Park National Corporation Reports 2007 Results


NEWARK, Ohio, Jan. 28, 2008 (PRIME NEWSWIRE) -- Park National Corporation (Park) (AMEX:PRK) today reported net income for 2007 was $22.7 million, 76 percent less than Park's 2006 net income of $94.1 million. Park's diluted earnings per share for the year 2007 were $1.60, a 76 percent decrease from $6.74 in diluted earnings per share for 2006. Without the $54 million impairment charge to fourth-quarter earnings based on the reduction in the goodwill value of Park subsidiary Vision Bank, headquartered in Panama City, Fla. (announced January 15, 2008), Park would have earned $76.7 million and $5.40 diluted earnings per share for 2007.

Park's net loss for the fourth quarter of 2007 was $43.2 million, or a net loss of $3.08 per share-diluted. Without the $54 million impairment charge to earnings for the fourth quarter, Park would have earned $10.9 million or $0.77 in diluted earnings per share for the fourth quarter 2007, compared to $22.6 million or $1.63 in diluted earnings per share in the fourth quarter of 2006.

Park had net loan charge-offs of $22.2 million for 2007 ($11.3 million for the fourth quarter 2007) and recorded a provision for loan losses for the year of $29.5 million ($18.6 million for the fourth quarter 2007). The provision for loan losses for the year ended December 31, 2006 was $3.9 million. Of the nearly $26 million increase in the provision for loan losses in 2007, $19.4 million was associated with Vision Bank. Vision Bank had $8.6 million of net loan charge-offs in 2007. The loan loss provision for the twelve-month period ended December 31, 2007 exceeds the net loan charge-offs for the same period by $7.3 million reflecting the deterioration of credit quality within Vision Bank's portfolio. Vision Bank's non-performing loans increased from $26.3 million at September 30, 2007 to $63.5 million at December 31, 2007. This represents 9.93 percent of Vision Bank's outstanding loans at December 31, 2007, which totaled $639.1 million.

Park's fourth quarter 2007 results also include a Visa(r) indemnification charge of $0.9 million, which is based on Park's membership interest in Visa(r). During the fourth quarter, Visa(r) announced that it had reached an agreement to settle one of its lawsuits and that they were establishing a liability for a potential settlement with another party. Visa(r) has also announced its plans for an initial public offering ("IPO"). If this IPO occurs, Visa's(r) stated intention is to fund litigation settlements from an escrow account that will be funded by the IPO. When and if an IPO takes place, Park would reverse the $0.9 million in contingent liabilities it has recorded in addition to recognizing gains as a result of the IPO.

"Our community banks in Ohio continue to perform very well in a challenging time for all financial institutions," said Park Chairman C. Daniel DeLawder. "As stated in the news release dated January 15, 2008, we reaffirm our belief in the long term value of the two Vision Bank divisions and believe they will add to our earnings per share in the future."

Headquartered in Newark, Ohio, Park holds $6.501 billion in assets (based on asset totals as of December 31,2007). Park and its subsidiaries consist of 14 community banking divisions, 12 of which are based in Ohio, 1 in Alabama and 1 in Florida, and 2 specialty finance companies. Park operates 154 offices through the following organizations: The Park National Bank, The Park National Bank of Southwest Ohio & Northern Kentucky Division, Fairfield National Division, The Richland Trust Company, Century National Bank, The First-Knox National Bank of Mount Vernon, Farmers and Savings Division, United Bank, N.A., Second National Bank, The Security National Bank and Trust Co., Unity National Division, The Citizens National Bank of Urbana, Vision Bank of Panama City, Florida, Vision Bank Division of Gulf Shores, Alabama, Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance), and Guardian Financial Services Company.

SAFE HARBOR STATEMENT under the private securities litigation reform act of 1995

This news release contains forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risk and uncertainties that could cause actual results to differ materially include without limitation, deterioration in the asset value of Vision Bank's loan portfolio may be worse than expected; Park's ability to execute its business plan; general economic and financial market conditions, either national or in the states in which Park and its subsidiaries do business, are worse than expected; changes in interest rates; competitive pressures among financial institutions increase significantly; changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and its subsidiaries; demand for loans in the respective market areas served by Park and its subsidiaries, and other risk factors relating to the banking industry as detailed from time to time in Park's reports filed with the Securities and Exchange Commission including those described in "Item 1A. Risk Factors" of Part I of Park's Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and in "Item 1A. Risk Factors" of Part II of Park's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Park does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.



                       PARK NATIONAL CORPORATION
                         FINANCIAL HIGHLIGHTS
             (Dollars in thousands, except per share data)

 INCOME STATEMENT   THREE MONTHS ENDED           TWELVE MONTHS ENDED
                       DECEMBER 31,                  DECEMBER 31,
                                  PERCENT                      PERCENT
                  2007     2006    CHANGE     2007      2006    CHANGE
                -------  -------  -------   --------  --------  ------
 NET INTEREST
  INCOME        $59,953  $52,441    14.32%  $234,677  $213,244   10.05%
 PROVISION FOR
  LOAN LOSSES    18,597    1,525  1119.48%    29,476     3,927  650.60%
 OTHER INCOME    17,944   16,590     8.16%    71,640    64,665   10.79%
 GAIN (LOSS) ON
  SALE OF
  SECURITIES         --       --       --         --        97      --
 GOODWILL IMPAIR-
  MENT CHARGE    54,035       --       --     54,035        --      --
 OTHER EXPENSE   45,523   35,645    27.71%   170,129   141,002   20.66%
 INCOME (LOSS)
  BEFORE TAXES  (40,258)  31,861  -226.36%    52,677   133,077  -60.42%
 NET INCOME
  (LOSS)        (43,170)  22,593  -291.08%    22,707    94,091  -75.87%
 NET INCOME
  BEFORE IMPAIR-
  MENT CHARGE(a) 10,865   22,593   -51.91%    76,742    94,091  -18.44%
 NET INCOME (LOSS)
  PER SHARE
  -BASIC          (3.08)    1.63  -288.96%      1.60      6.75  -76.30%
 NET INCOME (LOSS)
  PER SHARE
  -DILUTED        (3.08)    1.63  -288.96%      1.60      6.74  -76.26%
 NET INCOME PER
  SHARE BEFORE
  IMPAIRMENT
  CHARGE
  -DILUTED(a)      0.77     1.63   -52.76%      5.40      6.74  -19.88%
 CASH DIVIDENDS
  DECLARED PER
  SHARE            0.94     0.93     1.08%      3.73      3.69    1.08%
 ---------------------------------------------------------------------

 RATIOS AND OTHER
  INFORMATION

 RETURN ON
  AVERAGE ASSETS  -2.63%    1.67%               0.37%     1.75%
 RETURN ON AVERAGE
  ASSETS BEFORE
  IMPAIRMENT
  CHARGE (a)       0.66%    1.67%               1.24%     1.75%
 RETURN ON AVERAGE
  EQUITY         -27.14%   15.93%               3.67%    17.26%
 RETURN ON AVERAGE
  EQUITY BEFORE
  IMPAIRMENT
  CHARGE (a)       6.83%   15.93%              12.40%    17.26%
 YIELD ON EARNING
  ASSETS           7.02%    6.85%               7.18%     6.77%
 COST OF PAYING
  LIABILITIES      3.47%    3.20%               3.50%     2.97%
 NET INTEREST
  MARGIN           4.04%    4.23%               4.20%     4.33%
 EFFICIENCY
  RATIO          127.06%   51.26%              72.74%    50.35%
 NET LOAN
  CHARGE-OFFS   $11,342   $1,522             $22,208    $3,920
 NET CHARGE-OFFS
  AS A PERCENT
  OF LOANS         1.07%    0.18%               0.55%     0.12%
 ---------------------------------------------------------------------

 BALANCE SHEET
 AT DECEMBER 31,                                           PERCENT
                                    2007        2006        CHANGE
                                 ----------  ----------    -------
 INVESTMENTS                     $1,703,103  $1,513,498      12.53%
 LOANS                            4,224,134   3,480,702      21.36%
 LOAN LOSS RESERVE                   87,102      70,500      23.55%
 GOODWILL AND OTHER INTANGIBLES     144,556      78,003      85.32%
 TOTAL ASSETS                     6,501,102   5,470,876      18.83%
 TOTAL DEPOSITS                   4,439,239   3,825,534      16.04%
 BORROWINGS                       1,389,727     979,913      41.82%
 EQUITY                             580,012     570,439       1.68%
 BOOK VALUE PER SHARE                 41.54       40.98       1.37%
 NONPERFORMING LOANS                103,932      25,117     313.79%
 NONPERFORMING ASSETS               117,375      28,468     312.31%
 PAST DUE 90 DAY LOANS                4,545       7,832     -41.97%
 ---------------------------------------------------------------------

 RATIOS

 LOANS/ASSETS                         64.98%      63.62%
 NONPERFORMING LOANS/LOANS             2.46%       0.72%
 PAST DUE 90 DAY LOANS/LOANS           0.11%       0.23%
 LOAN LOSS RESERVE/LOANS               2.06%       2.03%
 EQUITY/ASSETS                         8.92%      10.43%
 ---------------------------------------------------------------------

 (a) Net income for the fourth quarter has been adjusted for the
     impairment charge to goodwill. Net income before impairment
     charge equals net income for the period plus the impairment
     charge to goodwill of $54,035.


                              THREE MONTHS ENDED    TWELVE MONTHS ENDED
                                  DECEMBER 31,          DECEMBER 31,
                                 2007      2006        2007      2006
                               -------   -------     -------   -------

 RECONCILIATION OF NET INCOME
  (LOSS) TO NET INCOME BEFORE
  IMPAIRMENT CHARGE:

 NET INCOME (LOSS)             (43,170)   22,593      22,707    94,091
 Plus goodwill impairment
  charge                        54,035        --      54,035        --
 NET INCOME BEFORE IMPAIRMENT
  CHARGE                        10,865    22,593      76,742    94,091
                               =======================================

 RECONCILIATION OF NET INCOME
  (LOSS) PER SHARE-DILUTED TO
  NET INCOME PER SHARE-DILUTED
  BEFORE IMPAIRMENT CHARGE:

 NET INCOME (LOSS) PER SHARE
  -DILUTED                       (3.08)     1.63        1.60      6.74
 Plus impairment charge
  to goodwill per share
  -diluted                        3.85        --        3.80        --
 NET INCOME PER SHARE
  -DILUTED BEFORE
  IMPAIRMENT CHARGE               0.77      1.63        5.40      6.74
                               =======================================

 PARK NATIONAL CORPORATION
 Consolidated Statements of Income
 (dollars in thousands, except per share data)

                         Three Months Ended      Twelve Months Ended
                            December 31,             December 31,
                      ----------------------   -----------------------
                           2007        2006          2007        2006
 -------------------------------------------   -----------------------
 Interest income:
  Interest and fees
   on loans           $   82,202  $   66,132   $  320,827   $  255,123
  Interest on:
   Obligations of U.S.
    Government, its
    agencies and other
    securities            21,365      18,268       77,016       75,300
   Obligations of
    states and political
    subdivisions             712         852        3,061        3,667
  Other interest
   income                    118         123          920          469
 -------------------------------------------   -----------------------
    Total interest
     income              104,397      85,375      401,824      334,559

 Interest expense:
  Interest on deposits:
   Demand and savings
    deposits               9,861       7,225       39,797       25,870
   Time deposits          20,975      15,774       81,224       56,402
  Interest on borrowings  13,608       9,935       46,126       39,043
    Total interest
     expense              44,444      32,934      167,147      121,315

    Net interest
     income               59,953      52,441      234,677      213,244
 -------------------------------------------   -----------------------

 Provision for loan
  losses                  18,597       1,525       29,476        3,927

   Net interest income
    after provision for
    loan losses           41,356      50,916      205,201      209,317

 Other income             17,944      16,590       71,640       64,665

 Gain (loss) on sale
  of securities               --          --           --           97

 Other expense:
  Salaries and employee
   benefits               24,936      21,019       97,712       82,579
  Occupancy expense        2,663       2,369       10,717        9,155
  Furniture and
   equipment expense       2,295       1,878        9,259        8,215
  Goodwill Impairment
   Charge                 54,035          --       54,035           --
  Other expense           15,629      10,379       52,441       41,053
    Total other expense   99,558      35,645      224,164      141,002
 -------------------------------------------   -----------------------
     Income (loss)
      before income
      taxes              (40,258)     31,861       52,677      133,077
 -------------------------------------------   -----------------------
 Income taxes              2,912       9,268       29,970       38,986
 -------------------------------------------   -----------------------
   Net income (loss)  $  (43,170) $   22,593   $   22,707   $   94,091
 ===========================================   =======================

 Per Share:
  Net income (loss)
   -  basic           $    (3.08) $     1.63   $     1.60   $     6.75
  Net income (loss)
   -  diluted         $    (3.08) $     1.63   $     1.60   $     6.74
  Weighted average
   shares - basic     14,029,944  13,845,071   14,212,805   13,929,090
  Weighted average
   shares - diluted   14,030,499  13,872,586   14,217,483   13,966,836
 -------------------------------------------   -----------------------


 PARK NATIONAL CORPORATION
 Consolidated Balance Sheets
 (dollars in thousands, except share data)

                                                     December 31,
                                            --------------------------
                                                 2007           2006
 ---------------------------------------------------------------------
 Assets
  Cash and due from banks                   $   183,165    $   177,990
  Money market instruments                       10,232          8,266
  Interest bearing deposits                           1              1
  Investment securities                       1,703,103      1,513,498

  Loans (net of unearned income)              4,224,134      3,480,702
  Allowance for loan losses                      87,102         70,500
 ---------------------------------------------------------------------
    Loans, net                                4,137,032      3,410,202

  Bank premises and equipment, net               66,634         47,554
  Other assets                                  400,935        313,365
 ---------------------------------------------------------------------
     Total assets                           $ 6,501,102    $ 5,470,876


 Liabilities and Stockholders' Equity
  Deposits:
    Noninterest bearing                     $   695,466    $   664,962
    Interest bearing                          3,743,773      3,160,572
 ---------------------------------------------------------------------
     Total deposits                           4,439,239      3,825,534

  Borrowings                                  1,389,727        979,913
  Other liabilities                              92,124         94,990
 ---------------------------------------------------------------------
     Total liabilities                        5,921,090      4,900,437

 Stockholders' Equity:
  Common stock (No par value;
   20,000,000 shares authorized in 2007
   and 2006; 16,151,200 shares issued in
   2007 and 15,358,323 in 2006)                 301,213        217,067
  Accumulated other comprehensive (loss),
   net of taxes                                  (2,608)       (22,820)
  Retained earnings                             489,511        519,563
  Treasury stock (2,186,624 shares in
   2007 and 1,436,794 shares in 2006)          (208,104)      (143,371)
 ---------------------------------------------------------------------
     Total stockholders' equity                 580,012        570,439
 ---------------------------------------------------------------------
       Total liabilities and
        stockholders' equity                $ 6,501,102    $ 5,470,876


 PARK NATIONAL CORPORATION
 Consolidated Average Balance Sheets
 (dollars in thousands)
                        Three Months Ended        Twelve Months Ended
                            December 31,              December 31,
                     -----------------------   -----------------------
                         2007         2006         2007         2006
 -------------------------------------------   -----------------------
 Assets
  Cash and due
   from banks        $  148,912   $  139,743   $  151,219   $  142,794
  Money market
   instruments           10,806       10,445       17,837        8,639
  Interest bearing
   deposits                   1            1            1           84
  Investment
   securities         1,710,357    1,526,529    1,573,882    1,578,244

  Loans (net of
   unearned income)   4,196,367    3,411,449    4,011,307    3,357,278
  Allowance for loan
   losses                80,673       70,188       78,255       70,386
 -------------------------------------------   -----------------------
     Loans, net       4,115,694    3,341,261    3,933,052    3,286,892

  Bank premises and
   equipment, net        66,782       46,704       61,604       46,894
  Other assets          460,798      318,400      431,561      317,076
 -------------------------------------------   -----------------------
      Total assets   $6,513,350   $5,383,083   $6,169,156   $5,380,623

 Liabilities and
  Stockholders' Equity
   Deposits:
    Noninterest
     bearing         $  717,778   $  651,753   $  697,247   $  662,077
    Interest bearing  3,789,396    3,162,943    3,706,231    3,162,867
 -------------------------------------------   -----------------------
      Total deposits  4,507,174    3,814,696    4,403,478    3,824,944

  Borrowings          1,289,179      924,075    1,062,735      928,639
  Other liabilities      85,936       81,518       84,185       81,966
 -------------------------------------------   -----------------------
      Total
       liabilities    5,882,289    4,820,289    5,550,398    4,835,549

 Stockholders' Equity:
  Common stock          300,476      209,721      284,626      208,733
  Accumulated other
   comprehensive (loss),
   net of taxes         (12,925)     (14,798)     (21,333)     (21,085)
  Retained earnings     546,636      511,583      530,324      491,723
  Treasury stock       (203,126)    (143,712)    (174,859)    (134,297)
 -------------------------------------------   -----------------------
    Total stock-
     holders' equity    631,061      562,794      618,758      545,074
 -------------------------------------------   -----------------------
    Total liabilities
     and stockholders'
     equity          $6,513,350   $5,383,083   $6,169,156   $5,380,623


            

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