EX-99.1 2 exhibit991earningsrelease2.htm EX-99.1 Document
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July 26, 2021                                            Exhibit 99.1

Park National Corporation reports financial results
for second quarter and first half of 2021

NEWARK, Ohio - Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the second quarter and first half of 2021 (three and six months ended June 30, 2021). Park's board of directors declared a quarterly cash dividend of $1.03 per common share, payable on September 10, 2021 to common shareholders of record as of August 20, 2021.

Park’s net income for the second quarter of 2021 was $39.1 million, a 32.6 percent increase from $29.5 million for the second quarter of 2020. Second quarter 2021 net income per diluted common share was $2.38, compared to $1.80 in the second quarter of 2020. Park's net income for the first half of 2021 was $82.0 million, a 58.0 percent increase from $51.9 million for the first half of 2020. Net income per diluted common share was $4.98 for the first half of 2021, compared to $3.16 for the first half of 2020. Various governmental programs and economic conditions continue to affect performance reports throughout the financial industry.

“Our positive results reflect the dedication of our associates who’ve been unwavering in serving our clients throughout the ups and downs of the past year. From lending to digital services to philanthropic support – we do not take lightly the trust our communities place in Park National Bank,” Park Chairman David Trautman said. “We remain focused on delivering on our promises to local families and businesses.”

Park's community-banking subsidiary, The Park National Bank, reported net income of $40.9 million for the second quarter of 2021, a 33.0 percent increase compared to $30.8 million for the same period of 2020. Park National Bank reported net income of $86.0 million for the first half of 2021, compared to $56.7 million for the first half of 2020. Park National Bank's mortgage origination volume for the first half of 2021 was $561 million; whereas, it was $527 million for the first half of 2020.

Park’s board also recognized the retirement of C. Daniel DeLawder, thanking him for his 50 years of service and leadership with the Park National organization. DeLawder, a former chairman and chief executive officer for Park, retired from employment on June 30, 2021. He will remain on the boards of directors for the Park National Corporation and Park National Bank; and will continue to serve as chair of the executive committee for the corporation and chair of Park National Bank's trust committee until his term expires in 2023.

Headquartered in Newark, Ohio, Park National Corporation has $9.9 billion in total assets (as of June 30, 2021). 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.


Complete financial tables are listed below.

Category: Earnings
Media contact: Bethany Lewis, 740.349.0421, bethany.lewis@parknationalbank.com
Investor contact: Brady Burt, 740.322.6844, brady.burt@parknationalbank.com
Park National Corporation, 50 N. Third Street, Newark, Ohio 43055

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Park cautions that any forward-looking statements contained in this news release or made by management of Park are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements.

Risks and uncertainties that could cause actual results to differ materially include, without limitation:
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com



•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 the federal, state, or local tax laws may negatively impact our financial performance. On March 31, 2021, President Biden unveiled his infrastructure plan, which includes a proposal to increase the federal corporate tax rate from 21% to 28% as part of a package of tax reforms to help fund the spending proposals in the plan. The Biden plan is in the early stages of the legislative process, which is expected to proceed this year due to the Democratic Party's majority in both houses of Congress. If adopted as proposed, the increase of the corporate tax rate would adversely affect our results of operations in future periods.
•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 and the various responses to the COVID-19 pandemic;
•Park may have more credit risk and higher credit losses to the extent there are loan concentrations by location or industry of borrowers or collateral;
•the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors;
•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 American Rescue Plan Act of 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 American Rescue Plan Act of 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, may adversely affect Park's reported financial condition or results of operations;
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com


•Park's assumptions and estimates used in applying critical accounting policies and modeling, including under the CECL model, 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, including those of Park's third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Park and/or result in Park incurring a financial loss;
•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, elevated U.S. government debt, potential changes in tax legislation that may increase tax rates 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;
•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, 2020.

Park does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement was made, or reflect the occurrence of unanticipated events, except to the extent required by law.
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com


PARK NATIONAL CORPORATION
Financial Highlights
As of or for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020     
       
 202120212020 Percent change vs.
(in thousands, except share and per share data)2nd QTR1st QTR2nd QTR 1Q '212Q '20
INCOME STATEMENT:     
Net interest income$83,851 $80,734 $81,186  3.9  %3.3  %
(Recovery of) provision for credit losses (l)(4,040)(4,855)12,224  (16.8) %N.M
Other income31,238 34,089 30,964  (8.4) %0.9  %
Other expense71,400 67,865 64,799  5.2  %10.2  %
Income before income taxes$47,729 $51,813 $35,127  (7.9)%35.9  %
Income taxes8,597 8,982 5,622  (4.3)%52.9  %
Net income$39,132 $42,831 $29,505  (8.6)%32.6  %
     
MARKET DATA:     
Earnings per common share - basic (a)$2.39 $2.63 $1.81  (9.1)%32.0 %
Earnings per common share - diluted (a)2.38 2.61 1.80  (8.8)%32.2 %
Cash dividends declared per common share1.03 1.23 1.02  (16.3)%1.0 %
Book value per common share at period end65.44 63.74 61.46  2.7 %6.5 %
Market price per common share at period end117.42 129.30 70.38  (9.2)%66.8 %
Market capitalization at period end1,918,733 2,112,238 1,146,942  (9.2)%67.3 %
    
Weighted average common shares - basic (b)16,340,690 16,314,987 16,296,427  0.2 %0.3 %
Weighted average common shares - diluted (b)16,472,800 16,439,920 16,375,434  0.2 %0.6 %
Common shares outstanding at period end16,340,772 16,335,951 16,296,425  — %0.3 %
    
PERFORMANCE RATIOS: (annualized)   
Return on average assets (a)(b)1.59 %1.81 %1.26  % (12.2) %26.2  %
Return on average shareholders' equity (a)(b)14.81 %16.63 %11.89  % (10.9) %24.6  %
Yield on loans4.60 %4.48 %4.63  % 2.7  %(0.6) %
Yield on investment securities2.31 %2.53 %2.76  % (8.7) %(16.3) %
Yield on money market instruments0.10 %0.11 %0.10  % (9.1) %—  %
Yield on interest earning assets3.93 %3.96 %4.14  % (0.8) %(5.1) %
Cost of interest bearing deposits0.13 %0.16 %0.36  % (18.8) %(63.9) %
Cost of borrowings1.91 %1.86 %1.33  % 2.7  %43.6  %
Cost of paying interest bearing liabilities0.29 %0.32 %0.43  % (9.4) %(32.6) %
Net interest margin (g)3.74 %3.76 %3.84  % (0.5) %(2.6) %
Efficiency ratio (g)61.65 %58.74 %57.41  % 5.0  %7.4  %
    
OTHER RATIOS (NON-GAAP):
Tangible book value per share (d)$55.17 $53.43 $51.04 3.3  %8.1  %
       
Note: Explanations for footnotes (a) - (l) are included at the end of the financial tables in the "Financial Reconciliations" section.      
      
      
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com

PARK NATIONAL CORPORATION
Financial Highlights (continued)
As of or for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020     
    Percent change vs.
(in thousands, except ratios)June 30, 2021March 31, 2021June 30, 2020 1Q '212Q '20
BALANCE SHEET:    
Investment securities$1,461,916 $1,176,240 $1,153,186  24.3  %26.8  %
Loans7,035,646 7,168,745 7,204,445  (1.9) %(2.3) %
Allowance for credit losses (l)83,577 86,886 73,476  (3.8) %13.7  %
Goodwill and other intangible assets167,897 168,376 169,905  (0.3) %(1.2) %
Other real estate owned (OREO)813 844 1,356  (3.7) %(40.0) %
Total assets9,947,994 9,914,069 9,712,994  0.3  %2.4  %
Total deposits8,214,624 8,236,199 8,161,900  (0.3) %0.6  %
Borrowings501,350 523,266 444,410  (4.2) %12.8  %
Total shareholders' equity1,069,392 1,041,271 1,001,594  2.7  %6.8  %
Tangible equity (d)901,495 872,895 831,689  3.3  %8.4  %
Total nonperforming loans114,695 130,327 126,044  (12.0) %(9.0) %
Total nonperforming assets118,672 134,335 130,999  (11.7) %(9.4) %
    
ASSET QUALITY RATIOS:   
Loans as a % of period end total assets70.72 %72.31 %74.17 % (2.2) %(4.7) %
Total nonperforming loans as a % of period end loans1.63 %1.82 %1.75 % (10.4) %(6.9) %
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets1.69 %1.87 %1.82 % (9.6) %(7.1) %
Allowance for credit losses as a % of period end loans1.19 %1.21 %1.02 % (1.7) %16.7  %
Net loan (recoveries) charge-offs $(731)$24 $251  N.MN.M
Annualized net loan (recoveries) charge-offs as a % of average loans (b)(0.04) %—  %0.01  % N.MN.M
    
CAPITAL & LIQUIDITY:   
Total shareholders' equity / Period end total assets10.75  %10.50  %10.31  % 2.4  %4.3  %
Tangible equity (d) / Tangible assets (f)9.22  %8.96  %8.72  % 2.9  %5.7  %
Average shareholders' equity / Average assets (b)10.74  %10.87  %10.61  % (1.2) %1.2  %
Average shareholders' equity / Average loans (b)14.94  %14.63  %14.30  % 2.1  %4.5  %
Average loans / Average deposits (b)86.49  %90.12  %88.59  % (4.0) %(2.4) %
Note: Explanations for footnotes (a) - (l) 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
Six months ended June 30, 2021 and June 30, 2020   
     
 20212020 
(in thousands, except share and per share data)Six months ended June 30Six months ended June 30 Percent change vs '20
INCOME STATEMENT:   
Net interest income$164,585 $157,469  4.5  %
(Recovery of) provision for credit losses (l)(8,895)17,377  N.M
Other income65,327 53,450  22.2  %
Other expense139,265 131,075  6.2  %
Income before income taxes$99,542 $62,467  59.4 %
Income taxes17,579 10,590  66.0 %
Net income$81,963 $51,877  58.0 %
    
MARKET DATA:   
Earnings per common share - basic (a)$5.02 $3.18  57.9 %
Earnings per common share - diluted (a)4.98 3.16  57.6 %
Cash dividends declared per common share2.26 2.24  0.9 %
   
Weighted average common shares - basic (b)16,327,838 16,300,015  0.2 %
Weighted average common shares - diluted (b)16,455,673 16,400,657  0.3 %
   
PERFORMANCE RATIOS: (annualized)  
Return on average assets (a)(b)1.70 %1.15 % 47.8  %
Return on average shareholders' equity (a)(b)15.71 %10.54 % 49.1  %
Yield on loans4.54 %4.81 % (5.6) %
Yield on investment securities2.41 %2.76 % (12.7) %
Yield on money market instruments0.10 %0.38 % (73.7) %
Yield on interest earning assets3.95 %4.35 % (9.2) %
Cost of interest bearing deposits0.14 %0.58 % (75.9) %
Cost of borrowings1.89 %1.69 % 11.8  %
Cost of paying interest bearing liabilities0.30 %0.66 % (54.5) %
Net interest margin (g)3.75 %3.89 % (3.6) %
Efficiency ratio (g)60.20 %61.72 % (2.5) %
   
ASSET QUALITY RATIOS
Net loan (recoveries) charge-offs$(707)$580 N.M.
Net loan (recoveries) charge-offs as a % of average loans (b)(0.02)%0.02 %N.M.
CAPITAL & LIQUIDITY
Average shareholders' equity / Average assets (b)10.80 %10.95 % (1.4) %
Average shareholders' equity / Average loans (b)14.79 %14.71 %0.5  %
Average loans / Average deposits (b)88.26 %89.21 %(1.1) %
     
Note: Explanations for footnotes (a) - (l) 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 EndedSix Months Ended
June 30,June 30,
(in thousands, except share and per share data)2021202020212020
Interest income:
   Interest and fees on loans$81,176 $80,155 $159,913 $160,842 
   Interest on:
      Obligations of U.S. Government, its agencies
         and other securities - taxable4,600 5,026 8,856 10,557 
      Obligations of states and political subdivisions - tax-exempt2,032 2,151 4,069 4,351 
   Other interest income186 113 329 604 
         Total interest income87,994 87,445 173,167 176,354 
Interest expense:
   Interest on deposits:
      Demand and savings deposits401 1,507 787 7,849 
      Time deposits1,285 3,346 2,869 7,631 
   Interest on borrowings2,457 1,406 4,926 3,405 
      Total interest expense4,143 6,259 8,582 18,885 
         Net interest income83,851 81,186 164,585 157,469 
(Recovery of) provision for credit losses (l)(4,040)12,224 (8,895)17,377 
         Net interest income after (recovery of) provision for credit losses87,891 68,962 173,480 140,092 
Other income31,238 30,964 65,327 53,450 
Other expense71,400 64,799 139,265 131,075 
         Income before income taxes47,729 35,127 99,542 62,467 
Income taxes8,597 5,622 17,579 10,590 
         Net income$39,132 $29,505 $81,963 $51,877 
Per common share:
         Net income - basic$2.39 $1.81 $5.02 $3.18 
         Net income - diluted$2.38 $1.80 $4.98 $3.16 
         Weighted average shares - basic16,340,690 16,296,427 16,327,838 16,300,015 
         Weighted average shares - diluted16,472,800 16,375,434 16,455,673 16,400,657 
        Cash dividends declared$1.03 $1.02 $2.26 $2.24 



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

 
PARK NATIONAL CORPORATION 
Consolidated Balance Sheets
   
(in thousands, except share data)June 30, 2021December 31, 2020
  
Assets 
  
Cash and due from banks$134,182 $155,596 
Money market instruments673,242 214,878 
Investment securities1,461,916 1,124,806 
Loans7,035,646 7,177,785 
Allowance for credit losses (l)(83,577)(85,675)
Loans, net6,952,069 7,092,110 
Bank premises and equipment, net89,570 88,660 
Goodwill and other intangible assets167,897 168,855 
Other real estate owned813 1,431 
Other assets468,305 432,685 
Total assets$9,947,994 $9,279,021 
  
Liabilities and Shareholders' Equity 
  
Deposits:
Noninterest bearing$2,876,110 $2,727,100 
Interest bearing5,338,514 4,845,258 
Total deposits8,214,624 7,572,358 
Borrowings501,350 562,504 
Other liabilities162,628 103,903 
Total liabilities$8,878,602 $8,238,765 
  
  
Shareholders' Equity: 
Preferred shares (200,000 shares authorized; no shares outstanding at June 30, 2021 and December 31, 2020)$— $— 
Common shares (No par value; 20,000,000 shares authorized; 17,623,143 shares issued at June 30, 2021 and 17,623,163 shares issued at December 31, 2020)459,276 460,687 
Accumulated other comprehensive (loss) income, net of taxes(2,930)5,571 
Retained earnings741,155 704,764 
Treasury shares (1,282,371 shares at June 30, 2021 and 1,308,966 shares at December 31, 2020)(128,109)(130,766)
Total shareholders' equity$1,069,392 $1,040,256 
Total liabilities and shareholders' equity$9,947,994 $9,279,021 


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

 
PARK NATIONAL CORPORATION 
Consolidated Average Balance Sheets
   
 Three Months EndedSix Months Ended
 June 30,June 30,
(in thousands)2021202020212020
   
Assets  
   
Cash and due from banks$131,397 $134,386 $139,784 $133,208 
Money market instruments720,238 461,055 637,531 318,930 
Investment securities 1,307,037 1,197,445 1,234,178 1,230,948 
Loans7,094,099 6,981,783 7,116,353 6,731,960 
Allowance for credit losses (l)(87,083)(62,387)(88,511)(60,001)
Loans, net7,007,016 6,919,396 7,027,842 6,671,959 
Bank premises and equipment, net90,269 80,096 90,006 77,509 
Goodwill and other intangible assets168,211 170,303 168,449 170,606 
Other real estate owned822 2,765 1,016 3,282 
Other assets447,088 442,819 444,221 437,585 
Total assets$9,872,078 $9,408,265 $9,743,027 $9,044,027 
   
   
Liabilities and Shareholders' Equity  
   
Deposits:
Noninterest bearing$2,940,602 $2,400,809 $2,866,909 $2,175,400 
Interest bearing5,261,608 5,480,366 5,195,848 5,370,376 
Total deposits8,202,210 7,881,175 8,062,757 7,545,776 
Borrowings514,855 425,349 526,715 405,930 
Other liabilities95,064 103,453 101,332 102,189 
Total liabilities$8,812,129 $8,409,977 $8,690,804 $8,053,895 
   
Shareholders' Equity:  
Preferred shares$— $— $— $— 
Common shares457,949 456,830 459,327 458,146 
Accumulated other comprehensive (loss) income, net of taxes(4,876)10,756 (1,865)5,331 
Retained earnings734,993 663,290 724,183 658,877 
Treasury shares(128,117)(132,588)(129,422)(132,222)
Total shareholders' equity$1,059,949 $998,288 $1,052,223 $990,132 
Total liabilities and shareholders' equity$9,872,078 $9,408,265 $9,743,027 $9,044,027 



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

 
PARK NATIONAL CORPORATION 
Consolidated Statements of Income - Linked Quarters
    
 20212021202020202020
(in thousands, except per share data)2nd QTR1st QTR4th QTR3rd QTR2nd QTR
  
Interest income: 
Interest and fees on loans $81,176 $78,737 $85,268 $82,617 $80,155 
Interest on:
Obligations of U.S. Government, its agencies and other securities - taxable4,600 4,256 4,420 4,841 5,026 
Obligations of states and political subdivisions - tax-exempt2,032 2,037 2,040 2,045 2,151 
Other interest income186 143 72 63 113 
Total interest income87,994 85,173 91,800 89,566 87,445 
  
Interest expense: 
Interest on deposits:
Demand and savings deposits401 386 490 803 1,507 
Time deposits1,285 1,584 1,893 2,662 3,346 
Interest on borrowings2,457 2,469 3,096 2,261 1,406 
Total interest expense4,143 4,439 5,479 5,726 6,259 
  
Net interest income83,851 80,734 86,321 83,840 81,186 
  
(Recovery of) provision for credit losses (l)(4,040)(4,855)(19,159)13,836 12,224 
  
Net interest income after (recovery of) provision for credit losses87,891 85,589 105,480 70,004 68,962 
  
Other income31,238 34,089 35,656 36,558 30,964 
Other expense71,400 67,865 85,661 69,859 64,799 
  
Income before income taxes47,729 51,813 55,475 36,703 35,127 
  
Income taxes8,597 8,982 10,275 5,857 5,622 
 
Net income $39,132 $42,831 $45,200 $30,846 $29,505 
  
Per common share:
Net income - basic$2.39 $2.63 $2.77 $1.89 $1.81 
Net income - diluted$2.38 $2.61 $2.75 $1.88 $1.80 




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
    
 20212021202020202020
(in thousands)2nd QTR1st QTR4th QTR3rd QTR2nd QTR
 
Other income:
Income from fiduciary activities$8,569 $8,173 $7,632 $7,335 $6,793 
Service charges on deposit accounts2,032 2,054 2,123 2,118 1,676 
Other service income7,159 9,617 12,040 13,047 8,758 
Debit card fee income6,758 6,086 5,787 5,853 5,560 
Bank owned life insurance income1,149 1,165 1,170 1,192 1,179 
ATM fees655 530 432 491 438 
Gain (loss) on the sale of OREO, net4 (33)(7)569 841 
Net (loss) gain on the sale of debt securities— — — (27)3,313 
Gain (loss) on equity securities, net467 1,810 2,931 1,201 (977)
Other components of net periodic benefit income2,038 2,038 1,988 1,988 1,988 
Miscellaneous2,407 2,649 1,560 2,791 1,395 
Total other income$31,238 $34,089 $35,656 $36,558 $30,964 
 
Other expense:
Salaries$30,303 $29,896 $37,280 $31,632 $30,699 
Employee benefits10,056 10,201 7,316 10,676 9,080 
Occupancy expense3,027 3,640 3,231 3,835 3,256 
Furniture and equipment expense2,756 2,610 4,949 4,687 4,850 
Data processing fees7,150 7,712 3,315 3,275 2,577 
Professional fees and services6,973 5,664 9,359 7,977 6,901 
Marketing1,290 1,491 1,752 1,454 1,136 
Insurance1,276 1,691 1,855 1,541 1,477 
Communication770 1,122 1,097 958 874 
State tax expense1,103 1,108 605 1,125 1,116 
Amortization of intangible assets479 479 525 525 607 
FHLB prepayment penalty— — 8,736 — — 
Foundation contributions4,000 — 3,000 — — 
Miscellaneous2,217 2,251 2,641 2,174 2,226 
Total other expense$71,400 $67,865 $85,661 $69,859 $64,799 



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


PARK NATIONAL CORPORATION 
Asset Quality Information
 
 Year ended December 31,
(in thousands, except ratios)June 30, 2021March 31, 20212020201920182017
 
Allowance for credit losses:
Allowance for credit losses, beginning of period$86,886 $85,675 $56,679 $51,512 $49,988 $50,624 
Cumulative change in accounting principle; adoption of ASU 2016-13— 6,090 — — — — 
Charge-offs1,070 1,701 10,304 11,177 13,552 19,403 
Recoveries1,801 1,677 27,246 10,173 7,131 10,210 
Net (recoveries) charge-offs (731)24 (16,942)1,004 6,421 9,193 
(Recovery of) provision for credit losses(4,040)(4,855)12,054 6,171 7,945 8,557 
Allowance for credit losses, end of period$83,577 $86,886 $85,675 $56,679 $51,512 $49,988 
General reserve trends:
Allowance for credit losses, end of period$83,577 $86,886 $85,675 $56,679 $51,512 $49,988 
Allowance on purchased credit deteriorated ("PCD") loans (purchased credit impaired ("PCI") loans for years 2020 and prior)— — 167 268 — — 
Allowance on purchased loans excluded from the general reserve— — 678 — — — 
Specific reserves on individually evaluated loans3,915 4,962 5,434 5,230 2,273 684 
General reserves on collectively evaluated loans$79,662 $81,924 $79,396 $51,181 $49,239 $49,304 
 
Total loans$7,035,646 $7,168,745 $7,177,785 $6,501,404 $5,692,132 $5,372,483 
PCD loans (PCI loans for years 2020 and prior)10,007 10,284 11,153 14,331 3,943 — 
Purchased loans excluded from collectively evaluated loans— — 360,056 548,436 225,029 — 
Individually evaluated loans86,874 100,407 108,407 77,459 48,135 56,545 
Collectively evaluated loans$6,938,765 $7,058,054 $6,698,169 $5,861,178 $5,415,025 $5,315,938 
 
Asset Quality Ratios:
Net (recoveries) charge-offs as a % of average loans (annualized)(0.04) %—  %(0.24) %0.02  %0.12  %0.17  %
Allowance for credit losses as a % of period end loans 1.19  %1.21  %1.19  %0.87  %0.90  %0.93  %
Allowance for credit losses as a % of period end loans (excluding PPP loans) (k)1.23 %1.28 %1.25 %N.A.N.A.N.A.
General reserve as a % of collectively evaluated loans 1.15  %1.16  %1.19  %0.87  %0.91  %0.93  %
General reserves as a % of collectively evaluated loans (excluding PPP loans) (k)1.19 %1.22 %1.24 %N.A.N.A.N.A.
 
Nonperforming assets:
Nonaccrual loans$96,760 $114,708 $117,368 $90,080 $67,954 $72,056 
Accruing troubled debt restructurings17,420 14,817 20,788 21,215 15,173 20,111 
Loans past due 90 days or more515 802 1,458 2,658 2,243 1,792 
Total nonperforming loans$114,695 $130,327 $139,614 $113,953 $85,370 $93,959 
Other real estate owned - Park National Bank219 250 837 3,100 2,788 6,524 
Other real estate owned - SEPH594 594 594 929 1,515 7,666 
Other nonperforming assets - Park National Bank3,164 3,164 3,164 3,599 3,464 4,849 
Total nonperforming assets$118,672 $134,335 $144,209 $121,581 $93,137 $112,998 
Percentage of nonaccrual loans to period end loans1.38  %1.60  %1.64  %1.39  %1.19  %1.34  %
Percentage of nonperforming loans to period end loans1.63  %1.82  %1.95  %1.75  %1.50  %1.75  %
Percentage of nonperforming assets to period end loans1.69  %1.87  %2.01  %1.87  %1.64  %2.10  %
Percentage of nonperforming assets to period end total assets1.19  %1.35  %1.55  %1.42  %1.19  %1.50  %
Note: Explanations for footnotes (a) - (l) 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)June 30, 2021March 31, 20212020201920182017
 
New nonaccrual loan information:
Nonaccrual loans, beginning of period$114,708 $117,368 $90,080 $67,954 $72,056 $87,822 
New nonaccrual loans11,342 12,540 103,386 81,009 76,611 58,753 
Resolved nonaccrual loans29,290 15,200 76,098 58,883 80,713 74,519 
Nonaccrual loans, end of period$96,760 $114,708 $117,368 $90,080 $67,954 $72,056 
 
Impaired commercial loan portfolio information (period end):
Unpaid principal balance$87,502 $100,996 $109,062 $78,178 $59,381 $66,585 
Prior charge-offs628 589 655 719 11,246 10,040 
Remaining principal balance86,874 100,407 108,407 77,459 48,135 56,545 
Specific reserves3,915 4,962 5,434 5,230 2,273 684 
Book value, after specific reserves$82,959 $95,445 $102,973 $72,229 $45,862 $55,861 

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


PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS
THREE MONTHS ENDEDSIX MONTHS ENDED
(in thousands, except share and per share data)June 30, 2021March 31, 2021June 30, 2020June 30, 2021June 30, 2020
Net interest income$83,851 $80,734 $81,186 $164,585 $157,469 
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions806 1,131 1,301 1,937 2,679 
less interest income on former Vision Bank relationships2,838 105 266 2,943 343 
Net interest income - adjusted$80,207 $79,498 $79,619 $159,705 $154,447 
(Recovery of) provision for credit losses$(4,040)$(4,855)$12,224 $(8,895)$17,377 
less recoveries on former Vision Bank relationships(152)(257)(685)(409)(1,449)
(Recovery of) provision for credit losses - adjusted$(3,888)$(4,598)$12,909 $(8,486)$18,826 
Other income$31,238 $34,089 $30,964 $65,327 $53,450 
less net gain on sale of former Vision Bank OREO properties— — 837 — 837 
less other service income related to former Vision Bank relationships3 58 52 61 52 
less rebranding initiative related expenses— — (274)— (274)
less net gain on the sale of debt securities in the ordinary course of business— — 3,313 — 3,313 
Other income - adjusted$31,235 $34,031 $27,036 $65,266 $49,522 
Other expense$71,400 $67,865 $64,799 $139,265 $131,075 
less merger-related expenses related to NewDominion and Carolina Alliance acquisitions4 12 214 16 457 
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions479 479 607 958 1,213 
less direct expenses related to collection of payments on former Vision Bank loan relationships300 107 — 407 — 
less FHLB prepayment penalty— — — — 1,793 
less rebranding initiative related expenses 342 955 138 1,297 408 
less Foundation contribution4,000 — — 4,000 — 
less severance and restructuring charges46 108 248 154 336 
less COVID-19 related expenses (j)670 865 1,919 1,535 2,181 
Other expense - adjusted$65,559 $65,339 $61,673 $130,898 $124,687 
Tax effect of adjustments to net income identified above (i)$429 $205 $(641)$634 $(422)
Net income - reported$39,132 $42,831 $29,505 $81,963 $51,877 
Net income - adjusted (h)$40,745 $43,601 $27,092 $84,346 $50,288 
Diluted EPS$2.38 $2.61 $1.80 $4.98 $3.16 
Diluted EPS, adjusted (h)$2.47 $2.65 $1.65 $5.13 $3.07 
Annualized return on average assets (a)(b)1.59 %1.81 %1.26 %1.70 %1.15 %
Annualized return on average assets, adjusted (a)(b)(h)
1.66 %1.84 %1.16 %1.75 %1.12 %
Annualized return on average tangible assets (a)(b)(e)1.62 %1.84 %1.28 %1.73 %1.18 %
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)1.68 %1.87 %1.18 %1.78 %1.14 %
Annualized return on average shareholders' equity (a)(b)14.81 %16.63 %11.89 %15.71 %10.54 %
Annualized return on average shareholders' equity, adjusted (a)(b)(h)15.42 %16.93 %10.92 %16.16 %10.21 %
Annualized return on average tangible equity (a)(b)(c)17.60 %19.84 %14.33 %18.70 %12.73 %
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)18.33 %20.19 %13.16 %19.25 %12.34 %
Efficiency ratio (g)61.65 %58.74 %57.41 %60.20 %61.72 %
Efficiency ratio, adjusted (g)(h)58.45 %57.19 %57.44 %57.82 %60.70 %
Annualized net interest margin (g)3.74 %3.76 %3.84 %3.75 %3.89 %
Annualized net interest margin, adjusted (g)(h)3.58 %3.70 %3.77 %3.64 %3.81 %
Note: Explanations for footnotes (a) - (l) 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 Reconciliations (continued)
(a) Reported measure uses net income
(b) Averages are for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020 and the six months ended June 30, 2021 and June 30, 2020, 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 ENDEDSIX MONTHS ENDED
 June 30, 2021March 31, 2021June 30, 2020June 30, 2021June 30, 2020
AVERAGE SHAREHOLDERS' EQUITY$1,059,949 $1,044,412 $998,288 $1,052,223 $990,132 
Less: Average goodwill and other intangible assets168,211 168,690 170,303 168,449 170,606 
AVERAGE TANGIBLE EQUITY$891,738 $875,722 $827,985 $883,774 $819,526 
(d) Tangible equity divided by common shares outstanding at period end. Tangible equity equals total shareholders' equity less goodwill and other intangible assets, in each case at the end of the period.
RECONCILIATION OF TOTAL SHAREHOLDERS' EQUITY TO TANGIBLE EQUITY:
 June 30, 2021March 31, 2021June 30, 2020
TOTAL SHAREHOLDERS' EQUITY$1,069,392 $1,041,271 $1,001,594 
Less: Goodwill and other intangible assets167,897 168,376 169,905 
TANGIBLE EQUITY$901,495 $872,895 $831,689 
    
(e) Net income for each period divided by average tangible assets during the period. Average tangible assets equal 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 ENDEDSIX MONTHS ENDED
 June 30, 2021March 31, 2021June 30, 2020June 30, 2021June 30, 2020
AVERAGE ASSETS$9,872,078 $9,612,542 $9,408,265 $9,743,027 $9,044,027 
Less: Average goodwill and other intangible assets168,211 168,690 170,303 168,449 170,606 
AVERAGE TANGIBLE ASSETS$9,703,867 $9,443,852 $9,237,962 $9,574,578 $8,873,421 
(f) Tangible equity divided by tangible assets. Tangible assets equal total assets less goodwill and other intangible assets, in each case at the end of the period.
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:
 June 30, 2021March 31, 2021June 30, 2020
TOTAL ASSETS$9,947,994 $9,914,069 $9,712,994 
Less: Goodwill and other intangible assets167,897 168,376 169,905 
TANGIBLE ASSETS$9,780,097 $9,745,693 $9,543,089 
    
(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 ENDEDSIX MONTHS ENDED
 June 30, 2021March 31, 2021June 30, 2020June 30, 2021June 30, 2020
Interest income$87,994 $85,173 $87,445 $173,167 $176,354 
Fully taxable equivalent adjustment718 714 723 1,432 1,448 
Fully taxable equivalent interest income$88,712 $85,887 $88,168 $174,599 $177,802 
Interest expense4,143 4,439 6,259 8,582 18,885 
Fully taxable equivalent net interest income$84,569 $81,448 $81,909 $166,017 $158,917 
(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, (recovery of) provision for credit 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 $248.9 million, $387.0 million and $331.6 million of PPP loans at June 30, 2021, March 31, 2021 and December 31, 2020, respectively.
(l) Park adopted ASU 2016-13 effective January 1, 2021. The allowance for credit losses at June 30, 2021 and March 31, 2021 and the related (recovery of) provision for credit losses for the three months ended June 30, 2021 and March 31, 2021 and the six months ended June 30, 2021 were calculated utilizing this new guidance.
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com