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PARK NATIONAL CORP /OH/ (PRK)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 EPS was $2.60 diluted ($2.57 adjusted), up 19.8% year over year; net income rose to $42.2M (+19.8% YoY), driven by higher net interest income and lower interest expense .
  • Net interest margin expanded to 4.62% (vs. 4.51% in Q4 and 4.28% in Q1 2024) and the efficiency ratio improved to 59.79% (from 61.60% in Q4 and 63.07% in Q1 2024), signaling better spread and cost discipline .
  • Deposits rose 0.7% QoQ on balance sheet and 2.3% including off-balance sheet; loans grew 0.9% QoQ, with commercial loans leading growth (+1.9% QoQ) .
  • Asset quality improved: nonperforming loans fell to 0.80% of loans (0.89% in Q4); annualized net charge-offs dropped to 0.03% (0.16% in Q4) .
  • Versus S&P Global consensus, Q1 EPS materially beat by $0.42 (Primary EPS 2.57* vs 2.15*), while revenue was modestly below ($129.37M* actual vs ~$130.37M* consensus). Bold catalysts: EPS beat, NIM expansion, and improving credit metrics.*

What Went Well and What Went Wrong

What Went Well

  • Net interest income increased to $104.4M (+9.2% YoY) on average loan growth of ~$351M and a 27 bp rise in loan yields; deposit costs fell 18 bps YoY and borrowings costs fell 31 bps, reducing interest expense .
  • Margin and efficiency gains: NIM rose to 4.62% and the efficiency ratio improved to 59.79%, reflecting spread resilience and operating discipline .
  • Credit metrics strengthened: nonperforming loans ratio dropped to 0.80%; annualized net charge-offs fell to 0.03% of average loans; allowance coverage remained stable at 1.12% of loans .
  • Management tone emphasized stability and relationship banking: “Our first quarter performance reflects our commitment to providing consistent financial support... showing up as a steady, reliable partner.” — CEO David Trautman . “Our bankers’ ability to serve others well is reflected in our first quarter results.” — President Matthew Miller .

What Went Wrong

  • Other income decreased slightly YoY (-1.7% to $25.7M), driven by a $1.1M decline in bank-owned life insurance income and lower ATM fees; equity securities produced a net loss .
  • Operating expense pressures in data processing and professional fees: data processing fees +19.5% YoY to $10.5M on software costs; professional fees +7.2% YoY .
  • Investment income declined as average investment balances fell ~$188M YoY and yields decreased 56 bps, offsetting loan income gains .
  • Period-end common share price was $151.40 (vs. $171.43 at 12/31/24), which may reflect broader market dynamics despite fundamental improvement .

Financial Results

Core Financials vs Prior Periods

MetricQ1 2024Q4 2024Q1 2025
Net Interest Income ($MM)$95.6 $103.4 $104.4
Other Income ($MM)$26.2 $31.1 $25.7
Income Before Taxes ($MM)$42.4 $47.3 $51.2
Net Income ($MM)$35.2 $38.6 $42.2
Diluted EPS ($)$2.17 $2.37 $2.60
Net Interest Margin (%)4.28% 4.51% 4.62%
Efficiency Ratio (%)63.07% 61.60% 59.79%
ROA (annualized, %)1.44% 1.54% 1.70%
ROE (annualized, %)12.23% 12.32% 13.46%

Estimate Comparison (S&P Global)

MetricConsensusActualSurprise
Primary EPS ($)2.15*2.57*+0.42, +19%*
Revenue ($MM)130.37*129.37*-1.00, -0.8%*
Primary EPS - # of Estimates3*——
Revenue - # of Estimates2*——
Target Price Consensus Mean ($)180.33*180.33*—

Values marked with * retrieved from S&P Global.

Loans by Type (Linked Periods)

Loan Type ($MM)Q1 2024Q4 2024Q1 2025
Home Equity$177.1 $203.9 $209.7
Installment$1,947.2 $1,927.2 $1,896.0
Real Estate$1,359.2 $1,452.8 $1,465.1
Commercial$4,038.3 $4,230.4 $4,311.1
Other$3.2 $2.8 $1.9
Total Loans$7,525.0 $7,817.1 $7,883.7

Deposits Mix (On/Off Balance Sheet)

Deposit Type ($MM)Q1 2024Q4 2024Q1 2025
Noninterest Bearing$2,587.2 $2,612.7 $2,637.6
Transaction Accounts$2,270.7 $1,939.8 $2,095.7
Savings$2,604.0 $2,679.3 $2,658.2
Certificates of Deposit$663.9 $735.3 $764.7
Brokered/Bid CDs$180.3 $176.5 $45.5
Total Deposits (On Balance Sheet)$8,306.0 $8,143.5 $8,201.7
Off-Balance Sheet Deposits$2.3 $115.2 $250.8
Total Incl. Off-Balance Sheet$8,308.3 $8,258.7 $8,452.5

Asset Quality & Cost KPIs

KPIQ1 2024Q4 2024Q1 2025
NPLs / Loans (%)0.95% 0.89% 0.80%
NPAs / Assets (%)0.63% 0.72% 0.64%
Allowance / Loans (%)1.13% 1.13% 1.12%
Net Charge-offs ($000)$841 $3,206 $592
Annualized Net Charge-offs (%)0.05% 0.16% 0.03%
Cost of Int.-Bearing Deposits (%)1.94% 1.90% 1.76%
Cost of Borrowings (%)4.25% 3.86% 3.94%
NIM (%)4.28% 4.51% 4.62%
Efficiency Ratio (%)63.07% 61.60% 59.79%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Cash Dividend per ShareQ2 2025 (payable 6/10/25)$1.06 $1.07 Raised
Revenue/Margins/OpEx/OI&E/Tax2025Not providedNot providedMaintained (no formal guidance)

No formal quantitative revenue or margin guidance was provided. Dividend declared $1.07 per common share, payable June 10, 2025; record date May 16, 2025 .

Earnings Call Themes & Trends

Earnings call transcript for Q1 2025 was not available; themes below synthesize press release and 8-K narrative.

TopicPrevious Mentions (Q-2: Q3 2024; Q-1: Q4 2024)Current Period (Q1 2025)Trend
Deposit management strategy (off-balance sheet program)Program usage not highlighted in Q3; Q4 showed deposit stability with lower brokered CDs Off-balance sheet deposits increased to $250.8M; total incl. off-balance sheet +2.3% QoQ; explanation provided on strategic usage Increasing use to manage balance sheet/liquidity
Office CRE exposure monitoringNPLs elevated vs 2023; office commentary not explicit $247.4M office loans (mostly accruing), no current stress but active monitoring Watchful stance; stable performance
Technology/data processing costsData processing fees increased in Q3/Q4 with system investments Data processing fees +19.5% YoY (software costs); some ATM/debit processing offset Persistent expense pressure
Asset qualityQ4 NPLs 0.89%; net charge-offs up vs Q3 NPLs down to 0.80%; annualized NCOs 0.03% Improving
Margin/efficiencyNIM 4.45–4.51% in Q3–Q4; efficiency ratio ~62% NIM 4.62%; efficiency 59.79% Improving
Fiduciary/fee incomeSolid fiduciary income in Q3–Q4 Fiduciary income +9.7% YoY to $11.0M Positive momentum

Management Commentary

  • Strategic posture: “Our first quarter performance reflects our commitment to providing consistent financial support... our greatest opportunity to serve more is through continuing to build authentic relationships and showing up as a steady, reliable partner.” — David Trautman, Chairman & CEO .
  • Relationship-driven growth: “We’re deeply grateful for the trust our communities, customers and neighbors place in us... growing these and new relationships, consistently delivering on our promises and expanding our impact.” — Matthew Miller, President .
  • Operating drivers: Management highlighted NII growth from higher average loans and yield, offset by lower investment income; reduced deposit and borrowing costs lowered interest expense .
  • Deposit strategy: Use of off-balance sheet deposits to manage balance sheet growth and liquidity while preserving customer relationships .

Q&A Highlights

The Q1 2025 earnings call transcript was not available in the document set; no Q&A highlights or clarifications could be sourced from a call transcript. Narrative-driven clarifications are captured from the 8-K Regulation FD sections .

Estimates Context

  • EPS: Primary EPS consensus 2.15* vs actual normalized 2.57* — bold beat driven by higher NII from loan growth and lower interest expense; slight offset from lower investment income and other income .*
  • Revenue: Consensus $130.37M* vs actual $129.37M* — modest miss; note Park’s reported net interest income ($104.4M) plus other income ($25.7M) totals ~$130.1M per company tables, reflecting definitional differences in SPGI revenue treatment .*
  • Target Price: Consensus $180.33*; Park’s period-end market price was $151.40 on 3/31; valuation implies room if fundamentals continue to improve .*

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Earnings quality: Solid beat on EPS versus consensus, underpinned by NIM expansion and lower funding costs; watch revenue definition differences across sources .*
  • Spread resilience: NIM up to 4.62% with loan yields +27 bps YoY and deposit costs -18 bps YoY; efficiency ratio improvement enhances operating leverage .
  • Credit normalization: NPLs down to 0.80% and annualized NCOs at 0.03%; allowance stable at 1.12% of loans — supportive of earnings durability .
  • Deposit strategy: Growth in total deposits including off-balance sheet (+2.3% QoQ) and a sharp reduction in brokered CDs improves funding mix and cost trajectory .
  • Fee dynamics: Fiduciary/other service income improved, but bank-owned life insurance income lower; monitor equity securities volatility and miscellaneous line items .
  • Expense watch: Data processing and professional fees rising (software/legal/credit services) — incremental headwinds to operating ratio if not offset by NIM or volume .
  • CRE office exposure: $247.4M non-owner-occupied office loans mostly accruing; continue to monitor for macro shifts; current portfolio not exhibiting stress .
  • Capital return: Dividend raised to $1.07; tangible book value per share increased to $68.94 (from $66.89 in Q4) .
  • Near-term trading: EPS beat, NIM expansion, and improved credit should be near-term positives; caution on revenue classification variances and rising tech/professional costs .*

Values marked with * retrieved from S&P Global.