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Park National Corporation Reports Financial Results for Third Quarter 2012

Park National Corporation Reports Financial Results for Third Quarter 2012

NEWARK, Ohio, Oct. 29, 2012 (GLOBE NEWSWIRE) -- Park National Corporation
(Park) (NYSE:PRK) today reported financial results for the three-month (third
quarter) and nine-month periods ended September 30, 2012.

Net income for the first nine months of 2012 was $62.3 million, a 12.8 percent
decline from the $71.5 million in net income for the same period in 2011. Net
income per diluted common share was $3.82, a 12.4 percent decrease from the
$4.36 net income per diluted common share reported for the first nine months
of 2011.

Net income for the third quarter of 2012 was $12.0 million, a 41.2 percent
decline from the $20.4 million in net income for the same period in 2011. Net
income per diluted common share was $0.78, a 36.6 percent decrease from the
$1.23 net income per diluted common share reported in the third quarter of
2011.

Net income for the third quarter and first nine months of 2011 included
pre-tax gains of $3.5 million and $25.5 million, respectively, from the sale
of investment securities. Net income for the first nine months of 2012 also
included a pre-tax gain of $22.2 million from the sale of substantially all of
the performing loans, operating assets and the liabilities of Vision Bank,
which closed on February 16, 2012. Excluding securities gains in 2011 and the
gain from the sale of the Vision Bank business in 2012, net income for the
nine months ended September 30, 2012 and 2011 would have been $47.9 million
and $55.0 million, respectively.

The Park National Bank Results

Park's community-banking subsidiary in Ohio, The Park National Bank (PNB),
reported net income of $22.1 million for the third quarter of 2012, compared
to net income of $24.5 million ($22.3 million, excluding the gain on sale of
securities) for the same period in 2011. PNB reported net income of $67.1
million for the first nine months of 2012, compared to net income of $87.8
million ($72.4 million, excluding the gain on sale of securities) for the same
period in 2011. The Park National Bank had total assets of $6.6 billion at
September 30, 2012, compared to $6.3 billion at September 30, 2011. This
performance generated a return on average assets of 1.37 percent and 1.81
percent (1.49 percent, excluding the gain on sale of securities) for The Park
National Bank in the first nine months of 2012 and 2011, respectively.

"We are proud of our performance in Ohio. The dedicated associates of our
affiliates continue to do extraordinary work – serving customers, lending
money, helping with deposit services and wealth management, all of which
provide personalized financial solutions for our clients," said Park Chairman
C. Daniel DeLawder.

According to DeLawder, the extremely low interest rate environment continues
to be a major factor fueling Park's mortgage loan volume and customer base
expansion. The bank originated $536.4 million of mortgage loans through the
nine months ended September 30, 2012, a 50 percent increase in origination
volume compared to $357.5 million through the same period in 2011. "We welcome
the opportunity to serve people who have not dealt with a strong community
bank before and to expand our relationships with our current clients," he
said.

Headquartered in Newark, Ohio, Park National Corporation has $6.8 billion in
total assets (as of September 30, 2012). Park consists of 11 community bank
divisions, a non-bank subsidiary and two specialty finance companies. Park's
Ohio-based banking operations are conducted through Park subsidiary The Park
National Bank and its divisions which include Fairfield National Bank
Division, Richland Bank Division, Century National Bank Division, First-Knox
National Bank Division, Farmers & Savings Bank Division, United Bank Division,
Second National Bank Division, Security National Bank Division, Unity National
Bank Division, The Park National Bank of Southwest Ohio & Northern Kentucky
Division and Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance). Park also
includes Guardian Financial Services Company (d.b.a. Guardian Finance Company)
and SE Property Holdings, LLC.

Complete financial tables are listed below...

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

Park cautions that any forward-looking statements contained in this 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: deterioration in the asset value of Park's loan portfolio
may be worse than expected due to a number of factors, such as adverse changes
in economic conditions that impair the ability of borrowers to repay their
loans, the underlying value of the collateral could prove less valuable than
assumed and cash flows may be worse than expected; Park's ability to sell OREO
properties at prices as favorable as anticipated; Park's ability to execute
its business plan successfully and within the expected timeframe; general
economic and financial market conditions, and weakening in the economy,
specifically the real estate market and the credit market, either nationally
or in the states in which Park and its subsidiaries do business, may be worse
than expected which could decrease the demand for loan, deposit and other
financial services and increase loan delinquencies and defaults; changes in
interest rates and prices may adversely impact the value of securities, loans,
deposits and other financial instruments and the interest rate sensitivity of
our consolidated balance sheet; changes in consumer spending, borrowing and
saving habits; changes in unemployment; asset/liability repricing risks and
liquidity risks; our liquidity requirements could be adversely affected by
changes in our assets and liabilities; competitive factors among financial
service organizations increase significantly, including product and pricing
pressures and our ability to attract, develop and retain qualified bank
professionals; the nature, timing and effect of changes in banking regulations
or other regulatory or legislative requirements affecting the respective
businesses of Park and its subsidiaries, including changes in laws and
regulations concerning taxes, accounting, banking, securities and other
aspects of the financial services industry, specifically the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), as
well as future regulations which will be adopted by the relevant regulatory
agencies, including the Consumer Financial Protection Bureau, to implement the
Dodd-Frank Act's provisions; the effect of changes in accounting policies and
practices, as may be adopted by the Financial Accounting Standards Board, the
SEC, the Public Company Accounting Oversight Board and other regulatory
agencies, and the accuracy of our assumptions and estimates used to prepare
our financial statements; the effect of fiscal and governmental policies of
the United States federal government; adequacy of our risk management program;
a failure in or breach of our operational or security systems or
infrastructure, or those of our third-party vendors and other service
providers, including as a result of cyber attacks; demand for loans in the
respective market areas served by Park and its subsidiaries; and other risk
factors relating to the banking industry as detailed from time to time in
Park's reports filed with the Securities and Exchange Commission 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, 2011 and in "Item 1A. Risk
Factors" of Part II of Park's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2012. 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 NATIONAL                                                     
CORPORATION
Financial Highlights                                              
Three months ended
September 30, 2012,                                               
June 30, 2012, and
September 30, 2011
                                                                 
                     2012          2012        2011        Percent change vs.
(in thousands, except
share and per share   3rd QTR       2nd QTR     3rd QTR     2Q '12    3Q '11
data)
INCOME STATEMENT:                                                 
Net interest income   $ 58,016      $ 58,680    $ 67,620    (1.1)%    (14.2)%
Provision for loan    16,655        5,238       16,438      218.0%    1.3%
losses
Other income          18,079        17,508      18,027      3.3%      0.3%
Gain on sale of       —             —           3,465       N.M.      N.M.
securities
Total other expense   45,683        45,804      45,599      (0.3)%    0.2%
Income before income  $ 13,757      $ 25,146    $ 27,075    (45.3)%   (49.2)%
taxes
Income taxes          1,775         6,260       6,694       (71.6)%   (73.5)%
Net income            $ 11,982      $ 18,886    $ 20,381    (36.6)%   (41.2)%
Preferred stock
dividends and         —             1,948       1,464       (100.0)%  (100.0)%
accretion
Net income available
to common             $ 11,982      $ 16,938    $ 18,917    (29.3)%   (36.7)%
shareholders
                                                                 
MARKET DATA:                                                      
Earnings per common   $ 0.78        $ 1.10      $ 1.23      (29.1)%   (36.6)%
share - basic (b)
Earnings per common   0.78          1.10        1.23        (29.1)%   (36.6)%
share - diluted (b)
Cash dividends per    0.94          0.94        0.94        —%        —%
common share
Common book value per
common share at       42.78         42.88       42.67       (0.2)%    0.3%
period end
Stock price per
common share at       70.02         69.75       52.88       0.4%      32.4%
period end
Market capitalization 1,078,720     1,074,561   814,294     0.4%      32.5%
at period end
                                                                 
Weighted average
common shares - basic 15,405,894    15,405,902  15,398,909  —%        —%
(a)
Weighted average
common shares -       15,405,894    15,405,902  15,398,909  —%        —%
diluted (a)
Common shares
outstanding at period 15,405,887    15,405,898  15,398,904  —%        —%
end
                                                                 
PERFORMANCE RATIOS:                                               
(annualized)
Return on average     0.70%         1.01%       1.04%       (30.7)%   (32.7)%
assets (a)(b)
Return on average     7.19%         10.33%      11.51%      (30.4)%   (37.5)%
common equity (a)(b)
Yield on loans        5.31%         5.36%       5.59%       (0.9)%    (5.0)%
Yield on investments  3.04%         3.30%       3.58%       (7.9)%    (15.1)%
Yield on money        0.25%         0.25%       0.24%       —%        4.2%
markets
Yield on earning      4.56%         4.71%       4.95%       (3.2)%    (7.9)%
assets
Cost of interest      0.46%         0.51%       0.63%       (9.8)%    (27.0)%
bearing deposits
Cost of borrowings    2.79%         2.81%       2.69%       (0.7)%    3.7%
Cost of paying        1.00%         1.05%       1.07%       (4.8)%    (6.5)%
liabilities
Net interest margin   3.75%         3.87%       4.09%       (3.1)%    (8.3)%
Efficiency ratio (g)  59.71%        59.80%      52.95%      (0.2)%    12.8%
                                                                 
OTHER RATIOS (NON                                                 
GAAP):
Annualized return on
average tangible      0.71%         1.03%       1.05%       (31.1)%   (32.4)%
assets (a)(b)(e)
Annualized return on
average tangible      8.07%         11.62%      13.05%      (30.6)%   (38.2)%
common equity
(a)(b)(c)
Tangible common book
value per common      $ 38.06       $ 38.15     $ 37.71     (0.2)%    0.9%
share (d)
                                                                 
                                                                 
PARK NATIONAL                                                     
CORPORATION
Financial Highlights                                              
Three months ended
September 30, 2012,                                               
June 30, 2012, and
September 30, 2011
                                                          
                                                          Percent change vs.
BALANCE SHEET:        September 30, June 30,    September   2Q '12    3Q '11
                      2012          2012        30, 2011
                                                                 
Investment securities $ 1,653,381   $ 1,688,654 $ 1,708,631 (2.1)%    (3.2)%
Loans                 4,400,510     4,386,851   4,680,575   0.3%      (6.0)%
Allowance for loan    55,565        58,696      107,310     (5.3)%    (48.2)%
losses
Goodwill and other    72,810        72,949      76,370      (0.2)%    (4.7)%
intangibles
Other real estate     35,633        38,424      46,911      (7.3)%    (24.0)%
owned
Total assets          6,752,938     6,705,574   7,095,098   0.7%      (4.8)%
Total deposits        4,793,077     4,822,975   5,089,187   (0.6)%    (5.8)%
Borrowings            1,187,431     1,152,139   1,142,043   3.1%      4.0%
Stockholders' equity  659,127       660,623     755,053     (0.2)%    (12.7)%
Common equity         659,127       660,623     657,121     (0.2)%    0.3%
Tangible common       586,317       587,674     580,751     (0.2)%    1.0%
equity (d)
Nonperforming loans   191,432       207,631     229,814     (7.8)%    (16.7)%
Nonperforming assets  227,065       246,055     276,725     (7.7)%    (17.9)%
Past due 90 day loans 2,076         1,870       2,162       11.0%     (4.0)%
and still accruing
                                                                 
ASSET QUALITY RATIOS:                                             
Loans as a % of       65.16%        65.42%      65.97%      (0.4)%    (1.2)%
period end assets
Nonperforming loans
as a % of period end  4.35%         4.73%       4.91%       (8.0)%    (11.4)%
loans
Past due 90 day loans
as a % of period end  0.05%         0.04%       0.05%       25.0%     —%
loans
Nonperforming assets
/ Period end loans +  5.12%         5.56%       5.85%       (7.9)%    (12.5)%
OREO
Allowance for loan
losses as a % of      1.26%         1.34%       2.29%       (6.0)%    (45.0)%
period end loans
Net loan charge-offs  $ 19,786      $ 6,469     $ 29,302    205.9%    (32.5)%
Annualized net loan
charge-offs as a % of 1.79%         0.6%        2.48%       198.3%    (27.8)%
average loans (a)
                                                                 
CAPITAL & LIQUIDITY:                                              
Total equity / Period 9.76%         9.85%       10.64%      (0.9)%    (8.3)%
end assets
Common equity /       9.76%         9.85%       9.26%       (0.9)%    5.4%
Period end assets
Tangible common
equity (d) / Tangible 8.78%         8.86%       8.27%       (0.9)%    6.2%
assets (f)
Average equity /      9.80%         10.21%      10.42%      (4.0)%    (6.0)%
Average assets (a)
Average equity /      15.10%        15.74%      15.98%      (4.1)%    (5.5)%
Average loans (a)
Average loans /       90.46%        90.83%      90.32%      (0.4)%    0.2%
Average deposits (a)
                                                                 
N.M. - Not meaningful                                             

                                                         
PARK NATIONAL CORPORATION                                 
Financial Highlights                                      
Nine months ended September                               
30, 2012 and 2011
                             2012           2011           Percent change vs.
(in thousands, except share                               3Q '11
and per share data)
INCOME STATEMENT:                                         
Net interest income           $ 178,424      $ 206,955      (13.8)%
Provision for loan losses     30,231         43,054         (29.8)%
Gain on sale of Vision Bank   22,167         —              N.M.
Other income                  53,040         48,195         10.1%
Gain on sale of securities    —              25,462         N.M.
Total other expense           139,957        138,952        0.7%
Income before income taxes    $ 83,443       $ 98,606       (15.4)%
Income taxes                  21,100         27,076         (22.1)%
Net income                    $ 62,343       $ 71,530       (12.8)%
Preferred stock dividends and 3,425          4,392          (22.0)%
accretion
Net income available to       $ 58,918       $ 67,138       (12.2)%
common shareholders
                                                         
MARKET DATA:                                              
Earnings per common share -   $ 3.82         $ 4.36         (12.4)%
basic (b)
Earnings per common share -   3.82           4.36           (12.4)%
diluted (b)
Cash dividends per common     2.82           2.82           —%
share
                                                         
Weighted average common       15,405,902     15,398,919     —%
shares - basic (a)
Weighted average common       15,409,186     15,400,641     0.1%
shares - diluted (a)
                                                         
PERFORMANCE RATIOS:                                       
(Annualized)
                                                         
Return on average assets      1.16%          1.24%          (6.5)%
(a)(b)
                                                         
Return on average common      11.95%         13.96%         (14.4)%
equity (a)(b)
                                                         
Yield on loans                5.40%          5.61%          (3.7)%
Yield on investments          3.23%          3.82%          (15.4)%
Yield on earning assets       4.69%          5.06%          (7.3)%
Cost of interest bearing      0.51%          0.68%          (25.0)%
deposits
Cost of borrowings            2.77%          2.61%          6.1
Cost of paying liabilities    1.03%          1.10%          (6.4)%
Net interest margin (g)       3.86%          4.16%          (7.2)%
Efficiency ratio (g)          54.91%         54.14%         1.4%
                                                         
ASSET QUALITY RATIOS:                                     
Net loan charge-offs          $ 43,110       $ 79,320       (45.7)%
Annualized net loan
charge-offs as a % of average 1.31%          2.24%          (41.5)%
loans (a)
                                                         
CAPITAL & LIQUIDITY:                                      
Average equity / Average      10.30%         10.22%         0.8%
assets (a)
Average equity / Average      15.86%         15.67%         1.2%
loans (a)
Average loans / Average       90.70%         90.39%         0.3%
deposits (a)
                                                         
OTHER RATIOS (NON GAAP):                                  
Annualized return on average  1.17%          1.25%          (6.4)%
tangible assets (a)(b)(e)
Annualized return on average
tangible common equity        13.45%         15.88%         (15.3)%
(a)(b)(c)
                                                         
(a) Averages are for the quarters or nine months ended September 30, 2012 and
September 30, 2011, as appropriate.
(b) Reported measure uses net income available to common shareholders.
(c) Net income available to common shareholders for each period divided by
average tangible common equity during the period.Average tangible common
equity equals average stockholders' equity during the applicable period less
(i) average preferred stock during the applicable period and (ii) average
goodwill and other intangibles during the applicable period.
                                                         

RECONCILIATION OF AVERAGE STOCKHOLDERS' EQUITY TO AVERAGE TANGIBLE COMMON
EQUITY:
                   THREE MONTHS ENDED                   NINE MONTHS ENDED
                   September    June 30,    September   September September
                    30, 2012     2012        30, 2011    30, 2012  30, 2011
AVERAGE
STOCKHOLDERS'       $ 663,314    $ 685,305   $ 749,610   $ 699,575 $ 740,392
EQUITY
Less:Average       —            25,944      97,808      41,244    97,596
preferred stock
Average goodwill
and other           72,888       73,027      76,734      73,177    77,397
intangibles
AVERAGE TANGIBLE    $ 590,426    $ 586,334   $ 575,068   $ 585,154 $ 565,399
COMMON EQUITY
                                                              
(d) Tangible common equity equals ending stockholders' equity less preferred
stock and goodwill and other intangibles, in each case at the end of the     
period.
                                                              
                                                              
RECONCILIATION OF STOCKHOLDERS' EQUITY TO TANGIBLE
COMMON EQUITY:
                   September    June 30,    September            
                    30, 2012     2012        30, 2011
STOCKHOLDERS'       $ 659,127    $ 660,623   $ 755,053            
EQUITY
Less: Preferred     —            —           97,932               
stock
Goodwill and other  72,810       72,949      76,370               
intangibles
TANGIBLE COMMON     $ 586,317    $ 587,674   $ 580,751            
EQUITY
                                                              
(e) Net income available to common shareholders for each
period divided by average tangible assets during the
period.Average tangible assets equals average assets             
less average goodwill and other intangibles, in each
case during the applicable period.
                                                              
                                                              
RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE              
ASSETS:
                                                              
                   THREE MONTHS ENDED                   NINE MONTHS ENDED
                   September    June 30,    September   September September
                    30, 2012     2012        30, 2011    30, 2012  30, 2011
AVERAGE ASSETS      $ 6,769,735  $ 6,712,439 $ 7,190,843 $         $
                                                         6,792,822 7,244,487
Less:Average
goodwill and other  72,888       73,027      76, 734    73,177    77,397
intangibles
AVERAGE TANGIBLE    $ 6,696,847  $ 6,639,412 $ 7,114,109 $         $
ASSETS                                                   6,719,645 7,167,090
                                                              
(f) Tangible common equity divided by tangible assets. Tangible assets
equals total assets less goodwill and other intangibles.
                                                              
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:                
                   September    June 30,    September            
                    30, 2012     2012        30, 2011
TOTAL ASSETS        $ 6,752,938  $ 6,705,574 $ 7,095,098          
Less: Goodwill and  72,810       72,949      76,370               
other intangibles
TANGIBLE ASSETS     $ 6,680,128  $ 6,632,625 $ 7,018,728          
                                                              
(g) Efficiency ratio is calculated by taking total other
expense divided by the sum of fully taxable equivalent
net interest income and other income. Fully taxable
equivalent net interest income reconciliation is shown            
below assuming a 35% tax rate. Additionally, net
interest margin is calculated on a fully taxable
equivalent basis.
                                                              
RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET
INTEREST INCOME
                   THREE MONTHS ENDED                   NINE MONTHS ENDED
                   September    June 30,    September   September September
                    30, 2012     2012        30, 2011    30, 2012  30, 2011
Interest income     $ 70,618     $ 71,486    $ 82,065    $ 216,942 $ 251,649
Fully taxable
equivalent          408          406         474         1,241     1,482
adjustment
Fully taxable
equivalent interest $ 71,026     $ 71,892    $ 82,539    $ 218,183 $ 253,131
income
Interest expense    12,602       12,806      14,445      38,518    44,694
Fully taxable
equivalent net      $ 58,424     $ 59,086    $ 68,094    $ 179,665 $ 208,437
interest income
                                                              

PARK NATIONAL CORPORATION
Consolidated Statements of Income
                                                                
                                  Three Months Ended    Nine Months Ended
                                  September 30,         September 30,
(in thousands, except share and    2012       2011       2012       2011
per share data)
                                                                
Interest income:                                                 
Interest and fees on loans         $ 58,269   $ 65,645   $ 176,967  $ 196,961
Interest on:                                                     
Obligations of U.S. Government,    12,187     16,289     39,565     54,302
its agencies and other securities
Obligations of states and          33         69         121        310
political subdivisions
Other interest income              129        62         289        76
Total interest income              70,618     82,065     216,942    251,649
                                                                
Interest expense:                                                
Interest on deposits:                                            
Demand and savings deposits        636        976        1,992      2,918
Time deposits                      3,757      5,661      12,517     18,595
Interest on borrowings             8,209      7,808      24,009     23,181
Total interest expense             12,602     14,445     38,518     44,694
                                                                
Net interest income                58,016     67,620     178,424    206,955
                                                                
Provision for loan losses          16,655     16,438     30,231     43,054
                                                                
Net interest income after          41,361     51,182     148,193    163,901
provision for loan losses
                                                                
Gain on sale of Vision Bank        —          —          22,167     —
Other income                       18,079     18,027     53,040     48,195
                                                                
Gain on sale of securities         —          3,465      —          25,462
                                                                
Total other expense                45,683     45,599     139,957    138,952
                                                                
Income before income taxes         13,757     27,075     83,443     98,606
                                                                
Income taxes                       1,775      6,694      21,100     27,076
                                                                
Net income                         $ 11,982   $ 20,381   $ 62,343   $ 71,530
                                                                
Preferred stock dividends and      —          1,464      3,425      4,392
accretion
                                                                
Net income available to common     $ 11,982   $ 18,917   $ 58,918   $ 67,138
shareholders
                                                                
Per Common Share:                                                
Net income- basic                 $ 0.78     $ 1.23     $ 3.82     $ 4.36
Net income- diluted               $ 0.78     $ 1.23     $ 3.82     $ 4.36
                                                                
Weighted average shares - basic    15,405,894 15,398,909 15,405,902 15,398,919
Weighted average shares - diluted  15,405,894 15,398,909 15,409,186 15,400,641
                                                                
Cash Dividends Declared            $ 0.94     $ 0.94     $ 2.82     $ 2.82
                                                                

PARK NATIONAL CORPORATION
Consolidated Balance Sheets

(in thousands, except share data)         September 30, 2012 December 31, 2011
                                                           
Assets                                                      
                                                           
Cash and due from banks                   $ 114,186          $ 137,770
Money market instruments                  167,109            19,716
Investment securities                     1,653,381          1,708,473
Loans                                     4,400,510          4,317,099
Allowance for loan losses                 55,565             68,444
Loans, net                                4,344,945          4,248,655
Bank premises and equipment, net          54,416             53,741
Goodwill and other intangibles            72,810             74,843
Other real estate owned                   35,633             42,272
Other assets                              310,458            304,313
Assets held for sale                      —                  382,462
Total assets                              $ 6,752,938        $ 6,972,245
                                                           
Liabilities and Stockholders' Equity                        
                                                           
Deposits:                                                   
Noninterest bearing                       $ 1,043,460        $ 995,733
Interest bearing                          3,749,617          3,469,381
Total deposits                            4,793,077          4,465,114
Borrowings                                1,187,431          1,162,026
Other liabilities                         113,303            66,555
Liabilities held for sale                 —                  536,186
Total liabilities                         $ 6,093,811        $ 6,229,881
                                                           
Stockholders' Equity:                                       
Preferred Stock (200,000 shares
authorized in 2012 and 2011; No shares    $ —                $ 98,146
issued at September 30, 2012 and 100,000
shares issued at December 31, 2011)
                                                           
Common stock (No par value; 20,000,000
shares authorized in 2011 and
2010;16,150,996 shares issued at         302,654            301,202
September 30, 2012 and 16,151,021 shares
issued at December 31, 2011)
                                                           
Common stock warrants                     —                  4,297
Accumulated other comprehensive loss, net (6,550)            (8,831)
of taxes
Retained earnings                         440,030            424,557
                                                           
Treasury stock (745,109 shares at
September 30, 2012 and at December 31,    (77,007)           (77,007)
2011)
Total stockholders' equity                $ 659,127          $ 742,364

Total liabilities and stockholders'       $ 6,752,938        $ 6,972,245
equity
                                                           

                                                               
PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
                                                               
                              Three Months Ended      Nine Months Ended
                              September 30,           September 30,
(in thousands)                 2012        2011        2012        2011
                                                               
Assets                                                          
                                                               
Cash and due from banks        $ 115,198   $ 129,604   $ 122,258  $ 124,114
Money market instruments       208,191     100,635     156,830     49,877
Investment securities          1,621,365   1,834,610   1,664,365   1,935,579
Loans                          4,392,067   4,692,013   4,410,042   4,726,074
Allowance for loan losses      59,686      119,866     63,525      138,495
Loans, net                     4,332,381   4,572,147   4,346,517   4,587,579
Bank premises and equipment,   52,671      69,534      55,123      69,659
net
Goodwill and other intangibles 72,888      76,734      73,177      77,397
Other real estate owned        36,575      45,898      39,760      45,351
Other assets                   330,466     361,681     334,792     354,931

Total assets                   $ 6,769,735 $ 7,190,843 $ 6,792,822 $ 7,244,487
                                                               
Liabilities and Stockholders'                                   
Equity
                                                               
Deposits:                                                       
Noninterest bearing            $ 1,026,690 $ 1,003,706 $ 1,034,801 $ 982,772
Interest bearing               3,828,830   4,191,313   3,827,370   4,245,949
Total deposits                 4,855,520   5,195,019   4,862,171   5,228,721
Borrowings                     1,172,379   1,152,489   1,155,900   1,187,509
Other liabilities              78,522      93,725      75,176      87,865
Total liabilities              $ 6,106,421 $ 6,441,233 $ 6,093,247 $ 6,504,095
                                                               
Stockholders' Equity:                                           
Preferred stock                $ —         $ 97,808    $ 41,244    $ 97,596
Common stock                   302,655     301,203     301,992     301,202
Common stock warrants          —           4,406       1,929       4,446
Accumulated other
comprehensive loss, net of     (7,009)     (6,202)     (7,874)     (4,563)
taxes
Retained earnings              444,675     430,128     439,291     419,444
Treasury stock                 (77,007)    (77,733)    (77,007)    (77,733)
Total stockholders' equity     $ 663,314   $ 749,610   $ 699,575   $ 740,392

Total liabilities and          $ 6,769,735 $ 7,190,843 $ 6,792,822 $ 7,244,487
stockholders' equity
                                                               

                                      

PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters
                                                                 
                                 2012     2012     2012     2011     2011
(in thousands, except per share   3rd QTR  2nd QTR  1st QTR  4th QTR  3rd QTR
data)
                                                                 
Interest income:                                                  
Interest and fees on loans        $ 58,269 $ 57,593 $ 61,105 $ 65,497 $ 65,645
Interest on:                                                      
Obligations of U.S. Government,   12,187   13,794   13,584   14,571   16,289
its agencies and other securities
Obligations of states and         33       42       46       61       69
political subdivisions
Other interest income             129      57       103      102      62
Total interest income             70,618   71,486   74,838   80,231   82,065
                                                                 
Interest expense:                                                 
Interest on deposits:                                             
Demand and savings deposits       636      602      754      894      976
Time deposits                     3,757    4,121    4,639    5,247    5,661
Interest on borrowings            8,209    8,083    7,717    7,811    7,808
Total interest expense            12,602   12,806   13,110   13,952   14,445

Net interest income               58,016   58,680   61,728   66,279   67,620
                                                                 
Provision for loan losses         16,655   5,238    8,338    20,218   16,438

Net interest income after         41,361   53,442   53,390   46,061   51,182
provision for loan losses
                                                                 
Gain on sale of Vision business   —        —        22,167   —        —
Other income                      18,079   17,508   17,453   17,885   18,027
                                                                 
Gain on sale of securities        —        —        —        3,367    3,465
                                                                 
Total other expense               45,683   45,804   48,470   49,365   45,599

Income before income taxes        13,757   25,146   44,540   17,948   27,075
                                                                 
Income taxes                      1,775    6,260    13,065   7,339    6,694

Net income                        $ 11,982 $ 18,886 $ 31,475 $ 10,609 $ 20,381
                                                                 
Preferred stock dividends and     —        1,948    1,477    1,464    1,464
accretion

Net income available to common    $ 11,982 $ 16,938 $ 29,998 $ 9,145  $ 18,917
shareholders
                                                                 
Per Common Share:                                                 
Net income- basic                $ 0.78   $ 1.1    $ 1.95   $ 0.59   $ 1.23
Net income- diluted              $ 0.78   $ 1.1    $ 1.95   $ 0.59   $ 1.23
                                                                 

                                                                 
PARK NATIONAL CORPORATION
Detail of other income and other expense - Linked Quarters
                                                                 
                                 2012     2012     2012     2011     2011
(in thousands)                    3rd QTR  2nd QTR  1st QTR  4th QTR  3rd QTR
                                                                 
Other income:                                                     
Income from fiduciary activities  $ 4,019  $ 4,044  $ 3,828  $ 3,699  $ 3,615
Service charges on deposits       4,244    4,154    4,071    4,643    4,894
Other service income              4,017    3,417    2,734    2,484    3,087
Checkcard fee income              3,038    3,180    3,172    3,115    3,154
Bank owned life insurance income  1,184    1,184    1,202    1,403    1,229
ATM fees                          565      536      608      641      726
OREO devaluations                 (425)    (2,648)  (1,359)  (1,742)  (588)
Gain/(loss) on the sale of OREO,  138      2,203    1,045    619      210
net
Gain on sale of Vision Bank       —        —        22,167   —        —
Other                             1,299    1,438    2,152    3,023    1,700
Total other income                $ 18,079 $ 17,508 $ 39,620 $ 17,885 $ 18,027
                                                                 
Other expense:                                                    
Salaries and employee benefits    $ 24,255 $ 22,813 $ 24,823 $ 25,952 $ 25,799
Net occupancy expense             2,303    2,249    2,670    2,866    2,665
Furniture and equipment expense   2,666    2,727    2,621    2,643    2,688
Data processing fees              904      899      1,200    1,393    1,184
Professional fees and services    6,040    5,800    5,581    5,920    5,005
Amortization of intangibles       139      139      1,754    1,528    669
Marketing                         924      705      843      852      764
Insurance                         1,408    1,400    1,490    1,526    681
Communication                     1,470    1,494    1,537    1,544    1,475
Loan put provision                346      2,701    662      —        —
Other                             5,228    4,877    5,289    5,141    4,669
Total other expense               $ 45,683 $ 45,804 $ 48,470 $ 49,365 $ 45,599
                                                                 

                                                                                            
PARK NATIONAL CORPORATION
Asset Quality Information
                                                                                            
                                                                                            
                 Quarter ended                             Year ended December 31,
(in thousands,    September    June 30,     March 31,       2011         2010         2009         2008
except ratios)    30, 2012     2012         2012
                                                                                            
Allowance for                                                                                
loan losses:
Allowance for
loan losses,      $58,696    $59,758    $68,444       $143,575   $116,717   $100,088   $87,102
beginning of
period
Transfer of loans —            —            —               (219)        —            —            —
at fair value
Transfer of
allowance to held —            —            —               (13,100)     —            —            —
for sale
Charge-offs       22,878       10,064       18,967       (A) 133,882      66,314       59,022       62,916
Recoveries        3,092        3,764        1,943           8,798        6,092        6,830        5,415
Net charge-offs   19,786       6,300        17,024          125,084      60,222       52,192       57,501
Provision for     16,655       5,238        8,338           63,272       87,080       68,821       70,487
loan losses
Allowance for
loan losses, end  $55,565    $58,696    $59,758       $68,444    $143,575   $116,717   $100,088
of period
(A) Includes the full charge-off of the Vision Bank ALLL of $12.1 million to bring the retained Vision Bank loan
portfolio to fair value prior to the merger of Vision Bank (as constituted following the transaction with
Centennial Bank and Home BancShares, Inc.) with and into SEPH, the non-bank subsidiary of Park, on February 16,
2012.
                                                                                            
General reserve                                                                              
trends:
Allowance for
loan losses, end  $55,565    $58,696    $59,758       $68,444    $143,575   $116,717   $100,088
of period
Specific reserves 7,579        10,946       9,505           15,935       66,904       36,721       8,875
General reserves  $47,986    $47,750    $50,253       $52,509    $76,671    $79,996    $91,213
                                                                                            
Total loans       $ 4,400,510  $ 4,386,851  $ 4,324,383     $ 4,317,099  $ 4,732,685  $ 4,640,432  $ 4,491,337
Impaired          142,288      170,224      179,293         187,074      250,933      201,143      141,343
commercial loans
Non-impaired      $4,258,222 $4,216,627 $4,145,090    $4,130,025 $4,481,752 $4,439,289 $4,349,994
loans
                                                                                            
                                                                                            
Asset Quality                                                                                
Ratios:
Net charge-offs
as a % of average
loans(annualized 1.79%        0.60%        1.53%           2.65%        1.30%        1.14%        1.32%
for quarterly
periods)
Allowance for
loan losses as a  1.26%        1.34%        1.38%           1.59%        3.03%        2.52%        2.23%
% of period end
loans
General reserves
as a % of         1.13%        1.13%        1.21%           1.27%        1.71%        1.80%        2.10%
non-impaired
loans
                                                                                            
Nonperforming
Assets - Park                                                                                
National
Corporation:
Nonaccrual loans  $160,064   $180,381   $183,227      $195,106   $289,268   $233,544   $159,512
Accruing troubled
debt              31,368       27,250       34,436          28,607       --           142          2,845
restructuring
Loans past due 90 2,076        1,870        2,281           3,489        3,590        14,773       5,421
days or more
Total
nonperforming     $193,508   $209,501   $219,944      $227,202   $292,858   $248,459   $167,778
loans
Other real estate
owned - Park      13,699       13,439       13,387          13,240       8,385        6,037        6,149
National Bank
Other real estate 21,934       24,985       28,578          29,032       --           --           --
owned - SEPH
Other real estate
owned - Vision    —            --           --              --           33,324       35,203       19,699
Bank
Total
nonperforming     $229,141   $247,925   $261,909      $269,474   $334,567   $289,699   $193,626
assets
Percentage of
nonaccrual loans  3.64%        4.11%        4.24%           4.52%        6.11%        5.03%        3.55%
to period end
loans
Percentage of
nonperforming     4.40%        4.78%        5.09%           5.26%        6.19%        5.35%        3.74%
loans to period
end loans
Percentage of
nonperforming     5.21%        5.65%        6.06%           6.24%        7.07%        6.24%        4.31%
assets to period
end loans
Percentage of
nonperforming     3.39%        3.70%        3.86%           3.86%        4.59%        4.11%        2.74%
assets to period
end assets
                                                                                            

                                                                            
PARK NATIONAL CORPORATION
Asset Quality Information (continued)
                                                                            
                Quarter ended                    Year ended December 31,
(in thousands,   September  June 30,   March 31,  2011       2010       2009       2008
except ratios)   30, 2012   2012       2012
                                                                            
Nonperforming
Assets - Park                                                                
National Bank
and Guardian:
Nonaccrual loans $101,226 $107,749 $102,886 $96,113  $117,815 $85,197  $68,306
Accruing
troubled debt    31,368     25,782     32,451     26,342     --         142        --
restructuring
Loans past due   2,076      1,870      2,281      3,367      3,226      3,496      4,777
90 days or more
Total
nonperforming    $134,670 $135,401 $137,618 $125,822 $121,041 $88,835  $73,083
loans
Other real
estate owned -   13,699     13,439     13,387     13,240     8,385      6,037      6,149
Park National
Bank
Total
nonperforming    $148,369 $148,840 $151,005 $139,062 $129,426 $94,872  $79,232
assets
Percentage of
nonaccrual loans 2.34%      2.50%      2.43%      2.29%      2.88%      2.15%      1.80%
to period end
loans
Percentage of
nonperforming    3.11%      3.15%      3.26%      3.00%      2.96%      2.24%      1.92%
loans to period
end loans
Percentage of
nonperforming    3.42%      3.46%      3.57%      3.32%      3.16%      2.39%      2.08%
assets to period
end loans
Percentage of
nonperforming    2.24%      2.27%      2.29%      2.21%      1.99%      1.53%      1.27%
assets to period
end assets
                                                                            
                                                                            
Nonperforming Assets -SEPH/Vision Bank (retained portfolio as of September 30, 2012, June 30,
2012, March 31, 2012, and December 31, 2011):
Nonaccrual loans $58,838  $72,632  $80,341  $98,993  $171,453 $148,347 $91,206
Accruing
troubled debt    —          1,468      1,985      2,265      --         --         2,845
restructuring
Loans past due   —          --         --         122        364        11,277     644
90 days or more
Total
nonperforming    $58,838  $74,100  $82,326  $101,380 $171,817 $159,624 $94,695
loans
Other real
estate owned -   —          --         --         --         33,324     35,023     19,699
Vision Bank
Other real
estate owned -   21,934     24,985     28,578     29,032     --         --         --
SEPH
Total
nonperforming    $80,772  $99,085  $110,904 $130,412 $205,141 $194,647 $114,394
assets
Percentage of
nonaccrual loans N.M.       N.M.       N.M.       N.M.       26.77%     21.91%     13.21%
to period end
loans
Percentage of
nonperforming    N.M.       N.M.       N.M.       N.M.       26.82%     23.58%     13.71%
loans to period
end loans
Percentage of
nonperforming    N.M.       N.M.       N.M.       N.M.       32.02%     28.78%     16.57%
assets to period
end loans
Percentage of
nonperforming    N.M.       N.M.       N.M.       N.M.       25.90%     21.70%     12.47%
assets to period
end assets
                                                                            
                                                                            
New nonaccrual
loan
information-Park                                                             
National
Corporation
Nonaccrual
loans, beginning $180,381 $183,227 $195,106 $289,268 $233,544 $159,512 $101,128
of period
New nonaccrual   18,660     23,769     21,778     124,158    175,175    184,181    141,749
loans
Resolved         38,977     26,615     33,657     218,320    119,451    110,149    83,365
nonaccrual loans
Nonaccrual
loans, end of    $160,064 $180,381 $183,227 $195,106 $289,268 $233,544 $159,512
period
                                                                            
New nonaccrual
loan                                                                         
information-Ohio
based operations
Nonaccrual
loans, beginning $107,749 $102,886 $96,113  $117,815 $85,197  $68,306  $38,113
of period
New nonaccrual
loans -          14,378     19,604     21,210     78,316     85,081     57,641     58,161
Ohio-based
operations
Resolved         20,901     14,741     14,437     100,018    52,463     40,750     27,968
nonaccrual loans
Nonaccrual
loans, end of    $101,226 $107,749 $102,886 $96,113  $117,815 $85,197  $68,306
period
                                                                            
New nonaccrual loan
information-SEPH/Vision                                                       
Bank (SEPH as of March 31,
2012)
Nonaccrual
loans, beginning $72,632  $80,341  $98,993  $171,453 $148,347 $91,206  $63,015
of period
New nonaccrual
loans -          4,282      4,165      568        45,842     90,094     126,540    83,588
SEPH/Vision Bank
Resolved         18,076     11,874     19,220     118,302    66,988     69,399     55,397
nonaccrual loans
Nonaccrual
loans, end of    $58,838  $72,632  $80,341  $98,993  $171,453 $148,347 $91,206
period
                                                                            
Impaired
Commercial Loan
Portfolio                                                                    
Information
(period end):
Unpaid principal $259,827 $277,375 $287,623 $290,908 $304,534 $245,092 $171,310
balance
Prior            117,539    107,151    108,330    103,834    53,601     43,949     29,967
charge-offs
Remaining
principal        142,288    170,224    179,293    187,074    250,933    201,143    141,343
balance
Specific         7,579      10,946     9,505      15,935     66,904     36,721     8,875
reserves
Book value,
after specific   $134,709 $159,278 $169,788 $171,139 $184,029 $164,422 $132,468
reserve
                                                                            

CONTACT: Media contacts:
         Bethany Lewis
         740.349.0421
         blewis@parknationalbank.com
 
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