GlobeNewswire Inc | Jul 27, 2020 04:15PM EDT

July 27, 2020

NEWARK, Ohio, July 27, 2020 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the second quarter and first half of 2020 (three and six months ended June 30, 2020). Park's board of directors declared a quarterly cash dividend of $1.02 per common share, payable on September 10, 2020 to common shareholders of record as of August 21, 2020.

Parks net income for the second quarter of 2020 was $29.5 million, a 33.1 percent increase from $22.2 million for the second quarter of 2019. Second quarter 2020 net income per diluted common share was $1.80, compared to $1.33 in the second quarter of 2019. Park's net income for the first half of 2020 was $51.9 million, an 8.9 percent increase from $47.6 million for the first half of 2019. Net income per diluted common share was $3.16 for the first half of 2020, compared to $2.94 for the first half of 2019.

Park's community-banking subsidiary, The Park National Bank, reported net income of $30.8 million for the second quarter of 2020, a 4.7 percent increase compared to $29.4 million for the same period of 2019. The bank reported net income of $56.7 million for the first half of 2020, compared to $56.1 million for the first half of 2019.

Many families and businesses took the opportunity this spring to make improvements and investments into their property, through new or renovated homes and buildings or new vehicles and equipment. Our lenders were fully accessible and enjoyed connecting with customers in new ways during these unusual circumstances with physical distancing, said Park Chairman David Trautman about the banks second quarter loan growth. Despite economic turbulence that may still be ahead for our country as the effects of the pandemic issue continue, we will remain compassionate, creative, and steadfast in service to the communities that rely on us.

Headquartered in Newark, Ohio, Park National Corporation had $9.7 billion in total assets (as of June 30, 2020). Park's banking operations are conducted through Park subsidiary The Park National Bank. Other Park subsidiaries are Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance), Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.

Complete financial tables are listed below.

Category: Earnings

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995Park 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 managements expectations and are subject to a number of risks and uncertainties.Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements.Risks and uncertainties that could cause actual results to differ materially include, without limitation: the ever-changing effects of the novel coronavirus (COVID-19) pandemic - - the duration, extent and severity of which are impossible to predict - - on economies (local, national and international) and markets, and on our customers, counterparties, employees and third-party service providers, as well as the effects of various responses of governmental and nongovernmental authorities to the COVID-19 pandemic, including actions directed toward the containment of the COVID-19 pandemic and stimulus packages; Park's ability to execute our business plan successfully and within the expected timeframe as well as Park's ability to manage strategic initiatives; general economic and financial market conditions, specifically in the real estate markets and the credit markets, either nationally or in the states in which Park and our subsidiaries do business, may experience a slowing in addition to continuing residual effects of prior recessionary conditions, resulting in adverse impacts on the demand for loan, deposit and other financial services, delinquencies, defaults and counterparties' inability to meet credit and other obligations and the possible impairment of collectability of loans; higher default rates on loans made to our customers due to the COVID-19 pandemic and its impact on our customers' operations and financial condition; changes in interest rates and prices as well as disruption in the liquidity and functioning of U.S. financial markets, as a result of the COVID-19 pandemic and reactions thereto, may adversely impact prepayment penalty income, mortgage banking income, income from fiduciary activities, the value of securities, loans, deposits and other financial instruments and the interest rate sensitivity of our consolidated balance sheet as well as reduce interest margins and impact loan demand; changes in consumer spending, borrowing and saving habits, whether due to changes in retail distribution strategies, consumer preferences and behavior, changes in business and economic conditions (including as a result of the COVID-19 pandemic and reactions thereto), legislative and regulatory initiatives (including those undertaken in response to the COVID-19 pandemic), or other factors may be different than anticipated; changes in unemployment may be different than anticipated in light of the impacts of the COVID-19 pandemic; changes in customers', suppliers', and other counterparties' performance and creditworthiness may be different than anticipated in light of the impacts of the COVID-19 pandemic; the adequacy of our internal controls and risk management program in the event of changes in the market, economic, operational (including those which may result from more associates working remotely), asset/liability repricing, legal, compliance, strategic, cybersecurity, liquidity, credit and interest rate risks associated with Park's business; disruption in the liquidity and other functioning of U.S. financial markets; our liquidity requirements could be adversely affected by changes to regulations governing bank and bank holding company capital and liquidity standards as well as by changes in our assets and liabilities; competitive pressures among financial services organizations could increase significantly, including product and pricing pressures (which could in turn impact our credit spreads), customer acquisition and retention, changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and our ability to attract, develop and retain qualified banking professionals; customers could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding; uncertainty regarding the nature, timing, cost and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and our subsidiaries, including major reform of the regulatory oversight structure of the financial services industry and changes in laws and regulations concerning taxes, FDIC insurance premium levels, pensions, bankruptcy, consumer protection, rent regulation and housing, financial accounting and reporting, environmental protection, insurance, bank products and services, bank capital and liquidity standards, fiduciary standards, securities and other aspects of the financial services industry, specifically the reforms provided for in the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act) and the Basel III regulatory capital reforms, as well as regulations already adopted and which may be adopted in the future by the relevant regulatory agencies, including the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve Board, to implement the provisions of the CARES Act, the provisions of the Dodd-Frank Act, and the Basel III regulatory capital reforms; the effect of changes in accounting policies and practices, as may be adopted by the Financial Accounting Standards Board (the "FASB"), the SEC, the Public Company Accounting Oversight Board and other regulatory agencies, including the extent to which the new current expected credit loss ("CECL") accounting standard issued by the FASB in June 2016 and in accordance with the CARES Act, the adoption of which can be deferred by Park (with retrospective application as of January 1, 2020) until the earlier of: (1) the interim reporting period during which the national emergency concerning the COVID-19 outbreak declared by the President on March 15, 2020 terminates; or (2) December 31, 2020, may adversely affect Park's reported financial condition or results of operations; Park's assumptions and estimates used in applying critical accounting policies and modeling, including under the CECL model, when adopted by Park, which may prove unreliable, inaccurate or not predictive of actual results; significant changes in the tax laws, which may adversely affect the fair values of net deferred tax assets and obligations of state and political subdivisions held in Park's investment securities portfolio; the impact of our ability to anticipate and respond to technological changes on our ability to respond to customer needs and meet competitive demands; operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Park and our subsidiaries are highly dependent; the ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors and other service providers, resulting in failures or disruptions in customer account management, general ledger, deposit, loan, or other systems, including as a result of cyber attacks; the existence or exacerbation of general geopolitical instability and uncertainty; the effect of trade policies (including the impact of potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations and changes in the relationship of the U.S. and its global trading partners), monetary and other fiscal policies (including the impact of money supply and interest rate policies of the Federal Reserve Board) and other governmental policies of the U.S. federal government, including those implemented in response to the COVID-19 pandemic; unexpected changes in interest rates or disruptions in the financial markets related to COVID-19 or responses to the related health crisis; the impact on financial markets and the economy of any changes in the credit ratings of the U.S. Treasury obligations and other U.S. government - backed debt, as well as issues surrounding the levels of U.S., European and Asian government debt and concerns regarding the creditworthiness of certain sovereign governments, supranationals and financial institutions in Europe and Asia; the uncertainty surrounding the actions to be taken to implement the referendum by United Kingdom voters to exit the European Union; our litigation and regulatory compliance exposure, including the costs and effects of any adverse developments in legal proceedings or other claims and the costs and effects of unfavorable resolution of regulatory and other governmental examinations or other inquiries; continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; the impact on Park's business, personnel, facilities or systems of losses related to acts of fraud, scams and schemes of third parties; the impact of widespread natural and other disasters, pandemics (including the COVID-19 pandemic), dislocations, civil unrest, terrorist activities or international hostilities on the economy and financial markets generally and on us or our counterparties specifically; any of the foregoing factors, or other cascading effects of the COVID-19 pandemic that are not currently foreseeable, could materially affect our business, including our customers' willingness to conduct banking transactions and their ability to pay on existing obligations; the effect of healthcare laws in the U.S. and potential changes for such laws, especially in light of the COVID-19 pandemic, which may increase our healthcare and other costs and negatively impact our operations and financial results; risk and uncertainties associated with Park's entry into new geographic markets with its recent acquisitions, including expected revenue synergies and cost savings from recent acquisitions not being fully realized or realized within the expected time frame; the discontinuation of the London Inter-Bank Offered Rate (LIBOR) and other reference rates which may result in increased expenses and litigation, and adversely impact the effectiveness of hedging strategies; and other risk factors relating to the banking industry as detailed from time to time in Park's reports filed with the SEC including those described in "Item 1A. Risk Factors" of Part I of Park's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in "Item 1A. Risk Factors" of Part II of Park's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020. Park does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement was made, or reflect the occurrence of unanticipated events, except to the extent required by law.

PARK NATIONAL CORPORATIONFinancial HighlightsAs of or for the three monthsended June 30, 2020, March 31, 2020, and June 30, 2019 2020 2020 2019 Percent change vs.(in thousands,except share and 2nd QTR 1st QTR 2nd QTR 1Q '20 2Q '19per share data)INCOME STATEMENT: Net interest income $ 81,186 $ 76,283 $ 75,851 6.4 7.0 Provision for loan 12,224 5,153 1,919 137.2 537.0 lossesOther income 30,964 22,486 22,808 37.7 35.8 Other expense 64,799 66,276 70,192 (2.2 ) (7.7 )Income before $ 35,127 $ 27,340 $ 26,548 28.5 32.3 income taxesIncome taxes 5,622 4,968 4,385 13.2 28.2 Net income $ 29,505 $ 22,372 $ 22,163 31.9 33.1 MARKET DATA: Earnings per common $ 1.81 $ 1.37 $ 1.34 32.1 35.1 share - basic (b)Earnings per common 1.80 1.36 1.33 32.4 35.3 share - diluted (b)Cash dividendsdeclared per common 1.02 1.22 1.01 (16.4 ) 1.0 shareBook value percommon share at 61.46 60.25 56.92 2.0 8.0 period endMarket price percommon share at 70.38 77.64 99.39 (9.4 ) (29.2 )period endMarketcapitalization at 1,146,942 1,265,180 1,631,741 (9.3 ) (29.7 )period end Weighted averagecommon shares - 16,296,427 16,303,602 16,560,545 ? (1.6 )basic (a)Weighted averagecommon shares - 16,375,434 16,425,881 16,642,571 (0.3 ) (1.6 )diluted (a)Common sharesoutstanding at 16,296,425 16,295,461 16,417,562 ? (0.7 )period end PERFORMANCE RATIOS: (annualized)Return on average 1.26 % 1.04 % 1.04 % 21.2 21.2 assets (a)(b)Return on averageshareholders' 11.89 % 9.16 % 9.49 % 29.8 25.3 equity (a)(b)Yield on loans 4.63 % 5.02 % 5.23 % (7.8 ) (11.5 )Yield on investment 2.76 % 2.72 % 2.78 % 1.5 (0.7 )securitiesYield on money 0.10 % 1.12 % 2.64 % (91.1 ) (96.2 )market instrumentsYield on interest 4.14 % 4.57 % 4.76 % (9.4 ) (13.0 )earning assetsCost of interest 0.36 % 0.81 % 1.04 % (55.6 ) (65.4 )bearing depositsCost of borrowings 1.33 % 2.08 % 2.15 % (36.1 ) (38.1 )Cost of payinginterest bearing 0.43 % 0.90 % 1.16 % (52.2 ) (62.9 )liabilitiesNet interest margin 3.84 % 3.93 % 3.92 % (2.3 ) (2.0 )(g)Efficiency ratio 57.41 % 66.61 % 70.61 % (13.8 ) (18.7 )(g) OTHER RATIOS (NON-GAAP):Tangible book value $ 51.04 $ 49.79 $ 46.30 2.5 10.2 per share (d) Note: Explanationsfor footnotes (a) -(i) are included atthe end of the financial tables inthe "FinancialReconciliations"section. PARK NATIONAL CORPORATIONFinancial Highlights (continued)As of or for the three monthsended June 30, 2020, March 31, 2020, and June 30, 2019 Percent change vs.(in thousands, June 30, 2020 March 31, June 30, 2019 1Q '20 2Q '19except ratios) 2020BALANCE SHEET: Investment $ 1,153,186 $ 1,253,087 $ 1,396,530 (8.0 ) (17.4 )securities % %Loans 7,204,445 6,522,519 6,376,737 10.5 % 13.0 %Allowance for loan 73,476 61,503 54,003 19.5 % 36.1 %lossesGoodwill and other 169,905 170,512 174,288 (0.4 ) (2.5 )intangible assets % %Other real estate 1,356 3,600 3,839 (62.3 ) (64.7 )owned (OREO) % %Total assets 9,712,994 8,719,291 8,657,453 11.4 % 12.2 %Total deposits 8,161,900 7,290,133 7,032,120 12.0 % 16.1 %Borrowings 444,410 348,373 595,578 27.6 % (25.4 ) %Total shareholders' 1,001,594 981,877 934,432 2.0 % 7.2 %equityTangible equity (d) 831,689 811,365 760,144 2.5 % 9.4 %Total nonperforming 126,044 119,311 86,833 5.6 % 45.2 %loansTotal nonperforming 130,999 126,510 94,168 3.5 % 39.1 %assets ASSET QUALITY RATIOS:Loans as a % of )period end total 74.17 % 74.81 % 73.66 % (0.9 % 0.7 %assetsTotal nonperforming )loans as a % of 1.75 % 1.83 % 1.36 % (4.4 % 28.7 %period end loansTotal nonperformingassets as a % ofperiod end loans + 1.82 % 1.94 % 1.48 % (6.2 ) 23.0 %OREO+ other %nonperformingassetsAllowance for loanlosses as a % of 1.02 % 0.94 % 0.85 % 8.5 % 20.0 %period end loansNet loan $ 251 $ 329 $ 1,284 (23.7 ) (80.5 )charge-offs % %Annualized net loancharge-offs as a % 0.01 % 0.02 % 0.08 % (50.0 ) (87.5 )of average loans % %(a) CAPITAL & LIQUIDITY:Total shareholders' ) )equity / Period end 10.31 % 11.26 % 10.79 % (8.4 % (4.4 %total assetsTangible equity (d) ) )/ Tangible assets 8.72 % 9.49 % 8.96 % (8.1 % (2.7 %(f)Averageshareholders' 10.61 % 11.31 % 10.92 % (6.2 ) (2.8 )equity / Average % %assets (a)Averageshareholders' 14.30 % 15.15 % 14.79 % (5.6 ) (3.3 )equity / Average % %loans (a)Average loans / ) )Average deposits 88.59 % 89.90 % 91.03 % (1.5 % (2.7 %(a)

PARK NATIONAL CORPORATIONFinancial HighlightsSix months ended June 30, 2020 and June 30, 2019 2020 2019 (in thousands, except share and per share Six months Six months Percentdata and ratios) ended June ended June change 30 30 vs '19INCOME STATEMENT: Net interest income $ 157,469 $ 143,627 9.6 %Provision for loan losses 17,377 4,417 293.4 %Other income 53,450 44,833 19.2 %Other expense 131,075 127,019 3.2 %Income before income taxes $ 62,467 $ 57,024 9.5 %Income taxes 10,590 9,406 12.6 %Net income $ 51,877 $ 47,618 8.9 % MARKET DATA: Earnings per common share - basic (b) $ 3.18 $ 2.96 7.4 %Earnings per common share - diluted (b) 3.16 2.94 7.5 %Cash dividends declared per common share 2.24 2.22 0.9 % Weighted average common shares - basic (a) 16,300,015 16,106,043 1.2 %Weighted average common shares - diluted 16,400,657 16,193,643 1.3 %(a) PERFORMANCE RATIOS: (annualized) Return on average assets (a)(b) 1.15 % 1.17 % (1.7 )%Return on average shareholders' equity (a) 10.54 % 10.81 % (2.5 )%(b)Yield on loans 4.81 % 5.19 % (7.3 )%Yield on investment securities 2.76 % 2.80 % (1.4 )%Yield on money market instruments 0.38 % 2.70 % (85.9 )%Yield on interest earning assets 4.35 % 4.71 % (7.6 )%Cost of interest bearing deposits 0.58 % 1.01 % (42.6 )%Cost of borrowings 1.69 % 2.08 % (18.8 )%Cost of paying interest bearing 0.66 % 1.13 % (41.6 )%liabilitiesNet interest margin (g) 3.89 % 3.89 % ? %Efficiency ratio (g) 61.72 % 66.87 % (7.7 )% ASSET QUALITY RATIOS: Net loan charge-offs $ 580 $ 1,926 (69.9 )%Annualized net loan charge-offs as a % of 0.02 % 0.06 % (66.7 )%average loans (a) CAPITAL & LIQUIDITY: Average shareholders' equity / Average 10.95 % 10.82 % 1.2 %assets (a)Average shareholders' equity / Average 14.71 % 14.77 % (0.4 )%loans (a)Average loans / Average deposits (a) 89.21 % 90.91 % (1.9 )% Note: Explanations for footnotes (a) - (i)are included at the end of the financial tables in the "Financial Reconciliations"section.

PARK NATIONAL CORPORATIONConsolidated Statements of Income Three Months Ended Six Months Ended June 30, June 30,(inthousands,except share 2020 2019 2020 2019and pershare data) Interest income: Interestand fees on $ 80,155 $ 82,471 $ 160,842 $ 154,474 loans Interest on:

Obligationsof U.S. Government,its agencies and othersecurities - 5,026 6,919 10,557 13,914 taxable

Obligationsof statesand 2,151 2,308 4,351 4,525 politicalsubdivisions- tax-exempt Otherinterest 113 528 604 1,169 income Totalinterest 87,445 92,226 176,354 174,082 income Interest expense: Interest on deposits: Demandand savings 1,507 8,811 7,849 15,904 deposits Time 3,346 4,357 7,631 8,134 deposits Intereston 1,406 3,207 3,405 6,417 borrowings Totalinterest 6,259 16,375 18,885 30,455 expense Netinterest 81,186 75,851 157,469 143,627 income Provisionfor loan 12,224 1,919 17,377 4,417 losses Netinterestincome after 68,962 73,932 140,092 139,210 provisionfor loanlosses Other income 30,964 22,808 53,450 44,833 Other 64,799 70,192 131,075 127,019 expense Incomebefore 35,127 26,548 62,467 57,024 income taxes Income taxes 5,622 4,385 10,590 9,406 Net $ 29,505 $ 22,163 $ 51,877 $ 47,618 income Per common share: Netincome - $ 1.81 $ 1.34 $ 3.18 $ 2.96 basic Netincome - $ 1.80 $ 1.33 $ 3.16 $ 2.94 diluted Weightedaverage 16,296,427 16,560,545 16,300,015 16,106,043 shares -basic Weightedaverage 16,375,434 16,642,571 16,400,657 16,193,643 shares -diluted Cashdividends $ 1.02 $ 1.01 $ 2.24 $ 2.22 declared

PARK NATIONAL CORPORATIONConsolidated Balance Sheets (in thousands, except share data) June 30, 2020 December 31, 2019 Assets Cash and due from banks $ 136,178 $ 135,567 Money market instruments 597,316 24,389 Investment securities 1,153,186 1,279,507 Loans 7,204,445 6,501,404 Allowance for loan losses (73,476 ) (56,679 )Loans, net 7,130,969 6,444,725 Bank premises and equipment, net 81,760 73,322 Goodwill and other intangible assets 169,905 171,118 Other real estate owned 1,356 4,029 Other assets 442,324 425,720 Total assets $ 9,712,994 $ 8,558,377 Liabilities and Shareholders' Equity Deposits: Noninterest bearing $ 2,518,437 $ 1,959,935 Interest bearing 5,643,463 5,092,677 Total deposits 8,161,900 7,052,612 Borrowings 444,410 438,157 Other liabilities 105,090 98,594 Total liabilities $ 8,711,400 $ 7,589,363 Shareholders' Equity: Preferred shares (200,000 shares authorized; noshares outstanding at June 30, 2020 and December $ ? $ ? 31, 2019)Common shares (No par value; 20,000,000 sharesauthorized;17,623,185 shares issued at June 30, 457,966 459,389 2020 and 17,623,199 shares issued at December31, 2019)Accumulated other comprehensive income (loss), 13,861 (9,589 )net of taxesRetained earnings 662,311 646,847 Treasury shares (1,326,760 shares at June 30, (132,544 ) (127,633 )2020 and 1,276,757 shares at December 31, 2019)Total shareholders' equity $ 1,001,594 $ 969,014 Total liabilities and shareholders' equity $ 9,712,994 $ 8,558,377

PARK NATIONAL CORPORATION Consolidated Average Balance Sheets Three Months Ended Six Months Ended June 30, June 30,(in 2020 2019 2020 2019thousands) Assets Cash and due $ 134,386 $ 127,115 $ 133,208 $ 122,485 from banksMoney market 461,055 80,239 318,930 87,212 instrumentsInvestment 1,197,445 1,413,309 1,230,948 1,401,641 securitiesLoans 6,981,783 6,332,167 6,731,960 6,012,446 Allowance for (62,387 ) (53,849 ) (60,001 ) (53,124 ) loan lossesLoans, net 6,919,396 6,278,318 6,671,959 5,959,322 Bank premisesand 80,096 71,253 77,509 66,079 equipment,netGoodwill andother 170,303 165,311 170,606 142,587 intangibleassetsOther real 2,765 4,183 3,282 4,277 estate ownedOther assets 442,819 436,767 437,585 422,899 Total assets $ 9,408,265 $ 8,576,495 $ 9,044,027 $ 8,206,502 Liabilitiesand Shareholders'Equity Deposits: Noninterest $ 2,400,809 $ 1,887,335 $ 2,175,400 $ 1,809,213 bearingInterest 5,480,366 5,068,709 5,370,376 4,804,076 bearingTotal 7,881,175 6,956,044 7,545,776 6,613,289 depositsBorrowings 425,349 597,448 405,930 622,414 Other 103,453 86,377 102,189 82,853 liabilitiesTotal $ 8,409,977 $ 7,639,869 $ 8,053,895 $ 7,318,556 liabilities Shareholders' Equity:Preferred $ ? $ ? $ ? $ ? sharesCommon shares 456,830 455,895 458,146 407,533 Accumulatedothercomprehensive 10,756 (36,825 ) 5,331 (41,655 ) income(loss), netof taxesRetained 663,290 624,995 658,877 623,291 earningsTreasury (132,588 ) (107,439 ) (132,222 ) (101,223 ) sharesTotalshareholders' $ 998,288 $ 936,626 $ 990,132 $ 887,946 equityTotalliabilitiesand $ 9,408,265 $ 8,576,495 $ 9,044,027 $ 8,206,502 shareholders'equity



PARK NATIONAL CORPORATIONConsolidated Statements of Income - Linked Quarters 2020 2020 2019 2019 2019(in thousands,except per 2nd QTR 1st QTR 4th QTR 3rd QTR 2nd QTRshare data) Interest income:Interest and $ 80,155 $ 80,687 $ 82,698 $ 84,213 $ 82,471 fees on loansInterest on: Obligations ofU.S.Government,its agencies 5,026 5,531 5,973 6,326 6,919 and othersecurities -taxableObligations ofstates andpolitical 2,151 2,200 2,205 2,225 2,308 subdivisions -tax-exemptOther interest 113 491 953 1,825 528 incomeTotal interest 87,445 88,909 91,829 94,589 92,226 income Interest expense:Interest on deposits:Demand andsavings 1,507 6,342 7,795 9,649 8,811 depositsTime deposits 3,346 4,285 4,666 4,694 4,357 Interest on 1,406 1,999 2,359 3,145 3,207 borrowingsTotal interest 6,259 12,626 14,820 17,488 16,375 expense Net interest 81,186 76,283 77,009 77,101 75,851 income Provision for(recovery of) 12,224 5,153 (213 ) 1,967 1,919 loan losses Net interestincome afterprovision for 68,962 71,130 77,222 75,134 73,932 (recovery of)loan losses Other income 30,964 22,486 24,224 28,136 22,808 Other expense 64,799 66,276 71,231 65,738 70,192 Income before 35,127 27,340 30,215 37,532 26,548 income taxes Income taxes 5,622 4,968 6,279 6,386 4,385 Net income $ 29,505 $ 22,372 $ 23,936 $ 31,146 $ 22,163 Per common share:Net income- $ 1.81 $ 1.37 $ 1.46 $ 1.90 $ 1.34 basicNet income- $ 1.80 $ 1.36 $ 1.45 $ 1.89 $ 1.33 diluted



PARK NATIONAL CORPORATIONDetail of other income and other expense - Linked Quarters 2020 2020 2019 2019 2019(in thousands) 2nd QTR 1st QTR 4th QTR 3rd QTR 2nd QTR Other income: Income fromfiduciary $ 6,793 $ 7,113 $ 7,268 $ 6,842 $ 6,935 activitiesService chargeson deposit 1,676 2,528 2,757 2,864 2,655 accountsOther service 8,758 3,766 4,382 4,260 4,040 incomeDebit card fee 5,560 4,960 5,341 5,313 5,227 incomeBank owned lifeinsurance 1,179 1,248 1,158 1,107 1,286 incomeATM fees 438 412 446 482 460 Gain (loss) onthe sale of 841 (196 ) 2 (53 ) (159 )OREO, netNet gain (loss)on the sale of 3,313 ? ? 186 (607 )investmentsecurities(Loss) gain onequity (977 ) (973 ) (191 ) 3,335 232 securities, netOthercomponents of 1,988 1,988 1,183 1,183 1,183 net periodicbenefit incomeMiscellaneous 1,395 1,640 1,878 2,617 1,556 Total other $ 30,964 $ 22,486 $ 24,224 $ 28,136 $ 22,808 income Other expense: Salaries $ 30,699 $ 28,429 $ 30,903 $ 30,713 $ 32,093 Employee 9,080 10,043 8,973 10,389 9,014 benefitsOccupancy 3,256 3,480 3,355 3,226 3,223 expenseFurniture andequipment 4,850 4,319 4,319 4,177 4,386 expenseData processing 2,577 2,492 2,777 2,935 2,905 feesProfessionalfees and 6,901 7,066 10,503 6,702 10,106 servicesMarketing 1,136 1,486 1,468 1,604 1,455 Insurance 1,477 1,550 317 276 1,381 Communication 874 1,155 1,256 1,387 1,375 State tax 1,116 1,145 1,024 746 1,054 expenseAmortization ofintangible 607 606 623 741 702 assetsMiscellaneous 2,226 4,505 5,713 2,842 2,498 Total other $ 64,799 $ 66,276 $ 71,231 $ 65,738 $ 70,192 expense



PARK NATIONAL CORPORATIONAsset Quality Information Year ended December 31,(in thousands, June 30, 2020 March 31, 2019 2018 2017 2016except ratios) 2020 Allowance for loan losses:Allowance forloan losses, $ 61,503 $ 56,679 $ 51,512 $ 49,988 $ 50,624 $ 56,494 beginning ofperiodCharge-offs 2,130 2,685 11,177 13,552 19,403 20,799 Recoveries 1,879 2,356 10,173 7,131 10,210 20,030 Net 251 329 1,004 6,421 9,193 769 charge-offsProvision for(recovery of) 12,224 5,153 6,171 7,945 8,557 (5,101 )loan lossesAllowance forloan losses, $ 73,476 $ 61,503 $ 56,679 $ 51,512 $ 49,988 $ 50,624 end of period Generalreserve trends:Allowance forloan losses, $ 73,476 $ 61,503 $ 56,679 $ 51,512 $ 49,988 $ 50,624 end of periodAllowance onpurchasedcredit 106 119 268 ? ? ? impaired("PCI") loansAllowance onpurchased 25 ? ? ? ? ? loansSpecific 5,808 5,531 5,230 2,273 684 548 reservesGeneralreserves on $ 67,537 $ 55,853 $ 51,181 $ 49,239 $ 49,304 $ 50,076 originatedloans Total loans $ 7,204,445 $ 6,522,519 $ 6,501,404 $ 5,692,132 $ 5,372,483 $ 5,271,857 PCI loans 12,569 13,765 14,331 3,943 ? ? Purchased 440,803 489,843 548,436 225,029 ? ? loansImpairedcommercial 91,724 85,646 77,459 48,135 56,545 70,415 loansOriginatedloansexcluding $ 6,659,349 $ 5,933,265 $ 5,861,178 $ 5,415,025 $ 5,315,938 $ 5,201,442 impairedcommercialloans Asset Quality Ratios:Netcharge-offs asa % of average 0.01 % 0.02 % 0.02 % 0.12 % 0.17 % 0.02 %loans(annualized)Allowance forloan losses as 1.02 % 0.94 % 0.87 % 0.90 % 0.93 % 0.96 %a % of periodend loansGeneralreserve as a %of originatedtotal loans 1.01 % 0.94 % 0.87 % 0.91 % 0.93 % 0.96 %less impairedcommercialloansGeneralreserves as a% oforiginatedtotal loans 1.10 % N.A. N.A. N.A. N.A. N.A. less impairedcommercialloans(excluding PPPloans) Nonperforming assets:Nonaccrual $ 100,406 $ 90,354 $ 90,080 $ 67,954 $ 72,056 $ 87,822 loansAccruingtroubled debt 23,948 27,168 21,215 15,173 20,111 18,175 restructuringsLoans past due90 days or 1,690 1,789 2,658 2,243 1,792 2,086 moreTotalnonperforming $ 126,044 $ 119,311 $ 113,953 $ 85,370 $ 93,959 $ 108,083 loansOther realestate owned - 427 2,671 3,100 2,788 6,524 6,025 Park NationalBankOther realestate owned - 929 929 929 1,515 7,666 7,901 SEPHOthernonperforming 3,599 3,599 3,599 3,464 4,849 ? assets - ParkNational BankTotalnonperforming $ 130,999 $ 126,510 $ 121,581 $ 93,137 $ 112,998 $ 122,009 assetsPercentage ofnonaccrualloans to 1.39 % 1.39 % 1.39 % 1.19 % 1.34 % 1.67 %period endloansPercentage ofnonperformingloans to 1.75 % 1.83 % 1.75 % 1.50 % 1.75 % 2.05 %period endloansPercentage ofnonperformingassets to 1.82 % 1.94 % 1.87 % 1.64 % 2.10 % 2.31 %period endloansPercentage ofnonperformingassets to 1.35 % 1.45 % 1.42 % 1.19 % 1.50 % 1.63 %period endtotal assets PARK NATIONAL CORPORATIONAsset Quality Information (continued) Year ended December 31,(in thousands, June 30, 2020 March 31, 2019 2018 2017 2016except ratios) 2020 New nonaccrualloan information:Nonaccrualloans, $ 90,354 $ 90,080 $ 67,954 $ 72,056 $ 87,822 $ 95,887 beginning ofperiodNew nonaccrual 21,995 21,651 81,009 76,611 58,753 74,786 loansResolvednonaccrual 11,943 21,377 58,883 80,713 74,519 82,851 loansNonaccrualloans, end of $ 100,406 $ 90,354 $ 90,080 $ 67,954 $ 72,056 $ 87,822 period Impairedcommercialloan portfolio information(period end):Unpaidprincipal $ 92,374 $ 86,379 $ 78,178 $ 59,381 $ 66,585 $ 95,358 balancePrior 650 733 719 11,246 10,040 24,943 charge-offsRemainingprincipal 91,724 85,646 77,459 48,135 56,545 70,415 balanceSpecific 5,808 5,531 5,230 2,273 684 548 reservesBook value,after specific $ 85,916 $ 80,115 $ 72,229 $ 45,862 $ 55,861 $ 69,867 reserves

PARK NATIONAL CORPORATION Financial ReconciliationsNON-GAAP RECONCILIATIONS THREE MONTHS ENDED SIX MONTHS ENDED(in thousands,except share June 30, March 31, June 30, June 30, 2020 June 30,and per share 2020 2020 2019 2019data)Net interest $ 81,186 $ 76,283 $ 75,851 $ 157,469 $ 143,627 incomeless purchaseaccountingaccretionrelated to 1,301 1,378 1,606 2,679 1,872 NewDominion andCarolinaAllianceacquisitionsless interestincome onformer Vision 266 77 ? 343 7 BankrelationshipsNet interestincome - $ 79,619 $ 74,828 $ 74,245 $ 154,447 $ 141,748 adjusted Provision for $ 12,224 $ 5,153 $ 1,919 $ 17,377 $ 4,417 loan lossesless recoverieson former (685 ) (764 ) (65 ) (1,449 ) (165 )Vision BankrelationshipsProvision forloan losses - $ 12,909 $ 5,917 $ 1,984 $ 18,826 $ 4,582 adjusted Other income $ 30,964 $ 22,486 $ 22,808 $ 53,450 $ 44,833 less net gain(loss) on saleof former 837 ? (139 ) 837 (139 )Vision BankOREO propertiesless rebrandinginitiative (274 ) ? ? (274 ) ? relatedexpensesless net gain(loss) on thesale of debtsecurities in 3,313 ? (607 ) 3,313 (607 )the ordinarycourse ofbusinessOther income - $ 27,088 $ 22,486 $ 23,554 $ 49,574 $ 45,579 adjusted Other expense $ 64,799 $ 66,276 $ 70,192 $ 131,075 $ 127,019 lessmerger-relatedexpensesrelated to 214 243 6,058 457 6,334 NewDominion andCarolinaAllianceacquisitionsless coredepositintangibleamortizationrelated to 607 606 702 1,213 991 NewDominion andCarolinaAllianceacquisitionsless FHLBprepayment ? 1,793 ? 1,793 ? penaltyless rebrandinginitiative 138 270 162 408 202 relatedexpensesless COVID-19related 1,919 262 ? 2,181 ? expensesOther expense - $ 61,921 $ 63,102 $ 63,270 $ 125,023 $ 119,492 adjusted Tax effect ofadjustments tonet income $ (683 ) $ 201 $ 1,259 $ (482 ) $ 1,308 identifiedabove (i) Net income - $ 29,505 $ 22,372 $ 22,163 $ 51,877 $ 47,618 reportedNet income - $ 26,938 $ 23,126 $ 26,901 $ 50,064 $ 52,539 adjusted Diluted EPS $ 1.80 $ 1.36 $ 1.33 $ 3.16 $ 2.94 Diluted EPS, $ 1.65 $ 1.41 $ 1.62 $ 3.05 $ 3.24 adjusted (h) Annualizedreturn on 1.26 % 1.04 % 1.04 % 1.15 % 1.17 %average assets(a)(b)Annualizedreturn onaverage assets, 1.15 % 1.07 % 1.26 % 1.11 % 1.29 %adjusted (a)(b)(h) Annualizedreturn onaverage 1.28 % 1.06 % 1.06 % 1.18 % 1.19 %tangible assets(a)(b)(e)Annualizedreturn onaveragetangible 1.17 % 1.09 % 1.28 % 1.13 % 1.31 %assets,adjusted (a)(b)(e)(h) Annualizedreturn onaverage 11.89 % 9.16 % 9.49 % 10.54 % 10.81 %shareholders'equity (a)(b)Annualizedreturn onaverageshareholders' 10.85 % 9.47 % 11.52 % 10.17 % 11.93 %equity,adjusted (a)(b)(h) Annualizedreturn onaverage 14.33 % 11.09 % 11.53 % 12.73 % 12.88 %tangible equity(a)(b)(c)Annualizedreturn onaveragetangible 13.09 % 11.47 % 13.99 % 12.28 % 14.21 %equity,adjusted (a)(b)(c)(h) Efficiency 57.41 % 66.61 % 70.61 % 61.72 % 66.87 %ratio (g)Efficiencyratio, adjusted 57.64 % 64.36 % 64.20 % 60.85 % 63.29 %(g)(h) Annualized netinterest margin 3.84 % 3.93 % 3.92 % 3.89 % 3.89 %(g)Annualized netinterest 3.77 % 3.86 % 3.84 % 3.81 % 3.84 %margin,adjusted (g)(h) Note: Explanations for footnotes (a) - (i) areincluded at the end of the financial tables in this "Financial Reconciliations" section.

PARK NATIONAL CORPORATION FinancialReconciliations (continued) (a) Averages are for the three months ended June 30, 2020, March 31, 2020,and June 30, 2019 and the six months ended June 30, 2020 and June 30, 2019.(b) Reported measure uses net income. (c) Net income for each period divided by average tangible equity during theperiod.Average tangible equity equals average shareholders' equity during theapplicable period less average goodwill and other intangible assets during theapplicable period. RECONCILIATION OF AVERAGE SHAREHOLDERS' EQUITY TO AVERAGE TANGIBLE EQUITY: THREE MONTHS ENDED SIX MONTHS ENDED June 30, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019AVERAGESHAREHOLDERS' $ 998,288 $ 981,976 $ 936,626 $ 990,132 $ 887,946 EQUITYLess: Averagegoodwill andother 170,303 170,909 165,311 170,606 142,587 intangibleassetsAVERAGE $ 827,985 $ 811,067 $ 771,315 $ 819,526 $ 745,359 TANGIBLE EQUITY (d) Tangible equity divided by common shares outstanding at period end.Tangible equity equals total shareholders' equity less goodwill and otherintangible assets, in each case at the end of the period. RECONCILIATION OF TOTAL SHAREHOLDERS' EQUITY TO TANGIBLE EQUITY: June 30, 2020 March 31, 2020 June 30, 2019 TOTALSHAREHOLDERS' $ 1,001,594 $ 981,877 $ 934,432 EQUITYLess: Goodwilland other 169,905 170,512 174,288 intangibleassetsTANGIBLE EQUITY $ 831,689 $ 811,365 $ 760,144 (e) Net income for each period divided by average tangible assets during theperiod.Average tangible assets equals average assets less average goodwilland other intangible assets, in each case during the applicable period. RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS THREE MONTHS ENDED SIX MONTHS ENDED June 30, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019AVERAGE ASSETS $ 9,408,265 $ 8,679,789 $ 8,576,495 $ 9,044,027 $ 8,206,502 Less: Averagegoodwill andother 170,303 170,909 165,311 170,606 142,587 intangibleassetsAVERAGE $ 9,237,962 $ 8,508,880 $ 8,411,184 $ 8,873,421 $ 8,063,915 TANGIBLE ASSETS (f) Tangible equity divided by tangible assets. Tangible assets equals totalassets less goodwill and other intangible assets, in each case at the end ofthe period. RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS: June 30, 2020 March 31, 2020 June 30, 2019 TOTAL ASSETS $ 9,712,994 $ 8,719,291 $ 8,657,453 Less: Goodwilland other 169,905 170,512 174,288 intangibleassetsTANGIBLE ASSETS $ 9,543,089 $ 8,548,779 $ 8,483,165 (g) Efficiency ratio is calculated by dividing total other expense by the sumof fully taxable equivalent net interest income and other income. Fully taxableequivalent net interest income reconciliation is shown assuming a 21% corporatefederal income tax rate. Additionally, net interest margin is calculated on afully taxable equivalent basis by dividing fully taxable equivalent netinterest income by average interest earning assets. RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTERESTINCOME THREE MONTHS ENDED SIX MONTHS ENDED June 30, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019Interest income $ 87,445 $ 88,909 $ 92,226 $ 176,354 $ 174,082 Fully taxableequivalent 723 725 752 1,448 1,486 adjustmentFully taxableequivalent $ 88,168 $ 89,634 $ 92,978 $ 177,802 $ 175,568 interest incomeInterest 6,259 12,626 16,375 18,885 30,455 expenseFully taxableequivalent net $ 81,909 $ 77,008 $ 76,603 $ 158,917 $ 145,113 interest income (h) Adjustments to net income for each period presented are detailed in thenon-GAAP reconciliations of net interest income, provision for (recovery of)loan losses, other income and other expense above.(i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate.



Media contact: Bethany Lewis, 740.349.0421, bethany.lewis@parknationalbank.comInvestor contact: Brady Burt, 740.322.6844, brady.burt@parknationalbank.comPark National Corporation, 50 N. Third Street, Newark, Ohio 43055