8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)                                July 19, 2010                                                                 

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))

Item 2.02 – Results of Operations and Financial Condition

On July 19, 2010, Park National Corporation (“Park”) issued a news release (the “Operating Results News Release”) announcing operating results for the three and six months ended June 30, 2010.  A copy of this Operating Results News Release is included as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein.

Park’s management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate Park’s performance. Specifically, management reviews return on average tangible common equity, return on average tangible assets, tangible common equity to tangible assets and tangible common book value per common share.  Management has included in the Operating Results News Release information relating to the return on average tangible common equity, return on average tangible assets, tangible common equity to tangible assets and tangible common book value per common share for the three and six month periods ended June 30, 2010 and 2009. For purposes of calculating the return on average tangible common equity, a non-GAAP financial measure, net income available to common shareholders for each period is divided by average tangible common equity during the period. Average tangible common equity equals average stockholders’ equity during the applicable period less (i) average goodwill and other intangible assets during the period and (ii) average preferred stock during the period. For the purpose of calculating the return on average tangible assets, a non-GAAP financial measure, net income available to common shareholders 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 tangible common equity to tangible assets, a non-GAAP financial measure, tangible common equity is divided by tangible assets.  Tangible common equity equals stockholders’ equity less preferred stock and goodwill and intangible assets.  Tangible assets equals total assets less goodwill and intangible assets.  For the purpose of calculating tangible common book value per common share, a non-GAAP financial measure, tangible common equity is dividend by common shares outstanding at period end.  Management believes that the disclosure of return on average tangible common equity, return on average tangible assets, tangible common equity to tangible assets and tangible common book value per common 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 GAAP, assists in analyzing Park’s operating performance and ensures comparability of operating performance from period to period while eliminating certain non-operational effects of acquisitions and, in the case of return on average common equity and tangible common book value per common share, the impact of preferred stock.  In the Operating Results News Release, Park has provided a reconciliation of average tangible common equity to average stockholders’ equity, average tangible assets to average assets, tangible common equity to stockholders’ equity and tangible assets to total assets solely for the purpose of complying with SEC Regulation G and not as an indication that return on average tangible common equity, return on average tangible assets or tangible common book value per common share are substitutes for return on average equity, return on average assets or common book value per common share as determined by GAAP.

2

Item 7.01 — Regulation FD Disclosure

The following is a discussion of the actual operating results for the first six months of 2010, and a comparison of management’s latest projections for the twelve months ending December 31, 2010 to the guidance previously provided within the Form 10-Q for the quarterly period ended March 31, 2010 (the “March 31, 2010 Form 10-Q”).

Net Interest Income:

For the first six months of 2010, net interest income was $136.1 million.  In the March 31, 2010 Form 10-Q, management had projected that net interest income would be $265 million to $275 million for 2010.  Net interest income through June 30, 2010 was in line with management expectations.  For the six months ended June 30, 2010, loans increased by $15.6 million or an annualized 0.7 percent.  In the March 31, 2010 Form 10-Q, management projected slow loan growth of 1% to 2% for the twelve months ended December 31, 2010 compared to the same period in 2009.  Management’s current projection for net interest income ($265 million to $275 million) and loan growth (1% to 2%) is unchanged from the guidance previously provided.

Provision for Loan Losses:

For the six months ended June 30, 2010, the provision for loan losses was $29.8 million and net loan charge-offs were $25.8 million.  In the March 31, 2010 Form 10-Q, management projected that the provision for loan losses would be approximately $50 million to $55 million in 2010.  The provision for loan losses for the first six months of 2010 was slightly higher than management expected. Management now expects that the provision for loan losses will be approximately $55 million to $60 million in 2010. In light of some uncertainty regarding the impact the oil spill may have on the gulf region and our Vision Bank subsidiary, to the best of our knowledge, management continues to believe the outlook for 2010 will be consistent with this guidance provided.  Park and Vision Bank management are working very closely with those borrowers who could potentially be impacted by the oil spill, assisting them through the claims process and assessing their continued ability to repay contractual principal and interest.

Other Income:

For the first six months of 2010, total other income, excluding gains from the sale of securities, was $33.4 million.  In the March 31, 2010 form 10-Q, management projected that total other income, excluding gains from the sale of securities, would be approximately $68 million for 2010.  Total other income through June 30, 2010 was in line with management’s projected results for 2010.

3

Gain on Sale of Securities:

In the Annual Report to Shareholders for the fiscal year ended December 31, 2009, on page 39, management projected that a pre-tax gain of $7.3 million would be recognized from the sale of $200 million of securities during the first quarter of 2010. During the first quarter of 2010, Park actually sold $201 million of investment securities for a pre-tax gain of $8.3 million.  During the second quarter of 2010, Park sold $56.8 million of investment securities for a pre-tax gain of $3.5 million.

Other Expense:

For the first six months of 2010, total other expense was $94.9 million.  In the March 31, 2010 Form 10-Q, management projected that total other expense would be $191 million in 2010.  Total other expense for the first six months of 2010 was consistent with management’s projected results for 2010.

4

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

This Current Report on Form 8-K, including Exhibit 99.1 included within this Current Report, contains forward-looking statements that 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. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. 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: deterioration in the asset value of Park’s loan portfolio may be worse than expected due to a number of factors, such as adverse changes in economic conditions that impair the ability of borrowers to repay their loans, the underlying value of the collateral could prove less valuable than assumed and cash flows may be worse than expected; Park’s ability to execute its business plan successfully and within the expected timeframe; general economic and financial market conditions, and weakening in the economy, specifically, the real estate market and credit market, either nationally or in the states in which Park and its subsidiaries do business, may be worse than expected which could decrease the demand for loan, deposit and other financial services and increase loan delinquencies and defaults; the effects of the Gulf of Mexico oil spill; changes in market rates and prices may adversely impact the value of securities, loans, deposits and other financial instruments and the interest rate sensitivity of our consolidated balance sheet; changes in consumer spending, borrowing and saving habits; our liquidity requirements could be adversely affected by changes in our assets and liabilities; competitive factors among financial institutions increase significantly, including product and pricing pressures and our ability to attract, develop and retain qualified bank professionals; the nature, timing and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and its subsidiaries, including changes in laws and regulations concerning taxes, accounting, banking, securities and other aspects of the financial services industry, specifically the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; the effect of fiscal and governmental policies of the United States federal government; demand for loans in the respective market areas served by Park and its subsidiaries, and other risk factors relating to the banking industry as detailed from time to time in Park’s reports filed with the Securities and Exchange Commission 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, 2009 and in "Item 1A. Risk Factors" of Part II of Park's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010.  Undue reliance should not be placed on the forward-looking statements, which speak only as of the date of this Current Report on Form 8-K. Park does not undertake, and specifically disclaims any obligation, to publicly release the result 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 is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

5

Item 8.01 – Other Events

Declaration of Cash Dividend

As reported in the Operating Results News Release, on July 19, 2010, the Park Board of Directors declared a $0.94 per share quarterly cash dividend in respect of Park’s common shares.  The dividend is payable on September 10, 2010 to common shareholders of record as of the close of business on August 25, 2010.  A copy of the Operating Results News Release is included as Exhibit 99.1 and the portion thereof addressing the declaration of the cash dividend by Park’s Board of Directors is incorporated by reference herein.

Monitoring developments of the oil spill in the Gulf of Mexico

Park is monitoring developments of the oil spill in the Gulf of Mexico. The extent of the potential effects on our customers and the areas in which they operate is presently being evaluated. Park and Vision Bank management are working very closely with those borrowers who could potentially be impacted by the oil spill, assisting them through the claims process.  The future effects of the oil spill could possibly impact Park and our earnings, but until more is known about the impact on our borrowers, we are unable to determine whether there will be any negative impact on their ability to repay contractual principal and interest.

Item 9.01 – Financial Statements and Exhibits.

(a) Not applicable

(b) Not applicable

(c) Not applicable

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

Exhibit No.	Description
99.1	News Release issued by Park National Corporation on July 19, 2010 addressing operating results for the three and six months ended June 30, 2010.

[Remainder of page intentionally left blank;

signature on following page.]

6

SIGNATURE

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

	PARK NATIONAL CORPORATION
Dated: July 19, 2010	By:	/s/ John W. Kozak
		John W. Kozak
		Chief Financial Officer

7

INDEX TO EXHIBITS

Current Report on Form 8-K

Dated July 19, 2010

Park National Corporation

Exhibit No.	Description
99.1	News Release issued by Park National Corporation on July 19, 2010 addressing operating results for the three and six months ended June 30, 2010.

8

EX-99.1

N e w s   R e l e a s e

July 19, 2010 Exhibit 99.1                        

Park National Corporation reports second quarter 2010

financial results and declares quarterly cash dividend

NEWARK, Ohio — Park National Corporation (Park) (NYSE Amex: PRK) today announced operating results for the three and six months ended June 30, 2010 (second quarter and first half of 2010). Park's Board of Directors also today declared a $0.94 per common share quarterly cash dividend, payable on September 10, 2010 to common shareholders of record as of August 25, 2010.

“We are pleased to report business loan growth in the second quarter of this year. Also, extraordinarily low residential mortgage rates continue to help generate significant consumer lending activity, including $244 million in mortgage loan originations for the first half of 2010,” said Park Chairman C. Daniel DeLawder. “Our lenders are focused on supporting each community we serve through high-quality, reliable lending with consistent underwriting. As economic conditions slowly improve, we hope to further expand our loan balances and reduce problem credits.”

Park’s second quarter net income was $21.2 million, compared to $21.3 million for the same period in 2009. Net income was $41.9 million for first half of 2010, a 1.8 percent decline from the first half of 2009 net income of $42.7 million.

Net income for Park's Ohio-based operations was $56.2 million for the first half of 2010, a 5.4 percent increase from the $53.3 million reported in the first half of 2009. Net income for Park’s Ohio-based operations was $27.9 million for the second quarter of 2010, the same as the $27.9 million reported in the second quarter of 2009.

While Park’s net income modestly declined for the second quarter and first half of 2010 in comparison to the same periods in 2009, earnings per common share for those periods declined by a greater percentage as a result of the issuance of common shares over the last five quarters. Second quarter 2010 net income per diluted common share was $1.30, an 8.5 percent decline from the $1.42 in the second quarter of 2009. Net income per diluted common share for the first half of 2010 was $2.60, an 8.8 percent decline from the $2.85 in the first half of 2009.

Exercise of common share warrants and issuance of common shares

Over the past five quarters, common shares outstanding have increased by 1,228,172 or 8.8 percent, as a result of capital raising activities. During 2009, Park sold 904,072 common shares and Series A and Series B Common Share Warrants covering an aggregate of 500,000 common shares at a weighted average price per share of $61.20 for gross proceeds of $55.3 million. Net of selling expenses and professional fees, Park raised $53.5 million of common equity from these capital raising activities in 2009. During the second quarter of 2010, 324,100 common shares were issued upon the exercise of the Series A and Series B Common Share Warrants at a price of $67.75 per common share. Net of all expenses, Park raised an additional $21.3 million of common equity from the sale of these 324,100 common shares.  Series B Common Share Warrants covering 175,900 common shares, with an exercise price of $67.75 per common share and an expiration date of October 30, 2010, remain outstanding.

Loan portfolio information

Park’s loan portfolio experienced solid growth during the 2010 second quarter, increasing $58.7 million to end the quarter at $4.66 billion. For the first half of 2010, Park’s loans have increased by $15.6 million. Park’s Ohio-based operations experienced loan growth of approximately $61.5 million and $20.9 million in the second quarter and first half of 2010, respectively.

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

N e w s   R e l e a s e

Net charge-offs for the first half of 2010 were $25.8 million, or an annualized 1.13 percent of average loans outstanding. This compares to $23.4 million, or an annualized 1.03 percent of average loans outstanding, for the same period in 2009.

Park's loan loss provision for the first half of 2010 was $29.8 million, compared to $28.1 million for the same period in 2009. Of the $29.8 million loan loss provision, $20.2 million was recorded at Vision Bank, with the remaining $9.6 million recorded within Park's Ohio-based operations. Overall, the allowance for loan losses increased by $4.0 million during the first half of 2010, ending the period at $120.7 million, or 2.59 percent of period-end loans.

Additional information

During the 2010 second quarter, Park completed the sale of approximately $56.8 million of investment securities, which resulted in a pre-tax gain of $3.5 million.

Headquartered in Newark, Ohio, Park National Corporation has $7.1 billion in total assets (as of June 30, 2010). Park consists of 13 community bank divisions and two specialty finance companies. Park's Ohio-based banking operations are conducted through Park subsidiary The Park National Bank and its divisions which include Fairfield National Bank Division, Richland Bank Division, Century National Bank Division, First-Knox National Bank Division, Farmers & Savings Bank Division, United Bank Division, Second National Bank Division, Security National Bank Division, Unity National Bank Division and The Park National Bank of Southwest Ohio & Northern Kentucky Division. Park's other banking subsidiary is Vision Bank (headquartered in Panama City, Florida), and its Vision Bank Division (of Gulf Shores, Alabama). Park also includes Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance) and Guardian Financial Services Company (d.b.a. Guardian Finance Company).

Complete financial tables are included below.

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

N e w s   R e l e a s e

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

This news release contains forward-looking statements that 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: deterioration in the asset value of Park's loan portfolio may be worse than expected due to a number of factors, such as adverse changes in economic conditions that impair the ability of borrowers to repay their loans, the underlying value of the collateral could prove less valuable than assumed and cash flows may be worse than expected; Park's ability to execute its business plan successfully and within the expected timeframe; general economic and financial market conditions, and weakening in the economy, specifically, the real estate market and credit market, either nationally or in the states in which Park and its subsidiaries do business, may be worse than expected which could decrease the demand for loan, deposit and other financial services and increase loan delinquencies and defaults; the effects of the Gulf of Mexico oil spill; changes in market rates and prices may adversely impact the value of securities, loans, deposits and other financial instruments and the interest rate sensitivity of our consolidated balance sheet; changes in consumer spending, borrowing and saving habits; our liquidity requirements could be adversely affected by changes in our assets and liabilities; competitive factors among financial institutions increase significantly, including product and pricing pressures and our ability to attract, develop and retain qualified bank professionals; the nature, timing and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and its subsidiaries, including changes in laws and regulations concerning taxes, accounting, banking, securities and other aspects of the financial services industry, specifically the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; the effect of fiscal and governmental policies of the United States federal government; demand for loans in the respective market areas served by Park and its subsidiaries, and other risk factors relating to the banking industry as detailed from time to time in Park's reports filed with the Securities and Exchange Commission 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, 2009 and in "Item 1A. Risk Factors" of Part II of Park's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Park does not undertake, and specifically disclaims any obligation, to publicly release the result 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 is 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

Three months ended June 30, 2010, March 31, 2010 and June 30, 2009

	2010						2009			Percent change vs.
(in thousands, except share and per share data)	2nd QTR			1st QTR			2nd QTR			1Q '10			2Q '09
INCOME STATEMENT:
Net interest income	$	68,721		$	67,380		$	67,994			2.0	%		1.1	%
Provision for loan losses		13,250			16,550			15,856			-19.9	%		-16.4	%
Other income		16,647			16,710			19,757			-0.4	%		-15.7	%
Gain on sale of securities		3,515			8,304			7,340			-57.7	%		-52.1	%
Total other expense		47,001			47,890			50,151			-1.9	%		-6.3	%
Income before income taxes	$	28,632		$	27,954		$	29,084			2.4	%		-1.6	%
Income taxes		7,466			7,175			7,777			4.1	%		-4.0	%
Net income	$	21,166		$	20,779		$	21,307			1.9	%		-0.7	%
Preferred stock dividends and accretion		1,451			1,452			1,441			-0.1	%		0.7	%
Net income available to common shareholders	$	19,715		$	19,327		$	19,866			2.0	%		-0.8	%
MARKET DATA:
Earnings per common share - basic (b)	$	1.30		$	1.30		$	1.42			0.0	%		-8.5	%
Earnings per common share - diluted (b)		1.30			1.30			1.42			0.0	%		-8.5	%
Cash dividends per common share		0.94			0.94			0.94			0.0	%		0.0	%
Common book value per common share at period end		42.94			41.94			40.20			2.4	%		6.8	%
Stock price per common share at period end		65.04			62.31			56.48			4.4	%		15.2	%
Market capitalization at period end		989,054			927,345			799,469			6.7	%		23.7	%
Weighted average common shares - basic (a)		15,114,846			14,882,774			14,001,608			1.6	%		8.0	%
Weighted average common shares - diluted (a)		15,114,846			14,882,774			14,001,608			1.6	%		8.0	%
Common shares outstanding at period end		15,206,854			14,882,765			14,154,908			2.2	%		7.4	%
PERFORMANCE RATIOS:
Annualized return on average assets (a)(b)		1.13	%		1.11	%		1.13	%		1.8	%		0.0	%
Annualized return on average common equity (a)(b)		12.27	%		12.43	%		14.11	%		-1.3	%		-13.0	%
Yield on loans		5.84	%		5.87	%		6.02	%		-0.5	%		-3.0	%
Yield on investments		4.44	%		4.43	%		4.92	%		0.2	%		-9.8	%
Yield on earning assets		5.44	%		5.45	%		5.69	%		-0.2	%		-4.4	%
Cost of interest bearing deposits		1.04	%		1.15	%		1.59	%		-9.6	%		-34.6	%
Cost of borrowings		2.94	%		2.90	%		2.41	%		1.4	%		22.0	%
Cost of paying liabilities		1.40	%		1.49	%		1.78	%		-6.0	%		-21.3	%
Net interest margin (annualized) (g)		4.29	%		4.22	%		4.21	%		1.7	%		1.9	%
Efficiency ratio (g)		54.75	%		56.63	%		56.81	%		-3.3	%		-3.6	%
OTHER RATIOS (NON GAAP):
Annualized return on average tangible assets (a)(b)(e)		1.14	%		1.12	%		1.15	%		1.8	%		-0.9	%
Annualized return on average tangible common equity (a)(b)(c)		14.03	%		14.27	%		16.58	%		-1.7	%		-15.4	%
Tangible common book value per common share (d)	$	37.68		$	36.51		$	34.29			3.2	%		9.9	%

PARK NATIONAL CORPORATION

Financial Highlights (continued)

Three months ended June 30, 2010, March 31, 2010 and June 30, 2009

										Percent change vs.
BALANCE SHEET:	June 30, 2010			March 31, 2010			June 30, 2009			1Q '10			2Q '09
Investment securities	$	1,845,594		$	1,941,465		$	1,913,620			-4.9	%		-3.6	%
Loans		4,655,997			4,597,304			4,620,026			1.3	%		0.8	%
Allowance for loan losses		120,676			119,674			104,804			0.8	%		15.1	%
Goodwill and other intangibles		80,021			80,863			83,672			-1.0	%		-4.4	%
Other real estate owned		46,456			45,854			41,279			1.3	%		12.5	%
Total assets		7,093,098			7,176,087			7,007,610			-1.2	%		1.2	%
Total deposits		5,168,814			5,268,858			5,053,424			-1.9	%		2.3	%
Borrowings		1,008,748			996,686			1,180,688			1.2	%		-14.6	%
Stockholders' equity		749,939			720,898			665,141			4.0	%		12.7	%
Common equity		653,053			624,213			569,039			4.6	%		14.8	%
Tangible common equity (d)		573,032			543,350			485,367			5.5	%		18.1	%
Nonperforming loans		237,854			230,558			206,581			3.2	%		15.1	%
Nonperforming assets		284,310			276,412			247,860			2.9	%		14.7	%
Past due 90 day loans and still accruing		17,283			11,853			4,417			45.8	%		291.3	%
ASSET QUALITY RATIOS:
Loans as a % of period end assets		65.64	%		64.06	%		65.93	%		2.5	%		-0.4	%
Nonperforming loans as a % of period end loans		5.11	%		5.02	%		4.47	%		1.8	%		14.3	%
Past due 90 day loans as a % of period end loans		0.37	%		0.26	%		0.10	%		42.3	%		270.0	%
Nonperforming assets / Period end loans + OREO		6.05	%		5.95	%		5.32	%		1.7	%		13.7	%
Allowance for loan losses as a % of period end loans		2.59	%		2.60	%		2.27	%		-0.4	%		14.1	%
Net loan charge-offs	$	12,248		$	13,593		$	12,331			-9.9	%		-0.7	%
Annualized net loan charge-offs as a % of average loans (a)		1.07	%		1.19	%		1.08	%		-10.1	%		-0.9	%
CAPITAL & LIQUIDITY:
Total equity / Period end assets		10.57	%		10.05	%		9.49	%		5.2	%		11.4	%
Common equity / Period end assets		9.21	%		8.70	%		8.12	%		5.9	%		13.4	%
Tangible common equity (d) / Tangible assets (f)		8.17	%		7.66	%		7.01	%		6.7	%		16.5	%
Average equity / Average assets (a)		10.56	%		10.26	%		9.40	%		2.9	%		12.3	%
Average equity / Average loans (a)		16.09	%		15.75	%		14.41	%		2.2	%		11.7	%
Average loans / Average deposits (a)		88.85	%		88.19	%		91.52	%		0.7	%		-2.9	%

PARK NATIONAL CORPORATION

Financial Highlights (continued)

Six months ended June 30, 2010 and 2009

	June 30,			June 30,			Percent
(in thousands, except share and per share data)	2010			2009			change
INCOME STATEMENT:
Net interest income	$	136,101		$	136,227			-0.1	%
Provision for loan losses		29,800			28,143			5.9	%
Other income		33,357			38,967			-14.4	%
Gain on sale of securities		11,819			7,340			61.0	%
Total other expense		94,891			96,013			-1.2	%
Income before income taxes	$	56,586		$	58,378			-3.1	%
Income taxes		14,641			15,681			-6.6	%
Net income	$	41,945		$	42,697			-1.8	%
Preferred stock dividends and accretion		2,903			2,881			0.8	%
Net income available to common shareholders	$	39,042		$	39,816			-1.9	%
MARKET DATA:
Earnings per commmon share - basic (b)	$	2.60		$	2.85			-8.8	%
Earnings per common share - diluted (b)		2.60			2.85			-8.8	%
Cash dividends per common share		1.88			1.88			0.0	%
Weighted average common shares - basic (a)		14,998,810			13,986,664			7.2	%
Weighted average common shares - diluted (a)		14,998,810			13,986,664			7.2	%
PERFORMANCE RATIOS:
Annualized return on average assets (a)(b)		1.12	%		1.15	%		-2.6	%
Annualized return on average common equity (a)(b)		12.35	%		17.35	%		-28.8	%
Yield on loans		5.86	%		6.10	%		-3.9	%
Yield on investments		4.44	%		4.95	%		-10.3	%
Yield on earning assets		5.44	%		5.75	%		-5.4	%
Cost of interest bearing deposits		1.10	%		1.66	%		-33.7	%
Cost of borrowings		2.92	%		2.28	%		28.1	%
Cost of paying liabilities		1.44	%		1.81	%		-20.4	%
Net interest margin (annualized) (g)		4.25	%		4.24	%		0.2	%
Efficiency ratio (g)		55.68	%		54.46	%		2.2	%
ASSET QUALITY RATIOS:
Net loan charge-offs	$	25,841		$	23,427			10.3	%
Annualized net loan charge-offs as a % of average loans (a)		1.13	%		1.03	%		9.7	%
CAPITAL AND LIQUIDITY:
Average equity / Average assets (a)		10.41	%		9.29	%		12.1	%
Average equity / Average loans (a)		15.92	%		14.33	%		11.1	%
Average loans / Average deposits (a)		88.52	%		92.83	%		-4.6	%
OTHER RATIOS (NON GAAP):
Annualized return on average tangible assets (a)(b)(e)		1.13	%		1.15	%		-1.7	%
Annualized return on average tangible common equity (a)(b)(c)		14.15	%		16.95	%		-16.5	%

PARK NATIONAL CORPORATION

Financial Highlights (continued)

(a) Averages are for the quarters ended June 30, 2010, March 31, 2010 and June 30, 2009, and the six-month periods ended June 30, 2010 and June 30, 2009.

(b) Reported measure uses net income available to common shareholders.

(c) Net income available to common shareholders for each period divided by average tangible common equity during the period. Average tangible common equity equals average stockholders' equity during the applicable period less (i) average preferred stock during the applicable period and (ii) average goodwill and other intangibles during the applicable period.

RECONCILIATION OF AVERAGE STOCKHOLDERS' EQUITY TO AVERAGE TANGIBLE COMMON EQUITY:

	THREE MONTHS ENDED						SIX MONTHS ENDED
	June 30, 2010		March 31, 2010		June 30, 2009		June 30, 2010		June 30, 2009
AVERAGE STOCKHOLDERS' EQUITY	$	741,006	$	727,237	$	660,837	$	734,160	$	654,381
Less: Average preferred stock		96,770		96,568		95,992		96,670		95,897
Average goodwill and other           intangibles		80,469		81,376		84,199		80,920		84,668
AVERAGE TANGIBLE COMMON EQUITY	$	563,767	$	549,293	$	480,646	$	556,570	$	473,816

(d) Tangible common equity equals ending stockholders' equity less preferred stock and goodwill and other intangibles, in each case at the end of the period.

RECONCILIATION OF STOCKHOLDERS' EQUITY TO TANGIBLE COMMON EQUITY:

	June 30, 2010		March 31, 2010		June 30, 2009
STOCKHOLDERS' EQUITY	$	749,939	$	720,898	$	665,141
Less: Preferred stock		96,886		96,685		96,102
Goodwill and other intangibles		80,021		80,863		83,672
TANGIBLE COMMON EQUITY	$	573,032	$	543,350	$	485,367

(e) Net income available to common shareholders for each period divided by average tangible assets during the period. Average tangible assets equals average assets less average goodwill and other intangibles.

RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS:

	THREE MONTHS ENDED						SIX MONTHS ENDED
	June 30, 2010		March 31, 2010		June 30, 2009		June 30, 2010		June 30, 2009
AVERAGE ASSETS	$	7,018,710	$	7,086,333	$	7,030,456	$	7,052,335	$	7,045,010
Less: Average goodwill and other intangibles		80,469		81,376		84,199		80,920		84,668
AVERAGE TANGIBLE ASSETS	$	6,938,241	$	7,004,957	$	6,946,257	$	6,971,415	$	6,960,342

(f) Tangible common equity divided by tangible assets. Tangible assets equals total assets less goodwill and other intangibles.

RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:

	June 30, 2010		March 31, 2010		June 30, 2009
TOTAL ASSETS	$	7,093,098	$	7,176,087	$	7,007,610
Less: Goodwill and other intangibles		80,021		80,863		83,672
TANGIBLE ASSETS	$	7,013,077	$	7,095,224	$	6,923,938

PARK NATIONAL CORPORATION

Financial Highlights (continued)

(g) Efficiency ratio is calculated by taking total other expense divided by the sum of fully taxable equivalent net interest income and other income. Fully taxable equivalent net interest income reconciliation is shown below assuming a 35% tax rate.

RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME

	THREE MONTHS ENDED						SIX MONTHS ENDED
	June 30, 2010		March 31, 2010		June 30, 2009		June 30, 2010		June 30, 2009
Interest income	$	87,242	$	87,202	$	92,092	$	174,444	$	185,457
Fully taxable equivalent adjustment		473		481		524		954		1,100
Fully taxable equivalent interest income	$	87,715	$	87,683	$	92,616	$	175,398	$	186,557
Interest expense		18,521		19,822		24,097		38,343		49,230
Fully taxable equivalent net interest income	$	69,194	$	67,861	$	68,519	$	137,055	$	137,327

PARK NATIONAL CORPORATION

Consolidated Statements of Income

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands, except share and per share data)	2010		2009		2010		2009
Interest income:
Interest and fees on loans	$	66,723	$	68,496	$	133,164	$	137,584
Interest on:
Obligations of U.S. Government, its agencies and other securities		20,263		23,201		40,738		47,029
Obligations of states and political subdivisions		204		393		421		815
Other interest income		52		2		121		29
Total interest income		87,242		92,092		174,444		185,457
Interest expense:
Interest on deposits:
Demand and savings deposits		1,582		2,809		3,357		5,714
Time deposits		9,518		13,800		20,168		28,174
Interest on borrowings		7,421		7,489		14,818		15,342
Total interest expense		18,521		24,098		38,343		49,230
Net interest income		68,721		67,994		136,101		136,227
Provision for loan losses		13,250		15,856		29,800		28,143
Net interest income after provision for loan losses		55,471		52,138		106,301		108,084
Other income		16,647		19,757		33,357		38,967
Gain on sale of securities		3,515		7,340		11,819		7,340
Other expense:
Salaries and employee benefits		24,013		25,334		49,184		50,821
Occupancy expense		2,793		2,882		5,910		6,040
Furniture and equipment expense		2,564		2,498		5,196		4,876
Other expense		17,631		19,437		34,601		34,276
Total other expense		47,001		50,151		94,891		96,013
Income before income taxes		28,632		29,084		56,586		58,378
Income taxes		7,466		7,777		14,641		15,681
Net income	$	21,166	$	21,307	$	41,945	$	42,697
Preferred stock dividends and accretion		1,451		1,441		2,903		2,881
Net income available to common shareholders	$	19,715	$	19,866	$	39,042	$	39,816
Per Common Share:
Net income - basic	$	1.30	$	1.42	$	2.60	$	2.85
Net income - diluted	$	1.30	$	1.42	$	2.60	$	2.85
Weighted average shares - basic		15,114,846		14,001,608		14,998,810		13,986,664
Weighted average shares - diluted		15,114,846		14,001,608		14,998,810		13,986,664

PARK NATIONAL CORPORATION

Consolidated Balance Sheets

(in thousands, except share data)	June 30, 2010			Dec. 31, 2009			June 30, 2009
Assets
Cash and due from banks	$	126,222		$	116,802		$	107,053
Money market instruments		75,323			42,289			23,960
Investment securities		1,845,594			1,863,560			1,913,620
Loans		4,655,997			4,640,432			4,620,026
Allowance for loan losses		120,676			116,717			104,804
Loans, net		4,535,321			4,523,715			4,515,222
Bank premises and equipment, net		68,929			69,091			67,254
Goodwill and other intangibles		80,021			81,799			83,672
Other real estate owned		46,456			41,240			41,279
Other assets		315,232			301,833			255,550
Total assets	$	7,093,098		$	7,040,329		$	7,007,610
Liabilities and Stockholders' Equity
Deposits:
Noninterest bearing	$	884,912			897,243			812,959
Interest bearing		4,283,902			4,290,809			4,240,465
Total deposits		5,168,814			5,188,052			5,053,424
Borrowings		1,008,748			1,053,850			1,180,688
Other liabilities		165,597			81,163			108,357
Total liabilities	$	6,343,159		$	6,323,065		$	6,342,469
Stockholders' Equity:
Preferred Stock (200,000 shares authorized in 2010 and 2009; 100,000 shares issued in 2010 and 2009)	$	96,886		$	96,483		$	96,102
Common stock (No par value; 20,000,000 shares authorized in 2010 and 2009; 16,151,086 shares issued at June 30, 2010, 16,151,112 at December 31, 2009, and 16,151,137 at June 30, 2009)		301,206			301,208			301,209
Common stock warrants		4,761			5,361			4,297
Accumulated other comprehensive income, net of taxes		15,879			15,661			8,612
Retained earnings		427,236			423,872			446,028
Treasury stock (944,232 shares at June 30, 2010, 1,268,332 at December 31, 2009 and 2,179,424 shares at June 30, 2009)		(96,029	)		(125,321	)		(191,107	)
Total stockholders' equity	$	749,939		$	717,264		$	665,141
Total liabilities and stockholders' equity	$	7,093,098		$	7,040,329		$	7,007,610

PARK NATIONAL CORPORATION

Consolidated Average Balance Sheets

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands)	2010			2009			2010			2009
Assets
Cash and due from banks	$	110,450		$	98,026		$	112,660		$	113,032
Money market instruments		94,669			21,221			110,146			22,477
Investment securities		1,814,859			1,974,176			1,826,563			1,996,788
Loans		4,604,481			4,585,406			4,610,944			4,567,459
Allowance for loan losses		120,424			100,198			118,857			100,325
Loans, net		4,484,057			4,485,208			4,492,087			4,467,134
Bank premises and equipment, net		69,286			68,076			69,419			68,213
Goodwill and other intangibles		80,469			84,199			80,920			84,668
Other real estate owned		46,127			38,584			44,061			32,662
Other assets		318,793			260,966			316,479			260,036
Total assets	$	7,018,710		$	7,030,456		$	7,052,335		$	7,045,010
Liabilities and Stockholders' Equity
Deposits:
Noninterest bearing	$	893,962		$	824,841		$	881,575			799,319
Interest bearing		4,288,551			4,185,578			4,327,568			4,120,986
Total deposits		5,182,513			5,010,419			5,209,143			4,920,305
Borrowings		1,013,006			1,248,571			1,024,382			1,359,010
Other liabilities		82,185			110,629			84,650			111,314
Total liabilities	$	6,277,704		$	6,369,619		$	6,318,175		$	6,390,629
Stockholders' Equity:
Preferred stock	$	96,770		$	95,992		$	96,670		$	95,897
Common stock		301,246			301,209			301,226			301,210
Common stock warrants		4,943			4,297			5,151			4,297
Accumulated other comprehensive income, net of taxes		15,217			13,088			17,676			11,054
Retained earnings		427,363			451,245			428,306			448,245
Treasury stock		(104,533	)		(204,994	)		(114,869	)		(206,322	)
Total stockholders' equity	$	741,006		$	660,837		$	734,160		$	654,381
Total liabilities and stockholders' equity	$	7,018,710		$	7,030,456		$	7,052,335		$	7,045,010

PARK NATIONAL CORPORATION

Consolidated Statements of Income - Linked Quarters

	2010		2010		2009		2009		2009
(in thousands, except per share data)	2nd QTR		1st QTR		4th QTR		3rd QTR		2nd QTR
Interest income:
Interest and fees on loans	$	66,723	$	66,441	$	68,676	$	69,339	$	68,496
Interest on:
Obligations of U.S. Government, its agencies and other securities		20,263		20,475		21,325		22,204		23,201
Obligations of states and political subdivisions		204		217		286		316		393
Other interest income		52		69		78		9		2
Total interest income		87,242		87,202		90,365		91,868		92,092
Interest expense:
Interest on deposits:
Demand and savings deposits		1,582		1,775		2,333		2,768		2,809
Time deposits		9,518		10,650		12,269		13,362		13,800
Interest on borrowings		7,421		7,397		6,961		7,276		7,489
Total interest expense		18,521		19,822		21,563		23,406		24,098
Net interest income		68,721		67,380		68,802		68,462		67,994
Provision for loan losses		13,250		16,550		25,720		14,958		15,856
Net interest income after provision for loan losses		55,471		50,830		43,082		53,504		52,138
Other income		16,647		16,710		16,718		18,165		19,757
Gain on sale of securities		3,515		8,304		-		-		7,340
Other expense:
Salaries and employee benefits		24,013		25,171		24,815		25,589		25,334
Occupancy expense		2,793		3,117		2,740		2,772		2,882
Furniture and equipment expense		2,564		2,632		2,395		2,463		2,498
Other expense		17,631		16,970		16,710		15,228		19,437
Total other expense		47,001		47,890		46,660		46,052		50,151
Income before income taxes		28,632		27,954		13,140		25,617		29,084
Income taxes		7,466		7,175		844		6,418		7,777
Net income	$	21,166	$	20,779	$	12,296	$	19,199	$	21,307
Preferred stock dividends and accretion		1,451		1,452		1,441		1,440		1,441
Net income available to common shareholders	$	19,715	$	19,327	$	10,855	$	17,759	$	19,866
Per Common Share:
Net income  - basic	$	1.30	$	1.30	$	0.74	$	1.25	$	1.42
Net income  - diluted	$	1.30	$	1.30	$	0.74	$	1.25	$	1.42

PARK NATIONAL CORPORATION

Detail of other income and other expense - Linked Quarters

	2010		2010		2009		2009		2009
(in thousands)	2nd QTR		1st QTR		4th QTR		3rd QTR		2nd QTR
Other income:
Income from fiduciary activities	$	3,528	$	3,422	$	3,397	$	3,071	$	3,140
Service charges on deposits		5,092		4,746		5,604		5,788		5,432
Other service income		3,476		2,982		3,588		3,895		5,738
Checkcard fee income		2,765		2,444		2,488		2,342		2,381
Bank owned life insurance income		1,254		1,216		1,329		1,297		1,235
Other		532		1,900		312		1,772		1,831
Total other income	$	16,647	$	16,710	$	16,718	$	18,165	$	19,757
Other expense:
Salaries and employee benefits	$	24,013	$	25,171	$	24,815	$	25,589	$	25,334
Net occupancy expense		2,793		3,117		2,740		2,772		2,882
Furniture and equipment expense		2,564		2,632		2,395		2,463		2,498
Data processing fees		1,394		1,593		1,544		1,323		1,459
Professional fees and services		5,299		4,856		5,385		3,725		3,605
Amortization of intangibles		842		936		937		936		937
Marketing		946		902		943		983		939
Insurance		2,333		2,198		2,376		2,254		5,840
Communication		1,647		1,769		1,720		1,652		1,619
State taxes		838		845		424		892		949
Other		4,332		3,871		3,381		3,463		4,089
Total other expense	$	47,001	$	47,890	$	46,660	$	46,052	$	50,151

PARK NATIONAL CORPORATION

Asset Quality Information

	Quarter ended						Year ended December 31,
(in thousands, except ratios)	June 30, 2010			March 31, 2010			2009			2008			2007			2006
Allowance for loan losses:
Allowance for loan losses, beginning of period	$	119,674		$	116,717		$	100,088		$	87,102		$	70,500		$	69,694
Charge-offs		13,273			15,578			59,022			62,916			27,776			10,772
Recoveries		1,025			1,985			6,830			5,415			5,568			6,853
Net charge-offs		12,248			13,593			52,192			57,501			22,208			3,919
Provision for loan losses		13,250			16,550			68,821			70,487			29,476			3,927
Allowance for loan losses of acquired bank		-			-			-			-			9,334			798
Allowance for loan losses, end of period	$	120,676		$	119,674		$	116,717		$	100,088		$	87,102		$	70,500
Asset Quality Ratios:
Net charge-offs as a % of average loans (annualized for quarterly periods)		1.07	%		1.19	%		1.14	%		1.32	%		0.55	%		0.12	%
Allowance for loan losses as a % of period end loans		2.59	%		2.60	%		2.52	%		2.23	%		2.06	%		2.03	%
Nonperforming Assets:
Nonaccrual loans	$	237,640		$	230,498		$	233,544		$	159,512		$	101,128		$	16,004
Renegotiated loans		214			60			142			2,845			2,804			9,113
Loans past due 90 days or more		17,283			11,853			14,773			5,421			4,545			7,832
Total nonperforming loans	$	255,137		$	242,411		$	248,459		$	167,778		$	108,477		$	32,949
Other real estate owned		46,456			45,854			41,240			25,848			13,443			3,351
Total nonperforming assets	$	301,593		$	288,265		$	289,699		$	193,626		$	121,920		$	36,300
Percentage of nonperforming loans to period end loans		5.48	%		5.27	%		5.35	%		3.74	%		2.57	%		0.95	%
Percentage of nonperforming assets to period end loans		6.48	%		6.27	%		6.24	%		4.31	%		2.89	%		1.04	%
Percentage of nonperforming assets to period end assets		4.25	%		4.02	%		4.11	%		2.74	%		1.88	%		0.66	%
New nonaccrual loan information:
Nonaccrual loans, beginning of period	$	230,498		$	233,544		$	159,512		$	101,128		$	16,004		$	14,922
New nonaccrual loans		30,870			30,252			184,181			141,749			113,720			4,949
Resolved nonaccrual loans		23,728			33,298			110,149			83,365			28,596			3,867
Nonaccrual loans, end of period	$	237,640		$	230,498		$	233,544		$	159,512		$	101,128		$	16,004
Impaired Commercial Loan Portfolio Information (period end):
Unpaid principal balance	$	250,305		$	244,822		$	245,092		$	171,310		$	100,307		$	21,926
Prior charge-offs		46,731			46,175			43,949			29,967			10,226			2,446
Remaining principal balance		203,574			198,647			201,143			141,343			90,081			19,480
Specific reserves		38,767			38,739			36,721			8,875			3,492			2,002
Book value, after specific reserve	$	164,807		$	159,908		$	164,422		$	132,468		$	86,589		$	17,478
Vision Bank Commercial Land & Development (CL&D) Loan Portfolio Information:
CL&D loans, period end	$	192,051		$	200,112		$	218,205		$	251,443		$	295,743
Performing CL&D loans, period end		97,562			116,672			132,788			191,712			260,195
Impaired CL&D loans, period end		94,489			83,440			85,417			59,731			35,548
Specific reserve on impaired CL&D loans		25,006			24,404			21,706			3,134			1,184
Book value of impaired CL&D loans, after specific reserve	$	69,483		$	59,036		$	63,711		$	56,597		$	34,364
Cumulative prior charge-offs on impaired Vision Bank CL&D loans, period end	$	23,973		$	26,334		$	24,931		$	18,839		$	7,399