Park National Corporation (Park) (NYSE MKT:PRK) today announced
financial results for the first quarter of 2017 (three months ended
March 31, 2017). Park’s board of directors also declared a
quarterly cash dividend of $0.94 per common share, payable on June
9, 2017 to common shareholders of record as of May 19, 2017.
Park reported $20.3 million in net income for the first quarter
of 2017, an 8.5 percent increase from $18.7 million for the same
period in 2016. Net income per diluted common share for the first
quarter of 2017 was $1.31, compared to $1.21 in the first quarter
of 2016.
Park's community-banking subsidiary, The Park National Bank,
reported net income of $21.5 million for the first quarter of 2017,
compared to $21.7 million for the first quarter of 2016. The bank
had total assets of $7.7 billion at March 31, 2017, rising from
$7.4 billion at December 31, 2016.
In the first quarter of 2017, the bank grew consumer loans by
$59.7 million (21.5 percent annualized). Total loans for the bank
were $5.28 billion at March 31, 2017, a $42 million (3.2 percent
annualized) increase over $5.23 billion at December 31, 2016.
About Park National Corporation:
Headquartered in Newark, Ohio, Park National Corporation had
$7.7 billion in total assets (as of March 31, 2017). The Park
organization principally consists of 11 community bank divisions, a
non-bank subsidiary and two specialty finance companies. Park's
Ohio-based banking operations are conducted through Park subsidiary
The Park National Bank and its divisions, which include Fairfield
National Bank Division, Richland Bank Division, Century National
Bank Division, First-Knox National Bank Division, Farmers Bank
Division, United Bank, N.A. Division, Second National Bank
Division, Security National Bank Division, Unity National Bank
Division, and The Park National Bank of Southwest Ohio &
Northern Kentucky Division; and Scope Leasing, Inc. (d.b.a. Scope
Aircraft Finance). The Park organization also includes Guardian
Financial Services Company (d.b.a. Guardian Finance Company) and SE
Property Holdings, LLC.
Complete financial tables are listed below…
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995Park cautions that any forward-looking statements
contained in this news release or made by management of Park are
provided to assist in the understanding of anticipated future
financial performance. Forward-looking statements provide current
expectations or forecasts of future events and are not guarantees
of future performance. The forward-looking statements
are based on management’s expectations and are subject to a number
of risks and uncertainties. Although management believes
that the expectations reflected in such forward-looking statements
are reasonable, actual results may differ materially from those
expressed or implied in such statements. Risks and
uncertainties that could cause actual results to differ materially
include, without limitation: Park's ability to execute our business
plan successfully and within the expected timeframe; general
economic and financial market conditions, specifically in the real
estate markets and the credit markets, either nationally or in the
states in which Park and our subsidiaries do business, may
experience a slowing or reversal of the recent economic expansion
in addition to continuing residual effects of recessionary
conditions and an uneven spread of positive impacts of recovery on
the economy and our counterparties, including adverse impacts on
the demand for loan, deposit and other financial services,
delinquencies, defaults and counterparties' ability to meet credit
and other obligations; changes in interest rates and prices may
adversely impact the value of securities, loans, deposits and other
financial instruments and the interest rate sensitivity of our
consolidated balance sheet as well as reduce interest margins and
impact loan demand; changes in consumer spending, borrowing and
saving habits, whether due to changing business and economic
conditions, legislative and regulatory initiatives, or other
factors; changes in unemployment; changes in customers',
suppliers', and other counterparties' performance and
creditworthiness; asset/liability repricing risks and liquidity
risks; our liquidity requirements could be adversely affected by
changes to regulations governing bank and bank holding company
capital and liquidity standards as well as by changes in our assets
and liabilities; competitive factors among financial services
organizations could increase significantly, including product and
pricing pressures, changes to third-party relationships and our
ability to attract, develop and retain qualified bank
professionals; clients could pursue alternatives to bank deposits,
causing us to lose a relatively inexpensive source of funding;
uncertainty regarding the nature, timing and effect of changes in
banking regulations or other regulatory or legislative requirements
affecting the respective businesses of Park and our subsidiaries,
including major reform of the regulatory oversight structure of the
financial services industry and changes in laws and regulations
concerning taxes, pensions, bankruptcy, consumer protection,
accounting, bank products and services, fiduciary standards,
securities and other aspects of the financial services industry,
specifically the reforms provided for in the Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”)
and the Basel III regulatory capital reforms, as well as
regulations already adopted and which may be adopted in the future
by the relevant regulatory agencies, including the Consumer
Financial Protection Bureau, the OCC, the FDIC, and the Federal
Reserve Board, to implement the Dodd-Frank Act's provisions, the
Budget Control Act of 2011, the American Taxpayer Relief Act of
2012, the JOBS Act, the FAST 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 SEC, the Public Company Accounting Oversight Board and
other regulatory agencies, and the accuracy of our assumptions and
estimates used to prepare our financial statements; changes in law
and policy accompanying the new presidential administration and
uncertainty or speculation pending the enactment of such changes;
significant changes in the tax laws, which may adversely affect the
fair values of net deferred tax assets and obligations of state and
political subdivisions held in Park's investment securities
portfolio; the effect of trade, monetary, fiscal and other
governmental policies of the U.S. federal government, including
money supply and interest rate policies of the Federal Reserve
Board; disruption in the liquidity and other functioning of U.S.
financial markets; the impact on financial markets and the economy
of any changes in the credit ratings of the U.S. Treasury
obligations and other U.S. government-backed debt, as well as
issues surrounding the levels of U.S., European and Asian
government debt and concerns regarding the creditworthiness of
certain sovereign governments, supranationals and financial
institutions in Europe and Asia; the uncertainty surrounding the
United Kingdom's exit from the European Union and its consequences;
our litigation and regulatory compliance exposure, including any
adverse developments in legal proceedings or other claims and
unfavorable resolution of regulatory and other governmental
examinations or other inquiries; the adequacy of our risk
management program; the ability to secure confidential information
and deliver products and services through the use of computer
systems and telecommunications networks; a failure in or breach of
our operational or security systems or infrastructure, or those of
our third-party vendors and other service providers, including as a
result of cyber attacks; fraud, scams and schemes of third parties;
the impact of widespread natural and other disasters, pandemics,
dislocations, terrorist activities or international hostilities on
the economy and financial markets generally or on us or our
counterparties specifically; demand for loans in the respective
market areas served by Park and our subsidiaries; and other risk
factors relating to the banking industry as detailed from time to
time in Park's reports filed with the SEC including those described
in "Item 1A. Risk Factors" of Part I of Park's Annual Report on
Form 10-K for the fiscal year ended December 31, 2016. Park does
not undertake, and specifically disclaims any obligation, to
publicly release the results of any revisions that may be made to
update any forward-looking statement to reflect the events or
circumstances after the date on which the forward-looking statement
was made, or reflect the occurrence of unanticipated events, except
to the extent required by law.
|
PARK NATIONAL CORPORATION |
Financial Highlights |
As
of or for the three months ended March 31, 2017, December 31, 2016,
and March 31, 2016 |
|
|
|
|
|
|
|
|
2017 |
2016 |
2016 |
|
Percent change vs. |
(in thousands, except share and per share
data) |
1st QTR |
4th QTR |
1st QTR |
|
4Q '16 |
1Q '16 |
INCOME
STATEMENT: |
|
|
|
|
|
|
Net interest
income |
$ |
58,952 |
|
$ |
62,249 |
|
$ |
59,819 |
|
|
(5.3 |
) % |
(1.4 |
) % |
Provision for (recovery
of) loan losses |
876 |
|
(1,282 |
) |
910 |
|
|
N.M. |
|
N.M. |
|
Other income |
17,507 |
|
22,071 |
|
17,389 |
|
|
(20.7 |
) % |
0.7 |
% |
Other
expense |
47,462 |
|
57,062 |
|
49,899 |
|
|
(16.8 |
) % |
(4.9 |
) % |
Income before income
taxes |
$ |
28,121 |
|
$ |
28,540 |
|
$ |
26,399 |
|
|
(1.5 |
)% |
6.5 |
% |
Income
taxes |
7,854 |
|
8,538 |
|
7,713 |
|
|
(8.0 |
)% |
1.8 |
% |
Net
income |
$ |
20,267 |
|
$ |
20,002 |
|
$ |
18,686 |
|
|
1.3 |
% |
8.5 |
% |
|
|
|
|
|
|
|
MARKET
DATA: |
|
|
|
|
|
|
Earnings per common
share - basic (b) |
$ |
1.32 |
|
$ |
1.30 |
|
$ |
1.22 |
|
|
1.5 |
% |
8.2 |
% |
Earnings per common
share - diluted (b) |
1.31 |
|
1.30 |
|
1.21 |
|
|
0.8 |
% |
8.3 |
% |
Cash dividends per
common share |
0.94 |
|
0.94 |
|
0.94 |
|
|
— |
% |
— |
% |
Book value per common
share at period end |
48.64 |
|
48.38 |
|
47.60 |
|
|
0.5 |
% |
2.2 |
% |
Market price per common
share at period end |
105.20 |
|
119.66 |
|
90.00 |
|
|
(12.1 |
)% |
16.9 |
% |
Market capitalization
at period end |
1,609,254 |
|
1,835,670 |
|
1,379,773 |
|
|
(12.3 |
)% |
16.6 |
% |
|
|
|
|
|
|
|
Weighted average common
shares - basic (a) |
15,312,059 |
|
15,337,806 |
|
15,330,813 |
|
|
(0.2 |
)% |
(0.1 |
)% |
Weighted average common
shares - diluted (a) |
15,432,769 |
|
15,415,132 |
|
15,406,508 |
|
|
0.1 |
% |
0.2 |
% |
Common shares
outstanding at period end |
15,297,087 |
|
15,340,718 |
|
15,330,807 |
|
|
(0.3 |
)% |
(0.2 |
)% |
|
|
|
|
|
|
|
PERFORMANCE
RATIOS: (annualized) |
|
|
|
|
|
|
Return on average
assets (a)(b) |
1.09 |
% |
1.07 |
% |
1.01 |
% |
|
1.9 |
% |
7.9 |
% |
Return on average
shareholders' equity (a)(b) |
11.05 |
% |
10.62 |
% |
10.38 |
% |
|
4.0 |
% |
6.5 |
% |
Yield on loans |
4.62 |
% |
4.87 |
% |
4.80 |
% |
|
(5.1 |
) % |
(3.8 |
) % |
Yield on investment
securities |
2.42 |
% |
2.29 |
% |
2.38 |
% |
|
5.7 |
% |
1.7 |
% |
Yield on money
markets |
0.85 |
% |
0.53 |
% |
0.51 |
% |
|
60.4 |
% |
66.7 |
% |
Yield on earning
assets |
4.06 |
% |
4.23 |
% |
4.11 |
% |
|
(4.0 |
) % |
(1.2 |
) % |
Cost of interest
bearing deposits |
0.36 |
% |
0.34 |
% |
0.31 |
% |
|
5.9 |
% |
16.1 |
% |
Cost of borrowings |
2.36 |
% |
2.40 |
% |
2.35 |
% |
|
(1.7 |
) % |
0.4 |
% |
Cost of paying
liabilities |
0.76 |
% |
0.74 |
% |
0.73 |
% |
|
2.7 |
% |
4.1 |
% |
Net interest margin
(g) |
3.49 |
% |
3.68 |
% |
3.55 |
% |
|
(5.2 |
) % |
(1.7 |
) % |
Efficiency ratio
(g) |
61.22 |
% |
67.04 |
% |
64.26 |
% |
|
(8.7 |
) % |
(4.7 |
) % |
|
|
|
|
|
|
|
OTHER RATIOS
(NON - GAAP): |
|
|
|
|
|
|
Annualized return on
average tangible assets (a)(b)(e) |
1.10 |
% |
1.08 |
% |
1.02 |
% |
|
1.9 |
% |
7.8 |
% |
Annualized return on
average tangible equity (a)(b)(c) |
12.24 |
% |
11.76 |
% |
11.53 |
% |
|
4.1 |
% |
6.2 |
% |
Tangible book value per
share (d) |
$ |
43.92 |
|
$ |
43.67 |
|
$ |
42.88 |
|
|
0.6 |
% |
2.4 |
% |
|
|
|
|
|
|
|
N.M. - Not
meaningful |
Note:
Explanations (a) - (g) are included at the end of the financial
highlights. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARK NATIONAL CORPORATION |
Financial Highlights (continued) |
Three months ended March 31, 2017, December 31, 2016, and
March 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Percent change vs. |
BALANCE
SHEET: |
March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
|
4Q '16 |
1Q '16 |
|
|
|
|
|
|
|
Investment
securities |
$ |
1,565,668 |
|
$ |
1,579,783 |
|
$ |
1,601,767 |
|
|
(0.9 |
) % |
(2.3 |
) % |
Loans |
5,313,641 |
|
5,271,857 |
|
5,062,185 |
|
|
0.8 |
% |
5.0 |
% |
Allowance for loan
losses |
49,922 |
|
50,624 |
|
56,948 |
|
|
(1.4 |
) % |
(12.3 |
) % |
Goodwill |
72,334 |
|
72,334 |
|
72,334 |
|
|
— |
% |
— |
% |
Other real estate owned
(OREO) |
13,693 |
|
13,926 |
|
17,745 |
|
|
(1.7 |
) % |
(22.8 |
) % |
Total assets |
7,744,690 |
|
7,467,586 |
|
7,428,185 |
|
|
3.7 |
% |
4.3 |
% |
Total deposits |
5,920,560 |
|
5,521,956 |
|
5,606,790 |
|
|
7.2 |
% |
5.6 |
% |
Borrowings |
1,010,703 |
|
1,134,076 |
|
1,004,279 |
|
|
(10.9 |
) % |
0.6 |
% |
Total shareholders'
equity |
744,122 |
|
742,240 |
|
729,701 |
|
|
0.3 |
% |
2.0 |
% |
Tangible equity
(d) |
671,788 |
|
669,906 |
|
657,367 |
|
|
0.3 |
% |
2.2 |
% |
Nonperforming
loans |
107,284 |
|
108,083 |
|
118,960 |
|
|
(0.7 |
) % |
(9.8 |
) % |
Nonperforming
assets |
120,977 |
|
122,009 |
|
136,705 |
|
|
(0.8 |
) % |
(11.5 |
) % |
|
|
|
|
|
|
|
ASSET QUALITY
RATIOS: |
|
|
|
|
|
|
Loans as a % of period
end total assets |
68.61 |
% |
70.60 |
% |
68.15 |
% |
|
(2.8 |
) % |
0.7 |
% |
Nonperforming loans as
a % of period end loans |
2.02 |
% |
2.05 |
% |
2.35 |
% |
|
(1.5 |
) % |
(14.0 |
) % |
Nonperforming assets as
a % of period end loans + OREO |
2.27 |
% |
2.31 |
% |
2.69 |
% |
|
(1.7 |
) % |
(15.6 |
) % |
Allowance for loan
losses as a % of period end loans |
0.94 |
% |
0.96 |
% |
1.12 |
% |
|
(2.1 |
) % |
(16.1 |
) % |
Net loan
charge-offs |
$ |
1,578 |
|
$ |
1,656 |
|
$ |
456 |
|
|
N.M. |
|
N.M. |
|
Annualized net loan
charge-offs as a % of average loans (a) |
0.12 |
% |
0.13 |
% |
0.04 |
% |
|
N.M. |
|
N.M. |
|
|
|
|
|
|
|
|
CAPITAL &
LIQUIDITY: |
|
|
|
|
|
|
Total shareholders'
equity / Period end total assets |
9.61 |
% |
9.94 |
% |
9.82 |
% |
|
(3.3 |
) % |
(2.1 |
) % |
Tangible equity (d) /
Tangible assets (f) |
8.76 |
% |
9.06 |
% |
8.94 |
% |
|
(3.3 |
) % |
(2.0 |
) % |
Average shareholders'
equity / Average assets (a) |
9.84 |
% |
10.11 |
% |
9.78 |
% |
|
(2.7 |
) % |
0.6 |
% |
Average shareholders'
equity / Average loans (a) |
14.10 |
% |
14.36 |
% |
14.34 |
% |
|
(1.8 |
) % |
(1.7 |
) % |
Average loans / Average
deposits (a) |
92.45 |
% |
93.54 |
% |
91.31 |
% |
|
(1.2 |
) % |
1.2 |
% |
|
|
|
|
|
|
|
N.M. - Not
meaningful |
Note:
Explanations (a) - (h) are included at the end of the financial
highlights. |
|
|
|
|
|
|
|
|
PARK NATIONAL CORPORATION |
Financial
Highlights (continued) |
|
|
|
|
|
|
|
(a)
Averages are for the three months ended March 31, 2017, December
31, 2016 and March 31, 2016. |
(b)
Reported measure uses net income. |
(c) Net
income for each period divided by average tangible equity during
the period. Average tangible equity equals average
shareholders' equity during the applicable period less average
goodwill during the applicable period. |
|
|
|
|
RECONCILIATION OF AVERAGE SHAREHOLDERS' EQUITY TO AVERAGE
TANGIBLE EQUITY: |
|
THREE MONTHS ENDED |
|
March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
AVERAGE SHAREHOLDERS'
EQUITY |
$ |
744,040 |
|
$ |
749,053 |
|
$ |
724,316 |
|
Less:
Average goodwill |
72,334 |
|
72,334 |
|
72,334 |
|
AVERAGE
TANGIBLE EQUITY |
$ |
671,706 |
|
$ |
676,719 |
|
$ |
651,982 |
|
|
|
|
|
(d)
Tangible equity divided by common shares outstanding at period end.
Tangible equity equals total shareholders' equity less goodwill, in
each case at the end of the period. |
|
|
|
|
RECONCILIATION OF TOTAL SHAREHOLDERS' EQUITY TO TANGIBLE
EQUITY: |
|
March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
TOTAL SHAREHOLDERS'
EQUITY |
$ |
744,122 |
|
$ |
742,240 |
|
$ |
729,701 |
|
Less:
Goodwill |
72,334 |
|
72,334 |
|
72,334 |
|
TANGIBLE
EQUITY |
$ |
671,788 |
|
$ |
669,906 |
|
$ |
657,367 |
|
|
|
|
|
(e) Net
income for each period divided by average tangible assets during
the period. Average tangible assets equals average assets less
average goodwill, in each case during the applicable period. |
|
|
|
|
RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE
ASSETS: |
|
THREE MONTHS ENDED |
|
March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
AVERAGE ASSETS |
$ |
7,559,691 |
|
$ |
7,408,109 |
|
$ |
7,405,345 |
|
Less: Average goodwill |
72,334 |
|
72,334 |
|
72,334 |
|
AVERAGE
TANGIBLE ASSETS |
$ |
7,487,357 |
|
$ |
7,335,775 |
|
$ |
7,333,011 |
|
|
|
|
|
(f)
Tangible equity divided by tangible assets. Tangible assets equals
total assets less goodwill, in each case at the end of the
period. |
|
|
|
|
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE
ASSETS: |
|
March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
TOTAL ASSETS |
$ |
7,744,690 |
|
$ |
7,467,586 |
|
$ |
7,428,185 |
|
Less:
Goodwill |
72,334 |
|
72,334 |
|
72,334 |
|
TANGIBLE
ASSETS |
$ |
7,672,356 |
|
$ |
7,395,252 |
|
$ |
7,355,851 |
|
|
|
|
|
(g)
Efficiency ratio is calculated by dividing total other expense by
the sum of fully taxable equivalent net interest income and other
income. Fully taxable equivalent net interest income reconciliation
is shown below assuming a 35% tax rate. Additionally, net interest
margin is calculated on a fully taxable equivalent basis by
dividing fully taxable equivalent net interest income by average
interest earning assets. |
|
|
|
|
RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST
INCOME TO NET INTEREST INCOME |
|
THREE MONTHS ENDED |
|
March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
Interest income |
$ |
68,755 |
|
$ |
71,697 |
|
$ |
69,308 |
|
Fully
taxable equivalent adjustment |
1,072 |
|
799 |
|
444 |
|
Fully taxable
equivalent interest income |
$ |
69,827 |
|
$ |
72,496 |
|
$ |
69,752 |
|
Interest
expense |
9,803 |
|
9,448 |
|
9,489 |
|
Fully
taxable equivalent net interest income |
$ |
60,024 |
|
$ |
63,048 |
|
$ |
60,263 |
|
|
|
|
|
|
|
|
|
|
PARK NATIONAL CORPORATION |
Consolidated Statements of Income |
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
(in thousands, except share and per share
data) |
|
2017 |
|
2016 |
|
|
|
|
|
Interest income: |
|
|
|
|
Interest
and fees on loans |
|
$ |
59,908 |
|
|
$ |
60,052 |
|
Interest
on: |
|
|
|
|
Obligations of U.S. Government, its agencies and other securities
|
|
7,138 |
|
|
8,609 |
|
Obligations of states and political subdivisions |
|
1,460 |
|
|
373 |
|
Other interest income |
|
249 |
|
|
274 |
|
Total interest income |
|
68,755 |
|
|
69,308 |
|
|
|
|
|
|
Interest expense: |
|
|
|
|
Interest
on deposits: |
|
|
|
|
Demand
and savings deposits |
|
1,614 |
|
|
824 |
|
Time
deposits |
|
2,161 |
|
|
2,387 |
|
Interest on borrowings |
|
6,028 |
|
|
6,278 |
|
Total interest expense |
|
9,803 |
|
|
9,489 |
|
|
|
|
|
|
Net interest income |
|
58,952 |
|
|
59,819 |
|
|
|
|
|
|
Provision for loan
losses |
|
876 |
|
|
910 |
|
|
|
|
|
|
Net interest income after provision for
loan losses |
|
58,076 |
|
|
58,909 |
|
|
|
|
|
|
Other income |
|
17,507 |
|
|
17,389 |
|
|
|
|
|
|
Other expense |
|
47,462 |
|
|
49,899 |
|
|
|
|
|
|
Income before income
taxes |
|
28,121 |
|
|
26,399 |
|
|
|
|
|
|
Income taxes |
|
7,854 |
|
|
7,713 |
|
|
|
|
|
|
Net income |
|
$ |
20,267 |
|
|
$ |
18,686 |
|
|
|
|
|
|
Per Common
Share: |
|
|
|
|
Net income - basic |
|
$ |
1.32 |
|
|
$ |
1.22 |
|
Net income -
diluted |
|
$ |
1.31 |
|
|
$ |
1.21 |
|
|
|
|
|
|
Weighted average shares -
basic |
|
15,312,059 |
|
|
15,330,813 |
|
Weighted average shares -
diluted |
|
15,432,769 |
|
|
15,406,508 |
|
|
|
|
|
|
Cash Dividends Declared |
|
$ |
0.94 |
|
|
$ |
0.94 |
|
|
|
|
|
|
|
PARK NATIONAL CORPORATION |
Consolidated Balance Sheets |
|
|
|
(in thousands, except share data) |
March 31, 2017 |
December 31, 2016 |
|
|
|
Assets |
|
|
|
|
|
Cash and due from
banks |
$ |
106,529 |
|
$ |
122,811 |
|
Money market
instruments |
285,243 |
|
23,635 |
|
Investment
securities |
1,565,668 |
|
1,579,783 |
|
Loans |
5,313,641 |
|
5,271,857 |
|
Allowance
for loan losses |
(49,922 |
) |
(50,624 |
) |
Loans,
net |
5,263,719 |
|
5,221,233 |
|
Bank premises and
equipment, net |
57,220 |
|
57,971 |
|
Goodwill |
72,334 |
|
72,334 |
|
Other real estate
owned |
13,693 |
|
13,926 |
|
Other assets |
380,284 |
|
375,893 |
|
Total assets |
$ |
7,744,690 |
|
$ |
7,467,586 |
|
|
|
|
Liabilities and
Shareholders' Equity |
|
|
|
|
|
Deposits: |
|
|
Noninterest
bearing |
$ |
1,548,363 |
|
$ |
1,523,417 |
|
Interest
bearing |
4,372,197 |
|
3,998,539 |
|
Total
deposits |
5,920,560 |
|
5,521,956 |
|
Borrowings |
1,010,703 |
|
1,134,076 |
|
Other
liabilities |
69,305 |
|
69,314 |
|
Total
liabilities |
$ |
7,000,568 |
|
$ |
6,725,346 |
|
|
|
|
|
|
|
Shareholders'
Equity: |
|
|
Preferred shares
(200,000 shares authorized; no shares outstanding at March 31, 2017
and December 31, 2016) |
$ |
— |
|
$ |
— |
|
Common shares (No par
value; 20,000,000 shares authorized in 2016 and
2015; 16,150,795 shares issued at March 31, 2017 and
16,150,807 shares issued at December 31, 2016) |
305,856 |
|
305,826 |
|
Accumulated other
comprehensive loss, net of taxes |
(16,723 |
) |
(17,745 |
) |
Retained earnings |
541,241 |
|
535,631 |
|
Treasury
shares (853,708 shares at March 31, 2017 and 810,089 shares at
December 31, 2016) |
(86,252 |
) |
(81,472 |
) |
Total
shareholders' equity |
$ |
744,122 |
|
$ |
742,240 |
|
|
|
|
Total liabilities and shareholders' equity |
$ |
7,744,690 |
|
$ |
7,467,586 |
|
|
|
|
|
|
|
|
|
PARK NATIONAL CORPORATION |
Consolidated Average Balance
Sheets |
|
|
|
|
Three Months Ended |
|
March 31, |
(in thousands) |
2017 |
2016 |
|
|
|
Assets |
|
|
|
|
|
Cash and
due from banks |
$ |
119,608 |
|
$ |
118,981 |
|
Money
market instruments |
118,999 |
|
217,384 |
|
Investment
securities |
1,565,977 |
|
1,562,194 |
|
Loans |
5,278,539 |
|
5,049,327 |
|
Allowance for loan losses |
(50,843 |
) |
(56,999 |
) |
Loans, net |
5,227,696 |
|
4,992,328 |
|
Bank
premises and equipment, net |
57,870 |
|
59,577 |
|
Goodwill |
72,334 |
|
72,334 |
|
Other real
estate owned |
13,744 |
|
18,303 |
|
Other assets |
383,463 |
|
364,244 |
|
Total assets |
$ |
7,559,691 |
|
$ |
7,405,345 |
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
Deposits: |
|
|
Noninterest
bearing |
$ |
1,499,355 |
|
$ |
1,357,998 |
|
Interest bearing |
4,210,203 |
|
4,171,865 |
|
Total deposits |
5,709,558 |
|
5,529,863 |
|
Borrowings |
1,034,678 |
|
1,072,814 |
|
Other liabilities |
71,415 |
|
78,352 |
|
Total liabilities |
$ |
6,815,651 |
|
$ |
6,681,029 |
|
|
|
|
Shareholders' Equity: |
|
|
Preferred
shares |
$ |
— |
|
$ |
— |
|
Common
shares |
305,908 |
|
303,986 |
|
Accumulated
other comprehensive loss, net of taxes |
(17,232 |
) |
(8,446 |
) |
Retained
earnings |
539,936 |
|
511,249 |
|
Treasury shares |
(84,572 |
) |
(82,473 |
) |
Total shareholders' equity |
$ |
744,040 |
|
$ |
724,316 |
|
|
|
|
Total liabilities and shareholders'
equity |
$ |
7,559,691 |
|
$ |
7,405,345 |
|
|
|
PARK NATIONAL CORPORATION |
Consolidated Statements of Income - Linked
Quarters |
|
|
|
|
|
|
|
2017 |
2016 |
2016 |
2016 |
2016 |
(in thousands, except per share data) |
1st QTR |
4th QTR |
3rd QTR |
2nd QTR |
1st QTR |
|
|
|
|
|
|
Interest income: |
|
|
|
|
|
Interest
and fees on loans |
$ |
59,908 |
|
$ |
63,633 |
|
$ |
59,893 |
|
$ |
58,401 |
|
$ |
60,052 |
|
Interest
on: |
|
|
|
|
|
Obligations of U.S. Government, its agencies and other
securities |
7,138 |
|
6,909 |
|
7,339 |
|
7,770 |
|
8,609 |
|
Obligations of states and political subdivisions |
1,460 |
|
979 |
|
689 |
|
591 |
|
373 |
|
Other interest income |
249 |
|
176 |
|
321 |
|
249 |
|
274 |
|
Total interest income |
68,755 |
|
71,697 |
|
68,242 |
|
67,011 |
|
69,308 |
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
Interest
on deposits: |
|
|
|
|
|
Demand
and savings deposits |
1,614 |
|
1,228 |
|
1,094 |
|
933 |
|
824 |
|
Time
deposits |
2,161 |
|
2,209 |
|
2,352 |
|
2,389 |
|
2,387 |
|
Interest on borrowings |
6,028 |
|
6,011 |
|
6,263 |
|
6,204 |
|
6,278 |
|
Total interest expense |
9,803 |
|
9,448 |
|
9,709 |
|
9,526 |
|
9,489 |
|
|
|
|
|
|
|
Net interest income |
58,952 |
|
62,249 |
|
58,533 |
|
57,485 |
|
59,819 |
|
|
|
|
|
|
|
Provision for (recovery
of) loan losses |
876 |
|
(1,282 |
) |
(7,366 |
) |
2,637 |
|
910 |
|
|
|
|
|
|
|
Net interest income after provision for (recovery of) loan
losses |
58,076 |
|
63,531 |
|
65,899 |
|
54,848 |
|
58,909 |
|
|
|
|
|
|
|
Other income |
17,507 |
|
22,071 |
|
20,535 |
|
18,736 |
|
17,389 |
|
|
|
|
|
|
|
Other expense |
47,462 |
|
57,062 |
|
46,756 |
|
45,306 |
|
49,899 |
|
|
|
|
|
|
|
Income before income taxes |
28,121 |
|
28,540 |
|
39,678 |
|
28,278 |
|
26,399 |
|
|
|
|
|
|
|
Income taxes |
7,854 |
|
8,538 |
|
12,229 |
|
8,280 |
|
7,713 |
|
|
|
|
|
|
|
Net income |
$ |
20,267 |
|
$ |
20,002 |
|
$ |
27,449 |
|
$ |
19,998 |
|
$ |
18,686 |
|
|
|
|
|
|
|
Per Common
Share: |
|
|
|
|
|
Net
income - basic |
$ |
1.32 |
|
$ |
1.30 |
|
$ |
1.79 |
|
$ |
1.30 |
|
$ |
1.22 |
|
Net
income - diluted |
$ |
1.31 |
|
$ |
1.30 |
|
$ |
1.78 |
|
$ |
1.30 |
|
$ |
1.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARK NATIONAL CORPORATION |
Detail of other income and other expense -
Linked Quarters |
|
|
|
|
|
|
|
2017 |
2016 |
2016 |
2016 |
2016 |
(in
thousands) |
1st QTR |
4th QTR |
3rd QTR |
2nd QTR |
1st QTR |
|
|
|
|
|
|
Other income: |
|
|
|
|
|
Income
from fiduciary activities |
$ |
5,514 |
|
$ |
5,534 |
|
$ |
5,315 |
|
$ |
5,438 |
|
$ |
5,113 |
|
Service
charges on deposits |
3,139 |
|
3,461 |
|
3,800 |
|
3,575 |
|
3,423 |
|
Other
service income |
2,804 |
|
4,854 |
|
3,640 |
|
3,351 |
|
2,574 |
|
Checkcard
fee income |
3,761 |
|
3,877 |
|
3,780 |
|
3,868 |
|
3,532 |
|
Bank
owned life insurance income |
1,103 |
|
1,054 |
|
1,038 |
|
1,049 |
|
1,197 |
|
ATM
fees |
542 |
|
534 |
|
581 |
|
570 |
|
583 |
|
OREO
valuation adjustments |
(73 |
) |
(29 |
) |
(233 |
) |
(221 |
) |
(118 |
) |
Gain on
the sale of OREO, net |
100 |
|
244 |
|
783 |
|
162 |
|
134 |
|
Miscellaneous |
617 |
|
2,542 |
|
1,831 |
|
944 |
|
951 |
|
Total other income |
$ |
17,507 |
|
$ |
22,071 |
|
$ |
20,535 |
|
$ |
18,736 |
|
$ |
17,389 |
|
|
|
|
|
|
|
Other expense: |
|
|
|
|
|
Salaries |
$ |
22,717 |
|
$ |
22,140 |
|
$ |
22,084 |
|
$ |
21,256 |
|
$ |
21,554 |
|
Employee
benefits |
5,181 |
|
4,522 |
|
5,073 |
|
4,894 |
|
4,773 |
|
Occupancy
expense |
2,635 |
|
2,546 |
|
2,506 |
|
2,639 |
|
2,548 |
|
Furniture
and equipment expense |
3,618 |
|
3,470 |
|
3,437 |
|
3,416 |
|
3,443 |
|
Data
processing fees |
1,965 |
|
1,568 |
|
1,450 |
|
1,373 |
|
1,217 |
|
Professional fees and services |
4,829 |
|
8,757 |
|
6,356 |
|
5,401 |
|
6,667 |
|
Marketing |
1,056 |
|
1,277 |
|
1,062 |
|
1,073 |
|
1,111 |
|
Insurance |
1,570 |
|
1,553 |
|
1,423 |
|
1,438 |
|
1,411 |
|
Communication |
1,333 |
|
1,257 |
|
1,154 |
|
1,353 |
|
1,221 |
|
State tax
expense |
1,063 |
|
941 |
|
895 |
|
798 |
|
926 |
|
Debt
prepayment penalty |
— |
|
5,554 |
|
— |
|
— |
|
— |
|
Miscellaneous |
1,495 |
|
3,477 |
|
1,316 |
|
1,665 |
|
5,028 |
|
Total other expense |
$ |
47,462 |
|
$ |
57,062 |
|
$ |
46,756 |
|
$ |
45,306 |
|
$ |
49,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARK NATIONAL CORPORATION |
Asset Quality Information |
|
|
|
|
|
|
|
|
|
Year ended December 31, |
(in thousands, except ratios) |
March 31, 2017 |
2016 |
2015 |
2014 |
|
2013 |
|
|
|
|
|
|
|
Allowance for
loan losses: |
|
|
|
|
|
|
Allowance for loan
losses, beginning of period |
$ |
50,624 |
|
$ |
56,494 |
|
$ |
54,352 |
|
$ |
59,468 |
|
|
$ |
55,537 |
|
Charge-offs |
3,708 |
|
20,799 |
|
14,290 |
|
24,780 |
|
(A) |
19,153 |
|
Recoveries |
2,130 |
|
20,030 |
|
11,442 |
|
26,997 |
|
|
19,669 |
|
Net charge-offs
(recoveries) |
1,578 |
|
769 |
|
2,848 |
|
(2,217 |
) |
|
(516 |
) |
Provision for (recovery
of) loan losses |
876 |
|
(5,101 |
) |
4,990 |
|
(7,333 |
) |
|
3,415 |
|
Allowance for loan losses, end of period |
$ |
49,922 |
|
$ |
50,624 |
|
$ |
56,494 |
|
$ |
54,352 |
|
|
$ |
59,468 |
|
(A) Year
ended December 31, 2014 included $4.3 million in charge-offs
related to the transfer of $22.0 million of commercial loans to the
held for sale portfolio. |
|
|
|
|
|
|
|
General reserve
trends: |
|
|
|
|
|
|
Allowance for loan
losses, end of period |
$ |
49,922 |
|
$ |
50,624 |
|
$ |
56,494 |
|
$ |
54,352 |
|
|
$ |
59,468 |
|
Specific
reserves |
1,091 |
|
548 |
|
4,191 |
|
3,660 |
|
|
10,451 |
|
General
reserves |
$ |
48,831 |
|
$ |
50,076 |
|
$ |
52,303 |
|
$ |
50,692 |
|
|
$ |
49,017 |
|
|
|
|
|
|
|
|
Total loans |
$ |
5,313,641 |
|
$ |
5,271,857 |
|
$ |
5,068,085 |
|
$ |
4,829,682 |
|
|
$ |
4,620,505 |
|
Impaired
commercial loans |
70,099 |
|
70,415 |
|
80,599 |
|
73,676 |
|
|
112,304 |
|
Total
loans less impaired commercial loans |
$ |
5,243,542 |
|
$ |
5,201,442 |
|
$ |
4,987,486 |
|
$ |
4,756,006 |
|
|
$ |
4,508,201 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Ratios: |
|
|
|
|
|
|
Net charge-offs
(recoveries) as a % of average loans |
0.12 |
% |
0.02 |
% |
0.06 |
% |
(0.05 |
) % |
|
(0.01 |
) % |
Allowance for loan
losses as a % of period end loans |
0.94 |
% |
0.96 |
% |
1.11 |
% |
1.13 |
% |
|
1.29 |
% |
General reserves as a %
of total loans less impaired commercial loans |
0.93 |
% |
0.96 |
% |
1.05 |
% |
1.07 |
% |
|
1.09 |
% |
|
|
|
|
|
|
|
Nonperforming
Assets - Park National Corporation: |
|
|
|
|
|
|
Nonaccrual loans |
$ |
84,294 |
|
$ |
87,822 |
|
$ |
95,887 |
|
$ |
100,393 |
|
|
$ |
135,216 |
|
Accruing troubled debt
restructuring |
21,153 |
|
18,175 |
|
24,979 |
|
16,254 |
|
|
18,747 |
|
Loans
past due 90 days or more |
1,837 |
|
2,086 |
|
1,921 |
|
2,641 |
|
|
1,677 |
|
Total
nonperforming loans |
$ |
107,284 |
|
$ |
108,083 |
|
$ |
122,787 |
|
$ |
119,288 |
|
|
$ |
155,640 |
|
Other real estate owned
- Park National Bank |
5,792 |
|
6,025 |
|
7,456 |
|
10,687 |
|
|
11,412 |
|
Other
real estate owned - SEPH |
7,901 |
|
7,901 |
|
11,195 |
|
11,918 |
|
|
23,224 |
|
Total nonperforming assets |
$ |
120,977 |
|
$ |
122,009 |
|
$ |
141,438 |
|
$ |
141,893 |
|
|
$ |
190,276 |
|
Percentage of
nonaccrual loans to period end loans |
1.59 |
% |
1.67 |
% |
1.89 |
% |
2.08 |
% |
|
2.93 |
% |
Percentage of
nonperforming loans to period end loans |
2.02 |
% |
2.05 |
% |
2.42 |
% |
2.47 |
% |
|
3.37 |
% |
Percentage of
nonperforming assets to period end loans |
2.28 |
% |
2.31 |
% |
2.79 |
% |
2.94 |
% |
|
4.12 |
% |
Percentage of
nonperforming assets to period end total assets |
1.56 |
% |
1.63 |
% |
1.93 |
% |
2.03 |
% |
|
2.87 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARK NATIONAL CORPORATION |
Asset Quality Information
(continued) |
|
|
|
|
|
|
|
|
|
Year ended December 31, |
(in thousands, except ratios) |
March 31, 2017 |
2016 |
2015 |
2014 |
|
2013 |
|
|
|
|
|
|
|
Nonperforming
Assets - Park National Bank and Guardian: |
|
|
|
|
|
|
Nonaccrual loans |
$ |
72,780 |
|
$ |
76,084 |
|
$ |
81,468 |
|
$ |
77,477 |
|
|
$ |
99,108 |
|
Accruing troubled debt
restructuring |
21,153 |
|
18,175 |
|
24,979 |
|
16,157 |
|
|
18,747 |
|
Loans
past due 90 days or more |
1,837 |
|
2,086 |
|
1,921 |
|
2,641 |
|
|
1,677 |
|
Total
nonperforming loans |
$ |
95,770 |
|
$ |
96,345 |
|
$ |
108,368 |
|
$ |
96,275 |
|
|
$ |
119,532 |
|
Other
real estate owned - Park National Bank |
5,792 |
|
6,025 |
|
7,456 |
|
10,687 |
|
|
11,412 |
|
Total nonperforming assets |
$ |
101,562 |
|
$ |
102,370 |
|
$ |
115,824 |
|
$ |
106,962 |
|
|
$ |
130,944 |
|
Percentage of
nonaccrual loans to period end loans |
1.37 |
% |
1.45 |
% |
1.61 |
% |
1.61 |
% |
|
2.16 |
% |
Percentage of
nonperforming loans to period end loans |
1.81 |
% |
1.83 |
% |
2.14 |
% |
2.00 |
% |
|
2.61 |
% |
Percentage of
nonperforming assets to period end loans |
1.92 |
% |
1.95 |
% |
2.29 |
% |
2.23 |
% |
|
2.86 |
% |
Percentage of
nonperforming assets to period end total assets |
1.32 |
% |
1.38 |
% |
1.60 |
% |
1.55 |
% |
|
2.01 |
% |
|
|
|
|
|
|
|
Nonperforming Assets - SEPH/Vision Bank (retained
portfolio): |
Nonaccrual loans |
$ |
11,514 |
|
$ |
11,738 |
|
$ |
14,419 |
|
$ |
22,916 |
|
|
$ |
36,108 |
|
Accruing troubled debt
restructuring |
— |
|
— |
|
— |
|
97 |
|
|
— |
|
Loans
past due 90 days or more |
— |
|
— |
|
— |
|
— |
|
|
— |
|
Total
nonperforming loans |
$ |
11,514 |
|
$ |
11,738 |
|
$ |
14,419 |
|
$ |
23,013 |
|
|
$ |
36,108 |
|
Other
real estate owned - SEPH |
7,901 |
|
7,901 |
|
11,195 |
|
11,918 |
|
|
23,224 |
|
Total nonperforming assets |
$ |
19,415 |
|
$ |
19,639 |
|
$ |
25,614 |
|
$ |
34,931 |
|
|
$ |
59,332 |
|
|
|
|
|
|
|
|
New nonaccrual
loan information - Park National Corporation |
|
|
|
|
|
|
Nonaccrual loans,
beginning of period |
$ |
87,822 |
|
$ |
95,887 |
|
$ |
100,393 |
|
$ |
135,216 |
|
|
$ |
155,536 |
|
New nonaccrual
loans |
11,733 |
|
74,786 |
|
80,791 |
|
70,059 |
|
|
67,398 |
|
Resolved nonaccrual
loans |
15,261 |
|
82,851 |
|
85,165 |
|
86,384 |
|
|
87,718 |
|
Sale of
nonaccrual loans held for sale |
— |
|
— |
|
132 |
|
18,498 |
|
|
— |
|
Nonaccrual loans, end of period |
$ |
84,294 |
|
$ |
87,822 |
|
$ |
95,887 |
|
$ |
100,393 |
|
|
$ |
135,216 |
|
|
|
|
|
|
|
|
New nonaccrual
loan information - Park National Bank and Guardian
|
|
|
|
|
|
|
Nonaccrual loans,
beginning of period |
$ |
76,084 |
|
$ |
81,468 |
|
$ |
77,477 |
|
$ |
99,108 |
|
|
$ |
100,244 |
|
New nonaccrual loans -
Ohio-based operations |
11,733 |
|
74,663 |
|
80,791 |
|
69,389 |
|
|
66,197 |
|
Resolved nonaccrual
loans |
15,037 |
|
80,047 |
|
76,800 |
|
78,288 |
|
|
67,333 |
|
Sale of
nonaccrual loans held for sale |
— |
|
— |
|
— |
|
12,732 |
|
|
— |
|
Nonaccrual loans, end of period |
$ |
72,780 |
|
$ |
76,084 |
|
$ |
81,468 |
|
$ |
77,477 |
|
|
$ |
99,108 |
|
|
|
|
|
|
|
|
New nonaccrual loan information - SEPH/Vision
Bank |
Nonaccrual loans,
beginning of period |
$ |
11,738 |
|
$ |
14,419 |
|
$ |
22,916 |
|
$ |
36,108 |
|
|
$ |
55,292 |
|
New nonaccrual loans -
SEPH/Vision Bank |
— |
|
123 |
|
— |
|
670 |
|
|
1,201 |
|
Resolved nonaccrual
loans |
224 |
|
2,804 |
|
8,365 |
|
8,096 |
|
|
20,385 |
|
Sale of
nonaccrual loans held for sale |
— |
|
— |
|
132 |
|
5,766 |
|
|
— |
|
Nonaccrual loans, end of period |
$ |
11,514 |
|
$ |
11,738 |
|
$ |
14,419 |
|
$ |
22,916 |
|
|
$ |
36,108 |
|
|
|
|
|
|
|
|
Impaired
Commercial Loan Portfolio Information (period end): |
|
|
|
|
|
|
Unpaid principal
balance |
$ |
93,830 |
|
$ |
95,358 |
|
$ |
109,304 |
|
$ |
106,156 |
|
|
$ |
175,576 |
|
Prior
charge-offs |
23,731 |
|
24,943 |
|
28,705 |
|
32,480 |
|
|
63,272 |
|
Remaining principal
balance |
70,099 |
|
70,415 |
|
80,599 |
|
73,676 |
|
|
112,304 |
|
Specific
reserves |
1,091 |
|
548 |
|
4,191 |
|
3,660 |
|
|
10,451 |
|
Book
value, after specific reserve |
$ |
69,008 |
|
$ |
69,867 |
|
$ |
76,408 |
|
$ |
70,016 |
|
|
$ |
101,853 |
|
|
|
|
|
|
|
|
Media contact: Bethany Lewis, 740.349.0421, blewis@parknationalbank.com
Investor contact: Brady Burt, 740.322.6844, bburt@parknationalbank.com
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com