Dec. 25--While some banks have been mum on how they plan to use federal bailout money, the chairman of Park National Bank insists that its share of the pot will be lent.

The Newark bank will loan the $100 million in equity capital it secured this week from the Treasury Department's Capital Purchase Program, C. Daniel DeLawder said yesterday.

"Our fondest hope is to lend it," he said. "We have had a great year of lending, and now we have every intention of lending this money, as well."

The funding is a small slice of the $250 billion the Treasury Department said it would invest in banks through the capital initiative, which is part of the $700 billion Troubled Asset Relief Program enacted in early October.

The bank said the Treasury Department secured $100 million worth of preferred Park National shares with a warrant to purchase 227,376 common shares at a price of $65.97, with a term of 10 years. The preferred shares will pay a dividend of 5 percent annually for the first five years and 9 percent afterward.

Park joins Huntington Bancshares, JPMorgan Chase, KeyCorp, Fifth Third Bancorp and U.S. Bancorp as locally operating banks that have benefited from the federal bailout. With $6.8 billion in assets, Park is a fraction of the size of those other banks. Park has 18 offices in central Ohio, as well as operations in southwestern Ohio, northern Kentucky, Florida and Alabama.

DeLawder said Park has boosted its loan portfolio by $240 million this year through September, nearly a 6 percent increase. In that respect, he said, Park has "not actually needed" the federal investment.

It hasn't been all clear sailing this year, however. The bank took a third-quarter charge of $55 million to write down good will of its Florida subsidiary Vision Bank, which Park acquired in early 2007. Park said in October that the charge was the result of declining property values and credit tightening in the Gulf Coast.

DeLawder acknowledged that the industry has been hurt a bit because banks won't always commit to how they'll use the bailout money.

"That baffled me, frankly," he said. "My understanding is that banks applied for it to improve their liquidity. Large banks need it to have liquid assets to loan."

mpramik@dispatch.com

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