Park National beats estimates, raises dividend 58%
Bank holding company posts 18.9% full-year profit growth on First Citizens merger momentum
Park National Corporation shares rose in Monday trading after the Ohio-based bank holding company reported fourth-quarter earnings that beat analyst expectations and announced a significant dividend increase, underscoring growing confidence ahead of its pending acquisition of First Citizens BancShares.
The Newark, Ohio-based company reported quarterly earnings per share of $2.93, exceeding analyst estimates of $2.735, while revenue reached $144.3 million, topping projections of $140.1 million. For the full year, net income increased 18.9% to $180.1 million, with diluted EPS rising 19.2% to $11.11.
The board approved raising the quarterly cash dividend to $1.10 per share, a 58% increase from the previous level, signaling management's confidence in the company's capital position and growth trajectory. The new dividend, when combined with the recent share price of $161.34, yields approximately 2.7% annually.
"Our strong 2025 results reflect the dedication of our entire team and the benefits of our diversified business model," said Daniel DeLawder, president and chief executive officer of Park National. "We remain focused on serving our communities while executing on strategic initiatives that will drive long-term value for our shareholders."
The earnings report comes as Park National advances its largest acquisition to date. The company received shareholder approval for its all-stock merger with First Citizens BancShares, announced in November 2025 and valued at approximately $322 million. The transaction is expected to close during the first quarter of 2026, according to regulatory filings.
The merger will expand Park National's footprint into Tennessee and push the combined entity beyond the $10 billion asset threshold, according to KBRA analysis. Upon completion, First Citizens National Bank will merge into The Park National Bank, creating a stronger regional banking presence across the Southeast.
Park National currently trades at a price-to-earnings ratio of 14.7, below its historical average, with analysts maintaining a consensus price target of $180.33, suggesting upside potential of approximately 12% from current levels. The stock has gained 6.8% over the past six months but remains below its 52-week high of $175.63.
The dividend increase marks the company's eighth consecutive year of dividend growth, highlighting its commitment to returning capital to shareholders while maintaining strong capital ratios. The bank's return on equity stands at 13.7%, well above the regional banking sector average of approximately 11%, according to industry data.
Investors will be watching integration progress closely following the First Citizens merger closing. The transaction is expected to generate cost synergies and expand Park National's market share in attractive Tennessee markets, according to investor presentation materials.
Park National's strong operational performance—characterized by a 43.5% operating margin and 32.9% profit margin—positions the company to maintain growth momentum even as the regional banking sector faces headwinds from interest rate volatility and increased regulatory scrutiny following last year's industry stress.
The company's conservative credit discipline and community-focused banking model have helped it avoid the asset quality issues that plagued some regional peers, with non-performing assets remaining well below industry averages throughout 2025.