Park National Corporation reports financial results for second quarter and first half of 2024

July 22, 2024

NEWARK, Ohio, July 22, 2024 (GLOBE NEWSWIRE) — Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the second quarter and first half of 2024. Park’s board of directors declared a quarterly cash dividend of $1.06 per common share, payable on September 10, 2024, to common shareholders of record as of August 16, 2024.

“Our performance stems from our commitment to provide consistent financial support, to remain resilient in uncertain times, and to never stop searching for new ways to serve customers,” said Park Chairman and Chief Executive Officer David Trautman. “We’re eager to introduce new tools that will make our banking services more accessible than ever and allow more people to experience a wonderful blend of digital elegance and human empathy in banking with Park.”

Park’s net income for the second quarter of 2024 was $39.4 million, a 24.6 percent increase from $31.6 million for the second quarter of 2023. Second quarter 2024 net income per diluted common share was $2.42, compared to $1.94 for the second quarter of 2023. Park’s net income for the first half of 2024 was $74.6 million, a 14.2 percent increase from $65.3 million for the first half of 2023. Net income per diluted common share for the first half of 2024 was $4.60 compared to $4.01 for the first half of 2023.

Park’s total loans increased 2.5 percent (5.1 percent annualized) during the first half of 2024 and increased 6.3% for the 12-month period ended June 30, 2024. Park’s total loans increased 1.9 percent (7.4 percent annualized) during the three months ended June 30, 2024.

Park’s total deposits increased 3.4 percent (6.7 percent annualized) during the first half of 2024 and decreased 0.6 percent for the 12-month period ended June 30, 2024. The combination of strong loan growth and steady deposits resulted in a net interest margin of 4.39 percent for the three months ended June 30, 2024, compared to 4.28 percent for the three months ended March 31, 2024, and 4.07 percent for the three months ended June 30, 2023. For the first half of 2024 the net interest margin was 4.33 percent compared to 4.07 percent for the first half of 2023.

“We continue to experience growth in net interest income, supported by year-to-date annualized commercial loan growth of 6.4 percent that reflects our consistent approach to lending regardless of economic fluctuations and the interest rate environment,” said Park President Matthew Miller. “We’re also pleased to report growth in net income and earnings per share, demonstrating our bankers’ commitment to controlling expenses and leveraging technology as we prepare to cross $10 billion in assets.”

Headquartered in Newark, Ohio, Park National Corporation has $9.9 billion in total assets (as of June 30, 2024). Park’s banking operations are conducted through its subsidiary The Park National Bank. Other Park subsidiaries are Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance), Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.

Complete financial tables are listed below.

Category: Earnings

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, including those described in Park’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as updated by our filings with the SEC. 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: (1) Park’s ability to execute our business plan successfully and within the expected timeframe; (2) adverse changes in future economic and financial market conditions; (3) adverse changes in real estate values and liquidity in our primary market areas; (4) the financial health of our commercial borrowers; (5) adverse changes in federal, state and local governmental law and policy, including the regulatory landscape, capital markets, elevated government debt, potential changes in tax legislation, government shutdown, infrastructure spending and social programs; (6) changes in consumer spending, borrowing and saving habits; (7) our litigation and regulatory compliance exposure; (8) increased credit risk and higher credit losses resulting from loan concentrations; (9) competitive pressures among financial services organizations; (10) changes in accounting policies and practices as may be adopted by regulatory agencies; (11) Park’s assumptions and estimates used in applying critical accounting policies and modeling which may prove unreliable, inaccurate or not predictive of actual results; (12) Park’s ability to anticipate and respond to technological changes and Park’s reliance on, and the potential failure of, a number of third-party vendors to perform as expected; (13) failures in or breaches of Park’s operational or security systems or infrastructure, or those of our third-party vendors and other service providers; (14) negative impacts on financial markets and the economy of any changes in the credit ratings of the U.S. Treasury obligations and other U.S. government-backed debt, as well as issues surrounding the levels of U.S., European and Asian government debt and concerns regarding the growth rates and financial stability of certain sovereign governments, supranationals and financial institutions in Europe and Asia; (15) effects of a fall in stock market prices on Park’s asset and wealth management businesses; (16) continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; (17) the impact on Park’s business, personnel, facilities or systems of losses related to acts of fraud, scams and schemes of third parties; (18) the impact of widespread natural and other disasters, pandemics, dislocations, regional or national protests and civil unrest (including any resulting branch closures or damages), military or terrorist activities or international hostilities on the economy and financial markets generally and on us or our counterparties specifically; (19) the potential further deterioration of the U.S. economy due to financial, political, or other shocks; (20) the effect of healthcare laws in the U.S. and potential changes for such laws that may increase our healthcare and other costs and negatively impact our operations and financial results; (21) the impact of larger or similar-sized financial institutions encountering problems that may adversely affect the banking industry; (22) and other risk factors relating to the financial services industry.

Park does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement was made, or reflect the occurrence of unanticipated events, except to the extent required by law.


PARK NATIONAL CORPORATION
Financial Highlights
As of or for the three months ended June 30, 2024, March 31, 2024 and June 30, 2023

		2024			2024			2023		Percent change vs.
*(in thousands, except common share and per common share data and ratios)*	2nd QTR			1st QTR			2nd QTR			1Q ’24		2Q ’23
INCOME STATEMENT:
Net interest income	$	97,837		$	95,623		$	91,572		2.3	%	6.8	%
Provision for credit losses		3,113			2,180			2,492		42.8	%	24.9	%
Other income		28,794			26,200			25,015		9.9	%	15.1	%
Other expense		75,189			77,228			75,885		(2.6)%		(0.9)%
Income before income taxes	$	48,329		$	42,415		$	38,210		13.9	%	26.5	%
Income taxes		8,960			7,211			6,626		24.3	%	35.2	%
Net income	$	39,369		$	35,204		$	31,584		11.8	%	24.6	%

MARKET DATA:
Earnings per common share – basic (a)	$	2.44		$	2.18		$	1.95		11.9	%	25.1	%
Earnings per common share – diluted (a)		2.42			2.17			1.94		11.5	%	24.7	%
Quarterly cash dividend declared per common share		1.06			1.06			1.05		—	%	1.0	%
Book value per common share at period end		73.27			71.95			67.40		1.8	%	8.7	%
Market price per common share at period end		142.34			135.85			102.32		4.8	%	39.1	%
Market capitalization at period end		2,298,723			2,199,556			1,652,818		4.5	%	39.1	%

Weighted average common shares – basic (b)		16,149,523			16,116,842			16,165,119		0.2	%	(0.1)%
Weighted average common shares – diluted (b)		16,239,617			16,191,065			16,240,600		0.3	%	—	%
Common shares outstanding at period end		16,149,523			16,149,523			16,153,425		—	%	—	%

PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)		1.61	%		1.44	%		1.28	%	11.8	%	25.8	%
Return on average shareholders’ equity (a)(b)		13.52	%		12.23	%		11.61	%	10.5	%	16.5	%
Yield on loans		6.13	%		5.99	%		5.43	%	2.3	%	12.9	%
Yield on investment securities		3.83	%		3.90	%		3.73	%	(1.8)%		2.7	%
Yield on money market instruments		5.33	%		5.48	%		5.11	%	(2.7)%		4.3	%
Yield on interest earning assets		5.78	%		5.66	%		5.08	%	2.1	%	13.8	%
Cost of interest bearing deposits		1.99	%		1.94	%		1.46	%	2.6	%	36.3	%
Cost of borrowings		4.08	%		4.25	%		3.54	%	(4.0)%		15.3	%
Cost of paying interest bearing liabilities		2.10	%		2.08	%		1.58	%	1.0	%	32.9	%
Net interest margin (g)		4.39	%		4.28	%		4.07	%	2.6	%	7.9	%
Efficiency ratio (g)		59.09	%		63.07	%		64.58	%	(6.3)%		(8.5)%

OTHER DATA (NON-GAAP) AND BALANCE SHEET INFORMATION:
Tangible book value per common share (d)	$	63.14		$	61.80		$	57.19		2.2	%	10.4	%
Average interest earning assets		9,016,905			9,048,204			9,122,323		(0.3)%		(1.2)%
Pre-tax, pre-provision net income (j)		51,442			44,595			40,702		15.4	%	26.4	%

Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.


PARK NATIONAL CORPORATION
Financial Highlights (continued)
As of or for the three months ended June 30, 2024, March 31, 2024 and June 30, 2023

										Percent change vs.
*(in thousands, except ratios)*	June 30, 2024			March 31, 2024			June 30, 2023			1Q ’24		2Q ’23
BALANCE SHEET:
Investment securities	$	1,264,858		$	1,339,747		$	1,756,953		(5.6)\%		(28.0)%
Loans		7,664,377			7,525,005			7,208,109		1.9	%	6.3	%
Allowance for credit losses		86,575			85,084			87,206		1.8	%	(0.7)%
Goodwill and other intangible assets		163,607			163,927			164,915		(0.2)%		(0.8)%
Other real estate owned (OREO)		1,210			1,674			2,267		(27.7)%		(46.6)%
Total assets		9,919,783			9,881,077			9,899,551		0.4	%	0.2	%
Total deposits		8,312,505			8,306,032			8,358,976		0.1	%	(0.6)%
Borrowings		283,874			295,130			332,818		(3.8)%		(14.7)%
Total shareholders’ equity		1,183,257			1,161,979			1,088,757		1.8	%	8.7	%
Tangible equity (d)		1,019,650			998,052			923,842		2.2	%	10.4	%
Total nonperforming loans		72,745			71,759			58,229		1.4	%	24.9	%
Total nonperforming assets		73,955			73,433			60,496		0.7	%	22.2	%

ASSET QUALITY RATIOS:
Loans as a % of period end total assets		77.26	%		76.16	%		72.81	%	1.4	%	6.1	%
Total nonperforming loans as a % of period end loans		0.95	%		0.95	%		0.81	%	—	%	17.3	%
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets		0.96	%		0.98	%		0.84	%	(2.0)%		14.3	%
Allowance for credit losses as a % of period end loans		1.13	%		1.13	%		1.21	%	—	%	(6.6)%
Net loan charge-offs	$	1,622		$	841		$	1,232		92.9	%	31.7	%
Annualized net loan charge-offs as a % of average loans (b)		0.09	%		0.05	%		0.07	%	80.0	%	28.6	%

CAPITAL & LIQUIDITY:
Total shareholders’ equity / Period end total assets		11.93	%		11.76	%		11.00	%	1.4	%	8.5	%
Tangible equity (d) / Tangible assets (f)		10.45	%		10.27	%		9.49	%	1.8	%	10.1	%
Average shareholders’ equity / Average assets (b)		11.94	%		11.74	%		11.00	%	1.7	%	8.5	%
Average shareholders’ equity / Average loans (b)		15.44	%		15.48	%		15.30	%	(0.3)%		0.9	%
Average loans / Average deposits (b)		92.53	%		91.11	%		85.34	%	1.6	%	8.4	%

Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.


PARK NATIONAL CORPORATION
Financial Highlights
Six months ended June 30, 2024 and June 30, 2023

		2024			2023
*(in thousands, except common share and per common share data and ratios)*	Six months ended June 30			Six months ended June 30			Percent change vs ’23
INCOME STATEMENT:
Net interest income	$	193,460		$	183,770		5.3	%
Provision for credit losses		5,293			2,675		97.9	%
Other income		54,994			49,402		11.3	%
Other expense		152,417			152,388		—	%
Income before income taxes	$	90,744		$	78,109		16.2	%
Income taxes		16,171			12,792		26.4	%
Net income	$	74,573		$	65,317		14.2	%

MARKET DATA:
Earnings per common share – basic (a)	$	4.62		$	4.03		14.6	%
Earnings per common share – diluted (a)		4.60			4.01		14.7	%
Quarterly cash dividend declared per common share		2.12			2.10		1.0	%

Weighted average common shares – basic (b)		16,133,183			16,203,736		(0.4)%
Weighted average common shares – diluted (b)		16,215,342			16,282,693		(0.4)%

PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)		1.52	%		1.32	%	15.2	%
Return on average shareholders’ equity (a)(b)		12.88	%		12.07	%	6.7	%
Yield on loans		6.06	%		5.34	%	13.5	%
Yield on investment securities		3.87	%		3.67	%	5.4	%
Yield on money market instruments		5.42	%		4.84	%	12.0	%
Yield on interest earning assets		5.72	%		4.99	%	14.6	%
Cost of interest bearing deposits		1.97	%		1.31	%	50.4	%
Cost of borrowings		4.17	%		3.39	%	23.0	%
Cost of paying interest bearing liabilities		2.09	%		1.44	%	45.1	%
Net interest margin (g)		4.33	%		4.07	%	6.4	%
Efficiency ratio (g)		61.05	%		64.84	%	(5.8)%

ASSET QUALITY RATIOS:
Net loan charge-offs	$	2,463		$	1,231		100.1	%
Net loan charge-offs as a % of average loans (b)		0.07	%		0.03	%	133.3	%

CAPITAL & LIQUIDITY
Average shareholders’ equity / Average Assets (b)		11.84	%		10.92	%	8.4	%
Average shareholders’ equity / Average loans (b)		15.46	%		15.33	%	0.8	%
Average loans / Average deposits (b)		91.82	%		84.69	%	8.4	%

OTHER DATA (NON-GAAP) AND BALANCE SHEET INFORMATION:
Average interest earning assets		9,032,554			9,194,469		(1.8)%
Pre-tax, pre-provision net income (j)		96,037			80,784		18.9	%

Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.


PARK NATIONAL CORPORATION
Consolidated Statements of Income

	Three Months Ended				Six Month Ended
	June 30				June 30
*(in thousands, except share and per share data)*		2024		2023		2024		2023

Interest income:
Interest and fees on loans	$	115,318	$	96,428	$	226,529	$	188,042
Interest on debt securities:
Taxable		10,950		13,431		22,849		26,410
Tax-exempt		1,382		2,906		2,792		5,818
Other interest income		1,254		1,909		3,374		5,305
Total interest income		128,904		114,674		255,544		225,575

Interest expense:
Interest on deposits:
Demand and savings deposits		20,370		18,068		40,225		32,280
Time deposits		7,525		1,966		14,863		3,313
Interest on borrowings		3,172		3,068		6,996		6,212
Total interest expense		31,067		23,102		62,084		41,805

Net interest income		97,837		91,572		193,460		183,770

Provision for credit losses		3,113		2,492		5,293		2,675

Net interest income after provision for credit losses		94,724		89,080		188,167		181,095

Other income		28,794		25,015		54,994		49,402

Other expense		75,189		75,885		152,417		152,388

Income before income taxes		48,329		38,210		90,744		78,109

Income taxes		8,960		6,626		16,171		12,792

Net income	$	39,369	$	31,584	$	74,573	$	65,317

Per common share:
Net income – basic	$	2.44	$	1.95	$	4.62	$	4.03
Net income – diluted	$	2.42	$	1.94	$	4.60	$	4.01

Weighted average common shares – basic		16,149,523		16,165,119		16,133,183		16,203,736
Weighted average common shares – diluted		16,239,617		16,240,600		16,215,342		16,282,693

Cash dividends declared:
Quarterly dividend	$	1.06	$	1.05	$	2.12	$	2.10

PARK NATIONAL CORPORATION
Consolidated Balance Sheets

*(in thousands, except share data)*	June 30, 2024			December 31, 2023

Assets

Cash and due from banks	$	142,593		$	160,477
Money market instruments		118,872			57,791
Investment securities		1,264,858			1,429,144
Loans		7,664,377			7,476,221
Allowance for credit losses		(86,575	)		(83,745	)
Loans, net		7,577,802			7,392,476
Bank premises and equipment, net		72,131			74,211
Goodwill and other intangible assets		163,607			164,247
Other real estate owned		1,210			983
Other assets		578,710			557,124
Total assets	$	9,919,783		$	9,836,453

Liabilities and Shareholders’ Equity

Deposits:
Noninterest bearing	$	2,542,446		$	2,628,234
Interest bearing		5,770,059			5,414,332
Total deposits		8,312,505			8,042,566
Borrowings		283,874			517,329
Other liabilities		140,147			131,265
Total liabilities	$	8,736,526		$	8,691,160


Shareholders’ Equity:
Preferred shares (200,000 shares authorized; no shares outstanding at June 30, 2024 and December 31, 2023)	$	—		$	—
Common shares (No par value; 20,000,000 shares authorized; 17,623,104 shares issued at June 30, 2024 and December 31, 2023)		460,821			463,280
Accumulated other comprehensive loss, net of taxes		(68,454	)		(66,191	)
Retained earnings		943,149			903,877
Treasury shares (1,473,581 shares at June 30, 2024 and 1,506,625 shares at December 31, 2023)		(152,259	)		(155,673	)
Total shareholders’ equity	$	1,183,257		$	1,145,293
Total liabilities and shareholders’ equity	$	9,919,783		$	9,836,453


PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets

	Three Months Ended						Six Months Ended
	June 30,						June 30,
*(in thousands)*		2024			2023			2024			2023

Assets

Cash and due from banks	$	124,906		$	153,564		$	134,310		$	154,568
Money market instruments		94,658			149,745			125,084			220,951
Investment securities		1,285,086			1,777,878			1,326,807			1,792,199
Loans		7,587,127			7,132,025			7,534,889			7,115,723
Allowance for credit losses		(85,397	)		(87,182	)		(84,732	)		(86,996	)
Loans, net		7,501,730			7,044,843			7,450,157			7,028,727
Bank premises and equipment, net		73,340			80,592			74,130			81,316
Goodwill and other intangible assets		163,816			165,129			163,977			165,292
Other real estate owned		1,389			1,966			1,239			1,702
Other assets		566,401			544,088			561,648			543,198
Total assets	$	9,811,326		$	9,917,805		$	9,837,352		$	9,987,953


Liabilities and Shareholders’ Equity

Deposits:
Noninterest bearing	$	2,572,947		$	2,847,921		$	2,570,989		$	2,908,857
Interest bearing		5,626,577			5,509,022			5,635,332			5,492,931
Total deposits		8,199,524			8,356,943			8,206,321			8,401,788
Borrowings		312,963			347,191			337,333			370,067
Other liabilities		127,492			122,655			128,933			125,113
Total liabilities	$	8,639,979		$	8,826,789		$	8,672,587		$	8,896,968

Shareholders’ Equity:
Preferred shares	$	—		$	—		$	—		$	—
Common shares		459,546			458,884			461,532			460,713
Accumulated other comprehensive loss, net of taxes		(73,705	)		(91,007	)		(70,524	)		(93,609	)
Retained earnings		937,765			873,810			927,705			869,567
Treasury shares		(152,259	)		(150,671	)		(153,948	)		(145,686	)
Total shareholders’ equity	$	1,171,347		$	1,091,016		$	1,164,765		$	1,090,985
Total liabilities and shareholders’ equity	$	9,811,326		$	9,917,805		$	9,837,352		$	9,987,953

PARK NATIONAL CORPORATION
Consolidated Statements of Income – Linked Quarters

		2024		2024		2023		2023			2023
*(in thousands, except per share data)*	2nd QTR		1st QTR		4th QTR		3rd QTR			2nd QTR

Interest income:
Interest and fees on loans	$	115,318	$	111,211	$	108,495	$	103,258		$	96,428
Interest on debt securities:
Taxable		10,950		11,899		13,055		13,321			13,431
Tax-exempt		1,382		1,410		2,248		2,900			2,906
Other interest income		1,254		2,120		1,408		1,410			1,909
Total interest income		128,904		126,640		125,206		120,889			114,674

Interest expense:
Interest on deposits:
Demand and savings deposits		20,370		19,855		19,467		20,029			18,068
Time deposits		7,525		7,338		6,267		3,097			1,966
Interest on borrowings		3,172		3,824		4,398		3,494			3,068
Total interest expense		31,067		31,017		30,132		26,620			23,102

Net interest income		97,837		95,623		95,074		94,269			91,572

Provision for (recovery of) credit losses		3,113		2,180		1,809		(1,580	)		2,492

Net interest income after provision for (recovery of ) credit losses		94,724		93,443		93,265		95,849			89,080

Other income		28,794		26,200		15,519		27,713			25,015

Other expense		75,189		77,228		79,043		77,808			75,885

Income before income taxes		48,329		42,415		29,741		45,754			38,210

Income taxes		8,960		7,211		5,241		8,837			6,626

Net income	$	39,369	$	35,204	$	24,500	$	36,917		$	31,584

Per common share:
Net income – basic	$	2.44	$	2.18	$	1.52	$	2.29		$	1.95
Net income – diluted	$	2.42	$	2.17	$	1.51	$	2.28		$	1.94


PARK NATIONAL CORPORATION
Detail of other income and other expense – Linked Quarters

		2024		2024			2023			2023		2023
(in thousands)	2nd QTR		1st QTR			4th QTR			3rd QTR		2nd QTR

Other income:
Income from fiduciary activities	$	10,728	$	10,024		$	8,943		$	9,100	$	8,816
Service charges on deposit accounts		2,214		2,106			2,054			2,109		2,041
Other service income		2,906		2,524			2,349			2,615		2,639
Debit card fee income		6,580		6,243			6,583			6,652		6,830
Bank owned life insurance income		1,565		2,629			1,373			1,448		1,332
ATM fees		458		496			517			575		553
Loss on sale of debt securities, net		—		(398	)		(7,875	)		—		—
Gain (loss) on equity securities, net		358		(687	)		353			998		25
Other components of net periodic benefit income		2,204		2,204			1,893			1,893		1,893
Miscellaneous		1,781		1,059			(671	)		2,323		886
Total other income	$	28,794	$	26,200		$	15,519		$	27,713	$	25,015

Other expense:
Salaries	$	35,954	$	35,733		$	36,192		$	34,525	$	33,649
Employee benefits		9,873		11,560			10,088			10,822		10,538
Occupancy expense		2,975		3,181			3,344			3,203		3,214
Furniture and equipment expense		2,454		2,583			2,824			3,060		3,103
Data processing fees		9,542		8,808			9,605			9,700		9,582
Professional fees and services		6,022		6,817			7,015			7,572		7,365
Marketing		1,164		1,741			1,716			1,197		1,239
Insurance		1,777		1,718			1,708			2,158		1,960
Communication		1,002		1,036			993			1,135		1,045
State tax expense		1,129		1,110			1,158			1,125		1,096
Amortization of intangible assets		320		320			334			334		328
Foundation contributions		—		—			1,000			—		—
Miscellaneous		2,977		2,621			3,066			2,977		2,766
Total other expense	$	75,189	$	77,228		$	79,043		$	77,808	$	75,885

PARK NATIONAL CORPORATION
Asset Quality Information

							Year ended December 31,
*(in thousands, except ratios)*	June 30, 2024			March 31, 2024				2023			2022			2021			2020			2019

Allowance for credit losses:
Allowance for credit losses, beginning of period	$	85,084		$	83,745		$	85,379		$	83,197		$	85,675		$	56,679		$	51,512
Cumulative change in accounting principle; adoption of ASU 2022-02 in 2023 and ASU 2016-13 in 2021		—			—			383			—			6,090			—			—
Charge-offs		3,097			3,240			10,863			9,133			5,093			10,304			11,177
Recoveries		1,475			2,399			5,942			6,758			8,441			27,246			10,173
Net charge-offs (recoveries)		1,622			841			4,921			2,375			(3,348	)		(16,942	)		1,004
Provision for (recovery of) credit losses		3,113			2,180			2,904			4,557			(11,916	)		12,054			6,171
Allowance for credit losses, end of period	$	86,575		$	85,084		$	83,745		$	85,379		$	83,197		$	85,675		$	56,679

General reserve trends:
Allowance for credit losses, end of period	$	86,575		$	85,084		$	83,745		$	85,379		$	83,197		$	85,675		$	56,679
Allowance on accruing purchased credit deteriorated (“PCD”) loans (purchased credit impaired (“PCI”) loans for years 2020 and prior)		—			—			—			—			—			167			268
Allowance on purchased loans excluded from collectively evaluated loans (for years 2020 and prior)		N.A.			N.A.			N.A.			N.A.			N.A.			678			—
Specific reserves on individually evaluated loans		5,311			5,032			4,983			3,566			1,616			5,434			5,230
General reserves on collectively evaluated loans	$	81,264		$	80,052		$	78,762		$	81,813		$	81,581		$	79,396		$	51,181

Total loans	$	7,664,377		$	7,525,005		$	7,476,221		$	7,141,891		$	6,871,122		$	7,177,785		$	6,501,404
Accruing PCD loans (PCI loans for years 2020 and prior)		2,420			2,454			2,835			4,653			7,149			11,153			14,331
Purchased loans excluded from collectively evaluated loans (for years 2020 and prior)		N.A.			N.A.			N.A.			N.A.			N.A.			360,056			548,436
Individually evaluated loans (k)		54,993			54,742			45,215			78,341			74,502			108,407			77,459
Collectively evaluated loans	$	7,606,964		$	7,467,809		$	7,428,171		$	7,058,897		$	6,789,471		$	6,698,169		$	5,861,178

Asset Quality Ratios:
Net charge-offs (recoveries) as a % of average loans		0.09	%		0.05	%		0.07	%		0.03	%	(0.05)%			(0.24)%				0.02	%
Allowance for credit losses as a % of period end loans		1.13	%		1.13	%		1.12	%		1.20	%		1.21	%		1.19	%		0.87	%
General reserve as a % of collectively evaluated loans		1.07	%		1.07	%		1.06	%		1.16	%		1.20	%		1.19	%		0.87	%

Nonperforming assets:
Nonaccrual loans	$	71,368		$	70,189		$	60,259		$	79,696		$	72,722		$	117,368		$	90,080
Accruing troubled debt restructurings (for years 2022 and prior) (k)	N.A.			N.A.			N.A.				20,134			28,323			20,788			21,215
Loans past due 90 days or more		1,377			1,570			859			1,281			1,607			1,458			2,658
Total nonperforming loans	$	72,745		$	71,759		$	61,118		$	101,111		$	102,652		$	139,614		$	113,953
Other real estate owned		1,210			1,674			983			1,354			775			1,431			4,029
Other nonperforming assets		—			—			—			—			2,750			3,164			3,599
Total nonperforming assets	$	73,955		$	73,433		$	62,101		$	102,465		$	106,177		$	144,209		$	121,581
Percentage of nonaccrual loans to period end loans		0.93	%		0.93	%		0.81	%		1.12	%		1.06	%		1.64	%		1.39	%
Percentage of nonperforming loans to period end loans		0.95	%		0.95	%		0.82	%		1.42	%		1.49	%		1.95	%		1.75	%
Percentage of nonperforming assets to period end loans		0.96	%		0.98	%		0.83	%		1.43	%		1.55	%		2.01	%		1.87	%
Percentage of nonperforming assets to period end total assets		0.75	%		0.74	%		0.63	%		1.04	%		1.11	%		1.55	%		1.42	%

Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.


PARK NATIONAL CORPORATION
Asset Quality Information (continued)

							Year ended December 31,
(in thousands, except ratios)	June 30, 2024			March 31, 2024				2023			2022			2021			2020			2019

New nonaccrual loan information:
Nonaccrual loans, beginning of period	$	70,189		$	60,259		$	79,696		$	72,722		$	117,368		$	90,080		$	67,954
New nonaccrual loans		13,180			19,012			48,280			64,918			38,478			103,386			81,009
Resolved nonaccrual loans		12,001			9,082			67,717			57,944			83,124			76,098			58,883
Nonaccrual loans, end of period	$	71,368		$	70,189		$	60,259		$	79,696		$	72,722		$	117,368		$	90,080

Individually evaluated commercial loan portfolio information (period end): (k)
Unpaid principal balance	$	57,184		$	57,053		$	47,564		$	80,116		$	75,126		$	109,062		$	78,178
Prior charge-offs		2,191			2,311			2,349			1,775			624			655			719
Remaining principal balance		54,993			54,742			45,215			78,341			74,502			108,407			77,459
Specific reserves		5,311			5,032			4,983			3,566			1,616			5,434			5,230
Book value, after specific reserves	$	49,682		$	49,710		$	40,232		$	74,775		$	72,886		$	102,973		$	72,229

Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.

PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS
	THREE MONTHS ENDED									SIX MONTHS ENDED
*(in thousands, except share and per share data)*	June 30, 2024			March 31, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Net interest income	$	97,837		$	95,623		$	91,572		$	193,460		$	183,770
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions		271			352			164			623			364
less interest income on former Vision Bank relationships		5			2			13			7			587
Net interest income – adjusted	$	97,561		$	95,269		$	91,395		$	192,830		$	182,819

Provision for credit losses	$	3,113		$	2,180		$	2,492		$	5,293		$	2,675
less recoveries on former Vision Bank relationships		(111	)		(953	)		(25	)		(1,064	)		(748	)
Provision for credit losses – adjusted	$	3,224		$	3,133		$	2,517		$	6,357		$	3,423

Other income	$	28,794		$	26,200		$	25,015		$	54,994		$	49,402
less loss on sale of debt securities, net		—			(398	)		—			(398	)		—
less impact of strategic initiatives		813			(155	)		—			658			—
less Vision related gain on the sale of OREO, net		(7	)		121			—			114			—
less other service income related to former Vision Bank relationships		6			7			—			13			135
Other income – adjusted	$	27,982		$	26,625		$	25,015		$	54,607		$	49,267

Other expense	$	75,189		$	77,228		$	75,885		$	152,417		$	152,388
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions		320			320			328			640			655
less direct expenses related to collection of payments on former Vision Bank loan relationships		—			—			—			—			100
Other expense – adjusted	$	74,869		$	76,908		$	75,557		$	151,777		$	151,633

Tax effect of adjustments to net income identified above (i)	$	(185	)	$	(118	)	$	26		$	(303	)	$	(227	)

Net income – reported	$	39,369		$	35,204		$	31,584		$	74,573		$	65,317
Net income – adjusted (h)	$	38,675		$	34,760		$	31,684		$	73,435		$	64,465

Diluted earnings per common share	$	2.42		$	2.17		$	1.94		$	4.60		$	4.01
Diluted earnings per common share, adjusted (h)	$	2.38		$	2.15		$	1.95		$	4.53		$	3.96

Annualized return on average assets (a)(b)		1.61	%		1.44	%		1.28	%		1.52	%		1.32	%
Annualized return on average assets, adjusted (a)(b)(h)		1.59	%		1.42	%		1.28	%		1.50	%		1.30	%

Annualized return on average tangible assets (a)(b)(e)		1.64	%		1.46	%		1.30	%		1.55	%		1.34	%
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)		1.61	%		1.44	%		1.30	%		1.53	%		1.32	%

Annualized return on average shareholders’ equity (a)(b)		13.52	%		12.23	%		11.61	%		12.88	%		12.07	%
Annualized return on average shareholders’ equity, adjusted (a)(b)(h)		13.28	%		12.07	%		11.65	%		12.68	%		11.92	%

Annualized return on average tangible equity (a)(b)(c)		15.72	%		14.24	%		13.68	%		14.98	%		14.23	%
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)		15.44	%		14.06	%		13.73	%		14.76	%		14.04	%

Efficiency ratio (g)		59.09	%		63.07	%		64.58	%		61.05	%		64.84	%
Efficiency ratio, adjusted (g)(h)		59.35	%		62.78	%		64.40	%		61.04	%		64.82	%

Annualized net interest margin (g)		4.39	%		4.28	%		4.07	%		4.33	%		4.07	%
Annualized net interest margin, adjusted (g)(h)		4.38	%		4.26	%		4.06	%		4.32	%		4.05	%
Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.


PARK NATIONAL CORPORATION
Financial Reconciliations (continued)

(a) Reported measure uses net income
(b) Averages are for the three months ended June 30, 2024, March 31, 2024, and June 30, 2023 and the six months ended June 30, 2024 and June 30, 2023, as appropriate
(c) Net income for each period divided by average tangible equity during the period. Average tangible equity equals average shareholders’ equity during the applicable period less average goodwill and other intangible assets during the applicable period.

RECONCILIATION OF AVERAGE SHAREHOLDERS’ EQUITY TO AVERAGE TANGIBLE EQUITY:
	THREE MONTHS ENDED						SIX MONTHS ENDED
	June 30, 2024		March 31, 2024		June 30, 2023		June 30, 2024		June 30, 2023
AVERAGE SHAREHOLDERS’ EQUITY	$	1,171,347	$	1,158,184	$	1,091,016	$	1,164,765	$	1,090,985
Less: Average goodwill and other intangible assets		163,816		164,137		165,129		163,977		165,292
AVERAGE TANGIBLE EQUITY	$	1,007,531	$	994,047	$	925,887	$	1,000,788	$	925,693

(d) Tangible equity divided by common shares outstanding at period end. Tangible equity equals total shareholders’ equity less goodwill and other intangible assets, in each case at the end of the period.

RECONCILIATION OF TOTAL SHAREHOLDERS’ EQUITY TO TANGIBLE EQUITY:
	June 30, 2024		March 31, 2024		June 30, 2024
TOTAL SHAREHOLDERS’ EQUITY	$	1,183,257	$	1,161,979	$	1,088,757
Less: Goodwill and other intangible assets		163,607		163,927		164,915
TANGIBLE EQUITY	$	1,019,650	$	998,052	$	923,842

(e) Net income for each period divided by average tangible assets during the period. Average tangible assets equal average assets less average goodwill and other intangible assets, in each case during the applicable period.

RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS
	THREE MONTHS ENDED						SIX MONTHS ENDED
	June 30, 2024		March 31, 2024		June 30, 2023		June 30, 2024		June 30, 2023
AVERAGE ASSETS	$	9,811,326	$	9,863,378	$	9,917,805	$	9,837,352	$	9,987,953
Less: Average goodwill and other intangible assets		163,816		164,137		165,129		163,977		165,292
AVERAGE TANGIBLE ASSETS	$	9,647,510	$	9,699,241	$	9,752,676	$	9,673,375	$	9,822,661

(f) Tangible equity divided by tangible assets. Tangible assets equal total assets less goodwill and other intangible assets, in each case at the end of the period.

RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:
	June 30, 2024		March 31, 2024		June 30, 2023
TOTAL ASSETS	$	9,919,783	$	9,881,077	$	9,899,551
Less: Goodwill and other intangible assets		163,607		163,927		164,915
TANGIBLE ASSETS	$	9,756,176	$	9,717,150	$	9,734,636


(g) Efficiency ratio is calculated by dividing total other expense by the sum of fully taxable equivalent net interest income and other income. Fully taxable equivalent net interest income reconciliation is shown assuming a 21% corporate federal income tax rate. Additionally, net interest margin is calculated on a fully taxable equivalent basis by dividing fully taxable equivalent net interest income by average interest earning assets, in each case during the applicable period.

RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
	THREE MONTHS ENDED						SIX MONTHS ENDED
	June 30, 2024		March 31, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Interest income	$	128,904	$	126,640	$	114,674	$	255,544	$	225,575
Fully taxable equivalent adjustment		605		616		920		1,221		1,846
Fully taxable equivalent interest income	$	129,509	$	127,256	$	115,594	$	256,765	$	227,421
Interest expense		31,067		31,017		23,102		62,084		41,805
Fully taxable equivalent net interest income	$	98,442	$	96,239	$	92,492	$	194,681	$	185,616

(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, provision for credit losses, other income, other expense and tax effect of adjustments to net income.
(i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate.
(j) Pre-tax, pre-provision (“PTPP”) net income is calculated as net income, plus income taxes, plus the provision for credit losses, in each case during the applicable period. PTPP net income is a common industry metric utilized in capital analysis and review. PTPP is used to assess the operating performance of Park while excluding the impact of the provision for credit losses.

RECONCILIATION OF PRE-TAX, PRE-PROVISION NET INCOME
	THREE MONTHS ENDED						SIX MONTHS ENDED
	June 30, 2024		March 31, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Net income	$	39,369	$	35,204	$	31,584	$	74,573	$	65,317
Plus: Income taxes		8,960		7,211		6,626		16,171		12,792
Plus: Provision for credit losses		3,113		2,180		2,492		5,293		2,675
Pre-tax, pre-provision net income	$	51,442	$	44,595	$	40,702	$	96,037	$	80,784

(k) Effective January 1, 2023, Park adopted Accounting Standards Update (“ASU”) 2022-02. Among other things, this ASU eliminated the concept of troubled debt restructurings (“TDRs”). As a result of the adoption of this ASU and elimination of the concept of TDRs, total nonperforming loans (“NPLs”) and total nonperforming assets (“NPAs”) each decreased by $20.1 million effective January 1, 2023. Additionally, as a result of the adoption of this ASU, individually evaluated loans decreased by $11.5 million effective January 1, 2023.

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