Park National Corporation (“Park”) is filing this Form 10-Q/A (Amendment No. 1) (this “Form 10-Q/A for September 30, 2011”) with respect to its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011, as originally filed with the Securities and Exchange Commission (the “SEC”) on November 9, 2011 (the “Original September 30, 2011 Form 10-Q”), in order to amend Part I –~~Items 1, 2 and 4, and Part II – Items 1A and 6~~. This Form 10-Q/A for September 30, 2011 is being filed to amend and restate our unaudited consolidated condensed financial statements as of and for the three and nine month periods ended September 30, 2011 included in “Item 1 – Financial Statements” of Part I and related disclosures in “Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Part I to make the corrections identified below.May 3, 2012.

This Form 10-Q/A for September 30, 2011 is being filed to reflect the impact on the consolidated financial information as of and for the three and nine month periods ended September 30, 2011 of the restatement of Park’s audited consolidated financial statements as of and for the year ended December 31, 2010. This Form 10-Q/A for September 30, 2011 should be read in conjunction with and follows the filing by Park of Form 10-K/A (Amendment No. 2) for the fiscal year ended December 31, 2010, which was filed on February 28, 2012. The restatement of consolidated financial information as of and for the three and nine month periods ended September 30, 2011 results in the following corrections:

~~Impact on Items Reported in Consolidated Condensed Statements of Income (Unaudited):~~

~~Impact on Items Reported in Consolidated Condensed Balance Sheet (Unaudited):~~

For a more detailed description of the restatement of the consolidated condensed financial statements, see Note 1A, “Restatement of Financial Statements” in our Notes to Unaudited Consolidated Condensed Financial Statements.

Park has not modified or updated the information in the Original September 30, 2011 Form 10-Q, except as necessary to reflect the effects of the restated consolidated condensed financial statements which took into consideration subsequent additional information about conditions that existed at September 30, 2011. This Form 10-Q/A for September 30, 2011 continues to speak as of the dates described herein, and we have not updated the disclosures contained in the Original September 30, 2011 Form 10-Q to reflect any events that occurred subsequent to such dates except as necessitated by the restatement and to discuss a subsequent event in Note 19 - Sale of Vision Bank. Information not affected by the restatement is unchanged and reflects the disclosures made at the time of the filing of the Original September 30, 2011 Form 10-Q on November 9, 2011. With respect to management’s discussion, within “Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I, of the projected results for the fiscal year ending December 31, 2011, we have removed the portion of the discussion related to items that would no longer be appropriate given the nature of the restatement of the consolidated financial information as of and for the quarterly period ended September 30, 2011 and the impact it had on certain line items in the Consolidated Condensed Statements of Income for the three and nine month periods ended September 30, 2011, including the provision for loan losses. Accordingly, this Form 10-Q/A for September 30, 2011 should be read in conjunction with our subsequent filings with the SEC, as information in such filings may update or supersede certain information contained in this Form 10-Q/A for September 30, 2011.

Park has modified “Item 4 – Controls and Procedures” of Part I in order to reflect the reevaluation by Park’s management of the effectiveness of the design and operation of Park’s disclosure controls and procedures as of September 30, 2011 in connection with the restatement of the consolidated condensed financial statements as described in this Form 10-Q/A for September 30, 2011.

Park has also modified the risk factor included in “Item 1A – Risk Factors” of Part II to include the restated financial information for Vision Bank where appropriate. The risk factor, including the corrected information, remains applicable as of the filing date of the Original September 30, 2011 Form 10-Q.

Park has updated the Computation of Ratio of Earnings to Fixed Charges and the Computation of Ratio of Earnings to Fixed Charges and Preferred Dividends included as Exhibit 12 to this Form 10-Q/A for September 30, 2011, in order to reflect the corrected consolidated financial information. Additionally, updated certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 have been included as Exhibits 31.1 and 31.2 to this Form 10-Q/A for September 30, 2011, and updated certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 have been included as Exhibits 32.1 and 32.2 to this Form 10-Q/A for September 30, 2011, which have been reflected in “Item 6 – Exhibits” of Part II.

For the convenience of the reader, this Form 10-Q/A for September 30, 2011 sets forth the disclosures to be included in the Form 10-Q for the quarterly period ended September 30, 2011 in their entirety, although Park is only amending and restating Items 1, 2 and 4 of Part I and Items 1A and 6 of Part II from the Original September 30, 2011 Form 10-Q as these are the only Items affected by the corrected consolidated financial information.

On November 16, 2011, Park and Vision Bank entered into a Purchase and Assumption Agreement (the “Purchase Agreement”) with Home BancShares, Inc. (“Home”) and its wholly-owned subsidiary Centennial Bank, an Arkansas state-chartered bank (“Centennial”), to sell substantially all of the operating assets and liabilities associated with Vision to Centennial for a purchase price of $27.9 million.

On February 16, 2012, Park and Vision Bank completed the transaction contemplated by the previously announced Purchase Agreement. In accordance with the Agreement, Vision sold approximately $354 million in performing loans, approximately $520 million of deposits, fixed assets of approximately $12.5 million and other miscellaneous assets and liabilities for a purchase price of $27.9 million.

Immediately following the closing of the transactions contemplated by the Agreement, Vision surrendered its Florida banking charter to the Florida Office of Financial Regulation (the “OFR”) and became a non-bank Florida corporation (the “Florida Corporation”). This Florida Corporation merged with and into a wholly-owned, non-bank subsidiary of Park, SE Property Holdings, LLC (“SE LLC”), with SE LLC being the surviving entity. Subsequent to the transactions contemplated by the Purchase Agreement, Vision will be left with approximately $22 million of performing loans and non-performing loans with a fair value of $88 million (both net of any necessary loan loss allowance that may have existed prior to the transactions). Park recognized a pre-tax gain, net of expenses directly related to the sale, of approximately $22 million.

The accompanying unaudited consolidated condensed financial statements included in this report have been prepared for Park National Corporation (the “Registrant”, “Corporation”, “Company”, or “Park”) and its subsidiaries. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of results of operations for the interim periods included herein have been made. The results of operations for the three ~~and nine~~ month ~~periods~~period ended ~~September 30, 2011~~March 31, 2012 are not necessarily indicative of the operating results to be anticipated for the fiscal year ending December 31, ~~2011.~~2012.

The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the instructions for Form 10-Q and, therefore, do not include all information and footnotes necessary for a fair presentation of the condensed balance sheets, condensed statements of income, condensed statements of comprehensive income, condensed statements of changes in stockholders’ equity and condensed statements of cash flows in conformity with U.S. generally accepted accounting principles (“GAAP”). These financial statements should be read in conjunction with the ~~audited~~ consolidated financial statements included in the Annual Report on Form 10-K/A – Amendment No. 2 of Park for the fiscal year ended December 31, 2010 filed on February 28, 2012 (the “2010 Form 10-K/A”), which served to restate the audited consolidated financial statements which had been incorporated by reference in the Annual Report on Form 10-K of Park for the fiscal year ended December 31, ~~2010 filed on February 28,~~ 2011 from Park’s ~~2010~~2011 Annual Report to Shareholders ~~(the “2010~~(“2011 Annual Report”).

Park’s significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements included in Park’s ~~2010 Form 10-K/A.~~2011 Annual Report. For interim reporting purposes, Park follows the same basic accounting policies, as updated by the information contained in this report, and considers each interim period an integral part of an annual period. Management has evaluated events occurring subsequent to the balance sheet date, determining no events require additional disclosure in these consolidated condensed financial ~~statements.~~

In a Current Report on Form 8-K filed on January 31, 2012 (the “January 31, 2012 Form 8-K”), Park announced that on January 27, 2012, management determined that (i) Park’s previously issued audited consolidated financial statements, ~~incorporated by reference in Park’s Annual Report on Form 10-K for~~with the year ended December 31, 2010, filed on February 28, 2011, and (ii) Park’s unaudited condensed consolidated financial statements included in Park’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2011, June 30, 2011, and September 30, 2011 should be restated.

The accounting treatment giving rise to the restatement was the inclusion of estimated future cash flows supporting the allowance for loan losses related to certain impaired commercial loans. For the year ended December 31, 2010, as part of Park’s process to measure impairment on certain impaired commercial loans at Vision Bank, management had reliedon expected future cash flows from guarantors, as to whom we were in litigation.Management determined that reliance on expected future cash flows, which may require protracted litigation to actually be received, is inappropriate given the difficulty in obtaining objective verifiable evidence supporting a conclusion as to the amount and timingexception of the ~~expected cash flows. GAAP requires that our assumptions be “reasonable and supportable” and the facts and circumstances around the existence~~subsequent events discussed in Note 20 of ~~protracted litigation make this assumption more difficult~~these Notes to ~~support.~~Consolidated Condensed Financial Statements.

The restatement also reflects certain OREO devaluations and additional loan loss provisions that are not related to guarantor support. These expense items are related to valuation issues identified at December 31, 2010, where Vision Bank management utilized (i) the work of a third-party contractor, which was not a licensed appraiser, when calculating the fair value of collateral for certain impaired loans and the fair value of certain OREO held by Vision Bank, and management did not have sufficient documentation to support the estimates of this third-party contractor, and (ii) internal estimates of collateral value when calculating specific reserves for certain impaired loans when, at times, such internal estimates were outdated. The impact is to reverse provisions for loan losses and OREO devaluations originally recorded in 2011 and recognize these provisions for loan losses and OREO devaluations in the restated audited consolidated financial statements for the year ended December 31, 2010.

~~The tables below detail the restated financial statement line items and Park’s regulatory capital ratios for the three and nine months ended September 30, 2011.~~

No. 2011-12 Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05: In December 2011,FASB issued Accounting Standards Update 2011-12,Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 (ASU 2011-12). This ASU defers only those changes in ASU 2011-05 that relate to the presentation of reclassification adjustments. Entities are to continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU 2011-05. The other requirements in ASU 2011-05 are not affected by this ASU.

On February 16, 2012, Park and its wholly-owned subsidiary, Vision Bank (“Vision”), a Florida state-chartered bank, completed their sale of substantially all of the performing loans, operating assets and liabilities associated with Vision to Centennial Bank (“Centennial”), an Arkansas state-chartered bank which is a wholly-owned subsidiary of Home BancShares, Inc. (“Home”), an Arkansas corporation, as contemplated by the previously announced Purchase and Assumption Agreement by and between Park, Vision, Home and Centennial, dated as of November 16, 2011, as amended by the First Amendment to Purchase and Assumption Agreement, dated as of January 25, 2012 (the “Agreement”) for a purchase price of $27.9 million.

The assets purchased and liabilities assumed by Centennial as of February 16, 2012, included the following:

Subsequent to the transactions contemplated by the Agreement, Vision was left with approximately $22 million of performing loans (including mortgage loans held for sale) and non-performing loans with a fair value of $88 million. Park recorded a pre-tax gain, net of expenses directly related to the sale, of $22.2 million, resulting from the transactions contemplated by the Agreement. The pre-tax gain, net of expense is provided in the table below:

Promptly following the closing of the transactions contemplated by the Agreement, Vision surrendered its Florida banking charter to the Florida Office of Financial Regulation and became a non-bank Florida corporation (the “Florida Corporation”). The Florida Corporation merged with and into a wholly-owned, non-bank subsidiary of Park, SE Property Holdings, LLC (“SE LLC”), with SE LLC being the surviving entity.

Of the $21.2 million in modified trouble debt restructurings which defaulted during the period ended March 31, 2012, $205,000 were accruing loans and $20.0 million were nonaccrual loans.

As a result of the February 16, 2012 acquisition of certain Vision assets and liabilities by Centennial Bank it was necessary to re-measure the plan assets and liabilities resulting in a reduction to the unrecognized net loss account, within Accumulated Other Comprehensive (loss), of $412,000 (net of tax of $222,000).

~~Nine~~

Three months ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~

(in thousands)	Obligations of states and political subdivisions			Equity Securities			Fair value swap
Balance, at January 1, 2012	$	-		$	763		$	(700	)
Total gains/(losses)
Included in earnings – realized		-			-			-
Included in earnings – unrealized		-			-			-
Included in other comprehensive income		-			(7	)		-
Purchases, sales, issuances and settlements, other		-			-			-
Periodic settlement of fair value swap		-			-			(565	)
Balance March 31, 2012	$	-		$	756		$	(135	)

Balance, at January 1, 2011	$	2,598		$	745		$	(60	)
Total gains/(losses)
Included in earnings – realized		-			-			-
Included in earnings – unrealized		-			-			-
Included in other comprehensive income		(128	)		(5	)		-
Purchases, sales, issuances and settlements, other		-			-			-
Re-evaluation of fair value swap		-			-			-
Balance March 31, 2011	$	2,470		$	740		$	(60	)

(in thousands)
Obligations of states
and political
subdivisions

Equity
Securities

Fair value
swap

Balance, at January 1, 2011 $ 2,598 $ 745 $ (60 )
Total gains/(losses)
Included in earnings – realized - - -
Included in earnings – unrealized (128 ) - -
Included in other comprehensive income - 4 -
Settlement (2,470 ) - -
Re-evaluation of fair value swap - - (140 )
Balance September 30, 2011 $ - $ 749 $ (200 )

Balance, at January 1, 2010 $ 2,751 $ - $ (500 )
Total gains/(losses)
Included in earnings – realized - - -
Included in earnings – unrealized - - -
Included in other comprehensive income 98 - -
Settlements - - 160
Balance September 30, 2010 $ 2,849 $ - $ (340 )

~~- 35 -~~

Assets and liabilities measured at fair value on a nonrecurring basis:

The following ~~table presents~~methods and assumptions were used by the Company in determining the fair value of assets and liabilities measured at fair value on a nonrecurring ~~basis:~~

Fair Value Measurements at September 30, 2011 (as restated) using:
(in thousands) (Level 1) (Level 2) (Level 3)
Balance at
September 30, 2011

Impaired loans:
Commercial, financial and agricultural $ - $ - $ 11,731 $ 11,731
Commercial real estate 20,347 20,347
Construction real estate:
Vision commercial land and development 25,317 25,317
Remaining commercial 10,178 10,178
Residential real estate 15,222 15,222
Total impaired loans $ - $ - $ 82,795 $ 82,795
Mortgage servicing rights - 4,963 - 4,963
Other real estate owned - - 46,911 46,911

Fair Value Measurements at December 31, 2010 Using:
(in thousands) (Level 1) (Level 2) (Level 3)
Balance at
December 31, 2010

Impaired loans:
Commercial, financial and agricultural $ - $ - $ 8,276 $ 8,276
Commercial real estate 32,229 32,229
Construction real estate:
Vision commercial land and development 42,274 42,274
Remaining commercial 10,465 10,465
Residential real estate 16,399 16,399
Total impaired loans $ - $ - $ 109,643 $ 109,643
Mortgage servicing rights - 3,813 - 3,813
Other real estate owned - - 41,709 41,709

basis described below:

Impaired Loans: At the time a loan is considered impaired, it is valued at the lower of cost or fair value. Impaired loans ~~which~~carried at fair value have been partially charged-off or receive specific allocations of the allowance for loan losses. For collateral dependent loans, fair value is commonly based on real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are ~~measured~~routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using, (1) an appraisal, (2) net book value per the borrower’s financial statements, or (3) aging reports. Collateral is then adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Impaired loans are evaluated on a quarterly basis for additional impairment ~~using~~and adjusted accordingly. Additionally, updated valuations are obtained annually for all impaired loans in accordance with Company policy.

Other Real Estate Owned (OREO): Assets acquired through or in lieu of loan foreclosure are initially recorded at fair value less costs to sell when acquired. The carrying value of OREO is not re-measured to fair value on a recurring basis, but is subject to fair value adjustments when the carrying value exceeds the fair value, less estimated selling costs. Fair value is based on recent real estate appraisals and is updated at least annually. These appraisals may utilize a single valuation approach or a combination of approaches including the comparable sales approach and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments result in a Level 3 classification of the inputs for determining fair value.

Appraisals for both collateral dependent impaired loans and other real estate owned are performed by licensed appraisers. Appraisals are generally obtained to support the fair value of collateral. In general, there are two types of appraisals, real estate appraisals and lot development loan appraisals, received by the underlying collateral or the present value of expected future cash flows, had a book value of $192.4 million at September 30, 2011, after partial charge-offs of $95.9 million. In addition, these loans had a specific valuation allowance of $40.3 million. Of the $192.4 million impaired loan portfolio, loans with a book value of $123.2 million were carried at their fair value of $82.8 million, as a result of the aforementioned charge-offs and specific valuation allowance. The remaining $69.2 million of impaired loans were carried at cost, as the fair value of the underlying collateral or present value of expected future cash flows on these loans exceeded the book value for each individual credit. At December 31, 2010, impaired loans had a book value of $250.9 million. Of these, $109.6 million were carried at fair value, as a result of partial charge-offs of $53.6 million and a specific valuation allowance of $66.9 million. The remaining $74.4 million of impaired loans at December 31, 2010 were carried at cost.

~~- 36 -~~

Company. These are discussed below:

Real estate appraisals typically incorporate measures such as recent sales prices for comparable properties. Appraisers may make adjustments to the sales prices of the comparable properties as deemed appropriate based on the age, condition or general characteristics of the subject property. Management generally applies a 15% discount to real estate appraised values which management expects will cover all disposition costs (including selling costs). This 15% discount is based on historical discounts to appraised values on sold OREO properties.

Lot development loan appraisals are typically performed using a discounted cash flow analysis. Appraisers determine an anticipated absorption period and a discount rate that takes into account an investor’s required rate of return based on recent comparable sales. Management generally applies a 6% discount to lot development appraised values, which is an additional discount above the net present value calculation included in the appraisal, to account for selling costs.

MSRs:MSRs ~~which~~ are carried at the lower of cost or fair value, were recorded at $10.1 million at September 30, 2011. Of the $10.1 million MSR carrying balance at September 30, 2011, $5.0 million was recorded at fair value and included a valuation allowance of $680,000. The remaining $5.1 million was recorded at cost, as the fair value exceeded cost at September 30, 2011. MSRsvalue.MSRs do not trade in active, open markets with readily observable prices. For example, sales of MSRs do occur, but precise terms and conditions typically are not readily available. As such, management, with the assistance of a ~~third party~~third-party specialist, ~~determined~~determines fair value based on the discounted value of the future cash flows estimated to be received. Significant inputs include the discount rate and assumed prepayment speeds utilized. The calculated fair value ~~was~~is then compared to market values where possible to ascertain the reasonableness of the valuation in relation to current market expectations for similar products. Accordingly, MSRs are classified as Level 2.

The following table presents assets and liabilities measured at fair value on a nonrecurring basis:

Fair Value Measurements at March 31, 2012 using:
(in thousands)	Level 1		Level 2		Level 3		Balance at March 31, 2012
Impaired loans:
Commercial, financial and agricultural	$	-	$	-	$	18,476	$	18,476
Commercial real estate		-		-		25,445		25,445
Construction real estate:
SE LLC commercial land and development		-		-		18,468		18,468
Remaining commercial		-		-		8,665		8,665
Residential real estate		-		-		12,270		12,270
Total impaired loans	$	-	$	-	$	83,324	$	83,324
Mortgage servicing rights		-		7,138				7,138
Other real estate owned		-		-		41,965		41,965

Fair Value Measurements at December 31, 2011 using:
(in thousands)	Level 1		Level 2		Level 3		Balance at December 31, 2011
Impaired loans:
Commercial, financial and agricultural	$	-	$	-	$	19,931	$	19,931
Commercial real estate		-		-		24,859		24,859
Construction real estate:
Vision commercial land and development		-		-		21,228		21,228
Remaining commercial		-		-		8,860		8,860
Residential real estate		-		-		12,935		12,935
Total impaired loans	$	-	$	-	$	87,813	$	87,813
Mortgage servicing rights		-		5,815		-		5,815
Other real estate owned		-		-		42,272		42,272

Impaired loans had a book value of $179.3 million at March 31, 2012, after partial charge-offs of $108.3 million. In addition, these loans had a specific valuation allowance of $9.5 million. Of the $179.3 million impaired loan portfolio, loans with a book value of $92.8 million were carried at their fair value of $83.3 million, as a result of the aforementioned charge-offs and specific valuation allowance. The remaining $86.5 million of impaired loans were carried at cost, as the fair value of the underlying collateral or present value of expected future cash flows on each of these loans exceeded the book value for each individual credit. At December 31, ~~2010,~~2011, impaired loans had a book value of $187.1 million. Of these, $87.8 million were carried at fair value, as a result of partial charge-offs of $103.8 million and a specific valuation allowance of $15.9 million. The remaining $83.4 million of impaired loans at December 31, 2011 were carried at cost.

MSRs, which are carried at the lower of cost or fair value, were recorded at $9.0 million at March 31, 2012. Of the $9.0 million MSR carrying balance at March 31, 2012, $7.1 million was recorded at fair value and included a valuation allowance of $1.0 million. The remaining $1.9 million was recorded at cost, as the fair value exceeded cost at March 31, 2012. At December 31, 2011, MSRs were recorded at ~~$10.5~~$9.3 million, including a valuation allowance of ~~$748,000.~~

Other real estate owned (OREO) is recorded at fair value based on property appraisals, less estimated selling costs, at the date of transfer. The carrying value of OREO is not re-measured to fair value on a recurring basis, but is subject to fair value adjustments when the carrying value exceeds the fair value, less estimated selling costs. $1.0 million.

At ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010,~~2011, the estimated fair value of OREO, less estimated selling costs, amounted to ~~$46.9~~$42.0 million and ~~$41.7~~$42.3 million, respectively. The financial impact of OREO devaluation adjustments for the three month ~~and nine month periods~~period ended ~~September 30, 2011~~March 31, 2012 was ~~$588,000 and $6.5 million, respectively.~~

$1.4 million.

The following methods and assumptions were used by the Corporation in estimating its fair value disclosures for assets and liabilities not discussed above:

Cash and cash equivalents:The carrying amounts reported in the consolidated condensed ~~balance sheet~~balancesheets for cash and short-term instruments approximate those assets’ fair values.

~~Interest bearing deposits with other banks:~~ ~~The carrying amounts reported in the consolidated condensed balance sheet for interest bearing deposits with other banks approximate those assets’ fair values.~~

Loans receivable:For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair values for certain mortgage loans (e.g., one-to-four family residential) are based on quoted market prices of similar loans sold in conjunction with securitization transactions, adjusted for differences in loan characteristics. The fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality.

Off-balance sheet instruments:Fair values for the Corporation’s loan commitments and standby letters of credit are based on the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The carrying amount and fair value are not material.

Deposit liabilities:The fair values disclosed for demand deposits (e.g., interest and non-interest checking, savings, and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). The carrying amounts for variable-rate, fixed-term certificates of deposit approximate their fair values at the reporting date. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities of time deposits.

Short-term borrowings:The carrying amounts of federal funds purchased, borrowings under repurchase agreements and other short-term borrowings approximate their fair values.

Long-term debt:Fair values for long-term debt are estimated using a discounted cash flow calculation that applies interest rates currently being offered on long-term debt to a schedule of monthly maturities.

Subordinated debentures and notes:Fair values for subordinated debentures and notes are estimated using a discounted cash flow calculation that applies interest rate spreads currently being offered on similar debt structures to a schedule of monthly maturities.

~~- 37 -~~

The fair value of financial instruments at ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010,~~2011, was as follows:

(in thousands) September 30, 2011 December 31, 2010
Carrying value Fair value Carrying value Fair value
Financial assets:
Cash and money market instruments $ 272,097 $ 272,097 $ 133,780 $ 133,780
Investment securities 1,640,739 1,658,532 1,971,092 1,983,636
Accrued interest receivable 21,990 21,990 24,137 24,137
Mortgage loans held for sale 10,778 10,778 8,340 8,340
Impaired loans carried at fair value (Restated) 82,795 82,795 109,643 109,643
Other loans (Restated)
4,479,692 4,491,085 4,471,127 4,490,855
Loans receivable, net $ 4,573,265 $ 4,584,658 $ 4,589,110 $ 4,608,838

Financial liabilities:
Noninterest bearing checking accounts $ 1,000,969 $ 1,000,969 $ 937,719 $ 937,719
Interest bearing transactions accounts 1,432,827 1,432,827 1,283,159 1,283,159
Savings accounts 943,948 943,948 899,288 899,288
Time deposits 1,705,844 1,713,888 1,973,903 1,990,163
Other 5,599 5,599 1,351 1,351
Total deposits $ 5,089,187 $ 5,097,231 $ 5,095,420 $ 5,111,680

Short-term borrowings $ 243,071 $ 243,071 $ 663,669 $ 663,669
Long-term debt 823,722 917,963 636,733 699,080
Subordinated debentures/notes 75,250 66,934 75,250 63,099
Accrued interest payable 5,416 5,416 6,123 6,123

Derivative financial instruments:
Interest rate swap $ 1,099 $ 1,099 $ 1,634 $ 1,634
Fair value swap 200 200 60 60

(in thousands)	March 31, 2012
			Fair Value Measurements

Financial assets:	Carrying value		Level 1		Level 2		Level 3		Total fair value
Cash and money market instruments	$	161,130	$	161,130	$	-	$	-	$	161,130
Investment securities		1,789,731		1,417		1,800,383		756		1,802,556
Accrued interest receivable - securities		7,027		-		7,027		-		7,027
Accrued interest receivable - loans		14,200		-		1		14,199		14,200
Mortgage loans held for sale		11,110		-		11,110		-		11,110
Impaired loans carried at fair value		83,324		-		-		83,324		83,324
Other loans		4,170,191		-		-		4,188,265		4,188,265
Loans receivable, net	$	4,264,625	$	-	$	11,110	$	4,271,589	$	4,282,699

Financial liabilities:
Noninterest bearing checking accounts	$	1,055,745	$	1,055,745	$	-	$		$	1,055,745
Interest bearing transactions accounts		1,215,562		1,215,562		-		-		1,215,562
Savings accounts		1,001,789		1,001,789				-		1,001,789
Time deposits		1,541,374		-		1,547,748		-		1,547,748
Other		2,918		2,918		-		-		2,918
Total deposits	$	4,817,388	$	3,276,014	$	1,547,748	$	-	$	4,823,762

Short-term borrowings	$	236,687	$	-	$	236,687	$	-	$	236,687
Long-term debt		821,801		-		907,995		-		907,995
Subordinated debentures/notes		75,250		-		68,475		-		68,475
Accrued interest payable – deposits		2,824		36		2,788		-		2,824
Accrued interest payable – debt/borrowings		2,210		-		2,210		-		2,210

Derivative financial instruments:
Interest rate swap	$	673	$	-	$	673	$	-	$	673
Fair value swap		135		-		-		135		135

(in thousands)	December 31, 2011
	Carrying value		Fair value
Financial assets:
Cash and money market instruments	$	157,486	$	157,486
Investment securities		1,640,869		1,655,219
Accrued interest receivable		19,697		19,697
Mortgage loans held for sale		11,535		11,535
Impaired loans carried at fair value		87,813		87,813
Other loans		4,149,307		4,167,224
Loans receivable, net	$	4,248,655	$	4,266,572
Assets held for sale	$	382,462	$	382,462

Financial liabilities:
Noninterest bearing checking accounts	$	995,733	$	995,733
Interest bearing transactions accounts		1,037,385		1,037,385
Savings accounts		931,526		931,526
Time deposits		1,499,105		1,506,075
Other		1,365		1,365
Total deposits	$	4,465,114	$	4,472,084

Short-term borrowings	$	263,594	$	263,594
Long-term debt		823,182		915,274
Subordinated debentures/notes		75,250		68,601
Accrued interest payable		4,916		4,916
Liabilities held for sale		536,186		536,991

Derivative financial instruments:
Interest rate swap	$	846	$	846
Fair value swap		700		700

Note 1617 –Participation in the U.S. Treasury Capital Purchase Program (CPP)

On December 23, 2008, Park issued $100 million of cumulative perpetual preferred shares, with a liquidation preference of $1,000 per share (the “Senior Preferred Shares”). The Senior Preferred Shares ~~constitute~~constituted Tier 1 capital and ~~rank~~ranked senior to Park’s common shares. The Senior Preferred Shares were to pay cumulative dividends at a rate of 5% per annum through February 14, 2014 and ~~will~~ reset to a rate of 9% per annum thereafter. For the three ~~and nine~~ month ~~periods~~period ended ~~September 30, 2011,~~March 31, 2012, Park recognized a charge to retained earnings of $1.5 million ~~and $4.4 million, respectively,~~ representing the preferred stock dividend and accretion of the discount on the preferred stock, associated with Park’s participation in the CPP.

As part of its participation in the CPP, Park also issued a warrant to the U.S. Treasury to purchase 227,376 common shares (the “Warrant”), which iswas equal to 15% of the aggregate amount of the Senior Preferred Shares purchased by the U.S. Treasury, having an exercise price of $65.97. The initial exercise price for the ~~warrant~~Warrant and the market price for determining the number of common shares subject to the ~~warrant~~Warrant were determined by reference to the market price of the common shares on the date the Company’s application for participation in the CPP was approved by the U.S. Department of the Treasury (calculated on a 20-day trailing average). The ~~warrant~~Warrant has a term of 10 years.

~~A company that participates~~

As a participant in the CPP, ~~must~~the Company was required to adopt certain standards for compensation and corporate governance, established under the American Recovery and Reinvestment Act of 2009 (the “ARRA”), which amended and replaced the executive compensation provisions of the Emergency Economic Stabilization Act of 2008 (“EESA”) in their entirety, and the Interim Final Rule promulgated by the Secretary of the U.S. Treasury under 31 C.F.R. Part 30 (collectively, the “Troubled Asset Relief Program (TARP) Compensation Standards”). In addition, Park’s ability to declare or pay dividends on or repurchase its common shares iswas partially restricted until December 23, 2011 as a result of its participation in the CPP.

~~- 38 -~~

Please refer to Note 1720 – Subsequent Events, which discusses the Company’s repurchase of the Senior Preferred Shares and of the Warrant.

Note 18 –Other Comprehensive Income (Loss)

Other comprehensive income (loss) components and related ~~taxes~~tax effect are shown in the following table for the three ~~and nine~~ month periods ended ~~September 30, 2011~~March 31, 2012 and ~~2010:~~

Nine months ended September 30,
(in thousands)

Before-tax
amount

Tax expense
(benefit)

Net-of-tax
amount

2011:
Unrealized gains on available-for-sale securities $ 26,451 $ 9,257 $ 17,194
Reclassification adjustment for gains realized in net income (25,462 ) (8,912 ) (16,550 )
Unrealized net holding gain on cash flow hedge 535 187 348
Other comprehensive income $ 1,524 $ 532 $ 992

2010:
Unrealized gains on available-for-sale securities $ 7,158 $ 2,506 $ 4,652
Reclassification adjustment for gains realized in net income (11,819 ) (4,137 ) (7,682 )
Unrealized net holding loss on cash flow hedge (426 ) (149 ) (277 )
Other comprehensive loss $ (5,087 ) $ (1,780 ) $ (3,307 )

Three months ended September 30,
(in thousands)

Before-tax
amount

Tax expense
(benefit)

Net-of-tax
amount

2011:
Unrealized gains on available-for-sale securities $ 17,532 $ 6,136 $ 11,396
Reclassification adjustment for gains realized in net income (3,465 ) (1,213 ) (2,252 )
Unrealized net holding gain on cash flow hedge 238 83 155
Other comprehensive income $ 14,305 $ 5,006 $ 9,299

2010:
Unrealized losses on available-for-sale securities $ (5,321 ) $ (1,862 ) $ (3,459 )
Unrealized net holding loss on cash flow hedge (102 ) (36 ) (66 )
Other comprehensive loss $ (5,423 ) $ (1,898 ) $ (3,525 )

For the three and nine months ended September 30, 2011, total comprehensive income was $29.7 million and $72.5 million, respectively. For the three and nine months ended September 30, 2010, total comprehensive income was $16.1 million and $58.2 million, respectively.

~~- 39 -~~

2011:

Three months ended March 31, (in thousands)	Before-tax amount			Tax effect			Net-of-tax amount

2012:
Change in pension plan assets and benefit obligations	$	634		$	222		$	412
Unrealized losses on available-for-sale securities		(3,390	)		(1,188	)		(2,202	)
Unrealized net holding gain on cash flow hedge		173			60			113
Other comprehensive loss	$	(2,583	)	$	(906	)	$	(1,677	)

2011:
Unrealized (losses) on available-for-sale securities	$	(3,166	)	$	(1,108	)	$	(2,058	)
Reclassification adjustment for gains realized in net income		(6,635	)		(2,322	)		(4,313	)
Unrealized net holding gain on cash flow hedge		204			71			133
Other comprehensive loss	$	(9,597	)	$	(3,359	)	$	(6,238	)

The ending balance of each component of accumulated other comprehensive income (loss) was as follows:

(in thousands)
Before-tax
amount

Tax expense
(benefit)

Net-of-tax
amount

September 30, 2011:
Changes in pension plan assets and benefit obligations $ (24,503 ) $ (8,576 ) $ (15,927 )
Unrealized gains on available-for-sale securities 24,253 8,488 15,765
Unrealized net holding loss on cash flow hedge (1,099 ) (385 ) (714 )
Total accumulated other comprehensive loss $ (1,349 ) $ (473 ) $ (876 )

December 31, 2010:
Changes in pension plan assets and benefit obligations $ (24,503 ) $ (8,576 ) $ (15,927 )
Unrealized gains on available-for-sale securities 23,264 8,143 15,121
Unrealized net holding loss on cash flow hedge (1,634 ) (572 ) (1,062 )
Total accumulated other comprehensive loss $ (2,873 ) $ (1,005 ) $ (1,868 )

September 30, 2010:
Changes in pension plan assets and benefit obligations $ (20,769 ) $ (7,269 ) $ (13,500 )
Unrealized gains on available-for-sale securities 41,685 14,590 27,095
Unrealized net holding loss on cash flow hedge (1,909 ) (668 ) (1,241 )
Total accumulated other comprehensive income $ 19,007 $ 6,653 $ 12,354

(in thousands)	Before-tax amount			Tax effect			Net-of-tax amount

March 31, 2012:
Changes in pension plan assets and benefit obligations	$	(31,603	)	$	(11,061	)	$	(20,542	)
Unrealized gains on available-for-sale securities		16,108			5,637			10,471
Unrealized net holding loss on cash flow hedge		(673	)		(236	)		(437	)
Total accumulated other comprehensive loss	$	(16,168	)	$	(5,660	)	$	(10,508	)

December 31, 2011:
Changes in pension plan assets and benefit obligations	$	(32,237	)	$	(11,283	)	$	(20,954	)
Unrealized gains on available-for-sale securities		19,498			6,825			12,673
Unrealized net holding loss on cash flow hedge		(846	)		(296	)		(550	)
Total accumulated other comprehensive loss	$	(13,585	)	$	(4,754	)	$	(8,831	)

March 31, 2011:
Changes in pension plan assets and benefit obligations	$	(24,503	)	$	(8,576	)	$	(15,927	)
Unrealized gains on available-for-sale securities		13,462			4,712			8,750
Unrealized net holding loss on cash flow hedge		(1,430	)		(501	)		(929	)
Total accumulated other comprehensive loss	$	(12,471	)	$	(4,365	)	$	(8,106	)

Note 1819 —Sale of Common Shares and Issuance of Common Stock Warrants

~~No additional~~

There were no sales of common shares or issuance of common stock ~~were issued~~warrants during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2012 or March 31, 2011. Outstanding as of ~~September 30,~~March 31, 2011 were 35,992 Series A Common Share Warrants and 35,992 Series B Common Share Warrants which were issued as part of the registered direct public offering completed on December 10, 2010. The Series A and Series B Common Share Warrants ~~have~~had an exercise price of ~~$76.41 and an expiration date of December 10, 2011.~~$76.41. The ~~35,992~~ Series A Common Share Warrants ~~issued in December 2010~~ were not exercised and expired on June 10, 2011.

~~19 –Sale of Vision Bank~~

~~On February 16, 2012, Park~~ The Series B Common Share Warrants were not exercised and its wholly-owned subsidiary, Vision Bank, a Florida state-chartered bank, completed its sale of substantially all of the operating assets and liabilities associated with Vision Bank to Home BancShares, Inc. (“Home”) and its wholly-owned Arkansas state-chartered bank, Centennial Bank (“Centennial”), as contemplated by the previously announced Purchase and Assumption Agreement (the “Agreement”) by and between Park, Vision, Home and Centennial, dated as of November 16,expired on December 20, 2011.

Note 20 -Subsequent Events

In ~~accordance~~connection with the ~~Agreement, Vision sold approximately $354 million in performing loans, approximately $520~~application submitted by Park to the U.S. Treasury for approval to repurchase from the U.S. Treasury the 100,000 Series A Preferred Shares, Park provided a proposed capital plan which included the issuance of an aggregate principal amount of $30 million of ~~deposits, fixed assets~~subordinated notes, which are intended to qualify as “Tier 2 Capital” under applicable rules and regulations of ~~approximately $12.5 million~~the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”).

On April 20, 2012, Park entered into a Note Purchase Agreement, dated April 20, 2012 (the “Purchase Agreement”), with 56 purchasers (each, a “Purchaser” and ~~other miscellaneous assets~~collectively, the “Purchasers”). Each Purchaser represented that such Purchaser qualified as an “accredited investor” within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Under the terms of the Purchase Agreement, the Purchasers purchased from Park an aggregate principal amount of $30,000,000 of 7% Subordinated Notes due April 20, 2022 (individually, a “Note” and ~~liabilities~~collectively, the “Notes”). The Notes are intended to qualify as Tier 2 Capital under applicable rules and regulations of the Federal Reserve Board. Each Note was purchased at a purchase price of 100% of the principal amount thereof.

On April 19, 2012, Park received the approval from the U.S. Treasury to repurchase the 100,000 Series A Preferred Shares, which were issued by Park to the U.S. Treasury on December 23, 2008 as part of the CPP. On April 25, 2012, Park entered into a Letter Agreement with the U.S. Treasury pursuant to which Park repurchased the 100,000 Series A Preferred Shares for a purchase price of ~~$27.9 million.~~$100 million plus a pro rata accrued and unpaid dividend. Total consideration of $100,972,222 included accrued and unpaid dividends of $972,222. In addition to the accrued and unpaid dividends of $972,222, the charge to retained earnings, resulting from the repurchase of the Series A Preferred Shares, was $1.6 million on April 25, 2012.

Immediately following the closing of the transactions contemplated by the Agreement, Vision surrendered its Florida banking charter to the Florida Office of Financial Regulation (the “OFR”) and became a non-bank Florida corporation (the “Florida Corporation”). This Florida Corporation merged with andOn May 2, 2012, Park entered into a ~~wholly-owned, non-bank subsidiary~~Letter Agreement pursuant to which Park repurchased from the U.S. Treasury the Warrant to purchase 227,376 Park common shares (the “Warrant Repurchase Letter Agreement”) for consideration of $2,842,400, or $12.50 per Park SE Property Holdings, LLC (“SE LLC”), with SE LLC being the surviving entity. Subsequent to the transactions contemplated by the Purchase Agreement, Vision will be left with approximately $22 million of performing loans and non-performing loans with a fair value of $88 million (both net of any necessary loan loss allowance that may have existed prior to the transactions). Park recognized a pre-tax gain, net of expenses directly related to the sale, of approximately $22 million.common share.

~~- 40 -~~

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Management’s discussion and analysis (“MD&A”) 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. We have tried, whenever possible, to identify such statements by using words such as “anticipate,” “estimate,” “expect,” “forecast,” “project,” “intend,” “plan,” “believe,” and similar expressions in connection with any discussion of future operating or financial performance. The forward-looking statements are based on management’s current 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 its business plan successfully and within the expected timeframe;~~ deterioration in the asset value of ~~our~~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~~Park's ability to sell OREO properties at prices as favorable as anticipated; ~~changes in~~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 the credit ~~markets,~~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; 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; changes in consumer spending, borrowing and saving habits; changes in unemployment; asset/liability repricing risks and liquidity risks; our liquidity requirements could be adversely affected by changes in our assets and liabilities; competitive factors among financial ~~institutions~~service organizations increase significantly, including product and pricing pressures and ~~Park’s~~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;~~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 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 fiscal and governmental policies of the United States federal government; the adequacy of our risk management program; 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 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 (“SEC”) including those described in “Item 1A. Risk Factors” of Part I of Park’s ~~2010 Form 10-K/A, in “Item 1A. Risk Factors” of Part II of Park’s Quarterly~~Annual Report on Form ~~10-Q/A (Amendment No. 1)~~10-K for the ~~quarterly period~~fiscal year ended ~~March~~December 31, 2011, in “Item 1A. Risk Factors” of Part II of Park’s Quarterly Report on Form 10-Q/A (Amendment No. 2) for the quarterly period ended June 30, 2011 and in “Item 1A. Risk Factors” of Part II of this Quarterly Report on Form 10-Q/A (Amendment No. 1).2011. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date ~~they were originally made.~~of this Quarterly Report on Form 10-Q. 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.

~~- 41 -~~

Critical Accounting Policies

Note 1 of the Notes to Consolidated Financial Statements included in ~~“Item 8 - Financial Statements and Supplementary Data of Part II of~~ Park’s ~~2010 Form 10-K/A~~2011 Annual Report to Shareholders (“2011 Annual Report”) lists significant accounting policies used in the development and presentation of Park’s consolidated financial statements. The accounting and reporting policies of Park conform with U.S. generally accepted accounting principles (GAAP) and general practices within the financial services industry. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates.

Park believes the determination of the allowance for loan losses involves a higher degree of judgment and complexity than its other significant accounting policies. The allowance for loan losses is calculated with the objective of maintaining a reserve level believed by management to be sufficient to absorb probable incurred credit losses in the loan portfolio. Management’s determination of the adequacy of the allowance for loan losses is based on periodic evaluations of the loan portfolio and of current economic conditions. However, this evaluation is inherently subjective as it requires material estimates, including expected default probabilities, the loss given default, the amounts and timing of expected future cash flows on impaired loans, and estimated losses on consumer loans and residential mortgage loans based on historical loss experience and current economic conditions. All of these factors may be susceptible to significant change. To the extent that actual results differ from management estimates, additional loan loss provisions may be required that would adversely impact earnings ~~for~~in future periods. (Refer to the “Provision for Loan Losses” section within this MD&A for additional discussion.)

Other real estate owned (“OREO”), property acquired through foreclosure, is recorded at estimated fair value less anticipated selling costs (net realizable value). If the net realizable value is below the carrying value of the loan on the date of transfer, the difference is charged to the allowance for loan losses. Subsequent declines in value, OREO devaluations, are reported as adjustments to the carrying amount of OREO and are expensed within other income. Gains or losses not previously recognized, resulting from the sale of OREO, are recognized in other income on the date of sale. At ~~September 30, 2011,~~March 31, 2012, OREO totaled ~~$46.9~~$42.0 million, representing a ~~12.5% increase~~0.7% decrease compared to ~~41.7%~~$42.3 million at December 31, ~~2010.~~2011. The ~~$5.2 million~~$300,000 net ~~increase~~decrease in OREO during the first ~~nine~~three months of ~~2011~~2012 was a result of ~~$27.7~~$5.0 million in new OREO offset by sales of ~~$16.0~~$3.9 million and devaluations of ~~$6.5~~$1.4 million.

U.S. GAAP requires management to establish a fair value hierarchy, which has the objective of maximizing the use of observable market inputs. U.S. GAAP also requires enhanced disclosures regarding the inputs used to calculate fair value. These are classified as Level 1, 2, and 3. Level 3 inputs are those with significant unobservable inputs that reflect a company’s own assumptions about the market for a particular instrument. Some of these inputs could be based on internal models and cash flow analyses. At ~~September 30, 2011,~~March 31, 2012, the fair value of assets based on Level 3 inputs for Park was approximately ~~$130.5~~$126.0 million. This was ~~13.9%~~11.0% of the total amount of assets measured at fair value as of the end of the ~~third~~first quarter. The fair value of impaired loans was approximately ~~$82.8~~$83.3 million (or ~~63.5%~~66.1%) of the total amount of Level 3 inputs. Additionally, there were ~~$69.2~~$86.5 million of loans that were impaired and carried at cost, as fair value exceeded book value for each individual credit. The large majority of Park’s Level 2 inputs consist of available-for-sale (“AFS”) securities. The fair value of these AFS securities is obtained largely through the use of matrix pricing, which is a mathematical technique widely used in the financial services industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities.

~~- 42 -~~

Management believes that the accounting for goodwill and other intangible assets also involves a higher degree of judgment than most other significant accounting policies. U.S. GAAP establishes standards for the amortization of acquired intangible assets and the impairment assessment of goodwill. Goodwill arising from business combinations represents the value attributable to unidentifiable intangible assets in the business acquired. Park’s goodwill relates to the value inherent in the banking industry and that value is dependent upon the ability of Park’s Ohio-based banking ~~subsidiaries~~subsidiary, The Park National Bank (“PNB”) to provide quality, cost-effective banking services in a competitive marketplace. The goodwill value is supported by revenue that is in part driven by the volume of business transacted. A decrease in earnings resulting from a decline in the customer base, the inability to deliver cost-effective services over sustained periods or significant credit problems can lead to impairment of goodwill that could adversely impact earnings in future periods. U.S. GAAP requires an annual evaluation of goodwill for impairment, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Park’s most recent evaluation was completed during the second quarter of 2011 and resulted in no impairment of goodwill. The fair value of the goodwill, which resides on the books of ~~Park’s subsidiary banks,~~PNB, is estimated by reviewing the past and projected operating results for ~~the Park subsidiary banks,~~PNB, deposit and loan totals for ~~the Park subsidiary banks~~PNB and banking industry comparable information. At ~~September 30, 2011,~~March 31, 2012, on a consolidated basis, Park had core deposit intangibles of ~~$4.0 million~~$755,000 subject to amortization and $72.3 million of goodwill, which was not subject to periodic amortization. The core deposit intangibles recorded on the balance sheet of Park National Bank (PNB) totaled $1.0 million and the core deposit intangibles at Vision Bank were $3.0 million. The goodwill asset of $72.3 million is carried on the balance sheet of PNB. Please see Note 34 –Goodwill and Intangible Assets of the Notes to Unaudited Consolidated Condensed Financial Statements in this Quarterly Report on Form ~~10-Q/A~~10-Q for additional information on intangible assets.

~~- 43 -~~

Comparison of Results of Operations

For the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~

Summary Discussion of Results

Net income for the three months ended ~~September 30, 2011~~March 31, 2012 was ~~$20.4~~$31.5 million compared to ~~$19.6~~$22.2 million for the ~~third~~first quarter of ~~2010,~~2011, an increase of ~~$804,000~~$9.3 million or ~~4.1%~~41.9%. Net income available to common shareholders (which is net of preferred stock dividends and accretion) was ~~$18.9~~$30.0 million for the ~~third~~first quarter of ~~2011~~2012 compared to ~~$18.1~~$20.7 million for the three months ended ~~September 30, 2010,~~March 31, 2011, an increase of ~~$792,000~~$9.3 million or ~~4.4%~~44.9%. Preferred stock dividends and the related accretion of the discount on the preferred stock, pertaining to the ~~$100 million~~Fixed Rate Cumulative Perpetual Preferred Shares, Series A, each without par value and with a liquidation preference of ~~preferred stock~~$1,000 per share (the “Series A Preferred Shares”) issued to the U.S. Treasury on December 23, 2008, were ~~$1.46~~$1.48 million for the ~~third~~first quarter of ~~2011~~2012 and ~~$1.45~~$1.46 million for the same quarter in ~~2010.~~

2011. The results for the first quarter of 2012 and 2011 include the gain from the sale of the Vision Bank business of $22.2 million ($14.4 million after-tax) and the gains resulting from the sale of investment securities of $6.6 million ($4.3 million after-tax), respectively.

Diluted earnings per common share were ~~$1.23~~$1.95 for the ~~third~~first quarter of 2012 compared to $1.35 for the first quarter of 2011, ~~compared to $1.19 for the third quarter of 2010,~~ an increase of ~~$0.04~~$0.60 per share or ~~3.4%~~44.4%. Weighted average diluted common shares outstanding were ~~15,398,909~~15,417,745 for the three months ended ~~September 30, 2011~~March 31, 2012 compared to ~~15,272,720~~15,403,420 diluted common shares for the ~~third~~first quarter of ~~2010,~~2011, an increase of ~~126,189~~14,325 diluted common shares or ~~0.8%~~0.09%. ~~Park sold~~

Included in the results discussed above for the first quarter of 2012 are the operating results for SE Property Holdings, LLC (“SE LLC”), a ~~total~~non-bank subsidiary of ~~509,184 common shares, issued~~Park. The remaining assets and liabilities retained by Vision Bank (“Vision”) subsequent to the sale to Centennial Bank (refer to additional discussion in the “Sale of Vision Bank Business” section below) were subsequently transferred to SE LLC through the merger of Vision into SE LLC. SE LLC also holds other real estate owned (“OREO”) that had previously been transferred to SE LLC from treasury shares, during the last three quarters of 2010. Most of the sales of common shares (437,200) resulted from the exercise of Series A and Series B Common Share Warrants issued in connection with the registered direct public offering which closed on October 30, 2009. In addition, Park sold 71,984 common shares, issued from treasury shares, in connection with a registered direct public offering which closed on December 10, 2010.

Vision. Net income for the nine months ended September 30, 2011 was $71.5 million compared to $61.5 million for the same period in 2010, an increase of $10.0 million or 16.3%. Net income available to common shareholders was $67.1 millionSE LLC for the first ~~nine months~~quarter of ~~2011~~2012 was $9.1 million, which included the gain on the sale of the Vision business.

Sale of Vision Bank Business

On February 16, 2012, Park completed the purchase and assumption transaction between Park, Home BancShares, Inc. (“Home”) and their respective subsidiary banks. Home subsidiary Centennial Bank (“Centennial”) purchased certain assets and liabilities of Vision for a purchase price of $27.9 million. Centennial purchased performing loans with an unpaid principal balance of approximately $354 million, assumed ownership or operation of all 17 Vision office locations, and assumed deposit liabilities of approximately $520 million. Certain other miscellaneous assets and liabilities were also purchased by Centennial. The remaining assets and liabilities were retained by Vision.

As a result of the transaction, Park recorded a pre-tax gain of $22.2 million (after actual expenses directly related to the transaction). The transaction also decreased Park’s total assets during the first quarter of 2012. As of March 31, 2012, Park had total assets of $6.8 billion, compared to $57.2 million for the same period in 2010, an increase of $9.9 million or 17.3%. Preferred stock dividends and the related accretion of the discount on the preferred stock issued to the U.S. Treasury totaled $4.4 million for the first nine months of$7.0 billion at December 31, 2011 and ~~2010.~~

Diluted earnings per common share were $4.36 for the nine months ended September 30, 2011 compared to $3.79 for the same period in 2010, an increase of $0.57 per share or 15.0%. Weighted average common shares outstanding were 15,398,919 for the nine months ended September 30, 2011 compared to 15,090,113 common shares for the nine months ended 2010, an increase of 308,806 common shares or 2.0%.

$7.3 billion at March 31, 2011.

The following tables compare the components of net income for the three ~~and nine~~ month ~~periods~~period ended ~~September 30, 2011~~March 31, 2012 with the components of net income for the three ~~and nine~~ month ~~periods~~period ended ~~September 30, 2010.~~March 31, 2011. This information is provided for Park, ~~Vision Bank~~PNB, Guardian Financial Services Company (“Guardian”), and Park excluding Vision Bank (“Park’s Ohio-based operations”). In general, for the first nine months of 2011, the operating results for Park’s Ohio-based operations were a little stronger than management projected, but the results for Vision Bank were weaker than anticipated.

Park – Summary Income Statement

Three months ended
September 30,

Nine months ended
September 30,

(in thousands)
2011 (Restated)
2010 % Change
2011 (Restated)
2010 % Change
Net interest income $ 67,620 $ 69,445 -2.63 % $ 206,955 $ 205,546 0.69 %
Provision for loan losses 16,438 14,654 -12.17 % 43,054 44,454 -3.15 %
Total other income 18,027 17,530 2.84 % 48,195 50,887 -5.29 %
Gain on sale of securities 3,465 - N.M. 25,462 11,819 115.43 %
Total other expense 45,599 45,696 -0.21 % 138,952 140,587 -1.16 %
Income before taxes $ 27,075 $ 26,625 1,69 % $ 98,606 $ 83,211 18.50 %
Income taxes 6,694 7,048 -5.02 % 27,076 21,689 24.84 %
Net income $ 20,381 $ 19,577 4.11 % $ 71,530 $ 61,522 16.27 %

~~- 44 -~~

SE LLC.

Table - Park – Summary Income Statement
Three months ended March 31,
(In thousands)	2012		2011		% Change
Net interest income	$	61,728	$	69,313		-10.94	%
Provision for loan losses		9,000		14,100		-36.17	%
Other income		17,453		15,030		16.12	%
Gain on sale of Vision business		22,167		-		N.M.
Security gains		-		6,635		N.M.
Operating expenses		47,808		46,346		3.15	%
Income before taxes	$	44,540	$	30,532		45.88	%
Income taxes		13,065		8,336		56.73	%
Net income	$	31,475	$	22,196		41.80	%

Table - PNB – Summary Income Statement
Three months ended March 31,
(In thousands)	2012		2011		% Change
Net interest income	$	55,846	$	60,236		-7.29	%
Provision for loan losses		4,672		4,975		-6.09	%
Other income		16,661		16,262		2.45	%
Security gains		-		6,635		N.M.
Operating expenses		38,056		36,321		4.78	%
Income before taxes	$	29,779	$	41,837		-28.82	%
Income taxes		8,218		12,808		-35.84	%
Net income	$	21,561	$	29,029		-25.73	%

Table - Guardian – Summary Income Statement Three months ended March 31,
(In thousands)	2012		2011		% Change
Net interest income	$	2,211	$	2,025		9.19	%
Provision for loan losses		250		525		-52.38	%
Other income		-		-		-
Security gains		-		-		-
Operating expenses		721		577		24.96	%
Income before taxes	$	1,240	$	923		34.34	%
Income taxes		434		323		34.37	%
Net income	$	806	$	600		34.33	%

Table - SE LLC – Summary Income Statement Three months ended March 31,
(In thousands)	2012		2011		% Change
Net interest income	$	2,610	-		N.M.
Provision for loan losses		4,078		-		N.M.
Other income		724		-		N.M.
Gain on sale of Vision business		22,167		-		N.M.
Security gains		-		-		N.M.
Operating expenses		7,503		-		N.M.
Income before taxes	$	13,920		-		N.M.
Income taxes		4,861		-		N.M.
Net income	$	9,059		-		N.M.

The following table compares the guidance for ~~2011~~2012 that management provided in Park’s ~~2010~~2011 Annual Report with the actual results for the ~~nine~~three month period ended ~~September 30, 2011.~~March 31, 2012. This guidance was included in Park’s ~~2010~~2011 Annual Report in the “Financial Review” section on pages 38 through 40.

(in thousands)
Projected results for
2011
75% of annual projection
Actual results
for the first nine months
of 2011 (Restated)

Net interest income $ 268,000 to $278,000 $ 201,000 - $208,500 $ 206,955
Provision for loan losses $ 47,000 to $57,000 $ 35,250 - $42,750 $ 43,054
Total other income $ 63,000 to $67,000 $ 47,250 - $50,250 $ 48,195
Total other expense $ 183,000 to $187,000 $ 137,250- $140,250 $ 138,952

(in thousands)	Projected results for 2012		25% of annual projection		Actual results for the first three months of 2012
Net interest income	$	240,000 to $250,000	$	60,000 - $62,500	$	61,728
Provision for loan losses	$	20,000 to $27,000	$	5,000 - $6,750	$	9,000
Total other income	$	62,000 to $66,000	$	15,500 - $16,500	$	17,453
Total other expense	$	170,000 to $175,000	$	42,500- $43,750	$	47,808

Park’s management believes that the guidance previously provided for ~~net interest~~total other income and total other expense ~~continues~~continue to be a good ~~estimate~~estimates for ~~2011.~~

~~Gains from~~2012. While each of total other income and total other expense were above 25% of the annual projection during the first quarter of 2012, management expects the performance over the remaining nine months of 2012 will bring these back in line with our original projections. The amounts above 25% of the annual projection during the first quarter of 2012 were largely related to (1) other income at Vision through February 16, 2012 and (2) other expense associated with the sale of ~~investment securities were $3.5 million for~~ the ~~third quarter of 2011 and $25.5 million~~Vision business.

Net interest income for the first ~~nine~~quarter of 2012 was within 25% of the annual projection for 2012; however, management’s most recent projection for the twelve months ending December 31, 2012 is for net interest income to be within the range of ~~2011. By comparison, there were no gains or losses from the sale of investment securities~~$235 million to $245 million. See more information in the ~~third~~section called “Guidance on Net Interest Income for 2012”.

The provision for loan losses for the first quarter of ~~2010 and gains were $11.8 million~~2012 was $9.0 million. The loan loss provision for the first three ~~quarters~~months of ~~2010.~~

~~All~~2012 was $2.3 million above 25% of the ~~investment securities sold in 2011 have been U.S. Government sponsored entity mortgage-backed securities. Management does not currently plan on selling additional investment securities~~annual projection provided in the ~~fourth quarter of 2011. However, the sale of additional securities~~2011 Annual Report.The provision for ~~a gain in 2011 is possible. At September 30, 2011, Park had approximately $22.1~~loan losses was $4.1 million ~~of unrealized gains in mortgage-backed securities,~~at SE LLC, which ~~are classified as available for sale.~~

~~- 45 -~~

~~The following table provides a summary income statement for Vision Bank.~~

Vision Bank – Summary Statement of Operations

Three Months Ended
September 30,

Nine Months Ended
September 30,

(in thousands)
2011 (Restated)
2010
% Change (Restated)
2011 (Restated) 2010
% Change (Restated)

Net interest income $ 6,493 $ 7,174 -9.49 % $ 20,248 $ 20,979 -3.48 %
Provision for loan losses 6,913 7,529 -8.18 % 22,529 27,729 -18.75 %
Total other income (loss) 2,014 (139 ) N.M. 524 (744 ) N.M.
Gain on sale of securities — — N.M. 1,828 — N.M.
Total other expense 7,267 7,726 -5.94 % 22,866 23,817 -3.99 %
Loss before taxes $ (5,673 ) $ (8,220 ) 30.99 % $ (22,795 ) $ (31,311 ) 27.20 %
Income tax credits (2,008 ) (2,904 ) 30.85 % (8,065 ) (11,783 ) 31.55 %
Net loss $ (3,665 ) $ (5,316 ) 31.06 % $ (14,730 ) $ (19,528 ) 24.57 %

~~N.M. – Not Meaningful~~

~~Refer to the “Vision Bank Results and Projection” section of MD&A for discussion of the material steps taken by~~was higher than management ~~to remediate the operating results of Vision Bank.~~

~~The following table provides a summary income statement for Park excluding Vision Bank.~~

Park Excluding Vision Bank – Summary Income Statement

Three Months Ended
September 30,

Nine Months Ended
September 30,

(in thousands) 2011 2010 % Change 2011 2010 % Change
Net interest income $ 61,127 $ 62,271 -1.84 % $ 186,707 $ 184,567 1.16 %
Provision for loan losses 9,525 7,125 33.68 % 20,525 16,725 22.72 %
Total other income 16,013 17,669 -9.37 % 47,671 51,631 -7.67 %
Gain on sale of securities 3,465 — N.M. 23,634 11,819 99.97 %
Total other expense 38,332 37,970 0.95 % 116,086 116,770 -0.59 %
Income before taxes $ 32,748 $ 34,845 -6.02 % $ 121,401 $ 114,522 6.01 %
Income taxes 8,702 9,952 -12.56 % 35,141 33,472 4.99 %
Net income $ 24,046 $ 24,893 -3.40 % $ 86,260 $ 81,050 6.43 %

~~- 46 -~~

~~The operating results for Park’s Ohio-based banking divisions were better than management’s forecast~~anticipated for the first ~~nine months~~quarter of 2011. However, excluding the after-tax impact of security gains, net income would have been $70.9 million for the first nine months of 2011 compared to $73.4 million for the first nine months of 2010.

~~Vision Bank Results and Projection~~

~~The table below provides operating results for Vision Bank for the nine months ended September 30, 2011 and for the three previous years.~~

Vision Bank – Summary Statement of Operations

Nine Months Ended
September 30,

Year Ended
December 31,

(in thousands)
2011 (Restated)
2010 2009 2008
Net interest income $ 20,248 $ 27,867 $ 25,634 $ 27,065
Provision for loan losses 22,529 61,407 44,430 46,963
Total other income (loss) 524 (6,023 ) (2,047 ) 3,014
Goodwill impairment - - - 54,986
Gain on sale of securities 1,828 - - -
Total other expense 22,866 31,623 28,091 27,149
Loss before taxes $ (22,795 ) $ (71,186 ) $ (48,934 ) $ (99,019 )
Income tax credits (8,065 ) (45,413 ) (18,824 ) (17,832 )
Net loss $ (14,730 ) $ (25,773 ) $ (30,110 ) $ (81,187 )

~~- 47 -~~

Vision Bank’s results in each of the periods shown above were significantly impacted by the percentage of the loan portfolio tied to commercial land and development (CL&D) loans. In June 2007, the CL&D portfolio peaked at $308.5 million in total loans outstanding, which represented 50.1% of Vision Bank’s loan portfolio. By the end of 2007, the CL&D loan portfolio declined to $295.7 million in total loans outstanding. Originations of CL&D loans declined significantly beginning early in 2008, as management determined that the CL&D loan portfolio would largely become a run-off portfolio. This is evidenced by the decline in total CL&D loans in the table below.

Vision Bank CL&D Loan Portfolio
(in thousands) - end of each respective period
September 30,
2011 (Restated)

Dec. 31,
2010

Dec. 31,
2009

Dec. 31,
2008

CL&D loans $ 102,271 $ 171,334 $ 218,263 $ 251,443
Performing CL&D loans 60,240 84,843 132,380 191,712
Impaired CL&D loans $ 42,031 $ 86,491 $ 85,883 $ 59,731

Specific reserve on impaired CL&D loans $ 15,133 $ 39,887 $ 21,802 $ 3,134
Cumulative charge-offs on impaired CL&D loans 51,615 28,652 24,931 18,839
Specific reserves plus cumulative charge-offs $ 66,748 $ 68,539 $ 46,733 $ 21,973

Specific reserves plus cumulative charge-offs as a percentage of impaired CL&D loans plus cumulative charge-offs 71.3 % 59.5 % 42.2 % 28.0 %

~~Vision Bank's operating results have also been heavily impacted by devaluations of OREO, which are recorded within other income.~~2012. During the first quarter of 2011, Park formed a limited liability company, SE Property Holdings, LLC (“SE Property Holdings”), as a direct subsidiary of Park. The purpose of SE Property Holdings is to purchase OREO from Vision Bank and continue to market such property for sale. As of September 30, 2011,2012, management reappraised approximately ~~$35 million of OREO was held by SE Property Holdings, which had been purchased from Vision Bank (at the then current fair market value) over the course~~half of the 2011 year. The purchase of OREO by SE Property Holdings will significantly improve Vision Bank’s other income in future periods. The table below provides OREO devaluation information through the first nine months of 2011 and for the years ended December 31, 2010, 2009 and 2008, and also provides other income levels (excluding security gains) absent OREO devaluations over the same period.

~~- 48 -~~

Nine months
ended
Year ended December 31,
(dollars in thousands)
Sept. 30, 2011(Restated)
2010 2009 2008
OREO devaluations $ 3,025 $ 11,359 $ 6,139 $ 2,663
Other income absent OREO devaluations 3,549 5,336 4,092 5,440
Other income absent OREO devaluations as a % of average assets (annualized for 2011) 0.62 % 0.62 % 0.45 % 0.60 %

~~Park management took significant steps during 2009 and 2010, as well as through the first nine months of 2011,~~collateral related to ~~support Vision Bank and improve future operating results, including:~~

In the first half of 2008, Park and Vision Bank decided to largely discontinue the origination of CL&D loans within the Vision Bank footprint. This has resulted in a decline in CL&D loans as a percentage of the total loan portfolio from 50.1% at June 30, 2007 to 18.6% at September 30, 2011. Management expects this decline will continue, as this portfolio continues to pay down in future periods.

During 2009, Park determined it was necessary to lower the lending authority of Vision Bank personnel. The origination or renewal of any loan exceeding the individual loan officer’s new lending authority required, and continues to require, Park approval. Loans originated subsequent to January 1, 2009 have defaulted at a much lower rate than those originated prior to this date.

In April 2009, Park engaged a third-party contractor to assist in the resolution of nonperforming loans at Vision Bank. This third-party contractor has helped maximize the value of the nonperforming loans at Vision Bank. We expect to continue utilizing this third-party contractor through 2011 and thereafter, until such point in time that Vision Bank’s impaired loan portfolio shows sustained and substantive improvement. Management expects to see an increase in recoveries of previously charged-off loans as our third party collection efforts continue.

During 2010, Park asked three additional Park-Ohio associates to move to Vision Bank to address the many challenges we face there. One additional Park-Ohio associate had moved to Vision Bank shortly after Park’s acquisition in 2007. All four were officers previously served in our Ohio affiliates and we were especially pleased with the individual response each made when presented with the opportunity to transfer to Vision Bank to assist. One of these individuals serves as the chief lending officer for Vision Bank and another serves as the senior lender of the Florida market. A significant focus of these four individuals in the 2010 year was the identification and administration of problem loans, which resulted in an increase in new nonaccruals in both the second and fourth quarters of 2010.

During the first quarter of 2011, Park formed SE Property Holdings to purchase OREO from Vision Bank. As of September 30, 2011, approximately $35 million of OREO was held by SE Property Holdings, which had been purchased from Vision Bank (at the then current fair market value) over the course of the 2011 year. The remaining OREO held by Vision Bank as of September 30, 2011, of $769,000, was purchased by SE Property Holdings (at the then current fair market value) during the fourth quarter of 2011.

~~Updated appraisals have been obtained on almost all nonperforming loans and OREO properties in the first nine months of 2011.~~ Through the first nine months of 2011, sales of OREO held at Vision Bank and SE Property Holdings have resulted in proceeds of $9.7 million for assets with a book value prior to sale of $9.3 million, therefore resulting in a small gain of $0.4 million. Management considers this to be an indication that real estate prices within Vision Bank’s footprint may be stabilizing. As such, provision expense pertaining to the write-down or reserving for nonaccrual loans is expected to dramatically decrease as management does not believe that new appraisals in 2012 will indicate that collateral values have continued to significantly decline.

~~Through September 30, 2011, Vision Bank’s balance sheet has shown signs of improvement as a result of the steps noted above. The table below highlights the level of~~ nonperforming loans held at SE LLC, which led to some charge-offs and ~~nonperforming assets at Vision Bank as of September 30, 2011 and for the three previous years.~~

~~- 49 -~~

September 30, Year ended December 31,
2011
2010
2009 2008
Nonperforming Assets - Vision Bank:
Nonaccrual loans $ 106,000 $ 171,453 $ 148,347 $ 91,206
Accruing renegotiated loans 1,743 - - 2,845
Loans past due 90 days or more - 364 11,277 644
Total nonperforming loans $ 107,743 $ 171,817 $ 159,624 $ 94,695
Other real estate owned 769 33,324 35,203 19,699
Total nonperforming assets $ 108,512 $ 205,141 $ 194,827 $ 114,394
% of nonperforming loans to period end loans 19.61 % 26.82 % 23.58 % 13.71 %
% of nonperforming assets to period end loans 19.75 % 32.02 % 28.78 % 16.57 %
% of nonperforming assets to period end assets 15.09 % 25.90 % 21.70 % 12.47 %

Additionally, the table below provides information regarding new nonaccrual loans for Vision Bank through September 30, 2011, compared to the level of new nonaccrual loans over the three previous years.

Nine months ended Year ended December 31,
(in thousands) September 30, 2011 2010 2009 2008
Nonaccrual loans, beginning of period $ 171,453 $ 148,347 $ 91,206 $ 63,015
New nonaccrual loans - Vision Bank 14,517 90,094 126,540 83,588
Resolved nonaccrual loans (1) 79,970 66,988 69,399 55,397
Nonaccrual loans, end of period $ 106,000 $ 171,453 $ 148,347 $ 91,206

~~(1)~~

~~Consists of paydowns, charge-offs, transfers to accrual status and transfers to OREO.~~

~~Management is encouraged by the improvement~~a corresponding increase in the ~~nonperforming asset levels at Vision Bank in 2011, which occurred largely as a result of~~loan loss provision. See the steps taken by management to improve Vision’s operating results. The substantial decline in new nonaccrual loans through the first nine months of 2011 is a substantial decline from the level of new nonaccrual loans in 2008, 2009 and 2010. Management is committed to continued improvement in nonperforming assets in the fourth quarter of 2011 and expects to see this trend continue in 2012.

~~The table below provides management’s projected results~~section called “Provision for ~~Vision Bank~~Loan Losses” for ~~the fourth quarter of 2011 and the years ending December 31, 2011 and 2012.~~

Vision Bank - Projected Operating Results
Q4 2011 2011 2012
Net interest income $ 6,193 $ 26,441 $ 23,866
Provision for loan losses 6,000 41,400 13,000
Total other income (loss) 737 (3,600 ) 4,662
Gain on sale of securities - 1,828 -
Total other expense 7,558 30,424 26,416
Loss before taxes $ (6,628 ) $ (47,155 ) $ (10,888 )
Income tax credits (2,320 ) (16,591 ) (3,811 )
Net loss $ (4,308 ) $ (30,564 ) $ (7,077 )

~~- 50 -~~

Market conditions in Vision Bank’s footprint continue to improve following the recession that began in December 2007 and the April 2010 Deepwater Horizon oil spill in the Gulf of Mexico. For example, Gulf Shores and Orange Beach tourism reported lodging revenue through the first six months of 2011 was 12.2% higher than it had been during the same period in 2007. Continued improvements in overall market conditions along with the steps previously taken by management, are expected to improve Vision Bank's operating results in future periods.

The improvements projected for Vision Bank in 2012 include a significant decline in the provision for loan losses, which remains high at 2.56% of anticipated average loan levels compared to a normalized level below 1.0%, and a normalized level of other income, at approximately 68 bps of average assets. For Vision Bank to return to profitability, management expects that the provision for loan losses will need to decline to a level below 1.0% of average loans outstanding and total other expense will need to decline to approximately 3.25% of average assets. Total other expense is currently projected to be approximately 3.9% of anticipated average assets in 2012, which includes an estimated $3.5 million of legal expense as Vision Bank continues to pursue guarantors who have the capacity to support problem loans. Management believes a normalized level of legal expense for Vision Bank is approximately $500,000, which would bring total other expense much closer to 3.25% of average assets.

more information.

Net Interest Income Comparison for the ~~Third~~First Quarter of ~~2011~~2012 and ~~2010~~

2011

Park’s principal source of earnings is net interest income, the difference between total interest income and total interest expense. Net interest income results from average balances outstanding for interest earning assets and interest bearing liabilities in conjunction with the average rates earned and paid on them. Net interest income decreased by ~~$1.8~~$7.6 million or ~~2.6%~~11.0% to ~~$67.6~~$61.7 million for the ~~third~~first quarter of ~~2011~~2012 compared to ~~$69.4~~$69.3 million for the ~~third~~first quarter of ~~2010.~~

2011. The $7.6 million decrease is primarily due to the sale of Vision during the first quarter of 2012. Vision’s net interest income for the three months ended March 31, 2012 was $2.6 million, a $4.1 million decline from $6.7 million for the same period in 2011.

The following table compares the average balance and tax equivalent yield on interest earning assets and the average balance and cost of interest bearing liabilities for the ~~third~~first quarter of ~~2011~~2012 with the same quarter in ~~2010.~~

Three months ended September 30,
2011 2010

(in thousands)

Average
balance

Tax
equivalent %

Average
balance

Tax
equivalent %

Loans (1) $ 4,692,013 5.59 % $ 4,651,739 5.76 %
Taxable investments 1,812,012 3.57 % 1,748,629 4.39 %
Tax exempt investments 6,293 6.79 % 16,650 7.11 %
Money market instruments 100,635 0.24 % 67,923 0.20 %
Interest earning assets $ 6,610,953 4.95 % $ 6,484,941 5.34 %

Interest bearing deposits $ 4,191,312 0.63 % $ 4,283,049 0.91 %
Short-term borrowings 253,700 0.28 % 287,172 0.37 %
Long-term debt 898,789 3.37 % 727,262 3.91 %
Interest bearing liabilities $ 5,343,801 1.07 % $ 5,297,483 1.29 %
Excess interest earning assets $ 1,267,152 $ 1,187,458
Net interest spread 3.88 % 4.05 %
Net interest margin 4.09 % 4.28 %

2011.


	Three months ended March 31,
	2012					2011
(in thousands)	Average balance		Tax equivalent %			Average balance		Tax equivalent %
Loans (1)	$	4,485,074		5.52	%	$	4,743,075		5.63	%
Taxable investments		1,639,775		3.33	%		1,939,873		3.98	%
Tax exempt investments		4,043		7.05	%		12,240		7.63	%
Money market instruments		168,880		0.25	%		26,948		0.10	%
Interest earning assets	$	6,297,772		4.81	%	$	6,722,136		5.14	%

Interest bearing deposits	$	3,891,482		0.56	%	$	4,245,255		0.74	%
Short-term borrowings		241,329		0.29	%		391,366		0.28	%
Long-term debt		897,699		3.38	%		847,800		3.52	%
Interest bearing liabilities	$	5,030,510		1.05	%	$	5,484,421		1.14	%
Excess interest earning assets	$	1,267,262				$	1,237,715
Net interest spread				3.76	%				4.00	%
Net interest margin				3.97	%				4.21	%

(1) For purposes of the computation, nonaccrual loans and Vision loans held for sale through February 16, 2012 are included in the average balance.

~~- 51 -~~

Average interest earning assets for the ~~third~~first quarter of ~~2011 increased~~2012 decreased by ~~$126~~$424 million or ~~1.9%~~6.3% to ~~$6,611~~$6,298 million compared to ~~$6,485~~$6,722 million for the ~~third~~first quarter of ~~2010.~~2011. The average yield on interest earning assets decreased by 3933 basis points to ~~4.95%~~4.81% for the ~~third~~first quarter of ~~2011~~2012 compared to ~~5.34%~~5.14% for the ~~third~~first quarter of ~~2010.~~

2011.

Average interest bearing liabilities for the ~~third~~first quarter of ~~2011 increased~~2012 decreased by ~~$47~~$453 million or ~~0.9%~~8.3% to ~~$5,344~~$5,031 million compared to ~~$5,297~~$5,484 million for the ~~third~~first quarter of ~~2010.~~2011. The average cost of interest bearing liabilities decreased by 229 basis points to ~~1.07%~~1.05% for the ~~third~~first quarter of ~~2011~~2012 compared to ~~1.29%~~1.14% for the ~~third~~first quarter of ~~2010.~~

2011.

Interest Rates

Short-term interest rates continue to be extremely low. The average federal funds rate was ~~.10%~~0.10% for the first ~~three quarters~~quarter of ~~2011, compared to .17% for~~2012, the ~~first nine months~~same as all of ~~2010.~~

2011.

In December 2008, the Federal Open Market Committee (“FOMC”) of the Federal Reserve lowered the targeted federal funds rate to a range of 0% to ~~.25%~~0.25% in response to a severe recession in the U.S. economy. Economic conditions began to improve in the second half of 2009 and continued to improve modestly throughout ~~2010.~~2010 and 2011. The modest economic recovery has continued during the first ~~nine~~three months of ~~2011,~~2012, but the U.S. housing market continues to be significantly depressed and the U.S. unemployment rate continues to be relatively high at ~~9.1%~~8.2% as of ~~September 30, 2011.~~

March 31, 2012.

Park’s management expects that the FOMC will continue to maintain the targeted federal funds interest rate in the range of 0% to ~~.25%~~0.25% during ~~the last quarter of 2011.~~2012. The annual average federal funds rate was ~~.16%~~0.16% for 2009, 0.18% for 2010, and ~~.18%~~0.10% for ~~2010.~~

2011.

Discussion of Loans, Investments, Deposits and Borrowings

Average loan balances ~~increased~~decreased by ~~$40~~$258 million or ~~0.9%~~5.4% to ~~$4,692~~$4,485 million for the three months ended ~~September 30, 2011,~~March 31, 2012, compared to ~~$4,652~~$4,743 million for the ~~third~~first quarter of ~~2010.~~2011. The average yield on the loan portfolio decreased by 1711 basis points to ~~5.59%~~5.52% for the ~~third~~first quarter of ~~2011~~2012 compared to ~~5.76%~~5.63% for the ~~third~~first quarter of ~~2010.~~

2011. The decrease in average loan balances during the first quarter of 2012 was primarily due to the sale of Vision loans to Centennial on February 16, 2012 of approximately $382 million.

Total loan balances outstanding at ~~September 30, 2011~~March 31, 2012 were ~~$4,681~~$4,324 million compared to ~~$4,733~~$4,317 million at December 31, ~~2010, a decrease~~2011, an increase of ~~$52~~$7 million, or ~~1.1%~~an annualized 0.7%. ~~This decrease in loan balances in~~The December 31, 2011 ~~was due to a decrease in loan balances~~amount excludes Vision loans held for sale at Vision Bank. Total loan balances at Vision Bank decreased by approximately $92 million to $549 million at September 30, 2011. Approximately $65 million of this decrease in loan balances at Vision Bank was due to a reduction in nonaccrual loans, as these loans were charged off or collected. Management expects modest loan growth during the fourth quarter of 2011.

that date.

The average balance of taxable investment securities ~~increased~~decreased by ~~$63~~$300 million or ~~3.6%~~15.5% to ~~$1,812~~$1,640 million for the ~~third~~first quarter of ~~2011~~2012 compared to ~~$1,749~~$1,940 million for the ~~third~~first quarter of ~~2010.~~2011. The average yield on taxable investment securities was ~~3.57%~~3.33% for the ~~third~~first quarter of ~~2011~~2012 compared to ~~4.39%~~3.98% for the ~~third~~first quarter of ~~2010.~~

2011.

The average balance of tax exempt investment securities decreased by ~~$10.4~~$8.2 million or ~~62.3%~~67.2% to ~~$6.3~~$4.0 million for the ~~third~~first quarter of ~~2011~~2012 compared to ~~$16.7~~$12.2 million for the ~~third~~first quarter of ~~2010.~~2011. The tax equivalent yield on tax exempt investment securities was ~~6.79%~~7.05% for the ~~third~~first quarter of ~~2011~~2012 and ~~7.11%~~7.63% for the ~~third~~first quarter of ~~2010.~~2011. Park has not purchased any tax exempt investment securities for the past several quarters and does not plan to purchase tax exempt securities in the ~~last~~second quarter of ~~2011.~~

2012.

The average balance of money market instruments increased by ~~$32.7~~$142 million ~~or 48.2%~~ to ~~$100.6~~$168.9 million for the ~~third~~first quarter of ~~2011~~2012 compared to ~~$67.9~~$26.9 million for the ~~third~~first quarter of ~~2010.~~2011. The average yield on money market instruments was ~~0.24%~~0.25% for the ~~third~~first quarter of ~~2011~~2012 compared to ~~0.20%~~0.10% for the ~~third~~first quarter of ~~2010~~.

~~- 52 -~~

2011.

The amortized cost of total investment securities was ~~$1,684~~$1,841 million at ~~September 30, 2011,~~March 31, 2012, compared to ~~$2,017~~$1,689 million at December 31, ~~2010.~~2011. At ~~September 30, 2011,~~March 31, 2012, the tax equivalent yield on Park’s investment portfolio was ~~3.68%~~3.34% and the remaining average life was ~~1.7~~2.7 years.

Average interest bearing deposit accounts decreased by ~~$92~~$354 million or ~~2.1%~~8.3% to ~~$4,191~~$3,891 million for the ~~third~~first quarter of ~~2011~~2012 compared to ~~$4,283~~$4,245 million for the ~~third~~first quarter of ~~2010.~~2011. The average interest rate paid on interest bearing deposits decreased by 2818 basis points to ~~0.63%~~0.56% for the ~~third~~first quarter of ~~2011~~2012 compared to ~~0.91%~~0.74% for the ~~third~~first quarter last year.

Average total borrowings were ~~$1,152~~$1,139 million for the three months ended ~~September 30, 2011,~~March 31, 2012, compared to ~~$1,014~~$1,239 million for the ~~third~~first quarter of ~~2010, an increase~~2011, a decrease of ~~$138~~$100 million or ~~13.6%~~8.1%. The average interest rate paid on total borrowings was ~~2.69%~~2.73% for the ~~third~~first quarter of ~~2011~~2012 compared to ~~2.91%~~2.50% for the ~~third~~first quarter of ~~2010.~~

2011.

The net interest spread (the difference between the tax equivalent yield on interest earning assets and the cost of interest bearing liabilities) decreased by 1724 basis points to ~~3.88%~~3.76% for the ~~third~~first quarter of ~~2011~~2012 compared to ~~4.05%~~4.00% for the ~~third~~first quarter last year. The net interest margin (the annualized tax equivalent net interest income divided by average interest earning assets) was ~~4.09% for the third quarter of 2011 compared to 4.28% for the third quarter of 2010.~~

~~- 53 -~~

~~Net Interest Income Comparison for the First Nine Months of 2011 and 2010~~

~~Net interest income increased by $1.5 million or 0.7% to $207.0 million~~3.97% for the first ~~nine months~~quarter of ~~2011~~2012 compared to $205.5 million for the same period in 2010. The following table compares the average balance and the annualized tax equivalent yield on interest earning assets and the average balance and cost of interest bearing liabilities4.21% for the first ~~nine months~~quarter of ~~2011 with the first nine months of 2010.~~

Nine Months Ended September 30,
2011 2010

(in thousands)

Average
balance

Tax
equivalent %

Average
balance

Tax
equivalent %

Loans (1)
$ 4,726,074 5.61 % $ 4,624,692 5.82 %
Taxable investments 1,907,719 3.81 % 1,755,472 4.58 %
Tax exempt investments 8,882 7.24 % 17,489 7.28 %
Money market instruments 49,877 0.20 % 95,917 0.22 %
Interest earning assets $ 6,692,552 5.06 % $ 6,493,570 5.41 %

Interest bearing deposits $ 4,245,949 0.68 % $ 4,312,565 1.03 %
Short-term borrowings 311,281 0.28 % 292,305 0.42 %
Long-term debt 876,228 3.44 % 728,724 3.92 %
Interest bearing liabilities $ 5,433,458 1.10 % $ 5,333,594 1.39 %
Excess interest earning assets $ 1,259,094 $ 1,159,976
Net interest spread 3.96 % 4.02 %
Net interest margin 4.16 % 4.26 %

~~(1)~~

~~For purposes of the computation, nonaccrual loans are included in the average balance.~~

Average interest earning assets increased by $199 million or 3.1% to $6,693 million for the first nine months of 2011 compared to $6,494 million for the same period in 2010. The average yield on interest earning assets was 5.06% for the nine months ended September 30, 2011 compared to 5.41% for the same period in 2010.

Average loans increased by $101 million or 2.2% to $4,726 million for the first nine months of 2011 compared to $4,625 million for the same period in 2010. The average yield on loans was 5.61% for the first nine months of 2011 compared to 5.82% for the same period in 2010.

Average investment securities, including money market instruments, were $1,966 million for the first nine months of 2011 compared to $1,869 million for the same period in 2010. The average yield on taxable investment securities was 3.81% for the first nine months of 2011 and 4.58% for the same period in 2010 and the average tax equivalent yield on tax exempt securities was 7.24% in 2011 and 7.28% in 2010.

Average interest bearing liabilities increased by $99 million or 1.9% to $5,433 million for the first nine months of 2011 compared to $5,334 million for the same period in 2010. The average cost of interest bearing liabilities was 1.10% for the first nine months of 2011 compared to 1.39% for the same period in 2010.

Average interest bearing deposits decreased by $67 million or 1.6% to $4,246 million for the first nine months of 2011 compared to $4,313 million for the same period in 2010. The average interest rate paid on interest bearing deposit accounts was .68% for the first nine months of 2011 compared to 1.03% for the same period in 2010.

Average total borrowings were $1,188 million for the first nine months of 2011 compared to $1,021 million for the same period in 2010. The average interest rate paid on total borrowings was 2.61% for the first nine months of 2011 compared to 2.91% for the same period in 2010.

The net interest spread was 3.96% for the first nine months of 2011 compared to 4.02% for the same period in 2010. The net interest margin decreased by 10 basis points to 4.16% for the nine months ended September 30, 2011 compared to 4.26% for the first nine months of 2010.

~~- 54 -~~

2011.

Guidance on Net Interest Income for ~~2011~~

2012

Management provided guidance in Park’s ~~2010~~2011 Annual Report (page 38) that net interest income for ~~2011~~2012 would be approximately ~~$268~~$240 million to ~~$278~~$250 million, ~~the~~ tax equivalent net interest margin would be approximately ~~4.10%~~3.88% to ~~4.20%~~3.98% and ~~the~~ average interest earning assets for ~~2011~~2012 would be approximately ~~$6,550~~$6,200 million.

The actual results for the first ~~nine~~three months of ~~2011~~2012 were ~~slightly above~~in line with management’s guidance. Net interest income for the first ~~nine~~three months of ~~2011~~2012 was ~~$207.0~~$61.7 million, which annualized would be approximately ~~$276.8~~$248.2 million for ~~2011.~~2012. The tax equivalent net interest margin was ~~4.16%~~3.97% and average interest earning assets were ~~$6,693~~$6,298 million for the first ~~nine~~three months of ~~2011.~~

2012.

The following table displays for the past five quarters the average balance of interest earning assets, net interest income and the tax equivalent net interest margin.

(in thousands)
Average interest
earning assets

Net interest
income

Tax equivalent
net interest margin

September 2010 $ 6,484,941 $ 69,445 4.28 %
December 2010 $ 6,447,046 $ 68,498 4.25 %
March 2011 $ 6,722,136 $ 69,313 4.21 %
June 2011 $ 6,745,790 $ 70,022 4.19 %
September 2011 $ 6,610,953 $ 67,620 4.09 %

(in thousands)	Average interest earning assets		Net interest income		Tax equivalent net interest margin
March 2011	$	6,722,136	$	69,313		4.21	%
June 2011	$	6,745,790	$	70,022		4.19	%
September 2011	$	6,610,953	$	67,620		4.09	%
December 2011	$	6,487,958	$	66,279		4.08	%
March 2012	$	6,297,772	$	61,728		3.97	%

Management’s current forecast projects that net interest income for the ~~fourth~~second quarter of 2012 will be approximately ~~$65~~$59 million and approximately ~~$272~~$239 million for all of ~~2011.~~2012. Management also expects that average interest earning assets will be approximately ~~$6,400~~$6,188 million for the ~~last~~second quarter of ~~2011~~2012 and that the tax equivalent net interest margin will be about ~~4.05%.~~

3.82% for the quarter.

Mix of Average Interest Earning Assets and Yield on Average Interest Earning Assets

The following table shows the mix of average interest earning assets for the first ~~three quarters~~quarter of ~~2011~~2012 and for the years of 2011, 2010 and 2009.

($ in thousands) Loans Investments
Money Market
Instruments
Total
2009 - year $ 4,594,436 $ 1,877,303 $ 52,658 $ 6,524,397
Percentage 70.42 % 28.77 % .81 % 100.00 %
2010 - year $ 4,642,478 $ 1,746,356 $ 93,009 $ 6,481,843
Percentage 71.62 % 26.94 % 1.44 % 100.00 %
March 2011 - quarter $ 4,743,075 $ 1,952,113 $ 26,948 $ 6,722,136
Percentage 70.56 % �� 29.04 % .40 % 100.00 %
June 2011 - quarter $ 4,743,696 $ 1,980,855 $ 21,239 $ 6,745,790
Percentage 70.32 % 29.36 % .32 % 100.00 %
Sept. 2011 - quarter $ 4,692,013 $ 1,818,305 $ 100,635 $ 6,610,953
Percentage 70.97 % 27.51 % 1.52 % 100.00 %

(dollars in thousands)	Loans			Investments			Money Market Instruments			Total
2009 - year	$	4,594,436		$	1,877,303		$	52,658		$	6,524,397
Percentage		70.42	%		28.77	%		0.81	%		100.00	%
2010 - year	$	4,642,478		$	1,746,356		$	93,009		$	6,481,843
Percentage		71.62	%		26.94	%		1.44	%		100.00	%
2011 - year	$	4,713,511		$	1,848,880		$	78,593		$	6,640,984
Percentage		70.98	%		27.84	%		1.18	%		100.00	%
2012 - first quarter	$	4,485,074		$	1,643,818		$	168,880		$	6,297,772
Percentage		71.22	%		26.10	%		2.68	%		100.00	%

A primary financial goal for Park is to increase the amount of quality loans on its balance sheet. Management emphasizes the importance of growing quality loans on an ongoing basis to its retail and commercial lenders. The average balance of loans for the first ~~nine~~three months of ~~2011~~2012 was ~~$4,726~~$4,485 million, compared to ~~$4,642~~$4,714 million for all of ~~2010.~~

~~- 55 -~~

2011.

Management actively manages the investment portfolio. The average balance of investment securities may increase as a result of attractive investment opportunities. Likewise, the average balance of investment securities may decrease if management sells investment securities or chooses not to reinvest the cash flow from maturities or investment repayments.

The following table shows the yield on average interest earning assets for the first ~~three quarters~~quarter of ~~2011~~2012 and for the years of 2011, 2010 and 2009.

Loans Investments
Money Market
Instruments
Total
2009 6.03 % 4.94 % .22 % 5.67 %
2010 5.80 % 4.47 % .22 % 5.36 %
March 2011 5.63 % 4.00 % .10 % 5.14 %
June 2011 5.61 % 3.87 % .15 % 5.08 %
September 2011 5.59 % 3.58 % .24 % 4.95 %

	Loans			Investments			Money Market Instruments			Total
2009 - year		6.03	%		4.94	%		0.22	%		5.67	%
2010 - year		5.80	%		4.47	%		0.22	%		5.36	%
2011 - year		5.60	%		3.76	%		0.23	%		5.03	%
2012 - first quarter		5.52	%		3.34	%		0.25	%		4.81	%

The loan portfolio for Park provides a higher yield than the yield on investment securities. As stated previously, a primary financial objective of Park is to grow quality loans. Our commercial and retail lenders are actively calling on current and prospective customers in an effort to generate additional loan volume.

Park’s net interest income and net interest margin would increase if Park were able to increase its loan portfolio with quality loans. Park has strong liquidity and would be able to easily fund an increase in its loan portfolio.

Provision for Loan Losses

The provision for loan losses for Park was ~~$16.4~~$9.0 million for the three months ended ~~September 30, 2011,~~March 31, 2012, compared to ~~$14.7~~$14.1 million for the same period in ~~2010.~~2011. Net loan charge-offs for Park were ~~$29.3~~$17.0 million for the ~~third~~first quarter of ~~2011,~~2012, compared to ~~$17.9~~$9.1 million for the ~~third~~first quarter of ~~2010.~~2011.Net loan charge-offs for the three months ended March 31, 2012 included the charge-off of $12.1 million related to the retained Vision loans to bring the retained Vision loan portfolio to fair value prior to the merger of Vision with and into SE LLC on February 16, 2012. In addition to this $12.1 million charge-off, PNB, Guardian and SE LLC recorded net charge-offs of $2.7 million, $197,000 and $2.1 million, respectively, during the first quarter of 2012. Park’s annualized ratio of net loan charge-offs to average loans was 1.53% for the three months ended March 31, 2012, compared to 0.78% for the same period in 2011.Management expects the annualized net loan charge-off ratio will decline throughout the remainder of 2012.

The provision for loan losses for PNB and Guardian, Park’s two Ohio-based subsidiaries, was $4.9 million for the three months ended March 31, 2012, compared to $5.5 million for the same period in 2011. Net loan charge-offs for PNB and Guardian were $2.9 million for the first quarter of 2012, compared to $4.1 million for the first quarter of 2011. The annualized ratio of net loan charge-offs to average loans for PNB and Guardian was ~~2.48%~~0.28% for the three months ended ~~September 30, 2011,~~March 31, 2012, compared to ~~1.53%~~0.40% for the same period in ~~2010.~~

~~For the first nine months of 2011, the~~2011.

The provision for loan losses ~~increased by $1.4 million~~for SE LLC, including those provisions recorded at Vision prior to ~~$43.1 million, compared to $44.5~~the February 16, 2012 merger of Vision with and into SE LLC, was $4.1 million for the ~~same period in 2010.~~three months ended March 31, 2012. Net loan charge-offs for SE LLC during the first quarter of 2012, subsequent to February 16, 2012, were ~~$79.3~~$2.1 million. As previously discussed, Vision recognized charge-offs of $12.1 million ~~for~~to bring the ~~nine months ended September 30, 2011, or 2.24% of average~~loan portfolio to fair value on February 16, 2012.

SE LLC, as a non-bank subsidiary, is not permitted to carry an ALLL, but instead must record loans on ~~an annualized basis, compared~~its balance sheet at fair value. Given this requirement, both the performing and nonperforming retained loan portfolios have been charged down to ~~$43.8~~their fair value, as noted in the table below:

SE LLC – Retained Vision Loan Portfolio
Charge-offs as a percentage of unpaid principal balance
March 31, 2012

(In thousands)	Unpaid Principal Balance		Charge-Offs		Net Book Balance		Charge-off Percentage
Nonperforming loans - retained by SE LLC	$	160,858	$	78,532	$	82,326		49	%
Performing loans - retained by SE LLC		17,348		1,225		16,123		7	%
Total SE LLC loan exposure	$	178,206	$	79,757	$	98,449		45	%

As part of the transaction between Vision and Centennial, Park agreed to allow Centennial to “put back” up to $7.5 million ~~or 1.27%~~aggregate principal amount of ~~average~~ loans, which were originally included within the loans sold in the transaction. The loan put-back option expires 180 days after the closing of the transaction, on ~~an annualized basis, for~~August 16, 2012. While it remains uncertain the total principal amount of loans which may be put back by Centennial and the potential loss exposure that may be recognized in connection with any loans repurchased, Park recorded a loan loss provision of $662,000 in respect of the Centennial put-back option during the first ~~nine months~~quarter of ~~2010.~~

2012. The $662,000 is included within other liabilities on the balance sheet and when combined with Park’s ALLL balance of $59.8 million at March 31, 2012 results in a total allowance for credit losses of $60.4 million.

The following table provides additional information related to Park’s allowance for loan losses, including information related to specific reserves and general reserves, at ~~September 30, 2011,~~March 31, 2012 and December 31, ~~2010 and September 30, 2010.~~

Park National Corporation – Allowance for Loan & Lease Losses (ALLL)
(in thousands)
September 30,
2011 (Restated)

December 31,
2010

September 30,
2010

Total ALLL $ 107,310 $ 143,575 $ 117,405
Less Ohio specific reserves
Ohio impaired loans 7,496 5,475 4,582
Vision Bank participations 7,396 7,501 4,843
Less specific reserves at Vision Bank 25,445 53,928 25,868
General reserves $ 66,973 $ 76,671 $ 82,112

Total loans $ 4,680,575 $ 4,732,685 $ 4,656,902
Less impaired commercial loans 192,363 250,933 206,155
Non-impaired loans $ 4,488,212 $ 4,481,752 $ 4,450,747

Total ALLL to total loan ratio 2.29 % 3.03 % 2.52 %
General reserves as a % of non-impaired loans 1.49 % 1.71 % 1.84 %

~~- 56 -~~

As we previously disclosed in a Form 8-K dated July 25, 2011 announcing earnings for the quarter and six months ended June 30, 2011, as a result of the passage of time and more clarity on the characteristics of many of the impaired commercial loans at Vision Bank, during the second quarter of 2011, management determined that it was appropriate to charge-off many of the specific reserves previously established on impaired commercial loans. As of September 30, 2011, the specific reserve balance of $40.3 million is consistent with the balance as of June 30, 2011. However, the general reserves have declined by approximately $10 million from levels at June 30, 2011 and periods previous. This is reflective of sustained declines in both new nonaccrual loans (see table below) and CL&D loans at Vision Bank.

Park National Corporation - Allowance for Loan & Lease Losses
(In thousands)	March 31, 2012			December 31, 2011
Total ALLL	$	59,758		$	68,444
Specific reserves		9,505			15,935
General reserves	$	50,253		$	52,509

Total loans	$	4,324,383		$	4,317,099
Impaired commercial loans		179,293			187,074
Non-impaired loans	$	4,145,090		$	4,130,025

Total ALLL to total loan ratio		1.38	%		1.59	%
General reserves as a % of non-impaired loans		1.21	%		1.27	%

During the first ~~nine~~three months of ~~2011, new nonaccrual loans for Park were approximately $65.0 million, compared to $95.2 million for the same period in 2010. For all of 2010,~~2012, new nonaccrual loans were ~~approximately $175.2~~$21.8 million. ~~Management expects~~These new nonaccruals were down significantly from the total level of new nonaccrual loans experienced in the previous four years and management expects this will continue ~~to be well below levels experienced in 2009 and 2010.~~throughout 2012. The following table shows new nonaccrual loans for the first ~~three quarters~~quarter of ~~2011~~2012 and the ~~two~~four previous years.

New nonaccrual loan information (in
thousands):

Sept. 30,
2011

June 30,
2011

March 31,
2011
2010 2009
Nonaccrual loans, beginning of period $ 238,690 $ 278,819 $ 289,268 $ 233,544 $ 159,512
New nonaccrual loans - Ohio-based operations 19,354 22,439 8,674 85,081 57,641
New nonaccrual loans - Vision Bank 5,543 2,980 5,994 90,094 126,540
Resolved nonaccrual loans 49,221 65,548 25,117 119,451 110,149

Nonaccrual loans, end of period $ 214,366 $ 238,690 $ 278,819 $ 289,268 $ 233,544

The loan loss provision for Vision Bank was $6.9 million for the three months ended September 30, 2011, compared to $7.5 million for the same quarter in 2010. Vision Bank had net loan charge-offs of $12.7 million, or an annualized 8.99% of average loans for the third quarter of 2011, compared to net loan charge-offs of $11.6 million, or 6.89% of average loans for the same period in 2010.

Park’s Ohio-based operations had a provision for loan losses of $9.5 million for the third quarter of 2011, compared to $7.1 million for the third quarter of 2010. Net loan charge-offs for Park’s Ohio-based operations were $16.6 million, or an annualized 1.59% of average loans for the third quarter of 2011, compared to $6.3 million, or an annualized 0.63% of average loans for the third quarter of 2010.

~~- 57 -~~

New nonaccrual loan information (in thousands):	March 31, 2012		2011		2010		2009		2008
Nonaccrual loans, beginning of period	$	195,106	$	289,268	$	233,544	$	159,512	$	101,128
New nonaccrual loans - Ohio-based operations		21,210		78,316		85,081		57,641		58,161
New nonaccrual loans - Vision/SE LLC		568		45,842		90,094		126,540		83,588
Resolved nonaccrual loans		33,657		218,320		119,451		110,149		83,365
Nonaccrual loans, end of period	$	183,227	$	195,106	$	289,268	$	233,544	$	159,512

The following table compares ~~Park's~~Park’s nonperforming assets at ~~September 30, 2011,~~March 31, 2012, December 31, ~~2010~~2011 and ~~September 30, 2010.~~

Park National Corporation - Nonperforming Assets
(in thousands)
September 30, 2011

December 31,
2010

September 30, 2010

Nonaccrual loans $ 214,366 $ 289,268 $ 237,194
Renegotiated loans on accrual status 15,448 - -
Loans past due 90 days or more 2,162 3,590 10,700
Total nonperforming loans $ 231,976 $ 292,858 $ 247,894

Other Real Estate Owned – Park National Bank 11,815 8,385 9,658
Other Real Estate Owned – SE Property Holdings 34,327 - -
Other Real Estate Owned – Vision Bank 769 33,324 43,179
Total nonperforming assets $ 278,887 $ 334,567 $ 300,731

Percentage of nonperforming loans to total loans 4.96 % 6.19 % 5.32 %
Percentage of nonperforming assets to total loans 5.96 % 7.07 % 6.46 %
Percentage of nonperforming assets to total assets 3.93 % 4.59 % 4.24 %

~~Prior to Park’s adoption of ASU 2011-02,~~ March 31, 2011.

Park ~~classified~~National Corporation - Nonperforming Assets

(in thousands)	March 31, 2012			December 31, 2011			March 31, 2011
Nonaccrual loans	$	183,227		$	195,106		$	278,819
Renegotiated loans on accrual status		34,436			28,607			260
Loans past due 90 days or more		2,281			3,489			2,228
Total nonperforming loans	$	219,944		$	227,202		$	281,307

Other real estate owned – PNB		13,387			13,240			9,788
Other real estate owned – SE LLC		28,578			29,032			13,004
Other real estate owned – Vision		-			-			22,476
Total nonperforming assets	$	261,909		$	269,474		$	326,575

Percentage of nonaccrual loans to total loans		4.24	%		4.52	%		5.87	%
Percentage of nonperforming loans to total loans		5.09	%		5.26	%		5.92	%
Percentage of nonperforming assets to total loans		6.06	%		6.24	%		6.87	%
Percentage of nonperforming assets to total assets		3.86	%		3.86	%		4.46	%

Park management reviews all troubled debt restructurings (TDRs) quarterly and may classify a TDR as ~~nonaccrual loans. With the adoption of ASU 2011-02, management determined it was appropriate to return certain TDRs to accrual status. Specifically,~~accruing if the ~~restructured note~~borrower has been current for a period of at least six months with respect to loan payments and management expects that the borrower will ~~remain current throughout~~be able to continue to make payments in accordance with the ~~renegotiated~~ ~~contract,~~terms of the ~~loan may be returned to accrual status.~~restructured note. At ~~September 30, 2011,~~March 31, 2012, management deemed it appropriate to ~~return $15.4~~have $34.4 million TDRs toon accrual status, while the remaining ~~$82.1~~$98.6 million of TDRs ~~are~~were on nonaccrual status.

During the first quarter of 2011, Park formed a limited liability company under the laws of the state of Ohio, called SE Property Holdings, as a direct subsidiary of Park. The purpose of SE Property Holdings is Management also reviews all accruing TDRs quarterly to ~~purchase OREO from Vision Bank and~~ensure payments continue to ~~market such property for sale. As of September 30, 2011, approximately $34.3 million of OREO was held by SE Property Holdings, purchased from Vision Bank (at~~be made in accordance with the then current fair market value) during 2011. The remaining $769,000 of OREO held by Vision Bank as of September 30, 2011 will be purchased by SE Property Holdings (at the then current fair market value) during the fourth quarter of 2011. Management plans to continue marketing the properties held by SE Property Holdings and sell such properties in an efficient manner.

~~Vision Bank’s nonperforming assets at September 30, 2011, December 31, 2010 and September 30, 2010, were as follows:~~

Vision Bank - Nonperforming Assets
(in thousands)
September 30,
2011

December 31,
2010

September 30,
2010

Nonaccrual loans $ 106,000 $ 171,453 $ 132,806
Renegotiated loans on accrual status 1,743 - -
Loans past due 90 days or more - 364 5,962
Total nonperforming loans $ 107,743 $ 171,817 $ 138,768

Other Real Estate Owned 769 33,324 43,179
Total nonperforming assets $ 108,512 $ 205,141 $ 181,947

Percentage of nonperforming loans to total loans 19.61 % 26.82 % 21.27 %
Percentage of nonperforming assets to total loans 19.75 % 32.02 % 27.89 %
Percentage of nonperforming assets to total assets 15.09 % 25.90 % 21.71 %

~~- 58 -~~

modified terms.

Nonperforming assets for ~~Park, excluding~~ PNB and Guardian and for SE LLC/Vision ~~Bank, at September 30, 2011,~~as of March 31, 2012, December 31, ~~2010~~2011 and ~~September 30, 2010, are included~~March 31, 2011 were as reported in the following ~~table:~~

Park, excluding Vision Bank - Nonperforming Assets
(in thousands)
September 30,
2011

December 31,
2010

September 30,
2010

Nonaccrual loans $ 108,366 $ 117,815 $ 104,388
Renegotiated loans 13,705 - -
Loans past due 90 days or more 2,162 3,226 4,738
Total nonperforming loans $ 124,233 $ 121,041 $ 109,126

Other Real Estate Owned – Park National Bank 11,815 8,385 9,658
Other Real Estate Owned – SE Property Holdings 34,327 - -
Total nonperforming assets $ 170,375 $ 129,426 $ 118,784

Percentage of nonperforming loans to total loans 3.01 % 2.96 % 2.73 %
Percentage of nonperforming assets to total loans 4.12 % 3.16 % 2.97 %
Percentage of nonperforming assets to total assets 2.67 % 1.99 % 1.90 %

Park’s allowance for loan losses includes an allocation for loans specifically identified as impaired under U.S. GAAP. At September 30, 2011, loans considered to be impaired consisted substantially of commercial loans graded as “doubtful”two tables:

PNB and ~~placed on nonaccrual status.~~

~~As a result of significant losses within~~ Guardian - Nonperforming Assets

(in thousands)	March 31, 2012			December 31, 2011			March 31, 2011
Nonaccrual loans	$	102,886		$	96,113		$	115,476
Renegotiated loans on accrual status		32,451			26,342			260
Loans past due 90 days or more		2,281			3,367			2,228
Total nonperforming loans	$	137,618		$	125,822		$	117,964

Other real estate owned – Park National Bank		13,387			13,240			9,788
Total nonperforming assets	$	151,005		$	139,062		$	127,752

Percentage of nonaccrual loans to total loans		2.43	%		2.29	%		2.78	%
Percentage of nonperforming loans to total loans		3.26	%		3.00	%		2.84	%
Percentage of nonperforming assets to total loans		3.57	%		3.32	%		3.08	%
Percentage of nonperforming assets to total assets		2.29	%		2.21	%		1.93	%

SE LLC/Vision Bank’s CL&D loan portfolio over the past four years, management continues to believe it is necessary to segregate this portion of the portfolio for both impaired credits, as well as those accruing CL&D loans at September 30, 2011. Cumulative charge-offs within Vision Bank’s impaired CL&D loan portfolio at September 30, 2011 was $51.6 million. Additionally, at September 30, 2011, management established a specific reserve of $12.1 million related to those CL&D loans at Vision Bank that were deemed to be impaired. The aggregate of cumulative prior charge-offs on impaired Vision Bank CL&D loans, along with the specific reserves at September 30, 2011, totaled $63.8 million. The following table summarizes the CL&D loan portfolio at Vision Bank:

- ~~59 -~~

Nonperforming Assets

(in thousands)	March 31, 2012		December 31, 2011		March 31, 2011
Nonaccrual loans	$	80,341	$	98,993	$	163,343
Renegotiated loans on accrual status		1,985		2,265		-
Loans past due 90 days or more		-		122		-
Total nonperforming loans	$	82,326	$	101,380	$	163,343

Other real estate owned – SE LLC		28,578		29,032		-
Other real estate owned – Vision		-		-		22,476
Total nonperforming assets	$	110,904	$	130,412	$	185,819

Percentage of nonaccrual loans to total loans		N.M.		N.M.		26.06	%
Percentage of nonperforming loans to total loans		N.M.		N.M.		26.06	%
Percentage of nonperforming assets to total loans		N.M.		N.M.		29.65	%
Percentage of nonperforming assets to total assets		N.M.		N.M.		23.62	%

When determining the quarterly loan loss provision, Park reviews the grades of commercial loans. These loans are graded from 1 to 8. A grade of 1 indicates little or no credit risk and a grade of 8 is considered a loss. Commercial loans with grades of 1 to 4 (pass-rated) are considered to be of acceptable credit risk. Commercial loans graded a 5 (special mention) are considered to be watch list credits and a higher loan loss reserve percentage is allocated to these loans. Commercial loans graded 6 (substandard), also considered watch list credits, are considered to represent higher credit risk and, as a result, a higher loan loss reserve percentage is allocated to these loans. Generally, commercial loans that are graded a 6 are considered for partial charge-off. Commercial loans that are graded a 7 (doubtful) are shown as nonperforming and Park generally charges these loans down to their fair value by taking a partial charge-off or recording a specific reserve. Any commercial loan graded an 8 (loss) is completely charged-off.

As of March 31, 2012, Park had taken partial charge-offs of approximately $108.3 million related to the $179.3 million of commercial loans considered to be impaired, compared to charge-offs of approximately $103.8 million related to the $187.1 million of impaired commercial loans at December 31, 2011. The table below provides additional information related to the Park impaired commercial loans at March 31, 2012, including those impaired commercial loans at PNB and those impaired Vision commercial loans retained at SE LLC.

Park National Corporation - Impaired Commercial Loans at March 31, 2012

(In thousands)	Unsold Principal balance (UPB)		Prior charge- offs		Total impaired loans		Specific reserve		Carrying balance		Carrying balance as a % of UPB
PNB	$	140,338	$	36,157	$	104,181	$	9,505	$	94,676		67.46	%
SE LLC - CL&D loans		67,545		48,112		19,433		-		19,433		28.77	%
SE LLC - Other loans		79,740		24,061		55,679		-		55,679		69.83	%
PRK totals	$	287,623	$	108,330	$	179,293	$	9,505	$	169,788		59.03	%

A significant portion of Park’s allowance for loan losses is allocated to commercial loans classified as “special mention” or “substandard.” “Special mention” loans are loans that have potential weaknesses that may result in loss exposure to Park. “Substandard” loans are those that exhibit a well defined weakness, jeopardizing repayment of the loan, resulting in a higher probability that Park will suffer a loss on the loan unless the weakness is corrected. ~~As previously discussed, management believes it is appropriate to segregate~~Park’s annualized 36-month loss experience for the ~~Vision Bank CL&D loans from other commercial loans that are still accruing. The Vision CL&D loans that were still accruing at September 30, 2011 totaled $60.2 million compared to $84.5 million at~~period ended December 31, ~~2010. Park’s loss experience,~~2011, defined as charge-offs plus changes in specific reserves, ~~on CL&D loans for~~within the 48 months ended December 31, 2010 was an annual rate of 10.03%. Management has allocated an allowance for loan losses to the $60.2 million of accruing CL&D loans based on one year of historical losses to cover probable incurred losses, for a total reserve of $6.0 million or 10.03%. Further, this allocation of 10.03% to the $60.2 million of CL&D loans was made regardless of the current loan grade, as this portion of thecommercial loan portfolio has experienced significant declines in collateral values, and thus if management determines that borrowers are unable to pay in accordance with the contractual terms of the loan agreement, significant specific reserves have typically been ~~necessary.~~

The remaining commercial loan portfolio (excluding Vision Bank’s CL&D loans) has experienced significantly different loss rates and management believes that using the last 36-month loss experience through the year ended December 31, 2010, defined as charge-offs plus changes in specific reserves, is appropriate. This 36-month loss experience was 1.09%0.71% of the principal balance of these loans. ~~Park’s management believes it is appropriate to cover approximately 1.4 years worth~~This annualized 36-month loss experience includes only the performance of ~~probable incurred losses within~~ the ~~other accruing commercial~~PNB loan ~~portfolio, thus the total reserve~~portfolio. The allowance for loan losses isrelated to performing commercial loans was $36.4 million or ~~1.47%~~1.64% of the outstanding principal balance of other accruing commercial loans at ~~September 30, 2011.~~ March 31, 2012.

The overall reserve of ~~1.47%~~1.64% for other accruing commercial loans breaks down as follows: pass-rated commercial loans are reserved at ~~1.04%~~1.35%; special mention commercial loans are reserved at ~~3.97%~~4.66%; and substandard commercial loans are reserved at ~~13.80%~~21.77%.

The reserve levels for pass-rated, special mention and substandard commercial loans in excess of the annualized 36-month loss experience of 0.71% are due to the following factors which management reviews on a quarterly or annual basis:

Loss Emergence Period Factor:Annually during the fourth quarter, management calculates the loss emergence period for each commercial loan segment. This loss emergence period is calculated based upon the average period of time it takes a credit to move from pass-rated to non - accrual. If the loss emergence period for any commercial loan segment is greater than one year, management applies additional general reserves to all performing loans within that segment of the commercial loan portfolio.

Loss Migration Factor:Park’s commercial loans are individually risk graded. If loan downgrades occur, the probability of default increases, and accordingly, management allocates a higher percentage reserve to those accruing commercial loans graded special mention and substandard. Annually, management calculates a loss migration factor for each commercial loan segment for special mention and substandard credits based on a review of losses over the past three year period, considering how each individual credit was rated at the beginning of the three year period.

Environmental Loss Factor:Management has identified certain macroeconomic factors that trend in accordance with losses in Park’s commercial loan portfolio. These macroeconomic factors are reviewed quarterly and adjustments to the environmental loss factor impacting each segment in the performing commercial loan portfolio correlates to changes in the macroeconomic environment.

Generally, consumer loans are not individually graded. Consumer loans include: (1) mortgage and installment loans included in the construction real estate segment of the loan portfolio; (2) mortgage, home equity lines of credit (HELOC), and installment loans included in the residential real estate segment of the loan portfolio; and (3) all loans included in the consumer segment of the loan portfolio. The amount of loan loss reserve assigned to these loans is based on historical loss experience over the past 36 ~~months ended December~~months. Management generally considers a one-year coverage period (the “Historical Loss Factor”) appropriate because the probable loss on any given loan in the consumer loan pool should ordinarily become apparent in that time frame. However, management may incorporate adjustments to the Historical Loss Factor as circumstances warrant additional reserves (e.g., increased loan delinquencies, improving or deteriorating economic conditions, changes in lending management and underwriting standards, etc.). At March 31, ~~2010, judgmentally increased to cover~~2012, the coverage period within the consumer portfolio was approximately ~~1.5 years of probable incurred losses.~~

1.34 years.

The judgmental increases discussed above incorporate management’s evaluation of the impact of environmental qualitative factors which pose additional risks and ~~assign~~assignment of a component of the ~~allowance for loan losses~~ALLL in consideration of these factors. Such environmental factors include: national and local economic trends and conditions; experience, ability and depth of lending management and staff; effects of any changes in lending policies and procedures; ~~and~~ levels of, and trends in, consumer bankruptcies, delinquencies, impaired loans and charge-offs and recoveries. The determination of this component of the ~~allowance for loan losses~~ALLL requires considerable management judgment. ~~As always, management is working~~Management continues to work to address weaknesses in those loans that may result in future loss. Actual loss experience may be more or less than the amount allocated.

~~- 60 -~~

On page 41 of Park’s 2011 Annual Report, management projected that the provision for loan losses would be within the range from $20 million to $27 million for 2012. While management expects that the provision for loan losses will be lower in each of the next three quarters compared to the first quarter of 2012, the projected range for the twelve months ended December 31, 2012 has been increased. Management now expects the provision for loan losses will be within the range of $23 million to $30 million for 2012.

Total Other Income

Total other income exclusive of securities gains increased by ~~$0.5~~$24.6 million ~~or 2.9%~~ to ~~$18.0~~$39.6 million for the quarter ended ~~September 30, 2011,~~March 31, 2012, compared to ~~$17.5~~$15.0 million for the ~~third~~first quarter of ~~2010. For~~2011. Excluding the ~~nine months ended September 30, 2011,~~$22.2 million gain on sale of Vision in the first quarter of 2012, total other income ~~decreased~~increased by ~~$2.7~~$2.4 million or ~~5.3% to $48.2 million compared to $50.9 million for the same period in 2010.~~

16%.

The following table is a summary of the changes in the components of total other ~~income.~~

(in thousands)

Three months ended
September 30,

Nine months ended
September 30,

2011 Restated 2010 Change Restated 2011 Restated 2010 Change Restated
Income from fiduciary activities $ 3,615 $ 3,314 $ 301 $ 11,266 $ 10,264 $ 1,002
Service charges on deposits 4,894 5,026 (132 ) 13,664 14,864 (1,200 )
Other service income 3,087 3,909 (822 ) 8,122 10,367 (2,245 )
Checkcard fee income 3,154 2,900 254 9,381 8,109 1,272
Bank owned life insurance income 1,229 1,313 (84 ) 3,686 3,783 (97 )
ATM fees 726 699 27 2,062 2,296 (234 )
OREO devaluations (588 ) (1,555 ) 967 (6,478 ) (4,619 ) (1,859 )
Other 1,910 1,924 (14 ) 6,492 5,823 669
Total other income $ 18,027 $ 17,530 $ 497 $ 48,195 $ 50,887 $ (2,692 )

~~- 61 -~~

income:

(in thousands)	Three months ended March 31,
	2012			2011			Change
Income from fiduciary activities	$	3,828		$	3,722		$	106
Service charges on deposits		4,071			4,245			(174	)
Other service income		2,734			2,301			433
Checkcard fee income		3,172			2,976			196
Bank owned life insurance income		1,202			1,229			(27	)
ATM fees		608			654			(46	)
OREO devaluations		(1,359	)		(2,535	)		1,176
Gain on sale of the Vision business		22,167			-			22,167
Other		3,197			2,438			759
Total other income	$	39,620		$	15,030		$	24,590

Income from fiduciary activities, which represents revenue earned from Park’s trust activities, increased by ~~$301,000,~~$106,000, or ~~9.1%~~2.8%, to ~~$3.6~~$3.8 million for the three months ended ~~September 30, 2011,~~March 31, 2012, compared to ~~$3.3~~$3.7 million for the same period in ~~2010. For the nine months ended September 30, 2011, income from fiduciary activities increased by $1 million or 9.7% to $11.3 million compared to $10.3 million in 2010.~~2011. Fiduciary fees are generally charged based on the market value of customer accounts. The average market value for assets under management for the ~~nine~~three months ended ~~September 30, 2011~~March 31, 2012 was ~~$3.394~~$3,554 million, an increase of approximately ~~10.6%~~3.2% compared to the average for the ~~nine~~three months ended ~~September 30, 2010~~March 31, 2011 of ~~$3.069~~$3,445 million.

Service charges on deposits decreased by ~~$132,000,~~$174,000, or ~~2.6%~~4.1%, to ~~$4.9~~$4.1 million for the three-month period ended ~~September 30, 2011,~~March 31, 2012, compared to ~~$5.0~~$4.2 million for the same period in ~~2010. Through the first nine months of 2011, service charges declined $1.2 million, or 8.1%, to $13.7 million, compared to $14.9 million in 2010.~~2011. This decrease was primarily attributable to a modest decline in non-sufficient funds (“NSF”) and overdraft charges during the first ~~nine~~three months of ~~2011~~2012 compared to the same period in ~~2010.~~

2011.

Fee income earned from origination and sale into the secondary market of long-term fixed-rate mortgage loans is included within other non-yield related fees in the subcategory “Other service income”. Other service income ~~decreased~~increased by ~~$822,000,~~$433,000, or ~~21.0%~~18.8%, to ~~$3.1~~$2.7 million for the three months ended ~~September 30, 2011,~~March 31, 2012, compared to ~~$3.9~~$2.3 million for the same period in ~~2010. For the nine months ended September 30, 2011, other service income decreased $2.2 million, or 21.7%, to $8.1 million, compared to $10.4 million in 2010.~~2011. This ~~decline~~increase was due to ~~a decline~~an increase in mortgage originations during ~~2011 and Park’s decision~~the first three months of 2012 compared to ~~maintain a majority of~~ the ~~15-year, fixed-rate mortgages on its balance sheet.~~

same period in 2011.

Checkcard fee income, which is generated from debit card transactions, increased ~~$254,000,~~$196,000, or ~~8.8%~~6.6%, to $3.2 million for the three months ended ~~September 30, 2011,~~March 31, 2012, compared to ~~$2.9~~$3.0 million for the same period in ~~2010. For the nine months ended September 30, 2011, checkcard fee income increased $1.3 million, or 15.7%, to $9.4 million compared to $8.1 million in 2010.~~2011. This increase iswas attributable to continued increases in the volume of debit card transactions. For the first ~~nine~~three months of ~~2011,~~2012, the number of Visa debit card transactions ~~have~~ increased by ~~12.2%~~7.4% compared to the same period in ~~2010.~~

2011.

OREO devaluations decreased by ~~$967,000~~$1.2 million to ~~$588,000~~$1.4 million for the three months ended ~~September 30, 2011,~~March 31, 2012, compared to ~~$1.6~~$2.5 million for the same period in ~~2010. For~~2011. Approximately $1.1 million of the ~~nine months ended September 30, 2011, OREO~~ devaluations ~~increased $1.9~~were at SE LLC and $0.3 million ~~to $6.5 million compared to $4.6 million in 2010. The increase was largely due to devaluations of OREO~~were at ~~Vision Bank through~~PNB during the first ~~nine months~~quarter of ~~2011.~~

~~- 62 -~~

~~The following table breaks out the change~~2012.

Management provided guidance in Park’s 2011 Annual Report (page 40) that total other income ~~between Park’s Ohio-based operations and Vision Bank.~~

Three months ended
September 30, 2011

Nine months ended
September 30, 2011

(In thousands)

Ohio-based
operations

Vision
Bank (Restated)
Total (Restated)
Ohio-based
operations

Vision
Bank (Restated)
Total (Restated)
Income from fiduciary activities $ 302 $ (1 ) $ 301 $ 997 $ 5 $ 1,002
Service charges on deposits (118 ) (14 ) (132 ) (953 ) (247 ) (1,200 )
Non-yield loan fee income (851 ) 29 (822 ) (2,335 ) 90 (2,245 )
Checkcard fee income 212 42 254 816 456 1,272
Bank owned life insurance income (84 ) - (84 ) (92 ) (5 ) (97 )
ATM fees 31 (4 ) 27 48 (282 ) (234 )
OREO devaluations (1,285 ) 2,252 967 (2,967 ) 1,108 (1,859 )
Other 137 (151 ) (14 ) 525 144 669
Total $ (1,656 ) $ 2,153 $ 497 $ (3,961 ) $ 1,269 $ (2,692 )

would be approximately $62 million to $66 million for 2012. Management’s latest projections remain unchanged from those in the 2011 Annual Report.

Gain on Sale of Securities

~~Gains from~~

For the ~~sale~~first quarter of 2012, Park did not sell any investment ~~securities were $3.5 million for~~securities. During the ~~third~~first quarter of 2011, ~~and $25.5~~Park sold approximately $105 million ~~for the first nine months~~ of ~~2011. By comparison, there were no gains or losses from the sale of investment securities in the third quarter of 2010 and gains were $11.8 million for the first three quarters of 2010.~~

~~All of the investment securities sold in 2011 have been~~ U.S. Government ~~sponsored entity~~Agency mortgage-backed ~~securities. The following table provides~~securities for a ~~summary~~pre-tax gain of ~~the gains realized from the sale of investment securities in 2011.~~

(in thousands) Amortized Cost Book Yield Sales Proceeds Yield to buyer Gain
Third Quarter $ 212,799 2.60 % $ 216,264 2.03 % $ 3,465
Second Quarter 191,037 5.25 % 206,399 1.92 % 15,362
First Quarter 105,444 5.02 % 112,079 2.10 % 6,635

Total $ 509,280 4.10 % $ 534,742 2.00 % $ 25,462

~~- 63 -~~

$6.6 million.

Total Other Expense

The following table is a summary of the changes in the components of total other ~~expense.~~

Three months ended
September 30,

Nine months ended
September 30,

(in thousands) 2011 2010 Change 2011 2010 Change
Salaries and employee benefits $ 25,799 $ 24,500 $ 1,299 $ 76,116 $ 73,684 $ 2,432
Occupancy expense 2,665 2,840 (175 ) 8,429 8,750 (321 )
Furniture and equipment expense 2,688 2,624 64 8,130 7,820 310
Data processing fees 1,184 1,403 (219 ) 3,572 4,390 (818 )
Professional fees and services 5,005 4,477 528 15,199 14,632 567
Amortization of intangibles 669 822 (153 ) 2,007 2,600 (593 )
Marketing 764 840 (76 ) 2,115 2,688 (573 )
Insurance 681 2,316 (1,635 ) 5,295 6,847 (1,552 )
Communication 1,475 1,696 (221 ) 4,516 5,112 (596 )
State taxes 469 865 (396 ) 1,414 2,548 (1,134 )
Other 4,200 3,313 887 12,159 11,516 643
Total other expense $ 45,599 $ 45,696 $ (97 ) $ 138,952 $ 140,587 $ (1,635 )

expense:

	Three months ended March 31,
(in thousands)	2012		2011		Change
Salaries and employee benefits	$	24,823	$	25,064	$	(241	)
Occupancy expense		2,670		3,000		(330	)
Furniture and equipment expense		2,621		2,657		(36	)
Data processing fees		1,200		1,253		(53	)
Professional fees and services		5,581		4,874		707
Amortization of intangibles		1,754		669		1,085
Marketing		843		623		220
Insurance		1,490		2,269		(779	)
Communication		1,537		1,556		(19	)
Other		5,289		4,381		908
Total other expense	$	47,808	$	46,346	$	1,462

Salaries and employee benefits ~~increased~~decreased by ~~$1.3 million,~~$241,000, or ~~5.3%~~1.0% to ~~$25.8~~$24.8 million for the three months ended ~~September 30, 2011~~March 31, 2012 compared to ~~$24.5~~$25.1 million for the same period in ~~2010. For~~2011.Salaries and benefits for SE LLC (and Vision for first quarter 2011) were $2.0 million for the ~~nine~~first three months ~~ended September 30, 2011, salaries and employee benefits increased by $2.4 million, or 3.3% to $76.1 million~~of 2012 compared to ~~$73.7~~$3.1 million for the same period in ~~2010. The table below breaks out~~2011. Management anticipates that salaries and ~~employee~~ benefits for SE LLC will continue to decline in the ~~three~~second quarter of 2012 as a result of the sale of the Vision business and ~~nine month periods~~the completion of system conversions (both for Park and Home).

Occupancy expense declined by $330,000, or 11.0% to $2.7 million for the quarter ended ~~September 30, 2011~~March 31, 2012 compared to ~~the same periods in 2010.~~

Three months ended
September 30,

Nine months ended
September 30,

(in thousands) 2011 2010 Change 2011 2010 Change
Salaries $ 20,503 $ 19,747 $ 756 $ 60,519 $ 59,407 $ 1,112
Employee benefits 5,296 4,753 543 15,597 14,277 1,320
Total salaries and employee benefits $ 25,799 $ 24,500 $ 1,299 $ 76,116 $ 73,684 $ 2,432

For the three months ended September 30, 2011, employee benefits increased by 11.4% or $543,000 to $5.3 million. For the nine months ended September 30, 2011, employee benefits increased by 9.2% or $1.3 million to $15.6 million compared to $14.3$3.0 million for the same period in ~~2010.~~2011. The reduction was due to a combination of the sale of the Vision business on February 16, 2012 and a modest decline at PNB.

Professional fees and services increased by $707,000, or 14.5% to $5.6 million for the first three months of 2012 compared to $4.9 million for the first quarter of 2011. Approximately $400,000 of the increase was at PNB and consisted of higher legal expenses and higher title appraisal expenses resulting from an increase in mortgage loan originations during the quarter. The remaining increase was largely related to increases in ~~2011~~legal fees associated with our continued pursuit of borrowers and guarantors at SE LLC.

Amortization of intangibles increased by $1.1 million, or 162% to $1.8 million for the first quarter of 2012 compared to ~~2010 are primarily related~~$669,000 for the same period in 2011. This increase was due to ~~higher medical claims experienced during 2011.~~

the acceleration of amortization expense at Vision for the period from January 1, 2012 through February 16, 2012, the closing date of the transaction between Vision and Centennial. Management expects amortization expense will be approximately $139,000 per quarter for the remainder of 2012.

Insurance expense declined by ~~$1.6~~$779,000 million or ~~70.5%~~34.3% to ~~$681,000~~$1.5 million for the three months ended ~~September 30, 2011~~March 31, 2012 compared to $2.3 million for the same period in ~~2010. For the nine months ended September 30, 2011 insurance declined by $1.6 million or 22.7% to $5.3 million compared to $6.8 million for the same period in 2010.~~2011. During the third quarter of 2011, Park began recognizing insurance expense for the premiums to be paid to the FDIC based on the new assessment methodology. This new methodology is based on a calculation using total assets less tangible equity. The new methodology will result in a decline in insurance expense going forward for the rest of 2012.

Management provided guidance in Park’s 2011 ~~and 2012.~~

~~- 64 -~~

~~The following table breaks out the change in~~Annual Report (page 40) that total other expense ~~between~~would be approximately $170 to $175 million for 2012. Management’s latest projection for total other expense is unchanged from the guidance in Park’s ~~Ohio-based operations~~2011 Annual Report.

The table below provides information related to other expense at Park, Vision and Park less Vision ~~Bank.~~

Three months ended
September 30, 2011

Nine months ended
September 30, 2011

(in thousands)
Ohio-based
operations

Vision
Bank
Total
Ohio-based
operations

Vision
Bank
Total
Salaries and employee benefits $ 1,624 $ (325 ) $ 1,299 $ 2,835 $ (403 ) $ 2,432
Occupancy expense (186 ) 11 (175 ) (339 ) 18 (321 )
Furniture and equipment expense 90 (26 ) 64 428 (118 ) 310
Data processing fees (100 ) (119 ) (219 ) (420 ) (398 ) (818 )
Professional fees and services (123 ) 651 528 124 443 567
Amortization of intangibles (153 ) - (153 ) (593 ) - (593 )
Marketing (79 ) 3 (76 ) (534 ) (39 ) (573 )
Insurance (1,394 ) (241 ) (1,635 ) (1,122 ) (430 ) (1,552 )
Communication (198 ) (23 ) (221 ) (587 ) (9 ) (596 )
State taxes (377 ) (19 ) (396 ) (1,130 ) (4 ) (1,134 )
Other 1,258 (371 ) 887 654 (11 ) 643
Total other expense $ 362 $ (459 ) $ (97 ) $ (684 ) $ (951 ) $ (1,635 )

for each quarter in 2011:

Other Expense - Quarterly 2011
	Park		Vision		Park, less Vision
Q1 2011	$	46,346	$	7,425	$	38,921
Q2 2011		47,007		8,174		38,833
Q3 2011		45,599		7,267		38,332
Q4 2011		49,365		8,513		40,852
Total 2011	$	188,317	$	31,379	$	156,938
Average quarterly expense	$	47,079	$	7,845	$	39,234

As shown in the table above, absent Vision, other expense would have been approximately $39.2 million per quarter in 2011. While SE LLC will continue to have other expense as Park management works through the retained loans and OREO, other expense at SE LLC is expected to be significantly lower than the average quarterly Vision expense recognized in 2011. Management currently expects total other expense will be approximately $41 to $42 million quarterly throughout the remainder of 2012.

Income Tax

~~For the three months ended September 30, 2011, federal~~

Federal income tax expense was $6.7 million and no state income tax benefit was recognized, compared to federal income tax expense of $7.0 million and no state income tax benefit for the third quarter of 2010. For the nine months ended September 30, 2011, federal income tax was $27.1 million and no state income tax benefit was recognized, compared to federal income tax of $22.8 million and a state income tax benefit of $1.2taxes were $13.1 million for the first ~~nine months~~quarter of ~~2010.~~

~~Vision Bank is subject~~2012 compared to ~~state~~$8.3 million for the first quarter of 2011. The effective federal income tax ~~in Alabama and Florida. A state income tax benefit~~rate for the first quarter of ~~$263,000 and a valuation allowance~~2012 was 29.3% compared to 27.3% for the same ~~amount were recorded during~~period in 2011. The difference between the ~~third quarter of 2011. For the first nine months of 2011, a state~~statutory federal income tax ~~benefit~~rate of ~~$1.1 million~~35% and ~~a valuation allowance~~Park’s effective tax rate is the permanent tax differences, primarily consisting of tax-exempt interest income from municipal investments and loans, low income housing tax credits, bank owned life insurance income, and dividends paid on shares held within Park’s salary deferral plan. Park expects permanent differences for the same amount were recorded at Vision Bank. Management has determined that the likelihood of realizing the full deferred tax asset on the state net operating loss carry-forward at Vision Bank fails to meet the “more likely than not” level. The net operating loss carry-forward periods for the states of Alabama and Florida are 8 years and 20 years, respectively. A merger of Vision Bank into Park National Bank would ensure the future utilization of the state net operating loss carry-forward at Vision Bank. However, management is not certain when a merger of Vision Bank into Park National Bank can take place and as a result has decided not to record the additional state tax benefit of losses at Vision Bank until management has a better understanding of the timing and likelihood of a merger of Vision Bank into Park National Bank. 2012 will be approximately $10 million.

Park and its Ohio-based ~~subsidiaries~~affiliates do not pay state income ~~tax~~taxes to the state of Ohio, but pay a franchise tax based on ~~year-end~~year end equity. The franchise tax expense is included in “state taxes” as part of ~~total~~ other expense on Park’s Consolidated Condensed Statements of Income.

~~Federal income tax expense as a percentage of income before taxes was 24.7% for~~

Management provided guidance in the ~~third quarter of~~ 2011 ~~compared to 26.5% for~~Annual Report (page 40) that the ~~same period in 2010. For the first nine months of 2011,~~effective federal income tax ~~expense as a percentage of income before taxes was 27.5%~~rate for 2012 would be approximately 26% to 28%, ~~compared to 27.5% for the same period in 2010. The federal effective income tax rate~~which is lower than the statutory rate of 35% primarily due to tax-exempt interest income from state and municipal investments and loans, low income housing tax credits and income from bank owned life insurance.

~~- 65 -~~

consistent with management’s most recent projection.

Comparison of Financial Condition

At ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010~~

2011

Changes in Financial Condition and Liquidity

Total assets decreased by ~~$187~~$195 million or ~~2.6%~~2.8% to ~~$7,095~~$6,777 million at ~~September 30, 2011,~~March 31, 2012, compared to ~~$7,282~~$6,972 million at December 31, ~~2010.~~2011. This decrease in total assets was due to ~~declines in investment securities and loan balances, offset by increases in cash and cash equivalents and other miscellaneous assets.~~

the sale of Vision assets to Centennial on February 16, 2012. At December 31, 2011, $382.5 million of assets were held for sale.

Total investment securities ~~decreased~~increased by ~~$331~~$149 million or ~~16.2%~~8.7% to ~~$1,709~~$1,857 million at ~~September 30, 2011,~~March 31, 2012, compared to ~~$2,040~~$1,708 million at December 31, ~~2010.~~2011. Loan balances ~~decreased~~increased by ~~$52~~$7 million to ~~$4,681~~$4,324 million at ~~September 30, 2011~~March 31, 2012 compared to ~~$4,733~~$4,317 million at December 31, ~~2010.~~

2011.

Total liabilities decreased by ~~$213~~$210 million or ~~3.3%~~3.4% during the first ~~nine~~three months of ~~2011~~2012 to ~~$6,340~~$6,020 million at ~~September 30, 2011~~March 31, 2012 from ~~$6,553~~$6,230 million at December 31, ~~2010.~~2011. The decrease in total liabilities was primarily due to ~~a decrease in total borrowings.~~

the assumption of Vision liabilities by Centennial on February 16, 2012. At December 31, 2011, $536.2 million of liabilities were held for sale.

Total deposits ~~decreased~~increased by $6$352 million or ~~0.1%~~7.9% during the first ~~nine~~three months of ~~2011~~2012 to ~~$5,089~~$4,817 million at ~~September 30, 2011~~March 31, 2012 from ~~$5,095~~$4,465 million at December 31, ~~2010.~~ 2011. The ~~mix of deposit balances has changed significantly during~~increase in deposits in the first ~~nine months~~quarter of ~~2011. Refer~~2012 was largely related to ~~the following table for a breakdown~~an increase in public fund deposits. This is consistent with increases in prior years. At March 31, 2011, total deposits were $5,315 million, which included deposits at Vision of ~~the change in total deposits:~~

(in thousands) September 30, 2011 December 31, 2010 Change
Noninterest bearing deposits $ 1,000,969 $ 937,719 $ 63,250
NOW and Money Market 1,432,827 1,283,158 149,669
Savings 949,547 900,639 48,908
Brokered Deposits 0 110,065 (110,065 )
Certificates of Deposit 1,705,844 1,863,839 (157,995 )
Total Deposits $ 5,089,187 $ 5,095,420 $ (6,233 )

$597 million.

Short-term borrowings decreased by ~~$421~~$27 million or ~~63.4%~~10.2% to ~~$243~~$237 million at ~~September 30, 2011~~March 31, 2012 from ~~$664~~$264 million at December 31, ~~2010. Conversely, long-term~~2011. Long-term borrowings ~~increased~~decreased slightly by ~~$187~~$1 million to ~~$824~~$897 million at ~~September 30, 2011~~March 31, 2012 compared to ~~$637~~$898 million at December 31, ~~2010.~~

2011.

Other liabilities increased by ~~$28~~$2.7 million or ~~37.3%~~4.4% to ~~$103~~$64.3 million at ~~September 30, 2011~~March 31, 2012 from ~~$75~~$61.6 million at December 31, ~~2010. This increase in other liabilities was primarily due to a payable at September 30, 2011 for the purchase of $21.2 million of investment securities that settled in the month of October.~~

2011.

Total stockholders’ equity increased by ~~$25.4~~$14 million or ~~3.5%~~1.9% to ~~$755.1~~$756.4 million at ~~September 30, 2011,~~March 31, 2012, from ~~$729.7~~$742.4 million at December 31, ~~2010.~~2011. Retained earnings increased by ~~$23.8~~$15.5 million during the period as a result of net income of ~~$71.5~~$31.5 million, offset by common ~~stock~~ dividends of ~~$43.4~~$14.5 million and accretion and dividends on the preferred stock of ~~$4.4~~$1.5 million. Preferred stock increased by ~~$642,000~~$226,000 during the first ~~nine~~three months of ~~2011~~2012 as a result of the accretion of the discount on preferred stock. Accumulated other comprehensive loss ~~improved~~increased by ~~$992,000~~$1.7 million during the first ~~nine~~three months of ~~2011~~2012 to a loss of ~~$876,000~~$10.5 million at ~~September 30, 2011.~~March 31, 2012. The increase of $1.7 million in other comprehensive loss was related to an unrealized net holding ~~gains~~loss in the investment portfolio ~~increased by $644,000,~~of $2.2 million, net of taxes, as a result of the mark-to-market adjustment at ~~September 30, 2011 and Park also recognized~~March 31, 2012, which was partially offset by (1) a ~~$348,000 decline~~$113,000 increase in the unrealized net holding ~~loss~~gain on the cash flow ~~hedge.~~

hedge, and (2) a $412,000 (net of tax) improvement to the funded status of the pension plan as a result in the sale of the Vision business.

Increases or decreases in the investment securities portfolio, short-term borrowings and long-term debt are greatly dependent upon the growth in loans and deposits. The primary objective of management is to grow loan and deposit totals. To the extent that management is unable to grow loan totals at a desired growth rate, additional investment securities may be acquired. Likewise, both short-term borrowings and long-term debt are utilized to fund the growth in earning assets if the growth in deposits and cash flow from operations are not sufficient to do so.

~~- 66 -~~

Effective liquidity management ensures that the cash flow requirements of depositors and borrowers, as well as the operating cash needs of the Corporation, are met. Funds are available from a number of sources, including the securities portfolio, the core deposit base, Federal Home Loan Bank borrowings, and the capability to securitize or package loans for sale. The Corporation’s loan to asset ratio was ~~65.9%~~63.81% at ~~September 30, 2011,~~March 31, 2012, compared to ~~64.8%~~61.92% at December 31, ~~2010~~2011 and ~~65.7%~~64.88% at ~~September 30, 2010.~~March 31, 2011. Cash and cash equivalents were ~~$272.1~~$161.1 million at ~~September 30, 2011,~~March 31, 2012, compared to ~~$133.8~~$157.5 million at December 31, ~~2010~~2011 and ~~$133.6~~$134.2 million at ~~September 30, 2010.~~March 31, 2011. Management believes that the present funding sources provide more than adequate liquidity for the Corporation to meet its cash flow needs.

On a monthly basis, Park’s Treasury Department forecasts the financial statements for the next twelve months. The projected liquidity position for the Corporation is reviewed each month to ensure that adequate liquidity is maintained. Management targets that the Corporation would have a minimum of $800 million of funds available to handle liquidity needs on a daily basis. This $800 million liquidity “war chest” consists of currently available additional borrowing capacity from the Federal Home Loan Bank, federal funds sold and unpledged U.S. Government Agency securities.

Capital Resources

Total stockholders’ equity at ~~September 30, 2011~~March 31, 2012 was ~~$755~~$756 million, or 11.2% of total assets, compared to $742 million, or 10.6% of total assets, ~~compared to~~at December 31, 2011 and $730 million, or 10.0% of total assets, at ~~December~~March 31, ~~2010 and $757 million, or 10.7% of total assets, at September 30, 2010.~~2011. Common equity, which is stockholders’ equity excluding the preferred stock, was ~~$657~~$658 million at ~~September 30, 2011,~~March 31, 2012, or ~~9.3%~~9.7% of total assets, compared to ~~$632~~$644 million, or ~~8.7%~~9.2% of total assets, at December 31, ~~2010.~~

2011.

Financial institution regulators have established guidelines for minimum capital ratios for banks, thrifts and bank holding companies. The net unrealized gain or loss on available-for-sale securities is generally not included in computing regulatory capital. The minimum leverage capital ratio (defined as stockholders’ equity less intangible assets divided by tangible assets) is 4% and the well capitalized ratio is greater than or equal to 5%. Park’s leverage ratio was ~~9.67%~~10.35% at ~~September 30, 2011~~March 31, 2012 and ~~9.54%~~9.81% at December 31, ~~2010.~~2011. The minimum Tier 1 risk-based capital ratio (defined as leverage capital divided by risk-adjusted assets) is 4% and the well capitalized ratio is greater than or equal to 6%. Park’s Tier 1 risk-based capital ratio was ~~13.96%~~15.35% at ~~September 30, 2011~~March 31, 2012 and ~~13.24%~~14.15% at December 31, ~~2010.~~2011. The minimum total risk-based capital ratio (defined as leverage capital plus supplemental capital divided by risk-adjusted assets) is 8% and the well capitalized ratio is greater than or equal to 10%. Park’s total risk-based capital ratio was ~~16.44%~~17.92% at ~~September 30, 2011~~March 31, 2012 and ~~15.71%~~16.65% at December 31, ~~2010.~~

~~The financial institution subsidiaries of Park each~~2011.

PNB met the well capitalized ratio guidelines at ~~September 30, 2011.~~March 31, 2012. The following table indicates the capital ratios for ~~each financial institution subsidiary~~PNB and Park at ~~September 30, 2011.~~

Leverage
Tier 1
Risk Based

Total
Risk-Based

The Park National Bank 6.67 % 9.81 % 11.76 %
Vision Bank - Restated 15..50 % 21.02 % 22.35 %
Park National Corporation - Restated 9.67 % 13.96 % 16.44 %
Minimum capital ratio 4.00 % 4.00 % 8.00 %
Well capitalized ratio 5.00 % 6.00 % 10.00 %

~~- 67 -~~

March 31, 2012.

	Leverage			Tier 1 Risk Based			Total Risk-Based
The Park National Bank		6.53	%		9.43	%		11.37	%
Park National Corporation		10.35	%		15.35	%		17.92	%
Minimum capital ratio		4.00	%		4.00	%		8.00	%
Well capitalized ratio		5.00	%		6.00	%		10.00	%

On April 25, 2012, Park entered into a Letter Agreement with the U.S. Treasury (the “Preferred Shares Repurchase Letter Agreement”) pursuant to which Park purchased from the U.S. Treasury all 100,000 of Park’s Series A Preferred Shares for a purchase price of $100 million plus final prorated accrued and unpaid dividends of $972,000. On May 2, 2012, Park entered into a second Letter Agreement with the U.S. Treasury (the “Warrant Repurchase Letter Agreement”) pursuant to which Park purchased from the U.S. Treasury the Warrant to purchase 227,376 Park common shares (the “Warrant”) which had been issued to the U.S. Treasury on December 23, 2008 in connection with Park’s sale to the U.S. Treasury of the Series A Preferred Shares. Park repurchased the Warrant for a purchase price of $2,842,400, or $12.50 per Park common share. The table below provides Park’s capital ratios as of March 31, 2012, excluding the $100 million related to the Series A Preferred Shares.

Leverage

Tier 1

Risk Based

Total

Risk-Based

Park National Corporation

8.89

13.18

15.75

Contractual Obligations and Commitments

In the ordinary course of operations, Park enters into certain contractual obligations. Such obligations include the funding of operations through debt issuances as well as leases for premises. See ~~Table 24~~page 46 of Park’s ~~2010 Form 10-K/A~~2011 Annual Report (Table 31) for disclosure concerning contractual obligations and commitments at December 31, ~~2010.~~2011. There were no significant changes in contractual obligations and commitments during the first ~~nine~~three months of ~~2011.~~

2012 other than in connection with the sale of the Vision business.

Financial Instruments with Off-Balance Sheet Risk

~~Park’s subsidiary banks are parties~~

PNB is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of ~~their respective~~its customers. These financial instruments include loan commitments and standby letters of credit. The instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated financial statements.

The exposure to credit loss (for ~~the subsidiary banks of Park)~~PNB) in the event of nonperformance by the other party to the financial instrument for loan commitments and standby letters of credit is represented by the contractual amount of those instruments. Park and ~~each of its subsidiary banks~~PNB use the same credit policies in making commitments and conditional obligations as they do for on-balance sheet instruments. Since many of the loan commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan commitments to customers.

The total amounts of off-balance sheet financial instruments with credit risk were as follows:

(in thousands)	March 31, 2012		December 31, 2011
Loan commitments	$	773,014	$	809,140
Standby letters of credit	$	24,175	$	18,772

(in thousands) September 30, 2011 December 31, 2010
Loan commitments $ 837,299 $ 716,598
Standby letters of credit $ 20,238 $ 24,462

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Management reviews interest rate sensitivity on a bi-monthly basis by modeling the consolidated financial statements under various interest rate scenarios. The primary reason for these efforts is to guard Park from adverse impacts of unforeseen changes in interest rates. Management continues to believe that further changes in interest rates will have a small impact on net income, consistent with the disclosure on pages 4344 and 4445 of Park’s ~~2010~~2011 Annual Report.

On ~~Table 23~~page 45 (Table 30) of Park’s ~~2010 Form 10-K/A,~~2011 Annual Report, management reported that Park’s twelve month cumulative rate sensitivity gap was a positive (assets exceeding liabilities) ~~$647.8~~$1,376 million or ~~9.53%~~21.46% of interest earning assets at December 31, ~~2010.~~2011. At ~~September 30, 2011,~~March 31, 2012, Park’s twelve month cumulative rate sensitivity gap was a positive (assets exceeding liabilities) ~~$1,166~~$592 million or ~~17.9%~~9.5% of interest earning assets.

Management supplements the interest rate sensitivity gap analysis with periodic simulations of balance sheet sensitivity under various interest rate and what-if scenarios to better forecast and manage the net interest margin. Management uses a 50 basis point change in market interest rates per quarter for a total of 200 basis points per year in evaluating the impact of changing interest rates on net interest income and net income over a twelve month horizon.

On page 4445 of Park’s ~~2010~~2011 Annual Report, management reported that at December 31, 2010, the earnings simulation model projected that net income would increase by 2.4% using a rising interest rate scenario and decrease by 1.4% using a declining interest rate scenario over the next year. At September 30, 2011, the earnings simulation model projected that net income would increase by ~~0.3%~~2.14% using a rising interest rate scenario and decrease by 3.52% using a declining interest rate scenario over the next year. At March 31, 2012, the earnings simulation model projected that net income would increase by 2.0% using a rising interest rate scenario and would decrease by ~~3.25%~~3.4% in a declining interest rate scenario. At ~~September 30, 2011,~~March 31, 2012, management continues to believe that gradual changes in interest rates (50 basis points per quarter for a total of 200 basis points per year) will have a small impact on net income.

~~- 68 -~~

ITEM 4 – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

~~As of September 30, 2011, the end of the quarterly period covered by this Form 10-Q/A for September 30, 2011, Park carried out an evaluation under the supervision and with~~

With the participation of ~~Park’s management, including Park’s~~the Chairman of the Board and Chief Executive Officer (the principal executive officer) and ~~Park’s~~the Chief Financial Officer (the principal financial officer), of Park, Park’s management has evaluated the effectiveness of Park’s disclosure controls and ~~procedures. In designing and evaluating Park’s disclosure controls and~~ procedures ~~Park and its management recognize~~(as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the quarterly period covered by this Quarterly Report on Form 10-Q. Based on that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and Park’s management necessarily was required to apply its judgment in evaluating and implementing possible controls and procedures. Based upon the evaluation, Park’s Chairman of the Board and Chief Executive Officer and Park’s Chief Financial Officer have concluded that Park’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by Park in the reports it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and the such information is accumulated and communicated to Park’s management, including Park’s Chairman of the Board and Chief Executive Officer and Park’s Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

As a result of the events necessitating the restatement described in the Explanatory Note and in Notes 1 and 1A of the Notes to Unaudited Consolidated Condensed Financial Statements set forth in “Item 1 - Financial Statements” of Part I of this Form 10-Q/A for September 30, 2011, however, Park’s management, including Park’s Chairman of the Board and Chief Executive Officer and Park’s Chief Financial Officer, has reevaluated the design and operation of Park’s disclosure controls and procedures and has now concluded that, as of September 30, 2011, Park did not maintain effective controls to ensure that the allowance for loan losses related to certain impaired commercial loans with guarantor support and the expenses related to certain devaluations of other real estate owned (“OREO”) and additional loan loss provisions that are not related to guarantor support were properly calculated.

Specifically, the accounting treatment giving rise to the restatement was the inclusion of estimated future cash flows supporting the allowance for loan losses related to certain impaired commercial loans. For the year ended December 31, 2010, as part of Park’s process to measure impairment on certain impaired commercial loans at Vision Bank, management had relied on expected cash flows from guarantors, as to whom Vision Bank was in litigation. Management has determined that reliance on expected cash flows, which may require protracted litigation to actually be received, is inappropriate given the difficulty in obtaining objective verifiable evidence supporting the conclusion as to the amount and timing of the expected cash flows. U.S. generally accepted accounting principles require that Park’s assumption be “reasonable and supportable” and the facts and circumstances around the existence of protracted litigation make this assumption more difficult to support.

~~- 69 -~~

The restatement also reflects certain OREO devaluations and additional loan loss provisions that are not related to guarantor support. These expense items are related to valuation issues identified at December 31, 2010, where Vision Bank management utilized (i) the work of a third-party contractor, which was not a licensed appraiser, when calculating the fair value of collateral for certain impaired loans and the fair value of certain OREO held by Vision Bank, and management did not have sufficient documentation to support the estimates of this third-party contractor, and (ii) internal estimates of collateral value when calculating specific reserves for certain impaired loans when, at times, such internal estimates were outdated. The impact is to reverse provisions for loan losses and OREO devaluations in the restated audited consolidated financial statements for the year ended December 31, 2010.

Because of these control deficiencies, which are considered to be material weaknesses and resulted in the restatement of not only Park’s previously issued audited consolidated financial statements incorporated by reference in Park’s Annual Report on Form 10-K for the year ended December 31, 2010 but also Park’s unaudited condensed consolidated financial statements included in Park’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2011, June 30, 2011 and September 30, 2011, Park’s management has restated its assessment for the period ended September 30, 2011 and concluded that Park’s disclosure controls and procedures were not effective as of September 30, 2011.

Park reviews its disclosure controls and procedures, which may include its internal control over financial reporting, on an ongoing basis and may from time to time make changes aimed at enhancing their effectiveness. Park’s management made process improvements throughout 2011 in an effort to address the material weakness related to guarantor support and as of the date of this filing, when calculating impairment under ASC 310, management no longer relies on expected cash flows from guarantors where litigation is required to collect those cash flows. Additionally, Park’s management made process improvements throughout 2011 in an effort to address the material weakness related to the OREO devaluations and loan loss provisions that are not related to guarantor support. These process improvements included:that:

~~Management has discontinued~~information required to be disclosed by Park in this Quarterly Report on Form 10-Q and other reports that Park files or submits under the ~~use of value-related information received from a third-party contractor, who is not a licensed appraiser. While~~Exchange Act would be accumulated and communicated to Park’s management, ~~continues~~including its principal executive officer and principal financial officer, as appropriate to consult with this third-party contractor on the current status of loan workouts and progress related to the pursuit of legally bound borrowers and guarantors, management no longer utilizes the third-party contractor’s estimates of value to determine the specific reserves that should be established on impaired loans.allow timely decisions regarding required disclosure;

~~Management has discontinued~~information required to be disclosed by Park in this Quarterly Report on Form 10-Q and the ~~use of information received from~~other reports that Park files or submits under the ~~third-party contractor to value OREO properties. Currently, OREO properties are valued based on external appraisals that are no more than 12 months old~~Exchange Act would be recorded, processed, summarized and ~~were prepared by external licensed appraisers.~~reported within the time periods specified in the SEC’s rules and forms; and

~~Management has discontinued~~Park’s disclosure controls and procedures were effective as of the ~~use~~end of ~~retail lot values (discounted~~the quarterly period covered by ~~management’s standard bulk sale discount)~~this Quarterly Report on ~~lot development projects and is now utilizing the bulk sale value provided by external licensed appraisers, which in certain cases applies a larger discount.~~Form 10-Q.

~~- 70 -~~

In addition to the real estate appraisal policy in place as of December 31, 2010, management has enhanced its commercial loan policy to formalize the requirements for the frequency and dollar threshold for which updated real estate appraisals are to be obtained from qualified licensed appraisers with respect to impaired loans and OREO properties. This enhancement to the commercial loan policy also discusses those situations where internally prepared valuations (“IPV”) are considered appropriate, the documentation that should accompany IPVs and the frequency of evaluating the accuracy of the assumptions and data used in the IPV estimates.

As of the date of the filing of this Form 10-Q/A (Amendment No. 1), management believes that the enhancements to Park’s internal control processes have resolved the material weaknesses that existed as of December 31, 2010.

Changes in Internal Control Over Financial Reporting

~~Park reviews its disclosure controls and procedures, which may include its~~

There were no changes in Park’s internal control over financial reporting ~~on an ongoing basis and may from time~~(as defined in Rule 13a – 15(f) under the Exchange Act) that occurred during Park’s fiscal quarter ended March 31, 2012, that have materially affected, or are reasonably likely to time make changes aimed at enhancing their effectiveness. Park’s management made process improvements throughout 2011 in an effort to address the material weakness related to guarantor support and as of the date of this filing, when calculating impairment under ASC 310, management no longer relies on expected cash flows from guarantors where litigation is required to collect those cash flows. Additionally, Park’s management made process improvements throughout 2011 in an effort to address the material weakness related to the OREO devaluations and loan loss provisions that are not related to guarantor support. These process improvements included:

Management has discontinued the use of value-related information received from a third-party contractor, who is not a licensed appraiser. While management continues to consult with this third-party contractor on the current status of loan workouts and progress related to the pursuit of legally bound borrowers and guarantors, management no longer utilizes the third-party contractor’s estimates of value to determine the specific reserves that should be established on impaired loans.

Management has discontinued the use of information received from the third-party contractor to value OREO properties. Currently, OREO properties are valued based on external appraisals that are no more than 12 months old and were prepared by external licensed appraisers.

Management has discontinued the use of retail lot values (discounted by management’s standard bulk sale discount) on lot development projects and is now utilizing the bulk sale value provided by external licensed appraisers, which in certain cases applies a larger discount.

~~As of the date of the filing of this Form 10-Q/A (Amendment No. 1), management believes that the enhancements to~~materially affect, Park’s internal control ~~processes have resolved the material weaknesses that existed as of December 31, 2010.~~over financial reporting.

~~- 71 -~~

PARK NATIONAL CORPORATION

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

There are no pending legal proceedings to which Park or any of its subsidiaries is a party or to which any of their property is subject, except for routine legal proceedings to which Park’s subsidiary ~~banks are parties~~bank is party to incidental to ~~their respective~~its banking ~~businesses.~~business. There are also certain legal proceedings at SE LLC which are routine legal proceedings to which Vision Bank (and SE LLC as the successor to Vision Bank) is party to incidental to its business. Park considers none of those proceedings to be material.

Item 1A. Risk Factors

There are certain risks and uncertainties in our business that could cause our actual results to differ materially from those anticipated. In “ITEM 1A. RISK FACTORS” of Part I of Park’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2010~~2011 (the ~~“2010~~“2011 Form 10-K”), we included a detailed discussion of our risk factors. Certain numbers included within the 2010 Form 10-K were subsequently updated in the 2010 Form 10-K/A - Amendment No. 2 filed on February 28, 2012. The following information updates certain of our risk factors and should be read in conjunction with the risk factors disclosed in the 2010 Form 10-K as updated by the Form 10-K/A - Amendment No . 2 . These risk factors should be read carefully in connection with evaluating our business and in connection with the forward-looking statements contained in this ~~From 10-Q/A for September 30, 2011.~~Quarterly Report on Form 10-Q. Any of the risks described ~~below or~~ in the ~~2010~~2011 Form 10-K ~~as updated by the Form 10-K/A - Amendment No. 2~~ could materially adversely affect our business, financial condition or future results and the actual outcome of matters as to which forward-looking statements are made. These are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

~~Changes in economic and political conditions could adversely affect our earnings, as our borrowers’ ability to repay loans and the value of the collateral securing our loans decline.~~

Our success depends, to a certain extent, upon economic and political conditions, local and national, as well as governmental fiscal and monetary policies. Conditions such as inflation, recession, unemployment, changes in interest rates, fiscal and monetary policy and other factors beyond our control may adversely affect our asset quality, deposit levels and loan demand and, therefore, our earnings and our capital. Because we have a significant amount of real estate loans, additional decreases in real estate values could adversely affect the value of property used as collateral and our ability to sell the collateral upon foreclosure. Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make timely repayments of their loans, which would have an adverse impact on our earnings and cash flows. The substantial majority of the loans made by our subsidiaries are to individuals and businesses in Ohio or in Gulf Coast communities in Alabama and the Florida panhandle. Consequently, a significant decline in the economy in Ohio or in Gulf Coast communities in Alabama or the panhandle of Florida could have a materially adverse effect on our financial condition and results of operations.

As disclosed earlier within this Form 10-Q/A for September 30, 2011, we continue to experience difficult credit conditions in the Alabama and Florida markets in which Vision Bank operates. For the nine-month period ended September 30 2011, Vision Bank has experienced $50.0 million in net loan charge-offs, or an annualized 11.13% of average loans. For the first nine months of 2010, net loan charge-offs for Vision Bank were $27.2 million, or an annualized 5.4% of average loans. The loan loss provision for Vision Bank was $22.5 million for the nine months ended September 30, 2011. Park’s nonperforming loans, defined as loans that are 90 days past due, nonaccrual and renegotiated loans, were $232.0 million or 4.96% of total loans at September 30, 2011, $292.9 million or 6.19% of loans at December 31, 2010 and $247.9 million or 5.32% of total loans at September 30, 2010. At September 30, 2011, Vision Bank had non-performing loans of $107.7 million or 19.61% of total loans, compared to $171.8 million or 26.82% of total loans at December 31, 2010 and $138.8 million or 21.27% of total loans at September 30, 2010. While we continue to generate net earnings on a consolidated basis, Vision Bank continues to generate net losses and is expected to generate net losses in the immediate future. For the nine months ended September 30, 2011, Vision Bank had a net loss of $14.7 million and Park contributed capital of $26.0 million to Vision Bank. Given the current economic environment in Vision Bank’s market, Park’s management has agreed to maintain the leverage ratio at Vision Bank at 12% and to maintain the total risk-based capital ratio at Vision Bank at 16%. It remains uncertain when the negative credit trends at Vision Bank will reverse. As a result, Park’s future earnings continue to be susceptible to further declining credit conditions in the markets in which we operate.

~~- 72 -~~

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a.)

Not applicable

(b.)

Not applicable

(c.)

No purchases of Park’s common shares were made by or on behalf of Park or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended, during the three months ended ~~September 30, 2011.~~March 31, 2012. The following table provides information concerning ~~changes in~~ the maximum number of common shares that may be purchased under Park’s previously announced stock repurchase ~~programs as a result of~~authorization to fund the ~~forfeiture of previously outstanding incentive stock options:~~Park National Corporation 2005 Incentive Stock Option Plan:

Period

Total number of

common shares

purchased

Average price

paid per

common

Total number of common

shares purchased as part of

publicly announced plans

or programs

Maximum number of

common shares that may

yet be purchased under the

plans or programs (1)

~~July~~January 1 through

~~July~~ January 31, ~~2011~~

2012

~~1,011,239~~982,267

~~August~~February 1 through

~~August 31, 2011~~

February 29, 2012

~~1,011,239~~982,267

~~September~~March 1 through

~~September 30, 2011~~

March 31, 2012

~~1,011,239~~982,267

Total

~~1,011,239~~982,267

(1)

The number shown represents, as of the end of each period, the maximum number of common shares that may yet be purchased as part of Park’s publicly announced stock repurchase authorization to fund the Park National Corporation 2005 Incentive Stock Option ~~Plan.~~

~~The Park National Corporation 2005 Incentive Stock Option~~ Plan (the “2005 Plan”).

The 2005 Plan was adopted by the Board of Directors of Park on January 18, 2005 and was approved by the Park shareholders at the Annual Meeting of Shareholders on April 18, 2005. Under the 2005 Plan, 1,500,000 common shares are authorized for delivery upon the exercise of incentive stock options granted under the 2005 Plan. All of the common shares delivered upon the exercise of incentive stock options granted under the 2005 Plan are to be treasury shares. As of ~~September 30, 2011,~~March 31, 2012, incentive stock options covering ~~74,570~~66,625 common shares were outstanding and ~~1,425,430~~1,433,375 common shares were available for future grants.

With ~~488,761~~451,108 common shares held as treasury shares for purposes of funding the 2005 Plan at ~~September 30, 2011,~~March 31, 2012, an additional ~~1,011,239~~982,267 common shares remained authorized for repurchase for purposes of funding the 2005 Plan.

~~- 73 -~~

~~Item 3.~~

~~Defaults Upon Senior Securities~~

Item 3. Defaults Upon Senior Securities

Not applicable.

~~Item 4.~~

~~[Reserved]~~

Item 4. Mine Safety Disclosures

Not applicable.

~~Item 5.~~

~~Other Information~~

Item 5. Other Information

(a), (b) Not applicable.

Item 6. Exhibits

~~Item 6.~~

~~Exhibits~~2.1(a)

Purchase and Assumption Agreement, made and entered into on November 16, 2011, by and between Vision Bank and Park National Corporation (collectively, “Seller”) and Centennial Bank and Home BancShares, Inc. (collectively, “Buyer”) (Incorporated herein by reference to Exhibit 2.1 to Park National Corporation’s Current Report on Form 8-K, dated and filed November 17, 2011 (File No. 1-13006))

Note: The disclosure schedules and other schedules (with the exception of Schedule S) referenced in the Purchase and Assumption Agreement have been omitted pursuant to Item 601(b)(2) of SEC Regulation S-K. Park National Corporation hereby undertakes to furnish a copy of the omitted disclosure schedules and other schedules upon request by the SEC.

~~3.1(a)~~

2.1(b)

First Amendment to Purchase and Assumption Agreement by and between Vision Bank and Park National Corporation and Centennial Bank and Home BancShares, Inc., effective as of January 25, 2012 (Incorporated herein by reference to Exhibit 2.1(b) to Park National Corporation’s Current Report on Form 8-K, dated and filed February 16, 2012 (File No. 1-13006))

2.1(c)

Second Amendment to Purchase and Assumption Agreement by and between Vision Bank and Park National Corporation and Centennial Bank and Home BancShares, Inc., effective as of April 30, 2012 (filed herewith)

2.2

Agreement and Plan of Merger, entered into as of January 25, 2012, by and between Vision Bank and SE Property Holdings, LLC (Incorporated herein by reference to Exhibit 2.2 to Park National Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 (File No. 1-13006))

3.1(a)

Articles of Incorporation of Park National Corporation as filed with the Ohio Secretary of State on March 24, 1992 (Incorporated herein by reference to Exhibit 3(a) to Park National Corporation’s Form 8-B, filed on May 20, 1992 (File No. 0-18772) (“Park’s Form 8-B”))


3.1(b)		Certificate of Amendment to the Articles of Incorporation of Park National Corporation as filed with the Ohio Secretary of State on May 6, 1993 (Incorporated herein by reference to Exhibit 3(b) to Park National Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993 (File No. 0-18772))


3.1(c)		Certificate of Amendment to the Articles of Incorporation of Park National Corporation as filed with the Ohio Secretary of State on April 16, 1996 (Incorporated herein by reference to Exhibit 3(a) to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1996 (File No. 1-13006))


3.1(d)		Certificate of Amendment by Shareholders to the Articles of Incorporation of Park National Corporation as filed with the Ohio Secretary of State on April 22, 1997 (Incorporated herein by reference to Exhibit 3(a)(1) to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997 (File No. 1-13006) (“Park’s June 30, 1997 Form 10-Q”))


3.1(e)		Certificate of Amendment by Shareholders or Members as filed with the Ohio Secretary of State ~~of the State of Ohio~~ on December 18, 2008 in order to evidence the adoption by the shareholders of Park National Corporation on December 18, 2008 of an amendment to Article FOURTH of Park National Corporation’s Articles of Incorporation to authorize Park National Corporation to issue up to 200,000 preferred shares, without par value (Incorporated herein by reference to Exhibit 3.1 to Park National Corporation’s Current Report on Form 8-K dated and filed December 19, 2008 (File No. 1-13006))


3.1(f)		Certificate of Amendment by Directors or Incorporators to Articles as filed with the Ohio Secretary of State ~~of the State of Ohio~~ on December 19, 2008, evidencing adoption of amendment by Board of Directors of Park National Corporation to Article FOURTH of Articles of Incorporation to establish express terms of Fixed Rate Cumulative Perpetual Preferred Shares, Series A, each without par value, of Park National Corporation (Incorporated herein by reference to Exhibit 3.1 to Park National Corporation’s Current Report on Form 8-K dated and filed December 23, 2008 (File No. 1-13006))

~~- 74 -~~

3.1(g)

Certificate of Amendment by Shareholders or Members filed with the Ohio Secretary of State ~~of the State of Ohio~~ on April 18, 2011 in order to evidence the adoption by Park National Corporation’s shareholders of an amendment to Article SIXTH of Park National Corporation’s Articles of Incorporation in order to provide that shareholders do not have preemptive rights (Incorporated herein by reference to Exhibit 3.1 to Park National Corporation’s Current Report on Form 8-K dated and filed April 19, 2011 (File No. 1-13006))


3.1(h)		Articles of Incorporation of Park National Corporation (reflecting amendments through April 18, 2011) [for SEC reporting compliance purposes only – not filed with Ohio Secretary of State] (Incorporated herein by reference to Exhibit 3.1(h) to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011 (File No. 1-13006))


3.2(a)		Regulations of Park National Corporation (Incorporated herein by reference to Exhibit 3(b) to Park’s Form 8-B)


3.2(b)		Certified Resolution regarding Adoption of Amendment to Subsection 2.02(A) of the Regulations of Park National Corporation by Shareholders on April 21, 1997 (Incorporated herein by reference to Exhibit 3(b)(1) to Park’s June 30, 1997 Form 10-Q)


3.2(c)		Certificate Regarding Adoption of Amendments to Sections 1.04 and 1.11 of Park National Corporation’s Regulations by the Shareholders on April 17, 2006 (Incorporated herein by reference to Exhibit 3.1 to Park National Corporation’s Current Report on Form 8-K dated and filed on April 18, 2006 (File No. 1-13006))


3.2(d)		Certificate Regarding Adoption by the Shareholders of Park National Corporation on April 21, 2008 of Amendment to Regulations to Add New Section 5.10 to Article Five (Incorporated herein by reference to Exhibit 3.2(d) to Park National Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2008 (File No. 1-13006) (“Park’s March 31, 2008 Form 10-Q”))


3.2(e)		Regulations of Park National Corporation (reflecting amendments through April 21, 2008) [For purposes of SEC reporting compliance only] (Incorporated herein by reference to Exhibit 3.2(e) to Park’s March 31, 2008 Form 10-Q)

4.1

Note Purchase Agreement, dated April 20, 2012, between Park National Corporation and a group of 56 accredited investors (Incorporated herein by reference to Exhibit 4.1 to Park National Corporation’s Current Report on Form 8-K, dated and filed April 20, 2012 (File No. 1-13006) (“Park’s April 20, 2012 Form 8-K”))

4.2

Form of 7% Subordinated Note due April 20, 2022 (Incorporated herein by reference to Exhibit 4.2 to Park’s April 20, 2012 for 8-K)

10.1

Letter Agreement, dated April 25, 2012, between Park National Corporation and the United States Department of the Treasury related to the repurchase of the 100,000 Fixed Rate Cumulative Perpetual Preferred Shares, Series A, issued by Park National Corporation (Incorporated herein by reference to Exhibit 10.1 to Park National Corporation’s Current Report on Form 8-K, dated and filed April 25, 2012 (File No. 1-13006))

10.2

Letter Agreement, dated May 2, 2012, between Park National Corporation and the United States Department of the Treasury related to the repurchase of the Warrant to purchase 227,376 Common Shares issued by Park National Corporation (Incorporated herein by reference to Exhibit 10.1 to Park National Corporation’s Current Report on Form 8-K, dated and filed May 2, 2012 (File No. 1-13006))

Computation of Ratios of Earnings to Fixed Charges and of Earnings to Fixed Charges and Preferred Share Dividends (filed herewith)


31.1		Rule 13a – 14(a) / 15d – 14(a) Certifications (Principal Executive Officer) (filed herewith)


31.2		Rule 13a – 14(a) / 15d – 14(a) Certifications (Principal Financial Officer) (filed herewith)


32.1		Certifications Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (Principal Executive Officer) (furnished herewith)

~~- 75 -~~

32.2

Certifications Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (Principal Financial Officer) (furnished herewith)


101		The following information from Park’s ~~September 30, 2011~~Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012 formatted in XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Condensed Balance Sheets as of ~~September 30, 2011~~March 31, 2012 (unaudited) and December 31, ~~2010;~~2011; (ii) the Consolidated Condensed Statements of Income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~ (unaudited); (iii) the Consolidated Condensed Statements of Comprehensive Income for the three months ended March 31, 2012 and 2011 (unaudited); (iv) the Consolidated Condensed Statements of Changes in Stockholders’ Equity for the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~ (unaudited); ~~(iv)~~(v) the Consolidated Condensed Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~ (unaudited); and ~~(v)~~(vi) the Notes to Unaudited Consolidated Condensed Financial ~~Statements.~~ Pursuant to Rule 406T of Regulation S-T, the interactive data files included as Exhibit 101 are furnished and not deemed filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those Sections. Statements (furnished herewithin).

~~- 76 -~~

Pursuant to Rule 406T of Regulation S-T, the interactive data files included as Exhibit 101 are furnished and not deemed filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those Sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		PARK NATIONAL CORPORATION

DATE: ~~February 28,~~May 4, 2012		/s/ C. Daniel DeLawder
		C. Daniel DeLawder
		Chairman of the Board and
		Chief Executive Officer

DATE: ~~February 28,~~May 4, 2012		/s/ John W. Kozak
		John W. Kozak
		Chief Financial Officer

~~- 77 -~~68

Ohio		31-1179518
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨
(Do not check if a smaller reporting company)

	Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements	3

Consolidated Condensed Balance Sheets as of ~~September 30, 2011~~March 31, 2012 (unaudited) and December 31, ~~2010~~2011	3

Consolidated Condensed Statements of Income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~ (unaudited)	4

Consolidated Condensed Statements of Comprehensive Income for the three months ended March 31, 2012 and 2011 (unaudited)	6

Consolidated Condensed Statements of Changes in Stockholders’ Equity for the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~ (unaudited)	67

Consolidated Condensed Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~ (unaudited)	78

Notes to Unaudited Consolidated Condensed Financial Statements	9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	4142

Item 3. Quantitative and Qualitative Disclosures ~~about~~About Market Risk	6861

Item 4. Controls and Procedures	6961

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	7263

Item 1A. Risk Factors	7263

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	7363

Item 3. Defaults Upon Senior Securities	7464

Item 4. ~~[Reserved]~~Mine Safety Disclosures	7464

Item 5. Other Information	7464

Item 6. Exhibits	7464

SIGNATURES	77 68

	September 30,			December 31,
	2011			2010
	Restated
Assets:
Cash and due from banks	$	132,988		$	109,058
Money market instruments		139,109			24,722
Cash and cash equivalents		272,097			133,780
Investment securities
Securities available-for-sale, at fair value
(amortized cost of $772,910 and $1,274,258 at September 30, 2011 and December 31, 2010)		797,163			1,297,522
Securities held-to-maturity, at amortized cost
(fair value of $861,369 and $686,114 at September 30, 2011 and December 31, 2010)		843,576			673,570
Other investment securities		67,892			68,699
Total investment securities		1,708,631			2,039,791

Loans		4,680,575			4,732,685
Allowance for loan losses		(107,310	)		(143,575	)
Net loans		4,573,265			4,589,110

Bank owned life insurance		153,159			146,450
Goodwill and other intangible assets		76,370			78,377
Bank premises and equipment, net		68,633			69,567
Other real estate owned		46,911			41,709
Accrued interest receivable		21,990			24,137
Mortgage loan servicing rights		10,069			10,488
Other		163,973			148,852

Total assets	$	7,095,098		$	7,282,261

Liabilities and Stockholders' Equity:
Deposits:
Noninterest bearing	$	1,000,969		$	937,719
Interest bearing		4,088,218			4,157,701
Total deposits		5,089,187			5,095,420

Short-term borrowings		243,071			663,669
Long-term debt		823,722			636,733
Subordinated debentures and notes		75,250			75,250
Accrued interest payable		5,416			6,123
Other		103,399			75,358
Total liabilities		6,340,045			6,552,553

COMMITMENTS AND CONTINGENCIES

Stockholders' equity:
Preferred stock (200,000 shares authorized; 100,000 shares issued with $1,000 per share liquidation preference)		97,932			97,290
Common stock (No par value; 20,000,000 shares authorized; 16,151,033 shares issued at September 30, 2011 and 16,151,062 shares issued at December 31, 2010)		301,203			301,204
Common stock warrants		4,406			4,473
Retained earnings		430,121			406,342
Treasury stock (752,129 shares at September 30, 2011 and 752,128 shares at December 31, 2010)		(77,733	)		(77,733	)

Accumulated other comprehensive (loss), net of taxes		(876	)		(1,868	)
Total stockholders' equity		755,053			729,708

Total liabilities and stockholders' equity	$	7,095,098		$	7,282,261

	March 31,			December 31,
	2012			2011

Assets:
Cash and due from banks	$	121,730		$	137,770
Money market instruments		39,400			19,716
Cash and cash equivalents		161,130			157,486
Investment securities
Securities available-for-sale, at fair value (amortized cost of $991,373 and $801,147 at March 31, 2012 and December 31, 2011)		1,007,481			820,645
Securities held-to-maturity, at amortized cost (fair value of $795,075 and $834,574 at March 31, 2012 and December 31, 2011)		782,250			820,224
Other investment securities		67,604			67,604
Total investment securities		1,857,335			1,708,473
Loans		4,324,383			4,317,099
Allowance for loan losses		(59,758	)		(68,444	)
Net loans		4,264,625			4,248,655
Bank owned life insurance		157,225			154,567
Goodwill and other intangible assets		73,089			74,843
Bank premises and equipment, net		52,157			53,741
Other real estate owned		41,965			42,272
Accrued interest receivable		21,227			19,697
Mortgage loan servicing rights		8,975			9,301
Other		139,123			120,748
Assets held for sale		-			382,462
Total assets	$	6,776,851		$	6,972,245

Liabilities and Stockholders' Equity:
Deposits:
Noninterest bearing	$	1,055,745		$	995,733
Interest bearing		3,761,643			3,469,381
Total deposits		4,817,388			4,465,114
Short-term borrowings		236,687			263,594
Long-term debt		821,801			823,182
Subordinated debentures and notes		75,250			75,250
Accrued interest payable		5,034			4,916
Other		64,262			61,639
Liabilities held for sale		-			536,186
Total liabilities		6,020,422			6,229,881
COMMITMENTS AND CONTINGENCIES
Stockholders' equity:
Preferred stock (200,000 shares authorized; 100,000 shares issued with $1,000 per share liquidation preference)		98,372			98,146
Common stock (No par value; 20,000,000 sharesauthorized; 16,151,014 shares issued at March 31, 2012 and 16,151,021 shares issued at December 31, 2011)		301,201			301,202
Common stock warrants		4,297			4,297
Retained earnings		440,074			424,557
Treasury stock (745,109 shares at March 31, 2012 and 745,109 shares at December 31,2011)		(77,007	)		(77,007	)
Accumulated other comprehensive (loss), net of taxes		(10,508	)		(8,831	)
Total stockholders' equity		756,429			742,364
Total liabilities and stockholders’ equity	$	6,776,851		$	6,972,245

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
	Restated						Restated
Interest and dividend income:

Interest and fees on loans	$	65,645		$	67,123		$	196,961		$	200,287

Interest and dividends on:
Obligations of U.S. Government, its agencies and other securities		16,289			19,333			54,302			60,071
Obligations of states and political subdivisions		69			192			310			613

Other interest income		62			34			76			155
Total interest and dividend income		82,065			86,682			251,649			261,126

Interest expense:

Interest on deposits:
Demand and savings deposits		976			1,263			2,918			4,620
Time deposits		5,661			8,532			18,595			28,700

Interest on borrowings:
Short-term borrowings		182			269			642			915
Long-term debt		7,626			7,173			22,539			21,345

Total interest expense		14,445			17,237			44,694			55,580

Net interest income		67,620			69,445			206,955			205,546

Provision for loan losses		16,438			14,654			43,054			44,454

Net interest income after provision for loan losses		51,182			54,791			163,901			161,092

Other income:
Income from fiduciary activities		3,615			3,314			11,266			10,264
Service charges on deposit accounts		4,894			5,026			13,664			14,864
Other service income		3,087			3,909			8,122			10,367
Checkcard fee income		3,154			2,900			9,381			8,109
Bank owned life insurance income		1,229			1,313			3,686			3,783
ATM fees		726			699			2,062			2,296
OREO devaluations		(588	)		(1,555	)		(6,478	)		(4,619	)
Other		1,910			1,924			6,492			5,823
Total other income		18,027			17,530			48,195			50,887

Gain on sale of securities		3,465			-			25,462			11,819

												Accumulated
									Treasury			Other
	Preferred		Common			Retained			Stock			Comprehensive			Comprehensive
Nine Months ended September 30, 2011 and 2010	Stock		Stock			Earnings			at Cost			Income (loss)			Income (loss)

Balance at December 31, 2009	$	96,483	$	306,569		$	423,872		$	(125,321	)	$	15,661
Net Income							61,522								$	61,522
Other comprehensive income (loss), net of tax:
Unrealized net holding (loss) on cash flow hedge, net of income taxes of $(149)													(277	)		(277	)
Unrealized net holding (loss) on securities available-for-sale, net of income taxes of $(1,631)													(3,030	)		(3,030	)
Total comprehensive income															$	58,215
Cash dividends on common stock at $2.82 per share							(42,668	)
Cash payment for fractional shares in dividend reinvestment plan				(2	)
Reissuance of common stock from treasury shares held for warrants issued				(852	)		(9,495	)		37,915
Accretion of discount on preferred stock		605					(605	)
Preferred stock dividends							(3,750	)
Balance at September 30, 2010	$	97,088	$	305,715		$	428,876		$	(87,406	)	$	12,354

Balance at December 31, 2010	$	97,290	$	305,677		$	406,342		$	(77,733	)	$	(1,868	)
Net Income (Restated)							71,530								$	71,530
Other comprehensive income (loss), net of tax:
Unrealized net holding gain on cash flow hedge, net of income taxes of $187													348			348
Unrealized net holding gain on securities available-for-sale, net of income taxes of $345													644			644
Total comprehensive income (Restated)															$	72,522
Cash dividends on common stock at $2.82 per share							(43,425	)
Cash payment for fractional shares in dividend reinvestment plan				(2	)
Common stock warrants cancelled				(66	)		66
Accretion of discount on preferred stock		642					(642	)
Preferred stock dividends							(3,750	)
Balance at September 30, 2011(Restated)	$	97,932	$	305,609		$	430,121		$	(77,733	)	$	(876	)

Three Months ended March 31, 2012 and 2011	Preferred Stock		Common Stock			Retained Earnings			Treasury Stock at Cost			Accumulated Other Comprehensive Income

Balance at December 31, 2010	$	97,290	$	305,677		$	406,342		$	(77,733	)	$	(1,868	)
Net Income							22,196
Other comprehensive loss, net of tax:
Unrealized net holding gain on cash flow hedge, net of income taxes of $71													133
Unrealized net holding (loss) on securities available-for-sale, net of income tax benefit of $(3,431)													(6,371	)
Cash dividends on common stock at $0.94 per share							(14,475	)
Cash payment for fractional shares in dividend reinvestment plan				(1	)
Accretion of discount on preferred stock		214					(214	)
Preferred stock dividends							(1,250	)
Balance at March 31, 2011	$	97,504	$	305,676		$	412,599		$	(77,733	)	$	(8,106	)

Balance at December 31, 2011	$	98,146	$	305,499		$	424,557		$	(77,007	)	$	(8,831	)
Net Income							31,475
Other comprehensive loss, net of tax:
Change in funded status of pension plan, net of income taxes of $222													412
Unrealized net holding gain on cash flow hedge, net of income taxes of $60													113
Unrealized net holding (loss) on securities available-for-sale, net of income tax benefit of $(1,188)													(2,202	)
Cash dividends on common stock at $0.94 per share							(14,481	)
Cash payment for fractional shares in dividend reinvestment plan				(1	)
Accretion of discount on preferred stock		226					(227	)
Preferred stock dividends							(1,250	)
Balance at March 31, 2012	$	98,372	$	305,498		$	440,074		$	(77,007	)	$	(10,508	)

Effect on Consolidated Condensed Balance Sheets
	September 30, 2011
	As Previously Reported		As Restated		Effect of Change
Allowance for loan losses	$	100,248	$	107,310	$	7,062
Net loans		4,580,327		4,573,265		(7,062	)
Other assets		161,501		163,973		2,472
Total assets		7,099,688		7,095,098		(4,590	)
Retained earnings		434,711		430,121		(4,590	)
Total stockholders’ equity		759,643		755,053		(4,590	)
Total liabilities and stockholders’ equity		7,099,688		7,095,098		(4,590	)

Effect on Consolidated Condensed Statements of Income
	Three months ended September 30, 2011
	As Previously Reported			As Restated			Effect of Change
Provision for loan losses	$	18,525		$	16,438		$	(2,087	)
Net interest income after provision for loan losses		49,095			51,182			2,087
OREO devaluations		(1,688	)		(588	)		1,100
Other income		16,927			18,027			1,100
Income before income taxes		23,888			27,075			3,187
Income taxes		5,579			6,694			1,115
Net income		18,309			20,381			2,072
Net income available to common shareholders		16,845			18,917			2,072

Earnings per common share
Basic	$	1.09		$	1.23		$	0.14
Diluted	$	1.09		$	1.23		$	0.14

Effect on Consolidated Condensed Statements of Income
	Nine months ended September 30, 2011
	As Previously Reported			As Restated			Effect of Change
Provision for loan losses	$	55,925		$	43,054		$	(12,871	)
Net interest income after provision for loan losses		151,030			163,901			12,871
OREO devaluations		(11,339	)		(6,478	)		4,861
Other income		43,334			48,195			4,861
Income before income taxes		80,874			98,606			17,732
Income taxes		20,870			27,076			6,206
Net income		60,004			71,530			11,526
Net income available to common shareholders		55,612			67,138			11,526

Earnings per common share
Basic	$	3.61		$	4.36		$	0.75
Diluted	$	3.61		$	4.36		$	0.75

Effect on Park National Corporation's Capital Ratios
	September 30, 2011
	As Previously Reported			As Restated			Effect of Change
Tier 1 Leverage Ratio		9.73	%		9.67	%		-0.06	%
Tier 1 Risk-based Capital Ratio		14.04	%		13.96	%		-0.08	%
Total Risk-based Capital Ratio		16.52	%		16.44	%		-0.08	%

(in thousands)	February 16, 2012
Assets sold
Cash and due from banks	$	20,711
Loans		355,750
Allowance for loan losses		(13,100	)
Net loans		342,650
Fixed assets		12,496
Other assets		4,612
Total assets sold	$	380,469
Liabilities sold
Deposits	$	522,856
Other liabilities		2,049
Total liabilities sold	$	524,905

(in thousands)
Premium paid	$	27,913
One-time gains		298
Loss on sale of fixed assets		(2,434	)
Employment and severance agreements		(1,610	)
Other one-time charges, including estimates		(2,000	)
Pre-tax gain	$	22,167

(in thousands)	March 31, 2012
Assets
Cash	$	16,049
Performing loans		16,123
Nonperforming loans		82,326
OREO		28,578
Other assets		18,417
Total assets	$	161,493

Liabilities and equity
Intercompany borrowings	$	140,000
Other liabilities		4,623
Equity		16,870
Total liabilities and equity	$	161,493

(in thousands)	Goodwill		Core Deposit Intangibles		Total
December 31, 2010	$	72,334	$	6,043	$	78,377
Amortization		-		2,007		2,007
September 30, 2011	$	72,334	$	4,036	$	76,370

(in thousands)	Annual Amortization
Remainder of 2011	$	669
2012		2,677
2013		690
Total	$	4,036

(in thousands)	Annual Amortization
Remainder of 2012	$	418
2013		337
2014		-
Total	$	755

	September 30, 2011						December 31, 2010
	Loan balance		Accrued interest receivable		Recorded investment		Loan balance		Accrued interest receivable		Recorded investment
(In thousands)
Commercial, financial and agricultural *	$	756,888	$	2,992	$	759,880	$	737,902	$	2,886	$	740,788

Commercial real estate *		1,250,936		5,064		1,256,000		1,226,616		4,804		1,231,420
Construction real estate:
Vision commercial land and development *		102,271		232		102,503		171,334		282		171,616
Remaining commercial		163,606		341		163,947		195,693		622		196,315
Mortgage		19,857		62		19,919		26,326		95		26,421
Installment		15,007		65		15,072		13,127		54		13,181
Residential real estate
Commercial		456,670		1,276		457,946		464,903		1,403		466,306
Mortgage		968,330		1,355		969,685		906,648		2,789		909,437
HELOC		253,461		959		254,420		260,463		1,014		261,477
Installment		51,118		204		51,322		60,195		255		60,450
Consumer		640,267		2,679		642,946		666,871		3,245		670,116
Leases		2,164		40		2,204		2,607		56		2,663
Total loans	$	4,680,575	$	15,269	$	4,695,844	$	4,732,685	$	17,505	$	4,750,190

	September 30, 2011
(In thousands)	Nonaccrual loans		Accruing restructured loans		Loans past due 90 days or more and accruing		Total nonperforming loans
Commercial, financial and agricultural	$	21,844	$	3,081	$	22	$	24,947
Commercial real estate		41,856		2,243		-		44,099
Construction real estate:
Vision commercial land and development		42,353		1,249		-		43,602
Remaining commercial		29,386		4,575		-		33,961
Mortgage		66		-		-		66
Installment		107		-		-		107
Residential real estate:
Commercial		47,422		-		-		47,422
Mortgage		25,976		4,393		1,237		31,606
HELOC		1,420		-		-		1,420
Installment		1,953		22		112		2,087
Consumer		1,983		-		851		2,834
Leases		-		-		-		-
Total loans	$	214,366	$	15,563	$	2,222	$	232,151

	September 30, 2011 (Restated)						December 31, 2010
	Unpaid principal balance		Recorded investment		Allowance for loan losses allocated		Unpaid principal balance		Recorded investment		Allowance for loan losses allocated
(in thousands)
With no related allowance recorded
Commercial, financial and agricultural	$	17,903	$	12,329	$	—	$	9,347	$	8,891	$	—
Commercial real estate		39,400		30,680		—		21,526		17,170		—
Construction real estate:
Vision commercial land and development		41,022		15,952		—		11,206		7,847		—
Remaining commercial		17,582		16,299		—		12,305		11,743		—
Residential real estate:
Commercial		32,568		29,949		—		46,344		43,031		—
Consumer		—		—		—		—		—		—

With an allowance recorded
Commercial, financial and agricultural		15,945		12,596		6,400		11,801		10,314		3,028
Commercial real estate		18,560		12,419		5,183		44,789		40,760		12,652
Construction real estate:
Vision commercial land and development		52,623		26,084		15,133		103,937		78,644		39,887
Remaining commercial		30,813		17,662		8,940		23,563		15,337		5,425
Residential real estate:
Commercial		21,847		17,473		4,681		19,716		17,196		5,912
Consumer		21		21		—		—		—		—

Total	$	288,284	$	192,464	$	40,337	$	304,534	$	250,933	$	66,904

			Three months ended September 30, 2011				Nine months ended September 30, 2011
	Recorded investment as of September 30, 2011		Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized
(in thousands)
Commercial, financial and agricultural	$	24,925	$	24,049	$	49	$	21,361	$	155
Commercial real estate		44,099		45,162		26		50,874		150
Construction real estate:
Vision commercial land and development		42,036		43,555		-		67,135		-
Remaining commercial		33,961		34,027		116		29,573		330
Residential real estate:
Commercial		47,422		48,064		-		54,454		153
Consumer		21		21		-		15		1

Total	$	192,464	$	194,878	$	191	$	223,412	$	789

	Three months ended March 31, 2012						Three months ended March 31, 2011
(in thousands)	Recorded investment as of March 31, 2012		Average recorded investment		Interest income recognized		Recorded investment as of March 31, 2011		Average recorded investment		Interest income recognized

Commercial, financial and agricultural	$	40,241	$	40,135	$	105	$	19,391	$	19,515	$	65
Commercial real estate		43,305		48,214		207		53,259		55,076		70
Construction real estate:
Vision/SE LLC commercial land and development		19,433		21,974		-		82,060		84,272		-
Remaining commercial		32,673		27,314		251		26,126		26,789		78
Residential real estate:
Commercial		43,752		43,276		40		58,123		59,465		139
Consumer		20		20		-		-		22		-

Total	$	179,424	$	180,933	$	603	$	238,959	$	245,139	$	352

	September 30, 2011
	Accruing loans past due 30-89 days		Past due nonaccrual loans and loans past due 90 days or more and accruing*		Total past due		Total current		Total recorded investment
(In thousands)
Commercial, financial and agricultural	$	2,211	$	16,457	$	18,668	$	741,212	$	759,880
Commercial real estate		9,543		23,119		32,662		1,223,338		1,256,000
Construction real estate:
Vision commercial land and development		425		35,654		36,079		66,424		102,503
Remaining commercial		-		17,807		17,807		146,140		163,947
Mortgage		145		66		211		19,708		19,919
Installment		202		69		271		14,801		15,072
Residential real estate:
Commercial		1,264		17,295		18,559		439,387		457,946
Mortgage		14,015		21,618		35,633		934,052		969,685
HELOC		539		673		1,212		253,208		254,420
Installment		1,428		499		1,927		49,395		51,322
Consumer		9,799		2,061		11,860		631,086		642,946
Leases		-		-		-		2,204		2,204
Total loans	$	39,571	$	135,318	$	174,889	$	4,520,955	$	4,695,844

	March 31, 2012
(in thousands)	5 Rated		6 Rated		Impaired		Pass Rated		Recorded Investment
Commercial, financial and agricultural	$	10,458	$	5,217	$	40,264	$	699,892	$	755,831

Commercial real estate		30,257		10,798		43,305		1,007,783		1,092,143

Construction real estate:
SE LLC commercial land and development		2,801		-		20,518		2,801		26,120
Remaining commercial		6,748		232		32,673		109,694		149,347

Residential real estate:
Commercial		16,793		1,469		43,752		331,658		393,672

Leases		-		-		-		2,001		2,001

Total Commercial Loans	$	67,057	$	17,716	$	180,512	$	2,153,829	$	2,419,114

	3 months ended September 30, 2011				9 months ended September 30, 2011
	Number of Contracts		Recorded Investment		Number of Contracts		Total recorded investment
(In thousands)
Commercial, financial and agricultural		14	$	1,977		32	$	5,677
Commercial real estate		4		2,763		21		7,633
Construction real estate:
Vision commercial land and development		2		504		8		3,342
Remaining commercial		3		2,192		16		14,795
Mortgage		-		-		1		66
Installment		-		-		-		-
Residential real estate:
Commercial		3		239		10		3,493
Mortgage		7		1,550		27		4,137
HELOC		-		-		1		50
Installment		1		17		2		36
Consumer		-		-		-		-
Leases		-		-		-		-
Total loans		34	$	9,242		118	$	39,229

	Three months ended March 31, 2012
	Number of Contracts		Accruing		Nonaccrual		Total Recorded Investment
(In thousands)
Commercial, financial and agricultural		5	$	1,289	$	750	$	2,039
Commercial real estate		16		2,212		2,967		5,179
Construction real estate:
SE LLC commercial land and development		4		-		894		894
Remaining commercial		9		8,641		1,565		10,206
Mortgage		-		-		-		-
Installment		-		-		-		-
Residential real estate:
Commercial		3		-		318		318
Mortgage		9		111		1,170		1,281
HELOC		-		-		-		-
Installment		-		-		-		-
Consumer		1		-		91		91
Leases		-		-				-
Total loans		47	$	12,253	$	7,755	$	20,008

	3 months ended September 30, 2011				9 months ended September 30, 2011
	Number of Contracts		Recorded Investment		Number of Contracts		Total recorded investment
(In thousands)
Commercial, financial and agricultural		3	$	506		7	$	642
Commercial real estate		5		8,511		7		12,994
Construction real estate:
Vision commercial land and development		2		1,962		3		1,979
Remaining commercial		1		5,000		1		5,000
Mortgage		1		66		1		66
Installment		-		-		-		-
Residential real estate:
Commercial		1		607		5		20,061
Mortgage		4		736		8		1,695
HELOC		1		50		1		50
Installment		-		-		-		-
Total loans		18	$	17,438		33	$	42,487

	Three months ended September 30, 2011 (Restated)															Three months ended March 31, 2012
	Commercial, financial and agricultural		Commercial real estate		Construction real estate		Residential real estate		Consumer		Leases			Total		Commercial, financial and agricultural		Commercial real estate		Construction real estate			Residential real estate		Consumer		Leases		Centennial loan put		Total
(In thousands)

Allowance for credit losses:
Beginning balance	$	16,709	$	23,307	$	40,113	$	32,297	$	7,744	$	4		$	120,174	$	16,950	$	15,539	$	14,433		$	15,692	$	5,830	$	-	$	-	$	68,444
Charge-offs		5,199		6,505		12,587		5,886		1,682		—			31,859		4,538		4,934		4,320			3,922		1,253		-		-		18,967
Recoveries		154		845		621		341		595		1			2,557		468		92		67			609		707		-		-		1,943
Net Charge-offs		5,045		5,660		11,966		5,545		1,087		(1	)		29,302		4,070		4,842		4,253			3,313		546		-		-		17,024
Provision		3,358		912		8,240		3,533		396		(1	)		16,438		5,448		1,309		(433	)		1,489		525		-		-		8,338
Ending balance	$	15,022	$	18,559	$	36,387	$	30,285	$	7,053	$	4		$	107,310	$	18,328	$	12,006	$	9,747		$	13,868	$	5,809	$	-		-	$	59,758
Provision for Centennial loan put																	-		-		-			-		-		-		662		662
Allowance for Credit Losses																$	18,328	$	12,006	$	9,747		$	13,868	$	5,809	$	-	$	662	$	60,420

	Nine months ended September 30, 2011 (Restated)
	Commercial, financial and agricultural		Commercial real estate		Construction real estate		Residential real estate		Consumer		Leases			Total
(In thousands)

Allowance for credit losses:
Beginning balance	$	11,555	$	24,369	$	70,462	$	30,259	$	6,925	$	5		$	143,575
Charge-offs		12,370		14,855		39,686		13,162		5,597		—			85,670
Recoveries		1,050		1,669		834		1,232		1,562		4			6,351
Net Charge-offs		11,320		13,186		38,852		11,930		4,035		(4	)		79,319
Provision		14,787		7,376		4,777		11,956		4,163		(5	)		43,054
Ending balance	$	15,022	$	18,559	$	36,387	$	30,285	$	7,053	$	4		$	107,310

(In thousands)	Three months ended September 30, 2010		Nine months ended September 30, 2010
Allowance for credit losses:
Beginning balance	$	120,676	$	116,717
Charge-offs		19,205		48,056
Recoveries		1,280		4,290
Net Charge-offs		17,925		43,766
Provision		14,654		44,454
Ending balance	$	117,405	$	117,405

(in thousands, except share and per share data)	Three months ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Numerator:	Restated				Restated
Income available to common shareholders	$	18,917	$	18,125	$	67,138	$	57,167
Denominator:
Denominator for basic earnings per share (weighted average common shares outstanding)		15,398,909		15,272,720		15,398,919		15,090,113
Effect of dilutive options and warrants		-		-		1,722		-
Denominator for diluted earnings per share (weighted average common shares outstanding adjusted for the effect of dilutive options and warrants)		15,398,909		15,272,720		15,400,641		15,090,113
Earnings per common share:
Basic earnings per common share	$	1.23	$	1.19	$	4.36	$	3.79
Diluted earnings per common share	$	1.23	$	1.19	$	4.36	$	3.79

Operating Results for the three months ended September 30, 2011
(in thousands)	PNB		VB(Restated)			All Other			Total(Restated)
Net interest income	$	58,588	$	6,493		$	2,539		$	67,620
Provision for loan losses		9,000		6,913			525			16,438
Other income (loss) and security gains		20,290		2,014			(812	)		21,492
Other expense		35,936		7,267			2,396			45,599
Net income (loss)		24,518		(3,665	)		(472	)		20,381

Balance at September 30, 2011
Assets	$	6,346,125	$	714,674		$	34,299		$	7,095,098

Operating Results for the nine months ended September 30, 2011
(in thousands)	PNB		VB (Restated)			All Other			Total (Restated)
Net interest income	$	179,366	$	20,248		$	7,341		$	206,955
Provision for loan losses		18,950		22,529			1,575			43,054
Other income (loss) and security gains		73,590		2,352			(2,285	)		73,657
Other expense		108,572		22,866			7,514			138,952
Net income (loss)		87,798		(14,730	)		(1,538	)		71,530

	Operating Results for the three months ended March 31, 2012
(in thousands)	PNB		VB		GFSC		SE LLC		All Other			Total
Net interest income	$	55,846	$	-	$	2,211	$	2,610	$	1,061		$	61,728
Provision for loan losses		4,672		-		250		4,078		-			9,000
Other income and security gains		16,661		-		-		22,891		68			39,620
Other expense		38,056		-		721		7,503		1,528			47,808
Net income		21,561		-		806		9,059		49			31,475

Assets (as of March 31, 2012)	$	6,587,773	$	-	$	47,380	$	161,493	$	(19,795	)	$	6,776,851