Park National Corporation reports financial results for second quarter and first half of 2022

NEWARK, Ohio, July 25, 2022 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE:PRK) today reported financial results for the second quarter and first half of 2022. Park's board of directors declared a quarterly cash dividend of $1.04 per common share, payable on September 9, 2022 to common shareholders of record as of August 19, 2022.

"Park bankers' enthusiasm, energy and competence are valued more than ever by customers and prospects alike. I am grateful for each of them and the talents they share," said Park Chairman and Chief Executive Officer David Trautman. "We listen to customers first, then find ways to help them on their journeys. If we do this right, we earn the chance to serve more as a result. It's a wonderful circle of service and growth."

Park's net income for the second quarter of 2022 was $34.3 million, a 12.3 percent decrease from $39.1 million for the second quarter of 2021. Second quarter 2022 net income per diluted common share was $2.10, compared to $2.38 in the second quarter of 2021. Park's net income for the first half of 2022 was $73.2 million, a 10.7 percent decrease from $82.0 million for the first half of 2021. Net income per diluted common share was $4.48 for the first half of 2022, compared to $4.98 for the first half of 2021.

Park's community-banking subsidiary, The Park National Bank, reported net income of $34.9 million for the second quarter of 2022, a 14.6 percent decrease compared to $40.9 million for the same period of 2021. Park National Bank reported net income of $76.4 million for the first half of 2022, compared to $86.0 million for the first half of 2021.

Headquartered in Newark, Ohio, Park National Corporation has $9.8 billion in total assets (as of June 30, 2022). 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 1995

Park cautions that any forward-looking statements contained in this news release or made by management of Park are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements.

Risks and uncertainties that could cause actual results to differ materially include, without limitation:

• the ever-changing effects of the global 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 or variants thereof - - on economies (local, national and international), supply chains and markets, on the labor market, including the potential for a sustained reduction in labor force participation, 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 availability, effectiveness and acceptance of vaccines, and the implementation of fiscal stimulus packages;
• 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;
• current and future economic and financial market conditions, either nationally or in the states in which Park and our subsidiaries do business, including the effects of higher unemployment rates, an acceleration in the pace of inflation, U.S. fiscal debt, budget and tax matters, geopolitical matters (including the impact of the Russia-Ukraine conflict and associated sanctions), and any slowdown in global economic growth, in addition to the continuing impact of the COVID-19 pandemic on our customers' operations and financial condition, any 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 changes in 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, market interest rate policies and policies impacting inflation, of the Federal Reserve Board, the U.S. Treasury and other governmental agencies) 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 the federal, state, or local tax laws 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 and otherwise negatively impact our financial performance;
• the impact of the changes in federal, state and local governmental policy, including the regulatory landscape, capital markets, elevated government debt, potential changes in tax legislation that may increase tax rates, infrastructure spending and social programs;
• changes in laws or requirements imposed by Park's regulators impacting Park's capital actions, including dividend payments and stock repurchases;
• 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 customers', suppliers', and other counterparties' performance and creditworthiness, and Park's expectations regarding future credit losses and our allowance for credit losses, may be different than anticipated due to the continuing impact of and the various responses to the COVID-19 pandemic and inflationary pressures;
• 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 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 Park's 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 American Rescue Plan Act of 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 American Rescue Plan Act of 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;
• 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 impact on Park's business and operating results of any costs associated with obtaining rights in intellectual property claimed by others and of adequacy of Park's intellectual property protection in general;
• 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, closing of border crossings and changes in the relationship of the U.S. and its global trading partners);
• 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 effect of a fall in stock market prices on Park's asset and wealth management businesses;
• 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 (especially in light of the Russia-Ukraine conflict) 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 most recent acquisitions, including expected revenue synergies and cost savings from recent acquisitions not being fully realized or realized within the expected time frame;
• the replacement of the London Inter-Bank Offered Rate (LIBOR) with 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, 2021.

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 June 30, 2022, March 31, 2022, and June 30, 2021
		2022			2022			2021			Percent change vs.
(in thousands, except share and per share data and ratios)	2nd QTR			1st QTR			2nd QTR				1Q '22		2Q '21
INCOME STATEMENT:
Net interest income	$	83,939		$	77,686		$	83,851			8.0	%	0.1	%
Provision for (recovery of) credit losses		2,991			(4,605	)		(4,040	)		N.	M.	N.	M.
Other income		31,193			31,656			31,238			(1.5	)%	(0.1)%
Other expense		70,048			67,373			71,400			4.0	%	(1.9)%
Income before income taxes	$	42,093		$	46,574		$	47,729			(9.6	)%	(11.8)%
Income taxes		7,769			7,699			8,597			0.9	%	(9.6)%
Net income	$	34,324		$	38,875		$	39,132			(11.7	)%	(12.3)%
MARKET DATA:
Earnings per common share - basic (a)	$	2.11		$	2.40		$	2.39			(12.1	)%	(11.7	)%
Earnings per common share - diluted (a)		2.10			2.38			2.38			(11.8	)%	(11.8	)%
Quarterly cash dividends declared per common share		1.04			1.04			1.03			—	%	1.0	%
Book value per common share at period end		64.62			66.24			65.44			(2.4	)%	(1.3	)%
Market price per common share at period end		121.25			131.38			117.42			(7.7	)%	3.3	%
Market capitalization at period end		1,970,228			2,134,834			1,918,733			(7.7	)%	2.7	%
Weighted average common shares - basic (b)		16,249,307			16,219,889			16,340,690			0.2	%	(0.6	)%
Weighted average common shares - diluted (b)		16,361,246			16,331,031			16,472,800			0.2	%	(0.7	)%
Common shares outstanding at period end		16,249,306			16,249,308			16,340,772			—	%	(0.6	)%
PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)		1.42	%		1.60	%		1.59	%		(11.3	)%	(10.7	)%
Return on average shareholders' equity (a)(b)		12.86	%		14.26	%		14.81	%		(9.8	)%	(13.2	)%
Yield on loans		4.57	%		4.31	%		4.60	%		6.0	%	(0.7	)%
Yield on investment securities		2.35	%		2.11	%		2.31	%		11.4	%	1.7	%
Yield on money market instruments		0.77	%		0.17	%		0.10	%		352.9	%	670.0	%
Yield on interest earning assets		4.04	%		3.71	%		3.93	%		8.9	%	2.8	%
Cost of interest bearing deposits		0.16	%		0.08	%		0.13	%		100.0	%	23.1	%
Cost of borrowings		2.50	%		2.35	%		1.91	%		6.4	%	30.9	%
Cost of paying interest bearing liabilities		0.33	%		0.25	%		0.29	%		32.0	%	13.8	%
Net interest margin (g)		3.84	%		3.55	%		3.74	%		8.2	%	2.7	%
Efficiency ratio (g)		60.38	%		61.16	%		61.65	%		(1.3	)%	(2.1	)%
OTHER DATA (NON-GAAP) AND BALANCE SHEET:
Tangible book value per share (d)	$	54.39		$	55.98		$	55.17			(2.8	)%	(1.4	)%
Average interest earning assets		8,857,089			8,959,109			9,062,368			(1.1	)%	(2.3	)%
Pre-tax, pre-provision net income (m)		45,084			41,969			43,689			7.4	%	3.2	%
Note: Explanations for footnotes (a) - (m) 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 June 30, 2022, March 31, 2022, and June 30, 2021
											Percent change vs.
(in thousands, except ratios)	June 30, 2022			March 31, 2022			June 30, 2021				1Q '22		2Q '21
BALANCE SHEET:
Investment securities	$	1,920,724		$	1,832,274		$	1,461,916			4.8	%	31.4	%
Commercial loans held for sale		6,321			—			—			N.	M	N.	M
Loans		6,958,685			6,821,606			7,035,646			2.0	%	(1.1	)%
Allowance for credit losses		81,448			78,861			83,577			3.3	%	(2.5	)%
Goodwill and other intangible assets		166,252			166,655			167,897			(0.2	)%	(1.0	)%
Other real estate owned (OREO)		1,354			760			813			78.2	%	66.5	%
Total assets		9,826,670			9,576,352			9,947,994			2.6	%	(1.2	)%
Total deposits		8,297,654			7,996,318			8,214,624			3.8	%	1.0	%
Borrowings		360,234			394,249			501,350			(8.6	)%	(28.1	)%
Total shareholders' equity		1,050,013			1,076,366			1,069,392			(2.4	)%	(1.8	)%
Tangible equity (d)		883,761			909,711			901,495			(2.9	)%	(2.0	)%
Total nonperforming loans		64,627			86,891			114,695			(25.6	)%	(43.7	)%
Total nonperforming loans including commercial loans held for sale		70,246			86,891			114,695			(19.2	)%	(38.8	)%
Total nonperforming assets		71,600			87,651			118,672			(18.3	)%	(39.7	)%
ASSET QUALITY RATIOS:
Loans as a % of period end total assets		70.81	%		71.23	%		70.72	%		(0.6	)%	0.1	%
Total nonperforming loans as a % of period end loans		0.93	%		1.27	%		1.63	%		(26.8	)%	(42.9	)%
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets		1.03	%		1.28	%		1.69	%		(19.5	)%	(39.1	)%
Allowance for credit losses as a % of period end loans		1.17	%		1.16	%		1.19	%		0.9	%	(1.7	)%
Net loan charge-offs (recoveries)	$	404		$	(269	)	$	(731	)		N.M		N.M
Annualized net loan charge-offs (recoveries) as a % of average loans (b)		0.02	%		(0.02	)%		(0.04	)%		N.M		N.M
CAPITAL & LIQUIDITY:
Total shareholders' equity / Period end total assets		10.69	%		11.24	%		10.75	%		(4.9	)%	(0.6	)%
Tangible equity (d) / Tangible assets (f)		9.15	%		9.67	%		9.22	%		(5.4	)%	(0.8	)%
Average shareholders' equity / Average assets (b)		11.06	%		11.25	%		10.74	%		(1.7	)%	3.0	%
Average shareholders' equity / Average loans (b)		15.65	%		16.19	%		14.94	%		(3.3	)%	4.8	%
Average loans / Average deposits (b)		84.27	%		83.32	%		86.49	%		1.1	%	(2.6	)%
Note: Explanations for footnotes (a) - (m) are included at the end of the financial tables in the "Financial Reconciliations" section.

PARK NATIONAL CORPORATION
Financial Highlights
Six months ended June 30, 2022 and June 30, 2021
		2022			2021
(in thousands, except share and per share data)	Six months ended June 30			Six months ended June 30				Percent change vs '21
INCOME STATEMENT:
Net interest income	$	161,625		$	164,585			(1.8)%
Recovery of credit losses		(1,614	)		(8,895	)		N.M
Other income		62,849			65,327			(3.8)%
Other expense		137,421			139,265			(1.3)%
Income before income taxes	$	88,667		$	99,542			(10.9)%
Income taxes		15,468			17,579			(12.0)%
Net income	$	73,199		$	81,963			(10.7)%
MARKET DATA:
Earnings per common share - basic (a)	$	4.51		$	5.02			(10.2)%
Earnings per common share - diluted (a)		4.48			4.98			(10.0)%
Quarterly cash dividends declared per common share		2.08			2.06			1.0	%
Special cash dividends declared per common share		—			0.20			N.M.
Weighted average common shares - basic (b)		16,234,598			16,327,838			(0.6)%
Weighted average common shares - diluted (b)		16,346,141			16,455,673			(0.7)%
PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)		1.51	%		1.70	%		(11.2)%
Return on average shareholders' equity (a)(b)		13.57	%		15.71	%		(13.6)%
Yield on loans		4.44	%		4.54	%		(2.2)%
Yield on investment securities		2.24	%		2.41	%		(7.1)%
Yield on money market instruments		0.34	%		0.10	%		240.0	%
Yield on interest earning assets		3.88	%		3.95	%		(1.8)%
Cost of interest bearing deposits		0.12	%		0.14	%		(14.3)%
Cost of borrowings		2.42	%		1.89	%		28.0	%
Cost of paying interest bearing liabilities		0.29	%		0.30	%		(3.3)%
Net interest margin (g)		3.70	%		3.75	%		(1.3)%
Efficiency ratio (g)		60.76	%		60.20	%		0.9	%
ASSET QUALITY RATIOS
Net loan charge-offs (recoveries)	$	135		$	(707	)		N.M.
Annualized net loan charge-offs (recoveries) as a % of average loans (b)		—	%	(0.02)%				N.M.
CAPITAL & LIQUIDITY
Average shareholders' equity / Average assets (b)		11.16	%		10.80	%		3.3	%
Average shareholders' equity / Average loans (b)		15.92	%		14.79	%		7.6	%
Average loans / Average deposits (b)		83.80	%		88.26	%		(5.1)%
OTHER DATA (NON-GAAP) AND BALANCE SHEET:
Average interest earning assets	$	8,907,817		$	8,925,097			(0.2)%
Pre-tax, pre-provision net income (m)		87,053			90,647			(4.0)%
Note: Explanations for footnotes (a) - (m) are included at the end of the financial tables in the "Financial Reconciliations" section.

PARK NATIONAL CORPORATION
Consolidated Statements of Income
		Three Months Ended							Six Months Ended
		June 30,							June 30,
(in thousands, except share and per share data)		2022				2021				2022				2021
Interest income:
Interest and fees on loans		$	77,787		$	81,176			$	150,203			$	159,913
Interest on debt securities:
Taxable			7,624			4,600				13,754				8,856
Tax-exempt			2,676			2,032				5,123				4,069
Other interest income			260			186				413				329
Total interest income			88,347			87,994				169,493				173,167
Interest expense:
Interest on deposits:
Demand and savings deposits			1,333			401				1,684				787
Time deposits			708			1,285				1,428				2,869
Interest on borrowings			2,367			2,457				4,756				4,926
Total interest expense			4,408			4,143				7,868				8,582
Net interest income			83,939			83,851				161,625				164,585
Provision for (recovery of) credit losses			2,991			(4,040	)			(1,614	)			(8,895	)
Net interest income after provision for (recovery of) credit losses			80,948			87,891				163,239				173,480
Other income			31,193			31,238				62,849				65,327
Other expense			70,048			71,400				137,421				139,265
Income before income taxes			42,093			47,729				88,667				99,542
Income taxes			7,769			8,597				15,468				17,579
Net income		$	34,324		$	39,132			$	73,199			$	81,963
Per common share:
Net income - basic		$	2.11		$	2.39			$	4.51			$	5.02
Net income - diluted		$	2.10		$	2.38			$	4.48			$	4.98
Weighted average shares - basic			16,249,307			16,340,690				16,234,598				16,327,838
Weighted average shares - diluted			16,361,246			16,472,800				16,346,141				16,455,673
Cash dividends declared:
Quarterly dividend		$	1.04		$	1.03			$	2.08			$	2.06
Special dividend		$	—		$	—			$	—			$	0.20

PARK NATIONAL CORPORATION
Consolidated Balance Sheets
(in thousands, except share data)	June 30, 2022			December 31, 2021
Assets
Cash and due from banks	$	171,114		$	144,507
Money market instruments		75,327			74,673
Investment securities		1,920,724			1,815,408
Commercial loans held for sale		6,321			—
Loans		6,958,685			6,871,122
Allowance for credit losses		(81,448	)		(83,197	)
Loans, net		6,877,237			6,787,925
Bank premises and equipment, net		85,531			89,008
Goodwill and other intangible assets		166,252			167,057
Other real estate owned		1,354			775
Other assets		522,810			480,901
Total assets	$	9,826,670		$	9,560,254
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing	$	3,057,977		$	3,066,419
Interest bearing		5,239,677			4,838,109
Total deposits		8,297,654			7,904,528
Borrowings		360,234			426,996
Other liabilities		118,769			117,971
Total liabilities	$	8,776,657		$	8,449,495
Shareholders' Equity:
Preferred shares (200,000 shares authorized; no shares outstanding at June 30, 2022 and December 31, 2021)	$	—		$	—
Common shares (No par value; 20,000,000 shares authorized; 17,623,104 shares issued at June 30, 2022 and 17,623,118 shares issued at December 31, 2021)		460,645			461,800
Accumulated other comprehensive (loss) income, net of taxes		(85,404	)		15,155
Retained earnings		814,241			776,294
Treasury shares (1,373,798 shares at June 30, 2022 and 1,403,555 shares at December 31, 2021)		(139,469	)		(142,490	)
Total shareholders' equity	$	1,050,013		$	1,110,759
Total liabilities and shareholders' equity	$	9,826,670		$	9,560,254

PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
		Three Months Ended							Six Months Ended
		June 30,							June 30,
(in thousands)			2022			2021				2022			2021
Assets
Cash and due from banks		$	159,095		$	131,397			$	163,884		$	139,784
Money market instruments			136,232			720,238				247,549			637,531
Investment securities			1,855,313			1,307,037				1,828,568			1,234,178
Loans			6,841,376			7,094,099				6,835,389			7,116,353
Allowance for credit losses			(78,907	)		(87,083	)			(81,158	)		(88,511	)
Loans, net			6,762,469			7,007,016				6,754,231			7,027,842
Bank premises and equipment, net			87,029			90,269				87,879			90,006
Goodwill and other intangible assets			166,516			168,211				166,716			168,449
Other real estate owned			773			822				766			1,016
Other assets			511,593			447,088				502,203			444,221
Total assets		$	9,679,020		$	9,872,078			$	9,751,796		$	9,743,027
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing		$	3,097,920		$	2,940,602			$	3,062,154		$	2,866,909
Interest bearing			5,020,698			5,261,608				5,095,085			5,195,848
Total deposits			8,118,618			8,202,210				8,157,239			8,062,757
Borrowings			380,361			514,855				395,806			526,715
Other liabilities			109,548			95,064				110,832			101,332
Total liabilities		$	8,608,527		$	8,812,129			$	8,663,877		$	8,690,804
Shareholders' Equity:
Preferred shares		$	—		$	—			$	—		$	—
Common shares			459,418			457,949				460,601			459,327
Accumulated other comprehensive loss, net of taxes			(58,869	)		(4,876	)			(30,452	)		(1,865	)
Retained earnings			809,413			734,993				798,724			724,183
Treasury shares			(139,469	)		(128,117	)			(140,954	)		(129,422	)
Total shareholders' equity		$	1,070,493		$	1,059,949			$	1,087,919		$	1,052,223
Total liabilities and shareholders' equity		$	9,679,020		$	9,872,078			$	9,751,796		$	9,743,027

PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters
		2022		2022			2021			2021		2021
(in thousands, except per share data)	2nd QTR		1st QTR			4th QTR			3rd QTR		2nd QTR
Interest income:
Interest and fees on loans	$	77,787	$	72,416		$	79,168		$	78,127	$	81,176
Interest on debt securities:
Taxable		7,624		6,130			5,698			4,904		4,600
Tax-exempt		2,676		2,447			2,209			2,029		2,032
Other interest income		260		153			191			360		186
Total interest income		88,347		81,146			87,266			85,420		87,994
Interest expense:
Interest on deposits:
Demand and savings deposits		1,333		351			373			435		401
Time deposits		708		720			831			1,011		1,285
Interest on borrowings		2,367		2,389			2,356			2,372		2,457
Total interest expense		4,408		3,460			3,560			3,818		4,143
Net interest income		83,939		77,686			83,706			81,602		83,851
Provision for (recovery of) credit losses		2,991		(4,605	)		(4,993	)		1,972		(4,040	)
Net interest income after provision for (recovery of) credit losses		80,948		82,291			88,699			79,630		87,891
Other income		31,193		31,656			32,206			32,411		31,238
Other expense		70,048		67,373			75,764			68,489		71,400
Income before income taxes		42,093		46,574			45,141			43,552		47,729
Income taxes		7,769		7,699			8,593			8,118		8,597
Net income	$	34,324	$	38,875		$	36,548		$	35,434	$	39,132
Per common share:
Net income - basic	$	2.11	$	2.40		$	2.25		$	2.17	$	2.39
Net income - diluted	$	2.10	$	2.38		$	2.23		$	2.16	$	2.38

PARK NATIONAL CORPORATION
Detail of other income and other expense - Linked Quarters
		2022		2022		2021		2021		2021
(in thousands)	2nd QTR		1st QTR		4th QTR		3rd QTR		2nd QTR
Other income:
Income from fiduciary activities	$	8,859	$	8,797	$	8,887	$	8,820	$	8,569
Service charges on deposit accounts		2,563		2,074		2,357		2,389		2,032
Other service income		4,940		4,819		6,368		6,668		7,159
Debit card fee income		6,731		6,126		6,568		6,453		6,758
Bank owned life insurance income		2,374		1,175		1,121		1,462		1,149
ATM fees		583		532		572		622		655
Gain on equity securities, net		709		2,353		2,125		609		467
Other components of net periodic benefit income		3,027		3,027		2,038		2,038		2,038
Miscellaneous		1,407		2,753		2,170		3,350		2,411
Total other income	$	31,193	$	31,656	$	32,206	$	32,411	$	31,238
Other expense:
Salaries	$	31,052	$	30,521	$	35,953	$	29,433	$	30,303
Employee benefits		10,199		10,499		10,706		10,640		10,056
Occupancy expense		3,040		3,214		3,161		3,211		3,027
Furniture and equipment expense		2,934		2,937		2,724		2,797		2,756
Data processing fees		8,416		7,504		7,860		7,817		7,150
Professional fees and services		6,775		5,858		7,840		6,973		6,973
Marketing		1,019		1,317		1,718		1,574		1,290
Insurance		1,245		1,405		1,547		1,403		1,276
Communication		935		890		851		796		770
State tax expense		1,167		1,192		931		1,113		1,103
Amortization of intangible assets		403		402		420		420		479
Foundation contributions		—		—		—		—		4,000
Miscellaneous		2,863		1,634		2,053		2,312		2,217
Total other expense	$	70,048	$	67,373	$	75,764	$	68,489	$	71,400

PARK NATIONAL CORPORATION
Asset Quality Information
							Year ended December 31,
(in thousands, except ratios)	June 30, 2022			March 31, 2022				2021			2020			2019			2018
Allowance for credit losses:
Allowance for credit losses, beginning of period	$	78,861		$	83,197		$	85,675		$	56,679		$	51,512		$	49,988
Cumulative change in accounting principle; adoption of ASU 2016-13		—			—			6,090			—			—			—
Charge-offs		2,402			1,347			5,093			10,304			11,177			13,552
Recoveries		1,998			1,616			8,441			27,246			10,173			7,131
Net charge-offs (recoveries)		404			(269	)		(3,348	)		(16,942	)		1,004			6,421
Provision for (recovery of) credit losses		2,991			(4,605	)		(11,916	)		12,054			6,171			7,945
Allowance for credit losses, end of period	$	81,448		$	78,861		$	83,197		$	85,675		$	56,679		$	51,512
General reserve trends:
Allowance for credit losses, end of period	$	81,448		$	78,861		$	83,197		$	85,675		$	56,679		$	51,512
Allowance on purchased credit deteriorated ("PCD") loans (purchased credit impaired ("PCI") loans for years 2020 and prior)		—			—			—			167			268			—
Allowance on purchased loans excluded from the general reserve		—			—			—			678			—			—
Specific reserves on individually evaluated loans		1,874			1,513			1,616			5,434			5,230			2,273
General reserves on collectively evaluated loans	$	79,574		$	77,348		$	81,581		$	79,396		$	51,181		$	49,239
Total loans	$	6,958,685		$	6,821,606		$	6,871,122		$	7,177,785		$	6,501,404		$	5,692,132
PCD loans (PCI loans for years 2020 and prior)		5,934			6,987			7,149			11,153			14,331			3,943
Purchased loans excluded from collectively evaluated loans		—			—			—			360,056			548,436			225,029
Individually evaluated loans		42,523			63,209			74,502			108,407			77,459			48,135
Collectively evaluated loans	$	6,910,228		$	6,751,410		$	6,789,471		$	6,698,169		$	5,861,178		$	5,415,025
Asset Quality Ratios:
Annualized net charge-offs (recoveries) as a % of average loans		0.02	%	(0.02) %			(0.05)%			(0.24)%				0.02	%		0.12	%
Allowance for credit losses as a % of period end loans		1.17	%		1.16	%		1.21	%		1.19	%		0.87	%		0.90	%
Allowance for credit losses as a % of period end loans (excluding PPP loans) (k)		1.17	%		1.16	%		1.22	%		1.25	%	N.A.			N.A.
General reserve as a % of collectively evaluated loans		1.15	%		1.15	%		1.20	%		1.19	%		0.87	%		0.91	%
General reserves as a % of collectively evaluated loans (excluding PPP loans) (k)		1.15	%		1.15	%		1.21	%		1.24	%	N.A.			N.A.
Nonperforming assets:
Nonaccrual loans	$	44,374		$	54,018		$	72,722		$	117,368		$	90,080		$	67,954
Accruing troubled debt restructurings		19,746			32,428			28,323			20,788			21,215			15,173
Loans past due 90 days or more		507			445			1,607			1,458			2,658			2,243
Total nonperforming loans	$	64,627		$	86,891		$	102,652		$	139,614		$	113,953		$	85,370
Commercial loans held for sale, previously nonperforming		5,619			—			—			—			—			—
Total nonperforming loans, including commercial loans held for sale	$	70,246		$	86,891		$	102,652		$	139,614		$	113,953		$	85,370
Other real estate owned - Park National Bank		—			166			181			837			3,100			2,788
Other real estate owned - SEPH		1,354			594			594			594			929			1,515
Other nonperforming assets - Park National Bank		—			—			2,750			3,164			3,599			3,464
Total nonperforming assets	$	71,600		$	87,651		$	106,177		$	144,209		$	121,581		$	93,137
Percentage of nonaccrual loans to period end loans		0.64	%		0.79	%		1.06	%		1.64	%		1.39	%		1.19	%
Percentage of nonperforming loans to period end loans		0.93	%		1.27	%		1.49	%		1.95	%		1.75	%		1.50	%
Percentage of nonperforming assets to period end loans		1.03	%		1.28	%		1.55	%		2.01	%		1.87	%		1.64	%
Percentage of nonperforming assets to period end total assets		0.73	%		0.92	%		1.11	%		1.55	%		1.42	%		1.19	%
Note: Explanations for footnotes (a) - (m) 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)	June 30, 2022		March 31, 2022		2021		2020		2019		2018
New nonaccrual loan information:
Nonaccrual loans, beginning of period	$	54,018	$	72,722	$	117,368	$	90,080	$	67,954	$	72,056
New nonaccrual loans		7,881		6,000		38,478		103,386		81,009		76,611
Resolved nonaccrual loans		11,906		24,704		83,124		76,098		58,883		80,713
Loans transferred to held for sale		5,619		—		—		—		—		—
Nonaccrual loans, end of period	$	44,374	$	54,018	$	72,722	$	117,368	$	90,080	$	67,954
Individually evaluated commercial loan portfolio information (period end):(l)
Unpaid principal balance	$	42,905	$	63,833	$	75,126	$	109,062	$	78,178	$	59,381
Prior charge-offs		382		624		624		655		719		11,246
Remaining principal balance		42,523		63,209		74,502		108,407		77,459		48,135
Specific reserves		1,874		1,513		1,616		5,434		5,230		2,273
Book value, after specific reserves	$	40,649	$	61,696	$	72,886	$	102,973	$	72,229	$	45,862
Note: Explanations for footnotes (a) - (m) are included at the end of the financial tables in the "Financial Reconciliations" section.

PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS
	THREE MONTHS ENDED										SIX MONTHS ENDED
(in thousands, except share and per share data)	June 30, 2022			March 31, 2022			June 30, 2021				June 30, 2022			June 30, 2021
Net interest income	$	83,939		$	77,686		$	83,851			$	161,625		$	164,585
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions		547			480			806				1,027			1,937
less interest income on former Vision Bank relationships		2,305			42			2,838				2,347			2,943
Net interest income - adjusted	$	81,087		$	77,164		$	80,207			$	158,251		$	159,705
Provision for (recovery of) credit losses	$	2,991		$	(4,605	)	$	(4,040	)		$	(1,614	)	$	(8,895	)
less recoveries on former Vision Bank relationships		(506	)		(1	)		(152	)			(507	)		(409	)
Provision for (recovery of) credit losses - adjusted	$	3,497		$	(4,604	)	$	(3,888	)		$	(1,107	)	$	(8,486	)
Other income	$	31,193		$	31,656		$	31,238			$	62,849		$	65,327
less other service income related to former Vision Bank relationships		500			—			3				500			61
Other income - adjusted	$	30,693		$	31,656		$	31,235			$	62,349		$	65,266
Other expense	$	70,048		$	67,373		$	71,400			$	137,421		$	139,265
less merger-related expenses related to NewDominion and Carolina Alliance acquisitions		—			—			4				—			16
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions		403			402			479				805			958
less direct expenses related to collection of payments on former Vision Bank loan relationships		366			—			300				366			407
less rebranding initiative related expenses		336			344			342				680			1,297
less Foundation contribution		—			—			4,000				—			4,000
less severance and restructuring charges		497			42			46				539			154
less COVID-19 related expenses (j)		141			606			670				747			1,535
Other expense - adjusted	$	68,305		$	65,979		$	65,559			$	134,284		$	130,898
Tax effect of adjustments to net income identified above (i)	$	(444	)	$	183		$	429			$	(261	)	$	634
Net income - reported	$	34,324		$	38,875		$	39,132			$	73,199		$	81,963
Net income - adjusted (h)	$	32,653		$	39,563		$	40,745			$	72,216		$	84,346
Diluted earnings per share	$	2.10		$	2.38		$	2.38			$	4.48		$	4.98
Diluted earnings per share, adjusted (h)	$	2.00		$	2.42		$	2.47			$	4.42		$	5.13
Annualized return on average assets (a)(b)		1.42	%		1.60	%		1.59	%			1.51	%		1.70	%
Annualized return on average assets, adjusted (a)(b)(h)		1.35	%		1.63	%		1.66	%			1.49	%		1.75	%
Annualized return on average tangible assets (a)(b)(e)		1.45	%		1.63	%		1.62	%			1.54	%		1.73	%
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)		1.38	%		1.66	%		1.68	%			1.52	%		1.78	%
Annualized return on average shareholders' equity (a)(b)		12.86	%		14.26	%		14.81	%			13.57	%		15.71	%
Annualized return on average shareholders' equity, adjusted (a)(b)(h)		12.23	%		14.51	%		15.42	%			13.39	%		16.16	%
Annualized return on average tangible equity (a)(b)(c)		15.23	%		16.80	%		17.60	%			16.02	%		18.70	%
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)		14.49	%		17.09	%		18.33	%			15.81	%		19.25	%
Efficiency ratio (g)		60.38	%		61.16	%		61.65	%			60.76	%		60.20	%
Efficiency ratio, adjusted (g)(h)		60.63	%		60.18	%		58.45	%			60.41	%		57.82	%
Annualized net interest margin (g)		3.84	%		3.55	%		3.74	%			3.70	%		3.75	%
Annualized net interest margin, adjusted (g)(h)		3.71	%		3.53	%		3.58	%			3.62	%		3.64	%
Note: Explanations for footnotes (a) - (m) are included at the end of the financial tables in the "Financial Reconciliations" section.

PARK NATIONAL CORPORATION
Financial Reconciliations (continued)
(a) Reported measure uses net income
(b) Averages are for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021 and the six months ended June 30, 2022 and June 30, 2021, 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									SIX MONTHS ENDED
	June 30, 2022		March 31, 2022			June 30, 2021				June 30, 2022			June 30, 2021
AVERAGE SHAREHOLDERS' EQUITY	$	1,070,493	$	1,105,540		$	1,059,949			$	1,087,919		$	1,052,223
Less: Average goodwill and other intangible assets		166,516		166,918			168,211				166,716			168,449
AVERAGE TANGIBLE EQUITY	$	903,977	$	938,622		$	891,738			$	921,203		$	883,774
(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:
	June 30, 2022		March 31, 2022			June 30, 2021
TOTAL SHAREHOLDERS' EQUITY	$	1,050,013	$	1,076,366		$	1,069,392
Less: Goodwill and other intangible assets		166,252		166,655			167,897
TANGIBLE EQUITY	$	883,761	$	909,711		$	901,495
(e) Net income for each period divided by average tangible assets during the period. Average tangible assets equal 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									SIX MONTHS ENDED
	June 30, 2022		March 31, 2022			June 30, 2021				June 30, 2022			June 30, 2021
AVERAGE ASSETS	$	9,679,020	$	9,825,382		$	9,872,078			$	9,751,796		$	9,743,027
Less: Average goodwill and other intangible assets		166,516		166,918			168,211				166,716			168,449
AVERAGE TANGIBLE ASSETS	$	9,512,504	$	9,658,464		$	9,703,867			$	9,585,080		$	9,574,578
(f) Tangible equity divided by tangible assets. Tangible assets equal total assets less goodwill and other intangible assets, in each case at the end of the period.
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:
	June 30, 2022		March 31, 2022			June 30, 2021
TOTAL ASSETS	$	9,826,670	$	9,576,352		$	9,947,994
Less: Goodwill and other intangible assets		166,252		166,655			167,897
TANGIBLE ASSETS	$	9,660,418	$	9,409,697		$	9,780,097
(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, in each case during the applicable period.
RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
	THREE MONTHS ENDED									SIX MONTHS ENDED
	June 30, 2022		March 31, 2022			June 30, 2021				June 30, 2022			June 30, 2021
Interest income	$	88,347	$	81,146		$	87,994			$	169,493		$	173,167
Fully taxable equivalent adjustment		872		819			718				1,691			1,432
Fully taxable equivalent interest income	$	89,219	$	81,965		$	88,712			$	171,184		$	174,599
Interest expense		4,408		3,460			4,143				7,868			8,582
Fully taxable equivalent net interest income	$	84,811	$	78,505		$	84,569			$	163,316		$	166,017
(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, provision for (recovery of) credit 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 $13.4 million, $37.4 million and $248.9 million of PPP loans at June 30, 2022, March 31, 2022 and June 30, 2021, respectively.
(l) Excludes $5.6 million of commercial loans held for sale for the period ended June 30, 2022.
(m) Pre-tax, pre-provision ("PTPP") net income is calculated as net income, plus income taxes, plus the provision for (recovery of) credit losses, in each case during the applicable period. PTPP net income is a common industry metric utilized in capital analysis and review. PTPP is used to assess the operating performance of Park while excluding the impact of credit losses.
RECONCILIATION OF PRE-TAX, PRE-PROVISION NET INCOME
	THREE MONTHS ENDED									SIX MONTHS ENDED
	June 30, 2022		March 31, 2022			June 30, 2021				June 30, 2022			June 30, 2021
Net income	$	34,324	$	38,875		$	39,132			$	73,199		$	81,963
Plus: Income Taxes		7,769		7,699			8,597				15,468			17,579
Plus: Provision for (recovery of) credit losses		2,991		(4,605	)		(4,040	)			(1,614	)		(8,895	)
Pre-tax, pre-provision net income	$	45,084	$	41,969		$	43,689			$	87,053		$	90,647

Media contact: Ellie Akey, 740-349-5493 or [email protected]
Investor contact: Brady Burt, 740-322-6844 or [email protected]