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Park National Corporation Reports Third Quarter 2015 Financial Results and Declares Quarterly Dividend

NEWARK, Ohio, Oct. 26, 2015 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE MKT: PRK) today announced financial results for the third quarter and first nine months of 2015, including increased net income and continued loan growth in the commercial, consumer, and mortgage categories. The board of directors also declared a quarterly cash dividend of $0.94 per common share, payable on December 10, 2015 to common shareholders of record as of November 20, 2015.

Park’s net income for the three months ended September 30, 2015 (third quarter) was $20.0 million, compared to $18.3 million for the same period in 2014, an increase of $1.7 million or 9.7 percent. Net income per diluted common share for the third quarter of 2015 was $1.30, compared to $1.19 in the same period of 2014. Net income for the nine months ended September 30, 2015 (first nine months) was $60.1 million, compared to $59.7 million for the same period in 2014. Net income per diluted common share for the first nine months of 2015 was $3.90, compared to $3.87 in the same period of 2014.

Park’s community-banking subsidiary, The Park National Bank, reported net income of $61.2 million for the nine months ended September 30, 2015, compared to net income of $60.9 million for the same period of 2014. The Park National Bank had total assets of $7.2 billion at September 30, 2015 and $6.9 billion at September 30, 2014. This performance generated an annualized return on average assets of 1.14 percent and 1.21 percent for the bank for the first nine-month periods of 2015 and 2014, respectively.

The Park National Bank loan portfolio expanded during the third quarter of 2015. Loans outstanding at September 30, 2015 were $4.96 billion, compared to $4.86 billion at June 30, 2015, an increase of $100 million or an annualized 8.19 percent. The bank reported growth in the third quarter across all loan categories: mortgage loan growth of $10 million (3.2 percent annualized), commercial loan growth of $70 million (11.4 percent annualized) and consumer loan growth of $20 million (8.4 percent annualized).

“This quarter, our strong lending capabilities combined with our reputation for reliability created more opportunities for us to serve business owners and families,” said Park Chief Executive Officer David L. Trautman. “We continue to focus our energy and resources on being a top provider of financing.”

About Park National Corporation

Headquartered in Newark, Ohio, Park National Corporation had $7.3 billion in total assets (as of September 30, 2015). The Park organization principally consists of 11 community bank divisions, a non-bank subsidiary and two specialty finance companies. Park's Ohio-based banking operations are conducted through Park subsidiary The Park National Bank and its divisions, which include Fairfield National Bank Division, Richland Bank Division, Century National Bank Division, First-Knox National Bank Division, Farmers Bank Division, United Bank, N.A. Division, Second National Bank Division, Security National Bank Division, Unity National Bank Division, and The Park National Bank of Southwest Ohio & Northern Kentucky Division; and Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance). The Park organization also includes Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.

Complete financial tables are listed below…

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Park cautions that any forward-looking statements contained in this release or made by management of Park are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation: Park's ability to execute our business plan successfully and within the expected timeframe; 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 slowing or reversal of the current economic expansion in addition to continuing residual effects of recessionary conditions and an uneven spread of positive impacts of recovery on the economy and our counterparties, including adverse impacts on demand for loan, deposit and other financial services, delinquencies, defaults and counterparty ability to meet credit and other obligations; changes in interest rates and prices may adversely impact the value of securities, loans, deposits and other financial instruments and the interest rate sensitivity of our consolidated balance sheet as well as reduce interest margins; changes in consumer spending, borrowing and saving habits, whether due to changing business and economic conditions, legislative and regulatory initiatives, or other factors; changes in customers', suppliers', and other counterparties' performance and creditworthiness; asset/liability repricing risks and liquidity risks; our liquidity requirements could be adversely affected by changes to regulations governing bank and bank holding company capital and liquidity standards as well as by changes in our assets and liabilities; competitive factors among financial services organizations could increase significantly, including product and pricing pressures, changes to third-party relationships and our ability to attract, develop and retain qualified bank professionals; clients could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding; the nature, timing 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, pensions, bankruptcy, consumer protection, accounting, banking, securities and other aspects of the financial services industry, specifically the reforms provided for in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), as well as future regulations which will be adopted by the relevant regulatory agencies, including the Consumer Financial Protection Bureau, to implement the Dodd-Frank Act's provisions, the Budget Control Act of 2011, the American Taxpayer Relief Act of 2012 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 SEC, the Public Company Accounting Oversight Board and other regulatory agencies, and the accuracy of our assumptions and estimates used to prepare our financial statements; the effect of trade, monetary, fiscal and other governmental policies of the U.S. federal government, including money supply and interest rate policies of the Federal Reserve; disruption in the liquidity and other functioning of U.S. financial markets; 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 creditworthiness of certain sovereign governments, supranationals and financial institutions in Europe and Asia; unfavorable resolution of legal proceedings or other claims and regulatory and other governmental examinations or other inquiries; the adequacy of our risk management program; the ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; a failure in or breach of our operational or security systems or infrastructure, or those of our third-party vendors and other service providers, including as a result of cyber attacks; demand for loans in the respective market areas served by Park and our subsidiaries; 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, 2014. 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
Three months ended September 30, 2015, June 30, 2015, and September 30, 2014
201520152014 Percent change vs.
(in thousands, except share and per share data)3rd QTR2nd QTR3rd QTR 2Q '153Q '14
INCOME STATEMENT:
Net interest income$57,715 $56,515 $56,709 2.1%1.8%
Provision for loan losses2,404 1,612 4,501 N.M. N.M.
Other income20,191 19,191 19,396 5.2%4.1%
Other expense47,429 44,667 44,972 6.2%5.5%
Income before income taxes$28,073 $29,427 $26,632 (4.6)%5.4%
Income taxes8,033 8,388 8,363 (4.2)%(3.9)%
Net income$20,040 $21,039 $18,269 (4.7)%9.7%
MARKET DATA:
Earnings per common share - basic (b)$1.30 $1.37 $1.19 (5.1)%9.2%
Earnings per common share - diluted (b)1.30 1.37 1.19 (5.1)%9.2%
Cash dividends per common share0.94 0.94 0.94 %%
Book value per common share at period end46.66 45.93 44.57 1.6%4.7%
Stock price per common share at period end90.22 87.37 75.42 3.3%19.6%
Market capitalization at period end1,384,035 1,342,954 1,160,896 3.1%19.2%
Weighted average common shares - basic (a)15,361,087 15,370,882 15,392,421 (0.1)%(0.2)%
Weighted average common shares - diluted (a)15,401,808 15,407,881 15,413,664 %(0.1)%
Common shares outstanding at period end15,340,670 15,370,877 15,392,413 (0.2)%(0.3)%
PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)1.07%1.16%1.05% (7.8)%1.9%
Return on average equity (a)(b)11.20%11.90%10.52% (5.9)%6.5%
Yield on loans4.65%4.68%4.80% (0.6)%(3.1)%
Yield on investments2.39%2.49%2.54% (4.0)%(5.9)%
Yield on money markets0.25%0.25%0.25% %%
Yield on earning assets3.91%3.96%4.17% (1.3)%(6.2)%
Cost of interest bearing deposits0.29%0.30%0.27% (3.3)%7.4%
Cost of borrowings2.39%2.46%2.58% (2.8)%(7.4)%
Cost of paying liabilities0.70%0.72%0.79% (2.8)%(11.4)%
Net interest margin (g)3.37%3.40%3.55% (0.9)%(5.1)%
Efficiency ratio (g)60.71%58.87%58.93% 3.1%3.0%
OTHER RATIOS (NON - GAAP):
Annualized return on average tangible assets (a)(b)(e)1.08%1.17%1.06% (7.7)%1.9%
Annualized return on average tangible equity (a)(b)(c)12.47%13.25%11.75% (5.9)%6.1%
Tangible book value per share (d)$41.95 $41.22 $39.87 1.8%5.2%
N.M. - Not meaningful
Note: Explanations (a) - (g) are included at the end of the financial highlights.
PARK NATIONAL CORPORATION
Financial Highlights (continued)
Three months ended September 30, 2015, June 30, 2015, and September 30, 2014
Percent change vs.
BALANCE SHEET:September 30,
2015
June 30, 2015September 30,
2014
2Q '153Q '14
Investment securities$1,469,284 $1,550,103 $1,472,625 (5.2)%(0.2)%
Loans (h)4,999,912 4,900,974 4,799,039 2.0%4.2%
Allowance for loan losses58,483 57,427 57,674 1.8%1.4%
Goodwill72,334 72,334 72,334 %%
Other real estate owned (OREO)20,136 21,876 19,185 (8.0)%5.0%
Total assets7,300,340 7,309,569 7,011,255 (0.1)%4.1%
Total deposits5,454,982 5,512,366 5,129,004 (1.0)%6.4%
Borrowings1,059,904 1,018,680 1,137,653 4.0%(6.8)%
Shareholders' equity715,803 705,963 685,999 1.4%4.3%
Tangible equity (d)643,469 633,629 613,665 1.6%4.9%
Nonperforming loans109,638 113,795 119,393 (3.7)%(8.2)%
Nonperforming assets129,774 135,671 160,563 (4.3)%(19.2)%
ASSET QUALITY RATIOS:
Loans as a % of period end total assets68.49%67.05%68.45% 2.1%0.1%
Nonperforming loans as a % of period end loans2.19%2.32%2.49% (5.6)%(12.0)%
Nonperforming assets as a % of period end loans + OREO2.59%2.76%3.33% (6.2)%(22.2)%
Allowance for loan losses as a % of period end loans1.17%1.17%1.20% %(2.5)%
Net loan charge-offs (recoveries)$1,348 $(407)$4,738 N.M. N.M.
Annualized net loan charge-offs (recoveries) as a % of average loans (a)0.11%(0.03)%0.39% N.M. N.M.
CAPITAL & LIQUIDITY:
Total equity / Period end total assets9.81%9.66%9.78% 1.6%0.3%
Tangible equity (d) / Tangible assets (f)8.90%8.76%8.84% 1.6%0.7%
Average equity / Average assets (a)9.59%9.76%9.98% (1.7)%(3.9)%
Average equity / Average loans (a)14.37%14.60%14.45% (1.6)%(0.6)%
Average loans / Average deposits (a)88.61%88.80%95.04% (0.2)%(6.8)%
N.M. - Not meaningful
Note: Explanations (a) - (h) are included at the end of the financial highlights.


PARK NATIONAL CORPORATION
Financial Highlights
Nine months ended September 30, 2015 and 2014
(in thousands, except share and per share data) 2015 2014 Percent change
vs. 2014
INCOME STATEMENT:
Net interest income $169,765 $167,750 1.2%
Provision for loan losses 5,648 1,016 N.M.
Other income 58,255 55,715 4.6%
Total other expense 137,816 136,992 0.6%
Income before income taxes $84,556 $85,457 (1.1)%
Income taxes 24,433 25,801 (5.3)%
Net income $60,123 $59,656 0.8%
MARKET DATA:
Earnings per common share - basic (b) $3.91 $3.87 1.0%
Earnings per common share - diluted (b) 3.90 3.87 0.8%
Cash dividends per common share 2.82 2.82 %
Weighted average common shares - basic (a) 15,370,380 15,395,320 (0.2)%
Weighted average common shares - diluted (a) 15,411,511 15,413,625 %
PERFORMANCE RATIOS: (Annualized)
Return on average assets (a)(b) 1.10% 1.17% (6.0)%
Return on average equity (a)(b) 11.35% 11.82% (4.0)%
Yield on loans 4.67% 4.85% (3.7)%
Yield on investments 2.48% 2.60% (4.6)%
Yield on earning assets 3.95% 4.21% (6.2)%
Cost of interest bearing deposits 0.30% 0.28% 7.1%
Cost of borrowings 2.40% 2.60% (7.7)%
Cost of paying liabilities 0.72% 0.81% (11.1)%
Net interest margin (g) 3.39% 3.58% (5.3)%
Efficiency ratio (g) 60.29% 61.12% (1.4)%
ASSET QUALITY RATIOS:
Net loan charge-offs $1,517 $2,810 (46.0)%
Annualized net loan charge-offs as a % of average loans (a) 0.04% 0.08% (50.0)%
CAPITAL & LIQUIDITY:
Average stockholders' equity / Average assets (a) 9.71% 9.90% (1.9)%
Average stockholders' equity / Average loans (a) 14.53% 14.40% 0.9%
Average loans / Average deposits (a) 89.23% 94.58% (5.7)%
OTHER RATIOS (NON-GAAP):
Annualized return on average tangible assets (a)(b)(e) 1.11% 1.18% (5.9)%
Annualized return on average tangible equity (a)(b)(c) 12.64% 13.24% (4.5)%


PARK NATIONAL CORPORATION
Financial Highlights (continued)
(a) Averages are for the three months ended September 30, 2015, June 30, 2015 and September 30, 2014 and the nine months ended September 30, 2015 and September 30, 2014.
(b) Reported measure uses net income.
(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 during the applicable period.
RECONCILIATION OF AVERAGE SHAREHOLDERS' EQUITY TO AVERAGE TANGIBLE EQUITY:
THREE MONTHS ENDED NINE MONTHS ENDED
September 30, 2015June 30, 2015September 30, 2014 September 30, 2015September 30, 2014
AVERAGE SHAREHOLDERS' EQUITY$710,128 $709,031 $689,068 $708,085 $674,789
Less: Average goodwill72,334 72,334 72,334 72,334 72,334
AVERAGE TANGIBLE EQUITY$637,794 $636,697 $616,734 $635,751 $602,455
(d) Tangible book value divided by common shares outstanding at period end. Tangible equity equals ending shareholders' equity less goodwill, in each case at the end of the period.
RECONCILIATION OF SHAREHOLDERS' EQUITY TO TANGIBLE EQUITY:
September 30, 2015June 30, 2015September 30, 2014
SHAREHOLDERS' EQUITY$715,803 $705,963 $685,999
Less: Goodwill72,334 72,334 72,334
TANGIBLE EQUITY$643,469 $633,629 $613,665
(e) Net income for each period divided by average tangible assets during the period. Average tangible assets equals average assets less average goodwill, in each case during the applicable period.
RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS:
THREE MONTHS ENDED NINE MONTHS ENDED
September 30, 2015June 30, 2015September 30, 2014 September 30, 2015September 30, 2014
AVERAGE ASSETS$7,405,178 $7,265,755 $6,901,110 $7,294,077 $6,813,257
Less: Average goodwill72,334 72,334 72,334 72,334 72,334
AVERAGE TANGIBLE ASSETS$7,332,844 $7,193,421 $6,828,776 $7,221,743 $6,740,923
(f) Tangible equity divided by tangible assets. Tangible assets equals total assets less goodwill, in each case at the end of the period.
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:
September 30, 2015June 30, 2015September 30, 2014
TOTAL ASSETS$7,300,340 $7,309,569 $7,011,255
Less: Goodwill72,334 72,334 72,334
TANGIBLE ASSETS$7,228,006 $7,237,235 $6,938,921
(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 below assuming a 35% tax rate. Additionally, net interest margin is calculated on a fully taxable equivalent basis.
RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
THREE MONTHS ENDED NINE MONTHS ENDED
September 30, 2015June 30, 2015September 30, 2014 September 30, 2015September 30, 2014
Interest income$67,087 $65,804 $66,622 $197,909 $197,327
Fully taxable equivalent adjustment220 170 209 551 653
Fully taxable equivalent interest income$67,307 $65,974 $66,831 $198,460 $197,980
Interest expense9,372 9,289 9,913 28,144 29,577
Fully taxable equivalent net interest income$57,935 $56,685 $56,918 $170,316 $168,403
(h) Includes $11.4 million, $9.2 million, and $28.6 million of loans held for sale as of September 30, 2015, June 30, 2015 and September 30, 2014, respectively.


PARK NATIONAL CORPORATION
Consolidated Statements of Income
Three Months Ended Nine Months Ended
Sept 30, Sept 30,
(in thousands, except share and per share data) 2015 2014 2015 2014
Interest income:
Interest and fees on loans $57,680 $57,492 $169,555 $169,249
Interest on:
Obligations of U.S. Government, its agencies
and other securities 9,175 9,011 27,677 27,758
Other interest income 232 119 677 320
Total interest income 67,087 66,622 197,909 197,327
Interest expense:
Interest on deposits:
Demand and savings deposits 614 440 1,656 1,232
Time deposits 2,508 2,136 7,672 6,547
Interest on borrowings 6,250 7,337 18,816 21,798
Total interest expense 9,372 9,913 28,144 29,577
Net interest income 57,715 56,709 169,765 167,750
Provision for loan losses 2,404 4,501 5,648 1,016
Net interest income after provision for loan losses 55,311 52,208 164,117 166,734
Other income 20,191 19,396 58,255 55,715
Other expense 47,429 44,972 137,816 136,992
Income before income taxes 28,073 26,632 84,556 85,457
Income taxes 8,033 8,363 24,433 25,801
Net income $20,040 $18,269 $60,123 $59,656
Per Common Share:
Net income - basic $1.30 $1.19 $3.91 $3.87
Net income - diluted $1.30 $1.19 $3.90 $3.87
Weighted average shares - basic 15,361,087 15,392,421 15,370,380 15,395,320
Weighted average shares - diluted 15,401,808 15,413,664 15,411,511 15,413,625
Cash Dividends Declared $0.94 $0.94 $2.82 $2.82


PARK NATIONAL CORPORATION
Consolidated Balance Sheets
(in thousands, except share data)September 30, 2015December 31, 2014
Assets
Cash and due from banks$102,928 $133,511
Money market instruments279,327 104,188
Investment securities1,469,284 1,500,788
Loans4,999,912 4,829,682
Allowance for loan losses(58,483)(54,352)
Loans, net4,941,429 4,775,330
Bank premises and equipment, net59,581 55,479
Goodwill72,334 72,334
Other real estate owned20,136 22,605
Other assets355,321 336,964
Total assets$7,300,340 $7,001,199
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing$1,288,750 $1,269,296
Interest bearing4,166,232 3,858,704
Total deposits5,454,982 5,128,000
Borrowings1,059,904 1,108,582
Other liabilities69,651 68,076
Total liabilities$6,584,537 $6,304,658
Shareholders' Equity:
Preferred shares (200,000 shares authorized; no shares outstanding at September 30, 2015 and December 31, 2014)$ $
Common shares (No par value; 20,000,000 shares authorized in 2015 and 2014; 16,150,859 shares issued at September 30, 2015 and 16,150,888 shares issued at December 31, 2014)303,805 303,104
Accumulated other comprehensive loss, net of taxes(7,429)(13,608)
Retained earnings501,145 484,484
Treasury shares (810,189 shares at September 30, 2015 and 758,489 shares at December 31, 2014)(81,718)(77,439)
Total shareholders' equity$715,803 $696,541
Total liabilities and shareholders' equity$7,300,340 $7,001,199


PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
Three Months Ended Nine Months Ended
September 30, September 30,
(in thousands)20152014 20152014
Assets
Cash and due from banks$113,708 $110,023 $117,617 $110,120
Money market instruments362,420 185,899 355,240 168,066
Investment securities1,528,404 1,396,880 1,500,275 1,407,734
Loans4,942,024 4,768,253 4,872,191 4,685,235
Allowance for loan losses(57,798)(57,949) (56,383)(58,969)
Loans, net4,884,226 4,710,304 4,815,808 4,626,266
Bank premises and equipment, net59,386 55,133 57,985 55,465
Goodwill and other intangibles72,334 72,334 72,334 72,334
Other real estate owned20,970 22,340 22,310 28,406
Other assets363,730 348,197 352,508 344,866
Total assets$7,405,178 $6,901,110 $7,294,077 $6,813,257
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing$1,302,987 $1,170,280 $1,290,383 $1,173,091
Interest bearing4,274,375 3,846,846 4,169,895 3,780,717
Total deposits5,577,362 5,017,126 5,460,278 4,953,808
Borrowings1,037,158 1,130,133 1,049,041 1,122,926
Other liabilities80,530 64,783 76,673 61,734
Total liabilities$6,695,050 $6,212,042 $6,585,992 $6,138,468
Shareholders' Equity:
Preferred shares$ $ $ $
Common shares303,631 302,870 303,392 302,762
Accumulated other comprehensive loss, net of taxes(12,136)(11,967) (9,154)(18,922)
Retained earnings498,670 475,778 493,117 468,350
Treasury shares(80,037)(77,613) (79,270)(77,401)
Total shareholders' equity$710,128 $689,068 $708,085 $674,789
Total liabilities and shareholders' equity$7,405,178 $6,901,110 $7,294,077 $6,813,257


PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters
20152015201520142014
(in thousands, except per share data)3rd QTR2nd QTR1st QTR4th QTR3rd QTR
Interest income:
Interest and fees on loans$57,680 $56,463 $55,412 $58,395 $57,492
Interest on:
Obligations of U.S. Government, its agencies and other securities9,175 9,113 9,389 9,223 9,011
Other interest income232 228 217 198 119
Total interest income67,087 65,804 65,018 67,816 66,622
Interest expense:
Interest on deposits:
Demand and savings deposits614 556 486 445 440
Time deposits2,508 2,542 2,622 2,776 2,136
Interest on borrowings6,250 6,191 6,375 7,301 7,337
Total interest expense9,372 9,289 9,483 10,522 9,913
Net interest income57,715 56,515 55,535 57,294 56,709
Provision for (recovery of) loan losses2,404 1,612 1,632 (8,349)4,501
Net interest income after provision for (recovery of) loan losses55,311 54,903 53,903 65,643 52,208
Other income20,191 19,191 18,873 19,834 19,396
Other expense47,429 44,667 45,720 50,518 44,972
Income before income taxes28,073 29,427 27,056 34,959 26,632
Income taxes8,033 8,388 8,012 10,658 8,363
Net income$20,040 $21,039 $19,044 $24,301 $18,269
Per Common Share:
Net income - basic$1.30 $1.37 $1.24 $1.58 $1.19
Net income - diluted$1.30 $1.37 $1.23 $1.58 $1.19


PARK NATIONAL CORPORATION
Detail of other income and other expense - Linked Quarters
20152015201520142014
(in thousands)3rd QTR2nd QTR1st QTR4th QTR3rd QTR
Other income:
Income from fiduciary activities$4,933 $5,210 $4,912 $5,050 $4,734
Service charges on deposits3,909 3,684 3,381 3,651 4,171
Other service income3,251 3,025 2,301 3,564 2,450
Checkcard fee income3,643 3,665 3,351 3,433 3,431
Bank owned life insurance income1,574 1,086 1,878 1,153 1,420
OREO valuation adjustments(718)(251)(304)(380)(935)
Gain on the sale of OREO, net243 513 673 45 2,149
Gain on commercial loans held for sale 756 1,867
Loss on sale of investments (1,175)
Miscellaneous3,356 2,259 1,925 2,626 1,976
Total other income$20,191 $19,191 $18,873 $19,834 $19,396
Other expense:
Salaries$21,692 $20,995 $20,982 $21,552 $20,515
Employee benefits6,721 4,729 5,685 2,973 5,728
Occupancy expense2,469 2,381 2,579 2,378 2,339
Furniture and equipment expense3,044 2,831 2,862 2,709 2,870
Data processing fees1,383 1,197 1,267 1,196 1,281
Professional fees and services5,424 5,583 4,694 8,195 6,934
Marketing1,058 937 1,013 1,160 1,087
Insurance1,399 1,362 1,461 1,413 1,396
Communication1,245 1,233 1,331 1,328 1,304
Miscellaneous2,994 3,419 3,846 7,614 1,518
Total other expense$47,429 $44,667 $45,720 $50,518 $44,972


PARK NATIONAL CORPORATION
Asset Quality Information
Year ended December 31,
(in thousands, except ratios)September 30, 2015June 30, 2015March 31, 20152014 20132012 2011
Allowance for loan losses:
Allowance for loan losses, beginning of period$57,427 $55,408 $54,352 $59,468 $55,537 $68,444 $143,575
Transfer of loans at fair value (219)
Transfer of allowance to held for sale (13,100)
Charge-offs3,716 3,027 3,418 24,780 (B)19,153 61,268 (A)133,882
Recoveries2,368 3,434 2,842 26,997 19,669 12,942 8,798
Net charge-offs (recoveries)1,348 (407)576 (2,217) (516)48,326 125,084
Provision for (recovery of) loan losses2,404 1,612 1,632 (7,333) 3,415 35,419 63,272
Allowance for loan losses, end of period$58,483 $57,427 $55,408 $54,352 $59,468 $55,537 $68,444
(A) Year ended December 31, 2012 included the full charge-off of the Vision Bank ALLL of $12.1 million to bring the retained Vision Bank loan portfolio to fair value prior to the merger of Vision Bank (as constituted following the transaction with Centennial Bank and Home BancShares, Inc.) with and into SEPH, the non-bank subsidiary of Park, on February 16, 2012.
(B) Year ended December 31, 2014 included $4.3 million in charge-offs related to the transfer of $22.0 million of commercial loans to the held for sale portfolio.
General reserve trends:
Allowance for loan losses, end of period$58,483 $57,427 $55,408 $54,352 $59,468 $55,537 $68,444
Specific reserves5,738 6,597 5,064 3,660 10,451 8,276 15,935
General reserves$52,745 $50,830 $50,344 $50,692 $49,017 $47,261 $52,509
Total loans$4,999,912 $4,900,974 $4,830,830 $4,829,682 $4,620,505 $4,450,322 $4,317,099
Impaired commercial loans69,188 70,553 70,461 73,676 112,304 137,238 187,074
Total loans less impaired commercial loans$4,930,724 $4,830,421 $4,760,369 $4,756,006 $4,508,201 $4,313,084 $4,130,025
Asset Quality Ratios:
Net charge-offs (recoveries) as a % of average loans0.11%(0.03)%0.05%(0.05)% (0.01)%1.10% 2.65%
Allowance for loan losses as a % of period end loans1.17%1.17%1.15%1.13% 1.29%1.25% 1.59%
General reserves as a % of total loans less impaired commercial loans1.07%1.05%1.06%1.07% 1.09%1.10% 1.27%
Nonperforming Assets - Park National Corporation:
Nonaccrual loans$90,995 $95,739 $95,873 $100,393 $135,216 $155,536 $195,106
Accruing troubled debt restructuring17,131 16,520 16,802 16,254 18,747 29,800 28,607
Loans past due 90 days or more1,512 1,536 1,629 2,641 1,677 2,970 3,489
Total nonperforming loans$109,638 $113,795 $114,304 $119,288 $155,640 $188,306 $227,202
Other real estate owned - Park National Bank7,797 8,774 10,223 10,687 11,412 14,715 13,240
Other real estate owned - SEPH12,339 13,102 16,114 11,918 23,224 21,003 29,032
Other real estate owned - Vision Bank
Total nonperforming assets$129,774 $135,671 $140,641 $141,893 $190,276 $224,024 $269,474
Percentage of nonaccrual loans to period end loans1.82%1.95%1.98%2.08% 2.93%3.49% 4.52%
Percentage of nonperforming loans to period end loans2.19%2.32%2.37%2.47% 3.37%4.23% 5.26%
Percentage of nonperforming assets to period end loans2.60%2.77%2.91%2.94% 4.12%5.03% 6.24%
Percentage of nonperforming assets to period end total assets1.78%1.86%1.92%2.03% 2.87%3.37% 3.86%
PARK NATIONAL CORPORATION
Asset Quality Information (continued)
Year ended December 31,
(in thousands, except ratios)September 30, 2015June 30, 2015March 31, 20152014 20132012 2011
Nonperforming Assets - Park National Bank and Guardian:
Nonaccrual loans$76,387 $80,470 $77,387 $77,477 $99,108 $100,244 $96,113
Accruing troubled debt restructuring17,036 16,423 16,706 16,157 18,747 29,800 26,342
Loans past due 90 days or more1,512 1,536 1,629 2,641 1,677 2,970 3,367
Total nonperforming loans$94,935 $98,429 $95,722 $96,275 $119,532 $133,014 $125,822
Other real estate owned - Park National Bank7,797 8,774 10,223 10,687 11,412 14,715 13,240
Total nonperforming assets$102,732 $107,203 $105,945 $106,962 $130,944 $147,729 $139,062
Percentage of nonaccrual loans to period end loans1.53%1.65%1.61%1.61% 2.16%2.28% 2.29%
Percentage of nonperforming loans to period end loans1.90%2.02%1.99%2.00% 2.61%3.03% 3.00%
Percentage of nonperforming assets to period end loans2.06%2.19%2.20%2.23% 2.86%3.36% 3.32%
Percentage of nonperforming assets to period end total assets1.42%1.48%1.47%1.55% 2.01%2.27% 2.21%
Nonperforming Assets - SEPH/Vision Bank (retained portfolio as of September 30, 2015, June 30, 2015, March 31, 2015, and December 31, 2014, 2013, 2012, and 2011):
Nonaccrual loans$14,608 $15,269 $18,486 $22,916 $36,108 $55,292 $98,993
Accruing troubled debt restructuring95 97 96 97 2,265
Loans past due 90 days or more 122
Total nonperforming loans$14,703 $15,366 $18,582 $23,013 $36,108 $55,292 $101,380
Other real estate owned - Vision Bank
Other real estate owned - SEPH12,339 13,102 16,114 11,918 23,224 21,003 29,032
Total nonperforming assets$27,042 $28,468 $34,696 $34,931 $59,332 $76,295 $130,412
Percentage of nonaccrual loans to period end loans N.M. N.M. N.M. N.M. N.M. N.M. N.M.
Percentage of nonperforming loans to period end loans N.M. N.M. N.M. N.M. N.M. N.M. N.M.
Percentage of nonperforming assets to period end loans N.M. N.M. N.M. N.M. N.M. N.M. N.M.
Percentage of nonperforming assets to period end total assets N.M. N.M. N.M. N.M. N.M. N.M. N.M.
New nonaccrual loan information - Park National Corporation
Nonaccrual loans, beginning of period$95,739 $95,873 $100,393 $135,216 $155,536 $195,106 $289,268
New nonaccrual loans9,231 23,974 13,844 70,059 67,398 83,204 124,158
Resolved nonaccrual loans13,975 24,108 18,232 86,384 87,718 122,774 218,320
Sale of nonaccrual loans held for sale 132 18,498
Nonaccrual loans, end of period$90,995 $95,739 $95,873 $100,393 $135,216 $155,536 $195,106
New nonaccrual loan information - Ohio - based operations
Nonaccrual loans, beginning of period$80,470 $77,387 $77,477 $99,108 $100,244 $96,113 $117,815
New nonaccrual loans - Ohio-based operations9,231 23,974 13,844 69,389 66,197 68,960 78,316
Resolved nonaccrual loans13,314 20,891 13,934 78,288 67,333 64,829 100,018
Sale of nonaccrual loans held for sale 12,732
Nonaccrual loans, end of period$76,387 $80,470 $77,387 $77,477 $99,108 $100,244 $96,113
New nonaccrual loan information - SEPH/Vision Bank
Nonaccrual loans, beginning of period$15,269 $18,486 $22,916 $36,108 $55,292 $98,993 $171,453
New nonaccrual loans - SEPH/Vision Bank 670 1,201 14,243 45,842
Resolved nonaccrual loans661 3,217 4,298 8,096 20,385 57,944 118,302
Sale of nonaccrual loans held for sale 132 5,766
Nonaccrual loans, end of period$14,608 $15,269 $18,486 $22,916 $36,108 $55,292 $98,993
PARK NATIONAL CORPORATION
Asset Quality Information (continued)
Year ended December 31,
(in thousands, except ratios)September 30, 2015June 30, 2015March 31, 20152014 20132012 2011
Impaired Commercial Loan Portfolio Information (period end):
Unpaid principal balance$99,172 $100,577 $96,235 $106,156 $175,576 $242,345 $290,908
Prior charge-offs29,984 30,024 25,774 32,480 63,272 105,107 103,834
Remaining principal balance69,188 70,553 70,461 73,676 112,304 137,238 187,074
Specific reserves5,738 6,597 5,064 3,660 10,451 8,276 15,935
Book value, after specific reserve$63,450 $63,956 $65,397 $70,016 $101,853 $128,962 $171,139


Media contact: Bethany Lewis, 740.349.0421, blewis@parknationalbank.com Investor contact: Brady Burt, 740.322.6844, bburt@parknationalbank.com

Source:Park National Corporation