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PRK > SEC Filings for PRK > Form 8-K on 22-Jul-2013All Recent SEC Filings

Show all filings for PARK NATIONAL CORP /OH/

Form 8-K for PARK NATIONAL CORP /OH/


22-Jul-2013

Results of Operations and Financial Condition, Change in Directors or Pri


Item 2.02 - Results of Operations and Financial Condition.

On July 22, 2013, Park National Corporation ("Park") issued a news release (the "Financial Results News Release") announcing financial results for the three and six months ended June 30, 2013. 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 six month periods ended June 30, 2013 and 2012. 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, in each case at period end. Tangible assets equals total assets less goodwill and intangible assets, in each case at period end. 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 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers On July 22, 2013, Park issued a news release (the "CEO Transition News Release") announcing that C. Daniel DeLawder, the Chairman of the Board and Chief Executive Officer (the "CEO") of each of Park and its wholly-owned subsidiary PNB, formally informed the Board of Directors of Park on July 22, 2013, of Mr. DeLawder's intent to retire from his positions as CEO of Park and PNB, effective January 1, 2014. Mr. DeLawder will continue to serve as the Chairman of the Board of each of Park and PNB and as a full-time executive employee of PNB following his retirement as CEO.
Also, on July 22, 2013, the Board of Directors of Park took action to name the current President of each of Park and PNB, David L. Trautman, as successor to Mr. DeLawder. Mr. Trautman will become CEO, as well as continuing to serve as President, of each of Park and PNB effective January 1, 2014. Mr. Trautman, who is 52, has served as President of each of Park and PNB since January 2005 and as Secretary of Park since July 2002. He also serves as a director of each of Park and PNB. Mr. Trautman served as Chairman of the Board from March 2001 to March 2006, a member of the Board of Directors from May 1997 to March 2006, and President and Chief Executive Officer from May 1997 to February 2002, of the First-Knox National Bank Division of PNB (which had been a separate national banking association subsidiary of Park known as The First-Knox National Bank of Mount Vernon prior to its merger with PNB effective September 5, 2008). Mr. Trautman served as Executive Vice President from February 2002 to December 2004 and Vice President from July 1993 to June 1997, of PNB. Mr. Trautman does not have any family relationship with any member of Park's Board of Directors or any of Park's executive officers. Mr. Trautman and members of his immediate family are customers of and have had banking relationships with PNB in the ordinary course of business and in compliance with applicable federal and state laws and regulations. In addition to being a shareholder of Park, Mr. Trautman holds a 10% Subordinated Note due December 23, 2019 issued by Park on December 23, 2009 in the original principal amount of $200,000.
In addition, on July 22, 2013, the Board of Directors of Park took action to name Brady T. Burt as Secretary of Park effective January 1, 2014. Mr. Burt currently serves as Chief Financial Officer of Park and PNB and Treasurer of Park. He will continue to serve in those capacities going forward. A copy of the CEO Transition News Release is included as Exhibit 99.2 to this Current Report on Form 8?K and incorporated herein by reference.




Item 7.01 - Regulation FD Disclosure

Projection of fiscal 2013 results

The information below begins with Park's projected consolidated pre-tax, pre-provision income and incorporates a projected range for provision for loan losses, income before income tax, income taxes and net income for Park on a consolidated basis in 2013.

                          Original projection for       50% of        Six months
   (In thousands)                   2013               midpoint        YTD 2013       Current projection for 2013
Pre-tax, pre-provision
income                    $  113,000   $ 131,000     $    61,000     $    55,600     $       108,000   $ 114,000
  Provision for loan
losses                        20,000      15,000           8,750           1,002              10,000       6,000
Income before income
tax                       $   93,000   $ 116,000     $    52,250     $    54,598     $        98,000   $ 108,000
  Federal income taxes        23,250      30,160          13,353          13,854              24,300      27,600
Net income                $   69,750   $  85,840     $    38,897     $    40,744     $        73,700   $  80,400

The decline in pre-tax, pre-provision income (from management's original projection) results from the continued low interest rate environment, resulting in lower than previously projected net interest income. Conversely, management currently projects that the provision for loan losses will be lower than originally projected as a result of positive credit experience at both The Park National Bank ("PNB") and SE Property Holdings, LLC ("SEPH"). See detailed segment information below.

First half of 2013 - Financial Results by segment The table below reflects the net income (loss) by segment for the first and second quarters of 2013, for the first half of 2013, for the first half of 2012 and results for each of the fiscal years ended December 31, 2012 and 2011. Park's segments include PNB, Guardian Financial Services Company ("GFSC"), SEPH and "All Other" which primarily consists of Park as the "Parent Company."

                                                              Six months   Six months
          (In thousands)            Q2 2013      Q1 2013       YTD 2013     YTD 2012        2012       2011
PNB                                $ 20,322     $ 19,940     $   40,262   $   45,044     $ 87,106   $ 106,851
GFSC                                    790          740          1,530        1,715        3,550       2,721
Park Parent Company                     191          132            323          183          195      (1,595 )
  Ongoing operations               $ 21,303     $ 20,812     $   42,115   $   46,942     $ 90,851   $ 107,977
Vision Bank                               -            -              -            -            -     (22,526 )
SEPH                                 (1,269 )       (102 )       (1,371 )      3,419      (12,221 )    (3,311 )
  Total Park                       $ 20,034     $ 20,710     $   40,744   $   50,361     $ 78,630   $  82,140

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", followed by additional information on SEPH.

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. The sale of the Vision business in the first quarter of 2012 resulted in a pre-tax gain of $22.2 million ($14.4 million after-tax), which is included in the six months year-to-date 2012 SEPH results presented in the table above. SEPH holds the remaining assets and liabilities retained by Vision subsequent to the sale. SEPH 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.


The Park National Bank (PNB)

The table below reflects the results for PNB for the first and second quarters
of 2013, for the first half of 2013, for the first half of 2012 and for each of
the fiscal years ended December 31, 2012 and 2011.

                                                         Six months    Six months
       (In thousands)          Q2 2013      Q1 2013       YTD 2013      YTD 2012         2012        2011
Net interest income          $  51,736     $ 52,735     $   104,471   $   111,868     $ 221,758   $ 236,282
Provision for loan losses        2,122        3,130           5,252         8,428        16,678      30,220
Fee income                      18,536       17,872          36,408        34,361        70,739      67,348
Security gains                       -            -               -             -             -      23,634
Total other expense             40,408       40,324          80,732        75,316       156,516     146,235
Income before income taxes   $  27,742     $ 27,153     $    54,895   $    62,485     $ 119,303   $ 150,809
  Federal income taxes           7,420        7,213          14,633        17,441        32,197      43,958
Net income                   $  20,322     $ 19,940     $    40,262   $    45,044     $  87,106   $ 106,851
Net income excluding
security gains               $  20,322     $ 19,940     $    40,262   $    45,044     $  87,106   $  91,489

The table below provides certain balance sheet information and financial ratios for PNB as of June 30, 2013, for the year ended December 31, 2012 and as of June 30, 2012.

                                                        Dec. 31,                       % change from % change from
          (In thousands)              June 30, 2013       2012       June 30, 2012       12/31/12       6/30/12
Loans                                $    4,441,617   $ 4,369,173   $    4,281,430       1.66  %        3.74  %
Allowance for loan losses                    52,694        53,131           56,288      (0.82 )%       (6.39 )%
Net loans                                 4,388,923     4,316,042        4,225,142       1.69  %        3.88  %
Investment securities                     1,342,868     1,579,889        1,686,475     (15.00 )%      (20.37 )%
Total assets                              6,519,766     6,502,579        6,535,709       0.26  %       (0.24 )%
Average assets (YTD)                      6,548,261     6,532,683        6,491,751       0.24  %        0.87  %
. . .


Item 8.01 - Other Events

Declaration of Cash Dividend

As reported in the Financial Results News Release, on July 22, 2013, the Park Board of Directors declared a $0.94 per share quarterly cash dividend in respect of Park's common shares. The dividend is payable on September 10, 2013 to common shareholders of record as of the close of business on August 23, 2013. A copy of the Financial Results News Release is included as Exhibit 99.1 and the portion thereof addressing the declaration of the cash dividend by Park's Board of Directors is incorporated by reference herein.




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 July 22,
                   2013 addressing operating results for the three and six months
                   ended June 30, 2013.



99.2               News Release issued by Park National Corporation on July 22,
                   2013 addressing transition of Chief Executive Officer position
                   from C. Daniel DeLawder to David L. Trautman effective
                   January 1, 2014

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