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Park National Corporation reports financial results for third quarter and first nine months of 2021

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Park National Corporation (NYSE American: PRK) reported strong financial results for Q3 and the first nine months of 2021. Net income rose by 14.9% to $35.4 million in Q3, while year-to-date net income reached $117.4 million, a 41.9% increase from 2020. The board declared a quarterly dividend of $1.03 and a special dividend of $0.20, both payable on December 10, 2021. Additionally, the company will raise its minimum wage to $15 per hour and provide one-time bonuses of $1,000 and $750 for full-time and part-time associates, respectively.

Positive
  • Q3 2021 net income increased by 14.9% to $35.4 million.
  • Net income for the first nine months rose by 41.9% to $117.4 million.
  • Declared quarterly cash dividend of $1.03 per share and special dividend of $0.20 per share.
  • Raised minimum wage for associates to $15 per hour to attract and retain talent.
  • One-time bonuses of $1,000 for full-time and $750 for part-time associates.
Negative
  • None.

Increased net income supports special cash dividend and associate award

NEWARK, Ohio, Oct. 25, 2021 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the third quarter and first nine months of 2021 (three and nine months ended September 30, 2021). Park's board of directors declared a quarterly cash dividend of $1.03 per common share, payable on December 10, 2021 to common shareholders of record as of November 19, 2021. The board also declared a special cash dividend of $0.20 per common share, also payable on December 10, 2021 to common shareholders of record as of November 19, 2021.

“Throughout another year of pandemic turbulence, our customers have relied on Park National for more security, convenience, and compassion. We continue to report new opportunities and growth in services from loans to retirement investments to digital banking. We are proud to help our communities not just endure difficult circumstances, but also navigate them and build for the future,” Park Chairman and CEO David Trautman said.

Park’s net income for the third quarter of 2021 was $35.4 million, a 14.9 percent increase from $30.8 million for the third quarter of 2020. Third quarter 2021 net income per diluted common share was $2.16, compared to $1.88 in the third quarter of 2020. Park's net income for the first nine months of 2021 was $117.4 million, a 41.9 percent increase from $82.7 million for the first nine months of 2020. Net income per diluted common share was $7.14 for the first nine months of 2021, compared to $5.04 for the first nine months of 2020.

Park's community-banking subsidiary, The Park National Bank, reported net income of $36.5 million for the third quarter of 2021, a 10.8 percent increase compared to $32.9 million for the same period of 2020. Park National Bank reported net income of $122.5 million for the first nine months of 2021, compared to $89.5 million for the first nine months of 2020.

Park also announced that effective October 31, 2021, it will raise its minimum wage for all associates to $15 per hour, to remain competitive in attracting and retaining associates in each of the communities Park serves. Additionally, Park will reward its current associates for their collective role in supporting Park’s outstanding performance throughout another challenging year. Park’s board approved a one-time bonus payment for all associates who are not eligible for Park’s annual incentive compensation program. In November, each full-time associate in that group will receive an extra payment of $1,000, and part-time associates will receive $750.

“Open communication, empathy, and flexibility have always been important parts of our culture, and that has been especially true throughout this pandemic. Our success depends on our associates, and our leaders keep a close watch to ensure we’re taking care of our colleagues and the customers they serve daily,” Park President Matthew Miller said. “We are pleased to continue to invest in support for our community organizations, customers, shareholders, and associates.”

Headquartered in Newark, Ohio, Park National Corporation has $10.0 billion in total assets (as of September 30, 2021). 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
Media contact: Bethany Lewis, 740.349.0421, bethany.lewis@parknationalbank.com
Investor contact: Brady Burt, 740.322.6844, brady.burt@parknationalbank.com
Park National Corporation, 50 N. Third Street, Newark, Ohio 43055

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:

  • 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 or variants thereof - - 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 (such as quarantines, shut downs and other restrictions on travel and commercial, social or other activities), the availability and effectiveness of vaccines, 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 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 results of the 2020 U.S. elections, including on the regulatory landscape, capital markets, tax policy, infrastructure spending and social programs;
  • 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 and the various responses to the COVID-19 pandemic;
  • 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 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 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;
  • 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 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, 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 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);
  • 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;
  • 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 (including any resulting branch closures or damages), military or 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, 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, 2021, June 30, 2021, and September 30, 2020     
       
 202120212020 Percent change vs.
(in thousands, except share and per share data)3rd QTR2nd QTR3rd QTR 2Q '213Q '20
INCOME STATEMENT:      
Net interest income$81,602  $83,851  $83,840   (2.7)%(2.7)%
Provision for (recovery of) credit losses (l)1,972  (4,040) 13,836   N.MN.M
Other income32,411  31,238  36,558   3.8 %(11.3)%
Other expense68,489  71,400  69,859   (4.1)%(2.0)%
Income before income taxes$43,552  $47,729  $36,703   (8.8)%18.7 %
Income taxes8,118  8,597  5,857   (5.6)%38.6 %
Net income$35,434  $39,132  $30,846   (9.5)%14.9 %
       
MARKET DATA:      
Earnings per common share - basic (a)$2.17  $2.39  $1.89   (9.2)%14.8 %
Earnings per common share - diluted (a)2.16  2.38  1.88   (9.2)%14.9 %
Cash dividends declared per common share1.03  1.03  1.02    %1.0 %
Book value per common share at period end65.90  65.44  62.39   0.7 %5.6 %
Market price per common share at period end121.95  117.42  81.96   3.9 %48.8 %
Market capitalization at period end1,976,343  1,918,733  1,336,011   3.0 %47.9 %
       
Weighted average common shares - basic (b)16,292,312  16,340,690  16,300,720   (0.3)%(0.1)%
Weighted average common shares - diluted (b)16,423,912  16,472,800  16,393,792   (0.3)%0.2 %
Common shares outstanding at period end16,206,177  16,340,772  16,300,763   (0.8)%(0.6)%
       
PERFORMANCE RATIOS: (annualized)      
Return on average assets (a)(b)1.40 %1.59 %1.28 % (11.9)%9.4 %
Return on average shareholders' equity (a)(b)13.04 %14.81 %12.03 % (12.0)%8.4 %
Yield on loans4.47 %4.60 %4.54 % (2.8)%(1.5)%
Yield on investment securities2.12 %2.31 %2.35 % (8.2)%(9.8)%
Yield on money market instruments0.16 %0.10 %0.11 % 60.0 %45.5 %
Yield on interest earning assets3.69 %3.93 %4.12 % (6.1)%(10.4)%
Cost of interest bearing deposits0.11 %0.13 %0.26 % (15.4)%(57.7)%
Cost of borrowings2.00 %1.91 %1.63 % 4.7 %22.7 %
Cost of paying interest bearing liabilities0.26 %0.29 %0.39 % (10.3)%(33.3)%
Net interest margin (g)3.53 %3.74 %3.85 % (5.6)%(8.3)%
Efficiency ratio (g)59.70 %61.65 %57.69 % (3.2)%3.5 %
       
OTHER RATIOS (NON-GAAP):      
Tangible book value per share (d)$55.56  $55.17  $52.00   0.7 %6.8 %
       
       
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 September 30, 2021, June 30, 2021, and September 30, 2020     
       
     Percent change vs.
(in thousands, except ratios)September 30, 2021June 30, 2021September 30, 2020 2Q '213Q '20
BALANCE SHEET:      
Investment securities$1,609,303  $1,461,916  $1,097,598   10.1 %46.6 %
Loans6,908,417  7,035,646  7,278,546   (1.8)%(5.1)%
Allowance for credit losses (l)88,129  83,577  87,038   5.4 %1.3 %
Goodwill and other intangible assets167,477  167,897  169,380   (0.3)%(1.1)%
Other real estate owned (OREO)813  813  836    %(2.8)%
Total assets10,034,018  9,947,994  9,240,006   0.9 %8.6 %
Total deposits8,364,385  8,214,624  7,475,829   1.8 %11.9 %
Borrowings424,078  501,350  643,103   (15.4)%(34.1)%
Total shareholders' equity1,067,912  1,069,392  1,016,996   (0.1)%5.0 %
Tangible equity (d)900,435  901,495  847,616   (0.1)%6.2 %
Total nonperforming loans106,872  114,695  148,442   (6.8)%(28.0)%
Total nonperforming assets110,849  118,672  152,670   (6.6)%(27.4)%
       
ASSET QUALITY RATIOS:      
Loans as a % of period end total assets68.85 %70.72 %78.77 % (2.6)%(12.6)%
Total nonperforming loans as a % of period end loans1.55 %1.63 %2.04 % (4.9)%(24.0)%
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets1.60 %1.69 %2.10 % (5.3)%(23.8)%
Allowance for credit losses as a % of period end loans1.28 %1.19 %1.20 % 7.6 %6.7 %
Net loan (recoveries) charge-offs$(2,580) $(731) $274   N.MN.M
Annualized net loan (recoveries) charge-offs as a % of average loans (b)(0.15)%(0.04)%0.02 % N.MN.M
       
CAPITAL & LIQUIDITY:      
Total shareholders' equity / Period end total assets10.64 %10.75 %11.01 % (1.0)%(3.4)%
Tangible equity (d) / Tangible assets (f)9.13 %9.22 %9.34 % (1.0)%(2.2)%
Average shareholders' equity / Average assets (b)10.71 %10.74 %10.67 % (0.3)%0.4 %
Average shareholders' equity / Average loans (b)15.50 %14.94 %14.08 % 3.7 %10.1 %
Average loans / Average deposits (b)82.68 %86.49 %92.02 % (4.4)%(10.1)%
       
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
Nine months ended September 30, 2021 and September 30, 2020   
     
 20212020  
(in thousands, except share and per share data)Nine months ended September 30Nine months ended September 30 Percent change vs '20
INCOME STATEMENT:    
Net interest income$246,187  $241,309   2.0 %
(Recovery of) provision for credit losses (l)(6,923) 31,213   N.M
Other income97,738  90,008   8.6 %
Other expense207,754  200,934   3.4 %
Income before income taxes$143,094  $99,170   44.3 %
Income taxes25,697  16,447   56.2 %
Net income$117,397  $82,723   41.9 %
     
MARKET DATA:    
Earnings per common share - basic (a)$7.20  $5.07   42.0 %
Earnings per common share - diluted (a)7.14  5.04   41.7 %
Cash dividends declared per common share3.29  3.26   0.9 %
     
Weighted average common shares - basic (b)16,315,996  16,300,250   0.1 %
Weighted average common shares - diluted (b)16,445,568  16,398,350   0.3 %
     
PERFORMANCE RATIOS: (annualized)    
Return on average assets (a)(b)1.59 %1.20 % 32.5 %
Return on average shareholders' equity (a)(b)14.79 %11.05 % 33.8 %
Yield on loans4.52 %4.72 % (4.2)%
Yield on investment securities2.30 %2.62 % (12.2)%
Yield on money market instruments0.13 %0.31 % (58.1)%
Yield on interest earning assets3.86 %4.27 % (9.6)%
Cost of interest bearing deposits0.13 %0.47 % (72.3)%
Cost of borrowings1.92 %1.66 % 15.7 %
Cost of paying interest bearing liabilities0.29 %0.57 % (49.1)%
Net interest margin (g)3.67 %3.88 % (5.4)%
Efficiency ratio (g)60.03 %60.26 % (0.4)%
     
ASSET QUALITY RATIOS    
Net loan (recoveries) charge-offs$(3,287) $854   N.M.
Net loan (recoveries) charge-offs as a % of average loans (b)(0.06)%0.02 % N.M.
     
CAPITAL & LIQUIDITY    
Average shareholders' equity / Average assets (b)10.77 %10.85 % (0.7)%
Average shareholders' equity / Average loans (b)15.02 %14.49 % 3.7 %
Average loans / Average deposits (b)86.33 %90.19 % (4.3)%
     
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 Nine Months Ended
  September 30, September 30,
(in thousands, except share and per share data) 2021 2020 2021 2020
         
Interest income:        
Interest and fees on loans $78,127  $82,617  $238,040  $243,459 
Interest on:        
Obligations of U.S. Government, its agencies        
and other securities - taxable 4,904  4,841  13,760  15,398 
Obligations of states and political subdivisions - tax-exempt 2,029  2,045  6,098  6,396 
Other interest income 360  63  689  667 
Total interest income 85,420  89,566  258,587  265,920 
         
Interest expense:        
Interest on deposits:        
Demand and savings deposits 435  803  1,222  8,652 
Time deposits 1,011  2,662  3,880  10,293 
Interest on borrowings 2,372  2,261  7,298  5,666 
Total interest expense 3,818  5,726  12,400  24,611 
         
Net interest income 81,602  83,840  246,187  241,309 
         
Provision for (recovery of) credit losses (l) 1,972  13,836  (6,923) 31,213 
         
Net interest income after provision for (recovery of) credit losses 79,630  70,004  253,110  210,096 
         
Other income 32,411  36,558  97,738  90,008 
         
Other expense 68,489  69,859  207,754  200,934 
         
Income before income taxes 43,552  36,703  143,094  99,170 
         
Income taxes 8,118  5,857  25,697  16,447 
         
Net income $35,434  $30,846  $117,397  $82,723 
         
Per common share:        
Net income - basic $2.17  $1.89  $7.20  $5.07 
Net income - diluted $2.16  $1.88  $7.14  $5.04 
         
Weighted average shares - basic 16,292,312  16,300,720  16,315,996  16,300,250 
Weighted average shares - diluted 16,423,912  16,393,792  16,445,568  16,398,350 
         
Cash dividends declared $1.03  $1.02  $3.29  $3.26 


 
PARK NATIONAL CORPORATION 
Consolidated Balance Sheets
   
(in thousands, except share data)September 30, 2021December 31, 2020
   
Assets  
   
Cash and due from banks$127,685  $155,596  
Money market instruments749,710  214,878  
Investment securities1,609,303  1,124,806  
Loans6,908,417  7,177,785  
Allowance for credit losses (l)(88,129) (85,675) 
Loans, net6,820,288  7,092,110  
Bank premises and equipment, net88,909  88,660  
Goodwill and other intangible assets167,477  168,855  
Other real estate owned813  1,431  
Other assets469,833  432,685  
Total assets$10,034,018  $9,279,021  
   
Liabilities and Shareholders' Equity  
   
Deposits:  
Noninterest bearing$2,981,928  $2,727,100  
Interest bearing5,382,457  4,845,258  
Total deposits8,364,385  7,572,358  
Borrowings424,078  562,504  
Other liabilities177,643  103,903  
Total liabilities$8,966,106  $8,238,765  
   
   
Shareholders' Equity:  
Preferred shares (200,000 shares authorized; no shares outstanding at September 30, 2021 and December 31, 2020)$  $  
Common shares (No par value; 20,000,000 shares authorized; 17,623,132 shares issued at September 30, 2021 and 17,623,163 shares issued at December 31, 2020)459,953  460,687  
Accumulated other comprehensive (loss) income, net of taxes(7,810) 5,571  
Retained earnings759,619  704,764  
Treasury shares (1,416,955 shares at September 30, 2021 and 1,308,966 shares at December 31, 2020)(143,850) (130,766) 
Total shareholders' equity$1,067,912  $1,040,256  
Total liabilities and shareholders' equity$10,034,018  $9,279,021  


    
PARK NATIONAL CORPORATION    
Consolidated Average Balance Sheets   
      
 Three Months Ended Nine Months Ended
 September 30, September 30,
(in thousands)20212020 20212020
      
Assets     
      
Cash and due from banks$130,716 $121,973  $136,728 $129,436 
Money market instruments895,784 223,563  724,561 286,909 
Investment securities1,461,434 1,330,520  1,310,762 1,264,381 
Loans6,956,064 7,247,021  7,062,336 6,904,900 
Allowance for credit losses (l)(83,935)(74,718) (86,969)(64,942)
Loans, net6,872,129 7,172,303  6,975,367 6,839,958 
Bank premises and equipment, net89,718 83,609  89,909 79,557 
Goodwill and other intangible assets167,754 169,726  168,215 170,311 
Other real estate owned776 1,299  935 2,616 
Other assets452,405 454,689  446,980 443,327 
Total assets$10,070,716 $9,557,682  $9,853,457 $9,216,495 
      
      
Liabilities and Shareholders' Equity     
      
Deposits:     
Noninterest bearing$2,953,605 $2,565,417  $2,896,126 $2,306,355 
Interest bearing5,459,400 5,309,718  5,284,664 5,350,009 
Total deposits8,413,005 7,875,135  8,180,790 7,656,364 
Borrowings471,148 552,452  507,989 455,127 
Other liabilities108,098 109,856  103,612 104,763 
Total liabilities$8,992,251 $8,537,443  $8,792,391 $8,216,254 
      
Shareholders' Equity:     
Preferred shares$ $  $ $ 
Common shares458,988 457,571  459,213 457,953 
Accumulated other comprehensive (loss) income, net of taxes(2,022)15,400  (1,918)8,712 
Retained earnings755,435 679,519  734,715 665,808 
Treasury shares(133,936)(132,251) (130,944)(132,232)
Total shareholders' equity$1,078,465 $1,020,239  $1,061,066 $1,000,241 
Total liabilities and shareholders' equity$10,070,716 $9,557,682  $9,853,457 $9,216,495 


 
PARK NATIONAL CORPORATION 
Consolidated Statements of Income - Linked Quarters
      
 20212021202120202020
(in thousands, except per share data)3rd QTR2nd QTR1st QTR4th QTR3rd QTR
      
Interest income:     
Interest and fees on loans$78,127 $81,176 $78,737 $85,268 $82,617 
Interest on:     
Obligations of U.S. Government, its agencies and other securities - taxable4,904 4,600 4,256 4,420 4,841 
Obligations of states and political subdivisions - tax-exempt2,029 2,032 2,037 2,040 2,045 
Other interest income360 186 143 72 63 
Total interest income85,420 87,994 85,173 91,800 89,566 
      
Interest expense:     
Interest on deposits:     
Demand and savings deposits435 401 386 490 803 
Time deposits1,011 1,285 1,584 1,893 2,662 
Interest on borrowings2,372 2,457 2,469 3,096 2,261 
Total interest expense3,818 4,143 4,439 5,479 5,726 
      
Net interest income81,602 83,851 80,734 86,321 83,840 
      
Provision for (recovery of) credit losses (l)1,972 (4,040)(4,855)(19,159)13,836 
      
Net interest income after provision for (recovery of) credit losses79,630 87,891 85,589 105,480 70,004 
      
Other income32,411 31,238 34,089 35,656 36,558 
      
Other expense68,489 71,400 67,865 85,661 69,859 
      
Income before income taxes43,552 47,729 51,813 55,475 36,703 
      
Income taxes8,118 8,597 8,982 10,275 5,857 
      
Net income $35,434 $39,132 $42,831 $45,200 $30,846 
      
Per common share:     
Net income - basic$2.17 $2.39 $2.63 $2.77 $1.89 
Net income - diluted$2.16 $2.38 $2.61 $2.75 $1.88 


 
PARK NATIONAL CORPORATION 
Detail of other income and other expense - Linked Quarters
      
 20212021202120202020
(in thousands)3rd QTR2nd QTR1st QTR4th QTR3rd QTR
      
Other income:     
Income from fiduciary activities$8,820 $8,569 $8,173 $7,632 $7,335 
Service charges on deposit accounts2,389 2,032 2,054 2,123 2,118 
Other service income6,668 7,159 9,617 12,040 13,047 
Debit card fee income6,453 6,758 6,086 5,787 5,853 
Bank owned life insurance income1,462 1,149 1,165 1,170 1,192 
ATM fees622 655 530 432 491 
Gain (loss) on the sale of OREO, net3 4 (33)(7)569 
Net loss on the sale of debt securities    (27)
Gain on equity securities, net609 467 1,810 2,931 1,201 
Other components of net periodic benefit income2,038 2,038 2,038 1,988 1,988 
Miscellaneous3,347 2,407 2,649 1,560 2,791 
Total other income$32,411 $31,238 $34,089 $35,656 $36,558 
      
Other expense:     
Salaries$29,433 $30,303 $29,896 $37,280 $31,632 
Employee benefits10,640 10,056 10,201 7,316 10,676 
Occupancy expense3,211 3,027 3,640 3,231 3,835 
Furniture and equipment expense2,797 2,756 2,610 4,949 4,687 
Data processing fees7,817 7,150 7,712 3,315 3,275 
Professional fees and services6,973 6,973 5,664 9,359 7,977 
Marketing1,574 1,290 1,491 1,752 1,454 
Insurance1,403 1,276 1,691 1,855 1,541 
Communication796 770 1,122 1,097 958 
State tax expense1,113 1,103 1,108 605 1,125 
Amortization of intangible assets420 479 479 525 525 
FHLB prepayment penalty   8,736  
Foundation contributions 4,000  3,000  
Miscellaneous2,312 2,217 2,251 2,641 2,174 
Total other expense$68,489 $71,400 $67,865 $85,661 $69,859 


PARK NATIONAL CORPORATION 
Asset Quality Information
        
    Year ended December 31,
(in thousands, except ratios)September 30, 2021June 30, 2021March 31, 20212020201920182017
        
Allowance for credit losses:       
Allowance for credit losses, beginning of period$83,577  $86,886  $85,675  $56,679  $51,512 $49,988 $50,624 
Cumulative change in accounting principle; adoption of ASU 2016-13   6,090       
Charge-offs1,002  1,070  1,701  10,304  11,177 13,552 19,403 
Recoveries3,582  1,801  1,677  27,246  10,173 7,131 10,210 
Net (recoveries) charge-offs(2,580) (731) 24  (16,942) 1,004 6,421 9,193 
Provision for (recovery of) credit losses1,972  (4,040) (4,855) 12,054  6,171 7,945 8,557 
Allowance for credit losses, end of period$88,129  $83,577  $86,886  $85,675  $56,679 $51,512 $49,988 
        
        
General reserve trends:       
Allowance for credit losses, end of period$88,129  $83,577  $86,886  $85,675  $56,679 $51,512 $49,988 
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 the general reserve      678     
Specific reserves on individually evaluated loans3,466  3,915  4,962  5,434  5,230 2,273 684 
General reserves on collectively evaluated loans$84,663  $79,662  $81,924  $79,396  $51,181 $49,239 $49,304 
        
Total loans$6,908,417  $7,035,646  $7,168,745  $7,177,785  $6,501,404 $5,692,132 $5,372,483 
PCD loans (PCI loans for years 2020 and prior)8,705  10,007  10,284  11,153  14,331 3,943  
Purchased loans excluded from collectively evaluated loans      360,056  548,436 225,029  
Individually evaluated loans79,264  86,874  100,407  108,407  77,459 48,135 56,545 
Collectively evaluated loans$6,820,448  $6,938,765  $7,058,054  $6,698,169  $5,861,178 $5,415,025 $5,315,938 
        
Asset Quality Ratios:       
Net (recoveries) charge-offs as a % of average loans (annualized)(0.15)%(0.04)% %(0.24)%0.02%0.12%0.17%
Allowance for credit losses as a % of period end loans1.28 %1.19 %1.21 %1.19 %0.87%0.90%0.93%
Allowance for credit losses as a % of period end loans (excluding PPP loans) (k)1.30 %1.23 %1.28 %1.25 %N.A.N.A.N.A.
General reserve as a % of collectively evaluated loans1.24 %1.15 %1.16 %1.19 %0.87%0.91%0.93%
General reserves as a % of collectively evaluated loans (excluding PPP loans) (k)1.27 %1.19 %1.22 %1.24 %N.A.N.A.N.A.
        
Nonperforming assets:       
Nonaccrual loans$87,791  $96,760  $114,708  $117,368  $90,080 $67,954 $72,056 
Accruing troubled debt restructurings18,797  17,420  14,817  20,788  21,215 15,173 20,111 
Loans past due 90 days or more284  515  802  1,458  2,658 2,243 1,792 
Total nonperforming loans$106,872  $114,695  $130,327  $139,614  $113,953 $85,370 $93,959 
Other real estate owned - Park National Bank219  219  250  837  3,100 2,788 6,524 
Other real estate owned - SEPH594  594  594  594  929 1,515 7,666 
Other nonperforming assets - Park National Bank3,164  3,164  3,164  3,164  3,599 3,464 4,849 
Total nonperforming assets$110,849  $118,672  $134,335  $144,209  $121,581 $93,137 $112,998 
Percentage of nonaccrual loans to period end loans1.27 %1.38 %1.60 %1.64 %1.39%1.19%1.34%
Percentage of nonperforming loans to period end loans1.55 %1.63 %1.82 %1.95 %1.75%1.50%1.75%
Percentage of nonperforming assets to period end loans1.60 %1.69 %1.87 %2.01 %1.87%1.64%2.10%
Percentage of nonperforming assets to period end total assets1.10 %1.19 %1.35 %1.55 %1.42%1.19%1.50%
        
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)September 30, 2021June 30, 2021March 31, 20212020201920182017
        
        
New nonaccrual loan information:       
Nonaccrual loans, beginning of period$96,760 $114,708 $117,368 $90,080 $67,954 $72,056 $87,822 
New nonaccrual loans8,825 11,342 12,540 103,386 81,009 76,611 58,753 
Resolved nonaccrual loans17,794 29,290 15,200 76,098 58,883 80,713 74,519 
Nonaccrual loans, end of period$87,791 $96,760 $114,708 $117,368 $90,080 $67,954 $72,056 
        
Impaired commercial loan portfolio information (period end):      
Unpaid principal balance$79,952 $87,502 $100,996 $109,062 $78,178 $59,381 $66,585 
Prior charge-offs688 628 589 655 719 11,246 10,040 
Remaining principal balance79,264 86,874 100,407 108,407 77,459 48,135 56,545 
Specific reserves3,466 3,915 4,962 5,434 5,230 2,273 684 
Book value, after specific reserves$75,798 $82,959 $95,445 $102,973 $72,229 $45,862 $55,861 


PARK NATIONAL CORPORATION   
Financial Reconciliations      
NON-GAAP RECONCILIATIONS      
 THREE MONTHS ENDED NINE MONTHS ENDED
(in thousands, except share and per share data)September 30, 2021June 30, 2021September 30, 2020 September 30, 2021September 30, 2020
Net interest income$81,602  $83,851  $83,840   $246,187  $241,309  
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions807  806  1,071   2,744  3,750  
less interest income on former Vision Bank relationships414  2,838  8   3,357  351  
Net interest income - adjusted$80,381  $80,207  $82,761   $240,086  $237,208  
       
Provision for (recovery of) credit losses$1,972  $(4,040) $13,836   $(6,923) $31,213  
less recoveries on former Vision Bank relationships(2,231) (152) (37)  (2,640) (1,486) 
Provision for (recovery of) credit losses - adjusted$4,203  $(3,888) $13,873   $(4,283) $32,699  
       
Other income$32,411  $31,238  $36,558   $97,738  $90,008  
less net gain on sale of former Vision Bank OREO properties    371     1,208  
less other service income related to former Vision Bank relationships143  3  36   204  88  
less rebranding initiative related expenses         (274) 
less net (loss) gain on the sale of debt securities in the ordinary course of business    (27)    3,286  
Other income - adjusted$32,268  $31,235  $36,178   $97,534  $85,700  
       
Other expense$68,489  $71,400  $69,859   $207,754  $200,934  
less merger-related expenses related to NewDominion and Carolina Alliance acquisitions4  4  163   20  620  
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions420  479  525   1,378  1,738  
less direct expenses related to collection of payments on former Vision Bank loan relationships254  300  232   661  232  
less FHLB prepayment penalty         1,793  
less rebranding initiative related expenses437  342  429   1,734  837  
less Foundation contribution  4,000     4,000    
less severance and restructuring charges140  46  67   294  403  
less COVID-19 related expenses (j)  670  744   1,535  2,884  
Other expense - adjusted$67,234  $65,559  $67,699   $198,132  $192,427  
       
Tax effect of adjustments to net income identified above (i)$(491) $429  $139   $142  $(291) 
       
Net income - reported$35,434  $39,132  $30,846   $117,397  $82,723  
Net income - adjusted (h)$33,585  $40,745  $31,371   $117,932  $81,626  
       
Diluted earnings per share$2.16  $2.38  $1.88   $7.14  $5.04  
Diluted earnings per share, adjusted (h)$2.04  $2.47  $1.91   $7.17  $4.98  
       
Annualized return on average assets (a)(b)1.40 %1.59 %1.28 % 1.59 %1.20 %
Annualized return on average assets, adjusted (a)(b)(h)1.32 %1.66 %1.31 % 1.60 %1.18 %
       
Annualized return on average tangible assets (a)(b)(e)1.42 %1.62 %1.31 % 1.62 %1.22 %
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)1.35 %1.68 %1.33 % 1.63 %1.21 %
       
Annualized return on average shareholders' equity (a)(b)13.04 %14.81 %12.03 % 14.79 %11.05 %
Annualized return on average shareholders' equity, adjusted (a)(b)(h)12.36 %15.42 %12.23 % 14.86 %10.90 %
       
Annualized return on average tangible equity (a)(b)(c)15.44 %17.60 %14.43 % 17.58 %13.31 %
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)14.63 %18.33 %14.67 % 17.66 %13.14 %
       
Efficiency ratio (g)59.70 %61.65 %57.69 % 60.03 %60.26 %
Efficiency ratio, adjusted (g)(h)59.31 %58.45 %56.58 % 58.31 %59.20 %
       
Annualized net interest margin (g)3.53 %3.74 %3.85 % 3.67 %3.88 %
Annualized net interest margin, adjusted (g)(h)3.48 %3.58 %3.80 % 3.58 %3.81 %
       
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 September 30, 2021, June 30, 2021, and September 30, 2020 and the nine months ended September 30, 2021 and September 30, 2020, 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 NINE MONTHS ENDED
 September 30, 2021June 30, 2021September 30, 2020 September 30, 2021September 30, 2020
AVERAGE SHAREHOLDERS' EQUITY$1,078,465 $1,059,949 $1,020,239  $1,061,066 $1,000,241 
Less: Average goodwill and other intangible assets167,754 168,211 169,726  168,215 170,311 
AVERAGE TANGIBLE EQUITY$910,711 $891,738 $850,513  $892,851 $829,930 
       
(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, 2021June 30, 2021September 30, 2020   
TOTAL SHAREHOLDERS' EQUITY$1,067,912 $1,069,392 $1,016,996    
Less: Goodwill and other intangible assets167,477 167,897 169,380    
TANGIBLE EQUITY$900,435 $901,495 $847,616    
       
(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 NINE MONTHS ENDED
 September 30, 2021June 30, 2021September 30, 2020 September 30, 2021September 30, 2020
AVERAGE ASSETS$10,070,716 $9,872,078 $9,557,682  $9,853,457 $9,216,495 
Less: Average goodwill and other intangible assets167,754 168,211 169,726  168,215 170,311 
AVERAGE TANGIBLE ASSETS$9,902,962 $9,703,867 $9,387,956  $9,685,242 $9,046,184 
       
(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:
 September 30, 2021June 30, 2021September 30, 2020   
TOTAL ASSETS$10,034,018 $9,947,994 $9,240,006    
Less: Goodwill and other intangible assets167,477 167,897 169,380    
TANGIBLE ASSETS$9,866,541 $9,780,097 $9,070,626    
       
(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, 2021June 30, 2021September 30, 2020 September 30, 2021September 30, 2020
Interest income$85,420 $87,994 $89,566  $258,587 $265,920 
Fully taxable equivalent adjustment717 718 706  2,149 2,154 
Fully taxable equivalent interest income$86,137 $88,712 $90,272  $260,736 $268,074 
Interest expense3,818 4,143 5,726  12,400 24,611 
Fully taxable equivalent net interest income$82,319 $84,569 $84,546  $248,336 $243,463 
       
(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 and other expense.
(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 $131.5 million, $248.9 million and $331.6 million of PPP loans at September 30, 2021, June 30, 2021 and December 31, 2020, respectively.
(l) Park adopted ASU 2016-13 effective January 1, 2021. The allowance for credit losses at September 30, 2021 and June 30, 2021 and the related provision for (recovery of) credit losses for the three months ended September 30, 2021 and June 30, 2021 and the nine months ended September 30, 2021 were calculated utilizing this new guidance.   


FAQ

What were Park National Corporation's Q3 earnings for 2021?

Park National Corporation reported Q3 2021 net income of $35.4 million, a 14.9% increase from Q3 2020.

What is the special dividend declared by Park National Corporation?

Park National Corporation declared a special dividend of $0.20 per share, payable on December 10, 2021.

What is the total net income for Park National Corporation for the first nine months of 2021?

The total net income for the first nine months of 2021 was $117.4 million.

When will Park National Corporation's dividends be paid?

The dividends will be paid on December 10, 2021, to shareholders of record as of November 19, 2021.

How much did Park National Corporation raise the wages for their associates?

Park National Corporation raised its minimum wage for associates to $15 per hour.

Park National Corporation

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