Segment Information

The Corporation is a financial holding company headquartered in Newark, Ohio. The operating segments for the Corporation are its chartered national bank subsidiary, The Park National Bank (headquartered in Newark, Ohio) (“PNB”), SE Property Holdings, LLC (“SEPH”), and Guardian Financial Services Company (“GFSC”).

Management is required to disclose information about the different types of business activities in which a company engages and also information on the different economic environments in which a company operates, so that the users of the financial statements can better understand the company’s performance, better understand the potential for future cash flows, and make more informed judgments about the company as a whole. Park has three operating segments, as: (i) discrete financial information is available for each operating segment and (ii) the segments are aligned with internal reporting to Park’s Chief Executive Officer and President, who is the chief operating decision maker.



	Operating Results for the three months ended September 30, 2017
(In thousands)	PNB		GFSC		SEPH			All Other			Total
Net interest income	$	59,415	$	1,455	$	401		$	280		$	61,551
Provision for (recovery of) loan losses	3,820		609		(1,146		)	—			3,283
Other income	20,367		18		411			1,293			22,089
Other expense	45,987		734		996			2,094			49,811
Income (loss) before income taxes	$	29,975	$	130	$	962		$	(521	)	$	30,546
Federal income tax expense (benefit)	8,678		46		336			(626		)	8,434
Net income	$	21,297	$	84	$	626		$	105		$	22,112

Assets (as of September 30, 2017)	$	7,788,248	$	33,260	$	25,377		$	15,810		$	7,862,695



	Operating Results for the three months ended September 30, 2016
(In thousands)	PNB			GFSC			SEPH			All Other			Total
Net interest income	$	57,033		$	1,472		$	8		$	20		$	58,533
Recovery of loan losses	(3,345		)	(313		)	(3,708		)	—			(7,366		)
Other income (loss)	19,279			(1		)	1,126			131			20,535
Other expense	42,327			800			1,789			1,840			46,756
Income (loss) before income taxes	$	37,330		$	984		$	3,053		$	(1,689	)	$	39,678
Federal income tax expense (benefit)	11,839			344			1,070			(1,024		)	12,229
Net income (loss)	$	25,491		$	640		$	1,983		$	(665	)	$	27,449

Assets (as of September 30, 2016)	$	7,287,923		$	32,759		$	36,938		$	6,472		$	7,364,092



	Operating Results for the nine months ended September 30, 2017
(In thousands)	PNB		GFSC		SEPH			All Other			Total
Net interest income	$	174,717	$	4,424	$	884		$	256		$	180,281
Provision for (recovery of) loan losses	9,114		1,419		(1,793		)	—			8,740
Other income	57,257		10		390			1,190			58,847
Other expense	133,667		2,295		3,010			6,407			145,379
Income (loss) before income taxes	$	89,193	$	720	$	57		$	(4,961	)	$	85,009
Federal income tax expense (benefit)	26,247		252		20			(2,921		)	23,598
Net income (loss)	$	62,946	$	468	$	37		$	(2,040	)	$	61,411



	Operating Results for the nine months ended September 30, 2016
(In thousands)	PNB			GFSC			SEPH			All Other			Total
Net interest income (expense)	$	170,194		$	4,416		$	1,240		$	(13	)	$	175,837
(Recovery of) provision for loan losses	(450		)	1,658			(5,027		)	—			(3,819		)
Other income (loss)	55,010			(1		)	1,272			379			56,660
Other expense	126,418			3,632			4,525			7,386			141,961
Income (loss) before income taxes	$	99,236		$	(875	)	$	3,014		$	(7,020	)	$	94,355
Federal income tax expense (benefit)	30,923			(305		)	1,056			(3,452		)	28,222
Net income (loss)	$	68,313		$	(570	)	$	1,958		$	(3,568	)	$	66,133

The operating results of the Parent Company in the “All Other” column are used to reconcile the segment totals to the consolidated condensed statements of income for the three-month and nine-month periods ended September 30, 2017 and 2016. The reconciling amounts for consolidated total assets for the periods ended September 30, 2017 and 2016 consisted of the elimination of intersegment borrowings and the assets of the Parent Company which were not eliminated.