PRK Park National Corp

Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the fourth quarter and full year of 2020 (three and twelve months ended December 31, 2020). The board of directors increased Park’s quarterly cash dividend, declaring it as $1.03 per common share. The board also declared a special cash dividend of $0.20 per common share, payable on March 10, 2021 to common shareholders of record as of February 19, 2021.

Park’s net income for the fourth quarter of 2020 was $45.2 million, an 88.8 percent increase from $23.9 million for the fourth quarter of 2019. Fourth quarter 2020 net income per diluted common share was $2.75, compared to $1.45 in the fourth quarter of 2019. Park's net income for the full year of 2020 was $127.9 million, a 24.6 percent increase from $102.7 million for the full year of 2019. Net income per diluted common share was $7.80 for 2020, compared to $6.29 for 2019.

“Our lending services throughout the year were a main driver in our overall performance. Our bankers mobilized to serve in new ways, delivering prompt advice and service to families and businesses who were struggling due to the pandemic or rushing to take advantage of opportunities,” said Park President Matthew Miller. “We’re proud of our lending teams’ outstanding response to the surge of home loan activity and demand for U.S. PPP loans; and we’re deeply grateful to all our associates who showed extraordinary dedication to caring for customers and each other every day in 2020.”

Park's community-banking subsidiary, The Park National Bank, reported net income of $34.2 million for the fourth quarter of 2020, a 28.6 percent increase compared to $26.6 million for the same period of 2019. The bank reported net income of $123.7 million for the full year of 2020, compared to $113.6 million for the full year of 2019.

“Park National bankers’ reliability and flexibility were never more important than in 2020,” Park Chairman and Chief Executive Officer David Trautman said. “In a year filled with odd and often uncomfortable circumstances, we grew relationships with our customers and communities by responding to their needs in consistent, compassionate, and creative ways.”

In 2020, Park National Corporation:

• Donated $4 million dollars to local organizations like shelters, theaters, support agencies, youth teams, and clubs.
• Helped over 8,000 families purchase a new home or refinance their current one to put themselves in a better financial situation.
• Helped small businesses maintain their workforces with the preservation of over 65,000 jobs through the Paycheck Protection Program. 
• Rapidly approved vehicle loans for 42,518 families who needed more space or more recreational time with the family.
• Guided local business owners in sustaining their retirement plans that support over 24,000 employees – including many individuals saving for the first time in 2020.
• Offered video chat sessions for senior citizens on topics like fraud awareness, online banking, and ways to stay socially connected from home.
• Donated $600,000 to school programs, supporting educators whose response during these challenging times was an inspiration.
• Paid over $3 million to bank employees regardless if they could be at work, and offered bonus pay to Park’s frontline employees.

Headquartered in Newark, Ohio, Park National Corporation has $9.3 billion in total assets (as of December 31, 2020). 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: Earnings

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995Park cautions that any forward-looking statements contained in this Current Report on Form 8-K 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:

• 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;
• 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, 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 and the follow-up legislation in the Consolidated Appropriations Act, 2021, the adoption of which can be deferred by Park until the earlier of: (1) the first day of the fiscal year that begins after the date on which the national emergency concerning the COVID-19 outbreak terminates; or (2) January 1, 2022, 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 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;
• 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, 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;
• 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, 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, 2019 and in "Item 1A. Risk Factors" of Part II of Park's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 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 CORPORATION
Financial Highlights
As of or for the three months ended December 31, 2020, September 30, 2020, and December 31, 2019
	2020				2020			2019					Percent change vs.
(in thousands, except share and per share data)	4th QTR				3rd QTR			4th QTR					3Q '20			4Q '19
INCOME STATEMENT:
Net interest income	$	86,321			$	83,840		$	77,009				3.0		%	12.1		%
(Recovery of) provision for loan losses	(19,159		)		13,836			(213		)			N.M			N.M
Other income	35,656				36,558			24,224					(2.5	)	%	47.2		%
Other expense	85,661				69,859			71,231					22.6		%	20.3		%
Income before income taxes	$	55,475			$	36,703		$	30,215				51.1		%	83.6		%
Income taxes	10,275				5,857			6,279					75.4		%	63.6		%
Net income	$	45,200			$	30,846		$	23,936				46.5		%	88.8		%
MARKET DATA:
Earnings per common share - basic (a)	$	2.77			$	1.89		$	1.46				46.6		%	89.7		%
Earnings per common share - diluted (a)	2.75				1.88			1.45					46.3		%	89.7		%
Cash dividends declared per common share	1.02				1.02			1.01					—		%	1.0		%
Book value per common share at period end	63.76				62.39			59.28					2.2		%	7.6		%
Market price per common share at period end	105.01				81.96			102.38					28.1		%	2.6		%
Market capitalization at period end	1,713,154				1,336,011			1,673,549					28.2		%	2.4		%
Weighted average common shares - basic (b)	16,310,551				16,300,720			16,342,485					0.1		%	(0.2	)	%
Weighted average common shares - diluted (b)	16,434,812				16,393,792			16,454,553					0.3		%	(0.1	)	%
Common shares outstanding at period end	16,314,197				16,300,763			16,346,442					0.1		%	(0.2	)	%
PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)	1.93			%	1.28		%	1.09			%		50.8		%	77.1		%
Return on average shareholders' equity (a)(b)	17.37			%	12.03		%	9.83			%		44.4		%	76.7		%
Yield on loans	4.69			%	4.54		%	5.11			%		3.3		%	(8.2	)	%
Yield on investment securities	2.80			%	2.35		%	2.72			%		19.1		%	2.9		%
Yield on money market instruments	0.11			%	0.11		%	1.86			%		—		%	(94.1	)	%
Yield on interest earning assets	4.33			%	4.12		%	4.64			%		5.1		%	(6.7	)	%
Cost of interest bearing deposits	0.19			%	0.26		%	0.95			%		(26.9	)	%	(80.0	)	%
Cost of borrowings	2.01			%	1.63		%	2.18			%		23.3		%	(7.8	)	%
Cost of paying interest bearing liabilities	0.40			%	0.39		%	1.04			%		2.6		%	(61.5	)	%
Net interest margin (g)	4.07			%	3.85		%	3.90			%		5.7		%	4.4		%
Efficiency ratio (g)	69.82			%	57.69		%	69.86			%		21.0		%	(0.1	)	%
OTHER RATIOS (NON-GAAP):
Tangible book value per share (d)	$	53.41			$	52.00		$	48.81				2.7		%	9.4		%
Note: Explanations for footnotes (a) - (k) are included at the end of the financial tables in the "Financial Reconciliations" section.
PARK NATIONAL CORPORATION
Financial Highlights (continued)
As of or for the three months ended December 31, 2020, September 30, 2020, and December 31, 2019
													Percent change vs.
(in thousands, except ratios)	December 31, 2020				September 30, 2020			December 31, 2019					3Q '20			4Q '19
BALANCE SHEET:
Investment securities	$	1,124,806			$	1,097,598		$	1,279,507				2.5		%	(12.1	)	%
Loans	7,177,785				7,278,546			6,501,404					(1.4	)	%	10.4		%
Allowance for loan losses	85,675				87,038			56,679					(1.6	)	%	51.2		%
Goodwill and other intangible assets	168,855				169,380			171,118					(0.3	)	%	(1.3	)	%
Other real estate owned (OREO)	1,431				836			4,029					71.2		%	(64.5	)	%
Total assets	9,279,021				9,240,006			8,558,377					0.4		%	8.4		%
Total deposits	7,572,358				7,475,829			7,052,612					1.3		%	7.4		%
Borrowings	562,504				643,103			438,157					(12.5	)	%	28.4		%
Total shareholders' equity	1,040,256				1,016,996			969,014					2.3		%	7.4		%
Tangible equity (d)	871,401				847,616			797,896					2.8		%	9.2		%
Total nonperforming loans	139,614				148,442			113,953					(5.9	)	%	22.5		%
Total nonperforming assets	144,209				152,670			121,581					(5.5	)	%	18.6		%
ASSET QUALITY RATIOS:
Loans as a % of period end total assets	77.35			%	78.77		%	75.97			%		(1.8	)	%	1.8		%
Total nonperforming loans as a % of period end loans	1.95			%	2.04		%	1.75			%		(4.4	)	%	11.4		%
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets	2.01			%	2.10		%	1.87			%		(4.3	)	%	7.5		%
Allowance for loan losses as a % of period end loans	1.19			%	1.20		%	0.87			%		(0.8	)	%	36.8		%
Net loan (recoveries) charge-offs	$	(17,796	)		$	274		$	(1,039	)			N.M			N.M
Annualized net loan (recoveries) charge-offs as a % of average loans (b)	(0.98		)	%	0.02		%	(0.06		)	%		N.M			N.M
CAPITAL & LIQUIDITY:
Total shareholders' equity / Period end total assets	11.21			%	11.01		%	11.32			%		1.8		%	(1.0	)	%
Tangible equity (d) / Tangible assets (f)	9.57			%	9.34		%	9.51			%		2.5		%	0.6		%
Average shareholders' equity / Average assets (b)	11.11			%	10.67		%	11.12			%		4.1		%	(0.1	)	%
Average shareholders' equity / Average loans (b)	14.29			%	14.08		%	15.03			%		1.5		%	(4.9	)	%
Average loans / Average deposits (b)	95.80			%	92.02		%	89.36			%		4.1		%	7.2		%
Note: Explanations for footnotes (a) - (k) are included at the end of the financial tables in the "Financial Reconciliations" section.

PARK NATIONAL CORPORATION
Financial Highlights
Twelve months ended December 31, 2020 and December 31, 2019
(in thousands, except share and per share data and ratios)	2020				2019				Percent change vs '19
INCOME STATEMENT:
Net interest income	$	327,630			$	297,737			10.0		%
Provision for loan losses	12,054				6,171				95.3		%
Other income	125,664				97,193				29.3		%
Other expense	286,595				263,988				8.6		%
Income before income taxes	$	154,645			$	124,771			23.9		%
Income taxes	26,722				22,071				21.1		%
Net income	$	127,923			$	102,700			24.6		%
MARKET DATA:
Earnings per common share - basic (a)	$	7.85			$	6.33			24.0		%
Earnings per common share - diluted (a)	7.80				6.29				24.0		%
Cash dividends declared per common share	4.28				4.24				0.9		%
Weighted average common shares - basic (b)	16,302,825				16,234,342				0.4		%
Weighted average common shares - diluted (b)	16,407,502				16,329,456				0.5		%
PERFORMANCE RATIOS:
Return on average assets (a)(b)	1.38			%	1.21		%		14.0		%
Return on average shareholders' equity (a)(b)	12.68			%	11.14		%		13.8		%
Yield on loans	4.71			%	5.19		%		(9.2	)	%
Yield on investment securities	2.66			%	2.76		%		(3.6	)	%
Yield on money market instruments	0.26			%	2.33		%		(88.8	)	%
Yield on interest earning assets	4.28			%	4.70		%		(8.9	)	%
Cost of interest bearing deposits	0.41			%	1.01		%		(59.4	)	%
Cost of borrowings	1.77			%	2.14		%		(17.3	)	%
Cost of paying interest bearing liabilities	0.52			%	1.12		%		(53.6	)	%
Net interest margin (g)	3.93			%	3.89		%		1.0		%
Efficiency ratio (g)	62.83			%	66.35		%		(5.3	)	%
ASSET QUALITY RATIOS:
Net loan charge-offs	$	(16,942	)		$	1,004			N.M.
Net loan charge-offs as a % of average loans (b)	(0.24		)	%	0.02		%		N.M.
CAPITAL & LIQUIDITY:
Average shareholders' equity / Average assets (b)	10.92			%	10.88		%		0.4		%
Average shareholders' equity / Average loans (b)	14.44			%	14.85		%		(2.8	)	%
Average loans / Average deposits (b)	91.58			%	89.91		%		1.9		%
Note: Explanations for footnotes (a) - (k) are included at the end of the financial tables in the "Financial Reconciliations" section.

PARK NATIONAL CORPORATION
Consolidated Statements of Income
		Three Months Ended										Twelve Months Ended
		December 31,										December 31,
(in thousands, except share and per share data)		2020					2019					2020				2019
Interest income:
Interest and fees on loans		$	85,268				$	82,698				$	328,727			$	321,385
Interest on:
Obligations of U.S. Government, its agencies
and other securities - taxable		4,420					5,973					19,818				26,213
Obligations of states and political subdivisions - tax-exempt		2,040					2,205					8,436				8,955
Other interest income		72					953					739				3,947
Total interest income		91,800					91,829					357,720				360,500
Interest expense:
Interest on deposits:
Demand and savings deposits		490					7,795					9,142				33,348
Time deposits		1,893					4,666					12,186				17,494
Interest on borrowings		3,096					2,359					8,762				11,921
Total interest expense		5,479					14,820					30,090				62,763
Net interest income		86,321					77,009					327,630				297,737
(Recovery of) provision for loan losses		(19,159		)			(213		)			12,054				6,171
Net interest income after (recovery of) provision for loan losses		105,480					77,222					315,576				291,566
Other income		35,656					24,224					125,664				97,193
Other expense		85,661					71,231					286,595				263,988
Income before income taxes		55,475					30,215					154,645				124,771
Income taxes		10,275					6,279					26,722				22,071
Net income		$	45,200				$	23,936				$	127,923			$	102,700
Per common share:
Net income - basic		$	2.77				$	1.46				$	7.85			$	6.33
Net income - diluted		$	2.75				$	1.45				$	7.80			$	6.29
Weighted average shares - basic		16,310,551					16,342,485					16,302,825				16,234,342
Weighted average shares - diluted		16,434,812					16,454,553					16,407,502				16,329,456
Cash dividends declared		$	1.02				$	1.01				$	4.28			$	4.24

PARK NATIONAL CORPORATION
Consolidated Balance Sheets
(in thousands, except share data)	December 31, 2020				December 31, 2019
Assets
Cash and due from banks	$	155,596			$	135,567
Money market instruments	214,878				24,389
Investment securities	1,124,806				1,279,507
Loans	7,177,785				6,501,404
Allowance for loan losses	(85,675		)		(56,679		)
Loans, net	7,092,110				6,444,725
Bank premises and equipment, net	88,660				73,322
Goodwill and other intangible assets	168,855				171,118
Other real estate owned	1,431				4,029
Other assets	432,685				425,720
Total assets	$	9,279,021			$	8,558,377
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing	$	2,727,100			$	1,959,935
Interest bearing	4,845,258				5,092,677
Total deposits	7,572,358				7,052,612
Borrowings	562,504				438,157
Other liabilities	103,903				98,594
Total liabilities	$	8,238,765			$	7,589,363
Shareholders' Equity:
Preferred shares (200,000 shares authorized; no shares outstanding at December 31, 2020 and December 31, 2019)	$	—			$	—
Common shares (No par value; 20,000,000 shares authorized; 17,623,163 shares issued at December 31, 2020 and 17,623,199 shares issued at December 31, 2019)	460,687				459,389
Accumulated other comprehensive income (loss), net of taxes	5,571				(9,589		)
Retained earnings	704,764				646,847
Treasury shares (1,308,966 shares at December 31, 2020 and 1,276,757 shares at December 31, 2019)	(130,766		)		(127,633		)
Total shareholders' equity	$	1,040,256			$	969,014
Total liabilities and shareholders' equity	$	9,279,021			$	8,558,377

PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
	Three Months Ended									Twelve Months Ended
	Dec 31									Dec 31
(in thousands)	2020				2019					2020				2019
Assets
Cash and due from banks	$	120,599			$	129,105				$	127,214			$	130,372
Money market instruments	263,212				203,259					280,952				169,703
Investment securities	1,066,145				1,300,927					1,214,551				1,360,540
Loans	7,245,273				6,431,374					6,990,458				6,208,496
Allowance for loan losses	(89,920		)		(56,904		)			(71,221		)		(54,516		)
Loans, net	7,155,353				6,374,470					6,919,237				6,153,980
Bank premises and equipment, net	86,717				73,487					81,357				69,710
Goodwill and other intangible assets	169,199				173,065					170,031				158,194
Other real estate owned	856				3,871					2,174				4,066
Other assets	454,418				430,513					446,117				427,464
Total assets	$	9,316,499			$	8,688,697				$	9,241,633			$	8,474,029
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing	$	2,657,881			$	1,980,898				$	2,394,717			$	1,875,628
Interest bearing	4,904,995				5,216,050					5,238,147				5,029,854
Total deposits	7,562,876				7,196,948					7,632,864				6,905,482
Borrowings	611,890				429,979					494,532				556,564
Other liabilities	106,240				95,222					105,135				89,809
Total liabilities	$	8,281,006			$	7,722,149				$	8,232,531			$	7,551,855
Shareholders' Equity:
Preferred shares	$	—			$	—				$	—			$	—
Common shares	458,521				458,264					458,096				432,795
Accumulated other comprehensive income (loss), net of taxes	12,594				(11,694		)			9,688				(30,160		)
Retained earnings	695,509				648,007					673,273				633,389
Treasury shares	(131,131		)		(128,029		)			(131,955		)		(113,850		)
Total shareholders' equity	$	1,035,493			$	966,548				$	1,009,102			$	922,174
Total liabilities and shareholders' equity	$	9,316,499			$	8,688,697				$	9,241,633			$	8,474,029

PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters
	2020				2020			2020			2020			2019
(in thousands, except per share data)	4th QTR				3rd QTR			2nd QTR			1st QTR			4th QTR
Interest income:
Interest and fees on loans	$	85,268			$	82,617		$	80,155		$	80,687		$	82,698
Interest on:
Obligations of U.S. Government, its agencies and other securities - taxable	4,420				4,841			5,026			5,531			5,973
Obligations of states and political subdivisions - tax-exempt	2,040				2,045			2,151			2,200			2,205
Other interest income	72				63			113			491			953
Total interest income	91,800				89,566			87,445			88,909			91,829
Interest expense:
Interest on deposits:
Demand and savings deposits	490				803			1,507			6,342			7,795
Time deposits	1,893				2,662			3,346			4,285			4,666
Interest on borrowings	3,096				2,261			1,406			1,999			2,359
Total interest expense	5,479				5,726			6,259			12,626			14,820
Net interest income	86,321				83,840			81,186			76,283			77,009
(Recovery of) provision for loan losses	(19,159		)		13,836			12,224			5,153			(213		)
Net interest income after (recovery of) provision for loan losses	105,480				70,004			68,962			71,130			77,222
Other income	35,656				36,558			30,964			22,486			24,224
Other expense	85,661				69,859			64,799			66,276			71,231
Income before income taxes	55,475				36,703			35,127			27,340			30,215
Income taxes	10,275				5,857			5,622			4,968			6,279
Net income	$	45,200			$	30,846		$	29,505		$	22,372		$	23,936
Per common share:
Net income - basic	$	2.77			$	1.89		$	1.81		$	1.37		$	1.46
Net income - diluted	$	2.75			$	1.88		$	1.80		$	1.36		$	1.45

PARK NATIONAL CORPORATION
Detail of other income and other expense - Linked Quarters
	2020				2020				2020				2020				2019
(in thousands)	4th QTR				3rd QTR				2nd QTR				1st QTR				4th QTR
Other income:
Income from fiduciary activities	$	7,632			$	7,335			$	6,793			$	7,113			$	7,268
Service charges on deposit accounts	2,123				2,118				1,676				2,528				2,757
Other service income	12,040				13,047				8,758				3,766				4,382
Debit card fee income	5,787				5,853				5,560				4,960				5,341
Bank owned life insurance income	1,170				1,192				1,179				1,248				1,158
ATM fees	432				491				438				412				446
(Loss) gain on the sale of OREO, net	(7		)		569				841				(196		)		2
Net (loss) gain on the sale of investment securities	—				(27		)		3,313				—				—
Gain (loss) on equity securities, net	2,931				1,201				(977		)		(973		)		(191		)
Other components of net periodic benefit income	1,988				1,988				1,988				1,988				1,183
Miscellaneous	1,560				2,791				1,395				1,640				1,878
Total other income	$	35,656			$	36,558			$	30,964			$	22,486			$	24,224
Other expense:
Salaries	$	37,280			$	31,632			$	30,699			$	28,429			$	30,903
Employee benefits	7,316				10,676				9,080				10,043				8,973
Occupancy expense	3,231				3,835				3,256				3,480				3,355
Furniture and equipment expense	4,949				4,687				4,850				4,319				4,319
Data processing fees	3,315				3,275				2,577				2,492				2,777
Professional fees and services	9,359				7,977				6,901				7,066				10,503
Marketing	1,752				1,454				1,136				1,486				1,468
Insurance	1,855				1,541				1,477				1,550				317
Communication	1,097				958				874				1,155				1,256
State tax expense	605				1,125				1,116				1,145				1,024
Amortization of intangible assets	525				525				607				606				623
FHLB prepayment penalty	8,736				—				—				1,793				492
Foundation contributions	3,000				—				—				—				1,500
Miscellaneous	2,641				2,174				2,226				2,712				3,721
Total other expense	$	85,661			$	69,859			$	64,799			$	66,276			$	71,231

PARK NATIONAL CORPORATION
Asset Quality Information
	Year ended December 31,
(in thousands, except ratios)	2020				2019			2018			2017			2016
Allowance for loan losses:
Allowance for loan losses, beginning of period	$	56,679			$	51,512		$	49,988		$	50,624		$	56,494
Charge-offs	10,304				11,177			13,552			19,403			20,799
Recoveries	27,246				10,173			7,131			10,210			20,030
Net (recoveries) charge-offs	(16,942		)		1,004			6,421			9,193			769
Provision for (recovery of) loan losses	12,054				6,171			7,945			8,557			(5,101		)
Allowance for loan losses, end of period	$	85,675			$	56,679		$	51,512		$	49,988		$	50,624
General reserve trends:
Allowance for loan losses, end of period	$	85,675			$	56,679		$	51,512		$	49,988		$	50,624
Allowance on purchased credit impaired ("PCI") loans	167				268			—			—			—
Allowance on purchased loans	678				—			—			—			—
Specific reserves	5,434				5,230			2,273			684			548
General reserves on originated loans	$	79,396			$	51,181		$	49,239		$	49,304		$	50,076
Total loans	$	7,177,785			$	6,501,404		$	5,692,132		$	5,372,483		$	5,271,857
PCI loans	11,153				14,331			3,943			—			—
Purchased loans	360,056				548,436			225,029			—			—
Impaired commercial loans	108,407				77,459			48,135			56,545			70,415
Originated loans excluding impaired commercial loans	$	6,698,169			$	5,861,178		$	5,415,025		$	5,315,938		$	5,201,442
Asset Quality Ratios:
Net (recoveries) charge-offs as a % of average loans	(0.24		)	%	0.02		%	0.12		%	0.17		%	0.02			%
Allowance for loan losses as a % of period end loans	1.19			%	0.87		%	0.90		%	0.93		%	0.96			%
Allowance for loan losses on originated loans as % of originated total loans (excluding PPP loans) (k)	1.31			%	N.A.			N.A.			N.A.			N.A.
General reserve as a % of originated total loans less impaired commercial loans	1.19			%	0.87		%	0.91		%	0.93		%	0.96			%
General reserves as a % of originated total loans less impaired commercial loans (excluding PPP loans) (k)	1.24			%	N.A.			N.A.			N.A.			N.A.
Nonperforming assets:
Nonaccrual loans	$	117,368			$	90,080		$	67,954		$	72,056		$	87,822
Accruing troubled debt restructurings	20,788				21,215			15,173			20,111			18,175
Loans past due 90 days or more	1,458				2,658			2,243			1,792			2,086
Total nonperforming loans	$	139,614			$	113,953		$	85,370		$	93,959		$	108,083
Other real estate owned - Park National Bank	837				3,100			2,788			6,524			6,025
Other real estate owned - SEPH	594				929			1,515			7,666			7,901
Other nonperforming assets - Park National Bank	3,164				3,599			3,464			4,849			—
Total nonperforming assets	$	144,209			$	121,581		$	93,137		$	112,998		$	122,009
Percentage of nonaccrual loans to period end loans	1.64			%	1.39		%	1.19		%	1.34		%	1.67			%
Percentage of nonperforming loans to period end loans	1.95			%	1.75		%	1.50		%	1.75		%	2.05			%
Percentage of nonperforming assets to period end loans	2.01			%	1.87		%	1.64		%	2.10		%	2.31			%
Percentage of nonperforming assets to period end total assets	1.55			%	1.42		%	1.19		%	1.50		%	1.63			%
Note: Explanations for footnotes (a) - (k) are included at the end of the financial tables in the "Financial Reconciliations" section.

PARK NATIONAL CORPORATION
Asset Quality Information (continued)
	Year ended December 31,
(in thousands, except ratios)	2020			2019			2018			2017			2016
New nonaccrual loan information:
Nonaccrual loans, beginning of period	$	90,080		$	67,954		$	72,056		$	87,822		$	95,887
New nonaccrual loans	103,386			81,009			76,611			58,753			74,786
Resolved nonaccrual loans	76,098			58,883			80,713			74,519			82,851
Nonaccrual loans, end of period	$	117,368		$	90,080		$	67,954		$	72,056		$	87,822
Impaired commercial loan portfolio information (period end):
Unpaid principal balance	$	109,062		$	78,178		$	59,381		$	66,585		$	95,358
Prior charge-offs	655			719			11,246			10,040			24,943
Remaining principal balance	108,407			77,459			48,135			56,545			70,415
Specific reserves	5,434			5,230			2,273			684			548
Book value, after specific reserves	$	102,973		$	72,229		$	45,862		$	55,861		$	69,867

PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS
	THREE MONTHS ENDED													TWELVE MONTHS ENDED
(in thousands, except share and per share data)	December 31, 2020				September 30, 2020				December 31, 2019					December 31, 2020				December 31, 2019
Net interest income	$	86,321			$	83,840			$	77,009				$	327,630			$	297,737
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions	919				1,071				1,947					4,669				5,786
less interest income on former Vision Bank relationships	102				8				249					453				256
Net interest income - adjusted	$	85,300			$	82,761			$	74,813				$	322,508			$	291,695
(Recovery of) provision for loan losses	$	(19,159	)		$	13,836			$	(213	)			$	12,054			$	6,171
less recoveries on former Vision Bank relationships	(20,496		)		(37		)		(2,302		)			(21,982		)		(3,042		)
(Recovery of) provision for loan losses - adjusted	$	1,337			$	13,873			$	2,089				$	34,036			$	9,213
Other income	$	35,656			$	36,558			$	24,224				$	125,664			$	97,193
less other service income related to former Vision Bank relationships	503				35				—					590				52
less net gain (loss) on sale of former Vision Bank OREO properties	—				371				28					1,208				(111		)
less rebranding initiative related expenses	(298		)		—				—					(572		)		—
less net (loss) gain on the sale of debt securities in the ordinary course of business	—				(27		)		—					3,286				(421		)
Other income - adjusted	$	35,451			$	36,179			$	24,196				$	121,152			$	97,673
Other expense	$	85,661			$	69,859			$	71,231				$	286,595			$	263,988
less merger-related expenses related to NewDominion and Carolina Alliance acquisitions	9				163				1,885					629				8,877
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions	525				525				623					2,263				2,355
less FDIC assessment credit	—				—				(1,136		)			—				(2,193		)
less direct expenses related to collection of payments on former Vision Bank loan relationships	4,051				232				622					4,283				622
less FHLB prepayment penalty	8,736				—				492					10,529				612
less rebranding initiative related expenses (including trade name intangible expense)	229				429				2,134					1,040				2,476
less Foundation contribution	3,000				—				1,500					3,000				1,500
less severance and restructuring charges	4,039				67				22					4,443				107
less COVID-19 related expenses (j)	738				744				—					3,622				—
Other expense - adjusted	$	64,334			$	67,699			$	65,089				$	256,786			$	249,632
Tax effect of adjustments to net income identified above (i)	$	(83	)		$	140			$	339				$	(379	)		$	1,208
Net income - reported	$	45,200			$	30,846			$	23,936				$	127,923			$	102,700
Net income - adjusted	$	44,888			$	31,371			$	25,213				$	126,495			$	107,244

Diluted EPS	$	2.75			$	1.88			$	1.45				$	7.80			$	6.29
Diluted EPS, adjusted (h)	$	2.73			$	1.91			$	1.53				$	7.71			$	6.57
Annualized return on average assets (a)(b)	1.93		%		1.28		%		1.09		%			1.38			%	1.21		%
Annualized return on average assets, adjusted (a)(b)(h)	1.92		%		1.31		%		1.15		%			1.37			%	1.27		%
Annualized return on average tangible assets (a)(b)(e)	1.97		%		1.31		%		1.12		%			1.41			%	1.23		%
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)	1.95		%		1.33		%		1.17		%			1.39			%	1.29		%
Annualized return on average shareholders' equity (a)(b)	17.37		%		12.03		%		9.83		%			12.68			%	11.14		%
Annualized return on average shareholders' equity, adjusted (a)(b)(h)	17.25		%		12.23		%		10.35		%			12.54			%	11.63		%
Annualized return on average tangible equity (a)(b)(c)	20.76		%		14.43		%		11.97		%			15.25			%	13.44		%
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)	20.61		%		14.67		%		12.61		%			15.08			%	14.04		%
Efficiency ratio (g)	69.82		%		57.69		%		69.86		%			62.83			%	66.35		%
Efficiency ratio, adjusted (g)(h)	52.97		%		56.58		%		65.26		%			57.51			%	63.63		%
Annualized net interest margin (g)	4.07		%		3.85		%		3.90		%			3.93			%	3.89		%
Annualized net interest margin, adjusted (g)(h)	4.02		%		3.80		%		3.79		%			3.86			%	3.81		%

PARK NATIONAL CORPORATION
Financial Reconciliations (continued)
(a) Reported measure uses net income
(b) Averages are for the three months ended December 31, 2020, September 30, 2020, and December 31, 2019 and for the twelve months ended December 31, 2020 and December 31, 2019, as appropriate
(c) Net income for each period divided by average tangible equity during the period. Average tangible equity equals average shareholders' equity during the applicable period less average goodwill and other intangible assets during the applicable period.
RECONCILIATION OF AVERAGE SHAREHOLDERS' EQUITY TO AVERAGE TANGIBLE EQUITY:
	THREE MONTHS ENDED										TWELVE MONTHS ENDED
	December 31, 2020			September 30, 2020			December 31, 2019				December 31, 2020			December 31, 2019
AVERAGE SHAREHOLDERS' EQUITY	$	1,035,493		$	1,020,239		$	966,548			$	1,009,102		$	922,174
Less: Average goodwill and other intangible assets	169,199			169,726			173,065				170,031			158,194
AVERAGE TANGIBLE EQUITY	$	866,294		$	850,513		$	793,483			$	839,071		$	763,980
(d) Tangible equity divided by common shares outstanding at period end. Tangible equity equals total shareholders' equity less goodwill and other intangible assets, in each case at the end of the period.
RECONCILIATION OF TOTAL SHAREHOLDERS' EQUITY TO TANGIBLE EQUITY:
	December 31, 2020			September 30, 2020			December 31, 2019
TOTAL SHAREHOLDERS' EQUITY	$	1,040,256		$	1,016,996		$	969,014
Less: Goodwill and other intangible assets	168,855			169,380			171,118
TANGIBLE EQUITY	$	871,401		$	847,616		$	797,896
(e) Net income for each period divided by average tangible assets during the period. Average tangible assets equals average assets less average goodwill and other intangible assets, in each case during the applicable period.
RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS
	THREE MONTHS ENDED										TWELVE MONTHS ENDED
	December 31, 2020			September 30, 2020			December 31, 2019				December 31, 2020			December 31, 2019
AVERAGE ASSETS	$	9,316,499		$	9,557,682		$	8,688,697			$	9,241,633		$	8,474,029
Less: Average goodwill and other intangible assets	169,199			169,726			173,065				170,031			158,194
AVERAGE TANGIBLE ASSETS	$	9,147,300		$	9,387,956		$	8,515,632			$	9,071,602		$	8,315,835
(f) Tangible equity divided by tangible assets. Tangible assets equals total assets less goodwill and other intangible assets, in each case at the end of the period.
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:
	December 31, 2020			September 30, 2020			December 31, 2019
TOTAL ASSETS	$	9,279,021		$	9,240,006		$	8,558,377
Less: Goodwill and other intangible assets	168,855			169,380			171,118
TANGIBLE ASSETS	$	9,110,166		$	9,070,626		$	8,387,259
(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 assuming a 21% corporate federal income tax rate. Additionally, net interest margin is calculated on a fully taxable equivalent basis by dividing fully taxable equivalent net interest income by average interest earning assets.
RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
	THREE MONTHS ENDED										TWELVE MONTHS ENDED
	December 31, 2020			September 30, 2020			December 31, 2019				December 31, 2020			December 31, 2019
Interest income	$	91,800		$	89,566		$	91,829			$	357,720		$	360,500
Fully taxable equivalent adjustment	712			706			726				2,866			2,956
Fully taxable equivalent interest income	$	92,512		$	90,272		$	92,555			$	360,586		$	363,456
Interest expense	5,479			5,726			14,820				30,090			62,763
Fully taxable equivalent net interest income	$	87,033		$	84,546		$	77,735			$	330,496		$	300,693
(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, (recovery of) provision for loan 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 $337.1 million and $542.8 million of PPP loans at December 31, 2020 and September 30, 2020, respectively.

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