Segment Information

The Corporation is a financial holding company headquartered in Newark, Ohio. The operating segments for the Corporation are its chartered national bank subsidiary, The Park National Bank (headquartered in Newark, Ohio) (“PNB”), SE Property Holdings, LLC (“SEPH”), and Guardian Financial Services Company (“GFSC”).

Management is required to disclose information about the different types of business activities in which a company engages and also information on the different economic environments in which a company operates, so that the users of the financial statements can better understand the company’s performance, better understand the potential for future cash flows, and make more informed judgments about the company as a whole. Park has three operating segments, as: (i) discrete financial information is available for each operating segment and (ii) the segments are aligned with internal reporting to Park’s Chief Executive Officer and President, who is the chief operating decision maker.



	Operating Results for the three months ended June 30, 2017
(In thousands)	PNB		GFSC			SEPH			All Other			Total
Net interest income (expense)	$	57,822	$	1,491		$	282		$	183		$	59,778
Provision for (recovery of) loan losses	4,574		373			(366		)	—			4,581
Other income (loss)	19,179		(8		)	(21		)	101			19,251
Other expense	43,877		825			1,238			2,166			48,106
Income (loss) before income taxes	$	28,550	$	285		$	(611	)	$	(1,882	)	$	26,342
Federal income taxes (benefit)	8,387		99			(213		)	(963		)	7,310
Net income (loss)	$	20,163	$	186		$	(398	)	$	(919	)	$	19,032

Assets (as of June 30, 2017)	$	7,754,898	$	33,860		$	24,595		$	18,739		$	7,832,092



	Operating Results for the three months ended June 30, 2016
(In thousands)	PNB		GFSC			SEPH			All Other			Total
Net interest income (expense)	$	56,006	$	1,440		$	71		$	(32	)	$	57,485
Provision for (recovery of) loan losses	1,362		1,444			(169		)	—			2,637
Other income	18,508		—			112			116			18,736
Other expense (income)	42,731		(966		)	1,332			2,209			45,306
Income (loss) before income taxes	$	30,421	$	962		$	(980	)	$	(2,125	)	$	28,278
Federal income taxes (benefit)	9,343		336			(343		)	(1,056		)	8,280
Net income (loss)	$	21,078	$	626		$	(637	)	$	(1,069	)	$	19,998

Assets (as of June 30, 2016)	$	7,351,293	$	32,546		$	32,822		$	14,949		$	7,431,610



	Operating Results for the six months ended June 30, 2017
(In thousands)	PNB		GFSC			SEPH			All Other			Total
Net interest income (expense)	$	115,302	$	2,969		$	483		$	(24	)	$	118,730
Provision for (recovery of) loan losses	5,294		810			(647		)	—			5,457
Other income (loss)	36,890		(8		)	(21		)	(103		)	36,758
Other expense	87,680		1,561			2,014			4,313			95,568
Income (loss) before income taxes	$	59,218	$	590		$	(905	)	$	(4,440	)	$	54,463
Federal income taxes (benefit)	17,569		206			(316		)	(2,295		)	15,164
Net income (loss)	$	41,649	$	384		$	(589	)	$	(2,145	)	$	39,299



	Operating Results for the six months ended June 30, 2016
(In thousands)	PNB		GFSC			SEPH			All Other			Total
Net interest income (expense)	$	113,161	$	2,944		$	1,232		$	(33	)	$	117,304
Provision for (recovery of) loan losses	2,895		1,971			(1,319		)	—			3,547
Other income	35,731		—			146			248			36,125
Other expense	84,091		2,832			2,736			5,546			95,205
Income (loss) before income taxes	$	61,906	$	(1,859	)	$	(39	)	$	(5,331	)	$	54,677
Federal income taxes (benefit)	19,084		(649		)	(14		)	(2,428		)	15,993
Net income (loss)	$	42,822	$	(1,210	)	$	(25	)	$	(2,903	)	$	38,684

The operating results of the Parent Company in the “All Other” column are used to reconcile the segment totals to the consolidated condensed statements of income for the three-month and six-month periods ended June 30, 2017 and 2016. The reconciling amounts for consolidated total assets for the periods ended June 30, 2017 and 2016 consisted of the elimination of intersegment borrowings and the assets of the Parent Company which were not eliminated.