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) July 19,
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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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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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 July 19, 2010, Park National
Corporation (“Park”) issued a news release (the “Operating Results News
Release”) announcing operating results for the three and six months ended June
30, 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, tangible common equity to 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,
tangible common equity to tangible assets and tangible common book value per
common share for the three and six month periods ended June 30, 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
period and (ii) average preferred stock during the 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 dividend 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 Operating 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 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
The
following is a discussion of the actual operating results for the first six
months of 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 March 31, 2010 (the “March
31, 2010 Form 10-Q”).
Net Interest
Income:
For the
first six months of 2010, net interest income was $136.1 million. In
the March 31, 2010 Form 10-Q, management had projected that net interest income
would be $265 million to $275 million for 2010. Net interest income
through June 30, 2010 was in line with management expectations. For
the six months ended June 30, 2010, loans increased by $15.6 million or an
annualized 0.7 percent. In the March 31, 2010 Form 10-Q, management
projected slow loan growth of 1% to 2% for the twelve months ended December 31,
2010 compared to the same period in 2009. Management’s current
projection for net interest income ($265 million to $275 million) and loan
growth (1% to 2%) is unchanged from the guidance previously
provided.
Provision for Loan
Losses:
For the
six months ended June 30, 2010, the provision for loan losses was $29.8 million
and net loan charge-offs were $25.8 million. In the March 31, 2010
Form 10-Q, management projected that the provision for loan losses would be
approximately $50 million to $55 million in 2010. The provision for
loan losses for the first six months of 2010 was slightly higher than management
expected. Management now expects 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 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
provided. Park and Vision Bank management are working very closely
with those borrowers who could potentially 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
first six months of 2010, total other income, excluding gains from the sale of
securities, was $33.4 million. In the March 31, 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 June 30, 2010 was in line with management’s projected results for
2010.
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.
Other
Expense:
For the
first six months of 2010, total other expense was $94.9 million. In
the March 31, 2010 Form 10-Q, management projected that total other expense
would be $191 million in 2010. Total other expense for the first six
months of 2010 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 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 period ended March 31, 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 Operating Results
News Release, on July 19, 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 September 10, 2010 to common shareholders of record as of
the close of business on August 25, 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.
Monitoring developments of
the oil spill in the Gulf of Mexico
Park is
monitoring developments of the oil spill in the Gulf of Mexico. The extent of
the potential effects on our customers and the areas in which they operate is
presently being evaluated. Park and Vision Bank management are working very
closely with those borrowers who could potentially be impacted by the oil spill,
assisting them through the claims process. The future effects of the
oil spill could possibly impact Park and our earnings, but until more is known
about the impact on our borrowers, we are unable to determine whether there will
be any negative impact on their ability to repay contractual principal and
interest.
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 July 19, 2010 addressing
operating results for the three and six months ended June 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:
July 19, 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
July 19, 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 July 19, 2010 addressing
operating results for the three and six months ended June 30,
2010.
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