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home / news releases / PRK - Park National Corporation reports financial results for second quarter and first half of 2022

PRK - Park National Corporation reports financial results for second quarter and first half of 2022

Park National Corporation

NEWARK, Ohio, July 25, 2022 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the second quarter and first half of 2022. Park's board of directors declared a quarterly cash dividend of $1.04 per common share, payable on September 9, 2022 to common shareholders of record as of August 19, 2022.

“Park bankers’ enthusiasm, energy and competence are valued more than ever by customers and prospects alike. I am grateful for each of them and the talents they share,” said Park Chairman and Chief Executive Officer David Trautman. “We listen to customers first, then find ways to help them on their journeys. If we do this right, we earn the chance to serve more as a result. It’s a wonderful circle of service and growth.”

Park’s net income for the second quarter of 2022 was $34.3 million, a 12.3 percent decrease from $39.1 million for the second quarter of 2021. Second quarter 2022 net income per diluted common share was $2.10, compared to $2.38 in the second quarter of 2021. Park's net income for the first half of 2022 was $73.2 million, a 10.7 percent decrease from $82.0 million for the first half of 2021. Net income per diluted common share was $4.48 for the first half of 2022, compared to $4.98 for the first half of 2021.

Park's community-banking subsidiary, The Park National Bank, reported net income of $34.9 million for the second quarter of 2022, a 14.6 percent decrease compared to $40.9 million for the same period of 2021. Park National Bank reported net income of $76.4 million for the first half of 2022, compared to $86.0 million for the first half of 2021.

Headquartered in Newark, Ohio, Park National Corporation has $9.8 billion in total assets (as of June 30, 2022). Park's banking operations are conducted through its subsidiary The Park National Bank. Other Park subsidiaries are Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance), Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.

Complete financial tables are listed below.

Category: Earnings

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Park cautions that any forward-looking statements contained in this news release or made by management of Park 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.

Risks and uncertainties that could cause actual results to differ materially include, without limitation:

  • the ever-changing effects of the global novel coronavirus (COVID-19) pandemic - - the duration, extent and severity of which are impossible to predict, including the possibility of further resurgence in the spread of COVID-19 or variants thereof - - on economies (local, national and international), supply chains and markets, on the labor market, including the potential for a sustained reduction in labor force participation, and on our customers, counterparties, employees and third-party service providers, as well as the effects of various responses of governmental and nongovernmental authorities to the COVID-19 pandemic, including public health actions directed toward the containment of the COVID-19 pandemic (such as quarantines, shut downs and other restrictions on travel and commercial, social or other activities), the availability, effectiveness and acceptance of vaccines, and the implementation of fiscal stimulus packages;
  • Park's ability to execute our business plan successfully and within the expected timeframe as well as our ability to manage strategic initiatives in light of the impact of the COVID-19 pandemic and the various responses to the COVID-19 pandemic;
  • current and future economic and financial market conditions, either nationally or in the states in which Park and our subsidiaries do business, including the effects of higher unemployment rates, an acceleration in the pace of inflation, U.S. fiscal debt, budget and tax matters, geopolitical matters (including the impact of the Russia-Ukraine conflict and associated sanctions), and any slowdown in global economic growth, in addition to the continuing impact of the COVID-19 pandemic on our customers’ operations and financial condition, any of which may result in adverse impacts on the demand for loan, deposit and other financial services, delinquencies, defaults and counterparties' inability to meet credit and other obligations and the possible impairment of collectability of loans;
  • factors that can impact the performance of our loan portfolio, including changes in real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers and the success of construction projects that we finance, including any loans acquired in acquisition transactions;
  • the effect of monetary and other fiscal policies (including the impact of money supply, market interest rate policies and policies impacting inflation, of the Federal Reserve Board, the U.S. Treasury and other governmental agencies) as well as disruption in the liquidity and functioning of U.S. financial markets, as a result of the COVID-19 pandemic and government policies implemented in response thereto, may adversely impact prepayment penalty income, mortgage banking income, income from fiduciary activities, the value of securities, deposits and other financial instruments, in addition to the loan demand and the performance of our loan portfolio, and the interest rate sensitivity of our consolidated balance sheet as well as reduce interest margins;
  • changes in the federal, state, or local tax laws may adversely affect the fair values of net deferred tax assets and obligations of state and political subdivisions held in Park's investment securities portfolio and otherwise negatively impact our financial performance;
  • the impact of the changes in federal, state and local governmental policy, including the regulatory landscape, capital markets, elevated government debt, potential changes in tax legislation that may increase tax rates, infrastructure spending and social programs;
  • changes in laws or requirements imposed by Park's regulators impacting Park's capital actions, including dividend payments and stock repurchases;
  • changes in consumer spending, borrowing and saving habits, whether due to changes in retail distribution strategies, consumer preferences and behavior, changes in business and economic conditions (including as a result of the COVID-19 pandemic and reactions thereto), legislative and regulatory initiatives (including those undertaken in response to the COVID-19 pandemic), or other factors may be different than anticipated;
  • changes in customers', suppliers', and other counterparties' performance and creditworthiness, and Park's expectations regarding future credit losses and our allowance for credit losses, may be different than anticipated due to the continuing impact of and the various responses to the COVID-19 pandemic and inflationary pressures;
  • Park may have more credit risk and higher credit losses to the extent there are loan concentrations by location or industry of borrowers or collateral;
  • the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors;
  • the adequacy of our internal controls and risk management program in the event of changes in the market, economic, operational (including those which may result from our associates working remotely), asset/liability repricing, legal, compliance, strategic, cybersecurity, liquidity, credit and interest rate risks associated with Park's business;
  • competitive pressures among financial services organizations could increase significantly, including product and pricing pressures (which could in turn impact our credit spreads), changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and Park's ability to attract, develop and retain qualified banking professionals;
  • uncertainty regarding the nature, timing, cost and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and our subsidiaries, including major reform of the regulatory oversight structure of the financial services industry and changes in laws and regulations concerning taxes, FDIC insurance premium levels, pensions, bankruptcy, consumer protection, rent regulation and housing, financial accounting and reporting, environmental protection, insurance, bank products and services, bank and bank holding company capital and liquidity standards, fiduciary standards, securities and other aspects of the financial services industry, specifically the reforms provided for in the Coronavirus Aid, Relief and Economic Security (CARES) Act and the follow-up legislation in the Consolidated Appropriations Act, 2021, the American Rescue Plan Act of 2021, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and the Basel III regulatory capital reforms, as well as regulations already adopted and which may be adopted in the future by the relevant regulatory agencies, including the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve Board, to implement the provisions of the CARES Act and the follow-up legislation in the Consolidated Appropriations Act, 2021, the provisions of the American Rescue Plan Act of 2021, the provisions of the Dodd-Frank Act, and the Basel III regulatory capital reforms;
  • the effect of changes in accounting policies and practices, as may be adopted by the Financial Accounting Standards Board (the "FASB"), the SEC, the Public Company Accounting Oversight Board and other regulatory agencies, may adversely affect Park's reported financial condition or results of operations;
  • Park's assumptions and estimates used in applying critical accounting policies and modeling, including under the CECL model, which may prove unreliable, inaccurate or not predictive of actual results;
  • the impact of Park's ability to anticipate and respond to technological changes on Park's ability to respond to customer needs and meet competitive demands;
  • operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Park and our subsidiaries are highly dependent;
  • the ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks, including those of Park's third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Park and/or result in Park incurring a financial loss;
  • a failure in or breach of Park's operational or security systems or infrastructure, or those of our third-party vendors and other service providers, resulting in failures or disruptions in customer account management, general ledger, deposit, loan, or other systems, including as a result of cyber attacks;
  • the impact on Park's business and operating results of any costs associated with obtaining rights in intellectual property claimed by others and of adequacy of Park's intellectual property protection in general;
  • the existence or exacerbation of general geopolitical instability and uncertainty as well as the effect of trade policies (including the impact of potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations, closing of border crossings and changes in the relationship of the U.S. and its global trading partners);
  • the impact on financial markets and the economy of any changes in the credit ratings of the U.S. Treasury obligations and other U.S. government-backed debt, as well as issues surrounding the levels of U.S., European and Asian government debt and concerns regarding the growth rates and financial stability of certain sovereign governments, supranationals and financial institutions in Europe and Asia and the risk they may face difficulties servicing their sovereign debt;
  • the effect of a fall in stock market prices on Park's asset and wealth management businesses;
  • our litigation and regulatory compliance exposure, including the costs and effects of any adverse developments in legal proceedings or other claims and the costs and effects of unfavorable resolution of regulatory and other governmental examinations or other inquiries;
  • continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends;
  • the impact on Park's business, personnel, facilities or systems of losses related to acts of fraud, scams and schemes of third parties;
  • the impact of widespread natural and other disasters, pandemics (including the COVID-19 pandemic), dislocations, regional or national protests and civil unrest (including any resulting branch closures or damages), military or terrorist activities or international hostilities (especially in light of the Russia-Ukraine conflict) on the economy and financial markets generally and on us or our counterparties specifically;
  • any of the foregoing factors, or other cascading effects of the COVID-19 pandemic that are not currently foreseeable, could materially affect our business, including our customers' willingness to conduct banking transactions and their ability to pay on existing obligations;
  • the effect of healthcare laws in the U.S. and potential changes for such laws, especially in light of the COVID-19 pandemic, which may increase our healthcare and other costs and negatively impact our operations and financial results;
  • risk and uncertainties associated with Park's entry into new geographic markets with our most recent acquisitions, including expected revenue synergies and cost savings from recent acquisitions not being fully realized or realized within the expected time frame;
  • the replacement of the London Inter-Bank Offered Rate (LIBOR) with other reference rates which may result in increased expenses and litigation, and adversely impact the effectiveness of hedging strategies;
  • and other risk factors relating to the banking industry as detailed from time to time in Park's reports filed with the SEC 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, 2021.

Park does not undertake, and specifically disclaims any obligation, to publicly release the results 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 was made, or reflect the occurrence of unanticipated events, except to the extent required by law.

PARK NATIONAL CORPORATION
Financial Highlights
As of or for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021
2022
2022
2021
Percent change vs.
(in thousands, except share and per share data and ratios)
2nd QTR
1st QTR
2nd QTR
1Q '22
2Q '21
INCOME STATEMENT:
Net interest income
$
83,939
$
77,686
$
83,851
8.0
%
0.1
%
Provision for (recovery of) credit losses
2,991
(4,605
)
(4,040
)
N.
M.
N.
M.
Other income
31,193
31,656
31,238
(1.5
)%
(0.1)%
Other expense
70,048
67,373
71,400
4.0
%
(1.9)%
Income before income taxes
$
42,093
$
46,574
$
47,729
(9.6
)%
(11.8)%
Income taxes
7,769
7,699
8,597
0.9
%
(9.6)%
Net income
$
34,324
$
38,875
$
39,132
(11.7
)%
(12.3)%
MARKET DATA:
Earnings per common share - basic (a)
$
2.11
$
2.40
$
2.39
(12.1
)%
(11.7
)%
Earnings per common share - diluted (a)
2.10
2.38
2.38
(11.8
)%
(11.8
)%
Quarterly cash dividends declared per common share
1.04
1.04
1.03
—
%
1.0
%
Book value per common share at period end
64.62
66.24
65.44
(2.4
)%
(1.3
)%
Market price per common share at period end
121.25
131.38
117.42
(7.7
)%
3.3
%
Market capitalization at period end
1,970,228
2,134,834
1,918,733
(7.7
)%
2.7
%
Weighted average common shares - basic (b)
16,249,307
16,219,889
16,340,690
0.2
%
(0.6
)%
Weighted average common shares - diluted (b)
16,361,246
16,331,031
16,472,800
0.2
%
(0.7
)%
Common shares outstanding at period end
16,249,306
16,249,308
16,340,772
—
%
(0.6
)%
PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)
1.42
%
1.60
%
1.59
%
(11.3
)%
(10.7
)%
Return on average shareholders' equity (a)(b)
12.86
%
14.26
%
14.81
%
(9.8
)%
(13.2
)%
Yield on loans
4.57
%
4.31
%
4.60
%
6.0
%
(0.7
)%
Yield on investment securities
2.35
%
2.11
%
2.31
%
11.4
%
1.7
%
Yield on money market instruments
0.77
%
0.17
%
0.10
%
352.9
%
670.0
%
Yield on interest earning assets
4.04
%
3.71
%
3.93
%
8.9
%
2.8
%
Cost of interest bearing deposits
0.16
%
0.08
%
0.13
%
100.0
%
23.1
%
Cost of borrowings
2.50
%
2.35
%
1.91
%
6.4
%
30.9
%
Cost of paying interest bearing liabilities
0.33
%
0.25
%
0.29
%
32.0
%
13.8
%
Net interest margin (g)
3.84
%
3.55
%
3.74
%
8.2
%
2.7
%
Efficiency ratio (g)
60.38
%
61.16
%
61.65
%
(1.3
)%
(2.1
)%
OTHER DATA (NON-GAAP) AND BALANCE SHEET:
Tangible book value per share (d)
$
54.39
$
55.98
$
55.17
(2.8
)%
(1.4
)%
Average interest earning assets
8,857,089
8,959,109
9,062,368
(1.1
)%
(2.3
)%
Pre-tax, pre-provision net income (m)
45,084
41,969
43,689
7.4
%
3.2
%
Note: Explanations for footnotes (a) - (m) are included at the end of the financial tables in the "Financial Reconciliations" section.
PARK NATIONAL CORPORATION
Financial Highlights (continued)
As of or for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021
Percent change vs.
(in thousands, except ratios)
June 30,
2022
March 31,
2022
June 30,
2021
1Q '22
2Q '21
BALANCE SHEET:
Investment securities
$
1,920,724
$
1,832,274
$
1,461,916
4.8
%
31.4
%
Commercial loans held for sale
6,321
—
—
N.
M
N.
M
Loans
6,958,685
6,821,606
7,035,646
2.0
%
(1.1
)%
Allowance for credit losses
81,448
78,861
83,577
3.3
%
(2.5
)%
Goodwill and other intangible assets
166,252
166,655
167,897
(0.2
)%
(1.0
)%
Other real estate owned (OREO)
1,354
760
813
78.2
%
66.5
%
Total assets
9,826,670
9,576,352
9,947,994
2.6
%
(1.2
)%
Total deposits
8,297,654
7,996,318
8,214,624
3.8
%
1.0
%
Borrowings
360,234
394,249
501,350
(8.6
)%
(28.1
)%
Total shareholders' equity
1,050,013
1,076,366
1,069,392
(2.4
)%
(1.8
)%
Tangible equity (d)
883,761
909,711
901,495
(2.9
)%
(2.0
)%
Total nonperforming loans
64,627
86,891
114,695
(25.6
)%
(43.7
)%
Total nonperforming loans including commercial loans held for sale
70,246
86,891
114,695
(19.2
)%
(38.8
)%
Total nonperforming assets
71,600
87,651
118,672
(18.3
)%
(39.7
)%
ASSET QUALITY RATIOS:
Loans as a % of period end total assets
70.81
%
71.23
%
70.72
%
(0.6
)%
0.1
%
Total nonperforming loans as a % of period end loans
0.93
%
1.27
%
1.63
%
(26.8
)%
(42.9
)%
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets
1.03
%
1.28
%
1.69
%
(19.5
)%
(39.1
)%
Allowance for credit losses as a % of period end loans
1.17
%
1.16
%
1.19
%
0.9
%
(1.7
)%
Net loan charge-offs (recoveries)
$
404
$
(269
)
$
(731
)
N.M
N.M
Annualized net loan charge-offs (recoveries) as a % of average loans (b)
0.02
%
(0.02
)%
(0.04
)%
N.M
N.M
CAPITAL & LIQUIDITY:
Total shareholders' equity / Period end total assets
10.69
%
11.24
%
10.75
%
(4.9
)%
(0.6
)%
Tangible equity (d) / Tangible assets (f)
9.15
%
9.67
%
9.22
%
(5.4
)%
(0.8
)%
Average shareholders' equity / Average assets (b)
11.06
%
11.25
%
10.74
%
(1.7
)%
3.0
%
Average shareholders' equity / Average loans (b)
15.65
%
16.19
%
14.94
%
(3.3
)%
4.8
%
Average loans / Average deposits (b)
84.27
%
83.32
%
86.49
%
1.1
%
(2.6
)%
Note: Explanations for footnotes (a) - (m) are included at the end of the financial tables in the "Financial Reconciliations" section.


PARK NATIONAL CORPORATION
Financial Highlights
Six months ended June 30, 2022 and June 30, 2021
2022
2021
(in thousands, except share and per share data)
Six months
ended
June 30
Six months
ended
June 30
Percent
change vs
'21
INCOME STATEMENT:
Net interest income
$
161,625
$
164,585
(1.8)%
Recovery of credit losses
(1,614
)
(8,895
)
N.M
Other income
62,849
65,327
(3.8)%
Other expense
137,421
139,265
(1.3)%
Income before income taxes
$
88,667
$
99,542
(10.9)%
Income taxes
15,468
17,579
(12.0)%
Net income
$
73,199
$
81,963
(10.7)%
MARKET DATA:
Earnings per common share - basic (a)
$
4.51
$
5.02
(10.2)%
Earnings per common share - diluted (a)
4.48
4.98
(10.0)%
Quarterly cash dividends declared per common share
2.08
2.06
1.0
%
Special cash dividends declared per common share
—
0.20
N.M.
Weighted average common shares - basic (b)
16,234,598
16,327,838
(0.6)%
Weighted average common shares - diluted (b)
16,346,141
16,455,673
(0.7)%
PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)
1.51
%
1.70
%
(11.2)%
Return on average shareholders' equity (a)(b)
13.57
%
15.71
%
(13.6)%
Yield on loans
4.44
%
4.54
%
(2.2)%
Yield on investment securities
2.24
%
2.41
%
(7.1)%
Yield on money market instruments
0.34
%
0.10
%
240.0
%
Yield on interest earning assets
3.88
%
3.95
%
(1.8)%
Cost of interest bearing deposits
0.12
%
0.14
%
(14.3)%
Cost of borrowings
2.42
%
1.89
%
28.0
%
Cost of paying interest bearing liabilities
0.29
%
0.30
%
(3.3)%
Net interest margin (g)
3.70
%
3.75
%
(1.3)%
Efficiency ratio (g)
60.76
%
60.20
%
0.9
%
ASSET QUALITY RATIOS
Net loan charge-offs (recoveries)
$
135
$
(707
)
N.M.
Annualized net loan charge-offs (recoveries) as a % of average loans (b)
—
%
(0.02)%
N.M.
CAPITAL & LIQUIDITY
Average shareholders' equity / Average assets (b)
11.16
%
10.80
%
3.3
%
Average shareholders' equity / Average loans (b)
15.92
%
14.79
%
7.6
%
Average loans / Average deposits (b)
83.80
%
88.26
%
(5.1)%
OTHER DATA (NON-GAAP) AND BALANCE SHEET:
Average interest earning assets
$
8,907,817
$
8,925,097
(0.2)%
Pre-tax, pre-provision net income (m)
87,053
90,647
(4.0)%
Note: Explanations for footnotes (a) - (m) are included at the end of the financial tables in the "Financial Reconciliations" section.


PARK NATIONAL CORPORATION
Consolidated Statements of Income
Three Months Ended
Six Months Ended
June 30,
June 30,
(in thousands, except share and per share data)
2022
2021
2022
2021
Interest income:
Interest and fees on loans
$
77,787
$
81,176
$
150,203
$
159,913
Interest on debt securities:
Taxable
7,624
4,600
13,754
8,856
Tax-exempt
2,676
2,032
5,123
4,069
Other interest income
260
186
413
329
Total interest income
88,347
87,994
169,493
173,167
Interest expense:
Interest on deposits:
Demand and savings deposits
1,333
401
1,684
787
Time deposits
708
1,285
1,428
2,869
Interest on borrowings
2,367
2,457
4,756
4,926
Total interest expense
4,408
4,143
7,868
8,582
Net interest income
83,939
83,851
161,625
164,585
Provision for (recovery of) credit losses
2,991
(4,040
)
(1,614
)
(8,895
)
Net interest income after provision for (recovery of) credit losses
80,948
87,891
163,239
173,480
Other income
31,193
31,238
62,849
65,327
Other expense
70,048
71,400
137,421
139,265
Income before income taxes
42,093
47,729
88,667
99,542
Income taxes
7,769
8,597
15,468
17,579
Net income
$
34,324
$
39,132
$
73,199
$
81,963
Per common share:
Net income - basic
$
2.11
$
2.39
$
4.51
$
5.02
Net income - diluted
$
2.10
$
2.38
$
4.48
$
4.98
Weighted average shares - basic
16,249,307
16,340,690
16,234,598
16,327,838
Weighted average shares - diluted
16,361,246
16,472,800
16,346,141
16,455,673
Cash dividends declared:
Quarterly dividend
$
1.04
$
1.03
$
2.08
$
2.06
Special dividend
$
—
$
—
$
—
$
0.20


PARK NATIONAL CORPORATION
Consolidated Balance Sheets
(in thousands, except share data)
June 30, 2022
December 31,
2021
Assets
Cash and due from banks
$
171,114
$
144,507
Money market instruments
75,327
74,673
Investment securities
1,920,724
1,815,408
Commercial loans held for sale
6,321
—
Loans
6,958,685
6,871,122
Allowance for credit losses
(81,448
)
(83,197
)
Loans, net
6,877,237
6,787,925
Bank premises and equipment, net
85,531
89,008
Goodwill and other intangible assets
166,252
167,057
Other real estate owned
1,354
775
Other assets
522,810
480,901
Total assets
$
9,826,670
$
9,560,254
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing
$
3,057,977
$
3,066,419
Interest bearing
5,239,677
4,838,109
Total deposits
8,297,654
7,904,528
Borrowings
360,234
426,996
Other liabilities
118,769
117,971
Total liabilities
$
8,776,657
$
8,449,495
Shareholders' Equity:
Preferred shares (200,000 shares authorized; no shares outstanding at June 30, 2022 and December 31, 2021)
$
—
$
—
Common shares (No par value; 20,000,000 shares authorized; 17,623,104 shares issued at June 30, 2022 and
17,623,118 shares issued at December 31, 2021)
460,645
461,800
Accumulated other comprehensive (loss) income, net of taxes
(85,404
)
15,155
Retained earnings
814,241
776,294
Treasury shares (1,373,798 shares at June 30, 2022 and 1,403,555 shares at December 31, 2021)
(139,469
)
(142,490
)
Total shareholders' equity
$
1,050,013
$
1,110,759
Total liabilities and shareholders' equity
$
9,826,670
$
9,560,254


PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
Three Months Ended
Six Months Ended
June 30,
June 30,
(in thousands)
2022
2021
2022
2021
Assets
Cash and due from banks
$
159,095
$
131,397
$
163,884
$
139,784
Money market instruments
136,232
720,238
247,549
637,531
Investment securities
1,855,313
1,307,037
1,828,568
1,234,178
Loans
6,841,376
7,094,099
6,835,389
7,116,353
Allowance for credit losses
(78,907
)
(87,083
)
(81,158
)
(88,511
)
Loans, net
6,762,469
7,007,016
6,754,231
7,027,842
Bank premises and equipment, net
87,029
90,269
87,879
90,006
Goodwill and other intangible assets
166,516
168,211
166,716
168,449
Other real estate owned
773
822
766
1,016
Other assets
511,593
447,088
502,203
444,221
Total assets
$
9,679,020
$
9,872,078
$
9,751,796
$
9,743,027
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing
$
3,097,920
$
2,940,602
$
3,062,154
$
2,866,909
Interest bearing
5,020,698
5,261,608
5,095,085
5,195,848
Total deposits
8,118,618
8,202,210
8,157,239
8,062,757
Borrowings
380,361
514,855
395,806
526,715
Other liabilities
109,548
95,064
110,832
101,332
Total liabilities
$
8,608,527
$
8,812,129
$
8,663,877
$
8,690,804
Shareholders' Equity:
Preferred shares
$
—
$
—
$
—
$
—
Common shares
459,418
457,949
460,601
459,327
Accumulated other comprehensive loss, net of taxes
(58,869
)
(4,876
)
(30,452
)
(1,865
)
Retained earnings
809,413
734,993
798,724
724,183
Treasury shares
(139,469
)
(128,117
)
(140,954
)
(129,422
)
Total shareholders' equity
$
1,070,493
$
1,059,949
$
1,087,919
$
1,052,223
Total liabilities and shareholders' equity
$
9,679,020
$
9,872,078
$
9,751,796
$
9,743,027


PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters
2022
2022
2021
2021
2021
(in thousands, except per share data)
2nd QTR
1st QTR
4th QTR
3rd QTR
2nd QTR
Interest income:
Interest and fees on loans
$
77,787
$
72,416
$
79,168
$
78,127
$
81,176
Interest on debt securities:
Taxable
7,624
6,130
5,698
4,904
4,600
Tax-exempt
2,676
2,447
2,209
2,029
2,032
Other interest income
260
153
191
360
186
Total interest income
88,347
81,146
87,266
85,420
87,994
Interest expense:
Interest on deposits:
Demand and savings deposits
1,333
351
373
435
401
Time deposits
708
720
831
1,011
1,285
Interest on borrowings
2,367
2,389
2,356
2,372
2,457
Total interest expense
4,408
3,460
3,560
3,818
4,143
Net interest income
83,939
77,686
83,706
81,602
83,851
Provision for (recovery of) credit losses
2,991
(4,605
)
(4,993
)
1,972
(4,040
)
Net interest income after provision for (recovery of) credit losses
80,948
82,291
88,699
79,630
87,891
Other income
31,193
31,656
32,206
32,411
31,238
Other expense
70,048
67,373
75,764
68,489
71,400
Income before income taxes
42,093
46,574
45,141
43,552
47,729
Income taxes
7,769
7,699
8,593
8,118
8,597
Net income
$
34,324
$
38,875
$
36,548
$
35,434
$
39,132
Per common share:
Net income - basic
$
2.11
$
2.40
$
2.25
$
2.17
$
2.39
Net income - diluted
$
2.10
$
2.38
$
2.23
$
2.16
$
2.38


PARK NATIONAL CORPORATION
Detail of other income and other expense - Linked Quarters
2022
2022
2021
2021
2021
(in thousands)
2nd QTR
1st QTR
4th QTR
3rd QTR
2nd QTR
Other income:
Income from fiduciary activities
$
8,859
$
8,797
$
8,887
$
8,820
$
8,569
Service charges on deposit accounts
2,563
2,074
2,357
2,389
2,032
Other service income
4,940
4,819
6,368
6,668
7,159
Debit card fee income
6,731
6,126
6,568
6,453
6,758
Bank owned life insurance income
2,374
1,175
1,121
1,462
1,149
ATM fees
583
532
572
622
655
Gain on equity securities, net
709
2,353
2,125
609
467
Other components of net periodic benefit income
3,027
3,027
2,038
2,038
2,038
Miscellaneous
1,407
2,753
2,170
3,350
2,411
Total other income
$
31,193
$
31,656
$
32,206
$
32,411
$
31,238
Other expense:
Salaries
$
31,052
$
30,521
$
35,953
$
29,433
$
30,303
Employee benefits
10,199
10,499
10,706
10,640
10,056
Occupancy expense
3,040
3,214
3,161
3,211
3,027
Furniture and equipment expense
2,934
2,937
2,724
2,797
2,756
Data processing fees
8,416
7,504
7,860
7,817
7,150
Professional fees and services
6,775
5,858
7,840
6,973
6,973
Marketing
1,019
1,317
1,718
1,574
1,290
Insurance
1,245
1,405
1,547
1,403
1,276
Communication
935
890
851
796
770
State tax expense
1,167
1,192
931
1,113
1,103
Amortization of intangible assets
403
402
420
420
479
Foundation contributions
—
—
—
—
4,000
Miscellaneous
2,863
1,634
2,053
2,312
2,217
Total other expense
$
70,048
$
67,373
$
75,764
$
68,489
$
71,400


PARK NATIONAL CORPORATION
Asset Quality Information
Year ended December 31,
(in thousands, except ratios)
June 30,
2022
March 31,
2022
2021
2020
2019
2018
Allowance for credit losses:
Allowance for credit losses, beginning of period
$
78,861
$
83,197
$
85,675
$
56,679
$
51,512
$
49,988
Cumulative change in accounting principle; adoption of ASU 2016-13
—
—
6,090
—
—
—
Charge-offs
2,402
1,347
5,093
10,304
11,177
13,552
Recoveries
1,998
1,616
8,441
27,246
10,173
7,131
Net charge-offs (recoveries)
404
(269
)
(3,348
)
(16,942
)
1,004
6,421
Provision for (recovery of) credit losses
2,991
(4,605
)
(11,916
)
12,054
6,171
7,945
Allowance for credit losses, end of period
$
81,448
$
78,861
$
83,197
$
85,675
$
56,679
$
51,512
General reserve trends:
Allowance for credit losses, end of period
$
81,448
$
78,861
$
83,197
$
85,675
$
56,679
$
51,512
Allowance on purchased credit deteriorated ("PCD") loans (purchased credit impaired ("PCI") loans for years 2020 and prior)
—
—
—
167
268
—
Allowance on purchased loans excluded from the general reserve
—
—
—
678
—
—
Specific reserves on individually evaluated loans
1,874
1,513
1,616
5,434
5,230
2,273
General reserves on collectively evaluated loans
$
79,574
$
77,348
$
81,581
$
79,396
$
51,181
$
49,239
Total loans
$
6,958,685
$
6,821,606
$
6,871,122
$
7,177,785
$
6,501,404
$
5,692,132
PCD loans (PCI loans for years 2020 and prior)
5,934
6,987
7,149
11,153
14,331
3,943
Purchased loans excluded from collectively evaluated loans
—
—
—
360,056
548,436
225,029
Individually evaluated loans
42,523
63,209
74,502
108,407
77,459
48,135
Collectively evaluated loans
$
6,910,228
$
6,751,410
$
6,789,471
$
6,698,169
$
5,861,178
$
5,415,025
Asset Quality Ratios:
Annualized net charge-offs (recoveries) as a % of average loans
0.02
%
(0.02) %
(0.05)%
(0.24)%
0.02
%
0.12
%
Allowance for credit losses as a % of period end loans
1.17
%
1.16
%
1.21
%
1.19
%
0.87
%
0.90
%
Allowance for credit losses as a % of period end loans (excluding PPP loans) (k)
1.17
%
1.16
%
1.22
%
1.25
%
N.A.
N.A.
General reserve as a % of collectively evaluated loans
1.15
%
1.15
%
1.20
%
1.19
%
0.87
%
0.91
%
General reserves as a % of collectively evaluated loans (excluding PPP loans) (k)
1.15
%
1.15
%
1.21
%
1.24
%
N.A.
N.A.
Nonperforming assets:
Nonaccrual loans
$
44,374
$
54,018
$
72,722
$
117,368
$
90,080
$
67,954
Accruing troubled debt restructurings
19,746
32,428
28,323
20,788
21,215
15,173
Loans past due 90 days or more
507
445
1,607
1,458
2,658
2,243
Total nonperforming loans
$
64,627
$
86,891
$
102,652
$
139,614
$
113,953
$
85,370
Commercial loans held for sale, previously nonperforming
5,619
—
—
—
—
—
Total nonperforming loans, including commercial loans held for sale
$
70,246
$
86,891
$
102,652
$
139,614
$
113,953
$
85,370
Other real estate owned - Park National Bank
—
166
181
837
3,100
2,788
Other real estate owned - SEPH
1,354
594
594
594
929
1,515
Other nonperforming assets - Park National Bank
—
—
2,750
3,164
3,599
3,464
Total nonperforming assets
$
71,600
$
87,651
$
106,177
$
144,209
$
121,581
$
93,137
Percentage of nonaccrual loans to period end loans
0.64
%
0.79
%
1.06
%
1.64
%
1.39
%
1.19
%
Percentage of nonperforming loans to period end loans
0.93
%
1.27
%
1.49
%
1.95
%
1.75
%
1.50
%
Percentage of nonperforming assets to period end loans
1.03
%
1.28
%
1.55
%
2.01
%
1.87
%
1.64
%
Percentage of nonperforming assets to period end total assets
0.73
%
0.92
%
1.11
%
1.55
%
1.42
%
1.19
%
Note: Explanations for footnotes (a) - (m) are included at the end of the financial tables in the "Financial Reconciliations" section.


PARK NATIONAL CORPORATION
Asset Quality Information (continued)
Year ended December 31,
(in thousands, except ratios)
June 30,
2022
March 31,
2022
2021
2020
2019
2018
New nonaccrual loan information:
Nonaccrual loans, beginning of period
$
54,018
$
72,722
$
117,368
$
90,080
$
67,954
$
72,056
New nonaccrual loans
7,881
6,000
38,478
103,386
81,009
76,611
Resolved nonaccrual loans
11,906
24,704
83,124
76,098
58,883
80,713
Loans transferred to held for sale
5,619
—
—
—
—
—
Nonaccrual loans, end of period
$
44,374
$
54,018
$
72,722
$
117,368
$
90,080
$
67,954
Individually evaluated commercial loan portfolio information (period end): (l)
Unpaid principal balance
$
42,905
$
63,833
$
75,126
$
109,062
$
78,178
$
59,381
Prior charge-offs
382
624
624
655
719
11,246
Remaining principal balance
42,523
63,209
74,502
108,407
77,459
48,135
Specific reserves
1,874
1,513
1,616
5,434
5,230
2,273
Book value, after specific reserves
$
40,649
$
61,696
$
72,886
$
102,973
$
72,229
$
45,862
Note: Explanations for footnotes (a) - (m) are included at the end of the financial tables in the "Financial Reconciliations" section.


PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS
THREE MONTHS ENDED
SIX MONTHS ENDED
(in thousands, except share and per share data)
June 30,
2022
March 31,
2022
June 30,
2021
June 30,
2022
June 30,
2021
Net interest income
$
83,939
$
77,686
$
83,851
$
161,625
$
164,585
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions
547
480
806
1,027
1,937
less interest income on former Vision Bank relationships
2,305
42
2,838
2,347
2,943
Net interest income - adjusted
$
81,087
$
77,164
$
80,207
$
158,251
$
159,705
Provision for (recovery of) credit losses
$
2,991
$
(4,605
)
$
(4,040
)
$
(1,614
)
$
(8,895
)
less recoveries on former Vision Bank relationships
(506
)
(1
)
(152
)
(507
)
(409
)
Provision for (recovery of) credit losses - adjusted
$
3,497
$
(4,604
)
$
(3,888
)
$
(1,107
)
$
(8,486
)
Other income
$
31,193
$
31,656
$
31,238
$
62,849
$
65,327
less other service income related to former Vision Bank relationships
500
—
3
500
61
Other income - adjusted
$
30,693
$
31,656
$
31,235
$
62,349
$
65,266
Other expense
$
70,048
$
67,373
$
71,400
$
137,421
$
139,265
less merger-related expenses related to NewDominion and Carolina Alliance acquisitions
—
—
4
—
16
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions
403
402
479
805
958
less direct expenses related to collection of payments on former Vision Bank loan relationships
366
—
300
366
407
less rebranding initiative related expenses
336
344
342
680
1,297
less Foundation contribution
—
—
4,000
—
4,000
less severance and restructuring charges
497
42
46
539
154
less COVID-19 related expenses (j)
141
606
670
747
1,535
Other expense - adjusted
$
68,305
$
65,979
$
65,559
$
134,284
$
130,898
Tax effect of adjustments to net income identified above (i)
$
(444
)
$
183
$
429
$
(261
)
$
634
Net income - reported
$
34,324
$
38,875
$
39,132
$
73,199
$
81,963
Net income - adjusted (h)
$
32,653
$
39,563
$
40,745
$
72,216
$
84,346
Diluted earnings per share
$
2.10
$
2.38
$
2.38
$
4.48
$
4.98
Diluted earnings per share, adjusted (h)
$
2.00
$
2.42
$
2.47
$
4.42
$
5.13
Annualized return on average assets (a)(b)
1.42
%
1.60
%
1.59
%
1.51
%
1.70
%
Annualized return on average assets, adjusted (a)(b)(h)
1.35
%
1.63
%
1.66
%
1.49
%
1.75
%
Annualized return on average tangible assets (a)(b)(e)
1.45
%
1.63
%
1.62
%
1.54
%
1.73
%
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)
1.38
%
1.66
%
1.68
%
1.52
%
1.78
%
Annualized return on average shareholders' equity (a)(b)
12.86
%
14.26
%
14.81
%
13.57
%
15.71
%
Annualized return on average shareholders' equity, adjusted (a)(b)(h)
12.23
%
14.51
%
15.42
%
13.39
%
16.16
%
Annualized return on average tangible equity (a)(b)(c)
15.23
%
16.80
%
17.60
%
16.02
%
18.70
%
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)
14.49
%
17.09
%
18.33
%
15.81
%
19.25
%
Efficiency ratio (g)
60.38
%
61.16
%
61.65
%
60.76
%
60.20
%
Efficiency ratio, adjusted (g)(h)
60.63
%
60.18
%
58.45
%
60.41
%
57.82
%
Annualized net interest margin (g)
3.84
%
3.55
%
3.74
%
3.70
%
3.75
%
Annualized net interest margin, adjusted (g)(h)
3.71
%
3.53
%
3.58
%
3.62
%
3.64
%
Note: Explanations for footnotes (a) - (m) are included at the end of the financial tables in the "Financial Reconciliations" section.


PARK NATIONAL CORPORATION
Financial Reconciliations (continued)
(a) Reported measure uses net income
(b) Averages are for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021 and the six months ended June 30, 2022 and June 30, 2021, as appropriate
(c) Net income for each period divided by average tangible equity during the period. Average tangible equity equals average shareholders' equity during the applicable period less average goodwill and other intangible assets during the applicable period.
RECONCILIATION OF AVERAGE SHAREHOLDERS' EQUITY TO AVERAGE TANGIBLE EQUITY:
THREE MONTHS ENDED
SIX MONTHS ENDED
June 30, 2022
March 31, 2022
June 30, 2021
June 30, 2022
June 30, 2021
AVERAGE SHAREHOLDERS' EQUITY
$
1,070,493
$
1,105,540
$
1,059,949
$
1,087,919
$
1,052,223
Less: Average goodwill and other intangible assets
166,516
166,918
168,211
166,716
168,449
AVERAGE TANGIBLE EQUITY
$
903,977
$
938,622
$
891,738
$
921,203
$
883,774
(d) Tangible equity divided by common shares outstanding at period end. Tangible equity equals total shareholders' equity less goodwill and other intangible assets, in each case at the end of the period.
RECONCILIATION OF TOTAL SHAREHOLDERS' EQUITY TO TANGIBLE EQUITY:
June 30, 2022
March 31, 2022
June 30, 2021
TOTAL SHAREHOLDERS' EQUITY
$
1,050,013
$
1,076,366
$
1,069,392
Less: Goodwill and other intangible assets
166,252
166,655
167,897
TANGIBLE EQUITY
$
883,761
$
909,711
$
901,495
(e) Net income for each period divided by average tangible assets during the period. Average tangible assets equal average assets less average goodwill and other intangible assets, in each case during the applicable period.
RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS
THREE MONTHS ENDED
SIX MONTHS ENDED
June 30, 2022
March 31, 2022
June 30, 2021
June 30, 2022
June 30, 2021
AVERAGE ASSETS
$
9,679,020
$
9,825,382
$
9,872,078
$
9,751,796
$
9,743,027
Less: Average goodwill and other intangible assets
166,516
166,918
168,211
166,716
168,449
AVERAGE TANGIBLE ASSETS
$
9,512,504
$
9,658,464
$
9,703,867
$
9,585,080
$
9,574,578
(f) Tangible equity divided by tangible assets. Tangible assets equal total assets less goodwill and other intangible assets, in each case at the end of the period.
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:
June 30, 2022
March 31, 2022
June 30, 2021
TOTAL ASSETS
$
9,826,670
$
9,576,352
$
9,947,994
Less: Goodwill and other intangible assets
166,252
166,655
167,897
TANGIBLE ASSETS
$
9,660,418
$
9,409,697
$
9,780,097
(g) Efficiency ratio is calculated by dividing total other expense by the sum of fully taxable equivalent net interest income and other income. Fully taxable equivalent net interest income reconciliation is shown assuming a 21% corporate federal income tax rate. Additionally, net interest margin is calculated on a fully taxable equivalent basis by dividing fully taxable equivalent net interest income by average interest earning assets, in each case during the applicable period.
RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
THREE MONTHS ENDED
SIX MONTHS ENDED
June 30, 2022
March 31, 2022
June 30, 2021
June 30, 2022
June 30, 2021
Interest income
$
88,347
$
81,146
$
87,994
$
169,493
$
173,167
Fully taxable equivalent adjustment
872
819
718
1,691
1,432
Fully taxable equivalent interest income
$
89,219
$
81,965
$
88,712
$
171,184
$
174,599
Interest expense
4,408
3,460
4,143
7,868
8,582
Fully taxable equivalent net interest income
$
84,811
$
78,505
$
84,569
$
163,316
$
166,017
(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, provision for (recovery of) credit losses, other income and other expense.
(i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate.
(j) COVID-19 related expenses include calamity pay and special one-time bonuses to certain associates.
(k) Excludes $13.4 million, $37.4 million and $248.9 million of PPP loans at June 30, 2022, March 31, 2022 and June 30, 2021, respectively.
(l) Excludes $5.6 million of commercial loans held for sale for the period ended June 30, 2022.
(m) Pre-tax, pre-provision ("PTPP") net income is calculated as net income, plus income taxes, plus the provision for (recovery of) credit losses, in each case during the applicable period. PTPP net income is a common industry metric utilized in capital analysis and review. PTPP is used to assess the operating performance of Park while excluding the impact of credit losses.
RECONCILIATION OF PRE-TAX, PRE-PROVISION NET INCOME
THREE MONTHS ENDED
SIX MONTHS ENDED
June 30, 2022
March 31, 2022
June 30, 2021
June 30, 2022
June 30, 2021
Net income
$
34,324
$
38,875
$
39,132
$
73,199
$
81,963
Plus: Income Taxes
7,769
7,699
8,597
15,468
17,579
Plus: Provision for (recovery of) credit losses
2,991
(4,605
)
(4,040
)
(1,614
)
(8,895
)
Pre-tax, pre-provision net income
$
45,084
$
41,969
$
43,689
$
87,053
$
90,647

Media contact: Ellie Akey, 740-349-5493 or ellie.akey@parknationalbank.comInvestor contact: Brady Burt, 740-322-6844 or brady.burt@parknationalbank.com
Stock Information
Company Name: Park National Corporation
Stock Symbol: PRK
Market: NYSE
Website: parknationalcorp.com
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