updated 1/24/2011 4:17:48 PM ET 2011-01-24T21:17:48

NEWARK, Ohio, Jan. 24, 2011 (GLOBE NEWSWIRE) -- Park National Corporation (NYSE Amex:PRK) (Park) today reported financial results for the three months ended December 31, 2010 and the year ended December 31, 2010. Park's Board of Directors also today declared a $0.94 per common share quarterly cash dividend, payable on March 10, 2011 to common shareholders of record on February 25, 2011.

Park's net income was $74.2 million for each of the years ended December 31, 2010 and 2009. Net income for the 2010 fourth quarter was $12.7 million, a slight increase from $12.3 million earned in the same period in 2009.

The issuance of common shares over the last four quarters resulted in a decline in net income per diluted common share compared to last year. Net income per diluted common share for the 2010 year was $4.51, a 6.4 percent decline from the $4.82 reported in 2009. Net income per diluted common share for the 2010 fourth quarter was $0.73, a 1.4 percent decline from $0.74 in the fourth quarter of 2009.

Ohio-Based Operations

Park, excluding Vision Bank (Park's Ohio-based operations), reported net income of $103.5 million for the 2010 year, compared to 2009 net income of $104.3 million. This performance resulted in return on assets of 1.58 percent and 1.61 percent for Park's Ohio-based operations in 2010 and 2009, respectively. Additionally, Park's two Ohio-based subsidiaries, The Park National Bank and Guardian Financial Services Company, generated record earnings in the 2010 year. 

Loan growth for Park's Ohio-based operations was $128.7 million, or 3.2 percent, during 2010. Nonperforming loans for Park's Ohio-based operations increased by $32.2 million in 2010, ending the year at $121.0 million, or 2.96 percent of period-end loans. Of the $32.2 million increase in nonperforming loans, $26.7 million was due to loans purchased from Vision Bank subsequent to Park's 2007 acquisition. Without these loan purchases, Park's Ohio-based operations would have experienced a $5.5 million increase in nonperforming loans in 2010.

"We are very pleased with our results in Ohio. Interest rates for 15- and 30-year home loans during 2010, combined with our local servicing, were especially appealing," said Park Chairman C. Daniel DeLawder. "More than 20 percent of the home loans we refinanced in Ohio last year were for clients whose original loan was from another lender. It remains a very attractive time to borrow money. We have it to lend and we continue to welcome opportunities to lend to individuals and businesses alike."

Credit Quality

In 2010, Park continued to proactively increase its allowance for loan losses, providing additional reserves for future losses in the loan portfolio. At December 31, 2010, the allowance for loan losses was $121.4 million, a 4.0 percent increase compared to $116.7 million at December 31, 2009. Nonperforming loans ended the 2010 year at $292.9 million, or 6.19 percent of period-end loans, compared to $248.5 million, or 5.35 percent of period-end loans in 2009.

Park's loan loss provision for the 2010 year was $64.9 million, compared to $68.8 million in 2009. Park's Ohio-based operations had a loan loss provision of $25.7 million in 2010, compared to $24.4 million in 2009. Park subsidiary Vision Bank had a loan loss provision of $39.2 million in 2010, compared to $44.4 million in 2009. Net loan charge-offs at Park for the 2010 year were $60.2 million, or 1.30 percent of average loans outstanding, compared to $52.2 million or 1.14 percent of average loans in 2009.

Capital Raising Activities

Capital-raising activities over the past seven quarters increased common shares outstanding by 1,413,256 or 10.1 percent, generating a net total of approximately $87 million. For the 2010 year, Park issued 509,184 common shares at a weighted average price per share of $67.99, for gross proceeds of $34.6 million. The weighted average price per share of $67.99 represents a multiple of 1.6 times the December 31, 2009 common book value per share of $41.71. After all expenses, Park raised an additional $33.5 million of common equity from the sale of these common shares in 2010.

Other Information

During 2010, Park realized a pre-tax gain of $11.9 million from the sale of investment securities. Park's 2009 results included a pre-tax gain of $7.3 million from the sale of investment securities.

Headquartered in Newark, Ohio, Park National Corporation has $7.3 billion in total assets (as of December 31, 2010). Park consists of 13 community bank divisions and two specialty finance companies. Park's Ohio-based banking operations are conducted through Park subsidiary The Park National Bank and its divisions which include Fairfield National Bank Division, Richland Bank Division, Century National Bank Division, First-Knox National Bank Division, Farmers & Savings Bank Division, United Bank Division, Second National Bank Division, Security National Bank Division, Unity National Bank Division and The Park National Bank of Southwest Ohio & Northern Kentucky Division. Park's other banking subsidiary is Vision Bank (headquartered in Panama City, Florida), and its Vision Bank Division (of Gulf Shores, Alabama). Park also includes Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance) and Guardian Financial Services Company (d.b.a. Guardian Finance Company).

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

This news release contains forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation: deterioration in the asset value of Park's loan portfolio may be worse than expected due to a number of factors, such as adverse changes in economic conditions that impair the ability of borrowers to repay their loans, the underlying value of the collateral could prove less valuable than assumed and cash flows may be worse than expected; Park's ability to execute its business plan successfully and within the expected timeframe; general economic and financial market conditions, and weakening in the economy, specifically, the real estate market and credit market, either nationally or in the states in which Park and its subsidiaries do business, may be worse than expected which could decrease the demand for loan, deposit and other financial services and increase loan delinquencies and defaults; the effects of the Gulf of Mexico oil spill; changes in market rates and prices may adversely impact the value of securities, loans, deposits and other financial instruments and the interest rate sensitivity of our consolidated balance sheet; changes in consumer spending, borrowing and saving habits; our liquidity requirements could be adversely affected by changes in our assets and liabilities; competitive factors among financial institutions increase significantly, including product and pricing pressures and our ability to attract, develop and retain qualified bank professionals; the nature, timing and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and its subsidiaries, including changes in laws and regulations concerning taxes, accounting, banking, securities and other aspects of the financial services industry, specifically the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; the effect of fiscal and governmental policies of the United States federal government; demand for loans in the respective market areas served by Park and its subsidiaries, and other risk factors relating to the banking industry as detailed from time to time in Park's reports filed with the Securities and Exchange Commission including those described in "Item 1A. Risk Factors" of Part I of Park's Annual Report on Form 10-K for the fiscal year ended December 31, 2009 and in "Item 1A. Risk Factors" of Part II of Park's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2010. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Park does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

PARK NATIONAL CORPORATION
Financial Highlights
Three months ended December 31, 2010, September 30, 2010, and December 31, 2009
           
  2010 2009 Percent change vs.
(in thousands, except share and per share data) 4th QTR 3rd QTR 4th QTR 3Q '10 4Q '09
INCOME STATEMENT:          
Net interest income  $ 68,498  $ 69,445  $ 68,802 -1.4% -0.4%
Provision for loan losses  20,448 14,654 25,720 39.5% -20.5%
Other income  14,745 17,530 16,718 -15.9% -11.8%
Gain on sale of securities  45  --  -- N/A N/A
Total other expense  46,520 45,696 46,660 1.8% -0.3%
Income before income taxes  $ 16,320  $ 26,625  $ 13,140 -38.7% 24.2%
Income taxes  3,625 7,048  844 -48.6% 329.5%
Net income  $ 12,695  $ 19,577  $ 12,296 -35.2% 3.2%
Preferred stock dividends and accretion  1,452 1,452  1,441 0.0% 0.8%
Net income available to common shareholders  $ 11,243  $ 18,125  $ 10,855 -38.0% 3.6%
           
MARKET DATA:          
Earnings per common share - basic (b)  $ 0.73  $ 1.19  $ 0.74 -38.7% -1.4%
Earnings per common share - diluted (b)  0.73  1.19  0.74 -38.7% -1.4%
Cash dividends per common share  0.94  0.94  0.94 0.0% 0.0%
Common book value per common share at period end  42.12  43.10  41.71 -2.3% 1.0%
Stock price per common share at period end  72.67  64.04  58.88 13.5% 23.4%
Market capitalization at period end  1,119,041  979,956  876,298 14.2% 27.7%
           
Weighted average common shares - basic (a)  15,340,427  15,272,720  14,658,601 0.4% 4.7%
Weighted average common shares - diluted (a)  15,352,600  15,272,720  14,658,601 0.5% 4.7%
Common shares outstanding at period end  15,398,934  15,302,244  14,882,780 0.6% 3.5%
           
PERFORMANCE RATIOS:          
Annualized return on average assets (a)(b) 0.64% 1.02% 0.61% -37.3% 4.9%
Annualized return on average common equity (a)(b) 6.72% 10.90% 6.94% -38.3% -3.2%
Yield on loans 5.73% 5.76% 5.91% -0.5% -3.0%
Yield on investments 3.87% 4.26% 4.53% -9.2% -14.6%
Yield on earning assets 5.23% 5.34% 5.51% -2.1% -5.1%
Cost of interest bearing deposits 0.82% 0.91% 1.33% -9.9% -38.3%
Cost of borrowings 2.76% 2.91% 2.68% -5.2% 3.0%
Cost of paying liabilities 1.21% 1.29% 1.58% -6.2% -23.4%
Net interest margin (annualized) 4.25% 4.28% 4.20% -0.7% 1.2%
Efficiency ratio (g) 55.52% 52.21% 54.24% 6.3% 2.4%
           
OTHER RATIOS (NON GAAP):          
Annualized return on average tangible assets (a)(b)(e) 0.64% 1.03% 0.62% -37.9% 3.2%
Annualized return on average tangible common equity (a)(b)(c) 7.63% 12.39% 8.00% -38.4% -4.6%
Tangible common book value per common share (d)   $ 37.03  $ 37.93  $ 36.22 -2.4% 2.2%
           
           
PARK NATIONAL CORPORATION
Financial Highlights (continued)
Three months ended December 31, 2010, September 30, 2010, and December 31, 2009
        Percent change vs.
BALANCE SHEET: December 31, 2010 September 30, 2010 December 31, 2009 3Q '10 4Q '09
Investment securities  $ 2,039,791  $ 1,896,969  $ 1,863,560 7.5% 9.5%
Loans 4,732,685 4,656,902 4,640,432 1.6% 2.0%
Allowance for loan losses 121,397 117,405 116,717 3.4% 4.0%
Goodwill and other intangibles 78,377 79,199 81,799 -1.0% -4.2%
Other real estate owned 44,325 52,837 41,240 -16.1% 7.5%
Total assets 7,298,377 7,090,456 7,040,329 2.9% 3.7%
Total deposits 5,095,420 5,100,030 5,188,052 -0.1% -1.8%
Borrowings 1,375,652 1,003,624 1,053,850 37.1% 30.5%
Stockholders' equity 745,824 756,627 717,264 -1.4% 4.0%
Common equity 648,534 659,539 620,781 -1.7% 4.5%
Tangible common equity (d) 570,157 580,340 538,982 -1.8% 5.8%
Nonperforming loans 289,268 237,194 233,686 22.0% 23.8%
Nonperforming assets 333,593 290,031 274,926 15.0% 21.3%
Past due 90 day loans and still accruing 3,590 10,700 14,773 -66.4% -75.7%
           
ASSET QUALITY RATIOS:          
Loans as a % of period end assets 64.85% 65.68% 65.91% -1.3% -1.6%
Nonperforming loans as a % of period end loans 6.11% 5.09% 5.04% 20.0% 21.2%
Past due 90 day loans as a % of period end loans 0.08% 0.23% 0.32% -65.2% -75.0%
Nonperforming assets / Period end loans + OREO  6.98% 6.16% 5.87% 13.3% 18.9%
Allowance for loan losses as a % of period end loans 2.57% 2.52% 2.52% 2.0% 2.0%
Net loan charge-offs  $ 16,456  $ 17,925  $ 19,044 -8.2% -13.6%
Annualized net loan charge-offs as a % of average loans (a) 1.39% 1.53% 1.63% -9.2% -14.7%
           
CAPITAL & LIQUIDITY:          
Total equity / Period end assets 10.22% 10.67% 10.19% -4.2% 0.3%
Common equity / Period end assets 8.89% 9.30% 8.82% -4.4% 0.8%
Tangible common equity (d) / Tangible assets (f) 7.90% 8.28% 7.75% -4.6% 1.9%
Average equity / Average assets (a) 10.84% 10.73% 10.14% 1.0% 6.9%
Average equity / Average loans (a) 16.20% 16.27% 15.49% -0.4% 4.6%
Average loans / Average deposits (a) 91.68% 89.64% 88.65% 2.3% 3.4%
 
 
PARK NATIONAL CORPORATION
Financial Highlights (continued)
Twelve months ended December 31, 2010 and 2009
       
(in thousands, except share and per share data) December 31,

2010
December 31,

2009
Percent

change
INCOME STATEMENT:      
Net interest income  $ 274,044  $ 273,491 0.2%
Provision for loan losses 64,902 68,821 -5.7%
Other income 65,632 73,850 -11.1%
Gain on sale of securities  11,864  7,340 61.6%
Total other expense 187,107 188,725 -0.9%
Income before income taxes  $ 99,531  $ 97,135 2.5%
Income taxes 25,314  22,943 10.3%
Net income  $ 74,217  $ 74,192 0.0%
Preferred stock dividends and accretion 5,807  5,762 0.8%
Net income available to common shareholders  $ 68,410  $ 68,430 0.0%
       
MARKET DATA:      
Earnings per common share - basic (b)  $ 4.51  $4.82 -6.4%
Earnings per common share - diluted (b)  4.51  4.82 -6.4%
Cash dividends per common share  3.76  3.76 0.0%
       
Weighted average common shares - basic (a)  15,152,692  14,206,335 6.7%
Weighted average common shares - diluted (a)  15,155,735  14,206,335 6.7%
       
PERFORMANCE RATIOS:      
Return on average assets (a)(b) 0.97% 0.97% 0.0%
Return on average common equity (a)(b) 10.53% 11.81% -10.8%
Yield on loans  5.80% 6.03% -3.8%
Yield on investments 4.25% 4.81% -11.6%
Yield on earning assets 5.36% 5.67% -5.5%
Cost of interest bearing deposits 0.98% 1.53% -35.9%
Cost of borrowings 2.88% 2.46% 17.1%
Cost of paying liabilities 1.35% 1.73% -22.0%
Net interest margin 4.26% 4.22% 0.9%
Efficiency ratio (g) 54.75% 54.01% 1.4%
       
ASSET QUALITY RATIOS:      
Net loan charge-offs  $ 60,222  $ 52,192 15.4%
Annualized net loan charge-offs as a % of average loans (a) 1.30% 1.14% 14.0%
       
CAPITAL AND LIQUIDITY:      
Average equity / Average assets (a) 10.60% 9.60% 10.4%
Average equity / Average loans (a) 16.08% 14.70% 9.4%
Average loans / Average deposits (a) 89.59% 90.97% -1.5%
       
OTHER RATIOS (NON GAAP):      
Return on average tangible assets (a)(b)(e) 0.98% 0.98% 0.0%
Return on average tangible common equity (a)(b)(c) 12.01% 13.81% -13.0%
 
 
PARK NATIONAL CORPORATION
Financial Highlights (continued)
           
1a) Averages are for the quarters ended December 31, 2010, September 30, 2010, and December 31, 2009, and the twelve-month periods ended December 31, 2010 and December 31, 2009.
           
(b) Reported measure uses net income available to common shareholders.
           
(c) Net income available to common shareholders for each period divided by average tangible common equity during the period. Average tangible common equity equals average stockholders' equity during the applicable period less (i) average preferred stock during the applicable period and (ii) average goodwill and other intangibles during the applicable period.
           
RECONCILIATION OF AVERAGE STOCKHOLDERS' EQUITY TO AVERAGE TANGIBLE COMMON EQUITY:
  THREE MONTHS ENDED TWELVE MONTHS ENDED
  December 31, 2010 September 30, 2010 December 31, 2009 December 31, 2010 December 31, 2009
AVERAGE STOCKHOLDERS' EQUITY  $ 760,556  $ 756,939  $ 717,268  $ 746,555  $ 675,314
Less: Average preferred stock  97,174  96,972  96,374  96,873  96,090
Average goodwill and other intangibles  78,823  79,651 82,322  80,072  83,722
AVERAGE TANGIBLE COMMON EQUITY  $ 584,559  $ 580,316  $ 538,572  $ 569,610  $ 495,502
           
           
(d) Tangible common equity equals ending stockholders' equity less preferred stock and goodwill and other intangibles, in each case at the end of the period.
           
RECONCILIATION OF STOCKHOLDERS' EQUITY TO TANGIBLE COMMON EQUITY:
  December 31, 2010 September 30, 2010 December 31, 2009    
STOCKHOLDERS' EQUITY  $ 745,824  $ 756,627  $ 717,264    
Less: Preferred stock 97,290 97,088  96,483    
Goodwill and other intangibles 78,377 79,199 81,799    
TANGIBLE COMMON EQUITY  $ 570,157  $ 580,340  $ 538,982    
           
           
(e) Net income available to common shareholders for each period divided by average tangible assets during the period. Average tangible assets equals average assets less average goodwill and other intangibles.
           
RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS:
  THREE MONTHS ENDED TWELVE MONTHS ENDED
  December 31, 2010 September 30, 2010 December 31, 2009 December 31, 2010 December 31, 2009
AVERAGE ASSETS  $ 7,013,852  $ 7,052,789  $ 7,076,494  $ 7,042,750  $ 7,035,531
Less: Average goodwill and other intangibles  78,823  79,651 82,322 80,072 83,722
AVERAGE TANGIBLE ASSETS  $ 6,935,029  $ 6,973,138  $ 6,994,172  $ 6,962,678  $ 6,951,809
           
           
(f) Tangible common equity divided by tangible assets. Tangible assets equals total assets less goodwill and other intangibles.
           
RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:
  December 31, 2010 September 30, 2010 December 31, 2009    
TOTAL ASSETS  $ 7,298,377  $ 7,090,456  $ 7,040,329    
Less: Goodwill and other intangibles 78,377 79,199 81,799    
TANGIBLE ASSETS  $ 7,220,000  $ 7,011,257  $ 6,958,530    
           
           
PARK NATIONAL CORPORATION
Financial Highlights (continued)
           
(g) Efficiency ratio is calculated by taking total other expense divided by the sum of fully taxable equivalent net interest income and other income. Fully taxable equivalent net interest income reconciliation is shown below assuming a 35% tax rate. Additionally, net interest margin is calculated on a fully taxable equivalent basis.
           
RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
  THREE MONTHS ENDED TWELVE MONTHS ENDED
  December 31, 2010 September 30, 2010 December 31, 2009 December 31, 2010 December 31, 2009
Interest income  $ 84,391  $ 86,682  $ 90,365  $ 345,517  $ 367,690
Fully taxable equivalent adjustment  540  553  505  2,047  2,082
Fully taxable equivalent interest income  $ 84,931  $ 87,235  $ 90,870  $ 347,564  $ 369,772
Interest expense  15,893  17,237  21,563  71,473  94,199
Fully taxable equivalent net interest income  $ 69,038  $ 69,998  $ 69,307  $ 276,091  $ 275,573
 
 
PARK NATIONAL CORPORATION 
Consolidated Statements of Income
         
         
  Three Months Ended

December 31,
Twelve Months Ended

December 31,
(in thousands, except share and per share data) 2010 2009 2010 2009
         
Interest income:        
Interest and fees on loans   $ 67,405  $ 68,676  $ 267,692  $ 275,599
Interest on:        
Obligations of U.S. Government, its agencies and other securities  16,768  21,325  76,839  90,558
Obligations of states and political subdivisions  173  286  786  1,417
Other interest income  45  78  200  116
Total interest income  84,391 90,365  345,517 367,690
         
Interest expense:        
Interest on deposits:        
Demand and savings deposits  1,133  2,333  5,753  10,815
Time deposits  7,512  12,269  36,212  53,805
Interest on borrowings  7,248  6,961  29,508  29,579
Total interest expense  15,893 21,563  71,473 94,199
         
Net interest income  68,498 68,802  274,044 273,491
         
Provision for loan losses  20,448  25,720  64,902 68,821
         
Net interest income after provision for loan losses  48,050 43,082  209,142 204,670
         
Other income  14,745  16,718  65,632  73,850
         
Gain on sale of securities  45  --  11,864  7,340
         
Other expense:        
Salaries and employee benefits  24,631  24,815  98,315  101,225
Occupancy expense  2,760  2,740  11,510  11,552
Furniture and equipment expense  2,615  2,395  10,435  9,734
Other expense  16,514  16,710  66,847  66,214
Total other expense  46,520 46,660  187,107 188,725
         
Income before income taxes  16,320 13,140  99,531 97,135
         
Income taxes  3,625  844  25,314  22,943
         
Net income   $ 12,695  $ 12,296  $ 74,217  $ 74,192
         
Preferred stock dividends and accretion  1,452  1,441  5,807  5,762
         
Net income available to common shareholders  $ 11,243  $ 10,855  $ 68,410  $ 68,430
         
Per Common Share:        
Net income - basic  $ 0.73  $ 0.74  $ 4.51  $ 4.82
Net income - diluted  $ 0.73  $ 0.74  $ 4.51  $ 4.82
         
Weighted average shares - basic  15,340,427  14,658,601  15,152,692  14,206,335
Weighted average shares - diluted  15,352,600  14,658,601  15,155,735  14,206,335
 
 
PARK NATIONAL CORPORATION 
Consolidated Balance Sheets
     
     
(in thousands, except share data) December 31, 2010 Dec. 31, 2009
     
Assets    
     
Cash and due from banks  $ 109,058  $ 116,802
Money market instruments 24,722 42,289
Investment securities 2,039,791 1,863,560
Loans 4,732,685 4,640,432
Allowance for loan losses 121,397 116,717
Loans, net  4,611,288 4,523,715
Bank premises and equipment, net 69,567 69,091
Goodwill and other intangibles 78,377 81,799
Other real estate owned 44,325 41,240
Other assets 321,249 301,833
     
Total assets  $ 7,298,377  $ 7,040,329
     
Liabilities and Stockholders' Equity    
     
Deposits:    
Noninterest bearing  $ 937,719  $ 897,243
Interest bearing 4,157,701 4,290,809
Total deposits  5,095,420 5,188,052
Borrowings 1,375,652 1,053,850
Other liabilities 81,481 81,163
Total liabilities  $ 6,552,553  $ 6,323,065
     
Stockholders' Equity:    
Preferred Stock (200,000 shares authorized in 2010 and 2009;

100,000 shares issued in 2010 and 2009)
 $ 97,290  $ 96,483
Common stock (No par value; 20,000,000 shares authorized

in 2010 and 2009; 16,151,062 shares issued at December 31, 2010,

and 16,151,112 at December 31, 2009)
301,205 301,208
Common stock warrants 4,472  5,361
Accumulated other comprehensive income, net of taxes (1,868) 15,661
Retained earnings 422,458 423,872
Treasury stock (752,128 shares at December 31, 2010, and 1,268,332 at

December 31, 2009)
(77,733) (125,321)
Total stockholders' equity  $ 745,824  $ 717,264
     
Total liabilities and stockholders' equity  $ 7,298,377  $ 7,040,329
     
 
PARK NATIONAL CORPORATION 
Consolidated Average Balance Sheets
         
         
  Three Months Ended

December 30,
Twelve Months Ended

December 30,
(in thousands) 2010 2009 2010 2009
         
Assets        
         
Cash and due from banks  $ 119,982  $ 105,000  $ 116,961  $ 110,227
Money market instruments 84,379 132,479 93,009 52,518
Investment securities  1,707,321 1,848,142 1,792,786 1,930,151
Loans 4,695,257 4,631,230 4,642,478 4,594,436
Allowance for loan losses 118,101 109,211 119,639 103,683
Loans, net  4,577,156 4,522,019  4,522,839 4,490,753
Bank premises and equipment, net 70,299 68,234 69,839 67,944
Goodwill and other intangibles 78,823 82,322 80,072 83,722
Other real estate owned 53,424 44,420 47,407 38,523
Other assets 322,468 273,878 319,837 261,693
         
Total assets  $ 7,013,852  $ 7,076,494  $ 7,042,750  $ 7,035,531
         
         
Liabilities and Stockholders' Equity        
         
Deposits:        
Noninterest bearing  $ 959,685  $ 856,093  $ 907,514  $818,243
Interest bearing 4,161,547 4,368,336 4,274,501 4,232,391
Total deposits  5,121,232 5,224,429  5,182,015 5,050,634
Borrowings 1,041,920 1,029,529 1,026,295 1,200,168
Other liabilities 90,144 105,268 87,885 109,415
Total liabilities  $ 6,253,296  $ 6,359,226  $ 6,296,195  $ 6,360,217
         
         
Stockholders' Equity:        
Preferred stock  $ 97,174  $ 96,374  $ 96,873  $ 96,090
Common stock  301,317 301,208 301,244 301,208
Common stock warrants 4,405  5,037 4,822  4,484
Accumulated other comprehensive income, net of taxes 11,169 21,786 15,478 13,534
Retained earnings 430,578 438,367 429,023 446,326
Treasury stock  (84,087) (145,504) (100,885) (186,328)
Total stockholders' equity  $ 760,556  $ 717,268  $ 746,555  $ 675,314
         
Total liabilities and stockholders' equity  $ 7,013,852  $ 7,076,494  $ 7,042,750  $ 7,035,531
 
 
PARK NATIONAL CORPORATION 
Consolidated Statements of Income - Linked Quarters
           
           
  2010 2010 2010 2010 2009
(in thousands, except per share data) 4th QTR 3rd QTR 2nd QTR 1st QTR 4th QTR
           
Interest income:          
Interest and fees on loans   $ 67,405  $ 67,123  $ 66,723  $ 66,441  $ 68,676
Interest on:          
Obligations of U.S. Government, its agencies and other securities  16,768  19,333  20,263 20,475  21,325
Obligations of states and political subdivisions  173  192  204  217  286
Other interest income  45  34  52  69  78
Total interest income  84,391  86,682  87,242  87,202  90,365
           
Interest expense:          
Interest on deposits:          
Demand and savings deposits  1,133  1,263  1,582  1,775  2,333
Time deposits  7,512  8,532  9,518  10,650  12,269
Interest on borrowings  7,248  7,442  7,421  7,397  6,961
Total interest expense  15,893  17,237  18,521  19,822  21,563
           
Net interest income  68,498  69,445  68,721  67,380  68,802
           
Provision for loan losses  20,448  14,654  13,250  16,550  25,720
           
Net interest income after provision for loan losses  48,050  54,791  55,471  50,830  43,082
           
Other income  14,745  17,530  16,647  16,710  16,718
           
Gain on sale of securities  45  --   3,515  8,304  -- 
           
Other expense:          
Salaries and employee benefits  24,631  24,500  24,013  25,171  24,815
Occupancy expense  2,760  2,840  2,793  3,117  2,740
Furniture and equipment expense  2,615  2,624  2,564  2,632  2,395
Other expense  16,514  15,732  17,631  16,970  16,710
Total other expense  46,520  45,696  47,001  47,890  46,660
           
Income before income taxes  16,320  26,625  28,632  27,954  13,140
           
Income taxes  3,625  7,048  7,466  7,175  844
           
Net income   $ 12,695  $ 19,577  $ 21,166  $ 20,779  $ 12,296
           
Preferred stock dividends and accretion  1,452  1,452  1,451  1,452  1,441
           
Net income available to common shareholders  $ 11,243  $ 18,125  $ 19,715  $ 19,327  $ 10,855
           
Per Common Share:          
 Net income - basic  $ 0.73  $ 1.19  $ 1.30  $ 1.30  $ 0.74
 Net income - diluted  $ 0.73  $ 1.19  $ 1.30  $ 1.30  $ 0.74
 
 
PARK NATIONAL CORPORATION 
Detail of other income and other expense - Linked Quarters
           
           
  2010 2010 2010 2010 2009
(in thousands) 4th QTR 3rd QTR 2nd QTR 1st QTR 4th QTR
           
Other income:          
Income from fiduciary activities  $ 3,609  $ 3,314  $ 3,528  $ 3,422  $ 3,397
Service charges on deposits  4,853  5,026  5,092  4,746  5,604
Other service income  3,449  3,909  3,476  2,982  3,588
Checkcard fee income  3,068  2,900  2,765  2,444  2,488
Bank owned life insurance income  1,195  1,313  1,254  1,216  1,329
Other  (1,429)  1,068  532  1,900  312
Total other income  $ 14,745  $ 17,530  $ 16,647  $ 16,710  $ 16,718
           
Other expense:          
Salaries and employee benefits  $ 24,631  $ 24,500  $ 24,013  $ 25,171  $ 24,815
Net occupancy expense  2,760  2,840  2,793  3,117  2,740
Furniture and equipment expense  2,615  2,624  2,564  2,632  2,395
Data processing fees  1,339  1,403  1,394  1,593  1,544
Professional fees and services  5,341  4,477  5,299  4,856  5,385
Amortization of intangibles  822  822  842  936  937
Marketing  968  840  946  902  943
Insurance  2,136  2,316  2,333  2,198  2,376
Communication  1,536  1,696  1,647  1,769  1,720
State taxes  622  865  838  845  424
Other  3,750  3,313  4,332  3,871  3,381
Total other expense  $ 46,520  $ 45,696  $ 47,001  $ 47,890  $ 46,660
 
 
PARK NATIONAL CORPORATION 
Asset Quality Information
         
         
  Year ended December 31,
(in thousands, except ratios) 2010 2009 2008 2007
         
Allowance for loan losses:        
Allowance for loan losses, beginning of period  $ 116,717  $ 100,088  $ 87,102  $ 70,500
Charge-offs 66,314 59,022 62,916 27,776
Recoveries  6,092  6,830  5,415  5,568
Net charge-offs  60,222  52,192  57,501  22,208
Provision for loan losses  64,902  68,821  70,487  29,476
Allowance for loan losses of acquired bank  --   --   --   9,334
Allowance for loan losses, end of period  $ 121,397  $ 116,717  $ 100,088  $ 87,102
         
         
General reserve trends:        
Allowance for loan losses, end of period  $ 121,397  $ 116,717  $ 100,088  $ 87,102
Specific reserves  43,459  36,721  8,875  3,492
General reserves  $ 77,938  $ 79,996  $ 91,213  $ 83,610
         
Total loans  $ 4,732,685  $ 4,640,432  $ 4,491,337  $ 4,224,134
Impaired commercial loans  250,933  201,143  141,343  90,081
Non-impaired loans  $ 4,481,752  $ 4,439,289  $ 4,349,994  $ 4,134,053
         
         
Asset Quality Ratios:        
Net charge-offs as a % of average loans 1.30% 1.14% 1.32% 0.55%
Allowance for loan losses as a % of period end loans 2.57% 2.52% 2.23% 2.06%
General reserves as a % of non-impaired loans 1.74% 1.80% 2.10% 2.02%
         
         
Nonperforming Assets - Park National Corporation:        
Nonaccrual loans  $ 289,268  $ 233,544  $ 159,512  $ 101,128
Renegotiated loans  --   142  2,845  2,804
Loans past due 90 days or more  3,590  14,773  5,421  4,545
Total nonperforming loans  $ 292,858  $ 248,459  $ 167,778  $ 108,477
Other real estate owned - Ohio-based operations  8,385  6,037  6,149  6,369
Other real estate owned - Vision Bank  35,940  35,203  19,699  7,074
Total nonperforming assets  $ 337,183  $ 289,699  $ 193,626  $ 121,920
Percentage of nonperforming loans to period end loans 6.19% 5.35% 3.74% 2.57%
Percentage of nonperforming assets to period end loans 7.12% 6.24% 4.31% 2.89%
Percentage of nonperforming assets to period end assets 4.62% 4.11% 2.74% 1.88%
         
         
Nonperforming Assets - Ohio-based operations:        
Nonaccrual loans  $ 117,815  $ 85,197  $ 68,306  $ 38,113
Renegotiated loans  --   142  --   2,804
Loans past due 90 days or more  3,226  3,496  4,777  4,088
Total nonperforming loans  $ 121,041  $ 88,835  $ 73,083  $ 45,005
Other real estate owned  8,385  6,037  6,149  6,369
Total nonperforming assets  $ 129,426  $ 94,872  $ 79,232  $ 51,374
Percentage of nonperforming loans to period end loans 2.96% 2.24% 1.92% 1.26%
Percentage of nonperforming assets to period end loans 3.16% 2.39% 2.08% 1.43%
Percentage of nonperforming assets to period end assets 1.99% 1.54% 1.29% 0.91%
         
         
Nonperforming Assets - Vision Bank:        
Nonaccrual loans  $ 171,453  $ 148,347  $ 91,206  $ 63,015
Renegotiated loans  --   --   2,845  -- 
Loans past due 90 days or more  364  11,277  644  457
Total nonperforming loans  $ 171,817  $ 159,624  $ 94,695  $ 63,472
Other real estate owned  35,940  35,203  19,699  7,074
Total nonperforming assets  $ 207,757  $ 194,827  $ 114,394  $ 70,546
Percentage of nonperforming loans to period end loans 26.82% 23.58% 13.71% 9.93%
Percentage of nonperforming assets to period end loans 32.43% 28.78% 16.57% 11.04%
Percentage of nonperforming assets to period end assets 25.71% 21.70% 12.47% 8.24%
         
         
New nonaccrual loan information:        
Nonaccrual loans, beginning of period  $ 233,544  $ 159,512  $ 101,128  $ 16,004
New nonaccrual loans - Ohio-based operations  85,081  57,641  58,161  44,620
New nonaccrual loans - Vision Bank  90,094  126,540  83,588  69,100
Resolved nonaccrual loans  119,451  110,149  83,365  28,596
Nonaccrual loans, end of period  $ 289,268  $ 233,544  $ 159,512  $ 101,128
         
         
Impaired Commercial Loan Portfolio Information (period end):        
Unpaid principal balance  $ 304,534  $ 245,092  $ 171,310  $ 100,307
Prior charge-offs  53,601  43,949  29,967  10,226
Remaining principal balance  250,933  201,143  141,343  90,081
Specific reserves  43,459  36,721  8,875  3,492
Book value, after specific reserve  $ 207,474  $ 164,422  $ 132,468  $ 86,589
         
         
Vision Bank Commercial Land & Development (CL&D) Loan Portfolio Information:        
CL&D loans, period end  $ 170,989  $ 218,205  $ 251,443  $ 295,743
Performing CL&D loans, period end  84,498  132,788  191,712  260,195
Impaired CL&D loans, period end  86,491  85,417  59,731  35,548
Specific reserve on impaired CL&D loans  23,585  21,706  3,134  1,184
Book value of impaired CL&D loans, after specific reserve  $ 62,906  $ 63,711  $ 56,597  $ 34,364
         
Cumulative prior charge-offs on impaired Vision Bank CL&D loans, period end  $ 28,652  $ 24,931  $ 18,839  $ 7,399
CONTACT: Park National Corporation
         Media contacts:
         Bethany Lewis, Communications Specialist, 740.349.0421
         blewis@parknationalbank.com
         John Kozak, CFO, 740.349.3792

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