NEWARK, Ohio, July 16, 2008 (PRIME NEWSWIRE) -- Park National Corporation (Park) (AMEX:PRK) today reported $18.2 million in net income for the second quarter 2008 (three months ended June 30, 2008), a 22.6 percent decrease from the $23.5 million in net income for the same period in 2007. Earnings per diluted share for the second quarter 2008 were $1.30, a 19.8 percent decrease compared to $1.62 in earnings per diluted share in the second quarter 2007. The provision for loan losses was the most significant factor behind the decrease in earnings for the second quarter of 2008. For the quarter ended June 30, 2008, the provision for loan losses was $14.6 million compared to $2.9 million for the second quarter of 2007.
Net income for the first half of 2008 (six months ended June 30, 2008) was $41.2 million, a 7.6 percent decrease from the first half of 2007 net income of $44.6 million. Earnings per diluted share for the first half of 2008 were $2.95, down 5.1 percent compared to the first half of 2007's $3.11 in earnings per diluted share. Again, the provision for loan losses increased significantly for the first six months of 2008 compared to the same period in 2007. The provision was $22.0 million year to date in 2008 compared to $5.1 million for the first half of 2007.
Park's net income was significantly impacted by continued real estate market deterioration in its affiliate Vision Bank's Florida markets. Park's net loan charge-offs and related loan loss provision were as reported in Park's press release issued on July 8, 2008, with net loan charge-offs of $23.0 million for the first six months of 2008 or an annualized 1.08 percent of average loans. For the same period in 2007, Park had net loan charge-offs of $5.0 million or an annualized .26 percent of average loans. For the second quarter of 2008, net loan charge-offs were $14.4 million or an annualized 1.34 percent of average loans, compared to $2.8 million or an annualized .28 percent of average loans for the second quarter of 2007. Vision Bank had net loan charge-offs of $16.3 million for the first six months of 2008 or an annualized 4.92 percent of average loans. For the first six months of 2007, Vision Bank had a negligible amount of net recoveries.
Park's Ohio-based banking affiliates, which had $5.9 billion in assets at June 30, 2008, increased net income by 18.8 percent, reporting $49.7 million for the first six months of 2008, compared to $41.8 million for the same period in 2007. For the second quarter of 2008, the Ohio-based banking affiliates earned approximately $24.9 million compared to approximately $21.3 million for the same period in 2007, a 16.6 percent increase.
"Our Ohio banks have generated strong operating results in 2008 and have been able to take advantage of new lending opportunities realized in part by reduced lending activities of many of our larger competitors," said Park Chairman C. Daniel DeLawder. "We are pleased to serve new customers as we remain focused on minimizing our losses in Florida and Alabama."
Park has experienced strong loan growth for the first six months of 2008, with loans growing $141.9 million, or 3.4 percent. Its Ohio-based banking affiliates reported loan growth of $101.2 million or 2.8 percent for the first six months of the year and Vision Bank had loan growth of $40.7 million or 6.4 percent.
Net loan charge-offs for the Ohio-based banking affiliates were $6.7 million for the first six months of 2008, or an annualized .37 percent of average loans. For the second quarter of 2008, Ohio-based banking affiliates had net loan charge-offs of $3.6 million or an annualized .39 percent of average loans.
Park's Vision Bank affiliate was acquired on March 9, 2007. Vision Bank is headquartered in Panama City, Fla. and its offices serve communities in the Florida panhandle and Baldwin County, Alabama.
Headquartered in Newark, Ohio, Park holds $6.8 billion in assets (as of June 30, 2008). 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 156 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 successfully and within expected timeframe; general economic and financial market conditions and weakening in the economy, especially in the real estate market, either national or in the states in which Park and its subsidiaries do business, are worse than expected; changes in the interest rate environment reduce net interest margins; competitive pressures among financial institutions increase significantly; the nature, time and effect of 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, 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.
Complete financial tables are below:
PARK NATIONAL CORPORATION
FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data)
JUNE 30, 2008
INCOME STATEMENT
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
PERCENT PERCENT
2008 2007 CHANGE 2008 2007 CHANGE
------- ------- ------- -------- -------- -------
NET INTEREST
INCOME $64,326 $60,410 6.48% $125,810 $115,308 9.11%
----------------------------------------------------------------------
PROVISION FOR
LOAN LOSSES 14,569 2,881 405.69% 21,963 5,086 331.83%
----------------------------------------------------------------------
OTHER INCOME 18,543 18,462 0.44% 39,582 34,636 14.28%
----------------------------------------------------------------------
GAIN ON SALE
OF SECURITIES 587 0 896 0
----------------------------------------------------------------------
OTHER EXPENSE 44,433 42,480 4.60% 87,710 81,789 7.24%
----------------------------------------------------------------------
INCOME BEFORE
TAXES 24,454 33,511 -27.03% 56,615 63,069 -10.23%
----------------------------------------------------------------------
NET INCOME 18,191 23,510 -22.62% 41,169 44,573 -7.64%
----------------------------------------------------------------------
NET INCOME PER
SHARE - BASIC 1.30 1.62 -19.75% 2.95 3.11 -5.14%
----------------------------------------------------------------------
NET INCOME PER
SHARE - DILUTED 1.30 1.62 -19.75% 2.95 3.11 -5.14%
----------------------------------------------------------------------
CASH DIVIDENDS
PER SHARE 0.94 0.93 1.08% 1.88 1.86 1.08%
----------------------------------------------------------------------
RATIOS AND OTHER INFORMATION
RETURN ON
AVERAGE ASSETS 1.08% 1.51% 1.25% 1.51%
----------------------------------------------------------------------
RETURN ON
AVERAGE EQUITY 12.57% 14.73% 14.28% 14.66%
----------------------------------------------------------------------
RETURN ON
AVERAGE
TANGIBLE
REALIZED
EQUITY(a) 16.80% 20.34% 19.21% 18.66%
----------------------------------------------------------------------
YIELD ON EARNING
ASSETS 6.40% 7.33% 6.60% 7.22%
----------------------------------------------------------------------
COST OF PAYING
LIABILITIES 2.55% 3.55% 2.80% 3.46%
----------------------------------------------------------------------
NET INTEREST
MARGIN 4.20% 4.32% 4.19% 4.31%
----------------------------------------------------------------------
EFFICIENCY RATIO 53.33% 53.55% 52.75% 54.21%
----------------------------------------------------------------------
NET LOAN
CHARGE-OFFS $14,372 $2,815 $23,020 $5,015
----------------------------------------------------------------------
NET CHARGE-OFFS
AS A PERCENT OF
LOANS 1.34% 0.28% 1.08% 0.26%
----------------------------------------------------------------------
BALANCE SHEET
June 30, December 31, June 30,
2008 2007 2007
---- ---- ----
INVESTMENTS $1,862,357 $1,703,103 $1,497,639
--------------------------------------------------------------------
LOANS 4,366,029 4,224,134 4,125,487
--------------------------------------------------------------------
LOAN LOSS RESERVE 86,045 87,102 79,905
--------------------------------------------------------------------
GOODWILL AND OTHER
INTANGIBLES 142,543 144,556 198,023
--------------------------------------------------------------------
TOTAL ASSETS 6,820,233 6,501,102 6,243,566
--------------------------------------------------------------------
DEPOSITS 4,531,874 4,439,239 4,540,448
--------------------------------------------------------------------
BORROWINGS 1,638,175 1,389,727 1,013,120
--------------------------------------------------------------------
EQUITY 578,113 580,012 627,391
--------------------------------------------------------------------
BOOK VALUE PER SHARE 41.40 41.54 43.81
--------------------------------------------------------------------
NONPERFORMING LOANS 107,680 103,932 38,754
--------------------------------------------------------------------
NONPERFORMING ASSETS 127,300 117,375 45,935
--------------------------------------------------------------------
PAST DUE 90 DAY LOANS 5,787 4,545 3,645
--------------------------------------------------------------------
RATIOS
LOANS/ASSETS 64.02% 64.98% 66.08%
--------------------------------------------------------------------
NONPERFORMING LOANS/LOANS 2.47% 2.46% 0.94%
--------------------------------------------------------------------
PAST DUE 90 DAY LOANS/LOANS 0.13% 0.11% 0.09%
--------------------------------------------------------------------
LOAN LOSS RESERVE/LOANS 1.97% 2.06% 1.94%
--------------------------------------------------------------------
EQUITY/ASSETS 8.48% 8.92% 10.05%
--------------------------------------------------------------------
(a) Net Income for each period divided by average tangible realized
equity during the period. Average tangible realized equity equals
average stockholders' equity during the applicable period less (i)
average goodwill and other intangible assets during the period and
(ii) average accumulated other comprehensive income (loss), net of
taxes, during the period.
RECONCILIATION OF AVERAGE STOCKHOLDERS' EQUITY TO
AVERAGE TANGIBLE REALIZED EQUITY:
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2008 2007 2008 2007
---- ---- ---- ----
AVERAGE STOCKHOLDERS'
EQUITY 582,015 640,302 579,961 613,153
--------------------------------------------------------------------
Less Average Goodwill and
Other Intangible Assets 143,117 198,665 143,618 153,973
--------------------------------------------------------------------
Average Accumulated Other
Comprehensive (Income)
Loss, Net of Taxes (3,354) 22,023 (5,330) 22,414
--------------------------------------------------------------------
AVERAGE TANGIBLE REALIZED
EQUITY 435,544 463,660 431,013 481,594
========================================
PARK NATIONAL CORPORATION
Consolidated Statements of Income
(dollars in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2008 2007 2008 2007
---------------------------------------------- ----------------------
Interest income:
Interest and fees
on loans $74,932 $83,479 $153,942 $154,661
---------------------------------------------- ----------------------
Interest on:
Obligations of
U.S. Government,
its agencies
and other
securities 22,629 18,278 43,334 36,825
---------------------------------------------- ----------------------
Obligations of
states and
political
subdivisions 565 782 1,219 1,595
---------------------------------------------- ----------------------
Other interest income 75 286 174 580
---------------------------------------------- ----------------------
Total interest
income 98,201 102,825 198,669 193,661
---------------------------------------------- ----------------------
Interest expense:
Interest on deposits:
Demand and
savings deposits 5,335 10,530 12,693 18,627
---------------------------------------------- ----------------------
Time deposits 16,618 21,228 35,817 38,809
---------------------------------------------- ----------------------
Interest on borrowings 11,922 10,657 24,349 20,917
---------------------------------------------- ----------------------
Total interest expense 33,875 42,415 72,859 78,353
---------------------------------------------- ----------------------
Net interest income 64,326 60,410 125,810 115,308
---------------------------------------------- ----------------------
Provision for loan
losses 14,569 2,881 21,963 5,086
---------------------------------------------- ----------------------
Net interest income
after provision
for loan losses 49,757 57,529 103,847 110,222
---------------------------------------------- ----------------------
Other income 18,543 18,462 39,582 34,636
---------------------------------------------- ----------------------
Gain on sale of
securities 587 - 896 -
---------------------------------------------- ----------------------
Other expense:
Salaries and
employee benefits 24,486 24,735 49,157 47,796
---------------------------------------------- ----------------------
Occupancy expense 2,883 2,794 5,908 5,354
---------------------------------------------- ----------------------
Furniture and
equipment expense 2,576 2,381 4,893 4,557
---------------------------------------------- ----------------------
Other expense 14,488 12,570 27,752 24,082
---------------------------------------------- ----------------------
Total other
expense 44,433 42,480 87,710 81,789
---------------------------------------------- ----------------------
Income before taxes 24,454 33,511 56,615 63,069
---------------------------------------------- ----------------------
Income taxes 6,263 10,001 15,446 18,496
---------------------------------------------- ----------------------
Net income $18,191 $23,510 $41,169 $44,573
============================================== ======================
Per Share:
Net income - basic $1.30 $1.62 $2.95 $3.11
---------------------------------------------- ----------------------
Net income - diluted $1.30 $1.62 $2.95 $3.11
---------------------------------------------- ----------------------
Weighted average
shares - basic 13,964,561 14,506,926 13,964,567 14,314,129
---------------------------------------------- ----------------------
Weighted average
shares - diluted 13,964,561 14,507,895 13,964,567 14,323,206
---------------------------------------------- ----------------------
PARK NATIONAL CORPORATION
Consolidated Balance Sheets
(dollars in thousands, except share data)
June 30,
---------------------------
2008 2007
---------------------------------------------------------------------
Assets
Cash and due from banks $ 184,259 $ 167,755
---------------------------------------------------------------------
Money market instruments 10,325 16,010
---------------------------------------------------------------------
Interest bearing deposits 1 1
---------------------------------------------------------------------
Investment securities 1,862,357 1,497,639
---------------------------------------------------------------------
Loans 4,366,029 4,125,487
---------------------------------------------------------------------
Allowance for loan losses 86,045 79,905
---------------------------------------------------------------------
Loans, net 4,279,984 4,045,582
---------------------------------------------------------------------
Bank premises and equipment, net 70,074 64,352
---------------------------------------------------------------------
Other assets 413,233 452,227
---------------------------------------------------------------------
Total assets $ 6,820,233 $ 6,243,566
---------------------------------------------------------------------
Liabilities and Stockholders' Equity
Deposits:
Noninterest bearing $ 764,405 $ 705,802
---------------------------------------------------------------------
Interest bearing 3,767,469 3,834,646
---------------------------------------------------------------------
Total deposits 4,531,874 4,540,448
---------------------------------------------------------------------
Borrowings 1,638,175 1,013,120
---------------------------------------------------------------------
Other liabilities 72,071 62,607
---------------------------------------------------------------------
Total liabilities 6,242,120 5,616,175
---------------------------------------------------------------------
Stockholders' Equity:
Common stock (No par value;
20,000,000 shares authorized in
2008 and 2007; 16,151,177 shares
issued at 2008 and 16,151,230
at 2007) 301,212 300,322
---------------------------------------------------------------------
Accumulated other comprehensive (loss),
net of taxes (7,502) (31,933)
---------------------------------------------------------------------
Retained earnings 492,507 537,653
---------------------------------------------------------------------
Treasury stock (2,186,624 shares at
2008 and 1,831,164 shares at 2007) (208,104) (178,651)
---------------------------------------------------------------------
Total stockholders' equity 578,113 627,391
---------------------------------------------------------------------
Total liabilities and
stockholders' equity $ 6,820,233 $ 6,243,566
---------------------------------------------------------------------
PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
(dollars in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2008 2007 2008 2007
-------------------------------------------- ----------------------
Assets
Cash and due
from banks $ 147,698 $ 157,861 $ 144,633 $ 154,337
-------------------------------------------- ----------------------
Money market
instruments 14,694 20,497 13,097 21,938
-------------------------------------------- ----------------------
Interest bearing
deposits 1 1 1 1
-------------------------------------------- ----------------------
Investment
securities 1,873,568 1,516,007 1,796,447 1,526,279
-------------------------------------------- ----------------------
Loans 4,311,989 4,094,718 4,270,706 3,864,223
-------------------------------------------- ----------------------
Allowance for
loan losses 84,577 79,213 85,925 76,210
-------------------------------------------- ----------------------
Loans, net 4,227,412 4,015,505 4,184,781 3,788,013
-------------------------------------------- ----------------------
Bank premises and
equipment, net 69,170 64,683 69,094 57,376
-------------------------------------------- ----------------------
Other assets 418,515 452,715 414,708 403,247
-------------------------------------------- ----------------------
Total assets $6,751,058 $6,227,269 $6,622,761 $5,951,191
-------------------------------------------- ----------------------
Liabilities and
Stockholders' Equity
Deposits:
Noninterest bearing $ 738,518 $ 714,462 $ 721,568 $ 685,772
-------------------------------------------- ----------------------
Interest bearing 3,767,366 3,815,458 3,767,713 3,597,186
-------------------------------------------- ----------------------
Total deposits 4,505,884 4,529,920 4,489,281 4,282,958
-------------------------------------------- ----------------------
Borrowings 1,570,201 975,001 1,456,902 969,424
-------------------------------------------- ----------------------
Other liabilities 92,958 82,046 96,617 85,656
-------------------------------------------- ----------------------
Total
liabilities 6,169,043 5,586,967 6,042,800 5,338,038
-------------------------------------------- ----------------------
Stockholders' Equity:
Common stock 301,212 300,323 301,213 268,592
-------------------------------------------- ----------------------
Accumulated other
comprehensive income
(loss), net of taxes 3,354 (22,023) 5,330 (22,414)
-------------------------------------------- ----------------------
Retained earnings 485,553 524,305 481,522 520,001
-------------------------------------------- ----------------------
Treasury stock (208,104) (162,303) (208,104) (153,026)
-------------------------------------------- ----------------------
Total stockholders'
equity 582,015 640,302 579,961 613,153
-------------------------------------------- ----------------------
Total liabilities
and stockholders'
equity $6,751,058 $6,227,269 $6,622,761 $5,951,191
-------------------------------------------- ----------------------