Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported) October 18,
2010
Park
National Corporation
(Exact
name of registrant as specified in its charter)
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Ohio
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1-13006
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31-1179518
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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50
North Third Street, P.O. Box 3500, Newark, Ohio
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43058-3500
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(Address
of principal executive offices)
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(Zip
Code)
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(Registrant’s
telephone number, including area code)
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 2.02 – Results of
Operations and Financial Condition
On
October 18, 2010, Park National Corporation (“Park”) issued a news release (the
“Financial Results News Release”) announcing financial results for the three and
nine months ended September 30, 2010. A copy of this Financial
Results News Release is included as Exhibit 99.1 to this Current Report on Form
8-K and incorporated by reference herein.
Park’s
management uses certain non-GAAP (generally accepted accounting principles)
financial measures to evaluate Park’s performance. Specifically, management
reviews the annualized return on average tangible common equity, the annualized
return on average tangible assets, tangible common equity to tangible assets and
tangible common book value per common share. Management has included
in the Financial Results News Release information relating to the annualized
return on average tangible common equity, the annualized return on average
tangible assets, tangible common equity to tangible assets and tangible common
book value per common share for the three and nine month periods ended September
30, 2010 and 2009. For purposes of calculating the annualized return
on average tangible common equity, a non-GAAP financial measure, net income
available to common shareholders for each period is divided by average tangible
common equity during the period. Average tangible common equity equals average
stockholders’ equity during the applicable period less (i) average goodwill
and other intangible assets during the applicable period and (ii) average
preferred stock during the applicable period. For the purpose of calculating the
annualized return on average tangible assets, a non-GAAP financial measure, net
income available to common shareholders for each period is divided by average
tangible assets during the period. Average tangible assets equals
average assets during the applicable period less average goodwill and other
intangible assets during the applicable period. For the purpose of
calculating tangible common equity to tangible assets, a non-GAAP financial
measure, tangible common equity is divided by tangible
assets. Tangible common equity equals stockholders’ equity less
preferred stock and goodwill and intangible assets. Tangible assets
equals total assets less goodwill and intangible assets. For the
purpose of calculating tangible common book value per common share, a non-GAAP
financial measure, tangible common equity is dividend by common shares
outstanding at period end. Management believes that the disclosure of
the annualized return on average tangible common equity, the annualized return
on average tangible assets, tangible common equity to tangible assets and
tangible common book value per common share presents additional information to
the reader of the consolidated financial statements, which, when read in
conjunction with the consolidated financial statements prepared in accordance
with GAAP, assists in analyzing Park’s operating performance and ensures
comparability of operating performance from period to period while eliminating
certain non-operational effects of acquisitions and, in the case of return on
average common equity and tangible common book value per common share, the
impact of preferred stock. In the Financial Results News Release,
Park has provided a reconciliation of average tangible common equity to average
stockholders’ equity, average tangible assets to average assets, tangible common
equity to stockholders’ equity and tangible assets to total assets solely for
the purpose of complying with SEC Regulation G and not as an indication
that return on average tangible common equity, return on average tangible
assets, tangible common equity to tangible assets or tangible common book value
per common share are substitutes for return on average equity, return on average
assets, common equity to assets or common book value per common share as
determined by GAAP.
Item 7.01 — Regulation
FD Disclosure
The
following is a discussion of the actual financial results for the three and nine
month periods ended September 30, 2010, and a comparison of management’s latest
projections for the twelve months ending December 31, 2010 to the guidance
previously provided within the Form 10-Q for the quarterly period ended June 30,
2010 (the “June 30, 2010 Form 10-Q”).
Net Interest
Income:
For the
third quarter of 2010, net interest income was $69.4 million and for the nine
months ended September 30, 2010, net interest income was $205.5
million. In the June 30, 2010 Form 10-Q, management projected that
net interest income would be a little higher than the middle of the range
between $265 million to $275 million for 2010, which remains unchanged through
the date of this Current Report on Form 8-K. For the nine months
ended September 30, 2010, loans increased by $16.5 million or an annualized 0.5
percent. In the June 30, 2010 Form 10-Q, management projected
continued slow loan growth for the twelve months ended December 31, 2010
compared to the same period in 2009, due to continued soft demand for
loans. Net interest income through September 30, 2010 was in line
with management’s
expectations.
Provision for Loan
Losses:
For the
three months ended September 30, 2010, the provision for loan losses was $14.7
million and net loan charge-offs were $17.9 million. For the nine months ended
September 30, 2010, the provision for loan losses was $44.5 million and net loan
charge-offs were $43.8 million. In the June 30, 2010 Form 10-Q,
management projected that the provision for loan losses would be approximately
$55 million to $60 million in 2010. Management continues to project
that the provision for loan losses will be approximately $55 million to $60
million in 2010. In light of some uncertainty regarding the impact the oil spill
may have on the Gulf of Mexico region and our Vision Bank subsidiary, to the
best of our knowledge, management continues to believe the outlook for 2010 will
be consistent with this guidance. Park and Vision Bank management
continue to work very closely with those borrowers who could be impacted by the
oil spill, assisting them through the claims process and assessing their
continued ability to repay contractual principal and interest.
Other
Income:
For the
third quarter of 2010, total other income was $17.5 million and for the first
nine months of 2010, total other income was $50.9 million. In the
June 30, 2010 Form 10-Q, management projected that total other income, excluding
gains from the sale of securities, would be approximately $68 million for
2010. Total other income through September 30, 2010 was in line with
management’s projected results for 2010 and management’s latest projections
continue to be in line with the guidance provided in the June 30, 2010 Form
10-Q.
Gain on Sale of
Securities:
In the
Annual Report to Shareholders for the fiscal year ended December 31, 2009, on
page 39, management projected that a pre-tax gain of $7.3 million would be
recognized from the sale of $200 million of securities during the first quarter
of 2010. During the first quarter of 2010, Park actually sold $201 million of
investment securities for a pre-tax gain of $8.3 million. During the
second quarter of 2010, Park sold $56.8 million of investment securities for a
pre-tax gain of $3.5 million. There were no gains or losses on the
sale of securities during the third quarter of 2010. Management does not
currently expect any gains or losses on the sale of securities in the remainder
of 2010.
Other
Expense:
For the
three months ended September 30, 2010, total other expense was $45.7 million and
was $140.6 million for the nine months ended September 30, 2010. In
the June 30, 2010 Form 10-Q, management projected that total other expense would
be $191 million in 2010. Total other expense for the first nine
months of 2010 was slightly improved compared to management’s projected results
for 2010. Management’s latest projections for total other expense are
approximately $188 million to $190 million for 2010.
SAFE HARBOR STATEMENT
UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This
Current Report on Form 8-K, including Exhibit 99.1 included within this Current
Report, contains forward-looking statements that are provided to assist in the
understanding of anticipated future financial performance. Forward-looking
statements provide current expectations or forecasts of future events and are
not guarantees of future performance. The forward-looking statements are based
on management’s expectations and are subject to a number of risks and
uncertainties. We have tried, wherever possible, to identify such statements by
using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,”
“believe,” “will” and similar expressions in connection with any discussion of
future operating or financial performance. 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: deterioration in the asset value of
Park’s loan portfolio may be worse than expected due to a number of factors,
such as adverse changes in economic conditions that impair the ability of
borrowers to repay their loans, the underlying value of the collateral could
prove less valuable than assumed and cash flows may be worse than expected;
Park’s ability to execute its business plan successfully and within the expected
timeframe; general economic and financial market conditions, and weakening in
the economy, specifically, the real estate market and credit market, either
nationally or in the states in which Park and its subsidiaries do business, may
be worse than expected which could decrease the demand for loan, deposit and
other financial services and increase loan delinquencies and defaults; the
effects of the Gulf of Mexico oil spill; changes in market 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;
changes in consumer spending, borrowing and saving habits; our liquidity
requirements could be adversely affected by changes in our assets and
liabilities; competitive factors among financial institutions increase
significantly, including product and pricing pressures and our ability to
attract, develop and retain qualified bank professionals; the nature, timing and
effect of changes in banking regulations or other regulatory or legislative
requirements affecting the respective businesses of Park and its subsidiaries,
including changes in laws and regulations concerning taxes, accounting, banking,
securities and other aspects of the financial services industry, specifically
the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; the
effect of fiscal and governmental policies of the United States federal
government; demand for loans in the respective market areas served by Park and
its subsidiaries, and other risk factors relating to the banking industry as
detailed from time to time in Park’s reports filed with the Securities and
Exchange Commission 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,
2009 and in "Item 1A. Risk Factors" of Part II of Park's Quarterly Reports on
Form 10-Q for the quarterly periods ended March 31, 2010 and June 30,
2010. Undue reliance should not be placed on the forward-looking
statements, which speak only as of the date of this Current Report on Form 8-K.
Park does not undertake, and specifically disclaims any obligation, to publicly
release the result 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 is 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 October 18, 2010, 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 December 10, 2010 to common
shareholders of record as of the close of business on November 24,
2010. A copy of the Financial Results News Release is included as
Exhibit 99.1 and the portion thereof addressing the declaration of the cash
dividend by Park’s Board of Directors is incorporated by reference
herein.
Item 9.01 – Financial
Statements and Exhibits.
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(d)
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Exhibits. The
following exhibit is included with this Current Report on Form
8-K:
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Exhibit No.
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Description
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99.1
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News
Release issued by Park National Corporation on October 18, 2010 addressing
financial results for the three and nine months ended September 30,
2010.
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[Remainder
of page intentionally left blank;
signature
on following page.]
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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PARK
NATIONAL CORPORATION
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Dated:
October 18, 2010
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By:
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/s/ John W. Kozak
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John
W. Kozak
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Chief
Financial Officer
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INDEX TO
EXHIBITS
Current
Report on Form 8-K
Dated
October 18, 2010
Park
National Corporation
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Exhibit No.
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Description
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99.1
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News Release issued by
Park National Corporation on October 18, 2010 addressing financial results
for the three and nine months ended September 30,
2010. |