Search the web
Welcome, Guest
[Sign Out, My Account]
EDGAR_Online

Quotes & Info
Enter Symbol(s):
e.g. YHOO, ^DJI
Symbol Lookup | Financial Search
PRK > SEC Filings for PRK > Form 8-K on 29-Oct-2012All Recent SEC Filings

Show all filings for PARK NATIONAL CORP /OH/

Form 8-K for PARK NATIONAL CORP /OH/


29-Oct-2012

Results of Operations and Financial Condition, Regulation FD Disclosure,


Item 2.02 - Results of Operations and Financial Condition.

On October 29, 2012, Park National Corporation ("Park") issued a news release (the "Financial Results News Release") announcing financial results for the three and nine months ended September 30, 2012. A copy of this Financial Results News Release is included as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein.

Park's management uses certain non-U.S. GAAP (U.S. generally accepted accounting principles) financial measures to evaluate Park's performance. Specifically, management reviews return on average tangible common equity, return on average tangible assets, tangible common equity to tangible assets and tangible common book value per common share. Management has included in the Financial Results News Release information relating to the return on average tangible common equity, return on average tangible assets, tangible common equity to tangible assets and tangible common book value per common share for the three and nine month periods ended September 30, 2012 and 2011. For purposes of calculating the return on average tangible common equity, a non-U.S. GAAP financial measure, net income available to common shareholders for each period is divided by average tangible common equity during the period. Average tangible common equity equals average stockholders' equity during the applicable period less (i) average goodwill and other intangible assets during the applicable period and
(ii) average preferred stock during the applicable period. For the purpose of calculating the return on average tangible assets, a non-U.S. GAAP financial measure, net income available to common shareholders for each period is divided by average tangible assets during the period. Average tangible assets equals average assets during the applicable period less average goodwill and other intangible assets during the applicable period. For the purpose of calculating tangible common equity to tangible assets, a non-U.S. GAAP financial measure, tangible common equity is divided by tangible assets. Tangible common equity equals stockholders' equity less preferred stock and goodwill and intangible assets. Tangible assets equals total assets less goodwill and intangible assets. For the purpose of calculating tangible common book value per common share, a non-U.S. GAAP financial measure, tangible common equity is divided by common shares outstanding at period end. Management believes that the disclosure of return on average tangible common equity, return on average tangible assets, tangible common equity to tangible assets and tangible common book value per common share presents additional information to the reader of the consolidated financial statements, which, when read in conjunction with the consolidated financial statements prepared in accordance with U.S. GAAP, assists in analyzing Park's operating performance and ensures comparability of operating performance from period to period while eliminating certain non-operational effects of acquisitions and, in the case of return on average common equity and tangible common book value per common share, the impact of preferred stock. In the Financial Results News Release, Park has provided a reconciliation of average tangible common equity to average stockholders' equity, average tangible assets to average assets, tangible common equity to stockholders' equity and tangible assets to total assets solely for the purpose of complying with SEC Regulation G and not as an indication that return on average tangible common equity, return on average tangible assets, tangible common equity to tangible assets and tangible common book value per common share are substitutes for return on average equity, return on average assets, common equity to assets and common book value per common share, respectively, as determined by U.S. GAAP.




Item 7.01 - Regulation FD Disclosure

The following is a discussion of the financial results for the three and nine months ended September 30, 2012 and a comparison of these results to the guidance previously provided within the Annual Report to Shareholders for the fiscal year ended December 31, 2011 (the "2011 Annual Report").

The table below reflects the net income (loss) by segment for the first, second and third quarters of 2012, projected results for the fourth quarter of 2012, and results for each of the prior two fiscal years ended December 31, 2011 and 2010. Park's segments include The Park National Bank ("PNB"), Guardian Financial Services Company ("GFSC"), SE Property Holdings, LLC ("SEPH") and "All Other" which primarily consists of Park as the "Parent Company."

                                                         Projected Q4
   (In thousands)     Q1 2012     Q2 2012      Q3 2012       2012       Projected 2012     2011        2010
PNB                  $ 21,561   $   23,483   $  22,068   $    21,661   $       88,773   $ 106,851   $ 102,948
GFSC                      806          909         971           993            3,679       2,721       2,006
Park Parent Company        49          134         274          (191 )            266      (1,595 )    (1,439 )
  Ongoing operations $ 22,416   $   24,526   $  23,313   $    22,463   $       92,718   $ 107,977   $ 103,515
Vision Bank                 -            -           -             -                -     (22,526 )   (45,414 )
SEPH                    9,059       (5,640 )   (11,331 )      (4,047 )        (11,959 )    (3,311 )         -
  Total Park         $ 31,475   $   18,886   $  11,982   $    18,416   $       80,759   $  82,140   $  58,101

The "Park Parent Company" above excludes the results for SEPH, an entity which is winding down commensurate with the disposition of its problem assets. Management considers the "Ongoing operations" results to be reflective of the business of Park and its subsidiaries on a going forward basis. The discussion below provides some additional information regarding the segments that make up the "Ongoing operations".

The Park National Bank (PNB)

The table below reflects the results for PNB for the first, second and third
quarters of 2012, projected results for the fourth quarter of 2012, and results
for each of the prior two fiscal years ended December 31, 2011 and 2010.

                                                             Projected Q4   Projected
      (In thousands)        Q1 2012    Q2 2012    Q3 2012        2012          2012        2011        2010
Net interest income        $ 55,846   $ 56,022   $ 55,366   $     54,216   $  221,450   $ 236,282   $ 237,281
Provision for loan losses     4,672      3,756      4,125          3,826       16,379      30,220      23,474
Fee income                   16,661     17,700     18,150         18,081       70,592      67,348      68,648
Security gains                    -          -          -              -            -      23,634      11,864
Total other expense          38,056     37,260     39,609         38,513      153,438     146,235     144,051
Income before income taxes $ 29,779   $ 32,706   $ 29,782   $     29,958   $  122,225   $ 150,809   $ 150,268
  Federal income taxes        8,218      9,223      7,714          8,297       33,452      43,958      47,320
Net income                 $ 21,561   $ 23,483   $ 22,068   $     21,661   $   88,773   $ 106,851   $ 102,948
Net income excluding
security gains             $ 21,561   $ 23,483   $ 22,068   $     21,661   $   88,773   $  91,489   $  95,236

Management previously projected 2012 net income for PNB of approximately $93 million within the 2011 Annual Report. Due primarily to the continued low interest rate environment, management's most recent projection for PNB's net income is $89 million.


The table below provides certain balance sheet information and financial ratios for PNB as of September 30, 2012, for the year ended December 31, 2011 and as of September 30, 2011.

                                                                                      % change    % change
                                      Sept. 30,         Dec. 31,      Sept. 30,         from        from
           (In thousands)                2012             2011           2011         12/31/11     9/30/11
Loans                                $  4,311,117    $  4,172,424    $  4,111,272        3.32  %     4.86  %
Allowance for loan losses                  53,145          55,409          63,780       (4.09 )%   (16.67 )%
Net loans                               4,257,972       4,117,015       4,047,492        3.42  %     5.20  %
Total assets                            6,601,785       6,281,747       6,346,125        5.09  %     4.03  %
Average assets (YTD)                    6,530,055       6,453,404       6,489,781        1.19  %     0.62  %
Deposits                                4,895,627       4,611,646       4,671,968        6.16  %     4.79  %
Return on average assets *                   1.37 %          1.42 %          1.49 %     (3.52 )%    (8.05 )%


* Annualized for the nine months ended September 30, 2012 and 2011. Excludes gains on the sale of investment securities for the nine months ended September 30, 2011 and the year ended December 31, 2011.

The $139 million (3.32%) increase in loans experienced at PNB through the first nine months of 2012 is primarily related to continued demand in the mortgage loan portfolio, which has increased by $98.4 million. Of the $98.4 million increase in the mortgage loan portfolio, approximately $96.8 million of the increase is associated with our decision to retain a portion of the 15-year, fixed-rate mortgages originated by PNB rather than selling them in the secondary market. As noted above, PNB's allowance for loan losses has declined by $10.6 million, or 16.67%, to $53.1 million at September 30, 2012 compared to $63.8 million at September 30, 2011. The decline in PNB's allowance for loan losses is due to continued improvement in the credit metrics across the PNB loan portfolio, as well as declines in specific reserves established for impaired commercial loans. Refer to the "Credit Metrics and Provision for Loan Losses" section below for additional information regarding the improvements in the credit metrics of PNB's loan portfolio.

Guardian Financial Services Company (GFSC)

The table below reflects the results for GFSC for the first, second and third
quarters of 2012, projected results for the fourth quarter of 2012, and results
for each of the prior two fiscal years ended December 31, 2011 and 2010.

                                                                Projected Q4
      (In thousands)         Q1 2012     Q2 2012     Q3 2012        2012        Projected 2012     2011       2010
Net interest income        $   2,211   $   2,305   $   2,371   $      2,407   $          9,294   $ 8,693   $  7,611
Provision for loan losses        250         200         184            151                785     2,000      2,200
Fee income                         -           -           -              1                  1         -          2
Total other expense              721         706         693            728              2,848     2,506      2,325
Income before income taxes $   1,240   $   1,399   $   1,494   $      1,529   $          5,662   $ 4,187   $  3,088
  Federal income taxes           434         490         523            536              1,983     1,466      1,082
Net income                 $     806   $     909   $     971   $        993   $          3,679   $ 2,721   $  2,006

In the 2011 Annual Report, management stated that GFSC was expected to make net income of $3.0 million in 2012. Management's latest guidance for 2012 reflects a slight increase in net income for GFSC to approximately $3.7 million. This improvement is the result of a lower provision for loan losses based on credit analysis performed by GFSC's management.


The table below provides certain balance sheet information and financial ratios for GFSC as of September 30, 2012, for the year ended December 31, 2011 and as of September 30, 2011.

                                      Sept. 30,                     Sept. 30,    % change from % change from
           (In thousands)               2012        Dec. 31, 2011     2011         12/31/11       9/30/11
Loans                                $    50,099   $      47,111   $    46,680       6.34 %        7.32 %
Allowance for loan losses                  2,419           2,297         2,043       5.31 %       18.40 %
Net loans                                 47,680          44,814        44,637       6.40 %        6.82 %
Total assets                              49,921          46,682        46,449       6.94 %        7.47 %
Average assets (YTD)                      47,819          45,588        45,345       4.89 %        5.46 %
Return on average assets *                  7.50 %          5.97 %        5.79 %    25.63 %       29.53 %


* Annualized for the nine months ended September 30, 2012 and 2011.

Park Parent Company

The table below reflects the results for Park's Parent Company for the first,
second and third quarters of 2012, projected results for the fourth quarter of
2012, and results for each of the prior two fiscal years ended December 31, 2011
and 2010.

                                                         Projected Q4
    (In thousands)       Q1 2012    Q2 2012    Q3 2012       2012       Projected 2012     2011       2010
Net interest income     $  1,061   $  1,478   $  1,167   $     1,211   $        4,917   $  2,155   $  1,285
Provision for loan
losses                         -          -          -             -                -          -          -
Fee income                    68         83        120            80              351        350        390
Total other expense        1,528      1,839      1,373         1,861            6,601      7,115      9,107
Income (loss) before
income taxes            $   (399 ) $   (278 ) $    (86 ) $      (570 ) $       (1,333 ) $ (4,610 ) $ (7,432 )
  Federal income tax
(benefit)                   (448 )     (412 )     (360 )        (379 )         (1,599 )   (3,015 )   (5,993 )
Net income (loss)       $     49   $    134   $    274   $      (191 ) $          266   $ (1,595 ) $ (1,439 )

In the 2011 Annual Report, management projected net income of $1 million for the Parent Company, Vision Bank through February 16, 2012 and SEPH. Typically, we expect the Park Parent Company will perform around breakeven. Management's most recent projection shows net income of $0.3 million for 2012.

The net interest income for Park's parent company includes interest income on loans to SEPH and on subordinated debt investments with PNB, which are eliminated in the consolidated Park National Corporation totals. Additionally, net interest income includes interest expense related to the $35.25 million and $30 million of subordinated notes issued by Park in December 2009 and April 2012, respectively.

SEPH / Vision Bank

Vision Bank ("Vision") merged with and into SEPH, a non-bank subsidiary of Park, following the sale of the Vision business to Centennial Bank ("Centennial") on February 16, 2012. SEPH holds the remaining assets and liabilities retained by Vision subsequent to the sale. SEPH's assets consist primarily of performing and nonperforming loans and other real estate owned ("OREO"). This segment represents a run off portfolio of the legacy Vision assets.

. . .



Item 9.01 - Financial Statements and Exhibits.

(a) Not applicable

(b) Not applicable

(c) Not applicable

(d) Exhibits. The following exhibit is included with this Current Report on Form 8-K:

Exhibit No.    Description
99.1                     News Release issued by Park National Corporation on
                         October 29, 2012 addressing operating results for the
                         three and nine months ended September 30, 2012.

[Remainder of page intentionally left blank; signature on following page.]


  Add PRK to Portfolio     Set Alert         Email to a Friend  
Get SEC Filings for Another Symbol: Symbol Lookup
Quotes & Info for PRK - All Recent SEC Filings
Copyright © 2014 Yahoo! Inc. All rights reserved. Privacy Policy - Terms of Service
SEC Filing data and information provided by EDGAR Online, Inc. (1-800-416-6651). All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.