EX-99.1 2 exhibit991earningsrelease2.htm EX-99.1 Document

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July 24, 2023                                        Exhibit 99.1

Park National Corporation reports financial results
for second quarter and first half of 2023


NEWARK, Ohio - Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the second quarter and first half of 2023. Park's board of directors declared a quarterly cash dividend of $1.05 per common share, payable on September 8, 2023 to common shareholders of record as of August 18, 2023.

“Amidst a rapidly evolving economy, Park has demonstrated exceptional financial strength, supported by robust capital and liquidity,” said Park Chairman and Chief Executive Officer David L. Trautman. “Our strong capital position allows us to weather uncertainties and offers long-term stability for our stakeholders.”

Park’s net income for the second quarter of 2023 was $31.6 million, an 8.0 percent decrease from $34.3 million for the second quarter of 2022. Second quarter 2023 net income per diluted common share was $1.94, compared to $2.10 for the second quarter of 2022. Park’s net income for the first half of 2023 was $65.3 million, a 10.8 percent decrease from $73.2 million for the first half of 2022. Net income per diluted common share for the first half of 2023 was $4.01, compared to $4.48 for the first half of 2022.

Park’s total loans increased 1.6 percent (6.5 percent annualized) during the second quarter of 2023.

“Our loan growth is a testament to our disciplined approach and consistently conservative and predictable credit culture. It enables Park bankers to uphold our promise to deliver outstanding financial solutions to our customers regardless of the economic environment,” Trautman said.

Park's community-banking subsidiary, The Park National Bank, reported net income of $35.5 million for the second quarter of 2023, a 1.6 percent increase compared to $34.9 million for the same period of 2022. The Park National Bank reported net income of $71.8 million for the first half of 2023, a 6.1 percent decrease compared to $76.4 million for the same period of 2022.

“We recognize our success is closely tied to the success of our customers and communities,” said Matthew R. Miller, Park President. “Our bankers are devoted to providing personal solutions, advice and experiences for customers and prospects, serving as a trusted financial partner, helping them navigate their financial journey.”

Headquartered in Newark, Ohio, Park National Corporation has $9.9 billion in total assets (as of June 30, 2023). Park's banking operations are conducted through its subsidiary The Park National Bank. Other Park subsidiaries are Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance), Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.

Complete financial tables are listed below.
Category: Earnings
Media contact: Ellie Akey, 740.349.5493, ellie.akey@parknationalbank.com
Investor contact: Brady Burt, 740.322.6844, investor@parknationalbank.com
Park National Corporation, 50 N. Third Street, Newark, Ohio 43055





Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com


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

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

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

•Park's ability to execute our business plan successfully and within the expected timeframe as well as our ability to manage strategic initiatives;
•current and future economic and financial market conditions, either nationally or in the states in which Park and our subsidiaries do business, that may reflect deterioration in business and economic conditions, including the effects of higher unemployment rates or labor shortages, the impact of persistent inflation, ongoing interest rate increases, changes in the economy or global supply chain, supply-demand imbalances affecting local real estate prices, U.S. fiscal debt, budget and tax matters, geopolitical matters (including the impact of the Russia-Ukraine conflict and associated sanctions and export controls), and any slowdown in global economic growth, in addition to the continuing impact of the COVID-19 pandemic and recovery therefrom on our customers’ operations and financial condition, any of which may result in adverse impacts on the demand for loan, deposit and other financial services, delinquencies, defaults and counterparties' inability to meet credit and other obligations and the possible impairment of collectability of loans;
•factors that can impact the performance of our loan portfolio, including changes in real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers and the success of construction projects that we finance, including any loans acquired in acquisition transactions;
•the effect of monetary and other fiscal policies (including the impact of money supply, ongoing increasing market interest rate policies and policies impacting inflation, of the Federal Reserve Board, the U.S. Treasury and other governmental agencies) as well as disruption in the liquidity and functioning of U.S. financial markets, may adversely impact prepayment penalty income, mortgage banking income, income from fiduciary activities, the value of securities, deposits and other financial instruments, in addition to the loan demand and the performance of our loan portfolio, and the interest rate sensitivity of our consolidated balance sheet as well as reduce net interest margins;
•changes in the federal, state, or local tax laws may adversely affect the fair values of net deferred tax assets and obligations of state and political subdivisions held in Park's investment securities portfolio and otherwise negatively impact our financial performance;
•the impact of the changes in federal, state and local governmental policy, including the regulatory landscape, capital markets, elevated government debt, potential changes in tax legislation that may increase tax rates, infrastructure spending and social programs;
•changes in laws or requirements imposed by Park's regulators impacting Park's capital actions, including dividend payments and stock repurchases;
•changes in consumer spending, borrowing and saving habits, whether due to changes in retail distribution strategies, consumer preferences and behaviors, changes in business and economic conditions, legislative and regulatory initiatives, or other factors may be different than anticipated;
•changes in customers', suppliers', and other counterparties' performance and creditworthiness, and Park's expectations regarding future credit losses and our allowance for credit losses, may be different than anticipated due to the continuing impact of and the various responses to inflationary pressures;
•Park may have more credit risk and higher credit losses to the extent there are loan concentrations by location or industry of borrowers or collateral;
•the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors;
•the adequacy of our internal controls and risk management program in the event of changes in the market, economic, operational (including those which may result from our associates working remotely), asset/liability repricing, legal, compliance, strategic, cybersecurity, liquidity, credit and interest rate risks associated with Park's business;
•competitive pressures among financial services organizations could increase significantly, including product and pricing pressures (which could in turn impact our credit spreads), changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and Park's ability to attract, develop and retain qualified banking professionals;
•uncertainty regarding the nature, timing, cost and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and our subsidiaries, including major reform of the regulatory oversight structure of the financial services industry and changes in laws and regulations concerning taxes, FDIC insurance premium levels, pensions, bankruptcy, consumer protection, rent regulation and housing, financial accounting and reporting, environmental protection, insurance, bank products and services, bank and bank holding company capital and liquidity standards, fiduciary standards, securities and other aspects of the financial services industry, specifically the reforms provided for in the Coronavirus Aid, Relief and Economic Security (CARES) Act and the follow-up legislation in the Consolidated Appropriations Act, 2021, the American Rescue Plan Act of 2021, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and the Basel III regulatory capital reforms, as well as regulations already adopted and which may be adopted in the future by
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com


the relevant regulatory agencies, including the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve Board, to implement the provisions of the CARES Act and the follow-up legislation in the Consolidated Appropriations Act, 2021, the provisions of the American Rescue Plan Act of 2021, the provisions of the Dodd-Frank Act, and the Basel III regulatory capital reforms;
•Park's ability to meet heightened supervisory requirements and expectations;
•the effect of changes in accounting policies and practices, as may be adopted by the Financial Accounting Standards Board (the "FASB"), the SEC, the Public Company Accounting Oversight Board and other regulatory agencies, may adversely affect Park's reported financial condition or results of operations;
•Park's assumptions and estimates used in applying critical accounting policies and modeling, including under the CECL model, which may prove unreliable, inaccurate or not predictive of actual results;
•the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions;
•Park's ability to anticipate and respond to technological changes and Park's reliance on, and the potential failure of, a number of third-party vendors to perform as expected, including Park's primary core banking system provider, which can impact Park's ability to respond to customer needs and meet competitive demands;
•operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Park and our subsidiaries are highly dependent;
•Park's ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks, including those of Park's third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Park and/or result in Park incurring a financial loss;
•a failure in or breach of Park's operational or security systems or infrastructure, or those of our third-party vendors and other service providers, resulting in failures or disruptions in customer account management, general ledger, deposit, loan, or other systems, including as a result of cyber attacks;
•the impact on Park's business and operating results of any costs associated with obtaining rights in intellectual property claimed by others and of the adequacy of Park's intellectual property protection in general;
•the existence or exacerbation of general geopolitical instability and uncertainty as well as the effect of trade policies (including the impact of potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations, closing of border crossings and changes in the relationship of the U.S. and its global trading partners);
•the impact on financial markets and the economy of any changes in the credit ratings of the U.S. Treasury obligations and other U.S. government-backed debt, as well as issues surrounding the levels of U.S., European and Asian government debt and concerns regarding the growth rates and financial stability of certain sovereign governments, supranationals and financial institutions in Europe and Asia and the risk they may face difficulties servicing their sovereign debt;
•the effect of a fall in stock market prices on Park's asset and wealth management businesses;
•our litigation and regulatory compliance exposure, including the costs and effects of any adverse developments in legal proceedings or other claims, the costs and effects of unfavorable resolution of regulatory and other governmental examinations or other inquiries, and liabilities and business restrictions resulting from litigation and regulatory investigations;
•continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends;
•the impact on Park's business, personnel, facilities or systems of losses related to acts of fraud, scams and schemes of third parties;
•the impact of widespread natural and other disasters, pandemics (including the COVID-19 pandemic), dislocations, regional or national protests and civil unrest (including any resulting branch closures or damages), military or terrorist activities or international hostilities (especially in light of the Russia-Ukraine conflict) on the economy and financial markets generally and on us or our counterparties specifically;
•the potential further deterioration of the U.S. economy due to financial, political, or other shocks;
•the effect of healthcare laws in the U.S. and potential changes for such laws, especially in light of the COVID-19 pandemic, which may increase our healthcare and other costs and negatively impact our operations and financial results;
•risk and uncertainties associated with Park's entry into new geographic markets with our most recent acquisitions, including expected revenue synergies and cost savings from recent acquisitions not being fully realized or realized within the expected time frame;
•uncertainty surrounding the transition from the London Inter-Bank Offered Rate (LIBOR) to an alternate reference rate;
•the impact of larger or similar-sized financial institutions encountering problems, such as the recent closures of Silicon Valley Bank in California, Signature Bank in New York and First Republic Bank in California, which may adversely affect the banking industry and/or Park's business generation and retention, funding and liquidity, including potential increased regulatory requirements and increased reputational risk and potential impacts to macroeconomic conditions;
•Park's continued ability to grow deposits or maintain adequate deposit levels in light of the recent bank failures;
•Unexpected outflows of deposits which may require Park to sell investment securities at a loss;
•and other risk factors relating to the banking industry as detailed from time to time in Park's reports filed with the SEC including those described in "Item 1A. Risk Factors" of Part I of Park's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and in "Item 1.A. Risk Factors" of Part II of Park's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023.

Park does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement was made, or reflect the occurrence of unanticipated events, except to the extent required by law.
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com


PARK NATIONAL CORPORATION
Financial Highlights
As of or for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022     
       
 202320232022 Percent change vs.
(in thousands, except common share and per common share data and ratios)2nd QTR1st QTR2nd QTR 1Q '232Q '22
INCOME STATEMENT:     
Net interest income$91,572 $92,198 $83,939  (0.7) %9.1  %
Provision for credit losses2,492 183 2,991  N.M.(16.7) %
Other income25,015 24,387 31,193  2.6  %(19.8) %
Other expense75,885 76,503 70,048  (0.8) %8.3  %
Income before income taxes$38,210 $39,899 $42,093  (4.2)%(9.2) %
Income taxes6,626 6,166 7,769  7.5 %(14.7) %
Net income$31,584 $33,733 $34,324  (6.4)%(8.0) %
     
MARKET DATA:     
Earnings per common share - basic (a)$1.95 $2.08 $2.11  (6.3)%(7.6)%
Earnings per common share - diluted (a)1.94 2.07 2.10  (6.3)%(7.6)%
Quarterly cash dividend declared per common share1.05 1.05 1.04  — %1.0 %
Book value per common share at period end67.40 66.91 64.62  0.7 %4.3 %
Market price per common share at period end102.32 118.57 121.25  (13.7)%(15.6)%
Market capitalization at period end1,652,818 1,917,759 1,970,228  (13.8)%(16.1)%
    
Weighted average common shares - basic (b)16,165,119 16,242,353 16,249,307  (0.5)%(0.5)%
Weighted average common shares - diluted (b)16,240,600 16,324,823 16,361,246  (0.5)%(0.7)%
Common shares outstanding at period end16,153,425 16,174,067 16,249,306  (0.1)%(0.6)%
    
PERFORMANCE RATIOS: (annualized)   
Return on average assets (a)(b)1.28 %1.36 %1.42  % (5.9) %(9.9) %
Return on average shareholders' equity (a)(b)11.61 %12.54 %12.86  % (7.4) %(9.7) %
Yield on loans5.43 %5.24 %4.57  % 3.6  %18.8  %
Yield on investment securities3.73 %3.60 %2.35  % 3.6  %58.7  %
Yield on money market instruments5.11 %4.70 %0.77  % 8.7  %N.M.
Yield on interest earning assets5.08 %4.89 %4.04  % 3.9  %25.7  %
Cost of interest bearing deposits1.46 %1.15 %0.16  % 27.0  %N.M.
Cost of borrowings3.54 %3.24 %2.50  % 9.3  %41.6  %
Cost of paying interest bearing liabilities1.58 %1.29 %0.33  % 22.5  %N.M.
Net interest margin (g)4.07 %4.08 %3.84  % (0.2) %6.0  %
Efficiency ratio (g)64.58 %65.10 %60.38  % (0.8) %7.0  %
    
OTHER DATA (NON-GAAP) AND BALANCE SHEET INFORMATION:
Tangible book value per common share (d)$57.19 $56.69 $54.39 0.9  %5.1  %
Average interest earning assets9,122,323 9,267,418 8,857,089 (1.6) %3.0  %
Pre-tax, pre-provision net income (k)40,702 40,082 45,084 1.5  %(9.7) %
Note: Explanations for footnotes (a) - (l) are included at the end of the financial tables in the "Financial Reconciliations" section.
      
      
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com

PARK NATIONAL CORPORATION
Financial Highlights (continued)
As of or for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022     
    Percent change vs.
(in thousands, except ratios)June 30, 2023March 31, 2023June 30, 2022 1Q '232Q '22
BALANCE SHEET:    
Investment securities$1,756,953 $1,800,410 $1,920,724  (2.4) %(8.5) %
Commercial loans held for sale— — 6,321 N.M.N.M.
Loans7,208,109 7,093,857 6,958,685  1.6  %3.6  %
Allowance for credit losses87,206 85,946 81,448  1.5  %7.1  %
Goodwill and other intangible assets164,915 165,243 166,252  (0.2) %(0.8) %
Other real estate owned (OREO)2,267 1,468 1,354  54.4  %67.4  %
Total assets9,899,551 9,856,981 9,826,670  0.4  %0.7  %
Total deposits8,358,976 8,294,444 8,297,654  0.8  %0.7  %
Borrowings332,818 360,843 360,234  (7.8) %(7.6) %
Total shareholders' equity1,088,757 1,082,153 1,050,013  0.6  %3.7  %
Tangible equity (d)923,842 916,910 883,761  0.8  %4.5  %
Total nonperforming loans (l)58,229 74,365 64,627  (21.7) %(9.9) %
Total nonperforming loans including commercial loans held for sale (l)58,229 74,365 70,246 (21.7) %(17.1) %
Total nonperforming assets (l)60,496 75,833 71,600  (20.2) %(15.5) %
    
ASSET QUALITY RATIOS:   
Loans as a % of period end total assets72.81 %71.97 %70.81 % 1.2  %2.8  %
Total nonperforming loans as a % of period end loans0.81 %1.05 %0.93 % (22.9) %(12.9) %
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets0.84 %1.07 %1.03 % (21.5) %(18.4) %
Allowance for credit losses as a % of period end loans1.21 %1.21 %1.17 % —  %3.4  %
Net loan charge-offs (recoveries) $1,232 $(1)$404  N.M.205.0  %
Annualized net loan charge-offs (recoveries) as a % of average loans (b)0.07  %—  %0.02  % N.M.250.0  %
    
CAPITAL & LIQUIDITY:   
Total shareholders' equity / Period end total assets11.00  %10.98  %10.69  % 0.2  %2.9  %
Tangible equity (d) / Tangible assets (f)9.49  %9.46  %9.15  % 0.3  %3.7  %
Average shareholders' equity / Average assets (b)11.00  %10.85  %11.06  % 1.4  %(0.5) %
Average shareholders' equity / Average loans (b)15.30  %15.37  %15.65  % (0.5) %(2.2) %
Average loans / Average deposits (b)85.34  %84.04  %84.27  % 1.5  %1.3  %
Note: Explanations for footnotes (a) - (l) are included at the end of the financial tables in the "Financial Reconciliations" section.   

Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com

PARK NATIONAL CORPORATION
Financial Highlights
Six months ended June 30, 2023 and June 30, 2022   
     
 20232022 
(in thousands, except share and per share data)Six months ended June 30Six months ended June 30 Percent change vs '22
INCOME STATEMENT:  
Net interest income$183,770 $161,625  13.7  %
Provision for (recovery of) credit losses2,675 (1,614) N.M
Other income49,402 62,849  (21.4) %
Other expense152,388 137,421  10.9  %
Income before income taxes$78,109 $88,667  (11.9)%
Income taxes12,792 15,468  (17.3)%
Net income$65,317 $73,199  (10.8)%
    
MARKET DATA:   
Earnings per common share - basic (a)$4.03 $4.51  (10.6)%
Earnings per common share - diluted (a)4.01 4.48  (10.5)%
Quarterly cash dividends declared per common share2.10 2.08  1.0 %
   
Weighted average common shares - basic (b)16,203,736 16,234,598  (0.2)%
Weighted average common shares - diluted (b)16,282,693 16,346,141  (0.4)%
   
PERFORMANCE RATIOS:   
Return on average assets (a)(b)1.32 %1.51 % (12.6) %
Return on average shareholders' equity (a)(b)12.07 %13.57 % (11.1) %
Yield on loans5.34 %4.44 % 20.3  %
Yield on investment securities3.67 %2.24 % 63.8  %
Yield on money market instruments4.84 %0.34 % N.M.
Yield on interest earning assets4.99 %3.88 % 28.6  %
Cost of interest bearing deposits1.31 %0.12 % N.M.
Cost of borrowings3.39 %2.42 % 40.1  %
Cost of paying interest bearing liabilities1.44 %0.29 % N.M.
Net interest margin (g)4.07 %3.70 % 10.0  %
Efficiency ratio (g)64.84 %60.76 % 6.7  %
   
ASSET QUALITY RATIOS
Net loan charge-offs$1,231 $135 N.M.
Net loan charge-offs as a % of average loans (b)0.03 %— %N.M.
CAPITAL & LIQUIDITY
Average shareholders' equity / Average assets (b)10.92 %11.16 % (2.2) %
Average shareholders' equity / Average loans (b)15.33 %15.92 %(3.7) %
Average loans / Average deposits (b)84.69 %83.80 %1.1  %
OTHER DATA (NON-GAAP) AND BALANCE SHEET:
Average interest earning assets$9,194,469 $8,907,817  3.2  %
Pre-tax, pre-provision net income (k)80,784 87,053 (7.2) %
Note: Explanations for footnotes (a) - (l) are included at the end of the financial tables in the "Financial Reconciliations" section.
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com


PARK NATIONAL CORPORATION
Consolidated Statements of Income
Three Months EndedSix Months Ended
June 30June 30
(in thousands, except share and per share data)2023202220232022
Interest income:
   Interest and fees on loans$96,428 $77,787 $188,042 $150,203 
   Interest on debt securities:
Taxable13,431 7,624 26,410 13,754 
Tax-exempt2,906 2,676 5,818 5,123 
   Other interest income1,909 260 5,305 413 
         Total interest income114,674 88,347 225,575 169,493 
Interest expense:
   Interest on deposits:
      Demand and savings deposits18,068 1,333 32,280 1,684 
      Time deposits1,966 708 3,313 1,428 
   Interest on borrowings3,068 2,367 6,212 4,756 
      Total interest expense23,102 4,408 41,805 7,868 
         Net interest income91,572 83,939 183,770 161,625 
Provision for (recovery of) credit losses2,492 2,991 2,675 (1,614)
         Net interest income after provision for (recovery of) credit losses89,080 80,948 181,095 163,239 
Other income25,015 31,193 49,402 62,849 
Other expense75,885 70,048 152,388 137,421 
         Income before income taxes38,210 42,093 78,109 88,667 
Income taxes6,626 7,769 12,792 15,468 
         Net income$31,584 $34,324 $65,317 $73,199 
Per common share:
         Net income - basic$1.95 $2.11 $4.03 $4.51 
         Net income - diluted$1.94 $2.10 $4.01 $4.48 
         Weighted average common shares - basic16,165,119 16,249,307 16,203,736 16,234,598 
         Weighted average common shares - diluted16,240,600 16,361,246 16,282,693 16,346,141 
        Cash dividends declared:
Quarterly dividend$1.05 $1.04 $2.10 $2.08 



Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com

 
PARK NATIONAL CORPORATION 
Consolidated Balance Sheets
   
(in thousands, except share data)June 30, 2023December 31, 2022
  
Assets 
  
Cash and due from banks$159,552 $156,750 
Money market instruments70,845 32,978 
Investment securities1,756,953 1,820,787 
Loans7,208,109 7,141,891 
Allowance for credit losses(87,206)(85,379)
Loans, net7,120,903 7,056,512 
Bank premises and equipment, net78,933 82,126 
Goodwill and other intangible assets164,915 165,570 
Other real estate owned2,267 1,354 
Other assets545,183 538,916 
Total assets$9,899,551 $9,854,993 
  
Liabilities and Shareholders' Equity 
  
Deposits:
Noninterest bearing$2,796,009 $3,074,276 
Interest bearing5,562,967 5,160,439 
Total deposits8,358,976 8,234,715 
Borrowings332,818 416,009 
Other liabilities119,000 135,043 
Total liabilities$8,810,794 $8,785,767 
  
  
Shareholders' Equity: 
Preferred shares (200,000 shares authorized; no shares outstanding at June 30, 2023 and December 31, 2022)$— $— 
Common shares (No par value; 20,000,000 shares authorized; 17,623,104 shares issued at June 30, 2023 and December 31, 2022)460,578 462,404 
Accumulated other comprehensive loss, net of taxes(96,786)(102,394)
Retained earnings876,830 847,235 
Treasury shares (1,469,679 shares at June 30, 2023 and 1,359,521 shares at December 31, 2022)(151,865)(138,019)
Total shareholders' equity$1,088,757 $1,069,226 
Total liabilities and shareholders' equity$9,899,551 $9,854,993 


Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com

 
PARK NATIONAL CORPORATION 
Consolidated Average Balance Sheets
   
 Three Months EndedSix Months Ended
 June 30,June 30,
(in thousands)2023202220232022
   
Assets  
   
Cash and due from banks$153,564 $159,095 $154,568 $163,884 
Money market instruments149,745 136,232 220,951 247,549 
Investment securities 1,777,878 1,855,313 1,792,199 1,828,568 
Loans7,132,025 6,841,376 7,115,723 6,835,389 
Allowance for credit losses(87,182)(78,907)(86,996)(81,158)
Loans, net7,044,843 6,762,469 7,028,727 6,754,231 
Bank premises and equipment, net80,592 87,029 81,316 87,879 
Goodwill and other intangible assets165,129 166,516 165,292 166,716 
Other real estate owned1,966 773 1,702 766 
Other assets544,088 511,593 543,198 502,203 
Total assets$9,917,805 $9,679,020 $9,987,953 $9,751,796 
   
   
Liabilities and Shareholders' Equity  
   
Deposits:
Noninterest bearing$2,847,921 $3,097,920 $2,908,857 $3,062,154 
Interest bearing5,509,022 5,020,698 5,492,931 5,095,085 
Total deposits8,356,943 8,118,618 8,401,788 8,157,239 
Borrowings347,191 380,361 370,067 395,806 
Other liabilities122,655 109,548 125,113 110,832 
Total liabilities$8,826,789 $8,608,527 $8,896,968 $8,663,877 
   
Shareholders' Equity:  
Preferred shares$— $— $— $— 
Common shares458,884 459,418 460,713 460,601 
Accumulated other comprehensive loss, net of taxes(91,007)(58,869)(93,609)(30,452)
Retained earnings873,810 809,413 869,567 798,724 
Treasury shares(150,671)(139,469)(145,686)(140,954)
Total shareholders' equity$1,091,016 $1,070,493 $1,090,985 $1,087,919 
Total liabilities and shareholders' equity$9,917,805 $9,679,020 $9,987,953 $9,751,796 



Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com

 
PARK NATIONAL CORPORATION 
Consolidated Statements of Income - Linked Quarters
    
 20232023202220222022
(in thousands, except per share data)2nd QTR1st QTR4th QTR3rd QTR2nd QTR
  
Interest income: 
Interest and fees on loans $96,428 $91,614 $89,382 $83,522 $77,787 
Interest on debt securities:
Taxable13,431 12,979 11,974 10,319 7,624 
Tax-exempt2,906 2,912 2,918 2,923 2,676 
Other interest income1,909 3,396 4,536 3,180 260 
Total interest income114,674 110,901 108,810 99,944 88,347 
  
Interest expense: 
Interest on deposits:
Demand and savings deposits18,068 14,212 10,205 5,757 1,333 
Time deposits1,966 1,347 1,061 825 708 
Interest on borrowings3,068 3,144 2,938 2,534 2,367 
Total interest expense23,102 18,703 14,204 9,116 4,408 
  
Net interest income91,572 92,198 94,606 90,828 83,939 
  
Provision for credit losses2,492 183 2,981 3,190 2,991 
  
Net interest income after provision for credit losses89,080 92,015 91,625 87,638 80,948 
  
Other income25,015 24,387 26,392 46,694 31,193 
Other expense75,885 76,503 77,654 82,903 70,048 
  
Income before income taxes38,210 39,899 40,363 51,429 42,093 
  
Income taxes6,626 6,166 7,279 9,361 7,769 
 
Net income $31,584 $33,733 $33,084 $42,068 $34,324 
  
Per common share:
Net income - basic$1.95 $2.08 $2.03 $2.59 $2.11 
Net income - diluted$1.94 $2.07 $2.02 $2.57 $2.10 




Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com

 
PARK NATIONAL CORPORATION 
Detail of other income and other expense - Linked Quarters
    
 20232023202220222022
(in thousands)2nd QTR1st QTR4th QTR3rd QTR2nd QTR
 
Other income:
Income from fiduciary activities$8,816 $8,615 $8,219 $8,216 $8,859 
Service charges on deposit accounts2,041 2,241 2,595 2,859 2,563 
Other service income2,639 2,697 2,580 2,956 4,940 
Debit card fee income6,830 6,457 6,675 6,514 6,731 
Bank owned life insurance income1,332 1,185 1,366 1,185 2,374 
ATM fees553 533 548 610 583 
Gain (loss) on the sale of OREO, net12 (9)— 5,607 4 
OREO valuation markup— 15 — 12,009 — 
Gain (loss) on equity securities, net25 (405)(165)58 709 
Other components of net periodic benefit income1,893 1,893 3,027 3,027 3,027 
Miscellaneous874 1,165 1,547 3,653 1,403 
Total other income$25,015 $24,387 $26,392 $46,694 $31,193 
 
Other expense:
Salaries$33,649 $34,871 $33,837 $37,889 $31,052 
Employee benefits10,538 10,816 9,895 9,897 10,199 
Occupancy expense3,214 3,353 4,157 3,455 3,040 
Furniture and equipment expense3,103 3,246 3,118 2,912 2,934 
Data processing fees9,582 8,750 8,537 8,170 8,416 
Professional fees and services7,365 7,221 9,845 8,359 6,775 
Marketing1,239 1,319 1,404 1,595 1,019 
Insurance1,960 1,814 1,526 1,237 1,245 
Communication1,045 1,037 968 1,098 935 
State tax expense1,096 1,278 1,040 1,186 1,167 
Amortization of intangible assets328 327 341 341 403 
Foundation contributions— — — 4,000 — 
Miscellaneous2,766 2,471 2,986 2,764 2,863 
Total other expense$75,885 $76,503 $77,654 $82,903 $70,048 



Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com


PARK NATIONAL CORPORATION 
Asset Quality Information
 
 Year ended December 31,
(in thousands, except ratios)June 30, 2023March 31, 20232022202120202019
 
Allowance for credit losses:
Allowance for credit losses, beginning of period$85,946 $85,379 $83,197 $85,675 $56,679 $51,512 
Cumulative change in accounting principle; adoption of ASU 2022-02 in 2023 and ASU 2016-13 in 2021— 383 — 6,090 — — 
Charge-offs2,685 2,235 9,133 5,093 10,304 11,177 
Recoveries1,453 2,236 6,758 8,441 27,246 10,173 
Net charge-offs (recoveries) 1,232 (1)2,375 (3,348)(16,942)1,004 
Provision for (recovery of) credit losses2,492 183 4,557 (11,916)12,054 6,171 
Allowance for credit losses, end of period$87,206 $85,946 $85,379 $83,197 $85,675 $56,679 
General reserve trends:
Allowance for credit losses, end of period$87,206 $85,946 $85,379 $83,197 $85,675 $56,679 
Allowance on purchased credit deteriorated ("PCD") loans (purchased credit impaired ("PCI") loans for years 2020 and prior)— — — — 167 268 
Allowance on purchased loans excluded from collectively evaluated loans (for years 2020 and prior)N.A.N.A.N.A.N.A.678 — 
Specific reserves on individually evaluated loans4,132 4,318 3,566 1,616 5,434 5,230 
General reserves on collectively evaluated loans$83,074 $81,628 $81,813 $81,581 $79,396 $51,181 
 
Total loans$7,208,109 $7,093,857 $7,141,891 $6,871,122 $7,177,785 $6,501,404 
PCD loans (PCI loans for years 2020 and prior)4,455 4,555 4,653 7,149 11,153 14,331 
Purchased loans excluded from collectively evaluated loans (for years 2020 and prior)N.A.N.A.N.A.N.A.360,056 548,436 
Individually evaluated loans (l)43,887 59,384 78,341 74,502 108,407 77,459 
Collectively evaluated loans$7,159,767 $7,029,918 $7,058,897 $6,789,471 $6,698,169 $5,861,178 
 
Asset Quality Ratios:
Net charge-offs (recoveries) as a % of average loans0.07  %—  %0.03  %(0.05) %(0.24) %0.02  %
Allowance for credit losses as a % of period end loans 1.21  %1.21  %1.20  %1.21  %1.19  %0.87  %
Allowance for credit losses as a % of period end loans (excluding PPP loans) (j)1.21 %1.21 %1.20 %1.22 %1.25 %N.A.
General reserve as a % of collectively evaluated loans 1.16  %1.16  %1.16  %1.20  %1.19  %0.87  %
General reserves as a % of collectively evaluated loans (excluding PPP loans) (j)1.16 %1.16 %1.16 %1.21 %1.24 %N.A.
 
Nonperforming assets:
Nonaccrual loans$57,279 $73,114 $79,696 $72,722 $117,368 $90,080 
Accruing troubled debt restructurings (for years 2022 and prior) (l)N.A.N.A.20,134 28,323 20,788 21,215 
Loans past due 90 days or more950 1,251 1,281 1,607 1,458 2,658 
Total nonperforming loans$58,229 $74,365 $101,111 $102,652 $139,614 $113,953 
Other real estate owned - Park National Bank913 114 — 181 837 3,100 
Other real estate owned - SEPH1,354 1,354 1,354 594 594 929 
Other nonperforming assets - Park National Bank— — — 2,750 3,164 3,599 
Total nonperforming assets$60,496 $75,833 $102,465 $106,177 $144,209 $121,581 
Percentage of nonaccrual loans to period end loans0.79  %1.03  %1.12  %1.06  %1.64  %1.39  %
Percentage of nonperforming loans to period end loans0.81  %1.05  %1.42  %1.49  %1.95  %1.75  %
Percentage of nonperforming assets to period end loans0.84  %1.07  %1.43  %1.55  %2.01  %1.87  %
Percentage of nonperforming assets to period end total assets0.61  %0.77  %1.04  %1.11  %1.55  %1.42  %
Note: Explanations for footnotes (a) - (l) are included at the end of the financial tables in the "Financial Reconciliations" section.
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com

PARK NATIONAL CORPORATION 
Asset Quality Information (continued)
 
 Year ended December 31,
(in thousands, except ratios)June 30, 2023March 31, 20232022202120202019
 
New nonaccrual loan information:
Nonaccrual loans, beginning of period$73,114 $79,696 $72,722 $117,368 $90,080 $67,954 
New nonaccrual loans10,940 9,207 64,918 38,478 103,386 81,009 
Resolved nonaccrual loans26,775 15,789 57,944 83,124 76,098 58,883 
Nonaccrual loans, end of period$57,279 $73,114 $79,696 $72,722 $117,368 $90,080 
 
Individually evaluated commercial loan portfolio information (period end): (l)
Unpaid principal balance$45,955 $60,922 $80,116 $75,126 $109,062 $78,178 
Prior charge-offs2,068 1,538 1,775 624 655 719 
Remaining principal balance43,887 59,384 78,341 74,502 108,407 77,459 
Specific reserves4,132 4,318 3,566 1,616 5,434 5,230 
Book value, after specific reserves$39,755 $55,066 $74,775 $72,886 $102,973 $72,229 
Note: Explanations for footnotes (a) - (l) are included at the end of the financial tables in the "Financial Reconciliations" section.

Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com


PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS
THREE MONTHS ENDEDSIX MONTHS ENDED
(in thousands, except share and per share data)June 30, 2023March 31, 2023June 30, 2022June 30, 2023June 30, 2022
Net interest income$91,572 $92,198 $83,939 $183,770 $161,625 
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions164 200 547 364 1,027 
less interest income on former Vision Bank relationships13 574 2,305 587 2,347 
Net interest income - adjusted$91,395 $91,424 $81,087 $182,819 $158,251 
Provision for (recovery of) credit losses$2,492 $183 $2,991 $2,675 $(1,614)
less recoveries on former Vision Bank relationships(25)(723)(506)(748)(507)
Provision for (recovery of) credit losses - adjusted$2,517 $906 $3,497 $3,423 $(1,107)
Other income$25,015 $24,387 $31,193 $49,402 $62,849 
less other service income related to former Vision Bank relationships— 135 500 135 500 
Other income - adjusted$25,015 $24,252 $30,693 $49,267 $62,349 
Other expense$75,885 $76,503 $70,048 $152,388 $137,421 
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions328 327 403 655 805 
less direct expenses related to collection of payments on former Vision Bank loan relationships— 100 366 100 366 
Other expense - adjusted$75,557 $76,076 $69,279 $151,633 $136,250 
Tax effect of adjustments to net income identified above (i)$26 $(253)$(649)$(227)$(674)
Net income - reported$31,584 $33,733 $34,324 $65,317 $73,199 
Net income - adjusted (h)$31,684 $32,781 $31,884 $64,465 $70,663 
Diluted earnings per common share$1.94 $2.07 $2.10 $4.01 $4.48 
Diluted earnings per common share, adjusted (h)$1.95 $2.01 $1.95 $3.96 $4.32 
Annualized return on average assets (a)(b)1.28 %1.36 %1.42 %1.32 %1.51 %
Annualized return on average assets, adjusted (a)(b)(h)
1.28 %1.32 %1.32 %1.30 %1.46 %
Annualized return on average tangible assets (a)(b)(e)1.30 %1.38 %1.45 %1.34 %1.54 %
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)1.30 %1.34 %1.34 %1.32 %1.49 %
Annualized return on average shareholders' equity (a)(b)11.61 %12.54 %12.86 %12.07 %13.57 %
Annualized return on average shareholders' equity, adjusted (a)(b)(h)11.65 %12.19 %11.95 %11.92 %13.10 %
Annualized return on average tangible equity (a)(b)(c)13.68 %14.78 %15.23 %14.23 %16.02 %
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)13.73 %14.36 %14.15 %14.04 %15.47 %
Efficiency ratio (g)64.58 %65.10 %60.38 %64.84 %60.76 %
Efficiency ratio, adjusted (g)(h)64.40 %65.24 %61.50 %64.82 %61.29 %
Annualized net interest margin (g)4.07 %4.08 %3.84 %4.07 %3.70 %
Annualized net interest margin, adjusted (g)(h)4.06 %4.04 %3.71 %4.05 %3.62 %
Note: Explanations for footnotes (a) - (l) are included at the end of the financial tables in the "Financial Reconciliations" section.
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com


PARK NATIONAL CORPORATION
Financial Reconciliations (continued)
(a) Reported measure uses net income
(b) Averages are for the three months ended June 30, 2023, March 31, 2023, and June 30, 2022 and the six months ended June 30, 2023 and June 30, 2022, as appropriate
(c) Net income for each period divided by average tangible equity during the period. Average tangible equity equals average shareholders' equity during the applicable period less average goodwill and other intangible assets during the applicable period.
RECONCILIATION OF AVERAGE SHAREHOLDERS' EQUITY TO AVERAGE TANGIBLE EQUITY:
 THREE MONTHS ENDEDSIX MONTHS ENDED
 June 30, 2023March 31, 2023June 30, 2022June 30, 2023June 30, 2022
AVERAGE SHAREHOLDERS' EQUITY$1,091,016 $1,090,952 $1,070,493 $1,090,985 $1,087,919 
Less: Average goodwill and other intangible assets165,129 165,457 166,516 165,292 166,716 
AVERAGE TANGIBLE EQUITY$925,887 $925,495 $903,977 $925,693 $921,203 
(d) Tangible equity divided by common shares outstanding at period end. Tangible equity equals total shareholders' equity less goodwill and other intangible assets, in each case at the end of the period.
RECONCILIATION OF TOTAL SHAREHOLDERS' EQUITY TO TANGIBLE EQUITY:
 June 30, 2023March 31, 2023June 30, 2022
TOTAL SHAREHOLDERS' EQUITY$1,088,757 $1,082,153 $1,050,013 
Less: Goodwill and other intangible assets164,915 165,243 166,252 
TANGIBLE EQUITY$923,842 $916,910 $883,761 
    
(e) Net income for each period divided by average tangible assets during the period. Average tangible assets equal average assets less average goodwill and other intangible assets, in each case during the applicable period.
RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS
 THREE MONTHS ENDEDSIX MONTHS ENDED
 June 30, 2023March 31, 2023June 30, 2022June 30, 2023June 30, 2022
AVERAGE ASSETS$9,917,805 $10,058,880 $9,679,020 $9,987,953 $9,751,796 
Less: Average goodwill and other intangible assets165,129 165,457 166,516 165,292 166,716 
AVERAGE TANGIBLE ASSETS$9,752,676 $9,893,423 $9,512,504 $9,822,661 $9,585,080 
(f) Tangible equity divided by tangible assets. Tangible assets equal total assets less goodwill and other intangible assets, in each case at the end of the period.
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:
 June 30, 2023March 31, 2023June 30, 2022
TOTAL ASSETS$9,899,551 $9,856,981 $9,826,670 
Less: Goodwill and other intangible assets164,915 165,243 166,252 
TANGIBLE ASSETS$9,734,636 $9,691,738 $9,660,418 
    
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com

PARK NATIONAL CORPORATION
Financial Reconciliations (continued)
(g) Efficiency ratio is calculated by dividing total other expense by the sum of fully taxable equivalent net interest income and other income. Fully taxable equivalent net interest income reconciliation is shown assuming a 21% corporate federal income tax rate. Additionally, net interest margin is calculated on a fully taxable equivalent basis by dividing fully taxable equivalent net interest income by average interest earning assets, in each case during the applicable period.
RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
 THREE MONTHS ENDEDSIX MONTHS ENDED
 June 30, 2023March 31, 2023June 30, 2022June 30, 2023June 30, 2022
Interest income$114,674 $110,901 $88,347 $225,575 $169,493 
Fully taxable equivalent adjustment920 926 872 1,846 1,691 
Fully taxable equivalent interest income$115,594 $111,827 $89,219 $227,421 $171,184 
Interest expense23,102 18,703 4,408 41,805 7,868 
Fully taxable equivalent net interest income$92,492 $93,124 $84,811 $185,616 $163,316 
(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, provision for (recovery of) credit losses, other income, other expense and tax effect of adjustments to net income.
(i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate.
(j) Excludes $3.1 million of PPP loans and $3,000 in related allowance at June 30, 2023, $3.4 million of PPP loans and $3,000 in related allowance at March 31, 2023, $4.2 million of PPP loans and $4,000 in related allowance at December 31, 2022, $74.4 million of PPP loans and $77,000 in related allowance at December 31, 2021 and $331.6 million of PPP loans and $337,000 in related allowance at December 31, 2020.
(k) Pre-tax, pre-provision ("PTPP") net income is calculated as net income, plus income taxes, plus the provision for (recovery of) credit losses, in each case during the applicable period. PTPP net income is a common industry metric utilized in capital analysis and review. PTPP is used to assess the operating performance of Park while excluding the impact of the provision for (recovery of) credit losses.
RECONCILIATION OF PRE-TAX, PRE-PROVISION NET INCOME
THREE MONTHS ENDEDSIX MONTHS ENDED
June 30, 2023March 31, 2023June 30, 2022June 30, 2023June 30, 2022
Net income$31,584 $33,733 $34,324 $65,317 $73,199 
Plus: Income taxes6,626 6,166 7,769 12,792 15,468 
Plus: Provision for (recovery of) credit losses2,492 183 2,991 2,675 (1,614)
Pre-tax, pre-provision net income$40,702 $40,082 $45,084 $80,784 $87,053 
(l) Effective January 1, 2023, Park adopted Accounting Standards Update ("ASU") 2022-02. Among other things, this ASU eliminated the concept of troubled debt restructurings ("TDRs"). As a result of the adoption of this ASU and elimination of the concept of TDRs, total nonperforming loans ("NPLs") and total nonperforming assets ("NPAs") each decreased by $20.1 million effective January 1, 2023. Additionally, as a result of the adoption of this ASU, individually evaluated loans decreased by $11.5 million effective January 1, 2023.
Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com