#relationshipscams | #dating | Park National Corporation reports financial results for third quarter and first nine months of 2020 NYSE:PRK

NEWARK, Ohio, Oct. 26, 2020 (GLOBE NEWSWIRE) — 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 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:

  • 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 )       (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, 
Investor contact: Brady Burt, 740.322.6844, 
Park National Corporation, 50 N. Third Street, Newark, Ohio 43055


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