EX-99.1 2 exhibit991earningsrelease2.htm EXHIBIT 99.1

Exhibit

July 25, 2016     Exhibit 99.1

Park National Corporation reports financial results

for second quarter and first half of 2016

NEWARK, Ohio - Park National Corporation (Park) (NYSE MKT: PRK) today announced financial results for the second quarter and first half of 2016 (three and six months ended June 30, 2016). The board of directors also declared a quarterly cash dividend of $0.94 per common share, payable on September 9, 2016 to common shareholders of record as of August 19, 2016.

Park’s second quarter net income in 2016 was $20.0 million, a 4.9 percent decrease from $21.0 million for the same period in 2015. Net income per diluted common share for the second quarter of 2016 was $1.30, compared to $1.37 in the second quarter of 2015.

Park’s net income for the first half of 2016 was $38.7 million, compared to $40.1 million for the same period in 2015, a decrease of 3.5 percent. Net income per diluted common share for the first half of 2016 was $2.51, compared to $2.60 in the same period of 2015.

“Advancements in our consumer lending operations have helped us respond to requests even more swiftly and thoroughly,” said Park Chief Executive Officer David L. Trautman. “The service style of our local lenders continues to be a driver of growth for our organization, and we look forward to the rest of 2016.”

In the first half of 2016, The Park National Bank grew consumer loans by $46.5 million (9.6 percent annualized) and commercial loans by $24.0 million (1.9 percent annualized). Total loans for the bank were $5.09 billion at June 30, 2016, up $227.7 million (4.68 percent) from $4.86 billion at June 30, 2015.

The bank generated net income of $21.1 million for the second quarter of 2016, compared to $21.3 million for the same period of 2015. The bank’s first half of 2016 net income was $42.8 million, compared to $40.5 million for the first half of 2015. The bank had total assets of $7.4 billion at June 30, 2016, rising from $7.2 billion at each of December 31, 2015 and June 30, 2015.

About Park National Corporation

Headquartered in Newark, Ohio, Park National Corporation had $7.4 billion in total assets (as of June 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…

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

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

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Park cautions that any forward-looking statements contained in this 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: 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 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; 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

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Financial Highlights
Three months ended June 30, 2016, March 31, 2016, and June 30, 2015
	2016			2016			2015				Percent change vs.
(in thousands, except share and per share data)	2nd QTR			1st QTR			2nd QTR				1Q '16		2Q '15
INCOME STATEMENT:
Net interest income	$	57,485		$	59,819		$	56,515			(3.9)	%	1.7	%
Provision for loan losses	2,637			910			1,612				189.8	%	63.6	%
Other income	18,736			17,389			19,191				7.7	%	(2.4)	%
Other expense	45,306			49,899			44,667				(9.2)	%	1.4	%
Income before income taxes	$	28,278		$	26,399		$	29,427			7.1	%	(3.9)	%
Income taxes	8,280			7,713			8,388				7.4	%	(1.3)	%
Net income	$	19,998		$	18,686		$	21,039			7.0	%	(4.9)	%
MARKET DATA:
Earnings per common share - basic (b)	$	1.30		$	1.22		$	1.37			6.6	%	(5.1	)%
Earnings per common share - diluted (b)	1.30			1.21			1.37				7.4	%	(5.1	)%
Cash dividends per common share	0.94			0.94			0.94				—	%	—	%
Book value per common share at period end	48.26			47.60			45.93				1.4	%	5.1	%
Stock price per common share at period end	91.78			90.00			87.37				2.0	%	5.0	%
Market capitalization at period end	1,407,060			1,379,773			1,342,954				2.0	%	4.8	%
Weighted average common shares - basic (a)	15,330,802			15,330,813			15,370,882				—	%	(0.3	)%
Weighted average common shares - diluted (a)	15,399,283			15,406,508			15,407,881				—	%	(0.1	)%
Common shares outstanding at period end	15,330,796			15,330,807			15,370,877				—	%	(0.3	)%
PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)	1.09		%	1.01		%	1.16		%		7.9	%	(6.0)	%
Return on average equity (a)(b)	10.98		%	10.38		%	11.90		%		5.8	%	(7.7)	%
Yield on loans	4.64		%	4.80		%	4.68		%		(3.3)	%	(0.9)	%
Yield on investments	2.30		%	2.38		%	2.49		%		(3.4)	%	(7.6)	%
Yield on money markets	0.51		%	0.51		%	0.25		%		—	%	104.0	%
Yield on earning assets	4.00		%	4.11		%	3.96		%		(2.7)	%	1.0	%
Cost of interest bearing deposits	0.32		%	0.31		%	0.30		%		3.2	%	6.7	%
Cost of borrowings	2.50		%	2.35		%	2.46		%		6.4	%	1.6	%
Cost of paying liabilities	0.74		%	0.73		%	0.72		%		1.4	%	2.8	%
Net interest margin (g)	3.43		%	3.55		%	3.40		%		(3.4)	%	0.9	%
Efficiency ratio (g)	59.01		%	64.26		%	58.87		%		(8.2)	%	0.2	%
OTHER RATIOS (NON - GAAP):
Annualized return on average tangible assets (a)(b)(e)	1.10		%	1.02		%	1.17		%		7.8	%	(6.0	)%
Annualized return on average tangible equity (a)(b)(c)	12.18		%	11.53		%	13.25		%		5.6	%	(8.1	)%
Tangible book value per share (d)	$	43.54		$	42.88		$	41.22			1.5	%	5.6	%
N.M. - Not meaningful
Note: Explanations (a) - (g) are included at the end of the financial highlights.

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Financial Highlights (continued)
Three months ended June 30, 2016, March 31, 2016, and June 30, 2015
											Percent change vs.
BALANCE SHEET:	June 30, 2016			March 31, 2016			June 30, 2015				1Q '16		2Q '15
Investment securities	$	1,548,006		$	1,601,767		$	1,550,103			(3.4)	%	(0.1)	%
Loans	5,127,644			5,062,185			4,900,974				1.3	%	4.6	%
Allowance for loan losses	58,699			56,948			57,427				3.1	%	2.2	%
Goodwill	72,334			72,334			72,334				—	%	—	%
Other real estate owned (OREO)	17,566			17,745			21,876				(1.0)	%	(19.7)	%
Total assets	7,431,610			7,428,185			7,309,569				—	%	1.7	%
Total deposits	5,623,879			5,606,790			5,512,366				0.3	%	2.0	%
Borrowings	996,905			1,004,279			1,018,680				(0.7)	%	(2.1)	%
Shareholders' equity	739,887			729,701			705,963				1.4	%	4.8	%
Tangible equity (d)	667,553			657,367			633,629				1.5	%	5.4	%
Nonperforming loans	131,456			118,960			113,795				10.5	%	15.5	%
Nonperforming assets	149,022			136,705			135,671				9.0	%	9.8	%
ASSET QUALITY RATIOS:
Loans as a % of period end total assets	69.00		%	68.15		%	67.05		%		1.2	%	2.9	%
Nonperforming loans as a % of period end loans	2.56		%	2.35		%	2.32		%		8.9	%	10.3	%
Nonperforming assets as a % of period end loans + OREO	2.90		%	2.69		%	2.76		%		7.8	%	5.1	%
Allowance for loan losses as a % of period end loans	1.14		%	1.12		%	1.17		%		1.8	%	(2.6)	%
Net loan charge-offs (recoveries)	$	886		$	456		$	(407	)		N.M.		N.M.
Annualized net loan charge-offs (recoveries) as a % of average loans (a)	0.07		%	0.04		%	(0.03)		%		N.M.		N.M.
CAPITAL & LIQUIDITY:
Total equity / Period end total assets	9.96		%	9.82		%	9.66		%		1.4	%	3.1	%
Tangible equity (d) / Tangible assets (f)	9.07		%	8.94		%	8.76		%		1.5	%	3.5	%
Average equity / Average assets (a)	9.92		%	9.78		%	9.76		%		1.4	%	1.6	%
Average equity / Average loans (a)	14.41		%	14.34		%	14.60		%		0.5	%	(1.3)	%
Average loans / Average deposits (a)	91.18		%	91.31		%	88.80		%		(0.1)	%	2.7	%
N.M. - Not meaningful
Note: Explanations (a) - (h) are included at the end of the financial highlights.

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Financial Highlights
Six months ended June 30, 2016 and 2015
(in thousands, except share and per share data)		2016				2015					Percent change vs. 2015
INCOME STATEMENT:
Net interest income		$	117,304			$	112,050				4.7	%
Provision for loan losses		3,547				3,244					9.3	%
Other income		36,125				38,064					(5.1	)%
Total other expense		95,205				90,387					5.3	%
Income before income taxes		$	54,677			$	56,483				(3.2	)%
Income taxes		15,993				16,400					(2.5	)%
Net income		$	38,684			$	40,083				(3.5	)%
MARKET DATA:
Earnings per common share - basic (b)		$	2.52			$	2.61				(3.4	)%
Earnings per common share - diluted (b)		2.51				2.60					(3.5	)%
Cash dividends per common share		1.88				1.88					—	%
Weighted average common shares - basic (a)		15,330,808				15,375,026					(0.3	)%
Weighted average common shares - diluted (a)		15,402,896				15,411,920					(0.1	)%
PERFORMANCE RATIOS: (Annualized)
Return on average assets (a)(b)		1.05		%		1.12		%			(6.3	)%
Return on average common equity (a)(b)		10.68		%		11.43		%			(6.6	)%
Yield on loans		4.72		%		4.68		%			0.9	%
Yield on investments		2.34		%		2.53		%			(7.5	)%
Yield on earning assets		4.06		%		3.97		%			2.3	%
Cost of interest bearing deposits		0.31		%		0.30		%			3.3	%
Cost of borrowings		2.42		%		2.40		%			0.8	%
Cost of paying liabilities		0.73		%		0.73		%			—	%
Net interest margin (g)		3.49		%		3.40		%			2.6	%
Efficiency ratio (g)		61.65		%		60.08		%			2.6	%
ASSET QUALITY RATIOS:
Net loan charge-offs		$	1,342			$	169				N.M.
Annualized net loan charge-offs as a % of average loans (a)		0.05		%		0.01		%			N.M.
CAPITAL & LIQUIDITY:
Average stockholders' equity / Average assets (a)		9.85		%		9.77		%			0.8	%
Average stockholders' equity / Average loans (a)		14.38		%		14.62		%			(1.6	)%
Average loans / Average deposits (a)		91.25		%		89.56		%			1.9	%
OTHER RATIOS (NON-GAAP):
Annualized return on average tangible assets (a)(b)(e)		1.06		%		1.13		%			(6.2	)%
Annualized return on average tangible common equity (a)(b)(c)		11.86		%		12.73		%			(6.8	)%

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Financial Highlights (continued)
(a) Averages are for the three months ended June 30, 2016, March 31, 2016 and June 30, 2015 and the six months ended June 30, 2016 and June 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										SIX MONTHS ENDED
	June 30, 2016			March 31, 2016			June 30, 2015				June 30, 2016			June 30, 2015
AVERAGE SHAREHOLDERS' EQUITY	$	732,759		$	724,316		$	709,031			$	728,537		$	707,047
Less: Average goodwill	72,334			72,334			72,334				72,334			72,334
AVERAGE TANGIBLE EQUITY	$	660,425		$	651,982		$	636,697			$	656,203		$	634,713
(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:
	June 30, 2016			March 31, 2016			June 30, 2015
SHAREHOLDERS' EQUITY	$	739,887		$	729,701		$	705,963
Less: Goodwill	72,334			72,334			72,334
TANGIBLE EQUITY	$	667,553		$	657,367		$	633,629
(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										SIX MONTHS ENDED
	June 30, 2016			March 31, 2016			June 30, 2015				June 30, 2016			June 30, 2015
AVERAGE ASSETS	$	7,383,703		$	7,405,345		$	7,265,755			$	7,394,524		$	7,237,605
Less: Average goodwill	72,334			72,334			72,334				72,334			72,334
AVERAGE TANGIBLE ASSETS	$	7,311,369		$	7,333,011		$	7,193,421			$	7,322,190		$	7,165,271
(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:
	June 30, 2016			March 31, 2016			June 30, 2015
TOTAL ASSETS	$	7,431,610		$	7,428,185		$	7,309,569
Less: Goodwill	72,334			72,334			72,334
TANGIBLE ASSETS	$	7,359,276		$	7,355,851		$	7,237,235
(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										SIX MONTHS ENDED
	June 30, 2016			March 31, 2016			June 30, 2015				June 30, 2016			June 30, 2015
Interest income	$	67,011		$	69,308		$	65,804			$	136,319		$	130,822
Fully taxable equivalent adjustment	555			444			170				999			331
Fully taxable equivalent interest income	$	67,566		$	69,752		$	65,974			$	137,318		$	131,153
Interest expense	9,526			9,489			9,289				19,015			18,772
Fully taxable equivalent net interest income	$	58,040		$	60,263		$	56,685			$	118,303		$	112,381

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

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)		2016				2015				2016				2015
Interest income:
Interest and fees on loans		$	58,401			$	56,463			$	118,453			$	111,875
Interest on:
Obligations of U.S. Government, its agencies
and other securities		7,770				9,113				16,379				18,502
Obligations of states and political subdivisions		591				—				964				—
Other interest income		249				228				523				445
Total interest income		67,011				65,804				136,319				130,822
Interest expense:
Interest on deposits:
Demand and savings deposits		933				556				1,757				1,042
Time deposits		2,389				2,542				4,776				5,164
Interest on borrowings		6,204				6,191				12,482				12,566
Total interest expense		9,526				9,289				19,015				18,772
Net interest income		57,485				56,515				117,304				112,050
Provision for loan losses		2,637				1,612				3,547				3,244
Net interest income after provision for loan losses		54,848				54,903				113,757				108,806
Other income		18,736				19,191				36,125				38,064
Other expense		45,306				44,667				95,205				90,387
Income before income taxes		28,278				29,427				54,677				56,483
Income taxes		8,280				8,388				15,993				16,400
Net income		$	19,998			$	21,039			$	38,684			$	40,083
Per Common Share:
Net income - basic		$	1.30			$	1.37			$	2.52			$	2.61
Net income - diluted		$	1.30			$	1.37			$	2.51			$	2.60
Weighted average shares - basic		15,330,802				15,370,882				15,330,808				15,375,026
Weighted average shares - diluted		15,399,283				15,407,881				15,402,896				15,411,920
Cash Dividends Declared		$	0.94			$	0.94			$	1.88			$	1.88

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Consolidated Balance Sheets
(in thousands, except share data)	June 30, 2016			December 31, 2015
Assets
Cash and due from banks	$	119,873		$	119,412
Money market instruments	196,016			30,047
Investment securities	1,548,006			1,643,879
Loans	5,127,644			5,068,085
Allowance for loan losses	(58,699		)	(56,494		)
Loans, net	5,068,945			5,011,591
Bank premises and equipment, net	58,962			59,493
Goodwill	72,334			72,334
Other real estate owned	17,566			18,651
Other assets	349,908			355,947
Total assets	$	7,431,610		$	7,311,354
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing	$	1,378,053		$	1,404,032
Interest bearing	4,245,826			3,943,610
Total deposits	5,623,879			5,347,642
Borrowings	996,905			1,177,347
Other liabilities	70,939			73,010
Total liabilities	$	6,691,723		$	6,597,999
Shareholders' Equity:
Preferred shares (200,000 shares authorized; no shares outstanding at June 30, 2016 and December 31, 2015)	$	—		$	—
Common shares (No par value; 20,000,000 shares authorized in 2016 and 2015; 16,150,835 shares issued at June 30, 2016 and 16,150,854 shares issued at December 31, 2015)	304,756			303,966
Accumulated other comprehensive income (loss), net of taxes	389			(15,643		)
Retained earnings	517,215			507,505
Treasury shares (820,039 shares at both June 30, 2016 and December 31, 2015)	(82,473		)	(82,473		)
Total shareholders' equity	$	739,887		$	713,355
Total liabilities and shareholders' equity	$	7,431,610		$	7,311,354

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
	Three Months Ended							Six Months Ended
	June 30,							June 30,
(in thousands)	2016			2015				2016			2015
Assets
Cash and due from banks	$	111,709		$	116,542			$	115,345		$	119,603
Money market instruments	196,226			361,994				206,805			351,591
Investment securities	1,536,331			1,481,460				1,549,263			1,485,978
Loans	5,083,802			4,857,799				5,066,565			4,836,696
Allowance for loan losses	(57,016		)	(56,291		)		(57,008		)	(55,664		)
Loans, net	5,026,786			4,801,508				5,009,557			4,781,032
Bank premises and equipment, net	59,293			57,978				59,435			57,272
Goodwill	72,334			72,334				72,334			72,334
Other real estate owned	17,427			22,661				17,865			22,991
Other assets	363,597			351,278				363,920			346,804
Total assets	$	7,383,703		$	7,265,755			$	7,394,524		$	7,237,605
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing	$	1,400,195		$	1,303,420			$	1,379,096		$	1,283,977
Interest bearing	4,175,344			4,166,835				4,173,605			4,116,789
Total deposits	5,575,539			5,470,255				5,552,701			5,400,766
Borrowings	998,195			1,007,975				1,035,505			1,055,081
Other liabilities	77,210			78,494				77,781			74,711
Total liabilities	$	6,650,944		$	6,556,724			$	6,665,987		$	6,530,558
Shareholders' Equity:
Preferred shares	$	—		$	—			$	—		$	—
Common shares	304,472			303,431				304,229			303,270
Accumulated other comprehensive loss, net of taxes	(5,002		)	(7,224		)		(6,724		)	(7,638		)
Retained earnings	515,762			492,046				513,505			490,295
Treasury shares	(82,473		)	(79,222		)		(82,473		)	(78,880		)
Total shareholders' equity	$	732,759		$	709,031			$	728,537		$	707,047
Total liabilities and shareholders' equity	$	7,383,703		$	7,265,755			$	7,394,524		$	7,237,605

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters
	2016			2016			2015			2015			2015
(in thousands, except per share data)	2nd QTR			1st QTR			4th QTR			3rd QTR			2nd QTR
Interest income:
Interest and fees on loans	$	58,401		$	60,052		$	58,424		$	57,680		$	56,463
Interest on:
Obligations of U.S. Government, its agencies and other securities	7,770			8,609			8,360			9,163			9,113
Obligations of states and political subdivisions	591			373			170			12			—
Other interest income	249			274			211			232			228
Total interest income	67,011			69,308			67,165			67,087			65,804
Interest expense:
Interest on deposits:
Demand and savings deposits	933			824			573			614			556
Time deposits	2,389			2,387			2,453			2,508			2,542
Interest on borrowings	6,204			6,278			6,272			6,250			6,191
Total interest expense	9,526			9,489			9,298			9,372			9,289
Net interest income	57,485			59,819			57,867			57,715			56,515
Provision for (recovery of) loan losses	2,637			910			(658		)	2,404			1,612
Net interest income after provision for (recovery of) loan losses	54,848			58,909			58,525			55,311			54,903
Other income	18,736			17,389			19,296			20,191			19,191
Other expense	45,306			49,899			48,798			47,429			44,667
Income before income taxes	28,278			26,399			29,023			28,073			29,427
Income taxes	8,280			7,713			8,134			8,033			8,388
Net income	$	19,998		$	18,686		$	20,889		$	20,040		$	21,039
Per Common Share:
Net income - basic	$	1.30		$	1.22		$	1.36		$	1.30		$	1.37
Net income - diluted	$	1.30		$	1.21		$	1.36		$	1.30		$	1.37

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Detail of other income and other expense - Linked Quarters
	2016			2016			2015			2015			2015
(in thousands)	2nd QTR			1st QTR			4th QTR			3rd QTR			2nd QTR
Other income:
Income from fiduciary activities	$	5,438		$	5,113		$	5,140		$	4,933		$	5,210
Service charges on deposits	3,575			3,423			3,777			3,909			3,684
Other service income	3,351			2,574			2,861			3,251			3,025
Checkcard fee income	3,868			3,532			3,902			3,643			3,665
Bank owned life insurance income	1,049			1,197			1,245			1,574			1,086
ATM fees	570			583			588			648			614
OREO valuation adjustments	(221		)	(118		)	(319		)	(718		)	(251		)
Gain on the sale of OREO, net	162			134			175			243			513
Gain on sale of investments	—			—			88			—			—
Miscellaneous	944			951			1,839			2,708			1,645
Total other income	$	18,736		$	17,389		$	19,296		$	20,191		$	19,191
Other expense:
Salaries	$	21,256		$	21,554		$	22,520		$	21,692		$	20,995
Employee benefits	4,894			4,773			4,161			6,721			4,729
Occupancy expense	2,639			2,548			2,257			2,469			2,381
Furniture and equipment expense	3,416			3,443			3,069			3,044			2,831
Data processing fees	1,373			1,217			1,190			1,383			1,197
Professional fees and services	5,401			6,667			7,751			5,424			5,583
Marketing	1,073			1,111			975			1,058			937
Insurance	1,438			1,411			1,407			1,399			1,362
Communication	1,353			1,221			1,321			1,245			1,233
State tax expense	798			926			857			779			883
Miscellaneous	1,665			5,028			3,290			2,215			2,536
Total other expense	$	45,306		$	49,899		$	48,798		$	47,429		$	44,667

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Asset Quality Information
							Year ended December 31,
(in thousands, except ratios)	June 30, 2016			March 31, 2016			2015			2014				2013			2012
Allowance for loan losses:
Allowance for loan losses, beginning of period	$	56,948		$	56,494		$	54,352		$	59,468			$	55,537		$	68,444
Charge-offs	4,419			3,401			14,290			24,780			(B)	19,153			61,268			(A)
Recoveries	3,533			2,945			11,442			26,997				19,669			12,942
Net charge-offs (recoveries)	886			456			2,848			(2,217		)		(516		)	48,326
Provision for (recovery of) loan losses	2,637			910			4,990			(7,333		)		3,415			35,419
Allowance for loan losses, end of period	$	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	$	58,699		$	56,948		$	56,494		$	54,352			$	59,468		$	55,537
Specific reserves	6,287			4,930			4,191			3,660				10,451			8,276
General reserves	$	52,412		$	52,018		$	52,303		$	50,692			$	49,017		$	47,261
Total loans	$	5,127,644		$	5,062,185		$	5,068,085		$	4,829,682			$	4,620,505		$	4,450,322
Impaired commercial loans	90,828			78,117			80,599			73,676				112,304			137,238
Total loans less impaired commercial loans	$	5,036,816		$	4,984,068		$	4,987,486		$	4,756,006			$	4,508,201		$	4,313,084
Asset Quality Ratios:
Annualized net charge-offs (recoveries) as a % of average loans	0.07		%	0.04		%	0.06		%	(0.05)		%		(0.01)		%	1.10		%
Allowance for loan losses as a % of period end loans	1.14		%	1.12		%	1.11		%	1.13		%		1.29		%	1.25		%
General reserves as a % of total loans less impaired commercial loans	1.04		%	1.04		%	1.05		%	1.07		%		1.09		%	1.10		%
Nonperforming Assets - Park National Corporation:
Nonaccrual loans	$	111,429		$	102,625		$	95,887		$	100,393			$	135,216		$	155,536
Accruing troubled debt restructuring	17,722			14,999			24,979			16,254				18,747			29,800
Loans past due 90 days or more	2,305			1,336			1,921			2,641				1,677			2,970
Total nonperforming loans	$	131,456		$	118,960		$	122,787		$	119,288			$	155,640		$	188,306
Other real estate owned - Park National Bank	7,038			6,846			7,456			10,687				11,412			14,715
Other real estate owned - SEPH	10,528			10,899			11,195			11,918				23,224			21,003
Total nonperforming assets	$	149,022		$	136,705		$	141,438		$	141,893			$	190,276		$	224,024
Percentage of nonaccrual loans to period end loans	2.17		%	2.03		%	1.89		%	2.08		%		2.93		%	3.49		%
Percentage of nonperforming loans to period end loans	2.56		%	2.35		%	2.42		%	2.47		%		3.37		%	4.23		%
Percentage of nonperforming assets to period end loans	2.91		%	2.70		%	2.79		%	2.94		%		4.12		%	5.03		%
Percentage of nonperforming assets to period end total assets	2.01		%	1.84		%	1.93		%	2.03		%		2.87		%	3.37		%

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com

PARK NATIONAL CORPORATION
Asset Quality Information (continued)
							Year ended December 31,
(in thousands, except ratios)	June 30, 2016			March 31, 2016			2015			2014				2013			2012
Nonperforming Assets - Park National Bank and Guardian:
Nonaccrual loans	$	97,642		$	88,351		$	81,468		$	77,477			$	99,108		$	100,244
Accruing troubled debt restructuring	17,722			14,999			24,979			16,157				18,747			29,800
Loans past due 90 days or more	2,305			1,336			1,921			2,641				1,677			2,970
Total nonperforming loans	$	117,669		$	104,686		$	108,368		$	96,275			$	119,532		$	133,014
Other real estate owned - Park National Bank	7,038			6,846			7,456			10,687				11,412			14,715
Total nonperforming assets	$	124,707		$	111,532		$	115,824		$	106,962			$	130,944		$	147,729
Percentage of nonaccrual loans to period end loans	1.91		%	1.75		%	1.61		%	1.61		%		2.16		%	2.28		%
Percentage of nonperforming loans to period end loans	2.30		%	2.07		%	2.14		%	2.00		%		2.61		%	3.03		%
Percentage of nonperforming assets to period end loans	2.44		%	2.21		%	2.29		%	2.23		%		2.86		%	3.36		%
Percentage of nonperforming assets to period end total assets	1.69		%	1.52		%	1.60		%	1.55		%		2.01		%	2.27		%
Nonperforming Assets - SEPH/Vision Bank (retained portfolio):
Nonaccrual loans	$	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		$	14,274		$	14,419		$	23,013			$	36,108		$	55,292
Other real estate owned - SEPH	10,528			10,899			11,195			11,918				23,224			21,003
Total nonperforming assets	$	24,315		$	25,173		$	25,614		$	34,931			$	59,332		$	76,295
New nonaccrual loan information - Park National Corporation
Nonaccrual loans, beginning of period	$	102,625		$	95,887		$	100,393		$	135,216			$	155,536		$	195,106
New nonaccrual loans	26,858			21,339			80,791			70,059				67,398			83,204
Resolved nonaccrual loans	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	$	111,429		$	102,625		$	95,887		$	100,393			$	135,216		$	155,536
New nonaccrual loan information - Ohio-based operations
Nonaccrual loans, beginning of period	$	88,351		$	81,468		$	77,477		$	99,108			$	100,244		$	96,113
New nonaccrual loans - Ohio-based operations	26,735			21,339			80,791			69,389				66,197			68,960
Resolved nonaccrual loans	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	$	97,642		$	88,351		$	81,468		$	77,477			$	99,108		$	100,244
New nonaccrual loan information - SEPH/Vision Bank
Nonaccrual loans, beginning of period	$	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		$	14,274		$	14,419		$	22,916			$	36,108		$	55,292
Impaired Commercial Loan Portfolio Information (period end):
Unpaid principal balance	$	115,186		$	106,539		$	109,304		$	106,156			$	175,576		$	242,345
Prior charge-offs	24,358			28,422			28,705			32,480				63,272			105,107
Remaining principal balance	90,828			78,117			80,599			73,676				112,304			137,238
Specific reserves	6,287			4,930			4,191			3,660				10,451			8,276
Book value, after specific reserve	$	84,541		$	73,187		$	76,408		$	70,016			$	101,853		$	128,962

Park National Corporation

50 N. Third Street, Newark, Ohio 43055

www.parknationalcorp.com