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home / news releases / PRK - Park National Corporation reports financial results for third quarter and first nine months of 2021

PRK - Park National Corporation reports financial results for third quarter and first nine months of 2021

Park National Corporation

NEWARK, Ohio, Oct. 25, 2021 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the third quarter and first nine months of 2021 (three and nine months ended September 30, 2021). Park's board of directors declared a quarterly cash dividend of $1.03 per common share, payable on December 10, 2021 to common shareholders of record as of November 19, 2021. The board also declared a special cash dividend of $0.20 per common share, also payable on December 10, 2021 to common shareholders of record as of November 19, 2021.

“Throughout another year of pandemic turbulence, our customers have relied on Park National for more security, convenience, and compassion. We continue to report new opportunities and growth in services from loans to retirement investments to digital banking. We are proud to help our communities not just endure difficult circumstances, but also navigate them and build for the future,” Park Chairman and CEO David Trautman said.

Park’s net income for the third quarter of 2021 was $35.4 million, a 14.9 percent increase from $30.8 million for the third quarter of 2020. Third quarter 2021 net income per diluted common share was $2.16, compared to $1.88 in the third quarter of 2020. Park's net income for the first nine months of 2021 was $117.4 million, a 41.9 percent increase from $82.7 million for the first nine months of 2020. Net income per diluted common share was $7.14 for the first nine months of 2021, compared to $5.04 for the first nine months of 2020.

Park's community-banking subsidiary, The Park National Bank, reported net income of $36.5 million for the third quarter of 2021, a 10.8 percent increase compared to $32.9 million for the same period of 2020. Park National Bank reported net income of $122.5 million for the first nine months of 2021, compared to $89.5 million for the first nine months of 2020.

Park also announced that effective October 31, 2021, it will raise its minimum wage for all associates to $15 per hour, to remain competitive in attracting and retaining associates in each of the communities Park serves. Additionally, Park will reward its current associates for their collective role in supporting Park’s outstanding performance throughout another challenging year. Park’s board approved a one-time bonus payment for all associates who are not eligible for Park’s annual incentive compensation program. In November, each full-time associate in that group will receive an extra payment of $1,000, and part-time associates will receive $750.

“Open communication, empathy, and flexibility have always been important parts of our culture, and that has been especially true throughout this pandemic. Our success depends on our associates, and our leaders keep a close watch to ensure we’re taking care of our colleagues and the customers they serve daily,” Park President Matthew Miller said. “We are pleased to continue to invest in support for our community organizations, customers, shareholders, and associates.”

Headquartered in Newark, Ohio, Park National Corporation has $10.0 billion in total assets (as of September 30, 2021). 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
Media contact: Bethany Lewis, 740.349.0421, bethany.lewis@parknationalbank.com
Investor contact: Brady Burt, 740.322.6844, brady.burt@parknationalbank.com
Park National Corporation, 50 N. Third Street, Newark, Ohio 43055

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 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) and markets, 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 and effectiveness of vaccines, and the implementation of fiscal stimulus packages;
  • the impact of future governmental and regulatory actions upon our participation in and execution of government programs related to the COVID-19 pandemic;
  • 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;
  • general economic and financial market conditions, specifically in the real estate markets and the credit markets, either nationally or in the states in which Park and our subsidiaries do business, may experience a weaker recovery than anticipated, in addition to the continuing impact of the COVID-19 pandemic on our customers’ operations and financial condition, either 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 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 and interest rate policies of the Federal Reserve Board) 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 results of the 2020 U.S. elections, including on the regulatory landscape, capital markets, tax policy, infrastructure spending and social programs;
  • 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 unemployment levels in the states in which Park and our subsidiaries do business may be different than anticipated due to the continuing impact of the COVID-19 pandemic;
  • changes in customers', suppliers', and other counterparties' performance and creditworthiness may be different than anticipated due to the continuing impact of and the various responses to the COVID-19 pandemic;
  • 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 more of 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 our 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 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 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;
  • 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 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 recent acquisitions, including expected revenue synergies and cost savings from recent acquisitions not being fully realized or realized within the expected time frame;
  • the discontinuation of the London Inter-Bank Offered Rate (LIBOR) and 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, 2020.

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 September 30, 2021, June 30, 2021, and September 30, 2020
2021
2021
2020
Percent change vs.
(in thousands, except share and per share data)
3rd QTR
2nd QTR
3rd QTR
2Q '21
3Q '20
INCOME STATEMENT:
Net interest income
$
81,602
$
83,851
$
83,840
(2.7
)
%
(2.7
)
%
Provision for (recovery of) credit losses (l)
1,972
(4,040
)
13,836
N.M
N.M
Other income
32,411
31,238
36,558
3.8
%
(11.3
)
%
Other expense
68,489
71,400
69,859
(4.1
)
%
(2.0
)
%
Income before income taxes
$
43,552
$
47,729
$
36,703
(8.8
)
%
18.7
%
Income taxes
8,118
8,597
5,857
(5.6
)
%
38.6
%
Net income
$
35,434
$
39,132
$
30,846
(9.5
)
%
14.9
%
MARKET DATA:
Earnings per common share - basic (a)
$
2.17
$
2.39
$
1.89
(9.2
)
%
14.8
%
Earnings per common share - diluted (a)
2.16
2.38
1.88
(9.2
)
%
14.9
%
Cash dividends declared per common share
1.03
1.03
1.02
—
%
1.0
%
Book value per common share at period end
65.90
65.44
62.39
0.7
%
5.6
%
Market price per common share at period end
121.95
117.42
81.96
3.9
%
48.8
%
Market capitalization at period end
1,976,343
1,918,733
1,336,011
3.0
%
47.9
%
Weighted average common shares - basic (b)
16,292,312
16,340,690
16,300,720
(0.3
)
%
(0.1
)
%
Weighted average common shares - diluted (b)
16,423,912
16,472,800
16,393,792
(0.3
)
%
0.2
%
Common shares outstanding at period end
16,206,177
16,340,772
16,300,763
(0.8
)
%
(0.6
)
%
PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)
1.40
%
1.59
%
1.28
%
(11.9
)
%
9.4
%
Return on average shareholders' equity (a)(b)
13.04
%
14.81
%
12.03
%
(12.0
)
%
8.4
%
Yield on loans
4.47
%
4.60
%
4.54
%
(2.8
)
%
(1.5
)
%
Yield on investment securities
2.12
%
2.31
%
2.35
%
(8.2
)
%
(9.8
)
%
Yield on money market instruments
0.16
%
0.10
%
0.11
%
60.0
%
45.5
%
Yield on interest earning assets
3.69
%
3.93
%
4.12
%
(6.1
)
%
(10.4
)
%
Cost of interest bearing deposits
0.11
%
0.13
%
0.26
%
(15.4
)
%
(57.7
)
%
Cost of borrowings
2.00
%
1.91
%
1.63
%
4.7
%
22.7
%
Cost of paying interest bearing liabilities
0.26
%
0.29
%
0.39
%
(10.3
)
%
(33.3
)
%
Net interest margin (g)
3.53
%
3.74
%
3.85
%
(5.6
)
%
(8.3
)
%
Efficiency ratio (g)
59.70
%
61.65
%
57.69
%
(3.2
)
%
3.5
%
OTHER RATIOS (NON-GAAP):
Tangible book value per share (d)
$
55.56
$
55.17
$
52.00
0.7
%
6.8
%
Note: Explanations for footnotes (a) - (l) 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 September 30, 2021, June 30, 2021, and September 30, 2020
Percent change vs.
(in thousands, except ratios)
September 30, 2021
June 30, 2021
September 30, 2020
2Q '21
3Q '20
BALANCE SHEET:
Investment securities
$
1,609,303
$
1,461,916
$
1,097,598
10.1
%
46.6
%
Loans
6,908,417
7,035,646
7,278,546
(1.8
)
%
(5.1
)
%
Allowance for credit losses (l)
88,129
83,577
87,038
5.4
%
1.3
%
Goodwill and other intangible assets
167,477
167,897
169,380
(0.3
)
%
(1.1
)
%
Other real estate owned (OREO)
813
813
836
—
%
(2.8
)
%
Total assets
10,034,018
9,947,994
9,240,006
0.9
%
8.6
%
Total deposits
8,364,385
8,214,624
7,475,829
1.8
%
11.9
%
Borrowings
424,078
501,350
643,103
(15.4
)
%
(34.1
)
%
Total shareholders' equity
1,067,912
1,069,392
1,016,996
(0.1
)
%
5.0
%
Tangible equity (d)
900,435
901,495
847,616
(0.1
)
%
6.2
%
Total nonperforming loans
106,872
114,695
148,442
(6.8
)
%
(28.0
)
%
Total nonperforming assets
110,849
118,672
152,670
(6.6
)
%
(27.4
)
%
ASSET QUALITY RATIOS:
Loans as a % of period end total assets
68.85
%
70.72
%
78.77
%
(2.6
)
%
(12.6
)
%
Total nonperforming loans as a % of period end loans
1.55
%
1.63
%
2.04
%
(4.9
)
%
(24.0
)
%
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets
1.60
%
1.69
%
2.10
%
(5.3
)
%
(23.8
)
%
Allowance for credit losses as a % of period end loans
1.28
%
1.19
%
1.20
%
7.6
%
6.7
%
Net loan (recoveries) charge-offs
$
(2,580
)
$
(731
)
$
274
N.M
N.M
Annualized net loan (recoveries) charge-offs as a % of average loans (b)
(0.15
)
%
(0.04
)
%
0.02
%
N.M
N.M
CAPITAL & LIQUIDITY:
Total shareholders' equity / Period end total assets
10.64
%
10.75
%
11.01
%
(1.0
)
%
(3.4
)
%
Tangible equity (d) / Tangible assets (f)
9.13
%
9.22
%
9.34
%
(1.0
)
%
(2.2
)
%
Average shareholders' equity / Average assets (b)
10.71
%
10.74
%
10.67
%
(0.3
)
%
0.4
%
Average shareholders' equity / Average loans (b)
15.50
%
14.94
%
14.08
%
3.7
%
10.1
%
Average loans / Average deposits (b)
82.68
%
86.49
%
92.02
%
(4.4
)
%
(10.1
)
%
Note: Explanations for footnotes (a) - (l) are included at the end of the financial tables in the "Financial Reconciliations" section.


PARK NATIONAL CORPORATION
Financial Highlights
Nine months ended September 30, 2021 and September 30, 2020
2021
2020
(in thousands, except share and per share data)
Nine months ended September 30
Nine months ended September 30
Percent change vs '20
INCOME STATEMENT:
Net interest income
$
246,187
$
241,309
2.0
%
(Recovery of) provision for credit losses (l)
(6,923
)
31,213
N.M
Other income
97,738
90,008
8.6
%
Other expense
207,754
200,934
3.4
%
Income before income taxes
$
143,094
$
99,170
44.3
%
Income taxes
25,697
16,447
56.2
%
Net income
$
117,397
$
82,723
41.9
%
MARKET DATA:
Earnings per common share - basic (a)
$
7.20
$
5.07
42.0
%
Earnings per common share - diluted (a)
7.14
5.04
41.7
%
Cash dividends declared per common share
3.29
3.26
0.9
%
Weighted average common shares - basic (b)
16,315,996
16,300,250
0.1
%
Weighted average common shares - diluted (b)
16,445,568
16,398,350
0.3
%
PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)
1.59
%
1.20
%
32.5
%
Return on average shareholders' equity (a)(b)
14.79
%
11.05
%
33.8
%
Yield on loans
4.52
%
4.72
%
(4.2
)
%
Yield on investment securities
2.30
%
2.62
%
(12.2
)
%
Yield on money market instruments
0.13
%
0.31
%
(58.1
)
%
Yield on interest earning assets
3.86
%
4.27
%
(9.6
)
%
Cost of interest bearing deposits
0.13
%
0.47
%
(72.3
)
%
Cost of borrowings
1.92
%
1.66
%
15.7
%
Cost of paying interest bearing liabilities
0.29
%
0.57
%
(49.1
)
%
Net interest margin (g)
3.67
%
3.88
%
(5.4
)
%
Efficiency ratio (g)
60.03
%
60.26
%
(0.4
)
%
ASSET QUALITY RATIOS
Net loan (recoveries) charge-offs
$
(3,287
)
$
854
N.M.
Net loan (recoveries) charge-offs as a % of average loans (b)
(0.06
)
%
0.02
%
N.M.
CAPITAL & LIQUIDITY
Average shareholders' equity / Average assets (b)
10.77
%
10.85
%
(0.7
)
%
Average shareholders' equity / Average loans (b)
15.02
%
14.49
%
3.7
%
Average loans / Average deposits (b)
86.33
%
90.19
%
(4.3
)
%
Note: Explanations for footnotes (a) - (l) are included at the end of the financial tables in the "Financial Reconciliations" section.


PARK NATIONAL CORPORATION
Consolidated Statements of Income
Three Months Ended
Nine Months Ended
September 30,
September 30,
(in thousands, except share and per share data)
2021
2020
2021
2020
Interest income:
Interest and fees on loans
$
78,127
$
82,617
$
238,040
$
243,459
Interest on:
Obligations of U.S. Government, its agencies
and other securities - taxable
4,904
4,841
13,760
15,398
Obligations of states and political subdivisions - tax-exempt
2,029
2,045
6,098
6,396
Other interest income
360
63
689
667
Total interest income
85,420
89,566
258,587
265,920
Interest expense:
Interest on deposits:
Demand and savings deposits
435
803
1,222
8,652
Time deposits
1,011
2,662
3,880
10,293
Interest on borrowings
2,372
2,261
7,298
5,666
Total interest expense
3,818
5,726
12,400
24,611
Net interest income
81,602
83,840
246,187
241,309
Provision for (recovery of) credit losses (l)
1,972
13,836
(6,923
)
31,213
Net interest income after provision for (recovery of) credit losses
79,630
70,004
253,110
210,096
Other income
32,411
36,558
97,738
90,008
Other expense
68,489
69,859
207,754
200,934
Income before income taxes
43,552
36,703
143,094
99,170
Income taxes
8,118
5,857
25,697
16,447
Net income
$
35,434
$
30,846
$
117,397
$
82,723
Per common share:
Net income - basic
$
2.17
$
1.89
$
7.20
$
5.07
Net income - diluted
$
2.16
$
1.88
$
7.14
$
5.04
Weighted average shares - basic
16,292,312
16,300,720
16,315,996
16,300,250
Weighted average shares - diluted
16,423,912
16,393,792
16,445,568
16,398,350
Cash dividends declared
$
1.03
$
1.02
$
3.29
$
3.26


PARK NATIONAL CORPORATION
Consolidated Balance Sheets
(in thousands, except share data)
September 30, 2021
December 31, 2020
Assets
Cash and due from banks
$
127,685
$
155,596
Money market instruments
749,710
214,878
Investment securities
1,609,303
1,124,806
Loans
6,908,417
7,177,785
Allowance for credit losses (l)
(88,129
)
(85,675
)
Loans, net
6,820,288
7,092,110
Bank premises and equipment, net
88,909
88,660
Goodwill and other intangible assets
167,477
168,855
Other real estate owned
813
1,431
Other assets
469,833
432,685
Total assets
$
10,034,018
$
9,279,021
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing
$
2,981,928
$
2,727,100
Interest bearing
5,382,457
4,845,258
Total deposits
8,364,385
7,572,358
Borrowings
424,078
562,504
Other liabilities
177,643
103,903
Total liabilities
$
8,966,106
$
8,238,765
Shareholders' Equity:
Preferred shares (200,000 shares authorized; no shares outstanding at September 30, 2021 and December 31, 2020)
$
—
$
—
Common shares (No par value; 20,000,000 shares authorized; 17,623,132 shares issued at September 30, 2021 and 17,623,163 shares issued at December 31, 2020)
459,953
460,687
Accumulated other comprehensive (loss) income, net of taxes
(7,810
)
5,571
Retained earnings
759,619
704,764
Treasury shares (1,416,955 shares at September 30, 2021 and 1,308,966 shares at December 31, 2020)
(143,850
)
(130,766
)
Total shareholders' equity
$
1,067,912
$
1,040,256
Total liabilities and shareholders' equity
$
10,034,018
$
9,279,021


PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
Three Months Ended
Nine Months Ended
September 30,
September 30,
(in thousands)
2021
2020
2021
2020
Assets
Cash and due from banks
$
130,716
$
121,973
$
136,728
$
129,436
Money market instruments
895,784
223,563
724,561
286,909
Investment securities
1,461,434
1,330,520
1,310,762
1,264,381
Loans
6,956,064
7,247,021
7,062,336
6,904,900
Allowance for credit losses (l)
(83,935
)
(74,718
)
(86,969
)
(64,942
)
Loans, net
6,872,129
7,172,303
6,975,367
6,839,958
Bank premises and equipment, net
89,718
83,609
89,909
79,557
Goodwill and other intangible assets
167,754
169,726
168,215
170,311
Other real estate owned
776
1,299
935
2,616
Other assets
452,405
454,689
446,980
443,327
Total assets
$
10,070,716
$
9,557,682
$
9,853,457
$
9,216,495
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing
$
2,953,605
$
2,565,417
$
2,896,126
$
2,306,355
Interest bearing
5,459,400
5,309,718
5,284,664
5,350,009
Total deposits
8,413,005
7,875,135
8,180,790
7,656,364
Borrowings
471,148
552,452
507,989
455,127
Other liabilities
108,098
109,856
103,612
104,763
Total liabilities
$
8,992,251
$
8,537,443
$
8,792,391
$
8,216,254
Shareholders' Equity:
Preferred shares
$
—
$
—
$
—
$
—
Common shares
458,988
457,571
459,213
457,953
Accumulated other comprehensive (loss) income, net of taxes
(2,022
)
15,400
(1,918
)
8,712
Retained earnings
755,435
679,519
734,715
665,808
Treasury shares
(133,936
)
(132,251
)
(130,944
)
(132,232
)
Total shareholders' equity
$
1,078,465
$
1,020,239
$
1,061,066
$
1,000,241
Total liabilities and shareholders' equity
$
10,070,716
$
9,557,682
$
9,853,457
$
9,216,495


PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters
2021
2021
2021
2020
2020
(in thousands, except per share data)
3rd QTR
2nd QTR
1st QTR
4th QTR
3rd QTR
Interest income:
Interest and fees on loans
$
78,127
$
81,176
$
78,737
$
85,268
$
82,617
Interest on:
Obligations of U.S. Government, its agencies and other securities - taxable
4,904
4,600
4,256
4,420
4,841
Obligations of states and political subdivisions - tax-exempt
2,029
2,032
2,037
2,040
2,045
Other interest income
360
186
143
72
63
Total interest income
85,420
87,994
85,173
91,800
89,566
Interest expense:
Interest on deposits:
Demand and savings deposits
435
401
386
490
803
Time deposits
1,011
1,285
1,584
1,893
2,662
Interest on borrowings
2,372
2,457
2,469
3,096
2,261
Total interest expense
3,818
4,143
4,439
5,479
5,726
Net interest income
81,602
83,851
80,734
86,321
83,840
Provision for (recovery of) credit losses (l)
1,972
(4,040
)
(4,855
)
(19,159
)
13,836
Net interest income after provision for (recovery of) credit losses
79,630
87,891
85,589
105,480
70,004
Other income
32,411
31,238
34,089
35,656
36,558
Other expense
68,489
71,400
67,865
85,661
69,859
Income before income taxes
43,552
47,729
51,813
55,475
36,703
Income taxes
8,118
8,597
8,982
10,275
5,857
Net income
$
35,434
$
39,132
$
42,831
$
45,200
$
30,846
Per common share:
Net income - basic
$
2.17
$
2.39
$
2.63
$
2.77
$
1.89
Net income - diluted
$
2.16
$
2.38
$
2.61
$
2.75
$
1.88


PARK NATIONAL CORPORATION
Detail of other income and other expense - Linked Quarters
2021
2021
2021
2020
2020
(in thousands)
3rd QTR
2nd QTR
1st QTR
4th QTR
3rd QTR
Other income:
Income from fiduciary activities
$
8,820
$
8,569
$
8,173
$
7,632
$
7,335
Service charges on deposit accounts
2,389
2,032
2,054
2,123
2,118
Other service income
6,668
7,159
9,617
12,040
13,047
Debit card fee income
6,453
6,758
6,086
5,787
5,853
Bank owned life insurance income
1,462
1,149
1,165
1,170
1,192
ATM fees
622
655
530
432
491
Gain (loss) on the sale of OREO, net
3
4
(33
)
(7
)
569
Net loss on the sale of debt securities
—
—
—
—
(27
)
Gain on equity securities, net
609
467
1,810
2,931
1,201
Other components of net periodic benefit income
2,038
2,038
2,038
1,988
1,988
Miscellaneous
3,347
2,407
2,649
1,560
2,791
Total other income
$
32,411
$
31,238
$
34,089
$
35,656
$
36,558
Other expense:
Salaries
$
29,433
$
30,303
$
29,896
$
37,280
$
31,632
Employee benefits
10,640
10,056
10,201
7,316
10,676
Occupancy expense
3,211
3,027
3,640
3,231
3,835
Furniture and equipment expense
2,797
2,756
2,610
4,949
4,687
Data processing fees
7,817
7,150
7,712
3,315
3,275
Professional fees and services
6,973
6,973
5,664
9,359
7,977
Marketing
1,574
1,290
1,491
1,752
1,454
Insurance
1,403
1,276
1,691
1,855
1,541
Communication
796
770
1,122
1,097
958
State tax expense
1,113
1,103
1,108
605
1,125
Amortization of intangible assets
420
479
479
525
525
FHLB prepayment penalty
—
—
—
8,736
—
Foundation contributions
—
4,000
—
3,000
—
Miscellaneous
2,312
2,217
2,251
2,641
2,174
Total other expense
$
68,489
$
71,400
$
67,865
$
85,661
$
69,859


PARK NATIONAL CORPORATION
Asset Quality Information
Year ended December 31,
(in thousands, except ratios)
September 30, 2021
June 30, 2021
March 31, 2021
2020
2019
2018
2017
Allowance for credit losses:
Allowance for credit losses, beginning of period
$
83,577
$
86,886
$
85,675
$
56,679
$
51,512
$
49,988
$
50,624
Cumulative change in accounting principle; adoption of ASU 2016-13
—
6,090
—
—
—
—
Charge-offs
1,002
1,070
1,701
10,304
11,177
13,552
19,403
Recoveries
3,582
1,801
1,677
27,246
10,173
7,131
10,210
Net (recoveries) charge-offs
(2,580
)
(731
)
24
(16,942
)
1,004
6,421
9,193
Provision for (recovery of) credit losses
1,972
(4,040
)
(4,855
)
12,054
6,171
7,945
8,557
Allowance for credit losses, end of period
$
88,129
$
83,577
$
86,886
$
85,675
$
56,679
$
51,512
$
49,988
General reserve trends:
Allowance for credit losses, end of period
$
88,129
$
83,577
$
86,886
$
85,675
$
56,679
$
51,512
$
49,988
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
3,466
3,915
4,962
5,434
5,230
2,273
684
General reserves on collectively evaluated loans
$
84,663
$
79,662
$
81,924
$
79,396
$
51,181
$
49,239
$
49,304
Total loans
$
6,908,417
$
7,035,646
$
7,168,745
$
7,177,785
$
6,501,404
$
5,692,132
$
5,372,483
PCD loans (PCI loans for years 2020 and prior)
8,705
10,007
10,284
11,153
14,331
3,943
—
Purchased loans excluded from collectively evaluated loans
—
—
—
360,056
548,436
225,029
—
Individually evaluated loans
79,264
86,874
100,407
108,407
77,459
48,135
56,545
Collectively evaluated loans
$
6,820,448
$
6,938,765
$
7,058,054
$
6,698,169
$
5,861,178
$
5,415,025
$
5,315,938
Asset Quality Ratios:
Net (recoveries) charge-offs as a % of average loans (annualized)
(0.15
)
%
(0.04
)
%
—
%
(0.24
)
%
0.02
%
0.12
%
0.17
%
Allowance for credit losses as a % of period end loans
1.28
%
1.19
%
1.21
%
1.19
%
0.87
%
0.90
%
0.93
%
Allowance for credit losses as a % of period end loans (excluding PPP loans) (k)
1.30
%
1.23
%
1.28
%
1.25
%
N.A.
N.A.
N.A.
General reserve as a % of collectively evaluated loans
1.24
%
1.15
%
1.16
%
1.19
%
0.87
%
0.91
%
0.93
%
General reserves as a % of collectively evaluated loans (excluding PPP loans) (k)
1.27
%
1.19
%
1.22
%
1.24
%
N.A.
N.A.
N.A.
Nonperforming assets:
Nonaccrual loans
$
87,791
$
96,760
$
114,708
$
117,368
$
90,080
$
67,954
$
72,056
Accruing troubled debt restructurings
18,797
17,420
14,817
20,788
21,215
15,173
20,111
Loans past due 90 days or more
284
515
802
1,458
2,658
2,243
1,792
Total nonperforming loans
$
106,872
$
114,695
$
130,327
$
139,614
$
113,953
$
85,370
$
93,959
Other real estate owned - Park National Bank
219
219
250
837
3,100
2,788
6,524
Other real estate owned - SEPH
594
594
594
594
929
1,515
7,666
Other nonperforming assets - Park National Bank
3,164
3,164
3,164
3,164
3,599
3,464
4,849
Total nonperforming assets
$
110,849
$
118,672
$
134,335
$
144,209
$
121,581
$
93,137
$
112,998
Percentage of nonaccrual loans to period end loans
1.27
%
1.38
%
1.60
%
1.64
%
1.39
%
1.19
%
1.34
%
Percentage of nonperforming loans to period end loans
1.55
%
1.63
%
1.82
%
1.95
%
1.75
%
1.50
%
1.75
%
Percentage of nonperforming assets to period end loans
1.60
%
1.69
%
1.87
%
2.01
%
1.87
%
1.64
%
2.10
%
Percentage of nonperforming assets to period end total assets
1.10
%
1.19
%
1.35
%
1.55
%
1.42
%
1.19
%
1.50
%
Note: Explanations for footnotes (a) - (l) 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)
September 30, 2021
June 30, 2021
March 31, 2021
2020
2019
2018
2017
New nonaccrual loan information:
Nonaccrual loans, beginning of period
$
96,760
$
114,708
$
117,368
$
90,080
$
67,954
$
72,056
$
87,822
New nonaccrual loans
8,825
11,342
12,540
103,386
81,009
76,611
58,753
Resolved nonaccrual loans
17,794
29,290
15,200
76,098
58,883
80,713
74,519
Nonaccrual loans, end of period
$
87,791
$
96,760
$
114,708
$
117,368
$
90,080
$
67,954
$
72,056
Impaired commercial loan portfolio information (period end):
Unpaid principal balance
$
79,952
$
87,502
$
100,996
$
109,062
$
78,178
$
59,381
$
66,585
Prior charge-offs
688
628
589
655
719
11,246
10,040
Remaining principal balance
79,264
86,874
100,407
108,407
77,459
48,135
56,545
Specific reserves
3,466
3,915
4,962
5,434
5,230
2,273
684
Book value, after specific reserves
$
75,798
$
82,959
$
95,445
$
102,973
$
72,229
$
45,862
$
55,861


PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS
THREE MONTHS ENDED
NINE MONTHS ENDED
(in thousands, except share and per share data)
September 30, 2021
June 30, 2021
September 30, 2020
September 30, 2021
September 30, 2020
Net interest income
$
81,602
$
83,851
$
83,840
$
246,187
$
241,309
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions
807
806
1,071
2,744
3,750
less interest income on former Vision Bank relationships
414
2,838
8
3,357
351
Net interest income - adjusted
$
80,381
$
80,207
$
82,761
$
240,086
$
237,208
Provision for (recovery of) credit losses
$
1,972
$
(4,040
)
$
13,836
$
(6,923
)
$
31,213
less recoveries on former Vision Bank relationships
(2,231
)
(152
)
(37
)
(2,640
)
(1,486
)
Provision for (recovery of) credit losses - adjusted
$
4,203
$
(3,888
)
$
13,873
$
(4,283
)
$
32,699
Other income
$
32,411
$
31,238
$
36,558
$
97,738
$
90,008
less net gain on sale of former Vision Bank OREO properties
—
—
371
—
1,208
less other service income related to former Vision Bank relationships
143
3
36
204
88
less rebranding initiative related expenses
—
—
—
—
(274
)
less net (loss) gain on the sale of debt securities in the ordinary course of business
—
—
(27
)
—
3,286
Other income - adjusted
$
32,268
$
31,235
$
36,178
$
97,534
$
85,700
Other expense
$
68,489
$
71,400
$
69,859
$
207,754
$
200,934
less merger-related expenses related to NewDominion and Carolina Alliance acquisitions
4
4
163
20
620
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions
420
479
525
1,378
1,738
less direct expenses related to collection of payments on former Vision Bank loan relationships
254
300
232
661
232
less FHLB prepayment penalty
—
—
—
—
1,793
less rebranding initiative related expenses
437
342
429
1,734
837
less Foundation contribution
—
4,000
—
4,000
—
less severance and restructuring charges
140
46
67
294
403
less COVID-19 related expenses (j)
—
670
744
1,535
2,884
Other expense - adjusted
$
67,234
$
65,559
$
67,699
$
198,132
$
192,427
Tax effect of adjustments to net income identified above (i)
$
(491
)
$
429
$
139
$
142
$
(291
)
Net income - reported
$
35,434
$
39,132
$
30,846
$
117,397
$
82,723
Net income - adjusted (h)
$
33,585
$
40,745
$
31,371
$
117,932
$
81,626
Diluted earnings per share
$
2.16
$
2.38
$
1.88
$
7.14
$
5.04
Diluted earnings per share, adjusted (h)
$
2.04
$
2.47
$
1.91
$
7.17
$
4.98
Annualized return on average assets (a)(b)
1.40
%
1.59
%
1.28
%
1.59
%
1.20
%
Annualized return on average assets, adjusted (a)(b)(h)
1.32
%
1.66
%
1.31
%
1.60
%
1.18
%
Annualized return on average tangible assets (a)(b)(e)
1.42
%
1.62
%
1.31
%
1.62
%
1.22
%
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)
1.35
%
1.68
%
1.33
%
1.63
%
1.21
%
Annualized return on average shareholders' equity (a)(b)
13.04
%
14.81
%
12.03
%
14.79
%
11.05
%
Annualized return on average shareholders' equity, adjusted (a)(b)(h)
12.36
%
15.42
%
12.23
%
14.86
%
10.90
%
Annualized return on average tangible equity (a)(b)(c)
15.44
%
17.60
%
14.43
%
17.58
%
13.31
%
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)
14.63
%
18.33
%
14.67
%
17.66
%
13.14
%
Efficiency ratio (g)
59.70
%
61.65
%
57.69
%
60.03
%
60.26
%
Efficiency ratio, adjusted (g)(h)
59.31
%
58.45
%
56.58
%
58.31
%
59.20
%
Annualized net interest margin (g)
3.53
%
3.74
%
3.85
%
3.67
%
3.88
%
Annualized net interest margin, adjusted (g)(h)
3.48
%
3.58
%
3.80
%
3.58
%
3.81
%
Note: Explanations for footnotes (a) - (l) 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 September 30, 2021, June 30, 2021, and September 30, 2020 and the nine months ended September 30, 2021 and September 30, 2020, 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
NINE MONTHS ENDED
September 30, 2021
June 30, 2021
September 30, 2020
September 30, 2021
September 30, 2020
AVERAGE SHAREHOLDERS' EQUITY
$
1,078,465
$
1,059,949
$
1,020,239
$
1,061,066
$
1,000,241
Less: Average goodwill and other intangible assets
167,754
168,211
169,726
168,215
170,311
AVERAGE TANGIBLE EQUITY
$
910,711
$
891,738
$
850,513
$
892,851
$
829,930
(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:
September 30, 2021
June 30, 2021
September 30, 2020
TOTAL SHAREHOLDERS' EQUITY
$
1,067,912
$
1,069,392
$
1,016,996
Less: Goodwill and other intangible assets
167,477
167,897
169,380
TANGIBLE EQUITY
$
900,435
$
901,495
$
847,616
(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
NINE MONTHS ENDED
September 30, 2021
June 30, 2021
September 30, 2020
September 30, 2021
September 30, 2020
AVERAGE ASSETS
$
10,070,716
$
9,872,078
$
9,557,682
$
9,853,457
$
9,216,495
Less: Average goodwill and other intangible assets
167,754
168,211
169,726
168,215
170,311
AVERAGE TANGIBLE ASSETS
$
9,902,962
$
9,703,867
$
9,387,956
$
9,685,242
$
9,046,184
(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:
September 30, 2021
June 30, 2021
September 30, 2020
TOTAL ASSETS
$
10,034,018
$
9,947,994
$
9,240,006
Less: Goodwill and other intangible assets
167,477
167,897
169,380
TANGIBLE ASSETS
$
9,866,541
$
9,780,097
$
9,070,626
(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.
RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
THREE MONTHS ENDED
NINE MONTHS ENDED
September 30, 2021
June 30, 2021
September 30, 2020
September 30, 2021
September 30, 2020
Interest income
$
85,420
$
87,994
$
89,566
$
258,587
$
265,920
Fully taxable equivalent adjustment
717
718
706
2,149
2,154
Fully taxable equivalent interest income
$
86,137
$
88,712
$
90,272
$
260,736
$
268,074
Interest expense
3,818
4,143
5,726
12,400
24,611
Fully taxable equivalent net interest income
$
82,319
$
84,569
$
84,546
$
248,336
$
243,463
(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 $131.5 million, $248.9 million and $331.6 million of PPP loans at September 30, 2021, June 30, 2021 and December 31, 2020, respectively.
(l) Park adopted ASU 2016-13 effective January 1, 2021. The allowance for credit losses at September 30, 2021 and June 30, 2021 and the related provision for (recovery of) credit losses for the three months ended September 30, 2021 and June 30, 2021 and the nine months ended September 30, 2021 were calculated utilizing this new guidance.


Stock Information
Company Name: Park National Corporation
Stock Symbol: PRK
Market: NYSE
Website: parknationalcorp.com
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