GlobeNewswire Inc | Apr 23, 2021 04:15PM EDT

April 23, 2021

NEWARK, Ohio, April 23, 2021 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the first quarter of 2021 (three months ended March 31, 2021), including net income growth driven by continued increases in lending activity. Park's board of directors declared a quarterly cash dividend of $1.03 per common share, payable on June 10, 2021 to common shareholders of record as of May 21, 2021.

Parks net income for the first quarter of 2021 was $42.8 million, a 91.4 percent increase from $22.4 million for the first quarter of 2020. First quarter 2021 net income per diluted common share was $2.61, compared to $1.36 in the first quarter of 2020. Like many financial institutions, Park did not experience the credit losses it had prepared for throughout the pandemic; and Park thus recognized a recovery in the first quarter of 2021. Additionally, steady growth in its consumer and commercial lending services over the past year helped drive first quarter 2021 performance.

Business owners are financing property, equipment, and other developments throughout our communities. Columbus, Cincinnati, Charlotte and Louisville have been particularly robust, Park Chairman and Chief Executive Officer David Trautman said. We have been available for our business customers through periods of stress and we are here for them as the economy picks up momentum.

Park's community-banking subsidiary, The Park National Bank, reported net income of $45.1 million for the first quarter of 2021, a 74.2 percent increase compared to $25.9 million for the same period of 2020. The banks first quarter 2021 mortgage origination volume was $304 million, whereas it was $178 million in the first quarter of 2020.

The real estate environment can be intense right now, and our customers continue to rely on our local bankers to help them take advantage of great opportunities in home buying and refinancing, said Park President Matthew Miller. Our responsiveness and experience with a variety of lending situations positioned us to serve customers more in the first quarter.

Headquartered in Newark, Ohio, Park National Corporation has $9.9 billion in total assets (as of March 31, 2021). Park's banking operations are conducted through its subsidiary The Park National Bank. Other Park subsidiaries are Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance), Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.

Complete financial tables are listed below.

Category: EarningsMedia 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

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, including the possibility of further resurgence in the spread of COVID-19 - - 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 public health actions directed toward the containment of the COVID-19 pandemic (such as quarantines, shut downs and other restrictions on travel and commercial, social or other activities), the development, availability and effectiveness of vaccines, and the implementation of fiscal stimulus packages; -- the impact of future governmental and regulatory actions upon our participation in and execution of government programs related to the COVID-19 pandemic; -- Park's ability to execute our business plan successfully and within the expected timeframe as well as our ability to manage strategic initiatives in light of the impact of the COVID-19 pandemic and the various responses to the COVID-19 pandemic; -- 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 weaker recovery than anticipated, in addition to the continuing impact of the COVID-19 pandemic on our customers operations and financial condition, either of which may result in adverse impacts on the demand for loan, deposit and other financial services, delinquencies, defaults and counterparties' inability to meet credit and other obligations and the possible impairment of collectability of loans; -- factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers and the success of construction projects that we finance, including any loans acquired in acquisition transactions; -- the effect of monetary and other fiscal policies (including the impact of money supply and interest rate policies of the Federal Reserve Board) as well as disruption in the liquidity and functioning of U.S. financial markets, as a result of the COVID-19 pandemic and government policies implemented in response thereto, may adversely impact prepayment penalty income, mortgage banking income, income from fiduciary activities, the value of securities, deposits and other financial instruments, in addition to the loan demand and the performance of our loan portfolio, and the interest rate sensitivity of our consolidated balance sheet as well as reduce interest margins; -- 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 levels in the states in which Park and our subsidiaries do business may be different than anticipated due to the continuing impact of the COVID-19 pandemic; -- changes in customers', suppliers', and other counterparties' performance and creditworthiness may be different than anticipated due to the continuing impact of the COVID-19 pandemic; -- Park may have more credit risk and higher credit losses to the extent there are loan concentrations by location or industry of borrowers or collateral; -- the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors; -- the adequacy of our internal controls and risk management program in the event of changes in the market, economic, operational (including those which may result from more of our associates working remotely), asset/liability repricing, legal, compliance, strategic, cybersecurity, liquidity, credit and interest rate risks associated with Park's business; -- competitive pressures among financial services organizations could increase significantly, including product and pricing pressures (which could in turn impact our credit spreads), changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and our ability to attract, develop and retain qualified banking professionals; -- uncertainty regarding the nature, timing, cost and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and our subsidiaries, including major reform of the regulatory oversight structure of the financial services industry and changes in laws and regulations concerning taxes, FDIC insurance premium levels, pensions, bankruptcy, consumer protection, rent regulation and housing, financial accounting and reporting, environmental protection, insurance, bank products and services, bank and bank holding company capital and liquidity standards, fiduciary standards, securities and other aspects of the financial services industry, specifically the reforms provided for in the Coronavirus Aid, Relief and Economic Security (CARES) Act and the follow-up legislation in the Consolidated Appropriations Act, 2021, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act) and the Basel III regulatory capital reforms, as well as regulations already adopted and which may be adopted in the future by the relevant regulatory agencies, including the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve Board, to implement the provisions of the CARES Act and the follow-up legislation in the Consolidated Appropriations Act, 2021, the provisions of the 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, 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, 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 Park's ability to anticipate and respond to technological changes on Park's ability to respond to customer needs and meet competitive demands; -- operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Park and our subsidiaries are highly dependent; -- the ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks, including those of Park's third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Park and/or result in Park incurring a financial loss; -- a failure in or breach of Park's operational or security systems or infrastructure, or those of our third-party vendors and other service providers, resulting in failures or disruptions in customer account management, general ledger, deposit, loan, or other systems, including as a result of cyber attacks; -- the existence or exacerbation of general geopolitical instability and uncertainty as well as the effect of trade policies (including the impact of potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations and changes in the relationship of the U.S. and its global trading partners); -- uncertainty regarding the impact of changes to the U.S. presidential administration and Congress on the regulatory landscape, capital markets, elevated U.S. government debt, potential changes in tax legislation that may increase tax rates and the response to and management of the COVID-19 pandemic; -- the impact on financial markets and the economy of any changes in the credit ratings of the U.S. Treasury obligations and other U.S. government-backed debt, as well as issues surrounding the levels of U.S., European and Asian government debt and concerns regarding the growth rates and financial stability of certain sovereign governments, supranationals and financial institutions in Europe and Asia and the risk they may face difficulties servicing their sovereign debt; -- 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, regional or national protests and civil unrest (including any resulting branch closures or damages), military or 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 our 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, 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 months ended March 31, 2021, December 31, 2020, andMarch 31, 2020 2021 2020 2020 Percent change vs.(in thousands,except share and 1st QTR 4th QTR 1st QTR 4Q '20 1Q '20per share data)INCOME STATEMENT:Net interest $ 80,734 $ 86,321 $ 76,283 (6.5 ) % 5.8 %income(Recovery of)provision for (4,855 ) (19,159 ) 5,153 N.M N.M credit losses(l)Other income 34,089 35,656 22,486 (4.4 ) % 51.6 %Other expense 67,865 85,661 66,276 (20.8 ) % 2.4 %Income before $ 51,813 $ 55,475 $ 27,340 (6.6 ) % 89.5 %income taxesIncome taxes 8,982 10,275 4,968 (12.6 ) % 80.8 %Net income $ 42,831 $ 45,200 $ 22,372 (5.2 ) % 91.4 % MARKET DATA: Earnings percommon share - $ 2.63 $ 2.77 $ 1.37 (5.1 ) % 92.0 %basic (a)Earnings percommon share - 2.61 2.75 1.36 (5.1 ) % 91.9 %diluted (a)Cash dividendsdeclared per 1.23 1.02 1.22 20.6 % 0.8 %common shareBook value percommon share at 63.74 63.76 60.25 ? % 5.8 %period endMarket price percommon share at 129.30 105.01 77.64 23.1 % 66.5 %period endMarketcapitalization 2,112,238 1,713,154 1,265,180 23.3 % 67.0 %at period end Weighted averagecommon shares - 16,314,987 16,310,551 16,303,602 ? % 0.1 %basic (b)Weighted averagecommon shares - 16,439,920 16,434,812 16,425,881 ? % 0.1 %diluted (b)Common sharesoutstanding at 16,335,951 16,314,197 16,295,461 0.1 % 0.2 %period end PERFORMANCERATIOS: (annualized)Return onaverage assets 1.81 % 1.93 % 1.04 % (6.2 ) % 74.0 %(a)(b)Return onaverage 16.63 % 17.37 % 9.16 % (4.3 ) % 81.6 %shareholders'equity (a)(b)Yield on loans 4.48 % 4.69 % 5.02 % (4.5 ) % (10.8 ) %Yield oninvestment 2.53 % 2.80 % 2.72 % (9.6 ) % (7.0 ) %securitiesYield on moneymarket 0.11 % 0.11 % 1.12 % ? % (90.2 ) %instrumentsYield oninterest earning 3.96 % 4.33 % 4.57 % (8.5 ) % (13.3 ) %assetsCost of interest 0.16 % 0.19 % 0.81 % (15.8 ) % (80.2 ) %bearing depositsCost of 1.86 % 2.01 % 2.08 % (7.5 ) % (10.6 ) %borrowingsCost of payinginterest bearing 0.32 % 0.40 % 0.90 % (20.0 ) % (64.4 ) %liabilitiesNet interest 3.76 % 4.07 % 3.93 % (7.6 ) % (4.3 ) %margin (g)Efficiency ratio 58.74 % 69.82 % 66.61 % (15.9 ) % (11.8 ) %(g) OTHER RATIOS (NON-GAAP):Tangible bookvalue per share $ 53.43 $ 53.41 $ 49.79 ? % 7.3 %(d) Note:Explanations forfootnotes (a) -(l) are includedat the end of the financialtables in the"FinancialReconciliations"section. PARK NATIONAL CORPORATIONFinancial Highlights (continued)As of or for the three monthsended March 31, 2021, December 31, 2020, and March 31, 2020 Percent change vs.(in thousands, March 31, 2021 December 31, March 31, 4Q '20 1Q '20except ratios) 2020 2020BALANCE SHEET: Investment $ 1,176,240 $ 1,124,806 $ 1,253,087 4.6 % (6.1 ) %securitiesLoans 7,168,745 7,177,785 6,522,519 (0.1 ) % 9.9 %Allowance forcredit losses 86,886 85,675 61,503 1.4 % 41.3 %(l)Goodwill andother intangible 168,376 168,855 170,512 (0.3 ) % (1.3 ) %assetsOther realestate owned 844 1,431 3,600 (41.0 ) % (76.6 ) %(OREO)Total assets 9,914,069 9,279,021 8,719,291 6.8 % 13.7 %Total deposits 8,236,199 7,572,358 7,290,133 8.8 % 13.0 %Borrowings 523,266 562,504 348,373 (7.0 ) % 50.2 %Totalshareholders' 1,041,271 1,040,256 981,877 0.1 % 6.0 %equityTangible equity 872,895 871,401 811,365 0.2 % 7.6 %(d)Totalnonperforming 130,327 139,614 119,311 (6.7 ) % 9.2 %loansTotalnonperforming 134,335 144,209 126,510 (6.8 ) % 6.2 %assets ASSET QUALITY RATIOS:Loans as a % ofperiod end total 72.31 % 77.35 % 74.81 % (6.5 ) % (3.3 ) %assetsTotalnonperforming 1.82 % 1.95 % 1.83 % (6.7 ) % (0.5 ) %loans as a % ofperiod end loansTotalnonperformingassets as a % ofperiod end loans 1.87 % 2.01 % 1.94 % (7.0 ) % (3.6 ) %+ OREO+ othernonperformingassetsAllowance forcredit losses as 1.21 % 1.19 % 0.94 % 1.7 % 28.7 %a % of periodend loansNet loancharge-offs $ 24 $ (17,796 ) $ 329 N.M N.M (recoveries)Annualized netloan charge-offs(recoveries) as ? % (0.98 ) % 0.02 % N.M N.M a % of averageloans (b) CAPITAL & LIQUIDITY:Totalshareholders' 10.50 % 11.21 % 11.26 % (6.3 ) % (6.7 ) %equity / Periodend total assetsTangible equity(d) / Tangible 8.96 % 9.57 % 9.49 % (6.4 ) % (5.6 ) %assets (f)Averageshareholders' 10.87 % 11.11 % 11.31 % (2.2 ) % (3.9 ) %equity / Averageassets (b)Averageshareholders' 14.63 % 14.29 % 15.15 % 2.4 % (3.4 ) %equity / Averageloans (b)Average loans /Average deposits 90.12 % 95.80 % 89.90 % (5.9 ) % 0.2 %(b) Note: Explanations for footnotes (a) - (l) are included at theend of the financial tables in the "Financial Reconciliations" section.

PARK NATIONAL CORPORATIONConsolidated Statements of Income Three Months Ended March 31(in thousands, except share and per share 2021 2020data) Interest income: Interest and fees on loans $ 78,737 $ 80,687 Interest on: Obligations of U.S. Government, its agenciesand other securities - taxable 4,256 5,531 Obligations of states and political 2,037 2,200 subdivisions - tax-exemptOther interest income 143 491 Total interest income 85,173 88,909 Interest expense: Interest on deposits: Demand and savings deposits 386 6,342 Time deposits 1,584 4,285 Interest on borrowings 2,469 1,999 Total interest expense 4,439 12,626 Net interest income 80,734 76,283 (Recovery of) provision for credit losses (4,855 ) 5,153 (l) Net interest income after (recovery of) 85,589 71,130 provision for credit losses Other income 34,089 22,486 Other expense 67,865 66,276 Income before income taxes 51,813 27,340 Income taxes 8,982 4,968 Net income $ 42,831 $ 22,372 Per common share: Net income - basic $ 2.63 $ 1.37 Net income - diluted $ 2.61 $ 1.36 Weighted average shares - basic 16,314,987 16,303,602 Weighted average shares - diluted 16,439,920 16,425,881 Cash dividends declared $ 1.23 $ 1.22

PARK NATIONAL CORPORATIONConsolidated Balance Sheets (in thousands, except share data) March 31, 2021 December 31, 2020 Assets Cash and due from banks $ 131,357 $ 155,596 Money market instruments 811,918 214,878 Investment securities 1,176,240 1,124,806 Loans 7,168,745 7,177,785 Allowance for credit losses (l) (86,886 ) (85,675 )Loans, net 7,081,859 7,092,110 Bank premises and equipment, net 89,533 88,660 Goodwill and other intangible assets 168,376 168,855 Other real estate owned 844 1,431 Other assets 453,942 432,685 Total assets $ 9,914,069 $ 9,279,021 Liabilities and Shareholders' Equity Deposits: Noninterest bearing $ 2,907,020 $ 2,727,100 Interest bearing 5,329,179 4,845,258 Total deposits 8,236,199 7,572,358 Borrowings 523,266 562,504 Other liabilities 113,333 103,903 Total liabilities $ 8,872,798 $ 8,238,765 Shareholders' Equity: Preferred shares (200,000 shares authorized; noshares outstanding at March 31, 2021 and $ ? $ ? December 31, 2020)Common shares (No par value; 20,000,000 sharesauthorized;17,623,154 shares issued at March 458,534 460,687 31, 2021 and 17,623,163 shares issued atDecember 31, 2020)Accumulated other comprehensive (loss) income, (7,901 ) 5,571 net of taxesRetained earnings 719,230 704,764 Treasury shares (1,287,203 shares at March 31, (128,592 ) (130,766 )2021 and 1,308,966 shares at December 31, 2020)Total shareholders' equity $ 1,041,271 $ 1,040,256 Total liabilities and shareholders' equity $ 9,914,069 $ 9,279,021

PARK NATIONAL CORPORATIONConsolidated Average Balance Sheets Three Months Ended Mar 31(in thousands) 2021 2020 Assets Cash and due from banks $ 148,264 $ 132,029 Money market instruments 553,906 176,805 Investment securities 1,160,509 1,264,452 Loans 7,138,854 6,482,137 Allowance for credit losses (l) (89,954 ) (57,615 )Loans, net 7,048,900 6,424,522 Bank premises and equipment, net 89,740 74,922 Goodwill and other intangible assets 168,690 170,909 Other real estate owned 1,212 3,800 Other assets 441,321 432,350 Total assets $ 9,612,542 $ 8,679,789 Liabilities and Shareholders' Equity Deposits: Noninterest bearing $ 2,792,398 $ 1,949,991 Interest bearing 5,129,357 5,260,385 Total deposits 7,921,755 7,210,376 Borrowings 538,706 386,511 Other liabilities 107,669 100,926 Total liabilities $ 8,568,130 $ 7,697,813 Shareholders' Equity: Preferred shares $ ? $ ? Common shares 460,721 459,462 Accumulated other comprehensive income (loss), 1,179 (94 )net of taxesRetained earnings 713,254 654,465 Treasury shares (130,742 ) (131,857 )Total shareholders' equity $ 1,044,412 $ 981,976 Total liabilities and shareholders' equity $ 9,612,542 $ 8,679,789

PARK NATIONAL CORPORATIONConsolidated Statements of Income - Linked Quarters 2021 2020 2020 2020 2020(inthousands, 1st QTR 4th QTR 3rd QTR 2nd QTR 1st QTRexcept pershare data) Interest income:Interest andfees on $ 78,737 $ 85,268 $ 82,617 $ 80,155 $ 80,687 loansInterest on: Obligationsof U.S.Government,its agencies 4,256 4,420 4,841 5,026 5,531 and othersecurities -taxableObligationsof statesand 2,037 2,040 2,045 2,151 2,200 politicalsubdivisions- tax-exemptOtherinterest 143 72 63 113 491 incomeTotalinterest 85,173 91,800 89,566 87,445 88,909 income Interest expense:Interest on deposits:Demand andsavings 386 490 803 1,507 6,342 depositsTime 1,584 1,893 2,662 3,346 4,285 depositsInterest on 2,469 3,096 2,261 1,406 1,999 borrowingsTotalinterest 4,439 5,479 5,726 6,259 12,626 expense Net interest 80,734 86,321 83,840 81,186 76,283 income (Recoveryof)provision (4,855 (19,159 13,836 12,224 5,153 for creditlosses (l) Net interestincome after(recoveryof) 85,589 105,480 70,004 68,962 71,130 provisionfor creditlosses Other income 34,089 35,656 36,558 30,964 22,486 Other 67,865 85,661 69,859 64,799 66,276 expense Incomebefore 51,813 55,475 36,703 35,127 27,340 income taxes Income taxes 8,982 10,275 5,857 5,622 4,968 Net income $ 42,831 $ 45,200 $ 30,846 $ 29,505 $ 22,372 Per common share:Netincome- $ 2.63 $ 2.77 $ 1.89 $ 1.81 $ 1.37 basicNetincome- $ 2.61 $ 2.75 $ 1.88 $ 1.80 $ 1.36 diluted

PARK NATIONAL CORPORATIONDetail of other income and other expense - Linked Quarters 2021 2020 2020 2020 2020(in thousands) 1st QTR 4th QTR 3rd QTR 2nd QTR 1st QTR Other income: Income fromfiduciary $ 8,173 $ 7,632 $ 7,335 $ 6,793 $ 7,113 activitiesService chargeson deposit 2,054 2,123 2,118 1,676 2,528 accountsOther service 9,617 12,040 13,047 8,758 3,766 incomeDebit card fee 6,086 5,787 5,853 5,560 4,960 incomeBank owned lifeinsurance 1,165 1,170 1,192 1,179 1,248 incomeATM fees 530 432 491 438 412 (Loss) gain onthe sale of (33 ) (7 ) 569 841 (196 )OREO, netNet gain (loss)on the sale of 177 ? (27 ) 3,313 ? investmentsecuritiesGain (loss) onequity 1,633 2,931 1,201 (977 ) (973 )securities, netOthercomponents of 2,038 1,988 1,988 1,988 1,988 net periodicbenefit incomeMiscellaneous 2,649 1,560 2,791 1,395 1,640 Total other $ 34,089 $ 35,656 $ 36,558 $ 30,964 $ 22,486 income Other expense: Salaries $ 29,896 $ 37,280 $ 31,632 $ 30,699 $ 28,429 Employee 10,201 7,316 10,676 9,080 10,043 benefitsOccupancy 3,640 3,231 3,835 3,256 3,480 expenseFurniture andequipment 2,610 4,949 4,687 4,850 4,319 expenseData processing 7,712 3,315 3,275 2,577 2,492 feesProfessionalfees and 5,664 9,359 7,977 6,901 7,066 servicesMarketing 1,491 1,752 1,454 1,136 1,486 Insurance 1,691 1,855 1,541 1,477 1,550 Communication 1,122 1,097 958 874 1,155 State tax 1,108 605 1,125 1,116 1,145 expenseAmortization ofintangible 479 525 525 607 606 assetsFHLB prepayment ? 8,736 ? ? 1,793 penaltyFoundation ? 3,000 ? ? ? contributionsMiscellaneous 2,251 2,641 2,174 2,226 2,712 Total other $ 67,865 $ 85,661 $ 69,859 $ 64,799 $ 66,276 expense

PARK NATIONAL CORPORATIONAsset Quality Information Year ended December 31,(in thousands, March 31, 2020 2019 2018 2017except ratios) 2021 Allowance for credit losses:Allowance forcredit losses, $ 85,675 $ 56,679 $ 51,512 $ 49,988 $ 50,624 beginning ofperiodCumulativechange inaccounting 6,090 ? ? ? ? principle;adoption ofASU 2016-13Charge-offs 1,701 10,304 11,177 13,552 19,403 Recoveries 1,677 27,246 10,173 7,131 10,210 Netcharge-offs 24 (16,942 ) 1,004 6,421 9,193 (recoveries)(Recovery of)provision for (4,855 ) 12,054 6,171 7,945 8,557 credit lossesAllowance forcredit losses, $ 86,886 $ 85,675 $ 56,679 $ 51,512 $ 49,988 end of period Generalreserve trends:Allowance forcredit losses, $ 86,886 $ 85,675 $ 56,679 $ 51,512 $ 49,988 end of periodAllowance onpurchasedcreditdeteriorated("PCD") loans(purchased ? 167 268 ? ? creditimpaired("PCI") loansfor years 2020and prior)Allowance onpurchasedloans excluded ? 678 ? ? ? from thegeneralreserveSpecificreserves onindividually 4,962 5,434 5,230 2,273 684 evaluatedloansGeneralreserves oncollectively $ 81,924 $ 79,396 $ 51,181 $ 49,239 $ 49,304 evaluatedloans Total loans $ 7,168,745 $ 7,177,785 $ 6,501,404 $ 5,692,132 $ 5,372,483 PCD loans (PCIloans for 10,284 11,153 14,331 3,943 ? years 2020 andprior)Purchasedloans excludedfrom ? 360,056 548,436 225,029 ? collectivelyevaluatedloansIndividuallyevaluated 100,407 108,407 77,459 48,135 56,545 loansCollectivelyevaluated $ 7,058,054 $ 6,698,169 $ 5,861,178 $ 5,415,025 $ 5,315,938 loans Asset Quality Ratios:Netcharge-offs(recoveries) ? % (0.24 ) % 0.02 % 0.12 % 0.17 %as a % ofaverage loans(annualized)Allowance forcredit lossesas a % of 1.21 % 1.19 % 0.87 % 0.90 % 0.93 %period endloansAllowance forcredit lossesas a % ofperiod end 1.28 % 1.25 % . N.A . N.A . N.A loans(excluding PPPloans) (k)Generalreserve as a %of 1.16 % 1.19 % 0.87 % 0.91 % 0.93 %collectivelyevaluatedloansGeneralreserves as a% ofcollectively 1.22 % 1.24 % . N.A . N.A . N.A evaluatedloans(excluding PPPloans) (k) Nonperforming assets:Nonaccrual $ 114,708 $ 117,368 $ 90,080 $ 67,954 $ 72,056 loansAccruingtroubled debt 14,817 20,788 21,215 15,173 20,111 restructuringsLoans past due90 days or 802 1,458 2,658 2,243 1,792 moreTotalnonperforming $ 130,327 $ 139,614 $ 113,953 $ 85,370 $ 93,959 loansOther realestate owned - 250 837 3,100 2,788 6,524 Park NationalBankOther realestate owned - 594 594 929 1,515 7,666 SEPHOthernonperforming 3,164 3,164 3,599 3,464 4,849 assets - ParkNational BankTotalnonperforming $ 134,335 $ 144,209 $ 121,581 $ 93,137 $ 112,998 assetsPercentage ofnonaccrualloans to 1.60 % 1.64 % 1.39 % 1.19 % 1.34 %period endloansPercentage ofnonperformingloans to 1.82 % 1.95 % 1.75 % 1.50 % 1.75 %period endloansPercentage ofnonperformingassets to 1.87 % 2.01 % 1.87 % 1.64 % 2.10 %period endloansPercentage ofnonperformingassets to 1.35 % 1.55 % 1.42 % 1.19 % 1.50 %period endtotal assets Note: Explanations for footnotes (a) - (l) are included at the end of thefinancial tables in the "Financial Reconciliations" section.

PARK NATIONAL CORPORATIONAsset Quality Information (continued) Year ended December 31,(in thousands, March 31, 2020 2019 2018 2017except ratios) 2021 New nonaccrual loan information:Nonaccrual loans,beginning of $ 117,368 $ 90,080 $ 67,954 $ 72,056 $ 87,822 periodNew nonaccrual 12,540 103,386 81,009 76,611 58,753 loansResolved 15,200 76,098 58,883 80,713 74,519 nonaccrual loansNonaccrual loans, $ 114,708 $ 117,368 $ 90,080 $ 67,954 $ 72,056 end of period Impairedcommercial loanportfolio information(period end):Unpaid principal $ 100,996 $ 109,062 $ 78,178 $ 59,381 $ 66,585 balancePrior charge-offs 589 655 719 11,246 10,040 Remaining 100,407 108,407 77,459 48,135 56,545 principal balanceSpecific reserves 4,962 5,434 5,230 2,273 684 Book value, after $ 95,445 $ 102,973 $ 72,229 $ 45,862 $ 55,861 specific reserves

PARK NATIONAL CORPORATIONFinancial Reconciliations NON-GAAP RECONCILIATIONS THREE MONTHS ENDED (in thousands, except share and per March 31, December 31, March 31,share data) 2021 2020 2020Net interest income $ 80,734 $ 86,321 $ 76,283 less purchase accounting accretionrelated to NewDominion 1,131 919 1,378 and Carolina Alliance acquisitionsless interest income on former Vision 105 102 77 Bank relationshipsNet interest income - adjusted $ 79,498 $ 85,300 $ 74,828 (Recovery of) provision for credit $ (4,855 ) $ (19,159 ) $ 5,153 lossesless recoveries on former Vision Bank (257 ) (20,496 ) (764 ) relationships(Recovery of) provision for credit $ (4,598 ) $ 1,337 $ 5,917 losses - adjusted Other income $ 34,089 $ 35,656 $ 22,486 less other service income related to 58 503 ? former Vision Bank relationshipsless rebranding initiative related ? (298 ) ? expensesOther income - adjusted $ 34,031 $ 35,451 $ 22,486 Other expense $ 67,865 $ 85,661 $ 66,276 less merger-related expenses related toNewDominion and Carolina Alliance 12 9 243 acquisitionsless core deposit intangibleamortization related to NewDominion and 479 525 606 Carolina Alliance acquisitionsless direct expenses related tocollection of payments on former Vision 107 4,051 ? Bank loan relationshipsless FHLB prepayment penalty ? 8,736 1,793 less rebranding initiative related 618 229 270 expensesless Foundation contribution ? 3,000 ? less severance and restructuring 108 4,039 88 chargesless COVID-19 related expenses (j) 634 738 262 Other expense - adjusted $ 65,907 $ 64,334 $ 63,014 Tax effect of adjustments to net income $ 85 $ (83 ) $ 219 identified above (i) Net income - reported $ 42,831 $ 45,200 $ 22,372 Net income - adjusted $ 43,153 $ 44,888 $ 23,196 Diluted EPS $ 2.61 $ 2.75 $ 1.36 Diluted EPS, adjusted (h) $ 2.62 $ 2.73 $ 1.41 Annualized return on average assets (a) 1.81 % 1.93 % 1.04 %(b)Annualized return on average assets, 1.82 % 1.92 % 1.07 %adjusted (a)(b)(h) Annualized return on average tangible 1.84 % 1.97 % 1.06 %assets (a)(b)(e)Annualized return on average tangible 1.85 % 1.95 % 1.10 %assets, adjusted (a)(b)(e)(h) Annualized return on average 16.63 % 17.37 % 9.16 %shareholders' equity (a)(b)Annualized return on averageshareholders' equity, adjusted (a)(b) 16.76 % 17.25 % 9.50 %(h) Annualized return on average tangible 19.84 % 20.76 % 11.09 %equity (a)(b)(c)Annualized return on average tangible 19.98 % 20.61 % 11.50 %equity, adjusted (a)(b)(c)(h) Efficiency ratio (g) 58.74 % 69.82 % 66.61 %Efficiency ratio, adjusted (g)(h) 57.69 % 52.97 % 64.27 % Annualized net interest margin (g) 3.76 % 4.07 % 3.93 %Annualized net interest margin, 3.70 % 4.02 % 3.86 %adjusted (g)(h)

PARK NATIONAL CORPORATIONFinancial Reconciliations (continued) (a) Reported measure uses net income(b) Averages are for the three months ended March 31, 2021, December 31, 2020,and March 31, 2020, as appropriate(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 March 31, 2021 December 31, March 31, 2020 2020AVERAGE SHAREHOLDERS' EQUITY $ 1,044,412 $ 1,035,493 $ 981,976 Less: Average goodwill and other 168,690 169,199 170,909 intangible assetsAVERAGE TANGIBLE EQUITY $ 875,722 $ 866,294 $ 811,067 (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: March 31, 2021 December 31, March 31, 2020 2020TOTAL SHAREHOLDERS' EQUITY $ 1,041,271 $ 1,040,256 $ 981,877 Less: Goodwill and other 168,376 168,855 170,512 intangible assetsTANGIBLE EQUITY $ 872,895 $ 871,401 $ 811,365 (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 March 31, 2021 December 31, March 31, 2020 2020AVERAGE ASSETS $ 9,612,542 $ 9,316,499 $ 8,679,789 Less: Average goodwill and other 168,690 169,199 170,909 intangible assetsAVERAGE TANGIBLE ASSETS $ 9,443,852 $ 9,147,300 $ 8,508,880 (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: March 31, 2021 December 31, March 31, 2020 2020TOTAL ASSETS $ 9,914,069 $ 9,279,021 $ 8,719,291 Less: Goodwill and other 168,376 168,855 170,512 intangible assetsTANGIBLE ASSETS $ 9,745,693 $ 9,110,166 $ 8,548,779 (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 March 31, 2021 December 31, March 31, 2020 2020Interest income $ 85,173 $ 91,800 $ 88,909 Fully taxable equivalent 714 712 725 adjustmentFully taxable equivalent interest $ 85,887 $ 92,512 $ 89,634 incomeInterest expense 4,439 5,479 12,626 Fully taxable equivalent net $ 81,448 $ 87,033 $ 77,008 interest income (h) Adjustments to net income for each period presented are detailed in thenon-GAAP reconciliations of net interest income, (recovery of) provision forloan losses, other income and other expense.(i) The tax effect of adjustments to net income was calculated assuming a 21%corporate federal income tax rate.(j) COVID-19 related expenses include calamity pay and special one-time bonuses to certain associates.(k) Excludes $387.0 million and $331.6 million of PPP loans at March 31, 2021and December 31, 2020, respectively.(l) Park adopted ASU 2016-13 effective January 1, 2021. The allowance forcredit losses as of March 31, 2021 and the related (recovery of) provision forcredit losses for the three months ended March 31, 2021 was calculatedutilizing this new guidance.