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)
|
January 24,
2011
|
|
Park
National Corporation
|
|
(Exact
name of registrant as specified in its
charter)
|
|
Ohio
|
|
1-13006
|
|
31-1179518
|
|
(State
or other jurisdiction
|
|
(Commission
|
|
(IRS
Employer
|
|
of
incorporation)
|
|
File
Number)
|
|
Identification
No.)
|
|
50
North Third Street, P.O. Box 3500, Newark, Ohio
|
|
43058-3500
|
|
(Address
of principal executive offices)
|
|
(Zip Code)
|
|
(740)
349-8451
|
|
(Registrant’s
telephone number, including area
code)
|
|
Not
Applicable
|
|
(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:
|
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Item 2.02 – Results of
Operations and Financial Condition
On January 24, 2011, 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, 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 return on average tangible common
equity, 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
return on average tangible common equity, return on average tangible assets,
tangible common equity to tangible assets and tangible common book value per
common share for the three and twelve month periods ended December 31, 2010 and
2009. For purposes of calculating the 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 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 divided by common shares outstanding at period
end. Management believes that the disclosure of return on average
tangible common equity, 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 and tangible common book value per common share are substitutes
for return on average equity, return on average assets, common equity to assets
and common book value per common share, respectively, as determined by
GAAP.
Item 7.01 — Regulation
FD Disclosure
The
following is a discussion of the actual financial results for the three months
and year ended December 31, 2010, and a comparison of these results to the
guidance previously provided within the Form 10-Q for the quarterly period ended
September 30, 2010 (the “September 30, 2010 Form 10-Q”) as well as a comparison
of these results to the original projection included in the Annual Report to
Shareholders for the fiscal year ended December 31, 2009 (the “2009 Annual
Report”). Finally, the following paragraphs also discuss the projected results
for the year ending December 31, 2011.
Net Interest
Income:
For the
fourth quarter of 2010, net interest income was $68.5 million and for the year
ended December 31, 2010, net interest income was $274.0 million. On
page 38 of the 2009 Annual Report, management projected that net interest income
would be between $265 million and $275 million. In the September 30, 2010 Form
10-Q, management projected that net interest income would be in the high end of
the range of $265 million to $275 million for 2010. Net interest
income for the year ended December 31, 2010 was in line with management
expectations. For the year ended December 31, 2010, loans increased
by $92.3 million, or 2.0 percent, which was in line with Management's projection
in the 2009 Annual Report of 1% to 3%. For the year ending December
31, 2011, management expects net interest income to be between $268 million and
$278 million.
Provision for Loan
Losses:
For the
three months ended December 31, 2010, the provision for loan losses was $20.4
million and net loan charge-offs were $16.5 million. For the year ended December
31, 2010, the provision for loan losses was $64.9 million and net loan
charge-offs were $60.2 million. On page 40 of the 2009 Annual Report,
management projected that the provision for loan losses would be between $45
million and $55 million. In the September 30, 2010 Form 10-Q, management
projected that the provision for loan losses would be approximately $55 million
to $60 million in 2010. The actual results for 2010 exceeded the top
end of the range by $4.9 million. Several factors contributed to
this, including the increase in nonaccrual loans, declines in collateral values
for certain loans that are collateral dependent, as well as the potential impact
from the Gulf of Mexico oil spill. 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. During 2010, nonaccrual
loans increased by $55.7 million, primarily due to loans which were deemed
troubled debt restructurings and therefore placed on nonaccrual status. For the
year ended December 31, 2011, management expects the provision for loan losses
will be approximately $47 million to $57 million.
Other
Income:
For the
fourth quarter of 2010, total other income was $14.7 million and for the year
ended December 31, 2010, total other income was $65.6 million, excluding in each
case gains from the sale of securities. On page 39 of the 2009 Annual
Report, management projected that total other income (excluding gains from the
sale of securities) would be $68 million for 2010. In the September
30, 2010 Form 10-Q, management reiterated the same guidance as provided in the
2009 Annual Report. Total other income for the year ended December
31, 2010 was $2.4 million below the latest projection, mainly as a result of
devaluations of other real estate owned. For the year ending December 31, 2011,
management expects other income to be within a range of $63 million to $67
million.
Gain on Sale of
Securities:
On page
39 of the 2009 Annual Report, 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. Additionally, there was a small gain of $45,000 in the
fourth quarter of 2010 from the sale of investment securities. In
total, Park had $11.9 million of pre-tax gains from the sale of investment
securities for the year ended December 31, 2010. Management does not
currently expect any gains or losses on the sale of investment securities during
2011, although at December 31, 2010, Park had a net unrealized gain of $23.3
million in available for sale securities.
Other
Expense:
Total
other expense was $46.5 million for the three months ended December 31, 2010 and
was $187.1 million for the year ended December 31, 2010. On page 39
of the 2009 Annual Report, management projected that total other expense would
be $191 million for 2010. In the September 30, 2010 Form 10-Q,
management projected that total other expense would be between $188 million and
$190 million for 2010. Total other expense for the year ended
December 31, 2010 was $0.9 million less than the low end of the range from the
latest projection. Management expects total other expense to be approximately
$183 million to $187 million for 2011.
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 Report on
Form 10-Q for the quarterly periods ended March 31, 2010, June 30, 2010, and
September 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 January 24, 2010, Park's 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, 2011 to common
shareholders of record as of the close of business on February 25,
2011. 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.
Notification of Date of 2011
Annual Meeting of Shareholders
Park’s Board of Directors took action
to set the date of Park’s 2011 Annual Meeting of Shareholders, which will be
held on April 18, 2011. The record date for determining the common
shareholders entitled to receive notice of and vote at the 2011 Annual Meeting
of Shareholders was also set by Park’s Board of Directors to be the close of
business on February 25, 2011.
Item 9.01 – Financial
Statements and Exhibits.
|
|
(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 24, 2011 addressing
financial results for the three months and year ended December 31,
2010.
|
[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.
|
|
PARK
NATIONAL CORPORATION
|
|
|
|
|
Dated:
January 24, 2011
|
By:
|
/s/ John W. Kozak
|
|
|
|
John
W. Kozak
|
|
|
|
Chief
Financial Officer
|
INDEX TO
EXHIBITS
Current
Report on Form 8-K
Dated
January 24, 2011
Park
National Corporation
|
Exhibit No.
|
|
Description
|
|
99.1
|
|
News
Release issued by Park National Corporation on January 24, 2011 addressing
financial results for the three months and year ended December 31,
2010.
|