Park National Corporation reports 2021 financial results

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Park National Corporation (PRK) reported mixed financial results for the fourth quarter and full year of 2021. In Q4, net income fell by 19.1% to $36.5 million, translating to $2.23 per diluted share, down from $2.75 in Q4 2020. However, for the full year, net income increased by 20.3% to $153.9 million, with earnings per share rising to $9.37. The Park National Bank also saw Q4 net income rise by 8.2% to $37.0 million. A cash dividend of $1.04 per share was declared, payable on March 10, 2022.

Positive

Full year 2021 net income increased by 20.3% to $153.9 million.
Earnings per share for 2021 rose to $9.37, compared to $7.80 in 2020.
Fourth quarter net income for Park National Bank increased by 8.2% to $37.0 million.
Board approved bonus payments totaling $2.5 million for associates.

Negative

Fourth quarter net income decreased by 19.1% to $36.5 million.
Earnings per diluted share in Q4 fell to $2.23 from $2.75 in the previous year.

01/24/2022 - 04:15 PM

Strong performance lays solid foundation for 2022

NEWARK, Ohio, Jan. 24, 2022 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the fourth quarter and full year of 2021 (three and twelve months ended December 31, 2021). Park's board of directors declared a quarterly cash dividend of $1.04 per common share, payable on March 10, 2022 to common shareholders of record as of February 18, 2022.

Park’s net income for the fourth quarter of 2021 was $36.5 million, a 19.1 percent decrease from $45.2 million for the fourth quarter of 2020. Fourth quarter 2021 net income per diluted common share was $2.23, compared to $2.75 in the fourth quarter of 2020. Park's net income for the full year of 2021 was $153.9 million, a 20.3 percent increase from $127.9 million for the full year of 2020. Net income per diluted common share was $9.37 for the full year of 2021, compared to $7.80 for the full year of 2020.

“Our colleagues live and love to serve. While the last two years have been trying, Park bankers have used their creativity, energy and imagination to serve our customers, prospects and communities more. Our financial results reflect our colleagues’ sustained efforts on all levels,” said Park Chairman and Chief Executive Officer David Trautman. “We look forward to finding opportunities to serve customers more and to invite prospects to the Park family this year.”

Park's community-banking subsidiary, The Park National Bank, reported net income of $37.0 million for the fourth quarter of 2021, an 8.2 percent increase compared to $34.2 million for the same period of 2020. Park National Bank reported net income of $159.5 million for the full year of 2021, compared to $123.7 million for the full year of 2020.

“I am continuously impressed by our bankers’ flexibility and resiliency. Park bankers rose to the challenge of another unpredictable year and found inventive ways to serve our customers more,” said Park President Matthew Miller.

Park also announced that the board of directors approved a second bonus payment, in addition to the one paid in 2021, for all associates who are not eligible for Park’s incentive compensation program. In February, each full-time associate in that group will receive an extra payment of $1,000, and part-time associates will receive $750. With these two bonus payments, Park awarded associates an extra $2.5 million to recognize their contributions to the bank’s strong financial performance.

Headquartered in Newark, Ohio, Park National Corporation had $9.6 billion in total assets (as of December 31, 2021). Park’s banking operations are conducted through Park subsidiary Park National Bank. Other bank subsidiaries are Scope Leasing Inc. (dba Scope Aircraft Finance), Guardian Financial Services Company (dba Guardian Finance Company) and SE Property Holdings, LLC.

Complete financial tables are listed below.

Category: Earnings
Media contact: Ellie Akey, Marketing & Communication Officer, 740-349-5493 or ellie.akey@parknationalbank.com
Investor contact: Brady Burt, Chief Financial Officer, 740-322-6844 or brady.burt@parknationalbank.com

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

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

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

the ever-changing effects of the novel coronavirus (COVID-19) pandemic - - the duration, extent and severity of which are impossible to predict, including the possibility of further resurgence in the spread of COVID-19 or variants thereof - - on economies (local, national and international), supply chains and markets, on the labor market, including the potential for a sustained reduction in labor force participation, and on our customers, counterparties, employees and third-party service providers, as well as the effects of various responses of governmental and nongovernmental authorities to the COVID-19 pandemic, including public health actions directed toward the containment of the COVID-19 pandemic (such as quarantines, shut downs and other restrictions on travel and commercial, social or other activities), the availability, effectiveness and acceptance of vaccines, and the implementation of fiscal stimulus packages;
government imposed COVID-19 vaccine mandates could have a material adverse impact on our business, results of operations and ability to retain and recruit key management and other personnel;
the impact of future governmental and regulatory actions upon our participation in and execution of government programs related to the COVID-19 pandemic;
Park's ability to execute our business plan successfully and within the expected timeframe as well as our ability to manage strategic initiatives in light of the impact of the COVID-19 pandemic and the various responses to the COVID-19 pandemic;
general economic and financial market conditions, specifically in the real estate markets and the credit markets, either nationally or in the states in which Park and our subsidiaries do business, may experience a weaker recovery than anticipated, in addition to the continuing impact of the COVID-19 pandemic on our customers’ operations and financial condition, either of which may result in adverse impacts on the demand for loan, deposit and other financial services, delinquencies, defaults and counterparties' inability to meet credit and other obligations and the possible impairment of collectability of loans;
factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers and the success of construction projects that we finance, including any loans acquired in acquisition transactions;
the effect of monetary and other fiscal policies (including the impact of money supply, interest rate policies and policies impacting inflation of the Federal Reserve Board, the U.S. Treasury and other governmental agencies) as well as disruption in the liquidity and functioning of U.S. financial markets, as a result of the COVID-19 pandemic and government policies implemented in response thereto, may adversely impact prepayment penalty income, mortgage banking income, income from fiduciary activities, the value of securities, deposits and other financial instruments, in addition to the loan demand and the performance of our loan portfolio, and the interest rate sensitivity of our consolidated balance sheet as well as reduce interest margins;
changes in the federal, state, or local tax laws may adversely affect the fair values of net deferred tax assets and obligations of state and political subdivisions held in Park's investment securities portfolio and otherwise negatively impact our financial performance;
the impact of the changes in federal, state and local governmental policy, including the regulatory landscape, capital markets, elevated government debt, potential changes in tax legislation that may increase tax rates, infrastructure spending and social programs;
changes in laws or requirements imposed by Park's regulators impacting Park's capital actions, including dividend payments and stock repurchases;
changes in consumer spending, borrowing and saving habits, whether due to changes in retail distribution strategies, consumer preferences and behavior, changes in business and economic conditions (including as a result of the COVID-19 pandemic and reactions thereto), legislative and regulatory initiatives (including those undertaken in response to the COVID-19 pandemic), or other factors may be different than anticipated;
changes in unemployment levels in the states in which Park and our subsidiaries do business may be different than anticipated due to the continuing impact of the COVID-19 pandemic;
changes in customers', suppliers', and other counterparties' performance and creditworthiness, and Park's expectations regarding future loan losses and our allowance for credit losses, may be different than anticipated due to the continuing impact of and the various responses to the COVID-19 pandemic;
Park may have more credit risk and higher credit losses to the extent there are loan concentrations by location or industry of borrowers or collateral;
the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors;
the adequacy of our internal controls and risk management program in the event of changes in the market, economic, operational (including those which may result from more of our associates working remotely), asset/liability repricing, legal, compliance, strategic, cybersecurity, liquidity, credit and interest rate risks associated with Park's business;
competitive pressures among financial services organizations could increase significantly, including product and pricing pressures (which could in turn impact our credit spreads), changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and Park's ability to attract, develop and retain qualified banking professionals;
uncertainty regarding the nature, timing, cost and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and our subsidiaries, including major reform of the regulatory oversight structure of the financial services industry and changes in laws and regulations concerning taxes, FDIC insurance premium levels, pensions, bankruptcy, consumer protection, rent regulation and housing, financial accounting and reporting, environmental protection, insurance, bank products and services, bank and bank holding company capital and liquidity standards, fiduciary standards, securities and other aspects of the financial services industry, specifically the reforms provided for in the Coronavirus Aid, Relief and Economic Security (CARES) Act and the follow-up legislation in the Consolidated Appropriations Act, 2021, the American Rescue Plan Act of 2021, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and the Basel III regulatory capital reforms, as well as regulations already adopted and which may be adopted in the future by the relevant regulatory agencies, including the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve Board, to implement the provisions of the CARES Act and the follow-up legislation in the Consolidated Appropriations Act, 2021, the provisions of the American Rescue Plan Act of 2021, the provisions of the Dodd-Frank Act, and the Basel III regulatory capital reforms;
the effect of changes in accounting policies and practices, as may be adopted by the Financial Accounting Standards Board (the "FASB"), the SEC, the Public Company Accounting Oversight Board and other regulatory agencies, may adversely affect Park's reported financial condition or results of operations;
Park's assumptions and estimates used in applying critical accounting policies and modeling, including under the CECL model, which may prove unreliable, inaccurate or not predictive of actual results;
the impact of Park's ability to anticipate and respond to technological changes on Park's ability to respond to customer needs and meet competitive demands;
operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Park and our subsidiaries are highly dependent;
the ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks, including those of Park's third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Park and/or result in Park incurring a financial loss;
a failure in or breach of Park's operational or security systems or infrastructure, or those of our third-party vendors and other service providers, resulting in failures or disruptions in customer account management, general ledger, deposit, loan, or other systems, including as a result of cyber attacks;
the impact on Park's business and operating results of any costs associated with obtaining rights in intellectual property claimed by others and of adequacy of Park's intellectual property protection in general;
the existence or exacerbation of general geopolitical instability and uncertainty as well as the effect of trade policies (including the impact of potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations, closing of border crossings and changes in the relationship of the U.S. and its global trading partners);
the impact on financial markets and the economy of any changes in the credit ratings of the U.S. Treasury obligations and other U.S. government-backed debt, as well as issues surrounding the levels of U.S., European and Asian government debt and concerns regarding the growth rates and financial stability of certain sovereign governments, supranationals and financial institutions in Europe and Asia and the risk they may face difficulties servicing their sovereign debt;
the effect of a fall in stock market prices on Park's asset and wealth management businesses;
our litigation and regulatory compliance exposure, including the costs and effects of any adverse developments in legal proceedings or other claims and the costs and effects of unfavorable resolution of regulatory and other governmental examinations or other inquiries;
continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends;
the impact on Park's business, personnel, facilities or systems of losses related to acts of fraud, scams and schemes of third parties;
the impact of widespread natural and other disasters, pandemics (including the COVID-19 pandemic), dislocations, regional or national protests and civil unrest (including any resulting branch closures or damages), military or terrorist activities or international hostilities on the economy and financial markets generally and on us or our counterparties specifically;
any of the foregoing factors, or other cascading effects of the COVID-19 pandemic that are not currently foreseeable, could materially affect our business, including our customers' willingness to conduct banking transactions and their ability to pay on existing obligations;
the effect of healthcare laws in the U.S. and potential changes for such laws, especially in light of the COVID-19 pandemic, which may increase our healthcare and other costs and negatively impact our operations and financial results;
risk and uncertainties associated with Park's entry into new geographic markets with our recent acquisitions, including expected revenue synergies and cost savings from recent acquisitions not being fully realized or realized within the expected time frame;
the discontinuation of the London Inter-Bank Offered Rate (LIBOR) and other reference rates which may result in increased expenses and litigation, and adversely impact the effectiveness of hedging strategies;
and other risk factors relating to the banking industry as detailed from time to time in Park's reports filed with the SEC including those described in "Item 1A. Risk Factors" of Part I of Park's Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

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 December 31, 2021, September 30, 2021, and December 31, 2020

		2021			2021			2020		Percent change vs.
*(in thousands, except share and per share data)*	4th QTR			3rd QTR			4th QTR			3Q '21		4Q '20
INCOME STATEMENT:
Net interest income	$	83,706		$	81,602		$	86,321		2.6	%	(3.0) %
(Recovery of) provision for credit losses (l)		(4,993	)		1,972			(19,159	)	N.M		N.M
Other income		32,206			32,411			35,656		(0.6) %		(9.7) %
Other expense		75,764			68,489			85,661		10.6	%	(11.6) %
Income before income taxes	$	45,141		$	43,552		$	55,475		3.6	%	(18.6) %
Income taxes		8,593			8,118			10,275		5.9	%	(16.4) %
Net income	$	36,548		$	35,434		$	45,200		3.1	%	(19.1) %

MARKET DATA:
Earnings per common share - basic (a)	$	2.25		$	2.17		$	2.77		3.7	%	(18.8) %
Earnings per common share - diluted (a)		2.23			2.16			2.75		3.2	%	(18.9) %
Cash dividends declared per common share		1.23			1.03			1.02		19.4	%	20.6	%
Book value per common share at period end		68.48			65.90			63.76		3.9	%	7.4	%
Market price per common share at period end		137.31			121.95			105.01		12.6	%	30.8	%
Market capitalization at period end		2,227,108			1,976,343			1,713,154		12.7	%	30.0	%

Weighted average common shares - basic (b)		16,216,076			16,292,312			16,310,551		(0.5) %		(0.6) %
Weighted average common shares - diluted (b)		16,363,968			16,423,912			16,434,812		(0.4) %		(0.4) %
Common shares outstanding at period end		16,219,563			16,206,177			16,314,197		0.1	%	(0.6) %

PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)		1.48	%		1.40	%		1.93	%	5.7	%	(23.3) %
Return on average shareholders' equity (a)(b)		13.44	%		13.04	%		17.37	%	3.1	%	(22.6) %
Yield on loans		4.58	%		4.47	%		4.69	%	2.5	%	(2.3) %
Yield on investment securities		2.05	%		2.12	%		2.80	%	(3.3) %		(26.8) %
Yield on money market instruments		0.15	%		0.16	%		0.11	%	(6.3) %		36.4	%
Yield on interest earning assets		3.88	%		3.69	%		4.33	%	5.1	%	(10.4) %
Cost of interest bearing deposits		0.09	%		0.11	%		0.19	%	(18.2) %		(52.6) %
Cost of borrowings		2.09	%		2.00	%		2.01	%	4.5	%	4.0	%
Cost of paying interest bearing liabilities		0.25	%		0.26	%		0.40	%	(3.8) %		(37.5) %
Net interest margin (g)		3.72	%		3.53	%		4.07	%	5.4	%	(8.6) %
Efficiency ratio (g)		64.94	%		59.70	%		69.82	%	8.8	%	(7.0) %

OTHER RATIOS (NON-GAAP):
Tangible book value per share (d)	$	58.18		$	55.56		$	53.41		4.7	%	8.9	%


Note: Explanations for footnotes (a) - (l) 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 December 31, 2021, September 30, 2021, and December 31, 2020

										Percent change vs.
*(in thousands, except ratios)*	December 31, 2021			September 30, 2021			December 31, 2020			3Q '21		4Q '20
BALANCE SHEET:
Investment securities	$	1,815,408		$	1,609,303		$	1,124,806		12.8	%	61.4	%
Loans		6,871,122			6,908,417			7,177,785		(0.5) %		(4.3) %
Allowance for credit losses (l)		83,197			88,129			85,675		(5.6) %		(2.9) %
Goodwill and other intangible assets		167,057			167,477			168,855		(0.3) %		(1.1) %
Other real estate owned (OREO)		775			813			1,431		(4.7) %		(45.8) %
Total assets		9,560,254			10,034,018			9,279,021		(4.7) %		3.0	%
Total deposits		7,904,528			8,364,385			7,572,358		(5.5) %		4.4	%
Borrowings		426,996			424,078			562,504		0.7	%	(24.1) %
Total shareholders' equity		1,110,759			1,067,912			1,040,256		4.0	%	6.8	%
Tangible equity (d)		943,702			900,435			871,401		4.8	%	8.3	%
Total nonperforming loans		102,652			106,872			139,614		(3.9) %		(26.5) %
Total nonperforming assets		106,177			110,849			144,209		(4.2) %		(26.4) %

ASSET QUALITY RATIOS:
Loans as a % of period end total assets		71.87	%		68.85	%		77.35	%	4.4	%	(7.1) %
Total nonperforming loans as a % of period end loans		1.49	%		1.55	%		1.95	%	(3.9) %		(23.6) %
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets		1.54	%		1.60	%		2.01	%	(3.8) %		(23.4) %
Allowance for credit losses as a % of period end loans		1.21	%		1.28	%		1.19	%	(5.5) %		1.7	%
Net loan recoveries	$	(61	)	$	(2,580	)	$	(17,796	)	N.M		N.M
Annualized net loan recoveries as a % of average loans (b)		—	%	(0.15) %			(0.98) %			N.M		N.M

CAPITAL & LIQUIDITY:
Total shareholders' equity / Period end total assets		11.62	%		10.64	%		11.21	%	9.2	%	3.7	%
Tangible equity (d) / Tangible assets (f)		10.05	%		9.13	%		9.57	%	10.1	%	5.0	%
Average shareholders' equity / Average assets (b)		10.97	%		10.71	%		11.11	%	2.4	%	(1.3) %
Average shareholders' equity / Average loans (b)		15.69	%		15.50	%		14.29	%	1.2	%	9.8	%
Average loans / Average deposits (b)		83.78	%		82.68	%		95.80	%	1.3	%	(12.5) %

Note: Explanations for footnotes (a) - (l) are included at the end of the financial tables in the "Financial Reconciliations" section.

PARK NATIONAL CORPORATION
Financial Highlights
Year ended December 31, 2021 and December 31, 2020


*(in thousands, except share and per share data)*		2021			2020		Percent change vs '20
INCOME STATEMENT:
Net interest income	$	329,893		$	327,630		0.7	%
(Recovery of) provision for credit losses (l)		(11,916	)		12,054		N.M
Other income		129,944			125,664		3.4	%
Other expense		283,518			286,595		(1.1)%
Income before income taxes	$	188,235		$	154,645		21.7	%
Income taxes		34,290			26,722		28.3	%
Net income	$	153,945		$	127,923		20.3	%

MARKET DATA:
Earnings per common share - basic (a)	$	9.45		$	7.85		20.4	%
Earnings per common share - diluted (a)		9.37			7.80		20.1	%
Cash dividends declared per common share		4.52			4.28		5.6	%

Weighted average common shares - basic (b)		16,291,016			16,302,825		(0.1)%
Weighted average common shares - diluted (b)		16,425,206			16,407,502		0.1	%

PERFORMANCE RATIOS:
Return on average assets (a)(b)		1.56	%		1.38	%	13.0	%
Return on average shareholders' equity (a)(b)		14.45	%		12.68	%	14.0	%
Yield on loans		4.53	%		4.71	%	(3.8) %
Yield on investment securities		2.22	%		2.66	%	(16.5) %
Yield on money market instruments		0.13	%		0.26	%	(50.0) %
Yield on interest earning assets		3.86	%		4.28	%	(9.8) %
Cost of interest bearing deposits		0.12	%		0.41	%	(70.7) %
Cost of borrowings		1.96	%		1.77	%	10.7	%
Cost of paying interest bearing liabilities		0.28	%		0.52	%	(46.2) %
Net interest margin (g)		3.69	%		3.93	%	(6.1) %
Efficiency ratio (g)		61.27	%		62.83	%	(2.5) %

ASSET QUALITY RATIOS
Net loan recoveries	$	(3,348	)	$	(16,942	)	N.M.
Net loan recoveries as a % of average loans (b)	(0.05)%			(0.24)%			N.M.

CAPITAL & LIQUIDITY
Average shareholders' equity / Average assets (b)		10.82	%		10.92	%	(0.9)%
Average shareholders' equity / Average loans (b)		15.19	%		14.44	%	5.2	%
Average loans / Average deposits (b)		85.68	%		91.58	%	(6.4)%


Note: Explanations for footnotes (a) - (l) are included at the end of the financial tables in the "Financial Reconciliations" section.

PARK NATIONAL CORPORATION
Consolidated Statements of Income

	Three Months Ended						Year Ended
	December 31,						December 31,
*(in thousands, except share and per share data)*		2021			2020			2021			2020

Interest income:
Interest and fees on loans	$	79,168		$	85,268		$	317,208		$	328,727
Interest on:
Obligations of U.S. Government, its agencies
and other securities - taxable		5,698			4,420			19,458			19,818
Obligations of states and political subdivisions - tax-exempt		2,209			2,040			8,307			8,436
Other interest income		191			72			880			739
Total interest income		87,266			91,800			345,853			357,720

Interest expense:
Interest on deposits:
Demand and savings deposits		373			490			1,595			9,142
Time deposits		831			1,893			4,711			12,186
Interest on borrowings		2,356			3,096			9,654			8,762
Total interest expense		3,560			5,479			15,960			30,090

Net interest income		83,706			86,321			329,893			327,630

(Recovery of) provision for credit losses (l)		(4,993	)		(19,159	)		(11,916	)		12,054

Net interest income after (recovery of) provision for credit losses		88,699			105,480			341,809			315,576

Other income		32,206			35,656			129,944			125,664

Other expense		75,764			85,661			283,518			286,595

Income before income taxes		45,141			55,475			188,235			154,645

Income taxes		8,593			10,275			34,290			26,722

Net income	$	36,548		$	45,200		$	153,945		$	127,923

Per common share:
Net income - basic	$	2.25		$	2.77		$	9.45		$	7.85
Net income - diluted	$	2.23		$	2.75		$	9.37		$	7.80

Weighted average shares - basic		16,216,076			16,310,551			16,291,016			16,302,825
Weighted average shares - diluted		16,363,968			16,434,812			16,425,206			16,407,502

Cash dividends declared	$	1.23		$	1.02		$	4.52		$	4.28

PARK NATIONAL CORPORATION
Consolidated Balance Sheets

*(in thousands, except share data)*	December 31, 2021			December 31, 2020

Assets

Cash and due from banks	$	144,507		$	155,596
Money market instruments		74,673			214,878
Investment securities		1,815,408			1,124,806
Loans		6,871,122			7,177,785
Allowance for credit losses (l)		(83,197	)		(85,675	)
Loans, net		6,787,925			7,092,110
Bank premises and equipment, net		89,008			88,660
Goodwill and other intangible assets		167,057			168,855
Other real estate owned		775			1,431
Other assets		480,901			432,685
Total assets	$	9,560,254		$	9,279,021

Liabilities and Shareholders' Equity

Deposits:
Noninterest bearing	$	3,066,419		$	2,727,100
Interest bearing		4,838,109			4,845,258
Total deposits		7,904,528			7,572,358
Borrowings		426,996			562,504
Other liabilities		117,971			103,903
Total liabilities	$	8,449,495		$	8,238,765


Shareholders' Equity:
Preferred shares (200,000 shares authorized; no shares outstanding at December 31, 2021 and December 31, 2020)	$	—		$	—
Common shares (No par value; 20,000,000 shares authorized; 17,623,118 shares issued at December 31, 2021 and 17,623,163 shares issued at December 31, 2020)		461,800			460,687
Accumulated other comprehensive income, net of taxes		15,155			5,571
Retained earnings		776,294			704,764
Treasury shares (1,403,555 shares at December 31, 2021 and 1,308,966 shares at December 31, 2020)		(142,490	)		(130,766	)
Total shareholders' equity	$	1,110,759		$	1,040,256
Total liabilities and shareholders' equity	$	9,560,254		$	9,279,021


PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets

	Three Months Ended						Year Ended
	December 31,						December 31,
*(in thousands)*		2021			2020			2021			2020

Assets

Cash and due from banks	$	148,433		$	120,599		$	139,678		$	127,214
Money market instruments		491,093			263,212			665,714			280,952
Investment securities		1,696,537			1,066,145			1,407,999			1,214,551
Loans		6,872,620			7,245,273			7,014,517			6,990,458
Allowance for credit losses (l)		(88,017	)		(89,920	)		(87,233	)		(71,221	)
Loans, net		6,784,603			7,155,353			6,927,284			6,919,237
Bank premises and equipment, net		89,312			86,717			89,758			81,357
Goodwill and other intangible assets		167,332			169,199			167,993			170,031
Other real estate owned		802			856			902			2,174
Other assets		451,545			454,418			448,130			446,117
Total assets	$	9,829,657		$	9,316,499		$	9,847,458		$	9,241,633


Liabilities and Shareholders' Equity

Deposits:
Noninterest bearing	$	3,058,428		$	2,657,881		$	2,937,035		$	2,394,717
Interest bearing		5,145,026			4,904,995			5,249,467			5,238,147
Total deposits		8,203,454			7,562,876			8,186,502			7,632,864
Borrowings		448,298			611,890			492,943			494,532
Other liabilities		99,411			106,240			102,553			105,135
Total liabilities	$	8,751,163		$	8,281,006		$	8,781,998		$	8,232,531

Shareholders' Equity:
Preferred shares	$	—		$	—		$	—		$	—
Common shares		460,037			458,521			459,421			458,096
Accumulated other comprehensive (loss) income, net of taxes		(10,656	)		12,594			(4,120	)		9,688
Retained earnings		771,957			695,509			744,102			673,273
Treasury shares		(142,844	)		(131,131	)		(133,943	)		(131,955	)
Total shareholders' equity	$	1,078,494		$	1,035,493		$	1,065,460		$	1,009,102
Total liabilities and shareholders' equity	$	9,829,657		$	9,316,499		$	9,847,458		$	9,241,633

PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters

		2021			2021		2021			2021			2020
*(in thousands, except per share data)*	4th QTR			3rd QTR		2nd QTR			1st QTR			4th QTR

Interest income:
Interest and fees on loans	$	79,168		$	78,127	$	81,176		$	78,737		$	85,268
Interest on:
Obligations of U.S. Government, its agencies and other securities - taxable		5,698			4,904		4,600			4,256			4,420
Obligations of states and political subdivisions - tax-exempt		2,209			2,029		2,032			2,037			2,040
Other interest income		191			360		186			143			72
Total interest income		87,266			85,420		87,994			85,173			91,800

Interest expense:
Interest on deposits:
Demand and savings deposits		373			435		401			386			490
Time deposits		831			1,011		1,285			1,584			1,893
Interest on borrowings		2,356			2,372		2,457			2,469			3,096
Total interest expense		3,560			3,818		4,143			4,439			5,479

Net interest income		83,706			81,602		83,851			80,734			86,321

(Recovery of) provision for credit losses (l)		(4,993	)		1,972		(4,040	)		(4,855	)		(19,159	)

Net interest income after (recovery of) provision for credit losses		88,699			79,630		87,891			85,589			105,480

Other income		32,206			32,411		31,238			34,089			35,656

Other expense		75,764			68,489		71,400			67,865			85,661

Income before income taxes		45,141			43,552		47,729			51,813			55,475

Income taxes		8,593			8,118		8,597			8,982			10,275

Net income	$	36,548		$	35,434	$	39,132		$	42,831		$	45,200

Per common share:
Net income - basic	$	2.25		$	2.17	$	2.39		$	2.63		$	2.77
Net income - diluted	$	2.23		$	2.16	$	2.38		$	2.61		$	2.75

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

	2021		2021		2021		2021				2020
(in thousands)	4th QTR		3rd QTR		2nd QTR		1st QTR			4th QTR

Other income:
Income from fiduciary activities	$	8,887	$	8,820	$	8,569	$	8,173		$	7,632
Service charges on deposit accounts		2,357		2,389		2,032		2,054			2,123
Other service income		6,368		6,668		7,159		9,617			12,040
Debit card fee income		6,568		6,453		6,758		6,086			5,787
Bank owned life insurance income		1,121		1,462		1,149		1,165			1,170
ATM fees		572		622		655		530			432
Gain (loss) on the sale of OREO, net		22		3		4		(33	)		(7	)
Gain on equity securities, net		2,125		609		467		1,810			2,931
Other components of net periodic benefit income		2,038		2,038		2,038		2,038			1,988
Miscellaneous		2,148		3,347		2,407		2,649			1,560
Total other income	$	32,206	$	32,411	$	31,238	$	34,089		$	35,656

Other expense:
Salaries	$	35,953	$	29,433	$	30,303	$	29,896		$	37,280
Employee benefits		10,706		10,640		10,056		10,201			7,316
Occupancy expense		3,161		3,211		3,027		3,640			3,231
Furniture and equipment expense		2,724		2,797		2,756		2,610			4,949
Data processing fees		7,860		7,817		7,150		7,712			3,315
Professional fees and services		7,840		6,973		6,973		5,664			9,359
Marketing		1,718		1,574		1,290		1,491			1,752
Insurance		1,547		1,403		1,276		1,691			1,855
Communication		851		796		770		1,122			1,097
State tax expense		931		1,113		1,103		1,108			605
Amortization of intangible assets		420		420		479		479			525
FHLB prepayment penalty		—		—		—		—			8,736
Foundation contributions		—		—		4,000		—			3,000
Miscellaneous		2,053		2,312		2,217		2,251			2,641
Total other expense	$	75,764	$	68,489	$	71,400	$	67,865		$	85,661

PARK NATIONAL CORPORATION
Asset Quality Information

	Year ended December 31,
*(in thousands, except ratios)*		2021			2020			2019			2018			2017

Allowance for credit losses:
Allowance for credit losses, beginning of period	$	85,675		$	56,679		$	51,512		$	49,988		$	50,624
Cumulative change in accounting principle; adoption of ASU 2016-13		6,090			—			—			—			—
Charge-offs		5,093			10,304			11,177			13,552			19,403
Recoveries		8,441			27,246			10,173			7,131			10,210
Net (recoveries) charge-offs		(3,348	)		(16,942	)		1,004			6,421			9,193
(Recovery of) provision for credit losses		(11,916	)		12,054			6,171			7,945			8,557
Allowance for credit losses, end of period	$	83,197		$	85,675		$	56,679		$	51,512		$	49,988


General reserve trends:
Allowance for credit losses, end of period	$	83,197		$	85,675		$	56,679		$	51,512		$	49,988
Allowance on purchased credit deteriorated ("PCD") loans (purchased credit impaired ("PCI") loans for years 2020 and prior)		—			167			268			—			—
Allowance on purchased loans excluded from the general reserve		—			678			—			—			—
Specific reserves on individually evaluated loans		1,616			5,434			5,230			2,273			684
General reserves on collectively evaluated loans	$	81,581		$	79,396		$	51,181		$	49,239		$	49,304

Total loans	$	6,871,122		$	7,177,785		$	6,501,404		$	5,692,132		$	5,372,483
PCD loans (PCI loans for years 2020 and prior)		7,149			11,153			14,331			3,943			—
Purchased loans excluded from collectively evaluated loans		—			360,056			548,436			225,029			—
Individually evaluated loans		74,502			108,407			77,459			48,135			56,545
Collectively evaluated loans	$	6,789,471		$	6,698,169		$	5,861,178		$	5,415,025		$	5,315,938

Asset Quality Ratios:
Net (recoveries) charge-offs as a % of average loans	(0.05)%			(0.24)%				0.02	%		0.12	%		0.17	%
Allowance for credit losses as a % of period end loans		1.21	%		1.19	%		0.87	%		0.90	%		0.93	%
Allowance for credit losses as a % of period end loans (excluding PPP loans) (k)		1.22	%		1.25	%	N.A.			N.A.			N.A.
General reserve as a % of collectively evaluated loans		1.20	%		1.19	%		0.87	%		0.91	%		0.93	%
General reserves as a % of collectively evaluated loans (excluding PPP loans) (k)		1.21	%		1.24	%	N.A.			N.A.			N.A.

Nonperforming assets:
Nonaccrual loans	$	72,722		$	117,368		$	90,080		$	67,954		$	72,056
Accruing troubled debt restructurings		28,323			20,788			21,215			15,173			20,111
Loans past due 90 days or more		1,607			1,458			2,658			2,243			1,792
Total nonperforming loans	$	102,652		$	139,614		$	113,953		$	85,370		$	93,959
Other real estate owned - Park National Bank		181			837			3,100			2,788			6,524
Other real estate owned - SEPH		594			594			929			1,515			7,666
Other nonperforming assets - Park National Bank		2,750			3,164			3,599			3,464			4,849
Total nonperforming assets	$	106,177		$	144,209		$	121,581		$	93,137		$	112,998
Percentage of nonaccrual loans to period end loans		1.06	%		1.64	%		1.39	%		1.19	%		1.34	%
Percentage of nonperforming loans to period end loans		1.49	%		1.95	%		1.75	%		1.50	%		1.75	%
Percentage of nonperforming assets to period end loans		1.55	%		2.01	%		1.87	%		1.64	%		2.10	%
Percentage of nonperforming assets to period end total assets		1.11	%		1.55	%		1.42	%		1.19	%		1.50	%

Note: Explanations for footnotes (a) - (l) 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)		2021			2020			2019			2018			2017


New nonaccrual loan information:
Nonaccrual loans, beginning of period	$	117,368		$	90,080		$	67,954		$	72,056		$	87,822
New nonaccrual loans		38,478			103,386			81,009			76,611			58,753
Resolved nonaccrual loans		83,124			76,098			58,883			80,713			74,519
Nonaccrual loans, end of period	$	72,722		$	117,368		$	90,080		$	67,954		$	72,056

Impaired commercial loan portfolio information (period end):
Unpaid principal balance	$	75,126		$	109,062		$	78,178		$	59,381		$	66,585
Prior charge-offs		624			655			719			11,246			10,040
Remaining principal balance		74,502			108,407			77,459			48,135			56,545
Specific reserves		1,616			5,434			5,230			2,273			684
Book value, after specific reserves	$	72,886		$	102,973		$	72,229		$	45,862		$	55,861

PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS
	THREE MONTHS ENDED									YEAR ENDED
*(in thousands, except share and per share data)*	December 31, 2021			September 30, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Net interest income	$	83,706		$	81,602		$	86,321		$	329,893		$	327,630
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions		559			807			919			3,303			4,669
less interest income on former Vision Bank relationships		4,628			414			102			7,985			453
Net interest income - adjusted	$	78,519		$	80,381		$	85,300		$	318,605		$	322,508

(Recovery of) provision for credit losses	$	(4,993	)	$	1,972		$	(19,159	)	$	(11,916	)	$	12,054
less recoveries on former Vision Bank relationships		(106	)		(2,654	)		(20,496	)		(3,169	)		(21,982	)
(Recovery of) provision for credit losses - adjusted	$	(4,887	)	$	4,626		$	1,337		$	(8,747	)	$	34,036

Other income	$	32,206		$	32,411		$	35,656		$	129,944		$	125,664
less net gain on sale of former Vision Bank OREO properties		—			—			—			—			1,208
less other service income related to former Vision Bank relationships		321			143			503			525			590
less rebranding initiative related expenses		—			—			(298	)		—			(572	)
less net gain on the sale of debt securities in the ordinary course of business		—			—			—			—			3,286
Other income - adjusted	$	31,885		$	32,268		$	35,451		$	129,419		$	121,152

Other expense	$	75,764		$	68,489		$	85,661		$	283,518		$	286,595
less merger-related expenses related to NewDominion and Carolina Alliance acquisitions		4			4			9			24			629
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions		420			420			525			1,798			2,263
less direct expenses related to collection of payments on former Vision Bank loan relationships		700			254			4,051			1,361			4,283
less FHLB prepayment penalty		—			—			8,736			—			10,529
less rebranding initiative related expenses		351			437			229			2,085			1,040
less Foundation contribution		—			—			3,000			4,000			3,000
less severance and restructuring charges		73			140			4,039			367			4,443
less COVID-19 related expenses (j)		587			—			738			2,122			3,622
Other expense - adjusted	$	73,629		$	67,234		$	64,334		$	271,761		$	256,786

Tax effect of adjustments to net income identified above (i)	$	(731	)	$	(580	)	$	(83	)	$	(677	)	$	(379	)

Net income - reported	$	36,548		$	35,434		$	45,200		$	153,945		$	127,923
Net income - adjusted (h)	$	33,800		$	33,251		$	44,888		$	151,397		$	126,495

Diluted earnings per share	$	2.23		$	2.16		$	2.75		$	9.37		$	7.80
Diluted earnings per share, adjusted (h)	$	2.07		$	2.02		$	2.73		$	9.22		$	7.71

Annualized return on average assets (a)(b)		1.48	%		1.40	%		1.93	%		1.56	%		1.38	%
Annualized return on average assets, adjusted (a)(b)(h)		1.36	%		1.31	%		1.92	%		1.54	%		1.37	%

Annualized return on average tangible assets (a)(b)(e)		1.50	%		1.42	%		1.97	%		1.59	%		1.41	%
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)		1.39	%		1.33	%		1.95	%		1.56	%		1.39	%

Annualized return on average shareholders' equity (a)(b)		13.44	%		13.04	%		17.37	%		14.45	%		12.68	%
Annualized return on average shareholders' equity, adjusted (a)(b)(h)		12.43	%		12.23	%		17.25	%		14.21	%		12.54	%

Annualized return on average tangible equity (a)(b)(c)		15.91	%		15.44	%		20.76	%		17.15	%		15.25	%
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)		14.72	%		14.49	%		20.61	%		16.87	%		15.08	%

Efficiency ratio (g)		64.94	%		59.70	%		69.82	%		61.27	%		62.83	%
Efficiency ratio, adjusted (g)(h)		66.23	%		59.31	%		52.97	%		60.27	%		57.51	%

Annualized net interest margin (g)		3.72	%		3.53	%		4.07	%		3.69	%		3.93	%
Annualized net interest margin, adjusted (g)(h)		3.49	%		3.48	%		4.02	%		3.56	%		3.86	%

Note: Explanations for footnotes (a) - (l) 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 December 31, 2021, September 30, 2021, and December 31, 2020 and the twelve months ended December 31, 2021 and December 31, 2020, 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						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
AVERAGE SHAREHOLDERS' EQUITY	$	1,078,494	$	1,078,465	$	1,035,493	$	1,065,460	$	1,009,102
Less: Average goodwill and other intangible assets		167,332		167,754		169,199		167,993		170,031
AVERAGE TANGIBLE EQUITY	$	911,162	$	910,711	$	866,294	$	897,467	$	839,071

(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:
	December 31, 2021		September 30, 2021		December 31, 2020
TOTAL SHAREHOLDERS' EQUITY	$	1,110,759	$	1,067,912	$	1,040,256
Less: Goodwill and other intangible assets		167,057		167,477		168,855
TANGIBLE EQUITY	$	943,702	$	900,435	$	871,401

(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						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
AVERAGE ASSETS	$	9,829,657	$	10,070,716	$	9,316,499	$	9,847,458	$	9,241,633
Less: Average goodwill and other intangible assets		167,332		167,754		169,199		167,993		170,031
AVERAGE TANGIBLE ASSETS	$	9,662,325	$	9,902,962	$	9,147,300	$	9,679,465	$	9,071,602

(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:
	December 31, 2021		September 30, 2021		December 31, 2020
TOTAL ASSETS	$	9,560,254	$	10,034,018	$	9,279,021
Less: Goodwill and other intangible assets		167,057		167,477		168,855
TANGIBLE ASSETS	$	9,393,197	$	9,866,541	$	9,110,166

(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.

RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
	THREE MONTHS ENDED						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
Interest income	$	87,266	$	85,420	$	91,800	$	345,853	$	357,720
Fully taxable equivalent adjustment		762		717		712		2,911		2,866
Fully taxable equivalent interest income	$	88,028	$	86,137	$	92,512	$	348,764	$	360,586
Interest expense		3,560		3,818		5,479		15,960		30,090
Fully taxable equivalent net interest income	$	84,468	$	82,319	$	87,033	$	332,804	$	330,496

(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, (recovery of) provision for credit losses, other income and other expense.
(i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate.
(j) COVID-19 related expenses include calamity pay and special one-time bonuses to certain associates.
(k) Excludes $74.4 million, $131.5 million and $331.6 million of PPP loans at December 31, 2021, September 30, 2021 and December 31, 2020, respectively.
(l) Park adopted ASU 2016-13 effective January 1, 2021. The allowance for credit losses at December 31, 2021 and September 30, 2021 and the related (recovery of) provision for credit losses for the three months ended December 31, 2021 and September 30, 2021 and the twelve months ended December 31, 2021 were calculated utilizing this new guidance.

PARK NATIONAL CORPORATION
Asset Quality Information

	Year ended December 31,
*(in thousands, except ratios)*		2021			2020			2019			2018			2017

Allowance for credit losses:
Allowance for credit losses, beginning of period	$	85,675		$	56,679		$	51,512		$	49,988		$	50,624
Cumulative change in accounting principle; adoption of ASU 2016-13		6,090			—			—			—			—
Charge-offs		5,093			10,304			11,177			13,552			19,403
Recoveries		8,441			27,246			10,173			7,131			10,210
Net (recoveries) charge-offs		(3,348	)		(16,942	)		1,004			6,421			9,193
(Recovery of) provision for credit losses		(11,916	)		12,054			6,171			7,945			8,557
Allowance for credit losses, end of period	$	83,197		$	85,675		$	56,679		$	51,512		$	49,988


General reserve trends:
Allowance for credit losses, end of period	$	83,197		$	85,675		$	56,679		$	51,512		$	49,988
Allowance on purchased credit deteriorated ("PCD") loans (purchased credit impaired ("PCI") loans for years 2020 and prior)		—			167			268			—			—
Allowance on purchased loans excluded from the general reserve		—			678			—			—			—
Specific reserves on individually evaluated loans		1,616			5,434			5,230			2,273			684
General reserves on collectively evaluated loans	$	81,581		$	79,396		$	51,181		$	49,239		$	49,304

Total loans	$	6,871,122		$	7,177,785		$	6,501,404		$	5,692,132		$	5,372,483
PCD loans (PCI loans for years 2020 and prior)		7,149			11,153			14,331			3,943			—
Purchased loans excluded from collectively evaluated loans		—			360,056			548,436			225,029			—
Individually evaluated loans		74,502			108,407			77,459			48,135			56,545
Collectively evaluated loans	$	6,789,471		$	6,698,169		$	5,861,178		$	5,415,025		$	5,315,938

Asset Quality Ratios:
Net (recoveries) charge-offs as a % of average loans	(0.05) %			(0.24) %				0.02	%		0.12	%		0.17	%
Allowance for credit losses as a % of period end loans		1.21	%		1.19	%		0.87	%		0.90	%		0.93	%
Allowance for credit losses as a % of period end loans (excluding PPP loans) (k)		1.22	%		1.25	%	N.A.			N.A.			N.A.
General reserve as a % of collectively evaluated loans		1.20	%		1.19	%		0.87	%		0.91	%		0.93	%
General reserves as a % of collectively evaluated loans (excluding PPP loans) (k)		1.21	%		1.24	%	N.A.			N.A.			N.A.

Nonperforming assets:
Nonaccrual loans	$	72,722		$	117,368		$	90,080		$	67,954		$	72,056
Accruing troubled debt restructurings		28,323			20,788			21,215			15,173			20,111
Loans past due 90 days or more		1,607			1,458			2,658			2,243			1,792
Total nonperforming loans	$	102,652		$	139,614		$	113,953		$	85,370		$	93,959
Other real estate owned - Park National Bank		181			837			3,100			2,788			6,524
Other real estate owned - SEPH		594			594			929			1,515			7,666
Other nonperforming assets - Park National Bank		2,750			3,164			3,599			3,464			4,849
Total nonperforming assets	$	106,177		$	144,209		$	121,581		$	93,137		$	112,998
Percentage of nonaccrual loans to period end loans		1.06	%		1.64	%		1.39	%		1.19	%		1.34	%
Percentage of nonperforming loans to period end loans		1.49	%		1.95	%		1.75	%		1.50	%		1.75	%
Percentage of nonperforming assets to period end loans		1.55	%		2.01	%		1.87	%		1.64	%		2.10	%
Percentage of nonperforming assets to period end total assets		1.11	%		1.55	%		1.42	%		1.19	%		1.50	%

Note: Explanations for footnotes (a) - (l) 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)		2021			2020			2019			2018			2017


New nonaccrual loan information:
Nonaccrual loans, beginning of period	$	117,368		$	90,080		$	67,954		$	72,056		$	87,822
New nonaccrual loans		38,478			103,386			81,009			76,611			58,753
Resolved nonaccrual loans		83,124			76,098			58,883			80,713			74,519
Nonaccrual loans, end of period	$	72,722		$	117,368		$	90,080		$	67,954		$	72,056

Impaired commercial loan portfolio information (period end):
Unpaid principal balance	$	75,126		$	109,062		$	78,178		$	59,381		$	66,585
Prior charge-offs		624			655			719			11,246			10,040
Remaining principal balance		74,502			108,407			77,459			48,135			56,545
Specific reserves		1,616			5,434			5,230			2,273			684
Book value, after specific reserves	$	72,886		$	102,973		$	72,229		$	45,862		$	55,861

PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS
	THREE MONTHS ENDED									YEAR ENDED
*(in thousands, except share and per share data)*	December 31, 2021			September 30, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Net interest income	$	83,706		$	81,602		$	86,321		$	329,893		$	327,630
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions		559			807			919			3,303			4,669
less interest income on former Vision Bank relationships		4,628			414			102			7,985			453
Net interest income - adjusted	$	78,519		$	80,381		$	85,300		$	318,605		$	322,508

(Recovery of) provision for credit losses	$	(4,993	)	$	1,972		$	(19,159	)	$	(11,916	)	$	12,054
less recoveries on former Vision Bank relationships		(106	)		(2,654	)		(20,496	)		(3,169	)		(21,982	)
(Recovery of) provision for credit losses - adjusted	$	(4,887	)	$	4,626		$	1,337		$	(8,747	)	$	34,036

Other income	$	32,206		$	32,411		$	35,656		$	129,944		$	125,664
less net gain on sale of former Vision Bank OREO properties		—			—			—			—			1,208
less other service income related to former Vision Bank relationships		321			143			503			525			590
less rebranding initiative related expenses		—			—			(298	)		—			(572	)
less net gain on the sale of debt securities in the ordinary course of business		—			—			—			—			3,286
Other income - adjusted	$	31,885		$	32,268		$	35,451		$	129,419		$	121,152

Other expense	$	75,764		$	68,489		$	85,661		$	283,518		$	286,595
less merger-related expenses related to NewDominion and Carolina Alliance acquisitions		4			4			9			24			629
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions		420			420			525			1,798			2,263
less direct expenses related to collection of payments on former Vision Bank loan relationships		700			254			4,051			1,361			4,283
less FHLB prepayment penalty		—			—			8,736			—			10,529
less rebranding initiative related expenses		351			437			229			2,085			1,040
less Foundation contribution		—			—			3,000			4,000			3,000
less severance and restructuring charges		73			140			4,039			367			4,443
less COVID-19 related expenses (j)		587			—			738			2,122			3,622
Other expense - adjusted	$	73,629		$	67,234		$	64,334		$	271,761		$	256,786

Tax effect of adjustments to net income identified above (i)	$	(731	)	$	(580	)	$	(83	)	$	(677	)	$	(379	)

Net income - reported	$	36,548		$	35,434		$	45,200		$	153,945		$	127,923
Net income - adjusted (h)	$	33,800		$	33,251		$	44,888		$	151,397		$	126,495

Diluted earnings per share	$	2.23		$	2.16		$	2.75		$	9.37		$	7.80
Diluted earnings per share, adjusted (h)	$	2.07		$	2.02		$	2.73		$	9.22		$	7.71

Annualized return on average assets (a)(b)		1.48	%		1.40	%		1.93	%		1.56	%		1.38	%
Annualized return on average assets, adjusted (a)(b)(h)		1.36	%		1.31	%		1.92	%		1.54	%		1.37	%

Annualized return on average tangible assets (a)(b)(e)		1.50	%		1.42	%		1.97	%		1.59	%		1.41	%
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)		1.39	%		1.33	%		1.95	%		1.56	%		1.39	%

Annualized return on average shareholders' equity (a)(b)		13.44	%		13.04	%		17.37	%		14.45	%		12.68	%
Annualized return on average shareholders' equity, adjusted (a)(b)(h)		12.43	%		12.23	%		17.25	%		14.21	%		12.54	%

Annualized return on average tangible equity (a)(b)(c)		15.91	%		15.44	%		20.76	%		17.15	%		15.25	%
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)		14.72	%		14.49	%		20.61	%		16.87	%		15.08	%

Efficiency ratio (g)		64.94	%		59.70	%		69.82	%		61.27	%		62.83	%
Efficiency ratio, adjusted (g)(h)		66.23	%		59.31	%		52.97	%		60.27	%		57.51	%

Annualized net interest margin (g)		3.72	%		3.53	%		4.07	%		3.69	%		3.93	%
Annualized net interest margin, adjusted (g)(h)		3.49	%		3.48	%		4.02	%		3.56	%		3.86	%

Note: Explanations for footnotes (a) - (l) 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 December 31, 2021, September 30, 2021, and December 31, 2020 and the twelve months ended December 31, 2021 and December 31, 2020, 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						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
AVERAGE SHAREHOLDERS' EQUITY	$	1,078,494	$	1,078,465	$	1,035,493	$	1,065,460	$	1,009,102
Less: Average goodwill and other intangible assets		167,332		167,754		169,199		167,993		170,031
AVERAGE TANGIBLE EQUITY	$	911,162	$	910,711	$	866,294	$	897,467	$	839,071

(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:
	December 31, 2021		September 30, 2021		December 31, 2020
TOTAL SHAREHOLDERS' EQUITY	$	1,110,759	$	1,067,912	$	1,040,256
Less: Goodwill and other intangible assets		167,057		167,477		168,855
TANGIBLE EQUITY	$	943,702	$	900,435	$	871,401

(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						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
AVERAGE ASSETS	$	9,829,657	$	10,070,716	$	9,316,499	$	9,847,458	$	9,241,633
Less: Average goodwill and other intangible assets		167,332		167,754		169,199		167,993		170,031
AVERAGE TANGIBLE ASSETS	$	9,662,325	$	9,902,962	$	9,147,300	$	9,679,465	$	9,071,602

(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:
	December 31, 2021		September 30, 2021		December 31, 2020
TOTAL ASSETS	$	9,560,254	$	10,034,018	$	9,279,021
Less: Goodwill and other intangible assets		167,057		167,477		168,855
TANGIBLE ASSETS	$	9,393,197	$	9,866,541	$	9,110,166

(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.

RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
	THREE MONTHS ENDED						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
Interest income	$	87,266	$	85,420	$	91,800	$	345,853	$	357,720
Fully taxable equivalent adjustment		762		717		712		2,911		2,866
Fully taxable equivalent interest income	$	88,028	$	86,137	$	92,512	$	348,764	$	360,586
Interest expense		3,560		3,818		5,479		15,960		30,090
Fully taxable equivalent net interest income	$	84,468	$	82,319	$	87,033	$	332,804	$	330,496

(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, (recovery of) provision for credit losses, other income and other expense.
(i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate.
(j) COVID-19 related expenses include calamity pay and special one-time bonuses to certain associates.
(k) Excludes $74.4 million, $131.5 million and $331.6 million of PPP loans at December 31, 2021, September 30, 2021 and December 31, 2020, respectively.
(l) Park adopted ASU 2016-13 effective January 1, 2021. The allowance for credit losses at December 31, 2021 and September 30, 2021 and the related (recovery of) provision for credit losses for the three months ended December 31, 2021 and September 30, 2021 and the twelve months ended December 31, 2021 were calculated utilizing this new guidance.

PARK NATIONAL CORPORATION
Asset Quality Information

	Year ended December 31,
*(in thousands, except ratios)*		2021			2020			2019			2018			2017

Allowance for credit losses:
Allowance for credit losses, beginning of period	$	85,675		$	56,679		$	51,512		$	49,988		$	50,624
Cumulative change in accounting principle; adoption of ASU 2016-13		6,090			—			—			—			—
Charge-offs		5,093			10,304			11,177			13,552			19,403
Recoveries		8,441			27,246			10,173			7,131			10,210
Net (recoveries) charge-offs		(3,348	)		(16,942	)		1,004			6,421			9,193
(Recovery of) provision for credit losses		(11,916	)		12,054			6,171			7,945			8,557
Allowance for credit losses, end of period	$	83,197		$	85,675		$	56,679		$	51,512		$	49,988


General reserve trends:
Allowance for credit losses, end of period	$	83,197		$	85,675		$	56,679		$	51,512		$	49,988
Allowance on purchased credit deteriorated ("PCD") loans (purchased credit impaired ("PCI") loans for years 2020 and prior)		—			167			268			—			—
Allowance on purchased loans excluded from the general reserve		—			678			—			—			—
Specific reserves on individually evaluated loans		1,616			5,434			5,230			2,273			684
General reserves on collectively evaluated loans	$	81,581		$	79,396		$	51,181		$	49,239		$	49,304

Total loans	$	6,871,122		$	7,177,785		$	6,501,404		$	5,692,132		$	5,372,483
PCD loans (PCI loans for years 2020 and prior)		7,149			11,153			14,331			3,943			—
Purchased loans excluded from collectively evaluated loans		—			360,056			548,436			225,029			—
Individually evaluated loans		74,502			108,407			77,459			48,135			56,545
Collectively evaluated loans	$	6,789,471		$	6,698,169		$	5,861,178		$	5,415,025		$	5,315,938

Asset Quality Ratios:
Net (recoveries) charge-offs as a % of average loans	(0.05) %			(0.24) %				0.02	%		0.12	%		0.17	%
Allowance for credit losses as a % of period end loans		1.21	%		1.19	%		0.87	%		0.90	%		0.93	%
Allowance for credit losses as a % of period end loans (excluding PPP loans) (k)		1.22	%		1.25	%	N.A.			N.A.			N.A.
General reserve as a % of collectively evaluated loans		1.20	%		1.19	%		0.87	%		0.91	%		0.93	%
General reserves as a % of collectively evaluated loans (excluding PPP loans) (k)		1.21	%		1.24	%	N.A.			N.A.			N.A.

Nonperforming assets:
Nonaccrual loans	$	72,722		$	117,368		$	90,080		$	67,954		$	72,056
Accruing troubled debt restructurings		28,323			20,788			21,215			15,173			20,111
Loans past due 90 days or more		1,607			1,458			2,658			2,243			1,792
Total nonperforming loans	$	102,652		$	139,614		$	113,953		$	85,370		$	93,959
Other real estate owned - Park National Bank		181			837			3,100			2,788			6,524
Other real estate owned - SEPH		594			594			929			1,515			7,666
Other nonperforming assets - Park National Bank		2,750			3,164			3,599			3,464			4,849
Total nonperforming assets	$	106,177		$	144,209		$	121,581		$	93,137		$	112,998
Percentage of nonaccrual loans to period end loans		1.06	%		1.64	%		1.39	%		1.19	%		1.34	%
Percentage of nonperforming loans to period end loans		1.49	%		1.95	%		1.75	%		1.50	%		1.75	%
Percentage of nonperforming assets to period end loans		1.55	%		2.01	%		1.87	%		1.64	%		2.10	%
Percentage of nonperforming assets to period end total assets		1.11	%		1.55	%		1.42	%		1.19	%		1.50	%

Note: Explanations for footnotes (a) - (l) 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)		2021			2020			2019			2018			2017


New nonaccrual loan information:
Nonaccrual loans, beginning of period	$	117,368		$	90,080		$	67,954		$	72,056		$	87,822
New nonaccrual loans		38,478			103,386			81,009			76,611			58,753
Resolved nonaccrual loans		83,124			76,098			58,883			80,713			74,519
Nonaccrual loans, end of period	$	72,722		$	117,368		$	90,080		$	67,954		$	72,056

Impaired commercial loan portfolio information (period end):
Unpaid principal balance	$	75,126		$	109,062		$	78,178		$	59,381		$	66,585
Prior charge-offs		624			655			719			11,246			10,040
Remaining principal balance		74,502			108,407			77,459			48,135			56,545
Specific reserves		1,616			5,434			5,230			2,273			684
Book value, after specific reserves	$	72,886		$	102,973		$	72,229		$	45,862		$	55,861

PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS
	THREE MONTHS ENDED									YEAR ENDED
*(in thousands, except share and per share data)*	December 31, 2021			September 30, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Net interest income	$	83,706		$	81,602		$	86,321		$	329,893		$	327,630
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions		559			807			919			3,303			4,669
less interest income on former Vision Bank relationships		4,628			414			102			7,985			453
Net interest income - adjusted	$	78,519		$	80,381		$	85,300		$	318,605		$	322,508

(Recovery of) provision for credit losses	$	(4,993	)	$	1,972		$	(19,159	)	$	(11,916	)	$	12,054
less recoveries on former Vision Bank relationships		(106	)		(2,654	)		(20,496	)		(3,169	)		(21,982	)
(Recovery of) provision for credit losses - adjusted	$	(4,887	)	$	4,626		$	1,337		$	(8,747	)	$	34,036

Other income	$	32,206		$	32,411		$	35,656		$	129,944		$	125,664
less net gain on sale of former Vision Bank OREO properties		—			—			—			—			1,208
less other service income related to former Vision Bank relationships		321			143			503			525			590
less rebranding initiative related expenses		—			—			(298	)		—			(572	)
less net gain on the sale of debt securities in the ordinary course of business		—			—			—			—			3,286
Other income - adjusted	$	31,885		$	32,268		$	35,451		$	129,419		$	121,152

Other expense	$	75,764		$	68,489		$	85,661		$	283,518		$	286,595
less merger-related expenses related to NewDominion and Carolina Alliance acquisitions		4			4			9			24			629
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions		420			420			525			1,798			2,263
less direct expenses related to collection of payments on former Vision Bank loan relationships		700			254			4,051			1,361			4,283
less FHLB prepayment penalty		—			—			8,736			—			10,529
less rebranding initiative related expenses		351			437			229			2,085			1,040
less Foundation contribution		—			—			3,000			4,000			3,000
less severance and restructuring charges		73			140			4,039			367			4,443
less COVID-19 related expenses (j)		587			—			738			2,122			3,622
Other expense - adjusted	$	73,629		$	67,234		$	64,334		$	271,761		$	256,786

Tax effect of adjustments to net income identified above (i)	$	(731	)	$	(580	)	$	(83	)	$	(677	)	$	(379	)

Net income - reported	$	36,548		$	35,434		$	45,200		$	153,945		$	127,923
Net income - adjusted (h)	$	33,800		$	33,251		$	44,888		$	151,397		$	126,495

Diluted earnings per share	$	2.23		$	2.16		$	2.75		$	9.37		$	7.80
Diluted earnings per share, adjusted (h)	$	2.07		$	2.02		$	2.73		$	9.22		$	7.71

Annualized return on average assets (a)(b)		1.48	%		1.40	%		1.93	%		1.56	%		1.38	%
Annualized return on average assets, adjusted (a)(b)(h)		1.36	%		1.31	%		1.92	%		1.54	%		1.37	%

Annualized return on average tangible assets (a)(b)(e)		1.50	%		1.42	%		1.97	%		1.59	%		1.41	%
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)		1.39	%		1.33	%		1.95	%		1.56	%		1.39	%

Annualized return on average shareholders' equity (a)(b)		13.44	%		13.04	%		17.37	%		14.45	%		12.68	%
Annualized return on average shareholders' equity, adjusted (a)(b)(h)		12.43	%		12.23	%		17.25	%		14.21	%		12.54	%

Annualized return on average tangible equity (a)(b)(c)		15.91	%		15.44	%		20.76	%		17.15	%		15.25	%
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)		14.72	%		14.49	%		20.61	%		16.87	%		15.08	%

Efficiency ratio (g)		64.94	%		59.70	%		69.82	%		61.27	%		62.83	%
Efficiency ratio, adjusted (g)(h)		66.23	%		59.31	%		52.97	%		60.27	%		57.51	%

Annualized net interest margin (g)		3.72	%		3.53	%		4.07	%		3.69	%		3.93	%
Annualized net interest margin, adjusted (g)(h)		3.49	%		3.48	%		4.02	%		3.56	%		3.86	%

Note: Explanations for footnotes (a) - (l) 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 December 31, 2021, September 30, 2021, and December 31, 2020 and the twelve months ended December 31, 2021 and December 31, 2020, 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						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
AVERAGE SHAREHOLDERS' EQUITY	$	1,078,494	$	1,078,465	$	1,035,493	$	1,065,460	$	1,009,102
Less: Average goodwill and other intangible assets		167,332		167,754		169,199		167,993		170,031
AVERAGE TANGIBLE EQUITY	$	911,162	$	910,711	$	866,294	$	897,467	$	839,071

(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:
	December 31, 2021		September 30, 2021		December 31, 2020
TOTAL SHAREHOLDERS' EQUITY	$	1,110,759	$	1,067,912	$	1,040,256
Less: Goodwill and other intangible assets		167,057		167,477		168,855
TANGIBLE EQUITY	$	943,702	$	900,435	$	871,401

(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						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
AVERAGE ASSETS	$	9,829,657	$	10,070,716	$	9,316,499	$	9,847,458	$	9,241,633
Less: Average goodwill and other intangible assets		167,332		167,754		169,199		167,993		170,031
AVERAGE TANGIBLE ASSETS	$	9,662,325	$	9,902,962	$	9,147,300	$	9,679,465	$	9,071,602

(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:
	December 31, 2021		September 30, 2021		December 31, 2020
TOTAL ASSETS	$	9,560,254	$	10,034,018	$	9,279,021
Less: Goodwill and other intangible assets		167,057		167,477		168,855
TANGIBLE ASSETS	$	9,393,197	$	9,866,541	$	9,110,166

(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.

RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
	THREE MONTHS ENDED						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
Interest income	$	87,266	$	85,420	$	91,800	$	345,853	$	357,720
Fully taxable equivalent adjustment		762		717		712		2,911		2,866
Fully taxable equivalent interest income	$	88,028	$	86,137	$	92,512	$	348,764	$	360,586
Interest expense		3,560		3,818		5,479		15,960		30,090
Fully taxable equivalent net interest income	$	84,468	$	82,319	$	87,033	$	332,804	$	330,496

(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, (recovery of) provision for credit losses, other income and other expense.
(i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate.
(j) COVID-19 related expenses include calamity pay and special one-time bonuses to certain associates.
(k) Excludes $74.4 million, $131.5 million and $331.6 million of PPP loans at December 31, 2021, September 30, 2021 and December 31, 2020, respectively.
(l) Park adopted ASU 2016-13 effective January 1, 2021. The allowance for credit losses at December 31, 2021 and September 30, 2021 and the related (recovery of) provision for credit losses for the three months ended December 31, 2021 and September 30, 2021 and the twelve months ended December 31, 2021 were calculated utilizing this new guidance.

PARK NATIONAL CORPORATION
Financial Highlights
As of or for the three months ended December 31, 2021, September 30, 2021, and December 31, 2020

		2021			2021			2020		Percent change vs.
*(in thousands, except share and per share data)*	4th QTR			3rd QTR			4th QTR			3Q '21		4Q '20
INCOME STATEMENT:
Net interest income	$	83,706		$	81,602		$	86,321		2.6	%	(3.0) %
(Recovery of) provision for credit losses (l)		(4,993	)		1,972			(19,159	)	N.M		N.M
Other income		32,206			32,411			35,656		(0.6) %		(9.7) %
Other expense		75,764			68,489			85,661		10.6	%	(11.6) %
Income before income taxes	$	45,141		$	43,552		$	55,475		3.6	%	(18.6) %
Income taxes		8,593			8,118			10,275		5.9	%	(16.4) %
Net income	$	36,548		$	35,434		$	45,200		3.1	%	(19.1) %

MARKET DATA:
Earnings per common share - basic (a)	$	2.25		$	2.17		$	2.77		3.7	%	(18.8) %
Earnings per common share - diluted (a)		2.23			2.16			2.75		3.2	%	(18.9) %
Cash dividends declared per common share		1.23			1.03			1.02		19.4	%	20.6	%
Book value per common share at period end		68.48			65.90			63.76		3.9	%	7.4	%
Market price per common share at period end		137.31			121.95			105.01		12.6	%	30.8	%
Market capitalization at period end		2,227,108			1,976,343			1,713,154		12.7	%	30.0	%

Weighted average common shares - basic (b)		16,216,076			16,292,312			16,310,551		(0.5) %		(0.6) %
Weighted average common shares - diluted (b)		16,363,968			16,423,912			16,434,812		(0.4) %		(0.4) %
Common shares outstanding at period end		16,219,563			16,206,177			16,314,197		0.1	%	(0.6) %

PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)		1.48	%		1.40	%		1.93	%	5.7	%	(23.3) %
Return on average shareholders' equity (a)(b)		13.44	%		13.04	%		17.37	%	3.1	%	(22.6) %
Yield on loans		4.58	%		4.47	%		4.69	%	2.5	%	(2.3) %
Yield on investment securities		2.05	%		2.12	%		2.80	%	(3.3) %		(26.8) %
Yield on money market instruments		0.15	%		0.16	%		0.11	%	(6.3) %		36.4	%
Yield on interest earning assets		3.88	%		3.69	%		4.33	%	5.1	%	(10.4) %
Cost of interest bearing deposits		0.09	%		0.11	%		0.19	%	(18.2) %		(52.6) %
Cost of borrowings		2.09	%		2.00	%		2.01	%	4.5	%	4.0	%
Cost of paying interest bearing liabilities		0.25	%		0.26	%		0.40	%	(3.8) %		(37.5) %
Net interest margin (g)		3.72	%		3.53	%		4.07	%	5.4	%	(8.6) %
Efficiency ratio (g)		64.94	%		59.70	%		69.82	%	8.8	%	(7.0) %

OTHER RATIOS (NON-GAAP):
Tangible book value per share (d)	$	58.18		$	55.56		$	53.41		4.7	%	8.9	%


Note: Explanations for footnotes (a) - (l) 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 December 31, 2021, September 30, 2021, and December 31, 2020

										Percent change vs.
*(in thousands, except ratios)*	December 31, 2021			September 30, 2021			December 31, 2020			3Q '21		4Q '20
BALANCE SHEET:
Investment securities	$	1,815,408		$	1,609,303		$	1,124,806		12.8	%	61.4	%
Loans		6,871,122			6,908,417			7,177,785		(0.5) %		(4.3) %
Allowance for credit losses (l)		83,197			88,129			85,675		(5.6) %		(2.9) %
Goodwill and other intangible assets		167,057			167,477			168,855		(0.3) %		(1.1) %
Other real estate owned (OREO)		775			813			1,431		(4.7) %		(45.8) %
Total assets		9,560,254			10,034,018			9,279,021		(4.7) %		3.0	%
Total deposits		7,904,528			8,364,385			7,572,358		(5.5) %		4.4	%
Borrowings		426,996			424,078			562,504		0.7	%	(24.1) %
Total shareholders' equity		1,110,759			1,067,912			1,040,256		4.0	%	6.8	%
Tangible equity (d)		943,702			900,435			871,401		4.8	%	8.3	%
Total nonperforming loans		102,652			106,872			139,614		(3.9) %		(26.5) %
Total nonperforming assets		106,177			110,849			144,209		(4.2) %		(26.4) %

ASSET QUALITY RATIOS:
Loans as a % of period end total assets		71.87	%		68.85	%		77.35	%	4.4	%	(7.1) %
Total nonperforming loans as a % of period end loans		1.49	%		1.55	%		1.95	%	(3.9) %		(23.6) %
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets		1.54	%		1.60	%		2.01	%	(3.8) %		(23.4) %
Allowance for credit losses as a % of period end loans		1.21	%		1.28	%		1.19	%	(5.5) %		1.7	%
Net loan recoveries	$	(61	)	$	(2,580	)	$	(17,796	)	N.M		N.M
Annualized net loan recoveries as a % of average loans (b)		—	%	(0.15)%			(0.98)%			N.M		N.M

CAPITAL & LIQUIDITY:
Total shareholders' equity / Period end total assets		11.62	%		10.64	%		11.21	%	9.2	%	3.7	%
Tangible equity (d) / Tangible assets (f)		10.05	%		9.13	%		9.57	%	10.1	%	5.0	%
Average shareholders' equity / Average assets (b)		10.97	%		10.71	%		11.11	%	2.4	%	(1.3) %
Average shareholders' equity / Average loans (b)		15.69	%		15.50	%		14.29	%	1.2	%	9.8	%
Average loans / Average deposits (b)		83.78	%		82.68	%		95.80	%	1.3	%	(12.5) %

Note: Explanations for footnotes (a) - (l) are included at the end of the financial tables in the "Financial Reconciliations" section.

PARK NATIONAL CORPORATION
Financial Highlights
Year ended December 31, 2021 and December 31, 2020


*(in thousands, except share and per share data)*		2021			2020		Percent change vs '20
INCOME STATEMENT:
Net interest income	$	329,893		$	327,630		0.7	%
(Recovery of) provision for credit losses (l)		(11,916	)		12,054		N.M
Other income		129,944			125,664		3.4	%
Other expense		283,518			286,595		(1.1) %
Income before income taxes	$	188,235		$	154,645		21.7	%
Income taxes		34,290			26,722		28.3	%
Net income	$	153,945		$	127,923		20.3	%

MARKET DATA:
Earnings per common share - basic (a)	$	9.45		$	7.85		20.4	%
Earnings per common share - diluted (a)		9.37			7.80		20.1	%
Cash dividends declared per common share		4.52			4.28		5.6	%

Weighted average common shares - basic (b)		16,291,016			16,302,825		(0.1) %
Weighted average common shares - diluted (b)		16,425,206			16,407,502		0.1	%

PERFORMANCE RATIOS:
Return on average assets (a)(b)		1.56	%		1.38	%	13.0	%
Return on average shareholders' equity (a)(b)		14.45	%		12.68	%	14.0	%
Yield on loans		4.53	%		4.71	%	(3.8) %
Yield on investment securities		2.22	%		2.66	%	(16.5) %
Yield on money market instruments		0.13	%		0.26	%	(50.0) %
Yield on interest earning assets		3.86	%		4.28	%	(9.8) %
Cost of interest bearing deposits		0.12	%		0.41	%	(70.7) %
Cost of borrowings		1.96	%		1.77	%	10.7	%
Cost of paying interest bearing liabilities		0.28	%		0.52	%	(46.2) %
Net interest margin (g)		3.69	%		3.93	%	(6.1) %
Efficiency ratio (g)		61.27	%		62.83	%	(2.5) %

ASSET QUALITY RATIOS
Net loan recoveries	$	(3,348	)	$	(16,942	)	N.M.
Net loan recoveries as a % of average loans (b)	(0.05) %			(0.24) %			N.M.

CAPITAL & LIQUIDITY
Average shareholders' equity / Average assets (b)		10.82	%		10.92	%	(0.9) %
Average shareholders' equity / Average loans (b)		15.19	%		14.44	%	5.2	%
Average loans / Average deposits (b)		85.68	%		91.58	%	(6.4) %

Note: Explanations for footnotes (a) - (l) are included at the end of the financial tables in the "Financial Reconciliations" section.


PARK NATIONAL CORPORATION
Consolidated Statements of Income

	Three Months Ended						Year Ended
	December 31,						December 31,
*(in thousands, except share and per share data)*		2021			2020			2021			2020

Interest income:
Interest and fees on loans	$	79,168		$	85,268		$	317,208		$	328,727
Interest on:
Obligations of U.S. Government, its agencies
and other securities - taxable		5,698			4,420			19,458			19,818
Obligations of states and political subdivisions - tax-exempt		2,209			2,040			8,307			8,436
Other interest income		191			72			880			739
Total interest income		87,266			91,800			345,853			357,720

Interest expense:
Interest on deposits:
Demand and savings deposits		373			490			1,595			9,142
Time deposits		831			1,893			4,711			12,186
Interest on borrowings		2,356			3,096			9,654			8,762
Total interest expense		3,560			5,479			15,960			30,090

Net interest income		83,706			86,321			329,893			327,630

(Recovery of) provision for credit losses (l)		(4,993	)		(19,159	)		(11,916	)		12,054

Net interest income after (recovery of) provision for credit losses		88,699			105,480			341,809			315,576

Other income		32,206			35,656			129,944			125,664

Other expense		75,764			85,661			283,518			286,595

Income before income taxes		45,141			55,475			188,235			154,645

Income taxes		8,593			10,275			34,290			26,722

Net income	$	36,548		$	45,200		$	153,945		$	127,923

Per common share:
Net income - basic	$	2.25		$	2.77		$	9.45		$	7.85
Net income - diluted	$	2.23		$	2.75		$	9.37		$	7.80

Weighted average shares - basic		16,216,076			16,310,551			16,291,016			16,302,825
Weighted average shares - diluted		16,363,968			16,434,812			16,425,206			16,407,502

Cash dividends declared	$	1.23		$	1.02		$	4.52		$	4.28

PARK NATIONAL CORPORATION
Consolidated Balance Sheets

*(in thousands, except share data)*	December 31, 2021			December 31, 2020

Assets

Cash and due from banks	$	144,507		$	155,596
Money market instruments		74,673			214,878
Investment securities		1,815,408			1,124,806
Loans		6,871,122			7,177,785
Allowance for credit losses (l)		(83,197	)		(85,675	)
Loans, net		6,787,925			7,092,110
Bank premises and equipment, net		89,008			88,660
Goodwill and other intangible assets		167,057			168,855
Other real estate owned		775			1,431
Other assets		480,901			432,685
Total assets	$	9,560,254		$	9,279,021

Liabilities and Shareholders' Equity

Deposits:
Noninterest bearing	$	3,066,419		$	2,727,100
Interest bearing		4,838,109			4,845,258
Total deposits		7,904,528			7,572,358
Borrowings		426,996			562,504
Other liabilities		117,971			103,903
Total liabilities	$	8,449,495		$	8,238,765


Shareholders' Equity:
Preferred shares (200,000 shares authorized; no shares outstanding at December 31, 2021 and December 31, 2020)	$	—		$	—
Common shares (No par value; 20,000,000 shares authorized; 17,623,118 shares issued at December 31, 2021 and 17,623,163 shares issued at December 31, 2020)		461,800			460,687
Accumulated other comprehensive income, net of taxes		15,155			5,571
Retained earnings		776,294			704,764
Treasury shares (1,403,555 shares at December 31, 2021 and 1,308,966 shares at December 31, 2020)		(142,490	)		(130,766	)
Total shareholders' equity	$	1,110,759		$	1,040,256
Total liabilities and shareholders' equity	$	9,560,254		$	9,279,021


PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets

	Three Months Ended						Year Ended
	December 31,						December 31,
*(in thousands)*		2021			2020			2021			2020

Assets

Cash and due from banks	$	148,433		$	120,599		$	139,678		$	127,214
Money market instruments		491,093			263,212			665,714			280,952
Investment securities		1,696,537			1,066,145			1,407,999			1,214,551
Loans		6,872,620			7,245,273			7,014,517			6,990,458
Allowance for credit losses (l)		(88,017	)		(89,920	)		(87,233	)		(71,221	)
Loans, net		6,784,603			7,155,353			6,927,284			6,919,237
Bank premises and equipment, net		89,312			86,717			89,758			81,357
Goodwill and other intangible assets		167,332			169,199			167,993			170,031
Other real estate owned		802			856			902			2,174
Other assets		451,545			454,418			448,130			446,117
Total assets	$	9,829,657		$	9,316,499		$	9,847,458		$	9,241,633


Liabilities and Shareholders' Equity

Deposits:
Noninterest bearing	$	3,058,428		$	2,657,881		$	2,937,035		$	2,394,717
Interest bearing		5,145,026			4,904,995			5,249,467			5,238,147
Total deposits		8,203,454			7,562,876			8,186,502			7,632,864
Borrowings		448,298			611,890			492,943			494,532
Other liabilities		99,411			106,240			102,553			105,135
Total liabilities	$	8,751,163		$	8,281,006		$	8,781,998		$	8,232,531

Shareholders' Equity:
Preferred shares	$	—		$	—		$	—		$	—
Common shares		460,037			458,521			459,421			458,096
Accumulated other comprehensive (loss) income, net of taxes		(10,656	)		12,594			(4,120	)		9,688
Retained earnings		771,957			695,509			744,102			673,273
Treasury shares		(142,844	)		(131,131	)		(133,943	)		(131,955	)
Total shareholders' equity	$	1,078,494		$	1,035,493		$	1,065,460		$	1,009,102
Total liabilities and shareholders' equity	$	9,829,657		$	9,316,499		$	9,847,458		$	9,241,633

PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters

		2021			2021		2021			2021			2020
*(in thousands, except per share data)*	4th QTR			3rd QTR		2nd QTR			1st QTR			4th QTR

Interest income:
Interest and fees on loans	$	79,168		$	78,127	$	81,176		$	78,737		$	85,268
Interest on:
Obligations of U.S. Government, its agencies and other securities - taxable		5,698			4,904		4,600			4,256			4,420
Obligations of states and political subdivisions - tax-exempt		2,209			2,029		2,032			2,037			2,040
Other interest income		191			360		186			143			72
Total interest income		87,266			85,420		87,994			85,173			91,800

Interest expense:
Interest on deposits:
Demand and savings deposits		373			435		401			386			490
Time deposits		831			1,011		1,285			1,584			1,893
Interest on borrowings		2,356			2,372		2,457			2,469			3,096
Total interest expense		3,560			3,818		4,143			4,439			5,479

Net interest income		83,706			81,602		83,851			80,734			86,321

(Recovery of) provision for credit losses (l)		(4,993	)		1,972		(4,040	)		(4,855	)		(19,159	)

Net interest income after (recovery of) provision for credit losses		88,699			79,630		87,891			85,589			105,480

Other income		32,206			32,411		31,238			34,089			35,656

Other expense		75,764			68,489		71,400			67,865			85,661

Income before income taxes		45,141			43,552		47,729			51,813			55,475

Income taxes		8,593			8,118		8,597			8,982			10,275

Net income	$	36,548		$	35,434	$	39,132		$	42,831		$	45,200

Per common share:
Net income - basic	$	2.25		$	2.17	$	2.39		$	2.63		$	2.77
Net income - diluted	$	2.23		$	2.16	$	2.38		$	2.61		$	2.75

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

	2021		2021		2021		2021			2020
(in thousands)	4th QTR		3rd QTR		2nd QTR		1st QTR			4th QTR

Other income:
Income from fiduciary activities	$	8,887	$	8,820	$	8,569	$	8,173		$	7,632
Service charges on deposit accounts		2,357		2,389		2,032		2,054			2,123
Other service income		6,368		6,668		7,159		9,617			12,040
Debit card fee income		6,568		6,453		6,758		6,086			5,787
Bank owned life insurance income		1,121		1,462		1,149		1,165			1,170
ATM fees		572		622		655		530			432
Gain (loss) on the sale of OREO, net		22		3		4		(33	)		(7	)
Gain on equity securities, net		2,125		609		467		1,810			2,931
Other components of net periodic benefit income		2,038		2,038		2,038		2,038			1,988
Miscellaneous		2,148		3,347		2,407		2,649			1,560
Total other income	$	32,206	$	32,411	$	31,238	$	34,089		$	35,656

Other expense:
Salaries	$	35,953	$	29,433	$	30,303	$	29,896		$	37,280
Employee benefits		10,706		10,640		10,056		10,201			7,316
Occupancy expense		3,161		3,211		3,027		3,640			3,231
Furniture and equipment expense		2,724		2,797		2,756		2,610			4,949
Data processing fees		7,860		7,817		7,150		7,712			3,315
Professional fees and services		7,840		6,973		6,973		5,664			9,359
Marketing		1,718		1,574		1,290		1,491			1,752
Insurance		1,547		1,403		1,276		1,691			1,855
Communication		851		796		770		1,122			1,097
State tax expense		931		1,113		1,103		1,108			605
Amortization of intangible assets		420		420		479		479			525
FHLB prepayment penalty		—		—		—		—			8,736
Foundation contributions		—		—		4,000		—			3,000
Miscellaneous		2,053		2,312		2,217		2,251			2,641
Total other expense	$	75,764	$	68,489	$	71,400	$	67,865		$	85,661

PARK NATIONAL CORPORATION
Asset Quality Information

	Year ended December 31,
*(in thousands, except ratios)*		2021			2020			2019			2018			2017

Allowance for credit losses:
Allowance for credit losses, beginning of period	$	85,675		$	56,679		$	51,512		$	49,988		$	50,624
Cumulative change in accounting principle; adoption of ASU 2016-13		6,090			—			—			—			—
Charge-offs		5,093			10,304			11,177			13,552			19,403
Recoveries		8,441			27,246			10,173			7,131			10,210
Net (recoveries) charge-offs		(3,348	)		(16,942	)		1,004			6,421			9,193
(Recovery of) provision for credit losses		(11,916	)		12,054			6,171			7,945			8,557
Allowance for credit losses, end of period	$	83,197		$	85,675		$	56,679		$	51,512		$	49,988


General reserve trends:
Allowance for credit losses, end of period	$	83,197		$	85,675		$	56,679		$	51,512		$	49,988
Allowance on purchased credit deteriorated ("PCD") loans (purchased credit impaired ("PCI") loans for years 2020 and prior)		—			167			268			—			—
Allowance on purchased loans excluded from the general reserve		—			678			—			—			—
Specific reserves on individually evaluated loans		1,616			5,434			5,230			2,273			684
General reserves on collectively evaluated loans	$	81,581		$	79,396		$	51,181		$	49,239		$	49,304

Total loans	$	6,871,122		$	7,177,785		$	6,501,404		$	5,692,132		$	5,372,483
PCD loans (PCI loans for years 2020 and prior)		7,149			11,153			14,331			3,943			—
Purchased loans excluded from collectively evaluated loans		—			360,056			548,436			225,029			—
Individually evaluated loans		74,502			108,407			77,459			48,135			56,545
Collectively evaluated loans	$	6,789,471		$	6,698,169		$	5,861,178		$	5,415,025		$	5,315,938

Asset Quality Ratios:
Net (recoveries) charge-offs as a % of average loans	(0.05)%			(0.24)%				0.02	%		0.12	%		0.17	%
Allowance for credit losses as a % of period end loans		1.21	%		1.19	%		0.87	%		0.90	%		0.93	%
Allowance for credit losses as a % of period end loans (excluding PPP loans) (k)		1.22	%		1.25	%	N.A.			N.A.			N.A.
General reserve as a % of collectively evaluated loans		1.20	%		1.19	%		0.87	%		0.91	%		0.93	%
General reserves as a % of collectively evaluated loans (excluding PPP loans) (k)		1.21	%		1.24	%	N.A.			N.A.			N.A.

Nonperforming assets:
Nonaccrual loans	$	72,722		$	117,368		$	90,080		$	67,954		$	72,056
Accruing troubled debt restructurings		28,323			20,788			21,215			15,173			20,111
Loans past due 90 days or more		1,607			1,458			2,658			2,243			1,792
Total nonperforming loans	$	102,652		$	139,614		$	113,953		$	85,370		$	93,959
Other real estate owned - Park National Bank		181			837			3,100			2,788			6,524
Other real estate owned - SEPH		594			594			929			1,515			7,666
Other nonperforming assets - Park National Bank		2,750			3,164			3,599			3,464			4,849
Total nonperforming assets	$	106,177		$	144,209		$	121,581		$	93,137		$	112,998
Percentage of nonaccrual loans to period end loans		1.06	%		1.64	%		1.39	%		1.19	%		1.34	%
Percentage of nonperforming loans to period end loans		1.49	%		1.95	%		1.75	%		1.50	%		1.75	%
Percentage of nonperforming assets to period end loans		1.55	%		2.01	%		1.87	%		1.64	%		2.10	%
Percentage of nonperforming assets to period end total assets		1.11	%		1.55	%		1.42	%		1.19	%		1.50	%

Note: Explanations for footnotes (a) - (l) 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)		2021			2020			2019			2018			2017


New nonaccrual loan information:
Nonaccrual loans, beginning of period	$	117,368		$	90,080		$	67,954		$	72,056		$	87,822
New nonaccrual loans		38,478			103,386			81,009			76,611			58,753
Resolved nonaccrual loans		83,124			76,098			58,883			80,713			74,519
Nonaccrual loans, end of period	$	72,722		$	117,368		$	90,080		$	67,954		$	72,056

Impaired commercial loan portfolio information (period end):
Unpaid principal balance	$	75,126		$	109,062		$	78,178		$	59,381		$	66,585
Prior charge-offs		624			655			719			11,246			10,040
Remaining principal balance		74,502			108,407			77,459			48,135			56,545
Specific reserves		1,616			5,434			5,230			2,273			684
Book value, after specific reserves	$	72,886		$	102,973		$	72,229		$	45,862		$	55,861

PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS
	THREE MONTHS ENDED									YEAR ENDED
*(in thousands, except share and per share data)*	December 31, 2021			September 30, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Net interest income	$	83,706		$	81,602		$	86,321		$	329,893		$	327,630
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions		559			807			919			3,303			4,669
less interest income on former Vision Bank relationships		4,628			414			102			7,985			453
Net interest income - adjusted	$	78,519		$	80,381		$	85,300		$	318,605		$	322,508

(Recovery of) provision for credit losses	$	(4,993	)	$	1,972		$	(19,159	)	$	(11,916	)	$	12,054
less recoveries on former Vision Bank relationships		(106	)		(2,654	)		(20,496	)		(3,169	)		(21,982	)
(Recovery of) provision for credit losses - adjusted	$	(4,887	)	$	4,626		$	1,337		$	(8,747	)	$	34,036

Other income	$	32,206		$	32,411		$	35,656		$	129,944		$	125,664
less net gain on sale of former Vision Bank OREO properties		—			—			—			—			1,208
less other service income related to former Vision Bank relationships		321			143			503			525			590
less rebranding initiative related expenses		—			—			(298	)		—			(572	)
less net gain on the sale of debt securities in the ordinary course of business		—			—			—			—			3,286
Other income - adjusted	$	31,885		$	32,268		$	35,451		$	129,419		$	121,152

Other expense	$	75,764		$	68,489		$	85,661		$	283,518		$	286,595
less merger-related expenses related to NewDominion and Carolina Alliance acquisitions		4			4			9			24			629
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions		420			420			525			1,798			2,263
less direct expenses related to collection of payments on former Vision Bank loan relationships		700			254			4,051			1,361			4,283
less FHLB prepayment penalty		—			—			8,736			—			10,529
less rebranding initiative related expenses		351			437			229			2,085			1,040
less Foundation contribution		—			—			3,000			4,000			3,000
less severance and restructuring charges		73			140			4,039			367			4,443
less COVID-19 related expenses (j)		587			—			738			2,122			3,622
Other expense - adjusted	$	73,629		$	67,234		$	64,334		$	271,761		$	256,786

Tax effect of adjustments to net income identified above (i)	$	(731	)	$	(580	)	$	(83	)	$	(677	)	$	(379	)

Net income - reported	$	36,548		$	35,434		$	45,200		$	153,945		$	127,923
Net income - adjusted (h)	$	33,800		$	33,251		$	44,888		$	151,397		$	126,495

Diluted earnings per share	$	2.23		$	2.16		$	2.75		$	9.37		$	7.80
Diluted earnings per share, adjusted (h)	$	2.07		$	2.02		$	2.73		$	9.22		$	7.71

Annualized return on average assets (a)(b)		1.48	%		1.40	%		1.93	%		1.56	%		1.38	%
Annualized return on average assets, adjusted (a)(b)(h)		1.36	%		1.31	%		1.92	%		1.54	%		1.37	%

Annualized return on average tangible assets (a)(b)(e)		1.50	%		1.42	%		1.97	%		1.59	%		1.41	%
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)		1.39	%		1.33	%		1.95	%		1.56	%		1.39	%

Annualized return on average shareholders' equity (a)(b)		13.44	%		13.04	%		17.37	%		14.45	%		12.68	%
Annualized return on average shareholders' equity, adjusted (a)(b)(h)		12.43	%		12.23	%		17.25	%		14.21	%		12.54	%

Annualized return on average tangible equity (a)(b)(c)		15.91	%		15.44	%		20.76	%		17.15	%		15.25	%
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)		14.72	%		14.49	%		20.61	%		16.87	%		15.08	%

Efficiency ratio (g)		64.94	%		59.70	%		69.82	%		61.27	%		62.83	%
Efficiency ratio, adjusted (g)(h)		66.23	%		59.31	%		52.97	%		60.27	%		57.51	%

Annualized net interest margin (g)		3.72	%		3.53	%		4.07	%		3.69	%		3.93	%
Annualized net interest margin, adjusted (g)(h)		3.49	%		3.48	%		4.02	%		3.56	%		3.86	%

Note: Explanations for footnotes (a) - (l) 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 December 31, 2021, September 30, 2021, and December 31, 2020 and the twelve months ended December 31, 2021 and December 31, 2020, 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						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
AVERAGE SHAREHOLDERS' EQUITY	$	1,078,494	$	1,078,465	$	1,035,493	$	1,065,460	$	1,009,102
Less: Average goodwill and other intangible assets		167,332		167,754		169,199		167,993		170,031
AVERAGE TANGIBLE EQUITY	$	911,162	$	910,711	$	866,294	$	897,467	$	839,071

(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:
	December 31, 2021		September 30, 2021		December 31, 2020
TOTAL SHAREHOLDERS' EQUITY	$	1,110,759	$	1,067,912	$	1,040,256
Less: Goodwill and other intangible assets		167,057		167,477		168,855
TANGIBLE EQUITY	$	943,702	$	900,435	$	871,401

(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						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
AVERAGE ASSETS	$	9,829,657	$	10,070,716	$	9,316,499	$	9,847,458	$	9,241,633
Less: Average goodwill and other intangible assets		167,332		167,754		169,199		167,993		170,031
AVERAGE TANGIBLE ASSETS	$	9,662,325	$	9,902,962	$	9,147,300	$	9,679,465	$	9,071,602

(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:
	December 31, 2021		September 30, 2021		December 31, 2020
TOTAL ASSETS	$	9,560,254	$	10,034,018	$	9,279,021
Less: Goodwill and other intangible assets		167,057		167,477		168,855
TANGIBLE ASSETS	$	9,393,197	$	9,866,541	$	9,110,166

(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.

RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
	THREE MONTHS ENDED						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
Interest income	$	87,266	$	85,420	$	91,800	$	345,853	$	357,720
Fully taxable equivalent adjustment		762		717		712		2,911		2,866
Fully taxable equivalent interest income	$	88,028	$	86,137	$	92,512	$	348,764	$	360,586
Interest expense		3,560		3,818		5,479		15,960		30,090
Fully taxable equivalent net interest income	$	84,468	$	82,319	$	87,033	$	332,804	$	330,496

(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, (recovery of) provision for credit losses, other income and other expense.
(i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate.
(j) COVID-19 related expenses include calamity pay and special one-time bonuses to certain associates.
(k) Excludes $74.4 million, $131.5 million and $331.6 million of PPP loans at December 31, 2021, September 30, 2021 and December 31, 2020, respectively.
(l) Park adopted ASU 2016-13 effective January 1, 2021. The allowance for credit losses at December 31, 2021 and September 30, 2021 and the related (recovery of) provision for credit losses for the three months ended December 31, 2021 and September 30, 2021 and the twelve months ended December 31, 2021 were calculated utilizing this new guidance.

PARK NATIONAL CORPORATION
Asset Quality Information

	Year ended December 31,
*(in thousands, except ratios)*		2021			2020			2019			2018			2017

Allowance for credit losses:
Allowance for credit losses, beginning of period	$	85,675		$	56,679		$	51,512		$	49,988		$	50,624
Cumulative change in accounting principle; adoption of ASU 2016-13		6,090			—			—			—			—
Charge-offs		5,093			10,304			11,177			13,552			19,403
Recoveries		8,441			27,246			10,173			7,131			10,210
Net (recoveries) charge-offs		(3,348	)		(16,942	)		1,004			6,421			9,193
(Recovery of) provision for credit losses		(11,916	)		12,054			6,171			7,945			8,557
Allowance for credit losses, end of period	$	83,197		$	85,675		$	56,679		$	51,512		$	49,988


General reserve trends:
Allowance for credit losses, end of period	$	83,197		$	85,675		$	56,679		$	51,512		$	49,988
Allowance on purchased credit deteriorated ("PCD") loans (purchased credit impaired ("PCI") loans for years 2020 and prior)		—			167			268			—			—
Allowance on purchased loans excluded from the general reserve		—			678			—			—			—
Specific reserves on individually evaluated loans		1,616			5,434			5,230			2,273			684
General reserves on collectively evaluated loans	$	81,581		$	79,396		$	51,181		$	49,239		$	49,304

Total loans	$	6,871,122		$	7,177,785		$	6,501,404		$	5,692,132		$	5,372,483
PCD loans (PCI loans for years 2020 and prior)		7,149			11,153			14,331			3,943			—
Purchased loans excluded from collectively evaluated loans		—			360,056			548,436			225,029			—
Individually evaluated loans		74,502			108,407			77,459			48,135			56,545
Collectively evaluated loans	$	6,789,471		$	6,698,169		$	5,861,178		$	5,415,025		$	5,315,938

Asset Quality Ratios:
Net (recoveries) charge-offs as a % of average loans	(0.05)%			(0.24)%				0.02	%		0.12	%		0.17	%
Allowance for credit losses as a % of period end loans		1.21	%		1.19	%		0.87	%		0.90	%		0.93	%
Allowance for credit losses as a % of period end loans (excluding PPP loans) (k)		1.22	%		1.25	%	N.A.			N.A.			N.A.
General reserve as a % of collectively evaluated loans		1.20	%		1.19	%		0.87	%		0.91	%		0.93	%
General reserves as a % of collectively evaluated loans (excluding PPP loans) (k)		1.21	%		1.24	%	N.A.			N.A.			N.A.

Nonperforming assets:
Nonaccrual loans	$	72,722		$	117,368		$	90,080		$	67,954		$	72,056
Accruing troubled debt restructurings		28,323			20,788			21,215			15,173			20,111
Loans past due 90 days or more		1,607			1,458			2,658			2,243			1,792
Total nonperforming loans	$	102,652		$	139,614		$	113,953		$	85,370		$	93,959
Other real estate owned - Park National Bank		181			837			3,100			2,788			6,524
Other real estate owned - SEPH		594			594			929			1,515			7,666
Other nonperforming assets - Park National Bank		2,750			3,164			3,599			3,464			4,849
Total nonperforming assets	$	106,177		$	144,209		$	121,581		$	93,137		$	112,998
Percentage of nonaccrual loans to period end loans		1.06	%		1.64	%		1.39	%		1.19	%		1.34	%
Percentage of nonperforming loans to period end loans		1.49	%		1.95	%		1.75	%		1.50	%		1.75	%
Percentage of nonperforming assets to period end loans		1.55	%		2.01	%		1.87	%		1.64	%		2.10	%
Percentage of nonperforming assets to period end total assets		1.11	%		1.55	%		1.42	%		1.19	%		1.50	%

Note: Explanations for footnotes (a) - (l) 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)		2021			2020			2019			2018			2017


New nonaccrual loan information:
Nonaccrual loans, beginning of period	$	117,368		$	90,080		$	67,954		$	72,056		$	87,822
New nonaccrual loans		38,478			103,386			81,009			76,611			58,753
Resolved nonaccrual loans		83,124			76,098			58,883			80,713			74,519
Nonaccrual loans, end of period	$	72,722		$	117,368		$	90,080		$	67,954		$	72,056

Impaired commercial loan portfolio information (period end):
Unpaid principal balance	$	75,126		$	109,062		$	78,178		$	59,381		$	66,585
Prior charge-offs		624			655			719			11,246			10,040
Remaining principal balance		74,502			108,407			77,459			48,135			56,545
Specific reserves		1,616			5,434			5,230			2,273			684
Book value, after specific reserves	$	72,886		$	102,973		$	72,229		$	45,862		$	55,861

PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS

	THREE MONTHS ENDED									YEAR ENDED
*(in thousands, except share and per share data)*	December 31, 2021			September 30, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Net interest income	$	83,706		$	81,602		$	86,321		$	329,893		$	327,630
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions		559			807			919			3,303			4,669
less interest income on former Vision Bank relationships		4,628			414			102			7,985			453
Net interest income - adjusted	$	78,519		$	80,381		$	85,300		$	318,605		$	322,508

(Recovery of) provision for credit losses	$	(4,993	)	$	1,972		$	(19,159	)	$	(11,916	)	$	12,054
less recoveries on former Vision Bank relationships		(106	)		(2,654	)		(20,496	)		(3,169	)		(21,982	)
(Recovery of) provision for credit losses - adjusted	$	(4,887	)	$	4,626		$	1,337		$	(8,747	)	$	34,036

Other income	$	32,206		$	32,411		$	35,656		$	129,944		$	125,664
less net gain on sale of former Vision Bank OREO properties		—			—			—			—			1,208
less other service income related to former Vision Bank relationships		321			143			503			525			590
less rebranding initiative related expenses		—			—			(298	)		—			(572	)
less net gain on the sale of debt securities in the ordinary course of business		—			—			—			—			3,286
Other income - adjusted	$	31,885		$	32,268		$	35,451		$	129,419		$	121,152

Other expense	$	75,764		$	68,489		$	85,661		$	283,518		$	286,595
less merger-related expenses related to NewDominion and Carolina Alliance acquisitions		4			4			9			24			629
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions		420			420			525			1,798			2,263
less direct expenses related to collection of payments on former Vision Bank loan relationships		700			254			4,051			1,361			4,283
less FHLB prepayment penalty		—			—			8,736			—			10,529
less rebranding initiative related expenses		351			437			229			2,085			1,040
less Foundation contribution		—			—			3,000			4,000			3,000
less severance and restructuring charges		73			140			4,039			367			4,443
less COVID-19 related expenses (j)		587			—			738			2,122			3,622
Other expense - adjusted	$	73,629		$	67,234		$	64,334		$	271,761		$	256,786

Tax effect of adjustments to net income identified above (i)	$	(731	)	$	(580	)	$	(83	)	$	(677	)	$	(379	)

Net income - reported	$	36,548		$	35,434		$	45,200		$	153,945		$	127,923
Net income - adjusted (h)	$	33,800		$	33,251		$	44,888		$	151,397		$	126,495

Diluted earnings per share	$	2.23		$	2.16		$	2.75		$	9.37		$	7.80
Diluted earnings per share, adjusted (h)	$	2.07		$	2.02		$	2.73		$	9.22		$	7.71

Annualized return on average assets (a)(b)		1.48	%		1.40	%		1.93	%		1.56	%		1.38	%
Annualized return on average assets, adjusted (a)(b)(h)		1.36	%		1.31	%		1.92	%		1.54	%		1.37	%

Annualized return on average tangible assets (a)(b)(e)		1.50	%		1.42	%		1.97	%		1.59	%		1.41	%
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)		1.39	%		1.33	%		1.95	%		1.56	%		1.39	%

Annualized return on average shareholders' equity (a)(b)		13.44	%		13.04	%		17.37	%		14.45	%		12.68	%
Annualized return on average shareholders' equity, adjusted (a)(b)(h)		12.43	%		12.23	%		17.25	%		14.21	%		12.54	%

Annualized return on average tangible equity (a)(b)(c)		15.91	%		15.44	%		20.76	%		17.15	%		15.25	%
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)		14.72	%		14.49	%		20.61	%		16.87	%		15.08	%

Efficiency ratio (g)		64.94	%		59.70	%		69.82	%		61.27	%		62.83	%
Efficiency ratio, adjusted (g)(h)		66.23	%		59.31	%		52.97	%		60.27	%		57.51	%

Annualized net interest margin (g)		3.72	%		3.53	%		4.07	%		3.69	%		3.93	%
Annualized net interest margin, adjusted (g)(h)		3.49	%		3.48	%		4.02	%		3.56	%		3.86	%

Note: Explanations for footnotes (a) - (l) 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 December 31, 2021, September 30, 2021, and December 31, 2020 and the twelve months ended December 31, 2021 and December 31, 2020, 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						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
AVERAGE SHAREHOLDERS' EQUITY	$	1,078,494	$	1,078,465	$	1,035,493	$	1,065,460	$	1,009,102
Less: Average goodwill and other intangible assets		167,332		167,754		169,199		167,993		170,031
AVERAGE TANGIBLE EQUITY	$	911,162	$	910,711	$	866,294	$	897,467	$	839,071

(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:
	December 31, 2021		September 30, 2021		December 31, 2020
TOTAL SHAREHOLDERS' EQUITY	$	1,110,759	$	1,067,912	$	1,040,256
Less: Goodwill and other intangible assets		167,057		167,477		168,855
TANGIBLE EQUITY	$	943,702	$	900,435	$	871,401

(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						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
AVERAGE ASSETS	$	9,829,657	$	10,070,716	$	9,316,499	$	9,847,458	$	9,241,633
Less: Average goodwill and other intangible assets		167,332		167,754		169,199		167,993		170,031
AVERAGE TANGIBLE ASSETS	$	9,662,325	$	9,902,962	$	9,147,300	$	9,679,465	$	9,071,602

(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:
	December 31, 2021		September 30, 2021		December 31, 2020
TOTAL ASSETS	$	9,560,254	$	10,034,018	$	9,279,021
Less: Goodwill and other intangible assets		167,057		167,477		168,855
TANGIBLE ASSETS	$	9,393,197	$	9,866,541	$	9,110,166

(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.

RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
	THREE MONTHS ENDED						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
Interest income	$	87,266	$	85,420	$	91,800	$	345,853	$	357,720
Fully taxable equivalent adjustment		762		717		712		2,911		2,866
Fully taxable equivalent interest income	$	88,028	$	86,137	$	92,512	$	348,764	$	360,586
Interest expense		3,560		3,818		5,479		15,960		30,090
Fully taxable equivalent net interest income	$	84,468	$	82,319	$	87,033	$	332,804	$	330,496

(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, (recovery of) provision for credit losses, other income and other expense.
(i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate.
(j) COVID-19 related expenses include calamity pay and special one-time bonuses to certain associates.
(k) Excludes $74.4 million, $131.5 million and $331.6 million of PPP loans at December 31, 2021, September 30, 2021 and December 31, 2020, respectively.
(l) Park adopted ASU 2016-13 effective January 1, 2021. The allowance for credit losses at December 31, 2021 and September 30, 2021 and the related (recovery of) provision for credit losses for the three months ended December 31, 2021 and September 30, 2021 and the twelve months ended December 31, 2021 were calculated utilizing this new guidance.

PARK NATIONAL CORPORATION
Asset Quality Information

	Year ended December 31,
*(in thousands, except ratios)*		2021			2020			2019			2018			2017

Allowance for credit losses:
Allowance for credit losses, beginning of period	$	85,675		$	56,679		$	51,512		$	49,988		$	50,624
Cumulative change in accounting principle; adoption of ASU 2016-13		6,090			—			—			—			—
Charge-offs		5,093			10,304			11,177			13,552			19,403
Recoveries		8,441			27,246			10,173			7,131			10,210
Net (recoveries) charge-offs		(3,348	)		(16,942	)		1,004			6,421			9,193
(Recovery of) provision for credit losses		(11,916	)		12,054			6,171			7,945			8,557
Allowance for credit losses, end of period	$	83,197		$	85,675		$	56,679		$	51,512		$	49,988


General reserve trends:
Allowance for credit losses, end of period	$	83,197		$	85,675		$	56,679		$	51,512		$	49,988
Allowance on purchased credit deteriorated ("PCD") loans (purchased credit impaired ("PCI") loans for years 2020 and prior)		—			167			268			—			—
Allowance on purchased loans excluded from the general reserve		—			678			—			—			—
Specific reserves on individually evaluated loans		1,616			5,434			5,230			2,273			684
General reserves on collectively evaluated loans	$	81,581		$	79,396		$	51,181		$	49,239		$	49,304

Total loans	$	6,871,122		$	7,177,785		$	6,501,404		$	5,692,132		$	5,372,483
PCD loans (PCI loans for years 2020 and prior)		7,149			11,153			14,331			3,943			—
Purchased loans excluded from collectively evaluated loans		—			360,056			548,436			225,029			—
Individually evaluated loans		74,502			108,407			77,459			48,135			56,545
Collectively evaluated loans	$	6,789,471		$	6,698,169		$	5,861,178		$	5,415,025		$	5,315,938

Asset Quality Ratios:
Net (recoveries) charge-offs as a % of average loans	(0.05)%			(0.24) %				0.02	%		0.12	%		0.17	%
Allowance for credit losses as a % of period end loans		1.21	%		1.19	%		0.87	%		0.90	%		0.93	%
Allowance for credit losses as a % of period end loans (excluding PPP loans) (k)		1.22	%		1.25	%	N.A.			N.A.			N.A.
General reserve as a % of collectively evaluated loans		1.20	%		1.19	%		0.87	%		0.91	%		0.93	%
General reserves as a % of collectively evaluated loans (excluding PPP loans) (k)		1.21	%		1.24	%	N.A.			N.A.			N.A.

Nonperforming assets:
Nonaccrual loans	$	72,722		$	117,368		$	90,080		$	67,954		$	72,056
Accruing troubled debt restructurings		28,323			20,788			21,215			15,173			20,111
Loans past due 90 days or more		1,607			1,458			2,658			2,243			1,792
Total nonperforming loans	$	102,652		$	139,614		$	113,953		$	85,370		$	93,959
Other real estate owned - Park National Bank		181			837			3,100			2,788			6,524
Other real estate owned - SEPH		594			594			929			1,515			7,666
Other nonperforming assets - Park National Bank		2,750			3,164			3,599			3,464			4,849
Total nonperforming assets	$	106,177		$	144,209		$	121,581		$	93,137		$	112,998
Percentage of nonaccrual loans to period end loans		1.06	%		1.64	%		1.39	%		1.19	%		1.34	%
Percentage of nonperforming loans to period end loans		1.49	%		1.95	%		1.75	%		1.50	%		1.75	%
Percentage of nonperforming assets to period end loans		1.55	%		2.01	%		1.87	%		1.64	%		2.10	%
Percentage of nonperforming assets to period end total assets		1.11	%		1.55	%		1.42	%		1.19	%		1.50	%

Note: Explanations for footnotes (a) - (l) 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)		2021			2020			2019			2018			2017


New nonaccrual loan information:
Nonaccrual loans, beginning of period	$	117,368		$	90,080		$	67,954		$	72,056		$	87,822
New nonaccrual loans		38,478			103,386			81,009			76,611			58,753
Resolved nonaccrual loans		83,124			76,098			58,883			80,713			74,519
Nonaccrual loans, end of period	$	72,722		$	117,368		$	90,080		$	67,954		$	72,056

Impaired commercial loan portfolio information (period end):
Unpaid principal balance	$	75,126		$	109,062		$	78,178		$	59,381		$	66,585
Prior charge-offs		624			655			719			11,246			10,040
Remaining principal balance		74,502			108,407			77,459			48,135			56,545
Specific reserves		1,616			5,434			5,230			2,273			684
Book value, after specific reserves	$	72,886		$	102,973		$	72,229		$	45,862		$	55,861

PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS
	THREE MONTHS ENDED									YEAR ENDED
*(in thousands, except share and per share data)*	December 31, 2021			September 30, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Net interest income	$	83,706		$	81,602		$	86,321		$	329,893		$	327,630
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions		559			807			919			3,303			4,669
less interest income on former Vision Bank relationships		4,628			414			102			7,985			453
Net interest income - adjusted	$	78,519		$	80,381		$	85,300		$	318,605		$	322,508

(Recovery of) provision for credit losses	$	(4,993	)	$	1,972		$	(19,159	)	$	(11,916	)	$	12,054
less recoveries on former Vision Bank relationships		(106	)		(2,654	)		(20,496	)		(3,169	)		(21,982	)
(Recovery of) provision for credit losses - adjusted	$	(4,887	)	$	4,626		$	1,337		$	(8,747	)	$	34,036

Other income	$	32,206		$	32,411		$	35,656		$	129,944		$	125,664
less net gain on sale of former Vision Bank OREO properties		—			—			—			—			1,208
less other service income related to former Vision Bank relationships		321			143			503			525			590
less rebranding initiative related expenses		—			—			(298	)		—			(572	)
less net gain on the sale of debt securities in the ordinary course of business		—			—			—			—			3,286
Other income - adjusted	$	31,885		$	32,268		$	35,451		$	129,419		$	121,152

Other expense	$	75,764		$	68,489		$	85,661		$	283,518		$	286,595
less merger-related expenses related to NewDominion and Carolina Alliance acquisitions		4			4			9			24			629
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions		420			420			525			1,798			2,263
less direct expenses related to collection of payments on former Vision Bank loan relationships		700			254			4,051			1,361			4,283
less FHLB prepayment penalty		—			—			8,736			—			10,529
less rebranding initiative related expenses		351			437			229			2,085			1,040
less Foundation contribution		—			—			3,000			4,000			3,000
less severance and restructuring charges		73			140			4,039			367			4,443
less COVID-19 related expenses (j)		587			—			738			2,122			3,622
Other expense - adjusted	$	73,629		$	67,234		$	64,334		$	271,761		$	256,786

Tax effect of adjustments to net income identified above (i)	$	(731	)	$	(580	)	$	(83	)	$	(677	)	$	(379	)

Net income - reported	$	36,548		$	35,434		$	45,200		$	153,945		$	127,923
Net income - adjusted (h)	$	33,800		$	33,251		$	44,888		$	151,397		$	126,495

Diluted earnings per share	$	2.23		$	2.16		$	2.75		$	9.37		$	7.80
Diluted earnings per share, adjusted (h)	$	2.07		$	2.02		$	2.73		$	9.22		$	7.71

Annualized return on average assets (a)(b)		1.48	%		1.40	%		1.93	%		1.56	%		1.38	%
Annualized return on average assets, adjusted (a)(b)(h)		1.36	%		1.31	%		1.92	%		1.54	%		1.37	%

Annualized return on average tangible assets (a)(b)(e)		1.50	%		1.42	%		1.97	%		1.59	%		1.41	%
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)		1.39	%		1.33	%		1.95	%		1.56	%		1.39	%

Annualized return on average shareholders' equity (a)(b)		13.44	%		13.04	%		17.37	%		14.45	%		12.68	%
Annualized return on average shareholders' equity, adjusted (a)(b)(h)		12.43	%		12.23	%		17.25	%		14.21	%		12.54	%

Annualized return on average tangible equity (a)(b)(c)		15.91	%		15.44	%		20.76	%		17.15	%		15.25	%
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)		14.72	%		14.49	%		20.61	%		16.87	%		15.08	%

Efficiency ratio (g)		64.94	%		59.70	%		69.82	%		61.27	%		62.83	%
Efficiency ratio, adjusted (g)(h)		66.23	%		59.31	%		52.97	%		60.27	%		57.51	%

Annualized net interest margin (g)		3.72	%		3.53	%		4.07	%		3.69	%		3.93	%
Annualized net interest margin, adjusted (g)(h)		3.49	%		3.48	%		4.02	%		3.56	%		3.86	%

Note: Explanations for footnotes (a) - (l) 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 December 31, 2021, September 30, 2021, and December 31, 2020 and the twelve months ended December 31, 2021 and December 31, 2020, 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						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
AVERAGE SHAREHOLDERS' EQUITY	$	1,078,494	$	1,078,465	$	1,035,493	$	1,065,460	$	1,009,102
Less: Average goodwill and other intangible assets		167,332		167,754		169,199		167,993		170,031
AVERAGE TANGIBLE EQUITY	$	911,162	$	910,711	$	866,294	$	897,467	$	839,071

(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:
	December 31, 2021		September 30, 2021		December 31, 2020
TOTAL SHAREHOLDERS' EQUITY	$	1,110,759	$	1,067,912	$	1,040,256
Less: Goodwill and other intangible assets		167,057		167,477		168,855
TANGIBLE EQUITY	$	943,702	$	900,435	$	871,401

(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						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
AVERAGE ASSETS	$	9,829,657	$	10,070,716	$	9,316,499	$	9,847,458	$	9,241,633
Less: Average goodwill and other intangible assets		167,332		167,754		169,199		167,993		170,031
AVERAGE TANGIBLE ASSETS	$	9,662,325	$	9,902,962	$	9,147,300	$	9,679,465	$	9,071,602

(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:
	December 31, 2021		September 30, 2021		December 31, 2020
TOTAL ASSETS	$	9,560,254	$	10,034,018	$	9,279,021
Less: Goodwill and other intangible assets		167,057		167,477		168,855
TANGIBLE ASSETS	$	9,393,197	$	9,866,541	$	9,110,166

(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.

RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
	THREE MONTHS ENDED						YEAR ENDED
	December 31, 2021		September 30, 2021		December 31, 2020		December 31, 2021		December 31, 2020
Interest income	$	87,266	$	85,420	$	91,800	$	345,853	$	357,720
Fully taxable equivalent adjustment		762		717		712		2,911		2,866
Fully taxable equivalent interest income	$	88,028	$	86,137	$	92,512	$	348,764	$	360,586
Interest expense		3,560		3,818		5,479		15,960		30,090
Fully taxable equivalent net interest income	$	84,468	$	82,319	$	87,033	$	332,804	$	330,496

(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, (recovery of) provision for credit losses, other income and other expense.
(i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate.
(j) COVID-19 related expenses include calamity pay and special one-time bonuses to certain associates.
(k) Excludes $74.4 million, $131.5 million and $331.6 million of PPP loans at December 31, 2021, September 30, 2021 and December 31, 2020, respectively.
(l) Park adopted ASU 2016-13 effective January 1, 2021. The allowance for credit losses at December 31, 2021 and September 30, 2021 and the related (recovery of) provision for credit losses for the three months ended December 31, 2021 and September 30, 2021 and the twelve months ended December 31, 2021 were calculated utilizing this new guidance.

FAQ

What were Park National Corporation's Q4 2021 earnings results?

In Q4 2021, Park National Corporation reported net income of $36.5 million, a 19.1% decrease from Q4 2020.

How did Park National Corporation perform in 2021 compared to 2020?

For the full year 2021, Park National Corporation's net income increased by 20.3% to $153.9 million, compared to $127.9 million in 2020.

What is the dividend payout for Park National Corporation in 2022?

Park National Corporation declared a quarterly cash dividend of $1.04 per share, payable on March 10, 2022.

What was the net income per diluted share for 2021 for Park National Corporation?

The net income per diluted share for Park National Corporation in 2021 was $9.37, an increase from $7.80 in 2020.

What changes were made to Park National Corporation's associate bonuses?

Park National Corporation approved an additional $1,000 bonus for full-time associates, totaling $2.5 million in bonus payments to recognize their contributions.

Park National Corporation reports 2021 financial results

FAQ

What were Park National Corporation's Q4 2021 earnings results?

How did Park National Corporation perform in 2021 compared to 2020?

What is the dividend payout for Park National Corporation in 2022?

What was the net income per diluted share for 2021 for Park National Corporation?

What changes were made to Park National Corporation's associate bonuses?

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Park National Corporation reports 2021 financial results

FAQ

What were Park National Corporation's Q4 2021 earnings results?

How did Park National Corporation perform in 2021 compared to 2020?

What is the dividend payout for Park National Corporation in 2022?

What was the net income per diluted share for 2021 for Park National Corporation?

What changes were made to Park National Corporation's associate bonuses?

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