NEWARK, Ohio, Jan. 28, 2008 (PRIME NEWSWIRE) -- Park National Corporation (Park) (AMEX:PRK) today reported net income for 2007 was $22.7 million, 76 percent less than Park's 2006 net income of $94.1 million. Park's diluted earnings per share for the year 2007 were $1.60, a 76 percent decrease from $6.74 in diluted earnings per share for 2006. Without the $54 million impairment charge to fourth-quarter earnings based on the reduction in the goodwill value of Park subsidiary Vision Bank, headquartered in Panama City, Fla. (announced January 15, 2008), Park would have earned $76.7 million and $5.40 diluted earnings per share for 2007.
Park's net loss for the fourth quarter of 2007 was $43.2 million, or a net loss of $3.08 per share-diluted. Without the $54 million impairment charge to earnings for the fourth quarter, Park would have earned $10.9 million or $0.77 in diluted earnings per share for the fourth quarter 2007, compared to $22.6 million or $1.63 in diluted earnings per share in the fourth quarter of 2006.
Park had net loan charge-offs of $22.2 million for 2007 ($11.3 million for the fourth quarter 2007) and recorded a provision for loan losses for the year of $29.5 million ($18.6 million for the fourth quarter 2007). The provision for loan losses for the year ended December 31, 2006 was $3.9 million. Of the nearly $26 million increase in the provision for loan losses in 2007, $19.4 million was associated with Vision Bank. Vision Bank had $8.6 million of net loan charge-offs in 2007. The loan loss provision for the twelve-month period ended December 31, 2007 exceeds the net loan charge-offs for the same period by $7.3 million reflecting the deterioration of credit quality within Vision Bank's portfolio. Vision Bank's non-performing loans increased from $26.3 million at September 30, 2007 to $63.5 million at December 31, 2007. This represents 9.93 percent of Vision Bank's outstanding loans at December 31, 2007, which totaled $639.1 million.
Park's fourth quarter 2007 results also include a Visa(r) indemnification charge of $0.9 million, which is based on Park's membership interest in Visa(r). During the fourth quarter, Visa(r) announced that it had reached an agreement to settle one of its lawsuits and that they were establishing a liability for a potential settlement with another party. Visa(r) has also announced its plans for an initial public offering ("IPO"). If this IPO occurs, Visa's(r) stated intention is to fund litigation settlements from an escrow account that will be funded by the IPO. When and if an IPO takes place, Park would reverse the $0.9 million in contingent liabilities it has recorded in addition to recognizing gains as a result of the IPO.
"Our community banks in Ohio continue to perform very well in a challenging time for all financial institutions," said Park Chairman C. Daniel DeLawder. "As stated in the news release dated January 15, 2008, we reaffirm our belief in the long term value of the two Vision Bank divisions and believe they will add to our earnings per share in the future."
Headquartered in Newark, Ohio, Park holds $6.501 billion in assets (based on asset totals as of December 31,2007). Park and its subsidiaries consist of 14 community banking divisions, 12 of which are based in Ohio, 1 in Alabama and 1 in Florida, and 2 specialty finance companies. Park operates 154 offices through the following organizations: The Park National Bank, The Park National Bank of Southwest Ohio & Northern Kentucky Division, Fairfield National Division, The Richland Trust Company, Century National Bank, The First-Knox National Bank of Mount Vernon, Farmers and Savings Division, United Bank, N.A., Second National Bank, The Security National Bank and Trust Co., Unity National Division, The Citizens National Bank of Urbana, Vision Bank of Panama City, Florida, Vision Bank Division of Gulf Shores, Alabama, Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance), and Guardian Financial Services Company.
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. Risk and uncertainties that could cause actual results to differ materially include without limitation, deterioration in the asset value of Vision Bank's loan portfolio may be worse than expected; Park's ability to execute its business plan; general economic and financial market conditions, either national or in the states in which Park and its subsidiaries do business, are worse than expected; changes in interest rates; competitive pressures among financial institutions increase significantly; changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and its subsidiaries; 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, 2006 and in "Item 1A. Risk Factors" of Part II of Park's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007. 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
(Dollars in thousands, except per share data)
INCOME STATEMENT THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
PERCENT PERCENT
2007 2006 CHANGE 2007 2006 CHANGE
------- ------- ------- -------- -------- ------
NET INTEREST
INCOME $59,953 $52,441 14.32% $234,677 $213,244 10.05%
PROVISION FOR
LOAN LOSSES 18,597 1,525 1119.48% 29,476 3,927 650.60%
OTHER INCOME 17,944 16,590 8.16% 71,640 64,665 10.79%
GAIN (LOSS) ON
SALE OF
SECURITIES -- -- -- -- 97 --
GOODWILL IMPAIR-
MENT CHARGE 54,035 -- -- 54,035 -- --
OTHER EXPENSE 45,523 35,645 27.71% 170,129 141,002 20.66%
INCOME (LOSS)
BEFORE TAXES (40,258) 31,861 -226.36% 52,677 133,077 -60.42%
NET INCOME
(LOSS) (43,170) 22,593 -291.08% 22,707 94,091 -75.87%
NET INCOME
BEFORE IMPAIR-
MENT CHARGE(a) 10,865 22,593 -51.91% 76,742 94,091 -18.44%
NET INCOME (LOSS)
PER SHARE
-BASIC (3.08) 1.63 -288.96% 1.60 6.75 -76.30%
NET INCOME (LOSS)
PER SHARE
-DILUTED (3.08) 1.63 -288.96% 1.60 6.74 -76.26%
NET INCOME PER
SHARE BEFORE
IMPAIRMENT
CHARGE
-DILUTED(a) 0.77 1.63 -52.76% 5.40 6.74 -19.88%
CASH DIVIDENDS
DECLARED PER
SHARE 0.94 0.93 1.08% 3.73 3.69 1.08%
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RATIOS AND OTHER
INFORMATION
RETURN ON
AVERAGE ASSETS -2.63% 1.67% 0.37% 1.75%
RETURN ON AVERAGE
ASSETS BEFORE
IMPAIRMENT
CHARGE (a) 0.66% 1.67% 1.24% 1.75%
RETURN ON AVERAGE
EQUITY -27.14% 15.93% 3.67% 17.26%
RETURN ON AVERAGE
EQUITY BEFORE
IMPAIRMENT
CHARGE (a) 6.83% 15.93% 12.40% 17.26%
YIELD ON EARNING
ASSETS 7.02% 6.85% 7.18% 6.77%
COST OF PAYING
LIABILITIES 3.47% 3.20% 3.50% 2.97%
NET INTEREST
MARGIN 4.04% 4.23% 4.20% 4.33%
EFFICIENCY
RATIO 127.06% 51.26% 72.74% 50.35%
NET LOAN
CHARGE-OFFS $11,342 $1,522 $22,208 $3,920
NET CHARGE-OFFS
AS A PERCENT
OF LOANS 1.07% 0.18% 0.55% 0.12%
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BALANCE SHEET
AT DECEMBER 31, PERCENT
2007 2006 CHANGE
---------- ---------- -------
INVESTMENTS $1,703,103 $1,513,498 12.53%
LOANS 4,224,134 3,480,702 21.36%
LOAN LOSS RESERVE 87,102 70,500 23.55%
GOODWILL AND OTHER INTANGIBLES 144,556 78,003 85.32%
TOTAL ASSETS 6,501,102 5,470,876 18.83%
TOTAL DEPOSITS 4,439,239 3,825,534 16.04%
BORROWINGS 1,389,727 979,913 41.82%
EQUITY 580,012 570,439 1.68%
BOOK VALUE PER SHARE 41.54 40.98 1.37%
NONPERFORMING LOANS 103,932 25,117 313.79%
NONPERFORMING ASSETS 117,375 28,468 312.31%
PAST DUE 90 DAY LOANS 4,545 7,832 -41.97%
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RATIOS
LOANS/ASSETS 64.98% 63.62%
NONPERFORMING LOANS/LOANS 2.46% 0.72%
PAST DUE 90 DAY LOANS/LOANS 0.11% 0.23%
LOAN LOSS RESERVE/LOANS 2.06% 2.03%
EQUITY/ASSETS 8.92% 10.43%
---------------------------------------------------------------------
(a) Net income for the fourth quarter has been adjusted for the
impairment charge to goodwill. Net income before impairment
charge equals net income for the period plus the impairment
charge to goodwill of $54,035.
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2007 2006 2007 2006
------- ------- ------- -------
RECONCILIATION OF NET INCOME
(LOSS) TO NET INCOME BEFORE
IMPAIRMENT CHARGE:
NET INCOME (LOSS) (43,170) 22,593 22,707 94,091
Plus goodwill impairment
charge 54,035 -- 54,035 --
NET INCOME BEFORE IMPAIRMENT
CHARGE 10,865 22,593 76,742 94,091
=======================================
RECONCILIATION OF NET INCOME
(LOSS) PER SHARE-DILUTED TO
NET INCOME PER SHARE-DILUTED
BEFORE IMPAIRMENT CHARGE:
NET INCOME (LOSS) PER SHARE
-DILUTED (3.08) 1.63 1.60 6.74
Plus impairment charge
to goodwill per share
-diluted 3.85 -- 3.80 --
NET INCOME PER SHARE
-DILUTED BEFORE
IMPAIRMENT CHARGE 0.77 1.63 5.40 6.74
=======================================
PARK NATIONAL CORPORATION
Consolidated Statements of Income
(dollars in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- -----------------------
2007 2006 2007 2006
------------------------------------------- -----------------------
Interest income:
Interest and fees
on loans $ 82,202 $ 66,132 $ 320,827 $ 255,123
Interest on:
Obligations of U.S.
Government, its
agencies and other
securities 21,365 18,268 77,016 75,300
Obligations of
states and political
subdivisions 712 852 3,061 3,667
Other interest
income 118 123 920 469
------------------------------------------- -----------------------
Total interest
income 104,397 85,375 401,824 334,559
Interest expense:
Interest on deposits:
Demand and savings
deposits 9,861 7,225 39,797 25,870
Time deposits 20,975 15,774 81,224 56,402
Interest on borrowings 13,608 9,935 46,126 39,043
Total interest
expense 44,444 32,934 167,147 121,315
Net interest
income 59,953 52,441 234,677 213,244
------------------------------------------- -----------------------
Provision for loan
losses 18,597 1,525 29,476 3,927
Net interest income
after provision for
loan losses 41,356 50,916 205,201 209,317
Other income 17,944 16,590 71,640 64,665
Gain (loss) on sale
of securities -- -- -- 97
Other expense:
Salaries and employee
benefits 24,936 21,019 97,712 82,579
Occupancy expense 2,663 2,369 10,717 9,155
Furniture and
equipment expense 2,295 1,878 9,259 8,215
Goodwill Impairment
Charge 54,035 -- 54,035 --
Other expense 15,629 10,379 52,441 41,053
Total other expense 99,558 35,645 224,164 141,002
------------------------------------------- -----------------------
Income (loss)
before income
taxes (40,258) 31,861 52,677 133,077
------------------------------------------- -----------------------
Income taxes 2,912 9,268 29,970 38,986
------------------------------------------- -----------------------
Net income (loss) $ (43,170) $ 22,593 $ 22,707 $ 94,091
=========================================== =======================
Per Share:
Net income (loss)
- basic $ (3.08) $ 1.63 $ 1.60 $ 6.75
Net income (loss)
- diluted $ (3.08) $ 1.63 $ 1.60 $ 6.74
Weighted average
shares - basic 14,029,944 13,845,071 14,212,805 13,929,090
Weighted average
shares - diluted 14,030,499 13,872,586 14,217,483 13,966,836
------------------------------------------- -----------------------
PARK NATIONAL CORPORATION
Consolidated Balance Sheets
(dollars in thousands, except share data)
December 31,
--------------------------
2007 2006
---------------------------------------------------------------------
Assets
Cash and due from banks $ 183,165 $ 177,990
Money market instruments 10,232 8,266
Interest bearing deposits 1 1
Investment securities 1,703,103 1,513,498
Loans (net of unearned income) 4,224,134 3,480,702
Allowance for loan losses 87,102 70,500
---------------------------------------------------------------------
Loans, net 4,137,032 3,410,202
Bank premises and equipment, net 66,634 47,554
Other assets 400,935 313,365
---------------------------------------------------------------------
Total assets $ 6,501,102 $ 5,470,876
Liabilities and Stockholders' Equity
Deposits:
Noninterest bearing $ 695,466 $ 664,962
Interest bearing 3,743,773 3,160,572
---------------------------------------------------------------------
Total deposits 4,439,239 3,825,534
Borrowings 1,389,727 979,913
Other liabilities 92,124 94,990
---------------------------------------------------------------------
Total liabilities 5,921,090 4,900,437
Stockholders' Equity:
Common stock (No par value;
20,000,000 shares authorized in 2007
and 2006; 16,151,200 shares issued in
2007 and 15,358,323 in 2006) 301,213 217,067
Accumulated other comprehensive (loss),
net of taxes (2,608) (22,820)
Retained earnings 489,511 519,563
Treasury stock (2,186,624 shares in
2007 and 1,436,794 shares in 2006) (208,104) (143,371)
---------------------------------------------------------------------
Total stockholders' equity 580,012 570,439
---------------------------------------------------------------------
Total liabilities and
stockholders' equity $ 6,501,102 $ 5,470,876
PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
(dollars in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------- -----------------------
2007 2006 2007 2006
------------------------------------------- -----------------------
Assets
Cash and due
from banks $ 148,912 $ 139,743 $ 151,219 $ 142,794
Money market
instruments 10,806 10,445 17,837 8,639
Interest bearing
deposits 1 1 1 84
Investment
securities 1,710,357 1,526,529 1,573,882 1,578,244
Loans (net of
unearned income) 4,196,367 3,411,449 4,011,307 3,357,278
Allowance for loan
losses 80,673 70,188 78,255 70,386
------------------------------------------- -----------------------
Loans, net 4,115,694 3,341,261 3,933,052 3,286,892
Bank premises and
equipment, net 66,782 46,704 61,604 46,894
Other assets 460,798 318,400 431,561 317,076
------------------------------------------- -----------------------
Total assets $6,513,350 $5,383,083 $6,169,156 $5,380,623
Liabilities and
Stockholders' Equity
Deposits:
Noninterest
bearing $ 717,778 $ 651,753 $ 697,247 $ 662,077
Interest bearing 3,789,396 3,162,943 3,706,231 3,162,867
------------------------------------------- -----------------------
Total deposits 4,507,174 3,814,696 4,403,478 3,824,944
Borrowings 1,289,179 924,075 1,062,735 928,639
Other liabilities 85,936 81,518 84,185 81,966
------------------------------------------- -----------------------
Total
liabilities 5,882,289 4,820,289 5,550,398 4,835,549
Stockholders' Equity:
Common stock 300,476 209,721 284,626 208,733
Accumulated other
comprehensive (loss),
net of taxes (12,925) (14,798) (21,333) (21,085)
Retained earnings 546,636 511,583 530,324 491,723
Treasury stock (203,126) (143,712) (174,859) (134,297)
------------------------------------------- -----------------------
Total stock-
holders' equity 631,061 562,794 618,758 545,074
------------------------------------------- -----------------------
Total liabilities
and stockholders'
equity $6,513,350 $5,383,083 $6,169,156 $5,380,623