EX-99.1 2 exhibit991earningsrelease4.htm EX-99.1 Document

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January 23, 2023                                        Exhibit 99.1

Park National Corporation reports 2022 financial results


NEWARK, Ohio - Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the fourth quarter and full year of 2022. Park's board of directors declared a quarterly cash dividend of $1.05 per common share, payable on March 10, 2023 to common shareholders of record as of February 17, 2023.

Park’s net income for the fourth quarter of 2022 was $33.1 million, a 9.5 percent decrease from $36.5 million for the fourth quarter of 2021. Fourth quarter 2022 net income per diluted common share was $2.02, compared to $2.23 in the fourth quarter of 2021. Park's net income for the full year of 2022 was $148.4 million, a 3.6 percent decrease from $153.9 million for the full year of 2021. Net income per diluted common share was $9.06 for the full year of 2022, compared to $9.37 for the full year of 2021.

“Our success is a direct result of our bankers’ unwavering dedication to building relationships and exceeding customer expectations. Individuals and businesses appreciate our personalized approach and trust our bankers’ experience and knowledge, especially in a time of economic uncertainty,” said Park Chairman and Chief Executive Officer, David Trautman. “We’re eager to serve – customers and communities – even more in 2023.”

Park's community-banking subsidiary, The Park National Bank, reported net income of $35.3 million for the fourth quarter of 2022, a 4.5 percent decrease compared to $37.0 million for the same period of 2021. Park National Bank reported net income of $143.2 million for the full year of 2022, compared to $159.5 million for the full year of 2021.

“We’ve earned a reputation for reliability, and our commitment goes beyond financial services,” said Park President Matt Miller. “Over the past 10 years, we’ve matched associate contributions to their local United Way agency dollar for dollar, totaling more than $10.5 million in donations. It’s one of many ways we show support to hundreds of organizations doing important work in the many communities we serve.”

Headquartered in Newark, Ohio, Park National Corporation has $9.9 billion in total assets (as of December 31, 2022). 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: Ellie Akey, 740.349.5493, ellie.akey@parknationalbank.com
Investor contact: Brady Burt, 740.322.6844, brady.burt@parknationalbank.com
Park National Corporation, 50 N. Third Street, Newark, Ohio 43055


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

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

Risks and uncertainties that could cause actual results to differ materially include, without limitation:

•the ever-changing effects of the global 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 or variants or mutations thereof - -
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com


on economies (local, national and international), supply chains and financial markets, on the labor market, including the potential for a sustained reduction in labor force participation, and on our customers (including potential changes in their banking preferences and behaviors), 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;
•Park's ability to execute our business plan successfully and within the expected timeframe as well as our ability to manage strategic initiatives;
•current and future economic and financial market conditions, either nationally or in the states in which Park and our subsidiaries do business, including the effects of higher unemployment rates, an acceleration in the pace of inflation, interest rate fluctuations, changes in the economy or global supply chain, supply-demand imbalances affecting local real estate prices, U.S. fiscal debt, budget and tax matters, geopolitical matters (including the impact of the Russia-Ukraine conflict and associated sanctions and export controls), and any slowdown in global economic growth, in addition to the continuing impact of the COVID-19 pandemic and recovery therefrom on our customers’ operations and financial condition, any 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 changes in 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, market interest rate policies and policies impacting inflation, of the Federal Reserve Board, the U.S. Treasury and other governmental agencies) as well as disruption in the liquidity and functioning of U.S. financial markets, 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 net interest margins;
•changes in the federal, state, or local tax laws 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 and otherwise negatively impact our financial performance;
•the impact of the changes in federal, state and local governmental policy, including the regulatory landscape, capital markets, elevated government debt, potential changes in tax legislation that may increase tax rates, infrastructure spending and social programs;
•changes in laws or requirements imposed by Park's regulators impacting Park's capital actions, including dividend payments and stock repurchases;
•changes in consumer spending, borrowing and saving habits, whether due to changes in retail distribution strategies, consumer preferences and behaviors, changes in business and economic conditions, legislative and regulatory initiatives, or other factors may be different than anticipated;
•changes in customers', suppliers', and other counterparties' performance and creditworthiness, and Park's expectations regarding future credit losses and our allowance for credit losses, may be different than anticipated due to the continuing impact of and the various responses to inflationary pressures;
•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 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 Park's 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;
•Park's ability to meet heightened supervisory requirements and expectations;
•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;
•the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions;
•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 impact on Park's business and operating results of any costs associated with obtaining rights in intellectual property claimed by others and of the adequacy of Park's intellectual property protection in general;
•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, closing of border crossings and changes in the relationship of the U.S. and its global trading partners);
•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 effect of a fall in stock market prices on Park's asset and wealth management businesses;
•our litigation and regulatory compliance exposure, including the costs and effects of any adverse developments in legal proceedings or other claims, the costs and effects of unfavorable resolution of regulatory and other governmental examinations or other inquiries, and liabilities and business restrictions resulting from litigation and regulatory investigations;
•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 (especially in light of the Russia-Ukraine conflict) on the economy and financial markets generally and on us or our counterparties specifically;
•a worsening of the U.S. economy due to financial, political, or other shocks;
•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 most recent acquisitions, including expected revenue synergies and cost savings from recent acquisitions not being fully realized or realized within the expected time frame;
•uncertainty surrounding the transition from the London Inter-Bank Offered Rate (LIBOR) to an alternate reference rate;
•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, 2021.

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, 2022, September 30, 2022, and December 30, 2021     
       
 202220222021 Percent change vs.
(in thousands, except share and per share data and ratios)4th QTR3rd QTR4th QTR 3Q '224Q '21
INCOME STATEMENT:     
Net interest income$94,606 $90,828 $83,706  4.2  %13.0  %
Provision for (recovery of) credit losses2,981 3,190 (4,993) (6.6) %N.M.
Other income26,392 46,694 32,206  (43.5) %(18.1) %
Other expense77,654 82,903 75,764  (6.3) %2.5  %
Income before income taxes$40,363 $51,429 $45,141  (21.5)%(10.6) %
Income taxes7,279 9,361 8,593  (22.2)%(15.3) %
Net income$33,084 $42,068 $36,548  (21.4)%(9.5) %
     
MARKET DATA:     
Earnings per common share - basic (a)$2.03 $2.59 $2.25  (21.6)%(9.8)%
Earnings per common share - diluted (a)2.02 2.57 2.23  (21.4)%(9.4)%
Quarterly cash dividend declared per common share1.04 1.04 1.03  — %1.0 %
Special cash dividend declared per common share0.50 — 0.20 N.M.150.0 %
Book value per common share at period end65.74 63.75 68.48  3.1 %(4.0)%
Market price per common share at period end140.75 124.48 137.31  13.1 %2.5 %
Market capitalization at period end2,289,099 2,023,272 2,227,108  13.1 %2.8 %
    
Weighted average common shares - basic (b)16,261,136 16,253,704 16,216,076  — %0.3 %
Weighted average common shares - diluted (b)16,393,179 16,374,982 16,363,968  0.1 %0.2 %
Common shares outstanding at period end16,263,583 16,253,794 16,219,563  0.1 %0.3 %
    
PERFORMANCE RATIOS: (annualized)   
Return on average assets (a)(b)1.28 %1.61 %1.48  % (20.5) %(13.5) %
Return on average shareholders' equity (a)(b)12.44 %15.50 %13.44  % (19.7) %(7.4) %
Yield on loans5.00 %4.72 %4.58  % 5.9  %9.2  %
Yield on investment securities3.25 %2.85 %2.05  % 14.0  %58.5  %
Yield on money market instruments3.63 %2.20 %0.15  % 65.0  %2,320.0  %
Yield on interest earning assets4.57 %4.18 %3.88  % 9.3  %17.8  %
Cost of interest bearing deposits0.81 %0.46 %0.09  % 76.1  %800.0  %
Cost of borrowings2.88 %2.61 %2.09  % 10.3  %37.8  %
Cost of paying interest bearing liabilities0.95 %0.60 %0.25  % 58.3  %280.0  %
Net interest margin (g)3.98 %3.81 %3.72  % 4.5  %7.0  %
Efficiency ratio (g)63.69 %59.88 %64.94  % 6.4  %(1.9) %
    
OTHER DATA (NON-GAAP) AND BALANCE SHEET:
Tangible book value per common share (d)$55.56 $53.54 $58.18 3.8  %(4.5) %
Average interest earning assets9,517,746 9,565,710 9,008,863 (0.5) %5.6  %
Pre-tax, pre-provision net income (k)43,344 54,619 40,148 (20.6) %8.0  %
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, 2022, September 30, 2022, and December 30, 2021     
    Percent change vs.
(in thousands, except ratios)December 31, 2022September 30, 2022December 31, 2021 3Q '224Q '21
BALANCE SHEET:    
Investment securities$1,820,787 $1,828,068 $1,815,408  (0.4) %0.3  %
Loans7,141,891 7,103,246 6,871,122  0.5  %3.9  %
Allowance for credit losses85,379 83,961 83,197  1.7  %2.6  %
Goodwill and other intangible assets165,570 165,911 167,057  (0.2) %(0.9) %
Other real estate owned (OREO)1,354 1,354 775  —  %74.7  %
Total assets9,854,993 9,855,047 9,560,254  —  %3.1  %
Total deposits8,234,715 8,309,927 7,904,528  (0.9) %4.2  %
Borrowings416,009 378,044 426,996  10.0  %(2.6) %
Total shareholders' equity1,069,226 1,036,172 1,110,759  3.2  %(3.7) %
Tangible equity (d)903,656 870,261 943,702  3.8  %(4.2) %
Total nonperforming loans101,111 65,233 102,652  55.0  %(1.5) %
Total nonperforming assets102,465 66,587 106,177  53.9  %(3.5) %
    
ASSET QUALITY RATIOS:   
Loans as a % of period end total assets72.47 %72.08 %71.87 % 0.5  %0.8  %
Total nonperforming loans as a % of period end loans1.42 %0.92 %1.49 % 54.3  %(4.7) %
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets1.43 %0.94 %1.54 % 52.1  %(7.1) %
Allowance for credit losses as a % of period end loans1.20 %1.18 %1.21 % 1.7  %(0.8) %
Net loan charge-offs (recoveries)$1,563 $677 $(61) 130.9  %N.M.
Annualized net loan charge-offs (recoveries) as a % of average loans (b)0.09  %0.04  %—  % 125.0  %N.M.
    
CAPITAL & LIQUIDITY:   
Total shareholders' equity / Period end total assets10.85  %10.51  %11.62  % 3.2  %(6.6) %
Tangible equity (d) / Tangible assets (f)9.33  %8.98  %10.05  % 3.9  %(7.2) %
Average shareholders' equity / Average assets (b)10.27  %10.37  %10.97  % (1.0) %(6.4) %
Average shareholders' equity / Average loans (b)14.85  %15.29  %15.69  % (2.9) %(5.4) %
Average loans / Average deposits (b)81.87  %80.06  %83.78  % 2.3  %(2.3) %
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
Year ended December 31, 2022 and December 31, 2021   
     
  
(in thousands, except share and per share data)20222021 Percent change vs '21
INCOME STATEMENT:   
Net interest income$347,059 $329,893  5.2  %
Provision for (recovery of) credit losses4,557 (11,916) N.M
Other income135,935 129,944  4.6  %
Other expense297,978 283,518  5.1  %
Income before income taxes$180,459 $188,235  (4.1)%
Income taxes32,108 34,290  (6.4)%
Net income$148,351 $153,945  (3.6)%
    
MARKET DATA:   
Earnings per common share - basic (a)$9.13 $9.45  (3.4)%
Earnings per common share - diluted (a)9.06 9.37  (3.3)%
Quarterly cash dividends declared per common share4.16 4.12  1.0 %
Special cash dividends declared per common share0.50 0.40 25.0 %
   
Weighted average common shares - basic (b)16,246,009 16,291,016  (0.3)%
Weighted average common shares - diluted (b)16,365,309 16,425,206  (0.4)%
   
PERFORMANCE RATIOS:   
Return on average assets (a)(b)1.48 %1.56 % (5.1) %
Return on average shareholders' equity (a)(b)13.78 %14.45 % (4.6) %
Yield on loans4.65 %4.53 % 2.6  %
Yield on investment securities2.66 %2.22 % 19.8  %
Yield on money market instruments2.07 %0.13 % 1,492.3  %
Yield on interest earning assets4.14 %3.86 % 7.3  %
Cost of interest bearing deposits0.39 %0.12 % 225.0  %
Cost of borrowings2.59 %1.96 % 32.1  %
Cost of paying interest bearing liabilities0.54 %0.28 % 92.9  %
Net interest margin (g)3.80 %3.69 % 3.0  %
Efficiency ratio (g)61.24 %61.27 % —  %
   
ASSET QUALITY RATIOS
Net loan charge-offs (recoveries) $2,375 $(3,348)N.M.
Net loan charge-offs (recoveries) as a % of average loans (b)0.03 %(0.05)%N.M.
CAPITAL & LIQUIDITY
Average shareholders' equity / Average assets (b)10.72 %10.82 % (0.9) %
Average shareholders' equity / Average loans (b)15.48 %15.19 %1.9  %
Average loans / Average deposits (b)82.32 %85.68 %(3.9) %
OTHER DATA (NON-GAAP) AND BALANCE SHEET:
Average interest earning assets$9,227,377 $9,028,340  2.2  %
Pre-tax, pre-provision net income (k)185,016 176,319 4.9  %
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 EndedTwelve Months Ended
December 31,December 31,
(in thousands, except share and per share data)2022202120222021
Interest income:
   Interest and fees on loans$89,382 $79,168 $323,107 $317,208 
   Interest on debt securities:
Taxable11,974 5,698 36,047 19,458 
Tax-exempt2,918 2,209 10,964 8,307 
   Other interest income4,536 191 8,129 880 
         Total interest income108,810 87,266 378,247 345,853 
Interest expense:
   Interest on deposits:
      Demand and savings deposits10,205 373 17,646 1,595 
      Time deposits1,061 831 3,314 4,711 
   Interest on borrowings2,938 2,356 10,228 9,654 
      Total interest expense14,204 3,560 31,188 15,960 
         Net interest income94,606 83,706 347,059 329,893 
Provision for (recovery of) credit losses2,981 (4,993)4,557 (11,916)
         Net interest income after provision for (recovery of) credit losses91,625 88,699 342,502 341,809 
Other income26,392 32,206 135,935 129,944 
Other expense77,654 75,764 297,978 283,518 
         Income before income taxes40,363 45,141 180,459 188,235 
Income taxes7,279 8,593 32,108 34,290 
         Net income$33,084 $36,548 $148,351 $153,945 
Per common share:
         Net income - basic$2.03 $2.25 $9.13 $9.45 
         Net income - diluted$2.02 $2.23 $9.06 $9.37 
         Weighted average shares - basic16,261,136 16,216,076 16,246,009 16,291,016 
         Weighted average shares - diluted16,393,719 16,363,968 16,365,309 16,425,206 
        Cash dividends declared:
Quarterly dividend$1.04 $1.03 $4.16 $4.12 
Special dividend$0.50 $0.20 $0.50 $0.40 



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, 2022December 31, 2021
  
Assets 
  
Cash and due from banks$156,750 $144,507 
Money market instruments32,978 74,673 
Investment securities1,820,787 1,815,408 
Loans7,141,891 6,871,122 
Allowance for credit losses(85,379)(83,197)
Loans, net7,056,512 6,787,925 
Bank premises and equipment, net82,126 89,008 
Goodwill and other intangible assets165,570 167,057 
Other real estate owned1,354 775 
Other assets538,916 480,901 
Total assets$9,854,993 $9,560,254 
  
Liabilities and Shareholders' Equity 
  
Deposits:
Noninterest bearing$3,074,276 $3,066,419 
Interest bearing5,160,439 4,838,109 
Total deposits8,234,715 7,904,528 
Borrowings416,009 426,996 
Other liabilities135,043 117,971 
Total liabilities$8,785,767 $8,449,495 
  
  
Shareholders' Equity: 
Preferred shares (200,000 shares authorized; no shares outstanding at December 31, 2022 and December 31, 2021)$— $— 
Common shares (No par value; 20,000,000 shares authorized; 17,623,104 shares issued at December 31, 2022 and 17,623,118 shares issued at December 31, 2021)462,404 461,800 
Accumulated other comprehensive (loss) income, net of taxes(102,394)15,155 
Retained earnings847,235 776,294 
Treasury shares (1,359,521 shares at December 31, 2022 and 1,403,555 shares at December 31, 2021)(138,019)(142,490)
Total shareholders' equity$1,069,226 $1,110,759 
Total liabilities and shareholders' equity$9,854,993 $9,560,254 


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

 
PARK NATIONAL CORPORATION 
Consolidated Average Balance Sheets
   
 Three Months EndedTwelve Months Ended
 December 31,December 31,
(in thousands)2022202120222021
   
Assets  
   
Cash and due from banks$145,040 $148,433 $157,295 $139,678 
Money market instruments495,350 491,093 392,256 665,714 
Investment securities 1,811,403 1,696,537 1,843,484 1,407,999 
Loans7,108,956 6,872,620 6,955,674 7,014,517 
Allowance for credit losses(83,478)(88,017)(81,736)(87,233)
Loans, net7,025,478 6,784,603 6,873,938 6,927,284 
Bank premises and equipment, net83,992 89,312 86,322 89,758 
Goodwill and other intangible assets165,794 167,332 166,337 167,993 
Other real estate owned1,354 802 1,161 902 
Other assets551,245 451,545 523,415 448,130 
Total assets$10,279,656 $9,829,657 $10,044,208 $9,847,458 
   
   
Liabilities and Shareholders' Equity  
   
Deposits:
Noninterest bearing$3,134,544 $3,058,428 $3,093,019 $2,937,035 
Interest bearing5,548,542 5,145,026 5,356,809 5,249,467 
Total deposits8,683,086 8,203,454 8,449,828 8,186,502 
Borrowings405,146 448,298 395,515 492,943 
Other liabilities135,915 99,411 121,986 102,553 
Total liabilities$9,224,147 $8,751,163 $8,967,329 $8,781,998 
   
Shareholders' Equity:  
Preferred shares$— $— $— $— 
Common shares461,391 460,037 460,696 459,421 
Accumulated other comprehensive loss, net of taxes(121,416)(10,656)(65,374)(4,120)
Retained earnings853,802 771,957 821,382 744,102 
Treasury shares(138,268)(142,844)(139,825)(133,943)
Total shareholders' equity$1,055,509 $1,078,494 $1,076,879 $1,065,460 
Total liabilities and shareholders' equity$10,279,656 $9,829,657 $10,044,208 $9,847,458 



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

 
PARK NATIONAL CORPORATION 
Consolidated Statements of Income - Linked Quarters
    
 20222022202220222021
(in thousands, except per share data)4th QTR3rd QTR2nd QTR1st QTR4th QTR
  
Interest income: 
Interest and fees on loans $89,382 $83,522 $77,787 $72,416 $79,168 
Interest on debt securities:
Taxable11,974 10,319 7,624 6,130 5,698 
Tax-exempt2,918 2,923 2,676 2,447 2,209 
Other interest income4,536 3,180 260 153 191 
Total interest income108,810 99,944 88,347 81,146 87,266 
  
Interest expense: 
Interest on deposits:
Demand and savings deposits10,205 5,757 1,333 351 373 
Time deposits1,061 825 708 720 831 
Interest on borrowings2,938 2,534 2,367 2,389 2,356 
Total interest expense14,204 9,116 4,408 3,460 3,560 
  
Net interest income94,606 90,828 83,939 77,686 83,706 
  
Provision for (recovery of) credit losses2,981 3,190 2,991 (4,605)(4,993)
  
Net interest income after provision for (recovery of) credit losses91,625 87,638 80,948 82,291 88,699 
  
Other income26,392 46,694 31,193 31,656 32,206 
Other expense77,654 82,903 70,048 67,373 75,764 
  
Income before income taxes40,363 51,429 42,093 46,574 45,141 
  
Income taxes7,279 9,361 7,769 7,699 8,593 
 
Net income $33,084 $42,068 $34,324 $38,875 $36,548 
  
Per common share:
Net income - basic$2.03 $2.59 $2.11 $2.40 $2.25 
Net income - diluted$2.02 $2.57 $2.10 $2.38 $2.23 




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
    
 20222022202220222021
(in thousands)4th QTR3rd QTR2nd QTR1st QTR4th QTR
 
Other income:
Income from fiduciary activities$8,219 $8,216 $8,859 $8,797 $8,887 
Service charges on deposit accounts2,595 2,859 2,563 2,074 2,357 
Other service income2,580 2,956 4,940 4,819 6,368 
Debit card fee income6,675 6,514 6,731 6,126 6,568 
Bank owned life insurance income1,366 1,185 2,374 1,175 1,121 
ATM fees548 610 583 532 572 
Gain on the sale of OREO, net— 5,607 4 — 22 
OREO valuation markup— 12,009 — 30 51 
(Loss) gain on equity securities, net(165)58 709 2,353 2,125 
Other components of net periodic benefit income3,027 3,027 3,027 3,027 2,038 
Miscellaneous1,547 3,653 1,403 2,723 2,097 
Total other income$26,392 $46,694 $31,193 $31,656 $32,206 
 
Other expense:
Salaries$33,837 $37,889 $31,052 $30,521 $35,953 
Employee benefits9,895 9,897 10,199 10,499 10,706 
Occupancy expense4,157 3,455 3,040 3,214 3,161 
Furniture and equipment expense3,118 2,912 2,934 2,937 2,724 
Data processing fees8,537 8,170 8,416 7,504 7,860 
Professional fees and services9,845 8,359 6,775 5,858 7,840 
Marketing1,404 1,595 1,019 1,317 1,718 
Insurance1,526 1,237 1,245 1,405 1,547 
Communication968 1,098 935 890 851 
State tax expense1,040 1,186 1,167 1,192 931 
Amortization of intangible assets341 341 403 402 420 
Foundation contributions— 4,000 — — — 
Miscellaneous2,986 2,764 2,863 1,634 2,053 
Total other expense$77,654 $82,903 $70,048 $67,373 $75,764 



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)20222021202020192018
 
Allowance for credit losses:
Allowance for credit losses, beginning of period$83,197 $85,675 $56,679 $51,512 $49,988 
Cumulative change in accounting principle; adoption of ASU 2016-13— 6,090 — — — 
Charge-offs9,133 5,093 10,304 11,177 13,552 
Recoveries6,758 8,441 27,246 10,173 7,131 
Net charge-offs (recoveries) 2,375 (3,348)(16,942)1,004 6,421 
Provision for (recovery of) credit losses4,557 (11,916)12,054 6,171 7,945 
Allowance for credit losses, end of period$85,379 $83,197 $85,675 $56,679 $51,512 
General reserve trends:
Allowance for credit losses, end of period$85,379 $83,197 $85,675 $56,679 $51,512 
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 collectively evaluated loans (for years 2020 and prior)N.A.N.A.678 — — 
Specific reserves on individually evaluated loans3,566 1,616 5,434 5,230 2,273 
General reserves on collectively evaluated loans$81,813 $81,581 $79,396 $51,181 $49,239 
 
Total loans$7,141,891 $6,871,122 $7,177,785 $6,501,404 $5,692,132 
PCD loans (PCI loans for years 2020 and prior)4,653 7,149 11,153 14,331 3,943 
Purchased loans excluded from collectively evaluated loans (for years 2020 and prior)N.A.N.A.360,056 548,436 225,029 
Individually evaluated loans78,341 74,502 108,407 77,459 48,135 
Collectively evaluated loans$7,058,897 $6,789,471 $6,698,169 $5,861,178 $5,415,025 
 
Asset Quality Ratios:
Net charge-offs (recoveries) as a % of average loans0.03  %(0.05) %(0.24) %0.02  %0.12  %
Allowance for credit losses as a % of period end loans 1.20  %1.21  %1.19  %0.87  %0.90  %
Allowance for credit losses as a % of period end loans (excluding PPP loans) (j)1.20 %1.22 %1.25 %N.A.N.A.
General reserve as a % of collectively evaluated loans 1.16  %1.20  %1.19  %0.87  %0.91  %
General reserves as a % of collectively evaluated loans (excluding PPP loans) (j)1.16 %1.21 %1.24 %N.A.N.A.
 
Nonperforming assets:
Nonaccrual loans$79,696 $72,722 $117,368 $90,080 $67,954 
Accruing troubled debt restructurings20,134 28,323 20,788 21,215 15,173 
Loans past due 90 days or more1,281 1,607 1,458 2,658 2,243 
Total nonperforming loans$101,111 $102,652 $139,614 $113,953 $85,370 
Other real estate owned - Park National Bank— 181 837 3,100 2,788 
Other real estate owned - SEPH1,354 594 594 929 1,515 
Other nonperforming assets - Park National Bank— 2,750 3,164 3,599 3,464 
Total nonperforming assets$102,465 $106,177 $144,209 $121,581 $93,137 
Percentage of nonaccrual loans to period end loans1.12  %1.06  %1.64  %1.39  %1.19  %
Percentage of nonperforming loans to period end loans1.42  %1.49  %1.95  %1.75  %1.50  %
Percentage of nonperforming assets to period end loans1.43  %1.55  %2.01  %1.87  %1.64  %
Percentage of nonperforming assets to period end total assets1.04  %1.11  %1.55  %1.42  %1.19  %
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)20222021202020192018
 
New nonaccrual loan information:
Nonaccrual loans, beginning of period$72,722 $117,368 $90,080 $67,954 $72,056 
New nonaccrual loans64,918 38,478 103,386 81,009 76,611 
Resolved nonaccrual loans57,944 83,124 76,098 58,883 80,713 
Nonaccrual loans, end of period$79,696 $72,722 $117,368 $90,080 $67,954 
 
Individually evaluated commercial loan portfolio information (period end):
Unpaid principal balance$80,116 $75,126 $109,062 $78,178 $59,381 
Prior charge-offs1,775 624 655 719 11,246 
Remaining principal balance78,341 74,502 108,407 77,459 48,135 
Specific reserves3,566 1,616 5,434 5,230 2,273 
Book value, after specific reserves$74,775 $72,886 $102,973 $72,229 $45,862 
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 Reconciliations
NON-GAAP RECONCILIATIONS
THREE MONTHS ENDEDTWELVE MONTHS ENDED
(in thousands, except share and per share data)December 31, 2022September 30, 2022December 31, 2021December 31, 2022December 31, 2021
Net interest income$94,606 $90,828 $83,706 $347,059 $329,893 
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions258 495 559 1,780 3,303 
less interest income on former Vision Bank relationships707 649 4,628 3,703 7,985 
Net interest income - adjusted$93,641 $89,684 $78,519 $341,576 $318,605 
Provision for (recovery of) credit losses$2,981 $3,190 $(4,993)$4,557 $(11,916)
less recoveries on former Vision Bank relationships(792)(20)(106)(1,319)(3,169)
Provision for (recovery of) credit losses - adjusted$3,773 $3,210 $(4,887)$5,876 $(8,747)
Other income$26,392 $46,694 $32,206 $135,935 $129,944 
less other service income related to former Vision Bank relationships285 3 321 788 525 
less Vision related gain on the sale of OREO, net— 5,607 — 5,607 — 
less Vision related OREO valuation markup— 12,009 — 12,009 — 
Other income - adjusted$26,107 $29,075 $31,885 $117,531 $129,419 
Other expense$77,654 $82,903 $75,764 $297,978 $283,518 
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions341 341 420 1,487 1,798 
less direct expenses related to collection of payments on former Vision Bank loan relationships100 1,295 700 1,761 1,361 
less Foundation contribution— 4,000 — 4,000 4,000 
Other expense - adjusted$77,213 $77,267 $74,644 $290,730 $276,359 
Tax effect of adjustments to net income identified above (i)$(336)$(2,761)$(944)$(3,771)$(1,643)
Net income - reported$33,084 $42,068 $36,548 $148,351 $153,945 
Net income - adjusted (h)$31,819 $31,682 $32,998 $134,164 $147,765 
Diluted earnings per common share$2.02 $2.57 $2.23 $9.06 $9.37 
Diluted earnings per common share, adjusted (h)$1.94 $1.93 $2.02 $8.20 $9.00 
Annualized return on average assets (a)(b)1.28 %1.61 %1.48 %1.48 %1.56 %
Annualized return on average assets, adjusted (a)(b)(h)
1.23 %1.21 %1.33 %1.34 %1.50 %
Annualized return on average tangible assets (a)(b)(e)1.30 %1.63 %1.50 %1.50 %1.59 %
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)1.25 %1.23 %1.35 %1.36 %1.53 %
Annualized return on average shareholders' equity (a)(b)12.44 %15.50 %13.44 %13.78 %14.45 %
Annualized return on average shareholders' equity, adjusted (a)(b)(h)11.96 %11.68 %12.14 %12.46 %13.87 %
Annualized return on average tangible equity (a)(b)(c)14.75 %18.33 %15.91 %16.29 %17.15 %
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)14.19 %13.81 %14.37 %14.73 %16.46 %
Efficiency ratio (g)63.69 %59.88 %64.94 %61.24 %61.27 %
Efficiency ratio, adjusted (g)(h)63.99 %64.56 %67.15 %62.84 %61.29 %
Annualized net interest margin (g)3.98 %3.81 %3.72 %3.80 %3.69 %
Annualized net interest margin, adjusted (g)(h)3.94 %3.76 %3.49 %3.74 %3.56 %
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 Reconciliations (continued)
(a) Reported measure uses net income
(b) Averages are for the three months ended December 31, 2022, September 30, 2022, and December 31, 2021 and the twelve months ended December 31, 2022 and December 31, 2021, 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 ENDEDTWELVE MONTHS ENDED
 December 31, 2022September 30, 2022December 31, 2021December 31, 2022December 31, 2021
AVERAGE SHAREHOLDERS' EQUITY$1,055,509 $1,076,526 $1,078,494 $1,076,879 $1,065,460 
Less: Average goodwill and other intangible assets165,794 166,136 167,332 166,337 167,993 
AVERAGE TANGIBLE EQUITY$889,715 $910,390 $911,162 $910,542 $897,467 
(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, 2022September 30, 2022December 31, 2021
TOTAL SHAREHOLDERS' EQUITY$1,069,226 $1,036,172 $1,110,759 
Less: Goodwill and other intangible assets165,570 165,911 167,057 
TANGIBLE EQUITY$903,656 $870,261 $943,702 
    
(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 ENDEDTWELVE MONTHS ENDED
 December 31, 2022September 30, 2022December 31, 2021December 31, 2022December 31, 2021
AVERAGE ASSETS$10,279,656 $10,384,049 $9,829,657 $10,044,208 $9,847,458 
Less: Average goodwill and other intangible assets165,794 166,136 167,332 166,337 167,993 
AVERAGE TANGIBLE ASSETS$10,113,862 $10,217,913 $9,662,325 $9,877,871 $9,679,465 
(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:
 December 31, 2022September 30, 2022December 31, 2021
TOTAL ASSETS$9,854,993 $9,855,047 $9,560,254 
Less: Goodwill and other intangible assets165,570 165,911 167,057 
TANGIBLE ASSETS$9,689,423 $9,689,136 $9,393,197 
    
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com

PARK NATIONAL CORPORATION
Financial Reconciliations (continued)
(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, in each case during the applicable period.
RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
 THREE MONTHS ENDEDTWELVE MONTHS ENDED
 December 31, 2022September 30, 2022December 31, 2021December 31, 2022December 31, 2021
Interest income$108,810 $99,944 $87,266 $378,247 $345,853 
Fully taxable equivalent adjustment918 932 762 3,541 2,911 
Fully taxable equivalent interest income$109,728 $100,876 $88,028 $381,788 $348,764 
Interest expense14,204 9,116 3,560 31,188 15,960 
Fully taxable equivalent net interest income$95,524 $91,760 $84,468 $350,600 $332,804 
(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, provision for (recovery of) credit losses, other income, other expense and income taxes.
(i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate.
(j) Excludes $4.2 million of PPP loans and $4,000 in related allowance at December 31, 2022, $74.4 million of PPP loans and $77,000 in related allowance at December 31, 2021 and $331.6 million of PPP loans and $337,000 in related allowance at December 31, 2020.
(k) Pre-tax, pre-provision ("PTPP") net income is calculated as net income, plus income taxes, plus the provision for (recovery of) credit losses, in each case during the applicable period. PTPP net income is a common industry metric utilized in capital analysis and review. PTPP is used to assess the operating performance of Park while excluding the impact of the provision for (recovery of) credit losses.
RECONCILIATION OF PRE-TAX, PRE-PROVISION NET INCOME
THREE MONTHS ENDEDTWELVE MONTHS ENDED
December 31, 2022September 30, 2022December 31, 2021December 31, 2022December 31, 2021
Net income$33,084 $42,068 $36,548 $148,351 $153,945 
Plus: Income taxes7,279 9,361 8,593 32,108 34,290 
Plus: Provision for (recovery of) credit losses2,981 3,190 (4,993)4,557 (11,916)
Pre-tax, pre-provision net income$43,344 $54,619 $40,148 $185,016 $176,319 
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com