Date of Report (Date of earliest event reported) | July 22, 2019 |
PARK NATIONAL CORP /OH/ |
(Exact name of registrant as specified in its charter) |
Ohio | 1-13006 | 31-1179518 |
(State or other jurisdiction | (Commission | (IRS Employer |
of incorporation) | File Number) | Identification No.) |
50 North Third Street, | P.O. Box 3500 | Newark, | Ohio | 43058-3500 |
(Address of principal executive offices) (Zip Code) |
(740) | 349-8451 |
(Registrant’s telephone number, including area code) | |
Not Applicable | |
(Former name or former address, if changed since last report.) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common shares, without par value | PRK | NYSEAMER |
Net income (loss) by segment | ||||||||||||||||||||||||
(In thousands) | Q2 2019 | Q1 2019 | Six months YTD 2019 | Six months YTD 2018 | 2018 | 2017 | ||||||||||||||||||
PNB | $ | 29,382 | $ | 26,692 | $ | 56,074 | $ | 55,542 | $ | 109,472 | $ | 87,315 | ||||||||||||
GFSC | 163 | 287 | 450 | 352 | 521 | 260 | ||||||||||||||||||
All Other | (7,382 | ) | (1,524 | ) | (8,906 | ) | 3,470 | 394 | (3,333 | ) | ||||||||||||||
Total Park | $ | 22,163 | $ | 25,455 | $ | 47,618 | $ | 59,364 | $ | 110,387 | $ | 84,242 |
(In thousands) | Q2 2019 | Q1 2019 | Six months YTD 2019 | Six months YTD 2018 | 2018 | 2017 | ||||||||||||
Net interest income | $ | 74,893 | $ | 66,282 | $ | 141,175 | $ | 124,124 | $ | 258,547 | $ | 235,243 | ||||||
Provision for loan losses | 1,803 | 2,440 | 4,243 | 1,556 | 7,569 | 9,898 | ||||||||||||
Other income | 22,674 | 20,708 | 43,382 | 41,985 | 88,981 | 82,742 | ||||||||||||
Other expense | 60,014 | 51,974 | 111,988 | 97,170 | 206,843 | 185,891 | ||||||||||||
Income before income taxes | $ | 35,750 | $ | 32,576 | $ | 68,326 | $ | 67,383 | $ | 133,116 | $ | 122,196 | ||||||
Income tax expense | 6,368 | 5,884 | 12,252 | 11,841 | 23,644 | 34,881 | ||||||||||||
Net income | $ | 29,382 | $ | 26,692 | $ | 56,074 | $ | 55,542 | $ | 109,472 | $ | 87,315 |
(In thousands) | June 30, 2019 | March 31, 2019 | December 31, 2018 | June 30, 2018 | % change from 03/31/19 | % change from 12/31/18 | % change from 6/30/18 | ||||||||||||
Loans | $ | 6,355,251 | $ | 5,719,373 | $ | 5,671,173 | $ | 5,305,560 | 11.12 | % | 12.06 | % | 19.78 | % | |||||
Allowance for loan losses | 51,760 | 51,064 | 49,067 | 47,110 | 1.36 | % | 5.49 | % | 9.87 | % | |||||||||
Net loans | 6,303,491 | 5,668,309 | 5,622,106 | 5,258,450 | 11.21 | % | 12.12 | % | 19.87 | % | |||||||||
Investment securities | 1,387,731 | 1,390,627 | 1,418,938 | 1,512,641 | (0.21 | )% | (2.20 | )% | (8.26 | )% | |||||||||
Total assets | 8,607,583 | 7,801,148 | 7,753,848 | 7,404,498 | 10.34 | % | 11.01 | % | 16.25 | % | |||||||||
Total deposits | 7,095,772 | 6,418,471 | 6,334,796 | 6,126,119 | 10.55 | % | 12.01 | % | 15.83 | % | |||||||||
Average assets (1) | 8,157,472 | 7,783,150 | 7,573,713 | 7,396,316 | 4.81 | % | 7.71 | % | 10.29 | % | |||||||||
Efficiency ratio (2) | 60.19 | % | 59.25 | % | 59.03 | % | 58.01 | % | 1.59 | % | 1.97 | % | 3.76 | % | |||||
Return on average assets (3) | 1.39 | % | 1.39 | % | 1.45 | % | 1.51 | % | — | % | (4.14 | )% | (7.95 | )% |
PNB less Carolina Alliance | ||||||||||||||
(In thousands) | June 30, 2019 | March 31, 2019 | change | % change | % change annualized | |||||||||
Home equity | $ | 201,751 | $ | 208,452 | $ | (6,701 | ) | (3.2 | )% | (12.9 | )% | |||
Installment | 1,343,806 | 1,288,904 | 54,902 | 4.3 | % | 17.1 | % | |||||||
Real estate | 1,213,681 | 1,201,999 | 11,682 | 1.0 | % | 3.9 | % | |||||||
Commercial | 3,014,884 | 3,015,008 | (124 | ) | — | % | — | % | ||||||
Other | 5,091 | 5,010 | 81 | 1.6 | % | 6.5 | % | |||||||
Total loans | $ | 5,779,213 | $ | 5,719,373 | $ | 59,840 | 1.0 | % | 4.2 | % |
PNB less Carolina Alliance | ||||||||||||||
(In thousands) | June 30, 2019 | December 31, 2018 | change | % change | % change annualized | |||||||||
Home equity | $ | 201,751 | $ | 215,426 | $ | (13,675 | ) | (6.3 | )% | (12.8 | )% | |||
Installment | 1,343,806 | 1,279,831 | 63,975 | 5.0 | % | 10.1 | % | |||||||
Real estate | 1,213,681 | 1,207,160 | 6,521 | 0.5 | % | 1.1 | % | |||||||
Commercial | 3,014,884 | 2,963,339 | 51,545 | 1.7 | % | 3.5 | % | |||||||
Other | 5,091 | 5,417 | (326 | ) | (6.0 | )% | (12.1 | )% | ||||||
Total loans | $ | 5,779,213 | $ | 5,671,173 | $ | 108,040 | 1.9 | % | 3.8 | % |
PNB less Carolina Alliance and NewDominion | ||||||||||||
(In thousands) | June 30, 2019 | June 30, 2018 | change | % change | ||||||||
Home equity | $ | 173,222 | $ | 188,797 | $ | (15,575 | ) | (8.2 | )% | |||
Installment | 1,343,295 | 1,271,795 | 71,500 | 5.6 | % | |||||||
Real estate | 1,151,596 | 1,149,813 | 1,783 | 0.2 | % | |||||||
Commercial | 2,815,884 | 2,691,118 | 124,766 | 4.6 | % | |||||||
Other | 5,091 | 4,037 | 1,054 | 26.1 | % | |||||||
Total loans | $ | 5,489,088 | $ | 5,305,560 | $ | 183,528 | 3.5 | % |
PNB less Carolina Alliance | ||||||||||||||
(In thousands) | June 30, 2019 | March 31, 2019 | change | % change | % change annualized | |||||||||
Non-interest bearing deposits | $ | 1,837,834 | $ | 1,864,932 | $ | (27,098 | ) | (1.5 | )% | (5.8 | )% | |||
Transaction accounts | 1,417,279 | 1,418,759 | (1,480 | ) | (0.1 | )% | (0.4 | )% | ||||||
Savings | 2,234,451 | 2,151,797 | 82,654 | 3.8 | % | 15.4 | % | |||||||
Certificates of deposits | 997,072 | 982,983 | 14,089 | 1.4 | % | 5.7 | % | |||||||
Total deposits | $ | 6,486,636 | $ | 6,418,471 | $ | 68,165 | 1.1 | % | 4.3 | % |
PNB less Carolina Alliance | ||||||||||||||
(In thousands) | June 30, 2019 | December 31, 2018 | change | % change | % change annualized | |||||||||
Non-interest bearing deposits | $ | 1,837,834 | $ | 1,882,979 | $ | (45,145 | ) | (2.4 | )% | (4.8 | )% | |||
Transaction accounts | 1,417,279 | 1,364,743 | 52,536 | 3.8 | % | 7.8 | % | |||||||
Savings | 2,234,451 | 2,043,897 | 190,554 | 9.3 | % | 18.8 | % | |||||||
Certificates of deposits | 997,072 | 1,043,177 | (46,105 | ) | (4.4 | )% | (8.9 | )% | ||||||
Total deposits | $ | 6,486,636 | $ | 6,334,796 | $ | 151,840 | 2.4 | % | 4.8 | % |
PNB less Carolina Alliance and NewDominion | ||||||||||||
(In thousands) | June 30, 2019 | June 30, 2018 | change | % change | ||||||||
Non-interest bearing deposits | $ | 1,751,928 | $ | 1,705,549 | $ | 46,379 | 2.7 | % | ||||
Transaction accounts | 1,338,130 | 1,330,809 | 7,321 | 0.6 | % | |||||||
Savings | 2,232,466 | 2,062,841 | 169,625 | 8.2 | % | |||||||
Certificates of deposits | 960,787 | 1,026,920 | (66,133 | ) | (6.4 | )% | ||||||
Total deposits | $ | 6,283,311 | $ | 6,126,119 | $ | 157,192 | 2.6 | % |
(In thousands) | Q2 2019 | Q1 2019 | Six months YTD 2019 | Six months YTD 2018 | 2018 | 2017 | ||||||||||||
Net interest income | $ | 1,217 | $ | 1,325 | $ | 2,542 | $ | 2,566 | $ | 5,048 | $ | 5,839 | ||||||
Provision for loan losses | 170 | 145 | 315 | 590 | 1,328 | 1,917 | ||||||||||||
Other income | 51 | 32 | 83 | 72 | 187 | 103 | ||||||||||||
Other expense | 891 | 845 | 1,736 | 1,602 | 3,245 | 3,099 | ||||||||||||
Income before income taxes | $ | 207 | $ | 367 | $ | 574 | $ | 446 | $ | 662 | $ | 926 | ||||||
Income tax expense | 44 | 80 | 124 | 94 | 141 | 666 | ||||||||||||
Net income | $ | 163 | $ | 287 | $ | 450 | $ | 352 | $ | 521 | $ | 260 |
(In thousands) | June 30, 2019 | December 31, 2018 | June 30, 2018 | % change from 12/31/18 | % change from 6/30/18 | |||||||||
Loans | $ | 29,981 | $ | 32,664 | $ | 30,612 | (8.21 | )% | (2.06 | )% | ||||
Allowance for loan losses | 2,243 | 2,445 | 2,342 | (8.26 | )% | (4.23 | )% | |||||||
Net loans | 27,738 | 30,219 | 28,270 | (8.21 | )% | (1.88 | )% | |||||||
Total assets | 29,222 | 31,388 | 29,232 | (6.90 | )% | (0.03 | )% | |||||||
Average assets (1) | 30,279 | 29,741 | 30,656 | 1.81 | % | (1.23 | )% | |||||||
Return on average assets (2) | 3.00 | % | 1.75 | % | 2.32 | % | 71.43 | % | 29.31 | % |
(In thousands) | Q2 2019 | Q1 2019 | Six months YTD 2019 | Six months YTD 2018 | 2018 | 2017 | ||||||||||||
Net interest (expense) income | $ | (259 | ) | $ | 169 | $ | (90 | ) | $ | 2,902 | $ | 3,303 | $ | 2,677 | ||||
Recovery of loan losses | (54 | ) | (87 | ) | (141 | ) | (500 | ) | (952 | ) | (3,258 | ) | ||||||
Other income | 83 | 1,285 | 1,368 | 8,088 | 11,933 | 3,584 | ||||||||||||
Other expense | 9,287 | 4,008 | 13,295 | 8,070 | 18,667 | 14,172 | ||||||||||||
Net (loss) income before income tax benefit | $ | (9,409 | ) | $ | (2,467 | ) | $ | (11,876 | ) | $ | 3,420 | $ | (2,479 | ) | $ | (4,653 | ) | |
Income tax (benefit) expense | (2,027 | ) | (943 | ) | (2,970 | ) | (50 | ) | (2,873 | ) | (1,320 | ) | ||||||
Net (loss) income | $ | (7,382 | ) | $ | (1,524 | ) | $ | (8,906 | ) | $ | 3,470 | $ | 394 | $ | (3,333 | ) |
(In thousands) | Q2 2019 | Q1 2019 | Six months YTD 2019 | Six months YTD 2018 | 2018 | 2017 | ||||||||||||
Net interest income | $ | 75,851 | $ | 67,776 | $ | 143,627 | $ | 129,592 | $ | 266,898 | $ | 243,759 | ||||||
Provision for loan losses | 1,919 | 2,498 | 4,417 | 1,646 | 7,945 | 8,557 | ||||||||||||
Other income | 22,808 | 22,025 | 44,833 | 50,145 | 101,101 | 86,429 | ||||||||||||
Other expense | 70,192 | 56,827 | 127,019 | 106,842 | 228,755 | 203,162 | ||||||||||||
Income before income taxes | $ | 26,548 | $ | 30,476 | $ | 57,024 | $ | 71,249 | $ | 131,299 | $ | 118,469 | ||||||
Income tax expense | 4,385 | 5,021 | 9,406 | 11,885 | 20,912 | 34,227 | ||||||||||||
Net income | $ | 22,163 | $ | 25,455 | $ | 47,618 | $ | 59,364 | $ | 110,387 | $ | 84,242 |
(In thousands) | Q 2019 | Q1 2019 | Six months YTD 2019 | Six months YTD 2018 | 2018 | 2017 | ||||||||||||
PNB | $ | 1,803 | $ | 2,440 | $ | 4,243 | $ | 1,556 | $ | 7,569 | $ | 9,898 | ||||||
GFSC | 170 | 145 | 315 | 590 | 1,328 | 1,917 | ||||||||||||
All Other | (54 | ) | (87 | ) | (141 | ) | (500 | ) | (952 | ) | (3,258 | ) | ||||||
Total Park | $ | 1,919 | $ | 2,498 | $ | 4,417 | $ | 1,646 | $ | 7,945 | $ | 8,557 |
(In thousands) | 6/30/2019 | 12/31/2018 | 6/30/2018 | ||||||
Total allowance for loan losses | $ | 54,003 | $ | 51,512 | $ | 49,452 | |||
Specific reserve | 2,379 | 2,273 | 1,396 | ||||||
General reserve | $ | 51,624 | $ | 49,239 | $ | 48,056 | |||
Total loans | $ | 6,376,737 | $ | 5,692,132 | $ | 5,324,974 | |||
Impaired commercial loans | 50,225 | 48,135 | 61,705 | ||||||
Total loans less impaired commercial loans | $ | 6,326,512 | $ | 5,643,997 | $ | 5,263,269 | |||
General reserve as a % of total loans less impaired commercial loans | 0.82 | % | 0.87 | % | 0.91 | % | |||
General reserve as a % of total loans less impaired commercial loans (excluding acquired loans) | 0.92 | % | 0.91 | % | 0.91 | % |
(a) | Not applicable |
(b) | Not applicable |
(c) | Not applicable |
(d) | Exhibits. The following exhibit is included with this Current Report on Form 8-K: |
PARK NATIONAL CORPORATION | ||
Dated: July 22, 2019 | By: | /s/ Brady T. Burt |
Brady T. Burt | ||
Chief Financial Officer, Secretary and Treasurer | ||
PARK NATIONAL CORPORATION | ||||||||||||||
Financial Highlights | ||||||||||||||
As of or for the three months ended June 30, 2019, March 31, 2019, and June 30, 2018 | ||||||||||||||
2019 | 2019 | 2018 | Percent change vs. | |||||||||||
(in thousands, except share and per share data) | 2nd QTR | 1st QTR | 2nd QTR | 1Q '19 | 2Q '18 | |||||||||
INCOME STATEMENT: | ||||||||||||||
Net interest income | $ | 75,851 | $ | 67,776 | $ | 64,742 | 11.9 | % | 17.2 | % | ||||
Provision for loan losses | 1,919 | 2,498 | 1,386 | (23.2) | % | 38.5 | % | |||||||
Other income | 22,808 | 22,025 | 23,242 | 3.6 | % | (1.9) | % | |||||||
Other expense | 70,192 | 56,827 | 52,534 | 23.5 | % | 33.6 | % | |||||||
Income before income taxes | $ | 26,548 | $ | 30,476 | $ | 34,064 | (12.9 | )% | (22.1) | % | ||||
Income taxes | 4,385 | 5,021 | 5,823 | (12.7 | )% | (24.7) | % | |||||||
Net income | $ | 22,163 | $ | 25,455 | $ | 28,241 | (12.9 | )% | (21.5) | % | ||||
MARKET DATA: | ||||||||||||||
Earnings per common share - basic (b) | $ | 1.34 | $ | 1.63 | $ | 1.85 | (17.8 | )% | (27.6 | )% | ||||
Earnings per common share - diluted (b) | 1.33 | 1.62 | 1.83 | (17.9 | )% | (27.3 | )% | |||||||
Cash dividends declared per common share | 1.01 | 1.21 | 1.21 | (16.5 | )% | (16.5 | )% | |||||||
Book value per common share at period end | 56.92 | 54.06 | 49.51 | 5.3 | % | 15.0 | % | |||||||
Market price per common share at period end | 99.39 | 94.75 | 111.42 | 4.9 | % | (10.8 | )% | |||||||
Market capitalization at period end | 1,631,741 | 1,480,990 | 1,699,277 | 10.2 | % | (4.0 | )% | |||||||
Weighted average common shares - basic (a) | 16,560,545 | 15,651,541 | 15,285,532 | 5.8 | % | 8.3 | % | |||||||
Weighted average common shares - diluted (a) | 16,642,571 | 15,744,777 | 15,417,607 | 5.7 | % | 7.9 | % | |||||||
Common shares outstanding at period end | 16,417,562 | 15,630,499 | 15,251,095 | 5.0 | % | 7.6 | % | |||||||
PERFORMANCE RATIOS: (annualized) | ||||||||||||||
Return on average assets (a)(b) | 1.04 | % | 1.32 | % | 1.52 | % | (21.2) | % | (31.6) | % | ||||
Return on average shareholders' equity (a)(b) | 9.49 | % | 12.31 | % | 15.02 | % | (22.9) | % | (36.8) | % | ||||
Yield on loans | 5.23 | % | 5.14 | % | 4.90 | % | 1.8 | % | 6.7 | % | ||||
Yield on investment securities | 2.78 | % | 2.82 | % | 2.73 | % | (1.4) | % | 1.8 | % | ||||
Yield on money market instruments | 2.64 | % | 2.76 | % | 1.99 | % | (4.3) | % | 32.7 | % | ||||
Yield on interest earning assets | 4.76 | % | 4.66 | % | 4.39 | % | 2.1 | % | 8.4 | % | ||||
Cost of interest bearing deposits | 1.04 | % | 0.97 | % | 0.64 | % | 7.2 | % | 62.5 | % | ||||
Cost of borrowings | 2.15 | % | 2.01 | % | 1.84 | % | 7.0 | % | 16.8 | % | ||||
Cost of paying interest bearing liabilities | 1.16 | % | 1.10 | % | 0.79 | % | 5.5 | % | 46.8 | % | ||||
Net interest margin (g) | 3.92 | % | 3.86 | % | 3.81 | % | 1.6 | % | 2.9 | % | ||||
Efficiency ratio (g) | 70.61 | % | 62.77 | % | 59.23 | % | 12.5 | % | 19.2 | % | ||||
OTHER RATIOS (NON-GAAP): | ||||||||||||||
Tangible book value per share (d) | $ | 46.30 | $ | 46.42 | $ | 44.77 | (0.3) | % | 3.4 | % | ||||
N.M. - Not meaningful | ||||||||||||||
Note: Explanations for footnotes (a) - (i) are included at the end of the financial tables | ||||||||||||||
PARK NATIONAL CORPORATION | ||||||||||||||
Financial Highlights (continued) | ||||||||||||||
As of or for the three months ended June 30, 2019, March 31, 2019, and June 30, 2018 | ||||||||||||||
Percent change vs. | ||||||||||||||
(in thousands, except ratios) | June 30, 2019 | March 31, 2019 | June 30, 2018 | 1Q '19 | 2Q '18 | |||||||||
BALANCE SHEET: | ||||||||||||||
Investment securities | $ | 1,396,530 | $ | 1,400,987 | $ | 1,529,783 | (0.3) | % | (8.7) | % | ||||
Loans | 6,376,737 | 5,740,760 | 5,324,974 | 11.1 | % | 19.8 | % | |||||||
Allowance for loan losses | 54,003 | 53,368 | 49,452 | 1.2 | % | 9.2 | % | |||||||
Goodwill and other intangibles | 174,288 | 119,421 | 72,334 | 45.9 | % | 140.9 | % | |||||||
Other real estate owned (OREO) | 3,839 | 4,629 | 5,729 | (17.1) | % | (33.0) | % | |||||||
Total assets | 8,657,453 | 7,852,246 | 7,462,156 | 10.3 | % | 16.0 | % | |||||||
Total deposits | 7,032,120 | 6,325,212 | 6,015,844 | 11.2 | % | 16.9 | % | |||||||
Borrowings | 595,578 | 602,569 | 631,139 | (1.2) | % | (5.6) | % | |||||||
Total shareholders' equity | 934,432 | 845,044 | 755,088 | 10.6 | % | 23.8 | % | |||||||
Tangible equity (d) | 760,144 | 725,623 | 682,754 | 4.8 | % | 11.3 | % | |||||||
Total nonperforming loans | 86,833 | 86,471 | 98,867 | 0.4 | % | (12.2) | % | |||||||
Total nonperforming assets | 94,168 | 94,596 | 104,596 | (0.5) | % | (10.0) | % | |||||||
ASSET QUALITY RATIOS: | ||||||||||||||
Loans as a % of period end total assets | 73.66 | % | 73.11 | % | 71.36 | % | 0.8 | % | 3.2 | % | ||||
Total nonperforming loans as a % of period end loans | 1.36 | % | 1.51 | % | 1.86 | % | (9.9) | % | (26.9) | % | ||||
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets | 1.48 | % | 1.65 | % | 1.96 | % | (10.3) | % | (24.5) | % | ||||
Allowance for loan losses as a % of period end loans | 0.85 | % | 0.93 | % | 0.93 | % | (8.6) | % | (8.6) | % | ||||
Net loan charge-offs | $ | 1,284 | $ | 642 | $ | 903 | 100.0 | % | 42.2 | % | ||||
Annualized net loan charge-offs as a % of average loans (a) | 0.08 | % | 0.05 | % | 0.07 | % | 60.0 | % | 14.3 | % | ||||
CAPITAL & LIQUIDITY: | ||||||||||||||
Total shareholders' equity / Period end total assets | 10.79 | % | 10.76 | % | 10.12 | % | 0.3 | % | 6.6 | % | ||||
Tangible equity (d) / Tangible assets (f) | 8.96 | % | 9.38 | % | 9.24 | % | (4.5) | % | (3.0) | % | ||||
Average shareholders' equity / Average assets (a) | 10.92 | % | 10.71 | % | 10.11 | % | 2.0 | % | 8.0 | % | ||||
Average shareholders' equity / Average loans (a) | 14.79 | % | 14.74 | % | 14.26 | % | 0.3 | % | 3.7 | % | ||||
Average loans / Average deposits (a) | 91.03 | % | 90.78 | % | 88.23 | % | 0.3 | % | 3.2 | % | ||||
PARK NATIONAL CORPORATION | |||||||||
Financial Highlights | |||||||||
Six months ended June 30, 2019 and June 30, 2018 | |||||||||
2019 | 2018 | ||||||||
(in thousands, except share and per share data and ratios) | Six months ended June 30 | Six months ended June 30 | Percent change vs '18 | ||||||
INCOME STATEMENT: | |||||||||
Net interest income | $ | 143,627 | $ | 129,592 | 10.8 | % | |||
Provision for loan losses | 4,417 | 1,646 | 168.3 | % | |||||
Other income | 44,833 | 50,145 | (10.6) | % | |||||
Other expense | 127,019 | 106,842 | 18.9 | % | |||||
Income before income taxes | $ | 57,024 | $ | 71,249 | (20.0) | % | |||
Income taxes | 9,406 | 11,885 | (20.9) | % | |||||
Net income | $ | 47,618 | $ | 59,364 | (19.8) | % | |||
MARKET DATA: | |||||||||
Earnings per common share - basic (b) | $ | 2.96 | $ | 3.88 | (23.7 | )% | |||
Earnings per common share - diluted (b) | 2.94 | 3.85 | (23.6 | )% | |||||
Cash dividends declared per common share | 2.22 | 2.15 | 3.3 | % | |||||
Weighted average common shares - basic (a) | 16,106,043 | 15,286,932 | 5.4 | % | |||||
Weighted average common shares - diluted (a) | 16,193,643 | 15,424,585 | 5.0 | % | |||||
PERFORMANCE RATIOS: (annualized) | |||||||||
Return on average assets (a)(b) | 1.17 | % | 1.61 | % | (27.3) | % | |||
Return on average shareholders' equity (a)(b) | 10.81 | % | 15.92 | % | (32.1) | % | |||
Yield on loans | 5.19 | % | 4.92 | % | 5.5 | % | |||
Yield on investment securities | 2.80 | % | 2.68 | % | 4.5 | % | |||
Yield on money market instruments | 2.70 | % | 1.76 | % | 53.4 | % | |||
Yield on interest earning assets | 4.71 | % | 4.39 | % | 7.3 | % | |||
Cost of interest bearing deposits | 1.01 | % | 0.59 | % | 71.2 | % | |||
Cost of borrowings | 2.08 | % | 1.78 | % | 16.9 | % | |||
Cost of paying interest bearing liabilities | 1.13 | % | 0.75 | % | 50.7 | % | |||
Net interest margin (g) | 3.89 | % | 3.84 | % | 1.3 | % | |||
Efficiency ratio (g) | 66.87 | % | 58.98 | % | 13.4 | % | |||
ASSET QUALITY RATIOS: | |||||||||
Net loan charge-offs | $ | 1,926 | $ | 2,182 | (11.7) | % | |||
Annualized net loan charge-offs as a % of average loans (a) | 0.06 | % | 0.08 | % | (25.0) | % | |||
CAPITAL & LIQUIDITY: | |||||||||
Average shareholders' equity / Average assets (a) | 10.82 | % | 10.08 | % | 7.3 | % | |||
Average shareholders' equity / Average loans (a) | 14.77 | % | 14.20 | % | 4.0 | % | |||
Average loans / Average deposits (a) | 90.91 | % | 88.80 | % | 2.4 | % | |||
N.M. - Not meaningful | |||||||||
Note: Explanations for footnotes (a) - (i) are included at the end of the financial tables |
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) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Interest income: | ||||||||||||||||
Interest and fees on loans | $ | 82,471 | $ | 64,496 | $ | 154,474 | $ | 128,898 | ||||||||
Interest on: | ||||||||||||||||
Obligations of U.S. Government, its agencies | ||||||||||||||||
and other securities - taxable | 6,919 | 7,746 | 13,914 | 14,513 | ||||||||||||
Obligations of states and political subdivisions - tax-exempt | 2,308 | 2,178 | 4,525 | 4,352 | ||||||||||||
Other interest income | 528 | 271 | 1,169 | 642 | ||||||||||||
Total interest income | 92,226 | 74,691 | 174,082 | 148,405 | ||||||||||||
Interest expense: | ||||||||||||||||
Interest on deposits: | ||||||||||||||||
Demand and savings deposits | 8,811 | 4,107 | 15,904 | 7,397 | ||||||||||||
Time deposits | 4,357 | 2,886 | 8,134 | 5,437 | ||||||||||||
Interest on borrowings | 3,207 | 2,956 | 6,417 | 5,979 | ||||||||||||
Total interest expense | 16,375 | 9,949 | 30,455 | 18,813 | ||||||||||||
Net interest income | 75,851 | 64,742 | 143,627 | 129,592 | ||||||||||||
Provision for loan losses | 1,919 | 1,386 | 4,417 | 1,646 | ||||||||||||
Net interest income after provision for loan losses | 73,932 | 63,356 | 139,210 | 127,946 | ||||||||||||
Other income | 22,808 | 23,242 | 44,833 | 50,145 | ||||||||||||
Other expense | 70,192 | 52,534 | 127,019 | 106,842 | ||||||||||||
Income before income taxes | 26,548 | 34,064 | 57,024 | 71,249 | ||||||||||||
Income taxes | 4,385 | 5,823 | 9,406 | 11,885 | ||||||||||||
Net income | $ | 22,163 | $ | 28,241 | $ | 47,618 | $ | 59,364 | ||||||||
Per Common Share: | ||||||||||||||||
Net income - basic | $ | 1.34 | $ | 1.85 | $ | 2.96 | $ | 3.88 | ||||||||
Net income - diluted | $ | 1.33 | $ | 1.83 | $ | 2.94 | $ | 3.85 | ||||||||
Weighted average shares - basic | 16,560,545 | 15,285,532 | 16,106,043 | 15,286,932 | ||||||||||||
Weighted average shares - diluted | 16,642,571 | 15,417,607 | 16,193,643 | 15,424,585 | ||||||||||||
Cash dividends declared | $ | 1.01 | $ | 1.21 | $ | 2.22 | $ | 2.15 | ||||||||
PARK NATIONAL CORPORATION | ||||||
Consolidated Balance Sheets | ||||||
(in thousands, except share data) | June 30, 2019 | December 31, 2018 | ||||
Assets | ||||||
Cash and due from banks | $ | 160,589 | $ | 141,890 | ||
Money market instruments | 98,916 | 25,324 | ||||
Investment securities | 1,396,530 | 1,428,145 | ||||
Loans | 6,376,737 | 5,692,132 | ||||
Allowance for loan losses | (54,003 | ) | (51,512 | ) | ||
Loans, net | 6,322,734 | 5,640,620 | ||||
Bank premises and equipment, net | 72,129 | 59,771 | ||||
Goodwill and other intangible assets | 174,288 | 119,710 | ||||
Other real estate owned | 3,839 | 4,303 | ||||
Other assets | 428,428 | 384,545 | ||||
Total assets | $ | 8,657,453 | $ | 7,804,308 | ||
Liabilities and Shareholders' Equity | ||||||
Deposits: | ||||||
Noninterest bearing | $ | 1,907,027 | $ | 1,804,881 | ||
Interest bearing | 5,125,093 | 4,455,979 | ||||
Total deposits | 7,032,120 | 6,260,860 | ||||
Borrowings | 595,578 | 636,966 | ||||
Other liabilities | 95,323 | 73,976 | ||||
Total liabilities | $ | 7,723,021 | $ | 6,971,802 | ||
Shareholders' Equity: | ||||||
Preferred shares (200,000 shares authorized; no shares outstanding at June 30, 2019 and December 31, 2018) | $ | — | $ | — | ||
Common shares (No par value; 20,000,000 shares authorized in 2019 and 2018; 17,623,216 shares issued at June 30, 2019 and 16,586,165 shares issued at December 31, 2018) | 456,911 | 358,598 | ||||
Accumulated other comprehensive loss, net of taxes | (26,307 | ) | (49,788 | ) | ||
Retained earnings | 625,227 | 614,069 | ||||
Treasury shares (1,205,654 shares at June 30, 2019 and 887,987 shares at December 31, 2018) | (121,399 | ) | (90,373 | ) | ||
Total shareholders' equity | $ | 934,432 | $ | 832,506 | ||
Total liabilities and shareholders' equity | $ | 8,657,453 | $ | 7,804,308 |
PARK NATIONAL CORPORATION | |||||||||||||
Consolidated Average Balance Sheets | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||
June 30, | June 30, | ||||||||||||
(in thousands) | 2019 | 2018 | 2019 | 2018 | |||||||||
Assets | |||||||||||||
Cash and due from banks | $ | 127,115 | $ | 118,870 | $ | 122,485 | $ | 118,561 | |||||
Money market instruments | 80,239 | 54,551 | 87,212 | 73,437 | |||||||||
Investment securities | 1,413,309 | 1,506,699 | 1,401,641 | 1,478,564 | |||||||||
Loans | 6,332,167 | 5,289,056 | 6,012,446 | 5,295,814 | |||||||||
Allowance for loan losses | (53,849 | ) | (49,750 | ) | (53,124 | ) | (50,168 | ) | |||||
Loans, net | 6,278,318 | 5,239,306 | 5,959,322 | 5,245,646 | |||||||||
Bank premises and equipment, net | 71,253 | 56,109 | 66,079 | 56,307 | |||||||||
Goodwill and other intangible assets | 165,311 | 72,334 | 142,587 | 72,334 | |||||||||
Other real estate owned | 4,183 | 8,416 | 4,277 | 10,962 | |||||||||
Other assets | 436,767 | 403,463 | 422,899 | 401,608 | |||||||||
Total assets | $ | 8,576,495 | $ | 7,459,748 | $ | 8,206,502 | $ | 7,457,419 | |||||
Liabilities and Shareholders' Equity | |||||||||||||
Deposits: | |||||||||||||
Noninterest bearing | $ | 1,887,335 | $ | 1,602,228 | $ | 1,809,213 | $ | 1,585,742 | |||||
Interest bearing | 5,068,709 | 4,392,733 | 4,804,076 | 4,378,091 | |||||||||
Total deposits | 6,956,044 | 5,994,961 | 6,613,289 | 5,963,833 | |||||||||
Borrowings | 597,448 | 645,909 | 622,414 | 678,296 | |||||||||
Other liabilities | 86,377 | 64,777 | 82,853 | 63,414 | |||||||||
Total liabilities | $ | 7,639,869 | $ | 6,705,647 | $ | 7,318,556 | $ | 6,705,543 | |||||
Shareholders' Equity: | |||||||||||||
Preferred shares | $ | — | $ | — | $ | — | $ | — | |||||
Common shares | 455,895 | 307,689 | 407,533 | 307,714 | |||||||||
Accumulated other comprehensive loss, net of taxes | (36,825 | ) | (54,184 | ) | (41,655 | ) | (47,965 | ) | |||||
Retained earnings | 624,995 | 588,170 | 623,291 | 579,448 | |||||||||
Treasury shares | (107,439 | ) | (87,574 | ) | (101,223 | ) | (87,321 | ) | |||||
Total shareholders' equity | $ | 936,626 | $ | 754,101 | $ | 887,946 | $ | 751,876 | |||||
Total liabilities and shareholders' equity | $ | 8,576,495 | $ | 7,459,748 | $ | 8,206,502 | $ | 7,457,419 |
PARK NATIONAL CORPORATION | |||||||||||||||
Consolidated Statements of Income - Linked Quarters | |||||||||||||||
2019 | 2019 | 2018 | 2018 | 2018 | |||||||||||
(in thousands, except per share data) | 2nd QTR | 1st QTR | 4th QTR | 3rd QTR | 2nd QTR | ||||||||||
Interest income: | |||||||||||||||
Interest and fees on loans | $ | 82,471 | $ | 72,003 | $ | 72,342 | $ | 69,905 | $ | 64,496 | |||||
Interest on: | |||||||||||||||
Obligations of U.S. Government, its agencies and other securities - taxable | 6,919 | 6,995 | 7,275 | 7,691 | 7,746 | ||||||||||
Obligations of states and political subdivisions - tax-exempt | 2,308 | 2,217 | 2,213 | 2,205 | 2,178 | ||||||||||
Other interest income | 528 | 641 | 337 | 428 | 271 | ||||||||||
Total interest income | 92,226 | 81,856 | 82,167 | 80,229 | 74,691 | ||||||||||
Interest expense: | |||||||||||||||
Interest on deposits: | |||||||||||||||
Demand and savings deposits | 8,811 | 7,093 | 6,006 | 6,412 | 4,107 | ||||||||||
Time deposits | 4,357 | 3,777 | 3,610 | 3,328 | 2,886 | ||||||||||
Interest on borrowings | 3,207 | 3,210 | 2,921 | 2,813 | 2,956 | ||||||||||
Total interest expense | 16,375 | 14,080 | 12,537 | 12,553 | 9,949 | ||||||||||
Net interest income | 75,851 | 67,776 | 69,630 | 67,676 | 64,742 | ||||||||||
Provision for loan losses | 1,919 | 2,498 | 3,359 | 2,940 | 1,386 | ||||||||||
Net interest income after provision for loan losses | 73,932 | 65,278 | 66,271 | 64,736 | 63,356 | ||||||||||
Other income | 22,808 | 22,025 | 26,892 | 24,064 | 23,242 | ||||||||||
Other expense | 70,192 | 56,827 | 62,597 | 59,316 | 52,534 | ||||||||||
Income before income taxes | 26,548 | 30,476 | 30,566 | 29,484 | 34,064 | ||||||||||
Income taxes | 4,385 | 5,021 | 4,305 | 4,722 | 5,823 | ||||||||||
Net income | $ | 22,163 | $ | 25,455 | $ | 26,261 | $ | 24,762 | $ | 28,241 | |||||
Per Common Share: | |||||||||||||||
Net income - basic | $ | 1.34 | $ | 1.63 | $ | 1.67 | $ | 1.58 | $ | 1.85 | |||||
Net income - diluted | $ | 1.33 | $ | 1.62 | $ | 1.67 | $ | 1.56 | $ | 1.83 |
PARK NATIONAL CORPORATION | |||||||||||||||
Detail of other income and other expense - Linked Quarters | |||||||||||||||
2019 | 2019 | 2018 | 2018 | 2018 | |||||||||||
(in thousands) | 2nd QTR | 1st QTR | 4th QTR | 3rd QTR | 2nd QTR | ||||||||||
Other income: | |||||||||||||||
Income from fiduciary activities | $ | 6,935 | $ | 6,723 | $ | 6,814 | $ | 6,418 | $ | 6,666 | |||||
Service charges on deposits | 2,655 | 2,559 | 2,852 | 2,861 | 2,826 | ||||||||||
Other service income | 4,040 | 2,818 | 3,279 | 3,246 | 3,472 | ||||||||||
Debit card fee income | 5,227 | 4,369 | 4,581 | 4,352 | 4,382 | ||||||||||
Bank owned life insurance income | 1,286 | 1,006 | 2,190 | 2,585 | 1,031 | ||||||||||
ATM fees | 460 | 440 | 444 | 500 | 510 | ||||||||||
OREO valuation adjustments | (55 | ) | (27 | ) | (93 | ) | (77 | ) | (114 | ) | |||||
(Loss) gain on the sale of OREO, net | (159 | ) | (12 | ) | 142 | (81 | ) | (147 | ) | ||||||
Net loss on the sale of investment securities | (607 | ) | — | — | — | — | |||||||||
Unrealized gain (loss) on equity securities | 232 | 1,742 | (17 | ) | 89 | 1,348 | |||||||||
Other components of net periodic benefit income | 1,183 | 1,183 | 1,705 | 1,705 | 1,705 | ||||||||||
Gain on the sale of loans | — | — | 2,826 | — | — | ||||||||||
Miscellaneous | 1,611 | 1,224 | 2,169 | 2,466 | 1,563 | ||||||||||
Total other income | $ | 22,808 | $ | 22,025 | $ | 26,892 | $ | 24,064 | $ | 23,242 | |||||
Other expense: | |||||||||||||||
Salaries | $ | 32,093 | $ | 25,805 | $ | 27,103 | $ | 27,229 | $ | 24,103 | |||||
Employee benefits | 9,014 | 8,430 | 7,977 | 7,653 | 7,630 | ||||||||||
Occupancy expense | 3,223 | 3,011 | 2,769 | 2,976 | 2,570 | ||||||||||
Furniture and equipment expense | 4,386 | 4,150 | 4,170 | 3,807 | 4,013 | ||||||||||
Data processing fees | 2,905 | 2,133 | 2,222 | 2,580 | 1,902 | ||||||||||
Professional fees and services | 10,106 | 6,006 | 8,516 | 8,065 | 6,123 | ||||||||||
Marketing | 1,455 | 1,226 | 1,377 | 1,364 | 1,185 | ||||||||||
Insurance | 1,381 | 1,156 | 1,277 | 1,388 | 1,196 | ||||||||||
Communication | 1,375 | 1,333 | 1,335 | 1,207 | 1,189 | ||||||||||
State tax expense | 1,054 | 1,005 | 750 | 1,000 | 958 | ||||||||||
Amortization of intangible assets | 702 | 289 | 289 | 289 | — | ||||||||||
Miscellaneous | 2,498 | 2,283 | 4,812 | 1,758 | 1,665 | ||||||||||
Total other expense | $ | 70,192 | $ | 56,827 | $ | 62,597 | $ | 59,316 | $ | 52,534 |
PARK NATIONAL CORPORATION | ||||||||||||||||||
Asset Quality Information | ||||||||||||||||||
Year ended December 31, | ||||||||||||||||||
(in thousands, except ratios) | June 30, 2019 | March 31, 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||
Allowance for loan losses: | ||||||||||||||||||
Allowance for loan losses, beginning of period | $ | 53,368 | $ | 51,512 | $ | 49,988 | $ | 50,624 | $ | 56,494 | $ | 54,352 | ||||||
Charge-offs | 2,928 | 2,987 | 13,552 | 19,403 | 20,799 | 14,290 | ||||||||||||
Recoveries | 1,644 | 2,345 | 7,131 | 10,210 | 20,030 | 11,442 | ||||||||||||
Net charge-offs | 1,284 | 642 | 6,421 | 9,193 | 769 | 2,848 | ||||||||||||
Provision for (recovery of) loan losses | 1,919 | 2,498 | 7,945 | 8,557 | (5,101 | ) | 4,990 | |||||||||||
Allowance for loan losses, end of period | $ | 54,003 | $ | 53,368 | $ | 51,512 | $ | 49,988 | $ | 50,624 | $ | 56,494 | ||||||
General reserve trends: | ||||||||||||||||||
Allowance for loan losses, end of period | $ | 54,003 | $ | 53,368 | $ | 51,512 | $ | 49,988 | $ | 50,624 | $ | 56,494 | ||||||
Specific reserves | 2,379 | 2,468 | 2,273 | 684 | 548 | 4,191 | ||||||||||||
General reserves | $ | 51,624 | $ | 50,900 | $ | 49,239 | $ | 49,304 | $ | 50,076 | $ | 52,303 | ||||||
Total loans | $ | 6,376,737 | $ | 5,740,760 | $ | 5,692,132 | $ | 5,372,483 | $ | 5,271,857 | $ | 5,068,085 | ||||||
Impaired commercial loans | 50,225 | 50,881 | 48,135 | 56,545 | 70,415 | 80,599 | ||||||||||||
Total loans less impaired commercial loans | $ | 6,326,512 | $ | 5,689,879 | $ | 5,643,997 | $ | 5,315,938 | $ | 5,201,442 | $ | 4,987,486 | ||||||
Asset Quality Ratios: | ||||||||||||||||||
Net charge-offs as a % of average loans (annualized) | 0.08 | % | 0.05 | % | 0.12 | % | 0.17 | % | 0.02 | % | 0.06 | % | ||||||
Allowance for loan losses as a % of period end loans | 0.85 | % | 0.93 | % | 0.90 | % | 0.93 | % | 0.96 | % | 1.11 | % | ||||||
General reserves as a % of total loans less impaired commercial loans | 0.82 | % | 0.89 | % | 0.87 | % | 0.93 | % | 0.96 | % | 1.05 | % | ||||||
General reserves as a % of total loans less impaired commercial loans (excluding acquired loans) | 0.92 | % | 0.93 | % | 0.91 | % | N.A. | N.A. | N.A. | |||||||||
Nonperforming assets: | ||||||||||||||||||
Nonaccrual loans | $ | 66,675 | $ | 69,175 | $ | 67,954 | $ | 72,056 | $ | 87,822 | $ | 95,887 | ||||||
Accruing troubled debt restructurings | 17,759 | 15,757 | 15,173 | 20,111 | 18,175 | 24,979 | ||||||||||||
Loans past due 90 days or more | 2,399 | 1,539 | 2,243 | 1,792 | 2,086 | 1,921 | ||||||||||||
Total nonperforming loans | $ | 86,833 | $ | 86,471 | $ | 85,370 | $ | 93,959 | $ | 108,083 | $ | 122,787 | ||||||
Other real estate owned - Park National Bank | 3,042 | 3,114 | 2,788 | 6,524 | 6,025 | 7,456 | ||||||||||||
Other real estate owned - SEPH | 797 | 1,515 | 1,515 | 7,666 | 7,901 | 11,195 | ||||||||||||
Other nonperforming assets - Park National Bank | 3,496 | 3,496 | 3,464 | 4,849 | — | — | ||||||||||||
Total nonperforming assets | $ | 94,168 | $ | 94,596 | $ | 93,137 | $ | 112,998 | $ | 122,009 | $ | 141,438 | ||||||
Percentage of nonaccrual loans to period end loans | 1.05 | % | 1.20 | % | 1.19 | % | 1.34 | % | 1.67 | % | 1.89 | % | ||||||
Percentage of nonperforming loans to period end loans | 1.36 | % | 1.51 | % | 1.50 | % | 1.75 | % | 2.05 | % | 2.42 | % | ||||||
Percentage of nonperforming assets to period end loans | 1.48 | % | 1.65 | % | 1.64 | % | 2.10 | % | 2.31 | % | 2.79 | % | ||||||
Percentage of nonperforming assets to period end total assets | 1.09 | % | 1.20 | % | 1.19 | % | 1.50 | % | 1.63 | % | 1.93 | % | ||||||
PARK NATIONAL CORPORATION | ||||||||||||||||||
Asset Quality Information (continued) | ||||||||||||||||||
Year ended December 31, | ||||||||||||||||||
(in thousands, except ratios) | June 30, 2019 | March 31, 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||
New nonaccrual loan information: | ||||||||||||||||||
Nonaccrual loans, beginning of period | $ | 69,175 | $ | 67,954 | $ | 72,056 | $ | 87,822 | $ | 95,887 | $ | 100,393 | ||||||
New nonaccrual loans | 17,952 | 12,484 | 76,611 | 58,753 | 74,786 | 80,791 | ||||||||||||
Resolved nonaccrual loans | 20,452 | 11,263 | 80,713 | 74,519 | 82,851 | 85,297 | ||||||||||||
Nonaccrual loans, end of period | $ | 66,675 | $ | 69,175 | $ | 67,954 | $ | 72,056 | $ | 87,822 | $ | 95,887 | ||||||
Impaired commercial loan portfolio information (period end): | ||||||||||||||||||
Unpaid principal balance | $ | 56,338 | $ | 61,838 | $ | 59,381 | $ | 66,585 | $ | 95,358 | $ | 109,304 | ||||||
Prior charge-offs | 6,113 | 10,957 | 11,246 | 10,040 | 24,943 | 28,705 | ||||||||||||
Remaining principal balance | 50,225 | 50,881 | 48,135 | 56,545 | 70,415 | 80,599 | ||||||||||||
Specific reserves | 2,379 | 2,468 | 2,273 | 684 | 548 | 4,191 | ||||||||||||
Book value, after specific reserves | $ | 47,846 | $ | 48,413 | $ | 45,862 | $ | 55,861 | $ | 69,867 | $ | 76,408 | ||||||
PARK NATIONAL CORPORATION | ||||||||||||||||
Financial Reconciliations | ||||||||||||||||
NON-GAAP RECONCILIATIONS | ||||||||||||||||
THREE MONTHS ENDED | SIX MONTHS ENDED | |||||||||||||||
(in thousands, except share and per share data) | June 30, 2019 | March 31, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | |||||||||||
Net interest income | $ | 75,851 | $ | 67,776 | $ | 64,742 | $ | 143,627 | $ | 129,592 | ||||||
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions | 1,606 | 266 | — | 1,872 | — | |||||||||||
less interest income on former Vision Bank relationships | — | 7 | 814 | 7 | 3,310 | |||||||||||
Net interest income - adjusted | $ | 74,245 | $ | 67,503 | $ | 63,928 | $ | 141,748 | $ | 126,282 | ||||||
Provision for loan losses | $ | 1,919 | $ | 2,498 | $ | 1,386 | $ | 4,417 | $ | 1,646 | ||||||
less recoveries on former Vision Bank relationships | (65 | ) | (100 | ) | (325 | ) | (165 | ) | (505 | ) | ||||||
Provision for loan losses - adjusted | $ | 1,984 | $ | 2,598 | $ | 1,711 | $ | 4,582 | $ | 2,151 | ||||||
Other income | $ | 22,808 | $ | 22,025 | $ | 23,242 | $ | 44,833 | $ | 50,145 | ||||||
less net (loss) gain on sale of former Vision Bank OREO properties | $ | (139 | ) | $ | — | $ | 32 | $ | (139 | ) | $ | 4,202 | ||||
less gain on 8.55% prior investment in NewDominion | — | — | — | — | 3,500 | |||||||||||
less other service income related to former Vision Bank relationships | — | — | 46 | — | 1,057 | |||||||||||
less net loss on the sale of debt securities in the ordinary course of business | (607 | ) | — | — | (607 | ) | (2,271 | ) | ||||||||
Other income - adjusted | $ | 23,554 | $ | 22,025 | $ | 23,164 | $ | 45,579 | $ | 43,657 | ||||||
Other expense | $ | 70,192 | $ | 56,827 | $ | 52,534 | $ | 127,019 | $ | 106,842 | ||||||
less merger related expenses related to NewDominion and Carolina Alliance acquisitions | 6,058 | 276 | 445 | 6,334 | 595 | |||||||||||
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions | 702 | 289 | — | 991 | — | |||||||||||
less management and consulting expenses related to collection of payments on former Vision Bank loan relationships | — | — | 47 | — | 1,236 | |||||||||||
less one-time incentive expense | — | — | — | — | 1,128 | |||||||||||
Other expense - adjusted | $ | 63,432 | $ | 56,262 | $ | 52,042 | $ | 119,694 | $ | 103,883 | ||||||
Tax effect of adjustments to net income identified above (i) | $ | 1,225 | $ | 40 | $ | (152 | ) | $ | 1,266 | $ | (1,542 | ) | ||||
Net income - reported | $ | 22,163 | $ | 25,455 | $ | 28,241 | $ | 47,618 | $ | 59,364 | ||||||
Net income - adjusted | $ | 26,773 | $ | 25,607 | $ | 27,668 | $ | 52,379 | $ | 53,562 | ||||||
Diluted EPS | $ | 1.33 | $ | 1.62 | $ | 1.83 | $ | 2.94 | $ | 3.85 | ||||||
Diluted EPS, adjusted (h) | $ | 1.61 | $ | 1.63 | $ | 1.79 | $ | 3.23 | $ | 3.47 | ||||||
Annualized return on average assets (a)(b) | 1.04 | % | 1.32 | % | 1.52 | % | 1.17 | % | 1.61 | % | ||||||
Annualized return on average assets, adjusted (a)(b)(h) | 1.25 | % | 1.33 | % | 1.49 | % | 1.29 | % | 1.45 | % | ||||||
Annualized return on average tangible assets (a)(b)(e) | 1.06 | % | 1.34 | % | 1.53 | % | 1.19 | % | 1.62 | % | ||||||
Annualized return on average tangible assets, adjusted (a)(b)(e)(h) | 1.28 | % | 1.35 | % | 1.50 | % | 1.31 | % | 1.46 | % | ||||||
Annualized return on average equity (a)(b) | 9.49 | % | 12.31 | % | 15.02 | % | 10.81 | % | 15.92 | % | ||||||
Annualized return on average equity, adjusted (a)(b)(h) | 11.47 | % | 12.38 | % | 14.72 | % | 11.90 | % | 14.37 | % | ||||||
Annualized return on average tangible equity (a)(b)(c) | 11.53 | % | 14.36 | % | 16.61 | % | 12.88 | % | 17.62 | % | ||||||
Annualized return on average tangible equity, adjusted (a)(b)(c)(h) | 13.92 | % | 14.44 | % | 16.28 | % | 14.17 | % | 15.89 | % | ||||||
Efficiency ratio (g) | 70.61 | % | 62.77 | % | 59.23 | % | 66.87 | % | 58.98 | % | ||||||
Efficiency ratio, adjusted (g)(h) | 64.36 | % | 62.33 | % | 59.28 | % | 63.39 | % | 60.63 | % | ||||||
Annualized net interest margin (g) | 3.92 | % | 3.86 | % | 3.81 | % | 3.89 | % | 3.84 | % | ||||||
Annualized net interest margin, adjusted (g)(h) | 3.84 | % | 3.85 | % | 3.77 | % | 3.84 | % | 3.75 | % | ||||||
Note: Explanations for footnotes (a) - (i) are included at the end of the financial tables |
PARK NATIONAL CORPORATION | ||||||||||||||||
Financial Reconciliations (continued) | ||||||||||||||||
(a) Averages are for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018 and the six months ended June 30, 2019 and June 30, 2018. | ||||||||||||||||
(b) Reported measure uses net income. | ||||||||||||||||
(c) Net income for each period divided by average tangible equity during the period. Average tangible equity equals average shareholders' equity during the applicable period less average goodwill 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, 2019 | March 31, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | ||||||||||||
AVERAGE SHAREHOLDERS' EQUITY | $ | 936,626 | $ | 838,723 | $ | 754,101 | $ | 887,946 | $ | 751,876 | ||||||
Less: Average goodwill and other intangible assets | 165,311 | 119,611 | 72,334 | 142,587 | 72,334 | |||||||||||
AVERAGE TANGIBLE EQUITY | $ | 771,315 | $ | 719,112 | $ | 681,767 | $ | 745,359 | $ | 679,542 | ||||||
(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, 2019 | March 31, 2019 | June 30, 2018 | ||||||||||||||
TOTAL SHAREHOLDERS' EQUITY | $ | 934,432 | $ | 845,044 | $ | 755,088 | ||||||||||
Less: Goodwill and other intangible assets | 174,288 | 119,421 | 72,334 | |||||||||||||
TANGIBLE EQUITY | $ | 760,144 | $ | 725,623 | $ | 682,754 | ||||||||||
(e) Net income for each period divided by average tangible assets during the period. Average tangible assets equals average assets less average goodwill and other intangible assets, in each case during the applicable period. | ||||||||||||||||
RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS | ||||||||||||||||
THREE MONTHS ENDED | SIX MONTHS ENDED | |||||||||||||||
June 30, 2019 | March 31, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | ||||||||||||
AVERAGE ASSETS | $ | 8,576,495 | $ | 7,832,397 | $ | 7,459,748 | $ | 8,206,502 | $ | 7,457,419 | ||||||
Less: Average goodwill and other intangible assets | 165,311 | 119,611 | 72,334 | 142,587 | 72,334 | |||||||||||
AVERAGE TANGIBLE ASSETS | $ | 8,411,184 | $ | 7,712,786 | $ | 7,387,414 | $ | 8,063,915 | $ | 7,385,085 | ||||||
(f) Tangible equity divided by tangible assets. Tangible assets equals total assets less goodwill and other intangible assets, in each case at the end of the period. | ||||||||||||||||
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS: | ||||||||||||||||
June 30, 2019 | March 31, 2019 | June 30, 2018 | ||||||||||||||
TOTAL ASSETS | $ | 8,657,453 | $ | 7,852,246 | $ | 7,462,156 | ||||||||||
Less: Goodwill and other intangible assets | 174,288 | 119,421 | 72,334 | |||||||||||||
TANGIBLE ASSETS | $ | 8,483,165 | $ | 7,732,825 | $ | 7,389,822 | ||||||||||
(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 | SIX MONTHS ENDED | |||||||||||||||
June 30, 2019 | March 31, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | ||||||||||||
Interest income | $ | 92,226 | $ | 81,856 | $ | 74,691 | $ | 174,082 | $ | 148,405 | ||||||
Fully taxable equivalent adjustment | 752 | 734 | 705 | 1,486 | 1,406 | |||||||||||
Fully taxable equivalent interest income | $ | 92,978 | $ | 82,590 | $ | 75,396 | $ | 175,568 | $ | 149,811 | ||||||
Interest expense | 16,375 | 14,080 | 9,949 | 30,455 | 18,813 | |||||||||||
Fully taxable equivalent net interest income | $ | 76,603 | $ | 68,510 | $ | 65,447 | $ | 145,113 | $ | 130,998 | ||||||
(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliation above. | ||||||||||||||||
(i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate. |