<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to ________________________
Commission File Number 1-13006
------------------------------------------------------
Park National Corporation
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 31-1179518
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
50 North Third Street, Newark, Ohio 43055
------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(740) 349-8451
----------------------------------------------------
(Registrant's telephone number, including area code)
N/A
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
9,300,656 common shares, no par value per share, outstanding at April 30,
1999.
Page 1 of 23
Exhibit Index at Page 21
<PAGE> 2
PARK NATIONAL CORPORATION
CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION 3-11
Item 1. Financial Statements 3-11
Consolidated Balance Sheets as of March 31, 1999 and
December 31, 1998 (unaudited) 3
Consolidated Condensed Statements of Income for the
Three Months ended March 31, 1999 and 1998 (unaudited) 4, 5
Consolidated Condensed Statements of Changes in Stockholders'
Equity for the Three Months ended March 31, 1999 and 1998 (unaudited) 6
Consolidated Statements of Cash Flows for the Three Months
ended March 31, 1999 and 1998 (unaudited) 7, 8
Notes to Consolidated Financial Statements 9-11
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations 12-19
Item 3. Quantitative and Qualitative Disclosure About Market Risk 19
PART II. OTHER INFORMATION 20
Item 1. Legal Proceedings 20
Item 2. Changes in Securities and Use of Proceeds 20
Item 3. Defaults Upon Senior Securities 20
Item 4. Submission of Matters to a Vote of Security Holders 20-21
Item 5. Other Information 21
Item 6. Exhibits and Reports on Form 8-K 21
SIGNATURES 22
EXHIBIT 27 23
</TABLE>
-2-
<PAGE> 3
PARK NATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands, except per share data)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Cash and due from banks $80,489 $100,291
- ----------------------------------------------------------------------------------------------------------
Securities available-for-sale, at fair value
(amortized cost of $643,482 and $634,809
at March 31, 1999 and December 31, 1998) 652,019 646,403
- ----------------------------------------------------------------------------------------------------------
Securities held-to-maturity, at amortized cost
(fair value approximates $6,308 and $6,347
at March 31, 1999 and December 31, 1998) 6,049 6,064
- ----------------------------------------------------------------------------------------------------------
Loans (net of unearned interest) 1,643,215 1,641,512
- ----------------------------------------------------------------------------------------------------------
Allowance for possible loan losses 39,457 37,989
- ----------------------------------------------------------------------------------------------------------
Net loans 1,603,758 1,603,523
- ----------------------------------------------------------------------------------------------------------
Bank premises and equipment, net 26,314 26,755
- ----------------------------------------------------------------------------------------------------------
Other assets 80,505 77,743
- ----------------------------------------------------------------------------------------------------------
Total assets $2,449,134 $2,460,779
- ----------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity:
Deposits:
Noninterest-bearing $262,144 $285,574
- ----------------------------------------------------------------------------------------------------------
Interest-bearing 1,650,163 1,654,204
- ----------------------------------------------------------------------------------------------------------
Total deposits 1,912,307 1,939,778
- ----------------------------------------------------------------------------------------------------------
Short-term borrowings 275,397 246,659
- ----------------------------------------------------------------------------------------------------------
Long-term debt 77 8,430
- ----------------------------------------------------------------------------------------------------------
Other liabilities 22,364 30,222
- ----------------------------------------------------------------------------------------------------------
Total liabilities 2,210,145 2,225,089
- ----------------------------------------------------------------------------------------------------------
Stockholders' Equity:
Common stock (No par value; 20,000,000 shares
authorized; 9,554,028 shares issued in 1999
and 9,553,407 issued in 1998) 68,420 68,398
- ----------------------------------------------------------------------------------------------------------
Unrealized holding gain on
available-for-sale securities, net 5,549 7,536
- ----------------------------------------------------------------------------------------------------------
Retained earnings 183,063 177,050
- ----------------------------------------------------------------------------------------------------------
Treasury stock (249,862 shares in 1999
and 245,491 shares in 1998) (18,043) (17,294)
- ----------------------------------------------------------------------------------------------------------
Total stockholders' equity 238,989 235,690
- ----------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $2,449,134 $2,460,779
- ----------------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-3-
<PAGE> 4
PARK NATIONAL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------------------------------
1999 1998
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Interest income:
Interest and fees on loans $36,105 $36,446
- -----------------------------------------------------------------------------------------------------------------
Interest on:
Obligations of U.S. Government,
its agencies and other securities 8,780 7,965
- -----------------------------------------------------------------------------------------------------------------
Obligations of states
and political subdivisions 1,343 1,093
- -----------------------------------------------------------------------------------------------------------------
Other interest income 13 56
- -----------------------------------------------------------------------------------------------------------------
Total interest income 46,241 45,560
- -----------------------------------------------------------------------------------------------------------------
Interest expense:
Interest on deposits:
Demand and savings deposits 3,301 4,080
- -----------------------------------------------------------------------------------------------------------------
Time deposits 12,184 12,910
- -----------------------------------------------------------------------------------------------------------------
Interest on borrowings:
Short-term borrowings 2,738 1,963
- -----------------------------------------------------------------------------------------------------------------
Long-term debt 120 282
- -----------------------------------------------------------------------------------------------------------------
Total interest expense 18,343 19,235
- -----------------------------------------------------------------------------------------------------------------
Net interest income 27,898 26,325
- -----------------------------------------------------------------------------------------------------------------
Provision for loan losses 1,545 1,674
- -----------------------------------------------------------------------------------------------------------------
Net interest income after
provision for loan losses 26,353 24,651
- -----------------------------------------------------------------------------------------------------------------
Other income 6,379 5,981
- -----------------------------------------------------------------------------------------------------------------
Gain on sale of securities 0 97
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
Continued
-4-
<PAGE> 5
PARK NATIONAL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
(CONTINUED)
(dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------------
1999 1998
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Other expense:
Salaries and employee benefits $8,584 $7,894
- ------------------------------------------------------------------------------------------------------
Occupancy expense 941 838
- ------------------------------------------------------------------------------------------------------
Furniture and equipment expense 986 966
- ------------------------------------------------------------------------------------------------------
Other expense 5,697 5,726
- ------------------------------------------------------------------------------------------------------
Total other expense 16,208 15,424
- ------------------------------------------------------------------------------------------------------
Income before federal income taxes 16,524 15,305
- ------------------------------------------------------------------------------------------------------
Federal income taxes 4,926 4,722
- ------------------------------------------------------------------------------------------------------
Net income $11,598 $10,583
======================================================================================================
PER SHARE:
Net income:
Basic $1.25 $1.13
- ------------------------------------------------------------------------------------------------------
Diluted $1.24 $1.12
======================================================================================================
Weighted average common shares outstanding:
Basic 9,306,595 9,386,913
- ------------------------------------------------------------------------------------------------------
Diluted 9,343,429 9,431,895
======================================================================================================
Cash dividends declared $0.60 $0.48
======================================================================================================
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-5-
<PAGE> 6
PARK NATIONAL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
(dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Accumulated
Treasury Other
Common Retained Stock Comprehensive Comprehensive
Stock Earnings at Cost Income Income
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1997 $68,275 $154,535 ($7,712) $7,019
- ------------------------------------------------------------------------------------------------------------------
Net Income 10,583 $10,583
- -----------------------------------------------------------------------------------------------------------------------------------
Net unrealized losses on securities available-for-sale
net of income taxes of ($353) (657) (657)
- -----------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income $9,926
- --------------------------------------------------------------------------------------------------------------------===============
Cash dividends on common stock:
Park at $.48 per share (4,507)
- ------------------------------------------------------------------------------------------------------------------
Treasury stock purchased - 43,265 shares (3,879)
- ------------------------------------------------------------------------------------------------------------------
Treasury stock reissued for stock options - 11,768 shares 627
- ------------------------------------------------------------------------------------------------------------------
BALANCE AT MARCH 31, 1998 $68,275 $160,611 ($10,964) $6,362
==================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1998 $68,398 $177,050 ($17,294) $7,536
- ------------------------------------------------------------------------------------------------------------------
Net Income $11,598 $11,598
- -----------------------------------------------------------------------------------------------------------------------------------
Net unrealized losses on securities available-for-sale
net of income taxes of ($1,069) (1,987) (1,987)
- -----------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income $9,611
- --------------------------------------------------------------------------------------------------------------------===============
Cash dividends on common stock:
Park at $.60 per share (5,585)
- ------------------------------------------------------------------------------------------------------------------
Shares issued for stock options - 621 shares 22
- ------------------------------------------------------------------------------------------------------------------
Treasury stock purchased - 12,705 shares (1,211)
- ------------------------------------------------------------------------------------------------------------------
Treasury stock reissued for stock options - 8,334 shares 462
- ------------------------------------------------------------------------------------------------------------------
BALANCE AT MARCH 31, 1999 $68,420 $183,063 ($18,043) $5,549
==================================================================================================================
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-6-
<PAGE> 7
PARK NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------------------
1999 1998
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating activities:
Net income $11,598 $10,583
- -------------------------------------------------------------------------------------------------------------------------------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation, amortization and accretion 487 364
------------------------------------------------------------------------------------------------------------------------
Provision for loan losses 1,545 1,674
------------------------------------------------------------------------------------------------------------------------
Amortization of the excess of cost over
net assets of banks purchased 575 697
-----------------------------------------------------------------------------------------------------------------------
Realized investment security gains 0 (97)
-----------------------------------------------------------------------------------------------------------------------
Changes in assets and liabilities:
Increase in other assets (2,267) (2,800)
-----------------------------------------------------------------------------------------------------------------------
Decrease in other liabilities (2,272) (4,107)
-----------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 9,666 6,314
-----------------------------------------------------------------------------------------------------------------------
Investing activities:
Proceeds from sales of:
Available-for-sale securities 0 51,839
-----------------------------------------------------------------------------------------------------------------------
Proceeds from maturities of:
Available-for-sale securities 47,930 24,414
-----------------------------------------------------------------------------------------------------------------------
Held-to-maturity securities 15 495
-----------------------------------------------------------------------------------------------------------------------
Purchases of:
Available-for-sale securities (56,425) (94,791)
-----------------------------------------------------------------------------------------------------------------------
Net (increase)/decrease in loans (1,574) 3,011
-----------------------------------------------------------------------------------------------------------------------
Purchases of premises and equipment, net (430) (535)
-----------------------------------------------------------------------------------------------------------------------
Net cash used by
investing activities (10,484) (15,567)
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
Continued
-7-
<PAGE> 8
PARK NATIONAL CORPORATION
Consolidated Statements of Cash Flows (Unaudited)
(CONTINUED)
(dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------------------
1999 1998
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Financing activities:
Net (decrease)/increase in deposits ($27,471) $5,595
-----------------------------------------------------------------------------------------------------------------
Net increase in short-term borrowings 28,738 30,742
-----------------------------------------------------------------------------------------------------------------
Exercise of stock options 22 0
-----------------------------------------------------------------------------------------------------------------
Purchase of treasury stock, net (749) (3,252)
-----------------------------------------------------------------------------------------------------------------
Repayment of long-term debt (8,353) (12,900)
-----------------------------------------------------------------------------------------------------------------
Cash dividends paid (11,171) (9,019)
-----------------------------------------------------------------------------------------------------------------
Net cash (used)/provided from financing activities (18,984) 11,166
------------------------------------------------------------------------------------------------------------------
(Decrease)/increase in cash and cash equivalents (19,802) 1,913
------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of year 100,291 93,585
- -------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $80,489 $95,498
=========================================================================================================================
Supplemental disclosures of cash flow information:
Cash paid for:
Interest $18,660 $19,471
------------------------------------------------------------------------------------------------------------------
Income taxes $0 $1,000
------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-8-
<PAGE> 9
PARK NATIONAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 1999 and 1998.
Note 1 - Basis of Presentation
---------------------
The consolidated financial statements included in this report have been prepared
by Park National Corporation (the "Registrant", "Corporation", "Company", or
"Park") without audit. In the opinion of management, all adjustments (consisting
solely of normal recurring accruals) necessary for a fair presentation of
results of operations for the interim periods included herein have been made.
The results of operations for the period ended March 31, 1999 are not
necessarily indicative of the operating results to be anticipated for the fiscal
year ended December 31, 1999.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions for Form 10-Q, and therefore, do not include
all information and footnotes necessary for a fair presentation of the balance
sheets, condensed statements of income, condensed statements of changes in
stockholders' equity and statements of cash flows in conformity with generally
accepted accounting principles. These financial statements should be read in
conjunction with the financial statements included in the Annual Report on Form
10-K for the year ended December 31, 1998. Certain amounts in 1998 have been
reclassified to conform to the financial statement presentation used for 1999.
Park does not have any off-balance sheet derivative financial instruments such
as interest-rate swap agreements.
Note 2 - Allowance for Possible Loan Losses
----------------------------------
The allowance for possible loan losses is that amount believed adequate to
absorb estimated credit losses in the loan portfolio based on management's
evaluation of various factors including overall growth in the loan portfolio, an
analysis of individual loans, prior and current loss experience, and current and
anticipated economic conditions. A provision for loan losses is charged to
operations based on management's periodic evaluation of these and other
pertinent factors.
<TABLE>
<CAPTION>
- ------------------------------------------ ----------------------------------------
(In Thousands)
- ------------------------------------------ ----------------------------------------
1999 1998
---- ----
- ------------------------------------------ --------------------- ------------------
<S> <C> <C>
Beginning January 1 $37,989 $35,595
- ------------------------------------------ --------------------- ------------------
Provision for loan losses 1,545 1,674
- ------------------------------------------ --------------------- ------------------
Losses charged to the reserve (1,536) (1,212)
- ------------------------------------------ --------------------- ------------------
Recoveries 1,459 1,194
- ------------------------------------------ --------------------- ------------------
Balance March 31, $39,457 $37,251
- ------------------------------------------ --------------------- ------------------
</TABLE>
-9-
<PAGE> 10
Note 3 - Earnings Per Share
------------------
The following table sets forth the computation of basic and diluted earnings per
share for the three month periods ended March 31, 1999 and 1998.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
- --------------------------------------------------------------------------------------- -------------- ---------------
THREE MONTHS ENDED
MARCH 31, 1999 1998
- --------------------------------------------------------------------------------------- -------------- ---------------
<S> <C> <C>
NUMERATOR:
- --------------------------------------------------------------------------------------- -------------- ---------------
NET INCOME $11,598 $10,583
- --------------------------------------------------------------------------------------- -------------- ---------------
DENOMINATOR:
- --------------------------------------------------------------------------------------- -------------- ---------------
DENOMINATOR FOR BASIC EARNINGS PER SHARE-WEIGHTED-AVG. SHARES 9,306,595 9,386,913
- --------------------------------------------------------------------------------------- -------------- ---------------
- --------------------------------------------------------------------------------------- -------------- ---------------
EFFECT OF DILUTIVE SECURITIES 36,834 44,982
- --------------------------------------------------------------------------------------- -------------- ---------------
- --------------------------------------------------------------------------------------- -------------- ---------------
DENOMINATOR FOR DILUTED EARNINGS PER SHARE-ADJUSTED WEIGHTED-AVERAGE SHARES AND 9,343,429 9,431,895
ASSUMED CONVERSIONS
- --------------------------------------------------------------------------------------- -------------- ---------------
- --------------------------------------------------------------------------------------- -------------- ---------------
EARNINGS PER SHARE:
- --------------------------------------------------------------------------------------- -------------- ---------------
BASIC EARNINGS PER SHARE $1.25 $1.13
- --------------------------------------------------------------------------------------- -------------- ---------------
DILUTED EARNINGS PER SHARE $1.24 $1.12
- --------------------------------------------------------------------------------------- -------------- ---------------
</TABLE>
Note 4 - Segment Information
-------------------
The Corporation is a multi-bank holding company headquartered in Newark, Ohio.
The operating segments for the Corporation are its banking subsidiaries and
their respective divisions. The Corporation's banking subsidiaries are The Park
National Bank (PNB), The Richland Trust Company (RTC), Century National Bank
(CNB), and The First-Knox National Bank of Mount Vernon (FKNB). PNB operates
through two banking divisions with the Park National Division (PND)
headquartered in Newark, Ohio and the Fairfield National Division (FND)
headquartered in Lancaster, Ohio. FKNB also operates through two banking
divisions with the First-Knox National Division (FKND) headquartered in Mount
Vernon, Ohio and the Farmers and Savings Division (FSD) headquartered in
Loudonville, Ohio. Information about reportable segments follows:
-10-
<PAGE> 11
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1999 (IN THOUSANDS)
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
PND FND RTC CNB FKND FSD All Other Total
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Interest $10,049 $3,005 $4,294 $3,990 $5,574 $757 $229 $27,898
Income
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
Provision for 735 150 225 120 279 36 -- 1,545
Loan Losses
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
Other Income 3,025 644 697 754 1,123 75 61 6,379
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
Other Expense 5,834 1,905 2,598 2,202 2,992 429 248 16,208
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
Net Income $4,527 $1,080 $1,437 $1,666 $2,419 $265 $204 $11,598
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
Balances at March 31, 1999:
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
Assets $842,345 $282,602 $410,042 $375,556 $487,622 $62,897 $(11,930) $2,449,134
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1998 (IN THOUSANDS)
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
PND FND RTC CNB FKND FSD All Other Total
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Interest $9,686 $2,750 $4,043 $3,780 $5,155 $682 $229 $26,325
Income
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
Provision for 720 150 375 120 279 30 -- 1,674
Loan Losses
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
Other Income 2,954 551 763 796 958 56 -- 6,078
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
Other Expense 5,164 1,737 2,493 2,187 3,180 370 293 15,424
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
Net Income $4,624 $950 $1,278 $1,535 $1,920 $242 $34 $10,583
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
Balances at March 31, 1998:
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
Assets $817,152 $258,462 $416,017 $356,318 $486,488 $60,137 $(89,206) $2,305,368
- ------------------- -------------- ------------- ------------- ------------- ------------- ----------- --------------- -----------
</TABLE>
The Parent Company's operating results (all other) are used to reconcile the
segment totals to the consolidated income statements for the quarters ended
March 31, 1999 and 1998. The reconciling amounts for consolidated total assets
for both of the quarters ended March 31, 1999 and 1998 consist of the
elimination of intersegment borrowings and the Parent Company assets which are
not eliminated.
-11-
<PAGE> 12
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Comparison of Results of Operations for the Quarters Ended March
31, 1999 and 1998.
Net Interest Income
- -------------------
The Corporation's principal source of earnings is net interest income, the
difference between total interest income and total interest expense. Net
interest income increased by $1.6 million or 6.0% to $27.9 million for the three
months ended March 31, 1999 compared to $26.3 million for the first quarter of
1998. The following table compares the average balance and tax equivalent
yield/cost for interest earning assets and interest bearing liabilities for the
first quarter of 1999 with the same quarter in 1998.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
THREE MONTHS ENDED MARCH 31,
(IN THOUSANDS)
- -------------------------------------- --------------------------- ------------------------------
1999 1998
- -------------------------------------- -------------- ------------ ---------------- -------------
Average Tax Average Tax
Balance Equivalent Balance Equivalent
% %
- -------------------------------------- -------------- ------------ ---------------- -------------
- -------------------------------------- -------------- ------------ ---------------- -------------
<S> <C> <C> <C> <C>
LOANS $1,640,973 8.96% $1,583,427 9.36%
- -------------------------------------- -------------- ------------ ---------------- -------------
TAXABLE INVESTMENTS $530,925 6.71% $452,071 7.15%
- -------------------------------------- -------------- ------------ ---------------- -------------
TAX EXEMPT INVESTMENTS $105,282 7.27% $81,888 7.60%
- -------------------------------------- -------------- ------------ ---------------- -------------
FEDERAL FUNDS SOLD $917 5.47% $3,877 5.64%
- -------------------------------------- -------------- ------------ ---------------- -------------
INTEREST EARNING ASSETS $2,278,097 8.35% $2,121,263 8.81%
- -------------------------------------- -------------- ------------ ---------------- -------------
- -------------------------------------- -------------- ------------ ---------------- -------------
INTEREST BEARING DEPOSITS $1,644,428 3.82% $1,598,620 4.31%
- -------------------------------------- -------------- ------------ ---------------- -------------
SHORT-TERM BORROWINGS $262,093 4.30% $150,663 4.89%
- -------------------------------------- -------------- ------------ ---------------- -------------
LONG-TERM DEBT $4,853 6.44% $31,431 5.88%
- -------------------------------------- -------------- ------------ ---------------- -------------
INTEREST BEARING LIABILITIES $1,911,374 3.89% $1,780,714 4.38%
- -------------------------------------- -------------- ------------ ---------------- -------------
EXCESS INTEREST EARNING ASSETS $366,723 4.46% $340,549 4.43%
- -------------------------------------- -------------- ------------ ---------------- -------------
NET INTEREST MARGIN 5.09% 5.14%
- -------------------------------------- -------------- ------------ ---------------- -------------
</TABLE>
Average interest earning assets increased by $157 million or 7.4% to $2,278
million for the quarter ended March 31, 1999 compared to the same quarter in
1998. Average loan totals increased by $58 million or 3.6% to $1,641 million for
the first quarter of 1999 compared to the first quarter in 1998. The demand for
fixed rate residential real estate loans has been quite strong during the past
year due to relatively low longer term interest rates. A large percentage of the
fixed rate loan originations are refinances of existing mortgages, some of which
are adjustable rate mortgage loans. Park sells in the secondary market all fixed
rate mortgage loans that are originated and as a result has experienced a
decrease of $35 million in residential real estate loans during the past year.
This trend in residential real estate loans may continue at current interest
rate levels. The demand for commercial, commercial real estate, and consumer
loans secured by automobiles has continued to be relatively strong and accounts
for the growth in average loan balances for the first quarter of 1999 compared
to the same period in 1998. The average yield
-12-
<PAGE> 13
on the loan portfolio was 8.96% for the first quarter of 1999 compared to 9.36%
for the same period in 1998. The average prime lending rate for Park's affiliate
banks was 7.75% for the first quarter of 1999 compared to 8.50% for the same
period in 1998. The Federal Reserve lowered the federal funds rate by .75%
during the second half of 1998 and Park's prime lending rate was lowered by the
same magnitude at the same time. Approximately 25% of Park's loan portfolio
reprices based on the prime lending rate which primarily accounts for the .40%
decrease in the average yield on the loan portfolio during the past year. If
short-term interest rates remain stable, the yield on the loan portfolio is
expected to continue to decline over the remainder of the year as new loan
originations have an average rate that is lower than the current loan portfolio
rate.
Average investment securities including federal funds sold increased by $99
million or 18.5% to $637 million for the first quarter of 1999 compared to the
same quarter in 1998. The large increase in average investment securities
resulted primarily from the purchase of mortgage-backed securities with an
average life of approximately four years. This increase in investment securities
was needed to maintain about the same leverage in the balance sheet. Average
equity to average assets was 9.63% for the first quarter of 1999 compared to
9.76% for the same quarter in 1998. The yield on taxable investment securities
decreased to 6.71% in 1999 compared to 7.15% in 1998 and the yield on tax-exempt
investments decreased to 7.27% in 1999 compared to 7.60% in 1998. Long-term
interest rates have decreased over the past year and as a result, purchases of
investment securities generally yield less than the average yield of the
portfolio. The remaining average life of the investment portfolio was
approximately 3.5 years at both March 31, 1999 and March 31, 1998.
Average interest bearing liabilities increased by $131 million or 7.3% to $1,911
million for the quarter ended March 31, 1999 compared to the same quarter in
1998. Average interest bearing deposits increased by $46 million or 2.9% to
$1,644 million for the first quarter of 1999 compared to the same period in
1998. Average short-term borrowings increased by $111 million or 74.0% to $262
million and average long-term debt decreased by $27 million to $5 million for
the first quarter of 1999 compared to the same period in 1998. The increase in
short-term borrowings was used to fund the increase in the investment portfolio
and for the repayment of long-term debt. Higher rate long-term debt was repaid
from lower rate short-term borrowings.
The average cost of interest bearing liabilities decreased by .49% to 3.89% in
1999 compared to 4.38% in 1998. The average cost of interest bearing deposits
also decreased by .49% to 3.82% in 1999 compared to 4.31% in 1998 and the
average cost of short-term borrowings decreased by .59% to 4.30% in 1999
compared to 4.89% in 1998. The decrease in the cost of interest bearing
liabilities in 1999 compared to 1998 is due to the decrease in short-term market
interest rates during the second half of 1998. If short-term interest rates
remain stable, the cost of interest bearing deposits is expected to continue to
decline over the remainder of the year as the new volume of certificates of
deposit has an average rate that is lower than the current average rate of the
certificates of deposit portfolio.
The increase in net interest income of $1.6 million or 6.0% to $27.9 million for
the quarter ended March 31, 1999 was due to both increases in the net interest
spread and interest earning assets. The net interest spread (the difference
between the yield on interest earning assets and the cost of interest bearing
liabilities) improved by .03% to 4.46% in 1999 compared to 4.43% in 1998.
Average interest earning assets increased by $157 million or 7.4% in 1999
compared to 1998 and
-13-
<PAGE> 14
excess interest earning assets increased by $26 million or 7.7% to $367 million
in 1999 compared to 1998. The tax equivalent net interest margin (defined as net
interest income divided by average interest earning assets) decreased by .05% to
5.09% for the first quarter of 1999 compared to 5.14% for the same period in
1998. The decrease in the net interest margin resulted from the decrease in the
average yield on interest earning assets by .46% to 8.35% in 1999 compared to
8.81% in 1998.
Provision for Loan Losses
- -------------------------
The provision for loan losses decreased by $129,000 or 7.7% to $1.55 million for
the three months ended March 31, 1999 compared to $1.67 million for the same
period in 1998. Net charge-offs were $77,000 in 1999 compared to $18,000 in
1998. Nonperforming loans, defined as loans that are 90 days past due,
renegotiated loans and nonaccrual loans were $5.0 million or .30% of loans at
March 31, 1999 compared to $5.0 million or .30% of loans at December 31, 1998
and $7.0 million or .44% of loans at March 31, 1998. The reserve for loan losses
as a percentage of outstanding loans was 2.40% at March 31, 1999 compared to
2.31% at December 31, 1998 and 2.34% at March 31, 1998. See Footnote 2 for a
discussion of the factors considered by management in determining the provision
for loan losses.
Noninterest Income
- ------------------
Noninterest income increased by $398,000 or 6.7% to $6.4 million for the first
quarter of 1999 compared to $6.0 million for the same period in 1998. This
increase was primarily due to an increase in fee income from service charges on
deposits.
Security Gains
- --------------
Investment security gains were $97,000 for the three months ended March 31, 1998
compared to no gains for the same period in 1999. Securities sold for gains were
due to mature later in 1998 and the proceeds from the sales were used to
purchase mortgage-backed securities with an average life of approximately 4
years.
At March 31, 1999, the net unrealized holding gain on available-for-sale
securities (accumulated other comprehensive income) was $5.5 million compared to
a net unrealized gain of $7.5 million at December 31, 1998 and a net unrealized
gain of $6.4 million at March 31, 1998.
Other Expense
- -------------
Total other expense increased by $784,000 or 5.1% to $16.2 million for the three
months ended March 31, 1999 compared to $15.4 million for the same period in
1998. Salaries and employee benefits expense increased by $690,000 or 8.7% to
$8.6 million for the first quarter of 1999 compared to the same period in 1998.
Salaries increased by $454,000 or 7.1% and benefits expense increased by
$236,000 or 15.5% in 1999 compared to 1998. Full time equivalent employees were
1,005 at March 31, 1999 compared to 985 at March 31, 1998. The increase in
benefits expense was primarily due to a 20% increase in Medical insurance for
employees.
-14-
<PAGE> 15
Federal Income Taxes
- --------------------
Federal income tax expense was $4.9 million for the first quarter of 1999
compared to $4.7 million for the same period in 1998. The ratio of federal
income tax expense to income before taxes was approximately 30% in 1999 and 31%
in 1998 compared to the statutory rate of 35%. The primary difference between
the effective federal income tax rate and the statutory rate is due to
tax-exempt interest income.
Net Income
- ----------
Net income increased by $1.0 million or 9.6% to $11.6 million for the three
months ended March 31, 1999 compared to $10.6 million for the same period in
1998. The annualized, first quarter net income to average assets ratio (ROA) was
1.93% in 1999 compared to 1.89% in 1998. The annualized, first quarter net
income to average equity ratio (ROE) was 20.03% in 1999 compared to 19.35% in
1998.
Diluted earnings per share increased by 10.7% to $1.24 for the first quarter of
1999 compared to $1.12 for the same quarter in 1998.
-15-
<PAGE> 16
COMPARISON OF FINANCIAL CONDITION
FOR MARCH 31, 1999 AND DECEMBER 31, 1998
Changes in Financial Condition and Liquidity
- --------------------------------------------
Total assets decreased by $12 million or .5% to $2,449 million at March 31, 1999
compared to $2,461 million at December 31, 1998. Cash and due from banks
decreased by $20 million and investment securities and loans increased by $12
million and $2 million, respectively. The small growth in loan balances was due
to the strong demand for fixed rate mortgage loans which when originated are
sold in the secondary market.
Total liabilities decreased by $15 million or .7% to $2,210 million at March 31,
1999 compared to $2,225 million at December 31, 1998. Total deposits decreased
by $28 million and short-term borrowings increased by $29 million. The decrease
in total deposits was primarily due to a decrease in noninterest bearing
deposits of $23 million. The increase in short-term borrowings was needed to
offset the decrease in deposits and to repay $8 million of higher rate long-term
debt.
Effective liquidity management ensures that the cash flow requirements of
depositors and borrowers, as well as the operating cash needs of the
Corporation, are met.
Funds are available from a number of sources, including the securities
portfolio, the core deposit base, Federal Home Loan Bank borrowings, and the
capability to securitize or package loans for sale. The Corporation's loan to
asset ratio was 67.1% at March 31, 1999 compared to 66.7% at December 31, 1998
and 68.9% at March 31, 1998. Cash and cash equivalents totaled $80 million at
March 31, 1999 compared to $100 million at December 31, 1998 and $95 million at
March 31, 1998. The present funding sources provide more than adequate liquidity
for the Corporation to meet its cash flow needs.
Capital Resources
- -----------------
Stockholders' equity at March 31, 1999 was $239 million or 9.76% of total assets
compared to $236 million or 9.58% of total assets at December 31, 1998 and $224
million or 9.73% of total assets at March 31, 1998.
Financial institution regulators have established guidelines for minimum capital
ratios for banks, thrifts, and bank holding companies. The net unrealized gain
or loss on available-for-sale securities is generally not included in computing
regulatory capital. The minimum leverage capital ratio (defined as stockholders'
equity less intangible assets divided by tangible assets) is 4% and the well
capitalized ratio is greater than or equal to 5%. Park's leverage ratio was
9.14% at March 31, 1999 and 9.06% at December 31, 1998. The minimum Tier I
risk-based capital ratio (defined as leverage capital divided by risk-adjusted
assets) is 4% and the well capitalized ratio is greater than or equal to 6%.
Park's Tier I risk-based capital ratio was 13.92% at March 31, 1999 and 13.64%
at December 31, 1998. The minimum total risk-based capital ratio (defined
-16-
<PAGE> 17
as leverage capital plus supplemental capital divided by risk-adjusted assets)
is 8% and the well capitalized ratio is greater than or equal to 10%. Park's
total risk-based capital ratio was 15.18% at March 31, 1999 and 14.92% at
December 31, 1998.
The financial institution subsidiaries of Park each met the well capitalized
capital ratio guidelines at March 31, 1999. The following table indicates the
capital ratios for each subsidiary and Park at March 31, 1999:
<TABLE>
<CAPTION>
TIER I TOTAL
LEVERAGE RISK-BASED RISK-BASED
- ------------------------------------------ -------------- ---------------- --------------
<S> <C> <C> <C>
Park National Bank 6.53% 9.22% 11.74%
- ------------------------------------------ -------------- ---------------- --------------
Richland Trust Company 6.99% 13.46% 14.73%
- ------------------------------------------ -------------- ---------------- --------------
Century National Bank 6.38% 11.23% 12.49%
- ------------------------------------------ -------------- ---------------- --------------
First-Knox National Bank 6.70% 9.77% 11.56%
- ------------------------------------------ -------------- ---------------- --------------
Park National Corporation 9.14% 13.92% 15.18%
- ------------------------------------------ -------------- ---------------- --------------
Minimum Capital Ratio 4.00% 4.00% 8.00%
- ------------------------------------------ -------------- ---------------- --------------
Well Capitalized Ratio 5.00% 6.00% 10.00%
- ------------------------------------------ -------------- ---------------- --------------
</TABLE>
At the April 19, 1999 Park National Corporation Board of Director's Meeting, a
cash dividend of $.60 per share was declared payable on June 10, 1999 to
stockholders of record on May 21, 1999.
Year 2000 Compliance Issues
- ---------------------------
Park National Corporation ("Park" or the "Corporation") intends this information
to constitute notice under the Year 2000 Information and Readiness Disclosure
Act as a "Y2K Readiness Disclosure". In early 1997, Park formed a Year 2000
project team made up of key Corporation and affiliate officers to identify and
remediate software systems and computer-related devices that require
modification for the Year 2000. A project plan has been developed with goals and
target dates. It has been approved by Park's Board of Directors and is monitored
by the Board on a quarterly basis. The Corporation's project team and business
units are in the final stages of completing this plan. The plan follows a five
phase approach recommended by regulators and others: awareness, assessment,
renovation, validation, and implementation.
Park's State of Readiness
- -------------------------
With regard to information technology ("IT") systems, Park uses standard
hardware and off-the-shelf, widely-used banking software packages to satisfy
most internal and customer needs. The software is purchased without source
programming code. As a result, Park runs the software as is without program
modifications, thereby eliminating the need for a line by line review of custom
programming. All software and hardware vendors have been surveyed and have
indicated their products' Y2K readiness status. In the majority of cases,
vendors have indicated their software or hardware is Y2K compliant. Testing is
required for of all mission critical software - identified as 79 software
packages by the Year 2000 project team - to confirm their state of readiness as
indicated by software and hardware vendors. In a few cases vendors have
indicated their
-17-
<PAGE> 18
hardware or software is not Y2K compliant. An upgrade or other vendor's
replacement software or hardware will be purchased, installed and tested for Y2K
compliance. Successful testing of all internally used software and hardware
systems has been completed. Installation and testing of replacement hardware or
software will be completed by June 30, 1999.
Mission critical outsourced software -- identified as 10 software packages by
the Year 2000 project team - is used to assist Park in serving customers. The
timetable of Y2K tests is controlled by the service provider. Because Park's
outsourced systems are offered by service providers that are national in scope,
management believes they are or will be made Y2K compliant. Testing of all
outsourced software packages will be completed by June 30, 1999.
Banking regulations require that Park develop and execute remediation
contingency plans in cases where it appears any software or hardware vendor or
outside service provider will not be able to provide a Y2K compliant solution.
No such plans have been deemed necessary at this stage of Park's Y2K readiness
project.
For non-IT systems, primarily buildings and banking equipment, vendor inquiries
and tests have been completed. Microcontrollers or embedded chips are generally
not present in Park's buildings due to their age and complexity. Upgrades of a
small number of Automated Teller Machines (ATMs) and building security systems
are complete. Non-IT systems are Y2K compliant.
Y2K readiness inquiries of Park's major borrowers and major funds providers have
been performed. In management's judgment, the result of these inquiries
indicates that the risk to the Corporation from Y2K failures related to these
entities is low. There can be no guarantee, but management's judgment is that
loan losses or liquidity problems attributed to the Y2K issue will not
materially impact the Corporation's financial condition or results of
operations.
Costs to Address Park's Year 2000 Issues
- ----------------------------------------
Y2K compliance is critical to Park. It has redeployed resources from
non-critical system enhancements to address this issue. Due to the importance of
IT systems to the Corporation's business, management has not deferred critical
systems enhancements to become Y2K ready. Park does not expect its redeployments
to have a material impact on the Corporation's financial condition or results of
operations.
The Corporation has incurred expenses throughout 1998 and the first quarter of
1999 related to its Y2K project and will continue to incur expenses through
1999. Depreciation expenses related to Y2K will continue thru 2001. These
expenses are not expected to materially impact operating results in any one
quarter or year, with a significant portion of these expenses represented by
existing staff that have been assigned to this project. Estimates are that
incremental expenses for all of 1999 will be $500,000 and for redeployed staff
$1,000,000. From January 1, 1998 through March 31, 1999, incremental expenses
are approximately $230,000 and redeployment expenses are approximately
$1,250,000.
Risks of the Corporation's Year 2000 Issues
- -------------------------------------------
Park cannot determine the consequences of Y2K problems, if any, on its results
of operations, liquidity and financial condition due to its reliance on third
parties to facilitate service delivery to the Corporation's customers. These
third parties would include utility companies, the federal
-18-
<PAGE> 19
government, outsource service providers and various critical vendors. Park is
engaged in discussions with its third parties and is attempting to obtain
information as to their Y2K readiness state. Park does not, however, have
sufficient information at the current time to predict whether they will be Y2K
ready. While management is executing steps to assure compliance with systems
over which it has control, it cannot be assured that third parties upon which
Park relies for service delivery will not have business interruptions due to Y2K
problems.
The Corporation and its banking affiliates are regulated by both state and
federal bank regulatory agencies. These agencies have issued numerous directives
with respect to the Year 2000 issue, with which Park is acting to comply.
Additionally, these regulatory agencies have made and will continue to make
on-site examinations to determine Y2K readiness.
Park's Contingency Plan
- -----------------------
As the testing and remediation work is completed for each of the 89 mission
critical software packages, a contingency plan is written in case of an
unforeseen Y2K failure. Completion of this effort will coincide with the
completion of the software testing and remediation which is scheduled for June
30, 1999.
Park currently has a business resumption contingency plan for the IT function.
The plan is being modified to address Y2K risks. Additionally, other non-IT
business functions are being included in the business resumption plan. This plan
will be completed by June 30, 1999.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
- --------------------------------------------------------------------------------
This Management's Discussion and Analysis of Financial Condition and Results of
Operations, including the discussion under "Year 2000 Readiness Disclosure,"
contains forward-looking statements within the meaning of federal securities
laws. Actual results are subject to risks and uncertainties, including those
specific to the Corporation and those specific to the industry which could cause
results to differ materially from those contemplated. The risks and
uncertainties include, but are not limited to third-party or Corporation
failures to achieve timely, effective remediation of Year 2000 issues, general
economic conditions, actions of competitors, regulatory actions, changes in
legislation and technology changes. Undue reliance should not be placed on the
forward-looking statements, which speak only as of the date hereof. The
Corporation does not undertake any obligation to publicly update any
forward-looking statement.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
See Footnote 1 for disclosure that Park does not have any off-balance sheet
derivative financial instruments.
-19-
<PAGE> 20
PARK NATIONAL CORPORATION
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
Park National Corporation is not engaged in any legal proceedings
of a material nature at the present time.
Item 2. Changes in Securities and Use of Proceeds
-----------------------------------------
Not applicable
Item 3. Defaults Upon Senior Securities
-------------------------------
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
a. On April 19, 1999 Park National Corporation held its Annual
Meeting of Shareholders. At the close of business on the record
date, 9,299,751 Park National Corporation common shares were
outstanding and entitled to vote. At the meeting, 8,533,166 or
91.8% of the outstanding common shares entitled to vote were
represented by proxy or in person.
b. Directors elected at the Annual Meeting for a three year term:
<TABLE>
<CAPTION>
C. Daniel DeLawder
<S> <C> <C>
8,518,043 For 15,123 Withheld -0- Abstain and Broker Non-Votes
--------- ------ ---
Philip H. Jordan, Jr.
8,505,844 For 27,322 Withheld -0- Abstain and Broker Non-Votes
--------- ------ ---
Tami L. Longaberger
8,509,393 For 23,773 Withheld -0- Abstain and Broker Non-Votes
---------- ------ ---
Howard E. LeFevre
8,478,260 For 54,906 Withheld -0- Abstain and Broker Non-Votes
--------- ------ ---
John J. O'Neill
8,497,583 For 35,583 Withheld -0- Abstain and Broker Non-Votes
--------- ------ ---
</TABLE>
-20-
<PAGE> 21
Directors whose term of office continued after the Annual Meeting:
James J. Cullers
R. William Geyer
William T. McConnell
James A. McElroy
William A. Phillips
John L. Warner
Maureen Buchwald
D.C. Fanello
Phillip T. Leitnaker
J. Gilbert Reese
Rick R. Taylor
c. See Item 4(b) for the voting results for directors.
d. Not applicable
Item 5. Other Information
-----------------
Not applicable
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a. Exhibits
--------
See Exhibit 27, Financial Data Schedule on Page 23
b. Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter ended
March 31, 1999.
-21-
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PARK NATIONAL CORPORATION
DATE: May 12, 1999 BY: /s/ C. Daniel DeLawder
------------ ---------------------------------
C. Daniel DeLawder
President and
Chief Executive Officer
DATE: May 12, 1999 BY: /s/ John W. Kozak
------------ ---------------------------------
John W. Kozak
Chief Financial Officer
-22-
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 80,489
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 652,019
<INVESTMENTS-CARRYING> 6,049
<INVESTMENTS-MARKET> 6,308
<LOANS> 1,643,215
<ALLOWANCE> 39,457
<TOTAL-ASSETS> 2,449,134
<DEPOSITS> 1,912,307
<SHORT-TERM> 275,397
<LIABILITIES-OTHER> 22,364
<LONG-TERM> 77
0
0
<COMMON> 68,420
<OTHER-SE> 170,569
<TOTAL-LIABILITIES-AND-EQUITY> 2,449,134
<INTEREST-LOAN> 36,105
<INTEREST-INVEST> 10,123
<INTEREST-OTHER> 13
<INTEREST-TOTAL> 46,241
<INTEREST-DEPOSIT> 15,485
<INTEREST-EXPENSE> 18,343
<INTEREST-INCOME-NET> 27,898
<LOAN-LOSSES> 1,545
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 16,208
<INCOME-PRETAX> 16,524
<INCOME-PRE-EXTRAORDINARY> 11,598
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,598
<EPS-PRIMARY> 1.25
<EPS-DILUTED> 1.24
<YIELD-ACTUAL> 5.09
<LOANS-NON> 2,770
<LOANS-PAST> 1,889
<LOANS-TROUBLED> 321
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 37,989
<CHARGE-OFFS> 1,536
<RECOVERIES> 1,459
<ALLOWANCE-CLOSE> 39,457
<ALLOWANCE-DOMESTIC> 39,457
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
