Park National Corporation Reports Second Quarter 2010 Financial Results and Declares Quarterly Cash Dividend

NEWARK, Ohio, July 19, 2010 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE Amex:PRK) today announced operating results for the three and six months ended June 30, 2010 (second quarter and first half of 2010). Park's Board of Directors also today declared a $0.94 per common share quarterly cash dividend, payable on September 10, 2010 to common shareholders of record as of August 25, 2010.

"We are pleased to report business loan growth in the second quarter of this year. Also, extraordinarily low residential mortgage rates continue to help generate significant consumer lending activity, including $244 million in mortgage loan originations for the first half of 2010," said Park Chairman C. Daniel DeLawder. "Our lenders are focused on supporting each community we serve through high-quality, reliable lending with consistent underwriting. As economic conditions slowly improve, we hope to further expand our loan balances and reduce problem credits."

Park's second quarter net income was $21.2 million, compared to $21.3 million for the same period in 2009. Net income was $41.9 million for first half of 2010, a 1.8 percent decline from the first half of 2009 net income of $42.7 million.

Net income for Park's Ohio-based operations was $56.2 million for the first half of 2010, a 5.4 percent increase from the $53.3 million reported in the first half of 2009. Net income for Park's Ohio-based operations was $27.9 million for the second quarter of 2010, the same as the $27.9 million reported in the second quarter of 2009.

While Park's net income modestly declined for the second quarter and first half of 2010 in comparison to the same periods in 2009, earnings per common share for those periods declined by a greater percentage as a result of the issuance of common shares over the last five quarters. Second quarter 2010 net income per diluted common share was $1.30, an 8.5 percent decline from the $1.42 in the second quarter of 2009. Net income per diluted common share for the first half of 2010 was $2.60, an 8.8 percent decline from the $2.85 in the first half of 2009.

Exercise of common share warrants and issuance of common shares

Over the past five quarters, common shares outstanding have increased by 1,228,172 or 8.8 percent, as a result of capital raising activities. During 2009, Park sold 904,072 common shares and Series A and Series B Common Share Warrants covering an aggregate of 500,000 common shares at a weighted average price per share of $61.20 for gross proceeds of $55.3 million. Net of selling expenses and professional fees, Park raised $53.5 million of common equity from these capital raising activities in 2009. During the second quarter of 2010, 324,100 common shares were issued upon the exercise of the Series A and Series B Common Share Warrants at a price of $67.75 per common share. Net of all expenses, Park raised an additional $21.3 million of common equity from the sale of these 324,100 common shares. Series B Common Share Warrants covering 175,900 common shares, with an exercise price of $67.75 per common share and an expiration date of October 30, 2010, remain outstanding.

Loan portfolio information

Park's loan portfolio experienced solid growth during the 2010 second quarter, increasing $58.7 million to end the quarter at $4.66 billion. For the first half of 2010, Park's loans have increased by $15.6 million. Park's Ohio-based operations experienced loan growth of approximately $61.5 million and $20.9 million in the second quarter and first half of 2010, respectively.

Net charge-offs for the first half of 2010 were $25.8 million, or an annualized 1.13 percent of average loans outstanding. This compares to $23.4 million, or an annualized 1.03 percent of average loans outstanding, for the same period in 2009.

Park's loan loss provision for the first half of 2010 was $29.8 million, compared to $28.1 million for the same period in 2009. Of the $29.8 million loan loss provision, $20.2 million was recorded at Vision Bank, with the remaining $9.6 million recorded within Park's Ohio-based operations. Overall, the allowance for loan losses increased by $4.0 million during the first half of 2010, ending the period at $120.7 million, or 2.59 percent of period-end loans.

Additional information

During the 2010 second quarter, Park completed the sale of approximately $56.8 million of investment securities, which resulted in a pre-tax gain of $3.5 million.

Headquartered in Newark, Ohio, Park National Corporation has $7.1 billion in total assets (as of June 30, 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).

Complete financial tables are included below.

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 March 31, 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.