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) January 25, 2021

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. ☐

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Item 2.02 - Results of Operations and Financial Condition.

On January 25, 2021, Park National Corporation (“Park”) issued a news release (the “Financial Results News Release”) announcing financial results for the three and twelve months ended December 31, 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 the return on average tangible equity, the return on average tangible assets, the tangible equity to tangible assets ratio and the 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 months ended and at December 31, 2020, September 30, 2020, and December 31, 2019 and the twelve months ended and at December 31, 2020 and December 31, 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 equal 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.

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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.

Paycheck Protection Program ("PPP") Loans

Park originated $543.1 million in loans as part of the PPP. These loans are not typical of Park's loan portfolio in that they are part of a specific government program to support businesses during the COVID-19 pandemic and are 100% guaranteed by the Small Business Administration ("SBA"). As such, management considers growth in the loan portfolio excluding PPP loans, the total allowance for loan losses on originated loans to total originated loans ratio (excluding PPP loans), and general reserve as a % of total originated loans (excluding acquisitions) less impaired commercial loans (excluding PPP loans) in addition to the related U.S. GAAP metrics which are not adjusted for PPP loans.

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 has offered various methods of support including loan modifications, payment deferral programs, participation in the CARES Act Paycheck Protection Program ("PPP"), planned participation in additional PPP loans authorized under the Consolidated Appropriations Act, 2021, and various other case by case accommodations. Park has implemented various physical 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 2020, Park provided calamity pay and special one-time bonuses to certain associates. The cost of the calamity pay and special bonuses amounted to $0.7 million and $3.6 million for the three month and twelve month periods ended December 31, 2020, respectively, and is included within salaries expense.

Paycheck Protection Program: Through December 31, 2020, Park had approved and funded 4,439 loans totaling $543.1 million under the PPP. These PPP loans had an average principal balance of $122,000. Of the $543.1 million in PPP loans, 21 loans totaling $68.2 million had a principal balance that was greater than $2 million. For its assistance in making and retaining the 4,439 loans, Park has received an aggregate of $20.2 million in fees from the SBA, of which $13.7 million were recognized within loan interest income during the twelve months ended December 31, 2020. Park funded the PPP loans with excess on-balance sheet liquidity. At December 31, 2020, the remaining balance of PPP loans was $337.1 million.

As of January 18, 2021, Park has submitted approximately 2,441 repayment requests on behalf of borrowers under the PPP to the SBA and has received $232.0 million in payments from the SBA.

During 2021, Park plans to offer additional PPP loans as authorized under the Consolidated Appropriations Act, 2021, signed

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into law on December 27, 2020.

Loan Modifications: During the twelve months ended December 31, 2020, Park had modified 5,005 consumer loans, with an aggregate balance of $103.5 million, and modified 1,399 commercial loans, with an aggregate balance of $563.7 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 six 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 current and will continue to accrue interest during the deferral period.

Detail of COVID-19 modifications on Park's loan portfolios during the twelve months ended December 31, 2020 follows:

(Dollars in thousands)	December 31, 2020 Total Balance		December 31, 2020 Balance Modified		Percent Modified
Commercial	$	4,116,124	$	563,707	13.7	%
Home equity	182,131		3,512		1.9	%
Installment	1,650,620		44,582		2.7	%
Real estate	1,213,820		53,713		4.4	%
Guardian Financial Service Company ("GFSC")	11,545		1,740		15.1	%
Other	3,545		—		—	%
Total Loans	$	7,177,785	$	667,254	9.3	%

Of the $667.3 million of COVID-19 modifications during the twelve months ended December 31, 2020, $10.1 million were currently greater than 30 days past due in accordance with the modified terms at December 31, 2020.

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Detail of COVID-19 modifications on selected commercial loan portfolios during the twelve months ended December 31, 2020 follows:

(Dollars in thousands)	December 31, 2020 Total Balance		December 31, 2020 Balance Modified		Percent Modified
Non-bank consumer finance companies	$	281,902	$	—	—	%
Hotel and accommodations	213,912		158,691		74.2	%
Restaurants and food service	47,967		10,654		22.2	%
Arts and recreation	43,738		13,304		30.4	%
Healthcare and social assistance	251,582		35,869		14.3	%
Strip shopping centers	248,736		70,186		28.2	%
Other real estate rental and leasing	1,189,978		158,229		13.3	%
PPP loans	337,090		—		—	%
Other commercial loans	1,501,219		116,774		7.8	%
Total commercial loans	$	4,116,124	$	563,707	13.7	%

Many of the initial interest only deferrals or principal and interest deferrals were for an initial period of three months. Park has received requests for additional deferrals. Loans which have had multiple COVID-19 modifications through December 31, 2020 are detailed below.

(Dollars in thousands)	December 31, 2020 Balance - Multiple Modifications		Weighted Average Risk Grade
Hotel and accommodations	$	61,602	4.95
Restaurants and food service	1,162		4.24
Arts and recreation	3,974		4.51
Strip shopping centers	1,884		4.00
Other real estate rental and leasing	6,166		5.87
Other commercial loans	18,436		5.16
Total commercial loans	$	93,224	5.00
Home equity	$	254	N.A.
Installment	6,338		N.A.
Real estate	15,489		N.A.
GFSC	974		N.A.
Other	—		N.A.
Total loans	$	116,279	N.A.

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Park considers a loan out of deferral when the first regular payment is due and that payment is subsequently made. The table below details the current status of loans with COVID-19 deferrals.

(Dollars in thousands)	December 31, 2020 Balance - Out of Deferral		December 31, 2020 Balance - In Deferral		Loans in Deferral as a Percent of Total Deferred		Loans in Deferral as a Percent of Total Loans
Hotel and accommodations	$	129,485	$	29,206	18.4	%	13.7	%
Restaurants and food service	10,582		72		0.7	%	0.2	%
Arts and recreation	12,550		754		5.7	%	1.7	%
Healthcare and social assistance	35,691		178		0.5	%	0.1	%
Strip shopping centers	70,186		—		—	%	—	%
Other real estate rental and leasing	153,089		5,140		3.2	%	0.4	%
Other commercial loans	105,311		11,463		9.8	%	0.8	%
Total commercial loans	$	516,894	$	46,813	8.3	%	1.1	%
Home equity	$	3,430	$	82	2.3	%	—	%
Installment	43,204		1,378		3.1	%	0.1	%
Real estate	49,809		3,904		7.3	%	0.3	%
GFSC	1,654		86		4.7	%	0.7	%
Total loans	$	614,991	$	52,263	7.8	%	0.7	%

Financial Results by Segment

The table below reflects the net income (loss) by segment for each quarter of 2020 and for the years ended December 31, 2020, 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)	Q4 2020		Q3 2020		Q2 2020		Q1 2020		2020		2019		2018
PNB	$	34,184	$	32,888	$	30,750	$	25,908	$	123,730	$	113,600	$	109,472
GFSC	372		332		323		112		1,139		762		521
All Other	10,644		(2,374)		(1,568)		(3,648)		3,054		(11,662)		394
Total Park	$	45,200	$	30,846	$	29,505	$	22,372	$	127,923	$	102,700	$	110,387

Net income for the twelve months ended December 31, 2020 of $127.9 million represented a $25.2 million, or 24.6%, increase compared to $102.7 million for the twelve months ended December 31, 2019. Net income for each of the three and twelve months ended December 31, 2020 and the three and twelve months December 31, 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.

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.

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The Park National Bank (PNB)

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

(In thousands)	Q4 2020		Q3 2020		Q2 2020		Q1 2020		2020		2019		2018
Net interest income	$	87,475	$	83,795	$	79,891	$	75,214	$	326,375	$	293,130	$	258,547
(Recovery of) provision for loan losses	(1,443)		13,839		12,883		5,534		30,813		8,356		7,569
Other income	34,311		35,430		31,009		23,481		124,231		92,392		88,981
Other expense	81,277		65,590		60,703		61,368		268,938		237,433		206,843
Income before income taxes	$	41,952	$	39,796	$	37,314	$	31,793	$	150,855	$	139,733	$	133,116
Income tax expense	7,768		6,908		6,564		5,885		27,125		26,133		23,644
Net income	$	34,184	$	32,888	$	30,750	$	25,908	$	123,730	$	113,600	$	109,472

Net interest income of $326.4 million for the twelve months ended December 31, 2020 represented a $33.2 million, or 11.3%, increase compared to $293.1 million for the twelve months ended December 31, 2019. The increase was a result of a $35.0 million decrease in interest expense, partially offset by a $1.8 million decrease in interest income.

The $1.8 million decrease in interest income was primarily due to a $10.2 million decrease in investment income, partially offset by a $8.4 million increase in interest income on loans. The decrease in investment income was partially the result of a $213.1 million decrease in average investments from $1.35 billion for the twelve months ended December 31, 2019 to $1.14 billion for the twelve months ended December 31, 2020. The decrease in investment income was also the result of a decrease in the yield on investments, which decreased 10 basis points to 2.66% for the twelve months ended December 31, 2020, compared to 2.76% for the twelve months ended December 31, 2019. The increase in interest income on loans was partially the result of a $786.0 million increase in average loans from $6.19 billion for the twelve months ended December 31, 2019, to $6.97 billion for the twelve months ended December 31, 2020. The increase in average loans was impacted by the addition of average PPP loans of approximately $352.6 million which also resulted in interest and fee income of $15.8 million for the year ended December 31, 2020. The increase in average loans was partially offset by the decrease in the yield on loans, which decreased 46 basis points to 4.66% for the twelve months ended December 31, 2020, compared to 5.12% for the twelve months ended December 31, 2019. Excluding the impact of PPP loan interest and fee income, the yield on loans was 4.67%, a decrease of 45 basis points, for the twelve months ended December 31, 2020, compared to 5.12% for the twelve months ended December 31, 2019. Interest income was impacted by 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 $30.6 million to interest income at PNB during the twelve months ended December 31, 2020, compared to $25.0 million for the twelve months ended December 31, 2019.

The $35.0 million decrease in interest expense was primarily due to an $29.5 million decrease in interest expense on deposits as well as a $5.5 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 60 basis points from 1.01% for the twelve months ended December 31, 2019 to 0.41% for the twelve months ended December 31, 2020. This was partially offset by a $209.1 million increase in average interest-bearing deposits from $5.03 billion for the twelve months ended December 31, 2019, to $5.24 billion for the twelve months ended December 31, 2020. The decrease in interest expense on borrowings was partially the result of a $129.2 million decrease in average borrowings from $533.1 million for the twelve months ended December 31, 2019, to $403.9 million for the twelve months ended December 31, 2020. The cost of borrowings also decreased by 69 basis points, from 2.10% for the twelve months ended December 31, 2019 to 1.41% for the twelve months ended December 31, 2020. Interest expense was impacted by the acquisition of Carolina Alliance. The Carolina Alliance Bank Division contributed an aggregate of $2.8 million to interest expense at PNB during the twelve months ended December 31, 2020 and $4.1 million during the twelve months ended December 31, 2019.

The provision for loan losses of $30.8 million for the twelve months ended December 31, 2020 represented an increase of $22.5 million, compared to $8.4 million for the twelve months ended December 31, 2019. Refer to the “Credit Metrics and (Recovery of) Provision for Loan Losses” section for additional details regarding the level of the (recovery of) provision for loan losses recognized in each period presented above.

Other income of $124.2 million for the twelve months ended December 31, 2020 represented an increase of $31.8 million, or 34.5%, compared to $92.4 million for the twelve months ended December 31, 2019. The $31.8 million increase was primarily related to a $21.6 million increase in other service income, which was primarily due to an increase in fee income from mortgage

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loan originations and investor rate locks; a $3.7 million increase in gain on sale of debt securities; a $3.2 million increase in other components of net periodic benefit income; a $1.9 million increase in debit card fee income; a $1.6 million increase in income from partnership investments; a $1.1 million increase in income from fiduciary activities; and a $946,000 increase in gain (loss) on sale of OREO, net. These increases were partially offset by a $2.4 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 $8.8 million to other income at PNB during the twelve months ended December 31, 2020 and $3.8 million during the twelve months ended December 31, 2019.

A summary of mortgage originations for the twelve months ended December 31, 2020 and 2019 follows. Of total mortgage originations shown below for 2020, refinances comprised 48.1% in the first quarter of 2020, 67.8% in the second quarter of 2020, 68.5% in the third quarter of 2020, 71.4% in the fourth quarter of 2020 and 66.7% for the twelve months ended December 31, 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, 41.3% in the third quarter of 2019, 47.6% in the fourth quarter of 2019 and 39.8% for the twelve months ended December 31, 2019.

(In thousands)	Q1 2020		Q2 2020		Q3 2020		Q4 2020		YTD 2020
Mortgage Origination Volume
Sold	$	85,030	$	248,339	$	355,755	$	325,841	$	1,014,965
Portfolio	56,018		64,351		61,227		99,077		280,673
Construction	33,109		33,754		40,560		29,825		137,248
Service released	3,794		2,362		2,275		2,950		11,381
Total mortgage originations	$	177,951	$	348,806	$	459,817	$	457,693	$	1,444,267
	Q1 2019		Q2 2019		Q3 2019		Q4 2019		YTD 2019
Mortgage Origination Volume
Sold	$	30,011	$	54,802	$	83,867	$	98,362	$	267,042
Portfolio	31,492		59,613		69,351		96,490		256,946
Construction	20,481		22,245		21,280		29,518		93,524
Service released	4,407		22,818		28,408		17,206		72,839
Total mortgage originations	$	86,391	$	159,478	$	202,906	$	241,576	$	690,351

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The table below reflects PNB's other expense for the twelve months ended December 31, 2020 and 2019.

(In thousands)	2020		2019		change		% change
Other expense:
Salaries	$	122,586	$	109,362	$	13,224	12.1	%
Employee benefits	36,282		36,017		265		0.7	%
Occupancy expense	13,571		12,555		1,016		8.1	%
Furniture and equipment expense	18,781		16,999		1,782		10.5	%
Data processing fees	11,653		10,589		1,064		10.0	%
Professional fees and services	24,444		22,056		2,388		10.8	%
Marketing	5,825		5,704		121		2.1	%
Insurance	5,804		2,489		3,315		133.2	%
Communication	3,985		5,193		(1,208)		(23.3)	%
State tax expense	3,293		3,016		277		9.2	%
Amortization of intangible assets	2,263		2,355		(92)		(3.9)	%
FHLB prepayment penalty	10,529		612		9,917		N.M.
Foundation contributions	3,000		1,500		1,500		100.0	%
Miscellaneous	6,922		8,986		(2,064)		(23.0)	%
Total other expense	$	268,938	$	237,433	$	31,505	13.3	%

Other expense of $268.9 million for the twelve months ended December 31, 2020 represented an increase of $31.5 million, or 13.3%, compared to $237.4 million for the twelve months ended December 31, 2019. The increase in salaries expense was primarily related to increases in base salary expense, severance related expenses, additional compensation incentives, including COVID-19 special one-time bonuses, vacation accruals and officer incentive compensation expense. The increase in employee benefits expense was primarily related to increased pension plan 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 and a write-down in the right-of-use lease asset related to branches that closed September 30, 2020. The increase in furniture and equipment expense was primarily related to increased expenses related to repairs and maintenance on equipment, which also included software maintenance and costs, as well as increased depreciation on furniture and equipment. The increase in data processing fees was related to increased mortgage processing costs, debit card processing costs and other data processing and software costs. The increase in professional fees and services was primarily related to increased title, appraisal and credit costs, increases in management and consulting fees and increases in other fees, partially offset by a $205,000 decrease in temporary wage expense. The increase in insurance expense was primarily due to a $2.2 million assessment credit which had been utilized for the FDIC expense for the twelve months ended December 31, 2019 (and not repeated in 2020), as well as an increase in the assessment base for the twelve months ended December 31, 2020, compared to the same period of 2019. The decrease in communications expense was primarily related to a change in statement mailing and production costs, which resulted in lower direct postage expense, but is more than offset by an increase in supply expense which is included in miscellaneous expense. The increase in the FHLB prepayment penalty was due to a $10.5 prepayment penalty on FHLB borrowings of $150 million repaid during the twelve months ended December 31, 2020. The increase in foundation contributions expense was due to a $3.0 million contribution during the twelve months ended December 31, 2020 compared to $1.5 million during the twelve months ended December 31, 2019. The decrease in miscellaneous expense was primarily related to a decrease in training and travel related expenses as well as decreased non loan related losses.

Other expense was impacted by the acquisition of Carolina Alliance. Of the $268.9 million of total other expense for the twelve months ended December 31, 2020, the Carolina Alliance Bank Division's total other expense was $19.4 million. Of the $237.4 million of total other expense for the twelve months ended December 31, 2019, the Carolina Alliance Bank Division's total other expense was $16.5 million.

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The table below reflects PNB's other expense less the impact of Carolina Alliance Bank Division for the twelve months ended December 31, 2020 and 2019. This table is provided to provide insight into changes in Park's expenses excluding the impact of acquisitions.

(In thousands)	2020		2019		change		% change
Other expense:
Salaries	$	113,571	$	102,003	$	11,568	11.3	%
Employee benefits	33,823		34,665		(842)		(2.4)	%
Occupancy expense	12,000		11,294		706		6.3	%
Furniture and equipment expense	17,923		16,351		1,572		9.6	%
Data processing fees	11,304		9,586		1,718		17.9	%
Professional fees and services	23,427		20,784		2,643		12.7	%
Marketing	5,633		5,365		268		5.0	%
Insurance	5,166		2,262		2,904		128.4	%
Communication	3,853		5,037		(1,184)		(23.5)	%
State tax expense	3,290		3,012		278		9.2	%
Amortization of intangible assets	1,149		1,234		(85)		(6.9)	%
FHLB prepayment penalty	10,529		612		9,917		N.M.
Foundation contributions	2,960		1,500		1,460		97.3	%
Miscellaneous	4,951		7,270		(2,319)		(31.9)	%
Total other expense	$	249,579	$	220,975	$	28,604	12.9	%

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

(In thousands)	December 31, 2020			December 31, 2019			% change from 12/31/19
Loans	$	7,165,840		$	6,481,644		10.56	%
Allowance for loan losses	84,321			54,692			54.17	%
Net loans	7,081,519			6,426,952			10.18	%
Investment securities	1,114,742			1,271,817			(12.35)	%
Total assets	9,236,915			8,521,537			8.39	%
Total deposits	7,820,983			7,125,111			9.77	%
Average assets (1)	9,198,141			8,425,536			9.17	%
Efficiency ratio (2)	59.31		%	61.12		%	(2.96)	%
Return on average assets	1.35		%	1.35		%	—	%

(1) Average assets for the twelve months ended December 31, 2020 and 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 $2.9 million for the year ended December 31, 2020, and $3.0 million for the year ended December 31, 2019.

Loans outstanding at December 31, 2020 were $7.17 billion, compared to $6.48 billion at December 31, 2019, an increase of $684.2 million, or 10.6%. Excluding $337.1 million of PPP loans, loans outstanding were $6.83 billion at December 31, 2020,

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compared to $6.48 billion at December 31, 2019, an increase of $347.1 million, or 5.4%. The table below breaks out the change in loans outstanding, by loan type.

(In thousands)	December 31, 2020		December 31, 2019		change from 12/31/19		% change from 12/31/19
Home equity	$	182,131	$	224,857	$	(42,726)	(19.0)	%
Installment	1,650,620		1,431,197		219,423		15.3	%
Real estate	1,213,820		1,275,154		(61,334)		(4.8)	%
Commercial (excluding PPP)	3,778,634		3,545,467		233,167		6.6	%
PPP loans	337,090		—		337,090		N.M.
Other	3,545		4,969		(1,424)		(28.7)	%
Total loans	$	7,165,840	$	6,481,644	$	684,196	10.6	%

PNB's allowance for loan losses increased by $29.6 million, or 54.2%, to $84.3 million at December 31, 2020, compared to $54.7 million at December 31, 2019. Net charge-offs were $1.2 million, or 0.02% of total average loans, for the twelve months ended December 31, 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 (Recovery of) Provision for Loan Losses” section for additional information regarding PNB's loan portfolio and the level of (recovery of) provision for loan losses recognized in each period presented.

Total deposits at December 31, 2020 were $7.82 billion, compared to $7.13 billion at December 31, 2019, an increase of $695.9 million, or 9.8%. During the twelve months ended December 31, 2020, Park made the decision to participate in a one-way sell (OWS) program in order to manage the balance sheet. At December 31, 2020, Park had $710.1 million in OWS insured cash sweep deposits which were off-balance sheet. Total deposits would have increased $1.4 billion, or 19.7%, compared to December 31, 2019 had the $710.1 million remained on the balance sheet. The table below breaks out the change in deposit balances, by deposit type.

(In thousands)	December 31, 2020		December 31, 2019		change from 12/31/19		% change from 12/31/19
Non-interest bearing deposits	$	2,978,005	$	2,036,359	$	941,646	46.2	%
Transaction accounts	1,381,479		1,628,741		(247,262)		(15.2)	%
Savings	2,596,926		2,320,880		276,046		11.9	%
Certificates of deposits	864,573		1,139,131		(274,558)		(24.1)	%
Total deposits	$	7,820,983	$	7,125,111	$	695,872	9.8	%

Guardian Financial Services Company (GFSC)

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

(In thousands)	Q4 2020		Q3 2020		Q2 2020		Q1 2020		2020		2019		2018
Net interest income	$	715	$	893	$	1,025	$	1,152	$	3,785	$	5,013	$	5,048
(Recovery of) provision for loan losses	(142)		34		27		277		196		754		1,328
Other income	101		60		62		32		255		170		187
Other expense	487		499		651		765		2,402		3,478		3,245
Income before income taxes	$	471	$	420	$	409	$	142	$	1,442	$	951	$	662
Income tax expense	99		88		86		30		303		189		141
Net income	$	372	$	332	$	323	$	112	$	1,139	$	762	$	521

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

(In thousands)	December 31, 2020			December 31, 2019			% change from 12/31/19
Loans	$	12,757		$	28,143		(54.67)	%
Allowance for loan losses	1,354			1,987			(31.86)	%
Net loans	11,403			26,156			(56.40)	%
Total assets	12,431			27,593			(54.95)	%
Average assets (1)	20,896			29,119			(28.24)	%
Return on average assets	5.45		%	2.62		%	108.02	%

(1) Average assets for the twelve months ended December 31, 2020 and 2019.

All Other

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

(In thousands)	Q4 2020		Q3 2020		Q2 2020		Q1 2020		2020		2019		2018
Net interest (expense) income	$	(1,869)	$	(848)	$	270	$	(83)	$	(2,530)	$	(406)	$	3,303
Recovery of loan losses	(17,574)		(37)		(686)		(658)		(18,955)		(2,939)		(952)
Other income (loss)	1,244		1,068		(107)		(1,027)		1,178		4,631		11,933
Other expense	3,897		3,770		3,445		4,143		15,255		23,077		18,667
Net income (loss) before income tax benefit	$	13,052	$	(3,513)	$	(2,596)	$	(4,595)	$	2,348	$	(15,913)	$	(2,479)
Income tax expense (benefit)	2,408		(1,139)		(1,028)		(947)		(706)		(4,251)		(2,873)
Net income (loss)	$	10,644	$	(2,374)	$	(1,568)	$	(3,648)	$	3,054	$	(11,662)	$	394

The net interest (expense) income 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. The net interest (expense) income for All Other included for the three and twelve months ended December 31, 2020 and for the three months ended September 30, 2020, interest expense on $175.0 million aggregate principal amount of 4.50% Fixed-to-Floating Rate Subordinated Notes due 2030 issued in August 2020.

Net interest (expense) income reflected net interest expense of $2.5 million for the twelve months ended December 31, 2020, compared to net interest expense of $406,000 for the twelve months ended December 31, 2019. The change was largely the result of an increase in borrowing interest expense, partially offset by an increase in loan interest income related to payment collections at SEPH.

SEPH had net recoveries of $19.0 million for the twelve months ended December 31, 2020, compared to net recoveries of $2.9 million for the twelve months ended December 31, 2019.

All Other had other income of $1.2 million for the twelve months ended December 31, 2020, compared to other income of $4.6 million for the twelve months ended December 31, 2019. The change was largely due to a $4.0 million decrease in income related to partnership investments, which went from a $3.9 million gain for the twelve months ended December 31, 2019 to a $21,000 loss for the twelve months ended December 31, 2020, and a $486,000 decrease in gain (loss) on equity securities, net, which went from a $261,000 gain for the twelve months ended December 31, 2019 to a $226,000 loss for the twelve months ended December 31, 2020.

All Other had other expense of $15.3 million for the twelve months ended December 31, 2020, compared to $23.1 million for the twelve months ended December 31, 2019. The decrease was largely due to a $8.2 million decrease in merger related expenses related to the NewDominion and Carolina Alliance acquisitions.

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Park National Corporation

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

(In thousands)	Q4 2020		Q3 2020		Q2 2020		Q1 2020		2020		2019		2018
Net interest income	$	86,321	$	83,840	$	81,186	$	76,283	$	327,630	$	297,737	$	266,898
(Recovery of) provision for loan losses	(19,159)		13,836		12,224		5,153		12,054		6,171		7,945
Other income	35,656		36,558		30,964		22,486		125,664		97,193		101,101
Other expense	85,661		69,859		64,799		66,276		286,595		263,988		228,755
Income before income taxes	$	55,475	$	36,703	$	35,127	$	27,340	$	154,645	$	124,771	$	131,299
Income tax expense	10,275		5,857		5,622		4,968		26,722		22,071		20,912
Net income	$	45,200	$	30,846	$	29,505	$	22,372	$	127,923	$	102,700	$	110,387

Credit Metrics and (Recovery of) Provision for 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 was set to expire on the earlier of the date on which the national emergency concerning COVID-19 terminated or December 31, 2020, with adoption being effective retrospectively as of January 1, 2020.

Section 540 of the Consolidated Appropriation Act, 2021, amended Section 4014 of the CARES Act by extending the relief period provided in the CARES Act. The Consolidated Appropriation Act, 2021, modifies the CARES Act so that temporary relief will expire on the earlier of the first day of the fiscal year that begins after the date on which the national emergency concerning COVID-19 terminates or January 1, 2022.

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. In the unprecedented circumstance surrounding the COVID-19 pandemic and the response thereto, Park believes that adopting the CECL model in the first quarter of 2020 would have added an unnecessary level of subjectivity and volatility to the calculation of the allowance for credit losses. With the approval of the Consolidated Appropriation Act, 2021, management has elected to further delay adoption of CECL to January 1, 2021. This will allow Park to utilize the CECL standard for the entire year of adoption.

On a consolidated basis, Park reported a provision for loan losses for the year ended December 31, 2020 of $12.1 million, compared to $6.2 million for the year ended December 31, 2019. Excluding a $20.0 million recovery from a former Vision Bank relationship, provision for loan losses for the year ended December 31, 2020 would have been $32.1 million. The table below shows a breakdown of the (recovery of) provision for loan losses by reportable segment.

(In thousands)	Q4 2020		Q3 2020		Q2 2020		Q1 2020		2020		2019		2018
PNB	$	(1,443)	$	13,839	$	12,883	$	5,534	$	30,813	$	8,356	$	7,569
GFSC	(142)		34		27		277		196		$	754	1,328
All Other	(17,574)		(37)		(686)		(658)		(18,955)		(2,939)		(952)
Total Park	$	(19,159)	$	13,836	$	12,224	$	5,153	$	12,054	$	6,171	$	7,945

PNB had net charge-offs of $1.2 million, GFSC had net charge-offs of $829,000, and All Other had net recoveries of $19.0 million for the twelve months ended December 31, 2020, resulting in net recoveries of $16.9 million for Park, on a consolidated basis. PNB had net charge-offs of $2.7 million, GFSC had net charge-offs of $1.2 million, and All Other had net recoveries of $2.9 million for the twelve months ended December 31, 2019, resulting in net charge-offs of $1.0 million for Park, on a consolidated basis.

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The table below provides additional information related to specific reserves and general reserves for Park as of December 31, 2020, December 31, 2019, and December 31, 2018.

(In thousands)	12/31/2020			12/31/2019			12/31/2018
Total allowance for loan losses	$	85,675		$	56,679		$	51,512
Allowance on purchased credit impaired ("PCI") loans	167			268			—
Allowance on purchased loans	678			—			—
Specific reserve	5,434			5,230			2,273
General reserve on originated loans	$	79,396		$	51,181		$	49,239
Total loans	$	7,177,785		$	6,501,404		$	5,692,132
PCI loans (1)	11,153			14,331			3,943
Purchased loans	360,056			548,436			225,029
Impaired commercial loans	108,407			77,459			48,135
Originated loans excluding impaired commercial loans	$	6,698,169		$	5,861,178		$	5,415,025
Total allowance for loan losses to total loans ratio	1.19		%	0.87		%	0.90		%
Total allowance for loan losses on originated loans to total originated loans ratio	1.25		%	0.95		%	0.94		%
Total allowance for loan losses on originated loans to total originated loans ratio (excluding PPP loans) (2)	1.31		%	N.A.			N.A.
General reserve as a % of total originated loans less impaired commercial loans	1.19		%	0.87		%	0.91		%
General reserve as a % of total originated loans less impaired commercial loans (excluding PPP loans) (2)	1.24		%	N.A.			N.A.

(1) Excludes PCI loans which are individually evaluated for impairment due to additional credit deterioration post acquisition. These loans had a balance of $0, $5,000, and $475,000 at December 31, 2020, December 31, 2019, and December 31, 2018, respectively.

(2) Excludes $337.1 million of PPP loans and $337,000 in related allowance at December 31, 2020. No PPP loans were outstanding at December 31, 2019 or December 31, 2018.

The allowance for loan losses of $85.7 million at December 31, 2020 represented a $29.0 million, or 51.2%, increase compared to $56.7 million at December 31, 2019. This increase was largely the result of a $28.2 million increase in general reserves on originated total loans and a $204,000 increase in specific reserves. As of December 31, 2020, a $678,000 allowance had been established for performing acquired loans and a $167,000 allowance had been established for PCI loans. In addition to the established allowance related to acquired loans, as of December 31, 2020, these loans have a remaining purchase accounting discount of $7.2 million. The $28.2 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 hotel and accommodations, restaurants and food service 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.

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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, including the possibility of further resurgence in the spread of COVID-19 - - 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 public health actions directed toward the containment of the COVID-19 pandemic (such as quarantines, shut downs and other restrictions on travel and commercial, social or other activities), the development, availability and effectiveness of vaccines, and the implementation of fiscal stimulus packages;

•the impact of future governmental and regulatory actions upon our participation in and execution of government programs related to the COVID-19 pandemic;

•Park's ability to execute our business plan successfully and within the expected timeframe as well as our ability to manage strategic initiatives in light of the impact of the COVID-19 pandemic and the various responses to the COVID-19 pandemic;

•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 weaker recovery than anticipated, in addition to the continuing impact of the COVID-19 pandemic on our customers’ operations and financial condition, either of which may result 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;

•factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers and the success of construction projects that we finance, including any loans acquired in acquisition transactions;

•the effect of monetary and other fiscal policies (including the impact of money supply and interest rate policies of the Federal Reserve Board) as well as disruption in the liquidity and functioning of U.S. financial markets, as a result of the COVID-19 pandemic and government policies implemented in response thereto, may adversely impact prepayment penalty income, mortgage banking income, income from fiduciary activities, the value of securities, deposits and other financial instruments, in addition to the loan demand and the performance of our loan portfolio, and the interest rate sensitivity of our consolidated balance sheet as well as reduce interest margins;

•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 levels in the states in which Park and our subsidiaries do business may be different than anticipated due to the continuing impact of the COVID-19 pandemic;

•changes in customers', suppliers', and other counterparties' performance and creditworthiness may be different than anticipated due to the continuing impact 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;

•competitive pressures among financial services organizations could increase significantly, including product and pricing pressures (which could in turn impact our credit spreads), 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;

•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 and bank holding company 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 and the follow-up legislation in the Consolidated Appropriations Act, 2021, 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 and the follow-up legislation in the Consolidated Appropriations Act, 2021, 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 and the follow-up legislation in the Consolidated Appropriations Act, 2021, the adoption of which can be deferred by

15

Park until the earlier of: (1) the first day of the fiscal year that begins after the date on which the national emergency concerning the COVID-19 outbreak terminates; or (2) January 1, 2022, 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 Park's ability to anticipate and respond to technological changes on Park's 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 Park's 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 as well as 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);

•uncertainty regarding the impact of changes to the U.S. presidential administration and Congress on the regulatory landscape, capital markets, and the response to and management of the COVID-19 pandemic;

•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 growth rates and financial stability of certain sovereign governments, supranationals and financial institutions in Europe and Asia and the risk they may face difficulties servicing their sovereign debt;

•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, regional or national protests and civil unrest (including any resulting branch closures or damages), military or 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 our 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 September 30, 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.

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Item 8.01 - Other Events

Declaration of Cash Dividend

As reported in the Financial Results News Release, on January 25, 2021, the Park Board of Directors (the "Park Board") declared a $1.03 per common share quarterly cash dividend and a special cash dividend of $0.20 per common share in respect of Park's common shares. These cash dividends are payable on March 10, 2021 to common shareholders of record as of the close of business on February 19, 2021. A copy of the Financial Results News Release is included as Exhibit 99.1 and the portion thereof addressing the declaration of the cash dividends 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 January 25, 2021 addressing financial results for the three and twelve months ended December 31, 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)

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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: January 25, 2021	By:	/s/ Brady T. Burt
		Brady T. Burt
		Chief Financial Officer, Secretary and Treasurer

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EX-99.1

January 25, 2021Exhibit 99.1

Park National Corporation reports 2020 financial results

Loan activity generated income growth and supported community outreach

NEWARK, Ohio - Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the fourth quarter and full year of 2020 (three and twelve months ended December 31, 2020). The board of directors increased Park’s quarterly cash dividend, declaring it as $1.03 per common share. The board also declared a special cash dividend of $0.20 per common share, payable on March 10, 2021 to common shareholders of record as of February 19, 2021.

Park’s net income for the fourth quarter of 2020 was $45.2 million, an 88.8 percent increase from $23.9 million for the fourth quarter of 2019. Fourth quarter 2020 net income per diluted common share was $2.75, compared to $1.45 in the fourth quarter of 2019. Park's net income for the full year of 2020 was $127.9 million, a 24.6 percent increase from $102.7 million for the full year of 2019. Net income per diluted common share was $7.80 for 2020, compared to $6.29 for 2019.

“Our lending services throughout the year were a main driver in our overall performance. Our bankers mobilized to serve in new ways, delivering prompt advice and service to families and businesses who were struggling due to the pandemic or rushing to take advantage of opportunities,” said Park President Matthew Miller. “We’re proud of our lending teams’ outstanding response to the surge of home loan activity and demand for U.S. PPP loans; and we’re deeply grateful to all our associates who showed extraordinary dedication to caring for customers and each other every day in 2020.”

Park's community-banking subsidiary, The Park National Bank, reported net income of $34.2 million for the fourth quarter of 2020, a 28.6 percent increase compared to $26.6 million for the same period of 2019. The bank reported net income of $123.7 million for the full year of 2020, compared to $113.6 million for the full year of 2019.

“Park National bankers’ reliability and flexibility were never more important than in 2020,” Park Chairman and Chief Executive Officer David Trautman said. “In a year filled with odd and often uncomfortable circumstances, we grew relationships with our customers and communities by responding to their needs in consistent, compassionate, and creative ways.”

In 2020, Park National Corporation:

•Donated $4 million dollars to local organizations like shelters, theaters, support agencies, youth teams, and clubs.

•Helped over 8,000 families purchase a new home or refinance their current one to put themselves in a better financial situation.

•Helped small businesses maintain their workforces with the preservation of over 65,000 jobs through the Paycheck Protection Program.

•Rapidly approved vehicle loans for 42,518 families who needed more space or more recreational time with the family.

•Guided local business owners in sustaining their retirement plans that support over 24,000 employees – including many individuals saving for the first time in 2020.

•Offered video chat sessions for senior citizens on topics like fraud awareness, online banking, and ways to stay socially connected from home.

•Donated $600,000 to school programs, supporting educators whose response during these challenging times was an inspiration.

•Paid over $3 million to bank employees regardless if they could be at work, and offered bonus pay to Park’s frontline employees.

Headquartered in Newark, Ohio, Park National Corporation has $9.3 billion in total assets (as of December 31, 2020). Park's banking operations are conducted through its 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.

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

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 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, including the possibility of further resurgence in the spread of COVID-19 - - 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 public health actions directed toward the containment of the COVID-19 pandemic (such as quarantines, shut downs and other restrictions on travel and commercial, social or other activities), the development, availability and effectiveness of vaccines, and the implementation of fiscal stimulus packages;

•the impact of future governmental and regulatory actions upon our participation in and execution of government programs related to the COVID-19 pandemic;

•Park's ability to execute our business plan successfully and within the expected timeframe as well as our ability to manage strategic initiatives in light of the impact of the COVID-19 pandemic and the various responses to the COVID-19 pandemic;

•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 weaker recovery than anticipated, in addition to the continuing impact of the COVID-19 pandemic on our customers’ operations and financial condition, either of which may result 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;

•factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers and the success of construction projects that we finance, including any loans acquired in acquisition transactions;

•the effect of monetary and other fiscal policies (including the impact of money supply and interest rate policies of the Federal Reserve Board) as well as disruption in the liquidity and functioning of U.S. financial markets, as a result of the COVID-19 pandemic and government policies implemented in response thereto, may adversely impact prepayment penalty income, mortgage banking income, income from fiduciary activities, the value of securities, deposits and other financial instruments, in addition to the loan demand and the performance of our loan portfolio, and the interest rate sensitivity of our consolidated balance sheet as well as reduce interest margins;

•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 levels in the states in which Park and our subsidiaries do business may be different than anticipated due to the continuing impact of the COVID-19 pandemic;

•changes in customers', suppliers', and other counterparties' performance and creditworthiness may be different than anticipated due to the continuing impact 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;

•competitive pressures among financial services organizations could increase significantly, including product and pricing pressures (which could in turn impact our credit spreads), 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;

•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 and bank holding company 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 and the follow-up legislation in the Consolidated Appropriations Act, 2021, the

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

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 and the follow-up legislation in the Consolidated Appropriations Act, 2021, 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 and the follow-up legislation in the Consolidated Appropriations Act, 2021, the adoption of which can be deferred by Park until the earlier of: (1) the first day of the fiscal year that begins after the date on which the national emergency concerning the COVID-19 outbreak terminates; or (2) January 1, 2022, 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 Park's ability to anticipate and respond to technological changes on Park's 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 Park's 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 as well as 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);

•uncertainty regarding the impact of changes to the U.S. presidential administration and Congress on the regulatory landscape, capital markets, and the response to and management of the COVID-19 pandemic;

•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 growth rates and financial stability of certain sovereign governments, supranationals and financial institutions in Europe and Asia and the risk they may face difficulties servicing their sovereign debt;

•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, regional or national protests and civil unrest (including any resulting branch closures or damages), military or 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 our 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 September 30, 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 December 31, 2020, September 30, 2020, and December 31, 2019
	2020			2020			2019			Percent change vs.
(in thousands, except share and per share data)	4th QTR			3rd QTR			4th QTR			3Q '20		4Q '19
INCOME STATEMENT:
Net interest income	$	86,321		$	83,840		$	77,009		3.0	%	12.1	%
(Recovery of) provision for loan losses	(19,159)			13,836			(213)			N.M		N.M
Other income	35,656			36,558			24,224			(2.5)	%	47.2	%
Other expense	85,661			69,859			71,231			22.6	%	20.3	%
Income before income taxes	$	55,475		$	36,703		$	30,215		51.1	%	83.6	%
Income taxes	10,275			5,857			6,279			75.4	%	63.6	%
Net income	$	45,200		$	30,846		$	23,936		46.5	%	88.8	%
MARKET DATA:
Earnings per common share - basic (a)	$	2.77		$	1.89		$	1.46		46.6	%	89.7	%
Earnings per common share - diluted (a)	2.75			1.88			1.45			46.3	%	89.7	%
Cash dividends declared per common share	1.02			1.02			1.01			—	%	1.0	%
Book value per common share at period end	63.76			62.39			59.28			2.2	%	7.6	%
Market price per common share at period end	105.01			81.96			102.38			28.1	%	2.6	%
Market capitalization at period end	1,713,154			1,336,011			1,673,549			28.2	%	2.4	%
Weighted average common shares - basic (b)	16,310,551			16,300,720			16,342,485			0.1	%	(0.2)	%
Weighted average common shares - diluted (b)	16,434,812			16,393,792			16,454,553			0.3	%	(0.1)	%
Common shares outstanding at period end	16,314,197			16,300,763			16,346,442			0.1	%	(0.2)	%
PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)	1.93		%	1.28		%	1.09		%	50.8	%	77.1	%
Return on average shareholders' equity (a)(b)	17.37		%	12.03		%	9.83		%	44.4	%	76.7	%
Yield on loans	4.69		%	4.54		%	5.11		%	3.3	%	(8.2)	%
Yield on investment securities	2.80		%	2.35		%	2.72		%	19.1	%	2.9	%
Yield on money market instruments	0.11		%	0.11		%	1.86		%	—	%	(94.1)	%
Yield on interest earning assets	4.33		%	4.12		%	4.64		%	5.1	%	(6.7)	%
Cost of interest bearing deposits	0.19		%	0.26		%	0.95		%	(26.9)	%	(80.0)	%
Cost of borrowings	2.01		%	1.63		%	2.18		%	23.3	%	(7.8)	%
Cost of paying interest bearing liabilities	0.40		%	0.39		%	1.04		%	2.6	%	(61.5)	%
Net interest margin (g)	4.07		%	3.85		%	3.90		%	5.7	%	4.4	%
Efficiency ratio (g)	69.82		%	57.69		%	69.86		%	21.0	%	(0.1)	%
OTHER RATIOS (NON-GAAP):
Tangible book value per share (d)	$	53.41		$	52.00		$	48.81		2.7	%	9.4	%
Note: Explanations for footnotes (a) - (k) 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 December 31, 2020, September 30, 2020, and December 31, 2019
										Percent change vs.
(in thousands, except ratios)	December 31, 2020			September 30, 2020			December 31, 2019			3Q '20		4Q '19
BALANCE SHEET:
Investment securities	$	1,124,806		$	1,097,598		$	1,279,507		2.5	%	(12.1)	%
Loans	7,177,785			7,278,546			6,501,404			(1.4)	%	10.4	%
Allowance for loan losses	85,675			87,038			56,679			(1.6)	%	51.2	%
Goodwill and other intangible assets	168,855			169,380			171,118			(0.3)	%	(1.3)	%
Other real estate owned (OREO)	1,431			836			4,029			71.2	%	(64.5)	%
Total assets	9,279,021			9,240,006			8,558,377			0.4	%	8.4	%
Total deposits	7,572,358			7,475,829			7,052,612			1.3	%	7.4	%
Borrowings	562,504			643,103			438,157			(12.5)	%	28.4	%
Total shareholders' equity	1,040,256			1,016,996			969,014			2.3	%	7.4	%
Tangible equity (d)	871,401			847,616			797,896			2.8	%	9.2	%
Total nonperforming loans	139,614			148,442			113,953			(5.9)	%	22.5	%
Total nonperforming assets	144,209			152,670			121,581			(5.5)	%	18.6	%
ASSET QUALITY RATIOS:
Loans as a % of period end total assets	77.35		%	78.77		%	75.97		%	(1.8)	%	1.8	%
Total nonperforming loans as a % of period end loans	1.95		%	2.04		%	1.75		%	(4.4)	%	11.4	%
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets	2.01		%	2.10		%	1.87		%	(4.3)	%	7.5	%
Allowance for loan losses as a % of period end loans	1.19		%	1.20		%	0.87		%	(0.8)	%	36.8	%
Net loan (recoveries) charge-offs	$	(17,796)		$	274		$	(1,039)		N.M		N.M
Annualized net loan (recoveries) charge-offs as a % of average loans (b)	(0.98)		%	0.02		%	(0.06)		%	N.M		N.M
CAPITAL & LIQUIDITY:
Total shareholders' equity / Period end total assets	11.21		%	11.01		%	11.32		%	1.8	%	(1.0)	%
Tangible equity (d) / Tangible assets (f)	9.57		%	9.34		%	9.51		%	2.5	%	0.6	%
Average shareholders' equity / Average assets (b)	11.11		%	10.67		%	11.12		%	4.1	%	(0.1)	%
Average shareholders' equity / Average loans (b)	14.29		%	14.08		%	15.03		%	1.5	%	(4.9)	%
Average loans / Average deposits (b)	95.80		%	92.02		%	89.36		%	4.1	%	7.2	%
Note: Explanations for footnotes (a) - (k) 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
Twelve months ended December 31, 2020 and December 31, 2019
(in thousands, except share and per share data and ratios)	2020			2019			Percent change vs '19
INCOME STATEMENT:
Net interest income	$	327,630		$	297,737		10.0	%
Provision for loan losses	12,054			6,171			95.3	%
Other income	125,664			97,193			29.3	%
Other expense	286,595			263,988			8.6	%
Income before income taxes	$	154,645		$	124,771		23.9	%
Income taxes	26,722			22,071			21.1	%
Net income	$	127,923		$	102,700		24.6	%
MARKET DATA:
Earnings per common share - basic (a)	$	7.85		$	6.33		24.0	%
Earnings per common share - diluted (a)	7.80			6.29			24.0	%
Cash dividends declared per common share	4.28			4.24			0.9	%
Weighted average common shares - basic (b)	16,302,825			16,234,342			0.4	%
Weighted average common shares - diluted (b)	16,407,502			16,329,456			0.5	%
PERFORMANCE RATIOS:
Return on average assets (a)(b)	1.38		%	1.21		%	14.0	%
Return on average shareholders' equity (a)(b)	12.68		%	11.14		%	13.8	%
Yield on loans	4.71		%	5.19		%	(9.2)	%
Yield on investment securities	2.66		%	2.76		%	(3.6)	%
Yield on money market instruments	0.26		%	2.33		%	(88.8)	%
Yield on interest earning assets	4.28		%	4.70		%	(8.9)	%
Cost of interest bearing deposits	0.41		%	1.01		%	(59.4)	%
Cost of borrowings	1.77		%	2.14		%	(17.3)	%
Cost of paying interest bearing liabilities	0.52		%	1.12		%	(53.6)	%
Net interest margin (g)	3.93		%	3.89		%	1.0	%
Efficiency ratio (g)	62.83		%	66.35		%	(5.3)	%
ASSET QUALITY RATIOS:
Net loan charge-offs	$	(16,942)		$	1,004		N.M.
Net loan charge-offs as a % of average loans (b)	(0.24)		%	0.02		%	N.M.
CAPITAL & LIQUIDITY:
Average shareholders' equity / Average assets (b)	10.92		%	10.88		%	0.4	%
Average shareholders' equity / Average loans (b)	14.44		%	14.85		%	(2.8)	%
Average loans / Average deposits (b)	91.58		%	89.91		%	1.9	%
Note: Explanations for footnotes (a) - (k) 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				Twelve Months Ended
	December 31,				December 31,
(in thousands, except share and per share data)	2020		2019		2020		2019
Interest income:
Interest and fees on loans	$	85,268	$	82,698	$	328,727	$	321,385
Interest on:
Obligations of U.S. Government, its agencies
and other securities - taxable	4,420		5,973		19,818		26,213
Obligations of states and political subdivisions - tax-exempt	2,040		2,205		8,436		8,955
Other interest income	72		953		739		3,947
Total interest income	91,800		91,829		357,720		360,500
Interest expense:
Interest on deposits:
Demand and savings deposits	490		7,795		9,142		33,348
Time deposits	1,893		4,666		12,186		17,494
Interest on borrowings	3,096		2,359		8,762		11,921
Total interest expense	5,479		14,820		30,090		62,763
Net interest income	86,321		77,009		327,630		297,737
(Recovery of) provision for loan losses	(19,159)		(213)		12,054		6,171
Net interest income after (recovery of) provision for loan losses	105,480		77,222		315,576		291,566
Other income	35,656		24,224		125,664		97,193
Other expense	85,661		71,231		286,595		263,988
Income before income taxes	55,475		30,215		154,645		124,771
Income taxes	10,275		6,279		26,722		22,071
Net income	$	45,200	$	23,936	$	127,923	$	102,700
Per common share:
Net income - basic	$	2.77	$	1.46	$	7.85	$	6.33
Net income - diluted	$	2.75	$	1.45	$	7.80	$	6.29
Weighted average shares - basic	16,310,551		16,342,485		16,302,825		16,234,342
Weighted average shares - diluted	16,434,812		16,454,553		16,407,502		16,329,456
Cash dividends declared	$	1.02	$	1.01	$	4.28	$	4.24

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Consolidated Balance Sheets
(in thousands, except share data)	December 31, 2020		December 31, 2019
Assets
Cash and due from banks	$	155,596	$	135,567
Money market instruments	214,878		24,389
Investment securities	1,124,806		1,279,507
Loans	7,177,785		6,501,404
Allowance for loan losses	(85,675)		(56,679)
Loans, net	7,092,110		6,444,725
Bank premises and equipment, net	88,660		73,322
Goodwill and other intangible assets	168,855		171,118
Other real estate owned	1,431		4,029
Other assets	432,685		425,720
Total assets	$	9,279,021	$	8,558,377
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing	$	2,727,100	$	1,959,935
Interest bearing	4,845,258		5,092,677
Total deposits	7,572,358		7,052,612
Borrowings	562,504		438,157
Other liabilities	103,903		98,594
Total liabilities	$	8,238,765	$	7,589,363
Shareholders' Equity:
Preferred shares (200,000 shares authorized; no shares outstanding at December 31, 2020 and December 31, 2019)	$	—	$	—
Common shares (No par value; 20,000,000 shares authorized; 17,623,163 shares issued at December 31, 2020 and 17,623,199 shares issued at December 31, 2019)	460,687		459,389
Accumulated other comprehensive income (loss), net of taxes	5,571		(9,589)
Retained earnings	704,764		646,847
Treasury shares (1,308,966 shares at December 31, 2020 and 1,276,757 shares at December 31, 2019)	(130,766)		(127,633)
Total shareholders' equity	$	1,040,256	$	969,014
Total liabilities and shareholders' equity	$	9,279,021	$	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				Twelve Months Ended
	Dec 31				Dec 31
(in thousands)	2020		2019		2020		2019
Assets
Cash and due from banks	$	120,599	$	129,105	$	127,214	$	130,372
Money market instruments	263,212		203,259		280,952		169,703
Investment securities	1,066,145		1,300,927		1,214,551		1,360,540
Loans	7,245,273		6,431,374		6,990,458		6,208,496
Allowance for loan losses	(89,920)		(56,904)		(71,221)		(54,516)
Loans, net	7,155,353		6,374,470		6,919,237		6,153,980
Bank premises and equipment, net	86,717		73,487		81,357		69,710
Goodwill and other intangible assets	169,199		173,065		170,031		158,194
Other real estate owned	856		3,871		2,174		4,066
Other assets	454,418		430,513		446,117		427,464
Total assets	$	9,316,499	$	8,688,697	$	9,241,633	$	8,474,029
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing	$	2,657,881	$	1,980,898	$	2,394,717	$	1,875,628
Interest bearing	4,904,995		5,216,050		5,238,147		5,029,854
Total deposits	7,562,876		7,196,948		7,632,864		6,905,482
Borrowings	611,890		429,979		494,532		556,564
Other liabilities	106,240		95,222		105,135		89,809
Total liabilities	$	8,281,006	$	7,722,149	$	8,232,531	$	7,551,855
Shareholders' Equity:
Preferred shares	$	—	$	—	$	—	$	—
Common shares	458,521		458,264		458,096		432,795
Accumulated other comprehensive income (loss), net of taxes	12,594		(11,694)		9,688		(30,160)
Retained earnings	695,509		648,007		673,273		633,389
Treasury shares	(131,131)		(128,029)		(131,955)		(113,850)
Total shareholders' equity	$	1,035,493	$	966,548	$	1,009,102	$	922,174
Total liabilities and shareholders' equity	$	9,316,499	$	8,688,697	$	9,241,633	$	8,474,029

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters
	2020		2020		2020		2020		2019
(in thousands, except per share data)	4th QTR		3rd QTR		2nd QTR		1st QTR		4th QTR
Interest income:
Interest and fees on loans	$	85,268	$	82,617	$	80,155	$	80,687	$	82,698
Interest on:
Obligations of U.S. Government, its agencies and other securities - taxable	4,420		4,841		5,026		5,531		5,973
Obligations of states and political subdivisions - tax-exempt	2,040		2,045		2,151		2,200		2,205
Other interest income	72		63		113		491		953
Total interest income	91,800		89,566		87,445		88,909		91,829
Interest expense:
Interest on deposits:
Demand and savings deposits	490		803		1,507		6,342		7,795
Time deposits	1,893		2,662		3,346		4,285		4,666
Interest on borrowings	3,096		2,261		1,406		1,999		2,359
Total interest expense	5,479		5,726		6,259		12,626		14,820
Net interest income	86,321		83,840		81,186		76,283		77,009
(Recovery of) provision for loan losses	(19,159)		13,836		12,224		5,153		(213)
Net interest income after (recovery of) provision for loan losses	105,480		70,004		68,962		71,130		77,222
Other income	35,656		36,558		30,964		22,486		24,224
Other expense	85,661		69,859		64,799		66,276		71,231
Income before income taxes	55,475		36,703		35,127		27,340		30,215
Income taxes	10,275		5,857		5,622		4,968		6,279
Net income	$	45,200	$	30,846	$	29,505	$	22,372	$	23,936
Per common share:
Net income - basic	$	2.77	$	1.89	$	1.81	$	1.37	$	1.46
Net income - diluted	$	2.75	$	1.88	$	1.80	$	1.36	$	1.45

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		2020		2020		2019
(in thousands)	4th QTR		3rd QTR		2nd QTR		1st QTR		4th QTR
Other income:
Income from fiduciary activities	$	7,632	$	7,335	$	6,793	$	7,113	$	7,268
Service charges on deposit accounts	2,123		2,118		1,676		2,528		2,757
Other service income	12,040		13,047		8,758		3,766		4,382
Debit card fee income	5,787		5,853		5,560		4,960		5,341
Bank owned life insurance income	1,170		1,192		1,179		1,248		1,158
ATM fees	432		491		438		412		446
(Loss) gain on the sale of OREO, net	(7)		569		841		(196)		2
Net (loss) gain on the sale of investment securities	—		(27)		3,313		—		—
Gain (loss) on equity securities, net	2,931		1,201		(977)		(973)		(191)
Other components of net periodic benefit income	1,988		1,988		1,988		1,988		1,183
Miscellaneous	1,560		2,791		1,395		1,640		1,878
Total other income	$	35,656	$	36,558	$	30,964	$	22,486	$	24,224
Other expense:
Salaries	$	37,280	$	31,632	$	30,699	$	28,429	$	30,903
Employee benefits	7,316		10,676		9,080		10,043		8,973
Occupancy expense	3,231		3,835		3,256		3,480		3,355
Furniture and equipment expense	4,949		4,687		4,850		4,319		4,319
Data processing fees	3,315		3,275		2,577		2,492		2,777
Professional fees and services	9,359		7,977		6,901		7,066		10,503
Marketing	1,752		1,454		1,136		1,486		1,468
Insurance	1,855		1,541		1,477		1,550		317
Communication	1,097		958		874		1,155		1,256
State tax expense	605		1,125		1,116		1,145		1,024
Amortization of intangible assets	525		525		607		606		623
FHLB prepayment penalty	8,736		—		—		1,793		492
Foundation contributions	3,000		—		—		—		1,500
Miscellaneous	2,641		2,174		2,226		2,712		3,721
Total other expense	$	85,661	$	69,859	$	64,799	$	66,276	$	71,231

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)	2020			2019			2018			2017			2016
Allowance for loan losses:
Allowance for loan losses, beginning of period	$	56,679		$	51,512		$	49,988		$	50,624		$	56,494
Charge-offs	10,304			11,177			13,552			19,403			20,799
Recoveries	27,246			10,173			7,131			10,210			20,030
Net (recoveries) charge-offs	(16,942)			1,004			6,421			9,193			769
Provision for (recovery of) loan losses	12,054			6,171			7,945			8,557			(5,101)
Allowance for loan losses, end of period	$	85,675		$	56,679		$	51,512		$	49,988		$	50,624
General reserve trends:
Allowance for loan losses, end of period	$	85,675		$	56,679		$	51,512		$	49,988		$	50,624
Allowance on purchased credit impaired ("PCI") loans	167			268			—			—			—
Allowance on purchased loans	678			—			—			—			—
Specific reserves	5,434			5,230			2,273			684			548
General reserves on originated loans	$	79,396		$	51,181		$	49,239		$	49,304		$	50,076
Total loans	$	7,177,785		$	6,501,404		$	5,692,132		$	5,372,483		$	5,271,857
PCI loans	11,153			14,331			3,943			—			—
Purchased loans	360,056			548,436			225,029			—			—
Impaired commercial loans	108,407			77,459			48,135			56,545			70,415
Originated loans excluding impaired commercial loans	$	6,698,169		$	5,861,178		$	5,415,025		$	5,315,938		$	5,201,442
Asset Quality Ratios:
Net (recoveries) charge-offs as a % of average loans	(0.24)		%	0.02		%	0.12		%	0.17		%	0.02		%
Allowance for loan losses as a % of period end loans	1.19		%	0.87		%	0.90		%	0.93		%	0.96		%
Allowance for loan losses on originated loans as % of originated total loans (excluding PPP loans) (k)	1.31		%	N.A.			N.A.			N.A.			N.A.
General reserve as a % of originated total loans less impaired commercial loans	1.19		%	0.87		%	0.91		%	0.93		%	0.96		%
General reserves as a % of originated total loans less impaired commercial loans (excluding PPP loans) (k)	1.24		%	N.A.			N.A.			N.A.			N.A.
Nonperforming assets:
Nonaccrual loans	$	117,368		$	90,080		$	67,954		$	72,056		$	87,822
Accruing troubled debt restructurings	20,788			21,215			15,173			20,111			18,175
Loans past due 90 days or more	1,458			2,658			2,243			1,792			2,086
Total nonperforming loans	$	139,614		$	113,953		$	85,370		$	93,959		$	108,083
Other real estate owned - Park National Bank	837			3,100			2,788			6,524			6,025
Other real estate owned - SEPH	594			929			1,515			7,666			7,901
Other nonperforming assets - Park National Bank	3,164			3,599			3,464			4,849			—
Total nonperforming assets	$	144,209		$	121,581		$	93,137		$	112,998		$	122,009
Percentage of nonaccrual loans to period end loans	1.64		%	1.39		%	1.19		%	1.34		%	1.67		%
Percentage of nonperforming loans to period end loans	1.95		%	1.75		%	1.50		%	1.75		%	2.05		%
Percentage of nonperforming assets to period end loans	2.01		%	1.87		%	1.64		%	2.10		%	2.31		%
Percentage of nonperforming assets to period end total assets	1.55		%	1.42		%	1.19		%	1.50		%	1.63		%
Note: Explanations for footnotes (a) - (k) 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
Asset Quality Information (continued)
	Year ended December 31,
(in thousands, except ratios)	2020		2019		2018		2017		2016
New nonaccrual loan information:
Nonaccrual loans, beginning of period	$	90,080	$	67,954	$	72,056	$	87,822	$	95,887
New nonaccrual loans	103,386		81,009		76,611		58,753		74,786
Resolved nonaccrual loans	76,098		58,883		80,713		74,519		82,851
Nonaccrual loans, end of period	$	117,368	$	90,080	$	67,954	$	72,056	$	87,822
Impaired commercial loan portfolio information (period end):
Unpaid principal balance	$	109,062	$	78,178	$	59,381	$	66,585	$	95,358
Prior charge-offs	655		719		11,246		10,040		24,943
Remaining principal balance	108,407		77,459		48,135		56,545		70,415
Specific reserves	5,434		5,230		2,273		684		548
Book value, after specific reserves	$	102,973	$	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						TWELVE MONTHS ENDED
(in thousands, except share and per share data)	December 31, 2020		September 30, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Net interest income	$	86,321	$	83,840	$	77,009	$	327,630	$	297,737
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions	919		1,071		1,947		4,669		5,786
less interest income on former Vision Bank relationships	102		8		249		453		256
Net interest income - adjusted	$	85,300	$	82,761	$	74,813	$	322,508	$	291,695
(Recovery of) provision for loan losses	$	(19,159)	$	13,836	$	(213)	$	12,054	$	6,171
less recoveries on former Vision Bank relationships	(20,496)		(37)		(2,302)		(21,982)		(3,042)
(Recovery of) provision for loan losses - adjusted	$	1,337	$	13,873	$	2,089	$	34,036	$	9,213
Other income	$	35,656	$	36,558	$	24,224	$	125,664	$	97,193
less other service income related to former Vision Bank relationships	503		35		—		590		52
less net gain (loss) on sale of former Vision Bank OREO properties	—		371		28		1,208		(111)
less rebranding initiative related expenses	(298)		—		—		(572)		—
less net (loss) gain on the sale of debt securities in the ordinary course of business	—		(27)		—		3,286		(421)
Other income - adjusted	$	35,451	$	36,179	$	24,196	$	121,152	$	97,673
Other expense	$	85,661	$	69,859	$	71,231	$	286,595	$	263,988
less merger-related expenses related to NewDominion and Carolina Alliance acquisitions	9		163		1,885		629		8,877
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions	525		525		623		2,263		2,355
less FDIC assessment credit	—		—		(1,136)		—		(2,193)
less direct expenses related to collection of payments on former Vision Bank loan relationships	4,051		232		622		4,283		622
less FHLB prepayment penalty	8,736		—		492		10,529		612
less rebranding initiative related expenses (including trade name intangible expense)	229		429		2,134		1,040		2,476
less Foundation contribution	3,000		—		1,500		3,000		1,500
less severance and restructuring charges	4,039		67		22		4,443		107
less COVID-19 related expenses (j)	738		744		—		3,622		—
Other expense - adjusted	$	64,334	$	67,699	$	65,089	$	256,786	$	249,632
Tax effect of adjustments to net income identified above (i)	$	(83)	$	140	$	339	$	(379)	$	1,208
Net income - reported	$	45,200	$	30,846	$	23,936	$	127,923	$	102,700
Net income - adjusted	$	44,888	$	31,371	$	25,213	$	126,495	$	107,244

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS
	THREE MONTHS ENDED									TWELVE MONTHS ENDED
(in thousands, except share and per share data)	December 31, 2020			September 30, 2020			December 31, 2019			December 31, 2020			December 31, 2019
Diluted EPS	$	2.75		$	1.88		$	1.45		$	7.80		$	6.29
Diluted EPS, adjusted (h)	$	2.73		$	1.91		$	1.53		$	7.71		$	6.57
Annualized return on average assets (a)(b)	1.93		%	1.28		%	1.09		%	1.38		%	1.21		%
Annualized return on average assets, adjusted(a)(b)(h)	1.92		%	1.31		%	1.15		%	1.37		%	1.27		%
Annualized return on average tangible assets (a)(b)(e)	1.97		%	1.31		%	1.12		%	1.41		%	1.23		%
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)	1.95		%	1.33		%	1.17		%	1.39		%	1.29		%
Annualized return on average shareholders' equity (a)(b)	17.37		%	12.03		%	9.83		%	12.68		%	11.14		%
Annualized return on average shareholders' equity, adjusted (a)(b)(h)	17.25		%	12.23		%	10.35		%	12.54		%	11.63		%
Annualized return on average tangible equity (a)(b)(c)	20.76		%	14.43		%	11.97		%	15.25		%	13.44		%
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)	20.61		%	14.67		%	12.61		%	15.08		%	14.04		%
Efficiency ratio (g)	69.82		%	57.69		%	69.86		%	62.83		%	66.35		%
Efficiency ratio, adjusted (g)(h)	52.97		%	56.58		%	65.26		%	57.51		%	63.63		%
Annualized net interest margin (g)	4.07		%	3.85		%	3.90		%	3.93		%	3.89		%
Annualized net interest margin, adjusted (g)(h)	4.02		%	3.80		%	3.79		%	3.86		%	3.81		%

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Financial Reconciliations (continued)
(a) Reported measure uses net income
(b) Averages are for the three months ended December 31, 2020, September 30, 2020, and December 31, 2019 and for the twelve months ended December 31, 2020 and December 31, 2019, as appropriate
(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						TWELVE MONTHS ENDED
	December 31, 2020		September 30, 2020		December 31, 2019		December 31, 2020		December 31, 2019
AVERAGE SHAREHOLDERS' EQUITY	$	1,035,493	$	1,020,239	$	966,548	$	1,009,102	$	922,174
Less: Average goodwill and other intangible assets	169,199		169,726		173,065		170,031		158,194
AVERAGE TANGIBLE EQUITY	$	866,294	$	850,513	$	793,483	$	839,071	$	763,980
(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:
	December 31, 2020		September 30, 2020		December 31, 2019
TOTAL SHAREHOLDERS' EQUITY	$	1,040,256	$	1,016,996	$	969,014
Less: Goodwill and other intangible assets	168,855		169,380		171,118
TANGIBLE EQUITY	$	871,401	$	847,616	$	797,896
(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						TWELVE MONTHS ENDED
	December 31, 2020		September 30, 2020		December 31, 2019		December 31, 2020		December 31, 2019
AVERAGE ASSETS	$	9,316,499	$	9,557,682	$	8,688,697	$	9,241,633	$	8,474,029
Less: Average goodwill and other intangible assets	169,199		169,726		173,065		170,031		158,194
AVERAGE TANGIBLE ASSETS	$	9,147,300	$	9,387,956	$	8,515,632	$	9,071,602	$	8,315,835
(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:
	December 31, 2020		September 30, 2020		December 31, 2019
TOTAL ASSETS	$	9,279,021	$	9,240,006	$	8,558,377
Less: Goodwill and other intangible assets	168,855		169,380		171,118
TANGIBLE ASSETS	$	9,110,166	$	9,070,626	$	8,387,259
(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						TWELVE MONTHS ENDED
	December 31, 2020		September 30, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Interest income	$	91,800	$	89,566	$	91,829	$	357,720	$	360,500
Fully taxable equivalent adjustment	712		706		726		2,866		2,956
Fully taxable equivalent interest income	$	92,512	$	90,272	$	92,555	$	360,586	$	363,456
Interest expense	5,479		5,726		14,820		30,090		62,763
Fully taxable equivalent net interest income	$	87,033	$	84,546	$	77,735	$	330,496	$	300,693
(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, (recovery of) provision for loan losses, other income and other expense.
(i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate.
(j) COVID-19 related expenses include calamity pay and special one-time bonuses to certain associates.
(k) Excludes $337.1 million and $542.8 million of PPP loans at December 31, 2020 and September 30, 2020, respectively.

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

XML

DEI Document	Jan. 25, 2021
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	Jan. 25, 2021
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