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Basis Of Presentation | 6 Months Ended
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Jun. 30, 2011
Basis Of Presentation [Abstract] |
Basis Of Presentation | Note 1 – Basis of Presentation The accompanying unaudited consolidated condensed financial statements included in this report have been prepared for Park National Corporation (the "Registrant", "Corporation", "Company", or "Park") and its subsidiaries. In the opinion of management, all adjustments (consisting 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 three and six month periods ended June 30, 2011 are not necessarily indicative of the operating results to be anticipated for the fiscal year ending December 31, 2011. The accompanying unaudited consolidated condensed 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 condensed balance sheets, condensed statements of income, condensed statements of changes in stockholders' equity and condensed statements of cash flows in conformity with U.S. generally accepted accounting principles ("GAAP"). These financial statements should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K/A – Amendment No. 2 of Park for the fiscal year ended December 31, 2010 filed on February 28, 2012 (the "2010 Form 10-K/A"), which served to restate the audited consolidated financial statements which had been incorporated by reference in the Annual Report on Form 10-K of Park for the fiscal year ended December 31, 2010 filed on February 28, 2011, from Park's 2010 Annual Report to Shareholders (the "2010 Annual Report"). Park's significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements included in Park's 2010 Form 10-K/A. For interim reporting purposes, Park follows the same basic accounting policies, as updated by the information contained in this report, and considers each interim period an integral part of an annual period. Management has evaluated events occurring subsequent to the balance sheet date, determining no events require additional disclosure in these consolidated condensed financial statements. 1A. RESTATEMENT OF FINANCIAL STATEMENTS In a Current Report on Form 8-K filed on January 31, 2012 (the "January 31, 2012 Form 8-K"), Park announced that on January 27, 2012, management determined that (i) Park's previously issued audited consolidated financial statements incorporated by reference in Park's Annual Report on Form 10-K for the year ended December 31, 2010, filed on February 28, 2011, and (ii) Park's unaudited condensed consolidated financial statements included in Park's Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2011, June 30, 2011, and September 30, 2011, should be restated. The accounting treatment giving rise to the restatement was the inclusion of estimated future cash flows supporting the allowance for loan losses related to certain impaired commercial loans. For the year ended December 31, 2010, as part of Park's process to measure impairment on certain impaired commercial loans at Vision Bank, management had relied on expected future cash flows from guarantors, as to whom we were in litigation. Management determined that reliance on expected future cash flows, which may require protracted litigation to actually be received, is inappropriate given the difficulty in obtaining objective verifiable evidence supporting a conclusion as to the amount and timing of the expected cash flows. GAAP requires that our assumptions be "reasonable and supportable" and the facts and circumstances around the existence of protracted litigation make this assumption more difficult to support. The restatement also reflects certain OREO devaluations and additional loan loss provisions that are not related to guarantor support. These expense items are related to valuation issues identified at December 31, 2010, where Vision Bank management utilized (i) the work of a third-party contractor, which was not a licensed appraiser, when calculating the fair value of collateral for certain impaired loans and the fair value of certain OREO held by Vision Bank, and management did not have sufficient documentation to support the estimates of this third-party contractor, and (ii) internal estimates of collateral value when calculating specific reserves for certain impaired loans when, at times, such internal estimates were outdated. The impact is to reverse provisions for loan losses and OREO devaluations originally recorded in 2011 and recognize these provisions for loan losses and OREO devaluations in the restated audited consolidated financial statements for the year ended December 31, 2010. The tables below detail the restated financial statement line items and Park's regulatory capital ratios for the three and six months ended June 30, 2011.
Effect on Consolidated Condensed Balance Sheet
|  | June 30, 2011 |
|  | As Previously Reported |  |  | As Restated |  |  | Effect of Change |
Allowance for loan losses |  | $ | 110,187 |  |  | $ | 120,174 |  |  | $ | 9,987 |
Net loans |  |  | 4,600,326 |  |  |  | 4,590,339 |  |  |  | (9,987 | )
Other real estate owned |  |  | 47,997 |  |  |  | 47,734 |  |  |  | (263 | )
Other assets |  |  | 170,699 |  |  |  | 174,287 |  |  |  | 3,588 |
Total assets |  |  | 7,328,686 |  |  |  | 7,322,024 |  |  |  | (6,662 | )
Retained earnings |  |  | 432,341 |  |  |  | 425,679 |  |  |  | (6,662 | )
Total stockholders' equity |  |  | 747,760 |  |  |  | 741,098 |  |  |  | (6,662 | )
Total liabilities and stockholders' equity |  |  | 7,328,686 |  |  |  | 7,322,024 |  |  |  | (6,662 | )
Effect on Consolidated Condensed Statements of Income
|  | Three months ended June 30, 2011 |
|  | As Previously Reported |  |  | As Restated |  |  | Effect of Change |
Provision for loan losses |  | $ | 23,900 |  |  | $ | 12,516 |  |  | $ | (11,384 | )
Net interest income after provision for loan losses |  |  | 46,122 |  |  |  | 57,506 |  |  |  | 11,384 |
OREO devaluations |  |  | (5,257 | ) |  |  | (3,355 | ) |  |  | 1,902 |
Total other income |  |  | 13,236 |  |  |  | 15,138 |  |  |  | 1,902 |
Income before income taxes |  |  | 27,713 |  |  |  | 40,999 |  |  |  | 13,286 |
Income taxes |  |  | 7,396 |  |  |  | 12,046 |  |  |  | 4,650 |
Net income |  |  | 20,317 |  |  |  | 28,953 |  |  |  | 8,636 |
Net income available to common shareholders |  |  | 18,853 |  |  |  | 27,489 |  |  |  | 8,636 |
Earnings per common share |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 1.22 |  |  | $ | 1.79 |  |  | $ | 0.57 |
Diluted |  | $ | 1.22 |  |  | $ | 1.79 |  |  | $ | 0.57 |
Effect on Consolidated Condensed Statements of Income
|  | Six months ended June 30, 2011 |
|  | As Previously Reported |  |  | As Restated |  |  | Effect of Change |
Provision for loan losses |  | $ | 37,400 |  |  | $ | 26,616 |  |  | $ | (10,784 | )
Net interest income after provision for loan losses |  |  | 101,935 |  |  |  | 112,719 |  |  |  | 10,784 |
OREO devaluations |  |  | (9,651 | ) |  |  | (5,890 | ) |  |  | 3,761 |
Total other income |  |  | 26,407 |  |  |  | 30,168 |  |  |  | 3,761 |
Income before income taxes |  |  | 56,986 |  |  |  | 71,531 |  |  |  | 14,545 |
Income taxes |  |  | 15,291 |  |  |  | 20,382 |  |  |  | 5,091 |
Net income |  |  | 41,695 |  |  |  | 51,149 |  |  |  | 9,454 |
Net income available to common shareholders |  |  | 38,767 |  |  |  | 48,221 |  |  |  | 9,454 |
Earnings per common share |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 2.52 |  |  | $ | 3.13 |  |  | $ | 0.61 |
Diluted |  | $ | 2.52 |  |  | $ | 3.13 |  |  | $ | 0.61 |
Effect on Consolidated Condensed Statements of Changes in Stockholders' Equity
|  | Six months ended June 30, 2011 |
|  | As Previously Reported |  |  | As Restated |  |  | Effect of Change |
Retained earnings, December 31, 2010 |  | $ | 422,458 |  |  | $ | 406,342 |  |  | $ | (16,116 | )
Net income |  |  | 41,695 |  |  |  | 51,149 |  |  |  | 9,454 |
Total comprehensive income |  |  | 33,388 |  |  |  | 42,842 |  |  |  | 9,454 |
Retained earnings, June 30, 2011 |  |  | 432,341 |  |  |  | 425,679 |  |  |  | (6,662 | )
Effect on Consolidated Condensed Statements of Cash Flows
|  | Six months ended June 30, 2011 |
|  | As Previously Reported |  |  | As Restated |  |  | Effect of Change |
Net income |  | $ | 41,695 |  |  | $ | 51,149 |  |  | $ | 9,454 |
Provision for loan losses |  |  | 37,400 |  |  |  | 26,616 |  |  |  | (10,784 | )
OREO devaluations |  |  | 9,651 |  |  |  | 5,890 |  |  |  | (3,761 | )
(Increase) in other assets |  |  | (43,293 | ) |  |  | (38,202 | ) |  |  | 5,091 |
Effect on Park National Corporation's Capital Ratios
|  | June 30, 2011 |
|  | As Previously Reported |  |  | As Restated |  |  | Effect of Change |
Tier 1 Leverage Ratio |  |  | 9.54 | % |  |  | 9.47 | % |  |  | -0.07 | %
Tier 1 Risk-based Capital Ratio |  |  | 13.72 | % |  |  | 13.60 | % |  |  | -0.12 | %
Total Risk-based Capital Ratio |  |  | 16.18 | % |  |  | 16.07 | % |  |  | -0.11 | %

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