10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2006

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number: 1-13006

Park National Corporation

(Exact name of Registrant as specified in its charter)

Ohio	31-1179518
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
50 North Third Street, P.O. Box 3500, Newark, Ohio	43058-3500
(Address of principal executive offices)	(Zip Code)

(740) 349-8451
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Shares, without par value	American Stock Exchange LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. þ Yes o No

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes þ No

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ            Accelerated filer o            Non-accelerated filer o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). o Yes þ No

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the Registrant’s most recently completed second fiscal quarter: As of June 30, 2006, the aggregate market value of the Registrant’s common shares (the only common equity of the Registrant) held by non-affiliates of the Registrant was $1,264,808,216 based on the closing sale price as reported on the American Stock Exchange LLC.

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date.

Class	Outstanding at February 21, 2007
Common Shares, without par value	13,923,994 common shares

DOCUMENTS INCORPORATED BY REFERENCE

Document	Parts Into Which Incorporated
Portions of the Registrant’s 2006 Annual Report	Parts I and II
Portions of the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on April 16, 2007	Part III

TABLE OF CONTENTS

PART I
	ITEM 1. BUSINESS
	ITEM 1A. RISK FACTORS
	ITEM 1B. UNRESOLVED STAFF COMMENTS
	ITEM 2. PROPERTIES
	ITEM 3. LEGAL PROCEEDINGS
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
PART II
	ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
	ITEM 6. SELECTED FINANCIAL DATA
	ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
	ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
	ITEM 9A. CONTROLS AND PROCEDURES
	ITEM 9B. OTHER INFORMATION
PART III
	ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATYE GOVERNANCE
	ITEM 11. EXECUTIVE COMPENSATION
	ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
	ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
	ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
PART IV
	ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
SIGNATURES
INDEX TO EXHIBITS
EX-2.1(B)
EX-4
EX-10.7(A)
EX-10.7(B)
EX-10.17(B)
EX-12
EX-13
EX-23.1
EX-23.2
EX-24
EX-31.1
EX-31.2
EX-32
EX-99.1(B)
EX-99.2(B)
EX-99.3(B)
EX-99.4(B)

PART I

ITEM 1. BUSINESS.

General

     Park National Corporation (“Park”) is a bank holding company registered under the Bank Holding Company Act of 1956, as amended (the “Bank Holding Company Act”). Park was incorporated under Ohio law in 1992. Park’s principal executive offices are located at 50 North Third Street, Newark, Ohio 43055, and its telephone number is (740) 349-8451. Park’s common shares are listed on the American Stock Exchange LLC (“AMEX”) under the symbol “PRK.”

     Park maintains an Internet website at www.parknationalcorp.com (this uniform resource locator, or URL, is an inactive textual reference only and is not intended to incorporate Park’s Internet website into this Annual Report on Form 10-K). Park makes available free of charge on or through its Internet website, Park’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after Park electronically files such material with, or furnishes it to, the Securities and Exchange Commission (the “SEC”).

     Park’s principal business consists of owning and supervising its subsidiaries. Although Park directs the overall policies of its subsidiaries, including lending policies and financial resources, most day-to-day affairs are managed by its subsidiaries’ respective officers.

Subsidiary Banks

     Through its subsidiary banks:

• The Park National Bank (“Park National Bank”), a national banking association with its main office in Newark, Ohio and financial service offices in Butler, Clermont, Delaware, Fairfield, Franklin, Hamilton, Licking and Montgomery Counties in Ohio and Boone County in Kentucky;

• The Richland Trust Company (“Richland Trust Company”), an Ohio state-chartered bank with its main office in Mansfield, Ohio and financial service offices in Richland County, Ohio;

• Century National Bank, a national banking association with its main office in Zanesville, Ohio and financial service offices in Athens, Coshocton, Hocking, Muskingum, Perry and Tuscarawas Counties in Ohio;

• The First-Knox National Bank of Mount Vernon (“First-Knox National Bank”), a national banking association with its main office in Mount Vernon, Ohio and financial service offices in Ashland, Holmes, Knox, Morrow and Richland Counties in Ohio;

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• United Bank, N.A. (“United Bank”), a national banking association with its main office in Bucyrus, Ohio and financial service offices in Crawford and Marion Counties in Ohio;

• Second National Bank, a national banking association with its main office in Greenville, Ohio and offices in Darke and Mercer Counties in Ohio;

• The Security National Bank and Trust Co. (“Security National Bank”), a national banking association with its main office in Springfield, Ohio and financial service offices in Clark, Fayette, Greene and Miami Counties in Ohio; and

• The Citizens National Bank of Urbana (“Citizens National Bank”), a national banking association with its main office in Urbana, Ohio and financial service offices in Champaign and Madison Counties in Ohio,

Through its subsidiary banks, Park engages in the commercial banking and trust business. This commercial banking and trust business is primarily conducted in small and medium population Ohio communities as of the date of this Annual Report on Form 10-K. Please see the discussion of the pending merger with Vision Bancshares, Inc. under the section captioned “Recent Developments — Pending Merger with Vision Bancshares, Inc.” below.

     Park National Bank operates through three banking divisions with the Park National Division headquartered in Newark, Ohio, the Fairfield National Division headquartered in Lancaster, Ohio, and The Park National Bank of Southwest Ohio & Northern Kentucky division headquartered in Milford, Ohio. First-Knox National Bank operates through two banking divisions with the First-Knox National Division headquartered in Mount Vernon, Ohio, and the Farmers and Savings Division headquartered in Loudonville, Ohio. Security National Bank also operates through two banking divisions with the Security National Division headquartered in Springfield, Ohio, and the Unity National Division (formerly The Third Savings and Loan Company) headquartered in Piqua, Ohio.

     Park’s subsidiary banks comprise Park’s reportable segments. Financial information about Park’s reportable segments is included in Note 20 of the Notes to Consolidated Financial Statements located on pages 60 and 61 of Park’s 2006 Annual Report. That financial information is incorporated herein by reference.

     At December 31, 2006 and as of the date of this Annual Report on Form 10-K, Park’s subsidiary banks operated 138 financial service offices and a network of 142 automated teller machines. These financial service offices span 29 Ohio counties — Ashland, Athens, Butler, Champaign, Clark, Clermont, Coshocton, Crawford, Darke, Delaware, Fairfield, Fayette, Franklin, Greene, Hamilton, Hocking, Holmes, Knox, Licking, Madison, Marion, Mercer, Miami, Montgomery, Morrow, Muskingum, Perry, Richland and Tuscarawas — as well as Boone County in northern Kentucky.

     Consolidated Computer Center, a division of Park National Bank, handles the data processing needs of Park’s subsidiaries.

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Consumer Finance Subsidiary

     Guardian Financial Services Company (“Guardian Finance”), an Ohio consumer finance company based in Hilliard, Ohio, also operates as a separate subsidiary of Park. Guardian Finance provides consumer finance services in the central Ohio area. As of the date of this Annual Report on Form 10-K, Guardian Finance had eight financial service offices spanning seven counties in Ohio: Clark, Delaware, Fairfield, Franklin, Licking, Montgomery and Richland. Financial information about Guardian Finance is included in the “All Others” category for purposes of the reportable segment information included in Note 20 of the Notes to Consolidated Financial Statements located on pages 60 and 61 of Park’s 2006 Annual Report. This financial information is immaterial for purposes of separate disclosure.

Leasing Subsidiaries

     Scope Leasing, Inc. (“Scope Leasing”), a subsidiary of Park National Bank, specializes in aircraft financing. Scope Leasing’s customers include small businesses and entrepreneurs intending to use the aircraft for business or pleasure. Scope Leasing serves customers throughout the United States.

     Another subsidiary of Park National Bank, Park Leasing Company (“Park Leasing”), was formed in 2001 for the purpose of participating in an automobile leasing program with a major national insurance company. However, that program was terminated during the fourth quarter of 2004 and Park Leasing is winding down its operations.

Insurance Agency Subsidiary

     Park National Bank also has an insurance agency subsidiary, Park Insurance Group, Inc. (“Park Insurance Group”). Park Insurance Group was formed in 2002 and offers life insurance and other insurance products through licensed representatives who work for Park’s subsidiary banks. However, Park Insurance Group’s results to date have not been material to the consolidated entity.

Title Agency Subsidiary

     Park National Bank holds 80% of the voting membership interest of Park Title Agency, LLC. (“Park Title Agency”). Park Title Agency is a traditional title agency serving the central Ohio area.

Other Subsidiaries

     Park Investments, Inc., a subsidiary of Park National Bank, Richland Investments, Inc., a subsidiary of Richland Trust Company, and MFS Investments, Inc., a subsidiary of Century National Bank, operate as asset management companies. Their operations are not significant to the consolidated entity.

     Park Capital Investments, Inc. (“Park Capital”), a subsidiary of Park; Park National Capital LLC, whose members are Park Capital and Park National Bank; First-Knox National Capital LLC, whose members are Park Capital and First-Knox National Bank; Security National Capital LLC, whose members are Park Capital and Security National Bank; and Century National Capital LLC,

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whose members are Park Capital and Century National Bank, operate as capital management companies. Their operations are also not significant to the consolidated entity.

     Park’s remaining subsidiaries are inactive.

Recent Developments

Expansion within Ohio

     Park National Bank has concentrated on further expanding its operations in three metropolitan areas in Ohio during the past two years. The metropolitan areas are Columbus, Cincinnati and Dayton. During 2005, Park National Bank opened a financial service office in Worthington (near Columbus), opened a financial service office in West Chester (near Cincinnati) and relocated its downtown Dayton financial service office to the Dayton suburb of Centerville.

     On June 12, 2006, the seven financial service offices which had comprised the First Clermont Division of Park National Bank (located in Amelia, Eastgate (2 offices), Milford (2 offices), New Richmond and Owensville, Ohio) were combined with the three Park National Bank financial service offices in southwest Ohio (located in Cincinnati, Dayton and West Chester) to form The Park National Bank of Southwest Ohio & Northern Kentucky division. On September 11, 2006, Park National Bank converted its loan production office located in Florence, Kentucky (near Cincinnati) into a full-service financial service office. Since Kentucky law permits an out-of-state bank, such as Park National Bank, to establish a full-service branch in Kentucky only through a merger transaction, Park had created a wholly-owned subsidiary, The Park National Bank of Kentucky. Immediately after its formation, The Park National Bank of Kentucky was merged with and into Park National Bank. The Florence, Kentucky financial service office is part of The Park National Bank of Southwest Ohio & Northern Kentucky division.

     On December 18, 2006, Park completed the acquisition of Anderson Bank Company, an Ohio state-chartered commercial bank (“Anderson”), through the merger of Anderson into Park National Bank. The two offices of Anderson, located in Anderson Township on the east side of Cincinnati and in Amelia, Ohio, became part of The Park National Bank of Southwest Ohio & Northern Kentucky division. The shareholders of Anderson received aggregate consideration consisting of 86,137 common shares of Park (valued at $8.665 million or $100.60 per share) and $9.052 million in cash.

     Management of Park National Bank expects to continue to add to the financial service office locations in the Cincinnati, Columbus and Dayton markets over the next two years.

Pending Merger with Vision Bancshares, Inc.

     On September 14, 2006, Park and Vision Bancshares, Inc. (“Vision”) jointly announced the signing of an agreement and plan of merger (the “Vision Merger Agreement”) providing for the merger of Vision into Park. Vision is an Alabama bank holding company headquartered in Panama City, Florida. Vision has two community bank affiliates, both named Vision Bank. One bank is headquartered in Gulf Shores, Alabama (“Vision Alabama”) and the other in Panama City, Florida (“Vision Florida”). Pursuant to the terms of the Vision Merger Agreement, J. Daniel Sizemore is to

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become a director of Park as of the effective time of the merger. The Vision Merger Agreement provides that the members of the Boards of Directors of Vision Alabama and Vision Florida will continue to serve following the merger until their respective successors are duly qualified and elected. In addition, C. Daniel DeLawder, Park’s Chairman of the Board and Chief Executive Officer, will become a director of each of Vision Alabama and Vision Florida following the merger. As contemplated by the terms of the Vision Merger Agreement, on September 14, 2006, Park, together with Vision Alabama and Vision Florida, as applicable, entered into employment agreements with five executive officers of Vision (J. Daniel Sizemore (Chairman of the Board, Chief Executive Officer and President of Vision and Chairman of the Board and Chief Executive Officer of Vision Alabama and Vision Florida), William E. Blackmon (Executive Vice President and Chief Financial Officer of Vision and Vision Alabama), Andrew W. Braswell (Executive Vice President and Senior Lending Officer of Vision Alabama), Joey W. Ginn (President of Vision Florida), and Robert S. McKean (President of Vision Alabama)) as well as with seven other senior officers of Vision Alabama and Vision Florida. Each of these employment agreements will become effective at the effective time of the merger.

     At the special meeting of shareholders of Vision held on February 20, 2007, the Vision shareholders approved the Vision Merger Agreement.

     Park and Vision have submitted applications to the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), the Alabama Banking Department and the Florida Office of Financial Regulation seeking approval of the merger and the acquisition by Park of Vision Alabama and Vision Florida as a result of the merger. The application submitted to the Federal Reserve Board was approved on February 21, 2007. The application submitted to the Alabama Banking Department was approved on February 23, 2007. As of the date of this Annual Report on Form 10-K, the application submitted to the Florida Office of Financial Regulation was still pending. The approvals by the Federal Reserve Board and the Alabama Banking Department are subject to compliance by Park, Vision, Vision Alabama and Vision Florida with certain representations, commitments and covenants. In addition, the merger may not be consummated for 15 days after the date of the approval by the Federal Reserve Board, during which time the United States Department of Justice may bring an action challenging the merger on antitrust grounds.

     The merger transaction is also subject to the satisfaction of customary closing conditions in the Vision Merger Agreement. Park anticipates the transaction will close on or about March 9, 2007, assuming that all required conditions to closing have been satisfied.

     Under the terms of the Vision Merger Agreement, the shareholders of Vision are entitled to receive, in exchange for their shares of Vision common stock, either (a) cash, (b) Park common shares, or (c) a combination of cash and Park common shares, subject to the election and allocation procedures set forth in the Vision Merger Agreement. Park will cause the requests of the Vision shareholders to be allocated on a pro-rata basis so that 50% of the shares of Vision common stock outstanding at the effective time of the merger will be exchanged for cash at the rate of $25.00 per share of Vision common stock and the other 50% of the outstanding shares of Vision common stock will be exchanged for Park common shares at the exchange rate of 0.2475 Park common shares for each share of Vision common stock. This allocation is subject to adjustment for cash paid in lieu of fractional Park common shares in accordance with the terms of the Vision Merger Agreement.

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     As of January 8, 2007 (the record date for the Vision special meeting of shareholders), 6,114,518 shares of Vision common stock were outstanding and 828,834 shares of Vision common stock were subject to outstanding stock options with a weighted average exercise price of $8.21 per share. Each outstanding stock option (that is not exercised prior to the election deadline specified in the Vision Merger Agreement) granted under one of Vision’s equity-based compensation plans will be cancelled and extinguished and converted into the right to receive an amount of cash equal to (1) (a) $25.00 multiplied by (b) the number of shares of Vision common stock subject to the unexercised portion of the stock option minus (2) the aggregate exercise price for the shares of Vision common stock subject to the unexercised portion of the stock option.

     The cash paid to the shareholders of Vision will be funded through the working capital of Park.

     As of December 31, 2006, Vision, as consolidated with Vision Alabama and Vision Florida, had total assets of $691 million, total loans of $588 million and total deposits of $587 million. Vision Alabama and its 100 employees provide general retail and commercial banking services principally to customers in Baldwin County, Alabama through Vision Alabama’s seven locations in Gulf Shores, Orange Beach, Point Clear, Foley, Fairhope, Elberta and Daphne. Vision Florida and its 78 employees provide general retail and commercial banking services to customers in Bay, Gulf, Okaloosa and Walton Counties in the panhandle of Florida through Vision Florida’s eight full-service offices located in Panama City, Panama City Beach (2 offices), Santa Rosa Beach, Wewahitchka, Port St. Joe, Port St. Joe Beach and Destin. All of the branch locations of Vision Alabama and Vision Florida are leased properties except for the Wewahitchka, Port St. Joe and Port St. Joe Beach locations. The markets served by Vision Alabama and Vision Florida are expected to grow much faster than many of the non-metropolitan markets in which Park’s subsidiary banks operate in Ohio.

     Vision Alabama is a state bank organized under the laws of the State of Alabama and its deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to the maximum amount permitted by law. Vision Alabama is subject to regulation, supervision and regular examination by the Superintendent of the Alabama State Banking Department and the FDIC. Federal and state banking laws and regulations regulate, among other things, the scope of the banking business conducted by Vision Alabama, its loans and investments, reserves against deposits, mergers and acquisitions, borrowings, dividends, minimum capital requirements and the locations of branch offices and certain facilities. The relationships of Vision Alabama with its executive officers, directors and affiliates are also the subject to statutory and regulatory requirements.

     Under the Alabama Banking Code, a state bank may not declare or pay a dividend in excess of 90% of the net earnings of such bank until the surplus of the bank is equal to at least 20% of its capital, and thereafter the prior written approval of the Superintendent of the Alabama Banking Department is required if the total of all dividends declared by the bank in any calendar year exceeds the total of its net earnings for that year combined with its retained net earnings for the preceding two years less any required transfers to surplus. No dividends, withdrawals or transfers

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may be made from the bank’s surplus without prior written approval of the Superintendent of the Alabama Banking Department.

     Vision Florida is organized under the laws of the State of Florida and its deposits are insured by the FDIC up to the maximum amount permitted by law. Vision Florida is subject to regulation, supervision and regular examination by the State of Florida’s Office of Financial Regulation and the FDIC. Federal and state banking laws and regulations regulate, among other things, the scope of the banking business conducted by Vision Florida, its loans and investments, reserves against deposits, mergers and acquisitions, borrowings, dividends, minimum capital requirements and the locations of branch offices and certain facilities. The relationships of Vision Florida to its executive officers, directors and affiliates are also the subject of statutory and regulatory requirements.

     Under Florida law, a bank generally may pay dividends out of net profits for the period for which dividends are declared combined with retained net profits of the preceding two years. Before declaring a dividend on its common stock, a bank must carry 20% of its net profits for the preceding period that is covered by the dividend to its surplus fund, until the same shall at least equal the amount of its common and preferred stock then issued and outstanding. A bank may not declare any dividend at any time at which its net income from the current year combined with the retained net income from the preceding two years is a loss or which would cause the capital accounts of the bank to fall below the minimum amount required by law, regulation, order, or any written agreement with the office or a state or federal regulatory agency.

     Vision Bancshares Financial Group, Inc., a wholly-owned subsidiary of Vision Alabama, conducts permissible insurance and securities networking activities and is licensed with the Alabama Department of Insurance as a provider. In an agency capacity, Vision Bancshares Financial Group, Inc. offers its customers fixed and variable annuities, life insurance, property and casualty insurance, and investment products. Vision Bancshares Financial Group, Inc. is subject to examination by the Alabama Department of Insurance and Alabama State Securities Commission.

     On December 5, 2005, Vision, through its subsidiary, Vision Bancshares Trust I (the “Vision Trust”), a Delaware statutory trust, sold to institutional investors $15.0 million of floating rate preferred securities. Holders of the preferred securities are entitled to receive preferential cumulative cash distributions from the Vision Trust, at a rate per annum reset quarterly equal to the sum of three-month LIBOR plus 148 basis points. Vision, through various contractual arrangements, fully and unconditionally guaranteed all of the Vision Trust’s obligations with respect to the preferred securities. The sole asset of the Vision Trust is $15.5 million of junior subordinated debentures issued by Vision. These junior subordinated debentures also carry the same floating rate as the preferred securities. Both the preferred securities and the junior subordinated debentures mature on December 30, 2035; however, the maturity of both may be shortened to a date not earlier than December 30, 2010. Vision can defer payment of interest on the junior subordinated debentures, and the Vision Trust can defer payment of the cash distributions on the preferred securities, at any time or from time to time for a period not to exceed twenty consecutive quarters. Following the merger of Vision into Park, Park, as successor to Vision, will assume and become bound by the terms of the indenture agreement governing the junior subordinated debentures issued by Vision to the Vision Trust.

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     Vision and Vision Alabama currently lease real property associated with Vision Alabama’s branch locations in Gulf Shores and Orange Beach, Alabama from Gulf Shores Investment Group, LLC, an Alabama limited liability company. The following directors and executive officers of Vision and Vision Alabama are members of Gulf Shores Investment Group, LLC: Gordon Barnhill, Jr., R. J. Billingsley, Julian Brackin, Joe C. Campbell, William D. Moody, James R. Owen, Jr., Donald W. Peak, Rick A. Phillips, Daniel M. Scarbrough, MD, J. Daniel Sizemore, George W. Skipper, III, Thomas Gray Skipper, J. Douglas Warren, Patrick Willingham and Royce T. Winborne. Vision and Vision Alabama also lease real property associated with Vision Alabama’s branch location in Elberta, Alabama from Elberta Holdings, LLC, an Alabama limited liability company. J. Daniel Sizemore and James R. Owen, Jr., are both members of Elberta Holdings, LLC.

     Vision and Vision Florida currently lease real property associated with Vision Florida’s branch location in Panama City, Florida from Bay County Investment Group, LLC, a Florida limited liability company. The following directors and executive officers of Vision and Vision Florida are members of Bay County Investment Group, LLC: Warren Banach, Gordon Barnhill, Jr., Julian B. Brackin, R. J. Billingsley, James D. Campbell, DDS, Joe C. Campbell, Jr., Joey W. Ginn, Charles S. Isler, III, William D. Moody, James R. Owen, Jr., Donald W. Peak, Rick A. Phillips, Daniel M. Scarbrough, MD, George W. Skipper, III, Thomas Gray Skipper, J. Daniel Sizemore, J. Douglas Warren, Patrick Willingham, Lana Jane Lewis-Brent, Jimmy Patronis, Jr., John S. Robbins, Jerry F. Sowell, Jr., and James R. Strohmenger, MD.

     Following the closing of the merger of Vision with and into Park, the real property leased by Vision and Vision Alabama from Gulf Shores Investment Group, LLC in Gulf Shores, Alabama will be purchased by Vision Alabama for a purchase price of $2,400,000, the real property leased by Vision and Vision Alabama from Gulf Shores Investment Group, LLC in Orange Beach, Alabama will be purchased for a purchase price of $2,000,000, the real property leased by Vision and Vision Alabama from Elberta Holdings, LLC in Elberta, Alabama will be purchased by Vision Alabama for a purchase price of $880,000 and the real property leased by Vision and Vision Florida from Bay County Investment Group, LLC in Panama City, Florida will be purchased by Vision Florida for a purchase price of $2,975,000. Each purchase price represents the average of the appraised values obtained on behalf of each of Park and Vision. Each branch location will be purchased for cash. Prior to purchasing any such property, Vision Alabama or Vision Florida, as appropriate, will calculate its “capital stock and surplus” for purposes of 12 C.F.R. § 223.3 in order to confirm that the amount of the proposed “covered transaction,” when combined with other “covered transactions,” will satisfy the limitations in respect of “covered transactions” set forth in Regulation W promulgated by the Federal Reserve Board. Park intends to make any additional capital contributions to Vision Alabama or Vision Florida which may be necessary to ensure that the limitations in respect of “covered transactions” are satisfied.

Services Provided by Park’s Current Subsidiaries

     All of Park’s subsidiary banks and their respective divisions provide the following principal services:

• the acceptance of deposits for demand, savings and time accounts and the servicing of those accounts;

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• commercial, industrial, consumer and real estate lending, including installment loans, credit cards, home equity lines of credit and commercial and auto leasing;

• trust services;

• cash management;

• safe deposit operations;

• electronic funds transfers;

• online Internet banking with bill pay service; and

• a variety of additional banking-related services tailored to the needs of individual customers.

     Park believes that the deposit mix of its subsidiary banks is such that no material portion has been obtained from a single customer and, consequently, the loss of any one customer of any subsidiary bank would not have a materially adverse effect on the business of that subsidiary bank or Park.

     Guardian Finance also provides consumer finance services.

Lending Activities

     Park’s subsidiary banks deal with consumers as well as with a wide cross-section of businesses and corporations located primarily in the 29 Ohio counties and one Kentucky county served by their financial service offices. Relatively few loans are made to borrowers outside these counties. Each subsidiary bank makes lending decisions in accordance with the written loan policy adopted by Park which is designed to maintain loan quality. Each subsidiary bank originates and retains for its own portfolio commercial and commercial real estate loans, variable rate residential real estate loans, home equity lines of credit, installment loans and credit card loans. Each subsidiary bank also generates fixed rate residential real estate loans for the secondary market. In addition, Park’s subsidiary banks purchased approximately $27 million of loan participations from Vision Alabama and Vision Florida during the fourth quarter of 2006.

     Guardian Finance originates and retains for its own portfolio consumer installment loans. Guardian Finance also makes lending decisions in accordance with the written loan policy adopted by Park.

     There are certain risks inherent in making loans. These risks include interest rate changes over the time period in which the loans may be repaid, risks resulting from changes in the economy, risks inherent in dealing with borrowers and, in the case of loans secured by collateral, risks resulting from uncertainties about the future value of the collateral.

     Commercial Loans. At December 31, 2006, Park’s subsidiaries (including Scope Leasing) had approximately $1,411.1 million in commercial loans outstanding (including commercial real

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estate loans) and commercial leases, representing approximately 40.5% of their total aggregate loan portfolio as of that date. Of this amount, approximately $548.3 million represented commercial loans, $854.9 million represented commercial real estate loans and $7.9 million represented commercial leases.

     Commercial loans are made for a wide variety of general corporate purposes, including financing for industrial and commercial properties, financing for equipment, inventories and accounts receivable and acquisition financing as well as commercial leasing. The term of each commercial loan varies by its purpose. Repayment terms are structured such that commercial loans will be repaid within the economic useful life of the underlying asset. Information concerning the loan maturity distribution within the commercial loan portfolio is provided in Table 4 included in the section of Park’s 2006 Annual Report captioned “FINANCIAL REVIEW,” on page 30, and is incorporated herein by reference.

     The commercial loan portfolio includes loans to a wide variety of corporations and businesses across many industrial classifications in the 29 Ohio counties and one Kentucky county where Park’s subsidiary banks operate. The primary industries represented by these customers include commercial real estate leasing, commercial real estate construction, manufacturing, retail trade, health care and other services.

     Commercial loans are evaluated for the adequacy of repayment sources at the time of approval and are regularly reviewed for any possible deterioration in the ability of the borrower to repay the loan. The credit information required generally includes fully completed financial statements, two years of federal income tax returns and a current credit report. Loan terms include amortization schedules commensurate with the purpose of each loan, the source of each repayment and the risk involved. In most instances, collateral is required to provide an additional source of repayment in the event of default by a commercial borrower. The structure of the collateral package, including the type and amount of the collateral, varies from loan to loan depending on the financial strength of the borrower, the amount and terms of the loan and the collateral available to be pledged by the borrower. Most often, the collateral is inventory, machinery, accounts receivable or real estate. The guarantee of the principals will generally be required on loans made to closely-held business entities.

     Commercial real estate loans include mortgage loans to developers and owners of commercial real estate. The lending policy for commercial real estate loans is the same as that for the commercial loan portfolio. The collateral for these loans is the underlying commercial real estate. Each subsidiary bank generally requires that the commercial real estate loan amount be no more than 85% of the purchase price or the appraised value of the real estate securing the loan. Commercial real estate loans made for each subsidiary bank’s portfolio generally have a variable interest rate although occasionally a commercial real estate loan may be made with a fixed interest rate for a term generally not exceeding five years.

     The regulatory limits for loans made to one borrower by Park National Bank, Richland Trust Company, Century National Bank, First-Knox National Bank, United Bank, Second National Bank, Security National Bank and Citizens National Bank were $24.4 million, $4.8 million, $7.8 million, $8.9 million, $2.0 million, $4.2 million, $8.7 million and $2.0 million, respectively, at

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December 31, 2006. Participations in loans of amounts larger than $25.0 million are generally sold to other banks or financial institutions.

     Park has a loan review program which annually evaluates substantially all (approximately 90%) of the loans with an outstanding balance greater than $250,000. If deterioration has occurred, the lender subsidiary takes effective and prompt action designed to increase the likelihood of payment of the loan. Upon detection of the reduced ability of a borrower to service interest and/or principal on a loan, the subsidiary may downgrade the loan and, under certain circumstances, place it on nonaccrual status. The subsidiary then works with the borrower to develop a payment schedule which they anticipate will permit service of the principal and interest on the loan by the borrower. Loans which deteriorate and show the inability of a borrower to repay principal and do not meet the subsidiary’s standards are charged off quarterly. Information about Park’s policy for placing loans on nonaccrual status is included under the caption “Loans” in Note 1 of the Notes to Consolidated Financial Statements located on page 48 of Park’s 2006 Annual Report. That information is incorporated herein by reference.

     Commercial loans are generally viewed as having a higher credit risk than residential real estate or consumer loans because commercial loans usually involve larger loan balances to a single borrower and are more susceptible to a risk of default during an economic downturn. The total indebtedness of the largest single borrower within the commercial portfolio was $21.9 million at December 31, 2006. Since commercial loans generally have variable interest rates, an increase in interest rates increases the debt service requirement for the borrowing. Credit risk for commercial loans arises from borrowers lacking the ability or willingness to pay principal or interest, and in the case of secured loans, by a shortfall in the collateral value in relation to the outstanding loan balance in the event of a default and subsequent liquidation of collateral. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. Other collateral securing loans may depreciate over time, may be difficult to appraise and may fluctuate in value based on success of the business. Information concerning the loan loss experience and allowance for loan losses related to the commercial loan portfolio and the commercial real estate portfolio is provided in Tables 8 and 9 included in the section of Park’s 2006 Annual Report captioned “FINANCIAL REVIEW,” on page 34, and is incorporated herein by reference.

     Park National Bank also leases equipment under terms similar to the commercial lending policies described above. Park Commercial Leasing, a division of Park National Bank, originates and services direct leases of equipment which it acquires with no outside financing. Commercial leases are primarily secured by equipment and have little residual risk since the residual values are generally ten percent or less of the financed amount. The estimated residual values of equipment leases are established at inception by determining the estimated residual value for the equipment from the appropriate industry leasing guide. Management re-evaluates the estimated residual values of equipment leases on a quarterly basis from a review of the industry leasing guides.

     Aircraft Financing. Scope Leasing specializes in aircraft financing. Scope Leasing’s customers include small businesses and entrepreneurs intending to use the aircraft for business or pleasure. The customers of Scope Leasing are located throughout the United States. The lending officers of Scope Leasing are experienced in the aircraft financing industry and rely upon that experience and industry guides in determining whether to grant an aircraft loan or lease. At

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December 31, 2006, Scope Leasing had outstanding approximately $68.1 million in loans primarily secured by aircraft (which are included in the commercial loan portfolio). In addition to the loans outstanding at December 31, 2006, Scope Leasing had $4.2 million of operating leases primarily secured by aircraft.

     Consumer Loans. At December 31, 2006, Park’s subsidiary banks, together with Park Leasing and Guardian Finance, had outstanding consumer loans (including automobile leases and credit cards) in an aggregate amount of approximately $534.3 million, constituting approximately 15.4% of their aggregate total loan portfolio. Of this amount, approximately $532.1 million represented consumer loans and $2.2 million represented automobile leases. These subsidiaries make installment credit available to customers and prospective customers in their primary market area of central and southern Ohio. Park Leasing had participated in an automobile leasing program with a major national insurance company. However, that program was terminated during the fourth quarter of 2004 and automobile lease lending is de-emphasized. Park Leasing had approximately $1.1 million of automobile leases outstanding at December 31, 2006.

     Credit approval for consumer loans requires demonstration of sufficient income to repay principal and interest due, stability of employment, a positive credit record and sufficient collateral for secured loans. It is the policy of Park’s subsidiaries to adhere strictly to all laws and regulations governing consumer lending. A qualified compliance officer is responsible for monitoring each subsidiary’s performance in this area and for advising and updating loan personnel. Each subsidiary reviews its consumer loan portfolio monthly and charges off loans which do not meet that subsidiary’s standards. Information about Park’s policy for placing loans on nonaccrual status is included under the caption “Loans” in Note 1 of the Notes to Consolidated Financial Statements located on page 48 of Park’s 2006 Annual Report. That information is incorporated herein by reference. Each subsidiary bank (other than The Park National Bank of Southwest Ohio & Northern Kentucky division of Park National Bank) also offers credit card accounts through its consumer lending department. These accounts are administered under the same standards as other consumer loans and leases.

     Consumer loans generally have a higher risk of default than real estate mortgage loans. Consumer loans typically have shorter terms and lower balances with higher yields as compared to real estate mortgage loans, but generally carry higher risks of default. Consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be affected by adverse personal circumstances. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount that can be recovered on these loans. Information concerning the loan loss experience and allowance for loan losses related to the consumer loan portfolio is provided in Tables 8 and 9 included in the section of Park’s 2006 Annual Report captioned “FINANCIAL REVIEW,” on page 34, and is incorporated herein by reference.

     Residential Real Estate and Construction Loans. At December 31, 2006, Park’s subsidiary banks had outstanding approximately $1,535.3 million in residential real estate, home equity lines of credit and construction mortgages, representing approximately 44.1% of total loans outstanding. Of this amount, approximately $1,079.0 million represented residential real estate loans, $221.3 million represented home equity lines of credit and $235.0 million represented construction loans.

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The market area for real estate lending by the subsidiary banks is concentrated in central and southern Ohio.

     Credit approval for residential real estate loans requires demonstration of sufficient income to repay the principal and interest and the real estate taxes and insurance, stability of employment, a positive credit record and the appropriate appraised value of the real estate securing the loan. All loans are sent through automated underwriting to determine a risk classification. All loans receiving a risk classification of caution require review by a senior lender and generally require additional documentation if the loan is approved.

     Each subsidiary bank generally requires that the residential real estate loan amount be no more than 80% of the purchase price or the appraised value of the real estate securing the loan, unless private mortgage insurance is obtained by the borrower. Loans made for each subsidiary bank’s portfolio in this lending category are generally adjustable rate, fully amortized mortgages. Each subsidiary bank also originates fixed rate real estate loans for the secondary market. These loans are generally sold immediately after closing. All real estate loans are secured by first mortgages with evidence of title in favor of the subsidiary bank in the form of an attorney’s opinion of title or a title insurance policy. Each subsidiary bank also requires proof of hazard insurance with the subsidiary bank named as the mortgagee and as the loss payee. Independent appraisals are generally obtained for consumer real estate loans.

     Home equity lines of credit are generally made as second mortgages by Park’s subsidiary banks. The maximum amount of a home equity line of credit is generally limited to 85% of the appraised value of the property less the balance of the first mortgage. The home equity lines of credit are written with ten-year terms. A variable interest rate is generally charged on the home equity lines of credit.

     Information concerning the loan loss experience and allowance for loan losses related to the residential real estate portfolio is provided in Tables 8 and 9 included in the section of Park’s 2006 Annual Report captioned “FINANCIAL REVIEW,” on page 34, and is incorporated herein by reference.

     Construction loans include commercial construction loans as well as residential construction loans. Construction loans may be in the form of a permanent loan or a short-term construction loan, depending on the needs of the individual borrower. Generally, the permanent construction loans have a variable interest rate although occasionally a permanent construction loan may be made with a fixed interest rate for a term generally not exceeding five years. Short-term construction loans are made with variable interest rates. Information concerning the loan maturity distribution within the construction financing portfolio is provided in Table 4 included in the section of Park’s 2006 Annual Report captioned “FINANCIAL REVIEW,” on page 30, and is incorporated herein by reference.

     Construction financing is generally considered to involve a higher degree of risk of loss than long-term financing on improved, occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the property’s value at completion of construction and the estimated cost (including interest) of construction. If the estimate of construction cost proves to be inaccurate, the subsidiary bank making the loan may be required to

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advance funds beyond the amount originally committed to permit completion of the project. If the estimate of value proves inaccurate, the subsidiary bank may be confronted, at or prior to the maturity of the loan, with a project having a value insufficient to assure full repayment, should the borrower default. In the event a default on a construction loan occurs and foreclosure follows, the subsidiary bank must take control of the project and attempt either to arrange for completion of construction or dispose of the unfinished project. Additional risk exists with respect to loans made to developers who do not have a buyer for the property, as the developer may lack funds to pay the loan if the property is not sold upon completion. Park’s subsidiary banks attempt to reduce such risks on loans to developers by requiring personal guarantees and reviewing current personal financial statements and tax returns as well as other projects undertaken by the developer. Information concerning the loan loss experience and allowance for loan losses related to the construction financing portfolio is provided in Tables 8 and 9 included in the section of Park’s 2006 Annual Report captioned “FINANCIAL REVIEW,” on page 34, and is incorporated herein by reference.

Insurance Agency

     Park Insurance Group offers life insurance and other insurance products to its customers through licensed representatives who work for Park’s subsidiary banks. Park Insurance Group’s customers include current customers of Park’s subsidiary banks and other residents in the 29 Ohio counties and one Kentucky county served by those subsidiaries. Park Insurance Group’s results to date have not been material to the consolidated entity.

Title Agency

     Park Title Agency is a traditional title agency serving residential and commercial customers in the central Ohio area who are seeking title insurance for purchases, construction and refinancing of real estate. Park Title Agency’s customers include current customers of Park’s subsidiary banks and other residents primarily in the 29 Ohio counties and one Kentucky county served by those subsidiary banks.

Competition

     The financial services industry is highly competitive. Park’s subsidiaries compete with other local, regional and national service providers, including banks, savings associations, credit unions and other types of financial institutions, finance companies, insurance agencies and title agencies. Other competitors include securities dealers, brokers, mortgage bankers, investment advisors, insurance companies and financial services subsidiaries of commercial and manufacturing companies. Many of these competitors enjoy the benefits of advanced technology, fewer regulatory constraints and lower cost structures. Many of the newer competitors offer one-stop financial services to their customers that may include services that banks and their subsidiaries may not have been able or legally permitted to offer their customers in the past. The primary factors in competing for loans are interest rates charged and overall services provided to borrowers. The primary factors in competing for deposits are interest rates paid on deposits, account liquidity, convenience and hours of office locations as well as having trained and competent staff to deliver services.

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Employees

     As of December 31, 2006, Park and its subsidiaries had 1,892 full-time equivalent employees.

Supervision and Regulation of Park and its Current Subsidiaries

     Park, its subsidiary banks and many of its other subsidiaries are subject to extensive regulation by federal and state agencies. The regulation of bank holding companies and their subsidiaries is intended primarily for the protection of depositors, federal deposit insurance funds and the banking system as a whole and not for the protection of shareholders.

     As a bank holding company, Park is subject to regulation under the Bank Holding Company Act and to inspection, examination and supervision by the Federal Reserve Board. Park is also under the jurisdiction of the SEC and certain state securities commissions related to the offering and sale of its securities. Park is subject to the disclosure and regulatory requirements of the Securities Act of 1933, as amended, and the Exchange Act, as administered by the SEC. Park’s common shares are listed on AMEX under the trading symbol “PRK,” and Park is subject to the AMEX rules for listed companies.

     Park National Bank, Century National Bank, First-Knox National Bank, United Bank, Second National Bank, Security National Bank and Citizens National Bank, as national banking associations, are subject to regulation, supervision and examination primarily by the Office of the Comptroller of the Currency (“OCC”) and secondarily by the FDIC.

     Richland Trust Company, as an Ohio state-chartered bank, is subject to regulation, supervision and examination primarily by the Ohio Division of Financial Institutions and secondarily by the FDIC.

     Guardian Finance, as an Ohio state-chartered consumer finance company, is subject to regulation, supervision and examination by the Ohio Division of Financial Institutions.

     Park Insurance Group, as an Ohio state-chartered insurance agency, and Park Title Agency, as an Ohio state-chartered title agency, are subject to regulation, supervision and examination by the Ohio Department of Insurance.

     The following information describes selected federal and Ohio statutory and regulatory provisions and is qualified in its entirety by reference to the full text of the particular statutory or regulatory provisions. These statutes and regulations are continually under review by Congress and state legislatures and federal and state regulatory agencies. A change in statutes, regulations or regulatory policies applicable to Park and its subsidiaries could have a material effect on their respective businesses.

Regulation of Bank Holding Companies

     Park is registered with the Federal Reserve Board as a bank holding company under the Bank Holding Company Act. Bank holding companies and their activities are subject to extensive regulation by the Federal Reserve Board. Bank holding companies are required to file reports with

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the Federal Reserve Board and such additional information as the Federal Reserve Board may require, and are subject to regular examinations by the Federal Reserve Board.

     The Federal Reserve Board also has extensive enforcement authority over bank holding companies, including, among other things, the ability to:

• assess civil money penalties;

• issue cease and desist or removal orders; and

• require that a bank holding company divest subsidiaries (including its subsidiary banks).

In general, the Federal Reserve Board may initiate enforcement actions for violations of laws and regulations and unsafe or unsound practices.

     Under Federal Reserve Board policy, a bank holding company is expected to act as a source of financial strength to each subsidiary bank and to commit resources to support those subsidiary banks. Under this policy, the Federal Reserve Board may require a bank holding company to contribute additional capital to an undercapitalized subsidiary bank.

     The Bank Holding Company Act requires the prior approval of the Federal Reserve Board in any case where a bank holding company proposes to:

• acquire direct or indirect ownership or control of more than 5% of the voting shares of any bank that is not already majority-owned by it;

• acquire all or substantially all of the assets of another bank or bank holding company; or

• merge or consolidate with any other bank holding company.

     The Bank Holding Company Act also prohibits a bank holding company, with certain exceptions, from acquiring more than 5% of the voting shares of any company that is not a bank and from engaging in any business other than banking or managing or controlling banks. The primary exception allows the ownership of shares by a bank holding company in any company the activities of which the Federal Reserve Board had determined as of November 19, 1999 to be so closely related to banking as to be a proper incident thereto. The Federal Reserve Board by regulation had determined that the following activities, among others, were so closely related to banking:

• operating a savings association, mortgage company, finance company, credit card company or factoring company;

• performing certain data processing operations;

• providing investment and financial advice;

• engaging in certain asset management services;

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• leasing personal or real property, subject to certain restrictions; and

• acting as an insurance agent for certain types of credit-related insurance.

     Subsidiary banks of a bank holding company are subject to certain restrictions imposed by the Federal Reserve Act on the maintenance of reserves against deposits, extensions of credit to the bank holding company or any of its subsidiaries, investments in the stock or other securities of the bank holding company or its subsidiaries and the taking of such stock or securities as collateral for loans to any borrower. Further, a bank holding company and its subsidiaries are prohibited from engaging in certain tying arrangements in connection with any extension of credit, lease or sale of property or furnishing of any services. Various consumer laws and regulations also affect the operations of these subsidiaries.

Transactions with Affiliates, Directors, Executive Officers and Shareholders

     Sections 23A and 23B of the Federal Reserve Act and Federal Reserve Board Regulation W restrict transactions by banks and their subsidiaries with their affiliates. An affiliate of a bank is any company or entity which controls, is controlled by or is under common control with the bank.

     Generally, Sections 23A and 23B and Regulation W:

• limit the extent to which a bank or its subsidiaries may engage in “covered transactions” with any one affiliate to an amount equal to 10% of that bank’s capital stock and surplus (i.e., tangible capital);

• limit the extent to which a bank or its subsidiaries may engage in “covered transactions” with all affiliates to 20% of that bank’s capital stock and surplus; and

• require that all such transactions be on terms substantially the same, or at least as favorable to the bank or subsidiary, as those provided to a non-affiliate.

The term “covered transaction” includes the making of loans to the affiliate, the purchase of assets from the affiliate, the issuance of a guarantee on behalf of the affiliate, the purchase of securities issued by the affiliate and other similar types of transactions.

     A bank’s authority to extend credit to executive officers, directors and greater than 10% shareholders, as well as entities such persons control, is subject to Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O promulgated thereunder by the Federal Reserve Board. Among other things, these loans must be made on terms substantially the same as those offered to unaffiliated individuals or be made as part of a benefit or compensation program and on terms widely available to employees, and must not involve a greater than normal risk of repayment. In addition, the amount of loans a bank may make to these persons is based, in part, on the bank’s capital position, and specified approval procedures must be followed in making loans which exceed specified amounts.

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Regulation of Nationally-Chartered Banks

     As national banking associations, Park National Bank, Century National Bank, First-Knox National Bank, United Bank, Second National Bank, Security National Bank and Citizens National Bank are subject to regulation under the National Banking Act and are periodically examined by the OCC. Furthermore, they are subject, as member banks, to certain rules and regulations of the Federal Reserve Board. Each is an insured institution as a member of the Deposit Insurance Fund. As a result, they are subject to regulation by the FDIC. In addition, the establishment of branches by each of Park National Bank, Century National Bank, First-Knox National Bank, United Bank, Second National Bank, Security National Bank and Citizens National Bank is subject to prior approval of the OCC.

Regulation of Ohio State-Chartered Banks and Consumer Finance Companies

     The FDIC is the primary federal regulator of Richland Trust Company. The FDIC issues regulations governing the operations of Richland Trust Company and examines Richland Trust Company. The FDIC may initiate enforcement actions against insured depository institutions and persons affiliated with them for violations of laws and regulations or for engaging in unsafe or unsound practices. If the grounds provided by law exist, the FDIC may appoint a conservator or a receiver for a nonmember bank.

     As a bank incorporated under Ohio law, Richland Trust Company is also subject to regulation and supervision by the Ohio Division of Financial Institutions. Division regulation and supervision affects the internal organization of Richland Trust Company, as well as its savings, mortgage lending and other investment activities. The Division of Financial Institutions may initiate supervisory measures or formal enforcement actions against Ohio commercial banks. Ultimately, if the grounds provided by law exist, the Division of Financial Institutions may place an Ohio bank in conservatorship or receivership. Whenever the Superintendent of Financial Institutions considers it necessary or appropriate, the Superintendent may also examine the affairs of any holding company or any affiliate or subsidiary of an Ohio bank.

     As a consumer finance company incorporated under Ohio law, Guardian Finance is also subject to regulation and supervision by the Division of Financial Institutions. Division regulation and supervision designed to protect consumers affect the lending activities of Guardian Finance, including interest rates and certain loan terms, advertising and record retention. If grounds provided by law exist, the Division of Financial Institutions may suspend or revoke an Ohio consumer finance company’s ability to make loans.

Federal Deposit Insurance Corporation

     The FDIC is an independent federal agency which insures the deposits, up to prescribed statutory limits, of federally-insured banks and savings associations and safeguards the safety and soundness of the financial institution industry.

     Insurance Premiums

     Insurance premiums for each insured institution are determined based upon the institution’s capital level and supervisory rating provided to the FDIC by the institution’s primary federal

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regulator and other information the FDIC determines to be relevant to the risk posed to the deposit insurance fund by the institution. The assessment rate determined by considering such information is then applied to the amount of the institution’s deposits to determine the institution’s insurance premium. An increase in the assessment rate could have a material adverse effect on the earnings of the affected institutions, depending on the amount of the increase.

     Insurance of deposits may be terminated by the FDIC upon a finding that the insured institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition enacted or imposed by the institution’s regulatory agency.

     Deposit Insurance Reform Act of 2005

     In February of 2006, President Bush signed into law the Deposit Insurance Reform Act of 2005 and its companion bill, the Deposit Insurance Reform Conforming Amendments Act of 2005 (collectively, the “Deposit Insurance Reform Acts”), pursuant to which the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF) were merged into a new Deposit Insurance Fund (DIF). The Deposit Insurance Reform Acts provide for several additional changes to the deposit insurance system, including the following:

• Increasing the deposit insurance limit for retirement accounts from $100,000 to $250,000;

• Adjusting the deposit insurance limits (currently $100,000 for most accounts) every five years based on an inflation index, with the first adjustment to be effective on January 1, 2011;

• Providing pass-through deposit insurance for the deposits of employee benefit plans (but prohibiting undercapitalized depository institutions from accepting employee benefit plan deposits);

• Allocating an aggregate of $4.7 billion of one-time credits to offset the premiums of depository institutions based on their assessment bases at the end of 1996;

• Establishing rules for awarding cash dividends to depository institutions, based on their relative contributions to the DIF and its predecessor funds, when the DIF reserve ratio reaches certain levels; and

• Revising the rules and procedures for risk-based premium assessments.

Park’s management does not expect that the Deposit Insurance Reform Acts will have a significant impact on Park or its subsidiary banks in 2007.

     Liability of Commonly Controlled Banks

     Under the Federal Deposit Insurance Act, a bank is generally liable for any loss incurred, or reasonably expected to be incurred, by the FDIC in connection with (a) the default of a commonly controlled bank or (b) any assistance provided by the FDIC to a commonly controlled bank in

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danger of default. “Default” means generally the appointment of a conservator or receiver. “In danger of default” means generally the existence of conditions indicating that a default is likely to occur in the absence of regulatory assistance.

Federal Home Loan Bank

     The Federal Home Loan Banks (“FHLBs”) provide credit to their members in the form of advances. As a member of the FHLB of Cincinnati, each of the subsidiary banks of Park must maintain an investment in the capital stock of the FHLB of Cincinnati. Each of Park’s subsidiary banks is in compliance with this requirement.

     Upon the origination or renewal of a loan or advance, each FHLB is required by law to obtain and maintain a security interest in certain types of collateral.

     Each FHLB is required to establish standards of community investment or service that its members must maintain for continued access to long-term advances from the FHLB. The standards take into account a member’s performance under the Community Reinvestment Act and its record of lending to first-time home buyers. All long-term advances by each FHLB must be made only to provide funds for residential housing finance.

Regulatory Capital

     The Federal Reserve Board has adopted risk-based capital guidelines for bank holding companies and state member banks. The OCC and the FDIC have adopted risk-based capital guidelines for national banks and state non-member banks, respectively. The guidelines provide a systematic analytical framework which makes regulatory capital requirements sensitive to differences in risk profiles among banking organizations, takes off-balance sheet exposures expressly into account in evaluating capital adequacy, and minimizes disincentives to holding liquid, low-risk assets. Capital levels as measured by these standards are also used to categorize financial institutions for purposes of certain prompt corrective action regulatory provisions.

     The minimum guideline for the ratio of total capital to risk-weighted assets (including certain off-balance sheet items such as standby letters of credit) is 8%. At least half of the minimum total risk-based capital ratio (4%) must be composed of common shareholders’ equity, minority interests in certain equity accounts of consolidated subsidiaries and a limited amount of qualifying preferred stock and qualified trust preferred securities, less goodwill and certain other deductions, including the unrealized net gains and losses, after applicable taxes, on available-for-sale securities carried at fair value (commonly known as “Tier 1” risk-based capital). The remainder of total risk-based capital (commonly known as “Tier 2” risk-based capital) may consist of certain amounts of hybrid capital instruments, mandatory convertible debt, subordinated debt, preferred stock not qualifying as Tier 1 capital, loan and lease loss allowance and net unrealized gains on certain available-for-sale equity securities, all subject to limitations established by the guidelines.

     Under the guidelines, capital is compared to the relative risk related to the balance sheet. To derive the risk included in the balance sheet, one of four risk weights (0%, 20%, 50% and 100%) is applied to different balance sheet and off-balance sheet assets, primarily based on the relative credit

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risk of the counterparty. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

     The Federal Reserve Board has established minimum leverage ratio guidelines for bank holding companies. The Federal Reserve Board guidelines provide for a minimum ratio of Tier 1 capital to average assets (excluding the loan and lease loss allowance, goodwill and certain other intangibles), or “leverage ratio,” of 3% for bank holding companies that meet certain criteria, including having the highest regulatory rating, and 4% for all other bank holding companies. The guidelines further provide that bank holding companies making acquisitions will be expected to maintain strong capital positions substantially above the minimum levels. The OCC and the FDIC have each also adopted minimum leverage ratio guidelines for national banks and for state non-member banks, respectively.

     The Federal Reserve Bank’s review of certain bank holding company transactions is affected by whether the applying bank holding company is “well-capitalized.” To be deemed “well-capitalized,” the bank holding company must have a Tier 1 risk-based capital ratio of at least 6% and a total risk-based capital ratio of at least 10%, and must not be subject to any written agreement, order, capital directive or prompt corrective action directive issued by the Federal Reserve Board to meet and maintain a specific capital level for any capital measure. Park is well capitalized.

     The federal banking agencies have established a system of prompt corrective action to resolve certain of the problems of undercapitalized institutions. This system is based on five capital level categories for insured depository institutions: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.”

     The federal banking agencies may (or in some cases must) take certain supervisory actions depending upon a bank’s capital level. For example, the banking agencies must appoint a receiver or conservator for a bank within 90 days after it becomes “critically undercapitalized” unless the bank’s primary regulator determines, with the concurrence of the FDIC, that other action would better achieve regulatory purposes. Banking operations otherwise may be significantly affected depending on a bank’s capital category. For example, a bank that is not “well capitalized” generally is prohibited from accepting brokered deposits and offering interest rates on deposits higher than the prevailing rate in its market, and the holding company of any undercapitalized depository institution must guarantee, in part, specific aspects of the bank’s capital plan for the plan to be acceptable.

     In order to be “well-capitalized,” a bank must have total risk-based capital of at least 10%, Tier 1 risk-based capital of at least 6% and a leverage ratio of at least 5%, and the bank must not be subject to any written agreement, order, capital directive or prompt corrective action directive to meet and maintain a specific capital level for any capital measure. Park’s management believes that each of its subsidiary banks is “well capitalized” according to the guidelines described above. See Note 19 of the Notes to Consolidated Financial Statements located on page 59 of Park’s 2006 Annual Report, which is incorporated herein by reference.

Fiscal and Monetary Policies

     The business and earnings of Park are affected significantly by the fiscal and monetary policies of the United States Government and its agencies. Park is particularly affected by the

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policies of the Federal Reserve Board, which regulates the supply of money and credit in the United States. These policies are used in varying degrees and combinations to directly affect the availability of bank loans and deposits, as well as the interest rates charged on loans and paid on deposits.

Limits on Dividends and Other Payments

     There are various legal limitations on the extent to which subsidiary banks may finance or otherwise supply funds to their parent holding companies. Under federal and Ohio law, subsidiary banks may not, subject to certain limited exceptions, make loans or extensions of credit to, or investments in the securities of, their bank holding companies. Subsidiary banks are also subject to collateral security requirements for any loans or extension of credit permitted by such exceptions.

     None of the Park’s subsidiary banks may pay dividends out of its surplus if, after paying these dividends, it would fail to meet the required minimum levels under the risk-based capital guidelines and minimum leverage ratio requirements established by the OCC and the FDIC. In addition, each subsidiary bank must have the approval of its regulatory authority if a dividend in any year would cause the total dividends for that year to exceed the sum of the subsidiary bank’s current year’s “net profits” (or net income, less dividends declared during the period based on regulatory accounting principles) and the retained net profits for the preceding two years, less required transfers to surplus. Payment of dividends by any of Park’s subsidiary banks may be restricted at any time at the discretion of its regulatory authorities, if such regulatory authorities deem such dividends to constitute unsafe and/or unsound banking practices or if necessary to maintain adequate capital.

     The ability of Park to obtain funds for the payment of dividends and for other cash requirements is largely dependent on the amount of dividends which may be declared by its subsidiary banks. However, the Federal Reserve Board expects Park to serve as a source of strength to its subsidiary banks, which may require Park to retain capital for further investment in its subsidiary banks, rather than pay dividends to the Park shareholders. Payment of dividends by one of Park’s subsidiary banks may be restricted at any time at the discretion of its applicable regulatory authorities, if they deem such dividends to constitute an unsafe and/or unsound banking practice. These provisions could have the effect of limiting Park’s ability to pay dividends on its common shares.

Financial Activities Permitted

     Bank holding companies may become financial holding companies and thereby affiliate with securities firms and insurance companies and engage in other activities that are financial in nature. A bank holding company may become a financial holding company if each of its subsidiary banks is well capitalized, is well managed, and has at least a satisfactory rating under the Community Reinvestment Act, by filing a declaration that the bank holding company wishes to become a financial holding company. No regulatory approval will be required for a financial holding company to acquire a company, other than a bank or savings association, engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the Federal Reserve Board.

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     “Financial in nature” is defined to include, in general:

• securities underwriting, dealing and market making;

• sponsoring mutual funds and investment companies;

• insurance underwriting and agency;

• merchant banking activities; and

• activities that the Federal Reserve Board has determined to be closely related to banking.

     A national bank also may engage, subject to limitations on investment, in activities that are financial in nature (other than insurance underwriting, insurance company portfolio investment, real estate development and real estate investment) through a financial subsidiary of the bank, if the bank is well capitalized and well managed, has at least a satisfactory Community Reinvestment Act rating and has received the prior approval of the OCC to engage in such activities. Subsidiary banks of a financial holding company or national banks with financial subsidiaries must continue to be well capitalized and well managed in order to continue to engage in activities that are financial in nature without regulatory actions or restrictions, which could include divestiture of the financial-in-nature subsidiary or subsidiaries. In addition, a financial holding company or a bank may not acquire a company that is engaged in activities that are financial in nature unless each of the subsidiary banks of the financial holding company or the bank has a Community Reinvestment Act rating of satisfactory or better.

     As of the date of this Annual Report on Form 10-K, Park had not elected to become a financial holding company.

Privacy Provisions of Gramm-Leach-Bliley Act

     Under the Gramm-Leach-Bliley Act, federal banking regulators were required to adopt rules that limit the ability of banks and other financial institutions to disclose non-public information about consumers to nonaffiliated third parties. These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a nonaffiliated third party.

Patriot Act

     In response to the terrorist events of September 11, 2001, the Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”) was signed into law in October 2001. The Patriot Act gives the United States Government new powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing and broadened anti-money laundering requirements. Title III of the Patriot Act takes measures intended to encourage information sharing among bank regulatory agencies and law enforcement bodies. Further, certain provisions of Title III impose affirmative obligations on a broad range of financial institutions. Among other

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requirements, Title III and related regulations require regulated financial institutions to establish a program specifying procedures for obtaining identifying information from customers seeking to open new accounts and establish enhanced due diligence policies, procedures and controls designed to detect and report suspicious activity. Parks’ subsidiary banks have established policies and procedures to comply with the requirements of the Patriot Act.

Corporate Governance

     As mandated by the Sarbanes-Oxley Act of 2002, the SEC has adopted rules and regulations governing, among other issues, corporate governance, auditing and accounting, executive compensation and enhanced and timely disclosure of corporate information. AMEX has also adopted corporate governance rules. The Board of Directors of Park has taken a series of actions to strengthen and improve Park’s already strong corporate governance practices in light of the rules of the SEC and AMEX. The Board of Directors has adopted charters for the Audit Committee, the Compensation Committee and the Nominating Committee and a Code of Business Conduct and Ethics governing the directors, officers and associates of Park and its affiliates. In addition, Park has implemented a “whistleblower” hotline called the “PRK Improvement Line.” Calls that relate to accounting, internal accounting controls or auditing matters or that relate to possible wrongdoing by associates of Park or one of its affiliates can be made anonymously through this hotline. The calls are received by an independent third party service and the information received is forwarded directly to the Chair of the Audit Committee and the Head of Internal Audit. The PRK Improvement Line number is 1-800-418-6423, Ext. PRK (775).

     The Board of Directors of Park also established a Risk Committee on November 21, 2006. The Risk Committee assists the Board of Directors in overseeing Park’s enterprise-wide risks and conducts its business under a charter adopted by the Board.

     The text of each of the Audit Committee Charter, the Compensation Committee Charter, the Nominating Committee Charter, the Risk Committee Charter and the Code of Business Conduct and Ethics is posted on the “Governance Documents” section of the “Investor Relations” page of Park’s Internet website located at www.parknationalcorp.com. Interested persons may also obtain copies of these documents, without charge, by writing to the President of Park at Park National Corporation, 50 North Third Street, P.O. Box 3500, Newark, Ohio 43058-3500, Attention: David L. Trautman.

Statistical Disclosure

     The statistical disclosure relating to Park and its subsidiaries required under the SEC’s Industry Guide 3, “Statistical Disclosure by Bank Holding Companies,” is included in the section of Park’s 2006 Annual Report captioned “FINANCIAL REVIEW,” on pages 26 through 38, and in Note 1 of the Notes to Consolidated Financial Statements located on pages 48 through 51 of Park’s 2006 Annual Report, Note 4 of the Notes to Consolidated Financial Statements located on pages 52 through 54 of Park’s 2006 Annual Report, Note 5 of the Notes to Consolidated Financial Statements located on page 54 of Park’s 2006 Annual Report and Note 9 of the Notes to Consolidated Financial Statements located on page 55 of Park’s 2006 Annual Report. This statistical disclosure is incorporated herein by reference.

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Effect of Environmental Regulation

     Compliance with federal, state and local provisions regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, has not had a material effect upon the capital expenditures, earnings or competitive position of Park and its subsidiaries. Park believes the nature of the operations of its subsidiaries has little, if any, environmental impact. Park, therefore, anticipates no material capital expenditures for environmental control facilities for its current fiscal year or for the foreseeable future.

     Park believes its primary exposure to environmental risk is through the lending activities of its subsidiaries. In cases where management believes environmental risk potentially exists, Park’s subsidiaries mitigate their environmental risk exposures by requiring environmental site assessments at the time of loan origination to confirm collateral quality as to commercial real estate parcels posing higher than normal potential for environmental impact, as determined by reference to present and past uses of the subject property and adjacent sites. Environmental assessments are typically required prior to any foreclosure activity involving non-residential real estate collateral.

ITEM 1A. RISK FACTORS.

Cautionary Statement Regarding Forward-Looking Information

     Certain statements contained in this Annual Report on Form 10-K which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, the statements specifically identified as forward-looking statements within this document. In addition, certain statements in future filings by Park with the SEC, in press releases, and in oral and written statements made by or with the approval of Park which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include: (i) projections of income or expense, earnings per share, the payment or non-payment of dividends, capital structure and other financial items; (ii) statements of plans and objectives of Park or our management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as “believes”, “anticipates”, “expects”, “intends”, “targeted”, and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying those statements.

     The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those discussed in the forward-looking statements. We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

     Forward-looking statements involve risks and uncertainties. Actual results may differ materially from those predicted by the forward-looking statements because of various factors and possible events, including those factors and events identified below. There is also the risk that

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Park’s management or Board of Directors incorrectly analyzes these risks and uncertainties or that the strategies Park develops to address them are unsuccessful.

     Forward-looking statements speak only as of the date on which they are made, and, except as may be required by law, Park undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made to reflect unanticipated events. All subsequent written and oral forward-looking statements attributable to Park or any person acting on our behalf are qualified in their entirety by the following cautionary statements.

Changes in interest rates could have a material adverse effect on our financial condition and results of operations.

     Our earnings depend substantially on our interest rate spread, which is the difference between (i) the rates we earn on loans, investment securities and other interest earning assets and (ii) the interest rates we pay on deposits and our borrowings. These rates are highly sensitive to many factors beyond our control, including general economic conditions and the policies of various governmental and regulatory authorities. While we have taken measures intended to manage the risks of operating in a changing interest rate environment, there can be no assurance that such measures will be effective in avoiding undue interest rate risk.

We extend credit to a variety of customers based on internally set standards and judgment. We manage the credit risk through a program of underwriting standards, the review of certain credit decisions and an on-going process of assessment of the quality of the credit already extended. Our credit standards and on-going process of credit assessment might not protect us from significant credit losses.

     We take credit risk by virtue of making loans and leases, extending loan commitments and letters of credit and, to a lesser degree, purchasing non-governmental securities.

     Our exposure to credit risk is managed through the use of consistent underwriting standards that emphasize “in-market” lending while avoiding highly leveraged transactions as well as excessive industry and other concentrations. Our credit administration function employs risk management techniques to ensure that loans and leases adhere to corporate policy and problem loans and leases are promptly identified. While these procedures are designed to provide us with the information needed to implement policy adjustments where necessary, and to take proactive corrective actions, there can be no assurance that such measures will be effective in avoiding undue credit risk.

Changes in economic and political conditions could adversely affect our earnings, as our borrowers’ ability to repay loans and the value of the collateral securing our loans decline.

     Our success depends, to a certain extent, upon economic and political conditions, local and national, as well as governmental monetary policies. Conditions such as inflation, recession, unemployment, changes in interest rates, money supply and other factors beyond our control may adversely affect our asset quality, deposit levels and loan demand and, therefore, our earnings.

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Because we have a significant amount of real estate loans, decreases in real estate values could adversely affect the value of property used as collateral. Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make timely repayments of their loans, which would have an adverse impact on our earnings. The substantial majority of our loans are to individuals and businesses in Ohio. In addition, we purchased loan participations from Vision Alabama and Vision Florida during the fourth quarter. The substantial majority of the loans made by Vision Alabama and Vision Florida are to individuals and businesses in Gulf Coast communities in Alabama and the Florida panhandle. Consequently, a significant decline in the economy in Ohio or in Gulf Coast communities in Alabama or the panhandle of Florida could have a materially adverse effect on our financial condition and results of operations.

We operate in an extremely competitive market, and our business will suffer if we are unable to compete effectively.

     In our market area, we encounter significant competition from other local, regional and national service providers, including banks, savings associations, credit unions and other types of financial institutions, finance companies, insurance agencies and title agencies. Other competitors include securities dealers, brokers, mortgage bankers, investment advisors, insurance companies and financial services subsidiaries of commercial and manufacturing companies. The increasingly competitive environment is a result primarily of changes in regulation, changes in technology and product delivery systems and the accelerating pace of consolidation among financial service providers. Many of our competitors enjoy the benefits of advanced technology, fewer regulatory constraints and lower cost structures. Many of the new competitors offer one-stop financial services to their customers that may include services that banks and their subsidiaries may not have been able or legally permitted to offer their customers in the past. Our ability to maintain our history of strong financial performance and return on investment to shareholders will depend in part on our continued ability to compete successfully in our market area and on our ability to expand our scope of available financial services as needed to meet the needs and demands of our customers.

We are exposed to operational risk.

     Similar to any large organization, we are exposed to many types of operational risk, including reputational risk, legal and compliance risk, the risk of fraud or theft by employees or outsiders, unauthorized transactions by employees or operational errors, including clerical or record-keeping errors or those resulting from faulty or disabled computer or telecommunications systems.

     Negative public opinion can result from our actual or alleged conduct in any number of activities, including lending practices, corporate governance and acquisitions and from actions taken by government regulators and community organizations in response to those activities. Negative public opinion can adversely affect our ability to attract and keep customers and can expose us to litigation and regulatory action.

     Given the volume of transactions we process, certain errors may be repeated or compounded before they are discovered and successfully rectified. Our necessary dependence upon automated systems to record and process our transaction volume may further increase the risk that technical system flaws or employee tampering or manipulation of those systems will result in losses that are

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difficult to detect. We may also be subject to disruptions of our operating systems arising from events that are wholly or partially beyond our control (for example, computer viruses or electrical or telecommunications outages), which may give rise to disruption of service to customers and to financial loss of liability. We are further exposed to the risk that our external vendors may be unable to fulfill their contractual obligations (or will be subject to the same risk of fraud or operational errors by their respective employees as we are) and to the risk that our (or our vendors’) business continuity and data security systems prove to be inadequate.

We depend upon the accuracy and completeness of information about customers and counterparties.

     In deciding whether to extend credit or enter into other transactions with customers and counterparties, we may rely on information provided to us by customers and counterparties, including financial statements and other financial information. We may also rely on representations of customers and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. For example, in deciding whether to extend credit to a business, we may assume that the customer’s audited financial statements conform with generally accepted accounting principles and present fairly, in all material respects, the financial condition, results of operations and cash flows of the customer. We may also rely on the audit report covering those financial statements. Our financial condition and results of operations could be negatively impacted to the extent we rely on financial statements that do not comply with generally accepted accounting principles or that are materially misleading.

Legislative or regulatory changes or actions, or significant litigation, could adversely impact us or the businesses in which we are engaged.

     The financial services industry is extensively regulated. We are subject to extensive state and federal regulation, supervision and legislation that govern almost all aspects of our operations. Laws and regulations may change from time to time and are primarily intended for the protection of consumers, depositors and the deposit insurance funds, and not to benefit our shareholders. The impact of any changes to laws and regulations or other actions by regulatory agencies may negatively impact us or our ability to increase the value of our business. Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the imposition of restrictions on the operation of an institution, the classification of assets by the institution and the adequacy of an institution’s allowance for loan losses. Additionally, actions by regulatory agencies or significant litigation against us could cause us to devote significant time and resources to defending our business and may lead to penalties that materially affect us and our shareholders. Proposals to change the laws governing financial institutions are frequently raised in Congress and before bank regulatory authorities. It is impossible to predict the ultimate form any proposed legislation might take or how it might affect us. Future changes in the laws or regulations or their interpretations or enforcement could be materially adverse to our business and our shareholders.

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Environmental liability associated with commercial lending could have a material adverse effect on our business, financial condition and results of operations.

     In the course of our business, we may acquire, through foreclosure, commercial properties securing loans that are in default. There is a risk that hazardous substances could be discovered on those properties. In this event, we could be required to remove the substances from and remediate the properties at our cost and expense. The cost of removal and environmental remediation could be substantial. We may not have adequate remedies against the owners of the properties or other responsible parties and could find it difficult or impossible to sell the affected properties. These events could have a material adverse effect on our financial condition and results of operation.

We have no prior operating experience in the Alabama and Florida markets in which Vision and its subsidiaries operate.

     As of the date of this Annual Report on Form 10-K, we and our subsidiaries operated 138 offices across 29 Ohio counties and one Kentucky county. The merger with Vision will result in the expansion of our banking operations into the Alabama and Florida markets currently served by Vision and its subsidiaries. We have no prior operating experience in these markets and, therefore, will rely to a large extent on the existing Boards of Directors and management of Vision and its subsidiaries with respect to the operation of Vision Alabama and Vision Florida after the merger. We, together with Vision Alabama and/or Vision Florida, as appropriate, entered into employment agreements with the following executive officers of Vision Alabama and Vision Florida: J. Daniel Sizemore, Chairman of the Board, Chief Executive Officer and President of Vision and Chairman of the Board and Chief Executive Officer of Vision Alabama and Vision Florida; William E. Blackmon, Executive Vice President and Chief Financial Officer of Vision and Vision Alabama; Andrew W. Braswell, Executive Vice President and Senior Lending Officer of Vision Alabama; Joey W. Ginn, President of Vision Florida; and Robert S. McKean, President of Vision Alabama; as well as seven other senior officers of Vision Alabama and Vision Florida. Each of these employment agreements, which will become effective at the effective time of the merger, continues the executive officer’s or employee’s employment relationship with Vision Alabama or Vision Florida, as applicable, after the effective time of the merger for at least a three-year term. However, there is no guarantee that we will be able to retain the services of these executive officers and employees of Vision Alabama and Vision Florida, or that we will be able to successfully manage the operations of the Vision subsidiaries in the Alabama and Florida markets.

We could experience difficulties in effectively integrating Vision and Anderson.

     We may not be able to achieve fully the strategic objectives and operating efficiencies in the merger with Vision. The costs or difficulties relating to the integration of Vision and its subsidiaries with our organization may be greater than expected or the cost savings or any revenue synergies of the combined organization may be lower or take longer to realize than expected. Inherent uncertainties exist in integrating the operations of any acquired entity. In addition, the markets and industries in which we and Vision and our respective subsidiaries operate are highly competitive. We may lose our customers or the customers of Vision and its subsidiaries as a result of the merger. We may also lose key personnel as a result of the merger,

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although we have entered into employment agreements with J. Daniel Sizemore and eleven other executive officers and employees of Vision Alabama and Vision Florida as described in the previous risk factor. These factors could contribute to our not fully achieving the expected benefits from the merger. Similarly, our recently completed acquisition of Anderson involves the same risks described above.

Our business strategy includes growth plans. Our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively.

     We intend to continue pursuing a profitable growth strategy. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in growth stages of development. We cannot assure you that we will be able to expand our market presence in our existing markets or successfully enter new markets or that any such expansion will not adversely affect our results of operations. Failure to manage our growth effectively could have a material adverse effect on our business, future prospects, financial condition or results of operations and could adversely affect our ability to successfully implement our business strategy. Also, if we grow more slowly than anticipated, our operating results could be materially adversely affected.

     Our ability to grow successfully will depend on a variety of factors including the continued availability of desirable business opportunities, the competitive responses from other financial institutions in our market areas and our ability to manage our growth. While we believe we have the management resources and internal systems in place to successfully manage our future growth, there can be no assurance growth opportunities will be available or growth will be successfully managed.

     We may incur substantial costs to expand, and we can give no assurance such expansion will result in the levels of profits we seek. There can be no assurance integration efforts for any future mergers or acquisitions will be successful. Also, we may issue equity securities in connection with future acquisitions, which could cause ownership and economic dilution to our current shareholders. There is no assurance that, following any future mergers or acquisitions, our integration efforts will be successful or that, after giving effect to the acquisition, we will achieve profits comparable to or better than our historical experience.

Impairment of goodwill or other intangible assets could require charges to earnings, which could result in a negative impact on our results of operations.

     Under current accounting standards, goodwill and certain other intangible assets with indeterminate lives are no longer amortized but, instead, are assessed for impairment periodically or when impairment indicators are present. Assessment of goodwill and such other intangible assets could result in circumstances where the applicable intangible asset is deemed to be impaired for accounting purposes. Under such circumstances, the intangible asset’s impairment would be reflected as a charge to earnings in the period during which such impairment is identified.

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Changes in accounting standards could impact reported earnings.

     The accounting standard setters, including the Financial Accounting Standards Board, the SEC and other regulatory bodies, periodically change the financial accounting and reporting standards that govern the preparation of our consolidated financial statements. These changes can be hard to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in the restatement of prior period financial statements.

The preparation of our financial statements requires the use of estimates that may vary from actual results.

     The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make significant estimates that affect the financial statements. Two of our most critical estimates are the level of the allowance for loan losses and the accounting for goodwill and other intangible assets. Due to the inherent nature of these estimates, we cannot provide absolute assurance that we will not be required to charge earnings for significant unexpected loan losses, nor that we will not recognize a significant provision for impairment of our goodwill. For more information on the sensitivity of these estimates, refer to the discussion of our “Critical Accounting Policies” included in the section of our 2006 Annual Report captioned “FINANCIAL REVIEW” on pages 27 and 28.

Consumers may decide not to use banks to complete their financial transactions.

     Technology and other changes are allowing parties to complete through alternative methods financial transactions that historically have involved banks. For example, consumers can now maintain funds in brokerage accounts or mutual funds that would have historically been held as bank deposits. Consumers can also complete transactions such as paying bills and/or transferring funds directly without the assistance of banks. The process of eliminating banks as intermediaries, known as “disintermediation,” could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits. The loss of these revenue streams and the lower cost deposits as a source of funds could have a material adverse effect on our financial condition and results of operations.

We may be a defendant from time to time in the future in a variety of litigation and other actions, which could have a material adverse effect on our financial condition and results of operation.

     We and our subsidiaries may be involved from time to time in the future in a variety of litigation arising out of our business. Our insurance may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. Should the ultimate judgments or settlements in any litigation exceed our insurance coverage, they could have a material adverse effect on our financial condition and results of operation. In addition, we may not be able to obtain appropriate types or levels of insurance in the future, nor may we be able to obtain adequate replacement policies with acceptable terms, if at all.

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Unauthorized disclosure of sensitive or confidential client or customer information, whether through a breach of our computer systems or otherwise, could severely harm our business.

     As part of our financial institution business, we collect, process and retain sensitive and confidential client and customer information on behalf of our subsidiaries and other third parties. Despite the security measures we have in place, our facilities and systems, and those of our third party service providers, may be vulnerable to security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming and/or human errors, or other similar events. If information security is breached, information can be lost or misappropriated, resulting in financial loss or costs to us or damages to others. Any security breach involving the misappropriation, loss or other unauthorized disclosure of confidential customer information, whether by us or by our vendors, could severely damage our reputation, expose us to the risks of litigation and liability, disrupt our operations and have a material adverse effect on our business.

Terrorism, acts of war or international conflicts could have a material adverse effect on our financial condition and results of operations.

     Acts or threats of war or terrorism, international conflicts, including ongoing military operations in Iraq and Afghanistan, and the actions taken by the United States and other governments in response to such events could negatively impact general business and economic conditions in the United States. If terrorist activity, acts of war or other international hostilities cause an overall economic decline, our financial condition and operating results could be materially adversely affected. The potential for future terrorist attacks, the national and international responses to terrorist attacks or perceived threats to national security and other actual or potential conflicts or acts of war, including conflict in the Middle East, have created many economic and political uncertainties that could seriously harm our business and results of operations in ways that cannot presently be predicted.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

     None.

ITEM 2. PROPERTIES.

     Park’s principal executive offices are located at 50 North Third Street, Newark, Ohio 43055.

Park National Bank

     As of the date of this Annual Report on Form 10-K, Park National Bank and its divisions have a total of 43 financial service offices. Park National Bank has six financial service offices (including its main office) and its operations center in Newark in Licking County. In addition, within Ohio, Park National Bank has: (a) financial service offices in Granville, Heath (two offices), Hebron, Johnstown, Kirkersville, Pataskala, Reynoldsburg and Utica in Licking County; (b) a financial service office in Delaware in Delaware County; (c) financial service offices in Canal Winchester, Columbus, Gahanna and Worthington in Franklin County; (d) a financial service office in West Chester in Butler County; (e) a financial service office in Dayton in Montgomery County; (f) financial service offices in Baltimore, Pickerington (two offices) and Lancaster (seven offices) in

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Fairfield County; (g) financial service offices in Amelia (two offices), Cincinnati (two offices), Milford (two offices), New Richmond and Owensville in Clermont County; and (h) financial service offices in Anderson and Cincinnati in Hamilton County. Park National Bank also has one financial service office in Florence (Boone County), Kentucky. The financial service offices in Canal Winchester and Fairfield County comprise the Fairfield National Division. The financial service offices in Butler, Clermont, Hamilton and Montgomery Counties in Ohio and in Boone County, Kentucky comprise The Park National Bank of Southwest Ohio & Northern Kentucky.

     Of the financial service offices described above, 21 are leased and the remainder are owned. Park National Bank also operates 12 off-site automated teller machines, three of which are operated by the Fairfield National Division and two of which are operated by The Park National Bank of Southwest Ohio & Northern Kentucky.

Richland Trust Company

     As of the date of this Annual Report on Form 10-K, Richland Trust Company has a total of 13 financial service offices. Richland Trust Company has eight financial service offices in Mansfield (including its main office) as well as financial service offices in Butler, Lexington, Ontario and Shelby (two offices) in Richland County. Of these financial service offices, three are leased and the remainder are owned. Richland Trust Company also operates two off-site automated teller machines.

Century National Bank

     As of the date of this Annual Report on Form 10-K, Century National Bank has a total of 16 financial service offices. Century National Bank has seven financial service offices (including its main office) and a mortgage lending office in Zanesville in Muskingum County. Century National Bank also has a financial service office in Athens in Athens County, two financial service offices in Coshocton in Coshocton County, a financial service office in Logan in Hocking County, financial service offices in New Concord and Dresden in Muskingum County, a financial service office in New Lexington in Perry County, and a financial service office in Newcomerstown in Tuscarawas County. Of these financial service offices, three are leased and the remainder are owned. Century National Bank also operates three off-site automated teller machines.

First-Knox National Bank

     As of the date of this Annual Report on Form 10-K, First-Knox National Bank and its divisions have a total of 14 financial service offices. First-Knox National Bank has three financial service offices (including its main office) and its operations center in Mount Vernon in Knox County. First-Knox National Bank also has financial service offices in Ashland, Loudonville and Perrysville in Ashland County, two financial service offices in Millersburg in Holmes County, financial service offices in Centerburg, Danville and Fredericktown in Knox County, two financial service offices in Mount Gilead in Morrow County and a financial service office in Bellville in Richland County. The financial service offices in Ashland County comprise the Farmers and Savings Division. Of these financial service offices, two are leased and the remainder are owned. First-Knox National Bank also operates 11 off-site automated teller machines, one of which is operated by the Farmers and Savings Division.

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United Bank

     As of the date of this Annual Report on Form 10-K, United Bank has a total of eight financial service offices. United Bank has its main office in Bucyrus and financial service offices in Crestline and Galion in Crawford County and financial service offices in Caledonia, Marion (two offices), Prospect and Waldo in Marion County. Of these financial service offices, three are leased and the remainder are owned. United Bank also operates one off-site automated teller machine.

Second National Bank

     As of the date of this Annual Report on Form 10-K, Second National Bank has a total of nine financial service offices. Second National Bank has five financial service offices (including its main office) in Greenville in Darke County. Second National Bank also has two financial service offices in Arcanum (two offices) and Versailles in Darke County and a financial service office in Fort Recovery in Mercer County. Of these financial service offices, two are leased and the remainder are owned.

Security National Bank

     As of the date of this Annual Report on Form 10-K, Security National Bank and its divisions have a total of 22 financial service offices. Security National Bank has six financial service offices (including its main office) in Springfield in Clark County. Security National Bank also has financial service offices in Enon, Medway, New Carlisle (two offices) and South Charleston in Clark County, a financial service office in Jeffersonville in Fayette County, financial service offices in Jamestown (two offices) and Xenia (two offices) in Greene County, and financial service offices in Piqua (three offices including an administrative building), Tipp City and Troy (two offices) in Miami County. The financial service offices in Miami County comprise the Unity National Division. Of these financial service offices, three are leased and the remainder are owned. Security National Bank also operates four off-site automated teller machines.

Citizens National Bank

     As of the date of this Annual Report on Form 10-K, Citizens National Bank has a total of five financial service offices. Citizens National Bank has two financial service offices (including its main office) in Urbana in Champaign County. In addition, Citizens National Bank has financial service offices in Mechanicsburg and North Lewisburg in Champaign County and a financial service office in Plain City in Madison County. All of Citizens National Bank’s financial service offices are owned. Citizens National Bank also operates two off-site automated teller machines.

Guardian Finance

     As of the date of this Annual Report on Form 10-K, Guardian Finance has a total of eight financial service offices. Guardian Finance has its main office in Hilliard and a financial service office in Columbus in Franklin County, a financial service office in Springfield in Clark County, a financial service office in Delaware in Delaware County, a financial service office in Lancaster in Fairfield County where it leases space from the Fairfield National Division of Park National Bank, a financial service office in Heath in Licking County, a financial service office in Centerville in Montgomery County and a financial service office in Mansfield in Richland County where it leases

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space from Richland Trust Company. All of Guardian Finance’s financial service offices are leased.

Locations to be added in connection with merger with Vision

     Please see the description of the branch locations of Vision Alabama and Vision Florida included in “ITEM 1. BUSINESS” of this Annual Report on Form 10-K under the caption “Recent Developments — Pending Merger with Vision Bancshares.”

ITEM 3. LEGAL PROCEEDINGS.

     There are no pending legal proceedings to which Park or any of its subsidiaries is a party or to which any of their property is subject, except for routine legal proceedings to which Park’s subsidiary banks are parties incidental to their respective banking businesses. Park considers none of those proceedings to be material.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     There were no matters submitted to a vote of the shareholders of Park during the fourth quarter of the fiscal year ended December 31, 2006.

PART II

ITEM 5.   MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

     The information called for in this Item 5 by Items 201(a) through (c) of SEC Regulation S-K is incorporated herein by reference from “Table 15 — Market and Dividend Information” and the accompanying disclosure in the section of Park’s 2006 Annual Report captioned “FINANCIAL REVIEW,” on page 38.

     During the fiscal quarter ended December 31, 2006, there were no purchases of Park’s common shares made by or on behalf of Park or any “affiliated purchaser” of Park, as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended. The following table provides information concerning changes in the maximum number of common shares that may be purchased under Park’s previously announced repurchase programs as a result of the forfeiture of previously outstanding incentive stock options.

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					Total Number of		Maximum Number of
					Common Shares		Common Shares
					Purchased as Part		that May Yet Be
	Total Number of		Average Price		of Publicly		Purchased under the
	Common Shares		Paid per		Announced Plans or		Plans or Programs
Period	Purchased		Common Share		Programs		(1)
October 1 through October 31, 2006		0		n/a		0		1,715,363
November 1 through November 30, 2006		0		n/a		0		1,714,043
December 1 through December 31, 2006		0		n/a		0		1,711,662
Total		0		n/a		0		1,711,662

(1)	The number shown represents, as of the end of each period, the maximum aggregate number of common shares that may yet be purchased under Park’s publicly announced stock repurchase authorization to fund Park’s 2005 Incentive Stock Option and 1995 Incentive Stock Option Plan as well as Park’s publicly announced stock repurchase program.
	On November 21, 2005, Park announced that its Board of Directors had granted management the authority to purchase up to an aggregate of 1,000,000 common shares from time to time over the three-year period ending November 20, 2008. At December 31, 2006, 662,180 common shares remained authorized for repurchase under this stock repurchase authorization.
	The Park National Corporation 2005 Incentive Stock Option Plan (the “2005 Plan”) was adopted by the Board of Directors of Park on January 18, 2005 and was approved by the Park shareholders at the Annual Meeting of Shareholders on April 18, 2005. Under the 2005 Plan, 1,500,000 common shares are authorized for delivery upon the exercise of incentive stock options granted under the 2005 Plan. All of the common shares delivered upon the exercise of incentive stock options granted under the 2005 Plan are to be treasury shares. As of December 31, 2006, incentive stock options covering 214,825 common shares were outstanding and 1,285,175 common shares were available for future grants under the 2005 Plan.
	The Park National Corporation 1995 Incentive Stock Option Plan (as amended, the “1995 Plan”) was adopted April 17, 1995, and amended April 20, 1998 and April 16, 2001. Pursuant to the terms of the 1995 Plan, all of the common shares delivered upon exercise of incentive stock options granted under the 1995 Plan are to be treasury shares. No further incentive stock options may be granted under the 1995 Plan. As of December 31, 2006, incentive stock options covering 457,480 common shares were outstanding under the 1995 Plan.
	Incentive stock options, granted under both the 2005 Plan and 1995 Plan, covering 672,305 common shares were outstanding as of December 31, 2006 and 1,285,175 common shares were available for future grants. With 907,998 common shares held as treasury shares for

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purposes of the 2005 Plan and 1995 Plan at December 31, 2006, an additional 1,049,482 common shares remained authorized for repurchase for purposes of funding the 2005 Plan and 1995 Plan.

ITEM 6. SELECTED FINANCIAL DATA.

     The information called for in this Item 6 is incorporated herein by reference from “Table 13 — Consolidated Five-Year Selected Financial Data” and the accompanying disclosure in the section of Park’s 2006 Annual Report captioned “FINANCIAL REVIEW,” on page 37.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

     The information called for in this Item 7 is incorporated herein by reference from the section of Park’s 2006 Annual Report captioned “FINANCIAL REVIEW,” on pages 26 through 37.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     As noted in Note 1 of the Notes to Consolidated Financial Statements under the caption “Derivative Instruments” on page 50 of Park’s 2006 Annual Report, Park and its subsidiaries did not use any derivative instruments in 2006, 2005 or 2004. The discussion of interest rate sensitivity included in the section of Park’s 2006 Annual Report captioned “FINANCIAL REVIEW — CAPITAL RESOURCES — Liquidity and Interest Rate Sensitivity Management,” on pages 34 through 36, is incorporated herein by reference. In addition, the discussion of Park’s commitments, contingent liabilities and off-balance sheet arrangements included on page 36 of Park’s 2006 Annual Report under the caption “FINANCIAL REVIEW — CONTRACTUAL OBLIGATIONS — Commitments, Contingent Liabilities, and Off-Balance Sheet Arrangements,” and in Note 17 of the Notes to Consolidated Financial Statements included on page 58 of Park’s 2006 Annual Report, is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     The Consolidated Balance Sheets of Park and its subsidiaries at December 31, 2006 and 2005, the related Consolidated Statements of Income, of Changes in Stockholders’ Equity and of Cash Flows for the years ended December 31, 2006, 2005 and 2004, the related Notes to Consolidated Financial Statements and the Reports of Independent Registered Public Accounting Firm (Crowe Chizek & Company LLC) appearing on pages 40 through 62 of Park’s 2006 Annual Report, are incorporated herein by reference. The Report of Ernst & Young LLP, Park’s predecessor independent registered public accounting firm, on the Consolidated Balance Sheet of Park and its subsidiaries at December 31, 2005 and the related Consolidated Statements of Income, of Changes in Stockholders’ Equity and of Cash Flows for each of the two years in the period ended December 31, 2005, is included on page 38 of this Annual Report on Form 10-K. Quarterly Financial Data provided in “Table 14 — Quarterly Financial Data” and the accompanying disclosure included in the section of Park’s 2006 Annual Report captioned “FINANCIAL REVIEW,” on page 37, is also incorporated herein by reference.

[Remainder of page intentionally left blank]

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Park National Corporation

We have audited the accompanying consolidated balance sheet of Park National Corporation and subsidiaries as of December 31, 2005, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2005. These financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Park National Corporation and subsidiaries at December 31, 2005, and the consolidated results of their operations and their cash flows for each of the two years in the period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

Columbus, Ohio
February 21, 2006

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

     No response required.

ITEM 9A. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

     With the participation of the Chairman of the Board and Chief Executive Officer (the principal executive officer) and the Chief Financial Officer (the principal financial officer) of Park, Park’s management has evaluated the effectiveness of Park’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the fiscal year covered by this Annual Report on Form 10-K. Based on that evaluation, Park’s Chairman of the Board and Chief Executive Officer and Park’s Chief Financial Officer have concluded that:

• information required to be disclosed by Park in this Annual Report on Form 10-K and the other reports that Park files or submits under the Exchange Act would be accumulated and communicated to Park’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure;

• information required to be disclosed by Park in this Annual Report on Form 10-K and the other reports that Park files or submits under the Exchange Act would be recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and

• Park’s disclosure controls and procedures were effective as of the end of the fiscal year covered by this Annual Report on Form 10-K to ensure that material information relating to Park and its consolidated subsidiaries is made known to them, particularly during the period in which this Annual Report on Form 10-K was being prepared.

Management’s Annual Report on Internal Control over Financial Reporting

     The “MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING” on page 39 of Park’s 2006 Annual Report is incorporated herein by reference.

Attestation Report of the Registered Public Accounting Firm

     The “REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM” on page 40 of Park’s 2006 Annual Report is incorporated herein by reference.

Changes in Internal Control over Financial Reporting

     There were no changes in Park’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during Park’s fiscal quarter ended December 31,

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2006, that have materially affected, or are reasonably likely to materially affect, Park’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

     No response required.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

     The information required by Item 401 of SEC Regulation S-K concerning the directors of Park and the nominees for re-election as directors of Park at the Annual Meeting of Shareholders to be held on April 16, 2007 (the “2007 Annual Meeting”) is incorporated herein by reference from the disclosure to be included under the captions “ELECTION OF DIRECTORS” and “BENEFICIAL OWNERSHIP OF PARK COMMON SHARES – Pending Merger with Vision Bancshares, Inc.” in Park’s definitive Proxy Statement relating to the 2007 Annual Meeting to be filed pursuant to SEC Regulation 14A (“Park’s 2007 Proxy Statement”). The information required by Item 401 of SEC Regulation S-K concerning the executive officers of Park is incorporated herein by reference from the disclosure to be included under the caption “EXECUTIVE OFFICERS” in Park’s 2007 Proxy Statement.

     The information required by Item 405 of SEC Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “BENEFICIAL OWNERSHIP OF PARK COMMON SHARES — Section 16(a) Beneficial Ownership Reporting Compliance” in Park’s 2007 Proxy Statement.

     Park’s Board of Directors has adopted charters for each of the Audit Committee, the Compensation Committee, the Nominating Committee and the Risk Committee.

     In accordance with the requirements of Section 807 of the AMEX Company Guide, the Board of Directors of Park has adopted a Code of Business Conduct and Ethics covering the directors, officers and employees of Park and its affiliates, including Park’s Chairman of the Board and Chief Executive Officer (the principal executive officer), Park’s President and Secretary and Park’s Chief Financial Officer (the principal financial officer and principal accounting officer). Park intends to disclose the following in a current report on Form 8-K within the required four business days following their occurrence: (A) the date and nature of any amendment to a provision of Park’s Code of Business Conduct and Ethics that (i) applies to Park’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, (ii) relates to any element of the code of ethics definition enumerated in Item 406(b) of SEC Regulation S-K, and (iii) is not a technical, administrative or other non-substantive amendment; and (B) a description of any waiver (including the nature of the waiver, the name of the person to whom the waiver was granted and the date of the waiver), including an implicit waiver, from a provision of the Code of Business Conduct and Ethics granted to Park’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions that relates to one or more of the elements of the code of ethics definition set forth in Item 406(b) of SEC Regulation S-K. In addition, Park will disclose any waivers from the provisions of the Code of Business Conduct and Ethics granted to a director or executive officer of Park in a current report on Form 8-K within four business days following their occurrence.

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     The text of each of the Code of Business Conduct and Ethics, the Audit Committee Charter, the Compensation Committee Charter, the Nominating Committee Charter and the Risk Committee Charter is posted on the “Governance Documents” section of the “Investor Relations” page of Park’s Internet website located at www.parknationalcorp.com. Interested persons may also obtain copies of the Code of Business Conduct and Ethics, the Audit Committee Charter, the Compensation Committee Charter, the Nominating Committee Charter and the Risk Committee Charter, without charge, by writing to the President of Park at Park National Corporation, 50 North Third Street, P.O. Box 3500, Newark, Ohio 43058-3500, Attention: David L. Trautman. In addition, Park’s Code of Business Conduct and Ethics, as amended on July 17, 2006, is incorporated by reference in Exhibit 14 to this Annual Report on Form 10-K.

     The information required by Item 407(c)(3) of SEC Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “CORPORATE GOVERNANCE—Nominating Procedures” in Park’s 2007 Proxy Statement.

     The information required by Items 407(d)(4) and 407(d)(5) of SEC Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “BOARD OF DIRECTORS MEETINGS AND COMMITTEES OF THE BOARD — Committees of the Board — Audit Committee” in Park’s 2007 Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION.

     The information required by Item 402 of SEC Regulation S-K is incorporated herein by reference from the disclosure to be included under the captions “EXECUTIVE COMPENSATION” and “DIRECTOR COMPENSATION” in Park’s 2007 Proxy Statement.

     The information required by Item 407(e)(4) of SEC Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION” in Park’s 2007 Proxy Statement.

     The information required by Item 407(e)(5) of SEC Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “EXECUTIVE COMPENSATION — Compensation Committee Report” in Park’s 2007 Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

     The information required by Item 403 of SEC Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “BENEFICIAL OWNERSHIP OF PARK COMMON SHARES” in Park’s 2007 Proxy Statement.

Equity Compensation Plan Information

     Park has three compensation plans (excluding plans assumed by Park in the merger with Security Banc Corporation effective March 23, 2001 (the “Assumed Security Plans”)) under which common shares of Park are authorized for issuance to directors, officers or employees of Park and Park’s subsidiaries in exchange for consideration in the form of goods or services — the Park

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National Corporation 1995 Incentive Stock Option Plan (as amended, the “1995 Plan”), the Park National Corporation 2005 Incentive Stock Option Plan (the “2005 Plan”) and the Park National Corporation Stock Plan for Non-Employee Directors of Park National Corporation and Subsidiaries (the “Directors’ Stock Plan”). In addition, Park maintains the Park National Corporation Employees Stock Ownership Plan (the “Park KSOP”), which is intended to meet the qualification requirements of Section 401(a) of the Internal Revenue Code of 1986, as amended. The 1995 Plan (and amendments thereto), the 2005 Plan and the Directors’ Stock Plan have been approved by Park’s shareholders.

     The following table shows the number of common shares issuable upon exercise of incentive stock options (“ISOs”) granted under the 1995 Plan and the 2005 Plan outstanding at December 31, 2006, the weighted-average exercise price of those ISOs and the number of common shares remaining available for future issuance under the 2005 Plan and the Directors’ Stock Plan at December 31, 2006, excluding common shares issuable upon exercise of outstanding ISOs granted under the 2005 Plan. No further ISOs may be granted under the 1995 Plan. The table does not include common shares subject to outstanding options granted under the Assumed Security Plans. Footnote (2) to the table sets forth the total number of common shares issuable upon exercise of options granted under the Assumed Security Plans which were outstanding at December 31, 2006, and the weighted-average exercise price of those options. Park cannot grant additional options under the Assumed Security Plans.

							Number of common
							shares remaining
							available for future
	Number of common						issuance under equity
	shares to be issued			Weighted-average			compensation plans
	upon exercise of			exercise price of			(excluding common
	outstanding options,			outstanding options,			shares reflected in
	warrants and rights			warrants and rights			column (a))
Plan category	(a)			(b)			(c)
Equity compensation plans approved by shareholders		672,305		$	101.61			1,366,935	(1)
Equity compensation plans not approved by shareholders		(2	)		(2	)			(2)
Total		672,305		$	101.61			1,366,935	(1)

(1) Includes 1,285,175 common shares remaining available for future issuance under the 2005 Plan and 81,760 common shares remaining available for future issuance under the Directors’ Stock Plan.

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(2) The table does not include information for the Assumed Security Plans. A total of 13,719 common shares were issuable upon exercise of options granted under Assumed Security Plans which were outstanding at December 31, 2006. The weighted-average exercise price of all options granted under the Assumed Security Plans which were outstanding at December 31, 2006, was $115.94. Park cannot grant additional options under the Assumed Security Plans.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

     The information required by Item 404 of SEC Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “CORPORATE GOVERNANCE — Transactions with Related Persons” in Park’s 2007 Proxy Statement.

     The information required by Item 407(a) of SEC Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “CORPORATE GOVERNANCE — Independence of Directors” in Park’s 2007 Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

     The information called for in this Item 14 is incorporated herein by reference from the disclosure to be included under the captions “AUDIT COMMITTEE MATTERS — Pre-Approval of Services Performed by Independent Registered Public Accounting Firms” and “AUDIT COMMITTEE MATTERS — Fees of Independent Registered Public Accounting Firms” in Park’s 2007 Proxy Statement.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a)(1) Financial Statements.
	The consolidated financial statements (and reports thereon) listed below are filed as a part of this Annual Report on Form 10-K or incorporated herein by reference from Park’s 2006 Annual Report as noted:

Reports of Independent Registered Public Accounting Firm
(Crowe Chizek and Company LLC) — Incorporated
by reference from pages 40 and 41 of Park’s 2006 Annual Report

Report of Independent Registered Public Accounting Firm
(Ernst & Young LLP) — Included on page 38 of this Annual
Report on Form 10-K

Consolidated Balance Sheets at December 31, 2006 and 2005 —
Incorporated by reference from pages 42 and 43 of Park’s
2006 Annual Report

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Consolidated Statements of Income for the years ended
December 31, 2006, 2005 and 2004 — Incorporated by
reference from pages 44 and 45 of Park’s 2006 Annual Report

Consolidated Statements of Changes in Stockholders’ Equity for
the years ended December 31, 2006, 2005 and 2004 —
Incorporated by reference from page 46 of Park’s 2006 Annual Report

Consolidated Statements of Cash Flows for the years ended
December 31, 2006, 2005 and 2004 — Incorporated by
reference from page 47 of Park’s 2006 Annual Report

Notes to Consolidated Financial Statements — Incorporated by
reference from pages 48 through 62 of Park’s 2006 Annual Report

(a)(2) Financial Statement Schedules.
	All schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions or are inapplicable and have been omitted.
(a)(3) Exhibits.
	The documents listed below are filed with this Annual Report on Form 10-K as exhibits or incorporated into this Annual Report on Form 10-K by reference as noted:

Exhibit No.	Description of Exhibit
2.1(a)	Agreement and Plan of Merger, dated to be effective as of September 14, 2006, by and between Park National Corporation and Vision Bancshares, Inc. (the “Vision Bancshares Merger Agreement”) (included as Annex A to the Prospectus of Park National Corporation/Proxy Statement of Vision Bancshares, Inc. dated January 9, 2007, filed on January 11, 2007 pursuant to Rule 424(b)(3) under the Securities Act of 1933 (Registration No. 333-139083))*
2.1(b)	First Amendment to Agreement and Plan of Merger, dated to be effective as of February 6, 2007, by and between Park National Corporation and Vision Bancshares, Inc. (filed herewith)

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Exhibit No.	Description of Exhibit
2.2(a)	Second Amended and Restated Agreement and Plan of Merger, dated to be effective as of August 14, 2006, by and among Park National Corporation, The Park National Bank and Anderson Bank Company (the “Anderson Merger Agreement”) (incorporated herein by reference to Annex A to the Prospectus of Park National Corporation/Proxy Statement of Anderson Bank Company dated November 13, 2006, filed on November 16, 2006 pursuant to Rule 424(b)(3) under the Securities Act of 1933 (Registration No. 333-138028)**
2.2(b)	Amendment to the Second Amended and Restated Agreement and Plan of Merger, entered into as of December 15, 2006, by and among Park National Corporation, The Park National Bank and Anderson Bank Company (incorporated herein by reference to Exhibit 2.2 to Park National Corporation’s Current Report on Form 8-K dated and filed on December 18, 2006 (File No. 1-13006))
3.1(a)	Articles of Incorporation of Park National Corporation as filed with the Ohio Secretary of State on March 24, 1992 (incorporated herein by reference to Exhibit 3(a) to Park National Corporation’s Form 8-B, filed on May 20, 1992 (File No. 0-18772) (“Park’s Form 8-B”))
3.1(b)	Certificate of Amendment to the Articles of Incorporation of Park National Corporation as filed with the Ohio Secretary of State on May 6, 1993 (incorporated herein by reference to Exhibit 3(b) to Park National Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993 (File No. 0-18772))
3.1(c)	Certificate of Amendment to the Articles of Incorporation of Park National Corporation as filed with the Ohio Secretary of State on April 16, 1996 (incorporated herein by reference to Exhibit 3(a) to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1996 (File No. 1-13006))
3.1(d)	Certificate of Amendment by Shareholders to the Articles of Incorporation of Park National Corporation as filed with the Ohio Secretary of State on April 22, 1997 (incorporated herein by reference to Exhibit 3(a)(1) to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997 (File No. 1-13006) (“Park’s June 30, 1997 Form 10-Q”))
3.1(e)	Articles of Incorporation of Park National Corporation (reflecting amendments through April 22, 1997) [for SEC reporting compliance purposes only — not filed with Ohio Secretary of State] (incorporated herein by reference to Exhibit 3(a)(2) to Park’s June 30, 1997 Form 10-Q)
3.2(a)	Regulations of Park National Corporation (incorporated herein by reference to Exhibit 3(b) to Park’s Form 8-B)

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Exhibit No.	Description of Exhibit
3.2(b)	Certified Resolution regarding Adoption of Amendment to Subsection 2.02(A) of the Regulations of Park National Corporation by Shareholders on April 21, 1997 (incorporated herein by reference to Exhibit 3(b)(1) to Park’s June 30, 1997 Form 10-Q)
3.2(c)	Certificate Regarding Adoption of Amendments to Sections 1.04 and 1.11 of Park National Corporation’s Regulations by the Shareholders on April 17, 2006 (incorporated herein by reference to Exhibit 3.1 to Park National Corporation’s Current Report on Form 8-K dated and filed on April 18, 2006 (File No. 1-13006))
3.2(d)	Regulations of Park National Corporation (reflecting amendments through April 17, 2006) [for purposes of SEC reporting compliance only] (incorporated herein by reference to Exhibit 3.2 to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2006 (File No. 1-13006))
4	Agreement to furnish instruments and agreements defining rights of holders of long-term debt (filed herewith)
10.1†	Summary of Base Salaries for Executive Officers of Park National Corporation (incorporated herein by reference to Exhibit 10.1 to Park National Corporation’s Pre-Effective Amendment No. 1 to Form S-4 Registration Statement filed on January 5, 2007 (Registration No. 333-139083))
10.2†	Summary of Incentive Compensation Plan of Park National Corporation (incorporated herein by reference to Exhibit 10.2 to Park National Corporation’s Pre-Effective Amendment No. 1 to Form S-4 Registration Statement filed on January 5, 2007 (Registration No. 333-139083))
10.3(a)†	Split-Dollar Agreement, dated May 17, 1993, between William T. McConnell and The Park National Bank (incorporated herein by reference to Exhibit 10(f) to Park National Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993 (File No. 0-18772))
10.3(b)†	Schedule identifying Split-Dollar Agreements between subsidiaries of Park National Corporation and executive officers or employees of such subsidiaries who are directors or executive officers of Park National Corporation, which Split-Dollar Agreements are identical to the Split-Dollar Agreement, dated May 17, 1993, between William T. McConnell and The Park National Bank (incorporated herein by reference to Exhibit 10.3(b) to Park National Corporation’s Form S-4 Registration Statement filed on December 1, 2006 (Registration No. 333-139083))
10.4(a)†	Split-Dollar Agreement, dated September 3, 1993, between Leon Zazworsky and The Park

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Exhibit No.	Description of Exhibit
	National Bank (incorporated herein by reference to Exhibit 10.3 to Park National Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 (File No. 1-13006) (“Park’s 2003 Form 10-K”))
10.4(b)†	Schedule identifying Split-Dollar Agreements between directors of Park National Corporation and The Park National Bank, The Richland Trust Company or The First-Knox National Bank of Mount Vernon as identified in such Schedule, which Split-Dollar Agreements are identical to the Split-Dollar Agreement, dated September 3, 1993, between Leon Zazworsky and The Park National Bank (incorporated herein by reference to Exhibit 10.4(b) to Park National Corporation’s Registration Statement on Form S-4 filed on October 16, 2006 (Registration No. 333-138028))
10.5†	Park National Corporation 1995 Incentive Stock Option Plan (reflects amendments and share dividends through December 15, 2004) (incorporated herein by reference to Exhibit 10.5 to Park National Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 (File No. 1-13006) (“Park’s 2004 Form 10-K”))
10.6†	Form of Stock Option Agreement executed in connection with the grant of options under the Park National Corporation 1995 Incentive Stock Option Plan, as amended (incorporated herein by reference to Exhibit 10(i) to Park National Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998 (File No. 1-13006))
10.7(a)†	Description of Park National Corporation Supplemental Executive Retirement Plan (filed herewith)
10.7(b)†	Form of Supplemental Executive Retirement Plan Agreement entered into by and between Park National Corporation or a wholly-owned subsidiary of Park National Corporation and each of C. Daniel DeLawder, John W. Kozak and William T. McConnell on December 27, 1996 (filed herewith)
10.8†	Security Banc Corporation 1987 Stock Option Plan, which was assumed by Park National Corporation (incorporated herein by reference to Exhibit 10(a) to Park National Corporation’s Registration Statement on Form S-8 filed April 23, 2001 (Registration No. 333-59378))
10.9†	Security Banc Corporation 1995 Stock Option Plan, which was assumed by Park National Corporation (incorporated herein by reference to Exhibit 10(b) to Park National Corporation’s Registration Statement on Form S-8 filed April 23, 2001 (Registration No. 333-59378))
10.10†	Security Banc Corporation 1998 Stock Option Plan, which was assumed by Park National Corporation (incorporated herein by reference to Exhibit 10(c) to Park National Corporation’s Registration Statement on Form S-8 filed April 23, 2001 (Registration No. 333-59378))

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Exhibit No.	Description of Exhibit
10.11†	Employment Agreement, made and entered into as of December 22, 1999, and the Amendment thereto, dated March 23, 2001, between The Security National Bank and Trust Co. (also known as Security National Bank and Trust Co.) and Harry O. Egger (incorporated herein by reference to Exhibit 10(e) to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2001 (File No. 1-13006))
10.12†	Park National Corporation Stock Plan for Non-Employee Directors of Park National Corporation and Subsidiaries (incorporated herein by reference to Exhibit 10 to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004 (File No. 1-13006))
10.13†	Summary of Certain Compensation for Directors of Park National Corporation (incorporated herein by reference to Exhibit 10.13 to Park National Corporation’s Pre-Effective Amendment No. 1 to Form S-4 Registration Statement filed on January 5, 2007 (Registration No. 333-139083))
10.14†	Security National Bank and Trust Co. Amended and Restated 1988 Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.16 to Park’s 2004 Form 10-K)
10.15†	Park National Corporation 2005 Incentive Stock Option Plan (incorporated herein by reference to Exhibit 10.1 to Park National Corporation’s Current Report on Form 8-K dated and filed on April 20, 2005 (File No. 1-13006) (“Park’s April 20, 2005 Form 8-K”))
10.16†	Form of Stock Option Agreement to be used in connection with the grant of incentive stock options under the Park National Corporation 2005 Incentive Stock Option Plan (incorporated herein by reference to Exhibit 10.2 to Park’s April 20, 2005 Form 8-K)
10.17(a)†	Employment Agreement for J. Daniel Sizemore, entered into September 14, 2006, by and among Park National Corporation; Vision Bank, an Alabama banking corporation; Vision Bank, a Florida banking corporation; and J. Daniel Sizemore (to be effective as of the effective time of the merger of Vision Bancshares, Inc. with and into Park National Corporation) (included as Exhibit C-1 to Annex A to the Prospectus of Park National Corporation/Proxy Statement of Vision Bancshares, Inc. dated January 9, 2007, filed on January 11, 2007 pursuant to Rule 424(b)(3) under the Securities Act of 1933 (Registration No. 333-139083))
10.17(b)†	First Amendment to Employment Agreement for J. Daniel Sizemore, entered into February 6, 2007, by and among Park National Corporation; Vision Bank, an Alabama banking corporation; Vision Bank, a Florida banking corporation; and J. Daniel Sizemore (filed herewith)

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Exhibit No.	Description of Exhibit
12	Computation of ratios (filed herewith)
13	2006 Annual Report (not deemed filed except for portions thereof which are specifically incorporated by reference in this Annual Report on Form 10-K) (filed herewith)
14	Code of Business Conduct and Ethics as amended July 17, 2006 (incorporated herein by reference to Exhibit 14 to Park National Corporation’s Current Report on Form 8-K dated and filed on July 21, 2006 (File No. 1-13006))
21	Subsidiaries of Park National Corporation (incorporated herein by reference to Exhibit 21 to Park National Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 1-13006))
23.1	Consent of Crowe Chizek and Company LLC (filed herewith)
23.2	Consent of Ernst & Young LLP (filed herewith)
24	Powers of Attorney of Directors and Executive Officers of Park National Corporation (filed herewith)
31.1	Rule 13a-14(a)/15d-14(a) Certification — Principal Executive Officer (filed herewith)
31.2	Rule 13a-14(a)/15d-14(a) Certification — Principal Financial Officer (filed herewith)
32	Section 1350 Certification — Principal Executive Officer and Principal Financial Officer (filed herewith)
99.1(a)	Employment Agreement for William E. Blackmon, entered into September 14, 2006, by and among Park National Corporation; Vision Bank, an Alabama banking corporation; and William E. Blackmon (to be effective as of the effective time of the merger of Vision Bancshares, Inc. with and into Park National Corporation) (included as Exhibit C-2 to Annex A to the Prospectus of Park National Corporation/Proxy Statement of Vision Bancshares, Inc. dated January 9, 2007, filed on January 11, 2007 pursuant to Rule 424(b)(3) under the Securities Act of 1933 (Registration No. 333-139083))
99.1(b)	First Amendment to Employment Agreement for William E. Blackmon, entered into February 6, 2007, by and among Park National Corporation; Vision Bank, an Alabama banking corporation; and William E. Blackmon (filed herewith)

-49-

Exhibit No.	Description of Exhibit
99.2(a)	Employment Agreement for Andrew W. Braswell, entered into September 14, 2006, by and among Park National Corporation; Vision Bank, an Alabama banking corporation; and Andrew W. Braswell (to be effective as of the effective time of the merger of Vision Bancshares, Inc. with and into Park National Corporation) (included as Exhibit C-3 to Annex A to the Prospectus of Park National Corporation/Proxy Statement of Vision Bancshares, Inc. dated January 9, 2007, filed on January 11, 2007 pursuant to Rule 424(b)(3) under the Securities Act of 1933 (Registration No. 333-139083))
99.2(b)	First Amendment to Employment Agreement for Andrew W. Braswell, entered into February 6, 2007, by and among Park National Corporation; Vision Bank, an Alabama banking corporation; and Andrew W. Braswell (filed herewith)
99.3(a)	Employment Agreement for Joey W. Ginn, entered into September 14, 2006, by and among Park National Corporation; Vision Bank, a Florida banking corporation; and Joey W. Ginn (to be effective as of the effective time of the merger of Vision Bancshares, Inc. with and into Park National Corporation) (included as Exhibit C-4 to Annex A to the Prospectus of Park National Corporation/Proxy Statement of Vision Bancshares, Inc. dated January 9, 2007, filed on January 11, 2007 pursuant to Rule 424(b)(3) under the Securities Act of 1933 (Registration no. 333-139083))
99.3(b)	First Amendment to Employment Agreement for Joey W. Ginn, entered into February 6, 2007, by and among Park National Corporation; Vision Bank, a Florida banking corporation; and Joey W. Ginn (filed herewith)
99.4(a)	Employment Agreement for Robert S. McKean, entered into September 14, 2006, by and among Park National Corporation; Vision Bank, an Alabama banking corporation; and Robert S. McKean (to be effective as of the effective time of the merger of Vision Bancshares, Inc. with and into Park National Corporation) (included as Exhibit C-5 to Annex A to the Prospectus of Park National Corporation/Proxy Statement of Vision Bancshares, Inc. dated January 9, 2007, filed on January 11, 2007 pursuant to Rule 424(b)(3) under the Securities Act of 1933 (Registration No. 333-139083))

-50-

Exhibit No.	Description of Exhibit
99.4(b)	First Amendment to Employment Agreement for Robert S. McKean, entered into February 6, 2007, by and among Park National Corporation; Vision Bank, an Alabama banking corporation; and Robert S. McKean (filed herewith)

*	The forms of employment agreements attached as Exhibits C-6 through C-12 to the Vision Bancshares Merger Agreement and the Vision Bancshares Disclosure Schedule referenced in the Vision Bancshares Merger Agreement have been omitted pursuant to Item 601(b)(2) of SEC Regulation S-K. Park National Corporation hereby undertakes to furnish supplementally a copy of the Vision Bancshares Disclosure Schedule and Exhibits C-6 through C-12 to the Vision Bancshares Merger Agreement upon request by the SEC.
**	The Anderson Disclosure Schedule referenced in the Anderson Merger Agreement has been omitted pursuant to Item 601(b)(2) of SEC Regulation S-K. Park hereby undertakes to furnish supplementally a copy of the Anderson Disclosure Schedule upon request by the SEC.
†	Management contract or compensatory plan or arrangement.

(b)	Exhibits.
	The documents listed in Item 15(a)(3) are filed with this Annual Report on Form 10-K as exhibits or incorporated into this Annual Report on Form 10-K by reference.
(c)	Financial Statement Schedules.
	None

-51-

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PARK NATIONAL CORPORATION
Date: February 28, 2007	By:	/s/ C. Daniel DeLawder
	C. Daniel DeLawder,
	Chairman of the Board and Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on the 28th day of February, 2007.

Name	Capacity
/s/ C. Daniel DeLawder C. Daniel DeLawder	Chairman of the Board, Chief Executive Officer and Director
/s/ David L. Trautman David L. Trautman	President, Secretary and Director
/s/ John W. Kozak John W. Kozak	Chief Financial Officer and Principal Accounting Officer
/s/ Nicholas L. Berning* Nicholas L. Berning	Director
/s/ Maureen Buchwald* Maureen Buchwald	Director
/s/ James J. Cullers* James J. Cullers	Director
/s/ Harry O. Egger* Harry O. Egger	Director

-52-

Name	Capacity
/s/ F. William Englefield IV* F. William Englefield IV	Director
/s/ William T. McConnell* William T. McConnell	Director
/s/ John J. O’Neill* John J. O’Neill	Director
/s/ William A. Phillips* William A. Phillips	Director
/s/ J. Gilbert Reese*	Director
J. Gilbert Reese
/s/ Rick R. Taylor* Rick R. Taylor	Director
/s/ Leon Zazworsky* Leon Zazworsky	Director

* The above-named directors of the Registrant sign this Annual Report on Form 10-K by C. Daniel
DeLawder, their attorney-in-fact, pursuant to Powers of Attorney signed by the above-named
directors, which Powers of Attorney are filed with this Annual Report on Form 10-K as
exhibits, in the capacities indicated and on the 28^th day of February, 2007.

By:	/s/ C. Daniel DeLawder
	C. Daniel DeLawder
	Chairman of the Board and Chief Executive Officer

-53-

PARK NATIONAL CORPORATION

Annual Report on Form 10-K
for the
Fiscal Year Ended December 31, 2006

INDEX TO EXHIBITS

Exhibit No.	Description of Exhibit
2.1(a)	Agreement and Plan of Merger, dated to be effective as of September 14, 2006, by and between Park National Corporation and Vision Bancshares, Inc. (the “Vision Bancshares Merger Agreement”) (included as Annex A to the Prospectus of Park National Corporation/Proxy Statement of Vision Bancshares, Inc. dated January 9, 2007, filed on January 11, 2007 pursuant to Rule 424(b)(3) under the Securities Act of 1933 (Registration No. 333-139083))*
2.1(b)	First Amendment to Agreement and Plan of Merger, dated to be effective as of February 6, 2007, by and between Park National Corporation and Vision Bancshares, Inc. (filed herewith)
2.2(a)	Second Amended and Restated Agreement and Plan of Merger, dated to be effective as of August 14, 2006, by and among Park National Corporation, The Park National Bank and Anderson Bank Company (the “Anderson Merger Agreement”) (incorporated herein by reference to Annex A to the Prospectus of Park National Corporation/Proxy Statement of Anderson Bank Company dated November 13, 2006, filed on November 16, 2006 pursuant to Rule 424(b)(3) under the Securities Act of 1933 (Registration No. 333-138028)**
2.2(b)	Amendment to the Second Amended and Restated Agreement and Plan of Merger, entered into as of December 15, 2006, by and among Park National Corporation, The Park National Bank and Anderson Bank Company (incorporated herein by reference to Exhibit 2.2 to Park National Corporation’s Current Report on Form 8-K dated and filed on December 18, 2006 (File No. 1-13006))
3.1(a)	Articles of Incorporation of Park National Corporation as filed with the Ohio Secretary of State on March 24, 1992 (incorporated herein by reference to Exhibit 3(a) to Park National Corporation’s Form 8-B, filed on May 20, 1992 (File No. 0-18772) (“Park’s Form 8-B”))

E-1

Exhibit No.	Description of Exhibit
3.1(b)	Certificate of Amendment to the Articles of Incorporation of Park National Corporation as filed with the Ohio Secretary of State on May 6, 1993 (incorporated herein by reference to Exhibit 3(b) to Park National Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993 (File No. 0-18772))
3.1(c)	Certificate of Amendment to the Articles of Incorporation of Park National Corporation as filed with the Ohio Secretary of State on April 16, 1996 (incorporated herein by reference to Exhibit 3(a) to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1996 (File No. 1-13006))
3.1(d)	Certificate of Amendment by Shareholders to the Articles of Incorporation of Park National Corporation as filed with the Ohio Secretary of State on April 22, 1997 (incorporated herein by reference to Exhibit 3(a)(1) to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997 (File No. 1-13006) (“Park’s June 30, 1997 Form 10-Q”))
3.1(e)	Articles of Incorporation of Park National Corporation (reflecting amendments through April 22, 1997) [for SEC reporting compliance purposes only — not filed with Ohio Secretary of State] (incorporated herein by reference to Exhibit 3(a)(2) to Park’s June 30, 1997 Form 10-Q)
3.2(a)	Regulations of Park National Corporation (incorporated herein by reference to Exhibit 3(b) to Park’s Form 8-B)
3.2(b)	Certified Resolution regarding Adoption of Amendment to Subsection 2.02(A) of the Regulations of Park National Corporation by Shareholders on April 21, 1997 (incorporated herein by reference to Exhibit 3(b)(1) to Park’s June 30, 1997 Form 10-Q)
3.2(c)	Certificate Regarding Adoption of Amendments to Sections 1.04 and 1.11 of Park National Corporation’s Regulations by the Shareholders on April 17, 2006 (incorporated herein by reference to Exhibit 3.1 to Park National Corporation’s Current Report on Form 8-K dated and filed on April 18, 2006 (File No. 1-13006))
3.2(d)	Regulations of Park National Corporation (reflecting amendments through April 17, 2006) [for purposes of SEC reporting compliance only] (incorporated herein by reference to Exhibit 3.2 to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2006 (File No. 1-13006))

E-2

Exhibit No.	Description of Exhibit
4	Agreement to furnish instruments and agreements defining rights of holders of long-term debt (filed herewith)
10.1†	Summary of Base Salaries for Executive Officers of Park National Corporation (incorporated herein by reference to Exhibit 10.1 to Park National Corporation’s Pre-Effective Amendment No. 1 to Form S-4 Registration Statement filed on January 5, 2007 (Registration No. 333-139083))
10.2†	Summary of Incentive Compensation Plan of Park National Corporation (incorporated herein by reference to Exhibit 10.2 to Park National Corporation’s Pre-Effective Amendment No. 1 to Form S-4 Registration Statement filed on January 5, 2007 (Registration No. 333-139083))
10.3(a)†	Split-Dollar Agreement, dated May 17, 1993, between William T. McConnell and The Park National Bank (incorporated herein by reference to Exhibit 10(f) to Park National Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993 (File No. 0-18772))
10.3(b)†	Schedule identifying Split-Dollar Agreements between subsidiaries of Park National Corporation and executive officers or employees of such subsidiaries who are directors or executive officers of Park National Corporation, which Split-Dollar Agreements are identical to the Split-Dollar Agreement, dated May 17, 1993, between William T. McConnell and The Park National Bank (incorporated herein by reference to Exhibit 10.3(b) to Park National Corporation’s Form S-4 Registration Statement filed on December 1, 2006 (Registration No. 333-139083))
10.4(a)†	Split-Dollar Agreement, dated September 3, 1993, between Leon Zazworsky and The Park National Bank (incorporated herein by reference to Exhibit 10.3 to Park National Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 (File No. 1-13006) (“Park’s 2003 Form 10-K”))
10.4(b)†	Schedule identifying Split-Dollar Agreements between directors of Park National Corporation and The Park National Bank, The Richland Trust Company or The First-Knox National Bank of Mount Vernon as identified in such Schedule, which Split-Dollar Agreements are identical to the Split-Dollar Agreement, dated September 3, 1993, between Leon Zazworsky and The Park National Bank (incorporated herein by reference to Exhibit 10.4(b) to Park National Corporation’s Registration Statement on Form S-4 filed on October 16, 2006 (Registration No. 333-138028))

E-3

Exhibit No.	Description of Exhibit
10.5†	Park National Corporation 1995 Incentive Stock Option Plan (reflects amendments and share dividends through December 15, 2004) (incorporated herein by reference to Exhibit 10.5 to Park National Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 (File No. 1-13006) (“Park’s 2004 Form 10-K”))
10.6†	Form of Stock Option Agreement executed in connection with the grant of options under the Park National Corporation 1995 Incentive Stock Option Plan, as amended (incorporated herein by reference to Exhibit 10(i) to Park National Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998 (File No. 1-13006))
10.7(a)†	Description of Park National Corporation Supplemental Executive Retirement Plan (filed herewith)
10.7(b)†	Form of Supplemental Executive Retirement Plan Agreement entered into by and between Park National Corporation or a wholly-owned subsidiary of Park National Corporation and each of C. Daniel DeLawder, John W. Kozak and William T. McConnell on December 27, 1996 (filed herewith)
10.8†	Security Banc Corporation 1987 Stock Option Plan, which was assumed by Park National Corporation (incorporated herein by reference to Exhibit 10(a) to Park National Corporation’s Registration Statement on Form S-8 filed April 23, 2001 (Registration No. 333-59378))
10.9†	Security Banc Corporation 1995 Stock Option Plan, which was assumed by Park National Corporation (incorporated herein by reference to Exhibit 10(b) to Park National Corporation’s Registration Statement on Form S-8 filed April 23, 2001 (Registration No. 333-59378))
10.10†	Security Banc Corporation 1998 Stock Option Plan, which was assumed by Park National Corporation (incorporated herein by reference to Exhibit 10(c) to Park National Corporation’s Registration Statement on Form S-8 filed April 23, 2001 (Registration No. 333-59378))
10.11†	Employment Agreement, made and entered into as of December 22, 1999, and the Amendment thereto, dated March 23, 2001, between The Security National Bank and Trust Co. (also known as Security National Bank and Trust Co.) and Harry O. Egger (incorporated herein by reference to Exhibit 10(e) to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2001 (File No. 1-13006))
10.12†	Park National Corporation Stock Plan for Non-Employee Directors of Park National Corporation and Subsidiaries (incorporated herein by reference to Exhibit 10 to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004 (File No. 1-13006))

E-4

Exhibit No.	Description of Exhibit
10.13†	Summary of Certain Compensation for Directors of Park National Corporation (incorporated herein by reference to Exhibit 10.13 to Park National Corporation’s Pre-Effective Amendment No. 1 to Form S-4 Registration Statement filed on January 5, 2007 (Registration No. 333-139083))
10.14†	Security National Bank and Trust Co. Amended and Restated 1988 Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.16 to Park’s 2004 Form 10-K)
10.15†	Park National Corporation 2005 Incentive Stock Option Plan (incorporated herein by reference to Exhibit 10.1 to Park National Corporation’s Current Report on Form 8-K dated and filed on April 20, 2005 (File No. 1-13006) (“Park’s April 20, 2005 Form 8-K”))
10.16†	Form of Stock Option Agreement to be used in connection with the grant of incentive stock options under the Park National Corporation 2005 Incentive Stock Option Plan (incorporated herein by reference to Exhibit 10.2 to Park’s April 20, 2005 Form 8-K)
10.17(a)†	Employment Agreement for J. Daniel Sizemore, entered into September 14, 2006, by and among Park National Corporation; Vision Bank, an Alabama banking corporation; Vision Bank, a Florida banking corporation; and J. Daniel Sizemore (to be effective as of the effective time of the merger of Vision Bancshares, Inc. with and into Park National Corporation) (included as Exhibit C-1 to Annex A to the Prospectus of Park National Corporation/Proxy Statement of Vision Bancshares, Inc. dated January 9, 2007, filed on January 11, 2007 pursuant to Rule 424(b)(3) under the Securities Act of 1933 (Registration No. 333-139083))
10.17(b)†	First Amendment to Employment Agreement for J. Daniel Sizemore, entered into February 6, 2007, by and among Park National Corporation; Vision Bank, an Alabama banking corporation; Vision Bank, a Florida banking corporation; and J. Daniel Sizemore (filed herewith)
12	Computation of ratios (filed herewith)
13	2006 Annual Report (not deemed filed except for portions thereof which are specifically incorporated by reference in this Annual Report on Form 10-K) (filed herewith)
14	Code of Business Conduct and Ethics as amended July 17, 2006 (incorporated herein by reference to Exhibit 14 to Park National Corporation’s Current Report on Form 8-K dated and filed on July 21, 2006 (File No. 1-13006))

E-5

Exhibit No.	Description of Exhibit
21	Subsidiaries of Park National Corporation (incorporated herein by reference to Exhibit 21 to Park National Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 1-13006))
23.1	Consent of Crowe Chizek and Company LLC (filed herewith)
23.2	Consent of Ernst & Young LLP (filed herewith)
24	Powers of Attorney of Directors and Executive Officers of Park National Corporation (filed herewith)
31.1	Rule 13a-14(a)/15d-14(a) Certification — Principal Executive Officer (filed herewith)
31.2	Rule 13a-14(a)/15d-14(a) Certification — Principal Financial Officer (filed herewith)
32	Section 1350 Certification — Principal Executive Officer and Principal Financial Officer (filed herewith)
99.1(a)	Employment Agreement for William E. Blackmon, entered into September 14, 2006, by and among Park National Corporation; Vision Bank, an Alabama banking corporation; and William E. Blackmon (to be effective as of the effective time of the merger of Vision Bancshares, Inc. with and into Park National Corporation) (included as Exhibit C-2 to Annex A to the Prospectus of Park National Corporation/Proxy Statement of Vision Bancshares, Inc. dated January 9, 2007, filed on January 11, 2007 pursuant to Rule 424(b)(3) under the Securities Act of 1933 (Registration No. 333-139083))
99.1(b)	First Amendment to Employment Agreement for William E. Blackmon, entered into February 6, 2007, by and among Park National Corporation; Vision Bank, an Alabama banking corporation; and William E. Blackmon (filed herewith)
99.2(a)	Employment Agreement for Andrew W. Braswell, entered into September 14, 2006, by and among Park National Corporation; Vision Bank, an Alabama banking corporation; and Andrew W. Braswell (to be effective as of the effective time of the merger of Vision Bancshares, Inc. with and into Park National Corporation) (included as Exhibit C-3 to Annex A to the Prospectus of Park National Corporation/Proxy Statement of Vision Bancshares, Inc. dated January 9, 2007, filed on January 11, 2007 pursuant to Rule 424(b)(3) under the Securities Act of 1933 (Registration No. 333-139083))

E-6

Exhibit No.	Description of Exhibit
99.2(b)	First Amendment to Employment Agreement for Andrew W. Braswell, entered into February 6, 2007, by and among Park National Corporation; Vision Bank, an Alabama banking corporation; and Andrew W. Braswell (filed herewith)
99.3(a)	Employment Agreement for Joey W. Ginn, entered into September 14, 2006, by and among Park National Corporation; Vision Bank, a Florida banking corporation; and Joey W. Ginn (to be effective as of the effective time of the merger of Vision Bancshares, Inc. with and into Park National Corporation) (included as Exhibit C-4 to Annex A to the Prospectus of Park National Corporation/Proxy Statement of Vision Bancshares, Inc. dated January 9, 2007, filed on January 11, 2007 pursuant to Rule 424(b)(3) under the Securities Act of 1933 (Registration no. 333-139083))
99.3(b)	First Amendment to Employment Agreement for Joey W. Ginn, entered into February 6, 2007, by and among Park National Corporation; Vision Bank, a Florida banking corporation; and Joey W. Ginn (filed herewith)
99.4(a)	Employment Agreement for Robert S. McKean, entered into September 14, 2006, by and among Park National Corporation; Vision Bank, an Alabama banking corporation; and Robert S. McKean (to be effective as of the effective time of the merger of Vision Bancshares, Inc. with and into Park National Corporation) (included as Exhibit C-5 to Annex A to the Prospectus of Park National Corporation/Proxy Statement of Vision Bancshares, Inc. dated January 9, 2007, filed on January 11, 2007 pursuant to Rule 424(b)(3) under the Securities Act of 1933 (Registration No. 333-139083))
99.4(b)	First Amendment to Employment Agreement for Robert S. McKean, entered into February 6, 2007, by and among Park National Corporation; Vision Bank, an Alabama banking corporation; and Robert S. McKean (filed herewith)

* The forms of employment agreements attached as Exhibits C-6 through C-12 to the Vision Bancshares Merger Agreement and the Vision Bancshares Disclosure Schedule referenced in the Vision Bancshares Merger Agreement have been omitted pursuant to Item 601(b)(2) of SEC Regulation S-K. Park National Corporation hereby undertakes to furnish supplementally a copy of the Vision Bancshares Disclosure Schedule and Exhibits C-6 through C-12 to the Vision Bancshares Merger Agreement upon request by the Securities and Exchange Commission (the “SEC”).

E-7

**	The Anderson Disclosure Schedule referenced in the Anderson Merger Agreement has been omitted pursuant to Item 601(b)(2) of SEC Regulation S-K. Park hereby undertakes to furnish supplementally a copy of the Anderson Disclosure Schedule upon request by the SEC.
†	Management contract or compensatory plan or arrangement.

E-8

EX-2.1.B

Exhibit 2.1(b)

FIRST AMENDMENT

TO

AGREEMENT AND PLAN OF MERGER

     This First Amendment to Agreement and Plan of Merger (this “Amendment”) is dated to be effective as of the 6^th day of February, 2007, by and between Park National Corporation, an Ohio corporation (“Park”), and Vision Bancshares, Inc., an Alabama corporation (“Vision Bancshares”).

WITNESSETH

     WHEREAS, Park and Vision Bancshares entered into that certain Agreement and Plan of Merger dated to be effective as of September 14, 2006 (the “Agreement”); and

     WHEREAS, Park and Vision Bancshares desire to amend Sections 6.15(a) and 6.15(b) of the Agreement in order to clarify the provisions governing indemnification and directors’ and officers’ liability insurance; and

     WHEREAS, pursuant to Section 9.02 of the Agreement, the Agreement may be amended by an agreement in writing between Park and Vision Bancshares;

     NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows, intending to be legally bound hereby:

     1. Amendment to Section 6.15(a). Park and Vision Bancshares hereby amend the Agreement by deleting the first sentence of Section 6.15(a) of the Agreement in its entirety and by substituting therefor the following:

     (a) Indemnity by Park. Following the Effective Date, Park shall indemnify, defend and hold harmless all Directors, Officers and Employees of Vision Bancshares and its Subsidiaries (each, an “Indemnified Party”) against all costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of actions or omissions or alleged actions or omissions in the course of the Indemnified Party’s duties as a director, officer or employee of Vision Bancshares or one of its Subsidiaries occurring on or prior to the Effective Time (including, without limitation, the transactions contemplated by this Agreement) to the fullest extent that Vision Bancshares is permitted to indemnify (and advance expenses to) its directors, officers and employees under the Laws of the States of Alabama and, as appropriate, Florida, and consistent with the terms and conditions of the Vision Bancshares Articles and the Vision Bancshares Bylaws as in effect on September 14, 2006; provided, however, that any such indemnification shall be subject to and conditioned upon compliance with the provisions of applicable federal

Laws, including, without limitation, the provisions of 12 U.S.C. § 1828(k) and Part 359 of the FDIC’s regulations (12 C.F.R. Part 359), which provisions contain certain prohibitions and limitations on the making of certain indemnification payments by FDIC-insured depository institutions and their holding companies.

     2. Amendment to Section 6.15(b). Park and Vision Bancshares hereby further amend the Agreement by adding the following sentence to the end of Section 6.15(b) of the Agreement:

Notwithstanding the foregoing, Park and Vision Bancshares acknowledge and agree that payments in respect of the insurance coverage provided by any policies of directors’ and officers’ liability insurance obtained as contemplated by this Section 6.15(b) shall be subject to the limits of applicable federal Laws, including, without limitation, the provisions of 12 U.S. C. § 1828(k) and Part 359 of the FDIC’s regulations (12 C.F.R. Part 359).

     3. Capitalized Terms. All capitalized terms used and not defined in this Amendment shall have the meanings ascribed to such terms in the Agreement.

     4. No Other Amendment. Except as explicitly set forth in this Amendment, the terms and provisions of the Agreement shall remain in full force and effect in accordance with the terms thereof.

     5. Governing Law. This Amendment shall be governed by, and construed and interpreted in accordance with, the Laws of the State of Ohio applicable to contracts made and to be performed entirely within such State (except to the extent that mandatory provisions of federal Laws are applicable).

     IN WITNESS WHEREOF, the parties have caused this Amendment to be executed in counterparts by their duly authorized officers, all as of the day and year first written above.

PARK NATIONAL CORPORATION
By:	/s/ C. Daniel DeLawder
	C. Daniel DeLawder
	Chairman of the Board and Chief
	Executive Officer
VISION BANCSHARES, INC.
By:	/s/ J. Daniel Sizemore
	J. Daniel Sizemore
	Chairman of the Board and Chief
	Executive Officer

EX-4

Exhibit 4

[Park National Corporation Letterhead]

February 28, 2007

Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549

           Re: Park National Corporation – Annual Report on Form 10-K
for the Fiscal Year Ended December 31, 2006

Ladies and Gentlemen:

     Park National Corporation, an Ohio corporation (“Park”), is today filing with the Securities and Exchange Commission (the “SEC”) the Annual Report on Form 10-K of Park for the fiscal year ended December 31, 2006 (“Park’s 2006 Form 10-K”).

     Neither Park nor any of Park’s consolidated subsidiaries has outstanding any instrument or agreement with respect to its long-term debt under which the total amount of long-term debt authorized exceeds 10% of the total assets of Park and Park’s subsidiaries on a consolidated basis. In accordance with the provisions of Item 601(b)(4)(iii) of SEC Regulation S-K, Park hereby agrees to furnish to the SEC, upon request, a copy of each such instrument or agreement defining the rights of holders of long-term debt of Park or one of Park’s consolidated subsidiaries, which is not being filed as an exhibit to Park’s 2006 Form 10-K.

Very truly yours,

PARK NATIONAL CORPORATION

/s/ John W. Kozak

John W. Kozak

Chief Financial Officer

EX-10.7.A

Exhibit 10.7(a)

Description of Park National Corporation
Supplemental Executive Retirement Plan

     Park National Corporation (“Park”) adopted the Park National Corporation Supplemental Executive Retirement Plan or “SERP” in December 1996. The SERP currently benefits 30 current and former officers of Park and its subsidiaries, including: (a) William T. McConnell, who serves as Chairman of the Executive Committee of the Board of Directors of each of Park and The Park National Bank, a subsidiary of Park (“PNB”); (b) C. Daniel DeLawder, who serves as Chairman of the Board and Chief Executive Officer of each of Park and PNB; and (c) John W. Kozak, who serves as Chief Financial Officer of Park and as Senior Vice President and Chief Financial Officer of PNB. David L. Trautman, who serves as President and Secretary of Park and as President of PNB, does not participate in the SERP.

     The SERP is a non-qualified benefit plan designed to restore benefits lost due to limitations under the Internal Revenue Code of 1986, as amended, on the amount of compensation covered by and the benefits payable under a defined benefit plan such as the Park National Corporation Defined Benefit Pension Plan. Park has purchased life insurance contracts to fund the SERP. The SERP is designed to provide an annual targeted retirement benefit of approximately $53,000, $128,000 and $4,000 for Messrs. McConnell, DeLawder and Kozak, respectively. These additional benefits are not guaranteed and are dependent upon the earnings from the related life insurance contracts compared to the average yield on three-month Treasury bills. The SERP also provides a life insurance benefit to a current or former officer of Park or one of its subsidiaries participating in the SERP who dies before age 86. The amount of this life insurance benefit will be equal to the present value of the stream of future benefits which would have been paid to the individual until age 86 but had not been paid at the time of the individual’s death.

EX-10.7.B

Exhibit 10.7(b)

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

     This Agreement, made and entered into by and between Park National Corporation or a wholly owned subsidiary of Park National Corporation, Corporations organized and existing under the laws of the State of Ohio, hereinafter referred to as “the Bank” and                     , a key employee and an Executive of the Bank, hereinafter referred to as “the Executive”.

     Due to recent government-mandated changes in the Bank’s Pension Plan, a qualified plan under the federal tax code, selected officers’ projected pension benefits have been reduced. The Board of Directors of the Bank (the Board) has agreed to adopt a Supplemental Executive Retirement Plan (SERP) designed to restore these pension benefits. In reaching their decision to adopt such a plan, the Board considered:

*	All applicable regulatory, government and tax rules
*	The reasonableness of the SERP considering all other compensation and fringe benefit plans
*	The risks involved in investing in insurance contracts to accomplish the SERP’s objectives

     It is understood by the Board, the Bank and the Executive that the SERP is a non-qualified, defined contribution plan designed to achieve a level of supplemental pension payment at retirement. However, that level of supplemental pension payment is not assured and is subject to the investment performance of the insurance contracts vis a vis the Bank’s return, the safety and soundness of the insurance company(ies) and other provisions outlined in this Agreement. The payment of any supplemental pension is not guaranteed by any government agency.

     Accordingly, it is the desire of the Bank and the Executive to enter into this Agreement under which the Bank will agree to make certain payments to the Executive upon his retirement and, alternatively, to his beneficiary(ies) in the event of his premature death while employed by the Bank.

     It is the intent of the parties hereto that this Agreement be considered an arrangement maintained primarily to provide supplemental retirement benefits for the Executive, as a member of a select group of management or highly-compensated employees of the Bank for purposes of the Employee Retirement Security Act of 1974 (ERISA). The Executive is fully advised of the Bank’s financial status.

     Therefore, in consideration of the Executive’s services performed in the past and those to be performed in the future and based upon the mutual promises and covenants herein contained, the Bank and the Executive, agree as follows:

I. DEFINITIONS

A.	Effective Date:
	The Effective Date of this Agreement shall be December 27, 1996.
B.	Plan Year:
	Any reference to “Plan Year” shall mean a calendar year from January 1 to December 31. In the year of implementation, the term “Plan Year” shall mean the period from the effective date to December 31 of the year of the effective date.
C.	Retirement Date:
	Retirement Date shall mean retirement from service with the Bank which becomes effective on the first day of the calendar month following the month in which the Executive reaches his sixty-second (62nd) birthday or such later date as the Executive may actually retire.
D.	Termination of Service:
	Termination of Service shall mean voluntary resignation of service by the Executive or the Bank’s discharge of the Executive without cause, prior to the Normal Retirement Age [described in subparagraph I (J) hereinafter].
E.	Pre-Retirement Account:
	A Pre-Retirement Account shall be established as a liability reserve account on the books of the Bank for the benefit of the Executive. Prior to termination of service or the Executive’s retirement, such liability reserve account shall be increased or decreased each Plan Year (including the Plan Year in which the Executive ceases to be employed by the Bank) by an amount equal to the annual earnings or loss for that Plan Year determined by the Index [described in subparagraph I (G) hereinafter], less the Opportunity Cost for that Plan Year [described in subparagraph I (H) hereinafter].
F.	Index Retirement Benefit:
	The Index Retirement Benefit for the Executive for any year shall be equal to the excess of the annual earnings (if any) determined by the Index [subparagraph I (G)] for that Plan Year over the Opportunity Cost [subparagraph I (H)] for that Plan Year.

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G.	Index:
	The Index for any Plan Year shall be the aggregate annual after-tax income from the life insurance contracts described hereinafter as defined by FASB Technical Bulletin 85-4. This Index shall be applied as if such insurance contracts were purchased on the effective date hereof.
	Insurance Company:   Policy Form:   Policy Name:   Insured’s Age and Sex:   Riders:   Ratings:   Face Amount:   Premiums Paid:   Number of Premium Payments:   Assumed Purchase Date:
	If such contracts of life insurance are actually purchased by the Bank, then the actual policies as of the dates they were purchased shall be used in calculations under this Agreement. If such contracts of life insurance are not purchased or are subsequently surrendered or lapsed, then the Bank shall receive annual policy illustrations that assume the above described policies were purchased from the above named insurance company(ies) on the Effective Date from which the increase in policy value will be used to calculate the amount of the Index.
	In either case, references to the life insurance contract are merely for purposes of calculating a benefit. The Bank has no obligation to purchase such life insurance and, if purchased, the Executive and his beneficiary(ies) shall have no ownership interest in such policy and shall always have no greater interest in the benefits under this Agreement than that of an unsecured, general creditor of the Bank.
H.	Opportunity Cost:
	The Opportunity Cost for any Plan Year shall be calculated by taking the sum of the amount of premiums set forth in the Indexed policies described above plus the amount of any after-tax benefits paid to the Executive pursuant to this Agreement (Paragraph III hereinafter) plus the amount of all previous years after-tax Opportunity Cost, and multiplying that sum by the average after-tax yield of a 90-day Treasury bill for the Plan Year.
I.	Change of Control:
	Change of control shall be deemed to be the cumulative transfer of more than fifty percent (50%) of the voting stock of the Bank from the Effective Date of this Agreement. For the purposes of this Agreement, transfers on account of deaths or

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	gifts, transfers between family members or transfers to a qualified retirement plan maintained by the Bank shall not be considered in determining whether there has been a change in control.
J.	Normal Retirement Age:
	Normal Retirement Age shall mean the date on which the Executive attains age sixty-two (62).

II.	EMPLOYMENT
	No provision of this Agreement shall be deemed to restrict or limit any existing employment agreement by and between the Bank and the Executive, nor shall any conditions herein create specific employment rights to the Executive nor limit the right of the Employer to discharge the Executive with or without cause. In a similar fashion, no provision shall limit the Executive’s rights to voluntarily sever his employment at any time.
III.	INDEX BENEFITS
	The following benefits provided by the Bank to the Executive are in the nature of a fringe benefit and shall in no event be construed to effect nor limit the Executive’s current or prospective salary increases, cash bonuses or profit-sharing distributions or credits.

A.	Retirement Benefits:
	Should the Executive continue to be employed by the Bank until his “Normal Retirement Age” defined in [subparagraph I (J)], he shall be entitled to receive the balance in his Pre-Retirement Account [as defined in subparagraph I (E)] in fifteen (15) equal annual installments commencing thirty (30) days following the Executive’s Normal Retirement Date. In addition to these payments, commencing with the Plan Year in which the Executive attains his Retirement Date, the Index Retirement Benefit [as defined in sub-paragraph I (F) above] for each year shall be paid to the Executive until his death.
	The Executive may elect to receive the balance in his Pre-Retirement Account in any number of years that is less than fifteen (15) years provided the election is made in writing to the Bank, no less than one (1) year prior to his Retirement Date.
B.	Termination of Service:
	Should the Executive experience a Termination of Service [as defined in subparagraph I (D)]; all benefits under this Agreement are forfeited. Should the Executive be discharged for cause [as defined in subparagraph III (E)], all benefits under this Agreement are forfeited.

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C.	Disability:
	Should the Executive begin to draw benefits from the Bank’s Long Term Disability Plan, for as long as he shall remain disabled, the Executive may elect to be paid the balance of his Pre-Retirement Account in equal annual installments from the time he began to draw benefits until his Normal Retirement Age [subparagraph I (J)]. From and after his Normal Retirement Age, the Executive shall be paid the Index Retirement Benefit [as described in subparagraph 1 (F)] for each year until his death.
D.	Death:
	Should the Executive die prior to having received the full balance of the Pre-Retirement Account, the unpaid balance of the Pre-Retirement Account shall be paid in a lump sum to the beneficiary selected by the Executive and filed with the Bank. In the absence of or a failure to designate a beneficiary, the unpaid balance shall be paid in a lump sum to the personal representative of the Executive’s estate.
E.	Discharge for Cause:
	Should the Executive be discharged for cause at any time prior to his Retirement Date, all Index Benefits under this Agreement [subparagraphs III (A), (B) (C) or (D)] shall be forfeited. The term “for cause” shall mean gross negligence or gross neglect or the conviction of a felony or gross misdemeanor involving moral turpitude, fraud, dishonesty or willful violation of any law that results in any adverse effect on the Bank. If a dispute arises as to discharge “for cause”, such dispute shall be resolved by arbitration as set forth in this Agreement.
F.	Death Benefit:
	Except as set forth above, there is no death benefit provided under this Agreement.

IV.	RESTRICTIONS UPON FUNDING
	The Bank shall have no obligation to set aside, earmark or entrust any fund or money with which to pay its obligations under this Agreement. The Executive, his beneficiary(ies) or any successor in interest to him shall be and remain simply a general creditor of the Bank in the same manner as any other creditor having a general claim for matured and unpaid compensation.
	The Bank reserves the absolute right at its sole discretion to either fund the obligations undertaken by this Agreement or to refrain from funding the same and to determine the exact nature and method of such funding. Should the Bank elect to fund this Agreement,

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	in whole or in part, through the purchase of life insurance, mutual funds, disability policies or annuities, the Bank reserves the absolute right, in its sole discretion, to terminate such funding at any time, in whole or in part. At no time shall the Executive be deemed to have any lien or right, title or interest in or to any specific funding investment or to any assets of the Bank.
	If the Bank elects to invest in a life insurance, disability or annuity policy upon the life of the executive, then the Executive shall assist the Bank by freely submitting to a physical exam and supplying such additional information necessary to obtain such insurance or annuities.
V.	CHANGE OF CONTROL
	Upon a Change of Control [as defined in subparagraph I (I) herein], if the Executive’s employment is subsequently terminated then he shall receive the benefits promised in this Agreement upon attaining Normal Retirement Age, as if he had been continuously employed by the Bank until his Normal Retirement Age. The Executive will also remain eligible for all promised death benefits in this Agreement. In addition, no sale, merger or consolidation of the Bank shall take place unless the new or surviving entity expressly acknowledges the obligations under this Agreement and agrees to abide by its terms.
VI.	MISCELLANEOUS

A.	Alienability and Assignment Prohibition:
	Neither the Executive, his/her surviving spouse nor any other beneficiary under this Agreement shall have any power or right to transfer, assign, anticipate, hypothecate, mortgage, commute, modify or otherwise encumber in advance any of the benefits payable hereunder nor shall any of said benefits be subject to seizure for the payment of any debts, judgments, alimony or separate maintenance [o]wed by the Executive or his beneficiary, nor be transferable by operation of law in the event of bankruptcy, insolvency or otherwise. In the event the Executive or any beneficiary attempts assignment, commutation, hypothecation, transfer or disposal of the benefits hereunder, the Bank’s liabilities shall forthwith cease and terminate.
B.	Binding Obligation of Bank and any Successor in Interest:
	The Bank expressly agrees that it shall not merge or consolidate into or with another bank or sell substantially all of its assets to another bank, firm or person until such bank, firm or person expressly agrees, in writing, to assume and discharge the duties and obligations of the Bank under this Agreement. This Agreement shall be binding upon the parties hereto, their successors, beneficiary(ies), heirs and personal representatives.

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C.	Revocation:
	It is agreed by and between the parties hereto that, during the lifetime of the Executive, this Agreement may be amended or revoked at any time or times, in whole or in part, by the mutual written assent of the Executive and the Bank.
D.	Gender:
	Whenever in this Agreement words are used in the masculine or neuter gender, they shall be read and construed as in the masculine, feminine or neuter gender, whenever they should so apply.
E.	Effect on Other Bank Benefit Plans:
	Nothing contained in this Agreement shall affect the right of the Executive to participate in or be covered by any qualified or non-qualified pension, profit-sharing, group, bonus or other supplemental compensation or fringe benefit plan constituting a part of the Bank’s existing or future compensation structure.
F.	Headings:
	Headings and subheadings in this Agreement are inserted for reference and convenience only and shall not be deemed a part of this Agreement.
G.	Applicable Law:
	The validity and interpretation of this Agreement shall be governed by the laws of the State of Ohio.

VII. ERISA PROVISION

A.	Named Fiduciary and Plan Administrator:
	The “Named Fiduciary and Plan Administrator” of this plan shall be the Bank until its removal by the Board. As Named Fiduciary and Administrator, the Bank shall be responsible for the management, control and administration of the Salary Continuation Agreement as established herein. The Named Fiduciary may delegate to others certain aspects of the management and operation responsibilities of the plan including the employment of advisors and the delegation of ministerial duties to qualified individuals.
B.	Claims Procedure and Arbitration:
	In the event a dispute arises over benefits under this Agreement and benefits are not paid to the Executive (or to his beneficiary in the case of the Executive’s death) and such claimants feel they are entitled to receive such benefits, then a

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written claim must be made to the Plan Administrator named above within ninety (90) days from the date payments are refused. The Plan Administrator shall review the written claim and if the claim is denied, in whole or in part, they shall provide in writing within ninety (90) days of receipt of such claim their specific reasons for such denial, reference to the provisions of this Agreement upon which the denial is based and any additional material or information necessary to perfect the claim. Such written notice shall further indicate the additional steps to be taken by claimants if a further review of the claim denial is desired. A claim shall be deemed denied if the Plan Administrator fails to take any action within the aforesaid ninety-day period.

If claimants desire a second review they shall notify the Plan Administrator in writing within ninety (90) days of the first claim denial. Claimants may review this Agreement or any documents relating thereto and submit any written issues and comments they may feel appropriate. In its sole discretion, the Plan Administrator shall then review the second claim and provide a written decision within ninety (90) days of receipt of such claim. This decision shall likewise state the specific reasons for the decision and shall include reference to specific provisions of this Agreement upon which the decision is based.

If claimants continue to dispute the benefit denial based upon completed performance of this Agreement or the meaning and effect of the terms and conditions thereof, then claimants may submit the dispute to a Board of Arbitration for final arbitration. Said Board shall consist of one member selected by the claimant, one member selected by the Bank, and the third member selected by the first two members. The Board shall operate under any generally recognized set of arbitration rules. The parties hereto agree that they and their heirs, personal representatives, successors and assigns shall be bound by the decision of such Board with respect to any controversy properly submitted to it for determination.

Where a dispute arises as to the Bank’s discharge of the Executive “for cause” as it relates to this Agreement, such dispute shall likewise be submitted to arbitration as above described and the parties hereto agree to be bound by the decision thereunder.

The finding of any arbitration hearing shall be limited solely to the issue of compensation, if any, to be paid. The result of the arbitration shall have no other binding effect, no collateral effect, and no evidentiary effect in any other forum.

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     IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Agreement and executed the original thereof on the 27th day of December, 1996 and that, upon execution, each has received a conforming copy.

		PARK NATIONAL CORPORATION
		or it’s wholly owned subsidiary
	By:
Witness
	Name:
		(Please print)
Witness (Please Print)
	Title:
	EXECUTIVE
	By:
Witness		[Name]
	Affiliate:
Witness (Please Print)

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SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

BENEFICIARY DESIGNATION FORM

EXHIBIT A

EMPLOYEE’S BENEFICIARY

	Primary Beneficiary, Relationship:
	Contingent Beneficiary(s), Relationship:
This Exhibit A is that one referred to in the Supplemental Executive Retirement Plan Agreement dated December 27, 1996.

Dated:

Witness

Employee Signature

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EX-10.17.B

Exhibit 10.17(b)

FIRST AMENDMENT
TO
EMPLOYMENT AGREEMENT
FOR
J. DANIEL SIZEMORE

     This First Amendment to Employment Agreement (this “Amendment”) is entered into this 6^th day of February, 2007, by and among Park National Corporation, an Ohio corporation (“Park”); Vision Bank, an Alabama banking corporation (the “Alabama Bank”); Vision Bank, a Florida banking corporation (the “Florida Bank”) (hereinafter the Alabama Bank and the Florida Bank shall be referred to collectively either as the “Employer” or the “Banks”); and J. Daniel Sizemore (the “Executive”).

WITNESSETH

     WHEREAS, on September 14, 2006, Park, the Banks and the Executive entered into a certain Employment Agreement for Daniel Sizemore (the “Agreement”); and

     WHEREAS, Park, the Banks and the Executive desire to amend the Agreement in order to clarify certain of its provisions; and

     WHEREAS, pursuant to Section 18 of the Agreement, the Agreement may be amended by mutual written agreement of the parties;

     NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows, intending to be legally bound hereby:

     1. New Section 20. Park, the Banks and the Executive hereby amend the Agreement by adding new Section 20 to the Agreement to read, in its entirety, as follows:

          20. Regulatory Limits. Notwithstanding anything to the contrary contained in this Agreement, Park, the Employer and the Executive acknowledge and agree that any payments made to the Executive by the Employer pursuant to this Agreement, or otherwise, are subject to and conditioned upon compliance with the provisions of 12 U.S.C. § 1828(k) and Part 359 of the FDIC’s regulations (12 C.F.R. Part 359), which provisions contain certain prohibitions and limitations on the making of “golden parachute” and certain indemnification payments by FDIC-insured depository institutions and their holding companies. In the event any payments to the Executive pursuant to this Agreement are prohibited or limited by the provisions of 12 U.S.C. § 1828(k) and/or Part 359 of the FDIC’s regulations, the Employer will use its commercially reasonable efforts to obtain the consent of the appropriate regulatory authorities to the payment by the Employer to the Executive of the maximum amount that is permitted (up to the amount payable under the terms of this Agreement).

     2. Capitalized Terms. All capitalized terms used and not defined in this Amendment shall have the meanings ascribed to such terms in the Agreement.

     3. No Other Amendment. Except as explicitly set forth in this Amendment, the terms and provisions of the Agreement shall remain in full force and effect in accordance with the terms thereof.

     4. Governing Law. This Amendment will be construed in accordance with, and pursuant to, the laws of the State of Ohio.

     IN WITNESS WHEREOF, the parties have executed this Amendment on the date first written above.

PARK NATIONAL CORPORATION
By:	/s/ C. Daniel DeLawder
Printed Name:  C. Daniel DeLawder
Title:	Chairman of the Board and Chief Executive Officer
VISION BANK, an Alabama banking corporation
By:	/s/ William E. Blackmon
Printed Name:  William E. Blackmon
Title:	CFO
VISION BANK, a Florida banking corporation
By:	/s/ Joey W. Ginn
Printed Name:  Joey W. Ginn
Title:	President
EXECUTIVE
By:	/s/ J. Daniel Sizemore
	J. Daniel Sizemore

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EX-12

Exhibit 12

COMPUTATION OF RATIOS

RETURN ON AVERAGE ASSETS	Net income/Average assets
RETURN ON AVERAGE EQUITY	Net income/Average stockholders’ equity
NET INTEREST MARGIN (computed on a fully taxable equivalent basis)	Fully taxable equivalent net interest income/Average earning assets
NONINTEREST EXPENSE TO NET REVENUE (computed on a fully taxable equivalent basis) [Also referred to as EFFICIENCY RATIO]	Total other expense/(Fully taxable equivalent net interest income plus total other income adjusted for gains or losses on sales of securities)
DIVIDEND PAYOUT RATIO	Dividends declared/Net income
AVERAGE STOCKHOLDERS’ EQUITY TO AVERAGE TOTAL ASSETS	Average stockholders’ equity/Average assets
TIER 1 CAPITAL RATIO	(Stockholders’ equity less goodwill and other intangible assets and accumulated other comprehensive income(loss)(“Tier 1 capital”)/Risk-adjusted assets
RISK-BASED CAPITAL RATIO	(Tier 1 capital plus qualifying loan loss allowance)/Risk-adjusted assets
LEVERAGE RATIO	Tier 1 capital/(Average total assets less goodwill and other intangible assets)
BOOK VALUE PER SHARE	Total stockholders’ equity/Common shares outstanding at year-end
ALLOWANCE FOR LOAN LOSSES TO END OF YEAR LOANS	Allowance for loan losses/Gross loans net of unearned interest
NET CHARGE-OFFS TO AVERAGE LOANS	Net charge-offs/Average gross loans net of unearned interest
NONPERFORMING LOANS TO LOANS	(Nonaccrual loans plus loans past due 90 days or greater plus renegotiated loans)/Gross loans net of unearned interest

NONPERFORMING ASSETS TO LOANS	(Nonaccrual loans plus loans past due 90 days or greater plus renegotiated loans plus other real estate owned)/Gross loans net of unearned interest
NONPERFORMING ASSETS TO TOTAL ASSETS	(Nonaccrual loans plus loans past due 90 days or greater plus renegotiated loans plus other real estate owned)/Total assets

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EX-13

Exhibit 13

FINANCIAL REVIEW

This financial review presents management’s discussion and analysis of the financial condition and results of operations for Park National Corporation (“Park” or the “Corporation”). This discussion should be read in conjunction with the consolidated financial statements and related notes and the five-year summary of selected financial data. Management’s discussion and analysis contains forward-looking statements that 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 its business plan, Park’s ability to successfully integrate acquisitions into Park’s operations, Park’s ability to achieve the anticipated cost savings and revenue synergies from acquisitions, changes in general economic and financial market conditions, changes in interest rates, changes in the competitive environment, changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and its subsidiaries, changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies, demand for loans in the respective market areas served by Park and its subsidiaries, and other risk factors relating to our industry as detailed from time to time in Park’s reports filed with the Securities and Exchange Commission (“SEC”) including those described in “Item 1A. Risk Factors” of Park’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Park does not undertake, and specifically disclaims any obligation, to publicly release the result 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 is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

Park’s Board of Directors approved a 5% stock dividend in November 2004. The additional common shares resulting from the dividend were distributed on December 15, 2004 to stockholders of record as of December 1, 2004. The consolidated financial statements, notes and other references to share and per share data have been retroactively restated for the stock dividend.

CORRECTION REFLECTED IN 2006 FINANCIAL STATEMENTS

On January 26, 2007, Park filed a Form 8-K with the SEC announcing that management had discovered an error in its accounting for accrued interest income on loans. Management determined that accrued interest receivable on loans was overstated by $1.933 million and as a result interest income on loans was overstated by $1.933 million on a cumulative basis. Management discovered in late January 2007 that certain previously charged-off loans were incorrectly accruing interest income. On Park’s data processing system, a loan that is charged-off also needs to be coded as nonaccrual for the data processing system to not accrue interest income on these loans. Primarily, one of Park’s subsidiary banks did not follow this procedure on certain installment loans for approximately the past ten years. Management determined that interest income on loans was overstated by approximately $100,000 per quarter for the past several quarters. Park’s management concluded that the overstatement of accrued interest receivable on loans and the related overstatement of interest income on loans is not material to any previously issued financial statements. Accordingly, Park recorded a cumulative adjustment of $1.933 million in the fourth quarter of 2006 to reduce accrued interest receivable on loans and reduce interest income on loans. On an after-tax basis, this adjustment reduced Park’s net income by $1.256 million for the three and twelve months ended December 31, 2006 and reduced diluted earnings per share by $.09 for the three and twelve months ended December 31, 2006, as compared to net income and diluted earnings per share that was previously reported by Park on January 16, 2007 in a Form 8-K filing with the SEC.

This financial review is written comparing the corrected 2006 financial statements to the financial statements for 2005 and 2004.

OVERVIEW

Net income for 2006 decreased by $1.1 million or 1.2% to $94.1 million, compared to net income of $95.2 million for 2005. Diluted earnings per share increased by 1.5% to $6.74 for 2006 compared to $6.64 for 2005.

For 2006 compared to 2005, income before federal income taxes was negatively impacted by a $7.3 million reduction in net interest income and a $1.6 million increase in total operating expenses. Income before federal income taxes benefited from a decrease in the loan loss provision of $1.5 million and an increase in total other income of $5.1 million. The net impact to income before federal income taxes from the reduction in net interest income, the reduction in the provision for loan losses, the increase in total other income and the increase in total operating expenses was a decrease of $2.3 million. Federal income tax expense decreased by $1.2 million, which generated the decrease in net income of $1.1 million in 2006 compared to 2005.

Net income for 2005 increased by $3.7 million to $95.2 million, a 4.1% increase over net income of $91.5 million for 2004. Diluted earnings per share increased by 5.1% to $6.64 for 2005 compared to $6.32 for 2004.

For 2005 compared to 2004, income before federal income taxes benefited from an $8.3 million increase in net interest income, a $3.2 million decrease in the provision for loan losses and a $7.9 million increase in total other income. Total operating expenses increased by $13.1 million and federal income tax expense increased by $2.4 million in 2005 compared to 2004.

The primary reason for the increases in net interest income, total other income and operating expenses (in 2005 compared to 2004) was the acquisitions of First Federal Bancorp, Inc. (“First Federal”) on December 31, 2004 and First Clermont Bank (“First Clermont”) on January 3, 2005. First Federal had $253 million of assets at the time of its acquisition and First Clermont had $185 million of assets on January 3, 2005. Both acquisitions were accounted for as purchases and did not have any impact on the 2004 operating results for Park.

The reduction in the provision for loan losses contributed to earnings for both 2006 and 2005. The provision for loan losses was $3.9 million in 2006, $5.4 million in 2005 and $8.6 million in 2004. The reduction in the provision for loan losses was primarily due to a reduction in net loan charge-offs, which were $3.9 million in 2006, $5.9 million in 2005 and $7.9 million in 2004.

The annualized net income to average assets ratio (ROA) was 1.75% for 2006, 1.71% for 2005 and 1.81% for 2004. The annualized net income to average equity ratio (ROE) was 17.26% for 2006, 17.03% for 2005 and 17.00% for 2004.

Park has been active the past three years in purchasing treasury stock. Park’s common shares outstanding at December 31, 2003 were 14.455 million compared to 14.320 million at year-end 2004, 14.093 million at year-end 2005 and 13.922 million at year-end 2006. Park purchased 214,681 treasury shares in 2004, 281,360 treasury shares in 2005 and 302,786 treasury shares in 2006. The average balance of Park’s common shares outstanding was 14.345 million shares in 2004, 14.259 million shares in 2005 and 13.929 million shares in 2006. The reduction in Park’s common shares outstanding contributed to the increase in earnings per share compared to the change in net income for the past three years. For 2006 compared to 2005, net income decreased by 1.2% and diluted earnings per share increased by 1.5%. For 2005 compared to 2004, net income increased by 4.1% and diluted earnings per share increased by 5.1%. For 2004 compared to 2003, net income increased by 5.3% and diluted earnings per share increased by 5.9%.

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FINANCIAL REVIEW

Effective the fourth quarter of 2006, the quarterly cash dividend on common shares was increased to $.93 per share. The new annualized cash dividend of $3.72 per share is 1.1% greater than the sum of the cash dividends declared for the four previous quarters. Park has paid quarterly cash dividends since becoming a holding company in early 1987. The annual compound growth rate for Park’s dividend declared per share for the last five years is 6.0%. The dividend pay out ratio was 54.65% for 2006, 54.19% for 2005 and 53.54% for 2004.

ACQUISITIONS AND BRANCH SALE

On December 18, 2006, Park acquired Anderson Bank Company (“Anderson”) of Cincinnati, Ohio for $17.7 million in a cash and stock transaction. Park paid the shareholders of Anderson aggregate consideration consisting of $9.052 million and 86,137 common shares of Park valued at $8.665 million. Anderson merged with Park’s subsidiary bank, The Park National Bank (“PNB”), and Anderson’s two offices are being operated as part of the operating division of PNB known as The Park National Bank of Southwest Ohio & Northern Kentucky (“PSW”). The fair value of the acquired assets of Anderson was $69.7 million and the fair value of the liabilities assumed was $62.6 million at December 18, 2006. The goodwill recognized as a result of this acquisition was $10.6 million.

On January 3, 2005, Park acquired First Clermont Bank (“First Clermont”) of Milford, Ohio for $52.5 million in an all cash transaction. First Clermont merged with PNB and operated as a separate division of PNB (under the First Clermont name) until June 12, 2006, when First Clermont and three offices of PNB in southwest Ohio were combined to form PSW. The fair value of the acquired assets of First Clermont was $185.4 million and the fair value of the liabilities assumed was $161.3 million at January 3, 2005. The goodwill recognized as a result of this acquisition was $28.4 million.

On December 31, 2004, Park acquired First Federal Bancorp, Inc. (“First Federal”) for $46.6 million in an all cash transaction accounted for as a purchase. The savings and loan subsidiary of First Federal, First Federal Savings Bank of Eastern Ohio, merged with Park’s subsidiary bank, Century National Bank (“CNB”). The goodwill recognized as a result of this acquisition was $26.7 million. The fair value of the acquired assets of First Federal was $252.7 million and the fair value of the liabilities assumed was $232.7 million at December 31, 2004.

On February 11, 2005, CNB sold its Roseville, Ohio branch office. The Roseville branch office was acquired in connection with the acquisition of First Federal on December 31, 2004. The Federal Reserve Board required that the Roseville branch office be sold as a condition of their approval of the merger transactions involving Park and First Federal. The deposits sold with the Roseville branch office totaled $12.4 million and the loans sold with the branch office totaled $5.3 million. CNB received a premium of $1.2 million from the sale of deposits which reduced goodwill by $860,000 and core deposit intangibles by $324,000.

The three acquisitions were funded through the working capital of Park and its subsidiary banks.

PENDING ACQUISITION

On September 14, 2006, Park and Vision Bancshares, Inc. (“Vision”) jointly announced the signing of an agreement and plan of merger (the “Merger Agreement”) providing for the merger of Vision into Park. On or about January 11, 2007, a prospectus of Park/proxy statement of Vision was mailed to the shareholders of Vision in connection with the special meeting of shareholders to be held on February 20, 2007. The merger transaction is subject to the satisfaction of customary closing conditions in the Merger Agreement and the approval of appropriate regulatory authorities and of the shareholders of Vision. Park has filed all necessary regulatory applications and anticipates the transaction will close on or about March 9, 2007, assuming that all required approvals have been received and conditions to closing are satisfied.

Vision operates two bank affiliates, both named Vision Bank. One bank is headquartered in Gulf Shores, Alabama and the other in Panama City, Florida. These banks operate 15 offices. As of December 31, 2006, (on a consolidated basis), Vision had total assets of $691 million, total loans of $588 million and total deposits of $587 million.

Under the terms of the Merger Agreement, the shareholders of Vision are entitled to receive, in exchange for their shares of Vision common stock, either (a) cash, (b) Park common shares, or (c) a combination of cash and Park common shares, subject to the election and allocation procedures set forth in the Merger Agreement. Park will cause the requests of the Vision shareholders to be allocated on a pro-rata basis so that 50% of the shares of Vision common stock outstanding at the effective time of the merger will be exchanged for cash at the rate of $25.00 per share of Vision common stock and the other 50% of the outstanding shares of Vision common stock will be exchanged for Park common shares at the exchange rate of .2475 Park common shares for each share of Vision common stock. This allocation is subject to adjustment for cash paid in lieu of fractional Park common shares in accordance with the terms of the Merger Agreement.

As of January 8, 2007, 6,114,518 shares of Vision common stock were outstanding and 828,834 shares of Vision common stock were subject to outstanding stock options with a weighted average exercise price of $8.21 per share. Each outstanding stock option (that is not exercised prior to the election deadline specified in the Merger Agreement) granted under one of Vision’s equity-based compensation plans will be cancelled and extinguished and converted into the right to receive an amount of cash equal to (1)(a) $25.00 multiplied by (b) the number of shares of Vision common stock subject to the unexercised portion of the stock option minus (2) the aggregate exercise price for the shares of Vision common stock subject to the unexercised portion of the stock option.

The cash paid to the shareholders of Vision will be funded through the working capital of Park.

CRITICAL ACCOUNTING POLICIES

The significant accounting policies used in the development and presentation of Park’s financial statements are listed in Note 1 of the Notes to Consolidated Financial Statements. The accounting and reporting policies of Park conform with U.S. generally accepted accounting principles and general practices within the financial services industry. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates.

Park considers that the determination of the allowance for loan losses involves a higher degree of judgement and complexity than its other significant accounting policies. The allowance for loan losses is calculated with the objective of maintaining a reserve level believed by management to be sufficient to absorb probable incurred credit losses in the loan portfolio. Management’s determination of the adequacy of the allowance for loan losses is based on periodic evaluations of the loan portfolio and of current economic conditions. However, this evaluation is inherently subjective as it requires material estimates, including expected default probabilities, loss given default, the amounts and timing of expected future cash flows on impaired loans, and estimated losses on consumer loans and residential mortgage loans based on historical loss experience and the current economic conditions. All of those factors may be susceptible to significant change. To the extent that actual results differ from management estimates, additional loan loss provisions may be required that would adversely impact earnings for future periods.

Management’s assessment of the adequacy of the allowance for loan losses considers individual impaired loans, pools of homogeneous loans with similar risk characteristics and other environmental risk factors. This assessment is updated on a quarterly basis. The allowance established for individual impaired loans reflects expected losses resulting from analyses developed through specific credit allocations for individual loans. The specific credit allocations are based on regular analyses of commercial, commercial real

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FINANCIAL REVIEW

estate and construction loans where the internal credit rating is at or below a predetermined classification. These analyses involve a high degree of judgement in estimating the amount of loss associated with specific impaired loans.

Pools of homogeneous loans with similar risk characteristics are also assessed for probable losses. A loss migration analysis is performed on certain commercial, commercial real estate loans and construction loans. These are loans above a fixed dollar amount that are assigned an internal credit rating. Generally, residential real estate loans and consumer loans are not individually graded. The amount of loan loss reserve assigned to these loans is dependent on their net charge-off history.

Management also evaluates the impact of environmental factors which pose additional risks. Such environmental factors include: national and local economic trends and conditions; experience, ability, and depth of lending management and staff; effects of any changes in lending policies and procedures; levels of, and trends in, consumer bankruptcies, delinquencies, impaired loans and charge-offs and recoveries. The determination of this component of the allowance for loan losses requires considerable management judgement.

Management believes that the accounting for goodwill and other intangible assets also involves a higher degree of judgement than most other significant accounting policies. Statement of Financial Accounting Standards (SFAS) No. 142, “Accounting for Goodwill and Other Intangible Assets,” establishes standards for the amortization of acquired intangible assets and the impairment assessment of goodwill. At December 31, 2006, Park had core deposit intangibles of $5.7 million subject to amortization and $72.3 million of goodwill, which was not subject to periodic amortization. Goodwill arising from business combinations represents the value attributable to unidentifiable intangible assets in the business acquired. Park’s goodwill relates to the value inherent in the banking industry and that value is dependent upon the ability of Park’s banking subsidiaries to provide quality, cost effective banking services in a competitive marketplace. The goodwill value of $72.3 million is supported by revenue that is in part driven by the volume of business transacted. A decrease in earnings resulting from a decline in the customer base or the inability to deliver cost effective services over sustained periods can lead to impairment of goodwill that could adversely impact earnings in future periods. SFAS No. 142 requires an annual evaluation of goodwill for impairment. The fair value of the goodwill, which resides on the books of Park’s subsidiary banks, is estimated by reviewing the past and projected operating results for the Park subsidiary banks, deposit and loan totals for the Park subsidiary banks and banking industry comparable information. Park has concluded in each of the past three years that the recorded value of goodwill was not impaired.

ABOUT OUR BUSINESS

Through its banking subsidiaries, Park is engaged in the commercial banking and trust business, generally in small to medium population Ohio communities. Management believes there is a significant number of consumers and businesses which seek long-term relationships with community-based financial institutions of quality and strength. While not engaging in activities such as foreign lending, nationally syndicated loans and investment banking operations, Park attempts to meet the needs of its customers for commercial, real estate and consumer loans, consumer and commercial leases, and investment, fiduciary and deposit services. Familiarity with its local markets has allowed Park to achieve solid financial results even in periods when there have been weak economic conditions.

A subsidiary bank of Park, PNB has concentrated on further expanding its operations in three metropolitan areas in Ohio during the past two years. The metropolitan areas are Columbus, Cincinnati and Dayton. During 2005, PNB opened an office in Worthington (near Columbus), opened an office in West Chester (near Cincinnati) and relocated its downtown Dayton office to the Dayton suburb of Centerville. In 2006, PNB opened an office in Florence, Kentucky (in the greater Cincinnati market) and added two additional offices in the Cincinnati market through the acquisition of Anderson Bank on December 18, 2006. Management expects to continue to add to branch locations in the Columbus, Cincinnati and Dayton markets over the next two years.

Management expects to close on the acquisition of Vision on or about March 9, 2007. Vision operates 15 branch locations in Gulf Coast communities in Alabama and the Florida panhandle. These markets are expected to grow much faster than many of the non-metro markets in which Park’s subsidiary banks operate in Ohio. Management expects that the acquisition of Vision will improve the future growth rate for Park’s loans and deposits. Management will consider other acquisition opportunities in fast growing markets after the Vision acquisition has been integrated.

Park’s subsidiaries compete for deposits and loans with other banks, savings associations, credit unions and other types of financial institutions. At December 31, 2006, Park and its subsidiaries operated 138 offices and a network of 142 automatic teller machines in 29 Ohio counties and one county in northern Kentucky.

Park has produced performance ratios which compare favorably to peer bank holding companies in terms of equity and asset returns, capital adequacy and asset quality. Continued strong results are contingent upon economic conditions in Ohio and competitive factors, among other things.

A table of financial data of Park’s subsidiaries for 2006, 2005 and 2004 is shown below. See Note 20 of the Notes to Consolidated Financial Statements for additional information on the Corporation’s subsidiaries.

Table 1 — Park National Corporation Affiliate Financial Data

	2006					2005					2004
	Average			Net		Average			Net		Average			Net
(In thousands)	Assets			Income		Assets			Income		Assets			Income
Park National Bank:
Park National Division	$	1,503,420		$	26,577	$	1,413,872		$	23,026	$	1,380,568		$	21,569
Fairfield National Division		338,183			6,457		362,192			6,856		335,006			7,309
Park National SW & N KY Division		288,189			1,331		229,726			3,049		—			—
Richland Trust Company		496,481			7,987		515,749			8,842		546,710			9,753
Century National Bank		719,864			10,149		743,276			12,464		503,239			8,065
First-Knox National Bank:
First-Knox National Division		639,969			11,406		639,000			10,805		665,116			11,049
Farmers & Savings Division		132,222			2,308		126,939			2,544		79,442			2,799
United Bank, N.A.		218,358			2,537		241,277			3,026		240,988			3,523
Second National Bank		386,139			4,705		404,656			6,029		390,906			6,859
Security National Bank:
Security National Division		766,298			11,931		782,467			11,393		773,710			12,290
Unity National Division		190,751			986		184,234			1,404		170,829			1,159
Citizens National Bank		166,611			1,854		189,965			1,928		201,916			2,332
Parent Company, including consolidating entries		(465,862	)		5,863		(275,265	)		3,872		(239,349	)		4,800
Consolidated Totals	$	5,380,623		$	94,091	$	5,558,088		$	95,238	$	5,049,081		$	91,507

RETURN ON EQUITY

Park’s primary financial goal is to achieve a superior long-term return on stockholders’ equity. The Corporation measures performance in its attempt to achieve this goal against its peers, defined as all U.S. bank holding companies between $3 billion and $10 billion in assets. At year-end 2006, there were approximately 94 bank holding companies in this peer group. The Corporation’s net income to average equity ratio (ROE) was 17.26%, 17.03% and 17.00% in 2006, 2005, and 2004, respectively. The return on equity ratio has averaged 17.11% over the past five years compared to 13.41% for the peer group.

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FINANCIAL REVIEW

BALANCE SHEET COMPOSITION

Park functions as a commercial bank holding company. The following section discusses the balance sheet for the Corporation.

SOURCE OF FUNDS

Deposits: Park’s major source of funds is provided by core deposits from individuals, businesses and local government units. These core deposits consist of all noninterest bearing and interest bearing deposits, excluding certificates of deposit of $100,000 and over which were less than 12% of total deposits for each of the last three years.

In 2006, year-end total deposits increased by $6 million or .2% exclusive of the $61 million of deposits that were acquired in the Anderson acquisition.

In 2005, year-end total deposits decreased by $55 million or 1.5% exclusive of the $136 million of deposits that were acquired in the First Clermont acquisition and the $12 million in deposits that were included in the sale of the Roseville branch office.

Average total deposits were $3,825 million in 2006 compared to $3,830 million in 2005 and $3,521 million in 2004. Average noninterest bearing deposits were $662 million in 2006 compared to $643 million in 2005 and $575 million in 2004.

Management expects that average total deposits (excluding the Vision acquisition) will increase by a modest amount (1% to 2%) in 2007. Emphasis will continue to be placed on increasing noninterest bearing deposits. A year ago, management projected that average total deposits would increase by 1% to 2% in 2006. Average total deposits decreased by $5 million in 2006 instead of increasing by the modest growth rate that was projected. The slower than expected growth was primarily due to increased competition for interest bearing balances. Management continued to concentrate on controlling the cost of interest bearing deposit accounts in 2006. Additionally, one of Park’s affiliate banks (PNB) lost a large deposit customer during the fourth quarter of 2006, as the customer relocated its business outside of the state of Ohio. This customer had maintained average deposits of approximately $73 million during the first nine months of 2006 and all of these funds were withdrawn during the first few weeks of the fourth quarter of 2006.

The average interest rate paid on interest bearing deposit accounts was 2.60% in 2006 compared to 1.79% in 2005 and 1.36% in 2004. By comparison, the average federal funds rate was 4.97% in 2006, 3.21% in 2005 and 1.36% in 2004.

Maturities of time certificates of deposit and other time deposits of $100,000 and over as of December 31, 2006 were:

Table 2 — $100,000 and Over Maturity Schedule

December 31, 2006	Time Certificates
(In thousands)	of Deposit
3 months or less	$	157,817
Over 3 months through 6 months		89,523
Over 6 months through 12 months		127,495
Over 12 months		75,020
Total	$	449,855

Short-Term Borrowings: Short-term borrowings consist of securities sold under agreements to repurchase, Federal Home Loan Bank advances, federal funds purchased and other borrowings. These funds are used to manage the Corporation’s liquidity needs and interest rate sensitivity risk. The average rate paid on short-term borrowings generally moves closely with changes in market interest rates for short-term investments. The average rate paid on short-term borrowings was 4.18% in 2006 compared to 2.57% in 2005 and 1.33% in 2004.

The Federal Reserve Board increased the federal funds rate by 25 basis points at each Federal Open Market Committee meeting from June 2004 thru June 2006. The federal funds rate increased by 1.00% to 2.25% at year-end 2004, increased to 4.25% by year-end 2005 and increased to 5.25% by June 30, 2006. The federal funds rate remained at 5.25% throughout the second half of 2006. The average federal funds rate was 1.36% in 2004, 3.21% in 2005 and 4.97% in 2006.

Average short-term borrowings were $375 million in 2006 compared to $292 million in 2005 and $401 million in 2004.

Long-Term Debt: Long-term debt primarily consists of borrowings from the Federal Home Loan Bank and repurchase agreements with investment banking firms. The average rate paid on long-term debt was 4.22% for 2006 compared to 3.69% for 2005 and 2.57% for 2004. In 2006, average long-term debt was $553 million compared to $800 million in 2005 and $520 million in 2004. Average total debt (long-term and short-term) was $929 million in 2006 compared to $1,092 million in 2005 and $921 million in 2004. Average long-term debt was 60% of average total debt in 2006 compared to 73% in 2005 and 56% in 2004.

Stockholders’ Equity: Average stockholders’ equity to average total assets was 10.13% in 2006, 10.06% in 2005 and 10.66% in 2004.

The decrease in the average stockholders’ equity to average total assets ratio in 2005 was primarily due to the acquisitions of First Federal and First Clermont, which added assets totaling $438 million, but no equity since both acquisitions were all cash transactions.

In accordance with SFAS No. 115, Park reflects any unrealized holding gain or loss on available-for-sale securities, net of federal taxes, as accumulated other comprehensive income (loss) which is part of Park’s equity. While the effects of this accounting are not recognized for calculation of regulatory capital adequacy ratios, it does impact Park’s equity as reported in the audited financial statements. The unrealized holding loss on available-for-sale securities, net of federal taxes, was $(16.0) million at year-end 2006 and $(10.1) million at year-end 2005. The unrealized holding gain on available-for-sale securities, net of federal taxes, was $12.4 million at year-end 2004. Long-term interest rates increased during 2005 which caused the market value of Park’s investment securities to decline and produced the unrealized holding loss on available-for-sale securities.

Park recorded an additional decrease in accumulated other comprehensive income (loss), net of federal taxes, of $(6.8) million in 2006 related to the adoption of SFAS No. 158, which pertains to the accounting for Park’s defined benefit pension plan. See Note 1 of the Notes to Consolidated Financial Statements for additional information on the adoption of SFAS No. 158.

INVESTMENT OF FUNDS

Loans: Average loans, net of unearned income, were $3,357 million in 2006 compared to $3,278 million in 2005 and $2,813 million in 2004. The average yield on loans was 7.61% in 2006 compared to 6.84% in 2005 and 6.38% in 2004. The average prime lending rate in 2006 was 7.96% compared to 6.19% in 2005 and 4.35% in 2004. Approximately 62% of loan balances mature or reprice within one year (see Table 11). This results in the interest rate yield on the loan portfolio adjusting with changes in interest rates, but on a delayed basis. Management expects that the yield on the loan portfolio will continue to increase in 2007 as variable rate loans reprice at higher interest rates.

Year-end loan balances, net of unearned income, increased by $100 million or 3.0% in 2006 exclusive of $53 million of loans that were acquired in the Anderson acquisition. In 2005, loans increased by $52 million or 1.7% exclusive of $161 million of loans that were acquired in the First Clermont acquisition and $5 million of loans that were included in the sale of the Roseville branch office. In 2004, loans increased by $167 million or 6.1% exclusive of $223 million of loans that were acquired in the First Federal acquisition.

In summary, year-end loan balances (exclusive of the acquisitions) have increased by 3.0%, 1.7% and 6.1% for the years 2006, 2005 and 2004, respectively. The growth in loans in 2005 was negatively impacted by the decrease in the loan portfolios of First Federal and First Clermont. Their combined loan portfolios decreased by approximately $47 million in 2005.

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FINANCIAL REVIEW

A year ago, management projected that year-end loan balances would grow between 3% to 5% during 2006. The actual increase in year-end loans was $100 million or 3.0% for 2006. However, $27 million of the growth in loans for 2006 resulted from the purchase of loan participations from Vision during the fourth quarter. Without the purchase of the loan participations from Vision, the growth in loans for 2006 would have been 2.2%. Management expects that loan growth for 2007 (exclusive of loans from the Vision acquisition) will be approximately 3% to 4%.

Year-end residential real estate loans were $1,300 million, $1,287 million and $1,190 million in 2006, 2005 and 2004, respectively. Residential real estate loans decreased by $15 million at year-end 2006 exclusive of the $28 million of loans from the Anderson acquisition. In 2005, residential real estate loans increased by $9 million exclusive of $88 million of loans from the First Clermont acquisition. In 2004, residential real estate loans increased by $78 million or 7.9% exclusive of $129 million of loans from the First Federal acquisition. Management expects no growth in residential real estate loans in 2007, exclusive of loans from the pending acquisition of Vision.

The long-term fixed rate mortgage loans that Park originates are sold in the secondary market and Park retains the servicing on these loans. The balance of sold fixed rate mortgage loans was $1,405 million at year-end 2006 compared to $1,403 million at year-end 2005 and $1,266 million at year-end 2004. Management expects that the balance of sold fixed rate mortgage loans would remain relatively stable during 2007.

Year-end consumer loans were $532 million, $495 million and $505 million in 2006, 2005 and 2004, respectively. Consumer loans increased by $35 million or 7.1% at year-end 2006 exclusive of $2 million of loans from the Anderson acquisition. In 2005, consumer loans decreased by $30 million or 5.9% exclusive of $20 million of loans from the First Clermont acquisition. Consumer loans increased by $3 million or .6% at year-end 2004 exclusive of $52 million of loans from the acquisition of First Federal. The increase in consumer loans in 2006 was primarily due to an increase in automobile loans originated through automobile dealers. Management expects that consumer loans will increase by approximately 5% in 2007, exclusive of loans from the pending acquisition of Vision.

The origination of construction loans, commercial loans and commercial real estate loans was positive in 2006. On a combined basis, these loans totaled $1,638 million, $1,529 million and $1,377 million at year-end 2006, 2005 and 2004, respectively. These combined loan totals increased by $86 million or 5.6% at year-end 2006 exclusive of $23 million of loans from the Anderson acquisition. In 2005, these combined loan totals increased by $96 million or 7.0% exclusive of $56 million of loans from the First Clermont acquisition. In 2004, these combined loan totals increased by $105 million or 8.5% exclusive of $40 million of loans from the acquisition of First Federal. Management expects that construction loans, commercial loans and commercial real estate loans will grow by approximately 6% in 2007, exclusive of loans from the pending acquisition of Vision.

Year-end lease balances were $10 million, $17 million and $48 million in 2006, 2005 and 2004, respectively. Management continues to de-emphasize automobile leasing and to a lesser extent commercial leasing. The year-end lease balances are expected to continue to decrease in 2007.

Table 3 reports year-end loan balances by type of loan for the past five years.

Table 3 — Loans by Type

December 31,
(In thousands)	2006		2005		2004		2003		2002
Commercial, financial and agricultural	$	548,254	$	512,636	$	469,382	$	441,165	$	440,030
Real estate — construction		234,988		193,185		155,326		121,160		99,102
Real estate — residential		1,300,294		1,287,438		1,190,275		983,702		998,202
Real estate — commercial		854,869		823,354		752,428		670,082		617,270
Consumer, net of unearned income		532,092		494,975		505,151		450,145		441,747
Leases, net of unearned income		10,205		16,524		48,046		64,549		95,836
Total Loans	$	3,480,702	$	3,328,112	$	3,120,608	$	2,730,803	$	2,692,187

Table 4 — Selected Loan Maturity Distribution

			Over One		Over
December 31, 2006	One Year		Through		Five
(In thousands)	or Less		Five Years		Years		Total
Commercial, financial and agricultural	$	254,874	$	186,164	$	107,216	$	548,254
Real estate — construction		118,459		67,427		49,102		234,988
Total	$	373,333	$	253,591	$	156,318	$	783,242
Total of these selected loans due after one year with:
Fixed interest rate							$	158,127
Floating interest rate							$	251,782

Investment Securities: Park’s investment securities portfolio is structured to provide liquidity and contribute to earnings. Park’s investment strategy is dynamic. As conditions change over time, Park’s overall interest rate risk, liquidity needs and potential return on the investment portfolio will change. Management regularly evaluates the securities in the investment portfolio as circumstances evolve. Circumstances that may precipitate a sale of a security would be to better manage interest rate risk, meet liquidity needs or to improve the overall yield on the investment portfolio.

Park classifies most of its securities as available-for-sale (see Note 4 of the Notes to Consolidated Financial Statements). These securities are carried on the books at their estimated fair value with the unrealized holding gain or loss, net of federal taxes, accounted for as accumulated other comprehensive income (loss) which is part of the Corporation’s equity.

Management classified approximately 88% of the securities portfolio as available-for-sale at December 31, 2006. These securities are available to be sold in future periods in carrying out Park’s investment strategies. The remaining securities are classified as held-to-maturity and are accounted for at amortized cost.

Average taxable investment securities were $1,533 million in 2006 compared to $1,758 million in 2005 and $1,795 million in 2004. The average yield on taxable securities was 4.91% in 2006 compared to 4.87% in 2005 and 4.84% in 2004. Average tax-exempt investment securities were $77 million in 2006 compared to $94 million in 2005 and $107 million in 2004. The average tax-equivalent yield on tax-exempt investment securities was 6.84% in 2006 compared to 7.01% in 2005 and 7.17% in 2004. On a combined basis, the total of the average balance of taxable and tax-exempt securities was 29.9% of average total assets in 2006 compared to 33.3% in 2005 and 37.7% in 2004.

Year-end total investment securities (at amortized cost) were $1,538 million in 2006, $1,679 million in 2005 and $1,908 million in 2004. Management purchased investment securities totaling $167 million in 2006, $301 million in 2005 and $427 million in 2004. Proceeds from repayments and maturities of investment securities were $313 million in 2006, $410 million in 2005 and $437 million in 2004. Proceeds from sales of available-for-sale securities were $304,000 in 2006, $132 million in 2005 and $58 million in 2004. Park realized net security gains of $97,000 in 2006 and $96,000 in 2005, and net security losses of $793,000 in 2004.

Long-term interest rates are currently lower than short-term interest rates. The monthly average rate on a 5 year U.S. Treasury security was below the federal funds rate of 5.25% for each of the last 6 months of 2006. The investment securities that Park usually buys (U.S. Government Agency 15 year mortgage-backed securities) typically yield approximately 75 basis points above a 5 year U.S. Treasury security. With current interest rates, the yield on purchases of investment securities do not provide a sufficient spread above the federal funds rate for Park to increase the investment portfolio. Without an improvement in investment opportunities, management plans on using much of the cash flow from the maturities and repayments of investment securities (approximately $245 million) to repay borrowings in 2007 and provide funding for loans.

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FINANCIAL REVIEW

At year-end 2006 and 2005, the average tax-equivalent yield on the total investment portfolio was 5.01% and 4.93%, respectively. The weighted average remaining maturity was 4.4 years at December 31, 2006 and 4.6 years at December 31, 2005. U.S. Government Agency asset-backed securities were approximately 85% of the total investment portfolio at year-end 2006 and were approximately 91% of the total investment portfolio at year-end 2005. This segment of the investment portfolio consists of 15 year mortgage-backed securities and collateralized mortgage obligations.

The average maturity of the investment portfolio would lengthen if long-term interest rates would increase as the principal repayments from mortgage-backed securities and collateralized mortgage obligations would be reduced. At year-end 2006, management estimated that the average maturity of the investment portfolio would lengthen to 4.8 years with a 100 basis point increase in long-term interest rates and to 5.0 years with a 200 basis point increase in long-term interest rates.

The following table sets forth the carrying value of investment securities at year-end 2006, 2005 and 2004:

Table 5 — Investment Securities

December 31,
(In thousands)	2006		2005		2004
Obligations of U.S. Treasury and other U.S. Government agencies	$	90,709	$	996	$	15,206
Obligations of states and political subdivisions		70,090		85,336		103,739
U.S. Government asset-backed securities and other asset-backed securities		1,288,969		1,516,950		1,754,852
Other securities		63,730		60,060		52,985
Total	$	1,513,498	$	1,663,342	$	1,926,782

Included in “Other Securities” in Table 5, are Park’s investments in Federal Home Loan Bank stock and Federal Reserve Bank stock. Park owned $55.5 million of Federal Home Loan Bank stock and $6.4 million of Federal Reserve Bank stock at December 31, 2006. At December 31, 2005, Park owned $52.1 million of Federal Home Loan Bank stock and $5.9 million of Federal Reserve Bank stock. At December 31, 2004, Park owned $47.1 million of Federal Home Loan Bank stock and $4.4 million of Federal Reserve Bank stock. The fair values of these investments are the same as their amortized costs.

ANALYSIS OF EARNINGS

Park’s principal source of earnings is net interest income, the difference between total interest income and total interest expense. Net interest income results from average balances outstanding for interest earning assets and interest bearing liabilities in conjunction with the average rates earned and paid on them. (See Table 6 for three years of history on the average balances of the balance sheet categories and the average rates earned on interest earning assets and the average rates paid on interest bearing liabilities.)

Table 6 — Distribution of Assets, Liabilities and Stockholders’ Equity

	2006								2005								2004
December 31,	Daily					Average			Daily					Average			Daily					Average
(Dollars in thousands)	Average			Interest		Rate			Average			Interest		Rate			Average			Interest		Rate
ASSETS
Interest earning assets:
Loans (1) (2)	$	3,357,278		$	255,641		7.61	%	$	3,278,092		$	224,346		6.84	%	$	2,813,069		$	179,458		6.38	%
Taxable investment securities		1,533,310			75,300		4.91	%		1,757,853			85,664		4.87	%		1,794,544			86,806		4.84	%
Tax-exempt investment securities (3)		77,329			5,288		6.84	%		93,745			6,571		7.01	%		106,585			7,637		7.17	%
Money market instruments		8,723			469		5.38	%		12,258			441		3.60	%		9,366			219		2.34	%
Total interest earning assets		4,976,640			336,698		6.77	%		5,141,948			317,022		6.17	%		4,723,564			274,120		5.80	%
Noninterest earning assets:
Allowance for possible loan losses		(70,386	)							(71,052	)							(64,676	)
Cash and due from banks		142,794								148,303								142,102
Premises and equipment, net		46,894								46,418								36,540
Other assets		284,681								292,471								211,551
TOTAL	$	5,380,623							$	5,558,088							$	5,049,081
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest bearing liabilities:
Transaction accounts	$	1,058,323		$	22,508		2.13	%	$	1,007,576		$	11,763		1.17	%	$	871,264		$	4,458		0.51	%
Savings deposits		573,067			3,362		0.59	%		633,545			3,328		0.53	%		598,181			2,437		0.41	%
Time deposits		1,531,477			56,402		3.68	%		1,545,912			41,808		2.70	%		1,476,915			33,103		2.24	%
Total interest bearing deposits		3,162,867			82,272		2.60	%		3,187,033			56,899		1.79	%		2,946,360			39,998		1.36	%
Short-term borrowings		375,332			15,692		4.18	%		291,842			7,508		2.57	%		401,299			5,319		1.33	%
Long-term debt		553,307			23,351		4.22	%		799,888			29,488		3.69	%		519,979			13,385		2.57	%
Total interest bearing liabilities		4,091,506			121,315		2.97	%		4,278,763			93,895		2.19	%		3,867,638			58,702		1.52	%
Noninterest bearing liabilities:
Demand deposits		662,077								643,032								574,560
Other		81,966								77,082								68,608
Total noninterest bearing liabilities		744,043								720,114								643,168
Stockholders’ equity		545,074								559,211								538,275
TOTAL	$	5,380,623							$	5,558,088							$	5,049,081
Net interest earnings				$	215,383							$	223,127							$	215,418
Net interest spread							3.80	%							3.98	%							4.28	%
Net yield on interest earning assets							4.33	%							4.34	%							4.56	%

(1)	Loan income includes loan related fee income of $4,340 in 2006, $3,809 in 2005 and $3,336 in 2004. Loan income also includes the effects of taxable equivalent adjustments using a 35% tax rate in 2006, 2005 and 2004. The taxable equivalent adjustment was $518 in 2006, $478 in 2005, and $605 in 2004.
(2)	For the purpose of the computation, nonaccrual loans are included in the daily average loans outstanding.
(3)	Interest income on tax-exempt investment securities includes the effects of taxable equivalent adjustments using a 35% tax rate in 2006, 2005 and 2004. The taxable equivalent adjustments were $1,621 in 2006, $2,085 in 2005, and $2,522 in 2004.

31

FINANCIAL REVIEW

Park expects to close on the acquisition of Vision in March 2007. The following analysis of earnings ignores the impact of the pending acquisition of Vision. Park’s management will update projections for 2007 in the Form 10-Q filed after the completion of the Vision acquisition.

Net interest income decreased by $7.3 million or 3.3% to $213.2 million for 2006 compared to an increase of $8.3 million or 3.9% to $220.6 million for 2005. The net yield on interest earning assets was 4.33% for 2006 compared to 4.34% for 2005 and 4.56% for 2004. The net interest rate spread (the difference between rates received for interest earning assets and the rates paid for interest bearing liabilities) was 3.80% for 2006 compared to 3.98% for 2005 and 4.28% for 2004. The decrease in net interest income in 2006 was primarily due to a decrease in average interest earning assets of $165 million or 3.2%. The increase in net interest income in 2005 was primarily due to an increase in average interest earning assets of $418 million or 8.9%.

The average yield on interest earning assets was 6.77% in 2006 compared to 6.17% in 2005 and 5.80% in 2004. The Federal Reserve Board increased the federal funds rate from 1.00% at June 29, 2004 to 2.25% at year-end 2004 and to 4.25% at year-end 2005 and finally to 5.25% at June 30, 2006. The federal funds rate remained at 5.25% for the final 6 months of 2006. The average yield on interest earning assets on a quarterly basis in 2006 was 6.57% for the first quarter, 6.76% for the second quarter, 6.87% for the third quarter and 6.85% for the fourth quarter. The average yield on loans on a quarterly basis in 2006 was 7.35% for the first quarter, 7.61% for the second quarter, 7.77% for the third quarter and 7.71% for the fourth quarter. (The average yield on interest earning assets and the average yield on loans were negatively impacted in the fourth quarter as a result of the $1.933 million cumulative reduction in interest income on loans, due to the overstatement of accrued interest receivable on loans. Without the $1.933 million adjustment, the average yield on interest earnings assets was 7.01% for the fourth quarter and the average yield on loans was 7.93% for the fourth quarter.) Management expects that the average yield on interest earning assets and loans will gradually increase in 2007 as loans reprice at higher interest rates or mature and are replaced with higher yielding loans.

The average rate paid on interest bearing liabilities was 2.97% in 2006 compared to 2.19% in 2005 and 1.52% for 2004. The average rate paid on interest bearing deposits was 2.60% in 2006 compared to 1.79% in 2005 and 1.36% in 2004. The average rate paid on interest bearing liabilities on a quarterly basis in 2006 was 2.67% for the first quarter, 2.89% for the second quarter, 3.10% for the third quarter and 3.20% for the fourth quarter. The average rate paid on interest bearing deposits on a quarterly basis in 2006 was 2.25% for the first quarter, 2.49% for the second quarter, 2.77% for the third quarter and 2.88% for the fourth quarter. Management expects that the average cost of interest bearing liabilities and the average rate paid on interest bearing deposits will gradually increase in 2007.

Management expects that net interest income will increase modestly (2% to 3%) in 2007. Management expects that average interest earning assets will slightly decrease in 2007, but the net yield on interest earning assets is expected to improve to approximately 4.40%.

A year ago, management projected that the net yield on interest earning assets would be between 4.35% and 4.40% for 2006. The actual net yield on interest earning assets was 4.33% for 2006. Management also projected modest growth in average interest earning assets and a modest increase in net interest income. The actual results in 2006 were a decrease in average interest earning assets of 3.2% and a decrease in net interest income of 3.3%. (Without the $1.933 million cumulative reduction to interest income on loans, the net interest margin was 4.37% for 2006.)

The change in interest due to both volume and rate has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of change in each.

Table 7 — Volume/Rate Variance Analysis

	Change from 2005 to 2006									Change from 2004 to 2005
(In thousands)	Volume			Rate			Total			Volume			Rate			Total
Increase (decrease) in:
Interest income:
Total loans	$	5,529		$	25,766		$	31,295		$	31,256		$	13,632		$	44,888
Taxable investments		(11,059	)		695			(10,364	)		(1,703	)		561			(1,142	)
Tax-exempt investments		(1,127	)		(156	)		(1,283	)		(899	)		(167	)		(1,066	)
Money market instruments		(153	)		181			28			81			141			222
Total interest income		(6,810	)		26,486			19,676			28,735			14,167			42,902
Interest expense:
Transaction accounts	$	621		$	10,124		$	10,745		$	788		$	6,517		$	7,305
Savings accounts		(332	)		366			34			150			741			891
Time deposits		(394	)		14,988			14,594			1,613			7,092			8,705
Short-term borrowings		2,566			5,618			8,184			(1,757	)		3,946			2,189
Long-term debt		(9,970	)		3,833			(6,137	)		8,899			7,204			16,103
Total interest expense		(7,509	)		34,929			27,420			9,693			25,500			35,193
Net variance	$	699		$	(8,443	)	$	(7,744	)	$	19,042		$	(11,333	)	$	7,709

Other Income: Total other income, exclusive of security gains or losses, increased by $5.1 million or 8.5% to $64.7 million in 2006 compared to an increase of $7.0 million or 13.2% to $59.6 million in 2005. The large increase in 2005 was primarily due to the additional customers and volume from the acquisitions of First Federal and First Clermont.

Income from fiduciary activities increased by $1.5 million or 12.6% to $13.5 million in 2006 and increased by $897,000 or 8.1% to $12.0 million in 2005. These increases are primarily due to growth in the number of customers being served. Additionally, the strong performance of the equity markets in 2006 contributed to an increase in the market value of assets being managed which contributed to the increase in fee income in 2006. Management expects an increase of 8% to 9% in fee income from fiduciary activities in 2007. First Federal and First Clermont did not have any fee income from fiduciary activities.

Service charges on deposit accounts increased by $2.1 million or 11.9% to $20.0 million in 2006 and increased by $2.3 million or 14.6% to $17.9 million in 2005. The primary reason for the relatively large increase in service charges on deposit accounts in 2006 was due to an increase in charges from Park’s courtesy overdraft program and to an increase in the number of checking account customers. The large increase in service charges on deposits in 2005 was due to the additional deposit customers from the First Federal and First Clermont acquisitions. Management expects that the increase in service charges on deposit accounts will be approximately 10% in 2007.

Fee income earned from the origination and sale into the secondary market of fixed rate mortgage loans is included with other non-yield related loan fees in the subcategory “other service income.” Other service income was $10.9 million in 2006 compared to $10.8 million in 2005 and $10.3 million in 2004. Management expects that the volume of mortgage loans originated and sold in the secondary market in 2007 will approximate 2006. Management projects that other service income will be approximately $11 million in 2007.

The subcategory of “other income” was $20.2 million in 2006 compared to $19.0 million in 2005 and $15.6 million in 2004. The percentage increase was 6.6% in 2006 compared to 21.6% in 2005. The large increase in other income in 2005 was primarily due to the additional customers from the First Federal and First Clermont acquisitions. This subcategory includes fees earned from check card and ATM services, fee income from bank owned life insurance, fee income earned from the sale of investment and insurance products, rental fee income from safety deposit boxes and fees earned from the sale of official checks and printed checks. Management expects that other income for 2007 will be approximately $20.5 million.

32

FINANCIAL REVIEW

A year ago, management projected that total other income, exclusive of security gains or losses, would be approximately $61.5 million in 2006. The actual results of $64.7 million exceeded the projection by $3.2 million or 5.1%. This variance was due to fee income from fiduciary activities exceeding the projection by $600,000, service charges on deposits exceeding the projection by $1.0 million and other income exceeding the projection by $1.6 million. These positive variances were primarily due to an increase in volume. For 2007, management expects that total other income, exclusive of security gains or losses, will be approximately $68.3 million in 2007, a projected increase of 5.6%.

Other Expense: Total other expense increased by $1.6 million or 1.1% to $141.0 million in 2006 and increased by $13.1 million or 10.4% to $139.4 million in 2005. The large increase in total other expense in 2005 of 10.4% was primarily due to the acquisitions of First Federal and First Clermont.

Salaries and employee benefits expense increased by $1.7 million or 2.2% to $80.2 million in 2006 and increased by $7.0 million or 9.8% to $78.5 million in 2005. Full-time equivalent employees at year-end 2006 were 1,892 compared to 1,824 at year-end 2005, an increase of 3.7%. The small increase in salaries and employee benefits expense in 2006 was primarily due to the $1.4 million reduction in the officer incentive compensation pool in 2006 compared to 2005. A total of 123 employees were added from the First Federal and First Clermont acquisitions, which explains the large increase of 9.8% in salaries and employee benefits expense in 2005. None of the employees of First Federal and First Clermont were included in salaries and employee benefits expense in 2004, but were included for the entire year of 2005. A year ago, management projected that salaries and employee benefits expense would be approximately $82.4 million for 2006 compared to the actual expense of $80.2 million in 2006. This positive variance was primarily due to a $1.4 million reduction in the officer incentive compensation pool. Management expects that salaries and employee benefits expense will increase by approximately 8% in 2007, primarily due to the increase in full-time equivalent employees and the expected increase in health insurance costs.

Data processing expense increased by $1.2 million or 11.1% to $11.8 million in 2006 and increased by $1.7 million or 19.5% to $10.6 million in 2005. The increase in data processing expense in 2006 was primarily due to upgrades that management made to its data processing systems. In 2005, the large increase in data processing expense was primarily due to the acquisitions of First Federal and First Clermont. Data processing expense is expected to increase by approximately 5% in 2007.

The expense for state franchise taxes was $2.2 million in 2006, $2.9 million in 2005 and $2.5 million in 2004. The decrease in expense in 2006 was primarily due to the First Clermont acquisition closing on January 3, 2005. First Clermont had a franchise tax liability for calendar year 2005 and none for 2006. Management expects that state franchise tax expense will be approximately $2.4 million in 2007.

The subcategory “other expense” was $10.3 million in 2006, $12.0 million in 2005 and $10.9 million in 2004. The subcategory other expense includes expenses for supplies, travel, charitable contributions, sundry write-offs and other miscellaneous expenses. The decrease in other expense in 2006 was due to the decrease in charitable contributions of $1.7 million. Charitable contribution expense was $300,000 in 2006 compared to $2.0 million in 2005. In 2005, the increase in other expense was primarily due to an increase in charitable contributions of $1.1 million to $2.0 million in 2005 compared to $900,000 in 2004. Management expects that charitable contribution expense will be approximately $900,000 in 2007. Management expects that the subcategory other expense will total approximately $11.5 million in 2007.

The expense for amortization of intangibles was $2.5 million in 2006, $2.5 million in 2005 and $1.5 million in 2004. The increase in this expense in 2005 was due to the acquisitions of First Federal and First Clermont. Intangible amortization expense is expected to decrease to $2.0 million in 2007 as the core deposit premiums pertaining to certain branch acquisitions were fully amortized at the end of 2006.

A year ago, management projected that total other expense would be approximately $145.0 million in 2006 compared to actual results of $141.0 million. Most of the positive variance was due to salary and employee benefit expense being $2.2 million below the projected amount. Additionally, management estimated a year ago that the operating expense pertaining to the issuance of incentive stock options would be $1 million in 2006. Park did not issue stock options in 2006 and accordingly did not recognize any expense in connection with the adoption of SFAS No. 123R “Share-Based Payment.” Park anticipates that few, if any, stock options would be issued in 2007. For 2007, management expects that total other expense will increase by approximately 6.2% to approximately $150 million in 2007.

Federal Income Taxes: Federal income tax expense as a percentage of income before taxes was 29.3% in 2006, 29.7% in 2005 and 29.2% in 2004. A lower effective tax percentage rate than the statutory rate of 35% is primarily due to tax-exempt interest income from state and municipal investments and loans, low income housing tax credits and fee income from bank owned life insurance. Park and its subsidiary banks do not pay state income tax to the state of Ohio, but pay a franchise tax based on year-end equity. The franchise tax expense is included in “state taxes” on Park’s Consolidated Statements of Income.

CREDIT EXPERIENCE

Provision for Loan Losses: The provision for loan losses is the amount added to the allowance for loan losses to absorb future loan charge-offs. The amount of the loan loss provision is determined by management after reviewing the risk characteristics of the loan portfolio, historic and current loan loss experience and current economic conditions.

The provision for loan losses was $3.9 million in 2006, $5.4 million in 2005 and $8.6 million in 2004. Net loan charge-offs were $3.9 million in 2006, $5.9 million in 2005 and $7.9 million in 2004. The ratio of net loan charge-offs to average loans was .12% in 2006, .18% in 2005 and .28% in 2004.

At year-end 2006, the allowance for loan losses was $70.5 million or 2.03% of total loans outstanding, compared to $69.7 million or 2.09% of total loans outstanding at year-end 2005 and $68.3 million or 2.19% of total loans outstanding at year-end 2004. In each of the last three years, the loan loss reserve from an acquired bank was added to Park’s allowance for loan losses. The Anderson acquisition added $798,000 in 2006, the First Clermont acquisition added $1.8 million in 2005 and the First Federal acquisition added $4.5 million in 2004.

Management believes that the allowance for loan losses at year-end 2006 is adequate to absorb probable incurred credit losses in the loan portfolio. See Note 1 of the Notes to Consolidated Financial Statements and the discussion under the heading “Critical Accounting Policies” earlier in this Financial Review section for additional information on management’s evaluation of the adequacy of the allowance for loan losses.

33

FINANCIAL REVIEW

The following table summarizes the activity in the allowance for loan losses for the past five years. The charge-offs and recoveries are listed by type of loan for each year.

Table 8 — Summary of Loan Loss Experience

(In thousands)	2006			2005			2004			2003			2002
Average loans (net of unearned interest)	$	3,357,278		$	3,278,092		$	2,813,069		$	2,695,830		$	2,719,805
Allowance for loan losses:
Beginning balance	$	69,694		$	68,328		$	63,142		$	62,028		$	59,959
Charge-offs:
Commercial, financial and agricultural		853			3,154			2,557			4,698			7,210
Real estate — construction		718			46			613			—			317
Real estate — residential		1,915			1,006			1,476			1,173			1,208
Real estate — commercial		556			1,612			1,951			1,947			884
Consumer		6,673			7,255			8,111			9,233			8,606
Lease financing		57			316			465			985			1,602
Total charge-offs		10,772			13,389			15,173			18,036			19,827
Recoveries:
Commercial, financial and agricultural	$	842		$	2,707		$	2,138		$	1,543		$	1,812
Real estate — construction		—			173			67			175			—
Real estate — residential		1,017			659			650			549			969
Real estate — commercial		1,646			517			292			407			565
Consumer		3,198			3,214			3,633			3,236			2,891
Lease financing		150			229			529			645			616
Total recoveries		6,853			7,499			7,309			6,555			6,853
Net charge-offs		3,919			5,890			7,864			11,481			12,974
Provision charged to earnings		3,927			5,407			8,600			12,595			15,043
Allowance for loan losses of acquired bank		798			1,849			4,450			—			—
Ending balance	$	70,500		$	69,694		$	68,328		$	63,142		$	62,028
Ratio of net charge-offs to average loans		0.12	%		0.18	%		0.28	%		0.43	%		0.48	%
Ratio of allowance for loan losses to end of year loans, net of unearned interest		2.03	%		2.09	%		2.19	%		2.31	%		2.30	%

The following table summarizes the allocation of the allowance for loan losses for the past five years:

Table 9 — Allocation of Allowance for Loan Losses

December 31,	2006					2005					2004					2003					2002
			Percent of					Percent of					Percent of					Percent of					Percent of
(Dollars in			Loans Per					Loans Per					Loans Per					Loans Per					Loans Per
thousands)	Allowance		Category			Allowance		Category			Allowance		Category			Allowance		Category			Allowance		Category
Commercial, financial and agricultural	$	16,985		15.75	%	$	17,942		15.40	%	$	17,837		15.04	%	$	17,117		16.16	%	$	17,049		16.34	%
Real estate — construction		4,425		6.75	%		3,864		5.80	%		3,107		4.98	%		2,423		4.44	%		1,982		3.68	%
Real estate — residential		10,402		37.36	%		10,329		38.68	%		8,926		38.14	%		7,378		36.02	%		7,504		37.17	%
Real estate — commercial		17,097		24.56	%		16,823		24.74	%		16,930		24.11	%		15,412		24.54	%		13,889		22.93	%
Consumer		21,285		15.29	%		19,799		14.87	%		20,206		16.19	%		18,681		16.48	%		18,322		16.40	%
Leases		306		0.29	%		937		0.51	%		1,322		1.54	%		2,131		2.36	%		3,282		3.48	%
Total	$	70,500		100.00	%	$	69,694		100.00	%	$	68,328		100.00	%	$	63,142		100.00	%	$	62,028		100.00	%

As of December 31, 2006, Park had no significant concentrations of loans to borrowers engaged in the same or similar industries nor did Park have any loans to foreign governments.

Nonperforming Assets: Nonperforming loans include: l) loans whose interest is accounted for on a nonaccrual basis; 2) loans whose terms have been renegotiated; and 3) loans which are contractually past due 90 days or more as to principal or interest payments but whose interest continues to accrue. Other real estate owned results from taking title to property used as collateral for a defaulted loan.

The percentage of nonperforming loans to total loans was .95% at year-end 2006, .90% at year-end 2005 and .92% at year-end 2004. The percentage of nonperforming assets to total loans was 1.04% at year-end 2006, .97% at year-end 2005 and 1.01% at year-end 2004.

Park had $176.8 million of loans included on the Corporation’s watch list of potential problem loans at December 31, 2006 compared to $130.8 million at year-end 2005 and $131.8 million at year-end 2004. The existing conditions of these loans do not warrant classification as nonaccrual. Management performs additional analyses regarding a borrower’s ability to comply with payment terms for watch list loans. As a percentage of year-end total loans, the Corporation’s watch list of potential problem loans was 5.1% in 2006, 3.9% in 2005 and 4.2% in 2004.

Management does not expect that the increase in watch list loans in 2006 of $46 million will lead to a significant increase in nonperforming loans and assets in 2007. Park’s lending management will work with the additional watch list loan borrowers to prevent these loans from becoming nonperforming.

The following is a summary of the nonaccrual, past due and renegotiated loans and other real estate owned for the last five years:

Table 10 — Nonperforming Assets

December 31,
(Dollars in thousands)	2006			2005			2004			2003			2002
Nonaccrual loans	$	16,004		$	14,922		$	17,873		$	15,921		$	17,579
Renegotiated loans		9,113			7,441			5,461			5,452			2,599
Loans past due 90 days or more		7,832			7,661			5,439			4,367			6,290
Total nonperforming loans		32,949			30,024			28,773			25,740			26,468
Other real estate owned		3,351			2,368			2,680			2,319			3,206
Total nonperforming assets	$	36,300		$	32,392		$	31,453		$	28,059		$	29,674
Percentage of nonperforming loans to loans, net of unearned interest		0.95	%		0.90	%		0.92	%		0.94	%		0.98	%
Percentage of nonperforming assets to loans, net of unearned interest		1.04	%		0.97	%		1.01	%		1.03	%		1.10	%
Percentage of nonperforming assets to total assets		0.66	%		0.60	%		0.58	%		0.56	%		0.67	%

Tax equivalent interest income from loans of $255.6 million for 2006 would have increased by $2.1 million if all loans had been current in accordance with their original terms. Interest income for the year ended December 31, 2006 in the approximate amount of $619,000 is included in interest income for those loans in accordance with their original terms.

CAPITAL RESOURCES

Liquidity and Interest Rate Sensitivity Management: The Corporation’s objective in managing its liquidity is to maintain the ability to continuously meet the cash flow needs of customers, such as borrowings or deposit withdrawals, while at the same time seeking higher yields from longer-term lending and investing activities.

34

FINANCIAL REVIEW

Cash and cash equivalents increased by $12.3 million during 2006 to $186.3 million at year end. Cash provided by operating activities was $85.3 million in 2006, $78.5 million in 2005, and $85.0 million in 2004. Net income was the primary source of cash for operating activities during each year.

Cash provided by investing activities was $47.8 million in 2006 and $145.1 million in 2005. Cash used in investing activities was $146.2 million in 2004. Security transactions are the major use or source of cash in investing activities. Proceeds from the sale, repayment or maturity of securities provide cash and purchases of securities use cash. Net security transactions provided $145.9 million of cash in 2006, $239.0 million in 2005 and $66.3 million in 2004. The other major use or source of cash in investing activities is the net increase or decrease in the loan portfolio. Cash used by the net increase in the loan portfolio was $99.3 million in 2006, $53.6 million in 2005 and $171.8 million in 2004.

Cash used by financing activities was $120.7 million in 2006 and $211.4 million in 2005. Cash provided by financing activities was $53.2 million in 2004. A major source of cash for financing activities is the net change in deposits. Cash provided by the net increase in deposits was $6.3 million in 2006 and $103.3 million in 2004. Cash used by the net decrease in deposits was $55.5 million in 2005.

Changes in short-term borrowings or long-term debt is another major source or use of cash for financing activities. The net increase in short-term borrowings provided cash of $61.7 million in 2006 and $35.8 million in 2005. The net decrease in short-term borrowings used cash of $256.8 million in 2004. Cash was used by the net decrease in long-term debt of $110.6 million in 2006 and $102.6 million in 2005. Cash was provided by the net increase in long-term debt of $271.4 million in 2004.

Funds are available from a number of sources, including the securities portfolio, the core deposit base, Federal Home Loan Bank borrowings, and the capability to securitize or package loans for sale. The present funding sources provide more than adequate liquidity for the Corporation to meet its cash flow needs.

The increase or decrease in the investment portfolio and short-term borrowings and long-term debt is greatly dependent upon the growth in loans and deposits. The primary objective of management is to grow loan and deposit totals. To the extent that management is unable to grow loan totals at a desired growth rate, additional investment securities may be added to the balance sheet. Likewise, short-term borrowings and long-term debt are utilized to fund the growth in earning assets if the growth in deposits and the cash flow from operations is not sufficient to do so.

Liquidity is enhanced by assets maturing or repricing within one year. Assets maturing or repricing within one year were $2,452 million or 49.0% of interest earning assets at year-end 2006. Liquidity is also enhanced by a significant amount of stable core deposits from a variety of customers in several Ohio markets served by the Corporation.

An asset/liability committee monitors and forecasts rate-sensitive assets and rate-sensitive liabilities and develops strategies and pricing policies to influence the acquisition of certain assets and liabilities. The purpose of these efforts is to guard the Corporation from adverse impacts of unforeseen swings in interest rates and to enhance the net income of the Corporation by accepting a limited amount of interest rate risk, based on interest rate projections.

The following table shows interest rate sensitivity data for five different time intervals as of December 31, 2006:

Table 11 — Interest Rate Sensitivity

(Dollars	0-3			3-12			1-3			3-5			Over 5
in thousands)	Months			Months			Years			Years			Years			Total
Interest earning assets:
Investment securities (1)	$	119,755		$	177,071		$	356,913		$	258,081		$	601,679		$	1,513,499
Money market instruments		8,266			—			—			—			—			8,266
Loans (1)		1,195,740			950,797			1,180,733			138,463			14,969			3,480,702
Total interest earning assets		1,323,761			1,127,868			1,537,646			396,544			616,648			5,002,467
Interest bearing liabilities:
Interest bearing transaction accounts		545,592			—			488,278			—			—			1,033,870
Savings accounts (2)		271,862			—			271,862			—			—			543,724
Time deposits		402,581			834,223			261,121			81,492			1,703			1,581,120
Other		1,858			—			—			—			—			1,858
Total deposits		1,221,893			834,223			1,021,261			81,492			1,703			3,160,572
Short-term borrowings		375,773			—			—			—			—			375,773
Long-term debt		127,700			288,476			165,783			18,920			3,261			604,140
Total interest bearing liabilities		1,725,366			1,122,699			1,187,044			100,412			4,964			4,140,485
Interest rate sensitivity gap		(401,605	)		5,169			350,602			296,132			611,684			861,982
Cumulative rate sensitivity gap		(401,605	)		(396,436	)		(45,834	)		250,298			861,982			—
Cumulative gap as a percentage of total interest earning assets		-8.03	%		-7.92	%		-0.92	%		5.00	%		17.23	%		—

(1)

Investment securities and loans that are subject to prepayment are shown in the table by the earlier of their repricing date or their expected repayment dates and not by their contractual maturity. The totals for investment securities include interest bearing deposits with other banks.

(2)

Management considers interest bearing transaction accounts and savings accounts to be core deposits and therefore, not as rate sensitive as other deposit accounts and borrowed money. Accordingly, only 53% of interest bearing transaction accounts and 50% of savings accounts are considered to reprice within one year. If all of the interest bearing checking accounts and savings accounts were considered to reprice within one year, the one year cumulative gap would change from a negative 7.92% to a negative 23.12%.

The interest rate sensitivity gap analysis provides a good overall picture of the Corporation’s static interest rate risk position. The Corporation’s policy is that the twelve month cumulative gap position should not exceed fifteen percent of interest earning assets for three consecutive quarters. At December 31, 2006, the cumulative interest earning assets maturing or repricing within twelve months were $2,452 million compared to the cumulative interest bearing liabilities maturing or repricing within twelve months of $2,848 million. For the twelve-month cumulative gap position, rate sensitive liabilities exceed rate sensitive assets by $396 million or 7.9% of interest earning assets.

A negative twelve month cumulative rate sensitivity gap (liabilities exceeding assets) would suggest that the Corporation’s net interest margin would decrease if interest rates were to rise. However, the usefulness of the interest sensitivity gap analysis as a forecasting tool in projecting net interest income is limited. The gap analysis does not consider the magnitude by which assets or liabilities will reprice during a period and also contains assumptions as to the repricing of transaction and savings accounts that may not prove to be correct.

The cumulative twelve month interest rate sensitivity gap position at December 31, 2005, was a negative $64 million or a negative 1.3% of interest earning assets compared to a negative $396 million or a negative 7.9% of interest earning assets at December 31, 2006. This change in the cumulative twelve month interest rate sensitivity gap of a negative $332 million was primarily due to an increase in time deposits maturing or repricing within one year.

35

FINANCIAL REVIEW

The amount of time deposits maturing or repricing within one year increased by $269 million to $1,237 million or 78.2% of the total time deposits at December 31, 2006 compared to $968 million or 64.3% of the total time deposits at December 31, 2005.

Management supplements the interest rate sensitivity gap analysis with periodic simulations of balance sheet sensitivity under various interest rate and what-if scenarios to better forecast and manage the net interest margin. The Corporation uses an earnings simulation model to analyze net interest income sensitivity to movements in interest rates. This model is based on actual cash flows and repricing characteristics for balance sheet instruments and incorporates market-based assumptions regarding the impact of changing interest rates on the prepayment rate of certain assets and liabilities. This model also includes management’s projections for activity levels of various balance sheet instruments and noninterest fee income and operating expense. Assumptions based on the historical behavior of deposit rates and balances in relation to changes in interest rates are also incorporated into this earnings simulation model. These assumptions are inherently uncertain and as a result, the model cannot precisely measure net interest income and net income. Actual results will differ from simulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in market conditions and management strategies.

Management uses a 50 basis point change in market interest rates per quarter for a total of 200 basis points per year in evaluating the impact of changing interest rates on net interest income and net income over a twelve month horizon. At December 31, 2006, the earnings simulation model projected that net income would increase by .1% using a rising interest rate scenario and decrease by .7% using a declining interest rate scenario over the next year. At December 31, 2005, the earnings simulation model projected that net income would decrease by .2% using a rising interest rate scenario and increase by .9% using a declining interest rate scenario over the next year and at December 31, 2004, the earnings simulation model projected that net income would increase by .9% using a rising interest rate scenario and decrease by .9% using a declining interest rate scenario over the next year. Consistently, over the past several years the earnings simulation model has projected that changes in interest rates would have only a small impact on net income and the net interest margin. The net interest margin has been relatively stable over the past four years at 4.33% in 2006, 4.34% in 2005, 4.56% in 2004 and 4.60% in 2003. A major goal of the asset/liability committee is to have a relatively stable net interest margin regardless of the level of interest rates. Management expects that the net interest margin will be approximately 4.40% in 2007. The decrease in the net interest margin for 2005 was largely due to the cash acquisitions of First Federal and First Clermont.

CONTRACTUAL OBLIGATIONS

In the ordinary course of operations, Park enters into certain contractual obligations. Such obligations include the funding of operations through debt issuances as well as leases for premises. The following table summarizes Park’s significant and determinable obligations by payment date at December 31, 2006.

Further discussion of the nature of each specified obligation is included in the referenced Note to the Consolidated Financial Statements or referenced Table in the Financial Review section.

Table 12 — Contractual Obligations

December 31, 2006	Payments Due In
(Dollars	Table /	0-1		1-3		3-5		Over 5
in thousands)	Note	Years		Years		Years		Years		Total
Deposits without stated maturity		$	2,244,414	$	—	$	—	$	—	$	2,244,414
Certificates of deposit	11		1,236,804		261,121		81,492		1,703		1,581,120
Short-term borrowings	11		375,773		—		—		—		375,773
Long-term debt	10		66,289		115,808		18,845		403,198		604,140
Operating leases	8		1,727		2,778		1,023		579		6,107
Purchase obligations			90,932		—		—		—		90,932
Total contractual obligations		$	4,015,939	$	379,707	$	101,360	$	405,480	$	4,902,486

The Corporation’s operating lease obligations represent short-term and long-term lease and rental payments for facilities and equipment. Purchase obligations represent obligations under agreements to purchase goods or services that are enforceable and legally binding on the Corporation. Purchase obligations in Table 12 include $90.4 million for the cash portion of the total consideration that could be paid to the Vision shareholders in connection with the pending acquisition.

Commitments, Contingent Liabilities, and Off-Balance Sheet Arrangements: In order to meet the financing needs of its customers, the Corporation issues loan commitments and standby letters of credit. At December 31, 2006, the Corporation had $824 million of loan commitments for commercial, commercial real estate, and residential real estate loans and had $140 million of commitments for revolving home equity and credit card lines. Standby letters of credit totaled $20 million at December 31, 2006.

Commitments to extend credit for loan commitments and standby letters of credit do not necessarily represent future cash requirements. These commitments often expire without being drawn upon. However, all of the loan commitments and standby letters of credit are permitted to be drawn upon in 2007. See Note 17 of the Notes to Consolidated Financial Statements for additional information on loan commitments and standby letters of credit.

The Corporation did not have any significant contingent liabilities at December 31, 2006, and did not have any off-balance sheet arrangements at year-end 2006.

Capital: Park’s primary means of maintaining capital adequacy is through net retained earnings. At December 31, 2006, the Corporation’s equity capital was $570.4 million, compared to $558.4 million at December 31, 2005. Stockholders’ equity at December 31, 2006 was 10.43% of total assets compared to 10.27% of total assets at December 31, 2005.

Net income for 2006 was $94.1 million, $95.2 million in 2005 and $91.5 million in 2004. The cash dividends declared were $51.4 million in 2006, $51.6 million in 2005 and $49.0 million 2004.

In 2006, Park purchased 302,786 shares of treasury stock totaling $30.5 million at a weighted average cost of $100.76 per share. In 2005, Park purchased 281,360 shares of treasury stock totaling $30.0 million at a weighted average cost of $106.55 per share. Treasury stock had a balance in stockholders’ equity of $143.4 million at December 31, 2006 compared to $116.7 million at December 31, 2005 and $91.4 million at December 31, 2004.

Accumulated other comprehensive income (loss) was $(22.8) million at December 31, 2006 compared to $(10.1) million at December 31, 2005 and $12.4 million at December 31, 2004. Long-term interest rates increased during 2005 and the market value of Park’s investment securities decreased causing the large decrease in accumulated other comprehensive income (loss) in 2005. Park adopted SFAS No. 158 concerning the accounting for its pension plan in 2006. This new accounting standard caused Park to charge accumulated other comprehensive income (loss) by $6.8 million.

36

FINANCIAL REVIEW

Financial institution regulators have established guidelines for minimum capital ratios for banks, thrifts and bank holding companies. Park’s accumulated other comprehensive income (loss) is not included in computing regulatory capital. The capital standard of risk-based capital to risk-based assets is 8.00% at December 31, 2006. At year-end 2006, the Corporation had a risk-based capital ratio of 15.98% or capital above the minimum required by $286 million. The capital standard of tier l capital to risk-based assets is 4.00% at December 31, 2006. Tier l capital includes stockholders’ equity net of goodwill and other intangible assets. At year-end 2006, the Corporation had a tier l capital to risk-based assets ratio of 14.72% or capital above the minimum required by $384 million. Bank regulators have also established a leverage capital ratio of 4%, consisting of tier 1 capital to total assets, not risk adjusted. At year-end 2006, the Corporation had a leverage capital ratio of 9.96% or capital above the minimum required by $316 million. Regulatory guidelines also establish capital ratio requirements for “well capitalized” bank holding companies. The capital ratios are 10% for risk-based capital, 6% for tier 1 capital to risk-based assets and 5% for tier 1 capital to total assets. The Corporation exceeds these higher capital standards and therefore is classified as “well capitalized.”

The financial institution subsidiaries of the Corporation each met the well capitalized ratio guidelines at December 31, 2006. See Note 19 of the Notes to Consolidated Financial Statements for the capital ratios for the Corporation and its financial institution subsidiaries.

Effects of Inflation: Balance sheets of financial institutions typically contain assets and liabilities that are monetary in nature and therefore, differ greatly from most commercial and industrial companies which have significant investments in premises, equipment and inventory. During periods of inflation, financial institutions that are in a net positive monetary position will experience a decline in purchasing power, which does have an impact on growth. Another significant effect on internal equity growth is other expenses, which tend to rise during periods of inflation.

Management believes the most significant impact on financial results is the Corporation’s ability to align its asset/liability management program to react to changes in interest rates.

The following table summarizes five-year financial information. All per share data have been retroactively restated for the 5% stock dividend paid on December 15, 2004.

Table 13 — Consolidated Five-Year Selected Financial Data

December 31,
(Dollars in thousands,
except per share data)	2006		2005		2004			2003			2002
Results of Operations:
Interest income	$	334,559	$	314,459	$	270,993		$	264,629		$	287,920
Interest expense		121,315		93,895		58,702			61,992			82,588
Net interest income		213,244		220,564		212,291			202,637			205,332
Provision for loan losses		3,927		5,407		8,600			12,595			15,043
Net interest income after provision for loan losses		209,317		215,157		203,691			190,042			190,289
Net gains (losses) on sale of securities		97		96		(793	)		(6,060	)		(182	)
Noninterest income		64,665		59,609		52,641			61,583			51,032
Noninterest expense		141,002		139,438		126,290			122,376			119,964
Net income		94,091		95,238		91,507			86,878			85,579
Per share:
Net income — basic		6.75		6.68		6.38			6.01			5.87
Net income — diluted		6.74		6.64		6.32			5.97			5.86
Cash dividends declared		3.690		3.620		3.414			3.209			2.962
Average Balances:
Loans	$	3,357,278	$	3,278,092	$	2,813,069		$	2,695,830		$	2,719,805
Investment securities		1,610,639		1,851,598		1,901,129			1,759,816			1,384,750
Money market instruments and other		8,723		12,258		9,366			35,768			36,679
Total earning assets		4,976,640		5,141,948		4,723,564			4,491,414			4,141,234

Table 13 — Consolidated Five-Year Selected Financial Data continued

December 31,
(Dollars in thousands,
except per share data)	2006			2005			2004			2003			2002
Noninterest bearing deposits		662,077			643,032			574,560			522,456			502,400
Interest bearing deposits		3,162,867			3,187,033			2,946,360			2,901,835			2,901,456
Total deposits		3,824,944			3,830,065			3,520,920			3,424,291			3,403,856
Short-term borrowings		375,332			291,842			401,299			515,328			226,238
Long-term debt		553,307			799,888			519,979			281,599			252,834
Stockholders’ equity		545,074			559,211			538,275			520,391			487,316
Total assets		5,380,623			5,558,088			5,049,081			4,803,263			4,435,162
Ratios:
Return on average assets		1.75	%		1.71	%		1.81	%		1.81	%		1.93	%
Return on average equity		17.26	%		17.03	%		17.00	%		16.69	%		17.56	%
Net interest margin (1)		4.33	%		4.34	%		4.56	%		4.60	%		5.06	%
Noninterest expense to net revenue (1)		50.35	%		49.32	%		47.11	%		45.66	%		46.02	%
Dividend payout ratio		54.65	%		54.19	%		53.54	%		53.42	%		50.42	%
Average stockholders’ equity to average total assets		10.13	%		10.06	%		10.66	%		10.83	%		10.99	%
Leverage capital		9.96	%		9.27	%		10.10	%		10.79	%		10.72	%
Tier 1 capital		14.72	%		14.17	%		15.16	%		16.51	%		16.51	%
Risk-based capital		15.98	%		15.43	%		16.43	%		17.78	%		17.78	%

(1) Computed on a fully taxable equivalent basis

The following table is a summary of selected quarterly results of operations for the years ended December 31, 2006 and 2005. Certain quarterly amounts have been reclassified to conform to the year-end financial statement presentation.

Table 14 — Quarterly Financial Data

(Dollars in thousands,	Three Months Ended
except per share data)	March 31		June 30		Sept. 30		Dec. 31
2006:
Interest income	$	80,596	$	83,298	$	85,290	$	85,375
Interest expense		27,177		29,476		31,728		32,934
Net interest income		53,419		53,822		53,562		52,441
Provision for loan losses		—		1,467		935		1,525
Gain (loss) on sale of securities		—		—		97		—
Income before income taxes		33,800		33,827		33,589		31,861
Net income		23,807		23,886		23,805		22,593
Per share data:
Net income — basic		1.70		1.71		1.72		1.63
Net income — diluted		1.69		1.70		1.71		1.63
Weighted-average common stock outstanding — basic		14,034,360		13,977,432		13,859,498		13,845,071
Weighted-average common stock equivalent — diluted		14,095,895		14,010,407		13,888,458		13,872,586
2005:
Interest income	$	74,959	$	78,928	$	79,768	$	80,804
Interest expense		20,514		23,516		24,217		25,648
Net interest income		54,445		55,412		55,551		55,156
Provision for loan losses		1,082		1,325		1,600		1,400
Gain (loss) on sale of securities		—		96		—		—
Income before income taxes		33,071		35,303		34,763		32,287
Net income		23,342		24,770		24,295		22,831
Per share data:
Net income — basic		1.63		1.73		1.70		1.62
Net income — diluted		1.61		1.72		1.69		1.61
Weighted-average common stock outstanding — basic		14,331,261		14,312,032		14,256,723		14,134,058
Weighted-average common stock equivalent — diluted		14,475,634		14,379,463		14,338,418		14,199,455

37

FINANCIAL REVIEW

The Corporation’s common stock (symbol: PRK) is traded on the American Stock Exchange (AMEX). At December 31, 2006, the Corporation had 4,994 stockholders of record. The following table sets forth the high, low and closing sale prices of, and dividends declared on the common stock for each quarterly period for the years ended December 31, 2006 and 2005, as reported by AMEX.

Table 15 — Market and Dividend Information

							Cash
							Dividend
					Last		Declared
	High		Low		Price		Per Share
2006:
First Quarter	$	117.21	$	103.00	$	106.50	$	0.92
Second Quarter		105.42		92.36		98.81		0.92
Third Quarter		105.00		93.72		100.09		0.92
Fourth Quarter		103.95		98.14		99.00		0.93
2005:
First Quarter	$	133.30	$	108.40	$	112.50	$	0.90
Second Quarter		113.01		99.04		110.50		0.90
Third Quarter		118.20		104.55		108.27		0.90
Fourth Quarter		112.91		101.00		102.64		0.92

PERFORMANCE GRAPH

Table 16 compares the total return performance for Park common shares with the AMEX Composite Index, the NASDAQ Bank Stocks Index and with the SNL Financial Bank and Thrift Index for the five year period from December 31, 2001 to December 31, 2006. The AMEX Composite Index is a market capitalization-weighted index of the stocks listed on the American Stock Exchange. The NASDAQ Bank Stock Index is comprised of all depository institutions and holding and other investment companies that are traded on The NASDAQ Global Select and Global Markets. Park considers a number of bank holding companies traded on The NASDAQ to be within its peer group. The SNL Financial Bank and Thrift Index is comprised of all publicly traded bank and thrift stocks researched by SNL Financial.

The AMEX Financial Stocks Index includes the stocks of banks, thrifts, finance companies and securities broker-dealers. Park believes that The NASDAQ Bank Stock Index and the SNL Financial Bank and Thrift Index are more appropriate industry indices for Park to use for the five year total return performance comparison.

Table 16 — Total Return Performance

		PERIOD ENDING
	Index	12/31/01		12/31/02		12/31/03		12/31/04		12/31/05		12/31/06
	Park National Corporation		100.00		110.00		130.01		168.28		131.73		131.77
	Amex Composite		100.00		99.37		145.77		183.03		230.95		277.00
	NASDAQ Bank Stocks		100.00		106.95		142.29		161.73		158.61		180.53
	SNL Bank and Thrift Index		100.00		93.96		127.39		142.66		144.89		169.30

The total return performance for Park’s common shares has lagged behind the total return performance on the three indices used in the five year comparison as indicated in Table 16. The annual compound total return on Park’s common shares for the past five years is 5.7%. The annual compound growth rate in Park’s diluted earnings per share for the past five years is 4.9%. Park’s performance ratios (such as return on average assets and return on average equity) continue to be strong compared to other financial institutions. However, Park has had difficulty in growing loans since 2000, and as a result diluted earnings per share have not grown faster than the 4.9% annual compound growth rate for the past five years.

38

MANAGEMENT’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING

To the Board of Directors and Stockholders
Park National Corporation

The management of Park National Corporation (the “Corporation”) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a—15(f) and 15d—15(f) under the Securities Exchange Act of 1934. The Corporation’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in conformity with U.S. generally accepted accounting principles. The Corporation’s internal control over financial reporting includes those policies and procedures that:

a.)	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Corporation and its consolidated subsidiaries;
b.)	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. generally accepted accounting principles, and that receipts and expenditures of the Corporation and its consolidated subsidiaries are being made only in accordance with authorizations of management and directors of the Corporation; and
c.)	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets of the Corporation and its consolidated subsidiaries that could have a material effect on the financial statements.

The Corporation’s internal control over financial reporting as it relates to the financial statements is evaluated for effectiveness by management and tested for reliability through a program of internal audits. Actions are taken to correct potential deficiencies as they are identified.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, even an effective system of internal control over financial reporting will provide only reasonable assurance with respect to financial statement preparation.

With the supervision and participation of our Chairman and Chief Executive Officer, our President and our Chief Financial Officer, management assessed the effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2006. In making this assessment, management used the criteria set forth for effective internal control over financial reporting by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.

Based on our assessment and those criteria, management concluded that the Corporation maintained effective internal control over financial reporting as of December 31, 2006.

Park’s independent registered public accounting firm (Crowe Chizek and Company LLC) has issued an attestation report on management’s assessment of the Corporation’s internal control over financial reporting which follows this report.

C. Daniel DeLawder	David L. Trautman	John W. Kozak
Chairman and Chief Executive Officer	President	Chief Financial Officer

February 23, 2007

39

REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders
Park National Corporation
Newark, Ohio

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that Park National Corporation maintained effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Park National Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that Park National Corporation maintained effective internal control over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based on criteria established in COSO. Also in our opinion, Park National Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on criteria established in COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Park National Corporation as of December 31, 2006, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for the year then ended, and our report dated February 23, 2007 expressed an unqualified opinion on those consolidated financial statements.

Crowe Chizek and Company LLC

Columbus, Ohio
February 23, 2007

40

REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders
Park National Corporation
Newark, Ohio

We have audited the accompanying consolidated balance sheet of Park National Corporation as of December 31, 2006, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. The consolidated balance sheet of Park National Corporation as of December 31, 2005 and the consolidated statements of income, changes in stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2005, were audited by other auditors whose report dated February 21, 2006, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the 2006 financial statements referred to above present fairly, in all material respects, the financial position of Park National Corporation as of December 31, 2006, and the results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Park National Corporation’s internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2007, expressed an unqualified opinion thereon.

/s/ Crowe Chizek and Company LLC

Columbus, Ohio
February 23, 2007

41

CONSOLIDATED BALANCE SHEETS

PARK NATIONAL CORPORATION AND SUBSIDIARIES
at December 31, 2006 and 2005 (Dollars in thousands)

ASSETS
	2006			2005
Cash and due from banks	$	177,990		$	169,690
Money market instruments		8,266			4,283
Cash and cash equivalents		186,256			173,973
Interest bearing deposits with other banks		1			300
Investment securities:
Securities available-for-sale, at fair value (amortized cost of $1,299,686 and $1,424,955 at December 31, 2006 and 2005, respectively)		1,275,079			1,409,351
Securities held-to-maturity, at amortized cost (fair value of $169,786 and $190,425 at December 31, 2006 and 2005, respectively)		176,485			195,953
Other investment securities		61,934			58,038
Total investment securities		1,513,498			1,663,342
Loans		3,485,994			3,333,713
Unearned loan interest		(5,292	)		(5,601	)
Total loans		3,480,702			3,328,112
Allowance for loan losses		(70,500	)		(69,694	)
Net loans		3,410,202			3,258,418
Other assets:
Bank owned life insurance		113,101			109,600
Goodwill and other intangible assets		78,003			69,188
Premises and equipment, net		47,554			47,172
Accrued interest receivable		26,122			23,306
Mortgage loan servicing rights		10,371			10,665
Other		85,768			80,084
Total other assets		360,919			340,015
Total assets	$	5,470,876		$	5,436,048

The accompanying notes are an integral part of the financial statements.

42

CONSOLIDATED BALANCE SHEETS (CONTINUED)

PARK NATIONAL CORPORATION AND SUBSIDIARIES
at December 31, 2006 and 2005 (Dollars in thousands)

LIABILITIES AND STOCKHOLDERS’ EQUITY
	2006			2005
Deposits:
Noninterest bearing	$	664,962		$	667,328
Interest bearing		3,160,572			3,090,429
Total deposits		3,825,534			3,757,757
Short-term borrowings		375,773			314,074
Long-term debt		604,140			714,784
Total borrowings		979,913			1,028,858
Other liabilities:
Accrued interest payable		13,076			8,943
Other		81,914			82,060
Total other liabilities		94,990			91,003
Total liabilities		4,900,437			4,877,618
COMMITMENTS AND CONTINGENCIES
Stockholders’ equity:
Common stock, no par value (20,000,000 shares authorized; 15,358,323 shares issued in 2006 and 15,271,574 issued in 2005)		217,067			208,365
Accumulated other comprehensive income (loss), net		(22,820	)		(10,143	)
Retained earnings		519,563			476,889
Less: Treasury stock (1,436,794 shares in 2006 and 1,178,948 shares in 2005)		(143,371	)		(116,681	)
Total stockholders’ equity		570,439			558,430
Total liabilities and stockholders’ equity	$	5,470,876		$	5,436,048

The accompanying notes are an integral part of the financial statements.

43

CONSOLIDATED STATEMENTS OF INCOME

PARK NATIONAL CORPORATION AND SUBSIDIARIES
for the years ended December 31, 2006, 2005 and 2004 (Dollars in thousands, except per share data)

	2006		2005		2004
Interest and dividend income:
Interest and fees on loans	$	255,123	$	223,868	$	178,853
Interest and dividends on:
Obligations of U.S. Government, its agencies and other securities		75,300		85,664		86,806
Obligations of states and political subdivisions		3,667		4,486		5,115
Other interest income		469		441		219
Total interest and dividend income		334,559		314,459		270,993
Interest expense:
Interest on deposits:
Demand and savings deposits		25,870		15,091		6,895
Time deposits		56,402		41,808		33,103
Interest on short-term borrowings		15,692		7,508		5,319
Interest on long-term debt		23,351		29,488		13,385
Total interest expense		121,315		93,895		58,702
Net interest income		213,244		220,564		212,291
Provision for loan losses		3,927		5,407		8,600
Net interest income after provision for loan losses		209,317		215,157		203,691
Other income:
Income from fiduciary activities		13,548		12,034		11,137
Service charges on deposit accounts		19,969		17,853		15,585
Net gains (losses) on sales of securities		97		96		(793	)
Other service income		10,920		10,753		10,325
Other		20,228		18,969		15,594
Total other income	$	64,762	$	59,705	$	51,848

The accompanying notes are an integral part of the financial statements.

44

CONSOLIDATED STATEMENTS OF INCOME (CONTINUED)

PARK NATIONAL CORPORATION AND SUBSIDIARIES
for the years ended December 31, 2006, 2005 and 2004 (Dollars in thousands, except per share data)

	2006		2005		2004
Other expense:
Salaries and employee benefits	$	80,227	$	78,498	$	71,464
Data processing fees		11,812		10,636		8,900
Fees and service charges		9,218		8,723		8,784
Net occupancy expense of bank premises		9,066		8,641		7,024
Amortization of intangibles		2,470		2,548		1,479
Furniture and equipment expense		5,166		5,278		5,749
Insurance		1,136		1,243		1,030
Marketing		4,438		4,197		3,972
Postage and telephone		4,890		4,827		4,482
State taxes		2,232		2,893		2,468
Other		10,347		11,954		10,938
Total other expense		141,002		139,438		126,290
Income before federal income taxes		133,077		135,424		129,249
Federal income taxes		38,986		40,186		37,742
Net income	$	94,091	$	95,238	$	91,507
Earnings per share:
Basic	$	6.75	$	6.68	$	6.38
Diluted	$	6.74	$	6.64	$	6.32

The accompanying notes are an integral part of the financial statements.

45

CONSOLIDATED STATEMENTS OF
CHANGES IN STOCKHOLDERS’ EQUITY

PARK NATIONAL CORPORATION AND SUBSIDIARIES
for the years ended December 31, 2006, 2005 and 2004 (Dollars in thousands, except per share data)

													Accumulated
	Common Stock												Other
	Shares						Retained			Treasury			Comprehensive						Comprehensive
	Outstanding			Amount			Earnings			Stock			Income (Loss)			Total			Income
Balance, January 1, 2004		14,455,027		$	105,895		$	486,769		$	(68,577	)	$	18,954		$	543,041
Net income		—			—			91,507			—			—			91,507			91,507
Other comprehensive income, net of tax:
Unrealized net holding loss on securities available-for-sale, net of income taxes of $(3,506)														(6,512	)		(6,512	)		(6,512	)
Total comprehensive income																				84,995
Cash dividends:
Corporation at $3.414 per share		—			—			(48,991	)		—			—			(48,991	)
Stock dividend at 5%					102,464			(96,025	)		(6,439	)					—
Cash payment for fractional shares for 5% stock dividend		(1,772	)		(249	)											(249	)
Cash payment for fractional shares in dividend reinvestment plan		(25	)		(3	)		—			—			—			(3	)
Shares issued for stock options		2,052			144			—			—			—			144
Treasury stock purchased		(214,681	)		—			—			(23,699	)		—			(23,699	)
Treasury stock reissued primarily for stock options exercised		79,626			—			—			7,323			—			7,323
Balance, December 31, 2004		14,320,227		$	208,251		$	433,260		$	(91,392	)	$	12,442		$	562,561
Net income		—			—			95,238			—			—			95,238			95,238
Other comprehensive income, net of tax:
Unrealized net holding loss on securities available-for-sale, net of income taxes of $(12,161)														(22,585	)		(22,585	)		(22,585	)
																				72,653
Cash dividends:
Corporation at $3.62 per share		—			—			(51,609	)		—			—			(51,609	)
Cash payment for fractional shares in dividend reinvestment plan		(50	)		(3	)		—			—			—			(3	)
Shares issued for stock options		1,917			117												117
Treasury stock purchased		(281,360	)		—			—			(29,978	)		—			(29,978	)
Treasury stock reissued primarily for stock options exercised		51,892			—			—			4,689			—			4,689
Balance, December 31, 2005		14,092,626		$	208,365		$	476,889		$	(116,681	)	$	(10,143	)	$	558,430
Net income		—			—			94,091			—			—			94,091			94,091
Other comprehensive income (loss), net of tax:
Unrealized net holding loss on securities available-for-sale, net of income taxes of $(3,151)														(5,851	)		(5,851	)		(5,851	)
Total comprehensive income																				88,240
Adjustment to initially apply SFAS No. 158, net of income taxes of $(3,675)														(6,826	)		(6,826	)
Cash dividends:
Corporation at $3.69 per share		—			—			(51,417	)		—			—			(51,417	)
Cash payment for fractional shares in dividend reinvestment plan		(72	)		(5	)		—			—			—			(5	)
Shares issued for stock options		684			42			—			—			—			42
Treasury stock purchased		(302,786	)		—			—			(30,508	)		—			(30,508	)
Treasury stock reissued primarily for stock options exercised		44,940			—			—			3,818			—			3,818
Shares issued for Anderson bank purchase		86,137			8,665			—			—			—			8,665
Balance, December 31, 2006		13,921,529		$	217,067		$	519,563		$	(143,371	)	$	(22,820	)	$	570,439

The accompanying notes are an integral part of the financial statements.

46

CONSOLIDATED STATEMENTS OF CASH FLOWS

PARK NATIONAL CORPORATION AND SUBSIDIARIES
for the years ended December 31, 2006, 2005 and 2004 (Dollars in thousands)

	2006			2005			2004
Operating activities:
Net income	$	94,091		$	95,238		$	91,507
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		3,927			5,407			8,600
Amortization of loan fees and costs, net		(4,340	)		(3,809	)		(3,336	)
Provision for depreciation and amortization		5,522			5,641			5,436
Amortization of intangible assets		2,470			2,548			1,479
Accretion of investment securities		(1,630	)		(2,444	)		(1,756	)
Deferred income tax expense (benefit)		156			1,990			(2,542	)
Realized net investment security (gains) losses		(97	)		(96	)		793
Stock dividends on Federal Home Loan Bank stock		(3,101	)		(2,525	)		(1,665	)
Changes in assets and liabilities:
Increase in other assets		(14,606	)		(24,431	)		(20,219	)
Increase in other liabilities		2,858			958			6,750
Net cash provided by operating activities		85,250			78,477			85,047
Investing activities:
Proceeds from sales of available-for-sale securities		304			131,794			58,438
Proceeds from maturities of securities:
Held-to-maturity		19,471			63,914			52,741
Available-for-sale		293,207			345,660			384,087
Purchase of securities:
Held-to-maturity		—			(187,420	)		(62,659	)
Available-for-sale		(166,518	)		(113,198	)		(364,215	)
Net increase in other investments		(532	)		(1,743	)		(2,094	)
Net decrease in interest bearing deposits with other banks		299			1,796			50
Net increase in loans		(99,316	)		(53,600	)		(171,784	)
Proceeds from loans sold with branch office		—			5,273			—
Cash received (paid) for acquisition, net		5,177			(39,227	)		(34,693	)
Purchases of premises and equipment, net		(4,311	)		(8,193	)		(6,047	)
Net cash provided by (used in) investing activities		47,781			145,056			(146,176	)
Financing activities:
Net increase (decrease) in deposits		6,320			(55,491	)		103,273
Deposits sold with branch office		—			(12,419	)		—
Net increase (decrease) in short-term borrowings		61,699			35,843			(256,756	)
Cash payment for fractional shares of common stock		(5	)		(3	)		(252	)
Exercise of stock options, including tax benefits		42			117			144
Purchase of treasury stock, net		(26,690	)		(25,289	)		(16,376	)
Proceeds from long-term debt		300,000			326,040			477,915
Repayment of long-term debt		(410,644	)		(428,689	)		(206,541	)
Cash dividends paid		(51,470	)		(51,498	)		(48,231	)
Net cash (used in) provided by financing activities		(120,748	)		(211,389	)		53,176
Increase (decrease) in cash and cash equivalents		12,283			12,144			(7,953	)
Cash and cash equivalents at beginning of year		173,973			161,829			169,782
Cash and cash equivalents at end of year	$	186,256		$	173,973		$	161,829
Supplemental disclosure
Summary of business acquisition:
Fair value of assets acquired	$	69,717		$	185,372		$	252,687
Cash paid for the purchase of financial institutions		(9,052	)		(52,500	)		(46,638	)
Stock issued for the purchase of financial institutions		(8,665	)		—			—
Fair value of liabilities assumed		(62,638	)		(161,241	)		(232,707	)
Goodwill recognized	$	(10,638	)	$	(28,369	)	$	(26,658	)

The accompanying notes are an integral part of the financial statements.

47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed in the preparation of the consolidated financial statements:

Principles of Consolidation

The consolidated financial statements include the accounts of Park National Corporation (“Park” or the “Corporation”) and all of its subsidiaries. Material intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The allowance for loan losses and the accounting for goodwill are particularly subject to change.

Reclassifications

Certain prior year amounts have been reclassified to conform with current year presentation.

Investment Securities

Investment securities are classified upon acquisition into one of three categories: Held-to-maturity, available-for-sale, or trading (see Note 4).

Held-to-maturity securities are those securities that the Corporation has the positive intent and ability to hold to maturity and are recorded at amortized cost. Available-for-sale securities are those securities that would be available to be sold in the future in response to the Corporation’s liquidity needs, changes in market interest rates, and asset-liability management strategies, among others. Available-for-sale securities are reported at fair value, with unrealized holding gains and losses excluded from earnings but included in other comprehensive income, net of applicable taxes. At December 31, 2006 and 2005, the Corporation did not hold any trading securities.

Available-for-sale and held-to-maturity securities are evaluated quarterly for potential other-than-temporary impairment. Management considers the facts of each security including the nature of the security, the amount and duration of the loss, credit quality of the issuer, the expectations for that security’s performance and Park’s intent and ability to hold the security until recovery. A decline in value that is considered to be other-than-temporary is recorded as a charge to earnings in the Consolidated Statements of Income.

Other investment securities (as shown on the balance sheet) consist of stock investments in the Federal Home Loan Bank and the Federal Reserve Bank. The fair values of these investments are the same as their amortized costs.

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated.

Gains and losses realized on the sale of investment securities have been accounted for on the trade date in the year of sale on a specific identification basis.

Federal Home Loan Bank (FHLB) Stock

Park’s subsidiary banks are members of the FHLB system. Members are required to own a certain amount of stock based on their level of borrowings and other factors and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on the ultimate recovery of the par value. Both cash and stock dividends are reported as income.

Bank Owned Life Insurance

Park has purchased life insurance policies on certain key officers and directors. Bank owned life insurance is recorded at its cash surrender value (or the amount that can be realized).

Mortgage Loans Held for Sale

Mortgage loans held for sale are carried at the lower of cost or fair value, determined using an aggregate basis. Write-downs to fair value are recognized as a charge to earnings at the time the decline in value occurs. Mortgage loans held for sale were $5.1 million at December 31, 2006 and $5.8 million at December 31, 2005. These amounts are included in loans on the balance sheet. The Corporation enters into forward commitments to sell mortgage loans to reduce market risk on mortgage loans in the process of origination and mortgage loans held for sale. Gains and losses resulting from sales of mortgage loans are recognized when the respective loans are sold to investors. Gains and losses are determined by the difference between the selling price and the carrying amount of the loans sold, net of discounts collected or paid and considering a normal servicing rate. Fees received from borrowers to guarantee the funding of mortgage loans held for sale and fees paid to investors to ensure the ultimate sale of such mortgage loans are recognized as income or expense when the loans are sold or when it becomes evident that the commitment will not be used.

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff, are reported at their outstanding principal balances adjusted for any charge-offs, any deferred fees or costs on originated loans, and any unamortized premiums or discounts on purchased loans. Interest income is reported on the interest method and includes amortization of net deferred loan fees and costs over the loan term. Generally, loans are placed on nonaccrual status at 90 days past due and interest is considered a loss, unless the loan is well-secured and in the process of collection. Consumer loans are generally charged-off when they are 120 days past due. For loans which are on nonaccrual status, it is Park’s policy to reverse interest previously accrued on the loan against interest income. Interest on such loans is thereafter recorded on a cash basis and is included in earnings only when actually received in cash and when full payment of principal is no longer doubtful.

The delinquency status of a loan is based on contractual terms and not on how recently payments have been received. Loans are removed from non-accrual status when loan payments have been received to cure the delinquency status and the loan is deemed to be well-secured by management.

Allowance for Loan Losses

The allowance for loan losses is that amount believed adequate to absorb probable incurred credit losses in the loan portfolio based on management’s evaluation of various factors, including overall growth in the loan portfolio, an analysis of individual loans, prior and current loss experience and current economic conditions. A provision for loan losses is charged to operations based on management’s periodic evaluation of these and other pertinent factors.

Statement of Financial Accounting Standards (“SFAS”) No. 114, “Accounting by Creditors for Impairment of a Loan,” as amended by SFAS No. 118, “Accounting by Creditors for Impairment of a Loan-Income Recognition and Disclosure” requires an allowance to be established as a component of the allowance for loan losses for certain loans when it is probable that all amounts due pursuant to the contractual terms of the loan will not be collected, and the recorded investment in the loan exceeds the fair value. Fair value is measured using either the present value of expected future cash flows based upon the initial effective interest rate on the loan, the observable market price of the loan or the fair value of the collateral, if the loan is collateral dependent.

Commercial loans are individually risk graded. Where appropriate, reserves are allocated to individual loans based on management’s estimate of the borrower’s ability to repay the loan given the availability of collateral and other sources of cash flow. Homogenous loans, such as consumer installment loans, residential mortgage loans and automobile leases are not individually risk graded. Reserves are established for each pool of loans based on historical loan loss experience, current economic conditions and loan delinquency.

Income Recognition

Income earned by the Corporation and its subsidiaries is recognized on the accrual basis of accounting, except for late charges on loans which are recognized as income when they are collected.

48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Premises and Equipment

Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is generally provided on the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the lives of the respective leases or the estimated useful lives of the improvements, whichever are the shorter periods. Upon the sale or other disposal of the assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized. Maintenance and repairs are charged to expense as incurred while renewals and improvements are capitalized.

The range of depreciable lives that premises and equipment are being depreciated over are:

Buildings	5 to 50 Years
Equipment, furniture and fixtures	3 to 20 Years
Leasehold improvements	1 to 10 Years

Buildings that are currently placed in service are depreciated over 30 years. Equipment, furniture and fixtures that are currently placed in service are depreciated over 3 to 12 years. Leasehold improvements are depreciated over the life of the leases which range from 1 to 10 years.

Other Real Estate Owned

Other real estate owned is recorded at the lower of cost or fair market value (which is not in excess of estimated net realizable value) and consists of property acquired through foreclosure, and real estate held for sale. Subsequent to acquisition, allowances for losses are established if carrying values exceed fair value less estimated costs to sell. Costs relating to development and improvement of such properties are capitalized (not in excess of fair value less estimated costs to sell), whereas, costs relating to holding the properties are charged to expense.

Mortgage Loan Servicing Rights

When Park sells mortgage loans with servicing rights retained, the total cost of the mortgage loan is allocated to the servicing rights and the loans based on their relative fair values. The servicing rights capitalized are amortized in proportion to and over the period of estimated servicing income. Capitalized mortgage servicing rights totaled $10.4 million at December 31, 2006 and $10.7 million at December 31, 2005. The estimated fair values of capitalized mortgage servicing rights are $11.6 million and $12.2 million at December 31, 2006 and 2005, respectively. The fair value of mortgage servicing rights is determined by discounting estimated future cash flows from the servicing assets, using market discount rates, and using expected future prepayment rates. Park capitalized $1.6 million in mortgage servicing rights in 2006 and capitalized $2.0 million in both 2005 and 2004. In 2006, 2005 and 2004, Park’s amortization of mortgage servicing rights was $1.9 million, $2.1 million and $2.0 million, respectively. Generally, mortgage servicing rights are capitalized and amortized on an individual sold loan basis. When a sold mortgage loan is paid off, the related mortgage servicing rights are fully amortized. Mortgage servicing rights increased by $1.3 million in 2005 as a result of the acquisition of First Clermont Bank on January 3, 2005 and also increased by $315,000 in 2004 as a result of the acquisition of First Federal Bancorp, Inc. on December 31, 2004. Mortgage servicing rights are assessed for impairment periodically, based on fair value, with any impairment recognized through a valuation allowance. Fees received for servicing mortgage loans owned by investors are based on a percentage of the outstanding monthly principal balance of such loans and are included in income as loan payments are received. The cost of servicing loans is charged to expense as incurred.

Park serviced sold mortgage loans of $1,405 million at December 31, 2006 compared to $1,403 million at December 31, 2005, and $1,266 million at December 31, 2004. At December 31, 2006, $77 million of the sold mortgage loans were sold with recourse compared to $87 million at December 31, 2005. Management closely monitors the delinquency rates on the mortgage loans sold with recourse. At December 31, 2006, management determined that no liability was deemed necessary for these loans.

Lease Financing

Leases of equipment, automobiles and aircraft to customers generally are direct leases in which the Corporation’s subsidiaries have acquired the equipment, automobiles or aircraft with no outside financing.

Such leases are accounted for as direct financing leases for financial reporting purposes. Under the direct financing method, a receivable is recorded for the total amount of the lease payments to be received.

Unearned lease income, representing the excess of the sum of the aggregate rentals of the equipment, automobiles or aircraft over its cost is included in income over the term of the lease under the interest method.

The estimated residual values of leases are established at inception by determining the estimated residual value for the equipment, automobiles or aircraft from the particular industry leasing guide. Management re-evaluates the estimated residual values of leases on a quarterly basis from review of the leasing guides and charges operating expense for any write-down of the estimated residual values of leases.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price over net identifiable tangible and intangible assets acquired in a purchase business combination. Other intangible assets represent purchased assets that have no physical property but represent some future economic benefit to its owner and are capable of being sold or exchanged on their own or in combination with a related asset or liability.

Goodwill and indefinite-lived intangible assets are not amortized to expense, but are subject to annual impairment tests. Intangible assets with definitive useful lives (such as core deposit intangibles) are amortized to expense over their estimated useful life.

Management considers several factors when performing the annual impairment tests on goodwill. The factors considered include the operating results for the particular Park subsidiary bank for the past year and the operating results budgeted for the current year, the purchase prices being paid for financial institutions in the Midwest, the deposit and loan totals of the Park subsidiary bank and the economic conditions in the markets served by the Park subsidiary bank.

The following table reflects the activity in goodwill and other intangible assets for the years 2006, 2005 and 2004. (See Note 2 of the Notes to Consolidated Financial Statements for details on the acquisitions of Anderson Bank Company (“Anderson”), First Federal Bancorp, Inc. (“First Federal”) and First Clermont Bank (“First Clermont”) and the sale of the Roseville branch office.)

				Core Deposit
(In thousands)	Goodwill			Intangibles			Total
January 1, 2004	$	7,529		$	5,429		$	12,958
Amortization		—			(1,479	)		(1,479	)
First Federal acquisition		26,658			2,750			29,408
December 31, 2004	$	34,187		$	6,700		$	40,887
First Clermont acquisition		28,369			3,664			32,033
Sale of branch office		(860	)		(324	)		(1,184	)
Amortization		—			(2,548	)		(2,548	)
December 31, 2005	$	61,696		$	7,492		$	69,188
Amortization		—			(2,470	)		(2,470	)
Anderson acquisition		10,638			647			11,285
December 31, 2006	$	72,334		$	5,669		$	78,003

49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Park evaluates goodwill for impairment during the first quarter of each year. A determination has been made each year that goodwill was not impaired.

The balance of goodwill was $72.3 million at December 31, 2006. This goodwill balance is located at three subsidiary banks of Park. The subsidiary banks are The Park National Bank ($39.0 million), Century National Bank ($25.8 million) and The Security National Bank and Trust Co. ($7.5 million).

Goodwill and other intangible assets (as shown on the balance sheet) totaled $78.0 million at December 31, 2006 and $69.2 million at December 31, 2005.

The core deposit intangibles are being amortized to expense principally on the straight-line method, over periods ranging from six to ten years. The amortization period for each of the First Federal, First Clermont and Anderson acquisitions is six years. Core deposit intangible amortization expense was $2.5 million in both 2006 and 2005 and was $1.5 million in 2004.

The accumulated amortization of core deposit intangibles was $9.0 million at December 31, 2006 and $11.1 million at December 31, 2005. Park’s subsidiary banks had two branch offices in 2006 for which the core deposit intangibles were fully amortized. These intangibles totaled $4.6 million. The expected core deposit intangible amortization expense for each of the next five years is as follows:

(In thousands)
2007	$	1,968
2008		1,456
2009		1,177
2010		853
2011		108
Total	$	5,562

Consolidated Statement of Cash Flows

Cash and cash equivalents include cash and cash items, amounts due from banks and money market instruments. Generally money market instruments are purchased and sold for one day periods.

Net cash provided by operating activities reflects cash payments as follows:

December 31,	2006		2005		2004
(Dollars in thousands)
Interest paid on deposits and other borrowings	$	118,589	$	91,408	$	58,986
Income taxes paid	$	34,633	$	37,146	$	41,884

Loss Contingencies

Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements.

Income Taxes

The Corporation accounts for income taxes using the asset and liability approach. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Stock Dividend

Park’s Board of Directors approved a 5% stock dividend in November 2004. The additional shares resulting from the dividend were distributed on December 15, 2004 to stockholders of record as of December 1, 2004. The consolidated financial statements, notes and other references to share and per share data have been retroactively restated for the stock dividend.

Treasury Stock

The purchase of Park’s common stock is recorded at cost. At the date of retirement or subsequent reissuance, the treasury stock account is reduced by the cost of such stock.

Stock Options

Effective January 1, 2006, Park adopted Statement of Financial Accounting Standards (“SFAS”) No. 123R, “Share-Based Payment,” using the modified prospective method and accordingly did not restate prior period results. The modified prospective method recognizes compensation expense beginning with the effective date of January 1, 2006, for all stock options granted after January 1, 2006, and for all stock options that became vested after January 1, 2006. Park did not grant any stock options in 2006. Additionally, no stock options became vested in 2006. The adoption of SFAS No. 123R on January 1, 2006, had no impact on Park’s net income in 2006.

Prior to January 1, 2006, Park accounted for its stock option plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25 “Accounting for Stock Issued to Employees” (APB 25) and related interpretations. Under APB 25, no stock based employee compensation cost was reflected in net income, as all options granted under Park’s plans had an exercise price equal to the market value of the underlying common stock on the grant date.

Park granted 228,150 incentive stock options in 2005 and 232,178 incentive stock options in 2004. Generally, these options vested immediately at the time of grant. The following table illustrates the effect on net income and earnings per share if compensation expense was measured using the fair value recognition provisions of SFAS No. 123R for 2005 and 2004.

December 31,	2005			2004
(Dollars in thousands, except per share data)
Net income as reported	$	95,238		$	91,507
Deduct: Stock-based compensation expense determined under fair value		(3,664	)		(3,223	)
Pro-forma net income		91,574			88,284
Basic earnings per share as reported	$	6.68		$	6.38
Pro-forma basic earnings per share		6.42			6.15
Diluted earnings per share as reported		6.64			6.32
Pro-forma diluted earnings per share		6.38			6.09

Derivative Instruments

Park did not use any derivative instruments (such as interest rate swaps) in 2006, 2005 and 2004.

Accounting for Defined Benefit Pension Plan

In September 2006, the Financial Accounting Standards Board issued SFAS No. 158, “Employers Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106 and 132R.” This statement requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multi-employer plan) as an asset or liability in its balance sheet, beginning with year-end 2006, and to recognize changes in the funded status in the year in which the changes occur through comprehensive income beginning in 2007. Additionally, defined benefit plan assets and obligations are to be measured as of the date of the employer’s fiscal year-end, starting in 2008. The adoption of SFAS No. 158 had the following effect on individual line items in the 2006 balance sheet:

	Before application						After application
(In thousands)	of SFAS No. 158			Adjustments			of SFAS No. 158
Prepaid pension benefit cost	$	16,342		$	(10,501	)	$	5,841
Deferred income tax asset		18,715			3,675			22,390
Total assets		5,477,702			(6,826	)		5,470,876
Accumulated other comprehensive income (loss), net		(15,994	)		(6,826	)		(22,820	)
Total stockholders’ equity	$	577,265		$	(6,826	)	$	570,439

50

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Prior Year Misstatements

In September 2006, the Securities and Exchange Commission (SEC) released Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (SAB 108),” which is effective for fiscal years ending on or after November 15, 2006. SAB 108 provides guidance on how the effects of prior-year uncorrected financial statement misstatements should be considered in quantifying a current year misstatement. SAB 108 requires public companies to quantify misstatements using both an income statement (rollover) and balance sheet (iron curtain) approach and evaluate whether either approach results in misstatement that when all relevant quantitative and qualitative factors are considered, is material. If prior year errors that had been previously considered immaterial now are considered material based on either approach, no restatement is required so long as management properly applied its previous approach and all relevant facts and circumstances were considered. Park had no items that required posting an adjustment to beginning retained earnings.

On January 26, 2007, Park filed a Form 8-K with the SEC announcing that management had discovered an error in its accounting for accrued interest income on loans. Management determined that accrued interest receivable on loans was overstated by $1.933 million and as a result interest income on loans was overstated by $1.933 million on a cumulative basis. Management discovered in late January 2007 that certain previously charged-off loans were incorrectly accruing interest income. On Park’s data processing system, a loan that is charged-off also needs to be coded as nonaccrual for the data processing system to not accrue interest income on these loans. Primarily, one of Park’s subsidiary banks did not follow this procedure on certain installment loans for approximately the past ten years. Management determined that interest income on loans was overstated by approximately $100,000 per quarter for the past several quarters. Park’s management concluded that the overstatement of accrued interest receivable on loans and the related overstatement of interest income on loans is not material to any previously issued financial statements. Accordingly, Park recorded a cumulative adjustment of $1.933 million in the fourth quarter of 2006 to reduce accrued interest receivable on loans and reduce interest income on loans. On an after-tax basis, this adjustment reduced Park’s net income by $1.256 million for the three and twelve months ended December 31, 2006 and reduced diluted earnings per share by $.09 for the three and twelve months ended December 31, 2006, as compared to net income and diluted earnings per share that was previously reported by Park on January 16, 2007, in a Form 8-K filing with the SEC.

Recently Issued but not yet Effective Accounting Pronouncements Accounting for Certain Hybrid Financial Instruments: In February 2006, FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments—an amendment to SFAS No. 133 and 140.” This statement permits fair value re-measurement for any hybrid financial instruments, clarifies which instruments are subject to the requirements of SFAS No. 133, and establishes a requirement to evaluate interests in securitized financial assets and other items. This Statement is effective for all financial instruments acquired, issued, or subject to a remeasurement (new basis) event occurring after January 1, 2007. Management does not expect that the adoption of this Statement will have a material impact on Park’s financial statements.

Accounting for Servicing of Financial Assets: In March 2006, FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets—an amendment of SFAS No. 140.” This Statement provides the following: 1.) revised guidance on when a servicing asset and servicing liability should be recognized; 2.) requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable; 3.) permits an entity to elect to measure servicing assets and servicing liabilities at fair value each reporting date and report changes in fair value in earnings in the period in which the changes occur; 4.) upon initial adoption, permits a one-time reclassification of available-for-sale securities to trading securities for securities which are identified as offsetting the entity’s exposure to changes in the fair value of servicing assets or liabilities that a servicer elects to subsequently measure at fair value; and 5.) requires separate presentation of servicing assets and servicing liabilities subsequently measured at fair value in the statement of financial condition and additional footnote disclosures. For Park, this Statement is effective January 1, 2007, with the effects of initial adoption being reported as a cumulative-effect adjustment to retained earnings. Management does not expect the adoption of this Statement will have a material impact on its financial statements.

Accounting for Income Taxes: In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an interpretation of SFAS No. 109 (FIN 48),” which prescribes a recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. For Park, FIN 48 is effective January 1, 2007. Management does not expect that the adoption of FIN 48 will have a material impact on its financial statements.

Accounting for Postretirement Benefits Pertaining to Life Insurance Arrangements: In September 2006, the FASB Emerging Issues Task Force (EITF) finalized Issue No. 06-4, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements.” EITF Issue No. 06-4 requires that a liability be recorded during the service period when a split-dollar life insurance agreement continues after the participants’ employment or retirement. The required accrued liability will be based on either the post-employment benefit cost for the continuing life insurance or based on the future death benefit depending on the contractual terms of the underlying agreement. For Park, Issue No. 06-4 is effective on January 1, 2008.

At December 31, 2006, Park and its subsidiary banks owned $113 million of bank owned life insurance. These life insurance policies are generally subject to endorsement split-dollar life insurance agreements. These arrangements were designed to provide a pre-retirement and post-retirement benefit for senior officers and directors of Park and its subsidiary banks. Park’s management has not completed its evaluation of the impact of adoption of EITF Issue No. 06-4 on Park’s financial statements. Without an adjustment to the post-retirement benefits provided by the endorsement split-dollar life insurance agreements, Park’s management has concluded that the adoption of EITF Issue No. 06-4 may have a material impact on Park’s financial statements.

Accounting for Purchases of Life Insurance: In September 2006, the FASB EITF finalized Issue No. 06-5, “Accounting for Purchases of Life Insurance—Determining the Amount That Could be Realized in Accordance with FASB Technical Bulletin No. 85-4 (Accounting for Purchases of Life Insurance).” EITF Issue No. 06-5 requires that a policyholder consider contractual terms of a life insurance policy in determining the amount that could be realized under the insurance contract. It also requires that if the contract provides for a greater surrender value if all individual policies in a group are surrendered at the same time, that the surrender value be determined based on the assumption that policies will be surrendered on an individual basis. Lastly, EITF Issue No. 06-5 discusses whether the cash surrender value should be discounted when the policyholder is contractually limited in its ability to surrender a policy. For Park, EITF Issue No. 06-5 is effective January 1, 2007. Park does not expect that this Issue will have a material impact on its financial statements.

Fair Value Measurements: In September 2006, FASB issued SFAS No. 157, “Fair Value Measurements.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS No. 157 is effective on January 1, 2008 for Park. Management does not expect that the adoption of SFAS No. 157 will have a material impact on Park’s financial statements.

51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. ORGANIZATION, ACQUISITIONS, BRANCH SALE AND PENDING ACQUISITION

Park National Corporation is a multi-bank holding company headquartered in Newark, Ohio. Through its banking subsidiaries, The Park National Bank (PNB), The Richland Trust Company (RTC), Century National Bank (CNB), The First-Knox National Bank of Mount Vernon (FKNB), United Bank, N.A. (UB), Second National Bank (SNB), The Security National Bank and Trust Co. (SEC), and The Citizens National Bank of Urbana (CIT), Park is engaged in a general commercial banking and trust business, primarily in Ohio. A wholly owned subsidiary of Park, Guardian Finance Company (GFC) began operating in May 1999. GFC is a consumer finance company located in Central Ohio. PNB operates through three banking divisions with the Park National Division headquartered in Newark, Ohio, the Fairfield National Division headquartered in Lancaster, Ohio and The Park National Bank of Southwest Ohio & Northern Kentucky Division headquartered in Milford, Ohio. FKNB operates through two banking divisions with the First-Knox National Division headquartered in Mount Vernon, Ohio and the Farmers and Savings Division headquartered in Loudonville, Ohio. SEC also operates through two banking divisions with the Security National Division headquartered in Springfield, Ohio and The Unity National Division (formerly The Third Savings and Loan Company) headquartered in Piqua, Ohio. All of the banking subsidiaries and their respective divisions provide the following principal services: the acceptance of deposits for demand, savings and time accounts; commercial, industrial, consumer and real estate lending, including installment loans, credit cards, home equity lines of credit, commercial and auto leasing; trust services; cash management; safe deposit operations; electronic funds transfers and a variety of additional banking-related services. See Note 20 for financial information on the Corporation’s banking subsidiaries.

On December 18, 2006, Park acquired all of the stock of Anderson Bank of Cincinnati, Ohio for $9.052 million in cash and 86,137 shares of Park common stock valued at $8.665 million or $100.60 per share. Immediately following Park’s acquisition, Anderson merged with Park’s subsidiary, The Park National Bank and is being operated as part of PNB’s operating division, The Park National Bank of Southwest Ohio & Northern Kentucky. The goodwill recognized as a result of this acquisition was $10.638 million. The fair value of the acquired assets of Anderson was $69.717 million and the fair value of the liabilities assumed was $62.638 million at December 18, 2006.

On January 3, 2005, Park acquired all of the stock of First Clermont Bank of Milford, Ohio for $52.5 million in an all cash transaction accounted for as a purchase. Immediately following Park’s stock acquisition, First Clermont merged with Park’s subsidiary, The Park National Bank. The goodwill recognized as a result of this acquisition was $28.369 million. The fair value of the acquired assets of First Clermont was $185.372 million and the fair value of the liabilities assumed was $161.241 million at January 3, 2005. During 2006, the First Clermont Division of PNB combined with three of PNB’s branches to form the operating division known as The Park National Bank of Southwest Ohio & Northern Kentucky.

On December 31, 2004, Park acquired First Federal Bancorp, Inc., a savings and loan holding company headquartered in Zanesville, Ohio, in an all cash transaction accounted for as a purchase. The stockholders of First Federal received $13.25 in cash for each outstanding common share of First Federal common stock. Park paid a total of $46.638 million to the stockholders of First Federal. The savings and loan subsidiary of First Federal, First Federal Savings Bank of Eastern Ohio, merged with Century National Bank. The goodwill recognized as a result of this acquisition was $26.658 million. The fair value of the acquired assets of First Federal was $252.687 million and the fair value of the liabilities assumed was $232.707 million at December 31, 2004.

On February 11, 2005, Park’s subsidiary Century National Bank, sold its Roseville, Ohio branch office. The Roseville branch office was acquired in connection with the acquisition of First Federal on December 31, 2004.

The Federal Reserve Board required that the Roseville branch office be sold as a condition of their approval of the merger transactions involving Park and First Federal. The deposits sold with the Roseville branch office totaled $12.419 million and the loans sold with the branch office totaled $5.273 million. Century National Bank received a premium of $1.184 million from the sale of the deposits.

Pending Acquisition

On September 14, 2006, Park and Vision Bancshares, Inc. (“Vision”) jointly announced the signing of an agreement and plan of merger (the “Merger Agreement”) providing for the merger of Vision into Park. This merger transaction is subject to the satisfaction of customary closing conditions in the Merger Agreement and the approval of appropriate regulatory authorities and of the shareholders of Vision. Park has filed all necessary regulatory applications and anticipates the transaction will close on or about March 9, 2007, assuming that all required approvals have been received and conditions to closing satisfied. Vision’s special shareholders meeting is scheduled to be held on February 20, 2007.

Vision operates two bank subsidiaries, both named Vision Bank. One bank is headquartered in Gulf Shores, Alabama and the other in Panama City, Florida. These banks operate fifteen offices. As of December 31, 2006, (on a consolidated basis) Vision had total assets of $691 million, total loans of $588 million and total deposits of $587 million.

Under the terms of the Merger Agreement, the shareholders of Vision are entitled to receive, in exchange for their shares of Vision common stock, either (a) cash, (b) Park common shares, or (c) a combination of cash and Park common shares, subject to the election and allocation procedures set forth in the Merger Agreement. Park will cause the requests of the Vision shareholders to be allocated on a pro-rata basis so that 50% of the shares of Vision common stock outstanding at the effective time of the merger will be exchanged for cash at the rate of $25.00 per share of Vision common stock and the other 50% of the outstanding shares of Vision common stock will be exchanged for Park common shares at the exchange rate of .2475 Park common shares for each share of Vision common stock. This allocation is subject to adjustment for cash paid in lieu of fractional Park common shares in accordance with the terms of the Merger Agreement.

As of January 8, 2007, 6,114,518 shares of Vision common stock were outstanding and 828,834 shares of Vision common stock were subject to outstanding stock options with a weighted average exercise price of $8.21 per share. Each outstanding stock option (that is not exercised prior to the election deadline specified in the Merger Agreement) granted under one of Vision’s equity-based compensation plans will be cancelled and extinguished and converted into the right to receive an amount of cash equal to (1)(a) $25.00 multiplied by (b) the number of shares of Vision common stock subject to the unexercised portion of the stock option minus (2) the aggregate exercise price for the shares of Vision common stock subject to the unexercised portion of the stock option.

3. RESTRICTIONS ON CASH AND DUE FROM BANKS

The Corporation’s banking subsidiaries are required to maintain average reserve balances with the Federal Reserve Bank. The average required reserve balance was approximately $30.9 million at December 31, 2006 and $37.7 million at December 31, 2005. No other compensating balance arrangements were in existence at year-end.

4. INVESTMENT SECURITIES

The amortized cost and fair value of investment securities are shown in the following table. Management evaluates the investment securities on a quarterly basis for permanent impairment. No impairment charges have been deemed necessary in 2006 and 2005.

52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Investment securities at December 31, 2006, were as follows:

			Gross		Gross
			Unrealized		Unrealized
	Amortized		Holding		Holding		Estimated
(In thousands)	Cost		Gains		Losses		Fair Value
2006:
Securities Available-for-Sale
Obligations of U.S. Treasury and other U.S. Government agencies	$	90,988	$	140	$	419	$	90,709
Obligations of states and political subdivisions		53,947		1,006		3		54,950
U.S. Government agencies’ asset-backed securities and other asset-backed securities		1,153,515		932		26,823		1,127,624
Other equity securities		1,236		595		35		1,796
Total	$	1,299,686	$	2,673	$	27,280	$	1,275,079
2006:
Securities Held-to-Maturity
Obligations of states and political subdivisions	$	15,140	$	169	$	—	$	15,309
U.S. Government agencies’ asset-backed securities and other asset-backed securities		161,345		1		6,869		154,477
Total	$	176,485	$	170	$	6,869	$	169,786

Other investment securities (as shown on the balance sheet) consist of stock investments in the Federal Home Loan Bank and the Federal Reserve Bank. Park owned $55.5 million of Federal Home Loan Bank stock and $6.4 million of Federal Reserve stock at December 31, 2006. Park owned $52.1 million of Federal Home Loan Bank stock and $5.9 million of Federal Reserve Bank stock at December 31, 2005. The fair values of these investments are the same as their amortized costs.

Management does not believe any individual unrealized loss as of December 31, 2006 and December 31, 2005, represents an other-than-temporary impairment. The unrealized losses relate primarily to the impact of increases in market interest rates on U.S. Government agencies’ asset-backed securities. The fair value is expected to recover as payments are received on these securities and they approach maturity.

Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.

Securities with unrealized losses at December 31, 2006, were as follows:

	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(In thousands)	Value		Losses		Value		Losses		Value		Losses
2006:
Securities Available-for-Sale
Obligations of U.S. Treasury and other U.S. Government agencies	$	60,577	$	419	$	—	$	—	$	60,577	$	419
Obligations of states and political subdivisions		131		1		120		2		251		3
U.S. Government agencies’ asset-backed securities and other asset-backed securities		17,266		116		1,064,607		26,707		1,081,873		26,823
Other equity securities		—		—		165		35		165		35
Total	$	77,974	$	536	$	1,064,892	$	26,744	$	1,142,866	$	27,280
2006:
Securities Held-to-Maturity
U.S. Government agencies’ asset-backed securities and other asset-backed securities	$	—	$	—	$	154,286	$	6,869	$	154,286	$	6,869

Investment securities at December 31, 2005, were as follows:

			Gross		Gross
			Unrealized		Unrealized
	Amortized		Holding		Holding		Estimated
(In thousands)	Cost		Gains		Losses		Fair Value
2005:
Securities Available-for-Sale
Obligations of U.S. Treasury and other U.S. Government agencies	$	998	$	—	$	2	$	996
Obligations of states and political subdivisions		66,181		1,740		15		67,906
U.S. Government agencies’ asset-backed securities and other asset-backed securities		1,356,233		1,823		19,629		1,338,427
Other equity securities		1,543		527		48		2,022
Total	$	1,424,955	$	4,090	$	19,694	$	1,409,351
2005:
Securities Held-to-Maturity
Obligations of states and political subdivisions	$	17,430	$	308	$	—	$	17,738
U.S. Government agencies’ asset-backed securities and other asset-backed securities		178,523		2		5,838		172,687
Total	$	195,953	$	310	$	5,838	$	190,425

Securities with unrealized losses at December 31, 2005, were as follows:

	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(In thousands)	Value		Losses		Value		Losses		Value		Losses
2005:
Securities Available-for-Sale
Obligations of U.S. Treasury and other U.S. Government agencies	$	996	$	2	$	—	$	—	$	996	$	2
Obligations of states and political subdivisions		346		4		474		11		820		15
U.S. Government agencies’ asset-backed securities and other asset-backed securities		1,244,306		19,272		4,338		357		1,248,644		19,629
Other equity securities		—		—		152		48		152		48
Total	$	1,245,648	$	19,278	$	4,964	$	416	$	1,250,612	$	19,694
2005:
Securities Held-to-Maturity
U.S. Government agencies’ asset-backed securities and other asset-backed securities	$	172,591	$	5,838	$	—	$	—	$	172,591	$	5,838

The amortized cost and estimated fair value of investments in debt securities at December 31, 2006, are shown in the following table by contractual maturity or the expected call date, except for asset-backed securities which are shown based on expected principal repayments. The average yield is computed on a tax equivalent basis using a thirty-five percent tax rate and is based on the amortized cost of the securities.

53

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

					Weighted
	Amortized		Estimated		Average	Average
(Dollars in thousands)	Cost		Fair Value		Maturity	Yield
Securities Available-for-Sale
U.S. Treasury and agencies’ notes:
Due within one year	$	996	$	995	0.21 years		4.92	%
Due five through ten years		89,992		89,714	9.34 years		5.97	%
Total	$	90,988	$	90,709	9.24 years		5.96	%
Obligations of states and political subdivisions:
Due within one year	$	22,700	$	22,889	0.50 years		7.21	%
Due one through five years		30,635		31,414	1.96 years		7.18	%
Due five through ten years		612		647	6.57 years		6.86	%
Total	$	53,947	$	54,950	1.40 years		7.19	%
U.S. Government agencies’ asset-backed securities and other asset-backed securities:
Due within one year	$	193,432	$	189,103	0.53 years		4.85	%
Due one through five years		553,790		541,321	2.85 years		4.83	%
Due five through ten years		358,802		350,772	7.24 years		4.76	%
Due over ten years		47,491		46,428	10.62 years		4.70	%
Total	$	1,153,515	$	1,127,624	4.16 years		4.81	%
Securities Held-to-Maturity
Obligations of states and political subdivisions:
Due within one year	$	7,761	$	7,792	0.43 years		6.57	%
Due one through five years		6,879		7,007	2.05 years		6.59	%
Due five through ten years		500		510	7.50 years		6.60	%
Total	$	15,140	$	15,309	1.40 years		6.58	%
U.S. Government agencies’ asset-backed securities and other asset-backed securities:
Due within one year	$	20,555	$	19,681	0.51 years		4.76	%
Due one through five years		35,380		33,876	3.07 years		4.72	%
Due five through ten years		88,954		85,164	7.59 years		4.73	%
Due over ten years		16,456		15,756	10.58 years		4.73	%
Total	$	161,345	$	154,477	6.00 years		4.73	%

Investment securities having a book value of $1,448 million and $1,503 million at December 31, 2006 and 2005, respectively, were pledged to collateralize government and trust department deposits in accordance with federal and state requirements and to secure repurchase agreements sold, and as collateral for Federal Home Loan Bank (FHLB) advance borrowings.

At December 31, 2006, $781 million was pledged for government and trust department deposits, $661 million was pledged to secure repurchase agreements and $6 million was pledged as collateral for FHLB advance borrowings. At December 31, 2005, $699 million was pledged for government and trust department deposits, $659 million was pledged to secure repurchase agreements and $145 million was pledged as collateral for FHLB advance borrowings.

In 2006, 2005 and 2004, gross gains of $106,000, $97,000 and $140,000, and gross losses of $9,000, $1,000 and $933,000 were realized, respectively. The tax expense related to the net securities gains was $34,000 in both 2006 and 2005 and the tax benefit related to net securities losses was $278,000 in 2004.

5. LOANS

The composition of the loan portfolio is as follows:

December 31 (Dollars in thousands)	2006		2005
Commercial, financial and agricultural	$	548,254	$	512,636
Real estate:
Construction		234,988		193,185
Residential		1,300,294		1,287,438
Commercial		854,869		823,354
Consumer, net		532,092		494,975
Leases, net		10,205		16,524
Total loans	$	3,480,702	$	3,328,112

Under the Corporation’s credit policies and practices, all nonaccrual and restructured commercial, financial, agricultural, construction and commercial real estate loans meet the definition of impaired loans under SFAS No. 114 and 118. Impaired loans as defined by SFAS No. 114 and 118 exclude certain consumer loans, residential real estate loans and lease financing classified as nonaccrual. The majority of the loans deemed impaired were evaluated using the fair value of the collateral as the measurement method.

Nonaccrual and restructured loans are summarized as follows:

December 31 (Dollars in thousands)	2006		2005
Impaired loans:
Nonaccrual	$	10,367	$	9,308
Restructured		9,113		7,441
Total impaired loans		19,480		16,749
Other nonaccrual loans		5,637		5,614
Total nonaccrual and restructured loans	$	25,117	$	22,363

The allowance for credit losses related to impaired loans at December 31, 2006 and 2005, was $2,002,000 and $1,988,000, respectively. All impaired loans for both periods were subject to a related allowance for credit losses.

The average balance of impaired loans was $21,976,000, $19,557,000 and $21,003,000 for 2006, 2005 and 2004, respectively.

Interest income on impaired loans is recognized after all past due and current principal payments have been made, and collectibility is no longer doubtful. For the years ended December 31, 2006, 2005 and 2004, the Corporation recognized $450,000, $490,000 and $721,000, respectively, of interest income on impaired loans, which included $471,000, $553,000 and $752,000, respectively, of interest income recognized using the cash basis method of income recognition.

Certain of Park’s and its affiliate banks’ executive officers, directors and their affiliates are loan customers of the Corporation’s banking subsidiaries. As of December 31, 2006 and 2005, loans aggregating approximately $112,486,000 and $130,116,000, respectively, were outstanding to such parties. During 2006, $17,870,000 of new loans were made and repayments totaled $35,500,000.

6. ALLOWANCE FOR LOAN LOSSES

Activity in the allowance for loan losses is summarized as follows:

(Dollars in thousands)	2006			2005			2004
Balance, January 1	$	69,694		$	68,328		$	63,142
Allowance for loan losses of acquired bank		798			1,849			4,450
Provision for loan losses		3,927			5,407			8,600
Losses charged to the reserve		(10,772	)		(13,389	)		(15,173	)
Recoveries		6,853			7,499			7,309
Balance, December 31	$	70,500		$	69,694		$	68,328

7. INVESTMENT IN FINANCING LEASES

The following is a summary of the components of the Corporation’s affiliates’ net investment in direct financing leases:

December 31 (Dollars in thousands)	2006			2005
Total minimum payments to be received	$	9,458		$	12,987
Estimated unguaranteed residual value of leased property		1,702			4,562
Less unearned income		(955	)		(1,025	)
Total	$	10,205		$	16,524

54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Minimum lease payments to be received as of December 31, 2006 are:

(In thousands)
2007		2,242
2008		1,666
2009		2,769
2010		999
2011		459
Thereafter		1,323
Total	$	9,458

8. PREMISES AND EQUIPMENT

The major categories of premises and equipment and accumulated depreciation are summarized as follows:

December 31 (Dollars in thousands)	2006			2005
Land	$	16,220		$	14,292
Buildings		59,917			58,308
Equipment, furniture and fixtures		55,377			53,630
Leasehold improvements		3,951			3,624
Total		135,465			129,854
Less accumulated depreciation and amortization		(87,911	)		(82,682	)
Premises and equipment, net	$	47,554		$	47,172

Depreciation and amortization expense amounted to $5,522,000, $5,641,000 and $5,436,000 for the three years ended December 31, 2006, 2005 and 2004, respectively.

The Corporation and its subsidiaries lease certain premises and equipment accounted for as operating leases. The following is a schedule of the future minimum rental payments required for the next five years under such leases with initial terms in excess of one year:

(In thousands)
2007		1,727
2008		1,544
2009		1,234
2010		697
2011		326
Thereafter		579
Total	$	6,107

Rent expense amounted to $2,107,000, $1,915,000 and $1,362,000, for the three years ended December 31, 2006, 2005 and 2004, respectively.

9. SHORT-TERM BORROWINGS

Short-term borrowings are as follows:

December 31 (Dollars in thousands)	2006		2005
Securities sold under agreements to repurchase and federal funds purchased	$	225,356	$	246,502
Federal Home Loan Bank advances		142,000		60,000
Other short-term borrowings		8,417		7,572
Total short-term borrowings	$	375,773	$	314,074

The outstanding balances for all short-term borrowings as of December 31, 2006, 2005 and 2004 (in thousands) and the weighted-average interest rates as of and paid during each of the years then ended are as follows:

	Repurchase						Demand
	Agreements			Federal			Notes
	and Federal			Home Loan			Due U.S.
	Funds			Bank			Treasury
(Dollars in thousands)	Purchased			Advances			and Other
2006:
Ending balance	$	225,356		$	142,000		$	8,417
Highest month-end balance		240,924			246,000			11,290
Average daily balance		224,662			147,145			3,525
Weighted-average interest rate:
As of year-end		3.73	%		5.24	%		5.06	%
Paid during the year		3.54	%		5.15	%		4.62	%
2005:
Ending balance	$	246,502		$	60,000		$	7,572
Highest month-end balance		246,502			170,000			8,583
Average daily balance		194,157			94,264			3,421
Weighted-average interest rate:
As of year-end		2.94	%		4.20	%		4.16	%
Paid during the year		2.14	%		3.46	%		2.93	%
2004:
Ending balance	$	192,483		$	78,228		$	7,520
Highest month-end balance		354,195			160,050			7,520
Average daily balance		323,978			74,043			3,278
Weighted-average interest rate:
As of year-end		1.29	%		2.31	%		2.25	%
Paid during the year		1.17	%		2.01	%		1.13	%

At December 31, 2006 and 2005, Federal Home Loan Bank (FHLB) advances were collateralized by investment securities owned by the Corporation’s subsidiary banks and by various loans pledged under a blanket agreement by the Corporation’s subsidiary banks.

See Note 4 of the Notes to Consolidated Financial Statements for the amount of investment securities that are pledged. At December 31, 2006, $1,770 million of commercial real estate and residential mortgage loans were pledged under a blanket agreement to the FHLB by Park’s subsidiary banks. At December 31, 2005, $867 million of residential mortgage loans were pledged to the FHLB.

10. LONG-TERM DEBT

Long-term debt is listed below:

December 31 (Dollars in thousands)	2006					2005
	Outstanding		Average			Outstanding		Average
	Balance		Rate			Balance		Rate
Total Federal Home Loan Bank advances by year of maturity:
2006	$	—		—		$	113,268		4.17	%
2007		41,289		4.01	%		41,243		4.02	%
2008		84,726		4.83	%		122,110		4.20	%
2009		6,082		3.92	%		6,115		3.93	%
2010		17,416		5.72	%		17,404		5.72	%
2011		1,429		4.01	%		6,422		4.59	%
Thereafter		103,198		4.15	%		73,222		4.53	%
Total	$	254,140		4.46	%	$	379,784		4.31	%
Total broker repurchase agreements by year of maturity:
2007	$	25,000		3.84	%	$	25,000		3.84	%
2009		25,000		3.79	%		85,000		3.94	%
2010		—		—			75,000		3.83	%
Thereafter		300,000		4.00	%		150,000		3.87	%
Total	$	350,000		3.97	%	$	335,000		3.88	%
Total combined long-term debt by year of maturity:
2006	$	—		—		$	113,268		4.17	%
2007		66,289		3.95	%		66,243		3.95	%
2008		84,726		4.83	%		122,110		4.20	%
2009		31,082		3.81	%		91,115		3.94	%
2010		17,416		5.72	%		92,404		4.19	%
2011		1,429		4.01	%		6,422		4.59	%
Thereafter		403,198		4.04	%		223,222		4.09	%
Total	$	604,140		4.18	%	$	714,784		4.11	%

55

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Park had approximately $403 million of long-term debt at December 31, 2006 with a contractual maturity longer than five years. However, approximately $303 million of this debt is callable by the issuer in 2007 and the remaining $100 million is callable by the issuer in 2008.

At December 31, 2006 and 2005, Federal Home Loan Bank (FHLB) advances were collateralized by investment securities owned by the Corporation’s subsidiary banks and by various loans pledged under a blanket agreement by the Corporation’s subsidiary banks.

See Note 4 of the Notes to Consolidated Financial Statements for the amount of investment securities that are pledged. See Note 9 of the Notes to Consolidated Financial Statements for the amount of residential mortgage loans that are pledged to the FHLB.

11. STOCK OPTION PLANS

The Park National Corporation 2005 Incentive Stock Option Plan (the “2005 Plan”) was adopted by the Board of Directors of Park on January 18, 2005, and was approved by the shareholders at the Annual Meeting of Shareholders on April 18, 2005. Under the 2005 Plan, 1,500,000 common shares are authorized for delivery upon the exercise of incentive stock options. All of the common shares delivered upon the exercise of incentive stock options granted under the 2005 Plan are to be treasury shares. At December 31, 2006, 1,285,175 options were available for future grants under the 2005 Plan. Under the terms of the 2005 Plan, incentive stock options may be granted at a price not less than the fair market value at the date of the grant, and for an option term of up to five years. No additional incentive stock options may be granted under the 2005 Plan after January 17, 2015.

The Park National Corporation 1995 Incentive Stock Option Plan (the “1995 Plan”) was adopted April 17, 1995, and amended, April 20, 1998 and April 16, 2001. Pursuant to the terms of the 1995 Plan, all of the common shares delivered upon exercise of incentive stock options are to be treasury shares. No incentive stock options may be granted under the 1995 Plan after January 16, 2005.

The fair value of each incentive stock option granted is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of Park’s common stock. The Corporation uses historical data to estimate option exercise behavior. The expected term of incentive stock options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the incentive stock option is based on the U.S. Treasury yield curve in effect at the time of the grant.

The fair value of incentive stock options granted was determined using the following weighted-average assumptions as of the grant date. Park did not grant any options in 2006.

	2005			2004
Risk-free interest rate		3.77	%		3.36	%
Expected term (years)		4.0			4.0
Expected stock price volatility		19.8	%		17.5	%
Dividend yield		3.00	%		3.00	%

The activity in Park’s stock option plans is listed in the following table for 2006:

	Stock Options
				Weighted
				Average
				Exercise
				Price per
	Number			Share
January 1, 2006		818,182		$	99.78
Granted		—			—
Exercised		(39,444	)		81.81
Forfeited/Expired		(92,714	)		91.76
December 31, 2006		686,024		$	101.89
Exercisable at year end:					686,024
Weighted-average remaining contractual life:				2.1 Years
Aggregate intrinsic value:				$	2,398,466

Information related to Park’s stock option plans for the past three years is listed in the following table for 2006:

(Dollars in thousands)	2006		2005		2004
Intrinsic value of options exercised	$	692	$	1,213	$	2,255
Cash received from option exercises		3,227		4,077		6,617
Tax benefit realized from option exercises		18		57		63
Weighted-average fair value of options granted per share	$	—	$	16.14	$	13.88

12. BENEFIT PLANS

The Corporation has a noncontributory defined benefit pension plan covering substantially all of the employees of the Corporation and its subsidiaries. The plan provides benefits based on an employee’s years of service and compensation.

The Corporation’s funding policy is to contribute annually an amount that can be deducted for federal income tax purposes using a different actuarial cost method and different assumptions from those used for financial reporting purposes. Management does not expect to make a contribution to the defined benefit pension plan in 2007.

Using an accrual measurement date of September 30, plan assets for the pension plan are listed below:

(Dollars in thousands)	2006			2005
Change in fair value of plan assets:
Fair value at beginning of measurement period	$	46,331		$	37,341
Actual return on plan assets		4,336			4,303
Company contributions		9,117			9,688
Benefits paid		(4,243	)		(5,001	)
Fair value at end of measurement period	$	55,541		$	46,331

The asset allocation for the defined benefit pension plan as of the measurement date, by asset category, is as follows:

		Percentage of Plan Assets
Asset Category	Target Allocation	2006			2005
Equity securities	50% - 100%		81	%		82	%
Fixed income and cash equivalents	remaining balance		19	%		18	%
Other	—		—			—
Total	—		100	%		100	%

The investment policy, as established by the Retirement Plan Committee, is to invest assets per the target allocation stated above. Assets will be reallocated periodically based on the investment strategy of the Retirement Plan Committee. The investment policy is reviewed periodically.

The expected long-term rate of return on plan assets is 7.75% in 2006 and 2005. This return is based on the expected return of each of the asset categories, weighted based on the median of the target allocation for each class.

56

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Using an actuarial measurement date of September 30, benefit obligation activity is listed as follows:

(Dollars in thousands)	2006			2005
Change in benefit obligation:
Projected benefit obligation at beginning of measurement period	$	46,641		$	45,169
Service cost		3,179			2,682
Interest cost		2,886			2,756
Actuarial loss or (gain)		1,237			1,035
Benefits paid		(4,243	)		(5,001	)
Projected benefit obligation at the end of measurement period	$	49,700		$	46,641

The accumulated benefit obligation for the defined benefit pension plan was $40.5 million at September 30, 2006 and $38.3 million at September 30, 2005.

The weighted average assumptions used to determine benefit obligations at September 30, were as follows:

	2006			2005
Discount rate		6.08	%		5.96	%
Rate of compensation increase		3.50	%		3.50	%

The estimated future pension benefit payments reflecting expected future service for the next ten years are shown below in thousands:

2007	$	1,156
2008		1,309
2009		1,470
2010		1,686
2011		2,028
2012 - 2015		17,987
Total	$	25,636

The following table displays the funded status of the defined benefit pension plan which is computed by taking the difference between the fair value of the plan assets and the projected benefit obligation at the measurement date of September 30. Park adopted SFAS No. 158 in 2006. SFAS No. 158 requires that the funded status of the defined benefit pension plan be shown in Park’s financial statements as the prepaid benefit cost at September 30, 2006. The prepaid benefit cost at September 30, 2005 includes the unrecognized prior service cost and the unrecognized net actuarial loss. The following table provides information on the prepaid benefit cost at September 30.

(Dollars in thousands)	2006		2005
Funded status	$	5,841	$	(310	)
Unrecognized prior service cost		—		238
Unrecognized net actuarial loss		—		9,956
Prepaid benefit cost	$	5,841	$	9,884

In 2006, Park recorded the unrecognized prior service cost and the unrecognized net actuarial loss as a reduction to prepaid benefit cost and an adjustment to accumulated other comprehensive income (loss).

(Dollars in thousands)	2006
Unrecognized prior service cost	$	(224	)
Unrecognized net actuarial loss		(10,277	)
Reduction to prepaid benefit cost		(10,501	)
Impact on deferred taxes		3,675
Adjustment to accumulated other comprehensive income (loss)	$	(6,826	)

Using an actuarial measurement date of September 30, components of net periodic benefit cost are as follows:

(Dollars in thousands)	2006			2005			2004
Components of net periodic benefit cost:
Service cost	$	3,179		$	2,682		$	2,502
Interest cost		2,886			2,756			2,577
Expected return on plan assets		(3,975	)		(3,334	)		(2,789	)
Amortization of prior service cost		14			12			12
Recognized net actuarial loss/(gain)		555			545			497
Benefit cost	$	2,659		$	2,661		$	2,799

The estimated net loss and prior service costs for the defined benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $363,000 and $34,000, respectively.

The weighted average assumptions used to determine net periodic benefit cost for the years ended December 31, are listed below:

	2006			2005
Discount rate		5.96	%		6.00	%
Rate of compensation increase		3.50	%		3.75	%
Expected long-term return on plan assets		7.75	%		7.75	%

The Corporation has a voluntary salary deferral plan covering substantially all of its employees. Eligible employees may contribute a portion of their compensation subject to a maximum statutory limitation. The Corporation provides a matching contribution established annually by the Corporation. Contribution expense for the Corporation was $1,672,000, $1,763,000 and $1,452,000 for 2006, 2005 and 2004, respectively.

The Corporation has a Supplemental Executive Retirement Plan (SERP) covering certain key officers of the Corporation and its subsidiaries with defined pension benefits in excess of limits imposed by federal tax law. At December 31, 2006 and 2005, the accrued benefit cost for this plan totaled $5,946,000 and $5,620,000, respectively. The expense for the Corporation was $620,000, $744,000, and $636,000 for 2006, 2005, and 2004, respectively.

13. FEDERAL INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Corporation’s deferred tax assets and liabilities are as follows:

December 31 (Dollars in thousands)	2006		2005
Deferred tax assets:
Allowance for loan losses	$	24,675	$	24,393
Accumulated other comprehensive loss — SFAS No. 115		8,612		5,461
Accumulated other comprehensive loss — SFAS No. 158		3,675		—
Intangible assets		3,209		3,465
Deferred compensation		3,678		3,545
Other		3,973		3,628
Total deferred tax assets	$	47,822	$	40,492
Deferred tax liabilities:
Lease revenue reporting	$	2,096	$	3,830
Deferred investment income		12,319		12,170
Pension plan		5,625		3,400
Mortgage servicing rights		3,630		3,733
Other		1,762		1,804
Total deferred tax liabilities	$	25,432	$	24,937
Net deferred tax assets	$	22,390	$	15,555

The components of the provision for federal income taxes are shown below:

(Dollars in thousands)	2006		2005		2004
Currently payable	$	38,830	$	38,196	$	40,284
Deferred		156		1,990		(2,542	)
Total	$	38,986	$	40,186	$	37,742

57

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a reconcilement of federal income tax expense to the amount computed at the statutory rate of 35% for the years ended December 31, 2006, 2005 and 2004.

December 31	2006			2005			2004
Statutory corporate tax rate		35.0	%		35.0	%		35.0	%
Changes in rates resulting from:
Tax-exempt interest, net of disallowed interest		(1.2	%)		(1.3	%)		(1.7	%)
Bank owned life insurance		(1.0	%)		(.9	%)		(1.0	%)
Tax credits (low income housing)		(2.9	%)		(2.5	%)		(2.2	%)
Other		(.6	%)		(.6	%)		(.9	%)
Effective tax rate		29.3	%		29.7	%		29.2	%

Park and its subsidiary banks do not pay state income tax to the State of Ohio, but pay a franchise tax based on their year-end equity. The franchise tax expense is included in state tax expense and was $2.2 million in 2006, $2.9 million in 2005 and $2.5 million in 2004.

14. OTHER COMPREHENSIVE INCOME (LOSS)

Other comprehensive income (loss) components and related taxes are shown in the following table for the years ended December 31, 2006, 2005 and 2004.

Year ended December 31	Before-Tax			Tax			Net-of-Tax
(Dollars in thousands)	Amount			Expense			Amount
2006:
Unrealized losses on available-for-sale securities	$	(8,905	)	$	(3,117	)	$	(5,788	)
Reclassification adjustment for gains realized in net income		(97	)		(34	)		(63	)
Other comprehensive loss	$	(9,002	)	$	(3,151	)	$	(5,851	)
2005:
Unrealized losses on available-for-sale securities	$	(34,650	)	$	(12,127	)	$	(22,523	)
Reclassification adjustment for gains realized in net income		(96	)		(34	)		(62	)
Other comprehensive loss	$	(34,746	)	$	(12,161	)	$	(22,585	)
2004:
Unrealized losses on available-for-sale securities	$	(10,811	)	$	(3,784	)	$	(7,027	)
Reclassification adjustment for losses realized in net income		793			278			515
Other comprehensive loss	$	(10,018	)	$	(3,506	)	$	(6,512	)

15. EARNINGS PER SHARE

SFAS No. 128, “Earnings Per Share” requires the reporting of basic and diluted earnings per share. Basic earnings per share excludes any dilutive effects of options, warrants and convertible securities. Diluted earnings per share is very similar to the previously reported fully diluted earnings per share.

The following table sets forth the computation of basic and diluted earnings per share:

Year ended December 31
(Dollars in thousands,
except per share data)	2006		2005		2004
Numerator:
Net income	$	94,091	$	95,238	$	91,507
Denominator:
Basic earnings per share:
Weighted-average shares		13,929,090		14,258,519		14,344,771
Effect of dilutive securities — stock options		37,746		89,724		141,556
Diluted earnings per share:
Adjusted weighted-average shares and assumed conversions		13,966,836		14,348,243		14,486,327
Earnings per share:
Basic earnings per share	$	6.75	$	6.68	$	6.38
Diluted earnings per share	$	6.74	$	6.64	$	6.32

16. DIVIDEND RESTRICTIONS

Bank regulators limit the amount of dividends a subsidiary bank can declare in any calendar year without obtaining prior approval. At December 31, 2006, approximately $2.4 million of the total stockholders’ equity of the bank subsidiaries is available for the payment of dividends to the Corporation, without approval by the applicable regulatory authorities.

17. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND FINANCIAL INSTRUMENTS WITH CONCENTRATIONS OF CREDIT RISK

The Corporation is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include loan commitments and standby letters of credit. The instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the financial statements.

The Corporation’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for loan commitments and standby letters of credit is represented by the contractual amount of those instruments. The Corporation uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Since many of the loan commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan commitments to customers.

The total amounts of off-balance sheet financial instruments with credit risk are as follows:

December 31 (Dollars in thousands)	2006		2005
Loan commitments	$	824,412	$	667,074
Unused credit card limits		140,100		132,591
Standby letters of credit		19,687		20,872

The loan commitments are generally for variable rates of interest.

The Corporation grants retail, commercial and commercial real estate loans to customers primarily located in Ohio. The Corporation evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Corporation upon extension of credit, is based on management’s credit evaluation of the customer. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties.

Although the Corporation has a diversified loan portfolio, a substantial portion of the borrowers’ ability to honor their contracts is dependent upon the economic conditions in each borrower’s geographic location.

18. FAIR VALUES OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used by the Corporation in estimating its fair value disclosures for financial instruments:

Cash and cash equivalents: The carrying amounts reported in the balance sheet for cash and short-term instruments approximate those assets’ fair values.

Interest bearing deposits with other banks: The carrying amounts reported in the balance sheet for interest bearing deposits with other banks approximate those assets’ fair values.

Investment securities: Fair values for investment securities are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.

Bank owned life insurance: The carrying amounts reported in the balance sheet for bank owned life insurance approximate those assets’ fair values.

58

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Loans receivable: For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair values for certain mortgage loans (e.g., one-to-four family residential) are based on quoted market prices of similar loans sold in conjunction with securitization transactions, adjusted for differences in loan characteristics. The fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality.

Off-balance sheet instruments: Fair values for the Corporation’s loan commitments and standby letters of credit are based on the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counter parties’ credit standing.

Deposit liabilities: The fair values disclosed for demand deposits (e.g., interest and non-interest checking, savings, and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). The carrying amounts for variable-rate, fixed-term certificates of deposit approximate their fair values at the reporting date. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities of time deposits.

Short-term borrowings: The carrying amounts of federal funds purchased, borrowings under repurchase agreements and other short-term borrowings approximate their fair values.

Long-term debt: Fair values for long-term debt are estimated using a discounted cash flow calculation that applies interest rates currently being offered on long-term debt to a schedule of monthly maturities.

The fair value of financial instruments at December 31, 2006 and 2005, is as follows:

	2006						2005
December 31,	Carrying			Fair			Carrying			Fair
(In thousands)	Amount			Value			Amount			Value
Financial assets:
Cash and money market instruments	$	186,256		$	186,256		$	173,973		$	173,973
Interest bearing deposits with other banks		1			1			300			300
Investment securities		1,513,498			1,506,799			1,663,342			1,657,814
Bank owned life insurance		113,101			113,101			109,600			109,600
Loans:
Commercial, financial and agricultural		548,254			548,254			512,636			512,636
Real estate:
Construction		234,988			234,988			193,185			193,185
Residential		1,300,294			1,294,157			1,287,438			1,281,657
Commercial		854,869			843,251			823,354			815,022
Consumer, net		532,092			527,128			494,975			494,064
Total loans		3,470,497			3,447,778			3,311,588			3,296,564
Allowance for loan losses		(70,500	)		—			(69,694	)		—
Loans receivable, net	$	3,399,997		$	3,447,778		$	3,241,894		$	3,296,564
Financial liabilities:
Noninterest bearing checking	$	664,962		$	664,962		$	667,328		$	667,328
Interest bearing transaction accounts		1,033,870			1,033,870			987,954			987,954
Savings		543,724			543,724			594,706			594,706
Time deposits		1,581,120			1,575,713			1,505,903			1,486,989
Other		1,858			1,858			1,866			1,866
Total deposits	$	3,825,534		$	3,820,127		$	3,757,757		$	3,738,843
Short-term borrowings		375,773			375,773			314,074			314,074
Long-term debt		604,140			603,516			714,784			718,384
Unrecognized financial instruments:
Loan commitments		—			(824	)		—			(667	)
Standby letters of credit		—			(98	)		—			(104	)

19. CAPITAL RATIOS

The following table reflects various measures of capital at December 31, 2006 and December 31, 2005:

December 31,	2006					2005
(Dollars in thousands)	Amount		Ratio			Amount		Ratio
Total equity (1)	$	570,439		10.43	%	$	558,430		10.27	%
Tier 1 capital (2)		528,019		14.72	%		498,502		14.17	%
Total risk-based capital (3)		573,216		15.98	%		543,000		15.43	%
Leverage (4)		528,019		9.96	%		498,502		9.27	%

(1)	Stockholders’ equity including accumulated other comprehensive income (loss); computed as a ratio to total assets.
(2)	Stockholders’ equity less certain intangibles and accumulated other comprehensive income (loss); computed as a ratio to risk-adjusted assets as defined.
(3)	Tier 1 capital plus qualifying loan loss allowance; computed as a ratio to risk-adjusted assets, as defined.
(4)	Tier 1 capital computed as a ratio to average total assets less certain intangibles.

At December 31, 2006 and 2005, the Corporation’s tier 1 capital, total risk-based capital and leverage ratios were well above both the required minimum levels of 4.00%, 8.00% and 4.00%, respectively and the well-capitalized levels of 6.00%, 10.00% and 5.00%, respectively.

At December 31, 2006 and 2005, all of the Corporation’s subsidiary financial institutions met the well-capitalized levels under the capital definitions prescribed in the FDIC Improvement Act of 1991. The following table indicates the capital ratios for each subsidiary at December 31, 2006 and December 31, 2005.

December 31	2006									2005
	Tier 1			Total						Tier 1			Total
	Risk-			Risk-						Risk-			Risk-
	Based			Based			Leverage			Based			Based			Leverage
Park National Bank		8.11	%		10.76	%		5.84	%		7.65	%		10.41	%		5.44	%
Richland Trust Company		9.44	%		10.70	%		5.47	%		9.76	%		11.02	%		5.76	%
Century National Bank		8.69	%		10.44	%		5.57	%		8.91	%		11.36	%		5.65	%
First-Knox National Bank		8.01	%		10.61	%		5.27	%		8.87	%		12.23	%		5.80	%
United Bank, N.A.		10.89	%		12.15	%		5.37	%		10.82	%		12.07	%		5.64	%
Second National Bank		8.39	%		10.64	%		5.39	%		9.27	%		12.64	%		5.63	%
Security National Bank		9.18	%		10.76	%		5.45	%		9.42	%		13.78	%		5.35	%
Citizens National Bank		14.58	%		15.83	%		7.24	%		11.86	%		17.29	%		5.60	%

59

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

20. SEGMENT INFORMATION

The Corporation’s segments are its banking subsidiaries. The operating results of the banking subsidiaries are monitored closely by senior management and each president of the subsidiary and division are held accountable for their results. Information about reportable segments follows. See Note 2 for a detailed description of individual banking subsidiaries.

Operating Results for the year ended December 31, 2006 (In thousands)
																				All
	PNB		RTC		CNB		FKNB		UB			SNB			SEC		CIT			Others			Total
Net interest income	$	72,526	$	18,493	$	23,361	$	30,755	$	7,727		$	12,034		$	30,479	$	5,383		$	12,486		$	213,244
Provision for loan losses		1,713		220		180		630		(130	)		155			235		125			799			3,927
Other income		27,858		4,672		8,498		7,772		2,218			2,333			9,051		1,709			651			64,762
Depreciation and amortization		1,790		433		866		689		245			299			779		221			200			5,522
Other expense		46,030		10,402		15,519		16,484		6,103			7,181			19,308		4,053			10,400			135,480
Income before taxes		50,851		12,110		15,294		20,724		3,727			6,732			19,208		2,693			1,738			133,077
Federal income taxes		16,486		4,123		5,145		7,010		1,190			2,027			6,291		839			(4,125	)		38,986
Net income	$	34,365	$	7,987	$	10,149	$	13,714	$	2,537		$	4,705		$	12,917	$	1,854		$	5,863		$	94,091
Balances at December 31, 2006:
Assets	$	1,970,072	$	534,142	$	745,168	$	778,864	$	220,701		$	397,602		$	860,995	$	162,498		$	(199,166	)	$	5,470,876
Loans		1,368,125		245,694		511,684		521,111		92,843			227,337			446,110		58,254			9,544			3,480,702
Deposits		1,367,942		377,356		493,218		499,199		194,834			248,985			572,269		122,358			(50,627	)		3,825,534
Operating Results for the year ended December 31, 2005 (In thousands)
Net interest income	$	71,227	$	20,273	$	27,599	$	30,855	$	8,606		$	13,592		$	30,811	$	6,140		$	11,461		$	220,564
Provision for loan losses		2,611		700		150		1,127		(160	)		(510	)		1,005		(100	)		584			5,407
Other income		25,566		4,442		7,439		7,191		1,968			2,154			8,880		1,518			547			59,705
Depreciation and amortization		1,705		394		913		675		233			315			993		200			213			5,641
Other expense		43,622		10,226		15,155		16,156		6,026			7,238			18,665		4,701			12,008			133,797
Income before taxes		48,855		13,395		18,820		20,088		4,475			8,703			19,028		2,857			(797	)		135,424
Federal income taxes		15,924		4,553		6,356		6,739		1,449			2,674			6,231		929			(4,669	)		40,186
Net income	$	32,931	$	8,842	$	12,464	$	13,349	$	3,026		$	6,029		$	12,797	$	1,928		$	3,872		$	95,238
Balances at December 31, 2005:
Assets	$	1,999,102	$	506,198	$	711,804	$	753,288	$	228,716		$	392,257		$	924,484	$	173,190		$	(252,991	)	$	5,436,048
Loans		1,247,105		266,293		503,278		507,148		96,232			203,638			439,698		58,611			6,109			3,328,112
Deposits		1,343,180		373,398		469,333		476,257		180,274			250,553			578,404		123,555			(37,197	)		3,757,757
Operating Results for the year ended December 31, 2004 (In thousands)
Net interest income	$	63,050	$	21,992	$	19,725	$	32,329	$	10,074		$	15,477		$	31,939	$	7,252		$	10,453		$	212,291
Provision for loan losses		3,230		735		965		1,695		320			(15	)		430		580			660			8,600
Other income		21,401		4,339		5,210		6,766		1,722			2,079			8,257		1,253			821			51,848
Depreciation and amortization		1,708		388		520		693		197			334			1,183		197			216			5,436
Other expense		36,827		10,549		11,413		15,995		6,071			7,282			18,649		4,284			9,784			120,854
Income before taxes		42,686		14,659		12,037		20,712		5,208			9,955			19,934		3,444			614			129,249
Federal income taxes		13,808		4,906		3,972		6,864		1,685			3,096			6,485		1,112			(4,186	)		37,742
Net income	$	28,878	$	9,753	$	8,065	$	13,848	$	3,523		$	6,859		$	13,449	$	2,332		$	4,800		$	91,507
Balances at December 31, 2004:
Assets	$	1,662,200	$	511,681	$	782,393	$	756,454	$	236,658		$	445,158		$	917,084	$	200,795		$	(99,839	)	$	5,412,584
Loans		1,011,912		277,812		540,607		479,348		101,628			196,577			436,718		69,830			6,176			3,120,608
Deposits		1,182,804		386,652		530,082		488,748		182,578			262,271			571,580		131,873			(46,727	)		3,689,861

60

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Reconciliation of financial information for the reportable segments to the Corporation’s consolidated totals.

	Net Interest		Depreciation		Other		Income
(In thousands)	Income		Expense		Expense		Taxes			Assets			Deposits
2006:
Totals for reportable segments	$	200,758	$	5,322	$	125,080	$	43,111		$	5,670,042		$	3,876,161
Elimination of intersegment items		—		—		—		—			(290,163	)		(50,627	)
Parent Co. and GFC totals — not eliminated		12,486		49		10,400		(4,125	)		90,997			—
Other items		—		151		—		—			—			—
Totals	$	213,244	$	5,522	$	135,480	$	38,986		$	5,470,876		$	3,825,534
2005:
Totals for reportable segments	$	209,103	$	5,428	$	121,789	$	44,855		$	5,689,039		$	3,794,954
Elimination of intersegment items		—		—		—		—			(337,393	)		(37,197	)
Parent Co. and GFC totals — not eliminated		11,461		62		12,008		(4,669	)		84,402			—
Other items		—		151		—		—			—			—
Totals	$	220,564	$	5,641	$	133,797	$	40,186		$	5,436,048		$	3,757,757
2004:
Totals for reportable segments	$	201,838	$	5,220	$	111,070	$	41,928		$	5,512,423		$	3,736,588
Elimination of intersegment items		—		—		—		—			(173,856	)		(46,727	)
Parent Co. and GFC totals — not eliminated		10,453		65		9,784		(4,186	)		74,017			—
Other items		—		151		—		—			—			—
Totals	$	212,291	$	5,436	$	120,854	$	37,742		$	5,412,584		$	3,689,861

21. PARENT COMPANY STATEMENTS

The Parent Company statements should be read in conjunction with the consolidated financial statements and the information set forth below.

Investments in subsidiaries are accounted for using the equity method of accounting.

The effective tax rate for the Parent Company is substantially less than the statutory rate due principally to tax-exempt dividends from subsidiaries.

Cash represents noninterest bearing deposits with a bank subsidiary.

Net cash provided by operating activities reflects cash payments (received from subsidiaries) for income taxes of $5.345 million, $5.492 million and $4.386 million in 2006, 2005 and 2004, respectively.

At December 31, 2006 and 2005, stockholders’ equity reflected in the Parent Company balance sheet includes $127.1 million and $120.1 million, respectively, of undistributed earnings of the Corporation’s subsidiaries which are restricted from transfer as dividends to the Corporation.

Balance Sheets
at December 31, 2006 and 2005

(In thousands)	2006		2005
Assets:
Cash	$	150,954	$	45,043
Investment in subsidiaries		382,620		375,454
Debentures receivable from subsidiary banks		27,500		56,000
Other investments		1,504		1,738
Dividends receivable from subsidiaries		—		75,075
Other assets		56,259		52,195
Total assets	$	618,837	$	605,505
Liabilities:
Dividends payable	$	12,947	$	13,000
Other liabilities		35,451		34,075
Total liabilities		48,398		47,075
Total stockholders’ equity		570,439		558,430
Total liabilities and stockholders’ equity	$	618,837	$	605,505

Statements of Income
for the years ended December 31, 2006, 2005 and 2004

(In thousands)	2006		2005			2004
Income:
Dividends from subsidiaries	$	89,500	$	109,250		$	83,000
Interest and dividends		7,107		6,553			6,461
Other		632		514			774
Total income		97,239		116,317			90,235
Expense:
Other, net		8,307		10,096			8,199
Total expense		8,307		10,096			8,199
Income before federal taxes and equity in undistributed earnings of subsidiaries		88,932		106,221			82,036
Federal income tax benefit		4,985		5,503			4,791
Income before equity in undistributed earnings of subsidiaries		93,917		111,724			86,827
Equity in undistributed earnings (losses) of subsidiaries		174		(16,486	)		4,680
Net income	$	94,091	$	95,238		$	91,507

61

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Statements of Cash Flows
for the years ended December 31, 2006, 2005 and 2004

(In thousands)	2006			2005			2004
Operating activities:
Net income	$	94,091		$	95,238		$	91,507
Adjustments to reconcile net income to net cash provided by operating activities:
Undistributed (earnings) losses of subsidiaries		(174	)		16,486			(4,680	)
Realized net investment security (gains) losses		(97	)		—			—
(Increase) decrease in dividends receivable from subsidiaries		75,075			(48,675	)		25,500
Increase in other assets		(4,090	)		(5,138	)		(3,833	)
Increase in other liabilities		1,378			1,408			3,689
Net cash provided by operating activities		166,183			59,319			112,183
Investing activities:
Cash paid for acquisition, net		(9,052	)		(52,500	)		(43,645	)
Sales (purchases) of investment securities		403			(521	)		277
Capital contribution to subsidiary		(2,000	)		(8,000	)		—
Repayment of debentures receivable from subsidiaries		28,500			—			—
Net cash provided by (used in) investing activities		17,851			(61,021	)		(43,368	)
Financing activities:
Cash dividends paid		(51,470	)		(51,498	)		(48,231	)
Proceeds from issuance of common stock		42			117			144
Cash payment for fractional shares		(5	)		(3	)		(252	)
Purchase of treasury stock, net		(26,690	)		(25,289	)		(16,376	)
Net cash used in financing activities		(78,123	)		(76,673	)		(64,715	)
Increase (decrease) in cash		105,911			(78,375	)		4,100
Cash at beginning of year		45,043			123,418			119,318
Cash at end of year	$	150,954		$	45,043		$	123,418

62

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements of Park National Corporation:

Form S-4 No.     333-139083
Form S-8 No.     33-92060
Form S-8 No.     333-52653
Form S-8 No.     333-59360
Form S-8 No.     333-59378
Form S-8 No.     333-91178
Form S-8 No.     333-115136
Form S-8 No.     333-126875

of our reports dated February 23, 2007, with respect to the consolidated financial statements of Park National Corporation, and management’s assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which reports are incorporated by reference from Park National Corporation’s 2006 Annual Report to Shareholders in this Annual Report on Form 10-K of Park National Corporation for the fiscal year ended December 31, 2006.

/s/ Crowe Chizek and Company LLC

Crowe Chizek and Company LLC

Columbus, Ohio
February 27, 2007

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

Form S-8 No.     33-92060
Form S-8 No.     333-52653
Form S-8 No.     333-59360
Form S-8 No.     333-59378
Form S-8 No.     333-91178
Form S-8 No.     333-115136
Form S-8 No.     333-126875
Form S-4 No.     333-139083

of our report dated February 21, 2006, with respect to the consolidated financial statements of Park National Corporation and subsidiaries, included in this Annual Report (Form 10-K) for the year ended December 31, 2006 filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

Columbus, Ohio
February 27, 2007

EX-24

Exhibit 24

POWER OF ATTORNEY

     The undersigned officer and director of Park National Corporation, an Ohio corporation (the “Corporation”), which anticipates filing with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2006, hereby constitutes and appoints David L. Trautman and John W. Kozak, and each of them, with full power of substitution and resubstitution, as attorney-in-fact and agent to sign for him, in any and all capacities, such Annual Report on Form 10-K and any and all amendments thereto, and any and all applications or documents to be filed with the Securities and Exchange Commission pertaining to such Annual Report on Form 10-K, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, as fully to all intents and purposes as he could do if personally present. The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 15^th day of February, 2007.

/s/ C. Daniel DeLawder  

C. Daniel DeLawder  

POWER OF ATTORNEY

     The undersigned officer and director of Park National Corporation, an Ohio corporation (the “Corporation”), which anticipates filing with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2006, hereby constitutes and appoints C. Daniel DeLawder and John W. Kozak, and each of them, with full power of substitution and resubstitution, as attorney-in-fact and agent to sign for him, in any and all capacities, such Annual Report on Form 10-K and any and all amendments thereto, and any and all applications or documents to be filed with the Securities and Exchange Commission pertaining to such Annual Report on Form 10-K, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, as fully to all intents and purposes as he could do if personally present. The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13^th day of February, 2007.

/s/ David L. Trautman  

David L. Trautman  

POWER OF ATTORNEY

     The undersigned officer of Park National Corporation, an Ohio corporation (the “Corporation”), which anticipates filing with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2006, hereby constitutes and appoints C. Daniel DeLawder and David L. Trautman, and each of them, with full power of substitution and resubstitution, as attorney-in-fact and agent to sign for him, in any and all capacities, such Annual Report on Form 10-K and any and all amendments thereto, and any and all applications or documents to be filed with the Securities and Exchange Commission pertaining to such Annual Report on Form 10-K, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, as fully to all intents and purposes as he could do if personally present. The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 17^th day of February, 2007.

/s/ John W. Kozak  

John W. Kozak  

POWER OF ATTORNEY

     The undersigned director of Park National Corporation, an Ohio corporation (the “Corporation”), which anticipates filing with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2006, hereby constitutes and appoints C. Daniel DeLawder, David L. Trautman and John W. Kozak, and each of them, with full power of substitution and resubstitution, as attorney-in-fact and agent to sign for him, in any and all capacities, such Annual Report on Form 10-K and any and all amendments thereto, and any and all applications or documents to be filed with the Securities and Exchange Commission pertaining to such Annual Report on Form 10-K, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, as fully to all intents and purposes as he could do if personally present. The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 16^th day of February, 2007.

/s/ Nicholas L. Berning  

Nicholas L. Berning  

POWER OF ATTORNEY

     The undersigned director of Park National Corporation, an Ohio corporation (the “Corporation”), which anticipates filing with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2006, hereby constitutes and appoints C. Daniel DeLawder, David L. Trautman and John W. Kozak, and each of them, with full power of substitution and resubstitution, as attorney-in-fact and agent to sign for her, in any and all capacities, such Annual Report on Form 10-K and any and all amendments thereto, and any and all applications or documents to be filed with the Securities and Exchange Commission pertaining to such Annual Report on Form 10-K, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, as fully to all intents and purposes as she could do if personally present. The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 16^th day of February, 2007.

/s/ Maureen Buchwald  

Maureen Buchwald  

POWER OF ATTORNEY

     The undersigned director of Park National Corporation, an Ohio corporation (the “Corporation”), which anticipates filing with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2006, hereby constitutes and appoints C. Daniel DeLawder, David L. Trautman and John W. Kozak, and each of them, with full power of substitution and resubstitution, as attorney-in-fact and agent to sign for him, in any and all capacities, such Annual Report on Form 10-K and any and all amendments thereto, and any and all applications or documents to be filed with the Securities and Exchange Commission pertaining to such Annual Report on Form 10-K, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, as fully to all intents and purposes as he could do if personally present. The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 14^th day of February, 2007.

/s/ James J. Cullers  

James J. Cullers  

POWER OF ATTORNEY

     The undersigned director of Park National Corporation, an Ohio corporation (the “Corporation”), which anticipates filing with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2006, hereby constitutes and appoints C. Daniel DeLawder, David L. Trautman and John W. Kozak, and each of them, with full power of substitution and resubstitution, as attorney-in-fact and agent to sign for him, in any and all capacities, such Annual Report on Form 10-K and any and all amendments thereto, and any and all applications or documents to be filed with the Securities and Exchange Commission pertaining to such Annual Report on Form 10-K, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, as fully to all intents and purposes as he could do if personally present. The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 17^th day of February, 2007.

/s/ Harry O. Egger  

Harry O. Egger  

POWER OF ATTORNEY

     The undersigned director of Park National Corporation, an Ohio corporation (the “Corporation”), which anticipates filing with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2006, hereby constitutes and appoints C. Daniel DeLawder, David L. Trautman and John W. Kozak, and each of them, with full power of substitution and resubstitution, as attorney-in-fact and agent to sign for him, in any and all capacities, such Annual Report on Form 10-K and any and all amendments thereto, and any and all applications or documents to be filed with the Securities and Exchange Commission pertaining to such Annual Report on Form 10-K, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, as fully to all intents and purposes as he could do if personally present. The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 16^th day of February, 2007.

/s/ F. William Englefield IV  

F. William Englefield IV  

POWER OF ATTORNEY

     The undersigned director of Park National Corporation, an Ohio corporation (the “Corporation”), which anticipates filing with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2006, hereby constitutes and appoints C. Daniel DeLawder, David L. Trautman and John W. Kozak, and each of them, with full power of substitution and resubstitution, as attorney-in-fact and agent to sign for him, in any and all capacities, such Annual Report on Form 10-K and any and all amendments thereto, and any and all applications or documents to be filed with the Securities and Exchange Commission pertaining to such Annual Report on Form 10-K, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, as fully to all intents and purposes as he could do if personally present. The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 16^th day of February, 2007.

/s/ William T. McConnell  

William T. McConnell  

POWER OF ATTORNEY

     The undersigned director of Park National Corporation, an Ohio corporation (the “Corporation”), which anticipates filing with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2006, hereby constitutes and appoints C. Daniel DeLawder, David L. Trautman and John W. Kozak, and each of them, with full power of substitution and resubstitution, as attorney-in-fact and agent to sign for him, in any and all capacities, such Annual Report on Form 10-K and any and all amendments thereto, and any and all applications or documents to be filed with the Securities and Exchange Commission pertaining to such Annual Report on Form 10-K, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, as fully to all intents and purposes as he could do if personally present. The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 14^th day of February, 2007.

/s/ John J. O’Neill  

John J. O’Neill  

POWER OF ATTORNEY

     The undersigned director of Park National Corporation, an Ohio corporation (the “Corporation”), which anticipates filing with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2006, hereby constitutes and appoints C. Daniel DeLawder, David L. Trautman and John W. Kozak, and each of them, with full power of substitution and resubstitution, as attorney-in-fact and agent to sign for him, in any and all capacities, such Annual Report on Form 10-K and any and all amendments thereto, and any and all applications or documents to be filed with the Securities and Exchange Commission pertaining to such Annual Report on Form 10-K, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, as fully to all intents and purposes as he could do if personally present. The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 15^th day of February, 2007.

/s/ William A. Phillips  

William A. Phillips  

POWER OF ATTORNEY

     The undersigned director of Park National Corporation, an Ohio corporation (the “Corporation”), which anticipates filing with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2006, hereby constitutes and appoints C. Daniel DeLawder, David L. Trautman and John W. Kozak, and each of them, with full power of substitution and resubstitution, as attorney-in-fact and agent to sign for him, in any and all capacities, such Annual Report on Form 10-K and any and all amendments thereto, and any and all applications or documents to be filed with the Securities and Exchange Commission pertaining to such Annual Report on Form 10-K, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, as fully to all intents and purposes as he could do if personally present. The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 15^th day of February, 2007.

/s/ J. Gilbert Reese  

J. Gilbert Reese  

POWER OF ATTORNEY

     The undersigned director of Park National Corporation, an Ohio corporation (the “Corporation”), which anticipates filing with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2006, hereby constitutes and appoints C. Daniel DeLawder, David L. Trautman and John W. Kozak, and each of them, with full power of substitution and resubstitution, as attorney-in-fact and agent to sign for him, in any and all capacities, such Annual Report on Form 10-K and any and all amendments thereto, and any and all applications or documents to be filed with the Securities and Exchange Commission pertaining to such Annual Report on Form 10-K, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, as fully to all intents and purposes as he could do if personally present. The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 21^st day of February, 2007.

/s/ Rick R. Taylor  

Rick R. Taylor  

POWER OF ATTORNEY

     The undersigned director of Park National Corporation, an Ohio corporation (the “Corporation”), which anticipates filing with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2006, hereby constitutes and appoints C. Daniel DeLawder, David L. Trautman and John W. Kozak, and each of them, with full power of substitution and resubstitution, as attorney-in-fact and agent to sign for him, in any and all capacities, such Annual Report on Form 10-K and any and all amendments thereto, and any and all applications or documents to be filed with the Securities and Exchange Commission pertaining to such Annual Report on Form 10-K, with full power and authority to do and perform any and all acts and things whatsoever required and necessary to be done in the premises, as fully to all intents and purposes as he could do if personally present. The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 16^th day of February, 2007.

/s/ Leon Zazworsky  

Leon Zazworsky  

EX-31.1

Exhibit 31.1

Rule 13a-14(a)/15d-14(a) Certification
(Principal Executive Officer)

I, C. Daniel DeLawder, certify that:

1.	I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2006 of Park National Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)

that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: February 28, 2007	By:	/s/ C. Daniel DeLawder
	Printed Name: C. Daniel DeLawder
	Title:		Chairman of the Board and Chief Executive Officer

EX-31.2

Exhibit 31.2

Rule 13a-14(a)/15d-14(a) Certification
(Principal Financial Officer)

     I, John W. Kozak, certify that:

1.	I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2006 of Park National Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)

that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: February 28, 2007	By:	/s/ John W. Kozak
	Printed Name: John W. Kozak
	Title:		Chief Financial Officer

EX-32

Exhibit 32

SECTION 1350 CERTIFICATION*

     In connection with the Annual Report of Park National Corporation (the “Corporation”) on Form 10-K for the fiscal year ended December 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned C. Daniel DeLawder, Chairman of the Board and Chief Executive Officer of the Corporation, and John W. Kozak, Chief Financial Officer of the Corporation, certify, pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of their knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)	The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of the Corporation and its subsidiaries.

/s/ C. Daniel DeLawder	/s/ John W. Kozak
C. Daniel DeLawder	John W. Kozak
Chairman of the Board and Chief Executive	Chief Financial Officer (Principal
Officer (Principal Executive Officer)	Financial Officer)
Dated: February 28, 2007	Dated: February 28, 2007

* This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Corporation specifically incorporates this certification by reference.

EX-99.1.B

Exhibit 99.1(b)

FIRST AMENDMENT

TO

EMPLOYMENT AGREEMENT

FOR

WILLIAM E. BLACKMON

     This First Amendment to Employment Agreement (this “Amendment”) is entered into this 6th day of February, 2007, by and among Park National Corporation, an Ohio corporation (“Park”); Vision Bank, an Alabama banking corporation (the “Employer” or the “Bank”); and William E. Blackmon (the “Executive”).

WITNESSETH

     WHEREAS, on September 14, 2006, Park, the Bank and the Executive entered into a certain Employment Agreement for William E. Blackmon (the “Agreement”); and

     WHEREAS, Park, the Bank and the Executive desire to amend the Agreement in order to clarify certain of its provisions; and

     WHEREAS, pursuant to Section 18 of the Agreement, the Agreement may be amended by mutual written agreement of the parties;

     NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows, intending to be legally bound hereby:

     1. New Section 20. Park, the Bank and the Executive hereby amend the Agreement by adding new Section 20 to the Agreement to read, in its entirety, as follows:

     20. Regulatory Limits. Notwithstanding anything to the contrary contained in this Agreement, Park, the Employer and the Executive acknowledge and agree that any payments made to the Executive by the Employer pursuant to this Agreement, or otherwise, are subject to and conditioned upon compliance with the provisions of 12 U.S.C. § 1828(k) and Part 359 of the FDIC’s regulations (12 C.F.R. Part 359), which provisions contain certain prohibitions and limitations on the making of “golden parachute” and certain indemnification payments by FDIC-insured depository institutions and their holding companies. In the event any payments to the Executive pursuant to this Agreement are prohibited or limited by the provisions of 12 U.S.C. § 1828(k) and/or Part 359 of the FDIC’s regulations, the Employer will use its commercially reasonable efforts to obtain the consent of the appropriate regulatory authorities to the payment by the Employer to the Executive of the maximum amount that is permitted (up to the amount payable under the terms of this Agreement).

     2. Capitalized Terms. All capitalized terms used and not defined in this Amendment shall have the meanings ascribed to such terms in the Agreement.

     3. No Other Amendment. Except as explicitly set forth in this Amendment, the terms and provisions of the Agreement shall remain in full force and effect in accordance with the terms thereof.

     4. Governing Law. This Amendment will be construed in accordance with, and pursuant to, the laws of the State of Ohio.

     IN WITNESS WHEREOF, the parties have executed this Amendment on the date first written above.

PARK NATIONAL CORPORATION
By:	/s/ C. Daniel DeLawder
Printed Name: C. Daniel DeLawder
Title:	Chairman of the Board and Chief
	Executive Officer
VISION BANK, an Alabama banking
corporation
By:	/s/ Andrew W. Braswell
Printed Name:		Andrew W. Braswell
Title:	EVP/Sr. Credit Officer
EXECUTIVE
By:	/s/ William E. Blackmon
	William E. Blackmon

2

EX-99.2.B

Exhibit 99.2(b)

FIRST AMENDMENT

TO

EMPLOYMENT AGREEMENT

FOR

ANDREW W. BRASWELL

     This First Amendment to Employment Agreement (this “Amendment”) is entered into this 6th day of February, 2007, by and among Park National Corporation, an Ohio corporation (“Park”); Vision Bank, an Alabama banking corporation (the “Employer” or the “Bank”); and Andrew W. Braswell (the “Executive”).

WITNESSETH

     WHEREAS, on September 14, 2006, Park, the Bank and the Executive entered into a certain Employment Agreement for Andrew W. Braswell (the “Agreement”); and

     WHEREAS, Park, the Bank and the Executive desire to amend the Agreement in order to clarify certain of its provisions; and

     WHEREAS, pursuant to Section 18 of the Agreement, the Agreement may be amended by mutual written agreement of the parties;

     NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows, intending to be legally bound hereby:

     1. New Section 20. Park, the Bank and the Executive hereby amend the Agreement by adding new Section 20 to the Agreement to read, in its entirety, as follows:

     20. Regulatory Limits. Notwithstanding anything to the contrary contained in this Agreement, Park, the Employer and the Executive acknowledge and agree that any payments made to the Executive by the Employer pursuant to this Agreement, or otherwise, are subject to and conditioned upon compliance with the provisions of 12 U.S.C. § 1828(k) and Part 359 of the FDIC’s regulations (12 C.F.R. Part 359), which provisions contain certain prohibitions and limitations on the making of “golden parachute” and certain indemnification payments by FDIC-insured depository institutions and their holding companies. In the event any payments to the Executive pursuant to this Agreement are prohibited or limited by the provisions of 12 U.S.C. § 1828(k) and/or Part 359 of the FDIC’s regulations, the Employer will use its commercially reasonable efforts to obtain the consent of the appropriate regulatory authorities to the payment by the Employer to the Executive of the maximum amount that is permitted (up to the amount payable under the terms of this Agreement).

     2. Capitalized Terms. All capitalized terms used and not defined in this Amendment shall have the meanings ascribed to such terms in the Agreement.

     3. No Other Amendment. Except as explicitly set forth in this Amendment, the terms and provisions of the Agreement shall remain in full force and effect in accordance with the terms thereof.

     4. Governing Law. This Amendment will be construed in accordance with, and pursuant to, the laws of the State of Ohio.

     IN WITNESS WHEREOF, the parties have executed this Amendment on the date first written above.

PARK NATIONAL CORPORATION
By:	/s/ C. Daniel DeLawder
Printed Name: C. Daniel DeLawder
Title:		Chairman of the Board and Chief Executive Officer
VISION BANK, an Alabama banking
corporation
By:	/s/ William E. Blackmon
Printed Name: William E. Blackmon
Title:		CFO
EXECUTIVE
By:	/s/ Andrew W. Braswell
	Andrew W. Braswell

2

EX-99.3.B

Exhibit 99.3(b)

FIRST AMENDMENT

TO

EMPLOYMENT AGREEMENT

FOR

JOEY W. GINN

     This First Amendment to Employment Agreement (this “Amendment”) is entered into this 6^th day of February, 2007, by and among Park National Corporation, an Ohio corporation (“Park”); Vision Bank, a Florida banking corporation (the “Employer” or the “Bank”); and Joey W. Ginn (the “Executive”).

WITNESSETH

     WHEREAS, on September 14, 2006, Park, the Bank and the Executive entered into a certain Employment Agreement for Joey W. Ginn (the “Agreement”); and

     WHEREAS, Park, the Bank and the Executive desire to amend the Agreement in order to clarify certain of its provisions; and

     WHEREAS, pursuant to Section 18 of the Agreement, the Agreement may be amended by mutual written agreement of the parties;

     NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows, intending to be legally bound hereby:

     1. New Section 20. Park, the Bank and the Executive hereby amend the Agreement by adding new Section 20 to the Agreement to read, in its entirety, as follows:

     20. Regulatory Limits. Notwithstanding anything to the contrary contained in this Agreement, Park, the Employer and the Executive acknowledge and agree that any payments made to the Executive by the Employer pursuant to this Agreement, or otherwise, are subject to and conditioned upon compliance with the provisions of 12 U.S.C. § 1828(k) and Part 359 of the FDIC’s regulations (12 C.F.R. Part 359), which provisions contain certain prohibitions and limitations on the making of “golden parachute” and certain indemnification payments by FDIC-insured depository institutions and their holding companies. In the event any payments to the Executive pursuant to this Agreement are prohibited or limited by the provisions of 12 U.S.C. § 1828(k) and/or Part 359 of the FDIC’s regulations, the Employer will use its commercially reasonable efforts to obtain the consent of the appropriate regulatory authorities to the payment by the Employer to the Executive of the maximum amount that is permitted (up to the amount payable under the terms of this Agreement).

     2. Capitalized Terms. All capitalized terms used and not defined in this Amendment shall have the meanings ascribed to such terms in the Agreement.

     3. No Other Amendment. Except as explicitly set forth in this Amendment, the terms and provisions of the Agreement shall remain in full force and effect in accordance with the terms thereof.

     4. Governing Law. This Amendment will be construed in accordance with, and pursuant to, the laws of the State of Ohio.

     IN WITNESS WHEREOF, the parties have executed this Amendment on the date first written above.

PARK NATIONAL CORPORATION
By:	/s/ C. Daniel DeLawder
Printed Name:		C. Daniel DeLawder
Title	: Chairman of the Board and Chief
Executive Officer
VISION BANK, a Florida banking
corporation
By:	/s/ J. Daniel Sizemore
Printed Name:			J. Daniel Sizemore
Title	: CEO
EXECUTIVE
By:	/s/ Joey W. Ginn
Joey W. Ginn

2

EX-99.4.B

Exhibit 99.4(b)

FIRST AMENDMENT

TO

EMPLOYMENT AGREEMENT

FOR

ROBERT S. MCKEAN

     This First Amendment to Employment Agreement (this “Amendment”) is entered into this 6th day of February, 2007, by and among Park National Corporation, an Ohio corporation (“Park”); Vision Bank, an Alabama banking corporation (the “Employer” or the “Bank”); and Robert S. McKean (the “Executive”).

WITNESSETH

     WHEREAS, on September 14, 2006, Park, the Bank and the Executive entered into a certain Employment Agreement for Robert S. McKean (the “Agreement”); and

     WHEREAS, Park, the Bank and the Executive desire to amend the Agreement in order to clarify certain of its provisions; and

     WHEREAS, pursuant to Section 18 of the Agreement, the Agreement may be amended by mutual written agreement of the parties;

     NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows, intending to be legally bound hereby:

     1. New Section 20. Park, the Bank and the Executive hereby amend the Agreement by adding new Section 20 to the Agreement to read, in its entirety, as follows:

     20. Regulatory Limits. Notwithstanding anything to the contrary contained in this Agreement, Park, the Employer and the Executive acknowledge and agree that any payments made to the Executive by the Employer pursuant to this Agreement, or otherwise, are subject to and conditioned upon compliance with the provisions of 12 U.S.C. § 1828(k) and Part 359 of the FDIC’s regulations (12 C.F.R. Part 359), which provisions contain certain prohibitions and limitations on the making of “golden parachute” and certain indemnification payments by FDIC-insured depository institutions and their holding companies. In the event any payments to the Executive pursuant to this Agreement are prohibited or limited by the provisions of 12 U.S.C. § 1828(k) and/or Part 359 of the FDIC’s regulations, the Employer will use its commercially reasonable efforts to obtain the consent of the appropriate regulatory authorities to the payment by the Employer to the Executive of the maximum amount that is permitted (up to the amount payable under the terms of this Agreement).

     2. Capitalized Terms. All capitalized terms used and not defined in this Amendment shall have the meanings ascribed to such terms in the Agreement.

     3. No Other Amendment. Except as explicitly set forth in this Amendment, the terms and provisions of the Agreement shall remain in full force and effect in accordance with the terms thereof.

     4. Governing Law. This Amendment will be construed in accordance with, and pursuant to, the laws of the State of Ohio.

     IN WITNESS WHEREOF, the parties have executed this Amendment on the date first written above.

PARK NATIONAL CORPORATION
By:	/s/ C. Daniel DeLawder
Printed Name: C. Daniel DeLawder
Title:		Chairman of the Board and Chief
		Executive Officer
VISION BANK, an Alabama banking
corporation
By:	/s/ William E. Blackmon
Printed Name: William E. Blackmon
Title:		CFO
EXECUTIVE
By:	/s/ Robert S. McKean
	Robert S. McKean

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