v3.26.1
Business Combinations, Asset Acquisitions, Transaction between Entities under Common Control, and Joint Venture Formation
 3 Months Ended
Mar. 31, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combination Business Combination
On February 1, 2026, First Citizens Bancshares, Inc., a Tennessee corporation (“First Citizens”), merged into Park, with Park continuing as the surviving corporation. Immediately following the merger, First Citizens National Bank ("FCNB"), a national banking association and a wholly-owned subsidiary of First Citizens, merged into The Park National Bank ("PNB"), with PNB as the surviving bank. This acquisition continues Park's expansion strategy into higher-growth, demographically attractive markets.

The First Citizens acquisition was valued at $324.1 million based on Park's closing stock price per share on January 30, 2026, the last trading day prior to the merger effective date, of $162.94, and resulted in Park issuing 1,988,131 Park common shares as merger consideration in exchange for First Citizens outstanding common stock.

First Citizens' results of operations were included in Park's results beginning February 1, 2026. It is not practicable to determine revenue or net income included in Park's operating results related to First Citizens since the date of the acquisition, as First Citizens results cannot be separately identified. For the three months ended March 31, 2026, Park recorded merger-related expenses of $15.5 million, associated with the First Citizens acquisition. No merger-related expenses were recorded for the three months ended March 31, 2025.

Park recorded $103.8 million in goodwill, $34.4 million in core deposit intangibles, and $3.6 million in customer relationship intangibles related to wealth management, which reflects the expected synergies and the cost savings resulting from the combining of the operations of PNB and First Citizens. The goodwill is not deductible for income tax purposes as the transaction was accounted for as a tax-free exchange.

The First Citizens acquisition was accounted for under the acquisition method of accounting. Assets acquired and liabilities assumed in the acquisition were recorded at their estimated fair values as of the acquisition date. These estimates were recorded based on preliminary valuations, and these estimates, including the initial accounting for deferred taxes, are considered preliminary as of March 31, 2026, and subject to adjustment for up to one year after the acquisition date.

In many cases, the determination of fair value required management to make estimates about discount rates, expected future cash flows, market conditions and other future events that are highly subjective in nature and subject to change. While Park believes that the information available on the acquisition date provided a reasonable basis for estimating fair value, additional information may be obtained during the measurement period that would result in changes to the estimated fair value amounts. The measurement period ends on the earlier of one year after the acquisition date or the date Park concludes that all necessary information about the facts and circumstances that existed as of the acquisition date have been obtained. Management anticipates that facts obtained during the measurement period could result in adjustments to the valuation amounts.
The following table summarizes the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed

(in thousands)February 1, 2026
Purchase Consideration
Cash consideration$105 
Fair value of Park common shares recorded in "common shares"321,891 
Fair value of Park common shares recorded in "Non-controlling interest in consolidated subsidiary"2,055 
Fair value of total consideration transferred324,051 
Recognized amounts of identifiable assets acquired and liabilities assumed
  Cash and cash equivalents145,670 
  Securities742,952 
  Loans, net of ACL1,558,903 
Loans held for sale4,902 
Bank owned life insurance33,887 
  Premises and equipment30,529 
  Core deposit intangible34,440 
Other intangible assets3,585 
  Other real estate owned21,271 
  Other assets36,281 
          Total assets acquired2,612,420 
  Deposits2,221,111 
Borrowings149,791 
  Other liabilities21,296 
          Total liabilities assumed2,392,198 
               Total identifiable net assets220,222 
Goodwill$103,829 

Loans acquired in the First Citizens acquisition were reviewed to identify any that had experienced a more-than-insignificant deterioration in credit quality since origination. Loans that met established criteria indicating such deterioration are classified as purchased credit deteriorated ("PCD") loans. The remaining loans were classified as purchased seasoned loans ("PSLs"). In accordance with ASU 2025-08 both PCD loans and PSLs are recorded at the purchase price net of expected allowance for credit losses at the time of acquisition. In addition, a non-credit discount or premium is allocated to the loans based on a valuation by a third-party specialist. Under this method, the acquired loans do not incur a provision for credit losses affecting net income at acquisition. However, changes to the allowance for these loans in subsequent periods would be recognized through the provision for credit losses.
Of the $1.6 billion in loans held for investment acquired from First Citizens, $1.5 billion were identified as PSL and $65.1 million were identified as PCD. These loans are summarized in the following table:
(in thousands)PCD LoansPSLsTotal Acquired Loans
Amortized cost of acquired loans$65,065 $1,526,711 $1,591,776 
Allowance of loans at acquisition(1,215)(14,358)(15,573)
Non-credit discount on loans(4,622)(12,678)(17,300)
Fair value price of loans$59,228 $1,499,675 $1,558,903 

The following table presents supplemental pro forma information as if the First Citizens acquisition had occurred as of January 1, 2025. The unaudited pro forma information includes adjustments for interest income on loans and securities acquired, amortization of intangibles arising from the transaction, depreciation expense on property acquired, interest expense on deposits acquired, and the related tax effects. The unaudited pro forma results exclude acquisition‑related costs that were recognized in noninterest expense during the three months ended March 31, 2026, as these costs are directly attributable to the acquisition and are not expected to have a continuing impact on Park's results of operations. The pro forma information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on the assumed date. The pro forma amounts below do not reflect any adjustments to the provision for credit losses for acquired loans, or Park's expectations as of the date of the pro forma information of further operating cost savings and other business synergies expected to be achieved, including revenue growth as a result of the acquisition.

Three months ended March 31,
(in thousands, except per share data)20262025
Net interest income$132,582 $121,250 
Net income available to common shareholders56,100 47,681 
Earnings per common share - basic3.112.63
Earnings per common share - diluted3.092.61