Park National (PRK) - 2025 Q3 - Quarterly Report

Financial Performance - Net income for the three months ended September 30, 2025, was $47,158 thousand, compared to $38,217 thousand, reflecting a growth of 23.96%[21] - Basic earnings per common share increased to $2.93 for the three months ended September 30, 2025, compared to $2.37, a rise of 23.6%[21] - For the nine months ended September 30, 2025, net income reached $137,434,000, up 21.9% from $112,790,000 in 2024[28] - Segment net income for the three months ended September 30, 2025, was $47.158 million, an increase of 23.4% compared to $38.217 million in 2024[201] - Segment net income rose to $137,434,000 for the nine months ended September 30, 2025, compared to $112,790,000 in 2024, marking a significant increase of 21.9%[202] Asset and Liability Management - Total assets increased to $9,862,068 thousand as of September 30, 2025, compared to $9,805,350 thousand at December 31, 2024, reflecting a growth of 0.58%[17] - Total liabilities decreased slightly to $8,530,247 thousand from $8,561,502 thousand, a reduction of 0.36%[18] - Retained earnings increased to $1,062,557 thousand as of September 30, 2025, compared to $977,599 thousand, an increase of 8.66%[18] - Cash and cash equivalents at the end of the period increased to $218,906,000 from $201,683,000 in 2024, marking an increase of 8.6%[29] - Total investment securities at September 30, 2025, amounted to $871,447,000, with $817,713,000 in fair value after accounting for unrealized losses[42] Loan and Deposit Growth - Net loans rose to $7,900,995 thousand, up from $7,729,162 thousand, marking an increase of 2.21%[17] - Total deposits increased to $8,329,924 thousand, compared to $8,143,526 thousand, representing a growth of 2.29%[18] - Net increase in deposits for the nine months ended September 30, 2025, was $222,034,000, compared to $170,920,000 in 2024, representing a 30% increase[29] - The total loan portfolio increased to $7.99 billion as of September 30, 2025, compared to $7.82 billion at December 31, 2024[57] Income and Expense Analysis - Net interest income after provision for credit losses was $106,987 thousand for the three months ended September 30, 2025, up from $95,799 thousand, an increase of 11.25%[20] - Total other income decreased to $30,574 thousand for the three months ended September 30, 2025, down from $36,530 thousand, a decline of 16.3%[21] - Other income for the nine months ended September 30, 2025, totaled $88,506,000, down from $91,524,000 in 2024, indicating a decrease of 3.3%[204] - The total charge-offs for the nine months ended September 30, 2025, were $11.490 million, while recoveries were $7.643 million, resulting in net charge-offs of $3.847 million[111] Credit Quality and Provisions - The provision for credit losses for the nine months ended September 30, 2025, was $7,639,000, down from $10,608,000 in 2024, showing a decrease of 28.3%[28] - The allowance for credit losses was $91.8 million as of September 30, 2025, up from $88.0 million at December 31, 2024[57] - Nonperforming loans totaled $90.6 million at September 30, 2025, compared to $69.9 million at December 31, 2024, indicating a rise in credit quality concerns[60][62] - The total past due loans at September 30, 2025 were $47,699,000, with $26,816,000 past due 30-89 days and $20,883,000 nonaccrual loans[67] Shareholder Returns and Dividends - Regular cash dividends declared per common share increased to $1.07 for the three months ended September 30, 2025, compared to $1.06, a rise of 0.94%[21] - Total dividends on common shares were $17,394,000 for the three months ended September 30, 2025, maintaining a consistent dividend payout[25] - Cash dividends paid increased slightly to $52,615,000 in 2025 from $52,288,000 in 2024, reflecting a 0.6% increase[29] Investment and Financing Activities - The company reported cash paid for interest at $86,491,000 for the nine months ended September 30, 2025, down from $95,288,000 in 2024, a decrease of 9.4%[29] - The company reported affordable housing tax credit investments of $71.251 million as of September 30, 2025, an increase from $66.077 million at December 31, 2024[119] - The company issued 32,365 common shares under share-based compensation awards during the period, indicating ongoing employee incentive programs[25] Economic Outlook and Risk Management - The "most likely" unemployment scenario for Ohio is forecasted to be between 5.05% and 5.49% for the next four quarters as of September 30, 2025, indicating ongoing economic uncertainty[108] - Management has excluded data from 2020-2022 in the loss driver analysis due to external interventions during the COVID-19 pandemic, which may not recur in future downturns[106] - The economic forecast considers various scenarios, with management weighing the "most likely" and "moderate recession" scenarios equally at 50% as of September 30, 2025[108] Merger and Acquisition Activities - The merger agreement with First Citizens Bancshares, Inc. was announced on October 27, 2025, with Park continuing as the surviving corporation[210] - Each share of First Citizens common stock will be converted into the right to receive 0.52 of a share of Park common stock upon the merger[211] - The completion of the merger is subject to customary conditions, including shareholder approval and regulatory consents[213]