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 25, 2011                                                      

Park National Corporation

(Exact name of registrant as specified in its charter)

Ohio	1-13006	31-1179518
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer 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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o 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 25, 2011, Park National Corporation (“Park”) issued a news release (the “Financial Results News Release”) announcing financial results for the three and six months ended June 30, 2011.  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 return on average tangible common equity, return on average tangible assets, the ratio of 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 return on average tangible common equity, return on average tangible assets, the ratio of tangible common equity to tangible assets and tangible common book value per common share for the three and six-month periods ended June 30, 2011 and 2010.  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 applicable period and (ii) average preferred stock during the applicable 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 the ratio of 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 other intangible assets.  Tangible assets equals total assets less goodwill and other intangible assets.  For the purpose of calculating tangible common book value per common share, a non-GAAP financial measure, tangible common equity is divided by common shares outstanding at period end.  Management believes that the disclosure of return on average tangible common equity, return on average tangible assets, the ratio of 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, the ratio of tangible common equity to tangible assets and tangible common book value per common share are substitutes for return on average equity, return on average assets, the ratio of common equity to total assets and common book value per common share, respectively, as determined by GAAP.

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Item 7.01 — Regulation FD Disclosure

The following is a discussion of the financial results for the three and six-months ended June 30, 2011, and a comparison of these results to the guidance previously provided within the Annual Report for the fiscal year ended December 31, 2010 (the “Annual Report”), the Form 10-Q for the quarterly period ended March 31, 2011 (“First Quarter 10-Q”) and the Form 8-K filed on June 30, 2011 (“June 30, 2011 Form 8-K”).

Net Interest Income:

For the first six months of 2011, net interest income was $139.3 million compared to $136.1 million for the same period in 2010.  For the three months ended June 30, 2011, net interest income was $70.0 million compared to $68.7 million for the same period in 2010.  On page 38 of the Annual Report, management projected that net interest income for the year ending December 31, 2011 would be between $268 million and $278 million.  Management’s latest projection, as of the date of this Current Report on Form 8-K, results in net interest income towards the top third of the range between $268 million and $278 million.

Net Loan Charge-Offs and Provision for Loan Losses:

For the first six months of 2011, the provision for loan losses was $37.4 million compared to $29.8 million for the same period in 2010.  For the second quarter of 2011, the provision for loan losses was $23.9 million compared to $13.3 million for the same period in 2010.  For the first six months of 2011, net loan charge-offs for Park were approximately $48.6 million compared to $25.8 million of net loan charge-offs for the same period in 2010.  For the second quarter of 2011, net loan charge-offs were $40.6 million compared to $12.2 million for the same period in 2010.  The following table provides a history of the Allowance for Loan and Lease Losses (“ALLL”), as well as details related to general reserve and specific reserve levels over the past three and a half years:

(in thousands)	6/30/2011			3/31/2011			12/31/2010			12/31/2009			12/31/2008
Vision Specific Reserve	$	18,678		$	33,544		$	30,483		$	29,225		$	4,697
Ohio Specific Reserve		14,132			13,743			12,976			7,496			4,178
Total Specific Reserve	$	32,810		$	47,287		$	43,459		$	36,721		$	8,875
General Reserve		77,377			79,572			77,938			79,996			91,213
Total ALLL	$	110,187		$	126,859		$	121,397		$	116,717		$	100,088
General Reserve as a % of non-impaired loans		1.72	%		1.76	%		1.74	%		1.80	%		2.10	%

As a result of the passage of time and more clarity on the characteristics of many of the impaired commercial loans at Vision Bank, during the second quarter of 2011, management determined that it was appropriate to charge-off many of the specific reserves previously established on impaired commercial loans. Of the $47.3 million of specific reserves at March 31, 2011, management determined it was appropriate to charge-off $29.3 million in the second quarter of 2011. These charge-offs of specific reserves, along with other charge-offs during the second quarter, resulted in a 3.43% annualized charge-off ratio for the quarter.  Finally, partially off-setting the $29.3 million reduction in the specific reserves due to charge-offs, new specific reserves were established in the amount of $14.8 million as a result of management’s typical quarterly evaluation of impaired commercial loans. This quarterly evaluation includes a detailed review of the expected cash flows and the current estimate of the collateral value for all impaired commercial loans.  As a result of the second quarter evaluation, management noted some deterioration in either collateral value or expected cash flows within certain of the larger impaired commercial, land and development loans at Vision Bank.

3

During the first six months of 2011, new nonaccrual loans for Park were approximately $40.1 million, compared to $61.1 million for the first half of 2010. For all of 2010, new nonaccrual loans were approximately $175.2 million.  Management expects new nonaccrual loans will continue to be well below levels experienced in 2009 and 2010.  The following table shows new non-accrual loans for the first two quarters of 2011 and the three previous years.

New nonaccrual loan information (in thousands):	June 30, 2011		March 31, 2011		2010		2009		2008
Nonaccrual loans, beginning of period	$	278,819	$	289,268	$	233,544	$	159,512	$	101,128
New nonaccrual loans - Ohio-based operations		22,439		8,674		85,081		57,641		58,161
New nonaccrual loans - Vision Bank		2,980		5,994		90,094		126,540		83,588
Resolved nonaccrual loans		65,548		25,117		119,451		110,149		83,365
Nonaccrual loans, end of period	$	238,690	$	278,819	$	289,268	$	233,544	$	159,512

On page 40 of the Annual Report, management projected that the provision for loan losses would be within the range from $47 million to $57 million for 2011.  In the June 30, 2011 Form 8-K, management projected that the provision for loan losses for the year ending December 31, 2011 would be approximately $56 million to $66 million.  The increase in the projection for 2011 was due to management’s typical quarterly procedures and was primarily a result of higher provisions at Vision Bank, as described above. The latest projection from the June 30, 2011 Form 8-K remains unchanged as of the date of this Current Report on Form 8-K.

Other Income:

For the first six months of 2011, total other income was $26.4 million compared to $33.4 million for the same period in 2010, excluding in each case gains from the sale of securities.  For the second quarter of 2011, total other income was $13.3 million compared to $16.6 million for the same period in 2010.  On page 39 of the Annual Report, management projected that other income, excluding gains from the sale of securities, would be within the range of $63 million to $67 million.  Subsequently, on page 52 of the First Quarter 10-Q, management projected that total other income, excluding gains from the sale of securities, would be between $60 million and $64 million.  Management’s latest projection anticipates that total other income, excluding gains from the sale of securities, will be between $58 million and $62 million.  The reduction in the latest projection as compared to the projections in the Annual Report and in the First Quarter 10-Q is a result of larger devaluations in respect of other real estate owned, primarily at Vision Bank.  For the first six months of 2011, Park has recognized approximately $9.7 million from the devaluations of other real estate owned, including $5.3 million in the second quarter.   Management does not expect significant OREO devaluations in the second half of 2011.  During the first two quarters of the year, management accelerated the appraisal dates for much of the OREO property at Vision Bank in order to expedite the transfer of OREO to SE Property Holdings, LLC, a wholly-owned subsidiary of the Park National Corporation. At June 30, 2011, $5.0 million of other real estate owned remains at Vision Bank, which will be transferred to SE Property Holdings, LLC during the third quarter of 2011.

4

Gain on Sale of Securities:

In the June 30, 2011 8-K, Park disclosed the sale of $192 million of 15-year U.S. Government sponsored entity mortgage-backed securities for a pre-tax gain of $15.4 million. During the first quarter of 2011, Park sold $105 million of U.S. Government sponsored entity mortgage-backed securities, for a pre-tax gain of $6.6 million.  Therefore, for the first six months of 2011, $297 million of U.S. Government sponsored entity mortgage-backed securities were sold for pre-tax gains of $22.0 million.

Other Expense:

Total other expense was $93.4 million for the first half of 2011 compared to $94.9 million for the same period in 2010.  On page 39 of the Annual Report, and then reiterated on page 53 of the First Quarter 10-Q, management projected that total other expense would be approximately $183 million to $187 million for 2011.  This projection remains unchanged as of the date of this Current Report on Form 8-K.

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

This Current Report on Form 8-K 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 sell OREO properties at prices as favorable as anticipated; 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 interest 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, 2010 and in “Item 1A. Risk Factors” of Part II of Park’s Quarterly Report on Form 10-Q for the period ended March 31, 2011.  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 July 25, 2011, 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 9, 2011 to common shareholders of record as of the close of business on August 24, 2011. 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.

Vision Bank Preliminary Exam Results

In the June 30, 2011 Form 8-K, management reported that the Federal Deposit Insurance Corporation (“FDIC”) and the Office of Financial Regulation (“OFR”) had communicated their preliminary on-site examination findings to the management of Vision Bank. The main issue, relating to Park’s accounting treatment related to guarantor support and the calculation of the allowance for loan losses, remains outstanding.  As reported in the June 30, 2011 Form 8-K, the FDIC and the OFR have taken exception to approximately $18 million in guarantor support underlying certain impaired commercial loans, which had been incorporated into Vision’s analysis of the allowance for loan losses.  As of June 30, 2011, the amount of underlying guarantor support specific to the $18 million noted by the FDIC and the OFR has been reduced to $12.7 million through collections and management’s typical quarterly evaluation of impaired commercial loans.  Park’s management continues to work with Park’s independent public accountants on this issue. Management still has the intention to appeal the findings from the FDIC when the joint report of examination is received from the FDIC and the OFR, if the final examination report is consistent with the preliminary findings communicated to management at the on-site exit meeting.

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 25, 2011 addressing operating results for the three and six months ended June 30, 2011.

[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: July 25, 2011	By:	/s/ John W. Kozak
		John W. Kozak
		Chief Financial Officer

8

INDEX TO EXHIBITS

Current Report on Form 8-K

Dated July 25, 2011

Park National Corporation

Exhibit No. Description

99.1 News Release issued by Park National Corporation on July 25, 2011 addressing operating results for the three and six months ended June 30, 2011.

9

EX-99.1

News Release

July 25, 2011 Exhibit 99.1

Park National Corporation Reports Second Quarter 2011

Financial Results and Continues $0.94 Quarterly Dividend

NEWARK, Ohio – Park National Corporation (Park) (NYSE Amex: PRK) today reported financial results for the three and six months ended June 30, 2011 (second quarter and first half, respectively). Also, Park's board of directors declared a $0.94 per common share quarterly cash dividend, payable on September 9, 2011 to common shareholders of record as of August 24, 2011.

Net income for the second quarter of 2011 was $20.3 million, compared to $21.2 million in net income for the same period in 2010. Net income per diluted common share was $1.22, a 6.2 percent decline from Park’s net income per diluted common share of $1.30 for the second quarter of 2010.

Net income for the first half of 2011 was $41.7 million, compared to $41.9 million in net income for the same period in 2010. Net income per diluted common share was $2.52 for the first half of 2011, a 3.1 percent decline from the net income per diluted common share of $2.60 reported in the first half of 2010.

Park’s net income for the first halves of 2011 and 2010 included pre-tax gains of $22.0 million and $11.8 million, respectively, from the sale of investment securities. Excluding these gains, net income for the first half of 2011 was $27.4 million or $1.59 per diluted common share, compared to net income of $34.3 million or $2.09 per diluted common share in 2010.

Ohio-Based Operations

Park's Ohio-based operations reported net income of $62.2 million for the first half of 2011, compared to net income of $56.2 million for the same period in 2010. Park’s Ohio-based operations had total assets of $6.6 billion at June 30, 2011, compared to $6.2 billion at June 30, 2010. This performance resulted in return on assets of 1.91 percent and 1.82 percent for Park’s Ohio-based operations in the first half of 2011 and 2010, respectively.

“We are proud that our successful performance continues to generate above-average results in our industry,” said Park Chairman C. Daniel DeLawder. “Net income for the first six months in Ohio exceeded the same period a year ago. Results for the full-year 2010 set a new record for us in Ohio, so we are especially happy about the first half of 2011. We are grateful for the dedication and high-quality work of our associates, as well as for the loyal relationships we have with local families, businesses, and organizations.”

Credit Quality

Total nonperforming loans (including loans past due 90 days and still accruing) were $241.9 million at June 30, 2011, a 17.4 percent decline from the $292.9 million in nonperforming loans at December 31, 2010. Park's loan loss provision for the six months ended June 30, 2011 was $37.4 million, compared to $29.8 million for the same period in 2010. Of the $37.4 million loan loss provision recorded in the first half of 2011, $26.4 million was recorded at Vision Bank, with the remaining $11.0 million recorded within Park's Ohio-based operations.

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

News Release

Headquartered in Newark, Ohio, Park National Corporation has $7.3 billion in total assets (as of June 30, 2011). 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, The Park National Bank of Southwest Ohio & Northern Kentucky Division and Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance). 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 Guardian Financial Services Company (d.b.a. Guardian Finance Company).

Media contacts: Bethany Lewis, 740.349.0421, blewis@parknationalbank.com or John Kozak, 740.349.3792

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

Park cautions that any forward-looking statements contained in this news release or made by management of Park are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation: 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 sell OREO properties at prices as favorable as anticipated; 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, 2010 and in “Item 1A. Risk Factors” of Part II of Park’s Quarterly Report on Form 10-Q for the period ended March 31, 2011. 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, 2011, March 31, 2011, and June 30, 2010

	2011			2011			2010			Percent change vs.
(in thousands, except share and per share data)	2nd QTR			1st QTR			2nd QTR			1Q '11			2Q '10
INCOME STATEMENT:
Net interest income	$	70,022		$	69,313		$	68,721			1.0	%		1.9	%
Provision for loan losses		23,900			13,500			13,250			77.0	%		80.4	%
Other income		13,236			13,171			16,647			0.5	%		-20.5	%
Gain on sale of securities		15,362			6,635			3,515		N.M.			N.M.
Total other expense		47,007			46,346			47,001			1.4	%		0.0	%
Income before income taxes	$	27,713		$	29,273		$	28,632			-5.3	%		-3.2	%
Income taxes		7,396			7,895			7,466			-6.3	%		-0.9	%
Net income	$	20,317		$	21,378		$	21,166			-5.0	%		-4.0	%
Preferred stock dividends and accretion		1,464			1,464			1,451			0.0	%		0.9	%
Net income available to common shareholders	$	18,853		$	19,914		$	19,715			-5.3	%		-4.4	%
MARKET DATA:
Earnings per common share - basic (b)	$	1.22		$	1.29		$	1.30			-5.4	%		-6.2	%
Earnings per common share - diluted (b)		1.22			1.29			1.30			-5.4	%		-6.2	%
Cash dividends per common share		0.94			0.94			0.94			0.0	%		0.0	%
Common book value per common share at period end (h)		42.21			42.06			42.94			0.4	%		-1.7	%
Stock price per common share at period end		65.86			66.82			65.04			-1.4	%		1.3	%
Market capitalization at period end		1,014,172			1,028,956			989,054			-1.4	%		2.5	%
Weighted average common shares - basic (a)		15,398,919			15,398,930			15,114,846			0.0	%		1.9	%
Weighted average common shares - diluted (a)		15,399,593			15,403,420			15,114,846			0.0	%		1.9	%
Common shares outstanding at period end		15,398,913			15,398,923			15,206,854			0.0	%		1.3	%
PERFORMANCE RATIOS:
Annualized return on average assets (a)(b)		1.04	%		1.11	%		1.13	%		-6.3	%		-8.0	%
Annualized return on average common equity (a)(b)		11.51	%		12.42	%		12.27	%		-7.3	%		-6.2	%
Yield on loans		5.61	%		5.63	%		5.84	%		-0.4	%		-3.9	%
Yield on investments		3.83	%		3.95	%		4.44	%		-3.0	%		-13.7	%
Yield on earning assets		5.08	%		5.14	%		5.44	%		-1.2	%		-6.6	%
Cost of interest bearing deposits		0.67	%		0.74	%		1.04	%		-9.5	%		-35.6	%
Cost of borrowings		2.65	%		2.50	%		2.94	%		6.0	%		-9.9	%
Cost of paying liabilities		1.09	%		1.14	%		1.40	%		-4.4	%		-22.1	%
Net interest margin (annualized) (g)		4.19	%		4.21	%		4.29	%		-0.5	%		-2.3	%
Efficiency ratio (g)		56.13	%		55.84	%		54.75	%		0.5	%		2.5	%
OTHER RATIOS (NON GAAP):
Annualized return on average tangible assets (a)(b)(e)		1.05	%		1.12	%		1.14	%		-6.2	%		-7.9	%
Annualized return on average tangible common equity (a)(b)(c)		13.04	%		14.11	%		14.03	%		-7.6	%		-7.1	%
Tangible common equity per common share (d)	$	37.21		$	37.02		$	37.68			0.5	%		-1.2	%

PARK NATIONAL CORPORATION

Financial Highlights (continued)

Three months ended June 30, 2011, March 31, 2011, and June 30, 2010

										Percent change vs.
BALANCE SHEET:	June 30, 2011			March 31, 2011			June 30, 2010			1Q '11			2Q '10
Investment securities	$	1,960,866		$	2,045,656		$	1,845,594			-4.1	%		6.2	%
Loans		4,710,513			4,750,975			4,655,997			-0.9	%		1.2	%
Allowance for loan losses		110,187			126,859			120,676			-13.1	%		-8.7	%
Goodwill and other intangibles		77,039			77,708			80,021			-0.9	%		-3.7	%
Other real estate owned		47,997			47,133			46,456			1.8	%		3.3	%
Total assets		7,328,686			7,338,403			7,093,098			-0.1	%		3.3	%
Total deposits		5,257,517			5,314,678			5,168,814			-1.1	%		1.7	%
Borrowings		1,130,564			1,178,678			1,008,748			-4.1	%		12.1	%
Stockholders' equity		747,760			745,238			749,939			0.3	%		-0.3	%
Common equity (h)		650,042			647,734			653,053			0.4	%		-0.5	%
Tangible common equity (d)		573,003			570,026			573,032			0.5	%		0.0	%
Nonperforming loans		238,723			279,079			237,854			-14.5	%		0.4	%
Nonperforming assets		286,720			326,212			284,310			-12.1	%		0.8	%
Past due 90 day loans and still accruing		3,142			2,228			17,283			41.0	%		-81.8	%
ASSET QUALITY RATIOS:
Loans as a % of period end assets		64.28	%		64.74	%		65.64	%		-0.7	%		-2.1	%
Nonperforming loans as a % of period end loans		5.07	%		5.87	%		5.11	%		-13.6	%		-0.8	%
Past due 90 day loans as a % of period end loans		0.07	%		0.05	%		0.37	%		40.0	%		-81.1	%
Nonperforming assets / Period end loans + OREO		6.03	%		6.80	%		6.05	%		-11.3	%		-0.3	%
Allowance for loan losses as a % of period end loans		2.34	%		2.67	%		2.59	%		-12.4	%		-9.7	%
Net loan charge-offs	$	40,572		$	8,038		$	12,248		N.M.			N.M.
Annualized net loan charge-offs as a % of average loans (a)		3.43	%		0.69	%		1.07	%	N.M.			N.M.
CAPITAL & LIQUIDITY:
Total equity / Period end assets		10.20	%		10.16	%		10.57	%		0.4	%		-3.5	%
Common equity / Period end assets		8.87	%		8.83	%		9.21	%		0.5	%		-3.7	%
Tangible common equity (d) / Tangible assets (f)		7.90	%		7.85	%		8.17	%		0.6	%		-3.3	%
Average equity / Average assets (a)		10.34	%		10.28	%		10.56	%		0.6	%		-2.1	%
Average equity / Average loans (a)		15.91	%		15.77	%		16.09	%		0.9	%		-1.1	%
Average loans / Average deposits (a)		89.67	%		91.19	%		88.85	%		-1.7	%		0.9	%

PARK NATIONAL CORPORATION

Financial Highlights

Six months ended June 30, 2011 and 2010

	Six months ended			Six months ended
(in thousands, except share and per share data)	June 30, 2011			June 30, 2010			Percent change
INCOME STATEMENT:
Net interest income	$	139,335		$	136,101			2.4	%
Provision for loan losses		37,400			29,800			25.5	%
Other income		26,407			33,357			-20.8	%
Gain on sale of securities		21,997			11,819			86.1	%
Total other expense		93,353			94,891			-1.6	%
Income before income taxes	$	56,986		$	56,586			0.7	%
Income taxes		15,291			14,641			4.4	%
Net income	$	41,695		$	41,945			-0.6	%
Preferred stock dividends and accretion		2,928			2,903			0.9	%
Net income available to common shareholders	$	38,767		$	39,042			-0.7	%
MARKET DATA:
Earnings per common share - basic (b)	$	2.52		$	2.60			-3.1	%
Earnings per common share - diluted (b)		2.52			2.60			-3.1	%
Cash dividends per common share		1.88			1.88			0.0	%
Weighted average common shares - basic (a)		15,398,925			14,998,810			2.7	%
Weighted average common shares - diluted (a)		15,401,506			14,998,810			2.7	%
PERFORMANCE RATIOS:
Annualized return on average assets (a)(b)		1.07	%		1.12	%		-4.5	%
Annualized return on average common equity (a)(b)		11.96	%		12.35	%		-3.2	%
Yield on loans		5.62	%		5.86	%		-4.1	%
Yield on investments		3.89	%		4.44	%		-12.4	%
Yield on earning assets		5.11	%		5.44	%		-6.1	%
Cost of interest bearing deposits		0.70	%		1.10	%		-36.4	%
Cost of borrowings		2.57	%		2.92	%		-12.0	%
Cost of paying liabilities		1.11	%		1.44	%		-22.9	%
Net interest margin (annualized) (g)		4.20	%		4.25	%		-1.2	%
Efficiency ratio (g)		55.98	%		55.68	%		0.5	%
ASSET QUALITY RATIOS:
Net loan charge-offs	$	48,610		$	25,841			88.1	%
Annualized net loan charge-offs as a % of average loans (a)		2.07	%		1.13	%		83.2	%
CAPITAL & LIQUIDITY:
Average equity / Average assets (a)		10.31	%		10.41	%		-1.0	%
Average equity / Average loans (a)		15.84	%		15.92	%		-0.5	%
Average loans / Average deposits (a)		90.42	%		88.52	%		2.1	%
OTHER RATIOS (NON GAAP):
Annualized return on average tangible assets (a)(b)(e)		1.08	%		1.13	%		-4.4	%
Annualized return on average tangible common equity (a)(b)(c)		13.57	%		14.15	%		-4.1	%

PARK NATIONAL CORPORATION

Financial Highlights (continued)

N.M.- Not Meaningful

(a) Averages are for the quarters ended June 30, 2011, March 31, 2011, and June 30, 2010, and the six-month periods ended June 30, 2011 and June 30, 2010, as applicable.

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

(c) Annualized return on average tangible common equity equals 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, 2011		March 31, 2011		June 30, 2010		June 30, 2011		June 30, 2010
AVERAGE STOCKHOLDERS' EQUITY	$	754,788	$	747,896	$	741,006	$	751,361	$	734,160
Less: Average preferred stock		97,595		97,380		96,770		97,488		96,670
Average goodwill and other intangibles		77,404		78,067		80,469		77,734		80,920
AVERAGE TANGIBLE COMMON EQUITY	$	579,789	$	572,449	$	563,767	$	576,139	$	556,570

(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, 2011		March 31, 2011		June 30, 2010
STOCKHOLDERS' EQUITY	$	747,760	$	745,238	$	749,939
Less: Preferred stock		97,718		97,504		96,886
Goodwill and other intangibles		77,039		77,708		80,021
TANGIBLE COMMON EQUITY	$	573,003	$	570,026	$	573,032

(e) Annualized return on average tangible assets equals 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, in each case during the applicable period.

RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS:

	THREE MONTHS ENDED						SIX MONTHS ENDED
	June 30, 2011		March 31, 2011		June 30, 2010		June 30, 2011		June 30, 2010
AVERAGE ASSETS	$	7,300,149	$	7,274,527	$	7,018,710	$	7,287,409	$	7,052,335
Less: Average goodwill and other intangibles		77,404		78,067		80,469		77,734		80,920
AVERAGE TANGIBLE ASSETS	$	7,222,745	$	7,196,460	$	6,938,241	$	7,209,675	$	6,971,415

(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, 2011		March 31, 2011		June 30, 2010
TOTAL ASSETS	$	7,328,686	$	7,338,403	$	7,093,098
Less: Goodwill and other intangibles		77,039		77,708		80,021
TANGIBLE ASSETS	$	7,251,647	$	7,260,695	$	7,013,077

PARK NATIONAL CORPORATION

Financial Highlights (continued)

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

RECONCILIATION OF INTEREST INCOME TO FULLY TAXABLE EQUIVALENT NET INTEREST INCOME

	THREE MONTHS ENDED						SIX MONTHS ENDED
	June 30, 2011		March 31, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Interest income	$	84,922	$	84,662	$	87,242	$	169,584	$	174,444
Fully taxable equivalent adjustment		490		518		473		1,008		954
Fully taxable equivalent interest income	$	85,412	$	85,180	$	87,715	$	170,592	$	175,398
Interest expense		14,900		15,349		18,521		30,249		38,343
Fully taxable equivalent net interest income	$	70,512	$	69,831	$	69,194	$	140,343	$	137,055

(h) Common book value per common share at period end equals common equity divided by common shares outstanding at period end. Common equity equals stockholders' equity less preferred stock, in each case at the end of the period.

RECONCILIATION OF STOCKHOLDERS' EQUITY TO COMMON EQUITY

	June 30, 2011		March 31, 2011		June 30, 2010
STOCKHOLDERS' EQUITY	$	747,760	$	745,238	$	749,939
Less: Preferred stock		97,718		97,504		96,886
COMMON EQUITY	$	650,042	$	647,734	$	653,053

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)	2011		2010		2011		2010
Interest income:
Interest and fees on loans	$	65,862	$	66,723	$	131,316	$	133,164
Interest on:
Obligations of U.S. Government, its agencies
and other securities		18,960		20,263		38,013		40,738
Obligations of states and political subdivisions		92		204		241		421
Other interest income		8		52		14		121
Total interest income		84,922		87,242		169,584		174,444
Interest expense:
Interest on deposits:
Demand and savings deposits		951		1,582		1,942		3,357
Time deposits		6,200		9,518		12,934		20,168
Interest on borrowings		7,749		7,421		15,373		14,818
Total interest expense		14,900		18,521		30,249		38,343
Net interest income		70,022		68,721		139,335		136,101
Provision for loan losses		23,900		13,250		37,400		29,800
Net interest income after provision for loan losses		46,122		55,471		101,935		106,301
Other income		13,236		16,647		26,407		33,357
Gain on sale of securities		15,362		3,515		21,997		11,819
Other expense:
Salaries and employee benefits		25,253		24,013		50,317		49,184
Occupancy expense		2,764		2,793		5,764		5,910
Furniture and equipment expense		2,785		2,564		5,442		5,196
Other expense		16,205		17,631		31,830		34,601
Total other expense		47,007		47,001		93,353		94,891
Income before income taxes		27,713		28,632		56,986		56,586
Income taxes		7,396		7,466		15,291		14,641
Net income	$	20,317	$	21,166	$	41,695	$	41,945
Preferred stock dividends and accretion		1,464		1,451		2,928		2,903
Net income available to common shareholders	$	18,853	$	19,715	$	38,767	$	39,042
Per Common Share:
Net income - basic	$	1.22	$	1.30	$	2.52	$	2.60
Net income - diluted	$	1.22	$	1.30	$	2.52	$	2.60
Weighted average shares - basic		15,398,919		15,114,846		15,398,925		14,998,810
Weighted average shares - diluted		15,399,593		15,114,846		15,401,506		14,998,810

PARK NATIONAL CORPORATION

Consolidated Balance Sheets

(in thousands, except share data)	June 30, 2011			December 31, 2010			June 30, 2010
Assets
Cash and due from banks	$	131,604		$	109,058		$	126,222
Money market instruments		85,512			24,722			75,323
Investment securities		1,960,866			2,039,791			1,845,594
Loans		4,710,513			4,732,685			4,655,997
Allowance for loan losses		110,187			121,397			120,676
Loans, net		4,600,326			4,611,288			4,535,321
Bank premises and equipment, net		69,830			69,567			68,929
Goodwill and other intangibles		77,039			78,377			80,021
Other real estate owned		47,997			44,325			46,456
Other assets		355,512			321,249			315,232
Total assets	$	7,328,686		$	7,298,377		$	7,093,098
Liabilities and Stockholders' Equity
Deposits:
Noninterest bearing	$	984,160		$	937,719		$	884,912
Interest bearing		4,273,357			4,157,701			4,283,902
Total deposits		5,257,517			5,095,420			5,168,814
Borrowings		1,130,564			1,375,652			1,008,748
Other liabilities		192,845			81,481			165,597
Total liabilities	$	6,580,926		$	6,552,553		$	6,343,159
Stockholders' Equity:
Preferred Stock (200,000 shares authorized in 2011 and 2010;
100,000 shares issued in 2011 and 2010)	$	97,718		$	97,290		$	96,886
Common stock (No par value; 20,000,000 shares authorized
in 2011 and 2010;  16,151,042 shares issued at June 30, 2011,
16,151,062 at December 31, 2010, and 16,151,086 at June 30, 2010)		301,203			301,204			301,206
Common stock warrants		4,406			4,473			4,761
Accumulated other comprehensive (loss) income, net of taxes		(10,175	)		(1,868	)		15,879
Retained earnings		432,341			422,458			427,236
Treasury stock (752,129 shares at June 30, 2011, 752,128 shares
at December 31, 2010, and 944,232 at June 30, 2010)		(77,733	)		(77,733	)		(96,029	)
Total stockholders' equity	$	747,760		$	745,824		$	749,939
Total liabilities and stockholders' equity	$	7,328,686		$	7,298,377		$	7,093,098

PARK NATIONAL CORPORATION

Consolidated Average Balance Sheets

	Three Months Ended									Six Months Ended
	June 30,			December 31,			June 30,			June 30,			June 30,
(in thousands)	2011			2010			2010			2011			2010
Assets
Cash and due from banks	$	122,298		$	119,982		$	110,450		$	121,324		$	112,660
Money market instruments		21,239			84,379			94,669			24,078			110,146
Investment securities		2,002,676			1,707,321			1,814,859			1,986,901			1,826,563
Loans		4,743,696			4,695,257			4,604,481			4,743,387			4,610,944
Allowance for loan losses		127,682			118,101			120,424			126,108			118,857
Loans, net		4,616,014			4,577,156			4,484,057			4,617,279			4,492,087
Bank premises and equipment, net		69,554			70,299			69,286			69,723			69,419
Goodwill and other intangibles		77,404			78,823			80,469			77,734			80,920
Other real estate owned		46,823			53,424			46,127			47,298			44,061
Other assets		344,141			322,468			318,793			343,072			316,479
Total assets	$	7,300,149		$	7,013,852		$	7,018,710		$	7,287,409		$	7,052,335
Liabilities and Stockholders' Equity
Deposits:
Noninterest bearing	$	988,028		$	959,685		$	893,962		$	972,132		$	881,575
Interest bearing		4,301,872			4,161,547			4,288,551			4,273,720			4,327,568
Total deposits		5,289,900			5,121,232			5,182,513			5,245,852			5,209,143
Borrowings		1,171,827			1,041,920			1,013,006			1,205,310			1,024,382
Other liabilities		83,634			90,144			82,185			84,886			84,650
Total liabilities	$	6,545,361		$	6,253,296		$	6,277,704		$	6,536,048		$	6,318,175
Stockholders' Equity:
Preferred stock	$	97,595		$	97,174		$	96,770		$	97,488		$	96,670
Common stock		301,202			301,317			301,246			301,202			301,226
Common stock warrants		4,458			4,405			4,943			4,466			5,151
Accumulated other comprehensive (loss) income, net of taxes		(2,717	)		11,169			15,217			(3,729	)		17,676
Retained earnings		431,983			430,578			427,363			429,667			428,306
Treasury stock		(77,733	)		(84,087	)		(104,533	)		(77,733	)		(114,869	)
Total stockholders' equity	$	754,788		$	760,556		$	741,006		$	751,361		$	734,160
Total liabilities and stockholders' equity	$	7,300,149		$	7,013,852		$	7,018,710		$	7,287,409		$	7,052,335

PARK NATIONAL CORPORATION

Consolidated Statements of Income - Linked Quarters

	2011		2011		2010		2010		2010
(in thousands, except per share data)	2nd QTR		1st QTR		4th QTR		3rd QTR		2nd QTR
Interest income:
Interest and fees on loans	$	65,862	$	65,454	$	67,405	$	67,123	$	66,723
Interest on:
Obligations of U.S. Government, its agencies
and other securities		18,960		19,053		16,768		19,333		20,263
Obligations of states and political subdivisions		92		149		173		192		204
Other interest income		8		6		45		34		52
Total interest income		84,922		84,662		84,391		86,682		87,242
Interest expense:
Interest on deposits:
Demand and savings deposits		951		991		1,133		1,263		1,582
Time deposits		6,200		6,734		7,512		8,532		9,518
Interest on borrowings		7,749		7,624		7,248		7,442		7,421
Total interest expense		14,900		15,349		15,893		17,237		18,521
Net interest income		70,022		69,313		68,498		69,445		68,721
Provision for loan losses		23,900		13,500		20,448		14,654		13,250
Net interest income after provision for loan losses		46,122		55,813		48,050		54,791		55,471
Other income		13,236		13,171		14,745		17,530		16,647
Gain on sale of securities		15,362		6,635		45		-		3,515
Other expense:
Salaries and employee benefits		25,253		25,064		24,631		24,500		24,013
Occupancy expense		2,764		3,000		2,760		2,840		2,793
Furniture and equipment expense		2,785		2,657		2,615		2,624		2,564
Other expense		16,205		15,625		16,514		15,732		17,631
Total other expense		47,007		46,346		46,520		45,696		47,001
Income before income taxes		27,713		29,273		16,320		26,625		28,632
Income taxes		7,396		7,895		3,625		7,048		7,466
Net income	$	20,317	$	21,378	$	12,695	$	19,577	$	21,166
Preferred stock dividends and accretion		1,464		1,464		1,452		1,452		1,451
Net income available to common shareholders	$	18,853	$	19,914	$	11,243	$	18,125	$	19,715
Per Common Share:
Net income - basic	$	1.22	$	1.29	$	0.73	$	1.19	$	1.30
Net income - diluted	$	1.22	$	1.29	$	0.73	$	1.19	$	1.30

PARK NATIONAL CORPORATION

Detail of other income and other expense - Linked Quarters

	2011			2011			2010			2010			2010
(in thousands)	2nd QTR			1st QTR			4th QTR			3rd QTR			2nd QTR
Other income:
Income from fiduciary activities	$	3,929		$	3,722		$	3,609		$	3,314		$	3,528
Service charges on deposits		4,525			4,245			4,853			5,026			5,092
Other service income		2,734			2,301			3,449			3,909			3,476
Checkcard fee income		3,251			2,976			3,068			2,900			2,765
Bank owned life insurance income		1,228			1,229			1,195			1,313			1,254
ATM fees		682			654			655			699			832
OREO devaluations		(5,257	)		(4,394	)		(5,971	)		(1,555	)		(1,919	)
Other		2,144			2,438			3,887			1,924			1,619
Total other income	$	13,236		$	13,171		$	14,745		$	17,530		$	16,647
Other expense:
Salaries and employee benefits	$	25,253		$	25,064		$	24,631		$	24,500		$	24,013
Net occupancy expense		2,764			3,000			2,760			2,840			2,793
Furniture and equipment expense		2,785			2,657			2,615			2,624			2,564
Data processing fees		1,135			1,253			1,339			1,403			1,394
Professional fees and services		5,320			4,874			5,341			4,477			5,299
Amortization of intangibles		669			669			822			822			842
Marketing		728			623			968			840			946
Insurance		2,345			2,269			2,136			2,316			2,333
Communication		1,485			1,556			1,536			1,696			1,647
State taxes		488			457			622			865			838
Other		4,035			3,924			3,750			3,313			4,332
Total other expense	$	47,007		$	46,346		$	46,520		$	45,696		$	47,001

PARK NATIONAL CORPORATION

Asset Quality Information

	Quarter ended						Year ended December 31,
(in thousands, except ratios)	June 30, 2011			March 31, 2011			2010			2009			2008
Allowance for loan losses:
Allowance for loan losses, beginning of period	$	126,859		$	121,397		$	116,717		$	100,088		$	87,102
Charge-offs		42,005			10,399			66,314			59,022			62,916
Recoveries		1,433			2,361			6,092			6,830			5,415
Net charge-offs		40,572			8,038			60,222			52,192			57,501
Provision for loan losses		23,900			13,500			64,902			68,821			70,487
Allowance for loan losses, end of period	$	110,187		$	126,859		$	121,397		$	116,717		$	100,088
General reserve trends:
Allowance for loan losses, end of period	$	110,187		$	126,859		$	121,397		$	116,717		$	100,088
Specific reserves		32,810			47,287			43,459			36,721			8,875
General reserves	$	77,377		$	79,572		$	77,938		$	79,996		$	91,213
Total loans	$	4,710,513		$	4,750,975		$	4,732,685		$	4,640,432		$	4,491,337
Impaired commercial loans		200,400			238,959			250,933			201,143			141,343
Non-impaired loans	$	4,510,113		$	4,512,016		$	4,481,752		$	4,439,289		$	4,349,994
Asset Quality Ratios:
Net charge-offs as a % of average loans (annualized for quarterly periods)		3.43	%		0.69	%		1.30	%		1.14	%		1.32	%
Allowance for loan losses as a % of period end loans		2.34	%		2.67	%		2.57	%		2.52	%		2.23	%
General reserves as a % of non-impaired loans		1.72	%		1.76	%		1.74	%		1.80	%		2.10	%
Nonperforming Assets - Park National Corporation:
Nonaccrual loans	$	238,690		$	278,819		$	289,268		$	233,544		$	159,512
Renegotiated loans		33			260			-			142			2,845
Loans past due 90 days or more		3,142			2,228			3,590			14,773			5,421
Total nonperforming loans	$	241,865		$	281,307		$	292,858		$	248,459		$	167,778
Other real estate owned - Park National Bank		10,309			9,788			8,385			6,037			6,149
Other real estate owned - SE Property Holdings, LLC		32,638			13,004			-			-			-
Other real estate owned - Vision Bank		5,050			24,341			35,940			35,203			19,699
Total nonperforming assets	$	289,862		$	328,440		$	337,183		$	289,699		$	193,626
Percentage of nonperforming loans to period end loans		5.13	%		5.92	%		6.19	%		5.35	%		3.74	%
Percentage of nonperforming assets to period end loans		6.15	%		6.91	%		7.12	%		6.24	%		4.31	%
Percentage of nonperforming assets to period end assets		3.96	%		4.48	%		4.62	%		4.11	%		2.74	%

PARK NATIONAL CORPORATION

Asset Quality Information

	Quarter ended						Year ended December 31,
(in thousands, except ratios)	June 30, 2011			March 31, 2011			2010			2009			2008
Nonperforming Assets - Ohio-based operations:
Nonaccrual loans	$	121,128		$	115,476		$	117,815		$	85,197		$	68,306
Renegotiated loans		33			260			-			142			-
Loans past due 90 days or more		2,162			2,228			3,226			3,496			4,777
Total nonperforming loans	$	123,323		$	117,964		$	121,041		$	88,835		$	73,083
Other real estate owned - Park National Bank		10,309			9,788			8,385			6,037			6,149
Other real estate owned - SE Property Holdings, LLC		32,638			13,004			-			-			-
Total nonperforming assets	$	166,270		$	140,756		$	129,426		$	94,872		$	79,232
Percentage of nonperforming loans to period end loans		2.97	%		2.86	%		2.96	%		2.24	%		1.92	%
Percentage of nonperforming assets to period end loans		4.01	%		3.41	%		3.16	%		2.39	%		2.08	%
Percentage of nonperforming assets to period end assets		2.53	%		2.15	%		1.99	%		1.54	%		1.29	%
Nonperforming Assets - Vision Bank:
Nonaccrual loans	$	117,562		$	163,343		$	171,453		$	148,347		$	91,206
Renegotiated loans		-			-			-			-			2,845
Loans past due 90 days or more		980			-			364			11,277			644
Total nonperforming loans	$	118,542		$	163,343		$	171,817		$	159,624		$	94,695
Other real estate owned		5,050			24,341			35,940			35,203			19,699
Total nonperforming assets	$	123,592		$	187,684		$	207,757		$	194,827		$	114,394
Percentage of nonperforming loans to period end loans		20.97	%		26.06	%		26.82	%		23.58	%		13.71	%
Percentage of nonperforming assets to period end loans		21.87	%		29.95	%		32.43	%		28.78	%		16.57	%
Percentage of nonperforming assets to period end assets		16.46	%		23.40	%		25.71	%		21.70	%		12.47	%
New nonaccrual loan information:
Nonaccrual loans, beginning of period	$	278,819		$	289,268		$	233,544		$	159,512		$	101,128
New nonaccrual loans - Ohio-based operations		22,439			8,674			85,081			57,641			58,161
New nonaccrual loans - Vision Bank		2,980			5,994			90,094			126,540			83,588
Resolved nonaccrual loans		65,548			25,117			119,451			110,149			83,365
Nonaccrual loans, end of period	$	238,690		$	278,819		$	289,268		$	233,544		$	159,512
Impaired Commercial Loan Portfolio Information (period end):
Unpaid principal balance	$	289,090		$	294,355		$	304,534		$	245,092		$	171,310
Prior charge-offs		88,690			55,396			53,601			43,949			29,967
Remaining principal balance		200,400			238,959			250,933			201,143			141,343
Specific reserves		32,810			47,287			43,459			36,721			8,875
Book value, after specific reserve	$	167,590		$	191,672		$	207,474		$	164,422		$	132,468
Vision Bank Commercial Land & Development (CL&D) Loan Portfolio Information:
CL&D loans	$	111,054		$	161,140		$	170,989		$	218,263		$	251,443
Performing CL&D loans		64,207			79,080			84,498			132,380			191,712
Impaired CL&D loans		46,847			82,060			86,491			85,883			59,731
Specific reserve on impaired CL&D loans		11,763			25,543			23,585			21,802			3,134
Cumulative charge-offs on impaired CL&D loans		49,692			30,538			28,652			24,931			18,839
Specific reserves plus cumulative charge-offs	$	61,455		$	56,081		$	52,237		$	46,733		$	21,973
Specific reserves plus cumulative charge-offs as a % of impaired CL&D loans plus cumulative charge-offs		63.7	%		49.8	%		45.4	%		42.2	%		28.0	%