Park National (PRK) 8-K Park National Corporation announces 2009 financial results and declares quarterly cash dividend

Exhibit 99.1

News Release

January 25, 2010

Park National Corporation announces 2009 financial results
and declares quarterly cash dividend

NEWARK, Ohio— Park National Corporation (Park) (NYSE Amex: PRK) today reported operating results for the three months ended December 31, 2009 (fourth quarter) and the twelve months ended December 31, 2009 (2009 year). In 2009, Park experienced loan growth, deposit growth, and an increase in net income in Ohio. Park’s board of directors also today declared a $0.94 per common share quarterly cash dividend, payable on March 10, 2010 to common shareholders of record as of February 26, 2010.

Park Chairman C. Daniel DeLawder credited Park associates for 2009 results. “In one of the most difficult and challenging banking environments we’ve ever experienced, we are very pleased to report an increase in net income, growth in loans and deposits, and the ability to continue paying significant dividends to our shareholders,” he said. “Our associates worked harder than ever resulting in performance levels that compare very favorably with industry trends and conditions.”

Income, Loan and Deposit Data

For the 2009 year, Park’s net income was $74.2 million or $4.82 per diluted common share. Net income for the 2009 fourth quarter was $12.3 million or $0.74 per diluted common share.

In 2008, Park recorded a goodwill impairment charge of $55.0 million at Vision Bank, significantly impacting earnings and comparability between years. For the 2008 year, Park reported net income of $13.7 million, or $0.97 per diluted common share. Without the goodwill impairment charge, Park’s net income for 2008 would have been $68.7 million, or $4.91 per diluted common share. Net income for the fourth quarter of 2008 was $11.0 million or $0.77 per diluted common share.

Park’s Ohio-based operations reported $104.3 million in net income for the 2009 year, a $9.4 million increase over net income of $94.9 million for 2008. Park grew loans by $149.1 million (3.32 percent) and deposits by $426.3 million (8.95 percent) for the 2009 year.

Park’s loan loss provision for the 2009 year was $68.8 million, compared to $70.5 million for 2008. Park subsidiary Vision Bank (based in Panama City, Fla.) had a loan loss provision of $44.4 million for the 2009 year, compared to $47.0 million for 2008. Park’s Ohio-based operations had a loan loss provision of $24.4 million in the 2009 year, compared to $23.5 million in 2008. Net loan charge-offs for the 2009 year were $52.2 million or 1.14 percent of average loans outstanding. This compares to net loan charge-offs of $57.5 million or 1.32 percent of average loans outstanding in 2008.

Park continues to proactively address current economic conditions within the loan portfolio through increases in the allowance for loan losses. As of December 31, 2009, the allowance for loan losses was $116.7 million, an increase of 16.6 percent over the balance of $100.1 million at December 31, 2008.

Capital Raising Activity

During 2009, Park executed various capital-raising strategies, selling an aggregate of 904,072 common shares at a purchase price of $61.20 per average weighted share, for gross proceeds of $55.3 million. In addition, Park raised $35.25 million through the issuance of 10 percent Subordinated Notes due December 23, 2019 (which qualify for Tier 2 Capital treatment under the Federal Reserve Board’s risk-based capital guidelines). The gross proceeds from Park’s 2009 capital raises totaled $90.55 million. Net of all selling and due diligence expenses, Park raised approximately $89 million.

Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com

News Release

Prior to these transactions, Park already maintained capital in excess of the federal regulatory requirements to qualify as well capitalized. “Throughout 2009, we executed a disciplined approach to raising additional capital for general corporate purposes and to take advantage of strategic opportunities that may arise in 2010,” DeLawder said. According to DeLawder, that could also include partial or complete repayment of Park’s $100 million obligation under the U.S. Treasury’s Capital Purchase Program.

Other information

• In January 2010, Park sold $200 million of mortgage backed securities. Park expects this transaction to settle in March 2010 and estimates a pre-tax gain on sale of $7.3 million.

• Park’s 2009 fourth quarter results included the completed sale of its Visa Class B shares, resulting in a pre-tax gain of approximately $3.0 million.

• Park’s 2008 fourth quarter results included the completed sale of its credit card portfolio and merchant processing business, resulting in a pre-tax gain of $11.8 million.

Headquartered in Newark, Ohio, Park National Corporation holds $7.0 billion in total assets (as of December 31, 2009). Park consists of 13 community bank divisions and two specialty finance companies. Park’s Ohio-based banking operations are conducted through Park subsidiary The Park National Bank and its divisions which include Fairfield National Bank, Richland Bank, Century National Bank, First-Knox National Bank, Farmers and Savings Bank, United Bank, Second National Bank, Security National Bank, Unity National Bank and The Park National Bank of Southwest Ohio & Northern Kentucky. Park’s other banking subsidiary is Vision Bank (headquartered in Panama City, Florida), and its Vision Bank Division (of Gulf Shores, Alabama). Park also includes Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance) and Guardian Finance Company.

Complete financial tables are included below.

###

Media Contacts: Bethany Lewis, Communications Specialist, 740.349.0421 or John Kozak, Chief Financial Officer, 740.349.3792

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

This news release contains forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation: deterioration in the asset value of Park’s loan portfolio may be worse than expected; Park’s ability to execute its business plan successfully and within the expected timeframe; general economic and financial market conditions, and weakening in the economy, specifically, the real estate market and credit market, either national 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 market rates and prices may adversely impact the value of securities, loans, deposits and other financial instruments and the interest rate sensitivity of our consolidated balance sheet; changes in consumer spending, borrowing and saving habits; our liquidity requirements could be adversely affected by changes in our assets and liabilities; our ability to convert our Ohio-based banking divisions into one operating system; competitive factors among financial institutions increase significantly, including product and pricing pressures and our ability to attract, develop and retain qualified bank professionals; the nature, timing and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and its subsidiaries, including changes in laws concerning taxes, banking, securities and other aspects of the financial services industry; the effect of fiscal and governmental policies of the United States federal government; demand for loans in the respective market areas served by Park and its subsidiaries, and other risk factors relating to the banking industry as detailed from time to time in Park’s reports filed with the Securities and Exchange Commission including those described in “Item 1A. Risk Factors” of Part I of Park’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and in “Item 1A. Risk Factors” of Part II of Park’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Park does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

Park National Corporation
50 N. Third Street, Newark, Ohio 43055
www.parknationalcorp.com

PARK NATIONAL CORPORATION
FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data)

	THREE MONTHS ENDED									TWELVE MONTHS ENDED
	DECEMBER 31,									DECEMBER 31,
							PERCENT									PERCENT
	2009			2008			CHANGE			2009			2008			CHANGE
INCOME STATEMENT AND RATIOS
NET INTEREST INCOME	$	68,802		$	64,835			6.12	%	$	273,491		$	255,873			6.89	%
PROVISION FOR LOAN LOSSES		25,720			32,618			-21.15	%		68,821			70,487			-2.36	%
OTHER INCOME		16,718			27,049			-38.19	%		73,850			83,719			-11.79	%
GAIN ON SALE OF SECURITIES		—			219						7,340			1,115
GOODWILL IMPAIRMENT CHARGE		—			—			—			—			54,986			-100.00	%
OTHER EXPENSE		46,660			47,312			-1.38	%		188,725			179,515			5.13	%
INCOME BEFORE TAXES		13,140			12,173			7.94	%		97,135			35,719			N.M.
NET INCOME (LOSS)		12,296			10,951			12.28	%		74,192			13,708			N.M.
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS (a)		10,855			10,809			0.43	%		68,430			13,566			N.M.
NET INCOME (LOSS) PER COMMON SHARE-BASIC (a)		0.74			0.77			-3.90	%		4.82			0.97			N.M.
NET INCOME (LOSS) PER COMMON SHARE-DILUTED (a)		0.74			0.77			-3.90	%		4.82			0.97			N.M.
RETURN ON AVERAGE ASSETS (a)		0.61	%		0.63	%					0.97	%		0.20	%
RETURN ON AVERAGE COMMON EQUITY (a)		6.94	%		8.10	%					11.81	%		2.40	%
CASH DIVIDENDS DECLARED PER COMMON SHARE		0.94			0.95			-1.05	%		3.76			3.77			-0.27	%
INCOME STATEMENT AND RATIOS (NON GAAP)
NET INCOME BEFORE IMPAIRMENT CHARGE (c)		12,296			10,951			12.28	%		74,192			68,694			8.00	%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS BEFORE IMPAIRMENT CHARGE (a)(c)		10,855			10,809			0.43	%		68,430			68,552			-0.18	%
NET INCOME BEFORE IMPAIRMENT CHARGE PER SHARE-DILUTED (c)		0.74			0.77			-3.90	%		4.82			4.91			-1.83	%
RETURN ON AVERAGE TANGIBLE ASSETS BEFORE IMPAIRMENT CHARGE (g)		0.62	%		0.64	%					0.98	%		1.04	%
RETURN ON AVERAGE ASSETS BEFORE IMPAIRMENT CHARGE (a)(c)		0.61	%		0.63	%					0.97	%		1.02	%
RETURN ON AVERAGE TANGIBLE REALIZED COMMON EQUITY BEFORE IMPAIRMENT CHARGE (a)(d)		8.33	%		9.56	%					14.20	%		15.66	%
RETURN ON AVERAGE COMMON EQUITY BEFORE IMPAIRMENT CHARGE (a)(c)		6.94	%		8.10	%					11.81	%		12.12	%
RETURN ON AVERAGE TANGIBLE ASSETS(f)(a)		0.62	%		0.64	%					0.98	%		0.21	%
RETURN ON AVERAGE TANGIBLE REALIZED COMMON EQUITY (b)(a)		8.33	%		9.56	%					14.20	%		3.10	%
OTHER RATIOS
YIELD ON EARNING ASSETS		5.51	%		5.99	%					5.67	%		6.35	%
COST OF PAYING LIABILITIES		1.58	%		2.21	%					1.74	%		2.55	%
NET INTEREST MARGIN		4.20	%		4.11	%					4.22	%		4.16	%
NET LOAN CHARGE-OFFS	$	19,044		$	21,725					$	52,192		$	57,501
NET CHARGE-OFFS AS A PERCENT OF AVERAGE LOANS		1.63	%		1.94	%					1.14	%		1.32	%

	December 31,			September 30,			December 31,
	2009			2009			2008
BALANCE SHEET
INVESTMENTS	$	1,863,560		$	1,873,953		$	2,059,051
LOANS		4,640,432			4,615,101			4,491,337
LOAN LOSS RESERVE		116,717			110,040			100,088
GOODWILL AND OTHER INTANGIBLES		81,799			82,735			85,545
TOTAL ASSETS		7,040,329			6,970,678			7,070,720
TOTAL DEPOSITS		5,188,052			5,114,976			4,761,750
BORROWINGS		1,053,850			1,066,757			1,554,754
EQUITY		717,264			687,327			642,663
COMMON EQUITY		620,781			591,035			546,942
TANGIBLE COMMON EQUITY (e)		538,982			508,300			461,397
COMMON BOOK VALUE PER SHARE		41.71			41.45			39.15
TANGIBLE COMMON BOOK VALUE PER SHARE (e)		36.22			35.65			33.02
NONPERFORMING LOANS		233,686			207,212			162,357
NONPERFORMING ASSETS		274,926			254,227			188,205
PAST DUE 90 DAY LOANS AND STILL ACCRUING		14,773			4,849			5,421
RATIOS
LOANS/ASSETS		65.91	%		66.21	%		63.52	%
NONPERFORMING LOANS/LOANS		5.04	%		4.49	%		3.61	%
PAST DUE 90 DAY LOANS/LOANS		0.32	%		0.11	%		0.12	%
LOAN LOSS RESERVE/LOANS		2.52	%		2.38	%		2.23	%
TOTAL EQUITY/ASSETS		10.19	%		9.86	%		9.09	%
COMMON EQUITY/ASSETS		8.82	%		8.48	%		7.74	%
TANGIBLE COMMON EQUITY/TANGIBLE ASSETS (h)		7.75	%		7.38	%		6.61	%

N.M. — Not meaningful
(a)	Reported measure excludes the impact of the preferred stock issued to the U.S. Treasury under the Capital Purchase Program and uses net income available to common shareholders.

(b)

Net Income available to common shareholders for each period divided by average tangible realized common equity during the period. Average tangible realized common equity equals average stockholders’ equity during the applicable period less (i) average goodwill and other intangibles during the period, (ii) average accumulated other comprehensive income, net of taxes, during the period, and (iii) average preferred stock.

(c)

Net income available to common shareholders for the year ended December 31, 2008 has been adjusted for the impairment charge to goodwill. Net income before impairment charge equals net income for the year plus the impairment charge to the Vision Bank goodwill of $54,986.

RECONCILIATION OF NET INCOME TO NET INCOME BEFORE IMPAIRMENT CHARGE:

	THREE MONTHS ENDED				TWELVE MONTHS ENDED
	DECEMBER 31,				DECEMBER 31,
	2009		2008		2009		2008
NET INCOME		12,296		10,951		74,192		13,708
Plus:
Goodwill impairment charge		—		—		—		54,986
NET INCOME BEFORE IMPAIRMENT CHARGE		12,296		10,951		74,192		68,694

RECONCILIATION OF NET INCOME PER SHARE-DILUTED TO NET INCOME BEFORE IMPAIRMENT CHARGE PER SHARE DILUTED:

	THREE MONTHS ENDED				TWELVE MONTHS ENDED
	DECEMBER 31,				DECEMBER 31,
	2009		2008		2009		2008
NET INCOME PER SHARE-DILUTED	$	0.74	$	0.77	$	4.82	$	0.97
Plus:
Impairment charge to goodwill per share-diluted		—		—		—		3.94
NET INCOME BEFORE IMPAIRMENT CHARGE PER SHARE-DILUTED	$	0.74	$	0.77	$	4.82	$	4.91

(d) Net Income before impairment charge for each period divided by average tangible realized common equity during the period. Average tangible realized common equity equals average stockholders’ equity during the applicable period less (i) average preferred stock, (ii) average goodwill and other intangibles during the period and (iii) average accumulated other comprehensive income (loss), net of taxes, during the period.

RECONCILIATION OF AVERAGE STOCKHOLDERS’ EQUITY TO AVERAGE TANGIBLE REALIZED COMMON EQUITY:

	THREE MONTHS ENDED					TWELVE MONTHS ENDED
	DECEMBER 31,					DECEMBER 31,
	2009		2008			2009		2008
AVERAGE STOCKHOLDERS’ EQUITY		717,268		540,287			675,314		567,965
Less: Average preferred stock		96,374		9,362			96,090		2,353
Average goodwill and other intangibles		82,322		86,117			83,722		128,635
Average accumulated other comprehensive income (loss), net of taxes		21,786		(4,847	)		13,534		(876	)
AVERAGE TANGIBLE REALIZED COMMON EQUITY		516,786		449,655			481,968		437,853

(e) Tangible common equity equals ending stockholders’ equity less preferred stock and goodwill and other intangibles at the end of the period.

RECONCILIATION OF STOCKHOLDERS’ EQUITY TO TANGIBLE COMMON EQUITY:

	December 31,		September 30,		December 31,
	2009		2009		2008
STOCKHOLDERS’ EQUITY		717,264		687,327		642,663
Less: Preferred stock		96,483		96,292		95,721
Goodwill and other intangibles		81,799		82,735		85,545
TANGIBLE COMMON EQUITY		538,982		508,300		461,397

(f) Net income (loss) available to common shareholders divided by average tangible assets. Average tangible assets equals average assets less average goodwill and other intangibles.

RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS

	THREE MONTHS ENDED				TWELVE MONTHS ENDED
	DECEMBER 31,				DECEMBER 31,
	2009		2008		2009		2008
AVERAGE ASSETS		7,076,494		6,789,083		7,035,531		6,708,086
Less average goodwill and other intangibles		82,322		86,117		83,722		128,635
AVERAGE TANGIBLE ASSETS		6,994,172		6,702,966		6,951,809		6,579,451

(g) Net income available to common shareholders before impairment charge divided by average tangible assets during the period. Average tangible assets equals average assets less average goodwill and other intangibles (see (f) above).

(h) Tangible common equity (see (e) above) divided by tangible assets. Tangible assets equals total assets less goodwill and other intangibles.

RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:

	December 31,		September 30,		December 31,
	2009		2009		2008
TOTAL ASSETS		7,040,329		6,970,678		7,070,720
Less: Goodwill and other intangibles		81,799		82,735		85,545
TANGIBLE ASSETS		6,958,530		6,887,943		6,985,175

PARK NATIONAL CORPORATION
Consolidated Statements of Income
(dollars in thousands, except per share data)

	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2009		2008		2009		2008
Interest income:
Interest and fees on loans	$	68,676	$	72,054	$	275,599	$	301,163
Interest on:
Obligations of U.S. Government, its agencies and other securities		21,325		22,173		90,558		87,711
Obligations of states and political subdivisions		286		464		1,417		2,171
Other interest income		78		32		116		294
Total interest income		90,365		94,723		367,690		391,339
Interest expense:
Interest on deposits:
Demand and savings deposits		2,333		4,367		10,815		22,633
Time deposits		12,269		15,915		53,805		67,259
Interest on borrowings		6,961		9,606		29,579		45,574
Total interest expense		21,563		29,888		94,199		135,466
Net interest income		68,802		64,835		273,491		255,873
Provision for loan losses		25,720		32,618		68,821		70,487
Net interest income after provision for loan losses		43,082		32,217		204,670		185,386
Other income		16,718		27,049		73,850		83,719
Gain on sale of securities		—		219		7,340		1,115
Other expense:
Salaries and employee benefits		24,815		24,756		101,225		99,018
Occupancy expense		2,740		2,776		11,552		11,534
Furniture and equipment expense		2,395		2,451		9,734		9,756
Goodwill Impairment charge		—		—		—		54,986
Other expense		16,710		17,329		66,214		59,207
Total other expense		46,660		47,312		188,725		234,501
Income before income taxes		13,140		12,173		97,135		35,719
Income taxes		844		1,222		22,943		22,011
Net income	$	12,296	$	10,951	$	74,192	$	13,708
Preferred stock dividends		1,441		142		5,762		142
Net income available to common shareholders	$	10,855	$	10,809	$	68,430	$	13,566
Per Common Share:
Net income — basic	$	0.74	$	0.77	$	4.82	$	0.97
Net income — diluted	$	0.74	$	0.77	$	4.82	$	0.97
Weighted average shares — basic		14,658,601		13,967,194		14,206,335		13,965,219
Weighted average shares — diluted		14,658,601		13,967,650		14,206,335		13,965,333

PARK NATIONAL CORPORATION
Consolidated Balance Sheets
(dollars in thousands, except share data)

	December 31,
	2009			2008
Assets
Cash and due from banks	$	116,802		$	150,298
Money market instruments		42,289			20,964
Investment securities		1,863,560			2,059,051
Loans		4,640,432			4,491,337
Allowance for loan losses		116,717			100,088
Loans, net		4,523,715			4,391,249
Bank premises and equipment, net		69,091			68,553
Goodwill and other intangibles		81,799			85,545
Other real estate owned		41,240			25,848
Other assets		301,833			269,212
Total assets	$	7,040,329		$	7,070,720
Liabilities and Stockholders’ Equity
Deposits:
Noninterest bearing	$	897,243		$	782,625
Interest bearing		4,290,809			3,979,125
Total deposits		5,188,052			4,761,750
Borrowings		1,053,850			1,554,754
Other liabilities		81,163			111,553
Total liabilities	$	6,323,065		$	6,428,057
Stockholders’ Equity:
Preferred Stock (200,000 shares authorized in 2009 and -0- in 2008; 100,000 shares issued in 2009 and -0- in 2008)	$	96,483		$	95,721
Common stock (No par value; 20,000,000 shares authorized in 2009 and 2008; 16,151,112 shares issued in 2009 and 16,151,151 in 2008)		301,208			301,210
Common stock warrants		5,361			4,297
Accumulated other comprehensive income, net of taxes		15,661			10,596
Retained earnings		423,872			438,504
Treasury stock (1,268,332 shares in 2009 and 2,179,424 shares in 2008)		(125,321	)		(207,665	)
Total stockholders’ equity		717,264			642,663
Total liabilities and stockholders’ equity	$	7,040,329		$	7,070,720

PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets
(dollars in thousands)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2009			2008			2009			2008
Assets
Cash and due from banks	$	105,000		$	138,004		$	110,227		$	143,151
Money market instruments		132,479			19,696			52,518			15,502
Investment securities		1,848,142			1,815,033			1,930,151			1,806,317
Loans		4,631,230			4,465,655			4,594,436			4,354,520
Allowance for loan losses		109,211			88,567			103,683			86,485
Loans, net		4,522,019			4,377,088			4,490,753			4,268,035
Bank premises and equipment, net		68,234			69,375			67,944			69,278
Goodwill and other intangibles		82,322			86,117			83,722			128,635
Other real estate owned		44,420			23,047			38,523			19,910
Other assets		273,878			260,723			261,693			257,258
Total assets	$	7,076,494		$	6,789,083		$	7,035,531		$	6,708,086
Liabilities and Stockholders’ Equity
Deposits:
Noninterest bearing	$	856,093		$	770,364		$	818,243		$	739,994
Interest bearing		4,368,336			4,039,670			4,232,391			3,862,780
Total deposits		5,224,429			4,810,034			5,050,634			4,602,774
Borrowings		1,029,529			1,350,520			1,200,168			1,444,741
Other liabilities		105,268			88,242			109,415			92,606
									��
Total liabilities	$	6,359,226		$	6,248,796		$	6,360,217		$	6,140,121
Stockholders’ Equity:
Preferred stock	$	96,374		$	9,362		$	96,090		$	2,353
Common stock		301,208			301,211			301,208			301,211
Common stock warrants		5,037			420			4,484			106
Accumulated other comprehensive income (loss), net of taxes		21,786			(4,847	)		13,534			(876	)
Retained earnings		438,367			442,092			446,326			473,236
Treasury stock		(145,504	)		(207,951	)		(186,328	)		(208,065	)
Total stockholders’ equity	$	717,268		$	540,287		$	675,314		$	567,965
Total liabilities and stockholders’ equity	$	7,076,494		$	6,789,083		$	7,035,531		$	6,708,086