Shares of Park National Corp. in Newark, Ohio, fell sharply Wednesday after the company said that continued loan losses at its troubled Florida bank led to increased chargeoffs and forced it to boost its loss provision significantly in the second quarter.
The $6.8 billion-asset, multibank holding company is not scheduled to release second-quarter earnings until July 21, but in a preliminary announcement late Tuesday it said loan chargeoffs in the quarter were $14.4 million, up 414% from a year earlier.
In the first half of this year the company charged off $23 million, 70% of which it attributed to loan deterioration at Vision Bank in Panama City, Fla., which it acquired last year. In 2007 Park recorded $22.2 million of net loan chargeoffs.
Its provision for loan losses nearly doubled in the second quarter from the previous quarter, to $14.6 million, and was up 407% from the year-earlier quarter.
"We continue to recognize loan losses as we identify them, and intense collection efforts designed to minimize future losses in the Florida Panhandle area are ongoing," Park chairman C. Daniel DeLawder said in a news release.
"Our Ohio-based financial institutions are performing well in an overall market that, while not growing, is not suffering from the extreme property value reductions experienced in other parts of the country," he said.
In late trading Wednesday Park's shares were down 10.6% from Tuesday's close, to $51.40. The stock price is down 48% from its 52-week high of $98.50.
