Park National Corporation Announces 2009 Financial Results and Declares Quarterly Cash Dividend

NEWARK, Ohio, Jan. 25, 2010 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE Amex:PRK) today reported operating results for the three months ended December 31, 2009 (fourth quarter) and the twelve months ended December 31, 2009 (2009 year). In 2009, Park experienced loan growth, deposit growth, and an increase in net income in Ohio. Park's board of directors also today declared a $0.94 per common share quarterly cash dividend, payable on March 10, 2010 to common shareholders of record as of February 26, 2010. 

Park Chairman C. Daniel DeLawder credited Park associates for 2009 results. "In one of the most difficult and challenging banking environments we've ever experienced, we are very pleased to report an increase in net income, growth in loans and deposits, and the ability to continue paying significant dividends to our shareholders," he said. "Our associates worked harder than ever resulting in performance levels that compare very favorably with industry trends and conditions."

Income, Loan and Deposit Data

For the 2009 year, Park's net income was $74.2 million or $4.82 per diluted common share. Net income for the 2009 fourth quarter was $12.3 million or $0.74 per diluted common share.

In 2008, Park recorded a goodwill impairment charge of $55.0 million at Vision Bank, significantly impacting earnings and comparability between years. For the 2008 year, Park reported net income of $13.7 million, or $0.97 per diluted common share. Without the goodwill impairment charge, Park's net income for 2008 would have been $68.7 million, or $4.91 per diluted common share. Net income for the fourth quarter of 2008 was $11.0 million or $0.77 per diluted common share.

Park's Ohio-based operations reported $104.3 million in net income for the 2009 year, a $9.4 million increase over net income of $94.9 million for 2008. Park grew loans by $149.1 million (3.32 percent) and deposits by $426.3 million (8.95 percent) for the 2009 year.

Park's loan loss provision for the 2009 year was $68.8 million, compared to $70.5 million for 2008. Park subsidiary Vision Bank (based in Panama City, Fla.) had a loan loss provision of $44.4 million for the 2009 year, compared to $47.0 million for 2008. Park's Ohio-based operations had a loan loss provision of $24.4 million in the 2009 year, compared to $23.5 million in 2008. Net loan charge-offs for the 2009 year were $52.2 million or 1.14 percent of average loans outstanding. This compares to net loan charge-offs of $57.5 million or 1.32 percent of average loans outstanding in 2008.

Park continues to proactively address current economic conditions within the loan portfolio through increases in the allowance for loan losses. As of December 31, 2009, the allowance for loan losses was $116.7 million, an increase of 16.6 percent over the balance of $100.1 million at December 31, 2008.

Capital Raising Activity

During 2009, Park executed various capital-raising strategies, selling an aggregate of 904,072 common shares at a purchase price of $61.20 per average weighted share, for gross proceeds of $55.3 million. In addition, Park raised $35.25 million through the issuance of 10 percent Subordinated Notes due December 23, 2019 (which qualify for Tier 2 Capital treatment under the Federal Reserve Board's risk-based capital guidelines). The gross proceeds from Park's 2009 capital raises totaled $90.55 million. Net of all selling and due diligence expenses, Park raised approximately $89 million.

Prior to these transactions, Park already maintained capital in excess of the federal regulatory requirements to qualify as well capitalized. "Throughout 2009, we executed a disciplined approach to raising additional capital for general corporate purposes and to take advantage of strategic opportunities that may arise in 2010," DeLawder said. According to DeLawder, that could also include partial or complete repayment of Park's $100 million obligation under the U.S. Treasury's Capital Purchase Program.

Other information

• In January 2010, Park sold $200 million of mortgage backed securities. Park expects this transaction to settle in March 2010 and estimates a pre-tax gain on sale of $7.3 million.
• Park's 2009 fourth quarter results included the completed sale of its Visa Class B shares, resulting in a pre-tax gain of approximately $3.0 million.
• Park's 2008 fourth quarter results included the completed sale of its credit card portfolio and merchant processing business, resulting in a pre-tax gain of $11.8 million.

Headquartered in Newark, Ohio, Park National Corporation holds $7.0 billion in total assets (as of December 31, 2009). Park consists of 13 community bank divisions and two specialty finance companies. 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 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) and Guardian Finance Company.

Complete financial tables are included 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 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; our ability to convert our Ohio-based banking divisions into one operating system; 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 concerning taxes, 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, 2008 and in "Item 1A. Risk Factors" of Part II of Park's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. 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.