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TheStreet Open House

Park National Corporation Reports Third Quarter 2010 Financial Results And Declares Quarterly Cash Dividend

Complete financial tables are included below.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This news release contains forward-looking statements that 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: deterioration in the asset value of Park's loan portfolio may be worse than expected due to a number of factors, such as adverse changes in economic conditions that impair the ability of borrowers to repay their loans, the underlying value of the collateral could prove less valuable than assumed and cash flows may be worse than expected; Park's ability to execute its business plan successfully and within the expected timeframe; general economic and financial market conditions, and weakening in the economy, specifically, the real estate market and credit market, either nationally or in the states in which Park and its subsidiaries do business, may be worse than expected which could decrease the demand for loan, deposit and other financial services and increase loan delinquencies and defaults; the effects of the Gulf of Mexico oil spill; changes in market rates and prices may adversely impact the value of securities, loans, deposits and other financial instruments and the interest rate sensitivity of our consolidated balance sheet; changes in consumer spending, borrowing and saving habits; our liquidity requirements could be adversely affected by changes in our assets and liabilities; competitive factors among financial institutions increase significantly, including product and pricing pressures and our ability to attract, develop and retain qualified bank professionals; the nature, timing and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and its subsidiaries, including changes in laws and regulations concerning taxes, accounting, banking, securities and other aspects of the financial services industry, specifically the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; the effect of fiscal and governmental policies of the United States federal government; demand for loans in the respective market areas served by Park and its subsidiaries, and other risk factors relating to the banking industry as detailed from time to time in Park's reports filed with the Securities and Exchange Commission 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, 2009 and in "Item 1A. Risk Factors" of Part II of Park's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Park does not undertake, and specifically disclaims any obligation, to publicly release the result 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 is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

PARK NATIONAL CORPORATION
Financial Highlights
Three months ended September 30, 2010, June 30, 2010, and September 30, 2009
           
  2010 2009 Percent change vs.
(in thousands, except share and per share data) 3rd QTR 2nd QTR 3rd QTR 2Q '10 3Q '09
INCOME STATEMENT:          
Net interest income  $ 69,445  $ 68,721  $ 68,462 1.1% 1.4%
Provision for loan losses  14,654 13,250 14,958 10.6% -2.0%
Other income  17,530 16,647 18,165 5.3% -3.5%
Gain on sale of securities  --  3,515  -- -100.0% N/A
Total other expense  45,696 47,001 46,052 -2.8% -0.8%
Income before income taxes  $ 26,625  $ 28,632  $ 25,617 -7.0% 3.9%
Income taxes  7,048 7,466  6,418 -5.6% 9.8%
Net income  $ 19,577  $ 21,166  $ 19,199 -7.5% 2.0%
Preferred stock dividends and accretion  1,452 1,451  1,440 0.1% 0.8%
Net income available to common shareholders  $ 18,125  $ 19,715  $ 17,759 -8.1% 2.1%
           
MARKET DATA:          
Earnings per common share - basic (b)  $ 1.19  $ 1.30  $ 1.25 -8.5% -4.8%
Earnings per common share - diluted (b)  1.19  1.30  1.25 -8.5% -4.8%
Cash dividends per common share  0.94  0.94  0.94 0.0% 0.0%
Common book value per common share at period end  43.10  42.94  41.45 0.4% 4.0%
Stock price per common share at period end  64.04  65.04  58.34 -1.5% 9.8%
Market capitalization at period end  979,956  989,054  831,927 -0.9% 17.8%
           
Weighted average common shares - basic (a)  15,272,720  15,114,846  14,193,411 1.0% 7.6%
Weighted average common shares - diluted (a)  15,272,720  15,114,846  14,193,411 1.0% 7.6%
Common shares outstanding at period end  15,302,244  15,206,854  14,259,971 0.6% 7.3%
           
PERFORMANCE RATIOS:          
Annualized return on average assets (a)(b) 1.02% 1.13% 1.01% -9.7% 1.0%
Annualized return on average common equity (a)(b) 10.90% 12.27% 12.18% -11.2% -10.5%
Yield on loans 5.76% 5.84% 5.99% -1.4% -3.8%
Yield on investments 4.26% 4.44% 4.82% -4.1% -11.6%
Yield on earning assets 5.34% 5.44% 5.66% -1.8% -5.7%
Cost of interest bearing deposits 0.91% 1.04% 1.48% -12.5% -38.5%
Cost of borrowings 2.91% 2.94% 2.73% -1.0% 6.6%
Cost of paying liabilities 1.29% 1.40% 1.73% -7.9% -25.4%
Net interest margin (annualized) (g) 4.28% 4.29% 4.22% -0.2% 1.4%
Efficiency ratio (g) 52.21% 54.75% 52.71% -4.6% -0.9%
           
OTHER RATIOS (NON GAAP):          
Annualized return on average tangible assets (a)(b)(e) 1.03% 1.14% 1.02% -9.6% 1.0%
Annualized return on average tangible common equity (a)(b)(c) 12.39% 14.03% 14.23% -11.7% -12.9%
Tangible common book value per common share (d)   $ 37.93  $ 37.68  $ 35.65 0.7% 6.4%
           
           
PARK NATIONAL CORPORATION
Financial Highlights (continued)
Three months ended September 30, 2010, June 30, 2010, and September 30, 2009
      Percent change vs.
BALANCE SHEET: September 30, 2010 June 30, 2010 September 30, 2009 2Q '10 3Q '09
Investment securities  $ 1,896,969  $ 1,845,594  $ 1,873,953 2.8% 1.2%
Loans 4,656,902 4,655,997 4,615,101 0.0% 0.9%
Allowance for loan losses 117,405 120,676 110,040 -2.7% 6.7%
Goodwill and other intangibles 79,199 80,021 82,735 -1.0% -4.3%
Other real estate owned 52,837 46,456 47,015 13.7% 12.4%
Total assets 7,090,456 7,093,098 6,970,678 0.0% 1.7%
Total deposits 5,100,030 5,168,814 5,114,976 -1.3% -0.3%
Borrowings 1,003,624 1,008,748 1,066,757 -0.5% -5.9%
Stockholders' equity 756,627 749,939 687,327 0.9% 10.1%
Common equity 659,539 653,053 591,035 1.0% 11.6%
Tangible common equity (d) 580,340 573,032 508,300 1.3% 14.2%
Nonperforming loans 237,194 237,854 207,212 -0.3% 14.5%
Nonperforming assets 290,031 284,310 254,227 2.0% 14.1%
Past due 90 day loans and still accruing 10,700 17,283 4,849 -38.1% 120.7%
           
ASSET QUALITY RATIOS:          
Loans as a % of period end assets 65.68% 65.64% 66.21% 0.1% -0.8%
Nonperforming loans as a % of period end loans 5.09% 5.11% 4.49% -0.4% 13.4%
Past due 90 day loans as a % of period end loans 0.23% 0.37% 0.11% -37.8% 109.1%
Nonperforming assets / Period end loans + OREO  6.16% 6.05% 5.45% 1.8% 13.0%
Allowance for loan losses as a % of period end loans 2.52% 2.59% 2.38% -2.7% 5.9%
Net loan charge-offs  $ 17,925  $ 12,248  $ 9,722 46.4% 84.4%
Annualized net loan charge-offs as a % of average loans (a) 1.53% 1.07% 0.84% 43.0% 82.1%
           
CAPITAL & LIQUIDITY:          
Total equity / Period end assets 10.67% 10.57% 9.86% 0.9% 8.2%
Common equity / Period end assets 9.30% 9.21% 8.48% 1.0% 9.7%
Tangible common equity (d) / Tangible assets (f) 8.28% 8.17% 7.38% 1.3% 12.2%
Average equity / Average assets (a) 10.73% 10.56% 9.67% 1.6% 11.0%
Average equity / Average loans (a) 16.27% 16.09% 14.63% 1.1% 11.2%
Average loans / Average deposits (a) 89.64% 88.85% 89.82% 0.9% -0.2%
           
           
PARK NATIONAL CORPORATION
Financial Highlights (continued)
Nine months ended September 30, 2010 and 2009  
           
  September 30, September 30, Percent  
(in thousands, except share and per share data) 2010 2009 change  
INCOME STATEMENT:        
Net interest income  $ 205,546  $ 204,689 0.4%  
Provision for loan losses 44,454 43,101 3.1%  
Other income 50,887 57,132 -10.9%  
Gain on sale of securities  11,819  7,340 61.0%  
Total other expense 140,587 142,065 -1.0%  
Income before income taxes  $ 83,211  $ 83,995 -0.9%  
Income taxes 21,689  22,099 -1.9%  
Net income  $ 61,522  $ 61,896 -0.6%  
Preferred stock dividends and accretion 4,355  4,321 0.8%  
Net income available to common shareholders  $ 57,167  $ 57,575 -0.7%  
         
MARKET DATA:        
Earnings per common share - basic (b)  $ 3.79  4.10 -7.6%  
Earnings per common share - diluted (b)  3.79  4.10 -7.6%  
Cash dividends per common share  2.82  2.82 0.0%  
         
Weighted average common shares - basic (a)  15,090,113  14,055,580 7.4%  
Weighted average common shares - diluted (a)  15,090,113  14,055,580 7.4%  
         
PERFORMANCE RATIOS:        
Annualized return on average assets (a)(b) 1.08% 1.10% -1.8%  
Annualized return on average common equity (a)(b) 11.85% 13.62% -13.0%  
Yield on loans  5.82% 6.07% -4.1%  
Yield on investments 4.38% 4.91% -10.8%  
Yield on earning assets 5.41% 5.72% -5.4%  
Cost of interest bearing deposits 1.03% 1.60% -35.6%  
Cost of borrowings 2.92% 2.40% 21.7%  
Cost of paying liabilities 1.39% 1.78% -21.9%  
Net interest margin (annualized) (g) 4.26% 4.23% 0.7%  
Efficiency ratio (g) 54.50% 53.94% 1.0%  
         
ASSET QUALITY RATIOS:        
Net loan charge-offs  $ 43,766  $ 33,149 32.0%  
Annualized net loan charge-offs as a % of average loans (a) 1.27% 0.97% 30.9%  
         
CAPITAL AND LIQUIDITY:        
Average equity / Average assets (a) 10.52% 9.42% 11.7%  
Average equity / Average loans (a) 16.04% 14.43% 11.2%  
Average loans / Average deposits (a) 88.89% 91.79% -3.2%  
         
OTHER RATIOS (NON GAAP):        
Annualized return on average tangible assets (a)(b)(e) 1.10% 1.11% -0.9%  
Annualized return on average tangible common equity (a)(b)(c) 13.54% 16.00% -15.4%  
           
           
PARK NATIONAL CORPORATION
Financial Highlights (continued)
           
(a) Averages are for the quarters ended September 30, 2010, June 30, 2010, and September 30, 2009, and the nine-month periods ended September 30, 2010 and September 30, 2009.
           
(b) Reported measure uses net income available to common shareholders.
           
(c) Net income available to common shareholders for each period divided by average tangible common equity during the period. Average tangible common equity equals average stockholders' equity during the applicable period less (i) average preferred stock during the applicable period and (ii) average goodwill and other intangibles during the applicable period.
           
RECONCILIATION OF AVERAGE STOCKHOLDERS' EQUITY TO AVERAGE TANGIBLE COMMON EQUITY:
  THREE MONTHS ENDED NINE MONTHS ENDED
  September 30, 2010 June 30, 2010 September 30, 2009 September 30, 2010 September 30, 2009
AVERAGE STOCKHOLDERS' EQUITY  $ 756,939  $ 741,006  $ 674,541  $ 741,837  $ 661,174
Less: Average preferred stock  96,972  96,770  96,183  96,771  95,994
 Average goodwill and other intangibles  79,651  80,469 83,261  80,492  84,194
AVERAGE TANGIBLE COMMON EQUITY  $ 580,316  $ 563,767  $ 495,097  $ 564,574  $ 480,986
           
           
(d) Tangible common equity equals ending stockholders' equity less preferred stock and goodwill and other intangibles, in each case at the end of the period.
           
RECONCILIATION OF STOCKHOLDERS' EQUITY TO TANGIBLE COMMON EQUITY:    
  September 30, 2010 June 30, 2010 September 30, 2009    
STOCKHOLDERS' EQUITY  $ 756,627  $ 749,939  $ 687,327    
Less: Preferred stock 97,088 96,886  96,292    
 Goodwill and other intangibles 79,199 80,021 82,735    
TANGIBLE COMMON EQUITY  $ 580,340  $ 573,032  $ 508,300    
           
           
(e) Net income available to common shareholders for each period divided by average tangible assets during the period. Average tangible assets equals average assets less average goodwill and other intangibles.
           
RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS:
  THREE MONTHS ENDED NINE MONTHS ENDED
  September 30, 2010 June 30, 2010 September 30, 2009 September 30, 2010 September 30, 2009
AVERAGE ASSETS  $ 7,052,789  $ 7,018,710  $ 6,975,918  $ 7,052,488  $ 7,021,726
Less: Average goodwill and other intangibles  79,651  80,469 83,261 80,492 84,194
AVERAGE TANGIBLE ASSETS  $ 6,973,138  $ 6,938,241  $ 6,892,657  $ 6,971,996  $ 6,937,532
           
           
(f) Tangible common equity divided by tangible assets. Tangible assets equals total assets less goodwill and other intangibles.
           
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:        
  September 30, 2010 June 30, 2010 September 30, 2009    
TOTAL ASSETS  $ 7,090,456  $ 7,093,098  $ 6,970,678    
Less: Goodwill and other intangibles 79,199 80,021 82,735    
TANGIBLE ASSETS  $ 7,011,257  $ 7,013,077  $ 6,887,943    
           
           
PARK NATIONAL CORPORATION
Financial Highlights (continued)
           
(g) Efficiency ratio is calculated by taking total other expense divided by the sum of fully taxable equivalent net interest income and other income. Fully taxable equivalent net interest income reconciliation is shown below assuming a 35% tax rate. Additionally, net interest margin is calculated on a fully taxable equivalent basis.
           
RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
  THREE MONTHS ENDED NINE MONTHS ENDED
  September 30, 2010 June 30, 2010 September 30, 2009 September 30, 2010 September 30, 2009
Interest income  $ 86,682  $ 87,242  $ 91,868  $ 261,126  $ 277,325
Fully taxable equivalent adjustment  553  473  478  1,507  1,577
Fully taxable equivalent interest income  $ 87,235  $ 87,715  $ 92,346  $ 262,633  $ 278,902
Interest expense  17,237  18,521  23,406  55,580  72,636
Fully taxable equivalent net interest income  $ 69,998  $ 69,194  $ 68,940  $ 207,053  $ 206,266
         
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) 2010 2009 2010 2009
         
Interest income:        
Interest and fees on loans   $ 67,123  $ 69,339  $ 200,287  $ 206,923
Interest on:        
Obligations of U.S. Government, its agencies and other securities  19,333  22,204  60,071  69,233
Obligations of states and political subdivisions  192  316  613  1,131
Other interest income  34  9  155  38
Total interest income  86,682 91,868  261,126 277,325
         
Interest expense:        
Interest on deposits:        
Demand and savings deposits  1,263  2,768  4,620  8,482
Time deposits  8,532  13,362  28,700  41,536
Interest on borrowings  7,442  7,276  22,260  22,618
Total interest expense  17,237 23,406  55,580 72,636
         
Net interest income  69,445 68,462  205,546 204,689
         
Provision for loan losses  14,654  14,958  44,454 43,101
         
Net interest income after provision for loan losses  54,791 53,504  161,092 161,588
         
Other income  17,530  18,165  50,887  57,132
         
Gain on sale of securities  --   --  11,819  7,340
         
Other expense:        
Salaries and employee benefits  24,500  25,589  73,684  76,410
Occupancy expense  2,840  2,772  8,750  8,812
Furniture and equipment expense  2,624  2,463  7,820  7,339
Other expense  15,732  15,228  50,333  49,504
Total other expense  45,696 46,052  140,587 142,065
         
Income before income taxes  26,625 25,617  83,211 83,995
         
Income taxes  7,048  6,418  21,689  22,099
         
Net income   $ 19,577  $ 19,199  $ 61,522  $ 61,896
         
Preferred stock dividends and accretion  1,452  1,440  4,355  4,321
         
Net income available to common shareholders  $ 18,125  $ 17,759  $ 57,167  $ 57,575
         
Per Common Share:        
Net income - basic  $ 1.19  $ 1.25  $ 3.79  $ 4.10
Net income - diluted  $ 1.19  $ 1.25  $ 3.79  $ 4.10
         
Weighted average shares - basic  15,272,720  14,193,411  15,090,113  14,055,580
Weighted average shares - diluted  15,272,720  14,193,411  15,090,113  14,055,580
       
PARK NATIONAL CORPORATION 
Consolidated Balance Sheets
       
(in thousands, except share data) September 30, 2010 Dec. 31, 2009 September 30, 2009
       
Assets      
       
Cash and due from banks  $ 115,795  $ 116,802  $ 127,079
Money market instruments 17,791 42,289 10,583
Investment securities 1,896,969 1,863,560 1,873,953
Loans 4,656,902 4,640,432 4,615,101
Allowance for loan losses 117,405 116,717 110,040
Loans, net  4,539,497 4,523,715 4,505,061
Bank premises and equipment, net 70,401 69,091 67,194
Goodwill and other intangibles 79,199 81,799 82,735
Other real estate owned 52,837 41,240 47,015
Other assets 317,967 301,833 257,058
       
Total assets  $ 7,090,456  $ 7,040,329  $ 6,970,678
       
       
Liabilities and Stockholders' Equity      
       
Deposits:      
Noninterest bearing  $ 909,619  $ 897,243  $ 817,897
Interest bearing 4,190,411 4,290,809 4,297,079
Total deposits  5,100,030 5,188,052 5,114,976
Borrowings 1,003,624 1,053,850 1,066,757
Other liabilities 230,175 81,163 101,618
Total liabilities  $ 6,333,829  $ 6,323,065  $ 6,283,351
       
       
Stockholders' Equity:      
Preferred Stock (200,000 shares authorized in 2010 and 2009;      
100,000 shares issued in 2010 and 2009)  $ 97,088  $ 96,483  $ 96,292
Common stock (No par value; 20,000,000 shares authorized      
in 2010 and 2009; 16,151,076 shares issued at September 30, 2010,       
16,151,112 at December 31, 2009, and 16,151,123 at September 30, 2009) 301,206 301,208 301,209
Common stock warrants 4,509  5,361  4,297
Accumulated other comprehensive income, net of taxes 12,354 15,661 20,018
Retained earnings 428,876 423,872 447,122
Treasury stock (848,832 shares at September 30, 2010, 1,268,332 at      
December 31, 2009 and 1,891,152 shares at September 30, 2009) (87,406) (125,321) (181,611)
Total stockholders' equity  $ 756,627  $ 717,264  $ 687,327
       
Total liabilities and stockholders' equity  $ 7,090,456  $ 7,040,329  $ 6,970,678
         
PARK NATIONAL CORPORATION 
Consolidated Average Balance Sheets
         
  Three Months Ended Nine Months Ended
  September 30, September 30,
(in thousands) 2010 2009 2010 2009
         
Assets        
         
Cash and due from banks  $ 122,405  $ 109,935  $ 115,944  $ 111,988
Money market instruments 67,923 31,661 95,917 25,571
Investment securities  1,811,797 1,881,061 1,821,587 1,957,788
Loans 4,651,739 4,610,716 4,624,692 4,582,037
Allowance for loan losses 122,717 104,763 120,158 101,821
Loans, net  4,529,022 4,505,953  4,504,534 4,480,216
Bank premises and equipment, net 70,206 67,124 69,684 67,846
Goodwill and other intangibles 79,651 83,261 80,492 84,194
Other real estate owned 47,971 44,155 45,379 36,535
Other assets 323,814 252,768 318,951 257,588
         
Total assets  $ 7,052,789  $ 6,975,918  $ 7,052,488  $ 7,021,726
         
         
Liabilities and Stockholders' Equity        
         
Deposits:        
Noninterest bearing  $ 906,376  $ 817,625  $ 889,933  805,488
Interest bearing 4,283,050 4,315,622 4,312,565 4,186,578
Total deposits  5,189,426 5,133,247  5,202,498 4,992,066
Borrowings 1,014,433 1,058,303 1,021,029 1,257,673
Other liabilities 91,991 109,827 87,124 110,813
Total liabilities  $ 6,295,850  $ 6,301,377  $ 6,310,651  $ 6,360,552
         
         
Stockholders' Equity:        
Preferred stock  $ 96,972  $ 96,183  $ 96,771  $ 95,994
Common stock  301,206 301,209 301,219 301,209
Common stock warrants 4,590  4,297 4,962  4,297
Accumulated other comprehensive income, net of taxes 15,462 10,160 16,930 10,752
Retained earnings 428,878 450,506 428,500 449,007
Treasury stock  (90,169) (187,814) (106,545) (200,085)
Total stockholders' equity  $ 756,939  $ 674,541  $ 741,837  $ 661,174
         
Total liabilities and stockholders' equity  $ 7,052,789  $ 6,975,918  $ 7,052,488  $ 7,021,726
           
PARK NATIONAL CORPORATION 
Consolidated Statements of Income - Linked Quarters
           
  2010 2010 2010 2009 2009
(in thousands, except per share data) 3rd QTR 2nd QTR 1st QTR 4th QTR 3rd QTR
           
Interest income:          
Interest and fees on loans   $ 67,123  $ 66,723  $ 66,441  $ 68,676  $ 69,339
Interest on:          
Obligations of U.S. Government, its agencies and other securities  19,333  20,263  20,475 21,325  22,204
Obligations of states and political subdivisions  192  204  217  286  316
Other interest income  34  52  69  78  9
Total interest income  86,682  87,242  87,202  90,365  91,868
           
Interest expense:          
Interest on deposits:          
Demand and savings deposits  1,263  1,582  1,775  2,333  2,768
Time deposits  8,532  9,518  10,650  12,269  13,362
Interest on borrowings  7,442  7,421  7,397  6,961  7,276
Total interest expense  17,237  18,521  19,822  21,563  23,406
           
Net interest income  69,445  68,721  67,380  68,802  68,462
           
Provision for loan losses  14,654  13,250  16,550  25,720  14,958
           
Net interest income after provision for loan losses  54,791  55,471  50,830  43,082  53,504
           
Other income  17,530  16,647  16,710  16,718  18,165
           
Gain on sale of securities  --   3,515  8,304  --   -- 
           
Other expense:          
Salaries and employee benefits  24,500  24,013  25,171  24,815  25,589
Occupancy expense  2,840  2,793  3,117  2,740  2,772
Furniture and equipment expense  2,624  2,564  2,632  2,395  2,463
Other expense  15,732  17,631  16,970  16,710  15,228
Total other expense  45,696  47,001  47,890  46,660  46,052
           
Income before income taxes  26,625  28,632  27,954  13,140  25,617
           
Income taxes  7,048  7,466  7,175  844  6,418
           
Net income   $ 19,577  $ 21,166  $ 20,779  $ 12,296  $ 19,199
           
Preferred stock dividends and accretion  1,452  1,451  1,452  1,441  1,440
           
Net income available to common shareholders  $ 18,125  $ 19,715  $ 19,327  $ 10,855  $ 17,759
           
Per Common Share:          
Net income - basic  $ 1.19  $ 1.30  $ 1.30  $ 0.74  $ 1.25
Net income - diluted  $ 1.19  $ 1.30  $ 1.30  $ 0.74  $ 1.25
           
PARK NATIONAL CORPORATION 
Detail of other income and other expense - Linked Quarters
           
  2010 2010 2010 2009 2009
(in thousands) 3rd QTR 2nd QTR 1st QTR 4th QTR 3rd QTR
           
Other income:          
Income from fiduciary activities  $ 3,314  $ 3,528  $ 3,422  $ 3,397  $ 3,071
Service charges on deposits  5,026  5,092  4,746  5,604  5,788
Other service income  3,909  3,476  2,982  3,588  3,895
Checkcard fee income  2,900  2,765  2,444  2,488  2,342
Bank owned life insurance income  1,313  1,254  1,216  1,329  1,297
Other  1,068  532  1,900  312  1,772
Total other income  $ 17,530  $ 16,647  $ 16,710  $ 16,718  $ 18,165
           
Other expense:          
Salaries and employee benefits  $ 24,500  $ 24,013  $ 25,171  $ 24,815  $ 25,589
Net occupancy expense  2,840  2,793  3,117  2,740  2,772
Furniture and equipment expense  2,624  2,564  2,632  2,395  2,463
Data processing fees  1,403  1,394  1,593  1,544  1,323
Professional fees and services  4,477  5,299  4,856  5,385  3,725
Amortization of intangibles  822  842  936  937  936
Marketing  840  946  902  943  983
Insurance  2,316  2,333  2,198  2,376  2,254
Communication  1,696  1,647  1,769  1,720  1,652
State taxes  865  838  845  424  892
Other  3,313  4,332  3,871  3,381  3,463
Total other expense  $ 45,696  $ 47,001  $ 47,890  $ 46,660  $ 46,052
             
PARK NATIONAL CORPORATION 
Asset Quality Information
             
  Quarter ended Year ended December 31,
(in thousands, except ratios) September 30, 2010 June 30, 2010 March 31, 2010 2009 2008 2007
             
Allowance for loan losses:            
Allowance for loan losses, beginning of period  $ 120,676  $ 119,674  $ 116,717  $ 100,088  $ 87,102  $ 70,500
Charge-offs 19,205 13,273 15,578 59,022 62,916 27,776
Recoveries  1,280  1,025  1,985  6,830  5,415  5,568
Net charge-offs  17,925  12,248  13,593  52,192  57,501  22,208
Provision for loan losses  14,654  13,250  16,550  68,821  70,487  29,476
Allowance for loan losses of acquired bank  --   --   --   --   --   9,334
Allowance for loan losses, end of period  $ 117,405  $ 120,676  $ 119,674  $ 116,717  $ 100,088  $ 87,102
             
             
Asset Quality Ratios:            
Net charge-offs as a % of average loans (annualized for quarterly periods) 1.53% 1.07% 1.19% 1.14% 1.32% 0.55%
Allowance for loan losses as a % of period end loans 2.52% 2.59% 2.60% 2.52% 2.23% 2.06%
             
             
Nonperforming Assets:            
Nonaccrual loans  $ 237,194  $ 237,640  $ 230,498  $ 233,544  $ 159,512  $ 101,128
Renegotiated loans  --   214  60  142  2,845  2,804
Loans past due 90 days or more  10,700  17,283  11,853  14,773  5,421  4,545
Total nonperforming loans  $ 247,894  $ 255,137  $ 242,411  $ 248,459  $ 167,778  $ 108,477
Other real estate owned - Ohio-based operations  9,658  9,554  10,802  6,037  6,149  6,369
Other real estate owned - Vision Bank  43,179  36,902  35,052  35,203  19,699  7,074
Total nonperforming assets  $ 300,731  $ 301,593  $ 288,265  $ 289,699  $ 193,626  $ 121,920
Percentage of nonperforming loans to period end loans 5.32% 5.48% 5.27% 5.35% 3.74% 2.57%
Percentage of nonperforming assets to period end loans 6.46% 6.48% 6.27% 6.24% 4.31% 2.89%
Percentage of nonperforming assets to period end assets 4.24% 4.25% 4.02% 4.11% 2.74% 1.88%
             
             
New nonaccrual loan information:            
Nonaccrual loans, beginning of period  $ 237,640  $ 230,498  $ 233,544  $ 159,512  $ 101,128  $ 16,004
New nonaccrual loans  34,104  30,870  30,252  184,181  141,749  113,720
Resolved nonaccrual loans  34,550  23,728  33,298  110,149  83,365  28,596
Nonaccrual loans, end of period  $ 237,194  $ 237,640  $ 230,498  $ 233,544  $ 159,512  $ 101,128
             
             
Impaired Commercial Loan Portfolio Information (period end):            
Unpaid principal balance  $ 254,356  $ 250,305  $ 244,822  $ 245,092  $ 171,310  $ 100,307
Prior charge-offs  48,201  46,731  46,175  43,949  29,967  10,226
Remaining principal balance  206,155  203,574  198,647  201,143  141,343  90,081
Specific reserves  35,293  38,767  38,739  36,721  8,875  3,492
Book value, after specific reserve  $ 170,862  $ 164,807  $ 159,908  $ 164,422  $ 132,468  $ 86,589
             
             
Vision Bank Commercial Land & Development (CL&D) Loan Portfolio Information:            
CL&D loans, period end  $ 175,988  $ 192,051  $ 200,112  $ 218,205  $ 251,443  $ 295,743
Performing CL&D loans, period end  93,361  97,562  116,672  132,788  191,712  260,195
Impaired CL&D loans, period end  82,627  94,489  83,440  85,417  59,731  35,548
Specific reserve on impaired CL&D loans  19,644  25,006  24,404  21,706  3,134  1,184
Book value of impaired CL&D loans, after specific reserve  $ 62,983  $ 69,483  $ 59,036  $ 63,711  $ 56,597  $ 34,364
             
Cumulative prior charge-offs on impaired Vision Bank CL&D loans, period end  $ 26,141  $ 23,973  $ 26,334  $ 24,931  $ 18,839  $ 7,399
CONTACT: Park National Corporation
         Bethany Lewis, Communications Specialist
           740.349.0421
         John Kozak, CFO
           740.349.3792

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