1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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 (I.R.S. Employer Identification No.)
incorporation or organization)
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)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------- ------
14,039,289 common shares, no par value per share, outstanding at April
27, 2001.
Page 1 of 23
Exhibit Index at Page 22
2
PARK NATIONAL CORPORATION
CONTENTS
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Page
----
PART I. FINANCIAL INFORMATION 3-12
Item 1. Financial Statements 3-12
Consolidated Balance Sheets as of March 31, 2001 and
and December 31, 2000 (unaudited) 3
Consolidated Condensed Statements of Income for the
Three Months ended March 31, 2001 and 2000 (unaudited) 4,5
Consolidated Condensed Statements of Changes in Stockholders'
Equity for the Three Months ended March 31, 2001 and 2000 (unaudited) 6
Consolidated Statements of Cash Flows for the Three Months
ended March 31, 2001 and 2000 (unaudited) 7,8
Notes to Consolidated Financial Statements 9-12
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations 13-18
Item 3. Quantitative and Qualitative Disclosure About Market Risk 18
PART II. OTHER INFORMATION 19-20
Item 1. Legal Proceedings 19
Item 2. Changes in Securities and Use of Proceeds 19
Item 3. Defaults Upon Senior Securities 19
Item 4. Submission of Matters to a Vote of Security Holders 19-21
Item 5. Other Information 21
Item 6. Exhibits and Reports on Form 8-K 21-22
SIGNATURES 23
EXHIBITS
-2-
3
PARK NATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands, except per share data)
March 31, December 31,
2001 2000
- ------------------------------------------------------------------------------------------------
Assets:
Cash and due from banks $ 111,107 $141,547
- ------------------------------------------------------------------------------------------------
Federal funds sold 22,500 28,030
- ------------------------------------------------------------------------------------------------
Interest bearing deposits 550 1,638
- ------------------------------------------------------------------------------------------------
Securities available-for-sale, at fair value
(amortized cost of $944,110 and $919,288
at March 31, 2001 and December 31, 2000) 961,562 925,496
- ------------------------------------------------------------------------------------------------
Securities held-to-maturity, at amortized cost
(fair value approximates $30,593 and $30,497
at March 31, 2001 and December 31, 2000) 30,326 30,474
- ------------------------------------------------------------------------------------------------
Loans (net of unearned interest) 2,913,643 2,956,204
- ------------------------------------------------------------------------------------------------
Allowance for possible loan losses 58,165 57,473
- ------------------------------------------------------------------------------------------------
Net loans 2,855,478 2,898,731
- ------------------------------------------------------------------------------------------------
Bank premises and equipment, net 39,946 39,616
- ------------------------------------------------------------------------------------------------
Other assets 140,516 140,013
- ------------------------------------------------------------------------------------------------
Total assets $4,161,985 $4,205,545
- ------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity:
Deposits:
Noninterest bearing $ 433,490 $493,994
- ------------------------------------------------------------------------------------------------
Interest bearing 2,763,790 2,658,257
- ------------------------------------------------------------------------------------------------
Total deposits 3,197,280 3,152,251
- ------------------------------------------------------------------------------------------------
Short-term borrowings 249,311 275,699
- ------------------------------------------------------------------------------------------------
Long-term debt 222,714 290,127
- ------------------------------------------------------------------------------------------------
Other liabilities 40,703 44,819
- ------------------------------------------------------------------------------------------------
Total liabilities 3,710,008 3,762,896
- ------------------------------------------------------------------------------------------------
Stockholders' Equity:
Common stock (No par value; 20,000,000 shares
authorized; 14,541,730 shares issued in 2001
and 14,801,010 issued in 2000) 105,868 119,229
- ------------------------------------------------------------------------------------------------
Retained earnings 374,902 365,975
- ------------------------------------------------------------------------------------------------
Treasury stock (493,762 shares in 2001
and 676,293 shares in 2000) (40,139) (46,583)
- ------------------------------------------------------------------------------------------------
Accumulated other comprehensive income,
net of taxes 11,346 4,028
- ------------------------------------------------------------------------------------------------
Total stockholders' equity 451,977 442,649
- ------------------------------------------------------------------------------------------------
Total liabilities and
stockholders' equity $4,161,985 $4,205,545
- ------------------------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3
4
PARK NATIONAL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands, except per share data)
Three Months Ended
March 31,
--------------------
2001 2000
- --------------------------------------------------------------------
Interest income:
Interest and fees on loans $65,441 $60,261
- --------------------------------------------------------------------
Interest on:
Obligations of U.S. Government,
its agencies and other securities 12,849 13,712
- --------------------------------------------------------------------
Obligations of states
and political subdivisions 1,997 2,150
- --------------------------------------------------------------------
Other interest income 527 363
- --------------------------------------------------------------------
Total interest income 80,814 76,486
- --------------------------------------------------------------------
Interest expense:
Interest on deposits:
Demand and savings deposits 6,586 6,473
- --------------------------------------------------------------------
Time deposits 22,478 19,232
- --------------------------------------------------------------------
Interest on borrowings:
Short-term borrowings 2,600 3,105
- --------------------------------------------------------------------
Long-term debt 3,719 3,319
- --------------------------------------------------------------------
Total interest expense 35,383 32,129
- --------------------------------------------------------------------
Net interest income 45,431 44,357
- --------------------------------------------------------------------
Provision for loan losses 2,259 2,039
- --------------------------------------------------------------------
Net interest income after
provision for loan losses 43,172 42,318
- --------------------------------------------------------------------
Other income 10,156 9,138
- --------------------------------------------------------------------
Gain (loss) on sale of securities 142 -
- --------------------------------------------------------------------
Continued
4
5
PARK NATIONAL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
(CONTINUED)
(dollars in thousands, except per share data)
Three Months Ended
March 31,
--------------------------------
2001 2000
- -------------------------------------------------------------------------------------
Other expense:
Salaries and employee benefits $ 14,566 $ 13,933
- -------------------------------------------------------------------------------------
Occupancy expense 1,517 1,435
- -------------------------------------------------------------------------------------
Furniture and equipment expense 1,415 1,553
- -------------------------------------------------------------------------------------
Other expense 9,472 9,026
- -------------------------------------------------------------------------------------
Total other expense 26,970 25,947
- -------------------------------------------------------------------------------------
Income before federal income taxes 26,500 25,509
- -------------------------------------------------------------------------------------
Federal income taxes 7,610 7,496
- -------------------------------------------------------------------------------------
Net income $ 18,890 $ 18,013
=====================================================================================
PER SHARE:
Net income:
Basic $ 1.34 $ 1.26
=====================================================================================
Diluted $ 1.34 $ 1.25
=====================================================================================
Weighted average
Basic 14,094,604 14,299,948
=====================================================================================
Diluted 14,120,492 14,366,000
=====================================================================================
Cash dividends declared $ 0.71 $ 0.65
=====================================================================================
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5
6
PARK NATIONAL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
(dollars in thousands, except per share data)
THREE MONTHS ENDED MARCH 31, 2001 AND 2000 Treasury
Common Retained Stock
Stock Earnings at Cost
- -------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1999 $ 121,210 $ 333,572 ($ 29,295)
- -------------------------------------------------------------------------------------------------------------------------------
Net Income 18,013
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated other comprehensive income,
net of income taxes of ($1,489)
- -------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income
- -------------------------------------------------------------------------------------------------------------------------------
Cash dividends on common stock:
Park at $.65 per share (6,324)
- -------------------------------------------------------------------------------------------------------------------------------
Cash dividends paid by U. B. Bancshares, SNB Corp. and
Security Banc Corporation prior to merger (2,398)
- -------------------------------------------------------------------------------------------------------------------------------
Shares issued for stock options - 1,094 shares 50
- -------------------------------------------------------------------------------------------------------------------------------
Treasury stock purchased - 86,477 shares (8,461)
- -------------------------------------------------------------------------------------------------------------------------------
Treasury stock reissued for stock options - 8,377 shares 425
- -------------------------------------------------------------------------------------------------------------------------------
BALANCE AT MARCH 31, 2000 $ 121,260 $ 342,863 ($ 37,331)
===============================================================================================================================
===============================================================================================================================
BALANCE AT DECEMBER 31, 2000 $ 119,229 $ 365,975 ($ 46,583)
- -------------------------------------------------------------------------------------------------------------------------------
Net Income $ 18,890
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated other comprehensive income,
net of income taxes of $3,940
- -------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income
- -------------------------------------------------------------------------------------------------------------------------------
Cash dividends on common stock:
Park at $.71 per share (7,608)
- -------------------------------------------------------------------------------------------------------------------------------
Cash dividends paid by Security Banc Corporation
prior to merger (2,355)
- -------------------------------------------------------------------------------------------------------------------------------
Retire treasury stock from Security Banc Corporation merger - 259,280 shares (13,361) 13,361
- -------------------------------------------------------------------------------------------------------------------------------
Treasury stock purchased - 85,334 shares (7,379)
- -------------------------------------------------------------------------------------------------------------------------------
Treasury stock reissued for stock options - 8,585 shares 462
- -------------------------------------------------------------------------------------------------------------------------------
BALANCE AT MARCH 31, 2001 $ 105,868 $ 374,902 ($ 40,139)
===============================================================================================================================
Accumulated
THREE MONTHS ENDED MARCH 31, 2001 AND 2000 Other
Comprehensive Comprehensive
Income Income
- --------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1999 ($ 16,304)
- --------------------------------------------------------------------------------------------------
Net Income $ 18,013
- --------------------------------------------------------------------------------------------------------------------------
Accumulated other comprehensive income,
net of income taxes of ($1,489) (2,765) (2,765)
- --------------------------------------------------------------------------------------------------------------------------
Total comprehensive income $ 15,248
- --------------------------------------------------------------------------------------------------------------============
Cash dividends on common stock:
Park at $.65 per share
- --------------------------------------------------------------------------------------------------
Cash dividends paid by U. B. Bancshares, SNB Corp. and
Security Banc Corporation prior to merger
- --------------------------------------------------------------------------------------------------
Shares issued for stock options - 1,094 shares
- --------------------------------------------------------------------------------------------------
Treasury stock purchased - 86,477 shares
- --------------------------------------------------------------------------------------------------
Treasury stock reissued for stock options - 8,377 shares
- --------------------------------------------------------------------------------------------------
BALANCE AT MARCH 31, 2000 ($ 19,069)
==================================================================================================
==========================================================================================================================
BALANCE AT DECEMBER 31, 2000 $ 4,028
- --------------------------------------------------------------------------------------------------
Net Income $ 18,890
- --------------------------------------------------------------------------------------------------------------------------
Accumulated other comprehensive income,
net of income taxes of $3,940 7,318 7,318
- --------------------------------------------------------------------------------------------------------------------------
Total comprehensive income $ 26,208
- --------------------------------------------------------------------------------------------------------------============
Cash dividends on common stock:
Park at $.71 per share
- --------------------------------------------------------------------------------------------------
Cash dividends paid by Security Banc Corporation
prior to merger
- --------------------------------------------------------------------------------------------------
Retire treasury stock from Security Banc Corporation merger - 259,280 shares
- --------------------------------------------------------------------------------------------------
Treasury stock purchased - 85,334 shares
- --------------------------------------------------------------------------------------------------
Treasury stock reissued for stock options - 8,585 shares
- --------------------------------------------------------------------------------------------------
BALANCE AT MARCH 31, 2001 $ 11,346
==================================================================================================
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6
7
PARK NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)
Three Months Ended
March 31,
-----------------------------
2001 2000
- ----------------------------------------------------------------------------------------------------
Operating activities:
Net income $ 18,890 $ 18,013
- ----------------------------------------------------------------------------------------------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization and accretion 772 1,161
- ----------------------------------------------------------------------------------------------------
Provision for loan losses 2,259 2,039
- ----------------------------------------------------------------------------------------------------
Amortization of the excess of cost over
net assets of banks purchased 988 993
- ----------------------------------------------------------------------------------------------------
Realized investment security gain (142) 0
- ----------------------------------------------------------------------------------------------------
Changes in assets and liabilities:
Increase in other assets (5,417) (1,113)
- ----------------------------------------------------------------------------------------------------
Increase (decrease) in other liabilities 3,554 (15,897)
- ----------------------------------------------------------------------------------------------------
Net cash provided from operating activities 20,904 5,196
-----------------------------------------------------------------------------------------
Investing activities:
Proceeds from sales of:
Available-for-sale securities 24,968 0
- ----------------------------------------------------------------------------------------------------
Proceeds from maturity of:
Available-for-sale securities 92,191 29,915
- ----------------------------------------------------------------------------------------------------
Held-to-maturity securities 148 57
- ----------------------------------------------------------------------------------------------------
Purchases of:
Available-for-sale securities (141,641) (22,341)
- ----------------------------------------------------------------------------------------------------
Net decrease (increase) in interest bearing deposits with other banks 1,088 (110)
- ----------------------------------------------------------------------------------------------------
Net decrease (increase) in loans 41,245 (32,969)
- ----------------------------------------------------------------------------------------------------
Purchases of premises and equipment, net (1,551) (553)
- ----------------------------------------------------------------------------------------------------
Net cash provided from (used by) investing activities 16,448 (26,001)
----------------------------------------------------------------------------------------
Continued
7
8
PARK NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(CONTINUED)
(dollars in thousands)
Three Months Ended
March 31,
-----------------------
2001 2000
- -----------------------------------------------------------------------------------
Financing activities:
Net increase in deposits $ 45,029 $ 75,241
- -----------------------------------------------------------------------------------
Net decrease in short-term borrowings (26,388) (164,143)
- -----------------------------------------------------------------------------------
Exercise of stock options 0 50
- -----------------------------------------------------------------------------------
Purchase of treasury stock, net (6,917) (8,036)
- -----------------------------------------------------------------------------------
Long-term debt issued 80,000 125,000
- -----------------------------------------------------------------------------------
Repayment of long-term debt (147,413) (19,665)
- -----------------------------------------------------------------------------------
Cash dividends paid (17,633) (15,676)
- -----------------------------------------------------------------------------------
Net cash used by financing activities (73,322) (7,229)
------------------------------------------------------------------------
Decrease in cash and cash equivalents (35,970) (28,034)
------------------------------------------------------------------------
Cash and cash equivalents at beginning of year 169,577 185,751
- -----------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 133,607 $ 157,717
========================================================================
Supplemental disclosures of cash flow information:
Cash paid for:
Interest $ 34,897 $ 31,735
------------------------------------------------------------
Income taxes $ 0 $ 0
------------------------------------------------------------
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8
9
PARK NATIONAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2001 and 2000.
Note 1 - BASIS OF PRESENTATION
The consolidated financial statements included in this report have been prepared
by Park National Corporation (the "Registrant", "Corporation", "Company", or
"Park") without audit. In the opinion of management, all adjustments (consisting
solely of normal recurring accruals) necessary for a fair presentation of
results of operations for the interim periods included herein have been made.
The results of operations for the period ended March 31, 2001 are not
necessarily indicative of the operating results to be anticipated for the fiscal
year ended December 31, 2001.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions for Form 10-Q, and therefore, do not include
all information and footnotes necessary for a fair presentation of the balance
sheets, condensed statements of income, condensed statements of changes in
stockholders' equity and statements of cash flows in conformity with generally
accepted accounting principles. These financial statements should be read in
conjunction with the financial statements included in the Annual Report on Form
10-K for the year ended December 31, 2000. Certain amounts in 2000 have been
reclassified to conform to the financial statement presentation used for 2001.
Park does not have any off-balance sheet derivative financial instruments such
as interest-rate swap agreements.
Note 2 - ACQUISITIONS
On March 23, 2001, Park merged with Security Banc Corporation, a $995 million
bank holding company headquartered in Springfield, Ohio in a transaction
accounted for as a pooling-of-interests. Park issued approximately 3,350,000
shares of common stock to the stockholders of Security Banc Corporation based
upon an exchange ratio of .284436 shares of Park common stock for each
outstanding share of Security Banc Corporation common stock. The three financial
institution subsidiaries of Security Banc Corporation (The Security National
Bank and Trust Co., The Citizens National Bank of Urbana, and The Third Savings
and Loan Company) are being operated as separate subsidiaries by Park.
On April 30, 2000, Park merged with U.B. Bancshares, Inc., a $180 million one
bank holding company headquartered in Bucyrus, Ohio in a transaction accounted
for as a pooling-of-interests. Park issued approximately 325,000 shares of
common stock to the stockholders of U.B. Bancshares, Inc. based upon an exchange
ratio of .577209 shares of Park common stock for each outstanding share of U.B.
Bancshares, Inc. common stock. United Bank, N.A., the wholly owned subsidiary of
U.B. Bancshares, Inc., is being operated as a separate banking subsidiary by
Park. Park also merged with SNB Corp., a $300 million one bank holding company
headquartered in
-9-
10
Greenville, Ohio, on April 30, 2000 in a transaction accounted for as a
pooling-of-interest. Park issued approximately 835,000 shares of common stock to
the stockholders of SNB Corp. based upon an exchange ratio of 5.367537 shares of
Park common stock for each outstanding share of SNB Corp. common stock. Second
National Bank, the wholly owned subsidiary of SNB Corp., is being operated as a
separate banking subsidiary by Park.
The historical financial statements of the Corporation have been restated to
show Security Banc Corporation, U.B. Bancshares, SNB Corp., and Park on a
combined basis. Separate results of operations for Park, Security Banc
Corporation, U.B. Bancshares, Inc. and SNB Corp. follow:
- -----------------------------------------------------------------
Three Months Ended
March 31, 2000
- -----------------------------------------------------------------
(Dollars in Thousands)
(except per share data)
Net Interest Income
- -----------------------------------------------------------------
Park $29,510
- -----------------------------------------------------------------
Security Banc Corporation 10,368
- -----------------------------------------------------------------
U.B. Bancshares, Inc. 1,706
- -----------------------------------------------------------------
SNB Corp. 2,773
- -----------------------------------------------------------------
Combined $44,357
=======
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Net Income
- -----------------------------------------------------------------
Park $12,434
- -----------------------------------------------------------------
Security Banc Corporation 4,149
- -----------------------------------------------------------------
U.B. Bancshares, Inc. 427
- -----------------------------------------------------------------
SNB Corp. 1,003
- -----------------------------------------------------------------
Combined $18,013
=======
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Basic Earnings Per Share
- -----------------------------------------------------------------
Park $1.28
- -----------------------------------------------------------------
Security Banc Corporation .34
- -----------------------------------------------------------------
U.B. Bancshares, Inc. .77
- -----------------------------------------------------------------
SNB Corp. 6.44
- -----------------------------------------------------------------
Combined $1.26
=====
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Diluted Earnings Per Share
- -----------------------------------------------------------------
Park $1.27
- -----------------------------------------------------------------
Security Banc Corporation .34
- -----------------------------------------------------------------
U.B. Bancshares, Inc. .75
- -----------------------------------------------------------------
SNB Corp. 6.44
- -----------------------------------------------------------------
Combined $1.25
=====
- -----------------------------------------------------------------
Note 3 - ALLOWANCE FOR POSSIBLE LOAN LOSSES
The allowance for possible loan losses is that amount believed adequate to
absorb
-10-
11
credit losses in the loan portfolio based on management's evaluation of various
factors including overall growth in the loan portfolio, an analysis of
individual loans, prior and current loss experience, and current economic
conditions. A provision for loan losses is charged to operations based on
management's periodic evaluation of these and other pertinent factors.
Allowance for Possible Loan Losses
----------------------------------
- ----------------------------------------------------------------------------
(In Thousands)
- ----------------------------------------------------------------------------
2001 2000
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Beginning January 1 $57,473 $52,140
- ----------------------------------------------------------------------------
Provision for loan losses 2,259 2,039
- ----------------------------------------------------------------------------
Losses charged to the reserve (3,206) (2,735)
- ----------------------------------------------------------------------------
Recoveries 1,639 1,274
------- -------
- ----------------------------------------------------------------------------
Balance March 31, $58,165 $52,718
======= =======
- ----------------------------------------------------------------------------
Note 4 - EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share for the three month periods ended March 31, 2001 and 2000.
- ----------------------------------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
- ----------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED
- ----------------------------------------------------------------------------------------------------------------------
MARCH 31, 2001 2000
- ----------------------------------------------------------------------------------------------------------------------
NUMERATOR:
- ----------------------------------------------------------------------------------------------------------------------
NET INCOME $18,890 $18,013
- ----------------------------------------------------------------------------------------------------------------------
DENOMINATOR:
- ----------------------------------------------------------------------------------------------------------------------
DENOMINATOR FOR BASIC EARNINGS PER SHARE (WEIGHTED-AVG. SHARES) 14,094,604 14,299,948
- ----------------------------------------------------------------------------------------------------------------------
EFFECT OF DILUTIVE SECURITIES 25,888 66,052
- ----------------------------------------------------------------------------------------------------------------------
DENOMINATOR FOR DILUTED EARNINGS PER SHARE (ADJUSTED WEIGHTED-AVERAGE SHARES AND 14,120,492 14,366,000
ASSUMED CONVERSIONS)
- ----------------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE:
- ----------------------------------------------------------------------------------------------------------------------
BASIC EARNINGS PER SHARE $1.34 $1.26
- ----------------------------------------------------------------------------------------------------------------------
DILUTED EARNINGS PER SHARE $1.34 $1.25
- ----------------------------------------------------------------------------------------------------------------------
-11-
12
Note 5 - SEGMENT INFORMATION
The Corporation is a multi-bank holding company headquartered in Newark, Ohio.
The operating segments for the Corporation are its financial institution
subsidiaries. The Corporation's financial institution subsidiaries are The Park
National Bank (PNB), The Richland Trust Company (RTC), Century National Bank
(CNB), The First-Knox National Bank of Mount Vernon (FKNB), United Bank N.A.
(UB), Second National Bank (SNB), The Security National Bank and Trust Co.
(SEC), The Citizens National Bank of Urbana (CIT), and The Third Savings and
Loan Company (TSL).
- ---------------------------------------------------------------------------------------------------------------------------------
Operating Results for the Three Months Ended March 31, 2001 (In Thousands)
- ---------------------------------------------------------------------------------------------------------------------------------
PNB RTC CNB FKNB UB SNB SEC CIT TSL All Other Total
- ---------------------------------------------------------------------------------------------------------------------------------
Net Interest $14,141 $4,442 $4,431 $6,918 $1,708 $2,807 $6,395 $1,633 $1,730 $1,226 $45,431
Income
- ---------------------------------------------------------------------------------------------------------------------------------
Provision for 720 270 150 444 60 75 300 135 75 30 2,259
Loan Losses
- ---------------------------------------------------------------------------------------------------------------------------------
Other Income 4,409 703 890 1,332 303 401 1,635 403 115 107 10,298
- ---------------------------------------------------------------------------------------------------------------------------------
Other Expense 8,432 2,701 2,410 3,672 1,439 1,763 3,567 1,083 1,022 881 26,970
- ---------------------------------------------------------------------------------------------------------------------------------
Net Income $6,516 $1,444 $1,846 $3,071 $396 $1,016 $2,870 $562 $446 $723 $18,890
- ---------------------------------------------------------------------------------------------------------------------------------
Balances at March 31, 2001
- ---------------------------------------------------------------------------------------------------------------------------------
Assets 1,338,720 441,923 408,111 609,875 175,424 302,933 655,677 172,741 198,889 (142,308) $4,161,985
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Operating Results for the Three Months Ended March 31, 2000 (In Thousands)
- ---------------------------------------------------------------------------------------------------------------------------------
PNB RTC CNB FKNB UB SNB SEC CIT TSL All Other Total
- ---------------------------------------------------------------------------------------------------------------------------------
Net Interest $13,703 $4,606 $4,224 $6,469 $1,730 $2,746 $6,538 $1,640 $1,774 $927 $44,357
Income
- ---------------------------------------------------------------------------------------------------------------------------------
Provision for 930 225 120 339 30 45 300 -- 30 20 2,039
Loan Losses
- ---------------------------------------------------------------------------------------------------------------------------------
Other Income 4,124 579 785 1,218 191 205 1,517 292 137 90 9,138
- ---------------------------------------------------------------------------------------------------------------------------------
Other Expense 8,019 2,629 2,387 3,675 1,327 1,546 3,654 1,106 1,021 583 25,947
- ---------------------------------------------------------------------------------------------------------------------------------
Net Income $6,219 $1,547 $1,722 $2,610 $423 $1,010 $2,811 $571 $518 $582 $18,013
- ---------------------------------------------------------------------------------------------------------------------------------
Balances at March 31, 2000
- ---------------------------------------------------------------------------------------------------------------------------------
Assets 1,253,772 444,846 393,330 594,096 178,507 301,458 625,031 165,403 190,433 (44,980) $4,101,896
- ---------------------------------------------------------------------------------------------------------------------------------
The operating results of the Parent Company and Guardian Finance Company (GFC)
(all other) are used to reconcile the segment totals to the consolidated income
statements for the quarters ended March 31, 2001 and 2000. The reconciling
amounts for consolidated total assets for both of the quarters ended March 31,
2001 and 2000 consist of the elimination of intersegment borrowings, and the
assets of the Parent Company and GFC which are not eliminated.
-12-
13
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This discussion and analysis by management contains forward-looking statements
that are provided to assist in the understanding of anticipated future financial
performance. These forward-looking statements involve significant risks and
uncertainties including changes in general economic and financial market
conditions and Park's ability to execute its business plans. Although Park
believes that the expectations reflected in such forward-looking statements are
reasonable, actual results may differ materially. Undue reliance should not be
placed on the forward-looking statements, which speak only as of the date
hereof. Park does not undertake any obligation to publicly update any
forward-looking statement.
Comparison of Results of Operations for the Quarters Ended
March 31, 2001 and 2000.
NET INTEREST INCOME
The Corporation's principal source of earnings is net interest income, the
difference between total interest income and total interest expense. Net
interest income increased by $1.1 million or 2.4% to $45.43 million for the
three months ended March 31, 2001 compared to $44.36 million for the first
quarter of 2000. The following table compares the average balance and tax
equivalent yield/cost for interest earning assets and interest bearing
liabilities for the first quarter of 2001 with the same quarter in 2000.
- -------------------------------------------------------------------------------------------------
Three Months Ended March 31,
(In Thousands)
- -------------------------------------------------------------------------------------------------
2001 2000
- -------------------------------------------------------------------------------------------------
Average Tax Average Tax
Balance Equivalent Balance Equivalent
% %
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Loans $2,929,017 9.10% $2,789,918 8.72%
- -------------------------------------------------------------------------------------------------
Taxable Investments 772,719 6,74% 832,309 6.63%
- -------------------------------------------------------------------------------------------------
Tax Exempt Investments 164,903 6.93% 178,290 7.01%
- -------------------------------------------------------------------------------------------------
Federal Funds Sold 36,460 5.87% 26,076 5.60%
- -------------------------------------------------------------------------------------------------
Interest Earning Assets $3,903,099 8.51% $3,826,593 8.16%
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Interest Bearing Deposits $2,697,633 4.37% $2,662,696 3.88%
- -------------------------------------------------------------------------------------------------
Short-term Borrowings 253,713 4.16% 246,008 5.08%
- -------------------------------------------------------------------------------------------------
Long-term Debt 274,242 5.50% 267,462 4.99%
- -------------------------------------------------------------------------------------------------
Interest Bearing Liabilities $3,225,588 4.45% $3,176,166 4.07%
- -------------------------------------------------------------------------------------------------
Excess Interest Earning Assets $677,511 4.06% $650,427 4.09%
- -------------------------------------------------------------------------------------------------
Net Interest Margin 4.83% 4.79%
- -------------------------------------------------------------------------------------------------
Average interest earning assets increased by $76 million or 2.0% to $3,903
million for the quarter ended March 31, 2001 compared to the same quarter in
2000. Average loan totals increased by $139 million or 5.0% to $2,929 million
for the first quarter of 2001 compared
-13-
14
to the first quarter in 2000. The demand for commercial, commercial real estate,
and consumer loans and leases secured by automobiles decreased sharply during
the first quarter of 2001 compared to the same period in 2000. The average yield
on the loan portfolio was 9.10% for the first quarter of 2001 compared to 8.72%
for the same period in 2000. The average prime lending rate for Park's affiliate
banks was 8.62% for the first quarter of 2001 compared to 8.69% for the same
period in 2000. The Federal Reserve decreased the federal funds rate by 1.50%
during the first quarter of 2001 and by another .50% on April 18, 2001 to 4.50%.
Park's prime lending rate was decreased by the same magnitude at the same time.
Approximately 25% of Park's loan portfolio reprices based on the prime lending
rate. The yield on Park's loan portfolio is expected to decrease over the
remainder of the year as variable rate loans reprice lower and new loan
originations have an average rate that is lower than the current loan portfolio
rate.
Average investment securities including federal funds sold decreased by $63
million or 6.0% to $974 million for the first quarter of 2001 compared to the
same quarter in 2000. The yield on taxable investment securities increased to
6.74% in 2001 compared to 6.63% in 2000 and the yield on tax exempt securities
decreased to 6.93% in 2001 compared to 7.01% in 2000. The average maturity or
repricing of the investment portfolio was approximately 3.9 years at March 31,
2001 compared to 5.5 years at March 31, 2000.
Average interest bearing liabilities increased by $49 million or 1.6% to $3,226
million for the quarter ended March 31, 2001 compared to the same quarter in
2000. Average interest bearing deposits increased by $35 million or 1.3% to
$2,698 million for the first quarter of 2001 compared to the same period in
2000. Average short-term borrowings increased by $8 million or 3.1% to $254
million and average long-term debt increased by $7 million to $274 million for
the first quarter of 2001 compared to the same period in 2000. Long-term debt
consists of Federal Home Loan Bank advances.
The average cost of interest bearing liabilities increased by .38% to 4.45% in
2001 compared to 4.07% in 2000. The average cost of interest bearing deposits
increased by .49% to 4.37% in 2001 compared to 3.88% in 2000. The average cost
of total borrowing decreased by .20% to 4.85% in 2001 compared to 5.05% in 2000.
The cost of Park's interest bearing liabilities is expected to decrease over the
remainder of the year as the cost of new certificates of deposit is lower than
the current portfolio rate and rates paid on other deposit accounts have been
lowered.
The increase in net interest income of $1.1 million or 2.4% to $45.4 million for
the quarter ended March 31, 2001 was primarily due to the 2.0% increase in
interest earning assets. The net interest spread (the difference between the
yield on interest earning assets and the cost of interest bearing liabilities)
decreased slightly by .03% to 4.06% in 2001 compared to 4.09% in 2000. The tax
equivalent net interest margin (defined as net interest income divided by
average interest earning assets) increased by .04% to 4.83% for the first
quarter of 2001 compared to 4.79% in 2000.
PROVISION FOR LOAN LOSSES
The provision for loan losses increased by $220,000 or 10.8% to $2.2 million for
the quarter ended March 31, 2001 compared to $2.0 million for the same period in
2000. Net charge-offs were $1.6 million in 2001 compared to $1.5 million in
2000. Nonperforming loans, defined as loans that are 90 days past due,
renegotiated loans, and nonaccrual loans were $21.2 million or
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.73% of loans at March 31, 2001 compared to $20.7 million or .70% of loans at
December 31, 2000 and $10.7 million or .38% of loans at March 31, 2000. The
reserve for loan losses as a percentage of outstanding loans was 2.00% at March
31, 2001 compared to 1.94% at December 31, 2000 and 1.87% at March 31, 2000. See
Footnote 3 for a discussion of the factors considered by management in
determining the provision for loan losses.
NONINTEREST INCOME
Noninterest income increased by $1.0 million or 11.1% to $10.2 million for the
first quarter of 2001 compared to $9.1 million for the first quarter of 2000.
The following table summarizes the change in noninterest income.
---------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED
MARCH 31,
(in thousands)
---------------------------------------------------------------------------------------------------------
2001 2000 Change
---------------------------------------------------------------------------------------------------------
Fees from Fiduciary Activities $2,162 $2,051 $111
---------------------------------------------------------------------------------------------------------
Service Charges on Deposit Accounts 3,156 2,964 192
---------------------------------------------------------------------------------------------------------
Other Service Income 1,552 1,260 292
---------------------------------------------------------------------------------------------------------
Other Income 3,286 2,863 423
---------------------------------------------------------------------------------------------------------
Total $10,156 $9,138 $1,018
---------------------------------------------------------------------------------------------------------
The increase in fee income from fiduciary activities was primarily due to an
increase in assets under management for new trust department customers. The
increase in service charges on deposit accounts was due to increases in the
number of transaction accounts and to fee increases. The increase in fees earned
from other service income was primarily due to an increase in the fee income
earned from the origination and sale into the secondary market of fixed rate
mortgage loans due to lower interest rates. The fee income from the origination
and sale of fixed rate mortgage loans is expected to increase during the second
quarter. The increase in other fee income was primarily due to increases in
check card and ATM transactions.
GAIN ON SALE OF SECURITIES
The gain on sale of securities of $142,000 for the first quarter of 2001 was due
to the sale of United States Treasury notes with the proceeds reinvested in
Agency mortgage-backed securities. The Agency mortgage-backed securities yield
1.70% more than the give-up yield on the Treasury notes.
OTHER EXPENSE
Total other expense increased by $1.0 million or 3.9% to $26.97 million for the
three months
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ended March 31, 2001 compared to $25.95 million for the same period in 2000.
Salaries and employee benefits expense increased by $633,000 or 4.5% to $14.6
million for the first quarter of 2001 compared to the same period in 2000.
Salaries increased by $415,000 or 3.8% and benefits expense increased by
$218,000 or 7.6% in 2001 compared to 2000. Full time equivalent employees were
1,525 at March 31, 2001 and 1,522 at March 31, 2000.
FEDERAL INCOME TAXES
Federal income tax expense was $7.6 million for the first quarter of 2001
compared to $7.5 million for the same period in 2000. The ratio of federal
income tax expense to income before taxes was approximately 28.7% in 2001 and
29.4% in 2000. The primary difference between the effective federal income tax
rate and the statutory rate of 35% is due to tax-exempt interest income from
state and municipal loans and investments, and low income housing tax credits.
NET INCOME
Net income increased by $877,000 or 4.9% to $18.9 million for the three months
ended March 31, 2001 compared to $18.0 million for the first quarter of 2000.
The annualized, first quarter net income to average assets ratio (ROA) was 1.85%
in 2001 compared to 1.78% in 2000. The annualized, first quarter net income to
average equity ratio (ROE) was 17.33% in 2001 compared to 17.97% in 2000.
Diluted earnings per share increased by 7.2% to $1.34 for the first quarter of
2001 compared to $1.25 for the same quarter in 2000.
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COMPARISON OF FINANCIAL CONDITION
AT MARCH 31, 2001 AND DECEMBER 31, 2000
CHANGES IN FINANCIAL CONDITION AND LIQUIDITY
Total assets decreased by $44 million or 1.0% to $4,162 million at March 31,
2001 compared to $4,206 million at December 31, 2000. Total loans decreased by
$43 million or 1.4% to $2,914 million as demand for commercial loans, commercial
real estate loans, and consumer loans and leases secured by automobiles was weak
during the first quarter. Due to the drop in interest rates during the quarter,
fixed rate mortgage loan volume increased. However, the fixed rate mortgage
loans are sold in the secondary market and as a result do not increase the loan
portfolio, but the related fee income does increase other service income. Growth
in the loan portfolio is expected to be slow during the second quarter as loan
demand continues to be weak.
Total liabilities decreased by $53 million or 1.4% to $3,710 million at March
31, 2001 compared to $3,763 million at December 31, 2000. Total borrowed money
decreased by $94 million or 16.6% to $472 million at March 31, 2001 compared to
$566 million at December 31, 2000. Total deposits increased by $45 million or
1.4% to $3,197 million at March 31, 2001 compared to $3,152 million at year-end
2000. Borrowed money was repaid with excess available funds which resulted from
the poor loan demand during the first quarter.
Effective liquidity management ensures that the cash flow requirements of
depositors and borrowers, as well as the operating cash needs of the
Corporation, are met.
Funds are available from a number of sources, including the securities
portfolio, the core deposit base, Federal Home Loan Bank borrowings, and the
capability to securitize or package loans for sale. The Corporation's loan to
asset ratio was 70.0% at March 31, 2001 compared to 70.3% at December 31, 2000
and 68.6% at March 31, 2000. Cash and cash equivalents totaled $134 million at
March 31, 2001 compared to $170 million at December 31, 2000 and $158 million at
March 31, 2000. The present funding sources provide more than adequate liquidity
for the Corporation to meet its cash flow needs.
CAPITAL RESOURCES
Stockholders' equity at March 31, 2001 was $452 million or 10.86% of total
assets compared to $443 million or 10.53% of total assets at December 31, 2000
and $408 million or 9.94% of total assets at March 31, 2000.
Financial institution regulators have established guidelines for minimum capital
ratios for banks, thrifts, and bank holding companies. The net unrealized gain
or loss on available-for-sale securities is generally not included in computing
regulatory capital. The minimum leverage capital ratio (defined as stockholders'
equity less intangible assets divided by tangible assets) is
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4% and the well capitalized ratio is greater than or equal to 5%. Park's
leverage ratio was 10.10% at March 31, 2001 and 9.90% at December 31, 2000. The
minimum Tier I risk-based capital ratio (defined as leverage capital divided by
risk-adjusted assets) is 4% and the well capitalized ratio is greater than or
equal to 6%. Park's Tier I risk-based capital ratio was 15.66% at March 31, 2001
and 15.00% at December 31, 2000. The minimum total risk-based capital ratio
(defined as leverage capital plus supplemental capital divided by risk-adjusted
assets) is 8% and the well capitalized ratio is greater than or equal to 10%.
Park's total risk-based capital ratio was 16.92% at March 31, 2001 and 16.26% at
December 31, 2000.
The financial institution subsidiaries of Park each met the well capitalized
capital ratio guidelines at March 31, 2001. The following table indicates the
capital ratios for each subsidiary and Park at March 31, 2001:
TIER I TOTAL
LEVERAGE RISK-BASED RISK-BASED
-------- ---------- ----------
- --------------------------------------------------------------------------------------
Park National Bank 6.03% 8.36% 11.77%
- --------------------------------------------------------------------------------------
Richland Trust Company 6.68% 11.58% 12.85%
- --------------------------------------------------------------------------------------
Century National Bank 6.28% 10.11% 12.60%
- --------------------------------------------------------------------------------------
First-Knox National Bank 6.37% 9.19% 12.81%
- --------------------------------------------------------------------------------------
Second National Bank 5.94% 9.01% 12.76%
- --------------------------------------------------------------------------------------
United Bank, N.A. 6.24% 10.65% 11.89%
- --------------------------------------------------------------------------------------
Security National Bank 6.76% 10.36% 15.08%
- --------------------------------------------------------------------------------------
Citizens National Bank 7.16% 12.09% 16.80%
- --------------------------------------------------------------------------------------
Third Savings and Loan 9.31% 11.60% 16.11%
- --------------------------------------------------------------------------------------
Park National Corporation 10.10% 15.66% 16.92%
- --------------------------------------------------------------------------------------
Minimum Capital Ratio 4.00% 4.00% 8.00%
- --------------------------------------------------------------------------------------
Well Capitalized Ratio 5.00% 6.00% 10.00%
- --------------------------------------------------------------------------------------
At the April 16, 2001 Park National Corporation Board of Director's meeting, a
cash dividend of $.71 per share was declared payable on June 8, 2001 to
stockholders of record on May 25, 2001.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See Footnote 1 for disclosure that Park does not have any off-balance sheet
derivative financial instruments.
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PARK NATIONAL CORPORATION
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Park National Corporation is not engaged in any legal proceedings of a
material nature at the present time.
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
I. Special Meeting of Shareholders - March 12, 2001:
a. On March 12, 2001, Park National Corporation held a Special
Meeting of Shareholders to consider and vote upon a proposal to adopt
the Agreement and Plan of Merger, dated as of November 20, 2000 (the
"Security Merger Agreement"), between Park and Security Banc
Corporation ("Security"). At the close of business on the January 29,
2001 record date, there were 10,771,952 Park common shares
outstanding and entitled to vote. At the meeting, 9,407,358 or 87.33%
of the outstanding Park common shares entitled to vote were
represented by proxy or in person.
b. No separate election of directors occurred at the Special Meeting
of Shareholders. However, pursuant to the terms of the Security
Merger Agreement, following the merger of Security into Park, Harry
O. Egger became a director of Park with a term expiring in 2002.
c. The proposal to adopt the Security Merger Agreement was passed
with 85.24% of the issued and outstanding Park common shares voting
for the proposal. The affirmative vote of the holders of at least
two-thirds of the issued and outstanding Park common shares was
required for adoption. The vote was as follows:
9,182,513 For 177,539 Against 47,306 Abstain and Broker Non-Votes
--------- ------- ------
d. Not Applicable
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II. Annual Meeting of Shareholders - April 16, 2001:
a. On April 16, 2001 Park National Corporation held its Annual
Meeting of Shareholders. At the close of business on the February 23,
2001 record date, 10,735,013 Park National Corporation common shares
were outstanding and entitled to vote. At the meeting, 9,862,310 or
91.9% of the outstanding common shares entitled to vote were
represented by proxy or in person.
b. Directors elected at the Annual Meeting for a three year term:
Maureen Buchwald
9,712,753 For 149,557 Withheld -0- Abstain and Broker Non-Votes
---------- ------- ---
D.C. Fanello
9,799,213 For 63,097 Withheld -0- Abstain and Broker Non-Votes
--------- ------ ---
Phillip T. Leitnaker
9,795,907 For 66,403 Withheld -0- Abstain and Broker Non-Votes
--------- ------ ----
J. Gilbert Reese
9,789,572 For 72,738 Withheld -0- Abstain and Broker Non-Votes
--------- ------ ---
Rick R. Taylor
9,804,797 For 57,513 Withheld -0- Abstain and Broker Non-Votes
--------- ------- ---
Directors whose term of office continued after the Annual Meeting:
James J. Cullers
C. Daniel DeLawder
Harry O. Egger
R. William Geyer
Howard E. LeFevre
William T. McConnell
James A. McElroy
John J. O'Neill
William A. Phillips
John L. Warner
Phillip H. Jordan, Jr. resigned as a director effective April 16, 2001.
c. See Item II (b) for the voting results for directors.
1. Proposal to amend the Park National Corporation 1995
Incentive Stock Option Plan, to increase the number of
common shares
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available under that Plan from 735,000 to 1,200,000. The
proposal passed with 88.8% of the issued and outstanding
Park common shares voting for the proposal. The
affirmative vote of 75% of the issued and outstanding
Park common shares were required for passage.
9,529,129 For 227,092 Against 106,089 Abstain and Broker Non-Votes
--------- ------- -------
d. Not applicable
Item 5. OTHER INFORMATION
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a. EXHIBITS
See page 22 for Index to Exhibits
b. REPORTS ON FORM 8-K
On March 28, 2001, Park filed a Current Report on Form 8-K, dated March 28,
2001, in order to report the consummation of the merger with Security Banc
Corporation effective March 23, 2001.
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INDEX TO EXHIBITS
-----------------
EXHIBIT NO. DESCRIPTION
- ---------- -----------
2 Agreement and Plan of Merger (excluding exhibits and
schedules), dated as of November 20, 2000, by and
between Park National Corporation ("Registrant") and
Security Banc Corporation [incorporated herein by
reference to Exhibit 2.1 to Registrant's Pre-Effective
Amendment No. 1 to Registration Statement on Form S-4
filed January 29, 2001 (Registration No. 333-53038)]
10(a) Security Banc Corporation 1987 Stock Option Plan
[incorporated herein by reference to Exhibit 10(a) to
Registrant's Registration Statement on Form S-8 filed
April 23, 2001 (Registration No. 333-59378)]
10(b) Security Banc Corporation 1995 Stock Option Plan
[incorporated herein by reference to Exhibit 10(b) to
Registrant's Registration Statement on Form S-8 filed
April 23, 2001 (Registration No. 33-59378)]
10(c) Security Banc Corporation 1998 Stock Option Plan
[incorporated herein by reference to Exhibit 10(c) to
Registrant's Registration Statement on Form S-8 filed
April 23, 2001 (Registration No. 333-59378)]
10(d) Park National Corporation 1995 Incentive Stock Option
Plan (reflects amendments and share dividends through
April 16, 2001) [incorporated herein by reference to
Exhibit 10 to Registrant's Registration Statement on
Form S-8 filed April 23, 2001 (Registration No.
333-59360)]
10(e) Employment Agreement, made and entered into as of
December 22, 1999, and the Amendment thereto, dated
March 23, 2001, between The Security National Bank and
Trust Co. (also known as Security National Bank and
Trust Co.) and Harry O. Egger
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PARK NATIONAL CORPORATION
DATE: May 8, 2001 BY: /S/C. Daniel DeLawder
----------- ----------------------
C. Daniel DeLawder
President and Chief Executive Officer
DATE: May 8, 2001 BY: /S/John W. Kozak
----------- ----------------
John W. Kozak
Chief Financial Officer
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