PARK NATIONAL CORP OH
For the period ended Dec 31, 2024. Filed Feb 24, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 24, 2025
PRK$176.95-1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-23.
0000805676-24-000037
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-24.
0000805676-25-000014
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 264 previous paragraphs and 226 current paragraphs.
81 unchanged; 124 reworded; 12 added; 51 removed; 8 previous and 9 current paragraphs rearranged.
Tables are not compared: 38 previous and 38 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
•During the year ended December 31, 2024, Park recognized a $6.1 million pension settlement gain due to a combination of lump sum payouts as well as the purchase of a nonparticipating annuity contract which will provide ongoing benefits to vested and retired participants. There was no pension settlement gain recognized during the years ended December 31, 2023 and December 31, 2022.
Current report
CRITICAL ACCOUNTING ESTIMATES
Current report
In 2024, the average balance of subordinated notes was $189 million, compared to $189 million in 2023 and $188 million in 2022. The average interest rate paid on subordinated notes was 4.98% in 2024, compared to 4.97% in 2023 and 4.69% in 2022.
Current report
The net other comprehensive income in 2024 was largely due to a $25.2 million ($19.9 million, net of taxes) net unrealized actuarial gain, partially offset by a $6.1 million ($4.9 million, net of taxes) realized pension settlement gain. The unrealized gain was due to asset returns greater than expected, anincrease in the discount rate and assumption updates for a change in the mortality table for lump sum distributions, reflecting updates for the 2024 assumption study, partially offset bydemographic losses and an increase in the interest credit rate. The realized pension settlement gain was recognized as a result of a combination of lump sum payouts as well as the purchase of a nonparticipating annuity contract which will provide ongoing benefits to vested participants.
Current report
-48- federal corporate income tax rate in 2024, 2023 and 2022. The taxable equivalent adjustments were $964,000 in 2024, $811,000 in 2023 and $627,000 in 2022.
Current report
During 2024, Park recognized a $6.1 million pension settlement gain due to a combination of lump sum payouts as well as the purchase of a nonparticipating annuity contract which will provide ongoing benefits to vested participants. There was no pension settlement gain recognized during 2023 or 2022.
Current report
(1) Includes accruing collateral dependent commercial loans to borrowers experiencing financial difficulty at December 31, 2024 and 2023 and accruing TDRs at December 31, 2022.
Current report
The allowance for credit losses of $88.0 million at December 31, 2024 represented a $4.2 million, or 5.0%, increase compared to $83.7 million at December 31, 2023. The increase was due to a $7.9 million increase in general reserves and a $3.7 million decrease in individual reserves on nonaccrual loans. The $7.9 million increase in general reserves takes into account changing economic forecasts and prepayment and curtailment speeds, while balancing the risks associated with other economic factors. Additionally, the $7.9 million increase in general reserves included a $757,000 additional reserve related to Hurricane Helene which impacted borrowers in Park's Carolina region. The decrease in individual reserves at December 31, 2024 compared to December 31, 2023 was primarily related to $4.2 million in charge-offs related to two relationships that previously carried individual reserves, partially offset by new or increasing reserves on other credits.
Current report
(1) Includes accruing collateral dependent commercial loans to borrowers experiencing financial difficulty at December 31, 2024 and 2023 and accruing TDRs at December 31, 2022.
Current report
The increase in watch list credits during the year ended 2024 was largely due to the downgrade of two non-bank consumer finance company relationships to special mention and/or accruing individually evaluated totaling $28.0 million, partially offset by problem loan resolutions. The downgraded loans were current in respect to their contractual terms at December 31, 2024.
Current report
Additional Considerations: As part of its quarterly allowance process, Park evaluates certain industries which are more likely to be under economic stress in the current environment. The office sector continues to face challenges as it adjusts to the new normal of work from home brought on by the pandemic. Nationally, office properties in downtown and urban business districts are seeing the most stress. As of December 31, 2024, Park had $247.2 million of loans which were fully or partially secured by non-owner-occupied office space, $244.0 million of which were accruing. This portfolio is not currently exhibiting signs of stress, but Park continues to monitor this portfolio, and others, for signs of deterioration.
Current report
(3) Subordinated notes are shown above based on their contractual maturity. Of the $189.7 million in subordinated notes, $15.0 million is currently able to be redeemed and $174.7 million is able to be redeemed on or after September 1, 2025.
Removed paragraphs (51)
Previous report
FORWARD-LOOKING STATEMENTS
Previous report
Management's discussion and analysis addresses the financial condition and results of operations for Park National Corporation and our subsidiaries (unless the context otherwise requires, collectively, "Park" or the "Corporation"). This discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. Management’s discussion and analysis 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.
Previous report
Risks and uncertainties that could cause actual results to differ materially include, without limitation:
Previous report
•Park's ability to execute our business plan successfully and within the expected timeframe as well as our ability to manage strategic initiatives;
Previous report
•current and future economic and financial market conditions, either nationally or in the states in which Park and our subsidiaries do business, that may reflect deterioration in business and economic conditions, including the effects of higher unemployment rates or labor shortages, the impact of persistent inflation, the impact of continued elevated interest rates, changes in the economy or global supply chain, supply-demand imbalances affecting local real estate prices, U.S. fiscal debt, budget and tax matters, geopolitical matters (including the impact of the Russia-Ukraine conflict and associated sanctions and export controls as well as the Israel-Hamas conflict), and any slowdown in global economic growth, any of which may result in adverse impacts on the demand for loan, deposit and other financial services, delinquencies, defaults and counterparties' inability to meet credit and other obligations and the possible impairment of collectability of loans;
Previous report
•factors that can impact the performance of our loan portfolio, including changes in real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers and the success of construction projects that we finance;
Previous report
•the effect of monetary and other fiscal policies (including the impact of money supply, ongoing increasing market interest rate policies and policies impacting inflation, of the Federal Reserve Board, the U.S. Treasury and other governmental agencies) as well as disruption in the liquidity and functioning of U.S. financial markets, may adversely impact prepayment penalty income, mortgage banking income, income from fiduciary activities, the value of securities, deposits and other financial instruments, in addition to the loan demand and the performance of our loan portfolio, and the interest rate sensitivity of our consolidated balance sheet as well as reduce net interest margins;
Previous report
•changes in the federal, state, or local tax laws may adversely affect the fair values of net deferred tax assets and obligations of state and political subdivisions held in Park's investment securities portfolio and otherwise negatively impact our financial performance;
Previous report
•the impact of the changes in federal, state and local governmental policy, including the regulatory landscape, capital markets, elevated government debt, potential changes in tax legislation that may increase tax rates, government shutdown, infrastructure spending and social programs;
Previous report
•changes in laws or requirements imposed by Park's regulators impacting Park's capital actions, including dividend payments and stock repurchases;
Previous report
•changes in consumer spending, borrowing and saving habits, whether due to changes in retail distribution strategies, consumer preferences and behaviors, changes in business and economic conditions, legislative and regulatory initiatives, or other factors may be different than anticipated;
Previous report
•changes in customers', suppliers', and other counterparties' performance and creditworthiness, and Park's expectations regarding future credit losses and our allowance for credit losses, may be different than anticipated due to the continuing impact of and the various responses to inflationary pressures and continued elevated interest rates;
Previous report
•Park may have more credit risk and higher credit losses to the extent there are loan concentrations by location or industry of borrowers or collateral;
Previous report
•the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors;
Previous report
•the adequacy of our internal controls and risk management program in the event of changes in the market, economic, operational (including those which may result from our associates working remotely), asset/liability repricing, legal, compliance, strategic, cybersecurity, liquidity, credit and interest rate risks associated with Park's business;
Previous report
•competitive pressures among financial services organizations could increase significantly, including product and pricing pressures (which could in turn impact our credit spreads), changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and Park's ability to attract, develop and retain qualified banking professionals;
Previous report
•uncertainty regarding the nature, timing, cost and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and our subsidiaries, including major reform of the regulatory oversight structure of the financial services industry and changes in laws and regulations concerning taxes, FDIC insurance premium levels, pensions, bankruptcy, consumer protection, rent regulation and housing, financial accounting and reporting, environmental protection, insurance, bank products and services, bank and bank holding company capital and liquidity standards, fiduciary standards, securities and other aspects of the financial services industry;
Previous report
•Park's ability to meet heightened supervisory requirements and expectations;
Previous report
•the effect of changes in accounting policies and practices, as may be adopted by the Financial Accounting Standards Board, the SEC, the Public Company Accounting Oversight Board and other regulatory agencies, may adversely affect Park's reported financial condition or results of operations;
Previous report
•Park's assumptions and estimates used in applying critical accounting policies and modeling which may prove unreliable, inaccurate or not predictive of actual results;
Previous report
•the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions;
Previous report
•Park's ability to anticipate and respond to technological changes and Park's reliance on, and the potential failure of, a number of third-party vendors to perform as expected, including Park's primary core banking system provider, which can impact Park's ability to respond to customer needs and meet competitive demands;
Previous report
•operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Park and our subsidiaries are highly dependent;
Previous report
•Park's ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks, including those of Park's third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Park and/or result in Park incurring a financial loss;
Previous report
•a failure in or breach of Park's operational or security systems or infrastructure, or those of our third-party vendors and other service providers, resulting in failures or disruptions in customer account management, general ledger, deposit, loan, or other systems, including as a result of cyber attacks;
Previous report
•the impact on Park's business and operating results of any costs associated with obtaining rights in intellectual property claimed by others and of the adequacy of Park's intellectual property protection in general;
Previous report
•the existence or exacerbation of general geopolitical instability and uncertainty as well as the effect of trade policies (including the impact of potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations, closing of border crossings and changes in the relationship of the U.S. and its global trading partners);
Previous report
•the impact on financial markets and the economy of any changes in the credit ratings of the U.S. Treasury obligations and other U.S. government-backed debt, as well as issues surrounding the levels of U.S., European and Asian government debt and concerns regarding the growth rates and financial stability of certain sovereign governments, supranationals and financial institutions in Europe and Asia and the risk they may face difficulties servicing their sovereign debt;
Previous report
•the effect of a fall in stock market prices on Park's asset and wealth management businesses;
Previous report
•our litigation and regulatory compliance exposure, including the costs and effects of any adverse developments in legal proceedings or other claims, the costs and effects of unfavorable resolution of regulatory and other governmental examinations or other inquiries, and liabilities and business restrictions resulting from litigation and regulatory investigations;
Previous report
•continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends;
Previous report
•the impact on Park's business, personnel, facilities or systems of losses related to acts of fraud, scams and schemes of third parties;
Previous report
•the impact of widespread natural and other disasters, pandemics (including the COVID-19 pandemic), dislocations, regional or national protests and civil unrest (including any resulting branch closures or damages), military or terrorist activities or international hostilities (especially in light of the Russia-Ukraine conflict and the Israel-Hamas conflict) on the economy and financial markets generally and on us or our counterparties specifically;
Previous report
•the potential further deterioration of the U.S. economy due to financial, political, or other shocks;
Previous report
•the effect of healthcare laws in the U.S. and potential changes for such laws which may increase our healthcare and other costs and negatively impact our operations and financial results;
Previous report
•the impact of larger or similar-sized financial institutions encountering problems which may adversely affect the banking industry and/or Park's business generation and retention, funding and liquidity, including potential increased regulatory requirements and increased reputational risk and potential impacts to macroeconomic conditions;
Previous report
•Park's continued ability to grow deposits or maintain adequate deposit levels due to changing customer behaviors;
Previous report
•unexpected outflows of deposits which may require Park to sell assets at a loss;
Previous report
•and other risk factors relating to the banking industry as detailed from time to time in Park's reports filed with the SEC including those described in "Item 1A. Risk Factors" of this Annual Report on Form 10-K.
Previous report
Park does not undertake, and specifically disclaims any obligation, to publicly release the results 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 was made, or reflect the occurrence of unanticipated events, except to the extent required by law.
Showing the first 40 of 51 passages. Open the source sections for the rest.
Reworded paragraphs (124)
Previous wording
Management's discussion and analysis contains non-U.S. GAAP financial measures where management believes it to be helpful in understanding Park’s results of operations or financial position. Where non-U.S. GAAP financial measures are used, the comparable U.S. GAAP financial measure, as well as the reconciliation to the comparable U.S. GAAP financial measure, can be found herein.
Current wording
Management's discussion and analysis contains non-U.S. GAAP financial measures where management believes it to be helpful in understanding Park’s results of operations or financial position. Where non-U.S. GAAP financial measures are used, the comparable U.S. GAAP financial measures, as well as the reconciliation from the comparable U.S. GAAP financial measures, can be found herein.
Previous wording
-40- divided by average tangible equity during the period. Average tangible equity equals average shareholders' equity during the applicable period less average goodwill and other intangible assets during the applicable period. For the purpose of calculating the return on average tangible assets, a non-GAAP financial measure, net income for each period is divided by average tangible assets during the period. Average tangible assets equals average assets during the applicable period less average goodwill and other intangible assets during the applicable period. For the purpose of calculating the tangible equity to tangible assets ratio, a non-GAAP financial measure, tangible equity is divided by tangible assets. Tangible equity equals total shareholders' equity less goodwill and other intangible assets, in each case at period end. Tangible assets equal total assets less goodwill and other intangible assets, in each case at period end. For the purpose of calculating pre-tax, pre-provision net income, a non-GAAP financial measure, income taxes and the provision for (recovery of) credit losses are added back to net income, in each case during the applicable period.
Current wording
Management has included in this Management's Discussion and Analysis of Financial Condition and Results of Operation, information relating to the return on average tangible equity, the return on average tangible assets, the tangible equity to tangible assets ratio,and pre-tax, pre-provision net income for the years ended December 31, 2024, December 31, 2023, and December 31, 2022. For the purpose of calculating the return on average tangible equity, a non-GAAP financial measure, net income for each period is divided by average tangible equity during the period. Average tangible equity equals average shareholders' equity during the applicable period less average goodwill and other intangible assets during the applicable period. For the purpose of calculating the return on average tangible assets, a non-GAAP financial measure, net income for each period is divided by average tangible assets during the period. Average tangible assets equals average assets during the applicable period less average goodwill and other intangible assets during the applicable period. For the purpose of calculating the tangible equity to tangible assets ratio, a non-GAAP financial measure, tangible equity is divided by tangible assets. Tangible equity equals total shareholders' equity less goodwill and other intangible assets, in each case at period end. Tangible assets equal total assets less goodwill and other intangible assets, in each case at period end. For the purpose of calculating pre-tax, pre-provision net income, a non-GAAP financial measure, income taxes and the provision for credit losses are added back to net income, in each case during the applicable period.
Previous wording
Management believes that the disclosure of the return on average tangible equity, the return on average tangible assets, the tangible equity to tangible assets ratio, and pre-tax, pre-provision net income presents additional information to the reader of the consolidated financial statements, which, when read in conjunction with the consolidated financial statements prepared in accordance with U.S. GAAP, assists in analyzing Park's operating performance, ensures comparability of operating performance from period to period, and facilitates comparisons with the performance of Park's peer financial holding companies and bank holding companies, while eliminating certain non-operational effects of acquisitions. In the tables included within the "ANALYSIS OF EARNINGS - Items Impacting Comparability" section of this Management's Discussion and Analysis of Financial Condition and Results of Operations, Park has provided a reconciliation of average tangible equity from average shareholders' equity, average tangible assets from average assets, tangible equity from total shareholders' equity, tangible assets from total assets, and pre-tax, pre-provision net income from net income solely for the purpose of complying with SEC Regulation G and not as an indication that the return on average tangible equity, the return on average tangible assets, the tangible equity to tangible assets ratio, and pre-provision net income are substitutes for the return on average equity, the return on average assets, the total shareholders' equity to total assets ratio, and net income, respectively, as determined in accordance with U.S. GAAP
Current wording
-36- performance from period to period, and facilitates comparisons with the performance of Park's peer financial holding companies and bank holding companies, while eliminating certain non-operational effects of acquisitions. In the tables included within the "ANALYSIS OF EARNINGS - Items Impacting Comparability" section of this Management's Discussion and Analysis of Financial Condition and Results of Operations, Park has provided a reconciliation of average tangible equity from average shareholders' equity, average tangible assets from average assets, tangible equity from total shareholders' equity, tangible assets from total assets, and pre-tax, pre-provision net income from net income solely for the purpose of complying with SEC Regulation G and not as an indication that the return on average tangible equity, the return on average tangible assets, the tangible equity to tangible assets ratio, and pre-tax, pre-provision net income are substitutes for the return on average equity, the return on average assets, the total shareholders' equity to total assets ratio, and net income, respectively, as determined in accordance with U.S. GAAP
Previous wording
(1) PTPP net income is calculated as net income, plus income taxes, plus the provision for (recovery of) credit losses, in each case during the applicable period.
Current wording
(1) PTPP net income is calculated as net income, plus income taxes, plus the provision for credit losses, in each case during the applicable period.
Previous wording
Net income for the year ended December 31, 2023 of $126.7 million represented a $21.6 million, or 14.6%, decrease compared to $148.4 million for the year ended December 31, 2022. Net income for the year ended December 31, 2022 of $148.4 million represented a $5.6 million, or 3.6%, decrease compared to $153.9 million for the year ended December 31, 2021.
Current wording
Net income for the year ended December 31, 2024 of $151.4 million represented a $24.7 million, or 19.5%, increase compared to $126.7 million for the year ended December 31, 2023. Net income for the year ended December 31, 2023 of $126.7 million represented a $21.6 million, or 14.6%, decrease compared to $148.4 million for the year ended December 31, 2022.
Previous wording
Pre-tax, pre-provision net income (non-U.S. GAAP) for the year ended December 31, 2023 of $156.5 million represented a $28.5 million, or 15.4%, decrease compared to $185.0 million for the year ended December 31, 2022. Pre-tax, pre-provision net income for the year ended December 31, 2022 of $185.0 million represented a $8.7 million, or 4.9%, increase compared to $176.3 million for the year ended December 31, 2021.
Current wording
Pre-tax, pre-provision net income (non-U.S. GAAP) for the year ended December 31, 2024 of $199.3 million represented a $42.8 million, or 27.3%, increase compared to $156.5 million for the year ended December 31, 2023. Pre-tax, pre-provision net income for the year ended December 31, 2023 of $156.5 million represented a $28.5 million, or 15.4%, decrease compared to $185.0 million for the year ended December 31, 2022.
Previous wording
•Park completed a series of debt security sale trades in November 2023, selling an aggregate of $291.0 million in available-for-sale ("AFS") debt securities with a net pre-tax loss of $7.9 million for the year ended December 31, 2023. Among the various objectives of the trade, the liquidity generated from the sale was used to reduce borrowing needs and improve the overall net interest margin. No gain or loss on the sale of debt securities was recorded in the years ended December 31, 2022 or December 31, 2021.
Current wording
•Park completed a series of debt security sale trades in November 2023, selling an aggregate of $291.0 million in available-for-sale ("AFS") debt securities with a net pre-tax loss of $7.9 million for the year ended December 31, 2023. Among the various objectives of the trade, the liquidity generated from the sale was used to reduce borrowing needs
Previous wording
•Park recognized a $5.6 million gain on the sale of OREO, net, during the year ended December 31, 2022 related to former Vision Bank relationships. There was no gain on the sale of OREO, net, related to former Vision Bank relationships during the years ended December 31, 2023 or December 31, 2021.
Current wording
•During the years ended December 31, 2024 and 2022, Park recognized $115,000 and $5.6 million, respectively, in net gains on the sale of OREO related to former Vision Bank relationships. There was no gain on the sale of OREO, net, related to former Vision Bank relationships during the year ended December 31, 2023.
Previous wording
•Park recognized a $12.0 million OREO valuation markup during the year ended December 31, 2022 related to the foreclosure and subsequent sale of a property collateralizing a former Vision Bank relationship compared to $46,000 for the year ended December 31, 2023. There was no OREO valuation markup related to former Vision Bank relationships during the year ended December 31, 2021.
Current wording
•During the years ended December 31, 2023 and 2022, Park recognized $46,000 and $12.0 million, respectively, in OREO valuation markups related to the foreclosure and subsequent sale of properties collateralizing former Vision Bank relationships. There was no OREO valuation markup related to former Vision Bank relationships during the year ended December 31, 2024.
Previous wording
•During the years ended December 31, 2023, 2022, and 2021, Park incurred $100,000, $1.8 million, and $1.4 million, respectively, in direct expenses related to the collection of payments on former Vision Bank loan relationships.
Current wording
•During the years ended December 31, 2024, 2023, and 2022, Park incurred $215,000, $100,000 and $1.8 million, respectively, in direct expenses related to the collection of payments on former Vision Bank loan relationships.
Previous wording
•During the year ended December 31, 2023, Park contributed $1.0 million to its charitable foundation, compared to $4.0 million for each of the years ended December 31, 2022 and December 31, 2021.
Current wording
•During the year ended December 31, 2024, Park contributed $2.0 million to its charitable foundation, compared to $1.0 million for the year ended December 31, 2023 and $4.0 million for the year ended December 31, 2022.
Previous wording
•Park's loans outstanding at December 31, 2023 increased 4.7% compared to December 31, 2022. Park's loans outstanding at December 31, 2022 increased 3.9% compared to December 31, 2021.
Current wording
•Park's loans outstanding at December 31, 2024 increased 4.6% compared to December 31, 2023. Park's loans outstanding at December 31, 2023 increased 4.7% compared to December 31, 2022.
Previous wording
Cash dividends declared on Park's common shares were $4.20 in 2023, $4.66 in 2022 and $4.52 in 2021. Dividends declared as a percentage of net income was 54%, 51% and 48% for 2023, 2022, and 2021, respectively. Management targets a dividend payout ratio of 50% each year.
Current wording
Cash dividends declared on Park's common shares were $4.74 in 2024, $4.20 in 2023 and $4.66 in 2022. Dividends declared as a percentage of net income was 51%, 54% and 51% for 2024, 2023 and 2022, respectively. Management targets a dividend payout ratio of 50% each year.
Previous wording
The quarterly cash dividend on Park's common shares was $1.05 per share for each of the quarters of 2023. The quarterly cash dividend on Park's common shares was $1.04 per share for the first, second and third quarter of 2022, and $1.54 per share for the fourth quarter of 2022. The fourth quarter of 2022 included a one-time special cash dividend of $0.50 per share. The quarterly cash dividend on Park's common shares was $1.23 per share for the first quarter of 2021, $1.03 per share for the second and third quarter of 2021, and $1.23 per share for the fourth quarter of 2021. The first and fourth quarters of 2021 included a one-time special cash dividend of $0.20 per share.
Current wording
The quarterly cash dividend on Park's common shares was $1.06 per share for the first, second and third quarters of 2024, and $1.56 per share for the fourth quarter of 2024. The fourth quarter of 2024 included a one-time special cash dividend of $0.50 per share. The quarterly cash dividend on Park's common shares was $1.05 per share for each of the quarters of 2023. The quarterly cash dividend on Park's common shares was $1.04 per share for the first, second and third quarters of 2022, and $1.54 per share for the fourth quarter of 2022. The fourth quarter of 2022 included a one-time special cash dividend of $0.50 per share.
Previous wording
The significant accounting policies used in the development and presentation of Park’s consolidated financial statements are listed in "Note 1 - Summary of Significant Accounting Policies" of the Notes to Consolidated Financial Statements included in "ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA." The accounting and reporting policies of Park conform with U.S. GAAP and general practices within the financial services industry. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.
Current wording
The significant accounting estimates used in the development and presentation of Park’s consolidated financial statements are listed in "Note 1 - Summary of Significant Accounting Policies" of the Notes to Consolidated Financial Statements included in "ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA." The accounting and reporting estimates of Park conform with U.S. GAAP and general practices within the financial services industry. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.
Previous wording
As noted above, in calculating the ACL, management weighs different scenarios, including a baseline (most likely) scenario and an adverse scenario. At December 31, 2023, management applied a 50% weighting to the baseline scenario and applied a 50% weighting to the adverse scenario. To create hypothetical sensitivity analyses, management calculated a quantitative allowance using a 100% weighting applied to a baseline scenario and a quantitative allowance using a 100% weighting applied to an adverse scenario. The adverse scenario assumes among other things that: (1) Tensions with China and Taiwan increase and China briefly interrupts trade through the Taiwan Strait and that the Russian invasion lasts longer than expected. Worries grow that the Hamas-Israel conflict will lead to a wider conflict. (2) Due to continuing concerns about inflation, the Fed keeps the fed funds rate at the terminal range of 5.25-5.50% through the first quarter of 2024 and, as downturn persist, the Fed begins to lower rates. (3) Europe goes into a recession. Populism in Europe rises, raising uncertainties about the longevity of the Euro and causes financial stress to highly indebted nations, especially Italy. (4) Risk of an extended government shutdown increases,
Current wording
As noted above, in calculating the ACL, management weighs different scenarios, including a baseline (most likely) scenario and an adverse scenario. At December 31, 2024, management applied a 50% weighting to the baseline scenario and applied a 50% weighting to the adverse scenario. To create hypothetical sensitivity analyses, management calculated a quantitative allowance using a 100% weighting applied to a baseline scenario and a quantitative allowance using a 100% weighting applied to an adverse scenario. The adverse scenario assumes among other things that: (1) Tensions with China and Taiwan increase and China briefly interrupts trade through the Taiwan Strait and the Russian invasion lasts longer than expected. Worries grow that the Hamas-Israel conflict will lead to a wider conflict. (2) Due to continuing concerns about rising inflation, the Federal Reserve raises the federal funds rate. However, it resumes easing in Q3 2025 as a downturn persists. (3) Europe goes into a recession as increased tariffs lower exports. Populism in Europe rises, raising uncertainties about longevity of the Euro and causes financial stress to highly indebted nations, especially Italy. (4) Impacts of Trump tariffs and deportations are significantly worse than expected. Tariffs will be levied on China, Canada, Mexico and Europe and the tariff rate will increase more than in the baseline forecast before rolling back in 2026. Retaliatory tariffs reduce US exports and lead to a global turndown. Tax revenues are lower than in the baseline creating a higher deficit. (5) Recession in Q1 2025 which lasts through Q3 2025. Real GDP declines by 2.6%. The unemployment rate rises to a peak of 8.3% in Q1 2026. The stock market falls 35% from Q1 2025 to Q3 2025. The adverse scenario forecasts Ohio unemployment for the next twelve months to range from 6.6% to 9.5%. Excluding consideration of qualitative adjustments, this sensitivity analysis would result in a hypothetical increase in Park's ACL of $27.5 million as of December 31, 2024 if only the adverse scenario was used. Excluding consideration of qualitative adjustments, a corresponding $27.5 million decrease in Park's ACL would occur in a hypothetical scenario if only the baseline (most likely) scenario was used.
Previous wording
Refer to the “CREDIT METRICS AND PROVISION FOR (RECOVERY OF) CREDIT LOSSES” section within this "ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" for additional discussion.
Current wording
Refer to the “CREDIT METRICS AND PROVISION FOR CREDIT LOSSES” section within this "ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" for additional discussion.
Previous wording
Pension Plan: The determination of pension plan obligations and related expenses requires the use of assumptions to estimate the amount of benefits that employees will earn while working, as well as the present value of those benefits. Annual pension expense is principally based on four components: (1) the value of benefits earned by employees for working during the year (service cost), (2) the increase in the liability due to the passage of time (interest cost), and (3) other gains and losses, reduced by (4) the expected return on plan assets for our pension plan.
Current wording
Pension Plan: The determination of pension plan obligations and related expenses requires the use of assumptions to estimate the amount of benefits that employees will earn while working, as well as the present value of those benefits. Annual pension income/expense is principally based on four components: (1) the value of benefits earned by employees for working during the year (service cost), (2) the increase in the liability due to the passage of time (interest cost), and (3) other gains and losses, reduced by (4) the expected return on plan assets for our pension plan. During the year ended December 31, 2024, Park exceeded the pension settlement threshold established in ASC 715-30 and recognized in income a pro-rata portion of the unamortized gain in accumulated other comprehensive loss (pension settlement gain).
Previous wording
The most significant of these assumptions is the discount rate and the expected return on assets. The discount rate utilized for the December 31, 2023 calculation was 5.14% and the expected return on plan assets was 6.92%. This compares to the discount rate utilized for the December 31, 2022 calculation of 5.32% and the expected return on plan assets of 6.92%. Presented below is the estimated impact on Park's projected benefit obligation ("PBO") and 2024 pension expense assuming changes in the significant assumptions.
Current wording
The most significant of these assumptions is the discount rate and the expected return on assets. The discount rate utilized for the December 31, 2024 calculation was 5.89% and the expected return on plan assets was 6.92%. This compares to the discount rate utilized for the December 31, 2023 calculation of 5.14% and the expected return on plan assets of 6.92%. Presented below is the estimated impact on Park's projected benefit obligation ("PBO") and 2024 pension expense assuming changes in the significant assumptions.
Previous wording
Our assumptions reflect our historical experience and management’s best judgment regarding future expectations. Due to the significant management judgment involved, our assumptions could have a material impact on the measurement of our pension plan expense and obligation.
Current wording
Our assumptions reflect our historical experience and management’s best judgment regarding future expectations. Due to the significant management judgment involved, our assumptions could have a material impact on the measurement of our pension plan income/expense and obligation.
Previous wording
Park’s subsidiaries compete for deposits and loans with other banks, savings associations, credit unions and other types of financial institutions. At December 31, 2023, Park operated 96 financial service offices (including those of PNB and Scope Leasing, Inc. ("Scope Aircraft Finance")) and a network of 115 automated teller machines in 26 Ohio counties, four North Carolina counties, four South Carolina counties and one Kentucky county. SEPH and Guardian each operated one administrative office, located in Newark, Ohio.
Current wording
Park’s subsidiaries compete for deposits and loans with other banks, savings associations, credit unions and other types of financial institutions. At December 31, 2024, Park operated 87 financial service offices (including those of PNB and Scope Leasing, Inc. ("Scope Aircraft Finance")) and a network of 108 automated teller machines in 24 Ohio counties, five North Carolina counties, four South Carolina counties and one Kentucky county. SEPH and Guardian each operated one administrative office, located in Newark, Ohio.
Previous wording
Average total deposits were $8,360 million in 2023, compared to $8,450 million in 2022 and $8,187 million in 2021. The average interest rate paid on interest bearing deposits was 1.52% in 2023, compared to 0.39% in 2022 and 0.12% in 2021. The average cost of interest bearing deposits for each quarter of 2023 was 1.84% for the fourth quarter, 1.63% for the third quarter, 1.46% for the second quarter and 1.15% for the first quarter.
Current wording
Average total deposits were $8,260 million in 2024, compared to $8,360 million in 2023 and $8,450 million in 2022. The average interest rate paid on interest bearing deposits was 1.97% in 2024, 1.52% in 2023 and 0.39% in 2022. The average cost of interest bearing deposits for each quarter of 2024 was 1.90% for the fourth quarter, 2.06% for the third quarter, 1.99% for the second quarter and 1.94% for the first quarter.
Previous wording
During the years ended December 31, 2023 and 2022, Park decided to continue participation in a program to transfer deposits off-balance sheet in order to manage growth of the balance sheet, as deposits increased significantly throughout the COVID-19 pandemic. Park is able to increase or decrease the amount of deposit balances transferred off balance sheet based on its balance sheet management strategies and liquidity needs. The balance of deposits transferred off balance sheet has declined as deposit balances have returned to pre-pandemic levels. At December 31, 2023 and December 31, 2022, Park had $1.2 million and $195.9 million, respectively, in off balance sheet deposits.
Current wording
During the years ended December 31, 2024 and 2023, Park decided to continue participation in a program to transfer deposits off-balance sheet in order to manage growth of the balance sheet. Park is able to increase or decrease the amount of deposit
Previous wording
During the year ended December 31, 2023, total deposits, including off balance sheet deposits, decreased by $386.9 million, or 4.6%. This decrease consisted of a $308.0 million decrease in total retail deposits and a $194.8 million decrease in off balance sheet deposits, partially offset by a $115.9 million increase in total commercial deposits. The majority of off balance sheet deposits are commercial and thus impact the increase in commercial deposits as the deposits are moved back onto the balance sheet.
Current wording
During the year ended December 31, 2024, total deposits including off balance sheet deposits increased by $215.0 million, or 2.7%. This increase consisted of a $134.5 million increase in total commercial deposits, a $114.0 million increase in off balance sheet deposits and a $11.5 million increase in brokered and bid CD deposits, partially offset by a $45.0 million decrease in total retail deposits. The majority of off balance sheet deposits are commercial and thus impact the change in commercial deposits as the deposits are moved on or off the balance sheet.
Previous wording
Included in the total commercial deposits and off balance sheet deposits shown in the previous table are public fund deposits. These balances fluctuate based on seasonality and the cycle of collection and remittance of tax funds. The following table
Current wording
Included in the total commercial deposits and off balance sheet deposits shown in the previous table are public fund deposits. These balances fluctuate based on seasonality and the cycle of collection and remittance of tax funds. Public funds include Bid Ohio CDs. The following table details the change in public fund deposits.
Previous wording
As of December 31, 2023, Park had approximately $1.3 billion of uninsured deposits, which was 16.2% of total deposits. Uninsured deposits of $1.3 billion included $288.2 million of deposits which were over $250,000 but were fully collateralized by Park's investment securities portfolio. As of December 31, 2022, Park had approximately $1.7 billion of uninsured deposits, which was 21.2% of total deposits. Uninsured deposits of $1.7 billion included $254.2 million of deposits which were over $250,000 but were fully collateralized by Park's investment securities portfolio. The uninsured amounts, those in excess of the $250,000 FDIC insurance limit, are estimates based on the methodologies used for the Corporation's regulatory reporting requirements.
Current wording
As of December 31, 2024, Park had approximately $1.4 billion of uninsured deposits, which was 17.6% of total deposits. Uninsured deposits of $1.4 billion included $395.4 million of deposits that were over $250,000, but were fully collateralized by Park's investment securities portfolio. As of December 31, 2023, Park had approximately $1.3 billion of uninsured deposits, which was 16.2% of total deposits. Uninsured deposits of $1.3 billion included $288.2 million of deposits which were over $250,000 but were fully collateralized by Park's investment securities portfolio. The uninsured amounts, those in excess of the $250,000 FDIC insurance limit, are estimates based on the methodologies used for the Corporation's regulatory reporting requirements.
Previous wording
Short-Term Borrowings: Short-term borrowings consist of securities sold under agreements to repurchase, Federal Home Loan Bank advances, Federal Funds purchased and other borrowings. These funds are used to manage the Corporation’s liquidity needs and interest rate sensitivity risk. The average rate paid on short-term borrowings generally moves closely with changes in market interest rates for short-term investments. The average rate paid on short-term borrowings was 2.58% in 2023, compared to 0.67% in 2022 and 0.27% in 2021. The year-end balance for short-term borrowings was $328 million at December 31, 2023, compared to $227 million at December 31, 2022 and $239 million at December 31, 2021.
Current wording
Short-Term Borrowings: Short-term borrowings consist of securities sold under agreements to repurchase, Federal Home Loan Bank advances, Federal Funds purchased and other borrowings. These funds are used to manage the Corporation’s liquidity needs and interest rate sensitivity risk. The average rate paid on short-term borrowings generally moves closely with changes in market interest rates for short-term investments. The average rate paid on short-term borrowings was 2.60% in 2024, compared to 2.58% in 2023 and 0.67% in 2022. The year-end balance for short-term borrowings was $90 million at December 31, 2024, compared to $328 million at December 31, 2023 and $227 million at December 31, 2022.
Previous wording
On August 20, 2020, Park completed the issuance and sale of $175 million aggregate principal amount of its 4.50% Fixed-to-Floating Rate Subordinated Notes due 2030 (the "Subordinated Notes"). The Subordinated Notes initially bear a fixed interest rate of 4.50% per year, payable semi-annually in arrears on March 1 and September 1 of each year, commencing on March 1, 2021. Commencing on September 1, 2025, the Subordinated Notes will bear interest at a floating rate per annum equal to the Benchmark rate, which is expected to be Three-Month Term SOFR, plus a spread of 439 basis points for each quarterly interest period during the floating rate period, payable quarterly in arrears; provided, however, that if the Benchmark rate is less than zero, then the Benchmark rate will be deemed to be zero. The Corporation may, at its option, beginning with the interest payment date of September 1, 2025 and on any interest payment date thereafter, redeem the Subordinated Notes, in whole or in part, from time to time, subject to obtaining the prior approval of the Federal Reserve Board to the extent the approval of the Federal Reserve Board is then required under the capital adequacy rules of the Federal Reserve Board, at a redemption price equal to 100% of the principal amount of the Subordinated Notes being redeemed, plus accrued and unpaid interest thereon to but excluding the date of redemption. The Subordinated Notes qualify as Tier 2 capital for Park under the Federal Reserve Board's capital adequacy rules.
Current wording
On August 20, 2020, Park completed the issuance and sale of $175 million aggregate principal amount of its 4.50% Fixed-to-Floating Rate Subordinated Notes due 2030 (the "Subordinated Notes"). The Subordinated Notes initially bear a fixed interest rate of 4.50% per year, payable semi-annually in arrears on March 1 and September 1 of each year, commencing on March 1, 2021. Commencing on September 1, 2025, the Subordinated Notes will bear interest at a floating rate per annum equal to the Benchmark rate, which is expected to be Three-Month Term SOFR, plus a spread of 439 basis points for each quarterly interest period during the floating rate period, payable quarterly in arrears; provided, however, that if the Benchmark rate is less than zero, then the Benchmark rate will be deemed to be zero. The Corporation may, at its option, beginning with the interest payment date of September 1, 2025 and on any interest payment date thereafter, redeem the Subordinated Notes, in whole or in part, subject to obtaining the prior approval of the Federal Reserve Board, if required, at a redemption price equal to 100% of the principal amount of the Subordinated Notes being redeemed, plus accrued and unpaid interest thereon to but excluding the date of redemption. The Subordinated Notes qualify as Tier 2 capital for Park under the Federal Reserve Board's capital adequacy rules.
Previous wording
Long-Term Debt: Long-term debt primarily consists of borrowings from the Federal Home Loan Bank. In addition, Park had a term note with another financial institution which was paid off on August 2, 2021. The average balance of long-term debt and the average cost of long-term debt include the subordinated notes discussed in the following section. In 2023, the average balance of long-term debt was $189 million, compared to $188 million in 2022 and $206 million in 2021. The average interest rate paid on long-term debt was 4.97% in 2023, compared to 4.69% in 2022 and 4.32% in 2021. Average total debt (long-term and short-term) was $372 million in 2023, compared to $396 million in 2022 and $493 million in 2021. Average total debt decreased by $23.6 million, or 6.0% in 2023 compared to 2022, and decreased by $97.4 million, or 19.8%, in 2022 compared to 2021. Average long-term debt was 51% of average total debt in 2023, compared to 48% of average total debt in 2022 and 42% of average total debt in 2021.
Current wording
Total Debt: Average total debt (subordinated notes and short-term) was $310 million in 2024, compared to $372 million in 2023 and $396 million in 2022. Average total debt decreased by $62.0 million, or 16.7% in 2024 compared to 2023 and decreased $23.6 million, or 6.0% in 2023 compared to 2022. Average long term subordinated notes were 61% of average total debt in 2024, compared to 51% of average total debt in 2023 and 48% of average total debt in 2022.
Previous wording
Shareholders' Equity: The ratio of total shareholders' equity to total assets was 11.64% at December 31, 2023, compared to 10.85% at December 31, 2022 and 11.62% at December 31, 2021. The non-gaap ratio of tangible shareholders’ equity [shareholders' equity ($1,145.3 million) less goodwill ($159.6 million) and other intangible assets ($4.7 million)] to tangible assets [total assets ($9,836.5 million) less goodwill ($159.6 million) and other intangible assets ($4.7 million)] was 10.14% at December 31, 2023, compared to 9.33% at December 31, 2022 and 10.05% at December 31, 2021.
Current wording
Shareholders' Equity: The ratio of total shareholders' equity to total assets was 12.69% at December 31, 2024, compared to 11.64% at December 31, 2023 and 10.85% at December 31, 2022. The non-GAAP ratio of tangible shareholders’ equity [shareholders' equity ($1,243.8 million) less goodwill ($159.6 million) and other intangible assets ($3.4 million)] to tangible assets [total assets ($9,805.4 million) less goodwill ($159.6 million) and other intangible assets ($3.4 million)] was 11.21% at December 31, 2024, compared to 10.14% at December 31, 2023 and 9.33% at December 31, 2022.
Previous wording
The unrealized net holding loss, net of income taxes, on AFS debt securities was $67.9 million at year-end 2023, compared to an unrealized net holding loss, net of income taxes, of $95.7 million at year-end 2022 and compared to an unrealized net holding gain, net of income taxes, of $21.2 million at year-end 2021. The unrealized net holding loss on AFS debt securities at December 31, 2023 was impacted by the realization of $6.2 million in losses, net of income taxes, during the year ended December 31, 2023 as the result of the sale of $291.0 million in AFS debt securities.
Current wording
The unrealized net holding loss, net of income taxes, on AFS debt securities was $62.9 million at year-end 2024, compared to an unrealized net holding loss, net of income taxes, $67.9 million at year-end 2023 and compared to an unrealized net holding loss, net of income taxes, of $95.7 million at year-end 2022. The unrealized net holding loss on AFS debt securities at December 31, 2024 was impacted by the realization of $415,000 in losses, net of income taxes, during the year ended December 31, 2024 as the result of the sale of $44.6 million in AFS debt securities. The unrealized net holding loss on AFS debt securities at December 31, 2023 was impacted by the realization of $6.2 million in losses, net of income taxes, during the year ended December 31, 2023 as the result of the sale of $291.0 million in AFS debt securities.
Previous wording
The unrealized net holding loss, net of income taxes, on cash flow hedging derivatives was zero at year-end 2023 and year-end 2022, compared to $206,000 at year-end 2021.
Current wording
The unrealized net holding loss, net of income taxes, on cash flow hedging derivatives was zero at year-end 2024, year-end 2023 and year-end 2022. Park's only borrowing cash flow hedging derivative was terminated during 2022.
Previous wording
In accordance with U.S. GAAP, Park adjusts accumulated other comprehensive (loss) income to recognize the net actuarial gain or loss and prior service cost or credit reflected in the funding status of Park’s pension plan. See "Note 21 - Benefit Plans" of the Notes to Consolidated Financial Statements included in "ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA" of this Annual Report on Form 10-K for information on the accounting for Park’s pension plan. Pertaining to the funding status of the pension plan, Park recognized net other comprehensive income of $8.4 million in 2023, compared to net other comprehensive loss of $888,000 in 2022 and compared to net other comprehensive income of $28.6 million in 2021.
Current wording
In accordance with U.S. GAAP, Park adjusts accumulated other comprehensive (loss) income to recognize the net actuarial gain or loss and prior service cost or credit reflected in the funding status of Park’s pension plan. See "Note 21 - Benefit Plans" of the Notes to Consolidated Financial Statements included in "ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA" of this Annual Report on Form 10-K for additional information on the accounting for Park’s pension plan. At year-end 2024, the balance in accumulated other comprehensive loss pertaining to the pension plan was unrealized income of $16.8 million, compared to unrealized income of $1.7 million at December 31, 2023 and compared to an unrealized loss of $6.7 million at December 31, 2022.
Previous wording
The net other comprehensive income in 2023 was largely due to a $10.5 million net actuarial gain. The gain was due to asset returns greater than expected, partially offset by the impact of demographic losses driven by salary increases greater than assumed and a decrease in the discount rate. The net other comprehensive loss in 2022 was largely due to $558,000 in prior service cost, as a result of plan amendments, and a $551,000 net actuarial loss. The net other comprehensive gain in 2021 was due to greater than expected investment returns on pension plan assets as well as a net decrease in the benefit obligation due to assumption changes.
Current wording
The net other comprehensive income in 2023 was largely due to a $10.5 million ($8.3 million, net of taxes) net actuarial gain. The gain was due to asset returns greater than expected, partially offset by the impact of demographic losses driven by salary increases greater than assumed and a decrease in the discount rate. The net other comprehensive loss in 2022 was largely due to $558,000 ($441,000, net of taxes) in prior service cost, as a result of plan amendments, and a $551,000 ($435,000, net of taxes) net actuarial loss.
Previous wording
Loans: Average loans were $7,222 million in 2023, compared to $6,956 million in 2022 and $7,015 million in 2021. The average yield on average loan balances was 5.55% in 2023, compared to 4.65% in 2022 and 4.53% in 2021. Approximately 47% of Park’s loan balances mature or reprice within one year (see Table 31). The average yield on average loan balances for each quarter of 2023 was 5.84% for the fourth quarter, 5.65% for the third quarter, 5.43% for the second quarter and 5.24% for the first quarter.
Current wording
Loans: Average loans were $7,627 million in 2024, compared to $7,222 million in 2023 and $6,956 million in 2022. The average yield on average loan balances was 6.14% in 2024, compared to 5.55% in 2023 and 4.65% in 2022. Approximately 45% of Park’s loan balances mature or reprice within one year (see Table 31). The average yield on average loan balances for each quarter of 2024 was 6.21% for the fourth quarter, 6.24% for the third quarter, 6.13% for the second quarter and 5.99% for the first quarter.
Previous wording
Loan interest income for 2023, 2022, and 2021 included $631,000, $3.7 million and $8.0 million, respectively, related to payments received on certain SEPH nonaccrual loan relationships, some of which are participated with PNB. In addition, loan interest income included $633,000, $1.8 million and $3.3 million, respectively, of the accretion of loan purchase accounting adjustments related to the acquisitions of NewDominion and Carolina Alliance. Loan interest income for 2023, 2022 and 2021 included interest and fee income related to PPP loans of $69,000, $3.1 million and $18.0 million, respectively. Excluding the impact of the purchase accounting accretion, SEPH income, and PPP income, the average yield on loans was 5.53%, 4.55% and 4.27%, for the years ended December 31, 2023, 2022, and 2021. Excluding the impact of the purchase accounting accretion, SEPH income, and PPP income, the average yield on loans was 5.83% for the fourth quarter of 2023, 5.64% for the third quarter of 2023, 5.42% for the second quarter of 2023, and 5.20% for the first quarter of 2023.
Current wording
Loan interest income for 2024, 2023, and 2022 included $54,000, $631,000 and $3.7 million, respectively, related to payments received on certain SEPH nonaccrual loan relationships, some of which are participated with PNB. In addition, loan interest income included $1.2 million, $633,000 and $1.8 million, respectively, of the accretion of loan purchase accounting adjustments related to the acquisitions of NewDominion and Carolina Alliance. Loan interest income for 2023 and 2022 included interest and fee income related to PPP loans of $69,000 and $3.1 million, respectively.
Previous wording
At December 31, 2023, loan balances were $7,476 million, compared to $7,142 million at year-end 2022, an increase of $334 million, or 4.7%. At December 31, 2022, loan balances were $7,142 million, compared to $6,871 million at year-end 2021, an increase of $271 million, or 3.9%.
Current wording
At December 31, 2024, loan balances were $7,817 million compared to $7,476 million at year-end 2023, an increase of $341 million, or 4.6%. At December 31, 2023, loan balances were $7,476 million, compared to $7,142 million at year-end 2022, an increase of $334 million, or 4.7%.
Previous wording
On a combined basis, year-end commercial, financial and agricultural loans, construction real estate loans and commercial real estate loans increased $56.3 million, or 1.6%, in 2023. The increase in 2023 was due to an increase in commercial real estate of $81.9 million, partially offset by a decrease of $20.3 million in construction real estate and a $5.3 million decrease in commercial, financial and agricultural loans. On a combined basis, year-end commercial, financial and agricultural loans, construction real estate loans and commercial real estate loans decreased by $1.8 million, or 0.1%, in 2022. The decrease in 2022 was due to a decrease in commercial real estate loans of $7.7 million, which were partially offset by an increase in commercial, financial and agricultural loans of $2.3 million and an increase in construction real estate loans of $3.6 million.
Current wording
On a combined basis, year-end commercial, financial and agricultural loans, construction real estate loans and commercial real estate loans increased by $199.8 million, or 5.7%, in 2024. The increase in 2024 was due to an increase in commercial real estate loans of $118.3 million and an increase in construction real estate loans of $107.5 million, which were partially offset by an decrease in commercial, financial and agricultural loans of $26.1 million. On a combined basis, year-end commercial, financial and agricultural loans, construction real estate loans and commercial real estate loans increased $56.3 million, or 1.6%, in 2023. The increase in 2023 was due to an increase in commercial real estate of $81.9 million, partially offset by a decrease of $20.3 million in construction real estate and a $5.3 million decrease in commercial, financial and agricultural loans.
Previous wording
Consumer loans increased by $41.0 million, or 2.1%, in 2023 and increased by $215.3 million, or 12.7%, in 2022. The increase in consumer loans in each of 2023 and 2022 was primarily due to an increase in automobile lending in Ohio.
Current wording
Consumer loans decreased by $35.6 million, or 1.8% in 2024 and increased by $41.0 million, or 2.1%, in 2023. The change in consumer loans in 2024 and 2023 was primarily due to fluctuations in automobile lending in Ohio.
Previous wording
Residential real estate loans increased by $232.7 million, or 12.9%, in 2023 and increased by $58.2 million, or 3.3%, in 2022. The increase in 2023 was due to an increase in mortgage loans secured by residential real estate of $164.4 million, an increase in commercial loans secured by residential real estate of $59.2 million, an increase in home equity loans secured by residential real estate of $7.2 million and an increase in installment loans secured by residential real estate of $1.8 million. The increase in 2022 was due to an increase in mortgage loans secured by residential real estate of $41.8 million, an increase in commercial loans secured by residential real estate of $16.4 million, and an increase in home equity loans secured by residential real estate of $1.5 million, partially offset by a decrease in installment loans secured by residential real estate of $1.6 million.
Current wording
Residential real estate loans increased by $170.9 million, or 8.4% in 2024 and increased by $232.7 million, or 12.9%, in 2023. The increase in 2024 was due to an increase in mortgage loans secured by residential real estate of $106.7 million, an increase in commercial loans secured by residential real estate of $35.0 million, an increase in home equity loans secured by residential real estate of $29.1 million and an increase in installment loans secured by residential real estate of $109,000. The increase in 2023 was due to an increase in mortgage loans secured by residential real estate of $164.4 million, an increase in commercial loans secured by residential real estate of $59.2 million, an increase in home equity loans secured by residential real estate of $7.2 million and an increase in installment loans secured by residential real estate of $1.8 million.
Showing the first 40 of 124 pairs. Open the source sections for the rest.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
Management believes that the disclosure of the return on average tangible equity, the return on average tangible assets, the tangible equity to tangible assets ratio, and pre-tax, pre-provision net income presents additional information to the reader of the consolidated financial statements, which, when read in conjunction with the consolidated financial statements prepared in accordance with U.S. GAAP, assists in analyzing Park's operating performance, ensures comparability of operating
Current report — wording carried from elsewhere
-37- and improve the overall net interest margin. A net loss on sale of debt securities of $526,000 was recognized during the year ended December 31, 2024. No gain or loss on the sale of debt securities was recorded in the year ended December 31, 2022.
Current report — wording carried from elsewhere
-40- balances transferred off balance sheet based on its balance sheet management strategies and liquidity needs. At December 31, 2024 and December 31, 2023, Park had $115.2 million and $1.2 million, respectively, in off balance sheet deposits.
Current report — wording carried from elsewhere
Excluding the impact of the purchase accounting accretion, SEPH income, and PPP income, the average yield on loans was 6.13%, 5.53% and 4.55%, for the years ended December 31, 2024, 2023, and 2022. Excluding the impact of the purchase accounting accretion, SEPH income, and PPP income, the average yield on loans was 6.20% for the fourth quarter of 2024, 6.22% for the third quarter of 2024, 6.11% for the second quarter of 2024, and 5.97% for the first quarter of 2024.
Current report — wording carried from elsewhere
Other investment securities (as shown on Park's Consolidated Balance Sheets) consist of restricted stock investments in the FHLB and the FRB and equity securities which include equity investments in other financial institutions and equity investments in limited partnerships which provide mezzanine funding. Total other investment securities were $104 million at December 31, 2024, $96 million at December 31, 2023 and $87 million at December 31, 2022. There were $9.2 million in FHLB stock
Current report — wording carried from elsewhere
-49- and 2022 included interest and fee income related to PPP loans of $69,000 and $3.1 million, respectively. Below is a summary of the impact of these items on the tax equivalent yield of loans.
Current report — wording carried from elsewhere
The increase in fiduciary fee income in 2024 was largely due to an increase in the market value of assets under management as well as updates to the fee structure. The increase in fiduciary fee income in 2023 was primarily related to an increase in wealth management assets due to improvements in equity market values and new wealth management accounts.
Current report — wording carried from elsewhere
Salaries expense increased by $8.1 million, or 5.8%, to $147.3 million in 2024, compared to $139.2 million in 2023. The $139.2 million in 2023 was an increase of $5.9 million, or 4.5%, compared to $133.3 million in 2022. The increase in 2024 was due to an increase in salaries expense of $4.9 million, a $2.6 million increase in officer incentive compensation expense, and a $1.2 million increase in additional compensation expense, partially offset by a $340,000 decrease in share-based compensation
Current report — wording carried from elsewhere
Accumulated other comprehensive (loss) income, net reflected a loss of $46.2 million, $66.2 million, and $102.4 million at December 31, 2024, 2023, and 2022, respectively. During 2024, the change in net unrealized holding (loss) gain on AFS debt
Rearranged previous paragraphs (8)
Previous report — wording carried elsewhere
Management has included in this Management's Discussion and Analysis of Financial Condition and Results of Operation, information relating to the return on average tangible equity, the return on average tangible assets, the tangible equity to tangible assets ratio, and pre-tax, pre-provision net income for the years ended December 31, 2023 and December 31, 2022. For the purpose of calculating the return on average tangible equity, a non-GAAP financial measure, net income for each period is
Previous report — wording carried elsewhere
-43- causing consumer and business confidence to fall. (5) Concerns about bank failures raise fears of further collapse in the banking industry, reducing consumer confidence and causing banks to tighten lending standards. (6) Recession occurs in the first quarter of 2024 and lasts through the third quarter of 2024. Real GDP declines by 2.6%. Unemployment rate rises to a peak of 7.7% in the first quarter of 2025. The stock market falls 35% from the first quarter of 2024 to the third quarter of 2024. The adverse scenario forecasts Ohio unemployment for the next twelve months to range from 6.2% to 8.8%. Excluding consideration of qualitative adjustments, this sensitivity analysis would result in a hypothetical increase in Park's ACL of $23.6 million as of December 31, 2023 if only the adverse scenario was used. Excluding consideration of qualitative adjustments, a corresponding $23.6 million decrease in Park's ACL would occur in a hypothetical scenario if only the baseline (most likely) scenario was used.
Previous report — wording carried elsewhere
-45- details the change in public fund deposits.
Previous report — wording carried elsewhere
At year-end 2023, the balance in accumulated other comprehensive income pertaining to the pension plan was unrealized income of $1.7 million, compared to an unrealized loss of $6.7 million at December 31, 2022 and compared to an unrealized loss of $5.8 million at December 31, 2021.
Previous report — wording carried elsewhere
Excluding the impact of these items, the average tax equivalent yield on home equity loans was 8.11%, 4.93% and 3.41%, respectively.
Previous report — wording carried elsewhere
$232,000 increase in general reserves, taking into consideration changing economic forecasts while balancing the risks associated with inflation and other economic factors.
Previous report — wording carried elsewhere
-65- costs to determine the net realizable value of the collateral, which is compared to the outstanding principal balance to determine if additional write-downs are necessary.
Previous report — wording carried elsewhere
-69- expense. Assumptions based on the historical behavior of deposit rates and balances in relation to changes in interest rates are also incorporated into this earnings simulation model. These assumptions are inherently uncertain and, as a result, the model cannot precisely measure net interest income and net income. Actual results will differ from simulated results due to the timing, magnitude and frequency of interest rate changes as well as changes in market conditions and management strategies.