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)                                October 18, 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 October 18, 2010, Park National Corporation (“Park”) issued a news release (the “Financial Results News Release”) announcing financial results for the three and nine months ended September 30, 2010.  A copy of this Financial 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 the annualized return on average tangible common equity, the annualized return on average tangible assets, tangible common equity to tangible assets and tangible common book value per common share.  Management has included in the Financial Results News Release information relating to the annualized return on average tangible common equity, the annualized return on average tangible assets, tangible common equity to tangible assets and tangible common book value per common share for the three and nine month periods ended September 30, 2010 and 2009.  For purposes of calculating the annualized 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 applicable period and (ii) average preferred stock during the applicable period. For the purpose of calculating the annualized 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 the annualized return on average tangible common equity, the annualized 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 Financial 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, tangible common equity to tangible assets or tangible common book value per common share are substitutes for return on average equity, return on average assets, common equity to assets or common book value per common share as determined by GAAP.

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Item 7.01 — Regulation FD Disclosure

The following is a discussion of the actual financial results for the three and nine month periods ended September 30, 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 June 30, 2010 (the “June 30, 2010 Form 10-Q”).

Net Interest Income:

For the third quarter of 2010, net interest income was $69.4 million and for the nine months ended September 30, 2010, net interest income was $205.5 million.  In the June 30, 2010 Form 10-Q, management projected that net interest income would be a little higher than the middle of the range between $265 million to $275 million for 2010, which remains unchanged through the date of this Current Report on Form 8-K.  For the nine months ended September 30, 2010, loans increased by $16.5 million or an annualized 0.5 percent.  In the June 30, 2010 Form 10-Q, management projected continued slow loan growth for the twelve months ended December 31, 2010 compared to the same period in 2009, due to continued soft demand for loans.  Net interest income through September 30, 2010 was in line with management’s expectations.

Provision for Loan Losses:

For the three months ended September 30, 2010, the provision for loan losses was $14.7 million and net loan charge-offs were $17.9 million. For the nine months ended September 30, 2010, the provision for loan losses was $44.5 million and net loan charge-offs were $43.8 million.  In the June 30, 2010 Form 10-Q, management projected that the provision for loan losses would be approximately $55 million to $60 million in 2010.  Management continues to project 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 of Mexico 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.  Park and Vision Bank management continue to work very closely with those borrowers who could 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 third quarter of 2010, total other income was $17.5 million and for the first nine months of 2010, total other income was $50.9 million.  In the June 30, 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 September 30, 2010 was in line with management’s projected results for 2010 and management’s latest projections continue to be in line with the guidance provided in the June 30, 2010 Form 10-Q.

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.  There were no gains or losses on the sale of securities during the third quarter of 2010. Management does not currently expect any gains or losses on the sale of securities in the remainder of 2010.

Other Expense:

For the three months ended September 30, 2010, total other expense was $45.7 million and was $140.6 million for the nine months ended September 30, 2010.  In the June 30, 2010 Form 10-Q, management projected that total other expense would be $191 million in 2010.  Total other expense for the first nine months of 2010 was slightly improved compared to management’s projected results for 2010.  Management’s latest projections for total other expense are approximately $188 million to $190 million for 2010.

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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 Reports on Form 10-Q for the quarterly periods ended March 31, 2010 and June 30, 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.

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Item 8.01 – Other Events

Declaration of Cash Dividend

As reported in the Financial Results News Release, on October 18, 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 December 10, 2010 to common shareholders of record as of the close of business on November 24, 2010.  A copy of the Financial Results News Release is included as Exhibit 99.1 and the portion thereof addressing the declaration of the cash dividend by Park’s Board of Directors is incorporated by reference herein.

Item 9.01 – Financial Statements and Exhibits.

(a) Not applicable

(b) Not applicable

(c) Not applicable

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

Exhibit No.	Description
99.1	News Release issued by Park National Corporation on October 18, 2010 addressing financial results for the three and nine months ended September 30, 2010.

[Remainder of page intentionally left blank;

signature on following page.]

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SIGNATURE

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

	PARK NATIONAL CORPORATION
Dated: October 18, 2010	By:	/s/ John W. Kozak
		John W. Kozak
		Chief Financial Officer

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INDEX TO EXHIBITS

Current Report on Form 8-K

Dated October 18, 2010

Park National Corporation

Exhibit No.	Description
99.1	News Release issued by Park National Corporation on October 18, 2010 addressing financial results for the three and nine months ended September 30, 2010.

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EX-99.1

N e w s   R e l e a s e

October 18, 2010 Exhibit 99.1                        

Park National Corporation reports third quarter 2010

financial results and declares quarterly cash dividend

NEWARK, Ohio — Park National Corporation (Park) (NYSE Amex: PRK) today announced financial results for the three month period (third quarter) and nine month period ended September 30, 2010. Park's Board of Directors also declared a $0.94 per common share quarterly cash dividend, payable on December 10, 2010 to common shareholders of record as of November 24, 2010.

For the three and nine month periods ended September 30, 2010, Park reported net income of $19.6 million and $61.5 million, respectively, compared to $19.2 million and $61.9 million for the same periods in 2009.

The issuance of common shares over the last six quarters resulted in a decline in net income per common share compared to last year. Net income per diluted common share for the third quarter of 2010 was $1.19, a 4.8 percent decline from $1.25 in the third quarter of 2009. Net income per diluted common share for the first nine months of 2010 was $3.79, a 7.6 percent decline from the $4.10 reported for the same period in 2009.

Net income for the third quarter of 2010 for Park’s Ohio-based operations was $24.9 million, a 3.5 percent decrease from $25.8 million in the third quarter of 2009. Net income for Park's Ohio-based operations was $81.1 million for the first nine months of 2010, a 2.7 percent increase from the $79.0 million reported in the same period of 2009.

Loan portfolio information

Mortgage lending activity continues to be very strong as borrowers take advantage of historically low interest rates. Park originated $193 million in residential mortgages during the third quarter of 2010, a $7 million increase over the $186 million originated in the 2009 third quarter. Park’s loan portfolio grew by $16.5 million during the first nine months of 2010, ending the quarter at $4.66 billion.

“We continue to be an active lender in the communities we serve, evidenced by residential mortgage originations in third quarter 2010 exceeding levels experienced in 2009. Low interest rates and direct access to lenders continues to fuel activity for new and refinanced loans for residential customers,” said Park Chairman C. Daniel DeLawder. “Park affiliates actively seek new relationships for consumers and businesses alike. It’s a great time to borrow money and we stand ready to help our clients meet their financing goals.”

Capital-raising information

Capital-raising activities over the past six quarters increased common shares outstanding by 1,323,572 or 9.5 percent, generating a net total of $81 million in additional capital.

In 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. After selling expenses and professional fees, Park raised $53.5 million of common equity from these capital-raising activities.

Through the first nine months of 2010, Park issued 419,500 common shares upon the exercise of the Series A and Series B Common Share Warrants at a price of $67.75 per common share. After all expenses, Park raised an additional $27.6 million of common equity from the sale of these common shares.

Headquartered in Newark, Ohio, Park National Corporation has $7.1 billion in total assets (as of September 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 June 30, 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.

CONTACTS: Bethany Lewis, Communications Specialist, 740.349.0421

John Kozak, CFO, 740.349.3792

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

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PARK NATIONAL CORPORATION
Financial Highlights
Three months ended September 30, 2010, June 30, 2010, and September 30, 2009
	2010						2009			Percent change vs.
(in thousands, except share and per share data)	3rd QTR			2nd QTR			3rd QTR			2Q '10			3Q '09
INCOME STATEMENT:
Net interest income	$	69,445		$	68,721		$	68,462			1.1	%		1.4	%
Provision for loan losses		14,654			13,250			14,958			10.6	%		-2.0	%
Other income		17,530			16,647			18,165			5.3	%		-3.5	%
Gain on sale of securities		—			3,515			—			-100.0	%		N/A
Total other expense		45,696			47,001			46,052			-2.8	%		-0.8	%
Income before income taxes	$	26,625		$	28,632		$	25,617			-7.0	%		3.9	%
Income taxes		7,048			7,466			6,418			-5.6	%		9.8	%
Net income	$	19,577		$	21,166		$	19,199			-7.5	%		2.0	%
Preferred stock dividends and accretion		1,452			1,451			1,440			0.1	%		0.8	%
Net income available to common shareholders	$	18,125		$	19,715		$	17,759			-8.1	%		2.1	%
MARKET DATA:
Earnings per common share - basic (b)	$	1.19		$	1.30		$	1.25			-8.5	%		-4.8	%
Earnings per common share - diluted (b)		1.19			1.30			1.25			-8.5	%		-4.8	%
Cash dividends per common share		0.94			0.94			0.94			0.0	%		0.0	%
Common book value per common share at period end		43.10			42.94			41.45			0.4	%		4.0	%
Stock price per common share at period end		64.04			65.04			58.34			-1.5	%		9.8	%
Market capitalization at period end		979,956			989,054			831,927			-0.9	%		17.8	%
Weighted average common shares - basic (a)		15,272,720			15,114,846			14,193,411			1.0	%		7.6	%
Weighted average common shares - diluted (a)		15,272,720			15,114,846			14,193,411			1.0	%		7.6	%
Common shares outstanding at period end		15,302,244			15,206,854			14,259,971			0.6	%		7.3	%
PERFORMANCE RATIOS:
Annualized return on average assets (a)(b)		1.02	%		1.13	%		1.01	%		-9.7	%		1.0	%
Annualized return on average common equity (a)(b)		10.90	%		12.27	%		12.18	%		-11.2	%		-10.5	%
Yield on loans		5.76	%		5.84	%		5.99	%		-1.4	%		-3.8	%
Yield on investments		4.26	%		4.44	%		4.82	%		-4.1	%		-11.6	%
Yield on earning assets		5.34	%		5.44	%		5.66	%		-1.8	%		-5.7	%
Cost of interest bearing deposits		0.91	%		1.04	%		1.48	%		-12.5	%		-38.5	%
Cost of borrowings		2.91	%		2.94	%		2.73	%		-1.0	%		6.6	%
Cost of paying liabilities		1.29	%		1.40	%		1.73	%		-7.9	%		-25.4	%
Net interest margin (annualized) (g)		4.28	%		4.29	%		4.22	%		-0.2	%		1.4	%
Efficiency ratio (g)		52.21	%		54.75	%		52.71	%		-4.6	%		-0.9	%
OTHER RATIOS (NON GAAP):
Annualized return on average tangible assets (a)(b)(e)		1.03	%		1.14	%		1.02	%		-9.6	%		1.0	%
Annualized return on average tangible common equity (a)(b)(c)		12.39	%		14.03	%		14.23	%		-11.7	%		-12.9	%
Tangible common book value per common share (d)	$	37.93		$	37.68		$	35.65			0.7	%		6.4	%

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PARK NATIONAL CORPORATION
Financial Highlights (continued)
Three months ended September 30, 2010, June 30, 2010, and September 30, 2009
										Percent change vs.
BALANCE SHEET:	September 30, 2010			June 30, 2010			September 30, 2009			2Q '10			3Q '09
Investment securities	$	1,896,969		$	1,845,594		$	1,873,953			2.8	%		1.2	%
Loans		4,656,902			4,655,997			4,615,101			0.0	%		0.9	%
Allowance for loan losses		117,405			120,676			110,040			-2.7	%		6.7	%
Goodwill and other intangibles		79,199			80,021			82,735			-1.0	%		-4.3	%
Other real estate owned		52,837			46,456			47,015			13.7	%		12.4	%
Total assets		7,090,456			7,093,098			6,970,678			0.0	%		1.7	%
Total deposits		5,100,030			5,168,814			5,114,976			-1.3	%		-0.3	%
Borrowings		1,003,624			1,008,748			1,066,757			-0.5	%		-5.9	%
Stockholders' equity		756,627			749,939			687,327			0.9	%		10.1	%
Common equity		659,539			653,053			591,035			1.0	%		11.6	%
Tangible common equity (d)		580,340			573,032			508,300			1.3	%		14.2	%
Nonperforming loans		237,194			237,854			207,212			-0.3	%		14.5	%
Nonperforming assets		290,031			284,310			254,227			2.0	%		14.1	%
Past due 90 day loans and still accruing		10,700			17,283			4,849			-38.1	%		120.7	%
ASSET QUALITY RATIOS:
Loans as a % of period end assets		65.68	%		65.64	%		66.21	%		0.1	%		-0.8	%
Nonperforming loans as a % of period end loans		5.09	%		5.11	%		4.49	%		-0.4	%		13.4	%
Past due 90 day loans as a % of period end loans		0.23	%		0.37	%		0.11	%		-37.8	%		109.1	%
Nonperforming assets / Period end loans + OREO		6.16	%		6.05	%		5.45	%		1.8	%		13.0	%
Allowance for loan losses as a % of period end loans		2.52	%		2.59	%		2.38	%		-2.7	%		5.9	%
Net loan charge-offs	$	17,925		$	12,248		$	9,722			46.4	%		84.4	%
Annualized net loan charge-offs as a % of average loans (a)		1.53	%		1.07	%		0.84	%		43.0	%		82.1	%
CAPITAL & LIQUIDITY:
Total equity / Period end assets		10.67	%		10.57	%		9.86	%		0.9	%		8.2	%
Common equity / Period end assets		9.30	%		9.21	%		8.48	%		1.0	%		9.7	%
Tangible common equity (d) / Tangible assets (f)		8.28	%		8.17	%		7.38	%		1.3	%		12.2	%
Average equity / Average assets (a)		10.73	%		10.56	%		9.67	%		1.6	%		11.0	%
Average equity / Average loans (a)		16.27	%		16.09	%		14.63	%		1.1	%		11.2	%
Average loans / Average deposits (a)		89.64	%		88.85	%		89.82	%		0.9	%		-0.2	%

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PARK NATIONAL CORPORATION
Financial Highlights (continued)
Nine months ended September 30, 2010 and 2009
	September 30,			September 30,			Percent
(in thousands, except share and per share data)	2010			2009			change
INCOME STATEMENT:
Net interest income	$	205,546		$	204,689			0.4	%
Provision for loan losses		44,454			43,101			3.1	%
Other income		50,887			57,132			-10.9	%
Gain on sale of securities		11,819			7,340			61.0	%
Total other expense		140,587			142,065			-1.0	%
Income before income taxes	$	83,211		$	83,995			-0.9	%
Income taxes		21,689			22,099			-1.9	%
Net income	$	61,522		$	61,896			-0.6	%
Preferred stock dividends and accretion		4,355			4,321			0.8	%
Net income available to common shareholders	$	57,167		$	57,575			-0.7	%
MARKET DATA:
Earnings per common share - basic (b)	$	3.79		$	4.10			-7.6	%
Earnings per common share - diluted (b)		3.79			4.10			-7.6	%
Cash dividends per common share		2.82			2.82			0.0	%
Weighted average common shares - basic (a)		15,090,113			14,055,580			7.4	%
Weighted average common shares - diluted (a)		15,090,113			14,055,580			7.4	%
PERFORMANCE RATIOS:
Annualized return on average assets (a)(b)		1.08	%		1.10	%		-1.8	%
Annualized return on average common equity (a)(b)		11.85	%		13.62	%		-13.0	%
Yield on loans		5.82	%		6.07	%		-4.1	%
Yield on investments		4.38	%		4.91	%		-10.8	%
Yield on earning assets		5.41	%		5.72	%		-5.4	%
Cost of interest bearing deposits		1.03	%		1.60	%		-35.6	%
Cost of borrowings		2.92	%		2.40	%		21.7	%
Cost of paying liabilities		1.39	%		1.78	%		-21.9	%
Net interest margin (annualized) (g)		4.26	%		4.23	%		0.7	%
Efficiency ratio (g)		54.50	%		53.94	%		1.0	%
ASSET QUALITY RATIOS:
Net loan charge-offs	$	43,766		$	33,149			32.0	%
Annualized net loan charge-offs as a % of average loans (a)		1.27	%		0.97	%		30.9	%
CAPITAL AND LIQUIDITY:
Average equity / Average assets (a)		10.52	%		9.42	%		11.7	%
Average equity / Average loans (a)		16.04	%		14.43	%		11.2	%
Average loans / Average deposits (a)		88.89	%		91.79	%		-3.2	%
OTHER RATIOS (NON GAAP):
Annualized return on average tangible assets (a)(b)(e)		1.10	%		1.11	%		-0.9	%
Annualized return on average tangible common equity (a)(b)(c)		13.54	%		16.00	%		-15.4	%

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PARK NATIONAL CORPORATION

Financial Highlights (continued)

(a) Averages are for the quarters ended September 30, 2010, June 30, 2010, and September 30, 2009, and the nine-month periods ended September 30, 2010 and September 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						NINE MONTHS ENDED
	September 30, 2010		June 30, 2010		September 30, 2009		September 30, 2010		September 30, 2009
AVERAGE STOCKHOLDERS' EQUITY	$	756,939	$	741,006	$	674,541	$	741,837	$	661,174
Less:  Average preferred stock		96,972		96,770		96,183		96,771		95,994
Average goodwill and other intangibles		79,651		80,469		83,261		80,492		84,194
AVERAGE TANGIBLE COMMON EQUITY	$	580,316	$	563,767	$	495,097	$	564,574	$	480,986

(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:
	September 30, 2010		June 30, 2010		September 30, 2009
STOCKHOLDERS' EQUITY	$	756,627	$	749,939	$	687,327
Less: Preferred stock		97,088		96,886		96,292
Goodwill and other intangibles		79,199		80,021		82,735
TANGIBLE COMMON EQUITY	$	580,340	$	573,032	$	508,300

(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						NINE MONTHS ENDED
	September 30, 2010		June 30, 2010		September 30, 2009		September 30, 2010		September 30, 2009
AVERAGE ASSETS	$	7,052,789	$	7,018,710	$	6,975,918	$	7,052,488	$	7,021,726
Less:  Average goodwill and other intangibles		79,651		80,469		83,261		80,492		84,194
AVERAGE TANGIBLE ASSETS	$	6,973,138	$	6,938,241	$	6,892,657	$	6,971,996	$	6,937,532

(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:
	September 30, 2010		June 30, 2010		September 30, 2009
TOTAL ASSETS	$	7,090,456	$	7,093,098	$	6,970,678
Less: Goodwill and other intangibles		79,199		80,021		82,735
TANGIBLE ASSETS	$	7,011,257	$	7,013,077	$	6,887,943

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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. Additionally, net interest margin is calculated on a fully taxable equivalent basis.

RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
	THREE MONTHS ENDED						NINE MONTHS ENDED
	September 30, 2010		June 30, 2010		September 30, 2009		September 30, 2010		September 30, 2009
Interest income	$	86,682	$	87,242	$	91,868	$	261,126	$	277,325
Fully taxable equivalent adjustment		553		473		478		1,507		1,577
Fully taxable equivalent interest income	$	87,235	$	87,715	$	92,346	$	262,633	$	278,902
Interest expense		17,237		18,521		23,406		55,580		72,636
Fully taxable equivalent net interest income	$	69,998	$	69,194	$	68,940	$	207,053	$	206,266

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PARK NATIONAL CORPORATION
Consolidated Statements of Income
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands, except share and per share data)	2010		2009		2010		2009
Interest income:
Interest and fees on loans	$	67,123	$	69,339	$	200,287	$	206,923
Interest on:
Obligations of U.S. Government, its agencies
and other securities		19,333		22,204		60,071		69,233
Obligations of states and political subdivisions		192		316		613		1,131
Other interest income		34		9		155		38
Total interest income		86,682		91,868		261,126		277,325
Interest expense:
Interest on deposits:
Demand and savings deposits		1,263		2,768		4,620		8,482
Time deposits		8,532		13,362		28,700		41,536
Interest on borrowings		7,442		7,276		22,260		22,618
Total interest expense		17,237		23,406		55,580		72,636
Net interest income		69,445		68,462		205,546		204,689
Provision for loan losses		14,654		14,958		44,454		43,101
Net interest income after provision for loan losses		54,791		53,504		161,092		161,588
Other income		17,530		18,165		50,887		57,132
Gain on sale of securities		—		—		11,819		7,340
Other expense:
Salaries and employee benefits		24,500		25,589		73,684		76,410
Occupancy expense		2,840		2,772		8,750		8,812
Furniture and equipment expense		2,624		2,463		7,820		7,339
Other expense		15,732		15,228		50,333		49,504
Total other expense		45,696		46,052		140,587		142,065
Income before income taxes		26,625		25,617		83,211		83,995
Income taxes		7,048		6,418		21,689		22,099
Net income	$	19,577	$	19,199	$	61,522	$	61,896
Preferred stock dividends and accretion		1,452		1,440		4,355		4,321
Net income available to common shareholders	$	18,125	$	17,759	$	57,167	$	57,575
Per Common Share:
Net income  - basic	$	1.19	$	1.25	$	3.79	$	4.10
Net income  - diluted	$	1.19	$	1.25	$	3.79	$	4.10
Weighted average shares - basic		15,272,720		14,193,411		15,090,113		14,055,580
Weighted average shares - diluted		15,272,720		14,193,411		15,090,113		14,055,580

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PARK NATIONAL CORPORATION
Consolidated Balance Sheets
(in thousands, except share data)	September 30, 2010			Dec. 31, 2009			September 30, 2009
Assets
Cash and due from banks	$	115,795		$	116,802		$	127,079
Money market instruments		17,791			42,289			10,583
Investment securities		1,896,969			1,863,560			1,873,953
Loans		4,656,902			4,640,432			4,615,101
Allowance for loan losses		117,405			116,717			110,040
Loans, net		4,539,497			4,523,715			4,505,061
Bank premises and equipment, net		70,401			69,091			67,194
Goodwill and other intangibles		79,199			81,799			82,735
Other real estate owned		52,837			41,240			47,015
Other assets		317,967			301,833			257,058
Total assets	$	7,090,456		$	7,040,329		$	6,970,678
Liabilities and Stockholders' Equity
Deposits:
Noninterest bearing	$	909,619		$	897,243		$	817,897
Interest bearing		4,190,411			4,290,809			4,297,079
Total deposits		5,100,030			5,188,052			5,114,976
Borrowings		1,003,624			1,053,850			1,066,757
Other liabilities		230,175			81,163			101,618
Total liabilities	$	6,333,829		$	6,323,065		$	6,283,351
Stockholders' Equity:
Preferred Stock (200,000 shares authorized in 2010 and 2009;
100,000 shares issued in 2010 and 2009)	$	97,088		$	96,483		$	96,292
Common stock (No par value; 20,000,000 shares authorized
in 2010 and 2009;  16,151,076 shares issued at September 30, 2010,
16,151,112 at December 31, 2009, and 16,151,123 at September 30, 2009)		301,206			301,208			301,209
Common stock warrants		4,509			5,361			4,297
Accumulated other comprehensive income, net of taxes		12,354			15,661			20,018
Retained earnings		428,876			423,872			447,122
Treasury stock (848,832 shares at September 30, 2010, 1,268,332 at
December 31, 2009 and 1,891,152 shares at September 30, 2009)		(87,406	)		(125,321	)		(181,611	)
Total stockholders' equity	$	756,627		$	717,264		$	687,327
Total liabilities and stockholders' equity	$	7,090,456		$	7,040,329		$	6,970,678

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PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in thousands)	2010			2009			2010			2009
Assets
Cash and due from banks	$	122,405		$	109,935		$	115,944		$	111,988
Money market instruments		67,923			31,661			95,917			25,571
Investment securities		1,811,797			1,881,061			1,821,587			1,957,788
Loans		4,651,739			4,610,716			4,624,692			4,582,037
Allowance for loan losses		122,717			104,763			120,158			101,821
Loans, net		4,529,022			4,505,953			4,504,534			4,480,216
Bank premises and equipment, net		70,206			67,124			69,684			67,846
Goodwill and other intangibles		79,651			83,261			80,492			84,194
Other real estate owned		47,971			44,155			45,379			36,535
Other assets		323,814			252,768			318,951			257,588
Total assets	$	7,052,789		$	6,975,918		$	7,052,488		$	7,021,726
Liabilities and Stockholders' Equity
Deposits:
Noninterest bearing	$	906,376		$	817,625		$	889,933		$	805,488
Interest bearing		4,283,050			4,315,622			4,312,565			4,186,578
Total deposits		5,189,426			5,133,247			5,202,498			4,992,066
Borrowings		1,014,433			1,058,303			1,021,029			1,257,673
Other liabilities		91,991			109,827			87,124			110,813
Total liabilities	$	6,295,850		$	6,301,377		$	6,310,651		$	6,360,552
Stockholders' Equity:
Preferred stock	$	96,972		$	96,183		$	96,771		$	95,994
Common stock		301,206			301,209			301,219			301,209
Common stock warrants		4,590			4,297			4,962			4,297
Accumulated other comprehensive income, net of taxes		15,462			10,160			16,930			10,752
Retained earnings		428,878			450,506			428,500			449,007
Treasury stock		(90,169	)		(187,814	)		(106,545	)		(200,085	)
Total stockholders' equity	$	756,939		$	674,541		$	741,837		$	661,174
Total liabilities and stockholders' equity	$	7,052,789		$	6,975,918		$	7,052,488		$	7,021,726

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PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters
	2010		2010		2010		2009		2009
(in thousands, except per share data)	3rd QTR		2nd QTR		1st QTR		4th QTR		3rd QTR
Interest income:
Interest and fees on loans	$	67,123	$	66,723	$	66,441	$	68,676	$	69,339
Interest on:
Obligations of U.S. Government, its agencies
and other securities		19,333		20,263		20,475		21,325		22,204
Obligations of states and political subdivisions		192		204		217		286		316
Other interest income		34		52		69		78		9
Total interest income		86,682		87,242		87,202		90,365		91,868
Interest expense:
Interest on deposits:
Demand and savings deposits		1,263		1,582		1,775		2,333		2,768
Time deposits		8,532		9,518		10,650		12,269		13,362
Interest on borrowings		7,442		7,421		7,397		6,961		7,276
Total interest expense		17,237		18,521		19,822		21,563		23,406
Net interest income		69,445		68,721		67,380		68,802		68,462
Provision for loan losses		14,654		13,250		16,550		25,720		14,958
Net interest income after provision for loan losses		54,791		55,471		50,830		43,082		53,504
Other income		17,530		16,647		16,710		16,718		18,165
Gain on sale of securities		—		3,515		8,304		—		—
Other expense:
Salaries and employee benefits		24,500		24,013		25,171		24,815		25,589
Occupancy expense		2,840		2,793		3,117		2,740		2,772
Furniture and equipment expense		2,624		2,564		2,632		2,395		2,463
Other expense		15,732		17,631		16,970		16,710		15,228
Total other expense		45,696		47,001		47,890		46,660		46,052
Income before income taxes		26,625		28,632		27,954		13,140		25,617
Income taxes		7,048		7,466		7,175		844		6,418
Net income	$	19,577	$	21,166	$	20,779	$	12,296	$	19,199
Preferred stock dividends and accretion		1,452		1,451		1,452		1,441		1,440
Net income available to common shareholders	$	18,125	$	19,715	$	19,327	$	10,855	$	17,759
Per Common Share:
Net income  - basic	$	1.19	$	1.30	$	1.30	$	0.74	$	1.25
Net income  - diluted	$	1.19	$	1.30	$	1.30	$	0.74	$	1.25

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PARK NATIONAL CORPORATION
Detail of other income and other expense - Linked Quarters
	2010		2010		2010		2009		2009
(in thousands)	3rd QTR		2nd QTR		1st QTR		4th QTR		3rd QTR
Other income:
Income from fiduciary activities	$	3,314	$	3,528	$	3,422	$	3,397	$	3,071
Service charges on deposits		5,026		5,092		4,746		5,604		5,788
Other service income		3,909		3,476		2,982		3,588		3,895
Checkcard fee income		2,900		2,765		2,444		2,488		2,342
Bank owned life insurance income		1,313		1,254		1,216		1,329		1,297
Other		1,068		532		1,900		312		1,772
Total other income	$	17,530	$	16,647	$	16,710	$	16,718	$	18,165
Other expense:
Salaries and employee benefits	$	24,500	$	24,013	$	25,171	$	24,815	$	25,589
Net occupancy expense		2,840		2,793		3,117		2,740		2,772
Furniture and equipment expense		2,624		2,564		2,632		2,395		2,463
Data processing fees		1,403		1,394		1,593		1,544		1,323
Professional fees and services		4,477		5,299		4,856		5,385		3,725
Amortization of intangibles		822		842		936		937		936
Marketing		840		946		902		943		983
Insurance		2,316		2,333		2,198		2,376		2,254
Communication		1,696		1,647		1,769		1,720		1,652
State taxes		865		838		845		424		892
Other		3,313		4,332		3,871		3,381		3,463
Total other expense	$	45,696	$	47,001	$	47,890	$	46,660	$	46,052

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PARK NATIONAL CORPORATION
Asset Quality Information
	Quarter ended									Year ended December 31,
(in thousands, except ratios)	September 30, 2010			June 30, 2010			March 31, 2010			2009			2008			2007
Allowance for loan losses:
Allowance for loan losses, beginning of period	$	120,676		$	119,674		$	116,717		$	100,088		$	87,102		$	70,500
Charge-offs		19,205			13,273			15,578			59,022			62,916			27,776
Recoveries		1,280			1,025			1,985			6,830			5,415			5,568
Net charge-offs		17,925			12,248			13,593			52,192			57,501			22,208
Provision for loan losses		14,654			13,250			16,550			68,821			70,487			29,476
Allowance for loan losses of acquired bank		—			—			—			—			—			9,334
Allowance for loan losses, end of period	$	117,405		$	120,676		$	119,674		$	116,717		$	100,088		$	87,102
Asset Quality Ratios:
Net charge-offs as a % of average loans (annualized for quarterly periods)		1.53	%		1.07	%		1.19	%		1.14	%		1.32	%		0.55	%
Allowance for loan losses as a % of period end loans		2.52	%		2.59	%		2.60	%		2.52	%		2.23	%		2.06	%
Nonperforming Assets:
Nonaccrual loans	$	237,194		$	237,640		$	230,498		$	233,544		$	159,512		$	101,128
Renegotiated loans		—			214			60			142			2,845			2,804
Loans past due 90 days or more		10,700			17,283			11,853			14,773			5,421			4,545
Total nonperforming loans	$	247,894		$	255,137		$	242,411		$	248,459		$	167,778		$	108,477
Other real estate owned - Ohio-based operations		9,658			9,554			10,802			6,037			6,149			6,369
Other real estate owned - Vision Bank		43,179			36,902			35,052			35,203			19,699			7,074
Total nonperforming assets	$	300,731		$	301,593		$	288,265		$	289,699		$	193,626		$	121,920
Percentage of nonperforming loans to period end loans		5.32	%		5.48	%		5.27	%		5.35	%		3.74	%		2.57	%
Percentage of nonperforming assets to period end loans		6.46	%		6.48	%		6.27	%		6.24	%		4.31	%		2.89	%
Percentage of nonperforming assets to period end assets		4.24	%		4.25	%		4.02	%		4.11	%		2.74	%		1.88	%
New nonaccrual loan information:
Nonaccrual loans, beginning of period	$	237,640		$	230,498		$	233,544		$	159,512		$	101,128		$	16,004
New nonaccrual loans		34,104			30,870			30,252			184,181			141,749			113,720
Resolved nonaccrual loans		34,550			23,728			33,298			110,149			83,365			28,596
Nonaccrual loans, end of period	$	237,194		$	237,640		$	230,498		$	233,544		$	159,512		$	101,128
Impaired Commercial Loan Portfolio Information (period end):
Unpaid principal balance	$	254,356		$	250,305		$	244,822		$	245,092		$	171,310		$	100,307
Prior charge-offs		48,201			46,731			46,175			43,949			29,967			10,226
Remaining principal balance		206,155			203,574			198,647			201,143			141,343			90,081
Specific reserves		35,293			38,767			38,739			36,721			8,875			3,492
Book value, after specific reserve	$	170,862		$	164,807		$	159,908		$	164,422		$	132,468		$	86,589
Vision Bank Commercial Land & Development (CL&D) Loan Portfolio Information:
CL&D loans, period end	$	175,988		$	192,051		$	200,112		$	218,205		$	251,443		$	295,743
Performing CL&D loans, period end		93,361			97,562			116,672			132,788			191,712			260,195
Impaired CL&D loans, period end		82,627			94,489			83,440			85,417			59,731			35,548
Specific reserve on impaired CL&D loans		19,644			25,006			24,404			21,706			3,134			1,184
Book value of impaired CL&D loans, after specific reserve	$	62,983		$	69,483		$	59,036		$	63,711		$	56,597		$	34,364
Cumulative prior charge-offs on impaired Vision Bank CL&D loans, period end	$	26,141		$	23,973		$	26,334		$	24,931		$	18,839		$	7,399

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