Park National Corporation reports financial results for second quarter and first half of 2023
July 24 2023 - 4:15PM
Park National Corporation (Park) (NYSE American: PRK) today
reported financial results for the second quarter and first half of
2023. Park's board of directors declared a quarterly cash dividend
of $1.05 per common share, payable on September 8, 2023, to common
shareholders of record as of August 18, 2023.
“Amidst a rapidly evolving economy, Park has demonstrated
exceptional financial strength, supported by robust capital and
liquidity,” said Park Chairman and Chief Executive Officer David L.
Trautman. “Our strong capital position allows us to weather
uncertainties and offers long-term stability for our
stakeholders.”
Park’s net income for the second quarter of 2023 was $31.6
million, an 8.0 percent decrease from $34.3 million for the second
quarter of 2022. Second quarter 2023 net income per diluted common
share was $1.94, compared to $2.10 for the second quarter of 2022.
Park’s net income for the first half of 2023 was $65.3 million, a
10.8 percent decrease from $73.2 million for the first half of
2022. Net income per diluted common share for the first half of
2023 was $4.01, compared to $4.48 for the first half of 2022.
Park’s total loans increased 1.6 percent (6.5 percent
annualized) during the second quarter of 2023.
“Our loan growth is a testament to our disciplined approach and
consistently conservative and predictable credit culture. It
enables Park bankers to uphold our promise to deliver outstanding
financial solutions to our customers regardless of the economic
environment,” Trautman said.
Park's community-banking subsidiary, The Park National Bank,
reported net income of $35.5 million for the second quarter of
2023, a 1.6 percent increase compared to $34.9 million for the same
period of 2022. The Park National Bank reported net income of $71.8
million for the first half of 2023, a 6.1 percent decrease compared
to $76.4 million for the same period of 2022.
“We recognize our success is closely tied to the success of our
customers and communities,” said Matthew R. Miller, Park President.
“Our bankers are devoted to providing personal solutions, advice
and experiences for customers and prospects, serving as a trusted
financial partner, helping them navigate their financial
journey.”
Headquartered in Newark, Ohio, Park National Corporation has
$9.9 billion in total assets (as of June 30, 2023). 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 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 as
well as our ability to manage strategic initiatives;
- current and future economic and
financial market conditions, either nationally or in the states in
which Park and our subsidiaries do business, that may reflect
deterioration in business and economic conditions, including the
effects of higher unemployment rates or labor shortages, the impact
of persistent inflation, ongoing interest rate increases, changes
in the economy or global supply chain, supply-demand imbalances
affecting local real estate prices, U.S. fiscal debt, budget and
tax matters, geopolitical matters (including the impact of the
Russia-Ukraine conflict and associated sanctions and export
controls), and any slowdown in global economic growth, in addition
to the continuing impact of the COVID-19 pandemic and recovery
therefrom on our customers’ operations and financial condition, any
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 changes in 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, ongoing
increasing market interest rate policies and policies impacting
inflation, of the Federal Reserve Board, the U.S. Treasury and
other governmental agencies) as well as disruption in the liquidity
and functioning of U.S. financial markets, 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 net
interest margins;
- changes in the federal, state, or
local tax laws 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 and otherwise negatively
impact our financial performance;
- the impact of the changes in
federal, state and local governmental policy, including the
regulatory landscape, capital markets, elevated government debt,
potential changes in tax legislation that may increase tax rates,
infrastructure spending and social programs;
- changes in laws or requirements
imposed by Park's regulators impacting Park's capital actions,
including dividend payments and stock repurchases;
- changes in consumer spending,
borrowing and saving habits, whether due to changes in retail
distribution strategies, consumer preferences and behaviors,
changes in business and economic conditions, legislative and
regulatory initiatives, or other factors may be different than
anticipated;
- changes in customers', suppliers',
and other counterparties' performance and creditworthiness, and
Park's expectations regarding future credit losses and our
allowance for credit losses, may be different than anticipated due
to the continuing impact of and the various responses to
inflationary pressures;
- Park may have more credit risk and
higher credit losses to the extent there are loan concentrations by
location or industry of borrowers or collateral;
- the volatility from quarter to
quarter of mortgage banking income, whether due to interest rates,
demand, the fair value of mortgage loans, or other factors;
- 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 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 Park's 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
and the follow-up legislation in the Consolidated Appropriations
Act, 2021, the American Rescue Plan Act of 2021, 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
and the follow-up legislation in the Consolidated Appropriations
Act, 2021, the provisions of the American Rescue Plan Act of 2021,
the provisions of the Dodd-Frank Act, and the Basel III regulatory
capital reforms;
- Park's ability to meet heightened
supervisory requirements and expectations;
- 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,
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, which may prove unreliable,
inaccurate or not predictive of actual results;
- the possibility that future credit
losses may be higher than currently expected due to changes in
economic assumptions;
- Park's ability to anticipate and
respond to technological changes and Park's reliance on, and the
potential failure of, a number of third-party vendors to perform as
expected, including Park's primary core banking system provider,
which can impact 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;
- Park's ability to secure
confidential information and deliver products and services through
the use of computer systems and telecommunications networks,
including those of Park's third-party vendors and other service
providers, which may prove inadequate, and could adversely affect
customer confidence in Park and/or result in Park incurring a
financial loss;
- 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 impact on Park's business and
operating results of any costs associated with obtaining rights in
intellectual property claimed by others and of the adequacy of
Park's intellectual property protection in general;
- 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, closing of border crossings and changes in the
relationship of the U.S. and its global trading partners);
- 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 effect of a fall in stock market
prices on Park's asset and wealth management businesses;
- our litigation and regulatory
compliance exposure, including the costs and effects of any adverse
developments in legal proceedings or other claims, the costs and
effects of unfavorable resolution of regulatory and other
governmental examinations or other inquiries, and liabilities and
business restrictions resulting from litigation and regulatory
investigations;
- 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
(including any resulting branch closures or damages), military or
terrorist activities or international hostilities (especially in
light of the Russia-Ukraine conflict) on the economy and financial
markets generally and on us or our counterparties
specifically;
- the potential further deterioration
of the U.S. economy due to financial, political, or other
shocks;
- 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 most recent
acquisitions, including expected revenue synergies and cost savings
from recent acquisitions not being fully realized or realized
within the expected time frame;
- uncertainty surrounding the
transition from the London Inter-Bank Offered Rate (LIBOR) to an
alternate reference rate;
- the impact of larger or
similar-sized financial institutions encountering problems, such as
the recent closures of Silicon Valley Bank in California, Signature
Bank in New York and First Republic Bank in California, which may
adversely affect the banking industry and/or Park's business
generation and retention, funding and liquidity, including
potential increased regulatory requirements and increased
reputational risk and potential impacts to macroeconomic
conditions;
- Park's continued ability to grow
deposits or maintain adequate deposit levels in light of the recent
bank failures;
- Unexpected outflows of deposits
which may require Park to sell investment securities at a
loss;
- 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, 2022 and in "Item 1.A. Risk
Factors" of Part II of Park's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2023.
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 June 30, 2023, March 31, 2023 and June
30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
Percent change vs. |
|
(in thousands, except common share and per common share
data and ratios) |
2nd QTR |
1st QTR |
2nd QTR |
|
1Q '23 |
2Q '22 |
|
INCOME STATEMENT: |
|
|
|
|
|
|
|
Net interest income |
$ |
91,572 |
|
$ |
92,198 |
|
$ |
83,939 |
|
|
(0.7 |
)% |
9.1 |
% |
|
Provision for credit
losses |
|
2,492 |
|
|
183 |
|
|
2,991 |
|
|
N.M. |
|
(16.7 |
)% |
|
Other income |
|
25,015 |
|
|
24,387 |
|
|
31,193 |
|
|
2.6 |
% |
(19.8 |
)% |
|
Other
expense |
|
75,885 |
|
|
76,503 |
|
|
70,048 |
|
|
(0.8 |
)% |
8.3 |
% |
|
Income before income taxes |
$ |
38,210 |
|
$ |
39,899 |
|
$ |
42,093 |
|
|
(4.2 |
)% |
(9.2 |
)% |
|
Income
taxes |
|
6,626 |
|
|
6,166 |
|
|
7,769 |
|
|
7.5 |
% |
(14.7 |
)% |
|
Net income |
$ |
31,584 |
|
$ |
33,733 |
|
$ |
34,324 |
|
|
(6.4 |
)% |
(8.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARKET
DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share -
basic (a) |
$ |
1.95 |
|
$ |
2.08 |
|
$ |
2.11 |
|
|
(6.3 |
)% |
(7.6 |
)% |
|
Earnings per common share -
diluted (a) |
|
1.94 |
|
|
2.07 |
|
|
2.10 |
|
|
(6.3 |
)% |
(7.6 |
)% |
|
Quarterly cash dividend
declared per common share |
|
1.05 |
|
|
1.05 |
|
|
1.04 |
|
|
— |
% |
1.0 |
% |
|
Book value per common share at
period end |
|
67.40 |
|
|
66.91 |
|
|
64.62 |
|
|
0.7 |
% |
4.3 |
% |
|
Market price per common share
at period end |
|
102.32 |
|
|
118.57 |
|
|
121.25 |
|
|
(13.7 |
)% |
(15.6 |
)% |
|
Market capitalization at
period end |
|
1,652,818 |
|
|
1,917,759 |
|
|
1,970,228 |
|
|
(13.8 |
)% |
(16.1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
- basic (b) |
|
16,165,119 |
|
|
16,242,353 |
|
|
16,249,307 |
|
|
(0.5 |
)% |
(0.5 |
)% |
|
Weighted average common shares
- diluted (b) |
|
16,240,600 |
|
|
16,324,823 |
|
|
16,361,246 |
|
|
(0.5 |
)% |
(0.7 |
)% |
|
Common shares outstanding at
period end |
|
16,153,425 |
|
|
16,174,067 |
|
|
16,249,306 |
|
|
(0.1 |
)% |
(0.6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE RATIOS:
(annualized) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
(a)(b) |
|
1.28 |
% |
|
1.36 |
% |
|
1.42 |
% |
|
(5.9 |
)% |
(9.9 |
)% |
|
Return on average
shareholders' equity (a)(b) |
|
11.61 |
% |
|
12.54 |
% |
|
12.86 |
% |
|
(7.4 |
)% |
(9.7 |
)% |
|
Yield on loans |
|
5.43 |
% |
|
5.24 |
% |
|
4.57 |
% |
|
3.6 |
% |
18.8 |
% |
|
Yield on investment
securities |
|
3.73 |
% |
|
3.60 |
% |
|
2.35 |
% |
|
3.6 |
% |
58.7 |
% |
|
Yield on money market
instruments |
|
5.11 |
% |
|
4.70 |
% |
|
0.77 |
% |
|
8.7 |
% |
N.M. |
|
|
Yield on interest earning
assets |
|
5.08 |
% |
|
4.89 |
% |
|
4.04 |
% |
|
3.9 |
% |
25.7 |
% |
|
Cost of interest bearing
deposits |
|
1.46 |
% |
|
1.15 |
% |
|
0.16 |
% |
|
27.0 |
% |
N.M. |
|
|
Cost of borrowings |
|
3.54 |
% |
|
3.24 |
% |
|
2.50 |
% |
|
9.3 |
% |
41.6 |
% |
|
Cost of paying interest
bearing liabilities |
|
1.58 |
% |
|
1.29 |
% |
|
0.33 |
% |
|
22.5 |
% |
N.M. |
|
|
Net interest margin (g) |
|
4.07 |
% |
|
4.08 |
% |
|
3.84 |
% |
|
(0.2 |
)% |
6.0 |
% |
|
Efficiency ratio (g) |
|
64.58 |
% |
|
65.10 |
% |
|
60.38 |
% |
|
(0.8 |
)% |
7.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER DATA (NON-GAAP)
AND BALANCE SHEET INFORMATION: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value per common
share (d) |
$ |
57.19 |
|
$ |
56.69 |
|
$ |
54.39 |
|
|
0.9 |
% |
5.1 |
% |
|
Average interest earning
assets |
|
9,122,323 |
|
|
9,267,418 |
|
|
8,857,089 |
|
|
(1.6 |
)% |
3.0 |
% |
|
Pre-tax, pre-provision net
income (k) |
|
40,702 |
|
|
40,082 |
|
|
45,084 |
|
|
1.5 |
% |
(9.7 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
Explanations for footnotes (a) - (l) 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 June 30, 2023, March 31, 2023 and June
30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change vs. |
|
(in thousands, except ratios) |
June 30, 2023 |
March 31, 2023 |
June 30, 2022 |
|
1Q '23 |
2Q '22 |
|
BALANCE SHEET: |
|
|
|
|
|
|
|
Investment securities |
$ |
1,756,953 |
|
$ |
1,800,410 |
|
$ |
1,920,724 |
|
|
(2.4 |
)% |
(8.5 |
)% |
|
Commercial loans held for
sale |
|
— |
|
|
— |
|
|
6,321 |
|
|
N.M. |
|
N.M. |
|
|
Loans |
|
7,208,109 |
|
|
7,093,857 |
|
|
6,958,685 |
|
|
1.6 |
% |
3.6 |
% |
|
Allowance for credit
losses |
|
87,206 |
|
|
85,946 |
|
|
81,448 |
|
|
1.5 |
% |
7.1 |
% |
|
Goodwill and other intangible
assets |
|
164,915 |
|
|
165,243 |
|
|
166,252 |
|
|
(0.2 |
)% |
(0.8 |
)% |
|
Other real estate owned
(OREO) |
|
2,267 |
|
|
1,468 |
|
|
1,354 |
|
|
54.4 |
% |
67.4 |
% |
|
Total assets |
|
9,899,551 |
|
|
9,856,981 |
|
|
9,826,670 |
|
|
0.4 |
% |
0.7 |
% |
|
Total deposits |
|
8,358,976 |
|
|
8,294,444 |
|
|
8,297,654 |
|
|
0.8 |
% |
0.7 |
% |
|
Borrowings |
|
332,818 |
|
|
360,843 |
|
|
360,234 |
|
|
(7.8 |
)% |
(7.6 |
)% |
|
Total shareholders'
equity |
|
1,088,757 |
|
|
1,082,153 |
|
|
1,050,013 |
|
|
0.6 |
% |
3.7 |
% |
|
Tangible equity (d) |
|
923,842 |
|
|
916,910 |
|
|
883,761 |
|
|
0.8 |
% |
4.5 |
% |
|
Total nonperforming loans
(l) |
|
58,229 |
|
|
74,365 |
|
|
64,627 |
|
|
(21.7 |
)% |
(9.9 |
)% |
|
Total nonperforming loans
including commercial loans held for sale (l) |
|
58,229 |
|
|
74,365 |
|
|
70,246 |
|
|
(21.7 |
)% |
(17.1 |
)% |
|
Total nonperforming assets
(l) |
|
60,496 |
|
|
75,833 |
|
|
71,600 |
|
|
(20.2 |
)% |
(15.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY
RATIOS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans as a % of period end
total assets |
|
72.81 |
% |
|
71.97 |
% |
|
70.81 |
% |
|
1.2 |
% |
2.8 |
% |
|
Total nonperforming loans as a
% of period end loans |
|
0.81 |
% |
|
1.05 |
% |
|
0.93 |
% |
|
(22.9 |
)% |
(12.9 |
)% |
|
Total nonperforming assets as
a % of period end loans + OREO + other nonperforming
assets |
|
0.84 |
% |
|
1.07 |
% |
|
1.03 |
% |
|
(21.5 |
)% |
(18.4 |
)% |
|
Allowance for credit losses as
a % of period end loans |
|
1.21 |
% |
|
1.21 |
% |
|
1.17 |
% |
|
— |
% |
3.4 |
% |
|
Net loan charge-offs
(recoveries) |
$ |
1,232 |
|
$ |
(1 |
) |
$ |
404 |
|
|
N.M. |
|
205.0 |
% |
|
Annualized net loan
charge-offs (recoveries) as a % of average loans (b) |
|
0.07 |
% |
|
— |
% |
|
0.02 |
% |
|
N.M. |
|
250.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL &
LIQUIDITY: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity /
Period end total assets |
|
11.00 |
% |
|
10.98 |
% |
|
10.69 |
% |
|
0.2 |
% |
2.9 |
% |
|
Tangible equity (d) / Tangible
assets (f) |
|
9.49 |
% |
|
9.46 |
% |
|
9.15 |
% |
|
0.3 |
% |
3.7 |
% |
|
Average shareholders' equity /
Average assets (b) |
|
11.00 |
% |
|
10.85 |
% |
|
11.06 |
% |
|
1.4 |
% |
(0.5 |
)% |
|
Average shareholders' equity /
Average loans (b) |
|
15.30 |
% |
|
15.37 |
% |
|
15.65 |
% |
|
(0.5 |
)% |
(2.2 |
)% |
|
Average loans / Average
deposits (b) |
|
85.34 |
% |
|
84.04 |
% |
|
84.27 |
% |
|
1.5 |
% |
1.3 |
% |
|
|
|
|
|
|
|
|
|
Note:
Explanations for footnotes (a) - (l) are included at the end of the
financial tables in the "Financial Reconciliations"
section. |
|
|
PARK
NATIONAL CORPORATION |
Financial
Highlights |
Six months
ended June 30, 2023 and June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(in thousands, except share and per share
data) |
Six months ended June 30 |
Six months ended June 30 |
|
Percent change vs '22 |
INCOME STATEMENT: |
|
|
|
|
Net interest income |
$ |
183,770 |
|
|
$ |
161,625 |
|
|
13.7 |
% |
Provision for (recovery of)
credit losses |
|
2,675 |
|
|
|
(1,614 |
) |
|
N.M |
|
Other income |
|
49,402 |
|
|
|
62,849 |
|
|
(21.4 |
)% |
Other
expense |
|
152,388 |
|
|
|
137,421 |
|
|
10.9 |
% |
Income before income taxes |
$ |
78,109 |
|
|
$ |
88,667 |
|
|
(11.9 |
)% |
Income
taxes |
|
12,792 |
|
|
|
15,468 |
|
|
(17.3 |
)% |
Net income |
$ |
65,317 |
|
|
$ |
73,199 |
|
|
(10.8 |
)% |
|
|
|
|
|
|
MARKET
DATA: |
|
|
|
|
|
Earnings per common share -
basic (a) |
$ |
4.03 |
|
|
$ |
4.51 |
|
|
(10.6 |
)% |
Earnings per common share -
diluted (a) |
|
4.01 |
|
|
|
4.48 |
|
|
(10.5 |
)% |
Quarterly cash dividends
declared per common share |
|
2.10 |
|
|
|
2.08 |
|
|
1.0 |
% |
|
|
|
|
|
|
Weighted average common shares
- basic (b) |
|
16,203,736 |
|
|
|
16,234,598 |
|
|
(0.2 |
)% |
Weighted average common shares
- diluted (b) |
|
16,282,693 |
|
|
|
16,346,141 |
|
|
(0.4 |
)% |
|
|
|
|
|
|
PERFORMANCE
RATIOS: |
|
|
|
|
|
Return on average assets
(a)(b) |
|
1.32 |
% |
|
|
1.51 |
% |
|
(12.6 |
)% |
Return on average
shareholders' equity (a)(b) |
|
12.07 |
% |
|
|
13.57 |
% |
|
(11.1 |
)% |
Yield on loans |
|
5.34 |
% |
|
|
4.44 |
% |
|
20.3 |
% |
Yield on investment
securities |
|
3.67 |
% |
|
|
2.24 |
% |
|
63.8 |
% |
Yield on money market
instruments |
|
4.84 |
% |
|
|
0.34 |
% |
|
N.M. |
|
Yield on interest earning
assets |
|
4.99 |
% |
|
|
3.88 |
% |
|
28.6 |
% |
Cost of interest bearing
deposits |
|
1.31 |
% |
|
|
0.12 |
% |
|
N.M. |
|
Cost of borrowings |
|
3.39 |
% |
|
|
2.42 |
% |
|
40.1 |
% |
Cost of paying interest
bearing liabilities |
|
1.44 |
% |
|
|
0.29 |
% |
|
N.M. |
|
Net interest margin (g) |
|
4.07 |
% |
|
|
3.70 |
% |
|
10.0 |
% |
Efficiency ratio (g) |
|
64.84 |
% |
|
|
60.76 |
% |
|
6.7 |
% |
|
|
|
|
|
|
ASSET QUALITY
RATIOS |
|
|
|
|
|
Net loan charge-offs |
$ |
1,231 |
|
|
$ |
135 |
|
|
N.M. |
|
Net loan charge-offs as a % of
average loans (b) |
|
0.03 |
% |
|
|
— |
% |
|
N.M. |
|
|
|
|
|
|
|
CAPITAL &
LIQUIDITY |
|
|
|
|
|
Average shareholders' equity /
Average assets (b) |
|
10.92 |
% |
|
|
11.16 |
% |
|
(2.2 |
)% |
Average shareholders' equity /
Average loans (b) |
|
15.33 |
% |
|
|
15.92 |
% |
|
(3.7 |
)% |
Average loans / Average
deposits (b) |
|
84.69 |
% |
|
|
83.80 |
% |
|
1.1 |
% |
|
|
|
|
|
|
OTHER DATA (NON-GAAP)
AND BALANCE SHEET: |
|
|
|
|
|
Average interest earning
assets |
$ |
9,194,469 |
|
|
$ |
8,907,817 |
|
|
3.2 |
% |
Pre-tax, pre-provision net
income (k) |
|
80,784 |
|
|
|
87,053 |
|
|
(7.2 |
)% |
|
|
|
|
|
|
Note:
Explanations for footnotes (a) - (l) are included at the end of the
financial tables in the "Financial Reconciliations" section. |
|
|
|
|
|
PARK NATIONAL CORPORATION |
Consolidated Statements of Income |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30 |
|
June 30 |
(in thousands, except share and per share
data) |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
Interest income: |
|
|
|
|
|
|
|
|
Interest and fees on loans |
|
$ |
96,428 |
|
$ |
77,787 |
|
$ |
188,042 |
|
$ |
150,203 |
|
Interest on debt securities: |
|
|
|
|
|
|
|
|
Taxable |
|
|
13,431 |
|
|
7,624 |
|
|
26,410 |
|
|
13,754 |
|
Tax-exempt |
|
|
2,906 |
|
|
2,676 |
|
|
5,818 |
|
|
5,123 |
|
Other interest income |
|
|
1,909 |
|
|
260 |
|
|
5,305 |
|
|
413 |
|
Total interest income |
|
|
114,674 |
|
|
88,347 |
|
|
225,575 |
|
|
169,493 |
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
Interest on deposits: |
|
|
|
|
|
|
|
|
Demand and savings deposits |
|
|
18,068 |
|
|
1,333 |
|
|
32,280 |
|
|
1,684 |
|
Time deposits |
|
|
1,966 |
|
|
708 |
|
|
3,313 |
|
|
1,428 |
|
Interest on borrowings |
|
|
3,068 |
|
|
2,367 |
|
|
6,212 |
|
|
4,756 |
|
Total interest expense |
|
|
23,102 |
|
|
4,408 |
|
|
41,805 |
|
|
7,868 |
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
91,572 |
|
|
83,939 |
|
|
183,770 |
|
|
161,625 |
|
|
|
|
|
|
|
|
|
|
Provision for (recovery of)
credit losses |
|
|
2,492 |
|
|
2,991 |
|
|
2,675 |
|
|
(1,614 |
) |
|
|
|
|
|
|
|
|
|
Net interest income after provision for (recovery of)
credit losses |
|
|
89,080 |
|
|
80,948 |
|
|
181,095 |
|
|
163,239 |
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
25,015 |
|
|
31,193 |
|
|
49,402 |
|
|
62,849 |
|
|
|
|
|
|
|
|
|
|
Other expense |
|
|
75,885 |
|
|
70,048 |
|
|
152,388 |
|
|
137,421 |
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
38,210 |
|
|
42,093 |
|
|
78,109 |
|
|
88,667 |
|
|
|
|
|
|
|
|
|
|
Income taxes |
|
|
6,626 |
|
|
7,769 |
|
|
12,792 |
|
|
15,468 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
31,584 |
|
$ |
34,324 |
|
$ |
65,317 |
|
$ |
73,199 |
|
|
|
|
|
|
|
|
|
|
Per common
share: |
|
|
|
|
|
|
|
|
Net income - basic |
|
$ |
1.95 |
|
$ |
2.11 |
|
$ |
4.03 |
|
$ |
4.51 |
|
Net income - diluted |
|
$ |
1.94 |
|
$ |
2.10 |
|
$ |
4.01 |
|
$ |
4.48 |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares - basic |
|
|
16,165,119 |
|
|
16,249,307 |
|
|
16,203,736 |
|
|
16,234,598 |
|
Weighted average common shares - diluted |
|
|
16,240,600 |
|
|
16,361,246 |
|
|
16,282,693 |
|
|
16,346,141 |
|
|
|
|
|
|
|
|
|
|
Cash dividends declared: |
|
|
|
|
|
|
|
|
Quarterly dividend |
|
$ |
1.05 |
|
$ |
1.04 |
|
$ |
2.10 |
|
$ |
2.08 |
|
|
|
|
|
|
|
|
|
|
PARK NATIONAL CORPORATION |
Consolidated Balance Sheets |
|
|
|
(in thousands, except share data) |
June 30, 2023 |
December 31, 2022 |
|
|
|
Assets |
|
|
|
|
|
Cash and due from banks |
$ |
159,552 |
|
$ |
156,750 |
|
Money market instruments |
|
70,845 |
|
|
32,978 |
|
Investment securities |
|
1,756,953 |
|
|
1,820,787 |
|
Loans |
|
7,208,109 |
|
|
7,141,891 |
|
Allowance for credit losses |
|
(87,206 |
) |
|
(85,379 |
) |
Loans, net |
|
7,120,903 |
|
|
7,056,512 |
|
Bank premises and equipment,
net |
|
78,933 |
|
|
82,126 |
|
Goodwill and other intangible
assets |
|
164,915 |
|
|
165,570 |
|
Other real estate owned |
|
2,267 |
|
|
1,354 |
|
Other
assets |
|
545,183 |
|
|
538,916 |
|
Total assets |
$ |
9,899,551 |
|
$ |
9,854,993 |
|
|
|
|
Liabilities and
Shareholders' Equity |
|
|
|
|
|
Deposits: |
|
|
Noninterest bearing |
$ |
2,796,009 |
|
$ |
3,074,276 |
|
Interest bearing |
|
5,562,967 |
|
|
5,160,439 |
|
Total deposits |
|
8,358,976 |
|
|
8,234,715 |
|
Borrowings |
|
332,818 |
|
|
416,009 |
|
Other
liabilities |
|
119,000 |
|
|
135,043 |
|
Total liabilities |
$ |
8,810,794 |
|
$ |
8,785,767 |
|
|
|
|
|
|
|
Shareholders'
Equity: |
|
|
Preferred shares (200,000
shares authorized; no shares outstanding at June 30, 2023 and
December 31, 2022) |
$ |
— |
|
$ |
— |
|
Common shares (No par value;
20,000,000 shares authorized; 17,623,104 shares issued at June
30, 2023 and December 31, 2022) |
|
460,578 |
|
|
462,404 |
|
Accumulated other
comprehensive loss, net of taxes |
|
(96,786 |
) |
|
(102,394 |
) |
Retained earnings |
|
876,830 |
|
|
847,235 |
|
Treasury shares (1,469,679 shares at June 30, 2023 and 1,359,521
shares at December 31, 2022) |
|
(151,865 |
) |
|
(138,019 |
) |
Total shareholders' equity |
$ |
1,088,757 |
|
$ |
1,069,226 |
|
Total liabilities and shareholders' equity |
$ |
9,899,551 |
|
$ |
9,854,993 |
|
|
|
|
|
PARK NATIONAL CORPORATION |
Consolidated Average Balance Sheets |
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
(in thousands) |
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
153,564 |
|
$ |
159,095 |
|
|
$ |
154,568 |
|
$ |
163,884 |
|
Money market instruments |
|
149,745 |
|
|
136,232 |
|
|
|
220,951 |
|
|
247,549 |
|
Investment
securities |
|
1,777,878 |
|
|
1,855,313 |
|
|
|
1,792,199 |
|
|
1,828,568 |
|
Loans |
|
7,132,025 |
|
|
6,841,376 |
|
|
|
7,115,723 |
|
|
6,835,389 |
|
Allowance for credit losses |
|
(87,182 |
) |
|
(78,907 |
) |
|
|
(86,996 |
) |
|
(81,158 |
) |
Loans, net |
|
7,044,843 |
|
|
6,762,469 |
|
|
|
7,028,727 |
|
|
6,754,231 |
|
Bank premises and equipment,
net |
|
80,592 |
|
|
87,029 |
|
|
|
81,316 |
|
|
87,879 |
|
Goodwill and other intangible
assets |
|
165,129 |
|
|
166,516 |
|
|
|
165,292 |
|
|
166,716 |
|
Other real estate owned |
|
1,966 |
|
|
773 |
|
|
|
1,702 |
|
|
766 |
|
Other
assets |
|
544,088 |
|
|
511,593 |
|
|
|
543,198 |
|
|
502,203 |
|
Total assets |
$ |
9,917,805 |
|
$ |
9,679,020 |
|
|
$ |
9,987,953 |
|
$ |
9,751,796 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
Noninterest bearing |
$ |
2,847,921 |
|
$ |
3,097,920 |
|
|
$ |
2,908,857 |
|
$ |
3,062,154 |
|
Interest bearing |
|
5,509,022 |
|
|
5,020,698 |
|
|
|
5,492,931 |
|
|
5,095,085 |
|
Total deposits |
|
8,356,943 |
|
|
8,118,618 |
|
|
|
8,401,788 |
|
|
8,157,239 |
|
Borrowings |
|
347,191 |
|
|
380,361 |
|
|
|
370,067 |
|
|
395,806 |
|
Other
liabilities |
|
122,655 |
|
|
109,548 |
|
|
|
125,113 |
|
|
110,832 |
|
Total liabilities |
$ |
8,826,789 |
|
$ |
8,608,527 |
|
|
$ |
8,896,968 |
|
$ |
8,663,877 |
|
|
|
|
|
|
|
Shareholders'
Equity: |
|
|
|
|
|
Preferred shares |
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
Common shares |
|
458,884 |
|
|
459,418 |
|
|
|
460,713 |
|
|
460,601 |
|
Accumulated other
comprehensive loss, net of taxes |
|
(91,007 |
) |
|
(58,869 |
) |
|
|
(93,609 |
) |
|
(30,452 |
) |
Retained earnings |
|
873,810 |
|
|
809,413 |
|
|
|
869,567 |
|
|
798,724 |
|
Treasury shares |
|
(150,671 |
) |
|
(139,469 |
) |
|
|
(145,686 |
) |
|
(140,954 |
) |
Total shareholders' equity |
$ |
1,091,016 |
|
$ |
1,070,493 |
|
|
$ |
1,090,985 |
|
$ |
1,087,919 |
|
Total liabilities and shareholders' equity |
$ |
9,917,805 |
|
$ |
9,679,020 |
|
|
$ |
9,987,953 |
|
$ |
9,751,796 |
|
|
|
|
|
|
|
PARK NATIONAL CORPORATION |
Consolidated Statements of Income - Linked
Quarters |
|
|
|
|
|
|
|
2023 |
2023 |
2022 |
2022 |
2022 |
(in thousands, except per share data) |
2nd QTR |
1st QTR |
4th QTR |
3rd QTR |
2nd QTR |
|
|
|
|
|
|
Interest income: |
|
|
|
|
|
Interest and fees on loans |
$ |
96,428 |
$ |
91,614 |
$ |
89,382 |
$ |
83,522 |
$ |
77,787 |
Interest on debt securities: |
|
|
|
|
|
Taxable |
|
13,431 |
|
12,979 |
|
11,974 |
|
10,319 |
|
7,624 |
Tax-exempt |
|
2,906 |
|
2,912 |
|
2,918 |
|
2,923 |
|
2,676 |
Other interest income |
|
1,909 |
|
3,396 |
|
4,536 |
|
3,180 |
|
260 |
Total interest income |
|
114,674 |
|
110,901 |
|
108,810 |
|
99,944 |
|
88,347 |
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
Interest on deposits: |
|
|
|
|
|
Demand and savings deposits |
|
18,068 |
|
14,212 |
|
10,205 |
|
5,757 |
|
1,333 |
Time deposits |
|
1,966 |
|
1,347 |
|
1,061 |
|
825 |
|
708 |
Interest on borrowings |
|
3,068 |
|
3,144 |
|
2,938 |
|
2,534 |
|
2,367 |
Total interest expense |
|
23,102 |
|
18,703 |
|
14,204 |
|
9,116 |
|
4,408 |
|
|
|
|
|
|
Net interest income |
|
91,572 |
|
92,198 |
|
94,606 |
|
90,828 |
|
83,939 |
|
|
|
|
|
|
Provision for credit
losses |
|
2,492 |
|
183 |
|
2,981 |
|
3,190 |
|
2,991 |
|
|
|
|
|
|
Net interest income after provision for credit
losses |
|
89,080 |
|
92,015 |
|
91,625 |
|
87,638 |
|
80,948 |
|
|
|
|
|
|
Other income |
|
25,015 |
|
24,387 |
|
26,392 |
|
46,694 |
|
31,193 |
|
|
|
|
|
|
Other expense |
|
75,885 |
|
76,503 |
|
77,654 |
|
82,903 |
|
70,048 |
|
|
|
|
|
|
Income before income taxes |
|
38,210 |
|
39,899 |
|
40,363 |
|
51,429 |
|
42,093 |
|
|
|
|
|
|
Income taxes |
|
6,626 |
|
6,166 |
|
7,279 |
|
9,361 |
|
7,769 |
|
|
|
|
|
|
Net income |
$ |
31,584 |
$ |
33,733 |
$ |
33,084 |
$ |
42,068 |
$ |
34,324 |
|
|
|
|
|
|
Per common
share: |
|
|
|
|
|
Net income -
basic |
$ |
1.95 |
$ |
2.08 |
$ |
2.03 |
$ |
2.59 |
$ |
2.11 |
Net income -
diluted |
$ |
1.94 |
$ |
2.07 |
$ |
2.02 |
$ |
2.57 |
$ |
2.10 |
PARK NATIONAL CORPORATION |
Detail of other income and other expense - Linked
Quarters |
|
|
|
|
|
|
|
2023 |
2023 |
|
2022 |
|
2022 |
2022 |
(in thousands) |
2nd QTR |
1st QTR |
4th QTR |
3rd QTR |
2nd QTR |
|
|
|
|
|
|
Other income: |
|
|
|
|
|
Income from fiduciary activities |
$ |
8,816 |
$ |
8,615 |
|
$ |
8,219 |
|
$ |
8,216 |
$ |
8,859 |
Service charges on deposit accounts |
|
2,041 |
|
2,241 |
|
|
2,595 |
|
|
2,859 |
|
2,563 |
Other service income |
|
2,639 |
|
2,697 |
|
|
2,580 |
|
|
2,956 |
|
4,940 |
Debit card fee income |
|
6,830 |
|
6,457 |
|
|
6,675 |
|
|
6,514 |
|
6,731 |
Bank owned life insurance income |
|
1,332 |
|
1,185 |
|
|
1,366 |
|
|
1,185 |
|
2,374 |
ATM fees |
|
553 |
|
533 |
|
|
548 |
|
|
610 |
|
583 |
Gain (loss) on the sale of OREO, net |
|
12 |
|
(9 |
) |
|
— |
|
|
5,607 |
|
4 |
OREO valuation markup |
|
— |
|
15 |
|
|
— |
|
|
12,009 |
|
— |
Gain (loss) on equity securities, net |
|
25 |
|
(405 |
) |
|
(165 |
) |
|
58 |
|
709 |
Other components of net periodic benefit income |
|
1,893 |
|
1,893 |
|
|
3,027 |
|
|
3,027 |
|
3,027 |
Miscellaneous |
|
874 |
|
1,165 |
|
|
1,547 |
|
|
3,653 |
|
1,403 |
Total other income |
$ |
25,015 |
$ |
24,387 |
|
$ |
26,392 |
|
$ |
46,694 |
$ |
31,193 |
|
|
|
|
|
|
Other expense: |
|
|
|
|
|
Salaries |
$ |
33,649 |
$ |
34,871 |
|
$ |
33,837 |
|
$ |
37,889 |
$ |
31,052 |
Employee benefits |
|
10,538 |
|
10,816 |
|
|
9,895 |
|
|
9,897 |
|
10,199 |
Occupancy expense |
|
3,214 |
|
3,353 |
|
|
4,157 |
|
|
3,455 |
|
3,040 |
Furniture and equipment expense |
|
3,103 |
|
3,246 |
|
|
3,118 |
|
|
2,912 |
|
2,934 |
Data processing fees |
|
9,582 |
|
8,750 |
|
|
8,537 |
|
|
8,170 |
|
8,416 |
Professional fees and services |
|
7,365 |
|
7,221 |
|
|
9,845 |
|
|
8,359 |
|
6,775 |
Marketing |
|
1,239 |
|
1,319 |
|
|
1,404 |
|
|
1,595 |
|
1,019 |
Insurance |
|
1,960 |
|
1,814 |
|
|
1,526 |
|
|
1,237 |
|
1,245 |
Communication |
|
1,045 |
|
1,037 |
|
|
968 |
|
|
1,098 |
|
935 |
State tax expense |
|
1,096 |
|
1,278 |
|
|
1,040 |
|
|
1,186 |
|
1,167 |
Amortization of intangible assets |
|
328 |
|
327 |
|
|
341 |
|
|
341 |
|
403 |
Foundation contributions |
|
— |
|
— |
|
|
— |
|
|
4,000 |
|
— |
Miscellaneous |
|
2,766 |
|
2,471 |
|
|
2,986 |
|
|
2,764 |
|
2,863 |
Total other expense |
$ |
75,885 |
$ |
76,503 |
|
$ |
77,654 |
|
$ |
82,903 |
$ |
70,048 |
|
|
|
|
|
|
PARK NATIONAL CORPORATION |
Asset Quality Information |
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
(in thousands, except ratios) |
June 30, 2023 |
March 31, 2023 |
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Allowance for credit
losses: |
|
|
|
|
|
|
Allowance for credit losses, beginning of period |
$ |
85,946 |
|
$ |
85,379 |
|
$ |
83,197 |
|
$ |
85,675 |
|
$ |
56,679 |
|
$ |
51,512 |
|
Cumulative change in
accounting principle; adoption of ASU 2022-02 in 2023 and ASU
2016-13 in 2021 |
|
— |
|
|
383 |
|
|
— |
|
|
6,090 |
|
|
— |
|
|
— |
|
Charge-offs |
|
2,685 |
|
|
2,235 |
|
|
9,133 |
|
|
5,093 |
|
|
10,304 |
|
|
11,177 |
|
Recoveries |
|
1,453 |
|
|
2,236 |
|
|
6,758 |
|
|
8,441 |
|
|
27,246 |
|
|
10,173 |
|
Net charge-offs (recoveries) |
|
1,232 |
|
|
(1 |
) |
|
2,375 |
|
|
(3,348 |
) |
|
(16,942 |
) |
|
1,004 |
|
Provision for (recovery of) credit losses |
|
2,492 |
|
|
183 |
|
|
4,557 |
|
|
(11,916 |
) |
|
12,054 |
|
|
6,171 |
|
Allowance for credit losses, end of period |
$ |
87,206 |
|
$ |
85,946 |
|
$ |
85,379 |
|
$ |
83,197 |
|
$ |
85,675 |
|
$ |
56,679 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General reserve
trends: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses,
end of period |
$ |
87,206 |
|
$ |
85,946 |
|
$ |
85,379 |
|
$ |
83,197 |
|
$ |
85,675 |
|
$ |
56,679 |
|
Allowance on purchased credit
deteriorated ("PCD") loans (purchased credit impaired ("PCI") loans
for years 2020 and prior) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
167 |
|
|
268 |
|
Allowance on purchased loans
excluded from collectively evaluated loans (for years 2020 and
prior) |
|
N.A. |
|
|
N.A. |
|
|
N.A. |
|
|
N.A. |
|
|
678 |
|
|
— |
|
Specific reserves on individually evaluated loans |
|
4,132 |
|
|
4,318 |
|
|
3,566 |
|
|
1,616 |
|
|
5,434 |
|
|
5,230 |
|
General reserves on collectively evaluated loans |
$ |
83,074 |
|
$ |
81,628 |
|
$ |
81,813 |
|
$ |
81,581 |
|
$ |
79,396 |
|
$ |
51,181 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans |
$ |
7,208,109 |
|
$ |
7,093,857 |
|
$ |
7,141,891 |
|
$ |
6,871,122 |
|
$ |
7,177,785 |
|
$ |
6,501,404 |
|
PCD loans (PCI loans for years
2020 and prior) |
|
4,455 |
|
|
4,555 |
|
|
4,653 |
|
|
7,149 |
|
|
11,153 |
|
|
14,331 |
|
Purchased loans excluded from
collectively evaluated loans (for years 2020 and prior) |
|
N.A. |
|
|
N.A. |
|
|
N.A. |
|
|
N.A. |
|
|
360,056 |
|
|
548,436 |
|
Individually evaluated loans (l) |
|
43,887 |
|
|
59,384 |
|
|
78,341 |
|
|
74,502 |
|
|
108,407 |
|
|
77,459 |
|
Collectively evaluated loans |
$ |
7,159,767 |
|
$ |
7,029,918 |
|
$ |
7,058,897 |
|
$ |
6,789,471 |
|
$ |
6,698,169 |
|
$ |
5,861,178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (recoveries)
as a % of average loans |
|
0.07 |
% |
|
— |
% |
|
0.03 |
% |
|
(0.05 |
)% |
|
(0.24 |
)% |
|
0.02 |
% |
Allowance for credit losses as a
% of period end loans |
|
1.21 |
% |
|
1.21 |
% |
|
1.20 |
% |
|
1.21 |
% |
|
1.19 |
% |
|
0.87 |
% |
Allowance for credit losses as
a % of period end loans (excluding PPP loans) (j) |
|
1.21 |
% |
|
1.21 |
% |
|
1.20 |
% |
|
1.22 |
% |
|
1.25 |
% |
|
N.A. |
|
General reserve as a % of
collectively evaluated loans |
|
1.16 |
% |
|
1.16 |
% |
|
1.16 |
% |
|
1.20 |
% |
|
1.19 |
% |
|
0.87 |
% |
General reserves as a % of
collectively evaluated loans (excluding PPP loans) (j) |
|
1.16 |
% |
|
1.16 |
% |
|
1.16 |
% |
|
1.21 |
% |
|
1.24 |
% |
|
N.A. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans |
$ |
57,279 |
|
$ |
73,114 |
|
$ |
79,696 |
|
$ |
72,722 |
|
$ |
117,368 |
|
$ |
90,080 |
|
Accruing troubled debt
restructurings (for years 2022 and prior) (l) |
|
N.A. |
|
|
N.A. |
|
|
20,134 |
|
|
28,323 |
|
|
20,788 |
|
|
21,215 |
|
Loans
past due 90 days or more |
|
950 |
|
|
1,251 |
|
|
1,281 |
|
|
1,607 |
|
|
1,458 |
|
|
2,658 |
|
Total nonperforming loans |
$ |
58,229 |
|
$ |
74,365 |
|
$ |
101,111 |
|
$ |
102,652 |
|
$ |
139,614 |
|
$ |
113,953 |
|
Other real estate owned - Park
National Bank |
|
913 |
|
|
114 |
|
|
— |
|
|
181 |
|
|
837 |
|
|
3,100 |
|
Other real estate owned -
SEPH |
|
1,354 |
|
|
1,354 |
|
|
1,354 |
|
|
594 |
|
|
594 |
|
|
929 |
|
Other
nonperforming assets - Park National Bank |
|
— |
|
|
— |
|
|
— |
|
|
2,750 |
|
|
3,164 |
|
|
3,599 |
|
Total nonperforming assets |
$ |
60,496 |
|
$ |
75,833 |
|
$ |
102,465 |
|
$ |
106,177 |
|
$ |
144,209 |
|
$ |
121,581 |
|
Percentage of nonaccrual loans to period end loans |
|
0.79 |
% |
|
1.03 |
% |
|
1.12 |
% |
|
1.06 |
% |
|
1.64 |
% |
|
1.39 |
% |
Percentage of nonperforming
loans to period end loans |
|
0.81 |
% |
|
1.05 |
% |
|
1.42 |
% |
|
1.49 |
% |
|
1.95 |
% |
|
1.75 |
% |
Percentage of nonperforming
assets to period end loans |
|
0.84 |
% |
|
1.07 |
% |
|
1.43 |
% |
|
1.55 |
% |
|
2.01 |
% |
|
1.87 |
% |
Percentage of nonperforming
assets to period end total assets |
|
0.61 |
% |
|
0.77 |
% |
|
1.04 |
% |
|
1.11 |
% |
|
1.55 |
% |
|
1.42 |
% |
|
|
|
|
|
|
|
Note:
Explanations for footnotes (a) - (l) 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) |
June 30, 2023 |
March 31, 2023 |
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
New nonaccrual loan
information: |
|
|
|
|
|
|
Nonaccrual loans, beginning of period |
$ |
73,114 |
$ |
79,696 |
$ |
72,722 |
$ |
117,368 |
$ |
90,080 |
$ |
67,954 |
New nonaccrual loans |
|
10,940 |
|
9,207 |
|
64,918 |
|
38,478 |
|
103,386 |
|
81,009 |
Resolved nonaccrual loans |
|
26,775 |
|
15,789 |
|
57,944 |
|
83,124 |
|
76,098 |
|
58,883 |
Nonaccrual loans, end of period |
$ |
57,279 |
$ |
73,114 |
$ |
79,696 |
$ |
72,722 |
$ |
117,368 |
$ |
90,080 |
|
|
|
|
|
|
|
Individually evaluated
commercial loan portfolio information (period end):
(l) |
|
|
|
|
|
|
Unpaid principal balance |
$ |
45,955 |
$ |
60,922 |
$ |
80,116 |
$ |
75,126 |
$ |
109,062 |
$ |
78,178 |
Prior
charge-offs |
|
2,068 |
|
1,538 |
|
1,775 |
|
624 |
|
655 |
|
719 |
Remaining principal balance |
|
43,887 |
|
59,384 |
|
78,341 |
|
74,502 |
|
108,407 |
|
77,459 |
Specific reserves |
|
4,132 |
|
4,318 |
|
3,566 |
|
1,616 |
|
5,434 |
|
5,230 |
Book value, after specific reserves |
$ |
39,755 |
$ |
55,066 |
$ |
74,775 |
$ |
72,886 |
$ |
102,973 |
$ |
72,229 |
|
|
|
|
|
|
|
Note:
Explanations for footnotes (a) - (l) are included at the end of the
financial tables in the "Financial Reconciliations" section. |
|
|
|
|
PARK
NATIONAL CORPORATION |
|
|
|
Financial
Reconciliations |
|
|
|
|
|
|
NON-GAAP
RECONCILIATIONS |
|
|
|
|
|
|
|
THREE MONTHS ENDED |
|
SIX MONTHS ENDED |
(in thousands, except share and per share
data) |
June 30, 2023 |
March 31, 2023 |
June 30, 2022 |
|
June 30, 2023 |
June 30, 2022 |
Net interest income |
$ |
91,572 |
|
$ |
92,198 |
|
$ |
83,939 |
|
|
$ |
183,770 |
|
$ |
161,625 |
|
less purchase accounting accretion related to NewDominion and
Carolina Alliance acquisitions |
|
164 |
|
|
200 |
|
|
547 |
|
|
|
364 |
|
|
1,027 |
|
less interest income on former Vision Bank relationships |
|
13 |
|
|
574 |
|
|
2,305 |
|
|
|
587 |
|
|
2,347 |
|
Net interest income - adjusted |
$ |
91,395 |
|
$ |
91,424 |
|
$ |
81,087 |
|
|
$ |
182,819 |
|
$ |
158,251 |
|
|
|
|
|
|
|
|
Provision for
(recovery of) credit losses |
$ |
2,492 |
|
$ |
183 |
|
$ |
2,991 |
|
|
$ |
2,675 |
|
$ |
(1,614 |
) |
less recoveries on former Vision Bank relationships |
|
(25 |
) |
|
(723 |
) |
|
(506 |
) |
|
|
(748 |
) |
|
(507 |
) |
Provision for (recovery of) credit losses -
adjusted |
$ |
2,517 |
|
$ |
906 |
|
$ |
3,497 |
|
|
$ |
3,423 |
|
$ |
(1,107 |
) |
|
|
|
|
|
|
|
Other
income |
$ |
25,015 |
|
$ |
24,387 |
|
$ |
31,193 |
|
|
$ |
49,402 |
|
$ |
62,849 |
|
less other service income related to former Vision Bank
relationships |
|
— |
|
|
135 |
|
|
500 |
|
|
|
135 |
|
|
500 |
|
Other income - adjusted |
$ |
25,015 |
|
$ |
24,252 |
|
$ |
30,693 |
|
|
$ |
49,267 |
|
$ |
62,349 |
|
|
|
|
|
|
|
|
Other
expense |
$ |
75,885 |
|
$ |
76,503 |
|
$ |
70,048 |
|
|
$ |
152,388 |
|
$ |
137,421 |
|
less core deposit intangible amortization related to NewDominion
and Carolina Alliance acquisitions |
|
328 |
|
|
327 |
|
|
403 |
|
|
|
655 |
|
|
805 |
|
less direct expenses related to collection of payments on former
Vision Bank loan relationships |
|
— |
|
|
100 |
|
|
366 |
|
|
|
100 |
|
|
366 |
|
Other expense - adjusted |
$ |
75,557 |
|
$ |
76,076 |
|
$ |
69,279 |
|
|
$ |
151,633 |
|
$ |
136,250 |
|
|
|
|
|
|
|
|
Tax effect of
adjustments to net income identified above (i) |
$ |
26 |
|
$ |
(253 |
) |
$ |
(649 |
) |
|
$ |
(227 |
) |
$ |
(674 |
) |
|
|
|
|
|
|
|
Net income -
reported |
$ |
31,584 |
|
$ |
33,733 |
|
$ |
34,324 |
|
|
$ |
65,317 |
|
$ |
73,199 |
|
Net income - adjusted
(h) |
$ |
31,684 |
|
$ |
32,781 |
|
$ |
31,884 |
|
|
$ |
64,465 |
|
$ |
70,663 |
|
|
|
|
|
|
|
|
Diluted earnings per common
share |
$ |
1.94 |
|
$ |
2.07 |
|
$ |
2.10 |
|
|
$ |
4.01 |
|
$ |
4.48 |
|
Diluted earnings per common share, adjusted (h) |
$ |
1.95 |
|
$ |
2.01 |
|
$ |
1.95 |
|
|
$ |
3.96 |
|
$ |
4.32 |
|
|
|
|
|
|
|
|
Annualized return on average
assets (a)(b) |
|
1.28 |
% |
|
1.36 |
% |
|
1.42 |
% |
|
|
1.32 |
% |
|
1.51 |
% |
Annualized return on average assets, adjusted (a)(b)(h) |
|
1.28 |
% |
|
1.32 |
% |
|
1.32 |
% |
|
|
1.30 |
% |
|
1.46 |
% |
|
|
|
|
|
|
|
Annualized return on average
tangible assets (a)(b)(e) |
|
1.30 |
% |
|
1.38 |
% |
|
1.45 |
% |
|
|
1.34 |
% |
|
1.54 |
% |
Annualized return on average tangible assets, adjusted
(a)(b)(e)(h) |
|
1.30 |
% |
|
1.34 |
% |
|
1.34 |
% |
|
|
1.32 |
% |
|
1.49 |
% |
|
|
|
|
|
|
|
Annualized return on average
shareholders' equity (a)(b) |
|
11.61 |
% |
|
12.54 |
% |
|
12.86 |
% |
|
|
12.07 |
% |
|
13.57 |
% |
Annualized return on average shareholders' equity, adjusted
(a)(b)(h) |
|
11.65 |
% |
|
12.19 |
% |
|
11.95 |
% |
|
|
11.92 |
% |
|
13.10 |
% |
|
|
|
|
|
|
|
Annualized return on average
tangible equity (a)(b)(c) |
|
13.68 |
% |
|
14.78 |
% |
|
15.23 |
% |
|
|
14.23 |
% |
|
16.02 |
% |
Annualized return on average tangible equity, adjusted
(a)(b)(c)(h) |
|
13.73 |
% |
|
14.36 |
% |
|
14.15 |
% |
|
|
14.04 |
% |
|
15.47 |
% |
|
|
|
|
|
|
|
Efficiency ratio (g) |
|
64.58 |
% |
|
65.10 |
% |
|
60.38 |
% |
|
|
64.84 |
% |
|
60.76 |
% |
Efficiency ratio, adjusted (g)(h) |
|
64.40 |
% |
|
65.24 |
% |
|
61.50 |
% |
|
|
64.82 |
% |
|
61.29 |
% |
|
|
|
|
|
|
|
Annualized net interest margin
(g) |
|
4.07 |
% |
|
4.08 |
% |
|
3.84 |
% |
|
|
4.07 |
% |
|
3.70 |
% |
Annualized net interest margin, adjusted (g)(h) |
|
4.06 |
% |
|
4.04 |
% |
|
3.71 |
% |
|
|
4.05 |
% |
|
3.62 |
% |
|
|
|
|
|
|
|
Note: Explanations for footnotes (a) - (l) are included at the end
of the financial tables in the "Financial Reconciliations"
section. |
|
|
|
|
|
|
PARK
NATIONAL CORPORATION |
|
|
|
Financial
Reconciliations (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Reported
measure uses net income |
(b) Averages are
for the three months ended June 30, 2023, March 31, 2023, and June
30, 2022 and the six months ended June 30, 2023 and June 30, 2022,
as appropriate |
(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 |
|
SIX MONTHS ENDED |
|
June 30, 2023 |
March 31, 2023 |
June 30, 2022 |
|
June 30, 2023 |
June 30, 2022 |
AVERAGE SHAREHOLDERS' EQUITY |
$ |
1,091,016 |
$ |
1,090,952 |
$ |
1,070,493 |
|
$ |
1,090,985 |
$ |
1,087,919 |
|
Less:
Average goodwill and other intangible assets |
|
165,129 |
|
165,457 |
|
166,516 |
|
|
165,292 |
|
166,716 |
|
AVERAGE TANGIBLE EQUITY |
$ |
925,887 |
$ |
925,495 |
$ |
903,977 |
|
$ |
925,693 |
$ |
921,203 |
|
|
|
|
|
|
|
|
(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: |
|
June 30, 2023 |
March 31, 2023 |
June 30, 2022 |
|
|
|
TOTAL SHAREHOLDERS' EQUITY |
$ |
1,088,757 |
$ |
1,082,153 |
$ |
1,050,013 |
|
|
|
Less:
Goodwill and other intangible assets |
|
164,915 |
|
165,243 |
|
166,252 |
|
|
|
TANGIBLE EQUITY |
$ |
923,842 |
$ |
916,910 |
$ |
883,761 |
|
|
|
|
|
|
|
|
|
|
(e) Net income
for each period divided by average tangible assets during the
period. Average tangible assets equal 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 |
|
SIX MONTHS ENDED |
|
June 30, 2023 |
March 31, 2023 |
June 30, 2022 |
|
June 30, 2023 |
June 30, 2022 |
AVERAGE ASSETS |
$ |
9,917,805 |
$ |
10,058,880 |
$ |
9,679,020 |
|
$ |
9,987,953 |
$ |
9,751,796 |
|
Less:
Average goodwill and other intangible assets |
|
165,129 |
|
165,457 |
|
166,516 |
|
|
165,292 |
|
166,716 |
|
AVERAGE TANGIBLE ASSETS |
$ |
9,752,676 |
$ |
9,893,423 |
$ |
9,512,504 |
|
$ |
9,822,661 |
$ |
9,585,080 |
|
|
|
|
|
|
|
|
(f) Tangible
equity divided by tangible assets. Tangible assets equal total
assets less goodwill and other intangible assets, in each case at
the end of the period. |
|
|
|
|
|
|
|
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE
ASSETS: |
|
June 30, 2023 |
March 31, 2023 |
June 30, 2022 |
|
|
|
TOTAL ASSETS |
$ |
9,899,551 |
$ |
9,856,981 |
$ |
9,826,670 |
|
|
|
Less:
Goodwill and other intangible assets |
|
164,915 |
|
165,243 |
|
166,252 |
|
|
|
TANGIBLE ASSETS |
$ |
9,734,636 |
$ |
9,691,738 |
$ |
9,660,418 |
|
|
|
|
|
|
|
|
|
|
(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, in each case during the applicable
period. |
|
|
|
|
|
|
|
RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST
INCOME TO NET INTEREST INCOME |
|
THREE MONTHS ENDED |
|
SIX MONTHS ENDED |
|
June 30, 2023 |
March 31, 2023 |
June 30, 2022 |
|
June 30, 2023 |
June 30, 2022 |
Interest income |
$ |
114,674 |
$ |
110,901 |
$ |
88,347 |
|
$ |
225,575 |
$ |
169,493 |
|
Fully
taxable equivalent adjustment |
|
920 |
|
926 |
|
872 |
|
|
1,846 |
|
1,691 |
|
Fully taxable equivalent interest income |
$ |
115,594 |
$ |
111,827 |
$ |
89,219 |
|
$ |
227,421 |
$ |
171,184 |
|
Interest expense |
|
23,102 |
|
18,703 |
|
4,408 |
|
|
41,805 |
|
7,868 |
|
Fully taxable equivalent net interest income |
$ |
92,492 |
$ |
93,124 |
$ |
84,811 |
|
$ |
185,616 |
$ |
163,316 |
|
|
|
|
|
|
|
|
(h) Adjustments
to net income for each period presented are detailed in the
non-GAAP reconciliations of net interest income, provision for
(recovery of) credit losses, other income, other expense and tax
effect of adjustments to net income. |
(i) The tax
effect of adjustments to net income was calculated assuming a 21%
corporate federal income tax rate. |
(j) Excludes $3.1
million of PPP loans and $3,000 in related allowance at June 30,
2023, $3.4 million of PPP loans and $3,000 in related allowance at
March 31, 2023, $4.2 million of PPP loans and $4,000 in related
allowance at December 31, 2022, $74.4 million of PPP loans and
$77,000 in related allowance at December 31, 2021 and $331.6
million of PPP loans and $337,000 in related allowance at December
31, 2020. |
(k) Pre-tax,
pre-provision ("PTPP") net income is calculated as net income, plus
income taxes, plus the provision for (recovery of) credit losses,
in each case during the applicable period. PTPP net income is a
common industry metric utilized in capital analysis and review.
PTPP is used to assess the operating performance of Park while
excluding the impact of the provision for (recovery of) credit
losses. |
|
|
|
|
|
|
|
RECONCILIATION OF PRE-TAX, PRE-PROVISION NET
INCOME |
|
THREE MONTHS ENDED |
|
SIX MONTHS ENDED |
|
June 30, 2023 |
March 31, 2023 |
June 30, 2022 |
|
June 30, 2023 |
June 30, 2022 |
Net income |
$ |
31,584 |
$ |
33,733 |
$ |
34,324 |
|
$ |
65,317 |
$ |
73,199 |
|
Plus: Income taxes |
|
6,626 |
|
6,166 |
|
7,769 |
|
|
12,792 |
|
15,468 |
|
Plus:
Provision for (recovery of) credit losses |
|
2,492 |
|
183 |
|
2,991 |
|
|
2,675 |
|
(1,614 |
) |
Pre-tax, pre-provision net income |
$ |
40,702 |
$ |
40,082 |
$ |
45,084 |
|
$ |
80,784 |
$ |
87,053 |
|
|
|
|
|
|
|
|
(l) Effective
January 1, 2023, Park adopted Accounting Standards Update ("ASU")
2022-02. Among other things, this ASU eliminated the concept of
troubled debt restructurings ("TDRs"). As a result of the adoption
of this ASU and elimination of the concept of TDRs, total
nonperforming loans ("NPLs") and total nonperforming assets
("NPAs") each decreased by $20.1 million effective January 1, 2023.
Additionally, as a result of the adoption of this ASU, individually
evaluated loans decreased by $11.5 million effective January 1,
2023. |
Media contact: Michelle Hamilton, 740-349-6014, media@parknationalbank.com
Investor contact: Brady Burt, 740.322.6844, investor@parknationalbank.com
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