008 |
|
|
72,969 |
|
|
|
|
|
|
|
|
|
|
Other expense |
|
69,859 |
|
|
65,738 |
|
|
200,934 |
|
|
192,757 |
|
|
|
|
|
|
|
|
|
|
Income
before income taxes |
|
36,703 |
|
|
37,532 |
|
|
99,170 |
|
|
94,556 |
|
|
|
|
|
|
|
|
|
|
Income taxes |
|
5,857 |
|
|
6,386 |
|
|
16,447 |
|
|
15,792 |
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
30,846 |
|
|
$ |
31,146 |
|
|
$ |
82,723 |
|
|
$ |
78,764 |
|
|
|
|
|
|
|
|
|
|
Per common
share: |
|
|
|
|
|
|
|
|
Net
income - basic |
|
$ |
1.89 |
|
|
$ |
1.90 |
|
|
$ |
5.07 |
|
|
$ |
4.86 |
|
Net
income - diluted |
|
$ |
1.88 |
|
|
$ |
1.89 |
|
|
$ |
5.04 |
|
|
$ |
4.84 |
|
|
|
|
|
|
|
|
|
|
Weighted
average shares - basic |
|
16,300,720 |
|
|
16,382,798 |
|
|
16,300,250 |
|
|
16,198,294 |
|
Weighted
average shares - diluted |
|
16,393,792 |
|
|
16,475,741 |
|
|
16,398,350 |
|
|
16,287,695 |
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared |
|
$ |
1.02 |
|
|
$ |
1.01 |
|
|
$ |
3.26 |
|
|
$ |
3.23 |
|
PARK
NATIONAL CORPORATION |
Consolidated
Balance Sheets |
|
|
|
(in thousands,
except share data) |
September 30, 2020 |
December 31, 2019 |
|
|
|
Assets |
|
|
|
|
|
Cash and due from banks |
$ |
110,774 |
|
|
$ |
135,567 |
|
|
Money market instruments |
135,935 |
|
|
24,389 |
|
|
Investment securities |
1,097,598 |
|
|
1,279,507 |
|
|
Loans |
7,278,546 |
|
|
6,501,404 |
|
|
Allowance for loan losses |
(87,038 |
) |
|
(56,679 |
) |
|
Loans,
net |
7,191,508 |
|
|
6,444,725 |
|
|
Bank premises and equipment,
net |
85,287 |
|
|
73,322 |
|
|
Goodwill and other intangible
assets |
169,380 |
|
|
171,118 |
|
|
Other real estate owned |
836 |
|
|
4,029 |
|
|
Other
assets |
448,688 |
|
|
425,720 |
|
|
Total assets |
$ |
9,240,006 |
|
|
$ |
8,558,377 |
|
|
|
|
|
Liabilities and
Shareholders' Equity |
|
|
|
|
|
Deposits: |
|
|
Noninterest bearing |
$ |
2,579,335 |
|
|
$ |
1,959,935 |
|
|
Interest bearing |
4,896,494 |
|
|
5,092,677 |
|
|
Total
deposits |
7,475,829 |
|
|
7,052,612 |
|
|
Borrowings |
643,103 |
|
|
438,157 |
|
|
Other
liabilities |
104,078 |
|
|
98,594 |
|
|
Total liabilities |
$ |
8,223,010 |
|
|
$ |
7,589,363 |
|
|
|
|
|
|
|
|
Shareholders'
Equity: |
|
|
Preferred shares (200,000
shares authorized; no shares outstanding at September 30, 2020 and
December 31, 2019) |
$ |
— |
|
|
$ |
— |
|
|
Common shares (No par value;
20,000,000 shares authorized; 17,623,179 shares issued at
September 30, 2020 and 17,623,199 shares issued at December 31,
2019) |
458,440 |
|
|
459,389 |
|
|
Accumulated other
comprehensive income (loss), net of taxes |
14,200 |
|
|
(9,589 |
) |
|
Retained earnings |
676,465 |
|
|
646,847 |
|
|
Treasury shares (1,322,416 shares at September 30, 2020 and
1,276,757 shares at December 31, 2019) |
(132,109 |
) |
|
(127,633 |
) |
|
Total shareholders' equity |
$ |
1,016,996 |
|
|
$ |
969,014 |
|
|
Total liabilities and shareholders' equity |
$ |
9,240,006 |
|
|
$ |
8,558,377 |
|
|
PARK
NATIONAL CORPORATION |
|
|
|
Consolidated
Average Balance Sheets |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
Sept
30 |
|
Sept 30 |
(in
thousands) |
2020 |
2019 |
|
2020 |
2019 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
121,973 |
|
|
$ |
147,156 |
|
|
|
$ |
129,436 |
|
|
$ |
130,799 |
|
|
Money market instruments |
223,563 |
|
|
298,441 |
|
|
|
286,909 |
|
|
158,395 |
|
|
Investment securities |
1,330,520 |
|
|
1,339,292 |
|
|
|
1,264,381 |
|
|
1,380,629 |
|
|
Loans |
7,247,021 |
|
|
6,371,323 |
|
|
|
6,904,900 |
|
|
6,133,386 |
|
|
Allowance for loan losses |
(74,718 |
) |
|
(54,867 |
) |
|
|
(64,942 |
) |
|
(53,711 |
) |
|
Loans,
net |
7,172,303 |
|
|
6,316,456 |
|
|
|
6,839,958 |
|
|
6,079,675 |
|
|
Bank premises and equipment,
net |
83,609 |
|
|
73,077 |
|
|
|
79,557 |
|
|
68,437 |
|
|
Goodwill and other intangible
assets |
169,726 |
|
|
174,027 |
|
|
|
170,311 |
|
|
153,182 |
|
|
Other real estate owned |
1,299 |
|
|
3,845 |
|
|
|
2,616 |
|
|
4,132 |
|
|
Other
assets |
454,689 |
|
|
433,398 |
|
|
|
443,327 |
|
|
426,438 |
|
|
Total assets |
$ |
9,557,682 |
|
|
$ |
8,785,692 |
|
|
|
$ |
9,216,495 |
|
|
$ |
8,401,687 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
Noninterest bearing |
$ |
2,565,417 |
|
|
$ |
1,901,024 |
|
|
|
$ |
2,306,355 |
|
|
$ |
1,840,153 |
|
|
Interest bearing |
5,309,718 |
|
|
5,287,851 |
|
|
|
5,350,009 |
|
|
4,967,106 |
|
|
Total
deposits |
7,875,135 |
|
|
7,188,875 |
|
|
|
7,656,364 |
|
|
6,807,259 |
|
|
Borrowings |
552,452 |
|
|
553,595 |
|
|
|
455,127 |
|
|
599,223 |
|
|
Other
liabilities |
109,856 |
|
|
98,077 |
|
|
|
104,763 |
|
|
87,984 |
|
|
Total liabilities |
$ |
8,537,443 |
|
|
$ |
7,840,547 |
|
|
|
$ |
8,216,254 |
|
|
$ |
7,494,466 |
|
|
|
|
|
|
|
|
Shareholders'
Equity: |
|
|
|
|
|
Preferred shares |
$ |
— |
|
|
$ |
— |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
Common shares |
457,571 |
|
|
457,029 |
|
|
|
457,953 |
|
|
424,213 |
|
|
Accumulated other
comprehensive income (loss), net of taxes |
15,400 |
|
|
(26,010 |
) |
|
|
8,712 |
|
|
(36,383 |
) |
|
Retained earnings |
679,519 |
|
|
638,639 |
|
|
|
665,808 |
|
|
628,463 |
|
|
Treasury shares |
(132,251 |
) |
|
(124,513 |
) |
|
|
(132,232 |
) |
|
(109,072 |
) |
|
Total shareholders' equity |
$ |
1,020,239 |
|
|
$ |
945,145 |
|
|
|
$ |
1,000,241 |
|
|
$ |
907,221 |
|
|
Total liabilities and shareholders' equity |
$ |
9,557,682 |
|
|
$ |
8,785,692 |
|
|
|
$ |
9,216,495 |
|
|
$ |
8,401,687 |
|
|
PARK
NATIONAL CORPORATION |
Consolidated
Statements of Income - Linked Quarters |
|
|
|
|
|
|
|
2020 |
2020 |
2020 |
2019 |
2019 |
(in thousands,
except per share data) |
3rd QTR |
2nd QTR |
1st QTR |
4th QTR |
3rd QTR |
|
|
|
|
|
|
Interest income: |
|
|
|
|
|
Interest and fees on loans |
$ |
82,617 |
|
$ |
80,155 |
|
$ |
80,687 |
|
$ |
82,698 |
|
|
$ |
84,213 |
|
Interest on: |
|
|
|
|
|
Obligations of U.S. Government, its agencies and other securities -
taxable |
4,841 |
|
5,026 |
|
5,531 |
|
5,973 |
|
|
6,326 |
|
Obligations of states and political subdivisions - tax-exempt |
2,045 |
|
2,151 |
|
2,200 |
|
2,205 |
|
|
2,225 |
|
Other interest income |
63 |
|
113 |
|
491 |
|
953 |
|
|
1,825 |
|
Total interest income |
89,566 |
|
87,445 |
|
88,909 |
|
91,829 |
|
|
94,589 |
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
Interest on deposits: |
|
|
|
|
|
Demand and savings deposits |
803 |
|
1,507 |
|
6,342 |
|
7,795 |
|
|
9,649 |
|
Time deposits |
2,662 |
|
3,346 |
|
4,285 |
|
4,666 |
|
|
4,694 |
|
Interest on borrowings |
2,261 |
|
1,406 |
|
1,999 |
|
2,359 |
|
|
3,145 |
|
Total interest expense |
5,726 |
|
6,259 |
|
12,626 |
|
14,820 |
|
|
17,488 |
|
|
|
|
|
|
|
Net interest income |
83,840 |
|
81,186 |
|
76,283 |
|
77,009 |
|
|
77,101 |
|
|
|
|
|
|
|
Provision for (recovery of)
loan losses |
13,836 |
|
12,224 |
|
5,153 |
|
(213 |
) |
|
1,967 |
|
|
|
|
|
|
|
Net interest income after provision for (recovery of) loan
losses |
70,004 |
|
68,962 |
|
71,130 |
|
77,222 |
|
|
75,134 |
|
|
|
|
|
|
|
Other income |
36,558 |
|
30,964 |
|
22,486 |
|
24,224 |
|
|
28,136 |
|
|
|
|
|
|
|
Other expense |
69,859 |
|
64,799 |
|
66,276 |
|
71,231 |
|
|
65,738 |
|
|
|
|
|
|
|
Income before income taxes |
36,703 |
|
35,127 |
|
27,340 |
|
30,215 |
|
|
37,532 |
|
|
|
|
|
|
|
Income taxes |
5,857 |
|
5,622 |
|
4,968 |
|
6,279 |
|
|
6,386 |
|
|
|
|
|
|
|
Net income |
$ |
30,846 |
|
$ |
29,505 |
|
$ |
22,372 |
|
$ |
23,936 |
|
|
$ |
31,146 |
|
|
|
|
|
|
|
Per common
share: |
|
|
|
|
|
Net income -
basic |
$ |
1.89 |
|
$ |
1.81 |
|
$ |
1.37 |
|
$ |
1.46 |
|
|
$ |
1.90 |
|
Net income -
diluted |
$ |
1.88 |
|
$ |
1.80 |
|
$ |
1.36 |
|
$ |
1.45 |
|
|
$ |
1.89 |
|
PARK
NATIONAL CORPORATION |
Detail of
other income and other expense - Linked Quarters |
|
|
|
|
|
|
|
2020 |
2020 |
2020 |
2019 |
2019 |
(in thousands) |
3rd QTR |
2nd QTR |
1st QTR |
4th QTR |
3rd QTR |
|
|
|
|
|
|
Other income: |
|
|
|
|
|
Income from fiduciary activities |
$ |
7,335 |
|
|
$ |
6,793 |
|
|
$ |
7,113 |
|
|
$ |
7,268 |
|
|
$ |
6,842 |
|
|
Service charges on deposit accounts |
2,118 |
|
|
1,676 |
|
|
2,528 |
|
|
2,757 |
|
|
2,864 |
|
|
Other service income |
13,047 |
|
|
8,758 |
|
|
3,766 |
|
|
4,382 |
|
|
4,260 |
|
|
Debit card fee income |
5,853 |
|
|
5,560 |
|
|
4,960 |
|
|
5,341 |
|
|
5,313 |
|
|
Bank owned life insurance income |
1,192 |
|
|
1,179 |
|
|
1,248 |
|
|
1,158 |
|
|
1,107 |
|
|
ATM fees |
491 |
|
|
438 |
|
|
412 |
|
|
446 |
|
|
482 |
|
|
Gain (loss) on the sale of OREO, net |
569 |
|
|
841 |
|
|
(196 |
) |
|
2 |
|
|
(53 |
) |
|
Net (loss) gain on the sale of investment securities |
(27 |
) |
|
3,313 |
|
|
— |
|
|
— |
|
|
186 |
|
|
Gain (loss) on equity securities, net |
1,201 |
|
|
(977 |
) |
|
(973 |
) |
|
(191 |
) |
|
3,335 |
|
|
Other components of net periodic benefit income |
1,988 |
|
|
1,988 |
|
|
1,988 |
|
|
1,183 |
|
|
1,183 |
|
|
Miscellaneous |
2,791 |
|
|
1,395 |
|
|
1,640 |
|
|
1,878 |
|
|
2,617 |
|
|
Total other income |
$ |
36,558 |
|
|
$ |
30,964 |
|
|
$ |
22,486 |
|
|
$ |
24,224 |
|
|
$ |
28,136 |
|
|
|
|
|
|
|
|
Other expense: |
|
|
|
|
|
Salaries |
$ |
31,632 |
|
|
$ |
30,699 |
|
|
$ |
28,429 |
|
|
$ |
30,903 |
|
|
$ |
30,713 |
|
|
Employee benefits |
10,676 |
|
|
9,080 |
|
|
10,043 |
|
|
8,973 |
|
|
10,389 |
|
|
Occupancy expense |
3,835 |
|
|
3,256 |
|
|
3,480 |
|
|
3,355 |
|
|
3,226 |
|
|
Furniture and equipment expense |
4,687 |
|
|
4,850 |
|
|
4,319 |
|
|
4,319 |
|
|
4,177 |
|
|
Data processing fees |
3,275 |
|
|
2,577 |
|
|
2,492 |
|
|
2,777 |
|
|
2,935 |
|
|
Professional fees and services |
7,977 |
|
|
6,901 |
|
|
7,066 |
|
|
10,503 |
|
|
6,702 |
|
|
Marketing |
1,454 |
|
|
1,136 |
|
|
1,486 |
|
|
1,468 |
|
|
1,604 |
|
|
Insurance |
1,541 |
|
|
1,477 |
|
|
1,550 |
|
|
317 |
|
|
276 |
|
|
Communication |
958 |
|
|
874 |
|
|
1,155 |
|
|
1,256 |
|
|
1,387 |
|
|
State tax expense |
1,125 |
|
|
1,116 |
|
|
1,145 |
|
|
1,024 |
|
|
746 |
|
|
Amortization of intangible assets |
525 |
|
|
607 |
|
|
606 |
|
|
623 |
|
|
741 |
|
|
Miscellaneous |
2,174 |
|
|
2,226 |
|
|
4,505 |
|
|
5,713 |
|
|
2,842 |
|
|
Total other expense |
$ |
69,859 |
|
|
$ |
64,799 |
|
|
$ |
66,276 |
|
|
$ |
71,231 |
|
|
$ |
65,738 |
|
|
PARK NATIONAL CORPORATION |
Asset Quality Information |
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
December 31, |
(in thousands,
except ratios) |
September 30, 2020 |
June 30, 2020 |
March 31, 2020 |
2019 |
2018 |
2017 |
2016 |
|
|
|
|
|
|
|
|
Allowance for loan
losses: |
|
|
|
|
|
|
|
Allowance for loan losses, beginning of period |
$ |
73,476 |
|
$ |
61,503 |
|
$ |
56,679 |
|
$ |
51,512 |
|
$ |
49,988 |
|
$ |
50,624 |
|
$ |
56,494 |
|
|
Charge-offs |
1,529 |
|
2,130 |
|
2,685 |
|
11,177 |
|
13,552 |
|
19,403 |
|
20,799 |
|
|
Recoveries |
1,255 |
|
1,879 |
|
2,356 |
|
10,173 |
|
7,131 |
|
10,210 |
|
20,030 |
|
|
Net charge-offs |
274 |
|
251 |
|
329 |
|
1,004 |
|
6,421 |
|
9,193 |
|
769 |
|
|
Provision for (recovery of) loan losses |
13,836 |
|
12,224 |
|
5,153 |
|
6,171 |
|
7,945 |
|
8,557 |
|
(5,101 |
) |
|
Allowance for loan losses, end of period |
$ |
87,038 |
|
$ |
73,476 |
|
$ |
61,503 |
|
$ |
56,679 |
|
$ |
51,512 |
|
$ |
49,988 |
|
$ |
50,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General reserve
trends: |
|
|
|
|
|
|
|
Allowance for loan losses, end
of period |
$ |
87,038 |
|
$ |
73,476 |
|
$ |
61,503 |
|
$ |
56,679 |
|
$ |
51,512 |
|
$ |
49,988 |
|
$ |
50,624 |
|
|
Allowance on purchased credit
impaired ("PCI") loans |
103 |
|
106 |
|
119 |
|
268 |
|
— |
|
— |
|
— |
|
|
Allowance on purchased
loans |
371 |
|
25 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
Specific reserves |
8,666 |
|
5,808 |
|
5,531 |
|
5,230 |
|
2,273 |
|
684 |
|
548 |
|
|
General
reserves on originated loans |
$ |
77,898 |
|
$ |
67,537 |
|
$ |
55,853 |
|
$ |
51,181 |
|
$ |
49,239 |
|
$ |
49,304 |
|
$ |
50,076 |
|
|
|
|
|
|
|
|
|
|
Total loans |
$ |
7,278,546 |
|
$ |
7,204,445 |
|
$ |
6,522,519 |
|
$ |
6,501,404 |
|
$ |
5,692,132 |
|
$ |
5,372,483 |
|
$ |
5,271,857 |
|
|
PCI loans |
11,877 |
|
12,569 |
|
13,765 |
|
14,331 |
|
3,943 |
|
— |
|
— |
|
|
Purchased loans |
393,752 |
|
440,803 |
|
489,843 |
|
548,436 |
|
225,029 |
|
— |
|
— |
|
|
Impaired commercial loans |
116,138 |
|
91,724 |
|
85,646 |
|
77,459 |
|
48,135 |
|
56,545 |
|
70,415 |
|
|
Originated loans excluding impaired commercial loans |
$ |
6,762,779 |
|
$ |
6,659,349 |
|
$ |
5,933,265 |
|
$ |
5,861,178 |
|
$ |
5,415,025 |
|
$ |
5,315,938 |
|
$ |
5,201,442 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Ratios: |
|
|
|
|
|
|
|
Net charge-offs as a % of
average loans (annualized) |
0.02 |
% |
0.01 |
% |
0.02 |
% |
0.02 |
% |
0.12 |
% |
0.17 |
% |
0.02 |
|
% |
Allowance for loan losses as a
% of period end loans |
1.20 |
% |
1.02 |
% |
0.94 |
% |
0.87 |
% |
0.90 |
% |
0.93 |
% |
0.96 |
|
% |
Allowance for loan losses on
originated loans as % of originated total loans (excluding PPP
loans) (k) |
1.36 |
% |
1.17 |
% |
N.A. |
N.A. |
N.A. |
N.A. |
N.A. |
General reserve as a % of
originated total loans less impaired commercial loans |
1.15 |
% |
1.01 |
% |
0.94 |
% |
0.87 |
% |
0.91 |
% |
0.93 |
% |
0.96 |
|
% |
General reserves as a % of
originated total loans less impaired commercial loans (excluding
PPP loans) (k) |
1.24 |
% |
1.10 |
% |
N.A. |
N.A. |
N.A. |
N.A. |
N.A. |
|
|
|
|
|
|
|
|
Nonperforming
assets: |
|
|
|
|
|
|
|
Nonaccrual loans |
$ |
123,050 |
|
$ |
100,406 |
|
$ |
90,354 |
|
$ |
90,080 |
|
$ |
67,954 |
|
$ |
72,056 |
|
$ |
87,822 |
|
|
Accruing troubled debt
restructurings |
23,774 |
|
23,948 |
|
27,168 |
|
21,215 |
|
15,173 |
|
20,111 |
|
18,175 |
|
|
Loans
past due 90 days or more |
1,618 |
|
1,690 |
|
1,789 |
|
2,658 |
|
2,243 |
|
1,792 |
|
2,086 |
|
|
Total nonperforming
loans |
$ |
148,442 |
|
$ |
126,044 |
|
$ |
119,311 |
|
$ |
113,953 |
|
$ |
85,370 |
|
$ |
93,959 |
|
$ |
108,083 |
|
|
Other real estate owned - Park
National Bank |
242 |
|
427 |
|
2,671 |
|
3,100 |
|
2,788 |
|
6,524 |
|
6,025 |
|
|
Other real estate owned -
SEPH |
594 |
|
929 |
|
929 |
|
929 |
|
1,515 |
|
7,666 |
|
7,901 |
|
|
Other
nonperforming assets - Park National Bank |
3,392 |
|
3,599 |
|
3,599 |
|
3,599 |
|
3,464 |
|
4,849 |
|
— |
|
|
Total nonperforming assets |
$ |
152,670 |
|
$ |
130,999 |
|
$ |
126,510 |
|
$ |
121,581 |
|
$ |
93,137 |
|
$ |
112,998 |
|
$ |
122,009 |
|
|
Percentage of nonaccrual loans
to period end loans |
1.69 |
% |
1.39 |
% |
1.39 |
% |
1.39 |
% |
1.19 |
% |
1.34 |
% |
1.67 |
|
% |
Percentage of nonperforming
loans to period end loans |
2.04 |
% |
1.75 |
% |
1.83 |
% |
1.75 |
% |
1.50 |
% |
1.75 |
% |
2.05 |
|
% |
Percentage of nonperforming
assets to period end loans |
2.10 |
% |
1.82 |
% |
1.94 |
% |
1.87 |
% |
1.64 |
% |
2.10 |
% |
2.31 |
|
% |
Percentage of nonperforming
assets to period end total assets |
1.65 |
% |
1.35 |
% |
1.45 |
% |
1.42 |
% |
1.19 |
% |
1.50 |
% |
1.63 |
|
% |
|
|
|
|
|
|
|
|
Note:
Explanations for footnotes (a) - (k) are included at the end of the
financial tables in the "Financial Reconciliations" section. |
PARK NATIONAL CORPORATION |
Asset Quality Information (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
(in thousands, except ratios) |
September 30, 2020 |
June 30, 2020 |
March 31, 2020 |
2019 |
2018 |
2017 |
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New nonaccrual loan
information: |
|
|
|
|
|
|
|
Nonaccrual loans, beginning of period |
$ |
100,406 |
|
$ |
90,354 |
|
$ |
90,080 |
|
$ |
67,954 |
|
$ |
72,056 |
|
$ |
87,822 |
|
$ |
95,887 |
|
New nonaccrual loans |
38,631 |
|
21,995 |
|
21,651 |
|
81,009 |
|
76,611 |
|
58,753 |
|
74,786 |
|
Resolved nonaccrual loans |
15,987 |
|
11,943 |
|
21,377 |
|
58,883 |
|
80,713 |
|
74,519 |
|
82,851 |
|
Nonaccrual loans, end of period |
$ |
123,050 |
|
$ |
100,406 |
|
$ |
90,354 |
|
$ |
90,080 |
|
$ |
67,954 |
|
$ |
72,056 |
|
$ |
87,822 |
|
|
|
|
|
|
|
|
|
Impaired commercial
loan portfolio information (period end): |
|
|
|
|
|
|
|
Unpaid principal balance |
$ |
116,701 |
|
$ |
92,374 |
|
$ |
86,379 |
|
$ |
78,178 |
|
$ |
59,381 |
|
$ |
66,585 |
|
$ |
95,358 |
|
Prior
charge-offs |
563 |
|
650 |
|
733 |
|
719 |
|
11,246 |
|
10,040 |
|
24,943 |
|
Remaining principal
balance |
116,138 |
|
91,724 |
|
85,646 |
|
77,459 |
|
48,135 |
|
56,545 |
|
70,415 |
|
Specific reserves |
8,666 |
|
5,808 |
|
5,531 |
|
5,230 |
|
2,273 |
|
684 |
|
548 |
|
Book
value, after specific reserves |
$ |
107,472 |
|
$ |
85,916 |
|
$ |
80,115 |
|
$ |
72,229 |
|
$ |
45,862 |
|
$ |
55,861 |
|
$ |
69,867 |
|
PARK
NATIONAL CORPORATION |
|
|
|
Financial
Reconciliations |
|
|
|
|
|
|
NON-GAAP
RECONCILIATIONS |
|
|
|
|
|
|
|
THREE MONTHS
ENDED |
|
NINE MONTHS
ENDED |
(in thousands, except share and per share
data) |
September 30, 2020 |
June 30, 2020 |
September 30, 2019 |
|
September 30, 2020 |
September 30, 2019 |
Net interest income |
$ |
83,840 |
|
|
$ |
81,186 |
|
|
$ |
77,101 |
|
|
|
$ |
241,309 |
|
|
$ |
220,728 |
|
|
less purchase accounting accretion related to NewDominion and
Carolina Alliance acquisitions |
1,071 |
|
|
1,301 |
|
|
1,967 |
|
|
|
3,750 |
|
|
3,839 |
|
|
less interest income on former Vision Bank relationships |
8 |
|
|
266 |
|
|
— |
|
|
|
351 |
|
|
7 |
|
|
Net interest income -
adjusted |
$ |
82,761 |
|
|
$ |
79,619 |
|
|
$ |
75,134 |
|
|
|
$ |
237,208 |
|
|
$ |
216,882 |
|
|
|
|
|
|
|
|
|
Provision for loan
losses |
$ |
13,836 |
|
|
$ |
12,224 |
|
|
$ |
1,967 |
|
|
|
$ |
31,213 |
|
|
$ |
6,384 |
|
|
less recoveries on former Vision Bank relationships |
(37 |
) |
|
(685 |
) |
|
(575 |
) |
|
|
(1,486 |
) |
|
(740 |
) |
|
Provision for loan
losses - adjusted |
$ |
13,873 |
|
|
$ |
12,909 |
|
|
$ |
2,542 |
|
|
|
$ |
32,699 |
|
|
$ |
7,124 |
|
|
|
|
|
|
|
|
|
Other
income |
$ |
36,558 |
|
|
$ |
30,964 |
|
|
$ |
28,136 |
|
|
|
$ |
90,008 |
|
|
$ |
72,969 |
|
|
less net gain (loss) on sale of former Vision Bank OREO
properties |
371 |
|
|
837 |
|
|
— |
|
|
|
1,208 |
|
|
(139 |
) |
|
less rebranding initiative related expenses |
— |
|
|
(274 |
) |
|
— |
|
|
|
(274 |
) |
|
— |
|
|
less net (loss) gain on the sale of debt securities in the ordinary
course of business |
(27 |
) |
|
3,313 |
|
|
186 |
|
|
|
3,286 |
|
|
(421 |
) |
|
Other income -
adjusted |
$ |
36,214 |
|
|
$ |
27,088 |
|
|
$ |
27,950 |
|
|
|
$ |
85,788 |
|
|
$ |
73,529 |
|
|
|
|
|
|
|
|
|
Other
expense |
$ |
69,859 |
|
|
$ |
64,799 |
|
|
$ |
65,738 |
|
|
|
$ |
200,934 |
|
|
$ |
192,757 |
|
|
less merger-related expenses related to NewDominion and Carolina
Alliance acquisitions |
163 |
|
|
214 |
|
|
658 |
|
|
|
620 |
|
|
6,992 |
|
|
less core deposit intangible amortization related to NewDominion
and Carolina Alliance acquisitions |
525 |
|
|
607 |
|
|
741 |
|
|
|
1,738 |
|
|
1,732 |
|
|
less FDIC assessment credit |
— |
|
|
— |
|
|
(1,057 |
) |
|
|
— |
|
|
(1,057 |
) |
|
less management and consulting expenses related to collection of
payments on former Vision Bank loan relationships |
232 |
|
|
— |
|
|
— |
|
|
|
232 |
|
|
— |
|
|
less FHLB prepayment penalty |
— |
|
|
— |
|
|
120 |
|
|
|
1,793 |
|
|
120 |
|
|
less rebranding initiative related expenses |
429 |
|
|
138 |
|
|
139 |
|
|
|
837 |
|
|
341 |
|
|
less COVID-19 related expenses (j) |
744 |
|
|
1,878 |
|
|
— |
|
|
|
2,884 |
|
|
— |
|
|
Other expense -
adjusted |
$ |
67,766 |
|
|
$ |
61,962 |
|
|
$ |
65,137 |
|
|
|
$ |
192,830 |
|
|
$ |
184,629 |
|
|
|
|
|
|
|
|
|
Tax effect of
adjustments to net income identified above (i) |
$ |
133 |
|
|
$ |
(691 |
) |
|
$ |
(447 |
) |
|
|
$ |
(358 |
) |
|
$ |
861 |
|
|
|
|
|
|
|
|
|
Net income -
reported |
$ |
30,846 |
|
|
$ |
29,505 |
|
|
$ |
31,146 |
|
|
|
$ |
82,723 |
|
|
$ |
78,764 |
|
|
Net income -
adjusted |
$ |
31,346 |
|
|
$ |
26,905 |
|
|
$ |
29,446 |
|
|
|
$ |
81,378 |
|
|
$ |
82,005 |
|
|
|
|
|
|
|
|
|
Diluted EPS |
$ |
1.88 |
|
|
$ |
1.80 |
|
|
$ |
1.89 |
|
|
|
$ |
5.04 |
|
|
$ |
4.84 |
|
|
Diluted EPS, adjusted (h) |
$ |
1.91 |
|
|
$ |
1.64 |
|
|
$ |
1.79 |
|
|
|
$ |
4.96 |
|
|
$ |
5.03 |
|
|
|
|
|
|
|
|
|
Annualized return on average
assets (a)(b) |
1.28 |
|
% |
1.26 |
|
% |
1.41 |
|
% |
|
1.20 |
|
% |
1.25 |
|
% |
Annualized return on average assets, adjusted (a)(b)(h) |
1.30 |
|
% |
1.15 |
|
% |
1.33 |
|
% |
|
1.18 |
|
% |
1.30 |
|
% |
|
|
|
|
|
|
|
Annualized return on average
tangible assets (a)(b)(e) |
1.31 |
|
% |
1.28 |
|
% |
1.43 |
|
% |
|
1.22 |
|
% |
1.28 |
|
% |
Annualized return on average tangible assets, adjusted
(a)(b)(e)(h) |
1.33 |
|
% |
1.17 |
|
% |
1.36 |
|
% |
|
1.20 |
|
% |
1.33 |
|
% |
|
|
|
|
|
|
|
Annualized return on average
shareholders' equity (a)(b) |
12.03 |
|
% |
11.89 |
|
% |
13.07 |
|
% |
|
11.05 |
|
% |
11.61 |
|
% |
Annualized return on average shareholders' equity, adjusted
(a)(b)(h) |
12.22 |
|
% |
10.84 |
|
% |
12.37 |
|
% |
|
10.87 |
|
% |
12.09 |
|
% |
|
|
|
|
|
|
|
Annualized return on average
tangible equity (a)(b)(c) |
14.43 |
|
% |
14.33 |
|
% |
16.02 |
|
% |
|
13.31 |
|
% |
13.97 |
|
% |
Annualized return on average tangible equity, adjusted
(a)(b)(c)(h) |
14.66 |
|
% |
13.07 |
|
% |
15.16 |
|
% |
|
13.10 |
|
% |
14.54 |
|
% |
|
|
|
|
|
|
|
Efficiency ratio (g) |
57.69 |
|
% |
57.41 |
|
% |
62.03 |
|
% |
|
60.26 |
|
% |
65.14 |
|
% |
Efficiency ratio, adjusted (g)(h) |
56.62 |
|
% |
57.68 |
|
% |
62.74 |
|
% |
|
59.30 |
|
% |
63.09 |
|
% |
|
|
|
|
|
|
|
Annualized net interest margin
(g) |
3.85 |
|
% |
3.84 |
|
% |
3.86 |
|
% |
|
3.88 |
|
% |
3.88 |
|
% |
Annualized net interest margin, adjusted (g)(h) |
3.80 |
|
% |
3.77 |
|
% |
3.76 |
|
% |
|
3.81 |
|
% |
3.81 |
|
% |
PARK
NATIONAL CORPORATION |
|
|
|
Financial
Reconciliations (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Reported
measure uses net income |
(b) Averages are
for the three months ended September 30, 2020, June 30, 2020,
and September 30, 2019 and the nine months ended September 30, 2020
and September 30, 2019. |
(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
intangible assets during the applicable period. |
|
|
|
|
|
|
|
RECONCILIATION OF AVERAGE SHAREHOLDERS' EQUITY TO AVERAGE
TANGIBLE EQUITY: |
|
|
|
|
THREE MONTHS
ENDED |
|
NINE MONTHS ENDED |
|
September 30, 2020 |
June 30, 2020 |
September 30, 2019 |
|
September 30, 2020 |
September 30, 2019 |
AVERAGE SHAREHOLDERS' EQUITY |
$ |
1,020,239 |
|
$ |
998,288 |
|
$ |
945,145 |
|
|
$ |
1,000,241 |
|
$ |
907,221 |
|
Less:
Average goodwill and other intangible assets |
169,726 |
|
170,303 |
|
174,027 |
|
|
170,311 |
|
153,182 |
|
AVERAGE
TANGIBLE EQUITY |
$ |
850,513 |
|
$ |
827,985 |
|
$ |
771,118 |
|
|
$ |
829,930 |
|
$ |
754,039 |
|
|
|
|
|
|
|
|
(d) Tangible
equity divided by common shares outstanding at period end. Tangible
equity equals total shareholders' equity less goodwill and other
intangible assets, in each case at the end of the period. |
|
|
|
|
|
|
|
RECONCILIATION OF TOTAL SHAREHOLDERS' EQUITY TO TANGIBLE
EQUITY: |
|
|
|
September 30, 2020 |
June 30, 2020 |
September 30, 2019 |
|
|
TOTAL SHAREHOLDERS'
EQUITY |
$ |
1,016,996 |
|
$ |
1,001,594 |
|
$ |
956,140 |
|
|
|
|
Less:
Goodwill and other intangible assets |
169,380 |
|
169,905 |
|
173,489 |
|
|
|
|
TANGIBLE EQUITY |
$ |
847,616 |
|
$ |
831,689 |
|
$ |
782,651 |
|
|
|
|
|
|
|
|
|
|
|
(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 intangible assets, in each case during
the applicable period. |
|
|
|
|
|
|
|
RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE
ASSETS |
|
|
|
|
THREE MONTHS
ENDED |
|
NINE MONTHS ENDED |
|
September 30, 2020 |
June 30, 2020 |
September 30, 2019 |
|
September 30, 2020 |
September 30, 2019 |
AVERAGE ASSETS |
$ |
9,557,682 |
|
$ |
9,408,265 |
|
$ |
8,785,692 |
|
|
$ |
9,216,495 |
|
$ |
8,401,687 |
|
Less:
Average goodwill and other intangible assets |
169,726 |
|
170,303 |
|
174,027 |
|
|
170,311 |
|
153,182 |
|
AVERAGE
TANGIBLE ASSETS |
$ |
9,387,956 |
|
$ |
9,237,962 |
|
$ |
8,611,665 |
|
|
$ |
9,046,184 |
|
$ |
8,248,505 |
|
|
|
|
|
|
|
|
(f) Tangible
equity divided by tangible assets. Tangible assets equals total
assets less goodwill and other intangible assets, in each case at
the end of the period. |
|
|
|
|
|
|
|
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE
ASSETS: |
|
|
|
September 30, 2020 |
June 30, 2020 |
September 30, 2019 |
|
|
|
TOTAL ASSETS |
$ |
9,240,006 |
|
$ |
9,712,994 |
|
$ |
8,723,610 |
|
|
|
|
Less:
Goodwill and other intangible assets |
169,380 |
|
169,905 |
|
173,489 |
|
|
|
|
TANGIBLE ASSETS |
$ |
9,070,626 |
|
$ |
9,543,089 |
|
$ |
8,550,121 |
|
|
|
|
|
|
|
|
|
|
|
(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 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 |
|
NINE MONTHS ENDED |
|
September 30, 2020 |
June 30, 2020 |
September 30, 2019 |
|
September 30, 2020 |
September 30, 2019 |
Interest income |
$ |
89,566 |
|
$ |
87,445 |
|
$ |
94,589 |
|
|
$ |
265,920 |
|
$ |
268,671 |
|
Fully
taxable equivalent adjustment |
706 |
|
723 |
|
744 |
|
|
2,154 |
|
2,230 |
|
Fully taxable equivalent
interest income |
$ |
90,272 |
|
$ |
88,168 |
|
$ |
95,333 |
|
|
$ |
268,074 |
|
$ |
270,901 |
|
Interest expense |
5,726 |
|
6,259 |
|
17,488 |
|
|
24,611 |
|
47,943 |
|
Fully
taxable equivalent net interest income |
$ |
84,546 |
|
$ |
81,909 |
|
$ |
77,845 |
|
|
$ |
243,463 |
|
$ |
222,958 |
|
|
|
|
|
|
|
|
(h) Adjustments
to net income for each period presented are detailed in the
non-GAAP reconciliations of net interest income, provision for loan
losses, other income and other expense above. |
(i) The tax
effect of adjustments to net income was calculated assuming a 21%
corporate federal income tax rate. |
|
|
|
(j) COVID-19
related expenses include calamity pay and special one-time bonuses
to certain associates. |
|
|
|
|
(k) Excludes
$542.8 million and $543.1 million of PPP loans at September 30,
2020 and June 30, 2020, respectively. |
Media contact: Bethany Lewis, 740.349.0421, bethany.lewis@parknationalbank.com
Investor contact: Brady Burt, 740.322.6844, brady.burt@parknationalbank.com
Park National Corporation, 50 N. Third Street, Newark, Ohio 43055
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