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) April 16,
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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(740)
349-8451
(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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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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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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o
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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 April 16, 2010, Park National
Corporation (“Park”) issued a news release (the “Operating Results News
Release”) announcing operating results for the three months ended March 31,
2010. A copy of this Operating 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 and tangible common book value per common share. Management
has included in the Operating Results News Release information relating to the
return on average tangible common equity, return on average tangible assets and
tangible common book value per common share for the three-month periods ended
March 31, 2010 and 2009 and December 31, 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 period and
(ii) average preferred stock. 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
book value per common share, a non-GAAP financial measure, tangible common
equity is dividend by common shares outstanding at period
end. Tangible common equity equals stockholders’ equity less
preferred stock and goodwill and other intangibles. Management
believes that the disclosure of return on average tangible common equity, return
on average 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 Operating Results News Release, Park has provided a reconciliation of
average tangible common equity to average stockholders’ equity, average tangible
assets to average assets and tangible common equity to stockholders’ equity
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 or tangible common book value per common share are substitutes
for return on average equity, return on average assets or common book value per
common share as determined by GAAP.
Item 7.01 — Regulation
FD Disclosure
In Park’s
2009 Annual Report to Shareholders (“Annual Report”) (Exhibit 13 to Park’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2009),
management provided guidance on the projected operating results for
2010. This guidance is included in the “Financial Review” section of
the Annual Report on pages 35-40.
The
following is a discussion of the actual operating results for the first three
months of 2010, and a comparison of management’s latest projections for the
twelve months ending December 31, 2010 to the guidance previously provided for
2010.
Net Interest
Income:
For the
first three months of 2010, net interest income was $67.4 million. In
the Annual Report on page 38, management had projected that net interest income
would be $265 million to $275 million for 2010. The first
quarter net interest income was in line to what management had
expected. During the three months ended March 31, 2010, loans
declined by $43.1 million or an annualized 3.8 percent. In the Annual
Report on page 35, management had projected loan growth of 1 percent to 3
percent during 2010. Management expects loans to grow modestly during the
remaining nine months of 2010, with no to very little growth in loans for the
twelve months ended December 31, 2010 compared to the same period in
2009.
Provision for Loan
Losses:
For the
first quarter of 2010, the provision for loan losses was $16.6 million and net
loan charge-offs were $13.6 million. In the Annual Report on page 40,
management had projected that the provision for loan losses would be
approximately $45 million to $55 million in 2010. The provision
for loan losses for the first quarter was higher than management expected,
however, management expects improvement for each of the next three quarters of
2010. Therefore, management now expects that the provision for loan losses will
be approximately $50 million to $55 million in 2010.
Other
Income:
For the
first three months of 2010, total other income was $16.7 million. In
the Annual Report on page 39, management had projected that total other income,
excluding gains from the sale of securities, would be approximately $68 million
for 2010. Total other income for the first quarter was in
line with management’s projections.
Gain on Sale of
Securities:
In the
Annual Report 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 sold
$201 million of investment securities, which resulted in a pre-tax gain of $8.3
million.
Other
Expense:
For the
first quarter of 2010, total other expense was $47.9 million. In the
Annual Report on page 39, management had projected that total other expense
would be $191 million in 2010. Total other expense for the first
quarter was consistent with management’s projected results 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; 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 national 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; 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; 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. 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 Operating Results
News Release, on April 16, 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 June 10, 2010 to common
shareholders of record as of the close of business on May 26, 2010. A
copy of the Operating 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 April 16, 2010 addressing
operating results for the three months ended March 31,
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:
April 16, 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
April 16, 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 April 16, 2010 addressing
operating results for the three months ended March 31, 2010.
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