8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 27, 2020

PARK NATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

Ohio	1-13006	31-1179518
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

50 North Third Street,	P.O. Box 3500,	Newark,	Ohio	43058-3500
(Address of principal executive offices) (Zip Code)

(740)	349-8451
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common shares, without par value	PRK	NYSE American

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

        Emerging growth company   ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

1

Item 2.02 - Results of Operations and Financial Condition.

On July 27, 2020, Park National Corporation (“Park”) issued a news release (the “Financial Results News Release”) announcing financial results for the three and six months ended June 30, 2020. A copy of the Financial Results News Release is included as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein.

Non-GAAP Financial Measures

Item 7.01 of this Current Report on Form 8-K as well as the Financial Results News Release contain non-GAAP (generally accepted accounting principles) financial measures where management believes it to be helpful in understanding Park’s results of operations or financial position. Where non-GAAP financial measures are used, the comparable U.S. GAAP financial measures, as well as the reconciliation to the comparable U.S. GAAP financial measures, can be found in the Financial Results News Release.

Items Impacting Comparability of Period Results

From time to time, revenue, expenses, and/or taxes are impacted by items judged by management of Park to be outside of ordinary banking activities and/or by items that, while they may be associated with ordinary banking activities, are so unusually large that their outsized impact is believed by management of Park at that time to be infrequent or short-term in nature. Most often, these items impacting comparability of period results are due to merger and acquisition activities and revenue and expenses related to former Vision Bank loan relationships. In other cases, they may result from management's decisions associated with significant corporate actions outside of the ordinary course of business.

Even though certain revenue and expense items are naturally subject to more volatility than others due to changes in market and economic environment conditions, as a general rule volatility alone does not result in the inclusion of an item as one impacting comparability of period results. For example, changes in the provision for loan losses (aside from those related to former Vision Bank loan relationships), gains (losses) on equity securities, and asset valuation writedowns, reflect ordinary banking activities and are, therefore, typically excluded from consideration as items impacting comparability of period results.

Management believes the disclosure of items impacting comparability of period results provides a better understanding of our performance and trends and allows management to ascertain which of such items, if any, to include or exclude from an analysis of our performance; i.e., within the context of determining how that performance differed from expectations, as well as how, if at all, to adjust estimates of future performance taking such items into account.

Items impacting comparability of the results of particular periods are not intended to be a complete list of items that may materially impact current or future period performance.

Non-GAAP Ratios

Park's management uses certain non-GAAP financial measures to evaluate Park's performance. Specifically, management reviews return on average tangible equity, return on average tangible assets, the tangible equity to tangible assets ratio and tangible book value per share.

Management has included in the Financial Results News Release information relating to the annualized return on average tangible equity, the annualized return on average tangible assets, the tangible equity to tangible assets ratio and the tangible book value per share for the three and six months ended and at June 30, 2020, March 31, 2020, and June 30, 2019. For purposes of calculating the annualized return on average tangible equity, a non-GAAP financial measure, net income for each period is divided by average tangible equity during the period. Average tangible equity equals average shareholders' equity during the applicable period less average goodwill and other intangible assets during the applicable period. For the purpose of calculating the annualized return on average tangible assets, a non-GAAP financial measure, net income for each period is divided by average tangible assets during the period. Average tangible assets equals average assets during the applicable period less average goodwill and other intangible assets during the applicable period. For the purpose of calculating the tangible equity to tangible assets ratio, a non-GAAP financial measure, tangible equity is divided by tangible assets. Tangible equity equals total shareholders' equity less goodwill and other intangible assets, in each case at period end. Tangible assets equals total assets less goodwill and other intangible assets, in each case at period end. For the purpose of calculating the tangible book value per share, a non-GAAP financial measure, tangible equity is divided by the number of common shares outstanding, in each case at period end.

2

Management believes that the disclosure of the annualized return on average tangible equity, the annualized return on average tangible assets, the tangible equity to tangible assets ratio and the tangible book value per share presents additional information to the reader of the consolidated financial statements, which, when read in conjunction with the consolidated financial statements prepared in accordance with U.S. GAAP, assists in analyzing Park's operating performance, ensures comparability of operating performance from period to period, and facilitates comparisons with the performance of Park's peer financial holding companies and bank holding companies, while eliminating certain non-operational effects of acquisitions. In the Financial Results News Release, Park has provided a reconciliation of average tangible equity to average shareholders' equity, average tangible assets to average assets, tangible equity to total shareholders' equity and tangible assets to total assets solely for the purpose of complying with SEC Regulation G and not as an indication that the annualized return on average tangible equity, the annualized return on average tangible assets, the tangible equity to tangible assets ratio and the tangible book value per share are substitutes for the annualized return on average equity, the annualized return on average assets, the total shareholders' equity to total assets ratio and the book value per share, respectively, as determined in accordance with U.S. GAAP.

FTE (fully taxable equivalent) Ratios

Interest income, yields, and ratios on a FTE basis are considered non-GAAP financial measures. Management believes net interest income on a FTE basis provides an insightful picture of the interest margin for comparison purposes. The FTE basis also allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The FTE basis assumes a corporate federal statutory tax rate of 21 percent. In the Financial Results News Release, Park has provided a reconciliation of FTE interest income solely for the purpose of complying with SEC Regulation G and not as an indication that FTE interest income, yields and ratios are substitutes for interest income, yields and ratios, as determined in accordance with U.S. GAAP.

Item 7.01 - Regulation FD Disclosure

COVID-19 Considerations

Banking has been identified by federal and state governmental authorities to be an essential service and Park is fully committed to continue serving our customers and communities through the COVID-19 public health crisis. For those in our communities experiencing a financial hardship, Park offers various methods of support including loan modifications, payment deferral programs, participation in the CARES Act Paycheck Protection Program ("PPP") and various other case by case accommodations. Park has implemented various social distancing guidelines to help protect associates, such as allowing associates to work from home, where practical, while maintaining customer service via our online banking services, mobile app, and ATMs, by keeping drive-thru lanes open to serve customers, maintaining selective branch office openings, and offering other banking services by appointment when necessary.

During the first six months of 2020, Park continued to pay its associates, even those unable to work due to the COVID-19 pandemic. Additionally, Park provided special one-time bonuses to certain associates. The cost of the calamity pay and special bonuses amounted to $2.2 million for the six months ended June 30, 2020, and is included within salaries expense.

Park is committed to helping individuals and businesses in the communities it serves.

Paycheck Protection Program: Through June 30, 2020, Park had approved and funded 4,438 loans totaling $543.1 million under the PPP. These PPP loans had an average balance of $122,000. Of the $543.1 million in PPP loans, 21 loans totaling $68.2 million were greater than $2 million. For its assistance in making and retaining these loans, Park has received an aggregate of $20.2 million in fees from the SBA, of which $2.8 million were recognized during the three months ended June 30, 2020. Park funded the PPP loans with excess on balance sheet liquidity.

Loan Modifications: During the six months ended June 30, 2020, Park had modified 4,474 consumer loans, with an aggregate balance of $113 million, and modified 1,387 commercial loans, with an aggregate balance of $635 million, in each case related to a hardship caused by the COVID-19 pandemic and responses thereto. Park is working with borrowers and providing modifications in the form of either interest only deferral or principal and interest deferral, in each case, for initial periods of up to 90 days. As necessary, Park is making available a second 90 day interest only deferral or principal and interest deferral bringing the total potential deferral period to 6 months. Modifications are structured in a manner to best address each individual customer's current situation. A majority of these modifications are excluded from TDR classification under Section 4013 of the CARES Act or under applicable interagency guidance of the federal banking regulators. Modified loans will be considered

3

current and will continue to accrue interest during the deferral period.

Detail of COVID-19 modifications on Park's loan portfolios during the six months ended June 30, 2020 follows:

(Dollars in thousands)	June 30, 2020 Total Balance		June 30, 2020 Balance Modified		Percent Modified
Commercial	$	4,140,491	$	634,952	15.3	%
Home equity	204,542		3,746		1.8	%
Installment	1,494,151		49,649		3.3	%
Real estate	1,341,739		57,559		4.3	%
Guardian Finance Service Company ("GFSC")	18,489		2,383		12.9	%
Other	5,033		—		—	%
Total Loans	$	7,204,445	$	748,289	10.4	%

Detail of COVID-19 modifications on selected commercial loan portfolios during the six months ended June 30, 2020 follows:

(Dollars in thousands)	June 30, 2020 Total Balance		June 30, 2020 Balance Modified		Percent Modified
Non-bank consumer finance companies	$	254,356	$	—	—	%
Hotel and accommodations	211,106		163,455		77.4	%
Restaurants and food service	51,442		12,641		24.6	%
Arts and recreation	45,108		16,907		37.5	%
Healthcare and social assistance	244,980		39,751		16.2	%
Strip shopping centers	218,237		73,117		33.5	%
Other real estate rental and leasing	1,077,898		192,076		17.8	%
PPP loans	543,086		—		—	%
Other loans	1,494,278		137,005		9.2	%
Total commercial loans	$	4,140,491	$	634,952	15.3	%

Financial Results by Segment

The table below reflects the net income (loss) by segment for the first and second quarters of 2020, for the first half of each of 2020 and 2019 and for the years ended December 31, 2019 and 2018. Park's segments include The Park National Bank ("PNB"), GFSC and "All Other" which primarily consists of Park as the "Parent Company" and SE Property Holdings, LLC ("SEPH"). SEPH is a non-bank subsidiary of Park, holding former Vision Bank other real estate owned ("OREO") property and non-performing loans.

Net income (loss) by segment
(In thousands)	Q2 2020		Q1 2020		Six months YTD 2020		Six months YTD 2019		2019		2018
PNB	$	30,750	$	25,908	$	56,658	$	56,074	$	113,600	$	109,472
GFSC	323		112		435		450		762		521
All Other	(1,568)		(3,648)		(5,216)		(8,906)		(11,662)		394
Total Park	$	29,505	$	22,372	$	51,877	$	47,618	$	102,700	$	110,387

Net income for the six months ended June 30, 2020 of $51.9 million represented a $4.3 million, or 8.9%, increase compared to $47.6 million for the six months ended June 30, 2019. Net income for each of the three and six months ended June 30, 2020 and the three and six months ended June 30, 2019 included several items of income and expense that impact comparability of period results. These items are detailed in the "Financial Reconciliations" section within the Financial Results News Release.

4

The following discussion provides additional information regarding the two segments that make up Park's ongoing operations, followed by additional information regarding All Other, which consists of the Parent Company and SEPH.

The Park National Bank (PNB)

The table below reflects PNB's net income for the first and second quarters of 2020, for the first half of each 2020 and 2019 and for the years ended December 31, 2019 and 2018.

(In thousands)	Q2 2020		Q1 2020		Six months YTD 2020		Six months YTD 2019		2019		2018
Net interest income	$	79,891	$	75,214	$	155,105	$	141,175	$	293,130	$	258,547
Provision for loan losses	12,883		5,534		18,417		4,243		8,356		7,569
Other income	31,009		23,481		54,490		43,382		92,392		88,981
Other expense	60,703		61,368		122,071		111,988		237,433		206,843
Income before income taxes	$	37,314	$	31,793	$	69,107	$	68,326	$	139,733	$	133,116
Income tax expense	6,564		5,885		12,449		12,252		26,133		23,644
Net income	$	30,750	$	25,908	$	56,658	$	56,074	$	113,600	$	109,472

Net interest income of $155.1 million for the six months ended June 30, 2020 represented a $13.9 million, or 9.9%, increase compared to $141.2 million for the six months ended June 30, 2019. The increase was a result of a $2.3 million increase in interest income, and an $11.6 million decrease in interest expense.

The $2.3 million increase in interest income was primarily due to a $6.4 million increase in interest income on loans, partially offset by a $4.1 million decrease in investment income. The increase in interest income on loans was partially the result of a $721.0 million increase in average loans from $5.99 billion for the six months ended June 30, 2019, to $6.71 billion for the six months ended June 30, 2020. The increase in average loans was partially offset by the decrease in the yield on loans, which decreased 37 basis points to 4.75% for the six months ended June 30, 2020, compared to 5.12% for the six months ended June 30, 2019. Interest income was impacted by the the acquisition of CAB Financial Corporation, the parent of Carolina Alliance Bank ("Carolina Alliance") on April 1, 2019. The Carolina Alliance Bank Division contributed an aggregate of $15.3 million to interest income at PNB during the six months ended June 30, 2020, compared to $8.4 million for the six months ended June 30, 2019. The decrease in investment income was partially the result of a decrease in the yield on investments, which decreased 54 basis points to 2.25% for the six months ended June 30, 2020, compared to 2.79% for the six months ended June 30, 2019. The decrease was also the result of a $14.4 million decrease in average investments from $1.50 billion for the six months ended June 30, 2019 to $1.49 billion for the six months ended June 30, 2020.

The $11.6 million decrease in interest expense was primarily due to an $8.6 million decrease in interest expense on deposits as well as a $3.1 million decrease in interest expense on borrowings. The decrease in interest expense on deposits was the result of a decrease in the cost of deposits of 43 basis points from 1.01% for the six months ended June 30, 2019 to 0.58% for the six months ended June 30, 2020. This was partially offset by a $566.7 million increase in average interest-bearing deposits from $4.80 billion for the six months ended June 30, 2019, to $5.37 billion for the six months ended June 30, 2020. Interest expense was impacted by the acquisition of Carolina Alliance. The Carolina Alliance Bank Division contributed an aggregate of $2.1 million to interest expense at PNB during the six months ended June 30, 2020, compared to $1.2 million for the six months ended June 30, 2019. The decrease in interest expense on borrowings was partially the result of a $237.3 million decrease in average borrowings from $614.0 million for the six months ended June 30, 2019, to $376.7 million for the six months ended June 30, 2020. The cost of borrowings also decreased by 35 basis points, from 2.07% for the six months ended June 30, 2019 to 1.72% for the six months ended June 30, 2020.

The provision for loan losses of $18.4 million for the six months ended June 30, 2020 represented an increase of $14.2 million, compared to $4.2 million for the six months ended June 30, 2019. Refer to the “Credit Metrics and Provision for (Recovery of) Loan Losses” section for additional details regarding the level of the provision for (recovery of) loan losses recognized in each period presented above.

5

Other income of $54.5 million for the six months ended June 30, 2020 represented an increase of $11.1 million, or 25.6%, compared to $43.4 million for the six months ended June 30, 2019. The $11.1 million increase was primarily related to a $5.6 million increase in other service income, which was primarily related to an increase in fee income related to mortgage loan originations and investor rate locks, partially offset by a decrease in mortgage service rights; a $3.9 million increase in gain on sale of debt securities; a $1.6 million increase in other components of net periodic benefit income; a $924,000 increase in debit card fee income; a $677,000 increase in gain (loss) on sale of OREO, net; a $306,000 increase in miscellaneous income, primarily related to an increase in operating lease income; a $249,000 increase in income from fiduciary activities; and a $248,000 increase in bank owned life insurance income. These increases were partially offset by a $1.3 million decrease in gains (losses) from capital investments, and a $1.0 million decrease in service charges on deposits. Other income was impacted by the acquisition of Carolina Alliance. The Carolina Alliance Bank Division contributed an aggregate of $3.7 million to other income at PNB during the six months ended June 30, 2020 and $1.3 million during the six months ended June 30, 2019.

A summary of mortgage originations for the six months ended June 30, 2020 and 2019 is below. Of total mortgage originations shown below for 2020, refinances comprised 48.5% in the first quarter of 2020, 67.5% in the second quarter of 2020, 61.1% for the six months ended 2020. Of total mortgage originations shown below for 2019, refinances comprised 32.5% in the first quarter of 2019, 29.7% in the second quarter of 2019, and 30.7% for the six months ended 2019.

(In thousands)	Q1 2020		Q2 2020		Six months ended June 30, 2020		Q1 2019		Q2 2019		Six months ended June 30, 2019
Mortgage Origination Volume
Sold	$	85,030	$	248,339	$	333,369	$	30,011	$	54,802	$	84,813
Portfolio	56,018		64,351		120,369		31,492		59,613		91,105
Construction	33,109		33,754		66,863		20,481		22,245		42,726
Service released	3,794		2,362		6,156		4,407		22,818		27,225
Total mortgage originations	$	177,951	$	348,806	$	526,757	$	86,391	$	159,478	$	245,869

The table below reflects PNB's other expense for the six months ended June 30, 2020 and 2019.

(In thousands)	Six months YTD 2020		Six months YTD 2019		change		% change
Other expense:
Salaries	$	56,253	$	52,016	$	4,237	8.1	%
Employee benefits	18,633		17,082		1,551		9.1	%
Occupancy expense	6,618		6,100		518		8.5	%
Furniture and equipment expense	9,150		8,517		633		7.4	%
Data processing fees	5,062		4,951		111		2.2	%
Professional fees and services	10,670		9,601		1,069		11.1	%
Marketing	2,619		2,659		(40)		(1.5)	%
Insurance	2,689		2,237		452		20.2	%
Communication	1,942		2,586		(644)		(24.9)	%
State tax expense	1,860		1,625		235		14.5	%
Amortization of intangible assets	1,213		991		222		22.4	%
Miscellaneous	5,362		3,623		1,739		48.0	%
Total other expense	$	122,071	$	111,988	$	10,083	9.0	%

6

Other expense of $122.1 million for the six months ended June 30, 2020 represented an increase of $10.1 million, or 9.0%, compared to $112.0 million for the six months ended June 30, 2019. The increase in salaries expense was primarily related to increases in base salary expense and additional compensation incentives, partially offset by a decrease in officer incentive compensation. The increase in employee benefits expense was primarily related to increased pension plan expense, payroll tax expense and defined contribution plan expense, partially offset by a decrease in group insurance costs. The increase in occupancy expense was primarily the result of increased depreciation on premises. The increase in furniture and equipment expense was primarily related to increased expenses related to repairs and maintenance on equipment, which also includes software maintenance and costs. The increase in professional fees and services was primarily related to increased title, appraisal and credit costs, increased insured cash sweep (ICS) fees, as well as increases in management and consulting fees, partially offset by a $427,000 decrease in temporary wage expense. The decrease in communications expense is primarily related to a change in statement mailing and production costs, which resulted in lower direct postage expense, but an increase in supply expense which is included in miscellaneous expense. The additional increase in miscellaneous expense was primarily related to a $1.8 million prepayment penalty on FHLB borrowings of $50 million repaid during the six months ended June 30, 2020. Other expense was impacted by the acquisition of Carolina Alliance. Of the $122.1 million of total other expense for the six months ended June 30, 2020, the Carolina Alliance Bank Division's total other expense was $9.5 million. Of the $112.0 million of total other expense for the six months ended June 30, 2019, the Carolina Alliance Bank Division's total other expense was $5.9 million.

The table below reflects PNB's other expense less the impact of Carolina Alliance Bank Division for the six months ended June 30, 2020 and 2019.

(In thousands)	Six months YTD 2020		Six months YTD 2019		change		% change
Other expense:
Salaries	$	52,011	$	49,407	$	2,604	5.3	%
Employee benefits	17,354		16,566		788		4.8	%
Occupancy expense	5,817		5,700		117		2.1	%
Furniture and equipment expense	8,733		8,229		504		6.1	%
Data processing fees	4,925		4,528		397		8.8	%
Professional fees and services	10,149		9,271		878		9.5	%
Marketing	2,501		2,554		(53)		(2.1)	%
Insurance	2,385		2,098		287		13.7	%
Communication	1,875		2,539		(664)		(26.2)	%
State tax expense	1,857		1,625		232		14.3	%
Amortization of intangible assets	656		578		78		13.5	%
Miscellaneous	4,349		3,037		1,312		43.2	%
Total other expense	$	112,612	$	106,132	$	6,480	6.1	%

Excluding the impact of the Carolina Alliance Bank Division, other expense of $112.6 million for the six months ended June 30, 2020 represented an increase of $6.5 million, or 6.1%, compared to $106.1 million for the six months ended June 30, 2019. The increase in salaries expense was primarily related to increases in base salary expense and additional compensation incentives, partially offset by a decrease in officer incentive compensation. The increase in employee benefits expense was primarily related to increased pension plan expense, payroll tax expense and defined contribution plan expense, partially offset by a decrease in group insurance costs. The increase in furniture and equipment expense was primarily related to increased expenses related to repairs and maintenance on equipment, which also includes software maintenance and costs. The increase in professional fees and services was primarily related to increased title, appraisal and credit costs, increased insured cash sweep (ICS) fees, as well as increases in management and consulting fees, partially offset by a $427,000 decrease in temporary wage expense. The decrease in communications expense is primarily related to a change in statement mailing and production costs, which resulted in lower direct postage expense, but an increase in supply expense which is included in miscellaneous expense. The additional increase in miscellaneous expense was primarily related to a $1.8 million prepayment penalty on FHLB borrowings of $50 million repaid during the six months ended June 30, 2020.

7

The table below provides certain balance sheet information and financial ratios for PNB as of or for the six months ended June 30, 2020 and 2019 and as of or for the twelve months ended December 31, 2019.

(In thousands)	June 30, 2020			December 31, 2019			June 30, 2019			% change from 12/31/19		% change from 06/30/19
Loans	$	7,185,297		$	6,481,644		$	6,355,251		10.86	%	13.06	%
Allowance for loan losses	71,606			54,692			51,760			30.93	%	38.34	%
Net loans	7,113,691			6,426,952			6,303,491			10.69	%	12.85	%
Investment securities	1,144,063			1,271,817			1,387,731			(10.04)	%	(17.56)	%
Total assets	9,665,657			8,521,537			8,607,583			13.43	%	12.29	%
Total deposits	8,230,098			7,125,111			7,095,772			15.51	%	15.99	%
Average assets (1)	8,999,888			8,425,536			8,157,472			6.82	%	10.33	%
Efficiency ratio (2)	57.84		%	61.12		%	60.19		%	(5.37)	%	(3.90)	%
Return on average assets (3)	1.27		%	1.35		%	1.39		%	(5.93)	%	(8.63)	%

(1) Average assets for the six months ended June 30, 2020 and 2019 and for the year ended December 31, 2019.

(2) Calculated utilizing fully taxable equivalent net interest income which includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate. The taxable equivalent adjustments were $1.4 million and $1.5 million for the six months ended June 30, 2020 and 2019, respectively, and $3.0 million for the year ended December 31, 2019.

(3) Annualized for the six months ended June 30, 2020 and 2019.

Loans outstanding at June 30, 2020 were $7.19 billion, compared to $6.48 billion at December 31, 2019, an increase of $703.7 million, or 10.9%. Loans outstanding at June 30, 2020 were $7.19 billion, compared to $6.36 billion at June 30, 2019, an increase of $830.0 million, or 13.1%. Excluding $543.1 million of PPP loans, loans outstanding were $6.64 billion at June 30, 2020, compared to $6.48 billion at December 31, 2019, an increase of $160.6 million, or 2.5%, and reflected an increase of $287.0 million, or 4.5%, compared to $6.36 billion at June 30, 2019. The table below breaks out the change in loans outstanding, by loan type.

(In thousands)	June 30, 2020		December 31, 2019		June 30, 2019		change from 12/31/19		% change from 12/31/19		change from 6/30/19		% change from 6/30/19
Home equity	$	204,541	$	224,857	$	239,103	$	(20,316)	(9.0)	%	$	(34,562)	(14.5)	%
Installment	1,494,151		1,431,197		1,348,727		62,954		4.4	%	145,424		10.8	%
Real estate	1,341,739		1,275,154		1,259,427		66,585		5.2	%	82,312		6.5	%
Commercial (excluding PPP)	3,596,747		3,545,467		3,503,770		51,280		1.4	%	92,977		2.7	%
PPP loans	543,086		—		—		543,086		N.M.		543,086		N.M.
Other	5,033		4,969		4,224		64		1.3	%	809		19.2	%
Total loans	$	7,185,297	$	6,481,644	$	6,355,251	$	703,653	10.9	%	$	830,046	13.1	%

PNB's allowance for loan losses increased by $16.9 million, or 30.9%, to $71.6 million at June 30, 2020, compared to $54.7 million at December 31, 2019. Net charge-offs were $1.5 million, or 0.05% of total average loans (annualized), for the six months ended June 30, 2020 and were $2.7 million, or 0.04% of total average loans, for the twelve months ended December 31, 2019. Refer to the “Credit Metrics and Provision for (Recovery of) Loan Losses” section for additional information regarding PNB's loan portfolio and the level of provision for (recovery of) loan losses recognized in each period presented.

8

Total deposits at June 30, 2020 were $8.23 billion, compared to $7.13 billion at December 31, 2019, an increase of $1.10 billion, or 15.5%. Total deposits at June 30, 2020 were $8.23 billion, compared to $7.10 billion at June 30, 2019, an increase of $1.13 billion, or 16.0%. The table below breaks out the change in deposit balances, by deposit type.

(In thousands)	June 30, 2020		December 31, 2019		June 30, 2019		change from 12/31/19		% change from 12/31/19		change from 6/30/19		% change from 6/30/19
Non-interest bearing deposits	$	2,589,685	$	2,036,359	$	1,974,761	$	553,326	27.2	%	$	614,924	31.1	%
Transaction accounts	1,931,630		1,628,741		1,659,985		302,889		18.6	%	271,645		16.4	%
Savings	2,726,365		2,320,880		2,329,716		405,485		17.5	%	396,649		17.0	%
Certificates of deposits	982,418		1,139,131		1,131,310		(156,713)		(13.8)	%	(148,892)		(13.2)	%
Total deposits	$	8,230,098	$	7,125,111	$	7,095,772	$	1,104,987	15.5	%	$	1,134,326	16.0	%

Guardian Financial Services Company (GFSC)

The table below reflects GFSC's net income for the first and second quarters of 2020, the first half of each of 2020 and 2019 and for the years ended December 31, 2019 and 2018. During 2020, Park made the decision to no longer seek new loans through the GFSC subsidiary.

(In thousands)	Q2 2020		Q1 2020		Six months YTD 2020		Six months YTD 2019		2019		2018
Net interest income	$	1,025	$	1,152	$	2,177	$	2,542	$	5,013	$	5,048
Provision for loan losses	27		277		304		315		754		1,328
Other income	62		32		94		83		170		187
Other expense	651		765		1,416		1,736		3,478		3,245
Income before income taxes	$	409	$	142	$	551	$	574	$	951	$	662
Income tax expense	86		30		116		124		189		141
Net income	$	323	$	112	$	435	$	450	$	762	$	521

The table below provides certain balance sheet information and financial ratios for GFSC as of or for the six months ended June 30, 2020 and 2019 and as of or for the twelve months ended December 31, 2019.

(In thousands)	June 30, 2020			December 31, 2019			June 30, 2019			% change from 12/31/19		% change from 06/30/19
Loans	$	20,538		$	28,143		$	29,981		(27.02)	%	(31.50)	%
Allowance for loan losses	1,869			1,987			2,243			(5.94)	%	(16.67)	%
Net loans	18,669			26,156			27,738			(28.62)	%	(32.70)	%
Total assets	20,125			27,593			29,222			(27.06)	%	(31.13)	%
Average assets (1)	24,774			29,119			30,279			(14.92)	%	(18.18)	%
Return on average assets (2)	3.53		%	2.62		%	3.00		%	34.73	%	17.67	%

(1) Average assets for the six months ended June 30, 2020 and 2019 and for the year ended December 31, 2019.

(2) Annualized for the six months ended June 30, 2020 and 2019.

9

All Other

The table below reflects All Other net (loss) income for the first and second quarters of 2020, for the first half of each of 2020 and 2019 and for the years ended December 31, 2019 and 2018.

(In thousands)	Q2 2020		Q1 2020		Six month YTD 2020		Six months YTD 2019		2019		2018
Net interest income (expense)	$	270	$	(83)	$	187	$	(90)	$	(406)	$	3,303
Recovery of loan losses	(686)		(658)		(1,344)		(141)		(2,939)		(952)
Other (loss) income	(107)		(1,027)		(1,134)		1,368		4,631		11,933
Other expense	3,445		4,143		7,588		13,295		23,077		18,667
Net loss before income tax benefit	$	(2,596)	$	(4,595)	$	(7,191)	$	(11,876)	$	(15,913)	$	(2,479)
Income tax benefit	(1,028)		(947)		(1,975)		(2,970)		(4,251)		(2,873)
Net (loss) income	$	(1,568)	$	(3,648)	$	(5,216)	$	(8,906)	$	(11,662)	$	394

The net interest income (expense) for All Other included, for all periods presented, interest income on subordinated debt investments in PNB, which were eliminated in the consolidated Park National Corporation totals, as well as interest income on SEPH impaired loan relationships.

Net interest income (expense) reflected net interest income of $187,000 for the six months ended June 30, 2020, compared to net interest expense of $90,000 for the six months ended June 30, 2019. The change was largely the result of an increase in loan interest income related to payment collections at SEPH.

SEPH had net recoveries of $1.3 million for the six months ended June 30, 2020, compared to net recoveries of $141,000 for the six months ended June 30, 2019.

All Other had an other loss of $1.1 million for the six months ended June 30, 2020, compared to other income of $1.4 million for the six months ended June 30, 2019. The change was largely due to a $1.9 million decrease in income related to partnership investments, which went from a $1.1 million gain for the six months ended June 30, 2019 to a $768,000 loss for the six months ended June 30, 2020, and a $699,000 decrease in gain (loss) on equity securities, net, which went from a $143,000 gain for the six months ended June 30, 2019 to a $556,000 loss for the six months ended June 30, 2020.

All Other had other expense of $7.6 million for the six months ended June 30, 2020, compared to $13.3 million for the six months ended June 30, 2019. The decrease was largely due to a $5.9 million decrease in merger related expenses related to the NewDominion and Carolina Alliance acquisitions.

Park National Corporation

The table below reflects Park's consolidated net income for the first and second quarters of 2020, for the first half of each of 2020 and 2019 and for the years ended December 31, 2019 and 2018.

(In thousands)	Q2 2020		Q1 2020		Six months YTD 2020		Six months YTD 2019		2019		2018
Net interest income	$	81,186	$	76,283	$	157,469	$	143,627	$	297,737	$	266,898
Provision for loan losses	12,224		5,153		17,377		4,417		6,171		7,945
Other income	30,964		22,486		53,450		44,833		97,193		101,101
Other expense	64,799		66,276		131,075		127,019		263,988		228,755
Income before income taxes	$	35,127	$	27,340	$	62,467	$	57,024	$	124,771	$	131,299
Income tax expense	5,622		4,968		10,590		9,406		22,071		20,912
Net income	$	29,505	$	22,372	$	51,877	$	47,618	$	102,700	$	110,387

10

Credit Metrics and Provision for (Recovery of) Loan Losses

Section 4014 of the CARES Act provided financial institutions with optional temporary relief from having to comply with the Financial Accounting Standards Board Accounting Standards Update 2016-13 ("Measurement of Credit Losses on Financial Instruments") including the current expected credit loss ("CECL") methodology for estimating the allowance for credit losses. This temporary relief will expire on the earlier of the date on which the national emergency concerning COVID-19 terminates or December 31, 2020, with adoption being effective retrospectively as of January 1, 2020.

Park elected to delay the implementation of CECL following the approval of the CARES Act. The CECL standard requires financial institutions to calculate an allowance utilizing a reasonable and supportable forecast period which Park has established as a one-year period. Much is still unknown about the economic impact of COVID-19 including the duration of the pandemic, the duration and impact of future government programs that may be established as a result of the pandemic, and the resiliency of the U.S. economy, making any forecast subject to large fluctuations in the coming months. In this unprecedented situation, Park believes that adopting the CECL model in the first quarter 2020 would have added an unnecessary level of subjectivity and volatility to the calculation of the allowance for credit losses.

On a consolidated basis, Park reported a provision for loan losses for the six months ended June 30, 2020 of $17.4 million, compared to $4.4 million for the six months ended June 30, 2019. The table below shows a breakdown of the provision for (recovery of) loan losses by reportable segment.

(In thousands)	Q2 2020		Q1 2020		Six months YTD 2020		Six months YTD 2019		2019		2018
PNB	$	12,883	$	5,534	$	18,417	$	4,243	$	8,356	$	7,569
GFSC	27		277		304		315		$	754	1,328
All Other	(686)		(658)		(1,344)		(141)		(2,939)		(952)
Total Park	$	12,224	$	5,153	$	17,377	$	4,417	$	6,171	$	7,945

PNB had net charge-offs of $1.5 million, GFSC had net charge-offs of $422,000, and All Other had net recoveries of $1.3 million for the six months ended June 30, 2020, resulting in net charge-offs of $580,000 for Park, on a consolidated basis. PNB had net charge-offs of $1.6 million, GFSC had net charge-offs of $517,000, and All Other had net recoveries of $141,000 for the six months ended June 30, 2019, resulting in net charge-offs of $1.9 million for Park, on a consolidated basis.

11

The table below provides additional information related to specific reserves and general reserves for Park as of June 30, 2020, December 31, 2019, and June 30, 2019.

(In thousands)	6/30/2020			12/31/2019			6/30/2019
Total allowance for loan losses	$	73,476		$	56,679		$	54,003
Allowance on purchased credit impaired ("PCI") loans	106			268			—
Allowance on purchased loans	25			—			—
Specific reserve	5,808			5,230			2,379
General reserve on originated loans	$	67,537		$	51,181		$	51,624
Total loans	$	7,204,445		$	6,501,404		$	6,376,737
PCI loans	12,569			14,331			23,027
Purchased loans	440,803			548,436			671,574
Impaired commercial loans	91,724			77,459			50,225
Originated loans excluding impaired commercial loans	$	6,659,349		$	5,861,178		$	5,631,911
General reserve as a % of originated total loans less impaired commercial loans	1.01		%	0.87		%	0.92		%
General reserve as a % of originated total loans less impaired commercial loans (excluding PPP loans) (1)	1.10		%	N.A.			N.A.

(1) Excludes $543.1 million of PPP loans and $543,000 in related allowance.

The allowance for loan losses of $73.5 million at June 30, 2020 represented a $16.8 million, or 29.6%, increase compared to $56.7 million at December 31, 2019. This increase was largely the result of a $16.4 million increase in general reserves on originated total loans and a $578,000 increase in specific reserves. As of June 30, 2020, a $25,000 allowance had been established for performing acquired loans and a $106,000 allowance had been established for PCI loans. In addition to the established allowance related to acquired loans, as of June 30, 2020, these loans have a remaining purchase accounting discount of $7.8 million. The $16.4 million increase in general reserves was the result of the estimated increase in incurred losses as a result of the impact of the COVID-19 pandemic. This estimate was established based on consideration of Park's existing environmental loss factors, modification programs Park has put in place, and balances of high risk portfolios such as hotels, restaurants and strip shopping centers. Much is still unknown about the long-term economic impact of the COVID-19 pandemic and management will continue to evaluate this estimate of incurred losses as new information becomes available.

12

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Park cautions that any forward-looking statements contained in this Current Report on Form 8-K or made by management of Park are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance.  The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties.  Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements.  Risks and uncertainties that could cause actual results to differ materially include, without limitation: the ever-changing effects of the novel coronavirus (COVID-19) pandemic - - the duration, extent and severity of which are impossible to predict - - on economies (local, national and international) and markets, and on our customers, counterparties, employees and third-party service providers, as well as the effects of various responses of governmental and nongovernmental authorities to the COVID-19 pandemic, including actions directed toward the containment of the COVID-19 pandemic and stimulus packages; Park's ability to execute our business plan successfully and within the expected timeframe as well as Park's ability to manage strategic initiatives; general economic and financial market conditions, specifically in the real estate markets and the credit markets, either nationally or in the states in which Park and our subsidiaries do business, may experience a slowing in addition to continuing residual effects of prior recessionary conditions, resulting in adverse impacts on the demand for loan, deposit and other financial services, delinquencies, defaults and counterparties' inability to meet credit and other obligations and the possible impairment of collectability of loans; higher default rates on loans made to our customers due to the COVID-19 pandemic and its impact on our customers' operations and financial condition; changes in interest rates and prices as well as disruption in the liquidity and functioning of U.S. financial markets, as a result of the COVID-19 pandemic and reactions thereto, may adversely impact prepayment penalty income, mortgage banking income, income from fiduciary activities, the value of securities, loans, deposits and other financial instruments and the interest rate sensitivity of our consolidated balance sheet as well as reduce interest margins and impact loan demand; changes in consumer spending, borrowing and saving habits, whether due to changes in retail distribution strategies, consumer preferences and behavior, changes in business and economic conditions (including as a result of the COVID-19 pandemic and reactions thereto), legislative and regulatory initiatives (including those undertaken in response to the COVID-19 pandemic), or other factors may be different than anticipated; changes in unemployment may be different than anticipated in light of the impacts of the COVID-19 pandemic; changes in customers', suppliers', and other counterparties' performance and creditworthiness may be different than anticipated in light of the impacts of the COVID-19 pandemic; the adequacy of our internal controls and risk management program in the event of changes in the market, economic, operational (including those which may result from more of our associates working remotely), asset/liability repricing, legal, compliance, strategic, cybersecurity, liquidity, credit and interest rate risks associated with Park's business; disruption in the liquidity and other functioning of U.S. financial markets; our liquidity requirements could be adversely affected by changes to regulations governing bank and bank holding company capital and liquidity standards as well as by changes in our assets and liabilities; competitive pressures among financial services organizations could increase significantly, including product and pricing pressures (which could in turn impact our credit spreads), customer acquisition and retention, changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and our ability to attract, develop and retain qualified banking professionals; customers could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding; uncertainty regarding the nature, timing, cost and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and our subsidiaries, including major reform of the regulatory oversight structure of the financial services industry and changes in laws and regulations concerning taxes, FDIC insurance premium levels, pensions, bankruptcy, consumer protection, rent regulation and housing, financial accounting and reporting, environmental protection, insurance, bank products and services, bank capital and liquidity standards, fiduciary standards, securities and other aspects of the financial services industry, specifically the reforms provided for in the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and the Basel III regulatory capital reforms, as well as regulations already adopted and which may be adopted in the future by the relevant regulatory agencies, including the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve Board, to implement the provisions of the CARES Act, the provisions of the Dodd-Frank Act, and the Basel III regulatory capital reforms; the effect of changes in accounting policies and practices, as may be adopted by the Financial Accounting Standards Board (the "FASB"), the SEC, the Public Company Accounting Oversight Board and other regulatory agencies, including the extent to which the new current expected credit loss ("CECL") accounting standard issued by the FASB in June 2016 and in accordance with the CARES Act, the adoption of which can be deferred by Park (with retrospective application as of January 1, 2020) until the earlier of: (1) the interim reporting period during which the national emergency concerning the COVID-19 outbreak declared by the President on March 15, 2020 terminates; or (2) December 31, 2020, may adversely affect Park's reported financial condition or results of operations; Park's assumptions and estimates used in applying critical accounting policies and modeling, including under the CECL model, when adopted by Park, which may prove unreliable, inaccurate or not predictive of actual results; significant changes in the tax laws, which may adversely affect the fair values of net deferred tax assets and obligations of state and political subdivisions held in Park's investment securities portfolio; the impact of our ability to anticipate and respond to technological changes on our ability to respond to customer needs and meet competitive demands; operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Park and our subsidiaries are highly dependent; the ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors and other service providers, resulting in failures or disruptions in customer account management, general ledger, deposit, loan, or other systems, including as a result of cyber attacks; the existence or exacerbation of general geopolitical instability and uncertainty; the effect of trade policies (including the impact of potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations and changes in the relationship of the U.S. and its global trading partners), monetary and other fiscal policies (including the impact of money supply and interest rate policies of the Federal Reserve Board) and other governmental policies of the U.S. federal government, including those implemented in response to the COVID-19 pandemic; unexpected changes in interest rates or disruptions in the financial markets related to COVID-19 or responses to the related health crisis; the impact on financial markets and the economy of any changes in the credit ratings of the U.S. Treasury obligations and other U.S. government - backed debt, as well as issues surrounding the levels of U.S., European and Asian

13

government debt and concerns regarding the creditworthiness of certain sovereign governments, supranationals and financial institutions in Europe and Asia; the uncertainty surrounding the actions to be taken to implement the referendum by United Kingdom voters to exit the European Union; our litigation and regulatory compliance exposure, including the costs and effects of any adverse developments in legal proceedings or other claims and the costs and effects of unfavorable resolution of regulatory and other governmental examinations or other inquiries; continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; the impact on Park's business, personnel, facilities or systems of losses related to acts of fraud, scams and schemes of third parties; the impact of widespread natural and other disasters, pandemics (including the COVID-19 pandemic), dislocations, civil unrest, terrorist activities or international hostilities on the economy and financial markets generally and on us or our counterparties specifically; any of the foregoing factors, or other cascading effects of the COVID-19 pandemic that are not currently foreseeable, could materially affect our business, including our customers' willingness to conduct banking transactions and their ability to pay on existing obligations; the effect of healthcare laws in the U.S. and potential changes for such laws, especially in light of the COVID-19 pandemic, which may increase our healthcare and other costs and negatively impact our operations and financial results; risk and uncertainties associated with Park's entry into new geographic markets with its recent acquisitions, including expected revenue synergies and cost savings from recent acquisitions not being fully realized or realized within the expected time frame; the discontinuation of the London Inter-Bank Offered Rate (LIBOR) and other reference rates which may result in increased expenses and litigation, and adversely impact the effectiveness of hedging strategies; and other risk factors relating to the banking industry as detailed from time to time in Park's reports filed with the SEC including those described in "Item 1A. Risk Factors" of Part I of Park's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in "Item 1A. Risk Factors" of Part II of Park's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020. Park does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement was made, or reflect the occurrence of unanticipated events, except to the extent required by law.

Item 8.01 - Other Events

Declaration of Cash Dividend

As reported in the Financial Results News Release, on July 27, 2020, the Park Board of Directors (the "Park Board") declared a $1.02 per common share quarterly cash dividend in respect of Park's common shares. These cash dividends are payable on September 10, 2020 to common shareholders of record as of the close of business on August 21, 2020. A copy of the Financial Results News Release is included as Exhibit 99.1 and the portion thereof addressing the declaration of the cash dividend by the Park Board is incorporated by reference herein.

Item 9.01 - Financial Statements and Exhibits.

(a)Not applicable

(b)Not applicable

(c)Not applicable

(d)Exhibits. The following exhibits are included with this Current Report on Form 8-K:

Exhibit No.  Description

99.1 News Release issued by Park National Corporation on July 27, 2020 addressing financial results for the three and six months ended June 30, 2020 and declaration of quarterly cash dividend

104 Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)

14

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PARK NATIONAL CORPORATION
Dated: July 27, 2020	By:	/s/ Brady T. Burt
		Brady T. Burt
		Chief Financial Officer, Secretary and Treasurer

15

EX-99.1

July 27, 2020 Exhibit 99.1

Park National Corporation reports financial results

for second quarter and first half of 2020

NEWARK, Ohio - Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the second quarter and first half of 2020 (three and six months ended June 30, 2020). Park's board of directors declared a quarterly cash dividend of $1.02 per common share, payable on September 10, 2020 to common shareholders of record as of August 21, 2020.

Park’s net income for the second quarter of 2020 was $29.5 million, a 33.1 percent increase from $22.2 million for the second quarter of 2019. Second quarter 2020 net income per diluted common share was $1.80, compared to $1.33 in the second quarter of 2019. Park's net income for the first half of 2020 was $51.9 million, an 8.9 percent increase from $47.6 million for the first half of 2019. Net income per diluted common share was $3.16 for the first half of 2020, compared to $2.94 for the first half of 2019.

Park's community-banking subsidiary, The Park National Bank, reported net income of $30.8 million for the second quarter of 2020, a 4.7 percent increase compared to $29.4 million for the same period of 2019. The bank reported net income of $56.7 million for the first half of 2020, compared to $56.1 million for the first half of 2019.

“Many families and businesses took the opportunity this spring to make improvements and investments into their property, through new or renovated homes and buildings or new vehicles and equipment. Our lenders were fully accessible and enjoyed connecting with customers in new ways during these unusual circumstances with physical distancing,” said Park Chairman David Trautman about the bank’s second quarter loan growth. “Despite economic turbulence that may still be ahead for our country as the effects of the pandemic issue continue, we will remain compassionate, creative, and steadfast in service to the communities that rely on us.”

Headquartered in Newark, Ohio, Park National Corporation had $9.7 billion in total assets (as of June 30, 2020). Park's banking operations are conducted through Park subsidiary The Park National Bank. Other Park subsidiaries are Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance), Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.

Complete financial tables are listed below.

Category: Earnings

Media contact: Bethany Lewis, 740.349.0421, bethany.lewis@parknationalbank.com

Investor contact: Brady Burt, 740.322.6844, brady.burt@parknationalbank.com

Park National Corporation, 50 N. Third Street, Newark, Ohio 43055

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Park cautions that any forward-looking statements contained in this News Release or made by management of Park are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties.  Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements.  Risks and uncertainties that could cause actual results to differ materially include, without limitation: the ever-changing effects of the novel coronavirus (COVID-19) pandemic - - the duration, extent and severity of which are impossible to predict - - on economies (local, national and international) and markets, and on our customers, counterparties, employees and third-party service providers, as well as the effects of various responses of governmental and nongovernmental authorities to the COVID-19 pandemic, including actions directed toward the containment of the COVID-19 pandemic and stimulus packages; Park's ability to execute our business plan successfully and within the expected timeframe as well as Park's ability to manage strategic initiatives; general economic and financial market conditions, specifically in the real estate markets and the credit markets, either nationally or in the states in which Park and our subsidiaries do business, may experience a slowing in addition to continuing residual effects of prior recessionary conditions, resulting in adverse impacts on the demand for loan, deposit and other financial services, delinquencies, defaults and counterparties' inability to meet credit and other obligations and the possible impairment of collectability of loans;

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

higher default rates on loans made to our customers due to the COVID-19 pandemic and its impact on our customers' operations and financial condition; changes in interest rates and prices as well as disruption in the liquidity and functioning of U.S. financial markets, as a result of the COVID-19 pandemic and reactions thereto, may adversely impact prepayment penalty income, mortgage banking income, income from fiduciary activities, the value of securities, loans, deposits and other financial instruments and the interest rate sensitivity of our consolidated balance sheet as well as reduce interest margins and impact loan demand; changes in consumer spending, borrowing and saving habits, whether due to changes in retail distribution strategies, consumer preferences and behavior, changes in business and economic conditions (including as a result of the COVID-19 pandemic and reactions thereto), legislative and regulatory initiatives (including those undertaken in response to the COVID-19 pandemic), or other factors may be different than anticipated; changes in unemployment may be different than anticipated in light of the impacts of the COVID-19 pandemic; changes in customers', suppliers', and other counterparties' performance and creditworthiness may be different than anticipated in light of the impacts of the COVID-19 pandemic; the adequacy of our internal controls and risk management program in the event of changes in the market, economic, operational (including those which may result from more of our associates working remotely), asset/liability repricing, legal, compliance, strategic, cybersecurity, liquidity, credit and interest rate risks associated with Park's business; disruption in the liquidity and other functioning of U.S. financial markets; our liquidity requirements could be adversely affected by changes to regulations governing bank and bank holding company capital and liquidity standards as well as by changes in our assets and liabilities; competitive pressures among financial services organizations could increase significantly, including product and pricing pressures (which could in turn impact our credit spreads), customer acquisition and retention, changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and our ability to attract, develop and retain qualified banking professionals; customers could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding; uncertainty regarding the nature, timing, cost and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and our subsidiaries, including major reform of the regulatory oversight structure of the financial services industry and changes in laws and regulations concerning taxes, FDIC insurance premium levels, pensions, bankruptcy, consumer protection, rent regulation and housing, financial accounting and reporting, environmental protection, insurance, bank products and services, bank capital and liquidity standards, fiduciary standards, securities and other aspects of the financial services industry, specifically the reforms provided for in the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and the Basel III regulatory capital reforms, as well as regulations already adopted and which may be adopted in the future by the relevant regulatory agencies, including the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve Board, to implement the provisions of the CARES Act, the provisions of the Dodd-Frank Act, and the Basel III regulatory capital reforms; the effect of changes in accounting policies and practices, as may be adopted by the Financial Accounting Standards Board (the "FASB"), the SEC, the Public Company Accounting Oversight Board and other regulatory agencies, including the extent to which the new current expected credit loss ("CECL") accounting standard issued by the FASB in June 2016 and in accordance with the CARES Act, the adoption of which can be deferred by Park (with retrospective application as of January 1, 2020) until the earlier of: (1) the interim reporting period during which the national emergency concerning the COVID-19 outbreak declared by the President on March 15, 2020 terminates; or (2) December 31, 2020, may adversely affect Park's reported financial condition or results of operations; Park's assumptions and estimates used in applying critical accounting policies and modeling, including under the CECL model, when adopted by Park, which may prove unreliable, inaccurate or not predictive of actual results; significant changes in the tax laws, which may adversely affect the fair values of net deferred tax assets and obligations of state and political subdivisions held in Park's investment securities portfolio; the impact of our ability to anticipate and respond to technological changes on our ability to respond to customer needs and meet competitive demands; operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Park and our subsidiaries are highly dependent; the ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors and other service providers, resulting in failures or disruptions in customer account management, general ledger, deposit, loan, or other systems, including as a result of cyber attacks; the existence or exacerbation of general geopolitical instability and uncertainty; the effect of trade policies (including the impact of potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations and changes in the relationship of the U.S. and its global trading partners), monetary and other fiscal policies (including the impact of money supply and interest rate policies of the Federal Reserve Board) and other governmental policies of the U.S. federal government, including those implemented in response to the COVID-19 pandemic; unexpected changes in interest rates or disruptions in the financial markets related to COVID-19 or responses to the related health crisis; the impact on financial markets and the economy of any changes in the credit ratings of the U.S. Treasury obligations and other U.S. government - backed debt, as well as issues surrounding the levels of U.S., European and Asian government debt and concerns regarding the creditworthiness of certain sovereign governments, supranationals and financial institutions in Europe and Asia; the uncertainty surrounding the actions to be taken to implement the referendum by United Kingdom voters to exit the European Union; our litigation and regulatory compliance exposure, including the costs and effects of any adverse developments in legal proceedings or other claims and the costs and effects of unfavorable resolution of regulatory and other governmental examinations or other inquiries; continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; the impact on Park's business, personnel, facilities or systems of losses related to acts of fraud, scams and schemes of third parties; the impact of widespread natural and other disasters, pandemics (including the COVID-19 pandemic), dislocations, civil unrest, terrorist activities or international hostilities on the economy and financial markets generally and on us or our counterparties specifically; any of the foregoing factors, or other cascading effects of the COVID-19 pandemic that are not currently foreseeable, could materially affect our business, including our customers' willingness to conduct banking transactions and their

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

ability to pay on existing obligations; the effect of healthcare laws in the U.S. and potential changes for such laws, especially in light of the COVID-19 pandemic, which may increase our healthcare and other costs and negatively impact our operations and financial results; risk and uncertainties associated with Park's entry into new geographic markets with its recent acquisitions, including expected revenue synergies and cost savings from recent acquisitions not being fully realized or realized within the expected time frame; the discontinuation of the London Inter-Bank Offered Rate (LIBOR) and other reference rates which may result in increased expenses and litigation, and adversely impact the effectiveness of hedging strategies; and other risk factors relating to the banking industry as detailed from time to time in Park's reports filed with the SEC including those described in "Item 1A. Risk Factors" of Part I of Park's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in "Item 1A. Risk Factors" of Part II of Park's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020. Park does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement was made, or reflect the occurrence of unanticipated events, except to the extent required by law.

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Financial Highlights
As of or for the three months ended June 30, 2020, March 31, 2020, and June 30, 2019
	2020			2020			2019			Percent change vs.
(in thousands, except share and per share data)	2nd QTR			1st QTR			2nd QTR			1Q '20		2Q '19
INCOME STATEMENT:
Net interest income	$	81,186		$	76,283		$	75,851		6.4	%	7.0	%
Provision for loan losses	12,224			5,153			1,919			137.2	%	537.0	%
Other income	30,964			22,486			22,808			37.7	%	35.8	%
Other expense	64,799			66,276			70,192			(2.2)	%	(7.7)	%
Income before income taxes	$	35,127		$	27,340		$	26,548		28.5	%	32.3	%
Income taxes	5,622			4,968			4,385			13.2	%	28.2	%
Net income	$	29,505		$	22,372		$	22,163		31.9	%	33.1	%
MARKET DATA:
Earnings per common share - basic (b)	$	1.81		$	1.37		$	1.34		32.1	%	35.1	%
Earnings per common share - diluted (b)	1.80			1.36			1.33			32.4	%	35.3	%
Cash dividends declared per common share	1.02			1.22			1.01			(16.4)	%	1.0	%
Book value per common share at period end	61.46			60.25			56.92			2.0	%	8.0	%
Market price per common share at period end	70.38			77.64			99.39			(9.4)	%	(29.2)	%
Market capitalization at period end	1,146,942			1,265,180			1,631,741			(9.3)	%	(29.7)	%
Weighted average common shares - basic (a)	16,296,427			16,303,602			16,560,545			—	%	(1.6)	%
Weighted average common shares - diluted (a)	16,375,434			16,425,881			16,642,571			(0.3)	%	(1.6)	%
Common shares outstanding at period end	16,296,425			16,295,461			16,417,562			—	%	(0.7)	%
PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)	1.26		%	1.04		%	1.04		%	21.2	%	21.2	%
Return on average shareholders' equity (a)(b)	11.89		%	9.16		%	9.49		%	29.8	%	25.3	%
Yield on loans	4.63		%	5.02		%	5.23		%	(7.8)	%	(11.5)	%
Yield on investment securities	2.76		%	2.72		%	2.78		%	1.5	%	(0.7)	%
Yield on money market instruments	0.10		%	1.12		%	2.64		%	(91.1)	%	(96.2)	%
Yield on interest earning assets	4.14		%	4.57		%	4.76		%	(9.4)	%	(13.0)	%
Cost of interest bearing deposits	0.36		%	0.81		%	1.04		%	(55.6)	%	(65.4)	%
Cost of borrowings	1.33		%	2.08		%	2.15		%	(36.1)	%	(38.1)	%
Cost of paying interest bearing liabilities	0.43		%	0.90		%	1.16		%	(52.2)	%	(62.9)	%
Net interest margin (g)	3.84		%	3.93		%	3.92		%	(2.3)	%	(2.0)	%
Efficiency ratio (g)	57.41		%	66.61		%	70.61		%	(13.8)	%	(18.7)	%
OTHER RATIOS (NON-GAAP):
Tangible book value per share (d)	$	51.04		$	49.79		$	46.30		2.5	%	10.2	%
Note: Explanations for footnotes (a) - (i) are included at the end of the financial tables in the "Financial Reconciliations" section.

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Financial Highlights (continued)
As of or for the three months ended June 30, 2020, March 31, 2020, and June 30, 2019
										Percent change vs.
(in thousands, except ratios)	June 30, 2020			March 31, 2020			June 30, 2019			1Q '20		2Q '19
BALANCE SHEET:
Investment securities	$	1,153,186		$	1,253,087		$	1,396,530		(8.0)	%	(17.4)	%
Loans	7,204,445			6,522,519			6,376,737			10.5	%	13.0	%
Allowance for loan losses	73,476			61,503			54,003			19.5	%	36.1	%
Goodwill and other intangible assets	169,905			170,512			174,288			(0.4)	%	(2.5)	%
Other real estate owned (OREO)	1,356			3,600			3,839			(62.3)	%	(64.7)	%
Total assets	9,712,994			8,719,291			8,657,453			11.4	%	12.2	%
Total deposits	8,161,900			7,290,133			7,032,120			12.0	%	16.1	%
Borrowings	444,410			348,373			595,578			27.6	%	(25.4)	%
Total shareholders' equity	1,001,594			981,877			934,432			2.0	%	7.2	%
Tangible equity (d)	831,689			811,365			760,144			2.5	%	9.4	%
Total nonperforming loans	126,044			119,311			86,833			5.6	%	45.2	%
Total nonperforming assets	130,999			126,510			94,168			3.5	%	39.1	%
ASSET QUALITY RATIOS:
Loans as a % of period end total assets	74.17		%	74.81		%	73.66		%	(0.9)	%	0.7	%
Total nonperforming loans as a % of period end loans	1.75		%	1.83		%	1.36		%	(4.4)	%	28.7	%
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets	1.82		%	1.94		%	1.48		%	(6.2)	%	23.0	%
Allowance for loan losses as a % of period end loans	1.02		%	0.94		%	0.85		%	8.5	%	20.0	%
Net loan charge-offs	$	251		$	329		$	1,284		(23.7)	%	(80.5)	%
Annualized net loan charge-offs as a % of average loans (a)	0.01		%	0.02		%	0.08		%	(50.0)	%	(87.5)	%
CAPITAL & LIQUIDITY:
Total shareholders' equity / Period end total assets	10.31		%	11.26		%	10.79		%	(8.4)	%	(4.4)	%
Tangible equity (d) / Tangible assets (f)	8.72		%	9.49		%	8.96		%	(8.1)	%	(2.7)	%
Average shareholders' equity / Average assets (a)	10.61		%	11.31		%	10.92		%	(6.2)	%	(2.8)	%
Average shareholders' equity / Average loans (a)	14.30		%	15.15		%	14.79		%	(5.6)	%	(3.3)	%
Average loans / Average deposits (a)	88.59		%	89.90		%	91.03		%	(1.5)	%	(2.7)	%

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Financial Highlights
Six months ended June 30, 2020 and June 30, 2019
	2020			2019
(in thousands, except share and per share data and ratios)	Six months ended June 30			Six months ended June 30			Percent change vs '19
INCOME STATEMENT:
Net interest income	$	157,469		$	143,627		9.6	%
Provision for loan losses	17,377			4,417			293.4	%
Other income	53,450			44,833			19.2	%
Other expense	131,075			127,019			3.2	%
Income before income taxes	$	62,467		$	57,024		9.5	%
Income taxes	10,590			9,406			12.6	%
Net income	$	51,877		$	47,618		8.9	%
MARKET DATA:
Earnings per common share - basic (b)	$	3.18		$	2.96		7.4	%
Earnings per common share - diluted (b)	3.16			2.94			7.5	%
Cash dividends declared per common share	2.24			2.22			0.9	%
Weighted average common shares - basic (a)	16,300,015			16,106,043			1.2	%
Weighted average common shares - diluted (a)	16,400,657			16,193,643			1.3	%
PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)	1.15		%	1.17		%	(1.7)	%
Return on average shareholders' equity (a)(b)	10.54		%	10.81		%	(2.5)	%
Yield on loans	4.81		%	5.19		%	(7.3)	%
Yield on investment securities	2.76		%	2.80		%	(1.4)	%
Yield on money market instruments	0.38		%	2.70		%	(85.9)	%
Yield on interest earning assets	4.35		%	4.71		%	(7.6)	%
Cost of interest bearing deposits	0.58		%	1.01		%	(42.6)	%
Cost of borrowings	1.69		%	2.08		%	(18.8)	%
Cost of paying interest bearing liabilities	0.66		%	1.13		%	(41.6)	%
Net interest margin (g)	3.89		%	3.89		%	—	%
Efficiency ratio (g)	61.72		%	66.87		%	(7.7)	%
ASSET QUALITY RATIOS:
Net loan charge-offs	$	580		$	1,926		(69.9)	%
Annualized net loan charge-offs as a % of average loans (a)	0.02		%	0.06		%	(66.7)	%
CAPITAL & LIQUIDITY:
Average shareholders' equity / Average assets (a)	10.95		%	10.82		%	1.2	%
Average shareholders' equity / Average loans (a)	14.71		%	14.77		%	(0.4)	%
Average loans / Average deposits (a)	89.21		%	90.91		%	(1.9)	%
Note: Explanations for footnotes (a) - (i) are included at the end of the financial tables in the "Financial Reconciliations" section.

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Consolidated Statements of Income
	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands, except share and per share data)	2020		2019		2020		2019
Interest income:
Interest and fees on loans	$	80,155	$	82,471	$	160,842	$	154,474
Interest on:
Obligations of U.S. Government, its agencies
and other securities - taxable	5,026		6,919		10,557		13,914
Obligations of states and political subdivisions - tax-exempt	2,151		2,308		4,351		4,525
Other interest income	113		528		604		1,169
Total interest income	87,445		92,226		176,354		174,082
Interest expense:
Interest on deposits:
Demand and savings deposits	1,507		8,811		7,849		15,904
Time deposits	3,346		4,357		7,631		8,134
Interest on borrowings	1,406		3,207		3,405		6,417
Total interest expense	6,259		16,375		18,885		30,455
Net interest income	81,186		75,851		157,469		143,627
Provision for loan losses	12,224		1,919		17,377		4,417
Net interest income after provision for loan losses	68,962		73,932		140,092		139,210
Other income	30,964		22,808		53,450		44,833
Other expense	64,799		70,192		131,075		127,019
Income before income taxes	35,127		26,548		62,467		57,024
Income taxes	5,622		4,385		10,590		9,406
Net income	$	29,505	$	22,163	$	51,877	$	47,618
Per common share:
Net income - basic	$	1.81	$	1.34	$	3.18	$	2.96
Net income - diluted	$	1.80	$	1.33	$	3.16	$	2.94
Weighted average shares - basic	16,296,427		16,560,545		16,300,015		16,106,043
Weighted average shares - diluted	16,375,434		16,642,571		16,400,657		16,193,643
Cash dividends declared	$	1.02	$	1.01	$	2.24	$	2.22

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Consolidated Balance Sheets
(in thousands, except share data)	June 30, 2020		December 31, 2019
Assets
Cash and due from banks	$	136,178	$	135,567
Money market instruments	597,316		24,389
Investment securities	1,153,186		1,279,507
Loans	7,204,445		6,501,404
Allowance for loan losses	(73,476)		(56,679)
Loans, net	7,130,969		6,444,725
Bank premises and equipment, net	81,760		73,322
Goodwill and other intangible assets	169,905		171,118
Other real estate owned	1,356		4,029
Other assets	442,324		425,720
Total assets	$	9,712,994	$	8,558,377
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing	$	2,518,437	$	1,959,935
Interest bearing	5,643,463		5,092,677
Total deposits	8,161,900		7,052,612
Borrowings	444,410		438,157
Other liabilities	105,090		98,594
Total liabilities	$	8,711,400	$	7,589,363
Shareholders' Equity:
Preferred shares (200,000 shares authorized; no shares outstanding at June 30, 2020 and December 31, 2019)	$	—	$	—
Common shares (No par value; 20,000,000 shares authorized; 17,623,185 shares issued at June 30, 2020 and 17,623,199 shares issued at December 31, 2019)	457,966		459,389
Accumulated other comprehensive income (loss), net of taxes	13,861		(9,589)
Retained earnings	662,311		646,847
Treasury shares (1,326,760 shares at June 30, 2020 and 1,276,757 shares at December 31, 2019)	(132,544)		(127,633)
Total shareholders' equity	$	1,001,594	$	969,014
Total liabilities and shareholders' equity	$	9,712,994	$	8,558,377

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands)	2020		2019		2020		2019
Assets
Cash and due from banks	$	134,386	$	127,115	$	133,208	$	122,485
Money market instruments	461,055		80,239		318,930		87,212
Investment securities	1,197,445		1,413,309		1,230,948		1,401,641
Loans	6,981,783		6,332,167		6,731,960		6,012,446
Allowance for loan losses	(62,387)		(53,849)		(60,001)		(53,124)
Loans, net	6,919,396		6,278,318		6,671,959		5,959,322
Bank premises and equipment, net	80,096		71,253		77,509		66,079
Goodwill and other intangible assets	170,303		165,311		170,606		142,587
Other real estate owned	2,765		4,183		3,282		4,277
Other assets	442,819		436,767		437,585		422,899
Total assets	$	9,408,265	$	8,576,495	$	9,044,027	$	8,206,502
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing	$	2,400,809	$	1,887,335	$	2,175,400	$	1,809,213
Interest bearing	5,480,366		5,068,709		5,370,376		4,804,076
Total deposits	7,881,175		6,956,044		7,545,776		6,613,289
Borrowings	425,349		597,448		405,930		622,414
Other liabilities	103,453		86,377		102,189		82,853
Total liabilities	$	8,409,977	$	7,639,869	$	8,053,895	$	7,318,556
Shareholders' Equity:
Preferred shares	$	—	$	—	$	—	$	—
Common shares	456,830		455,895		458,146		407,533
Accumulated other comprehensive income (loss), net of taxes	10,756		(36,825)		5,331		(41,655)
Retained earnings	663,290		624,995		658,877		623,291
Treasury shares	(132,588)		(107,439)		(132,222)		(101,223)
Total shareholders' equity	$	998,288	$	936,626	$	990,132	$	887,946
Total liabilities and shareholders' equity	$	9,408,265	$	8,576,495	$	9,044,027	$	8,206,502

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters
	2020		2020		2019		2019		2019
(in thousands, except per share data)	2nd QTR		1st QTR		4th QTR		3rd QTR		2nd QTR
Interest income:
Interest and fees on loans	$	80,155	$	80,687	$	82,698	$	84,213	$	82,471
Interest on:
Obligations of U.S. Government, its agencies and other securities - taxable	5,026		5,531		5,973		6,326		6,919
Obligations of states and political subdivisions - tax-exempt	2,151		2,200		2,205		2,225		2,308
Other interest income	113		491		953		1,825		528
Total interest income	87,445		88,909		91,829		94,589		92,226
Interest expense:
Interest on deposits:
Demand and savings deposits	1,507		6,342		7,795		9,649		8,811
Time deposits	3,346		4,285		4,666		4,694		4,357
Interest on borrowings	1,406		1,999		2,359		3,145		3,207
Total interest expense	6,259		12,626		14,820		17,488		16,375
Net interest income	81,186		76,283		77,009		77,101		75,851
Provision for (recovery of) loan losses	12,224		5,153		(213)		1,967		1,919
Net interest income after provision for (recovery of) loan losses	68,962		71,130		77,222		75,134		73,932
Other income	30,964		22,486		24,224		28,136		22,808
Other expense	64,799		66,276		71,231		65,738		70,192
Income before income taxes	35,127		27,340		30,215		37,532		26,548
Income taxes	5,622		4,968		6,279		6,386		4,385
Net income	$	29,505	$	22,372	$	23,936	$	31,146	$	22,163
Per common share:
Net income - basic	$	1.81	$	1.37	$	1.46	$	1.90	$	1.34
Net income - diluted	$	1.80	$	1.36	$	1.45	$	1.89	$	1.33

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Detail of other income and other expense - Linked Quarters
	2020		2020		2019		2019		2019
(in thousands)	2nd QTR		1st QTR		4th QTR		3rd QTR		2nd QTR
Other income:
Income from fiduciary activities	$	6,793	$	7,113	$	7,268	$	6,842	$	6,935
Service charges on deposit accounts	1,676		2,528		2,757		2,864		2,655
Other service income	8,758		3,766		4,382		4,260		4,040
Debit card fee income	5,560		4,960		5,341		5,313		5,227
Bank owned life insurance income	1,179		1,248		1,158		1,107		1,286
ATM fees	438		412		446		482		460
Gain (loss) on the sale of OREO, net	841		(196)		2		(53)		(159)
Net gain (loss) on the sale of investment securities	3,313		—		—		186		(607)
(Loss) gain on equity securities, net	(977)		(973)		(191)		3,335		232
Other components of net periodic benefit income	1,988		1,988		1,183		1,183		1,183
Miscellaneous	1,395		1,640		1,878		2,617		1,556
Total other income	$	30,964	$	22,486	$	24,224	$	28,136	$	22,808
Other expense:
Salaries	$	30,699	$	28,429	$	30,903	$	30,713	$	32,093
Employee benefits	9,080		10,043		8,973		10,389		9,014
Occupancy expense	3,256		3,480		3,355		3,226		3,223
Furniture and equipment expense	4,850		4,319		4,319		4,177		4,386
Data processing fees	2,577		2,492		2,777		2,935		2,905
Professional fees and services	6,901		7,066		10,503		6,702		10,106
Marketing	1,136		1,486		1,468		1,604		1,455
Insurance	1,477		1,550		317		276		1,381
Communication	874		1,155		1,256		1,387		1,375
State tax expense	1,116		1,145		1,024		746		1,054
Amortization of intangible assets	607		606		623		741		702
Miscellaneous	2,226		4,505		5,713		2,842		2,498
Total other expense	$	64,799	$	66,276	$	71,231	$	65,738	$	70,192

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Asset Quality Information
							Year ended December 31,
(in thousands, except ratios)	June 30, 2020			March 31, 2020			2019			2018			2017			2016
Allowance for loan losses:
Allowance for loan losses, beginning of period	$	61,503		$	56,679		$	51,512		$	49,988		$	50,624		$	56,494
Charge-offs	2,130			2,685			11,177			13,552			19,403			20,799
Recoveries	1,879			2,356			10,173			7,131			10,210			20,030
Net charge-offs	251			329			1,004			6,421			9,193			769
Provision for (recovery of) loan losses	12,224			5,153			6,171			7,945			8,557			(5,101)
Allowance for loan losses, end of period	$	73,476		$	61,503		$	56,679		$	51,512		$	49,988		$	50,624
General reserve trends:
Allowance for loan losses, end of period	$	73,476		$	61,503		$	56,679		$	51,512		$	49,988		$	50,624
Allowance on purchased credit impaired ("PCI") loans	106			119			268			—			—			—
Allowance on purchased loans	25			—			—			—			—			—
Specific reserves	5,808			5,531			5,230			2,273			684			548
General reserves on originated loans	$	67,537		$	55,853		$	51,181		$	49,239		$	49,304		$	50,076
Total loans	$	7,204,445		$	6,522,519		$	6,501,404		$	5,692,132		$	5,372,483		$	5,271,857
PCI loans	12,569			13,765			14,331			3,943			—			—
Purchased loans	440,803			489,843			548,436			225,029			—			—
Impaired commercial loans	91,724			85,646			77,459			48,135			56,545			70,415
Originated loans excluding impaired commercial loans	$	6,659,349		$	5,933,265		$	5,861,178		$	5,415,025		$	5,315,938		$	5,201,442
Asset Quality Ratios:
Net charge-offs as a % of average loans (annualized)	0.01		%	0.02		%	0.02		%	0.12		%	0.17		%	0.02		%
Allowance for loan losses as a % of period end loans	1.02		%	0.94		%	0.87		%	0.90		%	0.93		%	0.96		%
General reserve as a % of originated total loans less impaired commercial loans	1.01		%	0.94		%	0.87		%	0.91		%	0.93		%	0.96		%
General reserves as a % of originated total loans less impaired commercial loans (excluding PPP loans)	1.10		%	N.A.			N.A.			N.A.			N.A.			N.A.
Nonperforming assets:
Nonaccrual loans	$	100,406		$	90,354		$	90,080		$	67,954		$	72,056		$	87,822
Accruing troubled debt restructurings	23,948			27,168			21,215			15,173			20,111			18,175
Loans past due 90 days or more	1,690			1,789			2,658			2,243			1,792			2,086
Total nonperforming loans	$	126,044		$	119,311		$	113,953		$	85,370		$	93,959		$	108,083
Other real estate owned - Park National Bank	427			2,671			3,100			2,788			6,524			6,025
Other real estate owned - SEPH	929			929			929			1,515			7,666			7,901
Other nonperforming assets - Park National Bank	3,599			3,599			3,599			3,464			4,849			—
Total nonperforming assets	$	130,999		$	126,510		$	121,581		$	93,137		$	112,998		$	122,009
Percentage of nonaccrual loans to period end loans	1.39		%	1.39		%	1.39		%	1.19		%	1.34		%	1.67		%
Percentage of nonperforming loans to period end loans	1.75		%	1.83		%	1.75		%	1.50		%	1.75		%	2.05		%
Percentage of nonperforming assets to period end loans	1.82		%	1.94		%	1.87		%	1.64		%	2.10		%	2.31		%
Percentage of nonperforming assets to period end total assets	1.35		%	1.45		%	1.42		%	1.19		%	1.50		%	1.63		%

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Asset Quality Information (continued)
					Year ended December 31,
(in thousands, except ratios)	June 30, 2020		March 31, 2020		2019		2018		2017		2016
New nonaccrual loan information:
Nonaccrual loans, beginning of period	$	90,354	$	90,080	$	67,954	$	72,056	$	87,822	$	95,887
New nonaccrual loans	21,995		21,651		81,009		76,611		58,753		74,786
Resolved nonaccrual loans	11,943		21,377		58,883		80,713		74,519		82,851
Nonaccrual loans, end of period	$	100,406	$	90,354	$	90,080	$	67,954	$	72,056	$	87,822
Impaired commercial loan portfolio information (period end):
Unpaid principal balance	$	92,374	$	86,379	$	78,178	$	59,381	$	66,585	$	95,358
Prior charge-offs	650		733		719		11,246		10,040		24,943
Remaining principal balance	91,724		85,646		77,459		48,135		56,545		70,415
Specific reserves	5,808		5,531		5,230		2,273		684		548
Book value, after specific reserves	$	85,916	$	80,115	$	72,229	$	45,862	$	55,861	$	69,867

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS
	THREE MONTHS ENDED									SIX MONTHS ENDED
(in thousands, except share and per share data)	June 30, 2020			March 31, 2020			June 30, 2019			June 30, 2020			June 30, 2019
Net interest income	$	81,186		$	76,283		$	75,851		$	157,469		$	143,627
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions	1,301			1,378			1,606			2,679			1,872
less interest income on former Vision Bank relationships	266			77			—			343			7
Net interest income - adjusted	$	79,619		$	74,828		$	74,245		$	154,447		$	141,748
Provision for loan losses	$	12,224		$	5,153		$	1,919		$	17,377		$	4,417
less recoveries on former Vision Bank relationships	(685)			(764)			(65)			(1,449)			(165)
Provision for loan losses - adjusted	$	12,909		$	5,917		$	1,984		$	18,826		$	4,582
Other income	$	30,964		$	22,486		$	22,808		$	53,450		$	44,833
less net gain (loss) on sale of former Vision Bank OREO properties	837			—			(139)			837			(139)
less rebranding initiative related expenses	(274)			—			—			(274)			—
less net gain (loss) on the sale of debt securities in the ordinary course of business	3,313			—			(607)			3,313			(607)
Other income - adjusted	$	27,088		$	22,486		$	23,554		$	49,574		$	45,579
Other expense	$	64,799		$	66,276		$	70,192		$	131,075		$	127,019
less merger-related expenses related to NewDominion and Carolina Alliance acquisitions	214			243			6,058			457			6,334
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions	607			606			702			1,213			991
less FHLB prepayment penalty	—			1,793			—			1,793			—
less rebranding initiative related expenses	138			270			162			408			202
less COVID-19 related expenses	1,919			262			—			2,181			—
Other expense - adjusted	$	61,921		$	63,102		$	63,270		$	125,023		$	119,492
Tax effect of adjustments to net income identified above (i)	$	(683)		$	201		$	1,259		$	(482)		$	1,308
Net income - reported	$	29,505		$	22,372		$	22,163		$	51,877		$	47,618
Net income - adjusted	$	26,938		$	23,126		$	26,901		$	50,064		$	52,539
Diluted EPS	$	1.80		$	1.36		$	1.33		$	3.16		$	2.94
Diluted EPS, adjusted (h)	$	1.65		$	1.41		$	1.62		$	3.05		$	3.24
Annualized return on average assets (a)(b)	1.26		%	1.04		%	1.04		%	1.15		%	1.17		%
Annualized return on average assets, adjusted (a)(b)(h)	1.15		%	1.07		%	1.26		%	1.11		%	1.29		%
Annualized return on average tangible assets (a)(b)(e)	1.28		%	1.06		%	1.06		%	1.18		%	1.19		%
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)	1.17		%	1.09		%	1.28		%	1.13		%	1.31		%
Annualized return on average shareholders' equity (a)(b)	11.89		%	9.16		%	9.49		%	10.54		%	10.81		%
Annualized return on average shareholders' equity, adjusted (a)(b)(h)	10.85		%	9.47		%	11.52		%	10.17		%	11.93		%
Annualized return on average tangible equity (a)(b)(c)	14.33		%	11.09		%	11.53		%	12.73		%	12.88		%
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)	13.09		%	11.47		%	13.99		%	12.28		%	14.21		%
Efficiency ratio (g)	57.41		%	66.61		%	70.61		%	61.72		%	66.87		%
Efficiency ratio, adjusted (g)(h)	57.64		%	64.36		%	64.20		%	60.85		%	63.29		%
Annualized net interest margin (g)	3.84		%	3.93		%	3.92		%	3.89		%	3.89		%
Annualized net interest margin, adjusted (g)(h)	3.77		%	3.86		%	3.84		%	3.81		%	3.84		%
Note: Explanations for footnotes (a) - (i) are included at the end of the financial tables in this "Financial Reconciliations" section.

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Financial Reconciliations (continued)
(a) Averages are for the three months ended June 30, 2020, March 31, 2020, and June 30, 2019 and the six months ended June 30, 2020 and June 30, 2019.
(b) Reported measure uses net income.
(c) Net income for each period divided by average tangible equity during the period. Average tangible equity equals average shareholders' equity during the applicable period less average goodwill and other intangible assets during the applicable period.
RECONCILIATION OF AVERAGE SHAREHOLDERS' EQUITY TO AVERAGE TANGIBLE EQUITY:
	THREE MONTHS ENDED						SIX MONTHS ENDED
	June 30, 2020		March 31, 2020		June 30, 2019		June 30, 2020		June 30, 2019
AVERAGE SHAREHOLDERS' EQUITY	$	998,288	$	981,976	$	936,626	$	990,132	$	887,946
Less: Average goodwill and other intangible assets	170,303		170,909		165,311		170,606		142,587
AVERAGE TANGIBLE EQUITY	$	827,985	$	811,067	$	771,315	$	819,526	$	745,359
(d) Tangible equity divided by common shares outstanding at period end. Tangible equity equals total shareholders' equity less goodwill and other intangible assets, in each case at the end of the period.
RECONCILIATION OF TOTAL SHAREHOLDERS' EQUITY TO TANGIBLE EQUITY:
	June 30, 2020		March 31, 2020		June 30, 2019
TOTAL SHAREHOLDERS' EQUITY	$	1,001,594	$	981,877	$	934,432
Less: Goodwill and other intangible assets	169,905		170,512		174,288
TANGIBLE EQUITY	$	831,689	$	811,365	$	760,144
(e) Net income for each period divided by average tangible assets during the period. Average tangible assets equals average assets less average goodwill and other intangible assets, in each case during the applicable period.
RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS
	THREE MONTHS ENDED						SIX MONTHS ENDED
	June 30, 2020		March 31, 2020		June 30, 2019		June 30, 2020		June 30, 2019
AVERAGE ASSETS	$	9,408,265	$	8,679,789	$	8,576,495	$	9,044,027	$	8,206,502
Less: Average goodwill and other intangible assets	170,303		170,909		165,311		170,606		142,587
AVERAGE TANGIBLE ASSETS	$	9,237,962	$	8,508,880	$	8,411,184	$	8,873,421	$	8,063,915
(f) Tangible equity divided by tangible assets. Tangible assets equals total assets less goodwill and other intangible assets, in each case at the end of the period.
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:
	June 30, 2020		March 31, 2020		June 30, 2019
TOTAL ASSETS	$	9,712,994	$	8,719,291	$	8,657,453
Less: Goodwill and other intangible assets	169,905		170,512		174,288
TANGIBLE ASSETS	$	9,543,089	$	8,548,779	$	8,483,165
(g) Efficiency ratio is calculated by dividing total other expense by the sum of fully taxable equivalent net interest income and other income. Fully taxable equivalent net interest income reconciliation is shown assuming a 21% corporate federal income tax rate. Additionally, net interest margin is calculated on a fully taxable equivalent basis by dividing fully taxable equivalent net interest income by average interest earning assets.
RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
	THREE MONTHS ENDED						SIX MONTHS ENDED
	June 30, 2020		March 31, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Interest income	$	87,445	$	88,909	$	92,226	$	176,354	$	174,082
Fully taxable equivalent adjustment	723		725		752		1,448		1,486
Fully taxable equivalent interest income	$	88,168	$	89,634	$	92,978	$	177,802	$	175,568
Interest expense	6,259		12,626		16,375		18,885		30,455
Fully taxable equivalent net interest income	$	81,909	$	77,008	$	76,603	$	158,917	$	145,113
(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, provision for (recovery of) loan losses, other income and other expense above.
(i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate.

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

XML

DEI Document	Jul. 27, 2020
Document Information [Line Items]
City Area Code	(740)
Entity Registrant Name	PARK NATIONAL CORPORATION
Entity Address, Address Line One	50 North Third Street,
Entity Address, Address Line Two	P.O. Box 3500,
Entity Address, City or Town	Newark,
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	43058-3500
Entity Incorporation, State or Country Code	OH
Document Period End Date	Jul. 27, 2020
Document Type	8-K
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common shares, without par value
Trading Symbol	PRK
Entity Emerging Growth Company	false
Amendment Flag	false
Document Fiscal Year Focus
Document Fiscal Period Focus
Entity Central Index Key	0000805676
Security Exchange Name	NYSEAMER
Entity File Number	1-13006
Entity Tax Identification Number	31-1179518
Local Phone Number	349-8451