v3.26.1
Fair Value
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Fair Value
 
The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that Park uses to measure fair value are as follows:

•Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that Park has the ability to access as of the measurement date.
•Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
•Level 3: Significant unobservable inputs that reflect Park's own assumptions about the assumptions that market participants would use in pricing an asset or liability. This could include the use of internally developed models, financial forecasting and similar inputs.
 
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the balance sheet date. When possible, the Company looks to active and observable markets to price identical assets or liabilities. When identical assets and liabilities are not traded in active markets, the Company looks to observable market data for similar assets and liabilities. However, certain assets and liabilities are not traded in observable markets and Park must use other valuation methods to develop a fair value. The fair value of individually evaluated collateral dependent loans is typically based on the fair value of the underlying collateral, which is estimated through third-party appraisals in accordance with Park's valuation requirements under its commercial and real estate loan policies.
Assets and Liabilities Measured at Fair Value on a Recurring Basis:
 
The following table presents assets and liabilities measured at fair value on a recurring basis:
 
Fair Value Measurements at March 31, 2026 using:
(In thousands)Level 1Level 2Level 3Balance at March 31, 2026
Assets    
Investment securities:    
Obligations of U.S. Government sponsored entities$— $109,257 $— $109,257 
Obligations of states and political subdivisions— 237,258 848 238,106 
U.S. Government sponsored entities’ asset-backed securities— 833,515 — 833,515 
Collateralized loan obligations— 38,133 — 38,133 
Corporate debt securities— 13,749 6,968 20,717 
Equity securities17,468 456 636 18,560 
Mortgage loans held for sale— 10,248 — 10,248 
Mortgage IRLCs— 154 — 154 
Loan interest rate swaps— 565 — 565 
Liabilities    
Fair value swap$— $— $100 $100 
Loan interest rate swaps— 565 — 565 
 
Fair Value Measurements at December 31, 2025 using:
(In thousands)Level 1Level 2Level 3Balance at December 31, 2025
Assets    
Investment securities:    
Obligations of states and political subdivisions$— $211,823 $— $211,823 
U.S. Government sponsored entities’ asset-backed securities— 399,964 — 399,964 
Collateralized loan obligations— 56,143 — 56,143 
Corporate debt securities— 13,322 7,416 20,738 
Equity securities16,867 — 626 17,493 
Mortgage loans held for sale— 4,004 — 4,004 
Mortgage IRLCs— 115 — 115 
Loan interest rate swaps— 548 — 548 
Liabilities    
Fair value swap$— $— $268 $268 
Loan interest rate swaps— 548 — 548 
 
The following methods and assumptions were used by the Company in determining the fair value of the financial assets and financial liabilities discussed above:

Fair value swap: The fair value of the swap agreement entered into with the purchaser of the Visa Class B shares represents an internally developed estimate of the exposure based upon probability-weighted potential Visa litigation losses and is classified as Level 3.

Interest rate swaps:  The fair values of interest rate swaps are based on valuation models using observable market data as of the measurement date (Level 2).

Investment securities: Fair values for investment securities are based on quoted market prices, where available (Level 1). If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments (Level 2). This includes the use of "matrix pricing" to value debt securities absent the exclusive use of quoted prices. For equity securities where quoted prices or market prices of similar securities are not available, fair values are calculated using alternative valuation techniques, based on unobservable inputs (Level 3). For debt securities where quoted prices or market prices of similar securities are not available, fair values are calculated using DCF (Level 3).

Mortgage interest rate lock commitments: Mortgage IRLCs are based on current secondary market pricing and are classified as Level 2.
 
Mortgage loans held for sale: Mortgage loans held for sale are carried at their fair value. Mortgage loans held for sale are estimated using market prices for similar product types and, therefore, are classified in Level 2.

The following tables present a reconciliation of the beginning and ending balances of the Level 3 inputs for the three-month periods ended March 31, 2026 and 2025, for financial instruments measured on a recurring basis and classified as Level 3:

Level 3 Fair Value Measurements
Three months ended March 31, 2026 and 2025
(In thousands)Corporate debt securitiesEquity securitiesFair value
swap
Balance at January 1, 2026$7,416 $626 $(268)
Transfer into (out of) level 3, net(404)— — 
Total gains / (losses)
Included in other income / other (expense)— 10 (42)
    Included in other comprehensive income(44)— — 
Purchases, sales, issuances and settlements, other, net— — 210 
Balance at March 31, 2026$6,968 $636 $(100)
Balance at January 1, 2025$6,664 $603 $(103)
Transfers into (out of) level 3, net— — — 
Total gains / (losses)
Included in other income / other (expense)— 8 (130)
Included in other comprehensive income58 — — 
Balance at March 31, 2025$6,722 $611 $(233)

One corporate debt security with a fair value of $404,000 as of December 31, 2025, was transferred out of Level 3 and into Level 2, during the three months ended March 31, 2026, because observable market data became available for this investment. Level 3 corporate debt securities consisted of a single debt security March 31, 2026 and two debt securities at December 31, 2025, which were valued using a discounted cash flow calculation. Significant unobservable inputs included a credit spread assumption which was 3.67% at March 31, 2026, and ranged from 3.67% to 4.45% at December 31, 2025.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis:
 
The following methods and assumptions were used by the Company in determining the fair value of assets and liabilities measured at fair value on a nonrecurring basis as described below:

Individually evaluated collateral dependent loans: When a loan is individually evaluated, it is valued at the lower of cost or fair value. Collateral dependent loans which are individually evaluated and carried at fair value have been partially charged off or receive allocations of the allowance for credit losses. For collateral dependent loans, fair value is generally based on real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including the comparable sales approach and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments result in a Level 3 classification of the inputs for determining fair value. Collateral is then adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the customer and the customer’s business, resulting in a Level 3 fair value classification. Individually evaluated loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly. Additionally, valuations for all collateral dependent loans are updated annually, either through independent valuations by a licensed appraiser or a VOV performed by an internal licensed appraiser, in accordance with Company policy. A VOV can only be used in select circumstances and verifies that the original appraised value has not deteriorated through property inspection, consideration of market conditions, and performance of all valuation methods utilized in a prior valuation.

Loans individually evaluated for impairment include all internally classified commercial nonaccrual loans and accruing collateral dependent loans to borrowers experiencing financial difficulty.

OREO: Assets acquired through or in lieu of loan foreclosure are initially recorded at fair value less costs to sell when acquired. The carrying value of OREO is not re-measured to fair value on a recurring basis, but is subject to fair value adjustments when the carrying value exceeds the fair value, less estimated selling costs. Fair value is based on recent real estate appraisals and is updated at least annually. These appraisals may utilize a single valuation approach or a combination of approaches including the comparable sales approach and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments result in a Level 3 classification of the inputs for determining fair value.
 
Appraisals for both individually evaluated collateral dependent loans and OREO are performed by licensed appraisers. Appraisals are generally obtained to support the fair value of collateral. In general, there are three types of appraisals received by the Company: real estate appraisals, income approach appraisals, and lot development loan appraisals. These are discussed below:
 
•Real estate appraisals typically incorporate measures such as recent sales prices for comparable properties. Appraisers may make adjustments to the sales prices of the comparable properties as deemed appropriate based on the age, condition or general characteristics of the subject property. Management generally applies a 15% discount to real estate appraised values which management expects will cover all disposition costs (including selling costs). This 15% discount is based on historical discounts to appraised values on sold OREO.

•Income approach appraisals typically incorporate the annual net operating income of the business divided by an appropriate capitalization rate, as determined by the appraiser. Management generally applies a 15% discount to income approach appraised values which management expects will cover all disposition costs (including selling costs).

•Lot development loan appraisals are typically performed using a DCF analysis. Appraisers determine an anticipated absorption period and a discount rate that takes into account an investor’s required rate of return based on recent comparable sales. Management generally applies a 6% discount to lot development appraised values, which is an additional discount above the net present value calculation included in the appraisal, to account for selling costs.

MSRs: MSRs are carried at the lower of cost or fair value. MSRs do not trade in active, open markets with readily observable prices. For example, sales of MSRs do occur, but precise terms and conditions typically are not readily available. As such, management, with the assistance of a third-party specialist, determines fair value based on the discounted value of the future cash flows estimated to be received. Significant inputs include the discount rate and assumed prepayment speeds. The calculated fair value is then compared to market values where possible to ascertain the reasonableness of the valuation in relation to current market expectations for similar products. Accordingly, MSRs are classified as Level 2.
The following tables present assets and liabilities measured at fair value on a nonrecurring basis. Individually evaluated collateral dependent loans secured by real estate are carried at fair value if they have been charged down to fair value or if a specific valuation allowance has been established. At March 31, 2026 and December 31, 2025, there were no PCD loans carried at fair value. Additionally, there were no accruing, individually evaluated, collateral-dependent loans carried at fair value. A new cost basis is established at the time a property is initially recorded in OREO. OREO properties are carried at fair value if a devaluation has been taken with respect to the property's value subsequent to the initial measurement. There were no OREO properties recorded at fair value as of March 31, 2026.

Fair Value Measurements at March 31, 2026 using:
(In thousands)Level 1Level 2Level 3Balance at March 31, 2026
Nonaccrual, individually evaluated, collateral-dependent loans recorded at fair value:    
Commercial, financial and agricultural (1)
$— $— $2,598 $2,598 
Commercial real estate— — 1,1731,173
Residential real estate— — 555 555 
Total nonaccrual, individually evaluated, collateral-dependent loans recorded at fair value$— $— $4,326 $4,326 
MSRs$— $40 $— $40 
(1) Includes commercial, financial and agricultural loans in which real estate collateral was obtained subsequent to loan origination.

Fair Value Measurements at December 31, 2025 using:
(In thousands)Level 1Level 2Level 3Balance at December 31, 2025
Nonaccrual, individually evaluated, collateral-dependent loans recorded at fair value:    
Commercial, financial and agricultural (1)
$— $— $3,674 $3,674 
Commercial real estate— — 370370
Residential real estate— — 17 17 
Total nonaccrual, individually evaluated, collateral-dependent loans recorded at fair value$— $— $4,061 $4,061 
MSRs$— $35 $— $35 
(1) Includes commercial, financial and agricultural loans in which real estate collateral was obtained subsequent to loan origination.
The tables below provide additional detail on those nonaccrual individually evaluated loans which are recorded at fair value as well as the remaining nonaccrual individually evaluated loan portfolio not included above. The remaining nonaccrual individually evaluated loans consist of 1) loans which are not collateral dependent, 2) loans which are not secured by real estate, and 3) loans carried at cost as the fair value of the underlying collateral or the present value of expected future cash flows on each of the loans exceeded the book value for each respective credit.

March 31, 2026
(In thousands)Loan BalancePrior Charge-OffsSpecific Valuation AllowanceCarrying Balance
Total nonaccrual, individually evaluated, collateral-dependent loans recorded at fair value$5,557 $4,579 $1,231 $4,326 
Remaining nonaccrual, individually evaluated loans54,651 103 1,810 52,841 
Total nonaccrual, individually evaluated loans$60,208 $4,682 $3,041 $57,167 

December 31, 2025
(In thousands)Loan BalancePrior Charge-OffsSpecific Valuation AllowanceCarrying Balance
Total nonaccrual, individually evaluated, collateral-dependent loans recorded at fair value$4,081 $4,640 $20 $4,061 
Remaining nonaccrual, individually evaluated loans42,843 100 719 42,124 
Total nonaccrual, individually evaluated loans$46,924 $4,740 $739 $46,185 

The expense from credit adjustments related to nonaccrual individually evaluated loans carried at fair value was $1.2 million and $68,000 for the three-month periods ended March 31, 2026 and 2025, respectively.

MSRs totaled $13.6 million at March 31, 2026. Of this $13.6 million MSR carrying balance, $40,000 was recorded at fair value and included a valuation allowance of $4,000. The remaining $13.6 million was recorded at cost, as the fair value exceeded cost at March 31, 2026. At December 31, 2025, MSRs totaled $13.7 million. Of this $13.7 million MSR carrying balance, $35,000 was recorded at fair value and included a valuation allowance of $3,000. The remaining $13.7 million was recorded at cost, as the fair value exceeded cost at December 31, 2025. The (expense) income related to MSRs carried at fair value was $(1,000) and $2,000 for the three-month periods ended March 31, 2026 and 2025, respectively.

Total OREO held by Park at March 31, 2026 and December 31, 2025 was $24.5 million and $0.7 million, respectively. At March 31, 2026 and December 31, 2025, there was no OREO held by Park that was carried at fair value due to fair value adjustments made subsequent to the initial OREO measurement. The expense related to OREO fair value adjustments was $22,000 during the three-month period ended March 31, 2026. There was no expense related to OREO carried at fair value during the three-month periods ended March 31, 2025.
The following tables present qualitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at March 31, 2026 and December 31, 2025:

March 31, 2026
(In thousands)Fair ValueValuation TechniqueUnobservable Input(s)Range
(Weighted Average)
Nonaccrual, individually evaluated, collateral-dependent loans:  
Commercial, financial and agricultural$2,598 Sales comparison approachAdj to comparables
5.0% - 46.0% (25.5%)
Commercial real estate$1,173 Sales comparison approachAdj to comparables
0.0% - 48.5% (16.9%)
Income approachCapitalization rate
2.0% - 10.0% (8.1%)
Cost approachEntrepreneurial profit
5.0% (5.0%)
Cost approachAccumulated depreciation
33.5% (33.5%)
Residential real estate$555 Sales comparison approachAdj to comparables
0.2% - 27.0% (9.8%)

December 31, 2025
(In thousands)Fair ValueValuation TechniqueUnobservable Input(s)Range
(Weighted Average)
Nonaccrual, individually evaluated, collateral-dependent loans:  
Commercial, financial and agricultural$3,674 Sales comparison approachAdj to comparables
5.0% - 46.0% (25.5%)
Commercial real estate$370 Sales comparison approachAdj to comparables
0.0% - 10.0% (3.8%)
Income approachCapitalization rate
10.0% (10.0%)
Residential real estate$17 Sales comparison approachAdj to comparables
11.9% - 38.9% (25.4%)
Assets Measured at Net Asset Value:

Park's portfolio of Partnership Investments is valued using the NAV practical expedient in accordance with ASC 820.

At March 31, 2026 and at December 31, 2025, Park had Partnership Investments with a NAV of $40.9 million and $39.3 million, respectively. At March 31, 2026 and at December 31, 2025, Park had $11.7 million and $12.6 million, respectively, in unfunded commitments related to these Partnership Investments. For the three-month periods ended March 31, 2026 and 2025, Park recognized income (expense) of $0.5 million and $(0.3) million, respectively, related to these Partnership Investments.

Fair Value Balance Sheet:

The fair value of certain financial instruments at March 31, 2026 and at December 31, 2025, was as follows:

March 31, 2026
  Fair Value Measurements
(In thousands)Carrying valueLevel 1Level 2Level 3Total fair value
Financial assets:
Cash and money market instruments$983,137 $983,137 $— $— $983,137 
Investment securities (1)
1,239,728 — 1,231,912 7,816 1,239,728 
Other investment securities (2)
18,560 17,468 456 636 18,560 
Mortgage loans held for sale10,248 — 10,248 — 10,248 
Mortgage IRLCs154 — 154 — 154 
Individually evaluated loans carried at fair value4,326 — — 4,326 4,326 
Other loans, net9,543,942 — — 9,446,923 9,446,923 
Loans receivable, net$9,558,670 $— $10,402 $9,451,249 $9,461,651 
Financial liabilities:     
Time deposits$1,378,998 $— $1,385,893 $— $1,385,893 
Brokered deposits and Bid Ohio CDs47,448 — 47,342 — 47,342 
Other3,035 3,035 — — 3,035 
Deposits (excluding demand deposits)$1,429,481 $3,035 $1,433,235 $— $1,436,270 
Short-term borrowings$135,176 $— $135,176 $— $135,176 
Subordinated notes15,000 — 14,720 — 14,720 
Derivative financial instruments - assets:
Loan interest rate swaps$565 $— $565 $— $565 
Derivative financial instruments - liabilities:     
Fair value swap$100 $— $— $100 $100 
Loan interest rate swaps565 — 565 — 565 
(1) Includes debt securities AFS.
(2) Excludes FHLB stock and FRB stock which are carried at their respective redemption values, investment securities accounted for at modified cost as these investments do not have a readily determinable fair value, and Partnership Investments valued using the NAV practical expedient.
December 31, 2025
  Fair Value Measurements
(In thousands)Carrying valueLevel 1Level 2Level 3Total fair value
Financial assets:
Cash and money market instruments$233,513 $233,513 $— $— $233,513 
Investment securities (1)
688,668 — 681,252 7,416 688,668 
Other investment securities (2)
17,493 16,867 — 626 17,493 
Mortgage loans held for sale4,004 — 4,004 — 4,004 
Mortgage IRLCs115 — 115 — 115 
Individually evaluated loans carried at fair value4,061 — — 4,061 4,061 
Other loans, net7,950,089 — — 7,848,810 7,848,810 
Loans receivable, net$7,958,269 $— $4,119 $7,852,871 $7,856,990 
Financial liabilities:     
Time deposits$772,952 $— $774,487 — $774,487 
Brokered deposits and Bid Ohio CDs17,000 — 17,000 — 17,000 
Other1,216 1,216 — — 1,216 
Deposits (excluding demand deposits)$791,168 $1,216 $791,487 $— $792,703 
Short-term borrowings$81,711 $— $81,711 $— $81,711 
Derivative financial instruments - assets:     
Loan interest rate swaps$548 $— $548 $— $548 
Derivative financial instruments - liabilities:
Fair value swap$268 $— $— $268 $268 
Loan interest rate swaps548 — 548 — 548 
(1) Includes debt securities AFS.
(2) Excludes FHLB stock and FRB stock which are carried at their respective redemption values, investment securities accounted for at modified cost as these investments do not have a readily determinable fair value, and Partnership Investments valued using the NAV practical expedient.