Park National Corporation (NYSEMKT:PRK) Files An 8-K Results of Operations and Financial Condition
Item 2.02 – Results of Operations and Financial Condition.
On January 23, 2017, Park National Corporation (Park) issued a
news release (the Financial Results News Release) announcing
financial results for the three months and year ended December
31, 2016. A copy of the Financial Results News Release is
included as Exhibit 99.1 to this Current Report on Form 8-K and
incorporated by reference herein.
news release (the Financial Results News Release) announcing
financial results for the three months and year ended December
31, 2016. A copy of the 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 equity, return on average tangible assets, tangible
equity to tangible assets and tangible book value per share.
Management has included in the Financial Results News Release
information relating to the annualized return on average tangible
equity, annualized return on average tangible assets, tangible
equity to tangible assets and tangible book value per share for
the three months ended and at December 31, 2016, September 30,
2016 and December 31, 2015 and the return on average tangible
equity, return on average tangible assets, tangible equity to
tangible assets and tangible book value per share for the fiscal
year ended and at December 31, 2016 and December 31, 2015. For
purposes of calculating the return on average tangible equity, a
non-GAAP financial measure, net income for each period is divided
by average tangible equity during the period. Average tangible
equity equals average shareholders’ equity during the applicable
period less average goodwill during the applicable period. For
the purpose of calculating the return on average tangible assets,
a non-GAAP financial measure, net income 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 during the applicable period. For
the purpose of calculating tangible equity to tangible assets, a
non-GAAP financial measure, tangible equity is divided by
tangible assets. Tangible equity equals shareholders’ equity
less goodwill, in each case at period end. Tangible assets equals
total assets less goodwill, in each case at period end. For the
purpose of calculating tangible book value per share, a non-GAAP
financial measure, tangible equity is divided by common shares
outstanding at period end. Management believes that the
disclosure of return on average tangible equity, return on
average tangible assets, tangible equity to tangible assets and
tangible book value per 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, ensures comparability of operating
performance from period to period, and facilitates comparisons
with the performance of Park’s peer financial holding companies
and bank holding companies, while eliminating certain
non-operational effects of acquisitions. In the Financial Results
News Release, Park has provided a reconciliation of average
tangible equity to average shareholders’ equity, average
tangible assets to average assets, tangible equity to
shareholders’ 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 equity, return on
average tangible assets, tangible equity to tangible assets and
tangible book value per share are substitutes for return on
average equity, return on average assets, shareholders’ equity
to total assets and book value per share, respectively, as
determined by GAAP.
accounting principles) financial measures to evaluate Park’s
performance. Specifically, management reviews return on average
tangible equity, return on average tangible assets, tangible
equity to tangible assets and tangible book value per share.
Management has included in the Financial Results News Release
information relating to the annualized return on average tangible
equity, annualized return on average tangible assets, tangible
equity to tangible assets and tangible book value per share for
the three months ended and at December 31, 2016, September 30,
2016 and December 31, 2015 and the return on average tangible
equity, return on average tangible assets, tangible equity to
tangible assets and tangible book value per share for the fiscal
year ended and at December 31, 2016 and December 31, 2015. For
purposes of calculating the return on average tangible equity, a
non-GAAP financial measure, net income for each period is divided
by average tangible equity during the period. Average tangible
equity equals average shareholders’ equity during the applicable
period less average goodwill during the applicable period. For
the purpose of calculating the return on average tangible assets,
a non-GAAP financial measure, net income 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 during the applicable period. For
the purpose of calculating tangible equity to tangible assets, a
non-GAAP financial measure, tangible equity is divided by
tangible assets. Tangible equity equals shareholders’ equity
less goodwill, in each case at period end. Tangible assets equals
total assets less goodwill, in each case at period end. For the
purpose of calculating tangible book value per share, a non-GAAP
financial measure, tangible equity is divided by common shares
outstanding at period end. Management believes that the
disclosure of return on average tangible equity, return on
average tangible assets, tangible equity to tangible assets and
tangible book value per 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, ensures comparability of operating
performance from period to period, and facilitates comparisons
with the performance of Park’s peer financial holding companies
and bank holding companies, while eliminating certain
non-operational effects of acquisitions. In the Financial Results
News Release, Park has provided a reconciliation of average
tangible equity to average shareholders’ equity, average
tangible assets to average assets, tangible equity to
shareholders’ 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 equity, return on
average tangible assets, tangible equity to tangible assets and
tangible book value per share are substitutes for return on
average equity, return on average assets, shareholders’ equity
to total assets and book value per 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.
of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
In the Financial Results News Release, Park announced that
Matthew R. Miller, Chief Accounting Officer and principal
accounting officer of Park and Chief Accounting Officer of PNB,
was appointed by the respective Boards of Directors of Park and
PNB to serve as Executive Vice President of Park and PNB
effective April 1, 2017 and will no longer be the Chief
Accounting Officer and principal accounting officer of Park or
the Chief Accounting Officer of PNB as of that date. The
respective Boards of Directors of Park and PNB took action with
respect to these appointments on January 23, 2017.
Matthew R. Miller, Chief Accounting Officer and principal
accounting officer of Park and Chief Accounting Officer of PNB,
was appointed by the respective Boards of Directors of Park and
PNB to serve as Executive Vice President of Park and PNB
effective April 1, 2017 and will no longer be the Chief
Accounting Officer and principal accounting officer of Park or
the Chief Accounting Officer of PNB as of that date. The
respective Boards of Directors of Park and PNB took action with
respect to these appointments on January 23, 2017.
In the Financial Results News Release, Park also announced that
Kelly A. Edds, who currently serves as Vice President of PNB in
the accounting department, was appointed by the respective Boards
of Directors of Park and PNB to serve as the Chief Accounting
Officer and principal accounting officer of Park and the Chief
Accounting Officer of PNB effective April 1, 2017, with each
Board of Directors taking action on January 23, 2017.
Kelly A. Edds, who currently serves as Vice President of PNB in
the accounting department, was appointed by the respective Boards
of Directors of Park and PNB to serve as the Chief Accounting
Officer and principal accounting officer of Park and the Chief
Accounting Officer of PNB effective April 1, 2017, with each
Board of Directors taking action on January 23, 2017.
Ms. Edds, who is 34, has served as Vice President of PNB since
December 2012 and served as Assistant Vice President of PNB from
April 2010 to December 2012. Prior to joining PNB, Ms. Edds was
employed by Deloitte Touche, LLP from September 2004 until March
2010, serving audit clients in the financial services industry.
Ms. Edds does not have any family relationship with any member of
Parks Board of Directors or any of Parks executive officers. Ms.
Edds and members of her immediate family are customers of and
have had banking relationships with PNB in the ordinary course of
business and in compliance with applicable federal and state laws
and regulations.
December 2012 and served as Assistant Vice President of PNB from
April 2010 to December 2012. Prior to joining PNB, Ms. Edds was
employed by Deloitte Touche, LLP from September 2004 until March
2010, serving audit clients in the financial services industry.
Ms. Edds does not have any family relationship with any member of
Parks Board of Directors or any of Parks executive officers. Ms.
Edds and members of her immediate family are customers of and
have had banking relationships with PNB in the ordinary course of
business and in compliance with applicable federal and state laws
and regulations.
The portions of the Financial Results New Release which addresses
the appointments of Matthew R. Miller and Kelly A. Edds are
incorporated herein by reference.
the appointments of Matthew R. Miller and Kelly A. Edds are
incorporated herein by reference.
Item 7.01 – Regulation FD Disclosure
Financial Results by segment
The table below reflects the net income (loss) by segment for
each quarter of 2016 and for the fiscal years ended December
31, 2016, 2015, and 2014. 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.”
each quarter of 2016 and for the fiscal years ended December
31, 2016, 2015, and 2014. 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)
|
Q4 2016
|
|
Q3 2016
|
|
Q2 2016
|
|
Q1 2016
|
|
|
|
|
|
|
||||||||||||||
|
PNB
|
$
|
16,138
|
|
|
$
|
25,491
|
|
|
$
|
21,078
|
|
|
$
|
21,744
|
|
|
$
|
84,451
|
|
|
$
|
84,345
|
|
|
$
|
82,907
|
|
|
GFSC
|
|
|
|
|
|
|
(1,836
|
)
|
(307
|
)
|
1,423
|
|
1,175
|
|
|||||||||||||
|
Parent Company
|
(989
|
)
|
|
(665
|
)
|
|
(1,069
|
)
|
|
(1,834
|
)
|
|
(4,557
|
)
|
|
(4,549
|
)
|
|
(5,050
|
)
|
|||||||
|
Ongoing operations
|
$
|
15,412
|
|
|
$
|
25,466
|
|
|
$
|
20,635
|
|
|
$
|
18,074
|
|
|
$
|
79,587
|
|
|
$
|
81,219
|
|
|
$
|
79,032
|
|
|
SEPH
|
4,590
|
1,983
|
(637
|
)
|
|
6,548
|
(207
|
)
|
4,925
|
||||||||||||||||||
|
Total Park
|
$
|
20,002
|
|
|
$
|
27,449
|
|
|
$
|
19,998
|
|
|
$
|
18,686
|
|
|
$
|
86,135
|
|
|
$
|
81,012
|
|
|
$
|
83,957
|
|
The category Parent Company above excludes the results for
SEPH, an entity which is winding down commensurate with the
disposition of SEPH’s nonperforming assets. Management
considers the Ongoing operations results, which exclude the
results of SEPH, to reflect the business of Park and Park’s
subsidiaries going forward. The discussion below provides
additional information regarding the segments that make up the
Ongoing operations, followed by additional information
regarding SEPH.
SEPH, an entity which is winding down commensurate with the
disposition of SEPH’s nonperforming assets. Management
considers the Ongoing operations results, which exclude the
results of SEPH, to reflect the business of Park and Park’s
subsidiaries going forward. The discussion below provides
additional information regarding the segments that make up the
Ongoing operations, followed by additional information
regarding SEPH.
The Park National Bank (PNB)
The table below reflects PNB’s net income for each quarter of
2016 and for the fiscal years ended December 31, 2016, 2015,
and 2014.
2016 and for the fiscal years ended December 31, 2016, 2015,
and 2014.
|
(In thousands)
|
Q4 2016
|
Q3 2016
|
Q2 2016
|
Q1 2016
|
|
|
|
||||||||||||||
|
Net interest income
|
$
|
57,382
|
$
|
57,033
|
$
|
56,006
|
$
|
57,155
|
$
|
227,576
|
$
|
220,879
|
$
|
218,641
|
|||||||
|
Provision for (recovery of) loan losses
|
3,061
|
|
(3,345
|
)
|
1,362
|
|
1,533
|
|
2,611
|
|
7,665
|
|
3,517
|
|
|||||||
|
Other income
|
19,793
|
19,279
|
18,508
|
17,223
|
74,803
|
75,188
|
69,384
|
||||||||||||||
|
Other expense
|
51,144
|
|
42,327
|
|
42,731
|
|
41,360
|
|
177,562
|
|
167,476
|
|
163,641
|
|
|||||||
|
Income before income taxes
|
$
|
22,970
|
$
|
37,330
|
|
$
|
30,421
|
$
|
31,485
|
$
|
122,206
|
$
|
120,926
|
$
|
120,867
|
||||||
|
Federal income taxes
|
6,832
|
|
11,839
|
|
9,343
|
|
9,741
|
|
37,755
|
|
36,581
|
|
37,960
|
|
|||||||
|
Net income
|
$
|
16,138
|
|
$
|
25,491
|
|
$
|
21,078
|
|
$
|
21,744
|
|
$
|
84,451
|
|
$
|
84,345
|
|
$
|
82,907
|
|
Net interest income of $227.6 million for the fiscal year ended
December 31, 2016 represented a $6.7 million, or 3.0% increase,
compared to $220.9 million for the fiscal year ended December
31, 2015. The increase was the result of a $7.4 million
increase in interest income offset by a $697,000 increase in
interest expense.
December 31, 2016 represented a $6.7 million, or 3.0% increase,
compared to $220.9 million for the fiscal year ended December
31, 2015. The increase was the result of a $7.4 million
increase in interest income offset by a $697,000 increase in
interest expense.
The $7.4 million increase in interest income was due to a $10.3
million increase in interest income on loans, offset by a $2.9
million decrease in interest income on investments. The
increase in interest income on loans was largely the result of
a $216 million, or 4.4%, increase in average loans from $4.9
billion for the fiscal year ended December 31, 2015, to $5.1
billion for the fiscal year ended December 31, 2016. Included
in interest income for the fiscal year ended December 31, 2016
was $801,000 in income related to PNB participations in legacy
Vision Bank (Vision) assets, compared to $241,000 for the
fiscal year ended December 31, 2015.
million increase in interest income on loans, offset by a $2.9
million decrease in interest income on investments. The
increase in interest income on loans was largely the result of
a $216 million, or 4.4%, increase in average loans from $4.9
billion for the fiscal year ended December 31, 2015, to $5.1
billion for the fiscal year ended December 31, 2016. Included
in interest income for the fiscal year ended December 31, 2016
was $801,000 in income related to PNB participations in legacy
Vision Bank (Vision) assets, compared to $241,000 for the
fiscal year ended December 31, 2015.
The $697,000 increase in interest expense was due to a $1.1
million increase in interest expense on deposits, offset by a
$393,000 decrease in interest expense on borrowings.
million increase in interest expense on deposits, offset by a
$393,000 decrease in interest expense on borrowings.
The provision for loan losses of $2.6 million for the fiscal
year ended December 31, 2016 represented an improvement of $5.1
million, compared to a provision of loan losses of $7.7 million
for the fiscal year ended December 31, 2015. Refer to the
Credit Metrics and (Recovery of) Provision for Loan Losses
section for additional details regarding the level of the
(recovery of) provision for loan losses recognized in each
period presented above.
year ended December 31, 2016 represented an improvement of $5.1
million, compared to a provision of loan losses of $7.7 million
for the fiscal year ended December 31, 2015. Refer to the
Credit Metrics and (Recovery of) Provision for Loan Losses
section for additional details regarding the level of the
(recovery of) provision for loan losses recognized in each
period presented above.
Other expense of $177.6 million for the fiscal year ended
December 31, 2016 represented an increase of $10.1 million,
or 6.0%, compared to $167.5 million for the fiscal year ended
December 31, 2015. The $10.1 million increase was primarily
related to a $5.6 borrowing prepayment penalty in 2016
compared to $532,000 in 2015, a $2.0 million increase in
furniture and equipment expense, a $2.0 million increase in
contribution expense, a $1.7 million increase in professional
fees and services, and a $1.0 million increase in non-loan
related losses. Increases were offset by a decrease of $2.1
million related to employee benefits expense, largely related
to a decline in medical expenses.
December 31, 2016 represented an increase of $10.1 million,
or 6.0%, compared to $167.5 million for the fiscal year ended
December 31, 2015. The $10.1 million increase was primarily
related to a $5.6 borrowing prepayment penalty in 2016
compared to $532,000 in 2015, a $2.0 million increase in
furniture and equipment expense, a $2.0 million increase in
contribution expense, a $1.7 million increase in professional
fees and services, and a $1.0 million increase in non-loan
related losses. Increases were offset by a decrease of $2.1
million related to employee benefits expense, largely related
to a decline in medical expenses.
PNB’s results for the fiscal years ended December 31, 2016,
2015, and 2014, included income and expense related to
participations in legacy Vision assets. The impact of these
participations on particular items within PNB’s income and
expense for these periods is detailed in the table below:
2015, and 2014, included income and expense related to
participations in legacy Vision assets. The impact of these
participations on particular items within PNB’s income and
expense for these periods is detailed in the table below:
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
(In thousands)
|
PNB as reported
|
Adjustments
(1) |
PNB as adjusted
|
|
PNB as reported
|
Adjustments
(1) |
PNB as adjusted
|
|
PNB as reported
|
Adjustments
(1) |
PNB as adjusted
|
||||||||||||||||||
|
Net interest income
|
$
|
227,576
|
|
$
|
|
|
$
|
226,775
|
|
|
$
|
220,879
|
|
$
|
|
|
$
|
220,638
|
|
|
$
|
218,641
|
|
$
|
|
|
$
|
218,332
|
|
|
Provision for (recovery of) loan losses
|
2,611
|
|
(3,118
|
)
|
5,729
|
|
|
7,665
|
|
(1,453
|
)
|
9,118
|
|
|
3,517
|
|
(6,198
|
)
|
9,715
|
|
|||||||||
|
Other income
|
74,803
|
|
|
|
74,609
|
|
|
75,188
|
|
1,225
|
|
73,963
|
|
|
69,384
|
|
1,256
|
|
68,128
|
|
|||||||||
|
Other expense
|
177,562
|
|
|
|
176,900
|
|
|
167,476
|
|
|
|
166,776
|
|
|
163,641
|
|
2,032
|
|
161,609
|
|
|||||||||
|
Income before income taxes
|
$
|
122,206
|
|
$
|
3,451
|
|
$
|
118,755
|
|
|
$
|
120,926
|
|
$
|
2,219
|
|
$
|
118,707
|
|
|
$
|
120,867
|
|
$
|
5,731
|
|
$
|
115,136
|
|
|
Federal income taxes
|
37,755
|
|
1,066
|
|
36,689
|
|
|
36,581
|
|
|
|
35,910
|
|
|
37,960
|
|
1,800
|
|
36,160
|
|
|||||||||
|
Net income
|
$
|
84,451
|
|
$
|
2,385
|
|
$
|
82,066
|
|
|
$
|
84,345
|
|
$
|
1,548
|
|
$
|
82,797
|
|
|
$
|
82,907
|
|
$
|
3,931
|
|
$
|
78,976
|
|
(1) Adjustments consist of the impact on the particular items
reported in PNB’s income statement of PNB participations in
legacy Vision assets.
reported in PNB’s income statement of PNB participations in
legacy Vision assets.
The table below provides certain balance sheet information
and financial ratios for PNB as of December 31, 2016 and
2015.
and financial ratios for PNB as of December 31, 2016 and
2015.
|
(In thousands)
|
December 31, 2016
|
December 31, 2015
|
|
% change from 12/31/15
|
|||||
|
Loans
|
$
|
5,234,828
|
|
$
|
5,029,072
|
|
|
4.09
|
%
|
|
Allowance for loan losses
|
48,782
|
|
54,453
|
|
|
(10.41
|
)%
|
||
|
Net loans
|
5,186,046
|
|
4,974,619
|
|
|
4.25
|
%
|
||
|
Investment securities
|
1,573,320
|
|
1,641,539
|
|
|
(4.16
|
)%
|
||
|
Total assets
|
7,389,538
|
|
7,229,764
|
|
|
2.21
|
%
|
||
|
Average assets
(1) |
7,337,438
|
|
7,219,898
|
|
|
1.63
|
%
|
||
|
Efficiency ratio
|
58.26
|
%
|
56.40
|
%
|
|
3.30
|
%
|
||
|
Return on average assets
|
1.15
|
%
|
1.17
|
%
|
|
(1.71
|
)%
|
(1) Average assets for the fiscal years ended December 31,
2016 and 2015.
2016 and 2015.
Loans outstanding at December 31, 2016 were $5.23 billion,
compared to $5.03 billion at December 31, 2015, an increase
of $206 million for the fiscal year ended December 31, 2016,
or 4.1%. The loan growth in 2016 consisted of commercial loan
growth of $82.2 million (3.2%), consumer loan growth of
$152.5 million (15.6%), and HELOC loan growth of $1.1 million
(0.5%), offset by a reduction in residential loan balances of
$28.9 million (2.3%).
compared to $5.03 billion at December 31, 2015, an increase
of $206 million for the fiscal year ended December 31, 2016,
or 4.1%. The loan growth in 2016 consisted of commercial loan
growth of $82.2 million (3.2%), consumer loan growth of
$152.5 million (15.6%), and HELOC loan growth of $1.1 million
(0.5%), offset by a reduction in residential loan balances of
$28.9 million (2.3%).
PNB’s allowance for loan losses decreased by $5.7 million,
or 10.4%, to $48.8 million at December 31, 2016, compared to
$54.5 million at December 31, 2015. Net charge-offs were $8.3
million, or 0.16% of total average loans, for the fiscal year
ended December 31, 2016. During the fourth quarter of 2016,
PNB charged-off $3.1 million in specific reserves for which
provision expense had already been recognized. Refer to the
Credit Metrics and (Recovery of) Provision for Loan Losses
section for additional information regarding PNB’s loan
portfolio and the level of (recovery of) provision for loan
losses recognized in each period presented.
or 10.4%, to $48.8 million at December 31, 2016, compared to
$54.5 million at December 31, 2015. Net charge-offs were $8.3
million, or 0.16% of total average loans, for the fiscal year
ended December 31, 2016. During the fourth quarter of 2016,
PNB charged-off $3.1 million in specific reserves for which
provision expense had already been recognized. Refer to the
Credit Metrics and (Recovery of) Provision for Loan Losses
section for additional information regarding PNB’s loan
portfolio and the level of (recovery of) provision for loan
losses recognized in each period presented.
Guardian Financial Services Company (GFSC)
The table below reflects GFSC’s net income (loss) for each
quarter of 2016 and for the fiscal years ended December 31,
2016, 2015 and 2014.
quarter of 2016 and for the fiscal years ended December 31,
2016, 2015 and 2014.
|
(In thousands)
|
Q4 2016
|
Q3 2016
|
Q2 2016
|
Q1 2016
|
|
|
|
||||||||||||||
|
Net interest income
|
$
|
1,458
|
|
$
|
1,472
|
|
$
|
1,440
|
|
$
|
1,504
|
|
$
|
5,874
|
|
$
|
6,588
|
|
$
|
7,457
|
|
|
Provision for (recovery of) loan losses
|
|
|
(313
|
)
|
1,444
|
|
|
|
1,887
|
|
1,415
|
|
1,544
|
|
|||||||
|
Other (loss) income
|
|
|
(1
|
)
|
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|||||||
|
Other expense
|
|
|
|
|
(966
|
)
|
3,798
|
|
4,457
|
|
2,984
|
|
4,103
|
|
|||||||
|
Income (loss) before income taxes
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(2,821
|
)
|
$
|
(471
|
)
|
$
|
2,191
|
|
$
|
1,809
|
|
|
Federal income taxes (benefit)
|
|
|
|
|
|
|
(985
|
)
|
(164
|
)
|
|
|
|
|
|||||||
|
Net income (loss)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(1,836
|
)
|
$
|
(307
|
)
|
$
|
1,423
|
|
$
|
1,175
|
|
The provision for loan losses of $1.9 million for the
fiscal year ended December 31, 2016 represented an increase
of $472,000, compared to $1.4 million for the fiscal year
ended December 31, 2015. Refer to the Credit Metrics and
(Recovery of) Provision for Loan Losses section for
additional information regarding Guardian’s loan portfolio
and the level of (recovery of) provision for loan losses
recognized in each period presented.
fiscal year ended December 31, 2016 represented an increase
of $472,000, compared to $1.4 million for the fiscal year
ended December 31, 2015. Refer to the Credit Metrics and
(Recovery of) Provision for Loan Losses section for
additional information regarding Guardian’s loan portfolio
and the level of (recovery of) provision for loan losses
recognized in each period presented.
Other expense of $4.5 million for the fiscal year ended
December 31, 2016 represented a $1.5 million increase,
compared to $3.0 million for the fiscal year ended December
31, 2015. The fluctuations in other expense during 2016,
and increase from 2015, primarily related to the evaluation
of litigation accruals.
December 31, 2016 represented a $1.5 million increase,
compared to $3.0 million for the fiscal year ended December
31, 2015. The fluctuations in other expense during 2016,
and increase from 2015, primarily related to the evaluation
of litigation accruals.
The table below provides certain balance sheet information
and financial ratios for GFSC as of December 31, 2016 and
December 31, 2015.
and financial ratios for GFSC as of December 31, 2016 and
December 31, 2015.
|
(In thousands)
|
December 31, 2016
|
December 31, 2015
|
|
% change from 12/31/15
|
|||||
|
Loans
|
$
|
32,661
|
|
$
|
35,469
|
|
|
(7.92
|
)%
|
|
Allowance for loan losses
|
1,842
|
|
2,041
|
|
|
(9.75
|
)%
|
||
|
Net loans
|
30,819
|
|
33,428
|
|
|
(7.80
|
)%
|
||
|
Total assets
|
32,268
|
|
35,793
|
|
|
(9.85
|
)%
|
||
|
Average assets
(1) |
33,370
|
|
37,675
|
|
|
(11.43
|
)%
|
||
|
Return on average assets
|
(0.92
|
)%
|
3.78
|
%
|
|
N.M.
|
|
(1) Average assets for the fiscal years ended December 31,
2016 and 2015.
2016 and 2015.
Park Parent Company
The table below reflects the Park Parent Company net loss
for each quarter of 2016 and for the fiscal years ended
December 31, 2016, 2015 and 2014.
for each quarter of 2016 and for the fiscal years ended
December 31, 2016, 2015 and 2014.
|
(In thousands)
|
Q4 2016
|
Q3 2016
|
Q2 2016
|
Q1 2016
|
|
|
|
||||||||||||||
|
Net interest (expense) income
|
$
|
(125
|
)
|
$
|
|
|
$
|
(32
|
)
|
$
|
(1
|
)
|
$
|
(138
|
)
|
$
|
|
|
$
|
(2,012
|
)
|
|
Provision for loan losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Other income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Other expense
|
2,345
|
|
1,840
|
|
2,209
|
|
3,337
|
|
9,731
|
|
9,972
|
|
8,000
|
|
|||||||
|
Loss before income tax benefit
|
$
|
(1,894
|
)
|
$
|
(1,689
|
)
|
$
|
(2,125
|
)
|
$
|
(3,206
|
)
|
$
|
(8,914
|
)
|
$
|
(9,220
|
)
|
$
|
(9,837
|
)
|
|
Federal income tax benefit
|
(905
|
)
|
(1,024
|
)
|
(1,056
|
)
|
(1,372
|
)
|
(4,357
|
)
|
(4,671
|
)
|
(4,787
|
)
|
|||||||
|
Net loss
|
$
|
(989
|
)
|
$
|
(665
|
)
|
$
|
(1,069
|
)
|
$
|
(1,834
|
)
|
$
|
(4,557
|
)
|
$
|
(4,549
|
)
|
$
|
(5,050
|
)
|
The net interest (expense) income for Park’s parent
company included, for all periods presented, interest
income on loans to SEPH (paid off on December 14, 2016) and
on subordinated debt investments in PNB, which were
eliminated in the consolidated Park National Corporation
totals. Additionally, net interest (expense) income
included, for all periods presented, interest expense
related to the $30.00 million of 7% Subordinated Notes due
April 20, 2022 issued by Park to accredited
company included, for all periods presented, interest
income on loans to SEPH (paid off on December 14, 2016) and
on subordinated debt investments in PNB, which were
eliminated in the consolidated Park National Corporation
totals. Additionally, net interest (expense) income
included, for all periods presented, interest expense
related to the $30.00 million of 7% Subordinated Notes due
April 20, 2022 issued by Park to accredited
investors on April 20, 2012. Results for the fiscal year
ended December 31, 2014 included, in addition to the
items previously discussed, interest expense related to
the $35.25 million of 10% Subordinated Notes due December
23, 2019 issued by Park to accredited investors on
December 23, 2009. Park paid off the $35.25 million
outstanding principal amount of the 10% Subordinated
Notes due December 23, 2019, plus accrued interest, on
December 24, 2014, the earliest redemption date allowable
under the related note purchase agreement dated December
23, 2009.
ended December 31, 2014 included, in addition to the
items previously discussed, interest expense related to
the $35.25 million of 10% Subordinated Notes due December
23, 2019 issued by Park to accredited investors on
December 23, 2009. Park paid off the $35.25 million
outstanding principal amount of the 10% Subordinated
Notes due December 23, 2019, plus accrued interest, on
December 24, 2014, the earliest redemption date allowable
under the related note purchase agreement dated December
23, 2009.
Other income of $955,000 million for the fiscal year
ended December 31, 2016 represented an increase of
$442,000, or 86.2%, compared to $513,000 for the same
period in 2015. This increase was due to $461,000 in
income from an equity investment.
ended December 31, 2016 represented an increase of
$442,000, or 86.2%, compared to $513,000 for the same
period in 2015. This increase was due to $461,000 in
income from an equity investment.
SEPH
The table below reflects SEPH’s net income (loss) for
each quarter of 2016 and for the fiscal years ended
December 31, 2016, 2015 and 2014. SEPH holds the
remaining assets and liabilities retained by Vision
subsequent to the sale of the Vision business on February
16, 2012. Prior to holding the remaining Vision assets,
SEPH held OREO assets that were transferred from Vision
to SEPH. This segment represents a run-off portfolio of
the legacy Vision assets.
each quarter of 2016 and for the fiscal years ended
December 31, 2016, 2015 and 2014. SEPH holds the
remaining assets and liabilities retained by Vision
subsequent to the sale of the Vision business on February
16, 2012. Prior to holding the remaining Vision assets,
SEPH held OREO assets that were transferred from Vision
to SEPH. This segment represents a run-off portfolio of
the legacy Vision assets.
|
(In thousands)
|
Q4 2016
|
Q3 2016
|
Q2 2016
|
Q1 2016
|
|
|
|
||||||||||||||
|
Net interest income (expense)
|
$
|
3,534
|
|
$
|
|
|
$
|
|
|
$
|
1,161
|
|
$
|
4,774
|
|
$
|
(74
|
)
|
$
|
|
|
|
Recovery of loan losses
|
(4,572
|
)
|
(3,708
|
)
|
(169
|
)
|
(1,150
|
)
|
(9,599
|
)
|
(4,090
|
)
|
(12,394
|
)
|
|||||||
|
Other income
|
1,702
|
|
1,126
|
|
|
|
|
|
2,974
|
|
1,848
|
|
5,991
|
|
|||||||
|
Other expense
|
2,748
|
|
1,789
|
|
1,332
|
|
1,404
|
|
7,273
|
|
6,182
|
|
11,766
|
|
|||||||
|
Income (loss) before income taxes
|
$
|
7,060
|
|
$
|
3,053
|
|
$
|
(980
|
)
|
$
|
|
|
$
|
10,074
|
|
$
|
(318
|
)
|
$
|
7,577
|
|
|
Federal income tax expense (benefit)
|
2,470
|
|
1,070
|
|
(343
|
)
|
|
|
3,526
|
|
(111
|
)
|
2,652
|
|
|||||||
|
Net income (loss)
|
$
|
4,590
|
|
$
|
1,983
|
|
$
|
(637
|
)
|
$
|
|
|
$
|
6,548
|
|
$
|
(207
|
)
|
$
|
4,925
|
|
Net interest income increased to $4.8 million for the
fiscal year ended December 31, 2016 from net interest
expense of $74,000 for the fiscal year ended December 31,
2015. The increase was largely the result of payments
received from certain SEPH impaired loan relationships.
fiscal year ended December 31, 2016 from net interest
expense of $74,000 for the fiscal year ended December 31,
2015. The increase was largely the result of payments
received from certain SEPH impaired loan relationships.
For the fiscal year ended December 31, 2016, SEPH had net
recoveries of loan losses of $9.6 million. The net
recoveries during 2016 consisted of $447,000 in
charge-offs offset by recoveries from loans previously
charged off of $10.0 million.
recoveries of loan losses of $9.6 million. The net
recoveries during 2016 consisted of $447,000 in
charge-offs offset by recoveries from loans previously
charged off of $10.0 million.
The $1.1 increase in other income for the fiscal year
ended December 31, 2016, compared to the fiscal year
ended December 31, 2015, was primarily the result of
payments received from certain SEPH impaired loan
relationships.
ended December 31, 2016, compared to the fiscal year
ended December 31, 2015, was primarily the result of
payments received from certain SEPH impaired loan
relationships.
The $1.1 million increase in other expense for the fiscal
year ended December 31, 2016, compared to the fiscal year
ended December 31, 2015, was primarily the result of a
$1.0 million decrease in expense related to reserves
established for potential mortgage loan repurchases,
offset by increases in legal fees of $390,000 and
management and consulting services of $2.1 million.
year ended December 31, 2016, compared to the fiscal year
ended December 31, 2015, was primarily the result of a
$1.0 million decrease in expense related to reserves
established for potential mortgage loan repurchases,
offset by increases in legal fees of $390,000 and
management and consulting services of $2.1 million.
In the aggregate, for the fiscal year ended December 31,
2016, SEPH realized $18.0 million in operating income
items, consisting of interest income, recoveries from
loans previously charged off, and other income, offset by
operating expense items totaling $7.9 million, consisting
of interest expense and other expense.
2016, SEPH realized $18.0 million in operating income
items, consisting of interest income, recoveries from
loans previously charged off, and other income, offset by
operating expense items totaling $7.9 million, consisting
of interest expense and other expense.
Legacy Vision assets at SEPH totaled $20.3 million as of
December 31, 2016. In addition to these SEPH assets, PNB
participations in legacy Vision assets totaled $9.6
million at December 31, 2016.
December 31, 2016. In addition to these SEPH assets, PNB
participations in legacy Vision assets totaled $9.6
million at December 31, 2016.
Park National Corporation
The table below reflects Park’s consolidated net
income for each quarter of 2016 and for the fiscal
years ended December 31, 2016, 2015 and 2014.
income for each quarter of 2016 and for the fiscal
years ended December 31, 2016, 2015 and 2014.
|
(In thousands)
|
Q4 2016
|
Q3 2016
|
Q2 2016
|
Q1 2016
|
|
|
|
||||||||||||||
|
Net interest income
|
$
|
62,249
|
|
$
|
58,533
|
|
$
|
57,485
|
|
$
|
59,819
|
|
$
|
238,086
|
|
$
|
227,632
|
|
$
|
225,044
|
|
|
(Recovery of) provision for loan losses
|
(1,282
|
)
|
(7,366
|
)
|
2,637
|
|
|
|
(5,101
|
)
|
4,990
|
|
(7,333
|
)
|
|||||||
|
Other income
|
22,071
|
|
20,535
|
|
18,736
|
|
17,389
|
|
78,731
|
|
77,551
|
|
75,549
|
|
|||||||
|
Other expense
|
57,062
|
|
46,756
|
|
45,306
|
|
49,899
|
|
199,023
|
|
186,614
|
|
187,510
|
|
|||||||
|
Income before income taxes
|
$
|
28,540
|
|
$
|
39,678
|
|
$
|
28,278
|
|
$
|
26,399
|
|
$
|
122,895
|
|
$
|
113,579
|
|
$
|
120,416
|
|
|
Federal income taxes
|
8,538
|
|
12,229
|
|
8,280
|
|
7,713
|
|
36,760
|
|
32,567
|
|
36,459
|
|
|||||||
|
Net income
|
$
|
20,002
|
|
$
|
27,449
|
|
$
|
19,998
|
|
$
|
18,686
|
|
$
|
86,135
|
|
$
|
81,012
|
|
$
|
83,957
|
|
Credit Metrics and (Recovery of) Provision for Loan
Losses
Losses
On a consolidated basis, Park reported a recovery of
loan losses for the fiscal year ended December 31, 2016
of $5.1 million, compared to a provision for loan
losses of $5.0 million for fiscal year ended December
31, 2015. The table below shows a breakdown of the
(recovery of) provision for loan losses by reportable
segment.
loan losses for the fiscal year ended December 31, 2016
of $5.1 million, compared to a provision for loan
losses of $5.0 million for fiscal year ended December
31, 2015. The table below shows a breakdown of the
(recovery of) provision for loan losses by reportable
segment.
|
(In thousands)
|
Q4 2016
|
Q3 2016
|
Q2 2016
|
Q1 2016
|
|
|
|
|
||||||||||||||
|
PNB
|
$
|
3,061
|
|
$
|
(3,345
|
)
|
$
|
1,362
|
|
$
|
1,533
|
|
$
|
2,611
|
|
$
|
7,665
|
|
|
$
|
3,517
|
|
|
GFSC
|
|
|
(313
|
)
|
1,444
|
|
|
|
1,887
|
|
1,415
|
|
|
1,544
|
|
|||||||
|
Park Parent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Total Ongoing Operations
|
$
|
3,290
|
|
$
|
(3,658
|
)
|
$
|
2,806
|
|
$
|
2,060
|
|
$
|
4,498
|
|
$
|
9,080
|
|
|
$
|
5,061
|
|
|
SEPH
|
(4,572
|
)
|
(3,708
|
)
|
(169
|
)
|
(1,150
|
)
|
(9,599
|
)
|
(4,090
|
)
|
|
(12,394
|
)
|
|||||||
|
Total Park
|
$
|
(1,282
|
)
|
$
|
(7,366
|
)
|
$
|
2,637
|
|
$
|
|
|
$
|
(5,101
|
)
|
$
|
4,990
|
|
|
$
|
(7,333
|
)
|
PNB had net charge-offs of $8.3 million, GFSC had net
charge-offs of $2.1 million, and SEPH had net
recoveries of $9.6 million for the fiscal year ended
December 31, 2016, resulting in net charge-offs of
$769,000 for Park, on a consolidated basis. Recovery of
loan losses at Park on a consolidated basis were $5.1
million for the fiscal year ended December 31, 2016.
Excluding SEPH, Park had net charge-offs of $10.4
million for the fiscal year ended December 31, 2016.
The provision for loan losses for Park, excluding SEPH,
was $4.5 million for the fiscal year ended December 31,
2016, which was $5.9 million lower than net
charge-offs, excluding SEPH, of $10.4 million. The
$10.4 million in net charge-offs, excluding SEPH, were
in excess of the provision for loan losses due to a
$3.6 million reduction in specific reserves on impaired
loans as well as Park’s ongoing evaluation of the
required allowance for loan losses to cover probable
incurred losses in the Park loan portfolio.
charge-offs of $2.1 million, and SEPH had net
recoveries of $9.6 million for the fiscal year ended
December 31, 2016, resulting in net charge-offs of
$769,000 for Park, on a consolidated basis. Recovery of
loan losses at Park on a consolidated basis were $5.1
million for the fiscal year ended December 31, 2016.
Excluding SEPH, Park had net charge-offs of $10.4
million for the fiscal year ended December 31, 2016.
The provision for loan losses for Park, excluding SEPH,
was $4.5 million for the fiscal year ended December 31,
2016, which was $5.9 million lower than net
charge-offs, excluding SEPH, of $10.4 million. The
$10.4 million in net charge-offs, excluding SEPH, were
in excess of the provision for loan losses due to a
$3.6 million reduction in specific reserves on impaired
loans as well as Park’s ongoing evaluation of the
required allowance for loan losses to cover probable
incurred losses in the Park loan portfolio.
The table below provides additional information related
to specific reserves and general reserves for Park’s
ongoing operations as of December 31, 2016, 2015 and
2014.
to specific reserves and general reserves for Park’s
ongoing operations as of December 31, 2016, 2015 and
2014.
|
(In thousands)
|
12/31/2016
|
12/31/2015
|
12/31/2014
|
||||||
|
Total allowance for loan losses
|
$
|
50,624
|
|
$
|
56,494
|
|
$
|
54,352
|
|
|
Specific reserve
|
|
|
4,191
|
|
3,660
|
|
|||
|
General reserve
|
$
|
50,076
|
|
$
|
52,303
|
|
$
|
50,692
|
|
|
|
|
|
|
||||||
|
Total loans
|
$
|
5,259,503
|
|
$
|
5,052,932
|
|
$
|
4,805,725
|
|
|
Impaired commercial loans
|
58,676
|
|
66,232
|
|
51,323
|
|
|||
|
Total loans less impaired commercial loans
|
$
|
5,200,827
|
|
$
|
4,986,700
|
|
$
|
4,754,402
|
|
|
|
|
|
|
||||||
|
General reserve as a % of total loans less
impaired commercial loans |
0.96
|
%
|
1.05
|
%
|
1.07
|
%
|
Note:>The table above includes only those loans at
PNB and GFSC, as these are the entities that have an
ALLL balance. The table in the “Asset Quality
Information” section of the financial information
included with the Financial Results News Release,
includes all Park loans (including those at SEPH) and
thus shows slightly different information.
PNB and GFSC, as these are the entities that have an
ALLL balance. The table in the “Asset Quality
Information” section of the financial information
included with the Financial Results News Release,
includes all Park loans (including those at SEPH) and
thus shows slightly different information.
The allowance for loan losses of $50.6 million at
December 31, 2016 represented a $5.9 million or 10.4%
decrease, compared to $56.5 million at December 31,
2015. This decrease was the result of a $3.6 million
decrease in specific reserves and a $2.2 million
decrease in general reserves.
December 31, 2016 represented a $5.9 million or 10.4%
decrease, compared to $56.5 million at December 31,
2015. This decrease was the result of a $3.6 million
decrease in specific reserves and a $2.2 million
decrease in general reserves.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
LITIGATION REFORM ACT OF 1995
Park cautions that any forward-looking statements
contained in this Current Report on Form 8-K 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 managements 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:
Park’s ability to execute our business plan
successfully and within the expected timeframe;
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 slowing or reversal of the recent
economic expansion in addition to continuing
residual effects of recessionary conditions and an
uneven spread of positive impacts of recovery on
the economy and our counterparties, including
adverse impacts on the demand for loan, deposit and
other financial services, delinquencies, defaults
and counterparties’ ability to meet credit and
other obligations; changes in interest rates and
prices may adversely impact the value of
securities, loans, deposits and other financial
instruments and the interest rate sensitivity of
our consolidated balance sheet as well as reduce
interest margins and impact loan demand; changes in
consumer spending, borrowing and saving habits,
whether due to changing business and economic
conditions, legislative and regulatory initiatives,
or other factors; changes in unemployment; changes
in customers’, suppliers’, and other
counterparties’ performance and creditworthiness;
asset/liability repricing risks and liquidity
risks; our liquidity requirements could be
adversely affected by changes to regulations
governing bank and bank holding company capital and
liquidity standards as well as by changes in our
assets and liabilities; competitive factors among
financial services organizations could increase
significantly, including product and pricing
pressures, changes to third-party relationships and
our ability to attract, develop and retain
qualified bank professionals; clients could pursue
alternatives to bank deposits, causing us to lose a
relatively inexpensive source of funding;
uncertainty regarding the nature, timing 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, pensions, bankruptcy,
consumer protection, accounting, bank products and
services, fiduciary standards, securities and other
aspects of the financial services industry,
specifically the reforms provided for in 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 OCC, the FDIC, and the
Federal Reserve Board, to implement the Dodd-Frank
Act’s provisions, the Budget Control Act of 2011,
the American Taxpayer Relief Act of 2012, the JOBS
Act, the FAST 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 SEC, the Public Company Accounting
Oversight Board and other regulatory agencies, and
the accuracy of our assumptions and estimates used
to prepare our financial statements; the effect of
trade, monetary, fiscal and other governmental
policies of the U.S. federal government, including
money supply and interest rate policies of the
Federal Reserve Board; disruption in the liquidity
and other functioning of U.S. financial markets;
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
creditworthiness of certain sovereign governments,
supranationals and financial institutions in Europe
and Asia; the uncertainty surrounding the United
Kingdom’s exit from the European Union and its
consequences; our litigation and regulatory
compliance exposure, including any adverse
developments in legal proceedings or other claims
and unfavorable resolution of regulatory and other
governmental examinations or other inquiries; the
adequacy of our risk management program; the
ability to secure confidential information and
deliver products and services through the use of
computer systems and telecommunications networks; a
failure in or breach of our operational or security
systems or infrastructure, or those of our
third-party vendors and other service providers,
including as a result of cyber attacks; fraud,
scams and schemes of third parties; the impact of
widespread natural and other disasters, pandemics,
dislocations, terrorist activities or international
hostilities on the economy and financial markets
generally or on us or our counterparties
specifically; demand for loans in the respective
market areas served by Park and our subsidiaries;
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, 2015. 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.
contained in this Current Report on Form 8-K 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 managements 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:
Park’s ability to execute our business plan
successfully and within the expected timeframe;
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 slowing or reversal of the recent
economic expansion in addition to continuing
residual effects of recessionary conditions and an
uneven spread of positive impacts of recovery on
the economy and our counterparties, including
adverse impacts on the demand for loan, deposit and
other financial services, delinquencies, defaults
and counterparties’ ability to meet credit and
other obligations; changes in interest rates and
prices may adversely impact the value of
securities, loans, deposits and other financial
instruments and the interest rate sensitivity of
our consolidated balance sheet as well as reduce
interest margins and impact loan demand; changes in
consumer spending, borrowing and saving habits,
whether due to changing business and economic
conditions, legislative and regulatory initiatives,
or other factors; changes in unemployment; changes
in customers’, suppliers’, and other
counterparties’ performance and creditworthiness;
asset/liability repricing risks and liquidity
risks; our liquidity requirements could be
adversely affected by changes to regulations
governing bank and bank holding company capital and
liquidity standards as well as by changes in our
assets and liabilities; competitive factors among
financial services organizations could increase
significantly, including product and pricing
pressures, changes to third-party relationships and
our ability to attract, develop and retain
qualified bank professionals; clients could pursue
alternatives to bank deposits, causing us to lose a
relatively inexpensive source of funding;
uncertainty regarding the nature, timing 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, pensions, bankruptcy,
consumer protection, accounting, bank products and
services, fiduciary standards, securities and other
aspects of the financial services industry,
specifically the reforms provided for in 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 OCC, the FDIC, and the
Federal Reserve Board, to implement the Dodd-Frank
Act’s provisions, the Budget Control Act of 2011,
the American Taxpayer Relief Act of 2012, the JOBS
Act, the FAST 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 SEC, the Public Company Accounting
Oversight Board and other regulatory agencies, and
the accuracy of our assumptions and estimates used
to prepare our financial statements; the effect of
trade, monetary, fiscal and other governmental
policies of the U.S. federal government, including
money supply and interest rate policies of the
Federal Reserve Board; disruption in the liquidity
and other functioning of U.S. financial markets;
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
creditworthiness of certain sovereign governments,
supranationals and financial institutions in Europe
and Asia; the uncertainty surrounding the United
Kingdom’s exit from the European Union and its
consequences; our litigation and regulatory
compliance exposure, including any adverse
developments in legal proceedings or other claims
and unfavorable resolution of regulatory and other
governmental examinations or other inquiries; the
adequacy of our risk management program; the
ability to secure confidential information and
deliver products and services through the use of
computer systems and telecommunications networks; a
failure in or breach of our operational or security
systems or infrastructure, or those of our
third-party vendors and other service providers,
including as a result of cyber attacks; fraud,
scams and schemes of third parties; the impact of
widespread natural and other disasters, pandemics,
dislocations, terrorist activities or international
hostilities on the economy and financial markets
generally or on us or our counterparties
specifically; demand for loans in the respective
market areas served by Park and our subsidiaries;
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, 2015. 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.
Item 8.01 – Other Events
Declaration of Cash Dividend
As reported in the Financial Results News
Release, on January 23, 2017, 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, 2017
to common shareholders of record as of the close
of business on February 17, 2017. 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.
Release, on January 23, 2017, 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, 2017
to common shareholders of record as of the close
of business on February 17, 2017. 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.
Stock Repurchase Authorization
As reported in the Financial Results News
Release, on January 23, 2017, the Park Board of
Directors authorized Park to purchase, from time
to time, up to an aggregate of 500,000 common
shares of Park National Corporation, which will
be held as treasury shares. Purchases may be made
through NYSE MKT, in the over-the-counter market
or in privately negotiated transactions, in each
case in compliance with applicable laws and
regulations and the rules applicable to issuers
having securities listed on NYSE MKT. Purchases
will be made upon such terms and conditions and
at such times and in such amounts as any one or
more of the authorized officers of Park deem to
be appropriate, subject to market conditions,
regulatory requirements and other factors, and in
the best interest of Park and Park’s
shareholders. The portion of the Financial
Results New Release which addresses the
authorization of the common share repurchase is
incorporated by reference.
Release, on January 23, 2017, the Park Board of
Directors authorized Park to purchase, from time
to time, up to an aggregate of 500,000 common
shares of Park National Corporation, which will
be held as treasury shares. Purchases may be made
through NYSE MKT, in the over-the-counter market
or in privately negotiated transactions, in each
case in compliance with applicable laws and
regulations and the rules applicable to issuers
having securities listed on NYSE MKT. Purchases
will be made upon such terms and conditions and
at such times and in such amounts as any one or
more of the authorized officers of Park deem to
be appropriate, subject to market conditions,
regulatory requirements and other factors, and in
the best interest of Park and Park’s
shareholders. The portion of the Financial
Results New Release which addresses the
authorization of the common share repurchase is
incorporated by reference.
Appointment of Certain Officers
As reported in the Financial Results News
Release, on January 23, 2017, each of the Boards
of Directors of Park and PNB took action to
appoint Matthew R. Miller to serve as Executive
Vice President of Park and PNB, effective April
1, 2017. Mr. Miller, who is 38, has served as
Chief Accounting Officer and principal accounting
officer of Park and the Senior Vice President and
Chief Accounting Officer of PNB since December
2012 and served as Vice President of PNB from
April 2009 to December 2012. Prior to joining
PNB, Mr. Miller was employed by Deloitte Touche,
LLP from September 2001 until March 2009, serving
audit clients in the financial services industry.
Release, on January 23, 2017, each of the Boards
of Directors of Park and PNB took action to
appoint Matthew R. Miller to serve as Executive
Vice President of Park and PNB, effective April
1, 2017. Mr. Miller, who is 38, has served as
Chief Accounting Officer and principal accounting
officer of Park and the Senior Vice President and
Chief Accounting Officer of PNB since December
2012 and served as Vice President of PNB from
April 2009 to December 2012. Prior to joining
PNB, Mr. Miller was employed by Deloitte Touche,
LLP from September 2001 until March 2009, serving
audit clients in the financial services industry.
The portion of the Financial Results New Release
which addresses the appointment of Matthew R.
Miller is incorporated herein by reference.
which addresses the appointment of Matthew R.
Miller is incorporated herein by reference.
Item 9.01 – Financial Statements and Exhibits.
|
(a)
|
Not applicable
|
|
(b)
|
Not applicable
|
|
(c)
|
Not applicable
|
|
(d)
|
Exhibits. The following exhibit is included
with this Current Report on Form 8-K: |
Exhibit No. Description
|
99.1
|
News Release issued by Park National
Corporation on January 23, 2017 addressing financial results for the three months and fiscal year ended December 31, 2016. |
Remainder of page intentionally left blank;
page follows.]
About Park National Corporation (NYSEMKT:PRK)
Park National Corporation (Park) is a financial holding company. The Company’s banking operations are conducted through The Park National Bank. The Company’s segments include Park National Bank, Guardian Financial Services Company (Guardian Finance) and SE Property Holdings, LLC (SEPH). The Park National Bank is engaged in the commercial banking and trust business, generally in small and medium population Ohio communities. Park’s principal business consists of owning and supervising its subsidiaries. The Park National Bank operates over 120 banking offices in Ohio through approximately 10 banking divisions with a network of over 140 automated teller machines. Guardian Finance provides consumer finance services in the central Ohio area. Guardian Finance includes over five financial service offices spanning approximately five counties in Ohio, which includes Clark, Fairfield, Franklin, Licking and Montgomery. SEPH is engaged in lending activities and has operations in Ohio. Park National Corporation (NYSEMKT:PRK) Recent Trading Information
Park National Corporation (NYSEMKT:PRK) closed its last trading session up +2.71 at 114.47 with 67,076 shares trading hands.
