Park National Corporation Reports Fourth Quarter and Year End 2012 Financial Results

Park National Corporation Reports Fourth Quarter and Year End 2012 Financial
Results

Board Continues Quarterly Cash Dividend of $0.94 per Common Share

NEWARK, Ohio, Jan. 28, 2013 (GLOBE NEWSWIRE) -- Park National Corporation
(Park) (NYSE MKT:PRK) today reported financial results for the three-months
(fourth quarter) and year ended December 31, 2012. Park's Board of Directors
also declared a $0.94 per common share quarterly cash dividend, payable on
March 8, 2013 to common shareholders of record on February 22, 2013. Park's
net income in 2012 reduced slightly compared to the previous year, and its
community bank divisions located in Ohio generated increases in loans,
deposits, and assets under management in their trust and investments
departments.

Park National Corporation Results

Net income for the year ended December 31, 2012 was $78.6 million, a 4.3
percent decline from the $82.1 million in net income for 2011. Earnings per
diluted common share were $4.88 for the year ended December 31, 2012, a 1.4
percent decrease from the $4.95 earnings per diluted common share reported for
2011.

Net income for the fourth quarter of 2012 was $16.3 million, a 53.8 percent
increase from the $10.6 million in net income for the same period in 2011.
Earnings per diluted common share were $1.06 for the fourth quarter of 2012, a
79.7 percent increase from the $0.59 earnings per diluted common share
reported in the fourth quarter of 2011.

"Our associates' hard work resulted in several highlights for the year,
including improved lending results and the sale of the Vision Bank business,"
said Park Chairman C. Daniel DeLawder. "The economic environment continues to
challenge most banks' efforts to increase net interest income, and we're very
proud of our successful growth, consistency, and overall performance."

Net income for the fourth quarter of 2011 and for the year ended December 31,
2011 included pre-tax gains of $3.4 million and $28.8 million, respectively,
from the sale of investment securities. There were no securities gains in
2012. Net income for the year ended December 31, 2012 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. Excluding securities
gains in 2011 and the gain from the sale of the Vision Bank business in 2012,
net income for the years ended December 31, 2012 and 2011 would have been
$64.2 million and $63.4 million, respectively.

The Park National Bank Results

Park's community-banking subsidiary in Ohio, The Park National Bank (PNB),
reported net income of $87.1 million for the year ended December 31, 2012,
compared to net income of $106.9 million ($91.5 million, excluding security
gains) for the same period in 2011. PNB had total assets of $6.5 billion at
December 31, 2012, compared to $6.3 billion at December 31, 2011. PNB's
performance generated a return on average assets of 1.33 percent and 1.66
percent (1.42 percent, excluding security gains) in the years ended December
31, 2012 and 2011, respectively.

PNB experienced loan growth of $196.7 million (or 4.7 percent) during 2012,
ending the year with total loans of $4.4 billion. PNB also reported deposit
growth of $202.5 million (or 4.4 percent) in 2012, ending the year with total
deposits of $4.8 billion.

"A key part of our strategy is to consistently make loans available to
individuals and businesses," said Park President David L. Trautman. "Our local
lenders' commitment to service excellence led to loan growth in 2012 in nearly
all categories, including home loans, business and commercial loans."

Headquartered in Newark, Ohio, Park National Corporation has $6.64 billion in
total assets (as of December 31, 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 September 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 December 31, 2012, September 30, 2012, and December 31,
2011
                                                                
                          2012       2012       2011       Percent change vs.
(in thousands, except      4th QTR    3rd QTR    4th QTR    3Q '12   4Q '11
share and per share data)
INCOME STATEMENT:                                                
Net interest income        $56,891    $58,016    $66,279    (1.9)%   (14.2)%
Provision for loan losses  5,188      16,655     20,218     (68.9)%  (74.3)%
Other income               17,196     18,079     17,886     (4.9)%   (3.9)%
Gain on sale of securities —          —          3,367      N.M.     N.M.
Total other expense        48,011     45,683     49,365     5.1%     (2.7)%
Income before income taxes $20,888    $13,757    $17,949    51.8%    16.4%
Income taxes               4,601      1,775      7,339      159.2%   (37.3)%
Net income                 $16,287    $11,982    $10,610    35.9%    53.5%
Preferred stock dividends  —          —          1,464      N.M.     (100.0)%
and accretion
Net income available to    $16,287    $11,982    $9,146     35.9%    78.1%
common shareholders
                                                                
MARKET DATA:                                                     
Earnings per common share  $1.06      $0.78      $0.59      35.9%    79.7%
- basic (b)
Earnings per common share  1.06       0.78       0.59       35.9%    79.7%
- diluted (b)
Cash dividends per common  0.94       0.94       0.94       —        —
share
Common book value per      42.20      42.78      41.82      (1.4)%   0.9%
common share at period end
Stock price per common     64.63      70.02      65.06      (7.7)%   (0.7)%
share at period end
Market capitalization at   996,077    1,078,720  1,002,309  (7.7)%   (0.6)%
period end
                                                                
Weighted average common    15,410,606 15,405,894 15,403,861 —        —
shares - basic (a)
Weighted average common    15,410,606 15,405,894 15,403,861 —        —
shares - diluted (a)
Common shares outstanding  15,411,998 15,405,887 15,405,912 —        —
at period end
                                                                
PERFORMANCE RATIOS:                                              
(annualized)
Return on average assets   0.97%      0.70%      0.51%      38.6%    90.2%
(a)(b)
Return on average common   9.81%      7.19%      5.53%      36.4%    77.4%
equity (a)(b)
Yield on loans             5.23%      5.31%      5.59%      (1.5)%   (6.4)%
Yield on investments       2.88%      3.04%      3.53%      (5.3)%   (18.4)%
Yield on money markets     0.24%      0.25%      0.25%      (4.0)%   (4.0)%
Yield on earning assets    4.49%      4.56%      4.93%      (1.5)%   (8.9)%
Cost of interest bearing   0.42%      0.46%      0.60%      (8.7)%   (30.0)%
deposits
Cost of borrowings         2.66%      2.79%      2.68%      (4.7)%   (0.7)%
Cost of paying liabilities 0.97%      1.00%      1.07%      (3.0)%   (9.3)%
Net interest margin        3.72%      3.75%      4.08%      (0.8)%   (8.8)%
Efficiency ratio (g)       64.47%     59.71%     58.34%     8.0%     10.5%
                                                                
OTHER RATIOS (NON GAAP):                                         
Annualized return on
average tangible assets    0.98%      0.71%      0.52%      38.0%    88.5%
(a)(b)(e)
Annualized return on
average tangible common    11.03%     8.07%      6.26%      36.7%    76.2%
equity (a)(b)(c)
Tangible common book value $37.48     $38.06     $36.96     (1.5)%   1.4%
per common share (d)

                                      

PARK NATIONAL CORPORATION                                              
Financial Highlights                                                   
Three months ended December 31,
2012, September 30, 2012, and                                      
December 31, 2011
                                                                      
                                                     Percent change     
                                                       vs.
BALANCE SHEET:        December   September  December   3Q '12  4Q '11
                      31,2012    30, 2012   31, 2011
                                                          
Investment securities $1,581,751 $1,653,381 $1,708,473 (4.3)%  (7.4)%
Loans                 4,450,322  4,400,510  4,317,099  1.1%    3.1%
Allowance for loan    55,537     55,565     68,444     (0.1)%  (18.9)%
losses
Goodwill and other    72,671     72,810     74,843     (0.2)%  (2.9)%
intangibles
Other real estate     35,718     35,633     42,272     0.2%    (15.5)%
owned
Total assets          6,642,803  6,752,938  6,972,245  (1.6)%  (4.7)%
Total deposits        4,716,032  4,793,077  4,465,114  (1.6)%  5.6%
Borrowings            1,206,076  1,187,431  1,162,026  1.6%    3.8%
Stockholders' equity  650,366    659,127    742,364    (1.3)%  (12.4)%
Common equity         650,366    659,127    644,218    (1.3)%  1.0%
Tangible common       577,695    586,317    569,375    (1.5)%  1.5%
equity (d)
Nonperforming loans   185,336    191,432    223,713    (3.2)%  (17.2)%
Nonperforming assets  221,054    227,065    265,985    (2.6)%  (16.9)%
Past due 90 day loans 2,970      2,076      3,489      43.1%   (14.9)%
and still accruing
                                                          
ASSET QUALITY RATIOS:                                      
Loans as a % of       66.99%     65.16%     61.92%     2.8%    8.2%
period end assets
Nonperforming loans
as a % of period end  4.16%      4.35%      5.18%      (4.4)%  (19.7)%
loans
Past due 90 day loans
as a % of period end  0.07%      0.05%      0.08%      40.0%   (12.5)%
loans
Nonperforming assets
/ Period end loans +  4.93%      5.12%      6.10%      (3.7)%  (19.2)%
OREO
Allowance for loan
losses as a % of      1.25%      1.26%      1.59%      (0.8)%  (21.4)%
period end loans
Net loan charge-offs  $5,216     $19,786    $45,764    (73.6)% (88.6)%
Annualized net loan
charge-offs as a % of 0.47%      1.79%      3.88%      (73.7)% (87.9)%
average loans (a)
                                                          
CAPITAL & LIQUIDITY:                                       
Total equity / Period 9.79%      9.76%      10.65%     0.3%    (8.1)%
end assets
Common equity /       9.79%      9.76%      9.24%      0.3%    6.0%
Period end assets
Tangible common
equity (d) / Tangible 8.79%      8.78%      8.25%      0.1%    6.5%
assets (f)
Average stockholders'
equity / Average      9.87%      9.80%      10.63%     0.7%    (7.1)%
assets (a)
Average stockholders'
equity / Average      14.97%     15.10%     16.13%     (0.9)%  (7.2)%
loans (a)
Average loans /       92.78%     90.46%     91.96%     2.6%    0.9%
Average deposits (a)
                                                          
N.M. - Not meaningful                                                  

                                      

PARK NATIONAL CORPORATION                                 
Financial Highlights                                      
Years ended December 31, 2012 and                         
2011
                                                         
(in thousands, except share and per   2012       2011       Percent change vs.
share data)                                                 2011
INCOME STATEMENT:                                         
Net interest income                   $235,315   $273,234   (13.9)%
Provision for loan losses             35,419     63,272     (44.0)%
Gain on sale of Vision Bank           22,167     —          N.M.
Other income                          70,236     66,081     6.3%
Gain on sale of securities            —          28,829     N.M.
Total other expense                   187,968    188,317    (0.2)%
Income before income taxes            $104,331   $116,555   (10.5)%
Income taxes                          25,701     34,415     (25.3)%
Net income                            $78,630    $82,140    (4.3)%
Preferred stock dividends and         3,425      5,856      (41.5)%
accretion
Net income available to common        $75,205    $76,284    (1.4)%
shareholders
                                                         
MARKET DATA:                                              
Earnings per common share - basic (b) $4.88      $4.95      (1.4)%
Earnings per common share - diluted   4.88       4.95       (1.4)%
(b)
Cash dividends per common share       3.76       3.76       —
                                                         
Weighted average common shares -      15,407,078 15,400,155 —
basic (a)
Weighted average common shares -      15,408,141 15,401,446 —
diluted (a)
                                                         
PERFORMANCE RATIOS: (Annualized)                          
Return on average assets (a)(b)       1.11%      1.06%      4.7%
Return on average common equity       11.41%     11.81%     (3.4)%
(a)(b)
Yield on loans                        5.35%      5.61%      (4.6)%
Yield on investments                  3.15%      3.76%      (16.2)%
Yield on earning assets               4.64%      5.03%      (7.8)%
Cost of interest bearing deposits     0.49%      0.66%      (25.8)%
Cost of borrowings                    2.74%      2.63%      4.2%
Cost of paying liabilities            1.02%      1.09%      (6.4)%
Net interest margin (g)               3.83%      4.14%      (7.5)%
Efficiency ratio (g)                  57.07%     55.18%     3.4%
                                                         
ASSET QUALITY RATIOS:                                     
Net loan charge-offs                  $48,326    $125,084   (61.4)%
Annualized net loan charge-offs as a  1.10%      2.65%      (58.5)%
% of average loans (a)
                                                         
CAPITAL & LIQUIDITY:                                      
Average stockholders' equity /        10.19%     10.32%     (1.3)%
Average assets (a)
Average stockholders' equity /        15.64%     15.78%     (0.9)%
Average loans (a)
Average loans / Average deposits (a)  91.22%     90.78%     0.5%
                                                         
OTHER RATIOS (NON GAAP):                                  
Annualized return on average tangible 1.12%      1.07%      4.7%
assets (a)(b)(e)
Annualized return on average tangible 12.84%     13.40%     (4.2)%
common equity (a)(b)(c)
                                                         

                                      

PARK NATIONAL CORPORATION
Financial
Highlights                                                   
(continued)
                                                            
(a) Averages are for the quarters ended December 31,
2012, September 30, 2012 and December 31, 2011, and             
the fiscal years ended December 31, 2012 and
December 31, 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                   TWELVE MONTHS ENDED
                December 31, September   December    December   December
                 2012         30, 2012    31, 2011     31, 2012   31, 2011
AVERAGE
STOCKHOLDERS'    $660,416     $663,314    $754,168    $689,732   $743,865
EQUITY
Less:Average    —            —           98,023      30,877     97,704
preferred stock
Less: Average
goodwill and     72,748       72,888      76,041      73,069     77,055
other
intangibles
AVERAGE TANGIBLE $587,668     $590,426    $580,104    $585,786   $569,106
COMMON EQUITY
                                                            
(d) Tangible common equity at the end of each period divided by common
shares outstanding at the end of each period. 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:
                December 31, September   December              
                 2012         30, 2012    31, 2011
STOCKHOLDERS'    $650,366     $659,127    $742,364              
EQUITY
Less: Preferred  —            —           98,146                
stock
Less: Goodwill
and other        72,671       72,810      74,843                
intangibles
TANGIBLE COMMON  $577,695     $586,317    $569,375                         
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                   TWELVE MONTHS ENDED
                December 31, September   December    December   December
                 2012         30, 2012    31, 2011     31, 2012   31, 2011
AVERAGE ASSETS   $6,689,321   $6,769,735  $7,092,437  $6,766,806 $7,206,163
Less:Average
goodwill and     72,748       72,888      76,041      73,069     77,055
other
intangibles
AVERAGE TANGIBLE $6,616,573   $6,696,847  $7,016,396  $6,693,737 $7,129,108
ASSETS
                                                            
(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:              
                December 31, September   December              
                 2012         30, 2012    31, 2011
TOTAL ASSETS     $6,642,803   $6,752,938  $6,972,245            
Less: Goodwill
and other        72,671       72,810      74,843                
intangibles
TANGIBLE ASSETS  $6,570,132   $6,680,128  $6,897,402                       
                                                            
(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                   TWELVE MONTHS ENDED
                December 31, September   December    December   December
                 2012         30, 2012    31, 2011     31, 2012   31, 2011
Interest income  $68,793      $70,618     $80,231     $285,735   $331,880
Fully taxable
equivalent       382          408         456         1,623      1,938
adjustment
Fully taxable
equivalent       $69,175      $71,026     $80,687     $287,358   $333,818
interest income
Interest expense 11,902       12,602      13,952      50,420     58,646
Fully taxable
equivalent net   $57,273      $58,424     $66,735     $236,938   $275,172
interest income

                                      

PARK NATIONAL CORPORATION
Consolidated Statements of Income
                                                                
                                  Three Months Ended    Twelve Months Ended
                                  December 31,          December 31,
(in thousands, except share and    2012       2011       2012       2011
per share data)
                                                                
Interest income:                                                 
Interest and fees on loans         $57,671    $65,497    $234,638   $262,458
Interest on:                                                     
Obligations of U.S. Government,                                  
its agencies
and other securities               10,984     14,571     50,549     68,873
Obligations of states and          19         61         140        371
political subdivisions
Other interest income              119        102        408        178
Total interest income              68,793     80,231     285,735    331,880
                                                                
Interest expense:                                                
Interest on deposits:                                            
Demand and savings deposits        491        894        2,483      3,812
Time deposits                      3,404      5,247      15,921     23,842
Interest on borrowings             8,007      7,811      32,016     30,992
Total interest expense             11,902     13,952     50,420     58,646
                                                                
Net interest income                56,891     66,279     235,315    273,234
                                                                
Provision for loan losses          5,188      20,218     35,419     63,272
                                                                
Net interest income after          51,703     46,061     199,896    209,962
provision for loan losses
                                                                
Gain on sale of Vision Bank        —          —          22,167     —
Other income                       17,196     17,886     70,236     66,081
                                                                
Gain on sale of securities         —          3,367      —          28,829
                                                                
Total other expense                48,011     49,365     187,968    188,317
                                                                
Income before income taxes         20,888     17,949     104,331    116,555
                                                                
Income taxes                       4,601      7,339      25,701     34,415
                                                                
Net income                         $16,287    $10,610    $78,630    $82,140
                                                                
Preferred stock dividends and      —          1,464      3,425      5,856
accretion
                                                                
Net income available to common     $16,287    $9,146     $75,205    $76,284
shareholders
                                                                
Per Common Share:                                                
Net income- basic                 $1.06      $0.59      $4.88      $4.95
Net income- diluted               $1.06      $0.59      $4.88      $4.95
                                                                
Weighted average shares - basic    15,410,606 15,403,861 15,407,078 15,400,155
Weighted average shares - diluted  15,410,606 15,403,861 15,408,141 15,401,446
                                                                
Cash Dividends Declared            $0.94      $0.94      $3.76      $3.76
                                                                

                                      


PARK NATIONAL CORPORATION
Consolidated Balance Sheets
                                          
(in thousands, except share data)          December 31, 2012 December 31, 2011
                                                           
Assets                                                      
                                                           
Cash and due from banks                    $164,120          $137,770
Money market instruments                   37,185            19,716
Investment securities                      1,581,751         1,708,473
Loans                                      4,450,322         4,317,099
Allowance for loan losses                  55,537            68,444
Loans, net                                 4,394,785         4,248,655
Bank premises and equipment, net           53,751            53,741
Goodwill and other intangibles             72,671            74,843
Other real estate owned                    35,718            42,272
Other assets                               302,822           304,313
Assets held for sale                       —                 382,462
Total assets                               $6,642,803        $6,972,245
                                                           
Liabilities and Stockholders' Equity                        
                                                           
Deposits:                                                   
Noninterest bearing                        $1,137,290        $995,733
Interest bearing                           3,578,742         3,469,381
Total deposits                             4,716,032         4,465,114
Borrowings                                 1,206,076         1,162,026
Other liabilities                          70,329            66,555
Liabilities held for sale                  —                 536,186
Total liabilities                          $5,992,437        $6,229,881
                                                           
                                                           
Stockholders' Equity:                                       
Preferred Stock (200,000 shares authorized
in 2012 and 2011; No shares issued at      $—                $98,146
December 31, 2012 and 100,000 shares
issued at December 31, 2011)
Common stock (No par value; 20,000,000
shares authorized in 2012 and
2011;16,150,987 shares issued at December 302,654           301,202
31, 2012 and 16,151,021 shares issued at
December 31, 2011)
Common stock warrants                      —                 4,297
Accumulated other comprehensive loss, net  (17,518)          (8,831)
of taxes
Retained earnings                          441,605           424,557
Treasury stock (738,989 shares at December (76,375)          (77,007)
31, 2012 and 745,109 at December 31, 2011)
Total stockholders' equity                 $650,366          $742,364
                                                           
Total liabilities and stockholders' equity $6,642,803        $6,972,245

                                      

                                                                  
PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
                                                                
                                  Three Months Ended    Twelve Months Ended
                                  December 31,          December 31,
(in thousands)                     2012       2011       2012       2011
                                                                
Assets                                                           
                                                                
Cash and due from banks            $110,926   $126,235   $119,410   $124,649
Money market instruments           194,582    163,804    166,319    78,593
Investment securities             1,540,650  1,668,826  1,633,268  1,868,343
Loans                              4,412,508  4,676,229  4,410,661  4,713,511
Allowance for loan losses          57,436     98,930     61,995     128,523
Loans, net                         4,355,072  4,577,299  4,348,666  4,584,988
Bank premises and equipment, net   54,300     69,054     54,917     69,507
Goodwill and other intangibles     72,748     76,041     73,069     77,055
Other real estate owned            35,848     43,226     38,777     44,815
Other assets                       325,195    367,952    332,380    358,213
                                                                
Total assets                       $6,689,321 $7,092,437 $6,766,806 $7,206,163
                                                                
                                                                
Liabilities and Stockholders'                                    
Equity
                                                                
Deposits:                                                        
Noninterest bearing                $1,090,475 $1,047,491 $1,048,796 $999,085
Interest bearing                   3,665,181  4,037,485  3,786,601  4,193,404
Total deposits                     4,755,656  5,084,976  4,835,397  5,192,489
Borrowings                         1,197,532  1,155,566  1,166,365  1,179,458
Other liabilities                  75,717     97,727     75,312     90,351
Total liabilities                  $6,028,905 $6,338,269 $6,077,074 $6,462,298
                                                                
Stockholders' Equity:                                            
Preferred stock                    $—         $98,023    $30,877    $97,704
Common stock                      302,654    301,203    302,159    301,203
Common stock warrants              —          4,382      1,444      4,429
Accumulated other comprehensive    (8,035)    (3,127)    (7,915)    (4,201)
loss, net of taxes
Retained earnings                  442,378    430,907    440,067    422,333
Treasury stock                    (76,581)   (77,220)   (76,900)   (77,603)
Total stockholders' equity         $660,416   $754,168   $689,732   $743,865
                                                                
Total liabilities and              $6,689,321 $7,092,437 $6,766,806 $7,206,163
stockholders' equity

                                      


PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters
                                                                  
                                      2012    2012    2012    2012    2011
(in thousands, except per share data)  4th QTR 3rd QTR 2nd QTR 1st QTR 4th QTR
                                                                  
Interest income:                                                   
Interest and fees on loans            $57,671 $58,269 $57,593 $61,105 $65,497
Interest on:                                                       
Obligations of U.S. Government, its    10,984  12,187  13,794  13,584  14,571
agencies and other securities
Obligations of states and political    19      33      42      46      61
subdivisions
Other interest income                  119     129     57      103     102
Total interest income                  68,793  70,618  71,486  74,838  80,231
                                                                  
Interest expense:                                                  
Interest on deposits:                                              
Demand and savings deposits            491     636     602     754     894
Time deposits                          3,404   3,757   4,121   4,639   5,247
Interest on borrowings                 8,007   8,209   8,083   7,717   7,811
Total interest expense                 11,902  12,602  12,806  13,110  13,952
                                                                  
Net interest income                    56,891  58,016  58,680  61,728  66,279
                                                                  
Provision for loan losses              5,188   16,655  5,238   8,338   20,218
                                                                  
Net interest income after provision    51,703  41,361  53,442  53,390  46,061
for loan losses
                                                                  
Gain on sale of Vision business        —       —       —       22,167  —
Other income                           17,196  18,079  17,508  17,453  17,886
                                                                  
Gain on sale of securities             —       —       —       —       3,367
                                                                  
Total other expense                    48,011  45,683  45,804  48,470  49,365
                                                                  
Income before income taxes             20,888  13,757  25,146  44,540  17,949
                                                                  
Income taxes                           4,601   1,775   6,260   13,065  7,339
                                                                  
Net income                            $16,287 $11,982 $18,886 $31,475 $10,610
                                                                  
Preferred stock dividends and          —       —       1,948   1,477   1,464
accretion
                                                                  
Net income available to common         $16,287 $11,982 $16,938 $29,998 $9,146
shareholders
                                                                  
Per Common Share:                                                  
Net income- basic                     $1.06   $0.78   $1.10   $1.95   $0.59
Net income- diluted                   $1.06   $0.78   $1.10   $1.95   $0.59

                                      


PARK NATIONAL CORPORATION
Detail of other income and other expense - Linked Quarters
                                                                
                                    2012    2012    2012    2012    2011
(in thousands)                       4th QTR 3rd QTR 2nd QTR 1stQTR 4thQTR
                                                                
Other income:                                                    
Income from fiduciary activities     $4,056  $4,019  $4,044  $3,828  $3,699
Service charges on deposits          4,235   4,244   4,154   4,071   4,643
Other service income                 3,463   4,017   3,417   2,734   2,484
Checkcard fee income                 3,151   3,038   3,180   3,172   3,115
Bank owned life insurance income     1,184   1,184   1,184   1,202   1,403
ATM fees                             650     565     536     608     641
                                                                
OREO devaluations                    (2,440) (425)   (2,648) (1,359) (1,742)
Gain/(loss) on the sale of OREO, net 1,028   138     2,203   1,045   619
Gain on sale of Vision Bank          —       —       —       22,167  —
Other                                1,869   1,299   1,438   2,152   3,024
Total other income                   $17,196 $18,079 $17,508 $39,620 $17,886
                                                                
Other expense:                                                   
Salaries and employee benefits       $24,086 $24,255 $22,813 $24,823 $25,952
Net occupancy expense                2,222   2,303   2,249   2,670   2,866
Furniture and equipment expense      2,774   2,666   2,727   2,621   2,643
Data processing fees                 913     904     899     1,200   1,393
Professional fees and services       6,846   6,040   5,800   5,581   5,920
Amortization of intangibles          139     139     139     1,754   1,528
Marketing                            1,002   924     705     843     852
Insurance                            1,482   1,408   1,400   1,490   1,526
Communication                        1,482   1,470   1,494   1,537   1,544
Loan put provision                   —       346     2,701   662     —
Other                                7,065   5,228   4,877   5,289   5,141
Total other expense                  $48,011 $45,683 $45,804 $48,470 $49,365

                                      

PARK NATIONAL CORPORATION
Asset Quality Information

                                                               
                    Year ended December 31,
(in thousands,       2012         2011        2010       2009       2008
except ratios)
                                                               
Allowance for loan                                              
losses:
Allowance for loan
losses, beginning of $68,444      $143,575    $116,717   $100,088   $87,102
period
Transfer of loans at —            (219)       —          —          —
fair value
Transfer of
allowance to held    —            (13,100)    —          —          —
for sale
Charge-offs          61,268       133,882     66,314     59,022     62,916
Recoveries           12,942       8,798       6,092      6,830      5,415
Net charge-offs      48,326       125,084     60,222     52,192     57,501
Provision for loan   35,419       63,272      87,080     68,821     70,487
losses
Allowance for loan
losses, end of       $55,537      $68,444     $143,575   $116,717   $100,088
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 of       $55,537      $68,444     $143,575   $116,717   $100,088
period
Specific reserves    8,276        15,935      66,904     36,721     8,875
General reserves     $47,261      $52,509     $76,671    $79,996    $91,213
                                                               
Total loans          $4,450,322   $4,317,099  $4,732,685 $4,640,432 $4,491,337
Impaired commercial  137,238      187,074     250,933    201,143    141,343
loans
Non-impaired loans   $4,313,084   $4,130,025  $4,481,752 $4,439,289 $4,349,994
                                                               
                                                               
Asset Quality                                                   
Ratios:
                                                               
Net charge-offs as a 1.10%        2.65%       1.30%      1.14%      1.32%
% of average loans
Allowance for loan
losses as a % of     1.25%        1.59%       3.03%      2.52%      2.23%
period end loans
General reserves as
a % of non-impaired  1.10%        1.27%       1.71%      1.80%      2.10%
loans
                                                               
Nonperforming Assets
- Park National                                                 
Corporation:
Nonaccrual loans     $155,536     $195,106    $289,268   $233,544   $159,512
Accruing troubled    29,800       28,607      --       142        2,845
debt restructuring
Loans past due 90    2,970        3,489       3,590      14,773     5,421
days or more
Total nonperforming  $188,306     $227,202    $292,858   $248,459   $167,778
loans
Other real estate
owned - Park         14,715       13,240      8,385      6,037      6,149
National Bank
Other real estate    21,003       29,032      —         —         —
owned - SEPH
Other real estate    —           —          33,324     35,203     19,699
owned - Vision Bank
Total nonperforming  $224,024     $269,474    $334,567   $289,699   $193,626
assets
Percentage of
nonaccrual loans to  3.49%        4.52%       6.11%      5.03%      3.55%
period end loans
Percentage of
nonperforming loans  4.23%        5.26%       6.19%      5.35%      3.74%
to period end loans
Percentage of
nonperforming assets 5.03%        6.24%       7.07%      6.24%      4.31%
to period end loans
Percentage of
nonperforming assets 3.37%        3.86%       4.59%      4.11%      2.74%
to period end assets
                                                               


PARK NATIONAL CORPORATION
Asset Quality Information (continued)
                                                               
                    Year ended December 31,
(in thousands,       2012         2011        2010       2009       2008
except ratios)
Nonperforming Assets
- Park National Bank                                            
and Guardian:
Nonaccrual loans     $100,244     $96,113     $117,815   $85,197    $68,306
Accruing troubled    29,800       26,342      —         142        —
debt restructuring
Loans past due 90    2,970        3,367       3,226      3,496      4,777
days or more
Total nonperforming  $133,014     $125,822    $121,041   $88,835    $73,083
loans
Other real estate
owned - Park         14,715       13,240      8,385      6,037      6,149
National Bank
Total nonperforming  $147,729     $139,062    $129,426   $94,872    $79,232
assets
Percentage of
nonaccrual loans to  2.28%        2.29%       2.88%      2.15%      1.80%
period end loans
Percentage of
nonperforming loans  3.03%        3.00%       2.96%      2.24%      1.92%
to period end loans
Percentage of
nonperforming assets 3.36%        3.32%       3.16%      2.39%      2.08%
to period end loans
Percentage of
nonperforming assets 2.27%        2.21%       1.99%      1.53%      1.27%
to period end assets
                                                               
Nonperforming Assets - SEPH/Vision Bank (retained portfolio as of December 31,
2012, and 2011):
Nonaccrual loans     $55,292      $98,993     $171,453   $148,347   $91,206
Accruing troubled    —            2,265       —          —          2,845
debt restructuring
Loans past due 90    —            122         364        11,277     644
days or more
Total nonperforming  $55,292      $101,380    $171,817   $159,624   $94,695
loans
Other real estate    —            —           33,324     35,203     19,699
owned - Vision Bank
Other real estate    21,003       29,032      —          —          —
owned - SEPH
Total nonperforming  $76,295      $130,412    $205,141   $194,827   $114,394
assets
Percentage of
nonaccrual loans to  N.M.         N.M.        26.77%     21.91%     13.21%
period end loans
Percentage of
nonperforming loans  N.M.         N.M.        26.82%     23.58%     13.71%
to period end loans
Percentage of
nonperforming assets N.M.         N.M.        32.02%     28.78%     16.57%
to period end loans
Percentage of
nonperforming assets N.M.         N.M.        25.90%     21.70%     12.47%
to period end assets
                                                               
                                                               
New nonaccrual loan
information-Park                                                
National Corporation
Nonaccrual loans,    $195,106     $289,268    $233,544   $159,512   $101,128
beginning of period
New nonaccrual loans 83,204       124,158     175,175    184,181    141,749
Resolved nonaccrual  122,774      218,320     119,451    110,149    83,365
loans
Nonaccrual loans,    $155,536     $195,106    $289,268   $233,544   $159,512
end of period
                                                               
New nonaccrual loan
information-Ohio                                                
based operations
Nonaccrual loans,    $96,113      $117,815    $85,197    $68,306    $38,113
beginning of period
New nonaccrual loans
- Ohio-based         68,960       78,316      85,081     57,641     58,161
operations
Resolved nonaccrual  64,829       100,018     52,463     40,750     27,968
loans
Nonaccrual loans,    $100,244     $96,113     $117,815   $85,197    $68,306
end of period
                                                               
New nonaccrual loan information-SEPH/Vision Bank (SEPH as of March 31, 2012)
Nonaccrual loans,    $98,993      $171,453    $148,347   $91,206    $63,015
beginning of period
New nonaccrual loans 14,243       45,842      90,094     126,540    83,588
- SEPH/Vision Bank
Resolved nonaccrual  57,944       118,302     66,988     69,399     55,397
loans
Nonaccrual loans,    $55,292      $98,993     $171,453   $148,347   $91,206
end of period
                                                               
                                                               
Impaired Commercial
Loan Portfolio                                                  
Information (period
end):
Unpaid principal     $242,345     $290,908    $304,534   $245,092   $171,310
balance
Prior charge-offs    105,107      103,834     53,601     43,949     29,967
Remaining principal  137,238      187,074     250,933    201,143    141,343
balance
Specific reserves    8,276        15,935      66,904     36,721     8,875
Book value, after    $128,962     $171,139    $184,029   $164,422   $132,468
specific reserve

CONTACT: Media contact:
         Bethany Lewis
         740.349.0421
         blewis@parknationalbank.com
        
         Investor contact:
         Brady Burt
         740-322-6844
         bburt@parknationalbank.com
 
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