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PRK > SEC Filings for PRK > Form 8-K on 27-Jan-2014All Recent SEC Filings

Show all filings for PARK NATIONAL CORP /OH/

Form 8-K for PARK NATIONAL CORP /OH/


27-Jan-2014

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


Item 2.02 - Results of Operations and Financial Condition.

On January 27, 2014, Park National Corporation ("Park") issued a news release (the "Financial Results News Release") announcing financial results for the three months (fourth quarter) and fiscal year ended December 31, 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-GAAP (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 months and years ended December 31, 2013 and 2012. For purposes of calculating the return on average tangible common equity, a non-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-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-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-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 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, stockholders' equity to total assets and common book value per common share, respectively, as determined by GAAP.




Item 5.02 - Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. Notifications of Retirement from Board of Directors On January 22, 2014, and January 23, 2014, respectively, John J. O'Neill and Reverend Dr. Charles W. Noble, Sr., each of whom currently serves in the class of directors of Park whose terms will expire at the 2014 Annual Meeting of Shareholders of Park (the "2014 Annual Meeting") notified Park that they have decided to retire and not stand for re-election to the Board of Directors of Park. Each of their terms as a director will expire immediately prior to the 2014 Annual Meeting, which will be held on April 28, 2014. In addition, each of Dr. Noble and John J. O'Neill will retire as a director of Park's national banking subsidiary, The Park National Bank, effective April 28, 2014. Dr. Noble has served as a member of the Board of Directors of Park since 2013 and as a member of the Board of Directors of The Park National Bank since 1988. Dr. Noble served as a member of the Audit Committees of both the organizations and provided spiritual leadership and wise counsel to members of the boards and management during his tenure.
John J. O'Neill has served as a member of the Board of Directors of Park since 1987 and as a member of the Board of Directors of The Park National Bank since 1964. Mr. O'Neill is an original member of the board of Park and served as a board member of The Park National Bank for five decades, joining the bank board in 1964. Mr. O'Neill served on various committees of both the bank and Park, including the Executive Committee of both, and the Investment and Compensation Committees of Park.
Both Dr. Noble and Mr. O'Neill were devoted advocates for The Park National Bank during their service as board members. They will be recognized during Park's Annual Meeting on April 28, 2014 for their dedicated service and superior counsel provided to both organizations.
The Nominating Committee, on behalf of the Board of Directors of Park, has recommended that rather than fill the vacancies which will be created by the retirement of Dr. Noble and Mr. O'Neill, the number of directors of Park will be reduced to twelve upon their retirement.

Park National Corporation 2013 Long-Term Incentive Plan - Performance-Based Restricted Stock Unit Awards
On January 24, 2014, the Compensation Committee (the "Compensation Committee") of the Board of Directors of Park granted awards (the "2014 PBRSU Awards") of performance-based restricted stock units ("PBRSUs") to each of Park's executive officers, which grants are to be effective on January 24, 2014, subject to the terms and conditions of Park's 2013 Long-Term Incentive Plan (the "Park 2013 LTIP"), which had been approved by Park's shareholders on April 22, 2013. The form of Performance-Based Restricted Stock Unit Award Agreement approved by the Compensation Committee on January 24, 2014 to evidence both the 2014 PBRSU Awards and any future awards of PBRSUs under the Park 2013 LTIP to employees of Park and its subsidiaries, is included as Exhibit 10.1 to this Current Report on Form 8-K.
The following schedule shows the minimum/target number of PBRSUs which may be earned (the "Target Award") and the maximum number of PBRSUs which may be earned (the "Maximum Award") in respect of the 2014 PBRSU Award granted each of the executive officers of Park:


Name and Position                            Target Award        Maximum Award
C. Daniel DeLawder
Chairman of the Board of Park; Chairman
of the Board and executive employee of
The Park National Bank                       2,000 PBRSUs        3,000 PBRSUs
David L. Trautman
President and Chief Executive Officer of
each Park and The Park National Bank         2,000 PBRSUs        3,000 PBRSUs
Brady T. Burt
Chief Financial Officer, Secretary and
Treasurer of Park; Senior Vice President
and Chief Financial Officer of The Park
National Bank                                 750 PBRSUs         1,125 PBRSUs

The number of PBRSUs earned and settled or, in the alternative, forfeited will be based upon Park's performance, measured by Park's cumulative return on average assets ("ROA") for the three-year performance period beginning January 1, 2014 and ending December 31, 2016 (the "Performance Period"), as compared to the cumulative ROA results for the Performance Period for a peer group comprised of bank holding companies with between $3 billion and $10 billion in total consolidated assets (the "Peer Group"). However, no PBRSUs will be earned by any executive officer if Park's consolidated net income for each fiscal year during the Performance Period has not equaled or exceeded an amount equal to 110% of all cash dividends declared and paid during such fiscal year. Park's performance at the 50th and 80th percentile of the Peer Group's performance will result in the earning of PBRSUs representing the Target Award and the Maximum Award, respectively (interpolated on a straight line basis for performance at percentiles between these specified percentiles).
Any PBRSUs earned based on Park's performance relative to the Peer Group will also be subject to a service-based vesting requirement. One-half of the PBRSUs earned in respect of the Performance Period will vest and be settled in Park common shares (on a one-for-one basis) on the date the Compensation Committee determines and certifies the number of PBRSUs earned in respect of the Performance Period (the "Certification Date") if the executive officer is still employed by Park or one of its affiliates on the Certification Date. On the first anniversary of the Certification Date, the other half of the PBRSUs earned in respect of the Performance Period will vest and be settled in Park common . . .



Item 7.01 - Regulation FD Disclosure

Financial Results by segment
The table below reflects the net income (loss) and net income available to common shareholders by segment for each quarter of 2013, for the fiscal year ended December 31, 2013, and for each of the prior two fiscal years ended December 31, 2012 and 2011. 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."

Net income (loss) by segment

        (In thousands)          Q1 2013      Q2 2013      Q3 2013      Q4 2013        2013         2012       2011
PNB                            $ 19,940     $ 20,322     $ 17,249     $ 18,083     $ 75,594     $ 87,106   $ 106,851
GFSC                                740          790          731          627        2,888        3,550       2,721
Park Parent Company                 132          191         (244 )     (1,476 )     (1,397 )        195      (1,595 )
  Ongoing operations           $ 20,812     $ 21,303     $ 17,736     $ 17,234     $ 77,085     $ 90,851   $ 107,977
Vision Bank                           -            -            -            -            -            -     (22,526 )
SEPH                               (102 )     (1,269 )      1,293          220          142      (12,221 )    (3,311 )
  Total Park                   $ 20,710     $ 20,034     $ 19,029     $ 17,454     $ 77,227     $ 78,630   $  82,140
Preferred dividends and
accretion                      $      -     $      -     $      -     $      -     $      -     $  3,425   $   5,856
Net income available to common
shareholders                   $ 20,710     $ 20,034     $ 19,029     $ 17,454     $ 77,227     $ 75,205   $  76,284

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 fiscal year ended December 31, 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 each quarter of 2013, for the
fiscal year ended December 31, 2013, and for each of the prior two fiscal years
ended December 31, 2012 and 2011.

       (In thousands)          Q1 2013      Q2 2013      Q3 2013      Q4 2013        2013          2012        2011
Net interest income           $ 52,735     $ 51,736     $ 52,348     $ 53,962     $ 210,781     $ 221,758   $ 236,282
Provision for loan losses        3,130        2,122        6,339        2,448        14,039        16,678      30,220
Other income                    17,872       18,536       16,756       17,677        70,841        70,739      67,348
Security gains                       -            -            -            -             -             -      23,634
Total other expense             40,324       40,408       39,860       45,073       165,665       156,516     146,235
Income before income taxes    $ 27,153     $ 27,742     $ 22,905     $ 24,118     $ 101,918     $ 119,303   $ 150,809
  Federal income taxes           7,213        7,420        5,656        6,035        26,324        32,197      43,958
Net income                    $ 19,940     $ 20,322     $ 17,249     $ 18,083     $  75,594     $  87,106   $ 106,851
Net income excluding security
gains                         $ 19,940     $ 20,322     $ 17,249     $ 18,083     $  75,594     $  87,106   $  91,489

The table below provides certain balance sheet information and financial ratios for PNB as of and for fiscal years ended December 31, 2013 and 2012.

                                                                                             % change from
                 (In thousands)                     December 31, 2013   December 31, 2012       12/31/12
Loans                                              $       4,559,406   $       4,369,173        4.35  %
Allowance for loan losses                                     56,888              53,131        7.07  %
Net loans                                                  4,502,518           4,316,042        4.32  %
Investment securities                                      1,421,937           1,579,889      (10.00 )%
Total assets                                               6,524,098           6,502,579        0.33  %
Average assets                                             6,576,420           6,532,683        0.67  %
Return on average assets                                        1.15 %              1.33 %    (13.53 )%

Loans outstanding at December 31, 2013 of $4.56 billion represented an increase of $190 million, or 4.35%, compared to the loans outstanding of $4.37 billion at December 31, 2012. The $190 million increase in loans experienced at PNB over . . .



Item 8.01 - Other Events

Declaration of Cash Dividend

As reported in the Financial Results News Release, on January 27, 2014, 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 March 10, 2014 to common shareholders of record as of the close of business on February 21, 2014. 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 exhibits are included with this Current Report on Form 8-K:

Exhibit No.    Description

10.1               Form of Park National Corporation 2013 Long-Term Incentive
                   Plan Performance-Based Restricted Stock Unit Award Agreement
                   used and to be used to evidence awards of Performance-Based
                   Restricted Stock Units to employees of Park National
                   Corporation and its subsidiaries granted on and after
                   January 24, 2014



99.1               News Release issued by Park National Corporation on January
                   27, 2014 addressing operating results for the three months and
                   fiscal year ended December 31, 2013.

[Remainder of page intentionally left blank; signature page follows.]


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