Ohio Banking Divisions Post Record Year Despite U.S. Economic Turbulence
NEWARK, Ohio, Jan. 26, 2009 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE:PRK) today reported results for the fourth quarter 2008 and for the 12 months ended December 31, 2008.
Net income results:
Park's net income for the 12 months ended December 31, 2008 was $13.7 million or $0.97 per common diluted share, compared to $22.7 million or $1.60 per diluted share for the same period in 2007. Park's fourth quarter net income (three months ended December 31, 2008) was $11.0 million or $0.77 per common diluted share. For the same period in 2007, Park reported a net loss of $43.2 million or $3.08 per diluted share.
These data reflect two impairment charges (fourth quarter 2007 and third quarter 2008) that Park recorded to the goodwill value of its subsidiary Vision Bank. Vision Bank operates in the Gulf Shore region of Florida and Alabama and continues to experience severely depressed real estate market values and credit deterioration. An impairment charge is a special accounting entry that does not affect a financial institution's regulatory capital, cash flow or ability to pay dividends. As previously reported, all goodwill value related to Vision Bank was written off.
Without the goodwill impairment charge in the third quarter of 2008, Park's net income available to common shareholders for 2008 was $68.6 million or $4.91 per common diluted share (compared to $76.7 million or $5.40 per diluted share for the 12 months ended December 31, 2007 without the goodwill impairment charge in the fourth quarter of 2007). Without the goodwill impairment charge in the fourth quarter of 2007, Park's net income available to common shareholders for that quarter was $10.9 million or $0.77 per diluted share, compared to $10.8 million or $0.77 per common diluted share in net income in the fourth quarter of 2008.
Park's 12 Ohio-based divisions reported record net income for the 12 months ended December 31, 2008. Net income for this period in 2008 was $94.9 million, a 13.8 percent increase over 2007's year-end net income of $83.4 million for the Ohio-based divisions. As reported on January 9, 2009, Park's loans in Ohio increased by more than $31 million in the past month (November 30, 2008 to December 31, 2008) or ten percent annualized. Park's Ohio-based divisions grew total loans in the year 2008 by more than $215 million, or six percent, compared to 2007.
Loan loss data:
Park's loan loss provisions for the year 2008 totaled $70.5 million compared to $29.5 million for the year 2007. Vision Bank's loan loss provision for 2008 was $47 million (compared to $19.4 million for 2007) and Park's Ohio-based divisions had a loan loss provision of $23.5 million for 2008 (compared to $10.1 million in 2007).
Park's net loan charge-offs for the year ended December 31, 2008 were $57.5 million, or 1.32 percent of total loans. For that same one-year period, Vision Bank had net loan charge-offs of $38.5 million, or 5.69 percent of total loans and Park's Ohio-based divisions had net loan charge-offs of $19.0 million, or 0.52 percent of loans.
Additional information:
On December 23, 2008, Park received $100 million of new equity capital from the U.S. Department of the Treasury's Capital Purchase Program (CPP) established under the Emergency Economic Stabilization Act of 2008. With the additional capital, Park's total equity to assets ratio improved to 9.09 percent at December 31, 2008 compared to a ratio of 7.79 percent at September 30, 2008. Park continues to easily exceed the "well capitalized" regulatory capital guidelines for financial institutions and as a result has a keen interest in continuing to make loans to qualified borrowers.
At its meeting earlier today, the Park board of directors declared a cash dividend for the first quarter of 2009 of $0.94 per share, payable on March 10, 2009 to shareholders of record as of February 26, 2009. This dividend is one cent less than the previous quarter's dividend and is consistent with Park's dividend amount in the quarters prior to October 14, 2008 as required of financial institutions which have received U.S. Treasury investments under the CPP.
Headquartered in Newark, Ohio, Park National Corporation holds $7.1 billion in assets (as of December 31, 2008). Park consists of 14 community bank divisions, a data processing and information technology division, two specialty finance companies and a title company. Park's Ohio-based banking operations are conducted through Park subsidiary The Park National Bank and its divisions which include Fairfield National Bank, Richland Bank, Century National Bank, First-Knox National Bank, Farmers and Savings Bank, United Bank, Second National Bank, Security National Bank, Unity National Bank, Citizens National Bank and The Park National Bank of Southwest Ohio & Northern Kentucky. Park's other banking subsidiary is Vision Bank (headquartered in Panama City, Florida), and its Vision Bank Division (of Gulf Shores, Alabama). Park also includes Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance), Guardian Finance Company and Park Title Agency.
Complete Financial Tables are below...
SAFE HARBOR STATEMENT under the private securities litigation reform act of 1995
This news release 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. 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 Vision Bank'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, either national or in the states in which Park and its subsidiaries do business, are worse than expected; changes in the interest rate environment reduce net interest margins; competitive pressures among financial institutions increase significantly; 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; 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, 2007 and in our other filings with the Securities and Exchange Commission in "Item 1A. Risk Factors" of Part II of Park's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof.
