Park National Corporation reports increased net income in first quarter 2018 financial results and raises quarterly dividend

NEWARK, Ohio, April 20, 2018 (GLOBE NEWSWIRE) -- Park National Corporation (Park) (NYSE American:PRK) today reported financial results for the first quarter of 2018 (three months ended March 31, 2018), including a rise in net income and dividend news.

Park’s board of directors increased the quarterly cash dividend from $0.94 per common share to $0.96 per common share. The board also approved a special one-time cash dividend payment of $0.25 per common share. Both dividends are payable on June 8, 2018 to common shareholders of record as of May 18, 2018. Park last increased its dividend more than ten years ago, and had maintained a consistent dividend throughout the great recession.

“With each decision, we aim to serve the best interests of our clients, associates, shareholders and communities. The results of our local bankers’ consistently excellent work plus developments in our country’s economic environment permitted us to distribute our earnings in a variety of ways,” said Park Chief Executive Officer David L. Trautman. “These dividends thank our shareholders – many of whom are our own associates, retirees and fellow community members. They understand who we are and loyally support our organization year after year.”

In February, Park awarded cash bonuses and pay increases to each non-executive associate throughout the organization (1,593 associates or 84 percent of Park’s staff). Park also raised its matching contribution for associate retirement savings plan contributions to 50 percent (from 25 percent). In 2017, Park added $2.5 million to the Park National Corporation Foundation, which funds the bank’s major charitable contributions and community support projects each year. Park supported 2,257 community organizations across Ohio in 2017 and its charitable donations totaled $2.96 million.

Net Income Results

Park’s net income for the first quarter of 2018 was $31.1 million, a 53.6 percent increase from $20.3 million for the first quarter of 2017. First quarter 2018 net income per diluted common share was $2.02, compared to $1.31 in the first quarter of 2017.

Park's community-banking subsidiary, The Park National Bank, reported net income of $26.7 million for the first quarter of 2018, compared to $21.5 million for the first quarter of 2017. The bank’s total assets were $7.5 billion at both March 31, 2018 and December 31, 2017.

According to Park Chief Financial Officer Brady T. Burt, federal tax reform, income related to asset recoveries at its SEPH subsidiary, and bank initiatives related to operating efficiency and balance sheet management all contributed to the rise in net income. “A long-term perspective has always been a part of our steady performance and success. This quarter reflects the results of plans we put into motion over the last few years,” Burt said.

Headquartered in Newark, Ohio, Park National Corporation had $7.5 billion in total assets (as of March 31, 2018). The Park organization principally consists of ten 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, 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…

Media contact: Bethany Lewis, 740.349.0421, blewis@parknationalbank.com
Investor contact: Brady Burt, 740.322.6844, bburt@parknationalbank.com
Park National Corporation, 50 N. Third Street, Newark, Ohio 43055, www.parknationalcorp.com

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Park cautions that any forward-looking statements contained in this Current Report on Form 8-K 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 recent 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, resulting in adverse impacts on the demand for loan, deposit and other financial services, delinquencies, defaults and counterparties' ability to meet credit and other obligations; changes in interest rates and prices may adversely impact prepayment penalty income, mortgage banking income, 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 and impact loan demand; changes in consumer spending, borrowing and saving habits, whether due to the newly-enacted tax legislation, changing business and economic conditions, legislative and regulatory initiatives, or other factors; changes in unemployment; 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; uncertainty regarding 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, rent regulation and housing, financial accounting and reporting, environmental protection, insurance, bank products and services, bank capital and liquidity standards, fiduciary standards, 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”) 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 OCC, the FDIC, and the Federal Reserve Board, to implement the Dodd-Frank Act's provisions, 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; changes in law and policy accompanying the current presidential administration, including the recently enacted Tax Cuts and Jobs Act, and uncertainty or speculation pending the enactment of such changes; uncertainties in Park's preliminary review of, and additional analysis of, the impact of the Tax Cuts and Jobs Act; the effect of healthcare laws in the United States and potential changes for such laws which may increase our healthcare and other costs and negatively impact our operations and financial results; significant changes in the tax laws, which 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; 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 Board; 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; the uncertainty surrounding the actions to be taken to implement the referendum by United Kingdom voters to exit the European Union; our litigation and regulatory compliance exposure, including any adverse developments in legal proceedings or other claims and unfavorable resolution of regulatory and other governmental examinations or other inquiries; the adequacy of our risk management program; the impact of our ability to anticipate and respond to technological changes on our ability to respond to customer needs and meet competitive demands; 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, resulting in failures or disruptions in customer account management, general ledger, deposit, loan, or other systems, including as a result of cyber attacks; 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; fraud, scams and schemes of third parties; the impact of widespread natural and other disasters, pandemics, dislocations, civil unrest, terrorist activities or international hostilities on the economy and financial markets generally or on us or our counterparties specifically; demand for loans in the respective market areas served by Park and our subsidiaries; the ability to obtain required governmental and shareholder approvals with respect to, and the ability to complete, the proposed merger transaction involving Park, PNB and NewDominion Bank (the “NewDominion Transaction”) on the proposed terms within the expected timeframe; the risk that the businesses of PNB and NewDominion Bank will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; expected revenue synergies and cost savings from the NewDominion Transaction may not be fully realized within the expected timeframe; revenues following the NewDominion Transaction may be lower than expected; customer and employee relationships and business operations may be disrupted by the NewDominion Transaction; 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, 2017. 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 March 31, 2018, December 31, 2017, and March 31, 2017
	2018				2017				2017							Percent change vs.
(in thousands, except share and per share data)	1st QTR				4th QTR				1st QTR							4Q '17					1Q '17
INCOME STATEMENT:
Net interest income	$	64,850			$		63,478		$	58,952						2.2				%	10.0	%
Provision for (recovery of) loan losses	260				(183			)	876							N.M.					N.M.
Other income	26,903				23,238				18,955							15.8				%	41.9	%
Other expense	54,308				53,439				48,910							1.6				%	11.0	%
Income before income taxes	$	37,185			$		33,460		$	28,121						11.1				%	32.2	%
Federal income taxes	6,062				10,629				7,854							(43.0				)%	(22.8	)%
Net income	$	31,123			$		22,831		$	20,267						36.3				%	53.6	%
MARKET DATA:
Earnings per common share - basic (b)	$	2.04			$		1.49		$	1.32						36.9				%	54.5	%
Earnings per common share - diluted (b)	2.02				1.48				1.31							36.5				%	54.2	%
Cash dividends per common share	0.94				0.94				0.94							—				%	—	%
Book value per common share at period end	49.20				49.46				48.64							(0.5				)%	1.2	%
Market price per common share at period end	103.76				104.00				105.20							(0.2				)%	(1.4	)%
Market capitalization at period end	1,587,642				1,589,972				1,609,254							(0.1				)%	(1.3	)%
Weighted average common shares - basic (a)	15,288,332				15,285,174				15,312,059							—				%	(0.2	)%
Weighted average common shares - diluted (a)	15,431,328				15,378,825				15,432,769							0.3				%	—	%
Common shares outstanding at period end	15,301,103				15,288,194				15,297,087							0.1				%	—	%
PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)	1.69		%		1.17			%	1.09					%		44.4				%	55.0	%
Return on average shareholders' equity (a)(b)	16.84		%		11.85			%	11.05					%		42.1				%	52.4	%
Yield on loans	4.94		%		4.79			%	4.62					%		3.1				%	6.9	%
Yield on investment securities	2.62		%		2.55			%	2.42					%		2.7				%	8.3	%
Yield on money markets	1.63		%		1.29			%	0.85					%		26.4				%	91.8	%
Yield on earning assets	4.40		%		4.19			%	4.06					%		5.0				%	8.4	%
Cost of interest bearing deposits	0.54		%		0.48			%	0.36					%		12.5				%	50.0	%
Cost of borrowings	1.72		%		2.15			%	2.36					%		(20.0				)%	(27.1	)%
Cost of paying liabilities	0.71		%		0.79			%	0.76					%		(10.1				)%	(6.6	)%
Net interest margin (g)	3.87		%		3.61			%	3.49					%		7.2				%	10.9	%
Efficiency ratio (g)	58.74		%		60.64			%	61.93					%		(3.1				)%	(5.2	)%
OTHER RATIOS (NON - GAAP):
Annualized return on average tangible assets (a)(b)(e)	1.71		%		1.18			%	1.10					%		44.9				%	55.5	%
Annualized return on average tangible equity (a)(b)(c)	18.64		%		13.09			%	12.24					%		42.4				%	52.3	%
Tangible book value per share (d)	$	44.47			$		44.73		$	43.92						(0.6				)%	1.3	%
N.M. - Not meaningful
Note: Explanations for footnotes (a) - (g) are included at the end of the financial highlights.
PARK NATIONAL CORPORATION
Financial Highlights (continued)
As of or for the three months ended March 31, 2018, December 31, 2017, and March 31, 2017
																Percent change vs.
BALANCE SHEET:	March 31, 2018				December 31, 2017				March 31, 2017							4Q '17					1Q '17
Investment securities	$	1,464,356			$		1,512,824		$	1,565,668						(3.2				)%	(6.5	)%
Loans	5,292,349				5,372,483				5,313,641							(1.5				)%	(0.4	)%
Allowance for loan losses	48,969				49,988				49,922							(2.0				)%	(1.9	)%
Goodwill	72,334				72,334				72,334							—				%	—	%
Other real estate owned (OREO)	9,055				14,190				13,693							(36.2				)%	(33.9	)%
Total assets	7,518,970				7,537,620				7,744,690							(0.2				)%	(2.9	)%
Total deposits	6,084,294				5,817,326				5,920,560							4.6				%	2.8	%
Borrowings	624,090				906,289				1,010,703							(31.1				)%	(38.3	)%
Total shareholders' equity	752,774				756,101				744,122							(0.4				)%	1.2	%
Tangible equity (d)	680,440				683,767				671,788							(0.5				)%	1.3	%
Nonperforming loans	86,205				93,959				107,284							(8.3				)%	(19.6	)%
Nonperforming assets	99,117				112,998				120,977							(12.3				)%	(18.1	)%
ASSET QUALITY RATIOS:
Loans as a % of period end total assets	70.39		%		71.28			%	68.61					%		(1.2				)%	2.6	%
Nonperforming loans as a % of period end loans	1.63		%		1.75			%	2.02					%		(6.9				)%	(19.3	)%
Nonperforming assets as a % of period end loans + OREO + other nonperforming assets	1.87		%		2.10			%	2.27					%		(11.0				)%	(17.6	)%
Allowance for loan losses as a % of period end loans	0.93		%		0.93			%	0.94					%		—				%	(1.1	)%
Net loan charge-offs	$	1,279			$		5,061		$	1,578						(74.7				)%	(18.9	)%
Annualized net loan charge-offs as a % of average loans (a)	0.10		%		0.37			%	0.12					%		(73.0				)%	(16.7	)%
CAPITAL & LIQUIDITY:
Total shareholders' equity / Period end total assets	10.01		%		10.03			%	9.61					%		(0.2				)%	4.2	%
Tangible equity (d) / Tangible assets (f)	9.14		%		9.16			%	8.76					%		(0.2				)%	4.3	%
Average shareholders' equity / Average assets (a)	10.06		%		9.88			%	9.84					%		1.8				%	2.2	%
Average shareholders' equity / Average loans (a)	14.14		%		14.24			%	14.10					%		(0.7				)%	0.3	%
Average loans / Average deposits (a)	89.39		%		90.73			%	92.45					%		(1.5				)%	(3.3	)%
PARK NATIONAL CORPORATION
Financial Highlights (continued)
(a) Averages are for the three months ended March 31, 2018, December 31, 2017 and March 31, 2017.
(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
				March 31, 2018								December 31, 2017						March 31, 2017
AVERAGE SHAREHOLDERS' EQUITY				$		749,627						$	764,211					$	744,040
Less: Average goodwill				72,334								72,334						72,334
AVERAGE TANGIBLE EQUITY				$		677,293						$	691,877					$	671,706
(d) Tangible equity divided by common shares outstanding at period end. Tangible equity equals total shareholders' equity less goodwill, in each case at the end of the period.
RECONCILIATION OF TOTAL SHAREHOLDERS' EQUITY TO TANGIBLE EQUITY:
				March 31, 2018								December 31, 2017						March 31, 2017
TOTAL SHAREHOLDERS' EQUITY				$		752,774						$	756,101					$	744,122
Less: Goodwill				72,334								72,334						72,334
TANGIBLE EQUITY				$		680,440						$	683,767					$	671,788
(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
				March 31, 2018								December 31, 2017						March 31, 2017
AVERAGE ASSETS				$		7,455,065						$	7,734,844					$	7,559,691
Less: Average goodwill				72,334								72,334						72,334
AVERAGE TANGIBLE ASSETS				$		7,382,731						$	7,662,510					$	7,487,357
(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:
				March 31, 2018								December 31, 2017						March 31, 2017
TOTAL ASSETS				$		7,518,970						$	7,537,620					$	7,744,690
Less: Goodwill				72,334								72,334						72,334
TANGIBLE ASSETS				$		7,446,636						$	7,465,286					$	7,672,356
(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 21% tax rate for 2018 and a 35% tax rate for 2017. 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
				March 31, 2018								December 31, 2017						March 31, 2017
Interest income				$		73,714						$	73,969					$	68,755
Fully taxable equivalent adjustment				701								1,413						1,072
Fully taxable equivalent interest income				$		74,415						$	75,382					$	69,827
Interest expense				8,864								10,491						9,803
Fully taxable equivalent net interest income				$		65,551						$	64,891					$	60,024

PARK NATIONAL CORPORATION
Consolidated Statements of Income
		Three Months Ended
		March 31,
(in thousands, except share and per share data)		2018				2017
Interest income:
Interest and fees on loans		$	64,402			$	59,908
Interest on:
Obligations of U.S. Government, its agencies
and other securities - taxable		6,767				7,138
Obligations of states and political subdivisions - tax-exempt		2,174				1,460
Other interest income		371				249
Total interest income		73,714				68,755
Interest expense:
Interest on deposits:
Demand and savings deposits		3,290				1,614
Time deposits		2,551				2,161
Interest on borrowings		3,023				6,028
Total interest expense		8,864				9,803
Net interest income		64,850				58,952
Provision for loan losses		260				876
Net interest income after provision for loan losses		64,590				58,076
Other income		26,903				18,955
Other expense		54,308				48,910
Income before income taxes		37,185				28,121
Federal income taxes		6,062				7,854
Net income		$	31,123			$	20,267
Per Common Share:
Net income  - basic		$	2.04			$	1.32
Net income  - diluted		$	2.02			$	1.31
Weighted average shares - basic		15,288,332				15,312,059
Weighted average shares - diluted		15,431,328				15,432,769
Cash Dividends Declared		$	0.94			$	0.94

PARK NATIONAL CORPORATION
Consolidated Balance Sheets
(in thousands, except share data)	March 31, 2018			December 31, 2017
Assets
Cash and due from banks	$	110,163		$	131,946
Money market instruments	166,418			37,166
Investment securities	1,464,356			1,512,824
Loans	5,292,349			5,372,483
Allowance for loan losses	(48,969		)	(49,988		)
Loans, net	5,243,380			5,322,495
Bank premises and equipment, net	56,239			55,901
Goodwill	72,334			72,334
Other real estate owned	9,055			14,190
Other assets	397,025			390,764
Total assets	$	7,518,970		$	7,537,620
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing	$	1,618,200		$	1,633,941
Interest bearing	4,466,094			4,183,385
Total deposits	6,084,294			5,817,326
Borrowings	624,090			906,289
Other liabilities	57,812			57,904
Total liabilities	$	6,766,196		$	6,781,519
Shareholders' Equity:
Preferred shares (200,000 shares authorized; no shares outstanding at March 31, 2018 and December 31, 2017)	$	—		$	—
Common shares (No par value; 20,000,000 shares authorized in 2018 and 2017; 16,150,740 shares issued at March 31, 2018 and 16,150,752 shares issued at December 31, 2017)	307,249			307,726
Accumulated other comprehensive loss, net of taxes	(52,641		)	(26,454		)
Retained earnings	583,941			561,908
Treasury shares (849,637 shares at March 31, 2018 and 862,558 at December 31, 2017)	(85,775		)	(87,079		)
Total shareholders' equity	$	752,774		$	756,101
Total liabilities and shareholders' equity	$	7,518,970		$	7,537,620

PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
	Three Months Ended
	March 31,
(in thousands)	2018			2017
Assets
Cash and due from banks	$	118,248		$	119,608
Money market instruments	92,533			118,999
Investment securities	1,450,116			1,565,977
Loans	5,302,648			5,278,539
Allowance for loan losses	(50,590		)	(50,843		)
Loans, net	5,252,058			5,227,696
Bank premises and equipment, net	56,506			57,870
Goodwill	72,334			72,334
Other real estate owned	13,537			13,744
Other assets	399,733			383,463
Total assets	$	7,455,065		$	7,559,691
Liabilities and Shareholders' Equity
Deposits:
Noninterest bearing	$	1,569,072		$	1,499,355
Interest bearing	4,363,287			4,210,203
Total deposits	5,932,359			5,709,558
Borrowings	711,044			1,034,678
Other liabilities	62,035			71,415
Total liabilities	$	6,705,438		$	6,815,651
Shareholders' Equity:
Preferred shares	$	—		$	—
Common shares	307,740			305,908
Accumulated other comprehensive loss, net of taxes	(41,677		)	(17,232		)
Retained earnings	570,629			539,936
Treasury shares	(87,065		)	(84,572		)
Total shareholders' equity	$	749,627		$	744,040
Total liabilities and shareholders' equity	$	7,455,065		$	7,559,691

PARK NATIONAL CORPORATION
Consolidated Statements of Income - Linked Quarters
	2018			2017			2017			2017			2017
(in thousands, except per share data)	1st QTR			4th QTR			3rd QTR			2nd QTR			1st QTR
Interest income:
Interest and fees on loans	$	64,402		$	64,447		$	63,110		$	61,222		$	59,908
Interest on:
Obligations of U.S. Government, its agencies and other securities - taxable	6,767			6,653			6,757			6,892			7,138
Obligations of states and political subdivisions - tax-exempt	2,174			2,112			1,974			1,664			1,460
Other interest income	371			757			1,383			698			249
Total interest income	73,714			73,969			73,224			70,476			68,755
Interest expense:
Interest on deposits:
Demand and savings deposits	3,290			2,677			2,882			2,291			1,614
Time deposits	2,551			2,490			2,521			2,457			2,161
Interest on borrowings	3,023			5,324			6,270			5,950			6,028
Total interest expense	8,864			10,491			11,673			10,698			9,803
Net interest income	64,850			63,478			61,551			59,778			58,952
Provision for (recovery of) loan losses	260			(183		)	3,283			4,581			876
Net interest income after provision for (recovery of) loan losses	64,590			63,661			58,268			55,197			58,076
Other income	26,903			23,238			23,537			20,699			18,955
Other expense	54,308			53,439			51,259			49,554			48,910
Income before income taxes	37,185			33,460			30,546			26,342			28,121
Federal income taxes	6,062			10,629			8,434			7,310			7,854
Net income	$	31,123		$	22,831		$	22,112		$	19,032		$	20,267
Per Common Share:
Net income - basic	$	2.04		$	1.49		$	1.45		$	1.24		$	1.32
Net income - diluted	$	2.02		$	1.48		$	1.44		$	1.24		$	1.31

PARK NATIONAL CORPORATION
Detail of other income and other expense - Linked Quarters
	2018			2017			2017			2017			2017
(in thousands)	1st QTR			4th QTR			3rd QTR			2nd QTR			1st QTR
Other income:
Income from fiduciary activities	$	6,395		$	6,264		$	5,932		$	6,025		$	5,514
Service charges on deposits	2,922			3,142			3,216			3,156			3,139
Other service income	4,172			3,554			3,357			3,447			2,804
Checkcard fee income	4,002			4,023			3,974			4,040			3,761
Bank owned life insurance income	1,009			1,068			1,573			1,114			1,103
ATM fees	524			545			605			561			542
OREO valuation adjustments	(207		)	(91		)	(22		)	(272		)	(73		)
Gain on the sale of OREO, net	4,321			47			51			53			100
Net (loss) gain on sale of investment securities	(2,271		)	1,794			—			27			—
Unrealized gain on equity securities	3,489			—			—			—			—
Other components of net periodic benefit income	1,705			1,450			1,448			1,448			1,448
Miscellaneous	842			1,442			3,403			1,100			617
Total other income	$	26,903		$	23,238		$	23,537		$	20,699		$	18,955
Other expense:
Salaries	$	25,320		$	23,157		$	23,302		$	23,001		$	22,717
Employee benefits	7,029			6,320			5,943			6,206			6,468
Occupancy expense	2,936			2,442			2,559			2,565			2,635
Furniture and equipment expense	4,149			4,198			3,868			3,640			3,618
Data processing fees	1,773			1,690			1,919			1,676			1,965
Professional fees and services	6,190			7,886			6,100			6,018			4,829
Marketing	1,218			1,112			1,122			1,084			1,056
Insurance	1,428			1,768			1,499			1,517			1,570
Communication	1,250			1,228			1,110			1,155			1,333
State tax expense	1,105			665			912			943			1,063
Miscellaneous	1,910			2,973			2,925			1,749			1,656
Total other expense	$	54,308		$	53,439		$	51,259		$	49,554		$	48,910

PARK NATIONAL CORPORATION
Asset Quality Information
					Year ended December 31,
(in thousands, except ratios)	March 31, 2018				2017			2016			2015			2014
Allowance for loan losses:
Allowance for loan losses, beginning of period	$	49,988			$	50,624		$	56,494		$	54,352		$	59,468
Charge-offs	3,450				19,403			20,799			14,290			24,780			(A)
Recoveries	2,171				10,210			20,030			11,442			26,997
Net charge-offs (recoveries)	1,279				9,193			769			2,848			(2,217		)
Provision for (recovery of) loan losses	260				8,557			(5,101		)	4,990			(7,333		)
Allowance for loan losses, end of period	$	48,969			$	49,988		$	50,624		$	56,494		$	54,352
(A) 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	$	48,969			$	49,988		$	50,624		$	56,494		$	54,352
Specific reserves	1,207				684			548			4,191			3,660
General reserves	$	47,762			$	49,304		$	50,076		$	52,303		$	50,692
Total loans	$	5,292,349			$	5,372,483		$	5,271,857		$	5,068,085		$	4,829,682
Impaired commercial loans	50,292				56,545			70,415			80,599			73,676
Total loans less impaired commercial loans	$	5,242,057			$	5,315,938		$	5,201,442		$	4,987,486		$	4,756,006
Asset Quality Ratios:
Net charge-offs (recoveries) as a % of average loans (annualized)	0.10		%		0.17		%	0.02		%	0.06		%	(0.05		)%
Allowance for loan losses as a % of period end loans	0.93		%		0.93		%	0.96		%	1.11		%	1.13		%
General reserves as a % of total loans less impaired commercial loans	0.91		%		0.93		%	0.96		%	1.05		%	1.07		%
Nonperforming Assets - Park National Corporation:
Nonaccrual loans	$	66,151			$	72,056		$	87,822		$	95,887		$	100,393
Accruing troubled debt restructuring	18,682				20,111			18,175			24,979			16,254
Loans past due 90 days or more	1,372				1,792			2,086			1,921			2,641
Total nonperforming loans	$	86,205			$	93,959		$	108,083		$	122,787		$	119,288
Other real estate owned - Park National Bank	4,846				6,524			6,025			7,456			10,687
Other real estate owned - SEPH	4,209				7,666			7,901			11,195			11,918
Other nonperforming assets - Park National Bank	3,857				4,849			—			—			—
Total nonperforming assets	$	99,117			$	112,998		$	122,009		$	141,438		$	141,893
Percentage of nonaccrual loans to period end loans	1.25		%		1.34		%	1.67		%	1.89		%	2.08		%
Percentage of nonperforming loans to period end loans	1.63		%		1.75		%	2.05		%	2.42		%	2.47		%
Percentage of nonperforming assets to period end loans	1.87		%		2.10		%	2.31		%	2.79		%	2.94		%
Percentage of nonperforming assets to period end total assets	1.32		%		1.50		%	1.63		%	1.93		%	2.03		%
PARK NATIONAL CORPORATION
Asset Quality Information (continued)
					Year ended December 31,
(in thousands, except ratios)	March 31, 2018				2017			2016			2015			2014
Nonperforming Assets - Park National Bank and Guardian:
Nonaccrual loans	$	66,151			$	61,753		$	76,084		$	81,468		$	77,477
Accruing troubled debt restructuring	18,682				20,111			18,175			24,979			16,157
Loans past due 90 days or more	1,372				1,792			2,086			1,921			2,641
Total nonperforming loans	$	86,205			$	83,656		$	96,345		$	108,368		$	96,275
Other real estate owned - Park National Bank	4,846				6,524			6,025			7,456			10,687
Other nonperforming assets - Park National Bank	3,857				4,849			—			—			—
Total nonperforming assets	$	94,908			$	95,029		$	102,370		$	115,824		$	106,962
Percentage of nonaccrual loans to period end loans	1.25		%		1.15		%	1.45		%	1.61		%	1.61		%
Percentage of nonperforming loans to period end loans	1.63		%		1.56		%	1.83		%	2.14		%	2.00		%
Percentage of nonperforming assets to period end loans	1.79		%		1.77		%	1.95		%	2.29		%	2.23		%
Percentage of nonperforming assets to period end total assets	1.27		%		1.27		%	1.38		%	1.60		%	1.55		%
Nonperforming Assets - SEPH/Vision Bank (retained portfolio):
Nonaccrual loans	$	—			$	10,303		$	11,738		$	14,419		$	22,916
Accruing troubled debt restructuring	—				—			—			—			97
Loans past due 90 days or more	—				—			—			—			—
Total nonperforming loans	$	—			$	10,303		$	11,738		$	14,419		$	23,013
Other real estate owned - SEPH	4,209				7,666			7,901			11,195			11,918
Total nonperforming assets	$	4,209			$	17,969		$	19,639		$	25,614		$	34,931
New nonaccrual loan information - Park National Corporation
Nonaccrual loans, beginning of period	$	72,056			$	87,822		$	95,887		$	100,393		$	135,216
New nonaccrual loans	23,075				58,753			74,786			80,791			70,059
Resolved nonaccrual loans	28,980				74,519			82,851			85,165			86,384
Sale of nonaccrual loans held for sale	—				—			—			132			18,498
Nonaccrual loans, end of period	$	66,151			$	72,056		$	87,822		$	95,887		$	100,393
New nonaccrual loan information - Park National Bank and Guardian
Nonaccrual loans, beginning of period	$	61,753			$	76,084		$	81,468		$	77,477		$	99,108
New nonaccrual loans - Ohio-based operations	23,075				58,753			74,663			80,791			69,389
Resolved nonaccrual loans	18,677				73,084			80,047			76,800			78,288
Sale of nonaccrual loans held for sale	—				—			—			—			12,732
Nonaccrual loans, end of period	$	66,151			$	61,753		$	76,084		$	81,468		$	77,477
New nonaccrual loan information - SEPH/Vision Bank (retained portfolio)
Nonaccrual loans, beginning of period	$	10,303			$	11,738		$	14,419		$	22,916		$	36,108
New nonaccrual loans - SEPH/Vision Bank	—				—			123			—			670
Resolved nonaccrual loans	10,303				1,435			2,804			8,365			8,096
Sale of nonaccrual loans held for sale	—				—			—			132			5,766
Nonaccrual loans, end of period	$	—			$	10,303		$	11,738		$	14,419		$	22,916
Impaired Commercial Loan Portfolio Information (period end):
Unpaid principal balance	$	60,264			$	66,585		$	95,358		$	109,304		$	106,156
Prior charge-offs	9,972				10,040			24,943			28,705			32,480
Remaining principal balance	50,292				56,545			70,415			80,599			73,676
Specific reserves	1,207				684			548			4,191			3,660
Book value, after specific reserve	$	49,085			$	55,861		$	69,867		$	76,408		$	70,016