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Park National Corporation reports financial results for third quarter and first nine months of 2020

Park National Corporation
·23 min read

NEWARK, Ohio, Oct. 26, 2020 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the third quarter and first nine months of 2020 (three and nine months ended September 30, 2020). Park's board of directors declared a quarterly cash dividend of $1.02 per common share, payable on December 10, 2020 to common shareholders of record as of November 20, 2020.

Parks net income for the third quarter of 2020 was $30.8 million, a 1.0 percent decrease from $31.1 million for the third quarter of 2019. Third quarter 2020 net income per diluted common share was $1.88, compared to $1.89 in the third quarter of 2019. Park's net income for the first nine months of 2020 was $82.7 million, a 5.0 percent increase from $78.8 million for the first nine months of 2019. Net income per diluted common share was $5.04 for the first nine months of 2020, compared to $4.84 for the first nine months of 2019.

Park's community-banking subsidiary, The Park National Bank, reported net income of $32.9 million for the third quarter of 2020, a 6.3 percent increase compared to $30.9 million for the same period of 2019. The bank reported net income of $89.5 million for the first nine months of 2020, compared to $87.0 million for the first nine months of 2019.

Our results through the spring and summer reflect the unwavering dedication our associates have to supporting customers in the most reliable and compassionate ways. Our service style has always included easy, direct access to local bankers, quick responses, and flexibility to fit unique situations. The excellent loan growth this year is absolutely connected to our bankers reputation for answering phones and providing solutions even on evenings and weekends, Park Chief Executive Office David Trautman explained.

As our communities adapted to pandemic conditions, local businesses needed swift access to funds as they adjusted and persevered. Families needed fair financing for vehicles and recreational equipment, and many needed guidance about low mortgage rates. Everyone needed and deserves service in the quickest, safest way possible. We are extremely proud of and grateful for our associates, in every corner of our organization, who continue to dedicate themselves to serving our communities and neighbors.

Headquartered in Newark, Ohio, Park National Corporation has $9.2 billion in total assets (as of September 30, 2020). Park's banking operations are conducted through its subsidiary The Park National Bank. Other Park subsidiaries are Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance), Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.

Complete financial tables are listed below.

Category: Earnings

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Park cautions that any forward-looking statements contained in this 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:

  • 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 - - 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, 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 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 the COVID-19 pandemic;

  • 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, 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, 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, including the extent to which the new current expected credit loss ("CECL") accounting standard issued by the FASB in June 2016 and in accordance with the CARES Act, the adoption of which can be deferred by Park (with retrospective application as of January 1, 2020) until the earlier of: (1) the interim reporting period during which the national emergency concerning the COVID-19 outbreak terminates; or (2) December 31, 2020, 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, when adopted by Park, which may prove unreliable, inaccurate or not predictive of actual results;

  • significant changes in the tax laws, which 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;

  • 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;

  • 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);

  • uncertainty regarding changes to the U.S. presidential administration and Congress and the impact thereof on the regulatory landscape, capital markets, and the response to and management of the COVID-19 pandemic;

  • the impact on financial markets and the economy of any changes in the credit ratings of the U.S. Treasury obligations and other U.S. government - backed debt, as well as issues surrounding the levels of U.S., European and Asian government debt and concerns regarding the growth rates and financial stability of certain sovereign governments, supranationals and financial institutions in Europe and Asia and the risk they may face difficulties servicing their sovereign debt;

  • the uncertainty surrounding the actions to be taken to implement the referendum by United Kingdom voters to exit the European Union;

  • 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, 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, 2019 and in "Item 1A. Risk Factors" of Part II of Park's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 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, 2020, June 30, 2020, and September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

2020

2019

 

Percent change vs.

(in thousands, except share and per share data)

3rd QTR

2nd QTR

3rd QTR

 

2Q '20

3Q '19

INCOME STATEMENT:

 

 

 

 

 

 

Net interest income

$

83,840

 

$

81,186

 

$

77,101

 

 

3.3

 

%

8.7

 

%

Provision for loan losses

13,836

 

12,224

 

1,967

 

 

13.2

 

%

603.4

 

%

Other income

36,558

 

30,964

 

28,136

 

 

18.1

 

%

29.9

 

%

Other expense

69,859

 

64,799

 

65,738

 

 

7.8

 

%

6.3

 

%

Income before income taxes

$

36,703

 

$

35,127

 

$

37,532

 

 

4.5

 

%

(2.2

)

%

Income taxes

5,857

 

5,622

 

6,386

 

 

4.2

 

%

(8.3

)

%

Net income

$

30,846

 

$

29,505

 

$

31,146

 

 

4.5

 

%

(1.0

)

%

 

 

 

 

 

 

 

MARKET DATA:

 

 

 

 

 

 

Earnings per common share - basic (a)

$

1.89

 

$

1.81

 

$

1.90

 

 

4.4

 

%

(0.5

)

%

Earnings per common share - diluted (a)

1.88

 

1.80

 

1.89

 

 

4.4

 

%

(0.5

)

%

Cash dividends declared per common share

1.02

 

1.02

 

1.01

 

 

 

%

1.0

 

%

Book value per common share at period end

62.39

 

61.46

 

58.54

 

 

1.5

 

%

6.6

 

%

Market price per common share at period end

81.96

 

70.38

 

94.81

 

 

16.5

 

%

(13.6

)

%

Market capitalization at period end

1,336,011

 

1,146,942

 

1,548,527

 

 

16.5

 

%

(13.7

)

%

 

 

 

 

 

 

 

Weighted average common shares - basic (b)

16,300,720

 

16,296,427

 

16,382,798

 

 

 

%

(0.5

)

%

Weighted average common shares - diluted (b)

16,393,792

 

16,375,434

 

16,475,741

 

 

0.1

 

%

(0.5

)

%

Common shares outstanding at period end

16,300,763

 

16,296,425

 

16,332,951

 

 

 

%

(0.2

)

%

 

 

 

 

 

 

 

PERFORMANCE RATIOS: (annualized)

 

 

 

 

 

 

Return on average assets (a)(b)

1.28

%

1.26

%

1.41

%

 

1.6

 

%

(9.2

)

%

Return on average shareholders' equity (a)(b)

12.03

%

11.89

%

13.07

%

 

1.2

 

%

(8.0

)

%

Yield on loans

4.54

%

4.63

%

5.25

%

 

(1.9

)

%

(13.5

)

%

Yield on investment securities

2.35

%

2.76

%

2.72

%

 

(14.9

)

%

(13.6

)

%

Yield on money market instruments

0.11

%

0.10

%

2.43

%

 

10.0

 

%

(95.5

)

%

Yield on interest earning assets

4.12

%

4.14

%

4.73

%

 

(0.5

)

%

(12.9

)

%

Cost of interest bearing deposits

0.26

%

0.36

%

1.08

%

 

(27.8

)

%

(75.9

)

%

Cost of borrowings

1.63

%

1.33

%

2.25

%

 

22.6

 

%

(27.6

)

%

Cost of paying interest bearing liabilities

0.39

%

0.43

%

1.19

%

 

(9.3

)

%

(67.2

)

%

Net interest margin (g)

3.85

%

3.84

%

3.86

%

 

0.3

 

%

(0.3

)

%

Efficiency ratio (g)

57.69

%

57.41

%

62.03

%

 

0.5

 

%

(7.0

)

%

 

 

 

 

 

 

 

OTHER RATIOS (NON-GAAP):

 

 

 

 

 

 

Tangible book value per share (d)

$

52.00

 

$

51.04

 

$

47.92

 

 

1.9

 

%

8.5

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Explanations for footnotes (a) - (k) 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, 2020, June 30, 2020, and September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent change vs.

(in thousands, except ratios)

September 30,
2020

June 30,
2020

September 30,
2019

 

2Q '20

3Q '19

BALANCE SHEET:

 

 

 

 

 

 

Investment securities

$

1,097,598

 

$

1,153,186

 

$

1,328,930

 

 

(4.8

)

%

(17.4

)

%

Loans

7,278,546

 

7,204,445

 

6,403,647

 

 

1.0

 

%

13.7

 

%

Allowance for loan losses

87,038

 

73,476

 

55,853

 

 

18.5

 

%

55.8

 

%

Goodwill and other intangible assets

169,380

 

169,905

 

173,489

 

 

(0.3

)

%

(2.4

)

%

Other real estate owned (OREO)

836

 

1,356

 

3,779

 

 

(38.3

)

%

(77.9

)

%

Total assets

9,240,006

 

9,712,994

 

8,723,610

 

 

(4.9

)

%

5.9

 

%

Total deposits

7,475,829

 

8,161,900

 

7,168,259

 

 

(8.4

)

%

4.3

 

%

Borrowings

643,103

 

444,410

 

498,338

 

 

44.7

 

%

29.0

 

%

Total shareholders' equity

1,016,996

 

1,001,594

 

956,140

 

 

1.5

 

%

6.4

 

%

Tangible equity (d)

847,616

 

831,689

 

782,651

 

 

1.9

 

%

8.3

 

%

Total nonperforming loans

148,442

 

126,044

 

111,184

 

 

17.8

 

%

33.5

 

%

Total nonperforming assets

152,670

 

130,999

 

118,561

 

 

16.5

 

%

28.8

 

%

 

 

 

 

 

 

 

ASSET QUALITY RATIOS:

 

 

 

 

 

 

Loans as a % of period end total assets

78.77

%

74.17

%

73.41

%

 

6.2

 

%

7.3

 

%

Total nonperforming loans as a % of period end loans

2.04

%

1.75

%

1.74

%

 

16.6

 

%

17.2

 

%

Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets

2.10

%

1.82

%

1.85

%

 

15.4

 

%

13.5

 

%

Allowance for loan losses as a % of period end loans

1.20

%

1.02

%

0.87

%

 

17.6

 

%

37.9

 

%

Net loan charge-offs

$

274

 

$

251

 

$

117

 

 

9.2

 

%

134.2

 

%

Annualized net loan charge-offs as a % of average loans (b)

0.02

%

0.01

%

0.01

%

 

100.0

 

%

100.0

 

%

 

 

 

 

 

 

 

CAPITAL & LIQUIDITY:

 

 

 

 

 

 

Total shareholders' equity / Period end total assets

11.01

%

10.31

%

10.96

%

 

6.8

 

%

0.5

 

%

Tangible equity (d) / Tangible assets (f)

9.34

%

8.72

%

9.15

%

 

7.1

 

%

2.1

 

%

Average shareholders' equity / Average assets (b)

10.67

%

10.61

%

10.76

%

 

0.6

 

%

(0.8

)

%

Average shareholders' equity / Average loans (b)

14.08

%

14.30

%

14.83

%

 

(1.5

)

%

(5.1

)

%

Average loans / Average deposits (b)

92.02

%

88.59

%

88.63

%

 

3.9

 

%

3.8

 

%

 

 

 

 

 

 

 

Note: Explanations for footnotes (a) - (k) are included at the end of the financial tables in the "Financial Reconciliations" section.

 

 

 



PARK NATIONAL CORPORATION

Financial Highlights

Nine months ended September 30, 2020 and September 30, 2019

 

 

 

 

 

 

 

 

 

2020

2019

 

 

(in thousands, except share and per share data and ratios)

Nine months
ended
September 30

Nine months
ended
September 30

 

Percent change
vs '19

INCOME STATEMENT:

 

 

 

 

Net interest income

$

241,309

 

$

220,728

 

 

9.3

 

%

Provision for loan losses

31,213

 

6,384

 

 

388.9

 

%

Other income

90,008

 

72,969

 

 

23.4

 

%

Other expense

200,934

 

192,757

 

 

4.2

 

%

Income before income taxes

$

99,170

 

$

94,556

 

 

4.9

 

%

Income taxes

16,447

 

15,792

 

 

4.1

 

%

Net income

$

82,723

 

$

78,764

 

 

5.0

 

%

 

 

 

 

 

MARKET DATA:

 

 

 

 

Earnings per common share - basic (a)

$

5.07

 

$

4.86

 

 

4.3

 

%

Earnings per common share - diluted (a)

5.04

 

4.84

 

 

4.1

 

%

Cash dividends declared per common share

3.26

 

3.23

 

 

0.9

 

%

 

 

 

 

 

Weighted average common shares - basic (b)

16,300,250

 

16,198,294

 

 

0.6

 

%

Weighted average common shares - diluted (b)

16,398,350

 

16,287,695

 

 

0.7

 

%

 

 

 

 

 

PERFORMANCE RATIOS: (annualized)

 

 

 

 

Return on average assets (a)(b)

1.20

%

1.25

%

 

(4.0

)

%

Return on average shareholders' equity (a)(b)

11.05

%

11.61

%

 

(4.8

)

%

Yield on loans

4.72

%

5.21

%

 

(9.4

)

%

Yield on investment securities

2.62

%

2.77

%

 

(5.4

)

%

Yield on money market instruments

0.31

%

2.53

%

 

(87.7

)

%

Yield on interest earning assets

4.27

%

4.72

%

 

(9.5

)

%

Cost of interest bearing deposits

0.47

%

1.03

%

 

(54.4

)

%

Cost of borrowings

1.66

%

2.13

%

 

(22.1

)

%

Cost of paying interest bearing liabilities

0.57

%

1.15

%

 

(50.4

)

%

Net interest margin (g)

3.88

%

3.88

%

 

 

%

Efficiency ratio (g)

60.26

%

65.14

%

 

(7.5

)

%

 

 

 

 

 

ASSET QUALITY RATIOS:

 

 

 

 

Net loan charge-offs

$

854

 

$

2,043

 

 

(58.2

)

%

Annualized net loan charge-offs as a % of average loans (b)

0.02

%

0.04

%

 

(50.0

)

%

 

 

 

 

 

CAPITAL & LIQUIDITY:

 

 

 

 

Average shareholders' equity / Average assets (b)

10.85

%

10.80

%

 

0.5

 

%

Average shareholders' equity / Average loans (b)

14.49

%

14.79

%

 

(2.0

)

%

Average loans / Average deposits (b)

90.19

%

90.10

%

 

0.1

 

%

 

 

 

 

 

 

 

 

 

 

Note: Explanations for footnotes (a) - (k) 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)

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

 

Interest income:

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

82,617 

 

 

$

84,213

 

 

$

243,459 

 

 

$

238,687

 

Interest on:

 

 

 

 

 

 

 

 

Obligations of U.S. Government, its agencies

 

 

 

 

 

 

 

 

and other securities - taxable

 

4,841 

 

 

6,326

 

 

15,398 

 

 

20,240

 

Obligations of states and political subdivisions - tax-exempt

 

2,045 

 

 

2,225

 

 

6,396 

 

 

6,750

 

Other interest income

 

63 

 

 

1,825

 

 

667 

 

 

2,994

 

         Total interest income

 

89,566 

 

 

94,589

 

 

265,920 

 

 

268,671

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

Interest on deposits:

 

 

 

 

 

 

 

 

Demand and savings deposits

 

803 

 

 

9,649

 

 

8,652 

 

 

25,553

 

Time deposits

 

2,662 

 

 

4,694

 

 

10,293 

 

 

12,828

 

Interest on borrowings

 

2,261 

 

 

3,145

 

 

5,666 

 

 

9,562

 

      Total interest expense

 

5,726 

 

 

17,488

 

 

24,611 

 

 

47,943

 

 

 

 

 

 

 

 

 

 

         Net interest income

 

83,840 

 

 

77,101

 

 

241,309 

 

 

220,728

 

 

 

 

 

 

 

 

 

 

Provision for loan losses

 

13,836 

 

 

1,967

 

 

31,213 

 

 

6,384

 

 

 

 

 

 

 

 

 

 

         Net interest income after provision for loan losses

 

70,004 

 

 

75,134

 

 

210,096 

 

 

214,344

 

 

 

 

 

 

 

 

 

 

Other income

 

36,558 

 

 

28,136

 

 

90,008 

 

 

72,969

 

 

 

 

 

 

 

 

 

 

Other expense

 

69,859 

 

 

65,738

 

 

200,934 

 

 

192,757

 

 

 

 

 

 

 

 

 

 

         Income before income taxes

 

36,703 

 

 

37,532

 

 

99,170 

 

 

94,556

 

 

 

 

 

 

 

 

 

 

Income taxes

 

5,857 

 

 

6,386

 

 

16,447 

 

 

15,792

 

 

 

 

 

 

 

 

 

 

         Net income

 

$

30,846 

 

 

$

31,146

 

 

$

82,723 

 

 

$

78,764

 

 

 

 

 

 

 

 

 

 

Per common share:

 

 

 

 

 

 

 

 

         Net income  - basic

 

$

1.89 

 

 

$

1.90

 

 

$

5.07 

 

 

$

4.86

 

         Net income  - diluted

 

$

1.88 

 

 

$

1.89

 

 

$

5.04 

 

 

$

4.84

 

 

 

 

 

 

 

 

 

 

         Weighted average shares - basic

 

16,300,720 

 

 

16,382,798

 

 

16,300,250 

 

 

16,198,294

 

         Weighted average shares - diluted

 

16,393,792 

 

 

16,475,741

 

 

16,398,350 

 

 

16,287,695

 

 

 

 

 

 

 

 

 

 

        Cash dividends declared

 

$

1.02 

 

 

$

1.01

 

 

$

3.26 

 

 

$

3.23

 



PARK NATIONAL CORPORATION 

Consolidated Balance Sheets

 

 

 

(in thousands, except share data)

September 30, 2020

December 31, 2019

 

 

 

Assets

 

 

 

 

 

Cash and due from banks

$

110,774 

 

 

$

135,567

 

 

Money market instruments

135,935 

 

 

24,389

 

 

Investment securities

1,097,598 

 

 

1,279,507

 

 

Loans

7,278,546 

 

 

6,501,404

 

 

Allowance for loan losses

(87,038

)

 

(56,679

)

 

Loans, net

7,191,508 

 

 

6,444,725

 

 

Bank premises and equipment, net

85,287 

 

 

73,322

 

 

Goodwill and other intangible assets

169,380 

 

 

171,118

 

 

Other real estate owned

836 

 

 

4,029

 

 

Other assets

448,688 

 

 

425,720

 

 

Total assets

$

9,240,006 

 

 

$

8,558,377

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

Deposits:

 

 

Noninterest bearing

$

2,579,335 

 

 

$

1,959,935

 

 

Interest bearing

4,896,494 

 

 

5,092,677

 

 

Total deposits

7,475,829 

 

 

7,052,612

 

 

Borrowings

643,103 

 

 

438,157

 

 

Other liabilities

104,078 

 

 

98,594

 

 

Total liabilities

$

8,223,010 

 

 

$

7,589,363

 

 

 

 

 

 

 

 

Shareholders' Equity:

 

 

Preferred shares (200,000 shares authorized; no shares outstanding at September 30, 2020 and December 31, 2019)

$

 

 

 

$

 

 

Common shares (No par value; 20,000,000 shares authorized; 17,623,179 shares issued at September 30, 2020 and 17,623,199 shares issued at December 31, 2019)

458,440 

 

 

459,389

 

 

Accumulated other comprehensive income (loss), net of taxes

14,200 

 

 

(9,589

)

 

Retained earnings

676,465 

 

 

646,847

 

 

Treasury shares (1,322,416 shares at September 30, 2020 and 1,276,757 shares at December 31, 2019)

(132,109

)

 

(127,633

)

 

Total shareholders' equity

$

1,016,996 

 

 

$

969,014

 

 

Total liabilities and shareholders' equity

$

9,240,006 

 

 

$

8,558,377

 

 



PARK NATIONAL CORPORATION 

 

 

 

Consolidated Average Balance Sheets

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

Sept 30

 

Sept 30

(in thousands)

2020

2019

 

2020

2019

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

121,973 

 

 

$

147,156

 

 

 

$

129,436 

 

 

$

130,799

 

 

Money market instruments

223,563 

 

 

298,441

 

 

 

286,909 

 

 

158,395

 

 

Investment securities

1,330,520 

 

 

1,339,292

 

 

 

1,264,381 

 

 

1,380,629

 

 

Loans

7,247,021 

 

 

6,371,323

 

 

 

6,904,900 

 

 

6,133,386

 

 

Allowance for loan losses

(74,718

)

 

(54,867

)

 

 

(64,942

)

 

(53,711

)

 

Loans, net

7,172,303 

 

 

6,316,456

 

 

 

6,839,958 

 

 

6,079,675

 

 

Bank premises and equipment, net

83,609 

 

 

73,077

 

 

 

79,557 

 

 

68,437

 

 

Goodwill and other intangible assets

169,726 

 

 

174,027

 

 

 

170,311 

 

 

153,182

 

 

Other real estate owned

1,299 

 

 

3,845

 

 

 

2,616 

 

 

4,132

 

 

Other assets

454,689 

 

 

433,398

 

 

 

443,327 

 

 

426,438

 

 

Total assets

$

9,557,682 

 

 

$

8,785,692

 

 

 

$

9,216,495 

 

 

$

8,401,687

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

Noninterest bearing

$

2,565,417 

 

 

$

1,901,024

 

 

 

$

2,306,355 

 

 

$

1,840,153

 

 

Interest bearing

5,309,718 

 

 

5,287,851

 

 

 

5,350,009 

 

 

4,967,106

 

 

Total deposits

7,875,135 

 

 

7,188,875

 

 

 

7,656,364 

 

 

6,807,259

 

 

Borrowings

552,452 

 

 

553,595

 

 

 

455,127 

 

 

599,223

 

 

Other liabilities

109,856 

 

 

98,077

 

 

 

104,763 

 

 

87,984

 

 

Total liabilities

$

8,537,443 

 

 

$

7,840,547

 

 

 

$

8,216,254 

 

 

$

7,494,466

 

 

 

 

 

 

 

 

Shareholders' Equity:

 

 

 

 

 

Preferred shares

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

Common shares

457,571 

 

 

457,029

 

 

 

457,953 

 

 

424,213

 

 

Accumulated other comprehensive income (loss), net of taxes

15,400 

 

 

(26,010

)

 

 

8,712 

 

 

(36,383

)

 

Retained earnings

679,519 

 

 

638,639

 

 

 

665,808 

 

 

628,463

 

 

Treasury shares

(132,251

)

 

(124,513

)

 

 

(132,232

)

 

(109,072

)

 

Total shareholders' equity

$

1,020,239 

 

 

$

945,145

 

 

 

$

1,000,241 

 

 

$

907,221

 

 

Total liabilities and shareholders' equity

$

9,557,682 

 

 

$

8,785,692

 

 

 

$

9,216,495 

 

 

$

8,401,687

 

 



PARK NATIONAL CORPORATION 

Consolidated Statements of Income - Linked Quarters

 

 

 

 

 

 

 

2020

2020

2020

2019

2019

(in thousands, except per share data)

3rd QTR

2nd QTR

1st QTR

4th QTR

3rd QTR

 

 

 

 

 

 

Interest income:

 

 

 

 

 

Interest and fees on loans

$

82,617 

 

$

80,155

 

$

80,687

 

$

82,698

 

 

$

84,213

 

Interest on:

 

 

 

 

 

Obligations of U.S. Government, its agencies and other securities - taxable

4,841 

 

5,026

 

5,531

 

5,973

 

 

6,326

 

Obligations of states and political subdivisions - tax-exempt

2,045 

 

2,151

 

2,200

 

2,205

 

 

2,225

 

Other interest income

63 

 

113

 

491

 

953

 

 

1,825

 

Total interest income

89,566 

 

87,445

 

88,909

 

91,829

 

 

94,589

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

Interest on deposits:

 

 

 

 

 

Demand and savings deposits

803 

 

1,507

 

6,342

 

7,795

 

 

9,649

 

Time deposits

2,662 

 

3,346

 

4,285

 

4,666

 

 

4,694

 

Interest on borrowings

2,261 

 

1,406

 

1,999

 

2,359

 

 

3,145

 

Total interest expense

5,726 

 

6,259

 

12,626

 

14,820

 

 

17,488

 

 

 

 

 

 

 

Net interest income

83,840 

 

81,186

 

76,283

 

77,009

 

 

77,101

 

 

 

 

 

 

 

Provision for (recovery of) loan losses

13,836 

 

12,224

 

5,153

 

(213

)

 

1,967

 

 

 

 

 

 

 

Net interest income after provision for (recovery of) loan losses

70,004 

 

68,962

 

71,130 77,222 75,134 Other income36,558 30,964 22,486 24,224 28,136 Other expense69,859 64,799 66,276 71,231 65,738 Income before income taxes36,703 35,127 27,340 30,215 37,532 Income taxes5,857 5,622 4,968 6,279 6,386 Net income $30,846 $29,505 $22,372 $23,936 $31,146 Per common share: Net income - basic$1.89 $1.81 $1.37 $1.46 $1.90 Net income - diluted$1.88 $1.80 $1.36 $1.45 $1.89



PARK NATIONAL CORPORATION

Detail of other income and other expense - Linked Quarters

2020

2020

2020

2019

2019

(in thousands)

3rd QTR

2nd QTR

1st QTR

4th QTR

3rd QTR

Other income:

Income from fiduciary activities

$

7,335

$

6,793

$

7,113

$

7,268

$

6,842

Service charges on deposit accounts

2,118

1,676

2,528

2,757

2,864

Other service income

13,047

8,758

3,766

4,382

4,260

Debit card fee income

5,853

5,560

4,960

5,341

5,313

Bank owned life insurance income

1,192

1,179

1,248

1,158

1,107

ATM fees

491

438

412

446

482

Gain (loss) on the sale of OREO, net

569

841

(196

)

2

(53

)

Net (loss) gain on the sale of investment securities

(27

)

3,313

186

Gain (loss) on equity securities, net

1,201

(977

)

(973

)

(191

)

3,335

Other components of net periodic benefit income

1,988

1,988

1,988

1,183

1,183

Miscellaneous

2,791

1,395

1,640

1,878

2,617

Total other income

$

36,558

$

30,964

$

22,486

$

24,224

$

28,136

Other expense:

Salaries

$

31,632

$

30,699

$

28,429

$

30,903

$

30,713

Employee benefits

10,676

9,080

10,043

8,973

10,389

Occupancy expense

3,835

3,256

3,480

3,355

3,226

Furniture and equipment expense

4,687

4,850

4,319

4,319

4,177

Data processing fees

3,275

2,577

2,492

2,777

2,935

Professional fees and services

7,977

6,901

7,066

10,503

6,702

Marketing

1,454

1,136

1,486

1,468

1,604

Insurance

1,541

1,477

1,550

317

276

Communication

958

874

1,155

1,256

1,387

State tax expense

1,125

1,116

1,145

1,024

746

Amortization of intangible assets

525

607

606

623

741

Miscellaneous

2,174

2,226

4,505

5,713

2,842

Total other expense

$

69,859

$

64,799

$

66,276

$

71,231

$

65,738



PARK NATIONAL CORPORATION

Asset Quality Information

Year ended December 31,

(in thousands, except ratios)

September 30,
2020

June 30, 2020

March 31,
2020

2019

2018

2017

2016

Allowance for loan losses:

Allowance for loan losses, beginning of period

$

73,476

$

61,503

$

56,679

$

51,512

$

49,988

$

50,624

$

56,494

Charge-offs

1,529

2,130

2,685

11,177

13,552

19,403

20,799

Recoveries

1,255

1,879

2,356

10,173

7,131

10,210

20,030

Net charge-offs

274

251

329

1,004

6,421

9,193

769

Provision for (recovery of) loan losses

13,836

12,224

5,153

6,171

7,945

8,557

(5,101

)

Allowance for loan losses, end of period

$

87,038

$

73,476

$

61,503

$

56,679

$

51,512

$

49,988

$

50,624

General reserve trends:

Allowance for loan losses, end of period

$

87,038

$

73,476

$

61,503

$

56,679

$

51,512

$

49,988

$

50,624

Allowance on purchased credit impaired ("PCI") loans

103

106

119

268

Allowance on purchased loans

371

25

Specific reserves

8,666

5,808

5,531

5,230

2,273

684

548

General reserves on originated loans

$

77,898

$

67,537

$

55,853

$

51,181

$

49,239

$

49,304

$

50,076

Total loans

$

7,278,546

$

7,204,445

$

6,522,519

$

6,501,404

$

5,692,132

$

5,372,483

$

5,271,857

PCI loans

11,877

12,569

13,765

14,331

3,943

Purchased loans

393,752

440,803

489,843

548,436

225,029

Impaired commercial loans

116,138

91,724

85,646

77,459

48,135

56,545

70,415

Originated loans excluding impaired commercial loans

$

6,762,779

$

6,659,349

$

5,933,265

$

5,861,178

$

5,415,025

$

5,315,938

$

5,201,442

Asset Quality Ratios:

Net charge-offs as a % of average loans (annualized)

0.02

%

0.01

%

0.02

%

0.02

%

0.12

%

0.17

%

0.02

%

Allowance for loan losses as a % of period end loans

1.20

%

1.02

%

0.94

%

0.87

%

0.90

%

0.93

%

0.96

%

Allowance for loan losses on originated loans as % of originated total loans (excluding PPP loans) (k)

1.36

%

1.17

%

N.A.

N.A.

N.A.

N.A.

N.A.

General reserve as a % of originated total loans less impaired commercial loans

1.15

%

1.01

%

0.94

%

0.87

%

0.91

%

0.93

%

0.96

%

General reserves as a % of originated total loans less impaired commercial loans (excluding PPP loans) (k)

1.24

%

1.10

%

N.A.

N.A.

N.A.

N.A.

N.A.

Nonperforming assets:

Nonaccrual loans

$

123,050

$

100,406

$

90,354

$

90,080

$

67,954

$

72,056

$

87,822

Accruing troubled debt restructurings

23,774

23,948

27,168

21,215

15,173

20,111

18,175

Loans past due 90 days or more

1,618

1,690

1,789

2,658

2,243

1,792

2,086

Total nonperforming loans

$

148,442

$

126,044

$

119,311

$

113,953

$

85,370

$

93,959

$

108,083

Other real estate owned - Park National Bank

242

427

2,671

3,100

2,788

6,524

6,025

Other real estate owned - SEPH

594

929

929

929

1,515

7,666

7,901

Other nonperforming assets - Park National Bank

3,392

3,599

3,599

3,599

3,464

4,849

Total nonperforming assets

$

152,670

$

130,999

$

126,510

$

121,581

$

93,137

$

112,998

$

122,009

Percentage of nonaccrual loans to period end loans

1.69

%

1.39

%

1.39

%

1.39

%

1.19

%

1.34

%

1.67

%

Percentage of nonperforming loans to period end loans

2.04

%

1.75

%

1.83

%

1.75

%

1.50

%

1.75

%

2.05

%

Percentage of nonperforming assets to period end loans

2.10

%

1.82

%

1.94

%

1.87

%

1.64

%

2.10

%

2.31

%

Percentage of nonperforming assets to period end total assets

1.65

%

1.35

%

1.45

%

1.42

%

1.19

%

1.50

%

1.63

%

Note: Explanations for footnotes (a) - (k) 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, 2020

June 30, 2020

March 31, 2020

2019

2018

2017

2016

New nonaccrual loan information:

Nonaccrual loans, beginning of period

$

100,406

$

90,354

$

90,080

$

67,954

$

72,056

$

87,822

$

95,887

New nonaccrual loans

38,631

21,995

21,651

81,009

76,611

58,753

74,786

Resolved nonaccrual loans

15,987

11,943

21,377

58,883

80,713

74,519

82,851

Nonaccrual loans, end of period

$

123,050

$

100,406

$

90,354

$

90,080

$

67,954

$

72,056

$

87,822

Impaired commercial loan portfolio information (period end):

Unpaid principal balance

$

116,701

$

92,374

$

86,379

$

78,178

$

59,381

$

66,585

$

95,358

Prior charge-offs

563

650

733

719

11,246

10,040

24,943

Remaining principal balance

116,138

91,724

85,646

77,459

48,135

56,545

70,415

Specific reserves

8,666

5,808

5,531

5,230

2,273

684

548

Book value, after specific reserves

$

107,472

$

85,916

$

80,115

$

72,229

$

45,862

$

55,861

$

69,867



PARK NATIONAL CORPORATION

Financial Reconciliations

NON-GAAP RECONCILIATIONS

THREE MONTHS ENDED

NINE MONTHS ENDED

(in thousands, except share and per share data)

September 30,
2020

June 30, 2020

September 30,
2019

September 30,
2020

September 30,
2019

Net interest income

$

83,840

$

81,186

$

77,101

$

241,309

$

220,728

less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions

1,071

1,301

1,967

3,750

3,839

less interest income on former Vision Bank relationships

8

266

351

7

Net interest income - adjusted

$

82,761

$

79,619

$

75,134

$

237,208

$

216,882

Provision for loan losses

$

13,836

$

12,224

$

1,967

$

31,213

$

6,384

less recoveries on former Vision Bank relationships

(37

)

(685

)

(575

)

(1,486

)

(740

)

Provision for loan losses - adjusted

$

13,873

$

12,909

$

2,542

$

32,699

$

7,124

Other income

$

36,558

$

30,964

$

28,136

$

90,008

$

72,969

less net gain (loss) on sale of former Vision Bank OREO properties

371

837

1,208

(139

)

less rebranding initiative related expenses

(274

)

(274

)

less net (loss) gain on the sale of debt securities in the ordinary course of business

(27

)

3,313

186

3,286

(421

)

Other income - adjusted

$

36,214

$

27,088

$

27,950

$

85,788

$

73,529

Other expense

$

69,859

$

64,799

$

65,738

$

200,934

$

192,757

less merger-related expenses related to NewDominion and Carolina Alliance acquisitions

163

214

658

620

6,992

less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions

525

607

741

1,738

1,732

less FDIC assessment credit

(1,057

)

(1,057

)

less management and consulting expenses related to collection of payments on former Vision Bank loan relationships

232

232

less FHLB prepayment penalty

120

1,793

120

less rebranding initiative related expenses

429

138

139

837

341

less COVID-19 related expenses (j)

744

1,878

2,884

Other expense - adjusted

$

67,766

$

61,962

$

65,137

$

192,830

$

184,629

Tax effect of adjustments to net income identified above (i)

$

133

$

(691

)

$

(447

)

$

(358

)

$

861

Net income - reported

$

30,846

$

29,505

$

31,146

$

82,723

$

78,764

Net income - adjusted

$

31,346

$

26,905

$

29,446

$

81,378

$

82,005

Diluted EPS

$

1.88

$

1.80

$

1.89

$

5.04

$

4.84

Diluted EPS, adjusted (h)

$

1.91

$

1.64

$

1.79

$

4.96

$

5.03

Annualized return on average assets (a)(b)

1.28

%

1.26

%

1.41

%

1.20

%

1.25

%

Annualized return on average assets, adjusted (a)(b)(h)

1.30

%

1.15

%

1.33

%

1.18

%

1.30

%

Annualized return on average tangible assets (a)(b)(e)

1.31

%

1.28

%

1.43

%

1.22

%

1.28

%

Annualized return on average tangible assets, adjusted (a)(b)(e)(h)

1.33

%

1.17

%

1.36

%

1.20

%

1.33

%

Annualized return on average shareholders' equity (a)(b)

12.03

%

11.89

%

13.07

%

11.05

%

11.61

%

Annualized return on average shareholders' equity, adjusted (a)(b)(h)

12.22

%

10.84

%

12.37

%

10.87

%

12.09

%

Annualized return on average tangible equity (a)(b)(c)

14.43

%

14.33

%

16.02

%

13.31

%

13.97

%

Annualized return on average tangible equity, adjusted (a)(b)(c)(h)

14.66

%

13.07

%

15.16

%

13.10

%

14.54

%

Efficiency ratio (g)

57.69

%

57.41

%

62.03

%

60.26

%

65.14

%

Efficiency ratio, adjusted (g)(h)

56.62

%

57.68

%

62.74

%

59.30

%

63.09

%

Annualized net interest margin (g)

3.85

%

3.84

%

3.86

%

3.88

%

3.88

%

Annualized net interest margin, adjusted (g)(h)

3.80

%

3.77

%

3.76

%

3.81

%

3.81

%



PARK NATIONAL CORPORATION

Financial Reconciliations (continued)

(a) Reported measure uses net income

(b) Averages are for the three months ended September 30, 2020, June 30, 2020, and September 30, 2019 and the nine months ended September 30, 2020 and September 30, 2019.

(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, 2020

June 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019

AVERAGE SHAREHOLDERS' EQUITY

$

1,020,239

$

998,288

$

945,145

$

1,000,241

$

907,221

Less: Average goodwill and other intangible assets

169,726

170,303

174,027

170,311

153,182

AVERAGE TANGIBLE EQUITY

$

850,513

$

827,985

$

771,118

$

829,930

$

754,039

(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, 2020

June 30, 2020

September 30, 2019

TOTAL SHAREHOLDERS' EQUITY

$

1,016,996

$

1,001,594

$

956,140

Less: Goodwill and other intangible assets

169,380

169,905

173,489

TANGIBLE EQUITY

$

847,616

$

831,689

$

782,651

(e) Net income for each period divided by average tangible assets during the period. Average tangible assets equals 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, 2020

June 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019

AVERAGE ASSETS

$

9,557,682

$

9,408,265

$

8,785,692

$

9,216,495

$

8,401,687

Less: Average goodwill and other intangible assets

169,726

170,303

174,027

170,311

153,182

AVERAGE TANGIBLE ASSETS

$

9,387,956

$

9,237,962

$

8,611,665

$

9,046,184

$

8,248,505

(f) Tangible equity divided by tangible assets. Tangible assets equals 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, 2020

June 30, 2020

September 30, 2019

TOTAL ASSETS

$

9,240,006

$

9,712,994

$

8,723,610

Less: Goodwill and other intangible assets

169,380

169,905

173,489

TANGIBLE ASSETS

$

9,070,626

$

9,543,089

$

8,550,121

(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, 2020

June 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019

Interest income

$

89,566

$

87,445

$

94,589

$

265,920

$

268,671

Fully taxable equivalent adjustment

706

723

744

2,154

2,230

Fully taxable equivalent interest income

$

90,272

$

88,168

$

95,333

$

268,074

$

270,901

Interest expense

5,726

6,259

17,488

24,611

47,943

Fully taxable equivalent net interest income

$

84,546

$

81,909

$

77,845

$

243,463

$

222,958

(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, provision for loan losses, other income and other expense above.

(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 $542.8 million and $543.1 million of PPP loans at September 30, 2020 and June 30, 2020, respectively.

CONTACT: 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