Park National's Net Interest Margin Widens After First Citizens Close

The Tip Desk · October 27, 2026 · 3 min read

Net interest income was $140.7 million in the third quarter as the margin reached 4.84% and merger costs of $7.0 million weighed on profit.

Park National Corporation (PRK), the Newark, Ohio community bank, reported net interest income of $140.7 million for the third quarter of 2026, up 1.4% from $138.9 million in the second quarter after a 26.8% year-over-year increase versus $111.0 million a year earlier.

The net interest margin expanded 3 bps sequentially to 4.84% from 4.81%, and 12 bps versus 4.72% a year earlier. The cost of interest-bearing deposits fell to 1.68% from 1.70%, and the cost of borrowings fell to 2.31% from 2.45%.

Net income was $56.9 million, or $3.13 a share, compared with $47.2 million, or $2.92 a share, a year earlier. The quarter included $7.0 million ($5.5 million after tax) in expenses related to the merger with First Citizens Bancshares, Inc. Other expense rose 6.5% sequentially to $107.5 million from $101.0 million.

The provision for credit losses flipped to a $1.0 million recovery from a $4.6 million provision in the second quarter, versus a $4.0 million provision a year earlier. Other income declined 7.3% sequentially to $36.6 million from $39.5 million, after a 19.8% year-over-year increase versus $30.6 million a year earlier. The efficiency ratio deteriorated to 60.25% from 56.30% in the second quarter, versus 55.85% a year earlier.

Period-end loans were $9.77 billion at September 30, 2026, up 0.4% from $9.73 billion at June 30, and 22.3% versus $8.0 billion a year earlier. Total deposits were $10.62 billion, down 0.4% from $10.67 billion at June 30, and 27.5% versus $8.33 billion a year earlier. Total assets were $12.6 billion.

During 2026 through September 30, total loans increased $1.72 billion, or 21.4%, including $1.58 billion acquired in the First Citizens transaction. Total deposits increased $2.38 billion, or 28.9%, including $2.22 billion acquired from First Citizens. The merger closed on February 1, 2026, in an all-stock deal that expanded Park’s footprint into Tennessee.

Credit quality remained a mixed picture. Total nonperforming loans rose 7.9% sequentially to $90.4 million from $83.8 million at June 30, and nonperforming loans as a percent of period-end loans increased to 0.92% from 0.86%. Net loan charge-offs were $2.8 million, and the annualized net charge-off rate rose to 0.11% of average loans from 0.10%. The allowance for credit losses was $110.0 million, or 1.12% of period-end loans.

The board declared a $1.30 special cash dividend alongside the $1.10 regular quarterly dividend, payable December 10, 2026, after a $1.10 regular dividend in both the second and third quarters. Book value per common share was $94.83 at period end.

For the first nine months of 2026, net income was $157.4 million, or $8.77 a share, compared with $137.4 million, or $8.48 a share, a year earlier. The nine-month period included $26.5 million ($21.0 million after tax) in merger-related expenses and other income reducing charges. Net interest income for the nine months was $405.4 million.

CEO and president Matthew R. Miller said continued solid financial performance reflects the strength of Park’s relationship-based approach to banking. Chairman David L. Trautman said the company is grateful for the trust of customers and communities, including those recently welcomed in Tennessee.