2013
For the transition period from | to |
Commission File Number | 1-13006 |
Park National Corporation |
(Exact name of registrant as specified in its charter) |
Ohio | 31-1179518 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
50 North Third Street, Newark, Ohio 43055 |
(Address of principal executive offices) (Zip Code) |
(740) 349-8451 |
(Registrant’s telephone number, including area code) |
N/A |
(Former name, former address and former fiscal year, if changed since last report) |
Large accelerated filer | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
(Do not check if a smaller reporting company) |
15,405,902
PARK NATIONAL CORPORATION
CONTENTS
Page | |
PART I. FINANCIAL INFORMATION | |
Item 1. Financial Statements | |
March 31, | December 31, | |||||||
2012 | 2011 | |||||||
Assets: | ||||||||
Cash and due from banks | $ | 121,730 | $ | 137,770 | ||||
Money market instruments | 39,400 | 19,716 | ||||||
Cash and cash equivalents | 161,130 | 157,486 | ||||||
Investment securities | ||||||||
Securities available-for-sale, at fair value (amortized cost of $991,373 and $801,147 at March 31, 2012 and December 31, 2011) | 1,007,481 | 820,645 | ||||||
Securities held-to-maturity, at amortized cost (fair value of $795,075 and $834,574 at March 31, 2012 and December 31, 2011) | 782,250 | 820,224 | ||||||
Other investment securities | 67,604 | 67,604 | ||||||
Total investment securities | 1,857,335 | 1,708,473 | ||||||
Loans | 4,324,383 | 4,317,099 | ||||||
Allowance for loan losses | (59,758 | ) | (68,444 | ) | ||||
Net loans | 4,264,625 | 4,248,655 | ||||||
Bank owned life insurance | 157,225 | 154,567 | ||||||
Goodwill and other intangible assets | 73,089 | 74,843 | ||||||
Bank premises and equipment, net | 52,157 | 53,741 | ||||||
Other real estate owned | 41,965 | 42,272 | ||||||
Accrued interest receivable | 21,227 | 19,697 | ||||||
Mortgage loan servicing rights | 8,975 | 9,301 | ||||||
Other | 139,123 | 120,748 | ||||||
Assets held for sale | - | 382,462 | ||||||
Total assets | $ | 6,776,851 | $ | 6,972,245 | ||||
Liabilities and Stockholders' Equity: | ||||||||
Deposits: | ||||||||
Noninterest bearing | $ | 1,055,745 | $ | 995,733 | ||||
Interest bearing | 3,761,643 | 3,469,381 | ||||||
Total deposits | 4,817,388 | 4,465,114 | ||||||
Short-term borrowings | 236,687 | 263,594 | ||||||
Long-term debt | 821,801 | 823,182 | ||||||
Subordinated debentures and notes | 75,250 | 75,250 | ||||||
Accrued interest payable | 5,034 | 4,916 | ||||||
Other | 64,262 | 61,639 | ||||||
Liabilities held for sale | - | 536,186 | ||||||
Total liabilities | 6,020,422 | 6,229,881 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Stockholders' equity: | ||||||||
Preferred stock (200,000 shares authorized; 100,000 shares issued with $1,000 per share liquidation preference) | 98,372 | 98,146 | ||||||
Common stock (No par value; 20,000,000 sharesauthorized; 16,151,014 shares issued at March 31, 2012 and 16,151,021 shares issued at December 31, 2011) | 301,201 | 301,202 | ||||||
Common stock warrants | 4,297 | 4,297 | ||||||
Retained earnings | 440,074 | 424,557 | ||||||
Treasury stock (745,109 shares at March 31, 2012 and 745,109 shares at December 31,2011) | (77,007 | ) | (77,007 | ) | ||||
Accumulated other comprehensive (loss), net of taxes | (10,508 | ) | (8,831 | ) | ||||
Total stockholders' equity | 756,429 | 742,364 | ||||||
Total liabilities and stockholders’ equity | $ | 6,776,851 | $ | 6,972,245 |
March 31, 2013 | December 31, 2012 | ||||||
Assets: | |||||||
Cash and due from banks | $ | 99,976 | $ | 164,120 | |||
Money market instruments | 420,536 | 37,185 | |||||
Cash and cash equivalents | 520,512 | 201,305 | |||||
Investment securities: | |||||||
Securities available-for-sale, at fair value (amortized cost of $990,116 and $1,099,658 at March 31, 2013 and December 31, 2012) | 1,001,251 | 1,114,454 | |||||
Securities held-to-maturity, at amortized cost (fair value of $294,314 and $410,705 at March 31, 2013 and December 31, 2012) | 285,250 | 401,390 | |||||
Other investment securities | 65,907 | 65,907 | |||||
Total investment securities | 1,352,408 | 1,581,751 | |||||
Loans | 4,443,523 | 4,450,322 | |||||
Allowance for loan losses | (55,315 | ) | (55,537 | ) | |||
Net loans | 4,388,208 | 4,394,785 | |||||
Bank owned life insurance | 166,651 | 161,069 | |||||
Goodwill and other intangible assets | 72,559 | 72,671 | |||||
Bank premises and equipment, net | 56,725 | 53,751 | |||||
Other real estate owned | 36,292 | 35,718 | |||||
Accrued interest receivable | 18,571 | 19,710 | |||||
Mortgage loan servicing rights | 8,121 | 7,763 | |||||
Other | 127,108 | 114,280 | |||||
Total assets | $ | 6,747,155 | $ | 6,642,803 | |||
Liabilities and Stockholders' Equity: | |||||||
Deposits: | |||||||
Noninterest bearing | $ | 1,119,902 | $ | 1,137,290 | |||
Interest bearing | 3,796,639 | 3,578,742 | |||||
Total deposits | 4,916,541 | 4,716,032 | |||||
Short-term borrowings | 244,002 | 344,168 | |||||
Long-term debt | 782,845 | 781,658 | |||||
Subordinated debentures and notes | 80,250 | 80,250 | |||||
Accrued interest payable | 3,403 | 3,459 | |||||
Other | 65,904 | 66,870 | |||||
Total liabilities | $ | 6,092,945 | $ | 5,992,437 | |||
COMMITMENTS AND CONTINGENCIES | |||||||
Stockholders' equity: | |||||||
Common stock (No par value; 20,000,000 shares authorized; 16,150,973 shares issued at March 31, 2013 and 16,150,987 shares issued at December 31, 2012) | $ | 302,653 | $ | 302,654 | |||
Retained earnings | 447,829 | 441,605 | |||||
Treasury stock (738,989 shares at March 31, 2013 and at December 31, 2012) | (76,375 | ) | (76,375 | ) | |||
Accumulated other comprehensive loss, net of taxes | (19,897 | ) | (17,518 | ) | |||
Total stockholders' equity | 654,210 | 650,366 | |||||
Total liabilities and stockholders’ equity | $ | 6,747,155 | $ | 6,642,803 |
Three Months Ended | ||||||||
March 31, | ||||||||
2012 | 2011 | |||||||
Interest and dividend income: | ||||||||
Interest and fees on loans | $ | 61,105 | $ | 65,454 | ||||
Interest and dividends on: | ||||||||
Obligations of U.S. Government, its agencies and other securities | 13,584 | 19,053 | ||||||
Obligations of states and political subdivisions | 46 | 149 | ||||||
Other interest income | 103 | 6 | ||||||
Total interest and dividend income | 74,838 | 84,662 | ||||||
Interest expense: | ||||||||
Interest on deposits: | ||||||||
Demand and savings deposits | 754 | 991 | ||||||
Time deposits | 4,639 | 6,734 | ||||||
Interest on borrowings: | ||||||||
Short-term borrowings | 175 | 267 | ||||||
Long-term debt | 7,542 | 7,357 | ||||||
Total interest expense | 13,110 | 15,349 | ||||||
Net interest income | 61,728 | 69,313 | ||||||
Provision for loan losses | 9,000 | 14,100 | ||||||
Net interest income after provision for loan losses | 52,728 | 55,213 | ||||||
Other income: | ||||||||
Income from fiduciary activities | 3,828 | 3,722 | ||||||
Service charges on deposit accounts | 4,071 | 4,245 | ||||||
Other service income | 2,734 | 2,301 | ||||||
Checkcard fee income | 3,172 | 2,976 | ||||||
Bank owned life insurance income | 1,202 | 1,229 | ||||||
ATM fees | 608 | 654 | ||||||
OREO devaluations | (1,359 | ) | (2,535 | ) | ||||
Gain on sale of the Vision business | 22,167 | - | ||||||
Other | 3,197 | 2,438 | ||||||
Total other income | 39,620 | 15,030 | ||||||
Gain on sale of securities | - | 6,635 |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Interest and dividend income: | |||||||
Interest and fees on loans | $ | 55,775 | $ | 61,105 | |||
Interest and dividends on: | |||||||
Obligations of U.S. Government, its agencies and other securities | 10,242 | 13,584 | |||||
Obligations of states and political subdivisions | 17 | 46 | |||||
Other interest income | 158 | 103 | |||||
Total interest and dividend income | 66,192 | 74,838 | |||||
Interest expense: | |||||||
Interest on deposits: | |||||||
Demand and savings deposits | 501 | 754 | |||||
Time deposits | 3,090 | 4,639 | |||||
Interest on borrowings: | |||||||
Short-term borrowings | 144 | 175 | |||||
Long-term debt | 7,004 | 7,542 | |||||
Total interest expense | 10,739 | 13,110 | |||||
Net interest income | 55,453 | 61,728 | |||||
Provision for loan losses | 329 | 8,338 | |||||
Net interest income after provision for loan losses | 55,124 | 53,390 | |||||
Other income: | |||||||
Income from fiduciary activities | 4,076 | 3,828 | |||||
Service charges on deposit accounts | 3,822 | 4,071 | |||||
Other service income | 3,985 | 2,734 | |||||
Checkcard fee income | 2,983 | 3,172 | |||||
Bank owned life insurance income | 1,202 | 1,202 | |||||
ATM fees | 627 | 608 | |||||
OREO valuation adjustments | 401 | (1,359 | ) | ||||
Gain on sale of OREO, net | 224 | 1,045 | |||||
Gain on sale of the Vision Bank business | — | 22,167 | |||||
Other | 1,485 | 2,152 | |||||
Total other income | 18,805 | 39,620 | |||||
Three Months Ended | ||||||||
March 31, | ||||||||
2012 | 2011 | |||||||
Other expense: | ||||||||
Salaries and employee benefits | $ | 24,823 | $ | 25,064 | ||||
Occupancy expense | 2,670 | 3,000 | ||||||
Furniture and equipment expense | 2,621 | 2,657 | ||||||
Data processing fees | 1,200 | 1,253 | ||||||
Professional fees and services | 5,581 | 4,874 | ||||||
Amortization of intangibles | 1,754 | 669 | ||||||
Marketing | 843 | 623 | ||||||
Insurance | 1,490 | 2,269 | ||||||
Communication | 1,537 | 1,556 | ||||||
Other expense | 5,289 | 4,381 | ||||||
Total other expense | 47,808 | 46,346 | ||||||
Income before income taxes | 44,540 | 30,532 | ||||||
Income taxes | 13,065 | 8,336 | ||||||
Net income | $ | 31,475 | $ | 22,196 | ||||
Preferred stock dividends and accretion | 1,477 | 1,464 | ||||||
Net income available to common shareholders | $ | 29,998 | $ | 20,732 | ||||
Per Common Share: | ||||||||
Net income available to common shareholders | ||||||||
Basic | $ | 1.95 | $ | 1.35 | ||||
Diluted | $ | 1.95 | $ | 1.35 | ||||
Weighted average common shares outstanding | ||||||||
Basic | 15,405,910 | 15,398,930 | ||||||
Diluted | 15,417,745 | 15,403,420 | ||||||
Cash dividends declared | $ | 0.94 | $ | 0.94 |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Other expense: | |||||||
Salaries and employee benefits | $ | 24,633 | $ | 24,823 | |||
Occupancy expense | 2,597 | 2,670 | |||||
Furniture and equipment expense | 2,607 | 2,621 | |||||
Data processing fees | 1,019 | 1,200 | |||||
Professional fees and services | 5,864 | 5,581 | |||||
Amortization of intangibles | 112 | 1,754 | |||||
Marketing | 848 | 843 | |||||
Insurance | 1,302 | 1,490 | |||||
Communication | 1,580 | 1,537 | |||||
State taxes | 928 | 989 | |||||
Loan put provision | — | 662 | |||||
OREO expense | 512 | 723 | |||||
Other expense | 4,096 | 3,577 | |||||
Total other expense | 46,098 | 48,470 | |||||
Income before income taxes | 27,831 | 44,540 | |||||
Federal income taxes | 7,121 | 13,065 | |||||
Net income | 20,710 | 31,475 | |||||
Preferred share dividends and accretion | — | 1,477 | |||||
Net income available to common shareholders | $ | 20,710 | $ | 29,998 | |||
Earnings per Common Share: | |||||||
Net income available to common shareholders | |||||||
Basic | $ | 1.34 | $ | 1.95 | |||
Diluted | $ | 1.34 | $ | 1.95 | |||
Weighted average common shares outstanding | |||||||
Basic | 15,411,990 | 15,405,910 | |||||
Diluted | 15,411,990 | 15,417,745 | |||||
Cash dividends declared | $ | 0.94 | $ | 0.94 |
Three Months Ended | ||||||||
March 31, | ||||||||
2012 | 2011 | |||||||
Net income | $ | 31,475 | $ | 22,196 | ||||
Other comprehensive income, net of tax: | ||||||||
Change in funded status of pension plan, net of income taxes of $222 | 412 | - | ||||||
Unrealized net holding gain on cash flow hedge,net of income taxes of $60 and $71 | 113 | 133 | ||||||
Unrealized net holding (loss) on securities available-for-sale, net of income tax benefit of $(1,188) and $(3,431) | (2,202 | ) | (6,371 | ) | ||||
Other comprehensive loss | $ | (1,677 | ) | $ | (6,238 | ) | ||
Comprehensive income | $ | 29,798 | $ | 15,958 |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Net income | $ | 20,710 | $ | 31,475 | |||
Other comprehensive income (loss), net of tax: | |||||||
Change in funded status of pension plan, net of income taxes of $222 for the three months ended March 31, 2012 | — | 412 | |||||
Unrealized net holding gain on cash flow hedge, net of income taxes of $60 for the three months ended March 31, 2012 | — | 113 | |||||
Unrealized net holding loss on securities available-for-sale, net of income tax benefit of $(1,282) and $(1,188) for the three months ended March 31, 2013 and 2012, respectively | (2,379 | ) | (2,202 | ) | |||
Other comprehensive loss | $ | (2,379 | ) | $ | (1,677 | ) | |
Comprehensive income | $ | 18,331 | $ | 29,798 |
Three Months ended March 31, 2012 and 2011 | Preferred Stock | Common Stock | Retained Earnings | Treasury Stock at Cost | Accumulated Other Comprehensive Income | |||||||||||||||
Balance at December 31, 2010 | $ | 97,290 | $ | 305,677 | $ | 406,342 | $ | (77,733 | ) | $ | (1,868 | ) | ||||||||
Net Income | 22,196 | |||||||||||||||||||
Other comprehensive loss, net of tax: | ||||||||||||||||||||
Unrealized net holding gain on cash flow hedge, net of income taxes of $71 | 133 | |||||||||||||||||||
Unrealized net holding (loss) on securities available-for-sale, net of income tax benefit of $(3,431) | (6,371 | ) | ||||||||||||||||||
Cash dividends on common stock at $0.94 per share | (14,475 | ) | ||||||||||||||||||
Cash payment for fractional shares in dividend reinvestment plan | (1 | ) | ||||||||||||||||||
Accretion of discount on preferred stock | 214 | (214 | ) | |||||||||||||||||
Preferred stock dividends | (1,250 | ) | ||||||||||||||||||
Balance at March 31, 2011 | $ | 97,504 | $ | 305,676 | $ | 412,599 | $ | (77,733 | ) | $ | (8,106 | ) | ||||||||
Balance at December 31, 2011 | $ | 98,146 | $ | 305,499 | $ | 424,557 | $ | (77,007 | ) | $ | (8,831 | ) | ||||||||
Net Income | 31,475 | |||||||||||||||||||
Other comprehensive loss, net of tax: | ||||||||||||||||||||
Change in funded status of pension plan, net of income taxes of $222 | 412 | |||||||||||||||||||
Unrealized net holding gain on cash flow hedge, net of income taxes of $60 | 113 | |||||||||||||||||||
Unrealized net holding (loss) on securities available-for-sale, net of income tax benefit of $(1,188) | (2,202 | ) | ||||||||||||||||||
Cash dividends on common stock at $0.94 per share | (14,481 | ) | ||||||||||||||||||
Cash payment for fractional shares in dividend reinvestment plan | (1 | ) | ||||||||||||||||||
Accretion of discount on preferred stock | 226 | (227 | ) | |||||||||||||||||
Preferred stock dividends | (1,250 | ) | ||||||||||||||||||
Balance at March 31, 2012 | $ | 98,372 | $ | 305,498 | $ | 440,074 | $ | (77,007 | ) | $ | (10,508 | ) |
Three Months ended March 31, 2013 and 2012 | Preferred Shares | Common Shares | Retained Earnings | Treasury Shares | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
Balance at December 31, 2011 | $ | 98,146 | $ | 305,499 | $ | 424,557 | $ | (77,007 | ) | $ | (8,831 | ) | ||||||||
Net Income | 31,475 | |||||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Change in funded status of pension plan, net of income taxes of $222 | 412 | |||||||||||||||||||
Unrealized net holding gain on cash flow hedge, net of income taxes of $60 | 113 | |||||||||||||||||||
Unrealized net holding loss on securities available-for-sale, net of income tax benefit of $(1,188) | (2,202 | ) | ||||||||||||||||||
Cash dividends on common stock at $0.94 per share | (14,481 | ) | ||||||||||||||||||
Cash payment for fractional shares in dividend reinvestment plan | (1 | ) | ||||||||||||||||||
Accretion of discount on preferred stock | 226 | (227 | ) | |||||||||||||||||
Preferred stock dividends | (1,250 | ) | ||||||||||||||||||
Balance at March 31, 2012 | $ | 98,372 | $ | 305,498 | $ | 440,074 | $ | (77,007 | ) | $ | (10,508 | ) | ||||||||
Balance at December 31, 2012 | $ | — | $ | 302,654 | $ | 441,605 | $ | (76,375 | ) | $ | (17,518 | ) | ||||||||
Net Income | 20,710 | |||||||||||||||||||
Other comprehensive (loss), net of tax: | ||||||||||||||||||||
Unrealized net holding loss on securities available-for-sale, net of income tax benefit of $(1,282) | (2,379 | ) | ||||||||||||||||||
Cash dividends on common stock at $0.94 per share | (14,486 | ) | ||||||||||||||||||
Cash payment for fractional shares in dividend reinvestment plan | (1 | ) | ||||||||||||||||||
Balance at March 31, 2013 | $ | — | $ | 302,653 | $ | 447,829 | $ | (76,375 | ) | $ | (19,897 | ) |
Three Months Ended | ||||||||
March 31, | ||||||||
2012 | 2011 | |||||||
Operating activities: | ||||||||
Net income | $ | 31,475 | $ | 22,196 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation, accretion and amortization | 1,470 | 2,784 | ||||||
Provision for loan losses | 9,000 | 14,100 | ||||||
Amortization of core deposit intangibles | 1,754 | 669 | ||||||
Realized net investment security gains | - | (6,635 | ) | |||||
OREO devaluations | 1,359 | 2,535 | ||||||
Bank owned life insurance income | (1,202 | ) | (1,229 | ) | ||||
Changes in assets and liabilities: | ||||||||
(Increase) in other assets | (19,773 | ) | (19,547 | ) | ||||
Increase (Decrease) in other liabilities | 2,854 | (6,539 | ) | |||||
Net cash provided by operating activities | $ | 26,937 | $ | 8,334 | ||||
Investing activities: | ||||||||
Proceeds from sales of available-for-sale securities | $ | - | $ | 113,105 | ||||
Proceeds from maturity of: | ||||||||
Available-for-sale securities | 229,878 | 75,071 | ||||||
Held-to-maturity securities | 157,101 | 59,506 | ||||||
Purchases of: | ||||||||
Available-for-sale securities | (419,998 | ) | (231,714 | ) | ||||
Held-to-maturity securities | (119,127 | ) | - | |||||
Net (increase) in loans | (23,339 | ) | (25,403 | ) | ||||
Sale of assets/liabilities related to Vision Bank | (153,724 | ) | - | |||||
Purchases of bank owned life insurance | (2,213 | ) | (3,000 | ) | ||||
Purchases of premises and equipment, net | (125 | ) | (1,990 | ) | ||||
Net cash (used in) investing activities | $ | (331,547 | ) | $ | (14,425 | ) | ||
Financing activities: | ||||||||
Net increase in deposits | $ | 352,274 | $ | 219,258 | ||||
Net (decrease) in short-term borrowings | (26,907 | ) | (346,950 | ) | ||||
Proceeds from issuance of long-term debt | - | 150,000 | ||||||
Repayment of long-term debt | (1,381 | ) | (24 | ) | ||||
Cash payment for fractional shares in dividend reinvestment plan | (1 | ) | (1 | ) | ||||
Cash dividends paid on common and preferred stock | (15,731 | ) | (15,725 | ) | ||||
Net cash provided by financing activities | $ | 308,254 | $ | 6,558 | ||||
Increase in cash and cash equivalents | 3,644 | 467 | ||||||
Cash and cash equivalents at beginning of year | 157,486 | 133,780 | ||||||
Cash and cash equivalents at end of period | $ | 161,130 | $ | 134,247 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for: | ||||||||
Interest | $ | 12,992 | $ | 15,217 | ||||
Income taxes | $ | - | $ | - | ||||
Non cash activities: | ||||||||
Securities acquired through payable | $ | - | $ | 25,000 |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Operating activities: | |||||||
Net income | $ | 20,710 | $ | 31,475 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for loan losses | 329 | 8,338 | |||||
Loan put provision | — | 662 | |||||
Amortization (accretion) of loan fees and costs, net | 728 | (134 | ) | ||||
Provision for depreciation | 1,773 | 1,709 | |||||
Amortization of core deposit intangibles | 112 | 1,754 | |||||
Amortization/(accretion) of investment securities | 42 | (105 | ) | ||||
Amortization of prepayment penalty on long-term debt | 1,202 | — | |||||
Loan originations to be sold in secondary market | (140,704 | ) | (77,203 | ) | |||
Proceeds from sale of loans in secondary market | 156,212 | 77,628 | |||||
Gain on sale of loans in secondary market | 1,511 | 1,182 | |||||
OREO valuation adjustments | (401 | ) | 1,359 | ||||
Bank owned life insurance income | (1,202 | ) | (1,202 | ) | |||
Changes in assets and liabilities: | |||||||
Increase in other assets | (13,816 | ) | (30,906 | ) | |||
(Decrease) increase in other liabilities | (1,022 | ) | 2,854 | ||||
Net cash provided by operating activities | $ | 25,474 | $ | 17,411 | |||
Investing activities: | |||||||
Proceeds from calls and maturity of: | |||||||
Available-for-sale securities | 309,212 | 229,878 | |||||
Held-to-maturity securities | 116,140 | 157,101 | |||||
Purchases of: | |||||||
Available-for-sale securities | (199,711 | ) | (419,998 | ) | |||
Held-to-maturity securities | — | (119,127 | ) | ||||
Net loan originations, portfolio loans | (8,403 | ) | (23,102 | ) | |||
Sale of assets/liabilities related to Vision Bank | — | (144,436 | ) | ||||
Purchases of bank owned life insurance, net | (4,600 | ) | (2,213 | ) | |||
Purchases of premises and equipment, net | (4,747 | ) | (125 | ) | |||
Net cash provided by (used in) investing activities | $ | 207,891 | $ | (322,022 | ) | ||
Financing activities: | |||||||
Net increase in deposits | $ | 200,509 | $ | 352,274 | |||
Net decrease in short-term borrowings | (100,166 | ) | (26,907 | ) | |||
Repayment of long-term debt | (15 | ) | (1,381 | ) | |||
Cash dividends paid on common stock and preferred stock | (14,486 | ) | (15,731 | ) | |||
Net cash provided by financing activities | $ | 85,842 | $ | 308,255 | |||
Increase in cash and cash equivalents | 319,207 | 3,644 | |||||
Cash and cash equivalents at beginning of year | 201,305 | 157,486 | |||||
Cash and cash equivalents at end of period | $ | 520,512 | $ | 161,130 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid for: | |||||||
Interest | $ | 10,795 | $ | 12,992 | |||
Income taxes | $ | — | $ | — | |||
Transfers to OREO | $ | 7,103 | $ | 4,448 | |||
PARK NATIONAL CORPORATION
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
2013.
No. 2011-05 – Presentation of Comprehensive Income: In June 2011, FASB issued Accounting Standards Update 2011-05,Presentation of Comprehensive IncomeImpairment
No. 2011-08 –Intangibles – Goodwill and Other: In September 2011, FASB issued Accounting Standards Update 2011-08,Intangibles – Goodwill and Other (ASU 2011-08)2012-02). The ASU allows an entity to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determinationindicate that it is more likely than not that the fair value of a reporting unitindefinite-lived intangible asset is less than its carrying amount.impaired. The new guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after DecemberSeptember 15, 2011. Management does not expect the2012. The adoption of this guidance willdid not have an impact on the consolidated financial statements.
The assets purchased and liabilities assumed by Centennial as of February 16, 2012, included the following:
(in thousands) | February 16, 2012 | |||
Assets sold | ||||
Cash and due from banks | $ | 20,711 | ||
Loans | 355,750 | |||
Allowance for loan losses | (13,100 | ) | ||
Net loans | 342,650 | |||
Fixed assets | 12,496 | |||
Other assets | 4,612 | |||
Total assets sold | $ | 380,469 | ||
Liabilities sold | ||||
Deposits | $ | 522,856 | ||
Other liabilities | 2,049 | |||
Total liabilities sold | $ | 524,905 |
(in thousands) | |||
Premium paid | $ | 27,913 | |
One-time gains | 298 | ||
Loss on sale of fixed assets | (2,434 | ) | |
Employment and severance agreements | (1,610 | ) | |
Other one-time charges, including estimates | (2,000 | ) | |
Pre-tax gain | $ | 22,167 |
(in thousands) | March 31, 2012 | |||
Assets | ||||
Cash | $ | 16,049 | ||
Performing loans | 16,123 | |||
Nonperforming loans | 82,326 | |||
OREO | 28,578 | |||
Other assets | 18,417 | |||
Total assets | $ | 161,493 | ||
Liabilities and equity | ||||
Intercompany borrowings | $ | 140,000 | ||
Other liabilities | 4,623 | |||
Equity | 16,870 | |||
Total liabilities and equity | $ | 161,493 |
(in thousands) | Goodwill | Core Deposit Intangibles | Total | |||||||||
December 31, 2011 | $ | 72,334 | $ | 2,509 | $ | 74,843 | ||||||
Amortization | - | 1,754 | 1,754 | |||||||||
March 31, 2012 | $ | 72,334 | $ | 755 | $ | 73,089 |
2013.
(in thousands) | Goodwill | Core Deposit Intangibles | Total | |||||||||
December 31, 2012 | $ | 72,334 | $ | 337 | $ | 72,671 | ||||||
Amortization | — | 112 | 112 | |||||||||
March 31, 2013 | $ | 72,334 | $ | 225 | $ | 72,559 |
Core deposit intangibles amortization expense is projected
March 31, 2012 | December 31, 2011 | |||||||||||||||||||||||
Loan balance | Accrued interest receivable | Recorded investment | Loan balance | Accrued interest receivable | Recorded investment | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Commercial, financial and agricultural * | $ | 752,392 | $ | 3,439 | $ | 755,831 | $ | 743,797 | $ | 3,121 | $ | 746,918 | ||||||||||||
Commercial real estate * | 1,088,348 | 3,795 | 1,092,143 | 1,108,574 | 4,235 | 1,112,809 | ||||||||||||||||||
Construction real estate: | ||||||||||||||||||||||||
Vision/SE LLC commercial land and development * | 26,081 | 39 | 26,120 | 31,603 | 31 | 31,634 | ||||||||||||||||||
Remaining commercial | 148,922 | 425 | 149,347 | 156,053 | 394 | 156,447 | ||||||||||||||||||
Mortgage | 19,628 | 65 | 19,693 | 20,039 | 64 | 20,103 | ||||||||||||||||||
Installment | 9,184 | 44 | 9,228 | 9,851 | 61 | 9,912 | ||||||||||||||||||
Residential real estate | ||||||||||||||||||||||||
Commercial | 392,552 | 1,120 | 393,672 | 395,824 | 1,105 | 396,929 | ||||||||||||||||||
Mortgage | 1,004,957 | 1,540 | 1,006,497 | 953,758 | 1,522 | 955,280 | ||||||||||||||||||
HELOC | 221,780 | 884 | 222,664 | 227,682 | 942 | 228,624 | ||||||||||||||||||
Installment | 48,410 | 217 | 48,627 | 51,354 | 236 | 51,590 | ||||||||||||||||||
Consumer | 610,180 | 2,580 | 612,760 | 616,505 | 2,930 | 619,435 | ||||||||||||||||||
Leases | 1,949 | 52 | 2,001 | 2,059 | 43 | 2,102 | ||||||||||||||||||
Total loans | $ | 4,324,383 | $ | 14,200 | $ | 4,338,583 | $ | 4,317,099 | $ | 14,684 | $ | 4,331,783 |
March 31, 2013 | December 31, 2012 | |||||||||||||||||||||||
(In thousands) | Loan balance | Accrued interest receivable | Recorded investment | Loan balance | Accrued interest receivable | Recorded investment | ||||||||||||||||||
Commercial, financial and agricultural * | $ | 796,449 | $ | 3,431 | $ | 799,880 | $ | 823,927 | $ | 2,976 | $ | 826,903 | ||||||||||||
Commercial real estate * | 1,108,915 | 4,084 | 1,112,999 | 1,092,164 | 3,839 | 1,096,003 | ||||||||||||||||||
Construction real estate: | ||||||||||||||||||||||||
SEPH commercial land and development * | 12,285 | 26 | 12,311 | 15,105 | 37 | 15,142 | ||||||||||||||||||
Remaining commercial | 115,589 | 285 | 115,874 | 115,473 | 331 | 115,804 | ||||||||||||||||||
Mortgage | 24,522 | 74 | 24,596 | 26,373 | 81 | 26,454 | ||||||||||||||||||
Installment | 8,055 | 31 | 8,086 | 8,577 | 33 | 8,610 | ||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||
Commercial | 400,400 | 1,008 | 401,408 | 392,203 | 959 | 393,162 | ||||||||||||||||||
Mortgage | 1,064,006 | 1,884 | 1,065,890 | 1,064,787 | 1,399 | 1,066,186 | ||||||||||||||||||
HELOC | 210,981 | 861 | 211,842 | 212,905 | 892 | 213,797 | ||||||||||||||||||
Installment | 41,204 | 163 | 41,367 | 43,750 | 176 | 43,926 | ||||||||||||||||||
Consumer | 657,697 | 2,643 | 660,340 | 651,930 | 2,835 | 654,765 | ||||||||||||||||||
Leases | 3,420 | 51 | 3,471 | 3,128 | 29 | 3,157 | ||||||||||||||||||
Total loans | $ | 4,443,523 | $ | 14,541 | $ | 4,458,064 | $ | 4,450,322 | $ | 13,587 | $ | 4,463,909 |
March 31, 2012 | ||||||||||||||||
(In thousands) | Nonaccrual loans | Accruing restructured loans | Loans past due 90 days or more and accruing | Total nonperforming loans | ||||||||||||
Commercial, financial and agricultural | $ | 36,164 | $ | 4,100 | $ | 12 | $ | 40,276 | ||||||||
Commercial real estate | 36,754 | 6,551 | - | �� | 43,305 | |||||||||||
Construction real estate: | ||||||||||||||||
SE LLC commercial land and development | 20,518 | - | - | 20,518 | ||||||||||||
Remaining commercial | 14,724 | 17,949 | - | 32,673 | ||||||||||||
Mortgage | 66 | - | - | 66 | ||||||||||||
Installment | 182 | - | 16 | 198 | ||||||||||||
Residential real estate: | ||||||||||||||||
Commercial | 43,211 | 541 | - | 43,752 | ||||||||||||
Mortgage | 26,374 | 5,421 | 1,523 | 33,318 | ||||||||||||
HELOC | 2,043 | - | - | 2,043 | ||||||||||||
Installment | 1,147 | 22 | 221 | 1,390 | ||||||||||||
Consumer | 2,044 | - | 567 | 2,611 | ||||||||||||
Leases | - | - | - | - | ||||||||||||
Total loans | $ | 183,227 | $ | 34,584 | $ | 2,339 | $ | 220,150 |
December 31, 2011 | ||||||||||||||||
(In thousands) | Nonaccrual loans | Accruing restructured loans | Loans past due 90 days or more and accruing | Total nonperforming loans | ||||||||||||
Commercial, financial and agricultural | $ | 37,797 | $ | 2,848 | $ | - | $ | 40,645 | ||||||||
Commercial real estate | 43,704 | 8,274 | - | 51,978 | ||||||||||||
Construction real estate: | ||||||||||||||||
Vision commercial land and development | 25,761 | - | - | 25,761 | ||||||||||||
Remaining commercial | 14,021 | 11,891 | - | 25,912 | ||||||||||||
Mortgage | 66 | - | - | 66 | ||||||||||||
Installment | 30 | - | - | 30 | ||||||||||||
Residential real estate: | ||||||||||||||||
Commercial | 43,461 | 815 | - | 44,276 | ||||||||||||
Mortgage | 25,201 | 4,757 | 2,610 | 32,568 | ||||||||||||
HELOC | 1,412 | - | - | 1,412 | ||||||||||||
Installment | 1,777 | 98 | 58 | 1,933 | ||||||||||||
Consumer | 1,876 | - | 893 | 2,769 | ||||||||||||
Leases | - | - | - | - | ||||||||||||
Total loans | $ | 195,106 | $ | 28,683 | $ | 3,561 | $ | 227,350 |
2012
:March 31, 2013 | ||||||||||||||||
(In thousands) | Nonaccrual loans | Accruing troubled debt restructurings | Loans past due 90 days or more and accruing | Total nonperforming loans | ||||||||||||
Commercial, financial and agricultural | $ | 20,339 | $ | 1,414 | $ | — | $ | 21,753 | ||||||||
Commercial real estate | 36,724 | 3,351 | — | 40,075 | ||||||||||||
Construction real estate: | ||||||||||||||||
SEPH commercial land and development | 11,133 | — | — | 11,133 | ||||||||||||
Remaining commercial | 16,900 | 3,583 | — | 20,483 | ||||||||||||
Mortgage | 146 | 99 | 44 | 289 | ||||||||||||
Installment | 128 | 172 | — | 300 | ||||||||||||
Residential real estate: | ||||||||||||||||
Commercial | 35,469 | 1,253 | — | 36,722 | ||||||||||||
Mortgage | 23,938 | 11,126 | 544 | 35,608 | ||||||||||||
HELOC | 1,864 | 753 | — | 2,617 | ||||||||||||
Installment | 1,404 | 817 | 33 | 2,254 | ||||||||||||
Consumer | 3,494 | 1,789 | 768 | 6,051 | ||||||||||||
Total loans | $ | 151,539 | $ | 24,357 | $ | 1,389 | $ | 177,285 |
December 31, 2012 | ||||||||||||||||
(In thousands) | Nonaccrual loans | Accruing troubled debt restructurings | Loans past due 90 days or more and accruing | Total nonperforming loans | ||||||||||||
Commercial, financial and agricultural | $ | 17,324 | $ | 5,277 | $ | 37 | $ | 22,638 | ||||||||
Commercial real estate | 40,983 | 3,295 | 1,007 | 45,285 | ||||||||||||
Construction real estate: | ||||||||||||||||
SEPH commercial land and development | 13,939 | — | — | 13,939 | ||||||||||||
Remaining commercial | 14,977 | 6,597 | — | 21,574 | ||||||||||||
Mortgage | 158 | 100 | — | 258 | ||||||||||||
Installment | 149 | 175 | — | 324 | ||||||||||||
Residential real estate: | ||||||||||||||||
Commercial | 33,961 | 1,661 | 94 | 35,716 | ||||||||||||
Mortgage | 28,260 | 9,425 | 950 | 38,635 | ||||||||||||
HELOC | 1,689 | 736 | — | 2,425 | ||||||||||||
Installment | 1,670 | 780 | 54 | 2,504 | ||||||||||||
Consumer | 2,426 | 1,900 | 888 | 5,214 | ||||||||||||
Total loans | $ | 155,536 | $ | 29,946 | $ | 3,030 | $ | 188,512 |
March 31, 2012 | December 31, 2011 | |||||||||||||||||||||||
(In thousands) | Nonaccrual and accruing restructured loans | Loans individually evaluated for impairment | Loans collectively evaluated for impairment | Nonaccrual and accruing restructured loans | Loans individually evaluated for impairment | Loans collectively evaluated for impairment | ||||||||||||||||||
Commercial, financial and agricultural | $ | 40,264 | $ | 40,241 | $ | 23 | $ | 40,645 | $ | 40,621 | $ | 24 | ||||||||||||
Commercial real estate | 43,305 | 43,305 | - | 51,978 | 51,978 | - | ||||||||||||||||||
Construction real estate: | ||||||||||||||||||||||||
Vision/SE LLC commercial land and development | 20,518 | 19,433 | 1,085 | 25,761 | 24,328 | 1,433 | ||||||||||||||||||
Remaining commercial | 32,673 | 32,673 | - | 25,912 | 25,912 | - | ||||||||||||||||||
Mortgage | 66 | - | 66 | 66 | - | 66 | ||||||||||||||||||
Installment | 182 | - | 182 | 30 | - | 30 | ||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||
Commercial | 43,752 | 43,752 | - | 44,276 | 44,276 | - | ||||||||||||||||||
Mortgage | 31,795 | - | 31,795 | 29,958 | - | 29,958 | ||||||||||||||||||
HELOC | 2,043 | - | 2,043 | 1,412 | - | 1,412 | ||||||||||||||||||
Installment | 1,169 | - | 1,169 | 1,875 | - | 1,875 | ||||||||||||||||||
Consumer | 2,044 | 20 | 2,024 | 1,876 | 20 | 1,856 | ||||||||||||||||||
Leases | - | - | - | - | - | - | ||||||||||||||||||
Total loans | $ | 217,811 | $ | 179,424 | $ | 38,387 | $ | 223,789 | $ | 187,135 | $ | 36,654 |
2012
.March 31, 2013 | December 31, 2012 | ||||||||||||||||||||||||
(In thousands) | Nonaccrual and accruing restructured loans | Loans individually evaluated for impairment | Loans collectively evaluated for impairment | Nonaccrual and accruing restructured loans | Loans individually evaluated for impairment | Loans collectively evaluated for impairment | |||||||||||||||||||
Commercial, financial and agricultural | $ | 21,753 | $ | 21,742 | $ | 11 | $ | 22,601 | $ | 22,587 | $ | 14 | |||||||||||||
Commercial real estate | 40,075 | 40,075 | — | 44,278 | 44,278 | — | |||||||||||||||||||
Construction real estate: | |||||||||||||||||||||||||
SEPH commercial land and development | 11,133 | 10,482 | 651 | 13,939 | 13,260 | 679 | |||||||||||||||||||
Remaining commercial | 20,483 | 20,483 | — | 21,574 | 21,574 | — | |||||||||||||||||||
Mortgage | 245 | — | 245 | 258 | — | 258 | |||||||||||||||||||
Installment | 300 | — | 300 | 324 | — | 324 | |||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||
Commercial | 36,722 | 36,722 | — | 35,622 | 35,622 | — | |||||||||||||||||||
Mortgage | 35,064 | — | 35,064 | 37,685 | — | 37,685 | |||||||||||||||||||
HELOC | 2,617 | — | 2,617 | 2,425 | — | 2,425 | |||||||||||||||||||
Installment | 2,221 | — | 2,221 | 2,450 | — | 2,450 | |||||||||||||||||||
Consumer | 5,283 | 799 | 4,484 | 4,326 | 18 | 4,308 | |||||||||||||||||||
Total loans | $ | 175,896 | $ | 130,303 | $ | 45,593 | $ | 185,482 | $ | 137,339 | $ | 48,143 |
March 31, 2012 | December 31, 2011 | |||||||||||||||||||||||
Unpaid principal balance | Recorded investment | Allowance for loan losses allocated | Unpaid principal balance | Recorded investment | Allowance for loan losses allocated | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
With no related allowance recorded | ||||||||||||||||||||||||
Commercial, financial and agricultural | $ | 33,769 | $ | 26,956 | $ | - | $ | 23,164 | $ | 18,098 | $ | - | ||||||||||||
Commercial real estate | 55,974 | 35,236 | - | 58,242 | 41,506 | - | ||||||||||||||||||
Construction real estate: | ||||||||||||||||||||||||
Vision /SE LLC commercial land and development | 68,297 | 19,433 | - | 54,032 | 17,786 | - | ||||||||||||||||||
Remaining commercial | 28,851 | 24,604 | - | 33,319 | 18,372 | - | ||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||
Commercial | 52,550 | 39,483 | - | 49,341 | 38,686 | - | ||||||||||||||||||
Consumer | 20 | 20 | - | 20 | 20 | - | ||||||||||||||||||
With an allowance recorded | ||||||||||||||||||||||||
Commercial, financial and agricultural | 14,597 | 13,285 | 4,704 | 23,719 | 22,523 | 5,819 | ||||||||||||||||||
Commercial real estate | 9,831 | 8,069 | 1,506 | 12,183 | 10,472 | 4,431 | ||||||||||||||||||
Construction real estate: | ||||||||||||||||||||||||
Vision/SE LLC commercial land and development | - | - | - | 20,775 | 6,542 | 1,540 | ||||||||||||||||||
Remaining commercial | 20,927 | 8,069 | 2,096 | 9,711 | 7,540 | 1,874 | ||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||
Commercial | 5,642 | 4,269 | 1,199 | 6,402 | 5,590 | 2,271 | ||||||||||||||||||
Consumer | - | - | - | - | - | - | ||||||||||||||||||
Total | $ | 290,458 | $ | 179,424 | $ | 9,505 | $ | 290,908 | $ | 187,135 | $ | 15,935 |
2012
.March 31, 2013 | December 31, 2012 | ||||||||||||||||||||||||
(In thousands) | Unpaid principal balance | Recorded investment | Allowance for loan losses allocated | Unpaid principal balance | Recorded investment | Allowance for loan losses allocated | |||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||
Commercial, financial and agricultural | $ | 22,392 | $ | 13,403 | $ | — | $ | 23,782 | $ | 14,683 | $ | — | |||||||||||||
Commercial real estate | 58,637 | 34,750 | — | 56,258 | 35,097 | — | |||||||||||||||||||
Construction real estate: | |||||||||||||||||||||||||
SEPH commercial land and development | 53,287 | 10,482 | — | 56,075 | 12,740 | — | |||||||||||||||||||
Remaining commercial | 24,614 | 11,209 | — | 29,328 | 14,093 | — | |||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||
Commercial | 40,341 | 32,566 | — | 39,918 | 31,957 | — | |||||||||||||||||||
Consumer | 799 | 799 | — | 18 | 18 | — | |||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||
Commercial, financial and agricultural | 12,924 | 8,339 | 3,519 | 12,268 | 7,904 | 3,180 | |||||||||||||||||||
Commercial real estate | 5,667 | 5,325 | 648 | 11,412 | 9,181 | 1,540 | |||||||||||||||||||
Construction real estate: | |||||||||||||||||||||||||
SEPH commercial land and development | — | — | — | 1,271 | 520 | — | |||||||||||||||||||
Remaining commercial | 9,984 | 9,274 | 2,939 | 8,071 | 7,481 | 2,277 | |||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||
Commercial | 4,498 | 4,156 | 1,154 | 3,944 | 3,665 | 1,279 | |||||||||||||||||||
Consumer | — | — | — | — | — | — | |||||||||||||||||||
Total | $ | 233,143 | $ | 130,303 | $ | 8,260 | $ | 242,345 | $ | 137,339 | $ | 8,276 |
Three months ended March 31, 2012 | Three months ended March 31, 2011 | |||||||||||||||||||||||
(in thousands) | Recorded investment as of March 31, 2012 | Average recorded investment | Interest income recognized | Recorded investment as of March 31, 2011 | Average recorded investment | Interest income recognized | ||||||||||||||||||
Commercial, financial and agricultural | $ | 40,241 | $ | 40,135 | $ | 105 | $ | 19,391 | $ | 19,515 | $ | 65 | ||||||||||||
Commercial real estate | 43,305 | 48,214 | 207 | 53,259 | 55,076 | 70 | ||||||||||||||||||
Construction real estate: | ||||||||||||||||||||||||
Vision/SE LLC commercial land and development | 19,433 | 21,974 | - | 82,060 | 84,272 | - | ||||||||||||||||||
Remaining commercial | 32,673 | 27,314 | 251 | 26,126 | 26,789 | 78 | ||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||
Commercial | 43,752 | 43,276 | 40 | 58,123 | 59,465 | 139 | ||||||||||||||||||
Consumer | 20 | 20 | - | - | 22 | - | ||||||||||||||||||
Total | $ | 179,424 | $ | 180,933 | $ | 603 | $ | 238,959 | $ | 245,139 | $ | 352 |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | |||||||||||||||||||||||
(In thousands) | Recorded investment as of March 31, 2013 | Average recorded investment | Interest income recognized | Recorded investment as of March 31, 2012 | Average recorded investment | Interest income recognized | ||||||||||||||||||
Commercial, financial and agricultural | $ | 21,742 | $ | 21,479 | $ | 128 | $ | 40,241 | $ | 40,135 | $ | 105 | ||||||||||||
Commercial real estate | 40,075 | 43,191 | 256 | 43,305 | 48,214 | 207 | ||||||||||||||||||
Construction real estate: | ||||||||||||||||||||||||
SEPH commercial land and development | 10,482 | 12,082 | — | 19,433 | 21,974 | — | ||||||||||||||||||
Remaining commercial | 20,483 | 20,912 | 220 | 32,673 | 27,314 | 251 | ||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||
Commercial | 36,722 | 35,859 | 130 | 43,752 | 43,276 | 40 | ||||||||||||||||||
Consumer | 799 | 204 | — | 20 | 20 | — | ||||||||||||||||||
Total | $ | 130,303 | $ | 133,727 | $ | 734 | $ | 179,424 | $ | 180,933 | $ | 603 |
March 31, 2012 | ||||||||||||||||||||
(in thousands) | Accruing loans past due 30-89 days | Past due nonaccrual loans and loans past due 90 days or more and accruing* | Total past due | Total current | Total recorded investment | |||||||||||||||
Commercial, financial and agricultural | $ | 3,935 | $ | 28,225 | $ | 32,160 | $ | 723,671 | $ | 755,831 | ||||||||||
Commercial real estate | 1,062 | 23,067 | 24,129 | 1,068,014 | 1,092,143 | |||||||||||||||
Construction real estate: | ||||||||||||||||||||
SE LLC commercial land and development | 337 | 16,587 | 16,924 | 9,196 | 26,120 | |||||||||||||||
Remaining commercial | - | 7,702 | 7,702 | 141,645 | 149,347 | |||||||||||||||
Mortgage | 173 | - | 173 | 19,520 | 19,693 | |||||||||||||||
Installment | 61 | 75 | 136 | 9,092 | 9,228 | |||||||||||||||
Residential real estate: | ||||||||||||||||||||
Commercial | 502 | 13,261 | 13,763 | 379,909 | 393,672 | |||||||||||||||
Mortgage | 13,174 | 18,840 | 32,014 | 974,483 | 1,006,497 | |||||||||||||||
HELOC | 331 | 297 | 628 | 222,036 | 222,664 | |||||||||||||||
Installment | 611 | 510 | 1,121 | 47,506 | 48,627 | |||||||||||||||
Consumer | 7,302 | 1,807 | 9,109 | 603,651 | 612,760 | |||||||||||||||
Leases | - | - | - | 2,001 | 2,001 | |||||||||||||||
Total loans | $ | 27,488 | $ | 110,371 | $ | 137,859 | $ | 4,200,724 | $ | 4,338,583 |
loan.
March 31, 2013 | |||||||||||||||||||
(In thousands) | Accruing loans past due 30-89 days | Past due nonaccrual loans and loans past due 90 days or more and accruing* | Total past due | Total current | Total recorded investment | ||||||||||||||
Commercial, financial and agricultural | $ | 3,891 | $ | 16,030 | $ | 19,921 | $ | 779,959 | $ | 799,880 | |||||||||
Commercial real estate | 2,502 | 23,275 | 25,777 | 1,087,222 | 1,112,999 | ||||||||||||||
Construction real estate: | |||||||||||||||||||
SEPH commercial land and development | 773 | 9,041 | 9,814 | 2,497 | 12,311 | ||||||||||||||
Remaining commercial | 334 | 4,221 | 4,555 | 111,319 | 115,874 | ||||||||||||||
Mortgage | 356 | 129 | 485 | 24,111 | 24,596 | ||||||||||||||
Installment | 77 | — | 77 | 8,009 | 8,086 | ||||||||||||||
Residential real estate: | |||||||||||||||||||
Commercial | 937 | 4,628 | 5,565 | 395,843 | 401,408 | ||||||||||||||
Mortgage | 11,165 | 13,366 | 24,531 | 1,041,359 | 1,065,890 | ||||||||||||||
HELOC | 344 | 732 | 1,076 | 210,766 | 211,842 | ||||||||||||||
Installment | 444 | 683 | 1,127 | 40,240 | 41,367 | ||||||||||||||
Consumer | 8,313 | 3,706 | 12,019 | 648,321 | 660,340 | ||||||||||||||
Leases | — | — | — | 3,471 | 3,471 | ||||||||||||||
Total loans | $ | 29,136 | $ | 75,811 | $ | 104,947 | $ | 4,353,117 | $ | 4,458,064 |
December 31, 2011 | ||||||||||||||||||||
(in thousands) | Accruing loans past due 30-89 days | Past due nonaccrual loans and loans past due 90 days or more and accruing* | Total past due | Total current | Total recorded investment | |||||||||||||||
Commercial, financial and agricultural | $ | 3,106 | $ | 11,308 | $ | 14,414 | $ | 732,504 | $ | 746,918 | ||||||||||
Commercial real estate | 2,632 | 21,798 | 24,430 | 1,088,379 | 1,112,809 | |||||||||||||||
Construction real estate: | ||||||||||||||||||||
Vision commercial land and development | - | 19,235 | 19,235 | 12,399 | 31,634 | |||||||||||||||
Remaining commercial | 99 | 7,839 | 7,938 | 148,509 | 156,447 | |||||||||||||||
Mortgage | 76 | - | 76 | 20,027 | 20,103 | |||||||||||||||
Installment | 421 | 8 | 429 | 9,483 | 9,912 | |||||||||||||||
Residential real estate: | ||||||||||||||||||||
Commercial | 1,545 | 10,097 | 11,642 | 385,287 | 396,929 | |||||||||||||||
Mortgage | 15,879 | 20,614 | 36,493 | 918,787 | 955,280 | |||||||||||||||
HELOC | 1,015 | 436 | 1,451 | 227,173 | 228,624 | |||||||||||||||
Installment | 1,549 | 1,136 | 2,685 | 48,905 | 51,590 | |||||||||||||||
Consumer | 11,195 | 2,192 | 13,387 | 606,048 | 619,435 | |||||||||||||||
Leases | - | - | - | 2,102 | 2,102 | |||||||||||||||
Total loans | $ | 37,517 | $ | 94,663 | $ | 132,180 | $ | 4,199,603 | $ | 4,331,783 |
The remaining are past due, nonaccrual loans and accruing TDRs.
December 31, 2012 | |||||||||||||||||||
(in thousands) | Accruing loans past due 30-89 days | Past due nonaccrual loans and loans past due 90 days or more and accruing* | Total past due | Total current | Total recorded investment | ||||||||||||||
Commercial, financial and agricultural | $ | 6,251 | $ | 11,811 | $ | 18,062 | $ | 808,841 | $ | 826,903 | |||||||||
Commercial real estate | 2,212 | 26,355 | 28,567 | 1,067,436 | 1,096,003 | ||||||||||||||
Construction real estate: | |||||||||||||||||||
SEPH commercial land and development | 686 | 11,314 | 12,000 | 3,142 | 15,142 | ||||||||||||||
Remaining commercial | 3,652 | 5,838 | 9,490 | 106,314 | 115,804 | ||||||||||||||
Mortgage | 171 | 85 | 256 | 26,198 | 26,454 | ||||||||||||||
Installment | 135 | 40 | 175 | 8,435 | 8,610 | ||||||||||||||
Residential real estate: | |||||||||||||||||||
Commercial | 1,163 | 5,917 | 7,080 | 386,082 | 393,162 | ||||||||||||||
Mortgage | 11,948 | 17,370 | 29,318 | 1,036,868 | 1,066,186 | ||||||||||||||
HELOC | 620 | 309 | 929 | 212,868 | 213,797 | ||||||||||||||
Installment | 563 | 787 | 1,350 | 42,576 | 43,926 | ||||||||||||||
Consumer | 12,924 | 2,688 | 15,612 | 639,153 | 654,765 | ||||||||||||||
Leases | — | — | — | 3,157 | 3,157 | ||||||||||||||
Total loans | $ | 40,325 | $ | 82,514 | $ | 122,839 | $ | 4,341,070 | $ | 4,463,909 |
The remaining are past due, nonaccrual loans and accruing TDRs.
March 31, 2012 | ||||||||||||||||||||
(in thousands) | 5 Rated | 6 Rated | Impaired | Pass Rated | Recorded Investment | |||||||||||||||
Commercial, financial and agricultural | $ | 10,458 | $ | 5,217 | $ | 40,264 | $ | 699,892 | $ | 755,831 | ||||||||||
Commercial real estate | 30,257 | 10,798 | 43,305 | 1,007,783 | 1,092,143 | |||||||||||||||
Construction real estate: | ||||||||||||||||||||
SE LLC commercial land and development | 2,801 | - | 20,518 | 2,801 | 26,120 | |||||||||||||||
Remaining commercial | 6,748 | 232 | 32,673 | 109,694 | 149,347 | |||||||||||||||
Residential real estate: | ||||||||||||||||||||
Commercial | 16,793 | 1,469 | 43,752 | 331,658 | 393,672 | |||||||||||||||
Leases | - | - | - | 2,001 | 2,001 | |||||||||||||||
Total Commercial Loans | $ | 67,057 | $ | 17,716 | $ | 180,512 | $ | 2,153,829 | $ | 2,419,114 |
December 31, 2011 | ||||||||||||||||||||
(in thousands) | 5 Rated | 6 Rated | Impaired | Pass Rated | Recorded Investment | |||||||||||||||
Commercial, financial and agricultural | $ | 11,785 | $ | 7,628 | $ | 40,645 | $ | 686,860 | $ | 746,918 | ||||||||||
Commercial real estate | 37,445 | 10,460 | 51,978 | 1,012,926 | 1,112,809 | |||||||||||||||
Construction real estate: | ||||||||||||||||||||
Vision commercial land and development | 3,102 | - | 25,761 | 2,771 | 31,634 | |||||||||||||||
Remaining commercial | 6,982 | 8,311 | 25,912 | 115,242 | 156,447 | |||||||||||||||
Residential real estate: | ||||||||||||||||||||
Commercial | 17,120 | 3,785 | 44,276 | 331,748 | 396,929 | |||||||||||||||
Leases | - | - | - | 2,102 | 2,102 | |||||||||||||||
Total Commercial Loans | $ | 76,434 | $ | 30,184 | $ | 188,572 | $ | 2,151,649 | $ | 2,446,839 |
March 31, 2013 | |||||||||||||||||||
(In thousands) | 5 Rated | 6 Rated | Impaired | Pass Rated | Recorded Investment | ||||||||||||||
Commercial, financial and agricultural * | $ | 8,233 | $ | 9,797 | $ | 21,753 | $ | 760,097 | $ | 799,880 | |||||||||
Commercial real estate * | 25,402 | 3,136 | 40,075 | 1,044,386 | 1,112,999 | ||||||||||||||
Construction real estate: | |||||||||||||||||||
SEPH commercial land and development * | 400 | — | 11,133 | 778 | 12,311 | ||||||||||||||
Remaining commercial | 6,556 | — | 20,483 | 88,835 | 115,874 | ||||||||||||||
Residential real estate: | |||||||||||||||||||
Commercial | 8,676 | 1,231 | 36,722 | 354,779 | 401,408 | ||||||||||||||
Leases | — | — | — | 3,471 | 3,471 | ||||||||||||||
Total Commercial Loans | $ | 49,267 | $ | 14,164 | $ | 130,166 | $ | 2,252,346 | $ | 2,445,943 |
December 31, 2012 | |||||||||||||||||||
(In thousands) | 5 Rated | 6 Rated | Impaired | Pass Rated | Recorded Investment | ||||||||||||||
Commercial, financial and agricultural * | $ | 9,537 | $ | 10,874 | $ | 22,601 | $ | 783,891 | $ | 826,903 | |||||||||
Commercial real estate * | 25,616 | 3,960 | 44,278 | 1,022,149 | 1,096,003 | ||||||||||||||
Construction real estate: | |||||||||||||||||||
SEPH commercial land and development * | 411 | — | 13,939 | 792 | 15,142 | ||||||||||||||
Remaining commercial | 6,734 | — | 21,574 | 87,496 | 115,804 | ||||||||||||||
Residential real estate: | |||||||||||||||||||
Commercial | 8,994 | 2,053 | 35,622 | 346,493 | 393,162 | ||||||||||||||
Leases | — | — | — | 3,157 | 3,157 | ||||||||||||||
Total Commercial Loans | $ | 51,292 | $ | 16,887 | $ | 138,014 | $ | 2,243,978 | $ | 2,450,171 |
difficulties but who were looking to reduce their cost of funds.
Three months ended March 31, 2012 | ||||||||||||||||
Number of Contracts | Accruing | Nonaccrual | Total Recorded Investment | |||||||||||||
(In thousands) | ||||||||||||||||
Commercial, financial and agricultural | 5 | $ | 1,289 | $ | 750 | $ | 2,039 | |||||||||
Commercial real estate | 16 | 2,212 | 2,967 | 5,179 | ||||||||||||
Construction real estate: | ||||||||||||||||
SE LLC commercial land and development | 4 | - | 894 | 894 | ||||||||||||
Remaining commercial | 9 | 8,641 | 1,565 | 10,206 | ||||||||||||
Mortgage | - | - | - | - | ||||||||||||
Installment | - | - | - | - | ||||||||||||
Residential real estate: | ||||||||||||||||
Commercial | 3 | - | 318 | 318 | ||||||||||||
Mortgage | 9 | 111 | 1,170 | 1,281 | ||||||||||||
HELOC | - | - | - | - | ||||||||||||
Installment | - | - | - | - | ||||||||||||
Consumer | 1 | - | 91 | 91 | ||||||||||||
Leases | - | - | - | |||||||||||||
Total loans | 47 | $ | 12,253 | $ | 7,755 | $ | 20,008 |
As
Three Months Ended March 31, 2013 | ||||||||||||||
(In thousands) | Number of Contracts | Accruing | Nonaccrual | Total Recorded Investment | ||||||||||
Commercial, financial and agricultural | 7 | $ | — | $ | 320 | $ | 320 | |||||||
Commercial real estate | 2 | 25 | 152 | 177 | ||||||||||
Construction real estate: | ||||||||||||||
SEPH commercial land and development | — | — | — | — | ||||||||||
Remaining commercial | 1 | 37 | — | 37 | ||||||||||
Mortgage | — | — | — | — | ||||||||||
Installment | 2 | — | 26 | 26 | ||||||||||
Residential real estate: | ||||||||||||||
Commercial | 6 | 493 | 1,561 | 2,054 | ||||||||||
Mortgage | 12 | 880 | 242 | 1,122 | ||||||||||
HELOC | 4 | 54 | — | 54 | ||||||||||
Installment | 4 | 40 | 9 | 49 | ||||||||||
Consumer | 72 | 332 | 137 | 469 | ||||||||||
Total loans | 110 | $ | 1,861 | $ | 2,447 | $ | 4,308 |
Three Months Ended March 31, 2012 | ||||||||||||||
(In thousands) | Number of Contracts | Accruing | Nonaccrual | Total Recorded Investment | ||||||||||
Commercial, financial and agricultural | 5 | $ | 1,289 | $ | 750 | $ | 2,039 | |||||||
Commercial real estate | 16 | 2,212 | 2,967 | 5,179 | ||||||||||
Construction real estate: | ||||||||||||||
SEPH commercial land and development | 4 | — | 894 | 894 | ||||||||||
Remaining commercial | 9 | 8,641 | 1,565 | 10,206 | ||||||||||
Mortgage | — | — | — | — | ||||||||||
Installment | — | — | — | — | ||||||||||
Residential real estate: | ||||||||||||||
Commercial | 3 | — | 318 | 318 | ||||||||||
Mortgage | 9 | 111 | 1,170 | 1,281 | ||||||||||
HELOC | — | — | — | — | ||||||||||
Installment | — | — | — | — | ||||||||||
Consumer | 1 | — | 91 | 91 | ||||||||||
Total loans | 47 | $ | 12,253 | $ | 7,755 | $ | 20,008 |
status as of December 31, 2011, but were not classified as TDRs.
Three months ended March 31, 2012 | ||||||||
Number of Contracts | Recorded Investment | |||||||
(In thousands) | ||||||||
Commercial, financial and agricultural | 15 | $ | 8,469 | |||||
Commercial real estate | 8 | 3,201 | ||||||
Construction real estate: | ||||||||
SE LLC commercial land and development | 3 | 659 | ||||||
Remaining commercial | 8 | 4,155 | ||||||
Mortgage | - | - | ||||||
Installment | - | - | ||||||
Residential real estate: | ||||||||
Commercial | 6 | 3,948 | ||||||
Mortgage | 5 | 684 | ||||||
HELOC | 1 | 48 | ||||||
Installment | - | - | ||||||
Consumer | - | - | ||||||
Leases | - | - | ||||||
Total loans | 46 | $ | 21,164 |
The additional allowance for loan loss resulting from the defaults on TDR loans was immaterial.
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | ||||||||||||||
(In thousands) | Number of Contracts | Recorded Investment | Number of Contracts | Recorded Investment | |||||||||||
Commercial, financial and agricultural | 10 | $ | 979 | 15 | $ | 8,469 | |||||||||
Commercial real estate | 2 | 198 | 8 | 3,201 | |||||||||||
Construction real estate: | |||||||||||||||
SEPH commercial land and development | 2 | 45 | 3 | 659 | |||||||||||
Remaining commercial | 3 | 506 | 8 | 4,155 | |||||||||||
Mortgage | 1 | 85 | — | — | |||||||||||
Installment | 1 | 12 | — | — | |||||||||||
Residential real estate: | |||||||||||||||
Commercial | 2 | 857 | 6 | 3,948 | |||||||||||
Mortgage | 34 | 3,430 | 5 | 684 | |||||||||||
HELOC | 2 | 77 | 1 | 48 | |||||||||||
Installment | 10 | 273 | — | — | |||||||||||
Consumer | 100 | 617 | — | — | |||||||||||
Leases | — | — | — | — | |||||||||||
Total loans | 167 | $ | 7,079 | 46 | $ | 21,164 |
Three months ended March 31, 2012 | ||||||||||||||||||||||||||||||||
Commercial, financial and agricultural | Commercial real estate | Construction real estate | Residential real estate | Consumer | Leases | Centennial loan put | Total | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 16,950 | $ | 15,539 | $ | 14,433 | $ | 15,692 | $ | 5,830 | $ | - | $ | - | $ | 68,444 | ||||||||||||||||
Charge-offs | 4,538 | 4,934 | 4,320 | 3,922 | 1,253 | - | - | 18,967 | ||||||||||||||||||||||||
Recoveries | 468 | 92 | 67 | 609 | 707 | - | - | 1,943 | ||||||||||||||||||||||||
Net Charge-offs | 4,070 | 4,842 | 4,253 | 3,313 | 546 | - | - | 17,024 | ||||||||||||||||||||||||
Provision | 5,448 | 1,309 | (433 | ) | 1,489 | 525 | - | - | 8,338 | |||||||||||||||||||||||
Ending balance | $ | 18,328 | $ | 12,006 | $ | 9,747 | $ | 13,868 | $ | 5,809 | $ | - | - | $ | 59,758 | |||||||||||||||||
Provision for Centennial loan put | - | - | - | - | - | - | 662 | 662 | ||||||||||||||||||||||||
Allowance for Credit Losses | $ | 18,328 | $ | 12,006 | $ | 9,747 | $ | 13,868 | $ | 5,809 | $ | - | $ | 662 | $ | 60,420 |
Three months ended March 31, 2011 | ||||||||||||||||||||||||||||
Commercial, financial and agricultural | Commercial real estate | Construction real estate | Residential real estate | Consumer | Leases | Total | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||
Beginning balance | $ | 11,555 | $ | 24,369 | $ | 70,462 | $ | 30,259 | $ | 6,925 | $ | 5 | $ | 143,575 | ||||||||||||||
Charge-offs | 1,841 | 1,785 | 3,420 | 2,487 | 1,973 | - | 11,506 | |||||||||||||||||||||
Recoveries | 569 | 802 | 96 | 501 | 390 | 3 | 2,361 | |||||||||||||||||||||
Net Charge-offs | 1,272 | 983 | 3,324 | 1,986 | 1,583 | (3 | ) | 9,145 | ||||||||||||||||||||
Provision | 1,508 | 1,834 | 4,697 | 4,142 | 1,923 | (4 | ) | 14,100 | ||||||||||||||||||||
Ending balance | $ | 11,791 | $ | 25,220 | $ | 71,835 | $ | 32,415 | $ | 7,265 | $ | 4 | $ | 148,530 |
The composition of the allowance for loan losses at March 31, 2012 and December 31, 2011 was as follows:
March 31, 2012 | ||||||||||||||||||||||||||||
Commercial, financial and agricultural | Commercial real estate | Construction real estate | Residential real estate | Consumer | Leases | Total | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Ending allowance balance attributed to loans: | ||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 4,704 | $ | 1,506 | $ | 2,096 | $ | 1,199 | $ | - | $ | - | $ | 9,505 | ||||||||||||||
Collectively evaluated for impairment | 13,624 | 10,500 | 7,651 | 12,669 | 5,809 | - | 50,253 | |||||||||||||||||||||
Total ending allowance balance | $ | 18,328 | $ | 12,006 | $ | 9,747 | $ | 13,868 | $ | 5,809 | $ | - | $ | 59,758 | ||||||||||||||
Loan balance: | ||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 40,210 | $ | 43,265 | $ | 52,046 | $ | 43,752 | $ | 20 | $ | - | $ | 179,293 | ||||||||||||||
Loans collectively evaluated for impairment | 712,182 | 1,045,083 | 151,769 | 1,623,947 | 610,160 | 1,949 | 4,145,090 | |||||||||||||||||||||
Total ending loan balance | $ | 752,392 | $ | 1,088,348 | $ | 203,815 | $ | 1,667,699 | $ | 610,180 | $ | 1,949 | $ | 4,324,383 | ||||||||||||||
Allowance for loan losses as a percentage of loan balance: | ||||||||||||||||||||||||||||
Loans individually evaluated for impairment | 11.70 | % | 3.48 | % | 4.03 | % | 2.74 | % | -% | -% | 5.30 | % | ||||||||||||||||
Loans collectively evaluated for impairment | 1.91 | % | 1.00 | % | 5.04 | % | 0.78 | % | 0.95 | % | -% | 1.21 | % | |||||||||||||||
Total ending loan balance | 2.44 | % | 1.10 | % | 4.78 | % | 0.83 | % | 0.95 | % | -% | 1.38 | % | |||||||||||||||
Recorded investment: | ||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 40,241 | $ | 43,305 | $ | 52,106 | $ | 43,752 | $ | 20 | $ | - | $ | 179,424 | ||||||||||||||
Loans collectively evaluated for impairment | 715,590 | 1,048,838 | 152,282 | 1,627,708 | 612,740 | 2,001 | 4,159,159 | |||||||||||||||||||||
Total ending loan balance | $ | 755,831 | $ | 1,092,143 | $ | 204,388 | $ | 1,671,460 | $ | 612,760 | $ | 2,001 | $ | 4,338,583 |
December 31, 2011 | ||||||||||||||||||||||||||||
(In thousands) | Commercial, financial and agricultural | Commercial real estate | Construction real estate | Residential real estate | Consumer | Leases | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Ending allowance balance attributed to loans: | ||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 5,819 | $ | 4,431 | $ | 3,414 | $ | 2,271 | $ | - | $ | - | $ | 15,935 | ||||||||||||||
Collectively evaluated for impairment | 11,131 | 11,108 | 11,019 | 13,421 | 5,830 | - | 52,509 | |||||||||||||||||||||
Total ending allowance balance | $ | 16,950 | $ | 15,539 | $ | 14,433 | $ | 15,692 | $ | 5,830 | $ | - | $ | 68,444 | ||||||||||||||
Loan balance: | ||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 40,621 | $ | 51,978 | $ | 50,240 | $ | 44,276 | $ | 20 | $ | - | $ | 187,135 | ||||||||||||||
Loans collectively evaluated for impairment | 703,176 | 1,056,596 | 167,306 | 1,584,342 | 616,485 | 2,059 | 4,129,964 | |||||||||||||||||||||
Total ending loan balance | $ | 743,797 | $ | 1,108,574 | $ | 217,546 | $ | 1,628,618 | $ | 616,505 | $ | 2,059 | $ | 4,317,099 | ||||||||||||||
Allowance for loan losses as a percentage of loan balance: | ||||||||||||||||||||||||||||
Loans individually evaluated for impairment | 14.33 | % | 8.52 | % | 6.80 | % | 5.13 | % | -% | -% | 8.52 | % | ||||||||||||||||
Loans collectively evaluated for impairment | 1.58 | % | 1.05 | % | 6.59 | % | 0.85 | % | 0.95 | % | -% | 1.27 | % | |||||||||||||||
Total ending loan balance | 2.28 | % | 1.40 | % | 6.63 | % | 0.96 | % | 0.95 | % | -% | 1.59 | % | |||||||||||||||
Recorded investment: | ||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 40,621 | $ | 51,978 | $ | 50,240 | $ | 44,276 | $ | 20 | $ | - | $ | 187,135 | ||||||||||||||
Loans collectively evaluated for impairment | 706,297 | 1,060,831 | 167,856 | 1,588,147 | 619,415 | 2,102 | 4,144,648 | |||||||||||||||||||||
Total ending loan balance | $ | 746,918 | $ | 1,112,809 | $ | 218,096 | $ | 1,632,423 | $ | 619,435 | $ | 2,102 | $ | 4,331,783 |
Three Months Ended March 31, 2013 | |||||||||||||||||||||||||||
(In thousands) | Commercial, financial and agricultural | Commercial real estate | Construction real estate | Residential real estate | Consumer | Leases | Total | ||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||
Beginning balance | $ | 15,635 | $ | 11,736 | $ | 6,841 | $ | 14,759 | $ | 6,566 | $ | — | $ | 55,537 | |||||||||||||
Charge-offs | 2,708 | 334 | 1,518 | 674 | 1,274 | — | 6,508 | ||||||||||||||||||||
Recoveries | 189 | 40 | 1,427 | 3,498 | 803 | — | 5,957 | ||||||||||||||||||||
Net charge-offs/(recoveries) | 2,519 | 294 | 91 | (2,824 | ) | 471 | — | 551 | |||||||||||||||||||
Provision | 2,301 | (372 | ) | 806 | (2,949 | ) | 543 | — | 329 | ||||||||||||||||||
Ending balance | $ | 15,417 | $ | 11,070 | $ | 7,556 | $ | 14,634 | $ | 6,638 | $ | — | $ | 55,315 |
Three Months Ended March 31, 2012 | |||||||||||||||||||||||||||
(In thousands) | Commercial, financial and agricultural | Commercial real estate | Construction real estate | Residential real estate | Consumer | Leases | Total | ||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||
Beginning balance | $ | 16,950 | $ | 15,539 | $ | 14,433 | $ | 15,692 | $ | 5,830 | $ | — | $ | 68,444 | |||||||||||||
Charge-offs | 4,538 | 4,934 | 4,320 | 3,922 | 1,253 | — | 18,967 | ||||||||||||||||||||
Recoveries | 468 | 92 | 67 | 609 | 707 | — | 1,943 | ||||||||||||||||||||
Net charge-offs | 4,070 | 4,842 | 4,253 | 3,313 | 546 | — | 17,024 | ||||||||||||||||||||
Provision | 5,448 | 1,309 | (433 | ) | 1,489 | 525 | — | 8,338 | |||||||||||||||||||
Ending balance | $ | 18,328 | $ | 12,006 | $ | 9,747 | $ | 13,868 | $ | 5,809 | $ | — | $ | 59,758 |
March 31, 2013 | |||||||||||||||||||||||||||
(In thousands) | Commercial, financial and agricultural | Commercial real estate | Construction real estate | Residential real estate | Consumer | Leases | Total | ||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||
Ending allowance balance attributed to loans: | |||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 3,519 | $ | 648 | $ | 2,939 | $ | 1,154 | $ | — | $ | — | $ | 8,260 | |||||||||||||
Collectively evaluated for impairment | 11,898 | 10,422 | 4,617 | 13,480 | 6,638 | — | 47,055 | ||||||||||||||||||||
Total ending allowance balance | $ | 15,417 | $ | 11,070 | $ | 7,556 | $ | 14,634 | $ | 6,638 | $ | — | $ | 55,315 | |||||||||||||
Loan balance: | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 21,736 | $ | 40,063 | $ | 30,955 | $ | 36,717 | $ | 799 | $ | — | $ | 130,270 | |||||||||||||
Loans collectively evaluated for impairment | 774,713 | 1,068,852 | 129,496 | 1,679,874 | 656,898 | 3,420 | 4,313,253 | ||||||||||||||||||||
Total ending loan balance | $ | 796,449 | $ | 1,108,915 | $ | 160,451 | $ | 1,716,591 | $ | 657,697 | $ | 3,420 | $ | 4,443,523 | |||||||||||||
Allowance for loan losses as a percentage of loan balance: | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | 16.19 | % | 1.62 | % | 9.49 | % | 3.14 | % | — | % | — | % | 6.34 | % | |||||||||||||
Loans collectively evaluated for impairment | 1.54 | % | 0.98 | % | 3.57 | % | 0.80 | % | 1.01 | % | — | % | 1.09 | % | |||||||||||||
Total ending loan balance | 1.94 | % | 1.00 | % | 4.71 | % | 0.85 | % | 1.01 | % | — | % | 1.24 | % | |||||||||||||
Recorded investment: | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 21,742 | $ | 40,075 | $ | 30,965 | $ | 36,722 | $ | 799 | $ | — | $ | 130,303 | |||||||||||||
Loans collectively evaluated for impairment | 778,138 | 1,072,924 | 129,902 | 1,683,785 | 659,541 | 3,471 | 4,327,761 | ||||||||||||||||||||
Total ending loan balance | $ | 799,880 | $ | 1,112,999 | $ | 160,867 | $ | 1,720,507 | $ | 660,340 | $ | 3,471 | $ | 4,458,064 |
December 31, 2012 | ||||||||||||||||||||||||||||
(In thousands) | Commercial, financial and agricultural | Commercial real estate | Construction real estate | Residential real estate | Consumer | Leases | Total | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||
Ending allowance balance attributed to loans: | ||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 3,180 | $ | 1,540 | $ | 2,277 | $ | 1,279 | $ | — | $ | — | $ | 8,276 | ||||||||||||||
Collectively evaluated for impairment | 12,455 | 10,196 | 4,564 | 13,480 | 6,566 | — | 47,261 | |||||||||||||||||||||
Total ending allowance balance | $ | 15,635 | $ | 11,736 | $ | 6,841 | $ | 14,759 | $ | 6,566 | $ | — | $ | 55,537 | ||||||||||||||
Loan balance: | ||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 22,523 | $ | 44,267 | $ | 34,814 | $ | 35,616 | $ | 18 | $ | — | $ | 137,238 | ||||||||||||||
Loans collectively evaluated for impairment | 801,404 | 1,047,897 | 130,714 | 1,678,029 | 651,912 | 3,128 | 4,313,084 | |||||||||||||||||||||
Total ending loan balance | $ | 823,927 | $ | 1,092,164 | $ | 165,528 | $ | 1,713,645 | $ | 651,930 | $ | 3,128 | $ | 4,450,322 | ||||||||||||||
Allowance for loan losses as a percentage of loan balance: | ||||||||||||||||||||||||||||
Loans individually evaluated for impairment | 14.12 | % | 3.48 | % | 6.54 | % | 3.59 | % | — | % | — | % | 6.03 | % | ||||||||||||||
Loans collectively evaluated for impairment | 1.55 | % | 0.97 | % | 3.49 | % | 0.80 | % | 1.01 | % | — | % | 1.10 | % | ||||||||||||||
Total ending loan balance | 1.90 | % | 1.07 | % | 4.13 | % | 0.86 | % | 1.01 | % | — | % | 1.25 | % | ||||||||||||||
Recorded investment: | ||||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 22,587 | $ | 44,278 | $ | 34,834 | $ | 35,622 | $ | 18 | $ | — | $ | 137,339 | ||||||||||||||
Loans collectively evaluated for impairment | 804,316 | 1,051,725 | 131,176 | 1,681,449 | 654,747 | 3,157 | 4,326,570 | |||||||||||||||||||||
Total ending loan balance | $ | 826,903 | $ | 1,096,003 | $ | 166,010 | $ | 1,717,071 | $ | 654,765 | $ | 3,157 | $ | 4,463,909 |
(in thousands, except share and per share data) | Three months ended March 31, | |||||||
2012 | 2011 | |||||||
Numerator: | ||||||||
Income available to common shareholders | $ | 29,998 | $ | 20,732 | ||||
Denominator: | ||||||||
Denominator for basic earnings per share (weighted average common shares outstanding) | 15,405,910 | 15,398,930 | ||||||
Effect of dilutive options and warrants | 11,835 | 4,490 | ||||||
Denominator for diluted earnings per share (weighted average common shares outstanding adjusted for the effect of dilutive options and warrants) | 15,417,745 | 15,403,420 | ||||||
Earnings per common share: | ||||||||
Basic earnings per common share | $ | 1.95 | $ | 1.35 | ||||
Diluted earnings per common share | $ | 1.95 | $ | 1.35 |
Three Months Ended March 31, | ||||||||
(In thousands, except share and per share data) | 2013 | 2012 | ||||||
Numerator: | ||||||||
Income available to common shareholders | $ | 20,710 | $ | 29,998 | ||||
Denominator: | ||||||||
Denominator for basic earnings per share (weighted average common shares outstanding) | 15,411,990 | 15,405,910 | ||||||
Effect of dilutive options and warrants | — | 11,835 | ||||||
Denominator for diluted earnings per share (weighted average common shares outstanding adjusted for the effect of dilutive options and warrants) | 15,411,990 | 15,417,745 | ||||||
Earnings per common share: | ||||||||
Basic earnings per common share | $ | 1.34 | $ | 1.95 | ||||
Diluted earnings per common share | $ | 1.34 | $ | 1.95 |
May 2, 2012.
.
Operating Results for the three months ended March 31, 2012 | ||||||||||||||||||||||||
(in thousands) | PNB | VB | GFSC | SE LLC | All Other | Total | ||||||||||||||||||
Net interest income | $ | 55,846 | $ | - | $ | 2,211 | $ | 2,610 | $ | 1,061 | $ | 61,728 | ||||||||||||
Provision for loan losses | 4,672 | - | 250 | 4,078 | - | 9,000 | ||||||||||||||||||
Other income and security gains | 16,661 | - | - | 22,891 | 68 | 39,620 | ||||||||||||||||||
Other expense | 38,056 | - | 721 | 7,503 | 1,528 | 47,808 | ||||||||||||||||||
Net income | 21,561 | - | 806 | 9,059 | 49 | 31,475 | ||||||||||||||||||
Assets (as of March 31, 2012) | $ | 6,587,773 | $ | - | $ | 47,380 | $ | 161,493 | $ | (19,795 | ) | $ | 6,776,851 |
Operating Results for the three months ended March 31, 2011 | ||||||||||||||||||||||||
(in thousands) | PNB | VB | GFSC | SE LLC | All Other | Total | ||||||||||||||||||
Net interest income | $ | 60,236 | $ | 6,755 | $ | 2,025 | $ | - | $ | 297 | $ | 69,313 | ||||||||||||
Provision for loan losses | 4,975 | 8,600 | 525 | - | - | 14,100 | ||||||||||||||||||
Other income (loss) and security gains | 22,897 | (1,318 | ) | - | - | 86 | 21,665 | |||||||||||||||||
Other expense | 36,321 | 7,425 | 577 | - | 2,023 | 46,346 | ||||||||||||||||||
Net income (loss) | 29,030 | (6,846 | ) | 600 | - | (588 | ) | 22,196 | ||||||||||||||||
Assets (as of March 31, 2011) | $ | 6,573,541 | $ | 786,856 | $ | 45,366 | $ | 20,000 | $ | (102,658 | ) | $ | 7,323,105 |
Operating Results for the three months ended March 31, 2013 | ||||||||||||||||||||
(In thousands) | PNB | GFSC | SEPH | All Other | Total | |||||||||||||||
Net interest income (loss) | $ | 52,735 | $ | 2,133 | $ | (655 | ) | $ | 1,240 | $ | 55,453 | |||||||||
Provision for (recovery of) loan losses | 3,130 | 210 | (3,011 | ) | — | 329 | ||||||||||||||
Other income | 17,872 | 2 | 831 | 100 | 18,805 | |||||||||||||||
Other expense | 40,324 | 786 | 3,344 | 1,644 | 46,098 | |||||||||||||||
Income (loss) before income taxes | $ | 27,153 | $ | 1,139 | $ | (157 | ) | $ | (304 | ) | $ | 27,831 | ||||||||
Federal income taxes (benefit) | 7,213 | 399 | (55 | ) | (436 | ) | 7,121 | |||||||||||||
Net income (loss) | $ | 19,940 | $ | 740 | $ | (102 | ) | $ | 132 | $ | 20,710 | |||||||||
Assets (as of March 31, 2013) | $ | 6,611,802 | $ | 49,555 | $ | 89,240 | $ | (3,442 | ) | $ | 6,747,155 |
Operating Results for the three months ended March 31, 2012 | ||||||||||||||||||||
(In thousands) | PNB | GFSC | SEPH | All Other | Total | |||||||||||||||
Net interest income | $ | 55,846 | $ | 2,211 | $ | 2,610 | $ | 1,061 | $ | 61,728 | ||||||||||
Provision for loan losses | 4,672 | 250 | 3,416 | — | 8,338 | |||||||||||||||
Other income | 16,661 | — | 724 | 68 | 17,453 | |||||||||||||||
Gain on sale of Vision business | 22,167 | 22,167 | ||||||||||||||||||
Other expense | 38,056 | 721 | 8,165 | 1,528 | 48,470 | |||||||||||||||
Income (loss) before income taxes | $ | 29,779 | $ | 1,240 | $ | 13,920 | $ | (399 | ) | $ | 44,540 | |||||||||
Federal income taxes (benefit) | 8,218 | 434 | 4,861 | (448 | ) | 13,065 | ||||||||||||||
Net income | $ | 21,561 | $ | 806 | $ | 9,059 | $ | 49 | $ | 31,475 | ||||||||||
Assets (as of March 31, 2012) | $ | 6,587,773 | $ | 47,380 | $ | 161,493 | $ | (19,795 | ) | $ | 6,776,851 |
Note 9 –Stock Option Plan
Park did not grant any stock options during the three month periods ended March 31, 2012 and 2011.
The following table summarizes stock option activity during the first three months of 2012.
Stock Options | Weighted Average Exercise Price Per Share | |||||||
Outstanding at December 31, 2011 | 74,020 | $ | 74.96 | |||||
Granted | - | - | ||||||
Exercised | - | - | ||||||
Forfeited/Expired | 7,395 | 74.96 | ||||||
Outstanding at March 31 ,2012 | 66,625 | $ | 74.96 |
All of the stock options outstanding at March 31, 2012 were exercisable. The aggregate intrinsic value of the outstanding stock options at March 31, 2012 was $0. In addition, no stock options were exercised during the first three months of 2012 or 2011. The weighted average contractual remaining term was 0.69 years for the stock options outstanding at March 31, 2012.
All of the common shares delivered upon the exercise of incentive stock options granted under the Park National Corporation 2005 Incentive Stock Option Plan (the “2005 Plan”) are to be treasury shares. At March 31, 2012, incentive stock options granted under the 2005 Plan covering 66,625 common shares were outstanding. At March 31, 2012, Park held 517,733 treasury shares that were available for issuance under the 2005 Plan.
(in thousands) | ||||||||||||||||
Securities Available-for-Sale | Amortized Cost | Gross Unrealized Holding Gains | Gross Unrealized Holding Losses | Estimated Fair Value | ||||||||||||
Obligations of U.S. Treasury and other U.S. Government sponsored entities | $ | 599,125 | $ | 478 | $ | 2,128 | $ | 597,475 | ||||||||
Obligations of states and political subdivisions | 2,616 | 39 | - | 2,655 | ||||||||||||
U.S. Government sponsored entities asset-backed securities | 388,444 | 16,734 | - | 405,178 | ||||||||||||
Other equity securities | 1,188 | 1,014 | 29 | 2,173 | ||||||||||||
Total | $ | 991,373 | $ | 18,265 | $ | 2,157 | $ | 1,007,481 |
Securities Held-to-Maturity | Amortized Cost | Gross Unrecognized Holding Gains | Gross Unrecognized Holding Losses | Estimated Fair Value | ||||||||||||
Obligations of states and political subdivisions | $ | 1,427 | $ | 3 | $ | - | $ | 1,430 | ||||||||
U.S. Government sponsored entities asset-backed securities | 780,823 | 13,102 | 280 | 793,645 | ||||||||||||
Total | $ | 782,250 | $ | 13,105 | $ | 280 | $ | 795,075 |
Securities Available-for-Sale (In thousands) | Amortized Cost | Gross Unrealized Holding Gains | Gross Unrealized Holding Losses | Estimated Fair Value | ||||||||||||
Obligations of U.S. Treasury and other U.S. Government sponsored entities | $ | 570,639 | $ | 338 | $ | 2,957 | $ | 568,020 | ||||||||
Obligations of states and political subdivisions | 984 | 11 | — | 995 | ||||||||||||
U.S. Government sponsored entities' asset-backed securities | 417,356 | 12,869 | 358 | 429,867 | ||||||||||||
Other equity securities | 1,137 | 1,232 | — | 2,369 | ||||||||||||
Total | $ | 990,116 | $ | 14,450 | $ | 3,315 | $ | 1,001,251 |
Securities Held-to-Maturity (In thousands) | Amortized Cost | Gross Unrecognized Holding Gains | Gross Unrecognized Holding Losses | Estimated Fair Value | ||||||||||||
Obligations of states and political subdivisions | $ | 485 | $ | 1 | $ | — | $ | 486 | ||||||||
U.S. Government sponsored entities' asset-backed securities | 284,765 | 9,063 | — | 293,828 | ||||||||||||
Total | $ | 285,250 | $ | 9,064 | $ | — | $ | 294,314 |
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||
(In thousands) | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | ||||||||||||||||||
Securities Available-for-Sale | ||||||||||||||||||||||||
Obligations of U.S. Treasury and other U.S. Government agencies | $ | 387,683 | $ | 2,957 | $ | — | $ | — | $ | 387,683 | $ | 2,957 | ||||||||||||
U.S. Government agencies' asset-backed securities | $ | 171,450 | $ | 358 | $ | — | $ | — | $ | 171,450 | $ | 358 | ||||||||||||
Total | $ | 559,133 | $ | 3,315 | $ | — | $ | — | $ | 559,133 | $ | 3,315 |
Securities Available-for-Sale (In thousands) | Amortized cost | Gross unrealized holding gains | Gross unrealized holding losses | Estimated fair value | ||||||||||||
Obligations of U.S. Treasury and other U.S. Government sponsored entities | $ | 695,655 | $ | 1,352 | $ | 1,280 | $ | 695,727 | ||||||||
Obligations of states and political subdivisions | 984 | 19 | — | 1,003 | ||||||||||||
U.S. Government sponsored entities' asset-backed securities | 401,882 | 14,067 | 447 | 415,502 | ||||||||||||
Other equity securities | 1,137 | 1,085 | — | 2,222 | ||||||||||||
Total | $ | 1,099,658 | $ | 16,523 | $ | 1,727 | $ | 1,114,454 |
Securities Held-to-Maturity (In thousands) | Amortized cost | Gross unrecognized holding gains | Gross unrecognized holding losses | Estimated fair value | ||||||||||||
Obligations of states and political subdivisions | $ | 570 | $ | 2 | $ | — | $ | 572 | ||||||||
U.S. Government sponsored entities' asset-backed securities | 400,820 | 9,351 | 38 | 410,133 | ||||||||||||
Total | $ | 401,390 | $ | 9,353 | $ | 38 | $ | 410,705 |
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||
(In thousands) | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | ||||||||||||||||||
Securities Available-for-Sale | ||||||||||||||||||||||||
Obligations of U.S. Treasury and other U.S. Government sponsored entities | $ | 177,470 | $ | 1,280 | $ | — | $ | — | $ | 177,470 | $ | 1,280 | ||||||||||||
U.S. Government sponsored entities' asset-backed securities | $ | 123,631 | $ | 447 | $ | — | $ | — | $ | 123,631 | $ | 447 | ||||||||||||
Total | $ | 301,101 | $ | 1,727 | $ | — | $ | — | $ | 301,101 | $ | 1,727 | ||||||||||||
Securities Held-to-Maturity | ||||||||||||||||||||||||
U.S. Government sponsored entities' asset-backed securities | $ | 10,120 | $ | 38 | $ | — | $ | — | $ | 10,120 | $ | 38 |
Securities with unrealized losses at March 31, 2012, were as follows:
(in thousands) | Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||
Securities Available-for-Sale | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | ||||||||||||||||||
Obligations of U.S. Treasury and other U.S. Government agencies | $ | 347,872 | $ | 2,128 | $ | - | $ | - | $ | 347,872 | $ | 2,128 | ||||||||||||
Other equity securities | - | - | 74 | 29 | 74 | 29 | ||||||||||||||||||
Total | $ | 347,872 | $ | 2,128 | $ | 74 | $ | 29 | $ | 347,946 | $ | 2,157 | ||||||||||||
Securities Held-to-Maturity | ||||||||||||||||||||||||
U.S. Government sponsored entities asset-backed securities | $ | 62,420 | $ | 280 | $ | - | $ | - | $ | 62,420 | $ | 280 |
Investment securities at December 31, 2011, were as follows:
(in thousands) | ||||||||||||||||
Securities Available-for-Sale | Amortized cost | Gross unrealized holding gains | Gross unrealized holding losses | Estimated fair value | ||||||||||||
Obligations of U.S. Treasury and other U.S. Government sponsored entities | $ | 370,043 | $ | 1,614 | $ | - | $ | 371,657 | ||||||||
Obligations of states and political subdivisions | 2,616 | 44 | - | 2,660 | ||||||||||||
U.S. Government sponsored entities asset-backed securities | 427,300 | 16,995 | - | 444,295 | ||||||||||||
Other equity securities | 1,188 | 877 | 32 | 2,033 | ||||||||||||
Total | $ | 801,147 | $ | 19,530 | $ | 32 | $ | 820,645 |
Securities Held-to-Maturity | Amortized cost | Gross unrecognized holding gains | Gross unrecognized holding losses | Estimated fair value | ||||||||||||
Obligations of states and political subdivisions | $ | 1,992 | $ | 5 | $ | - | $ | 1,997 | ||||||||
U.S. Government sponsored entities asset-backed securities | 818,232 | 14,377 | 32 | 832,577 | ||||||||||||
Total | $ | 820,224 | $ | 14,382 | $ | 32 | $ | 834,574 |
Securities with unrealized losses at December 31, 2011, were as follows:
(in thousands) | Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||
Securities Available-for-Sale | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | ||||||||||||||||||
Other equity securities | $ | - | $ | - | $ | 80 | $ | 32 | $ | 80 | $ | 32 | ||||||||||||
Securities Held-to-Maturity | ||||||||||||||||||||||||
U.S. Government sponsored entities asset-backed securities | $ | - | $ | - | $ | 38,775 | $ | 32 | $ | 38,775 | $ | 32 |
(in thousands) | Amortized cost | Fair value | ||||||
Securities Available-for-Sale | ||||||||
U.S. Treasury and sponsored entities notes: | ||||||||
Due within one year | $ | 249,125 | $ | 249,604 | ||||
Due one through five years | 275,000 | 273,532 | ||||||
Due five through ten years | 75,000 | 74,339 | ||||||
Total | $ | 599,125 | $ | 597,475 | ||||
Obligations of states and political subdivisions: | ||||||||
Due within one year | $ | 2,121 | $ | 2,130 | ||||
Due one through five years | 495 | 525 | ||||||
$ | 2,616 | $ | 2,655 | |||||
U.S. Government sponsored entities asset-backed securities: | ||||||||
Total | $ | 388,444 | $ | 405,178 |
(in thousands) | Amortized cost | Fair value | ||||||
Securities Held-to-Maturity | ||||||||
Obligations of state and political subdivisions: | ||||||||
Due within one year | $ | 1,427 | $ | 1,430 | ||||
Total | $ | 1,427 | $ | 1,430 | ||||
U.S. Government sponsored entities asset-backed securities: | ||||||||
Total | $ | 780,823 | $ | 793,645 |
Securities Available-for-Sale (In thousands) | Amortized cost | Fair value | ||||||
U.S. Treasury and sponsored entities' obligations: | ||||||||
Due within one year | $ | 180,000 | $ | 180,338 | ||||
Due one through five years | 173,750 | 171,548 | ||||||
Due five through ten years | 216,889 | 216,134 | ||||||
Total | $ | 570,639 | $ | 568,020 | ||||
Obligations of states and political subdivisions: | ||||||||
Due within one year | $ | 984 | $ | 995 | ||||
U.S. Government sponsored entities' asset-backed securities: | $ | 417,356 | $ | 429,867 |
Securities Held-to-Maturity (In thousands) | Amortized cost | Fair value | ||||||
Obligations of state and political subdivisions: | ||||||||
Due within one year | $ | 485 | $ | 486 | ||||
U.S. Government sponsored entities' asset-backed securities: | $ | 284,765 | $ | 293,828 |
March 31, | December 31, | |||||||
(in thousands) | 2012 | 2011 | ||||||
Federal Home Loan Bank stock | $ | 60,728 | $ | 60,728 | ||||
Federal Reserve Bank stock | 6,876 | 6,876 | ||||||
Total | $ | 67,604 | $ | 67,604 |
March 31, 2013 | December 31, 2012 | |||||||
(In thousands) | ||||||||
Federal Home Loan Bank stock | $ | 59,032 | $ | 59,032 | ||||
Federal Reserve Bank stock | 6,875 | 6,875 | ||||||
Total | $ | 65,907 | $ | 65,907 |
(in thousands) | Three months ended March 31, | |||||||
2012 | 2011 | |||||||
Service cost | $ | 1,068 | $ | 1,139 | ||||
Interest cost | 1,012 | 992 | ||||||
Expected return on plan assets | (2,186 | ) | (1,886 | ) | ||||
Amortization of prior service cost | 5 | 5 | ||||||
Recognized net actuarial loss | 427 | 353 | ||||||
Benefit expense | $ | 326 | $ | 603 |
Three Months Ended March 31, | ||||||||
(In thousands) | 2013 | 2012 | ||||||
Service cost | $ | 1,204 | $ | 1,068 | ||||
Interest cost | 1,056 | 1,012 | ||||||
Expected return on plan assets | (2,384 | ) | (2,186 | ) | ||||
Amortization of prior service cost | 5 | 5 | ||||||
Recognized net actuarial loss | 676 | 427 | ||||||
Benefit expense | $ | 557 | $ | 326 |
During the first quarter
At
For the three months ended March 31, 2012, the change in the fair value of the interest rate swap reported in other comprehensive income was a gain of $113,000 (net of taxes of $60,000). Amounts reported in accumulated other comprehensive income related to the interest rate swap will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt.
As of March 31, 2012,2013
losses and consideration of the Visa settlement agreement announced on July 13, 2012 to resolve the Federal Multi-District Interchange Litigation.
future loan repurchases.
(in thousands) | Three months ended March 31, 2012 | Three months ended March 31, 2011 | ||||||
Mortgage servicing rights: | ||||||||
Carrying amount, net, beginning of period | $ | 9,301 | $ | 10,488 | ||||
Additions | 562 | 330 | ||||||
Amortization | (888 | ) | (521 | ) | ||||
Changes in valuation inputs & assumptions | - | 68 | ||||||
Carrying amount, net, end of period | $ | 8,975 | $ | 10,365 | ||||
Valuation allowance: | ||||||||
Beginning of period | $ | 1,021 | $ | 748 | ||||
Changes due to fair value adjustments | - | (68 | ) | |||||
End of period | $ | 1,021 | $ | 680 |
Three Months Ended March 31, | ||||||||
(In thousands) | 2013 | 2012 | ||||||
Mortgage servicing rights: | ||||||||
Carrying amount, net, beginning of period | $ | 7,763 | $ | 9,301 | ||||
Additions | 1,111 | 562 | ||||||
Amortization | (815 | ) | (888 | ) | ||||
Changes in valuation allowance | 62 | — | ||||||
Carrying amount, net, end of period | $ | 8,121 | $ | 8,975 | ||||
Valuation allowance: | ||||||||
Beginning of period | $ | 2,324 | $ | 1,021 | ||||
Changes in valuation allowance | (62 | ) | — | |||||
End of period | $ | 2,262 | $ | 1,021 |
2013
and 2012, respectively.Fair Value Measurements at March 31, 2012 using: | ||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Balance at March 31, 2012 | ||||||||||||
Assets | ||||||||||||||||
Investment securities | ||||||||||||||||
Obligations of U.S. Treasury and other U.S. Government sponsored entities | $ | - | $ | 597,475 | $ | - | $ | 597,475 | ||||||||
Obligations of states and political subdivisions | - | 2,655 | - | 2,655 | ||||||||||||
U.S. Government sponsored entities’ asset-backed securities | - | 405,178 | - | 405,178 | ||||||||||||
Equity securities | 1,417 | - | 756 | 2,173 | ||||||||||||
Mortgage loans held for sale | - | 11,110 | - | 11,110 | ||||||||||||
Mortgage IRLCs | - | 169 | - | 169 | ||||||||||||
Liabilities | ||||||||||||||||
Interest rate swap | $ | - | $ | 673 | $ | - | $ | 673 | ||||||||
Fair value swap | - | - | 135 | 135 |
Fair Value Measurements at December 31, 2011 using: | ||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Balance at December 31, 2011 | ||||||||||||
Assets | ||||||||||||||||
Investment securities | ||||||||||||||||
Obligations of U.S. Treasury and other U.S. Government sponsored entities | $ | - | $ | 371,657 | $ | - | $ | 371,657 | ||||||||
Obligations of states and political subdivisions | - | 2,660 | - | 2,660 | ||||||||||||
U.S. Government sponsored entities’ asset-backed securities | - | 444,295 | - | 444,295 | ||||||||||||
Equity securities | 1,270 | - | 763 | 2,033 | ||||||||||||
Mortgage loans held for sale | - | 11,535 | - | 11,535 | ||||||||||||
Mortgage IRLCs | - | 251 | - | 251 | ||||||||||||
Liabilities | ||||||||||||||||
Interest rate swap | $ | - | $ | 846 | $ | - | $ | 846 | ||||||||
Fair value swap | - | - | 700 | 700 |
Fair Value Measurements at March 31, 2013 using: | ||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Balance at March 31, 2013 | ||||||||||||
Assets | ||||||||||||||||
Investment securities: | ||||||||||||||||
Obligations of U.S. Treasury and other U.S. Government sponsored entities | $ | — | $ | 568,020 | $ | — | $ | 568,020 | ||||||||
Obligations of states and political subdivisions | — | 995 | — | 995 | ||||||||||||
U.S. Government sponsored entities’ asset-backed securities | — | 429,867 | — | 429,867 | ||||||||||||
Equity securities | 1,593 | — | 776 | 2,369 | ||||||||||||
Mortgage loans held for sale | — | 10,235 | — | 10,235 | ||||||||||||
Mortgage IRLCs | — | 251 | — | 251 | ||||||||||||
Liabilities | ||||||||||||||||
Fair value swap | $ | — | $ | — | $ | 135 | $ | 135 |
Fair Value Measurements at December 31, 2012 using: | ||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Balance at December 31, 2012 | ||||||||||||
Assets | ||||||||||||||||
Investment securities: | ||||||||||||||||
Obligations of U.S. Treasury and other U.S. Government sponsored entities | $ | — | $ | 695,727 | $ | — | $ | 695,727 | ||||||||
Obligations of states and political subdivisions | — | 1,003 | — | 1,003 | ||||||||||||
U.S. Government sponsored entities’ asset-backed securities | — | 415,502 | — | 415,502 | ||||||||||||
Equity securities | 1,442 | — | 780 | 2,222 | ||||||||||||
Mortgage loans held for sale | — | 25,743 | — | 25,743 | ||||||||||||
Mortgage IRLCs | — | 372 | — | 372 | ||||||||||||
Liabilities | ||||||||||||||||
Fair value swap | $ | — | $ | — | $ | 135 | $ | 135 |
inputs as of the end of the reporting period.
Interest rate swap: The fair value of the interest rate swap represents the estimated amount Park would pay or receive to terminate the agreement, considering current interest rates and the current creditworthiness of the counterparty.
(in thousands) | Obligations of states and political subdivisions | Equity Securities | Fair value swap | |||||||||
Balance, at January 1, 2012 | $ | - | $ | 763 | $ | (700 | ) | |||||
Total gains/(losses) | ||||||||||||
Included in earnings – realized | - | - | - | |||||||||
Included in earnings – unrealized | - | - | - | |||||||||
Included in other comprehensive income | - | (7 | ) | - | ||||||||
Purchases, sales, issuances and settlements, other | - | - | - | |||||||||
Periodic settlement of fair value swap | - | - | (565 | ) | ||||||||
Balance March 31, 2012 | $ | - | $ | 756 | $ | (135 | ) | |||||
Balance, at January 1, 2011 | $ | 2,598 | $ | 745 | $ | (60 | ) | |||||
Total gains/(losses) | ||||||||||||
Included in earnings – realized | - | - | - | |||||||||
Included in earnings – unrealized | - | - | - | |||||||||
Included in other comprehensive income | (128 | ) | (5 | ) | - | |||||||
Purchases, sales, issuances and settlements, other | - | - | - | |||||||||
Re-evaluation of fair value swap | - | - | - | |||||||||
Balance March 31, 2011 | $ | 2,470 | $ | 740 | $ | (60 | ) |
(In thousands) | Equity Securities | Fair value swap | ||||||
Balance, at January 1, 2013 | $ | 780 | $ | (135 | ) | |||
Total gains/(losses) | ||||||||
Included in earnings – realized | — | — | ||||||
Included in earnings – unrealized | — | — | ||||||
Included in other comprehensive income | (4 | ) | — | |||||
Purchases, sales, issuances and settlements, other | — | — | ||||||
Periodic settlement of fair value swap | — | — | ||||||
Balance at March 31, 2013 | $ | 776 | $ | (135 | ) | |||
Balance, at January 1, 2012 | $ | 763 | $ | (700 | ) | |||
Total gains/(losses) | ||||||||
Included in earnings – realized | — | — | ||||||
Included in earnings – unrealized | — | — | ||||||
Included in other comprehensive income | (7 | ) | — | |||||
Purchases, sales, issuances and settlements, other | — | — | ||||||
Periodic settlement of fair value swap | — | 565 | ||||||
Balance at March 31, 2012 | $ | 756 | $ | (135 | ) |
Fair Value Measurements at March 31, 2012 using: | ||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Balance at March 31, 2012 | ||||||||||||
Impaired loans: | ||||||||||||||||
Commercial, financial and agricultural | $ | - | $ | - | $ | 18,476 | $ | 18,476 | ||||||||
Commercial real estate | - | - | 25,445 | 25,445 | ||||||||||||
Construction real estate: | ||||||||||||||||
SE LLC commercial land and development | - | - | 18,468 | 18,468 | ||||||||||||
Remaining commercial | - | - | 8,665 | 8,665 | ||||||||||||
Residential real estate | - | - | 12,270 | 12,270 | ||||||||||||
Total impaired loans | $ | - | $ | - | $ | 83,324 | $ | 83,324 | ||||||||
Mortgage servicing rights | - | 7,138 | 7,138 | |||||||||||||
Other real estate owned | - | - | 41,965 | 41,965 |
Fair Value Measurements at December 31, 2011 using: | ||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Balance at December 31, 2011 | ||||||||||||
Impaired loans: | ||||||||||||||||
Commercial, financial and agricultural | $ | - | $ | - | $ | 19,931 | $ | 19,931 | ||||||||
Commercial real estate | - | - | 24,859 | 24,859 | ||||||||||||
Construction real estate: | ||||||||||||||||
Vision commercial land and development | - | - | 21,228 | 21,228 | ||||||||||||
Remaining commercial | - | - | 8,860 | 8,860 | ||||||||||||
Residential real estate | - | - | 12,935 | 12,935 | ||||||||||||
Total impaired loans | $ | - | $ | - | $ | 87,813 | $ | 87,813 | ||||||||
Mortgage servicing rights | - | 5,815 | - | 5,815 | ||||||||||||
Other real estate owned | - | - | 42,272 | 42,272 |
basis. Collateral dependent impaired loans are carried at fair value if they have been charged down to fair value or if a specific valuation allowance has been established. A new cost basis is established at the time a property is initially recorded in OREO. OREO properties are carried at fair value if a devaluation has been taken to the property's value subsequent to the initial measurement.
Fair Value Measurements at March 31, 2013 using: | ||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Balance at March 31, 2013 | ||||||||||||
Impaired loans: | ||||||||||||||||
Commercial real estate | $ | — | $ | — | $ | 25,093 | $ | 25,093 | ||||||||
Construction real estate: | ||||||||||||||||
SEPH commercial land and development | — | — | 10,482 | 10,482 | ||||||||||||
Remaining commercial | — | — | 8,657 | 8,657 | ||||||||||||
Residential real estate | — | — | 7,039 | 7,039 | ||||||||||||
Total impaired loans | $ | — | $ | — | $ | 51,271 | $ | 51,271 | ||||||||
Mortgage servicing rights | — | 5,896 | — | 5,896 | ||||||||||||
OREO: | ||||||||||||||||
Commercial real estate | — | — | 4,838 | 4,838 | ||||||||||||
Construction real estate | — | — | 10,345 | 10,345 | ||||||||||||
Residential real estate | — | — | 3,166 | 3,166 | ||||||||||||
Total OREO | $ | — | $ | — | $ | 18,349 | $ | 18,349 |
Fair Value Measurements at December 31, 2012 using: | ||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Balance at December 31, 2012 | ||||||||||||
Impaired loans: | ||||||||||||||||
Commercial real estate | $ | — | $ | — | $ | 25,997 | $ | 25,997 | ||||||||
Construction real estate: | ||||||||||||||||
SEPH commercial land and development | — | — | 12,832 | 12,832 | ||||||||||||
Remaining commercial | — | — | 8,113 | 8,113 | ||||||||||||
Residential real estate | — | — | 6,990 | 6,990 | ||||||||||||
Total impaired loans | $ | — | $ | — | $ | 53,932 | $ | 53,932 | ||||||||
Mortgage servicing rights | — | 6,642 | — | 6,642 | ||||||||||||
OREO: | ||||||||||||||||
Commercial real estate | — | — | 3,485 | 3,485 | ||||||||||||
Construction real estate | — | — | 12,134 | 12,134 | ||||||||||||
Residential real estate | — | — | 4,307 | 4,307 | ||||||||||||
Total OREO | $ | — | $ | — | $ | 19,926 | $ | 19,926 |
The financial impact of credit adjustments related to impaired loans carried at fair value during the three months ended March 31, 2013 and 2012 was
$2.3 million and $4.4 million, respectively.At
March 31, 2013 | ||||||||||
(In thousands) | Fair Value | Valuation Technique | Unobservable Input(s) | Range (Weighted Average) | ||||||
Impaired loans: | ||||||||||
Commercial real estate | $ | 25,093 | Sales comparison approach | Adj to comparables | 0.0% - 111.0% (21.7%) | |||||
Income approach | Capitalization rate | 7.5% - 20.9% (9.7%) | ||||||||
Cost approach | Accumulated depreciation | 38.0% - 65.0% (53.1%) | ||||||||
Construction real estate: | �� | |||||||||
SEPH commercial land and development | $ | 10,482 | Sales comparison approach | Adj to comparables | 0.0% - 218.0% (23.3%) | |||||
Bulk sale approach | Discount rate | 11.0% - 55.0% (25.4%) | ||||||||
Remaining commercial | $ | 8,657 | Sales comparison approach | Adj to comparables | 0.0% - 75.0% (27.7%) | |||||
Bulk sale approach | Discount rate | 11.0% - 55.0% (17.9%) | ||||||||
Residential real estate | $ | 7,039 | Sales comparison approach | Adj to comparables | 0.0% - 178.0% (17.5%) | |||||
Income approach | Capitalization rate | 7.8% - 10.5% (8.2%) | ||||||||
Other real estate owned: | ||||||||||
Commercial real estate | $ | 4,838 | Sales comparison approach | Adj to comparables | 0.0% - 85.0% (35.8%) | |||||
Income approach | Capitalization rate | 8.5% - 11.5% (9.9%) | ||||||||
Bulk sale approach | Discount rate | 10.0% - 13.0% (2.1%) | ||||||||
Cost approach | Accumulated depreciation | 40.0% - 90.0% (65.0%) | ||||||||
Construction real estate | $ | 10,345 | Sales comparison approach | Adj to comparables | 0.0% - 312.0% (30.4%) | |||||
Bulk sale approach | Discount rate | 13.0% (13.0%) | ||||||||
Residential real estate | $ | 3,166 | Sales comparison approach | Adj to comparables | 0.0% - 173.7% (19.0%) | |||||
Income approach | Capitalization rate | 7.9% - 9.3% (8.5%) | ||||||||
Cost approach | Accumulated depreciation | 6.0% (6.0%) |
December 31, 2012 | ||||||||||
(In thousands) | Fair Value | Valuation Technique | Unobservable Input(s) | Range (Weighted Average) | ||||||
Impaired loans: | ||||||||||
Commercial real estate | $ | 25,997 | Sales comparison approach | Adj to comparables | 0.0% - 116.0% (22.3%) | |||||
Income approach | Capitalization rate | 7.5% - 20.9% (10.1%) | ||||||||
Cost approach | Accumulated depreciation | 23.0% - 63.0% (50.4%) | ||||||||
Construction real estate: | ||||||||||
SEPH commercial land and development | $ | 12,832 | Sales comparison approach | Adj to comparables | 0.0% - 218.0% (31.9%) | |||||
Bulk sale approach | Discount rate | 11.0% - 55.0% (23.4%) | ||||||||
Remaining commercial | $ | 8,113 | Sales comparison approach | Adj to comparables | 0.0% - 75.0% (26.2%) | |||||
Bulk sale approach | Discount rate | 10.0% - 55.0% (18.3%) | ||||||||
Residential real estate | $ | 6,990 | Sales comparison approach | Adj to comparables | 0.0% - 178.0% (17.9%) | |||||
Other real estate owned: | ||||||||||
Commercial real estate | $ | 3,485 | Sales comparison approach | Adj to comparables | 0.0% - 67.0% (25.8%) | |||||
Income approach | Capitalization rate | 11.0% (11.0%) | ||||||||
Bulk sale approach | Discount rate | 13.0% (13.0%) | ||||||||
Cost approach | Accumulated depreciation | 40.9% - 90.0% (65.0%) | ||||||||
Construction real estate | $ | 12,134 | Sales comparison approach | Adj to comparables | 0.0% - 273.0% (34.0%) | |||||
Income approach | Capitalization rate | 8.5% (8.5%) | ||||||||
Bulk sale approach | Discount rate | 10.0% - 12.0% (10.8%) | ||||||||
Residential real estate | $ | 4,307 | Sales comparison approach | Adj to comparables | 1.0% - 61.0% (18.0%) | |||||
Income approach | Capitalization rate | 7.9% - 9.3% (8.7%) | ||||||||
Cost approach | Accumulated depreciation | 6.0% (6.0%) |
(in thousands) | March 31, 2012 | |||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||
Financial assets: | Carrying value | Level 1 | Level 2 | Level 3 | Total fair value | |||||||||||||||
Cash and money market instruments | $ | 161,130 | $ | 161,130 | $ | - | $ | - | $ | 161,130 | ||||||||||
Investment securities | 1,789,731 | 1,417 | 1,800,383 | 756 | 1,802,556 | |||||||||||||||
Accrued interest receivable - securities | 7,027 | - | 7,027 | - | 7,027 | |||||||||||||||
Accrued interest receivable - loans | 14,200 | - | 1 | 14,199 | 14,200 | |||||||||||||||
Mortgage loans held for sale | 11,110 | - | 11,110 | - | 11,110 | |||||||||||||||
Impaired loans carried at fair value | 83,324 | - | - | 83,324 | 83,324 | |||||||||||||||
Other loans | 4,170,191 | - | - | 4,188,265 | 4,188,265 | |||||||||||||||
Loans receivable, net | $ | 4,264,625 | $ | - | $ | 11,110 | $ | 4,271,589 | $ | 4,282,699 | ||||||||||
Financial liabilities: | ||||||||||||||||||||
Noninterest bearing checking accounts | $ | 1,055,745 | $ | 1,055,745 | $ | - | $ | $ | 1,055,745 | |||||||||||
Interest bearing transactions accounts | 1,215,562 | 1,215,562 | - | - | 1,215,562 | |||||||||||||||
Savings accounts | 1,001,789 | 1,001,789 | - | 1,001,789 | ||||||||||||||||
Time deposits | 1,541,374 | - | 1,547,748 | - | 1,547,748 | |||||||||||||||
Other | 2,918 | 2,918 | - | - | 2,918 | |||||||||||||||
Total deposits | $ | 4,817,388 | $ | 3,276,014 | $ | 1,547,748 | $ | - | $ | 4,823,762 | ||||||||||
Short-term borrowings | $ | 236,687 | $ | - | $ | 236,687 | $ | - | $ | 236,687 | ||||||||||
Long-term debt | 821,801 | - | 907,995 | - | 907,995 | |||||||||||||||
Subordinated debentures/notes | 75,250 | - | 68,475 | - | 68,475 | |||||||||||||||
Accrued interest payable – deposits | 2,824 | 36 | 2,788 | - | 2,824 | |||||||||||||||
Accrued interest payable – debt/borrowings | 2,210 | - | 2,210 | - | 2,210 | |||||||||||||||
Derivative financial instruments: | ||||||||||||||||||||
Interest rate swap | $ | 673 | $ | - | $ | 673 | $ | - | $ | 673 | ||||||||||
Fair value swap | 135 | - | - | 135 | 135 |
(in thousands) | December 31, 2011 | |||||||
Carrying value | Fair value | |||||||
Financial assets: | ||||||||
Cash and money market instruments | $ | 157,486 | $ | 157,486 | ||||
Investment securities | 1,640,869 | 1,655,219 | ||||||
Accrued interest receivable | 19,697 | 19,697 | ||||||
Mortgage loans held for sale | 11,535 | 11,535 | ||||||
Impaired loans carried at fair value | 87,813 | 87,813 | ||||||
Other loans | 4,149,307 | 4,167,224 | ||||||
Loans receivable, net | $ | 4,248,655 | $ | 4,266,572 | ||||
Assets held for sale | $ | 382,462 | $ | 382,462 | ||||
Financial liabilities: | ||||||||
Noninterest bearing checking accounts | $ | 995,733 | $ | 995,733 | ||||
Interest bearing transactions accounts | 1,037,385 | 1,037,385 | ||||||
Savings accounts | 931,526 | 931,526 | ||||||
Time deposits | 1,499,105 | 1,506,075 | ||||||
Other | 1,365 | 1,365 | ||||||
Total deposits | $ | 4,465,114 | $ | 4,472,084 | ||||
Short-term borrowings | $ | 263,594 | $ | 263,594 | ||||
Long-term debt | 823,182 | 915,274 | ||||||
Subordinated debentures/notes | 75,250 | 68,601 | ||||||
Accrued interest payable | 4,916 | 4,916 | ||||||
Liabilities held for sale | 536,186 | 536,991 | ||||||
Derivative financial instruments: | ||||||||
Interest rate swap | $ | 846 | $ | 846 | ||||
Fair value swap | 700 | 700 |
March 31, 2013 | ||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||
(In thousands) | Carrying value | Level 1 | Level 2 | Level 3 | Total fair value | |||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and money market instruments | $ | 520,512 | $ | 520,512 | $ | — | $ | — | $ | 520,512 | ||||||||||
Investment securities | 1,286,501 | 1,593 | 1,293,196 | 776 | 1,295,565 | |||||||||||||||
Accrued interest receivable - securities | 4,030 | — | 4,030 | — | 4,030 | |||||||||||||||
Accrued interest receivable - loans | 14,541 | — | — | 14,541 | 14,541 | |||||||||||||||
Mortgage loans held for sale | 10,235 | — | 10,235 | — | 10,235 | |||||||||||||||
Mortgage IRLCs | 251 | — | 251 | — | 251 | |||||||||||||||
Impaired loans carried at fair value | 51,271 | — | — | 51,271 | 51,271 | |||||||||||||||
Other loans | 4,326,451 | — | — | 4,344,928 | 4,344,928 | |||||||||||||||
Loans receivable, net | $ | 4,388,208 | $ | — | $ | 10,486 | $ | 4,396,199 | $ | 4,406,685 | ||||||||||
Financial liabilities: | ||||||||||||||||||||
Noninterest bearing checking accounts | $ | 1,119,902 | $ | 1,119,902 | $ | — | $ | — | $ | 1,119,902 | ||||||||||
Interest bearing transactions accounts | 1,290,108 | 1,290,108 | — | — | 1,290,108 | |||||||||||||||
Savings accounts | 1,091,381 | 1,091,381 | — | — | 1,091,381 | |||||||||||||||
Time deposits | 1,412,354 | — | 1,418,673 | — | 1,418,673 | |||||||||||||||
Other | 2,796 | 2,796 | — | — | 2,796 | |||||||||||||||
Total deposits | $ | 4,916,541 | $ | 3,504,187 | $ | 1,418,673 | $ | — | $ | 4,922,860 | ||||||||||
Short-term borrowings | $ | 244,002 | $ | — | $ | 244,002 | $ | — | $ | 244,002 | ||||||||||
Long-term debt | 782,845 | — | 859,396 | — | 859,396 | |||||||||||||||
Subordinated debentures/notes | 80,250 | — | 79,380 | — | 79,380 | |||||||||||||||
Accrued interest payable – deposits | 1,895 | 32 | 1,863 | — | 1,895 | |||||||||||||||
Accrued interest payable – debt/borrowings | 1,508 | 15 | 1,493 | — | 1,508 | |||||||||||||||
Derivative financial instruments: | ||||||||||||||||||||
Fair value swap | $ | 135 | $ | — | $ | — | $ | 135 | $ | 135 |
December 31, 2012 | ||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||
(In thousands) | Carrying value | Level 1 | Level 2 | Level 3 | Total fair value | |||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and money market instruments | $ | 201,305 | $ | 201,305 | $ | — | $ | — | $ | 201,305 | ||||||||||
Investment securities | 1,515,844 | 1,442 | 1,522,937 | 780 | 1,525,159 | |||||||||||||||
Accrued interest receivable - securities | 6,122 | — | 6,122 | — | 6,122 | |||||||||||||||
Accrued interest receivable - loans | 13,588 | — | 2 | 13,586 | 13,588 | |||||||||||||||
Mortgage loans held for sale | 25,743 | — | 25,743 | — | 25,743 | |||||||||||||||
Mortgage IRLCs | 372 | — | 372 | — | 372 | |||||||||||||||
Impaired loans carried at fair value | 53,932 | — | — | 53,932 | 53,932 | |||||||||||||||
Other loans | 4,314,738 | — | — | 4,348,705 | 4,348,705 | |||||||||||||||
Loans receivable, net | $ | 4,394,785 | $ | — | $ | 26,115 | $ | 4,402,637 | $ | 4,428,752 | ||||||||||
Financial liabilities: | ||||||||||||||||||||
Noninterest bearing checking accounts | $ | 1,137,290 | $ | 1,137,290 | $ | — | — | $ | 1,137,290 | |||||||||||
Interest bearing transactions accounts | 1,088,617 | 1,088,617 | — | — | 1,088,617 | |||||||||||||||
Savings accounts | 1,038,356 | 1,038,356 | — | — | 1,038,356 | |||||||||||||||
Time deposits | 1,450,424 | — | 1,458,793 | — | 1,458,793 | |||||||||||||||
Other | 1,345 | 1,345 | — | — | 1,345 | |||||||||||||||
Total deposits | $ | 4,716,032 | $ | 3,265,608 | $ | 1,458,793 | $ | — | $ | 4,724,401 | ||||||||||
Short-term borrowings | $ | 344,168 | $ | — | $ | 344,168 | $ | — | $ | 344,168 | ||||||||||
Long-term debt | 781,658 | — | 861,466 | — | 861,466 | |||||||||||||||
Subordinated debentures/notes | 80,250 | — | 79,503 | — | 79,503 | |||||||||||||||
Accrued interest payable – deposits | 1,960 | 21 | 1,939 | — | 1,960 | |||||||||||||||
Accrued interest payable – debt/borrowings | 1,499 | 8 | 1,491 | — | 1,499 | |||||||||||||||
Derivative financial instruments: | ||||||||||||||||||||
Fair value swap | 135 | — | — | 135 | 135 |
As part of its participation in the CPP, Park also issued a warrant to the U.S. Treasury to purchase 227,376 common shares (the “Warrant”), which was equal to 15% of the aggregate amount of the Senior Preferred Shares purchased by the U.S. Treasury, having an exercise price of $65.97. The initial exercise price for the Warrant and the market price for determining the number of common shares subject to the Warrant were determined by reference to the market price of the common shares on the date the Company’s application for participation in the CPP was approved by the U.S. Department of the Treasury (calculated on a 20-day trailing average). The Warrant has a term of 10 years.
As a participant in the CPP, the Company was required to adopt certain standards for compensation and corporate governance, established under the American Recovery and Reinvestment Act of 2009 (the “ARRA”), which amended and replaced the executive compensation provisions of the Emergency Economic Stabilization Act of 2008 (“EESA”) in their entirety, and the Interim Final Rule promulgated by the Secretary of the U.S. Treasury under 31 C.F.R. Part 30 (collectively, the “Troubled Asset Relief Program (TARP) Compensation Standards”). In addition, Park’s ability to declare or pay dividends on or repurchase its common shares was partially restricted until December 23, 2011 as a result of its participation in the CPP. Please refer to Note 20 – Subsequent Events, which discusses the Company’s repurchase of the Senior Preferred Shares and of the Warrant.
Note 18 –Other Comprehensive Income (Loss)
Other comprehensive income (loss) components and related tax effect are shown in the following table for the three month periods ended March 31, 2012 and 2011:
Three months ended March 31, (in thousands) | Before-tax amount | Tax effect | Net-of-tax amount | |||||||||
2012: | ||||||||||||
Change in pension plan assets and benefit obligations | $ | 634 | $ | 222 | $ | 412 | ||||||
Unrealized losses on available-for-sale securities | (3,390 | ) | (1,188 | ) | (2,202 | ) | ||||||
Unrealized net holding gain on cash flow hedge | 173 | 60 | 113 | |||||||||
Other comprehensive loss | $ | (2,583 | ) | $ | (906 | ) | $ | (1,677 | ) | |||
2011: | ||||||||||||
Unrealized (losses) on available-for-sale securities | $ | (3,166 | ) | $ | (1,108 | ) | $ | (2,058 | ) | |||
Reclassification adjustment for gains realized in net income | (6,635 | ) | (2,322 | ) | (4,313 | ) | ||||||
Unrealized net holding gain on cash flow hedge | 204 | 71 | 133 | |||||||||
Other comprehensive loss | $ | (9,597 | ) | $ | (3,359 | ) | $ | (6,238 | ) |
The ending balance of each component of accumulated other comprehensive income (loss) was as follows:
(in thousands) | Before-tax amount | Tax effect | Net-of-tax amount | |||||||||
March 31, 2012: | ||||||||||||
Changes in pension plan assets and benefit obligations | $ | (31,603 | ) | $ | (11,061 | ) | $ | (20,542 | ) | |||
Unrealized gains on available-for-sale securities | 16,108 | 5,637 | 10,471 | |||||||||
Unrealized net holding loss on cash flow hedge | (673 | ) | (236 | ) | (437 | ) | ||||||
Total accumulated other comprehensive loss | $ | (16,168 | ) | $ | (5,660 | ) | $ | (10,508 | ) | |||
December 31, 2011: | ||||||||||||
Changes in pension plan assets and benefit obligations | $ | (32,237 | ) | $ | (11,283 | ) | $ | (20,954 | ) | |||
Unrealized gains on available-for-sale securities | 19,498 | 6,825 | 12,673 | |||||||||
Unrealized net holding loss on cash flow hedge | (846 | ) | (296 | ) | (550 | ) | ||||||
Total accumulated other comprehensive loss | $ | (13,585 | ) | $ | (4,754 | ) | $ | (8,831 | ) | |||
March 31, 2011: | ||||||||||||
Changes in pension plan assets and benefit obligations | $ | (24,503 | ) | $ | (8,576 | ) | $ | (15,927 | ) | |||
Unrealized gains on available-for-sale securities | 13,462 | 4,712 | 8,750 | |||||||||
Unrealized net holding loss on cash flow hedge | (1,430 | ) | (501 | ) | (929 | ) | ||||||
Total accumulated other comprehensive loss | $ | (12,471 | ) | $ | (4,365 | ) | $ | (8,106 | ) |
Note 19 —Sale of Common Shares and Issuance of Common Stock Warrants
There were no sales of common shares or issuance of common stock warrants during the three months ended March 31, 2012 or March 31, 2011. Outstanding as of March 31, 2011 were 35,992 Series A Common Share Warrants and 35,992 Series B Common Share Warrants which were issued as part of the registered direct public offering completed on December 10, 2010. The Series A and Series B Common Share Warrants had an exercise price of $76.41. The Series A Common Share Warrants were not exercised and expired on June 10, 2011. The Series B Common Share Warrants were not exercised and expired on December 20, 2011.
Note 20 -Subsequent Events
In connection with the application submitted by Park to the U.S. Treasury for approval to repurchase from the U.S. Treasury the 100,000 Series A Preferred Shares, Park provided a proposed capital plan which included the issuance of an aggregate principal amount of $30 million of subordinated notes, which are intended to qualify as “Tier 2 Capital” under applicable rules and regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”).
On April 20, 2012, Park entered into a Note Purchase Agreement, dated April 20, 2012 (the “Purchase Agreement”), with 56 purchasers (each, a “Purchaser” and collectively, the “Purchasers”). Each Purchaser represented that such Purchaser qualified as an “accredited investor” within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Under the terms of the Purchase Agreement, the Purchasers purchased from Park an aggregate principal amount of $30,000,000 of 7% Subordinated Notes due April 20, 2022 (individually, a “Note” and collectively, the “Notes”). The Notes are intended to qualify as Tier 2 Capital under applicable rules and regulations of the Federal Reserve Board. Each Note was purchased at a purchase price of 100% of the principal amount thereof.
On April 19, 2012, Park received the approval from the U.S. Treasury to repurchase the 100,000 Series A Preferred Shares, which were issued by Park to the U.S. Treasury on December 23, 2008 as part of the CPP.
(in thousands) | Changes in pension plan assets and benefit obligations | Unrealized gains and losses on available for sale securities | Unrealized net holding loss on cash flow hedge | Total | |||||||||||||
Beginning balance at December 31, 2012 | $ | (27,134 | ) | $ | 9,616 | $ | — | $ | (17,518 | ) | |||||||
Other comprehensive loss before reclassifications | — | (2,379 | ) | — | (2,379 | ) | |||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | — | — | |||||||||||||
Net current period other comprehensive loss | — | (2,379 | ) | — | (2,379 | ) | |||||||||||
Ending balance at March 31, 2013 | $ | (27,134 | ) | $ | 7,237 | $ | — | $ | (19,897 | ) | |||||||
Beginning balance at December 31, 2011 | $ | (20,954 | ) | $ | 12,673 | $ | (550 | ) | $ | (8,831 | ) | ||||||
Net current period other comprehensive income (loss) | 412 | (2,202 | ) | 113 | (1,677 | ) | |||||||||||
Ending balance at March 31, 2012 | $ | (20,542 | ) | $ | 10,471 | $ | (437 | ) | $ | (10,508 | ) |
2012.
Please see Note 15-
Fair Value of the Notes to Unaudited Consolidated Condensed Financial Statements in this Quarterly Report on Form 10-Q for additional information on fair value.2012
Diluted earnings pernet income available to common share were $1.95 for the first quarter of 2012 compared to $1.35 for the first quarter of 2011, an increase of $0.60 per share or 44.4%. Weighted average diluted common shares outstanding were 15,417,745shareholders for the three months ended March 31, 2012 included a gain of $22.2 million ($14.4 million after-tax) from the sale of substantially all of the performing loans, operating assets and the liabilities of Vision Bank ("Vision"). Excluding the gain on sale of the Vision business, net income and net income available to common shareholders was $17.1 million and $15.6 million, respectively, for the period ended March 31, 2012.
IncludedFiscal 2013 Results - By Operating Segment
Projected Net Income | ||||||||||||||||||||||
(In thousands) | Original projection for 2013 | 25% of midpoint | Q1 2013 | Current projection for 2013 | ||||||||||||||||||
Pre-tax, pre-provision income | $ | 113,000 | $ | 131,000 | $ | 30,500 | $ | 28,160 | $ | 106,000 | $ | 118,000 | ||||||||||
Provision for loan losses | 20,000 | 15,000 | 4,375 | 329 | 14,000 | 10,000 | ||||||||||||||||
Income before income tax | $ | 93,000 | $ | 116,000 | $ | 26,125 | $ | 27,831 | $ | 92,000 | $ | 108,000 | ||||||||||
Federal income taxes | 23,250 | 30,160 | 6,676 | 7,121 | 22,000 | 27,600 | ||||||||||||||||
Net income | $ | 69,750 | $ | 85,840 | $ | 19,449 | $ | 20,710 | $ | 70,000 | $ | 80,400 |
(In thousands) | Q1 2013 | Q1 2012 | 2012 | 2011 | ||||||||||
PNB | $ | 19,940 | $ | 21,561 | $ | 87,106 | $ | 106,851 | ||||||
GFSC | 740 | 806 | 3,550 | 2,721 | ||||||||||
Park Parent Company | 132 | 49 | 195 | (1,595 | ) | |||||||||
Ongoing operations | $ | 20,812 | $ | 22,416 | $ | 90,851 | $ | 107,977 | ||||||
Vision Bank | — | — | — | (22,526 | ) | |||||||||
SEPH | (102 | ) | 9,059 | (12,221 | ) | (3,311 | ) | |||||||
Total Park | $ | 20,710 | $ | 31,475 | $ | 78,630 | $ | 82,140 |
(In thousands) | Q1 2013 | Q1 2012 | 2012 | 2011 | ||||||||||
Net interest income | $ | 52,735 | $ | 55,846 | $ | 221,758 | $ | 236,282 | ||||||
Provision for loan losses | 3,130 | 4,672 | 16,678 | 30,220 | ||||||||||
Fee income | 17,872 | 16,661 | 70,739 | 67,348 | ||||||||||
Security gains | — | — | — | 23,634 | ||||||||||
Total other expense | 40,324 | 38,056 | 156,516 | 146,235 | ||||||||||
Income before income taxes | $ | 27,153 | $ | 29,779 | $ | 119,303 | $ | 150,809 | ||||||
Federal income taxes | 7,213 | 8,218 | 32,197 | 43,958 | ||||||||||
Net income | $ | 19,940 | $ | 21,561 | $ | 87,106 | $ | 106,851 | ||||||
Net income excluding security gains | $ | 19,940 | $ | 21,561 | $ | 87,106 | $ | 91,489 |
(In thousands) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | % change from 12/31/12 | % change from 3/31/12 | ||||||||||
Loans | $ | 4,368,446 | $ | 4,369,173 | $ | 4,203,435 | (0.02 | )% | 3.93 | % | |||||
Allowance for loan losses | 52,901 | 53,131 | 57,408 | (0.43 | )% | (7.85 | )% | ||||||||
Net loans | 4,315,545 | 4,316,042 | 4,146,027 | (0.01 | )% | 4.09 | % | ||||||||
Total assets | 6,611,802 | 6,502,579 | 6,587,773 | 1.68 | % | 0.36 | % | ||||||||
Average assets (YTD) | 6,555,952 | 6,532,683 | 6,451,704 | 0.36 | % | 1.62 | % | ||||||||
Deposits | 5,005,238 | 4,814,107 | 4,961,121 | 3.97 | % | 0.89 | % | ||||||||
Return on average assets * | 1.23 | % | 1.33 | % | 1.34 | % | (7.52 | )% | (8.21 | )% | |||||
* Annualized for the three months ended March 31, 2013 and 2012. |
(In thousands) | Q1 2013 | Q1 2012 | 2012 | 2011 | ||||||||||
Net interest income | $ | 2,133 | $ | 2,211 | $ | 9,156 | $ | 8,693 | ||||||
Provision for loan losses | 210 | 250 | 859 | 2,000 | ||||||||||
Fee income | 2 | — | — | — | ||||||||||
Total other expense | 786 | 721 | 2,835 | 2,506 | ||||||||||
Income before income taxes | $ | 1,139 | $ | 1,240 | $ | 5,462 | $ | 4,187 | ||||||
Federal income taxes | 399 | 434 | 1,912 | 1,466 | ||||||||||
Net income | $ | 740 | $ | 806 | $ | 3,550 | $ | 2,721 |
(In thousands) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | % change from 12/31/12 | % change from 3/31/12 | ||||||||||
Loans | $ | 49,961 | $ | 50,082 | $ | 48,044 | (0.24 | )% | 3.99 | % | |||||
Allowance for loan losses | 2,414 | 2,406 | 2,350 | 0.33 | % | 2.72 | % | ||||||||
Net loans | 47,547 | 47,676 | 45,694 | (0.27 | )% | 4.06 | % | ||||||||
Total assets | 49,555 | 49,926 | 47,380 | (0.74 | )% | 4.59 | % | ||||||||
Average assets (YTD) | 49,172 | 48,381 | 46,362 | 1.63 | % | 6.06 | % | ||||||||
Return on average assets * | 6.10 | % | 7.34 | % | 6.99 | % | (16.89 | )% | (12.73 | )% | |||||
* Annualized for the three months ended March 31, 2013 and 2012. |
(In thousands) | Q1 2013 | Q1 2012 | 2012 | 2011 | ||||||||||
Net interest income | $ | 1,240 | $ | 1,061 | $ | 4,742 | $ | 2,155 | ||||||
Provision for loan losses | — | — | — | — | ||||||||||
Fee income | 100 | 68 | 233 | 350 | ||||||||||
Total other expense | 1,644 | 1,528 | 6,585 | 7,115 | ||||||||||
Loss before income taxes | $ | (304 | ) | $ | (399 | ) | $ | (1,610 | ) | $ | (4,610 | ) | ||
Federal income tax benefit | (436 | ) | (448 | ) | (1,805 | ) | (3,015 | ) | ||||||
Net income (loss) | $ | 132 | $ | 49 | $ | 195 | $ | (1,595 | ) |
(In thousands) | Q1 2013 | Q1 2012 | 2012 | SEPH 2011 | Vision 2011 | |||||||||||||
Net interest income (expense) | $ | (655 | ) | $ | 2,610 | $ | (341 | ) | $ | (974 | ) | $ | 27,078 | |||||
Provision for (recovery of) loan losses | (3,011 | ) | 3,416 | 17,882 | — | 31,052 | ||||||||||||
Fee income | 831 | 724 | (736 | ) | (3,039 | ) | 1,422 | |||||||||||
Security gains | — | — | — | — | 5,195 | |||||||||||||
Gain on sale of Vision business | — | 22,167 | 22,167 | — | — | |||||||||||||
Total other expense | 3,344 | 8,165 | 22,032 | 1,082 | 31,379 | |||||||||||||
Income (loss) before income taxes | $ | (157 | ) | $ | 13,920 | $ | (18,824 | ) | $ | (5,095 | ) | $ | (28,736 | ) | ||||
Federal income taxes (benefit) | (55 | ) | 4,861 | (6,603 | ) | (1,784 | ) | (6,210 | ) | |||||||||
Net income (loss) | $ | (102 | ) | $ | 9,059 | $ | (12,221 | ) | $ | (3,311 | ) | $ | (22,526 | ) | ||||
Net income (loss) excluding security gains | $ | (102 | ) | $ | 9,059 | $ | (12,221 | ) | $ | (3,311 | ) | $ | (25,903 | ) |
SEPH - Retained Vision Loan Portfolio | ||||||||||||
(In thousands) | Unpaid Principal Balance | Charge-Offs | Net Book Balance | Charge-off Percentage | ||||||||
Nonperforming loans - retained by SEPH | $ | 116,605 | $ | 68,312 | $ | 48,293 | 58.58 | % | ||||
Performing loans - retained by SEPH | 3,470 | 209 | 3,261 | 6.02 | % | |||||||
Total SEPH loan exposure | $ | 120,075 | $ | 68,521 | $ | 51,554 | 57.07 | % |
(In thousands) | SEPH 03/31/13 | SEPH 12/31/2012 | Change from last quarter | |||||||
Nonperforming loans - retained by SEPH | $ | 48,293 | $ | 55,292 | $ | (6,999 | ) | |||
OREO - retained by SEPH | 21,705 | 21,003 | 702 | |||||||
Total nonperforming assets | $ | 69,998 | $ | 76,295 | $ | (6,297 | ) | |||
Performing loans - retained by SEPH | 3,261 | 3,886 | (625 | ) | ||||||
Total Legacy Vision assets - retained by SEPH | $ | 73,259 | $ | 80,181 | $ | (6,922 | ) |
(In thousands) | Q1 2013 | Q1 2012 | 2012 | 2011 | ||||||||||
Net interest income | $ | 55,453 | $ | 61,728 | $ | 235,315 | $ | 273,234 | ||||||
Provision for loan losses | 329 | 8,338 | 35,419 | 63,272 | ||||||||||
Fee income | 18,805 | 17,453 | 70,236 | 66,081 | ||||||||||
Security gains | — | — | — | 28,829 | ||||||||||
Gain on sale of Vision business | — | 22,167 | 22,167 | — | ||||||||||
Total other expense | 46,098 | 48,470 | 187,968 | 188,317 | ||||||||||
Income before income taxes | $ | 27,831 | $ | 44,540 | $ | 104,331 | $ | 116,555 | ||||||
Federal income taxes | 7,121 | 13,065 | 25,701 | 34,415 | ||||||||||
Net income | $ | 20,710 | $ | 31,475 | $ | 78,630 | $ | 82,140 | ||||||
Net income excluding gains (1) | $ | 20,710 | $ | 17,066 | $ | 64,221 | $ | 63,401 |
Sale of Vision Bank Business
On February 16, 2012, Park completed the purchase and assumption transaction between Park, Home BancShares, Inc. (“Home”) and their respective subsidiary banks. Home subsidiary Centennial Bank (“Centennial”) purchased certain assets and liabilities of Vision for a purchase price of $27.9 million. Centennial purchased performing loans with an unpaid principal balance of approximately $354 million, assumed ownership or operation of all 17 Vision office locations, and assumed deposit liabilities of approximately $520 million. Certain other miscellaneous assets and liabilities were also purchased by Centennial. The remaining assets and liabilities were retained by Vision.
As a result of the transaction, Park recorded a pre-tax gain of $22.2 million (after actual expenses directly related to the transaction). The transaction also decreased Park’s total assets during the first quarter of 2012. As of March 31, 2012, Park had total assets of $6.8 billion, compared to $7.0 billion at December 31, 2011 and $7.3 billion at March 31, 2011.
The following tables compare the components of net income for the three month periodyear ended March 31, 2012 with the components of net income for the three month period ended March 31, 2011. This information is provided for Park, PNB, Guardian Financial Services Company (“Guardian”), and SE LLC.
Table - Park – Summary Income Statement | ||||||||||||
Three months ended March 31, | ||||||||||||
(In thousands) | 2012 | 2011 | % Change | |||||||||
Net interest income | $ | 61,728 | $ | 69,313 | -10.94 | % | ||||||
Provision for loan losses | 9,000 | 14,100 | -36.17 | % | ||||||||
Other income | 17,453 | 15,030 | 16.12 | % | ||||||||
Gain on sale of Vision business | 22,167 | - | N.M. | |||||||||
Security gains | - | 6,635 | N.M. | |||||||||
Operating expenses | 47,808 | 46,346 | 3.15 | % | ||||||||
Income before taxes | $ | 44,540 | $ | 30,532 | 45.88 | % | ||||||
Income taxes | 13,065 | 8,336 | 56.73 | % | ||||||||
Net income | $ | 31,475 | $ | 22,196 | 41.80 | % |
Table - PNB – Summary Income Statement | ||||||||||||
Three months ended March 31, | ||||||||||||
(In thousands) | 2012 | 2011 | % Change | |||||||||
Net interest income | $ | 55,846 | $ | 60,236 | -7.29 | % | ||||||
Provision for loan losses | 4,672 | 4,975 | -6.09 | % | ||||||||
Other income | 16,661 | 16,262 | 2.45 | % | ||||||||
Security gains | - | 6,635 | N.M. | |||||||||
Operating expenses | 38,056 | 36,321 | 4.78 | % | ||||||||
Income before taxes | $ | 29,779 | $ | 41,837 | -28.82 | % | ||||||
Income taxes | 8,218 | 12,808 | -35.84 | % | ||||||||
Net income | $ | 21,561 | $ | 29,029 | -25.73 | % |
Table - Guardian – Summary Income Statement Three months ended March 31, | ||||||||||||
(In thousands) | 2012 | 2011 | % Change | |||||||||
Net interest income | $ | 2,211 | $ | 2,025 | 9.19 | % | ||||||
Provision for loan losses | 250 | 525 | -52.38 | % | ||||||||
Other income | - | - | - | |||||||||
Security gains | - | - | - | |||||||||
Operating expenses | 721 | 577 | 24.96 | % | ||||||||
Income before taxes | $ | 1,240 | $ | 923 | 34.34 | % | ||||||
Income taxes | 434 | 323 | 34.37 | % | ||||||||
Net income | $ | 806 | $ | 600 | 34.33 | % |
Table - SE LLC – Summary Income Statement Three months ended March 31, | ||||||||||||
(In thousands) | 2012 | 2011 | % Change | |||||||||
Net interest income | $ | 2,610 | - | N.M. | ||||||||
Provision for loan losses | 4,078 | - | N.M. | |||||||||
Other income | 724 | - | N.M. | |||||||||
Gain on sale of Vision business | 22,167 | - | N.M. | |||||||||
Security gains | - | - | N.M. | |||||||||
Operating expenses | 7,503 | - | N.M. | |||||||||
Income before taxes | $ | 13,920 | - | N.M. | ||||||||
Income taxes | 4,861 | - | N.M. | |||||||||
Net income | $ | 9,059 | - | N.M. |
The following table compares the guidance for 2012 that management provided in Park’s 2011 Annual Report with the actual results for the three month period ended March 31, 2012. This guidance was included in Park’s 2011 Annual Report in the “Financial Review” section on pages 38 through 40.
(in thousands) | Projected results for 2012 | 25% of annual projection | Actual results for the first three months of 2012 | ||||||||
Net interest income | $ | 240,000 to $250,000 | $ | 60,000 - $62,500 | $ | 61,728 | |||||
Provision for loan losses | $ | 20,000 to $27,000 | $ | 5,000 - $6,750 | $ | 9,000 | |||||
Total other income | $ | 62,000 to $66,000 | $ | 15,500 - $16,500 | $ | 17,453 | |||||
Total other expense | $ | 170,000 to $175,000 | $ | 42,500- $43,750 | $ | 47,808 |
Park’s management believes that the guidance previously provided for total other income and total other expense continue to be good estimates for 2012. While each of total other income and total other expense were above 25% of the annual projection during the first quarter of 2012, management expects the performance over the remaining nine months of 2012 will bring these back in line with our original projections. The amounts above 25% of the annual projection during the first quarter of 2012 were largely related to (1) other income at Vision through February 16, 2012 and (2) other expense associated with the sale of the Vision business.
Net interest income for the first quarter of 2012 was within 25% of the annual projection for 2012; however, management’s most recent projection for the twelve months ending December 31, 2012 is for net interest income to be withinand the range of $235 million to $245 million. See more information in the section called “Guidance on Net Interest Income for 2012”.
The provision for loan lossessecurity gains for the first quarteryear ended December 31, 2011.
2012
respectively.
Three months ended March 31, | ||||||||||||||||
2012 | 2011 | |||||||||||||||
(in thousands) | Average balance | Tax equivalent % | Average balance | Tax equivalent % | ||||||||||||
Loans (1) | $ | 4,485,074 | 5.52 | % | $ | 4,743,075 | 5.63 | % | ||||||||
Taxable investments | 1,639,775 | 3.33 | % | 1,939,873 | 3.98 | % | ||||||||||
Tax exempt investments | 4,043 | 7.05 | % | 12,240 | 7.63 | % | ||||||||||
Money market instruments | 168,880 | 0.25 | % | 26,948 | 0.10 | % | ||||||||||
Interest earning assets | $ | 6,297,772 | 4.81 | % | $ | 6,722,136 | 5.14 | % | ||||||||
Interest bearing deposits | $ | 3,891,482 | 0.56 | % | $ | 4,245,255 | 0.74 | % | ||||||||
Short-term borrowings | 241,329 | 0.29 | % | 391,366 | 0.28 | % | ||||||||||
Long-term debt | 897,699 | 3.38 | % | 847,800 | 3.52 | % | ||||||||||
Interest bearing liabilities | $ | 5,030,510 | 1.05 | % | $ | 5,484,421 | 1.14 | % | ||||||||
Excess interest earning assets | $ | 1,267,262 | $ | 1,237,715 | ||||||||||||
Net interest spread | 3.76 | % | 4.00 | % | ||||||||||||
Net interest margin | 3.97 | % | 4.21 | % |
2012.
Three months ended March 31, 2013 | Three months ended March 31, 2012 | |||||||||||||
(In thousands) | Average balance | Tax equivalent % | Average balance | Tax equivalent % | ||||||||||
Loans (1) | $ | 4,438,308 | 5.13 | % | $ | 4,485,074 | 5.52 | % | ||||||
Taxable investments | 1,425,903 | 2.91 | % | 1,639,775 | 3.33 | % | ||||||||
Tax exempt investments | 1,469 | 7.15 | % | 4,043 | 7.05 | % | ||||||||
Money market instruments | 259,723 | 0.25 | % | 168,880 | 0.25 | % | ||||||||
Interest earning assets | $ | 6,125,403 | 4.41 | % | $ | 6,297,772 | 4.81 | % | ||||||
Interest bearing deposits (2) | $ | 3,747,633 | 0.39 | % | $ | 3,891,482 | 0.56 | % | ||||||
Short-term borrowings | 245,695 | 0.24 | % | 241,329 | 0.29 | % | ||||||||
Long-term debt | 862,610 | 3.29 | % | 897,699 | 3.38 | % | ||||||||
Interest bearing liabilities | $ | 4,855,938 | 0.90 | % | $ | 5,030,510 | 1.05 | % | ||||||
Excess interest earning assets | $ | 1,269,465 | $ | 1,267,262 | ||||||||||
Net interest spread | 3.51 | % | 3.76 | % | ||||||||||
Net interest margin | 3.70 | % | 3.97 | % |
Vision loans sold to Centennial on February 16, 2012 totaled approximately $356 million.
2012.
2012.
2012. Additionally, the ten-year treasury rate averaged 1.95% for the first quarter of 2013, and 2.02% for the first quarter of 2012.
Park’s management expects that the FOMC will continue to maintain the targeted federal funds interest rate in the range of 0% to 0.25% during 2012.market. The annual average federal funds rate was 0.16% for 2009, 0.18% for 2010, and 0.10% for 2011.
Discussion of 2011, and 0.15% for 2012.
Total loan balancesthe balance sheet.
2012.
2012.
quarters.
both periods.
The net2012.
(in thousands) | Average interest earning assets | Net interest income | Tax equivalent net interest margin | |||||||||
March 2011 | $ | 6,722,136 | $ | 69,313 | 4.21 | % | ||||||
June 2011 | $ | 6,745,790 | $ | 70,022 | 4.19 | % | ||||||
September 2011 | $ | 6,610,953 | $ | 67,620 | 4.09 | % | ||||||
December 2011 | $ | 6,487,958 | $ | 66,279 | 4.08 | % | ||||||
March 2012 | $ | 6,297,772 | $ | 61,728 | 3.97 | % |
Management’s current forecast projects that net interest income for the second quarter of 2012 will be approximately $59 million and approximately $239 million for all of 2012. Management also expects that average interest earning assets will be approximately $6,188 million for the second quarter of 2012 and that the tax equivalent net interest margin will be about 3.82% for the quarter.
(In thousands) | Average interest earning assets | Net interest income | Tax equivalent net interest margin | ||||||||
March 2012 | $ | 6,297,772 | $ | 61,728 | 3.97 | % | |||||
June 2012 | $ | 6,134,797 | $ | 58,680 | 3.87 | % | |||||
September 2012 | $ | 6,200,288 | $ | 58,016 | 3.75 | % | |||||
December 2012 | $ | 6,128,159 | $ | 56,891 | 3.72 | % | |||||
March 2013 | $ | 6,125,403 | $ | 55,453 | 3.70 | % |
(dollars in thousands) | Loans | Investments | Money Market Instruments | Total | ||||||||||||
2009 - year | $ | 4,594,436 | $ | 1,877,303 | $ | 52,658 | $ | 6,524,397 | ||||||||
Percentage | 70.42 | % | 28.77 | % | 0.81 | % | 100.00 | % | ||||||||
2010 - year | $ | 4,642,478 | $ | 1,746,356 | $ | 93,009 | $ | 6,481,843 | ||||||||
Percentage | 71.62 | % | 26.94 | % | 1.44 | % | 100.00 | % | ||||||||
2011 - year | $ | 4,713,511 | $ | 1,848,880 | $ | 78,593 | $ | 6,640,984 | ||||||||
Percentage | 70.98 | % | 27.84 | % | 1.18 | % | 100.00 | % | ||||||||
2012 - first quarter | $ | 4,485,074 | $ | 1,643,818 | $ | 168,880 | $ | 6,297,772 | ||||||||
Percentage | 71.22 | % | 26.10 | % | 2.68 | % | 100.00 | % |
2010.
(Dollars in thousands) | Loans | Investments | Money Market Instruments | Total | ||||||||||||
2010 - year | $ | 4,642,478 | $ | 1,746,356 | $ | 93,009 | $ | 6,481,843 | ||||||||
Percentage of total earning assets | 71.62 | % | 26.94 | % | 1.44 | % | 100.00 | % | ||||||||
2011 - year | $ | 4,713,511 | $ | 1,848,880 | $ | 78,593 | $ | 6,640,984 | ||||||||
Percentage of total earning assets | 70.98 | % | 27.84 | % | 1.18 | % | 100.00 | % | ||||||||
2012 - year | $ | 4,410,661 | $ | 1,613,131 | $ | 166,319 | $ | 6,190,111 | ||||||||
Percentage of total earning assets | 71.25 | % | 26.06 | % | 2.69 | % | 100.00 | % | ||||||||
2013 - first quarter | $ | 4,438,308 | $ | 1,427,372 | $ | 259,723 | $ | 6,125,403 | ||||||||
Percentage of total earning assets | 72.46 | % | 23.30 | % | 4.24 | % | 100.00 | % |
2012.
Loans | Investments | Money Market Instruments | Total | |||||||||||||
2009 - year | 6.03 | % | 4.94 | % | 0.22 | % | 5.67 | % | ||||||||
2010 - year | 5.80 | % | 4.47 | % | 0.22 | % | 5.36 | % | ||||||||
2011 - year | 5.60 | % | 3.76 | % | 0.23 | % | 5.03 | % | ||||||||
2012 - first quarter | 5.52 | % | 3.34 | % | 0.25 | % | 4.81 | % |
2010.
Loans | Investments | Money Market Instruments | Total | ||||||||
2010 - year | 5.80 | % | 4.47 | % | 0.22 | % | 5.36 | % | |||
2011 - year | 5.60 | % | 3.76 | % | 0.23 | % | 5.03 | % | |||
2012 - year | 5.35 | % | 3.15 | % | 0.25 | % | 4.64 | % | |||
2013 - first quarter | 5.13 | % | 2.92 | % | 0.25 | % | 4.41 | % |
Park’s net interest income and net interest margin would increase if Park were able to increase its loan portfolio with quality loans. Park has strong liquidity and would be able to easily fund ana significant increase in its loan portfolio.
2012.
SE LLC, as2012, when Vision merged with and into SEPH, the loans then held by Vision were transferred to SEPH by operation of law at their fair market value and no allowance for loan loss is carried at SEPH. As a non-bank subsidiary, is not permitted to carry an ALLL, but instead must recordresult, the loans on its balance sheet at fair value. Given this requirement,included in both the performing and nonperforming retained loan portfolios have beenwere charged down to their fair value,value. The table below provides additional information regarding cumulative charge-offs as noted in the table below:
SE LLC – Retained Vision Loan Portfolio | ||||||||||||||||
Charge-offs as a percentage of unpaid principal balance | ||||||||||||||||
March 31, 2012 | ||||||||||||||||
(In thousands) | Unpaid Principal Balance | Charge-Offs | Net Book Balance | Charge-off Percentage | ||||||||||||
Nonperforming loans - retained by SE LLC | $ | 160,858 | $ | 78,532 | $ | 82,326 | 49 | % | ||||||||
Performing loans - retained by SE LLC | 17,348 | 1,225 | 16,123 | 7 | % | |||||||||||
Total SE LLC loan exposure | $ | 178,206 | $ | 79,757 | $ | 98,449 | 45 | % |
a percentage of unpaid principal balance, as of March 31, 2013.
SEPH - Retained Vision Loan Portfolio | ||||||||||||
Charge-offs as a percentage of unpaid principal balance | ||||||||||||
(In thousands) | Unpaid Principal Balance | Charge-Offs | Net Book Balance | Charge-off Percentage | ||||||||
Nonperforming loans - retained by SEPH | $ | 116,605 | $ | 68,312 | $ | 48,293 | 58.58 | % | ||||
Performing loans - retained by SEPH | 3,470 | 209 | 3,261 | 6.02 | % | |||||||
Total SEPH loan exposure | $ | 120,075 | $ | 68,521 | $ | 51,554 | 57.07 | % |
Park National Corporation - Allowance for Loan & Lease Losses | ||||||||
(In thousands) | March 31, 2012 | December 31, 2011 | ||||||
Total ALLL | $ | 59,758 | $ | 68,444 | ||||
Specific reserves | 9,505 | 15,935 | ||||||
General reserves | $ | 50,253 | $ | 52,509 | ||||
Total loans | $ | 4,324,383 | $ | 4,317,099 | ||||
Impaired commercial loans | 179,293 | 187,074 | ||||||
Non-impaired loans | $ | 4,145,090 | $ | 4,130,025 | ||||
Total ALLL to total loan ratio | 1.38 | % | 1.59 | % | ||||
General reserves as a % of non-impaired loans | 1.21 | % | 1.27 | % |
During the first three months2012.
Park National Corporation - Allowance for Loan & Lease Losses | |||||||||||
(In thousands) | March 31, 2013 | December 31, 2012 | March 31, 2012 | ||||||||
Total ALLL | $ | 55,315 | $ | 55,537 | 59,758 | ||||||
Specific reserves | 8,260 | 8,276 | 9,505 | ||||||||
General reserves | $ | 47,055 | $ | 47,261 | 50,253 | ||||||
Total loans | $ | 4,443,523 | $ | 4,450,322 | 4,324,383 | ||||||
Impaired commercial loans | 130,270 | 137,238 | 179,293 | ||||||||
Non-impaired loans | $ | 4,313,253 | $ | 4,313,084 | 4,145,090 | ||||||
Total ALLL to total loan ratio | 1.24 | % | 1.25 | % | 1.38 | % | |||||
General reserves as a % of non-impaired loans | 1.09 | % | 1.10 | % | 1.21 | % |
Commercial loans * (In thousands) | March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||
Pass rated | $ | 2,232,747 | $ | 2,225,702 | $ | 2,132,391 | ||||
Special Mention | 47,298 | 49,275 | 57,823 | |||||||
Substandard | 14,127 | 16,843 | 17,376 | |||||||
Impaired | 86,411 | 89,365 | 104,181 | |||||||
Total | $ | 2,380,583 | $ | 2,381,185 | $ | 2,311,771 |
New nonaccrual loan information (in thousands): | March 31, 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||
Nonaccrual loans, beginning of period | $ | 195,106 | $ | 289,268 | $ | 233,544 | $ | 159,512 | $ | 101,128 | ||||||||||
New nonaccrual loans - Ohio-based operations | 21,210 | 78,316 | 85,081 | 57,641 | 58,161 | |||||||||||||||
New nonaccrual loans - Vision/SE LLC | 568 | 45,842 | 90,094 | 126,540 | 83,588 | |||||||||||||||
Resolved nonaccrual loans | 33,657 | 218,320 | 119,451 | 110,149 | 83,365 | |||||||||||||||
Nonaccrual loans, end of period | $ | 183,227 | $ | 195,106 | $ | 289,268 | $ | 233,544 | $ | 159,512 |
restructured terms. Impaired commercial loans are individually evaluated for impairment and specific reserves are established to cover incurred losses.
2012.
(in thousands) | March 31, 2012 | December 31, 2011 | March 31, 2011 | |||||||||
Nonaccrual loans | $ | 183,227 | $ | 195,106 | $ | 278,819 | ||||||
Renegotiated loans on accrual status | 34,436 | 28,607 | 260 | |||||||||
Loans past due 90 days or more | 2,281 | 3,489 | 2,228 | |||||||||
Total nonperforming loans | $ | 219,944 | $ | 227,202 | $ | 281,307 | ||||||
Other real estate owned – PNB | 13,387 | 13,240 | 9,788 | |||||||||
Other real estate owned – SE LLC | 28,578 | 29,032 | 13,004 | |||||||||
Other real estate owned – Vision | - | - | 22,476 | |||||||||
Total nonperforming assets | $ | 261,909 | $ | 269,474 | $ | 326,575 | ||||||
Percentage of nonaccrual loans to total loans | 4.24 | % | 4.52 | % | 5.87 | % | ||||||
Percentage of nonperforming loans to total loans | 5.09 | % | 5.26 | % | 5.92 | % | ||||||
Percentage of nonperforming assets to total loans | 6.06 | % | 6.24 | % | 6.87 | % | ||||||
Percentage of nonperforming assets to total assets | 3.86 | % | 3.86 | % | 4.46 | % |
(In thousands) | March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||
Nonaccrual loans | $ | 151,539 | $ | 155,536 | $ | 183,227 | ||||||
Accruing TDRs | 24,274 | 29,800 | 34,436 | |||||||||
Loans past due 90 days or more | 1,350 | 2,970 | 2,281 | |||||||||
Total nonperforming loans | $ | 177,163 | $ | 188,306 | $ | 219,944 | ||||||
OREO – PNB | 14,587 | 14,715 | 13,387 | |||||||||
OREO – SEPH | 21,705 | 21,003 | 28,578 | |||||||||
Total nonperforming assets | $ | 213,455 | $ | 224,024 | $ | 261,909 | ||||||
Percentage of nonaccrual loans to total loans | 3.41 | % | 3.49 | % | 4.24 | % | ||||||
Percentage of nonperforming loans to total loans | 3.99 | % | 4.23 | % | 5.09 | % | ||||||
Percentage of nonperforming assets to total loans | 4.80 | % | 5.03 | % | 6.06 | % | ||||||
Percentage of nonperforming assets to total assets | 3.16 | % | 3.37 | % | 3.86 | % |
(in thousands) | March 31, 2012 | December 31, 2011 | March 31, 2011 | |||||||||
Nonaccrual loans | $ | 102,886 | $ | 96,113 | $ | 115,476 | ||||||
Renegotiated loans on accrual status | 32,451 | 26,342 | 260 | |||||||||
Loans past due 90 days or more | 2,281 | 3,367 | 2,228 | |||||||||
Total nonperforming loans | $ | 137,618 | $ | 125,822 | $ | 117,964 | ||||||
Other real estate owned – Park National Bank | 13,387 | 13,240 | 9,788 | |||||||||
Total nonperforming assets | $ | 151,005 | $ | 139,062 | $ | 127,752 | ||||||
Percentage of nonaccrual loans to total loans | 2.43 | % | 2.29 | % | 2.78 | % | ||||||
Percentage of nonperforming loans to total loans | 3.26 | % | 3.00 | % | 2.84 | % | ||||||
Percentage of nonperforming assets to total loans | 3.57 | % | 3.32 | % | 3.08 | % | ||||||
Percentage of nonperforming assets to total assets | 2.29 | % | 2.21 | % | 1.93 | % |
SE LLC/
(In thousands) | March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||
Nonaccrual loans | $ | 103,246 | $ | 100,244 | $ | 102,886 | ||||||
Accruing TDRs | 24,274 | 29,800 | 32,451 | |||||||||
Loans past due 90 days or more | 1,350 | 2,970 | 2,281 | |||||||||
Total nonperforming loans | $ | 128,870 | $ | 133,014 | $ | 137,618 | ||||||
OREO – PNB | 14,587 | 14,715 | 13,387 | |||||||||
Total nonperforming assets | $ | 143,457 | $ | 147,729 | $ | 151,005 | ||||||
Percentage of nonaccrual loans to total loans | 2.35 | % | 2.28 | % | 2.43 | % | ||||||
Percentage of nonperforming loans to total loans | 2.93 | % | 3.03 | % | 3.26 | % | ||||||
Percentage of nonperforming assets to total loans | 3.27 | % | 3.36 | % | 3.57 | % | ||||||
Percentage of nonperforming assets to total assets | 2.17 | % | 2.27 | % | 2.29 | % |
(in thousands) | March 31, 2012 | December 31, 2011 | March 31, 2011 | |||||||||
Nonaccrual loans | $ | 80,341 | $ | 98,993 | $ | 163,343 | ||||||
Renegotiated loans on accrual status | 1,985 | 2,265 | - | |||||||||
Loans past due 90 days or more | - | 122 | - | |||||||||
Total nonperforming loans | $ | 82,326 | $ | 101,380 | $ | 163,343 | ||||||
Other real estate owned – SE LLC | 28,578 | 29,032 | - | |||||||||
Other real estate owned – Vision | - | - | 22,476 | |||||||||
Total nonperforming assets | $ | 110,904 | $ | 130,412 | $ | 185,819 | ||||||
Percentage of nonaccrual loans to total loans | N.M. | N.M. | 26.06 | % | ||||||||
Percentage of nonperforming loans to total loans | N.M. | N.M. | 26.06 | % | ||||||||
Percentage of nonperforming assets to total loans | N.M. | N.M. | 29.65 | % | ||||||||
Percentage of nonperforming assets to total assets | N.M. | N.M. | 23.62 | % |
(In thousands) | March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||
Nonaccrual loans | $ | 48,293 | $ | 55,292 | $ | 80,341 | ||||||
Accruing TDRs | — | — | 1,985 | |||||||||
Loans past due 90 days or more | — | — | — | |||||||||
Total nonperforming loans | $ | 48,293 | $ | 55,292 | $ | 82,326 | ||||||
OREO – SEPH | 21,705 | 21,003 | 28,578 | |||||||||
Total nonperforming assets | $ | 69,998 | $ | 76,295 | $ | 110,904 |
SEPH.
(In thousands) | Unsold Principal balance (UPB) | Prior charge- offs | Total impaired loans | Specific reserve | Carrying balance | Carrying balance as a % of UPB | ||||||||||||||||||
PNB | $ | 140,338 | $ | 36,157 | $ | 104,181 | $ | 9,505 | $ | 94,676 | 67.46 | % | ||||||||||||
SE LLC - CL&D loans | 67,545 | 48,112 | 19,433 | - | 19,433 | 28.77 | % | |||||||||||||||||
SE LLC - Other loans | 79,740 | 24,061 | 55,679 | - | 55,679 | 69.83 | % | |||||||||||||||||
PRK totals | $ | 287,623 | $ | 108,330 | $ | 179,293 | $ | 9,505 | $ | 169,788 | 59.03 | % |
2013
(In thousands) | Unpaid principal balance (UPB) | Prior charge- offs | Total impaired loans | Specific reserve | Carrying balance | Carrying balance as a % of UPB | |||||||||||||||||
PNB | $ | 124,359 | $ | 37,948 | $ | 86,411 | $ | 8,260 | $ | 78,151 | 62.84 | % | |||||||||||
SEPH - CL&D loans | 53,287 | 42,805 | 10,482 | — | 10,482 | 19.67 | % | ||||||||||||||||
SEPH - Other loans | 55,498 | 22,121 | 33,377 | — | 33,377 | 60.14 | % | ||||||||||||||||
PRK totals | $ | 233,144 | $ | 102,874 | $ | 130,270 | $ | 8,260 | $ | 122,010 | 52.33 | % |
2013.
On page 41 of Park’s 2011 Annual Report, management projected that the provision for loan losses would be within the range from $20 million to $27 million for 2012. While management expects that the provision for loan losses will be lower in each of the next three quarters compared to the first quarter of 2012, the projected range for the twelve months ended December 31, 2012 has been increased. Management now expects the provision for loan losses will be within the range of $23 million to $30 million for 2012.
to $18.8 million for the three months ended March 31, 2013.
(in thousands) | Three months ended March 31, | |||||||||||
2012 | 2011 | Change | ||||||||||
Income from fiduciary activities | $ | 3,828 | $ | 3,722 | $ | 106 | ||||||
Service charges on deposits | 4,071 | 4,245 | (174 | ) | ||||||||
Other service income | 2,734 | 2,301 | 433 | |||||||||
Checkcard fee income | 3,172 | 2,976 | 196 | |||||||||
Bank owned life insurance income | 1,202 | 1,229 | (27 | ) | ||||||||
ATM fees | 608 | 654 | (46 | ) | ||||||||
OREO devaluations | (1,359 | ) | (2,535 | ) | 1,176 | |||||||
Gain on sale of the Vision business | 22,167 | - | 22,167 | |||||||||
Other | 3,197 | 2,438 | 759 | |||||||||
Total other income | $ | 39,620 | $ | 15,030 | $ | 24,590 |
income.
Three months ended March 31, | ||||||||||||
(In thousands) | 2013 | 2012 | Change | |||||||||
Income from fiduciary activities | $ | 4,076 | $ | 3,828 | $ | 248 | ||||||
Service charges on deposits | 3,822 | 4,071 | (249 | ) | ||||||||
Other service income | 3,985 | 2,734 | 1,251 | |||||||||
Checkcard fee income | 2,983 | 3,172 | (189 | ) | ||||||||
Bank owned life insurance income | 1,202 | 1,202 | — | |||||||||
ATM fees | 627 | 608 | 19 | |||||||||
OREO valuation adjustments | 401 | (1,359 | ) | 1,760 | ||||||||
Gain on sale of OREO, net | 224 | 1,045 | (821 | ) | ||||||||
Gain on sale of the Vision business | — | 22,167 | (22,167 | ) | ||||||||
Other | 1,485 | 2,152 | (667 | ) | ||||||||
Total other income | $ | 18,805 | $ | 39,620 | $ | (20,815 | ) |
Change from 2012 to 2013 | ||||||||||||
(In thousands) | Ohio based operations | SEPH/VB | Total | |||||||||
Income from fiduciary activities | $ | 251 | $ | (3 | ) | $ | 248 | |||||
Service charges on deposits | (95 | ) | (154 | ) | (249 | ) | ||||||
Other service income | 1,359 | (108 | ) | 1,251 | ||||||||
Checkcard fee income | (71 | ) | (118 | ) | (189 | ) | ||||||
Bank owned life insurance income | 18 | (18 | ) | — | ||||||||
ATM fees | 28 | (9 | ) | 19 | ||||||||
OREO valuation adjustments | 71 | 1,689 | 1,760 | |||||||||
Gain on sale of OREO, net | (823 | ) | 2 | (821 | ) | |||||||
Gain on sale of the Vision business | — | (22,167 | ) | (22,167 | ) | |||||||
Other | 507 | (1,174 | ) | (667 | ) | |||||||
Total other income | $ | 1,245 | $ | (22,060 | ) | $ | (20,815 | ) |
2012.
Checkcard fee income, which is generated from debit card transactions, increased $196,000, or 6.6%, to $3.2 million for2012.
OREO devaluations decreased by $1.2 million to $1.4 million for the three months ended March 31, 2012, compared to $2.5 million for the same period in 2011. Approximately $1.1 millionat PNB.
Three months ended March 31, | ||||||||||||
(in thousands) | 2012 | 2011 | Change | |||||||||
Salaries and employee benefits | $ | 24,823 | $ | 25,064 | $ | (241 | ) | |||||
Occupancy expense | 2,670 | 3,000 | (330 | ) | ||||||||
Furniture and equipment expense | 2,621 | 2,657 | (36 | ) | ||||||||
Data processing fees | 1,200 | 1,253 | (53 | ) | ||||||||
Professional fees and services | 5,581 | 4,874 | 707 | |||||||||
Amortization of intangibles | 1,754 | 669 | 1,085 | |||||||||
Marketing | 843 | 623 | 220 | |||||||||
Insurance | 1,490 | 2,269 | (779 | ) | ||||||||
Communication | 1,537 | 1,556 | (19 | ) | ||||||||
Other | 5,289 | 4,381 | 908 | |||||||||
Total other expense | $ | 47,808 | $ | 46,346 | $ | 1,462 |
Three months ended March 31, | ||||||||||||
(In thousands) | 2013 | 2012 | Change | |||||||||
Salaries and employee benefits | $ | 24,633 | $ | 24,823 | $ | (190 | ) | |||||
Occupancy expense | 2,597 | 2,670 | (73 | ) | ||||||||
Furniture and equipment expense | 2,607 | 2,621 | (14 | ) | ||||||||
Data processing fees | 1,019 | 1,200 | (181 | ) | ||||||||
Professional fees and services | 5,864 | 5,581 | 283 | |||||||||
Amortization of intangibles | 112 | 1,754 | (1,642 | ) | ||||||||
Marketing | 848 | 843 | 5 | |||||||||
Insurance | 1,302 | 1,490 | (188 | ) | ||||||||
Communication | 1,580 | 1,537 | 43 | |||||||||
State taxes | 928 | 989 | (61 | ) | ||||||||
Loan put provision | — | 662 | (662 | ) | ||||||||
OREO expense | 512 | 723 | (211 | ) | ||||||||
Other | 4,096 | 3,577 | 519 | |||||||||
Total other expense | $ | 46,098 | $ | 48,470 | $ | (2,372 | ) |
Three months ended March 31, | ||||||||||||
(In thousands) | Ohio based operations | SEPH/Vision | Total | |||||||||
Salaries and employee benefits | $ | 1,451 | $ | (1,641 | ) | $ | (190 | ) | ||||
Occupancy expense | 240 | (313 | ) | (73 | ) | |||||||
Furniture and equipment expense | 56 | (70 | ) | (14 | ) | |||||||
Data processing fees | 61 | (242 | ) | (181 | ) | |||||||
Professional fees and services | 414 | (131 | ) | 283 | ||||||||
Amortization of intangibles | (27 | ) | (1,615 | ) | (1,642 | ) | ||||||
Marketing | 27 | (22 | ) | 5 | ||||||||
Insurance | (51 | ) | (137 | ) | (188 | ) | ||||||
Communication | 132 | (89 | ) | 43 | ||||||||
State taxes | (9 | ) | (52 | ) | (61 | ) | ||||||
Loan put provision | — | (662 | ) | (662 | ) | |||||||
OREO expense | 70 | (281 | ) | (211 | ) | |||||||
Other | 85 | 434 | 519 | |||||||||
Total other expense | $ | 2,449 | $ | (4,821 | ) | $ | (2,372 | ) |
Occupancy expense declined by $330,000, or 11.0% to $2.7Ohio-based operations were $24.3 million for the quarterthree months ended March 31, 2012 compared to $3.02013, a 6.4% increase from the $22.8 million for the same period in 2011. The reduction was due to a combination2012.
expenses.
Insurance expense declined by $779,000 million or 34.3% to $1.5 million for the three months ended March 31, 2012 compared to $2.3 million for the same period in 2011. During the third quarter of 2011, Park began recognizing insurance expense for the premiums to be paid to the FDIC based on the new assessment methodology. This new methodology is based on a calculation using total assets less tangible equity. The new methodology will result in a decline in insurance expense going forward for the rest of 2012.
Management provided guidance in Park’s 2011 Annual Report (page 40) that total other expense would be approximately $170 to $175 million for 2012. Management’s latest projection for total other expense is unchanged from the guidance in Park’s 2011 Annual Report.
2013.
Other Expense - Quarterly 2011 | ||||||||||||
Park | Vision | Park, less Vision | ||||||||||
Q1 2011 | $ | 46,346 | $ | 7,425 | $ | 38,921 | ||||||
Q2 2011 | 47,007 | 8,174 | 38,833 | |||||||||
Q3 2011 | 45,599 | 7,267 | 38,332 | |||||||||
Q4 2011 | 49,365 | 8,513 | 40,852 | |||||||||
Total 2011 | $ | 188,317 | $ | 31,379 | $ | 156,938 | ||||||
Average quarterly expense | $ | 47,079 | $ | 7,845 | $ | 39,234 |
As shown in the table above, absent Vision, other expense would have been approximately $39.2 million per quarter in 2011. While SE LLC will continue2012 and 2013 to have other expense as Park management works through the retained loans and OREO, other expense at SE LLC is expected to be significantly lower than the average quarterly Vision expense recognized in 2011. Management currently expects total other expense will be approximately $41 to $42 million quarterly throughout the remainder of 2012.
date.
Other Expense - Quarterly 2012 and 2013 | ||||||||||||||||||||||||
(In thousands) | PNB | GFSC | All Other | Vision | SEPH | Total PRK | ||||||||||||||||||
Q1 2012 | $ | 38,056 | $ | 721 | $ | 1,528 | $ | — | $ | 8,165 | $ | 48,470 | ||||||||||||
Q2 2012 | 37,260 | 706 | 1,839 | — | 5,999 | 45,804 | ||||||||||||||||||
Q3 2012 | 39,609 | 693 | 1,373 | — | 4,008 | 45,683 | ||||||||||||||||||
Q4 2012 | 41,591 | 715 | 1,845 | — | 3,860 | 48,011 | ||||||||||||||||||
Total 2012 | $ | 156,516 | $ | 2,835 | $ | 6,585 | $ | — | $ | 22,032 | $ | 187,968 | ||||||||||||
Q1 2013 | $ | 40,324 | $ | 786 | $ | 1,644 | $ | — | $ | 3,344 | $ | 46,098 | ||||||||||||
YTD 2013 | $ | 40,324 | $ | 786 | $ | 1,644 | $ | — | $ | 3,344 | $ | 46,098 |
Management provided guidance in the 2011 Annual Report (page 40) that the effective federal income tax rate for 2012 would be approximately 26% to 28%, which is consistent with management’s most recent projection.
2012
2012. Loan balances decreased by $6 million to $4,444 million at March 31, 2013, compared to $4,450 million at December 31, 2012.
$100 million.
interest bearing transaction accounts and savings accounts.
Other liabilities increased by $2.7 million or 4.4% to $64.3 million at March 31, 2012 from $61.6 million at December 31, 2011.
2012.
2013.
2012 and $658 million, or 9.7% of total assets, at March 31, 2012.
2012.
Leverage | Tier 1 Risk Based | Total Risk-Based | ||||||||||
The Park National Bank | 6.53 | % | 9.43 | % | 11.37 | % | ||||||
Park National Corporation | 10.35 | % | 15.35 | % | 17.92 | % | ||||||
Minimum capital ratio | 4.00 | % | 4.00 | % | 8.00 | % | ||||||
Well capitalized ratio | 5.00 | % | 6.00 | % | 10.00 | % |
On April 25, 2012, Park entered into a Letter Agreement with the U.S. Treasury (the “Preferred Shares Repurchase Letter Agreement”) pursuant to which Park purchased from the U.S. Treasury all 100,000 of Park’s Series A Preferred Shares for a purchase price of $100 million plus final prorated accrued and unpaid dividends of $972,000. On May 2, 2012, Park entered into a second Letter Agreement with the U.S. Treasury (the “Warrant Repurchase Letter Agreement”) pursuant to which Park purchased from the U.S. Treasury the Warrant to purchase 227,376 Park common shares (the “Warrant”) which had been issued to the U.S. Treasury on December 23, 2008 in connection with Park’s sale to the U.S. Treasury of the Series A Preferred Shares. Park repurchased the Warrant for a purchase price of $2,842,400, or $12.50 per Park common share. The table below provides Park’s capital ratios as of March 31, 2012, excluding the $100 million related to the Series A Preferred Shares.
Leverage | Tier 1 Risk Based | Total Risk-Based | ||||||||||
Park National Corporation | 8.89 | % | 13.18 | % | 15.75 | % |
2013.
Leverage | Tier 1 Risk Based | Total Risk-Based | ||||||
The Park National Bank | 6.72 | % | 9.78 | % | 11.67 | % | ||
Park National Corporation | 9.26 | % | 13.35 | % | 16.01 | % | ||
Minimum capital ratio | 4.00 | % | 4.00 | % | 8.00 | % | ||
Well capitalized ratio (PNB only) | 5.00 | % | 6.00 | % | 10.00 | % |
2013.
(in thousands) | March 31, 2012 | December 31, 2011 | ||||||
Loan commitments | $ | 773,014 | $ | 809,140 | ||||
Standby letters of credit | $ | 24,175 | $ | 18,772 |
(In thousands) | March 31, 2013 | December 31, 2012 | ||||||
Loan commitments | $ | 857,235 | $ | 815,585 | ||||
Standby letters of credit | $ | 22,023 | $ | 22,961 |
PARK NATIONAL CORPORATION
(a) | Not applicable |
(b) | Not applicable |
(c) | No purchases of Park’s common shares were made by or on behalf of Park or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended, during the three months ended March 31, |
Period | Total number of common shares purchased | Average price paid per common share | Total number of common shares purchased as part of publicly announced plans or programs | Maximum number of common shares that may yet be purchased under the plans or programs (1) | |||||||||||||||
January 1 through January 31, | — | — | 761,011 | ||||||||||||||||
February 1 through February | — | — | 761,011 | ||||||||||||||||
March 1 through March 31, | — | — | 761,011 | ||||||||||||||||
Total | — | — | 761,011 |
(1) | The number shown represents, as of the end of each period, the maximum number of common shares that may yet be purchased as part of Park’s publicly announced stock repurchase authorization to fund the Park National Corporation 2005 Incentive Stock Option Plan (the “2005 Plan”). |
Note: The disclosure schedules and other schedules (with the exception of Schedule S) referenced in the Purchase and Assumption Agreement have been omitted pursuant to Item 601(b)(2) of SEC Regulation S-K. Park National Corporation hereby undertakes to furnish a copy of the omitted disclosure schedules and other schedules upon request by the SEC.
3.1(a) | Articles of Incorporation of Park National Corporation as filed with the Ohio Secretary of State on March 24, 1992 (Incorporated herein by reference to Exhibit 3(a) to Park National Corporation’s Form 8-B, filed on May 20, 1992 (File No. 0-18772) (“Park’s Form 8-B”)) |
3.1(b) | Certificate of Amendment to the Articles of Incorporation of Park National Corporation as filed with the Ohio Secretary of State on May 6, 1993 (Incorporated herein by reference to Exhibit 3(b) to Park National Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993 (File No. 0-18772)) |
3.1(c) | Certificate of Amendment to the Articles of Incorporation of Park National Corporation as filed with the Ohio Secretary of State on April 16, 1996 (Incorporated herein by reference to Exhibit 3(a) to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1996 (File No. 1-13006)) |
3.1(d) | Certificate of Amendment by Shareholders to the Articles of Incorporation of Park National Corporation as filed with the Ohio Secretary of State on April 22, 1997 (Incorporated herein by reference to Exhibit 3(a)(1) to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997 (File No. 1-13006) (“Park’s June 30, 1997 Form 10-Q”)) |
3.1(e) | Certificate of Amendment by Shareholders |
3.1(f) | Certificate of Amendment by Directors |
3.1(g) | Certificate of Amendment by Shareholders |
3.1(h) | Articles of Incorporation of Park National Corporation (reflecting amendments through April 18, 2011) [for SEC reporting compliance purposes only – not filed with Ohio Secretary of State] (Incorporated herein by reference to Exhibit 3.1(h) to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011 (File No. 1-13006)) |
3.2(a) | Regulations of Park National Corporation (Incorporated herein by reference to Exhibit 3(b) to Park’s Form 8-B) |
3.2(b) | Certified Resolution regarding Adoption of Amendment to Subsection 2.02(A) of the Regulations of Park National Corporation by Shareholders on April 21, 1997 (Incorporated herein by reference to Exhibit 3(b)(1) to Park’s June 30, 1997 Form 10-Q) | |
3.2(c) | Certificate Regarding Adoption of Amendments to Sections 1.04 and 1.11 of Park National Corporation’s Regulations by the Shareholders on April 17, 2006 (Incorporated herein by reference to Exhibit 3.1 to Park National Corporation’s Current Report on Form 8-K dated and filed on April 18, 2006 (File No. 1-13006)) |
3.2(d) | Certificate Regarding Adoption by the Shareholders of Park National Corporation on April 21, 2008 of Amendment to Regulations to Add New Section 5.10 to Article Five (Incorporated herein by reference to Exhibit 3.2(d) to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2008 (File No. 1-13006) (“Park’s March 31, 2008 Form 10-Q”)) |
3.2(e) | Regulations of Park National Corporation (reflecting amendments through April 21, 2008) [For purposes of SEC reporting compliance only] (Incorporated herein by reference to Exhibit 3.2(e) to Park’s March 31, 2008 Form 10-Q) |
10.1 | Park National Corporation |
31.1 | Rule 13a – 14(a) / 15d – 14(a) Certifications (Principal Executive Officer) (filed herewith) |
31.2 | Rule 13a – 14(a) / 15d – 14(a) Certifications (Principal Financial Officer) (filed herewith) |
32.1 | Certifications Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (Principal Executive Officer) (furnished herewith) |
32.2 | Certifications Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (Principal Financial Officer) (furnished herewith) |
101 | The following information from Park’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, |
Pursuant to Rule 406T
PARK NATIONAL CORPORATION | ||
DATE: May | /s/ C. Daniel DeLawder | |
C. Daniel DeLawder | ||
Chairman of the Board and | ||
Chief Executive Officer | ||
DATE: May | /s/ | |
Chief Financial Officer and |
Treasurer |