Consumer and commercial loans propel community bank income

NEWARK, Ohio, Oct. 24, 2016 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE MKT:PRK) today announced increased net income and other financial results for the third quarter and first nine months of 2016 (three and nine months ended September 30, 2016). The board of directors also declared a quarterly cash dividend of $0.94 per common share, payable on December 9, 2016 to common shareholders of record as of November 18, 2016.

Park’s third quarter net income in 2016 was $27.4 million, a 37.0 percent increase from $20.0 million for the same period in 2015. Net income per diluted common share for the third quarter of 2016 was $1.78, compared to $1.30 in the third quarter of 2015. Park cited substantial recoveries from loans in its Southeast Property Holdings unit as part of the boost in income for the quarter.

Park’s net income for the first nine months of 2016 was $66.1 million, compared to $60.1 million for the same period in 2015, an increase of 10.0 percent. Net income per diluted common share for the first nine months of 2016 was $4.29, compared to $3.90 in the same period of 2015.

“Our results this year position us well as we look ahead and make plans for the future,” said Park President and CEO David L. Trautman. “We lead our organization with long-run performance in mind. While any given quarter may contain one-time income items or expenses, it’s the consistency of our community banks that demonstrates our strength and steady success.”

Park's community-banking subsidiary, The Park National Bank, reported net income of $25.5 million for the third quarter of 2016, compared to $20.7 million for the third quarter of 2015. The bank’s first nine months of 2016 net income was $68.3 million, compared to $61.2 million for the same period of 2015. The bank had total assets of $7.3 billion at September 30, 2016, rising from $7.2 billion at December 31, 2015.

In the first nine months of 2016, the bank grew consumer loans by $100.2 million (13.7 percent annualized) and commercial loans by $35.9 million (1.9 percent annualized). Total loans for the bank were $5.15 billion at September 30, 2016, up $187.8 million (3.79 percent) from $4.96 billion at September 30, 2015.

About Park National Corporation

Headquartered in Newark, Ohio, Park National Corporation had $7.4 billion in total assets (as of September 30, 2016). The Park organization principally consists of 11 community bank divisions, a non-bank subsidiary and two specialty finance companies. Park's Ohio-based banking operations are conducted through Park subsidiary The Park National Bank and its divisions, which include Fairfield National Bank Division, Richland Bank Division, Century National Bank Division, First- Knox National Bank Division, Farmers Bank Division, United Bank, N.A. Division, Second National Bank Division, Security National Bank Division, Unity National Bank Division, and The Park National Bank of Southwest Ohio & Northern Kentucky Division; and Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance). The Park organization also includes Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.

Complete financial tables are listed below…

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Park 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: Park's ability to execute our business plan successfully and within the expected timeframe; general economic and financial market conditions, specifically in the real estate markets and the credit markets, either nationally or in the states in which Park and our subsidiaries do business, may experience a slowing or reversal of the recent economic expansion in addition to continuing residual effects of recessionary conditions and an uneven spread of positive impacts of recovery on the economy and our counterparties, including adverse impacts on the demand for loan, deposit and other financial services, delinquencies, defaults and counterparties' ability to meet credit and other obligations; changes in interest rates and prices may adversely impact the value of securities, loans, deposits and other financial instruments and the interest rate sensitivity of our consolidated balance sheet as well as reduce interest margins; changes in consumer spending, borrowing and saving habits, whether due to changing business and economic conditions, legislative and regulatory initiatives, or other factors; changes in unemployment; changes in customers', suppliers', and other counterparties' performance and creditworthiness; asset/liability repricing risks and liquidity risks; our liquidity requirements could be adversely affected by changes to regulations governing bank and bank holding company capital and liquidity standards as well as by changes in our assets and liabilities; competitive factors among financial services organizations could increase significantly, including product and pricing pressures, changes to third-party relationships and our ability to attract, develop and retain qualified bank professionals; clients could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding; the nature, timing 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, pensions, bankruptcy, consumer protection, accounting, banking, securities and other aspects of the financial services industry, specifically the reforms provided for in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), 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, to implement the Dodd-Frank Act's provisions, the Budget Control Act of 2011, the American Taxpayer Relief Act of 2012, the JOBS Act, the FAST 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 SEC, the Public Company Accounting Oversight Board and other regulatory agencies, and the accuracy of our assumptions and estimates used to prepare our financial statements; the effect of trade, monetary, fiscal and other governmental policies of the U.S. federal government, including money supply and interest rate policies of the Federal Reserve; disruption in the liquidity and other functioning of U.S. financial markets; the impact on financial markets and the economy of any changes in the credit ratings of the U.S. Treasury obligations and other U.S. government-backed debt, as well as issues surrounding the levels of U.S., European and Asian government debt and concerns regarding the creditworthiness of certain sovereign governments, supranationals and financial institutions in Europe and Asia; the uncertainty surrounding the United Kingdom's exit from the European Union and its consequences; our litigation and regulatory compliance exposure, including any adverse developments in legal proceedings or other claims and unfavorable resolution of regulatory and other governmental examinations or other inquiries; the adequacy of our risk management program; the ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors and other service providers, including as a result of cyber attacks; fraud, scams and schemes of third parties; the impact of widespread natural and other disasters, pandemics, dislocations, terrorist activities or international hostilities on the economy and financial markets generally or on US or our counterparties specifically; demand for loans in the respective market areas served by Park and our subsidiaries; 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, 2015. 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
Three months ended September 30, 2016, June 30, 2016, and September 30, 2015
	2016			2016			2015				Percent change vs.
(in thousands, except share and per share data)	3rd QTR			2nd QTR			3rd QTR				2Q '16		3Q '15
INCOME STATEMENT:
Net interest income	$	58,533		$	57,485		$	57,715			1.8	%	1.4	%
(Recovery of) provision for loan losses	(7,366		)	2,637			2,404				N.M.		N.M.
Other income	20,535			18,736			20,191				9.6	%	1.7	%
Other expense	46,756			45,306			47,429				3.2	%	(1.4	) %
Income before income taxes	$	39,678		$	28,278		$	28,073			40.3	%	41.3	%
Income taxes	12,229			8,280			8,033				47.7	%	52.2	%
Net income	$	27,449		$	19,998		$	20,040			37.3	%	37.0	%
MARKET DATA:
Earnings per common share - basic (b)	$	1.79		$	1.30		$	1.30			37.7	%	37.7	%
Earnings per common share - diluted (b)	1.78			1.30			1.30				36.9	%	36.9	%
Cash dividends per common share	0.94			0.94			0.94				—	%	—	%
Book value per common share at period end	48.99			48.26			46.66				1.5	%	5.0	%
Market price per common share at period end	96.00			91.78			90.22				4.6	%	6.4	%
Market capitalization at period end	1,471,755			1,407,060			1,384,035				4.6	%	6.3	%
Weighted average common shares - basic (a)	15,330,791			15,330,802			15,361,087				—	%	(0.2	)%
Weighted average common shares - diluted (a)	15,399,707			15,399,283			15,401,808				—	%	—	%
Common shares outstanding at period end	15,330,781			15,330,796			15,340,670				—	%	(0.1	)%
PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)	1.46		%	1.09		%	1.07		%		33.9	%	36.4	%
Return on average equity (a)(b)	14.67		%	10.98		%	11.20		%		33.6	%	31.0	%
Yield on loans	4.66		%	4.64		%	4.65		%		0.4	%	0.2	%
Yield on investments	2.25		%	2.30		%	2.39		%		(2.2	)%	(5.9	)%
Yield on money markets	0.52		%	0.51		%	0.25		%		2.0	%	108.0	%
Yield on earning assets	3.99		%	4.00		%	3.91		%		(0.3	)%	2.0	%
Cost of interest bearing deposits	0.32		%	0.32		%	0.29		%		—	%	10.3	%
Cost of borrowings	2.49		%	2.50		%	2.39		%		(0.4	)%	4.2	%
Cost of paying liabilities	0.74		%	0.74		%	0.70		%		—	%	5.7	%
Net interest margin (g)	3.42		%	3.43		%	3.37		%		(0.3	)%	1.5	%
Efficiency ratio (g)	58.67		%	59.01		%	60.71		%		(0.6	)%	(3.4	)%
OTHER RATIOS (NON - GAAP):
Annualized return on average tangible assets (a)(b)(e)	1.48		%	1.10		%	1.08		%		34.5	%	37.0	%
Annualized return on average tangible equity (a)(b)(c)	16.24		%	12.18		%	12.47		%		33.3	%	30.2	%
Tangible book value per share (d)	$	44.27		$	43.54		$	41.95			1.7	%	5.5	%
N.M. - Not meaningful
Note: Explanations (a) - (g) are included at the end of the financial highlights.
PARK NATIONAL CORPORATION
Financial Highlights (continued)
Three months ended September 30, 2016, June 30, 2016, and September 30, 2015
											Percent change vs.
BALANCE SHEET:	September 30, 2016			June 30, 2016			September 30, 2015				2Q '16		3Q '15
Investment securities	$	1,478,255		$	1,548,006		$	1,469,284			(4.5	)%	0.6	%
Loans	5,187,004			5,127,644			4,999,912				1.2	%	3.7	%
Allowance for loan losses	53,562			58,699			58,483				(8.8	)%	(8.4	)%
Goodwill	72,334			72,334			72,334				—	%	—	%
Other real estate owned (OREO)	14,941			17,566			20,136				(14.9	)%	(25.8	)%
Total assets	7,364,092			7,431,610			7,300,340				(0.9	)%	0.9	%
Total deposits	5,519,659			5,623,879			5,454,982				(1.9	)%	1.2	%
Borrowings	1,005,937			996,905			1,059,904				0.9	%	(5.1	)%
Shareholders' equity	751,063			739,887			715,803				1.5	%	4.9	%
Tangible equity (d)	678,729			667,553			643,469				1.7	%	5.5	%
Nonperforming loans	116,864			131,456			109,638				(11.1	)%	6.6	%
Nonperforming assets	131,805			149,022			129,774				(11.6	)%	1.6	%
ASSET QUALITY RATIOS:
Loans as a % of period end total assets	70.44		%	69.00		%	68.49		%		2.1	%	2.8	%
Nonperforming loans as a % of period end loans	2.25		%	2.56		%	2.19		%		(12.1	)%	2.7	%
Nonperforming assets as a % of period end loans + OREO	2.53		%	2.90		%	2.59		%		(12.8	)%	(2.3	)%
Allowance for loan losses as a % of period end loans	1.03		%	1.14		%	1.17		%		(9.6	)%	(12.0	)%
Net loan (recoveries) charge-offs	$	(2,229	)	$	886		$	1,348			N.M.		N.M.
Annualized net loan (recoveries) charge-offs  as a % of average loans (a)	(0.17		) %	0.07		%	0.11		%		N.M.		N.M.
CAPITAL & LIQUIDITY:
Total equity / Period end total assets	10.20		%	9.96		%	9.81		%		2.4	%	4.0	%
Tangible equity (d) / Tangible assets (f)	9.31		%	9.07		%	8.90		%		2.6	%	4.6	%
Average equity / Average assets (a)	9.97		%	9.92		%	9.59		%		0.5	%	4.0	%
Average equity / Average loans (a)	14.49		%	14.41		%	14.37		%		0.6	%	0.8	%
Average loans / Average deposits (a)	91.14		%	91.18		%	88.61		%		—	%	2.9	%
N.M. - Not meaningful
Note: Explanations (a) - (h) are included at the end of the financial highlights.

PARK NATIONAL CORPORATION
Financial Highlights
Nine months ended September 30, 2016 and 2015
(in thousands, except share and per share data)		2016				2015					Percent change vs. 2015
INCOME STATEMENT:
Net interest income		$	175,837			$	169,765				3.6	%
(Recovery of) provision for loan losses		(3,819		)		5,648					N.M.
Other income		56,660				58,255					(2.7	)%
Total other expense		141,961				137,816					3.0	%
Income before income taxes		$	94,355			$	84,556				11.6	%
Income taxes		28,222				24,433					15.5	%
Net income		$	66,133			$	60,123				10.0	%
MARKET DATA:
Earnings per common share - basic (b)		$	4.31			$	3.91				10.2	%
Earnings per common share - diluted (b)		4.29				3.90					10.0	%
Cash dividends per common share		2.82				2.82					—	%
Weighted average common shares - basic (a)		15,330,802				15,370,380					(0.3	)%
Weighted average common shares - diluted (a)		15,401,825				15,411,511					(0.1	)%
PERFORMANCE RATIOS: (Annualized)
Return on average assets (a)(b)		1.19		%		1.10		%			8.2	%
Return on average common equity (a)(b)		12.04		%		11.35		%			6.1	%
Yield on loans		4.70		%		4.67		%			0.6	%
Yield on investments		2.31		%		2.48		%			(6.9	)%
Yield on earning assets		4.03		%		3.95		%			2.0	%
Cost of interest bearing deposits		0.32		%		0.30		%			6.7	%
Cost of borrowings		2.44		%		2.40		%			1.7	%
Cost of paying liabilities		0.74		%		0.72		%			2.8	%
Net interest margin (g)		3.47		%		3.39		%			2.4	%
Efficiency ratio (g)		60.64		%		60.29		%			0.6	%
ASSET QUALITY RATIOS:
Net loan (recoveries) charge-offs		$	(887	)		$	1,517				N.M.
Annualized net loan (recoveries) charge-offs as a % of average loans (a)		(0.02		)%		0.04		%			N.M.
CAPITAL & LIQUIDITY:
Average stockholders' equity / Average assets (a)		9.89		%		9.71		%			1.9	%
Average stockholders' equity / Average loans (a)		14.42		%		14.53		%			(0.8	)%
Average loans / Average deposits (a)		91.21		%		89.23		%			2.2	%
OTHER RATIOS (NON-GAAP):
Annualized return on average tangible assets (a)(b)(e)		1.20		%		1.11		%			8.1	%
Annualized return on average tangible common equity (a)(b)(c)		13.35		%		12.64		%			5.6	%

PARK NATIONAL CORPORATION
Financial Highlights (continued)
(a) Averages are for the three months ended September 30, 2016, June 30, 2016 and September 30, 2015 and the nine months ended September 30, 2016 and September 30, 2015.
(b) Reported measure uses net income.
(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 during the applicable period.
RECONCILIATION OF AVERAGE SHAREHOLDERS' EQUITY TO AVERAGE TANGIBLE EQUITY:
	THREE MONTHS ENDED										NINE MONTHS ENDED
	September 30, 2016			June 30, 2016			September 30, 2015				September 30, 2016			September 30, 2015
AVERAGE SHAREHOLDERS' EQUITY	$	744,620		$	732,759		$	710,128			$	733,937		$	708,085
Less: Average goodwill	72,334			72,334			72,334				72,334			72,334
AVERAGE TANGIBLE EQUITY	$	672,286		$	660,425		$	637,794			$	661,603		$	635,751
(d) Tangible book value divided by common shares outstanding at period end. Tangible equity equals ending shareholders' equity less goodwill, in each case at the end of the period.
RECONCILIATION OF SHAREHOLDERS' EQUITY TO TANGIBLE EQUITY:
	September 30, 2016			June 30, 2016			September 30, 2015
SHAREHOLDERS' EQUITY	$	751,063		$	739,887		$	715,803
Less: Goodwill	72,334			72,334			72,334
TANGIBLE EQUITY	$	678,729		$	667,553		$	643,469
(e) Net income for each period divided by average tangible assets during the period. Average tangible assets equals average assets less average goodwill, in each case during the applicable period.
RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS:
	THREE MONTHS ENDED										NINE MONTHS ENDED
	September 30, 2016			June 30, 2016			September 30, 2015				September 30, 2016			September 30, 2015
AVERAGE ASSETS	$	7,468,439		$	7,383,703		$	7,405,178			$	7,419,342		$	7,294,077
Less: Average goodwill	72,334			72,334			72,334				72,334			72,334
AVERAGE TANGIBLE ASSETS	$	7,396,105		$	7,311,369		$	7,332,844			$	7,347,008		$	7,221,743
(f) Tangible equity divided by tangible assets. Tangible assets equals total assets less goodwill, in each case at the end of the period.
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:
	September 30, 2016			June 30, 2016			September 30, 2015
TOTAL ASSETS	$	7,364,092		$	7,431,610		$	7,300,340
Less: Goodwill	72,334			72,334			72,334
TANGIBLE ASSETS	$	7,291,758		$	7,359,276		$	7,228,006
(g) Efficiency ratio is calculated by dividing total other expense by the sum of fully taxable equivalent net interest income and other income. Fully taxable equivalent net interest income reconciliation is shown below assuming a 35% tax rate. Additionally, net interest margin is calculated on a fully taxable equivalent basis.
RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
	THREE MONTHS ENDED										NINE MONTHS ENDED
	September 30, 2016			June 30, 2016			September 30, 2015				September 30, 2016			September 30, 2015
Interest income	$	68,242		$	67,011		$	67,087			$	204,561		$	197,909
Fully taxable equivalent adjustment	619			555			220				1,618			551
Fully taxable equivalent interest income	$	68,861		$	67,566		$	67,307			$	206,179		$	198,460
Interest expense	9,709			9,526			9,372				28,724			28,144
Fully taxable equivalent net interest income	$	59,152		$	58,040		$	57,935			$	177,455		$	170,316

PARK NATIONAL CORPORATION
Consolidated Statements of Income
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(in thousands, except share and per share data)		2016				2015				2016				2015
Interest income:
Interest and fees on loans		$	59,893			$	57,680			$	178,346			$	169,555
Interest on:
Obligations of U.S. Government, its agencies
and other securities		7,339				9,163				23,718				27,665
Obligations of states and political subdivisions		689				12				1,653				12
Other interest income		321				232				844				677
Total interest income		68,242				67,087				204,561				197,909
Interest expense:
Interest on deposits:
Demand and savings deposits		1,094				614				2,851				1,656
Time deposits		2,352				2,508				7,128				7,672
Interest on borrowings		6,263				6,250				18,745				18,816
Total interest expense		9,709				9,372				28,724				28,144
Net interest income		58,533				57,715				175,837				169,765
(Recovery of) provision for loan losses		(7,366		)		2,404				(3,819		)		5,648
Net interest income after (recovery of) provision for loan losses		65,899				55,311				179,656				164,117
Other income		20,535				20,191				56,660				58,255
Other expense		46,756				47,429				141,961				137,816
Income before income taxes		39,678				28,073				94,355				84,556
Income taxes		12,229				8,033				28,222				24,433
Net income		$	27,449			$	20,040			$	66,133			$	60,123
Per Common Share:
Net income  - basic		$	1.79			$	1.30			$	4.31			$	3.91
Net income  - diluted		$	1.78			$	1.30			$	4.29			$	3.90
Weighted average shares - basic		15,330,791				15,361,087				15,330,802				15,370,380
Weighted average shares - diluted		15,399,707				15,401,808				15,401,825				15,411,511
Cash Dividends Declared		$	0.94			$	0.94			$	2.82			$	2.82

PARK NATIONAL CORPORATION
Consolidated Balance Sheets
(in thousands, except share data)	September 30, 2016			December 31, 2015
Assets
Cash and due from banks	$	117,457		$	119,412
Money market instruments	122,541			30,047
Investment securities	1,478,255			1,643,879
Loans	5,187,004			5,068,085
Allowance for loan losses	(53,562		)	(56,494		)
Loans, net	5,133,442			5,011,591
Bank premises and equipment, net	58,361			59,493
Goodwill	72,334			72,334
Other real estate owned	14,941			18,651
Other assets	366,761			355,947
Total assets	$	7,364,092		$	7,311,354
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing	$	1,429,024		$	1,404,032
Interest bearing	4,090,635			3,943,610
Total deposits	5,519,659			5,347,642
Borrowings	1,005,937			1,177,347
Other liabilities	87,433			73,010
Total liabilities	$	6,613,029		$	6,597,999
Shareholders' Equity:
Preferred shares (200,000 shares authorized; no shares outstanding at September 30, 2016 and December 31, 2015)	$	—		$	—
Common shares (No par value; 20,000,000 shares authorized in 2016 and 2015; 16,150,820 shares issued at September 30, 2016 and 16,150,854 shares issued at December 31, 2015)	305,152			303,966
Accumulated other comprehensive loss, net of taxes	(1,793		)	(15,643		)
Retained earnings	530,177			507,505
Treasury shares (820,039 shares at both September 30, 2016 and December 31, 2015)	(82,473		)	(82,473		)
Total shareholders' equity	$	751,063		$	713,355
Total liabilities and shareholders' equity	$	7,364,092		$	7,311,354

PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
	Three Months Ended							Nine Months Ended
	September 30,							September 30,
(in thousands)	2016			2015				2016			2015
Assets
Cash and due from banks	$	116,069		$	113,708			$	115,588		$	117,617
Money market instruments	247,475			362,420				220,461			355,240
Investment securities	1,507,484			1,528,404				1,535,235			1,500,275
Loans	5,139,781			4,942,024				5,091,148			4,872,191
Allowance for loan losses	(59,470		)	(57,798		)		(57,835		)	(56,383		)
Loans, net	5,080,311			4,884,226				5,033,313			4,815,808
Bank premises and equipment, net	58,890			59,386				59,252			57,985
Goodwill	72,334			72,334				72,334			72,334
Other real estate owned	17,374			20,970				17,700			22,310
Other assets	368,502			363,730				365,459			352,508
Total assets	$	7,468,439		$	7,405,178			$	7,419,342		$	7,294,077
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing	$	1,401,201		$	1,302,987			$	1,386,518		$	1,290,383
Interest bearing	4,238,301			4,274,375				4,195,328			4,169,895
Total deposits	5,639,502			5,577,362				5,581,846			5,460,278
Borrowings	1,001,761			1,037,158				1,024,175			1,049,041
Other liabilities	82,556			80,530				79,384			76,673
Total liabilities	$	6,723,819		$	6,695,050			$	6,685,405		$	6,585,992
Shareholders' Equity:
Preferred shares	$	—		$	—			$	—		$	—
Common shares	304,885			303,631				304,449			303,392
Accumulated other comprehensive loss, net of taxes	(350		)	(12,136		)		(4,584		)	(9,154		)
Retained earnings	522,558			498,670				516,545			493,117
Treasury shares	(82,473		)	(80,037		)		(82,473		)	(79,270		)
Total shareholders' equity	$	744,620		$	710,128			$	733,937		$	708,085
Total liabilities and shareholders' equity	$	7,468,439		$	7,405,178			$	7,419,342		$	7,294,077

PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters
	2016			2016			2016			2015			2015
(in thousands, except per share data)	3rd QTR			2nd QTR			1st QTR			4th QTR			3rd QTR
Interest income:
Interest and fees on loans	$	59,893		$	58,401		$	60,052		$	58,424		$	57,680
Interest on:
Obligations of U.S. Government, its agencies and other securities	7,339			7,770			8,609			8,360			9,163
Obligations of states and political subdivisions	689			591			373			170			12
Other interest income	321			249			274			211			232
Total interest income	68,242			67,011			69,308			67,165			67,087
Interest expense:
Interest on deposits:
Demand and savings deposits	1,094			933			824			573			614
Time deposits	2,352			2,389			2,387			2,453			2,508
Interest on borrowings	6,263			6,204			6,278			6,272			6,250
Total interest expense	9,709			9,526			9,489			9,298			9,372
Net interest income	58,533			57,485			59,819			57,867			57,715
(Recovery of) provision for loan losses	(7,366		)	2,637			910			(658		)	2,404
Net interest income after (recovery of) provision for loan losses	65,899			54,848			58,909			58,525			55,311
Other income	20,535			18,736			17,389			19,296			20,191
Other expense	46,756			45,306			49,899			48,798			47,429
Income before income taxes	39,678			28,278			26,399			29,023			28,073
Income taxes	12,229			8,280			7,713			8,134			8,033
Net income	$	27,449		$	19,998		$	18,686		$	20,889		$	20,040
Per Common Share:
Net income - basic	$	1.79		$	1.30		$	1.22		$	1.36		$	1.30
Net income - diluted	$	1.78		$	1.30		$	1.21		$	1.36		$	1.30

PARK NATIONAL CORPORATION
Detail of other income and other expense - Linked Quarters
	2016			2016			2016			2015			2015
(in thousands)	3rd QTR			2nd QTR			1st QTR			4th QTR			3rd QTR
Other income:
Income from fiduciary activities	$	5,315		$	5,438		$	5,113		$	5,140		$	4,933
Service charges on deposits	3,800			3,575			3,423			3,777			3,909
Other service income	3,640			3,351			2,574			2,861			3,251
Checkcard fee income	3,780			3,868			3,532			3,902			3,643
Bank owned life insurance income	1,038			1,049			1,197			1,245			1,574
ATM fees	581			570			583			588			648
OREO valuation adjustments	(233		)	(221		)	(118		)	(319		)	(718		)
Gain on the sale of OREO, net	783			162			134			175			243
Gain on sale of investments	—			—			—			88			—
Miscellaneous	1,831			944			951			1,839			2,708
Total other income	$	20,535		$	18,736		$	17,389		$	19,296		$	20,191
Other expense:
Salaries	$	22,084		$	21,256		$	21,554		$	22,520		$	21,692
Employee benefits	5,073			4,894			4,773			4,161			6,721
Occupancy expense	2,506			2,639			2,548			2,257			2,469
Furniture and equipment expense	3,437			3,416			3,443			3,069			3,044
Data processing fees	1,450			1,373			1,217			1,190			1,383
Professional fees and services	6,356			5,401			6,667			7,751			5,424
Marketing	1,062			1,073			1,111			975			1,058
Insurance	1,423			1,438			1,411			1,407			1,399
Communication	1,154			1,353			1,221			1,321			1,245
State tax expense	895			798			926			857			779
Miscellaneous	1,316			1,665			5,028			3,290			2,215
Total other expense	$	46,756		$	45,306		$	49,899		$	48,798		$	47,429

PARK NATIONAL CORPORATION
Asset Quality Information
										Year ended December 31,
(in thousands, except ratios)	September 30, 2016			June 30, 2016			March 31, 2016			2015			2014				2013			2012
Allowance for loan losses:
Allowance for loan losses, beginning of period	$	58,699		$	56,948		$	56,494		$	54,352		$	59,468			$	55,537		$	68,444
Charge-offs	4,140			4,419			3,401			14,290			24,780			(B)	19,153			61,268			(A)
Recoveries	6,369			3,533			2,945			11,442			26,997				19,669			12,942
Net (recoveries) charge-offs	(2,229		)	886			456			2,848			(2,217		)		(516		)	48,326
(Recovery of) provision for loan losses	(7,366		)	2,637			910			4,990			(7,333		)		3,415			35,419
Allowance for loan losses, end of period	$	53,562		$	58,699		$	56,948		$	56,494		$	54,352			$	59,468		$	55,537
(A) Year ended December 31, 2012 included the full charge-off of the Vision Bank ALLL of $12.1 million to bring the retained Vision Bank loan portfolio to fair value prior to the merger of Vision Bank (as constituted following the transaction with Centennial Bank and Home BancShares, Inc.) with and into SEPH, the non-bank subsidiary of Park, on February 16, 2012..
(B) Year ended December 31, 2014 included $4.3 million in charge-offs related to the transfer of $22.0 million of commercial loans to the held for sale portfolio
General reserve trends:
Allowance for loan losses, end of period	$	53,562		$	58,699		$	56,948		$	56,494		$	54,352			$	59,468		$	55,537
Specific reserves	4,232			6,287			4,930			4,191			3,660				10,451			8,276
General reserves	$	49,330		$	52,412		$	52,018		$	52,303		$	50,692			$	49,017		$	47,261
Total loans	$	5,187,004		$	5,127,644		$	5,062,185		$	5,068,085		$	4,829,682			$	4,620,505		$	4,450,322
Impaired commercial loans	77,986			90,828			78,117			80,599			73,676				112,304			137,238
Total loans less impaired commercial loans	$	5,109,018		$	5,036,816		$	4,984,068		$	4,987,486		$	4,756,006			$	4,508,201		$	4,313,084
Asset Quality Ratios:
Annualized net (recoveries) charge-offs as a % of average loans	(0.17		) %	0.07		%	0.04		%	0.06		%	(0.05		) %		(0.01		) %	1.10		%
Allowance for loan losses as a % of period end loans	1.03		%	1.14		%	1.12		%	1.11		%	1.13		%		1.29		%	1.25		%
General reserves as a % of total loans less impaired commercial loans	0.97		%	1.04		%	1.04		%	1.05		%	1.07		%		1.09		%	1.10		%
Nonperforming Assets - Park National Corporation:
Nonaccrual loans	$	97,832		$	111,429		$	102,625		$	95,887		$	100,393			$	135,216		$	155,536
Accruing troubled debt restructuring	17,350			17,722			14,999			24,979			16,254				18,747			29,800
Loans past due 90 days or more	1,682			2,305			1,336			1,921			2,641				1,677			2,970
Total nonperforming loans	$	116,864		$	131,456		$	118,960		$	122,787		$	119,288			$	155,640		$	188,306
Other real estate owned - Park National Bank	7,004			7,038			6,846			7,456			10,687				11,412			14,715
Other real estate owned - SEPH	7,937			10,528			10,899			11,195			11,918				23,224			21,003
Total nonperforming assets	$	131,805		$	149,022		$	136,705		$	141,438		$	141,893			$	190,276		$	224,024
Percentage of nonaccrual loans to period end loans	1.89		%	2.17		%	2.03		%	1.89		%	2.08		%		2.93		%	3.49		%
Percentage of nonperforming loans to period end loans	2.25		%	2.56		%	2.35		%	2.42		%	2.47		%		3.37		%	4.23		%
Percentage of nonperforming assets to period end loans	2.54		%	2.91		%	2.70		%	2.79		%	2.94		%		4.12		%	5.03		%
Percentage of nonperforming assets to period end total assets	1.79		%	2.01		%	1.84		%	1.93		%	2.03		%		2.87		%	3.37		%
PARK NATIONAL CORPORATION
Asset Quality Information (continued)
										Year ended December 31,
(in thousands, except ratios)	September 30, 2016			June 30, 2016			March 31, 2016			2015			2014				2013			2012
Nonperforming Assets - Park National Bank and Guardian:
Nonaccrual loans	$	84,045		$	97,642		$	88,351		$	81,468		$	77,477			$	99,108		$	100,244
Accruing troubled debt restructuring	17,350			17,722			14,999			24,979			16,157				18,747			29,800
Loans past due 90 days or more	1,682			2,305			1,336			1,921			2,641				1,677			2,970
Total nonperforming loans	$	103,077		$	117,669		$	104,686		$	108,368		$	96,275			$	119,532		$	133,014
Other real estate owned - Park National Bank	7,004			7,038			6,846			7,456			10,687				11,412			14,715
Total nonperforming assets	$	110,081		$	124,707		$	111,532		$	115,824		$	106,962			$	130,944		$	147,729
Percentage of nonaccrual loans to period end loans	1.62		%	1.91		%	1.75		%	1.61		%	1.61		%		2.16		%	2.28		%
Percentage of nonperforming loans to period end loans	1.99		%	2.30		%	2.07		%	2.14		%	2.00		%		2.61		%	3.03		%
Percentage of nonperforming assets to period end loans	2.13		%	2.44		%	2.21		%	2.29		%	2.23		%		2.86		%	3.36		%
Percentage of nonperforming assets to period end total assets	1.51		%	1.69		%	1.52		%	1.60		%	1.55		%		2.01		%	2.27		%
Nonperforming Assets - SEPH/Vision Bank (retained portfolio):
Nonaccrual loans	$	13,787		$	13,787		$	14,274		$	14,419		$	22,916			$	36,108		$	55,292
Accruing troubled debt restructuring	—			—			—			—			97				—			—
Loans past due 90 days or more	—			—			—			—			—				—			—
Total nonperforming loans	$	13,787		$	13,787		$	14,274		$	14,419		$	23,013			$	36,108		$	55,292
Other real estate owned - SEPH	7,937			10,528			10,899			11,195			11,918				23,224			21,003
Total nonperforming assets	$	21,724		$	24,315		$	25,173		$	25,614		$	34,931			$	59,332		$	76,295
New nonaccrual loan information - Park National Corporation
Nonaccrual loans, beginning of period	$	111,429		$	102,625		$	95,887		$	100,393		$	135,216			$	155,536		$	195,106
New nonaccrual loans	12,363			26,858			21,339			80,791			70,059				67,398			83,204
Resolved nonaccrual loans	25,960			18,054			14,601			85,165			86,384				87,718			122,774
Sale of nonaccrual loans held for sale	—			—			—			132			18,498				—			—
Nonaccrual loans, end of period	$	97,832		$	111,429		$	102,625		$	95,887		$	100,393			$	135,216		$	155,536
New nonaccrual loan information - Ohio-based operations
Nonaccrual loans, beginning of period	$	97,642		$	88,351		$	81,468		$	77,477		$	99,108			$	100,244		$	96,113
New nonaccrual loans - Ohio-based operations	12,363			26,735			21,339			80,791			69,389				66,197			68,960
Resolved nonaccrual loans	25,960			17,444			14,456			76,800			78,288				67,333			64,829
Sale of nonaccrual loans held for sale	—			—			—			—			12,732				—			—
Nonaccrual loans, end of period	$	84,045		$	97,642		$	88,351		$	81,468		$	77,477			$	99,108		$	100,244
New nonaccrual loan information - SEPH/Vision Bank
Nonaccrual loans, beginning of period	$	13,787		$	14,274		$	14,419		$	22,916		$	36,108			$	55,292		$	98,993
New nonaccrual loans - SEPH/Vision Bank	—			123			—			—			670				1,201			14,243
Resolved nonaccrual loans	—			610			145			8,365			8,096				20,385			57,944
Sale of nonaccrual loans held for sale	—			—			—			132			5,766				—			—
Nonaccrual loans, end of period	$	13,787		$	13,787		$	14,274		$	14,419		$	22,916			$	36,108		$	55,292
Impaired Commercial Loan Portfolio Information (period end):
Unpaid principal balance	$	100,187		$	115,186		$	106,539		$	109,304		$	106,156			$	175,576		$	242,345
Prior charge-offs	22,201			24,358			28,422			28,705			32,480				63,272			105,107
Remaining principal balance	77,986			90,828			78,117			80,599			73,676				112,304			137,238
Specific reserves	4,232			6,287			4,930			4,191			3,660				10,451			8,276
Book value, after specific reserve	$	73,754		$	84,541		$	73,187		$	76,408		$	70,016			$	101,853		$	128,962

 

Media contact: 
Bethany Lewis, 
740.349.0421, 
blewis@parknationalbank.com

Investor contact: 
Brady Burt, 
740.322.6844, 
bburt@parknationalbank.com