PRK filing — read by section

prk-20220630 
 
 UNITED STATES 
 SECURITIES AND EXCHANGE COMMISSION 
 WASHINGTON, D.C. 20549 
 
 FORM 10-Q 
 
 (Mark One) 
 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
 
 For the quarterly period ended June 30, 2022 
 OR 
 
 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
 
 For the transition period from ______________________ to __________________________ 
 
 Commission File Number 1-13006 

 PARK NATIONAL CORPORATION 
 (Exact name of registrant as specified in its charter) 

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

 50 North Third Street, P.O. Box 3500 Newark, Ohio 43058-3500 
 (Address of principal executive offices) (Zip Code) 

 (740) 349-8451 
 (Registrant’s telephone number, including area code) 

 N/A 
 (Former name, former address and former fiscal year, if changed since last report) 

 Securities registered pursuant to Section 12(b) of the Act: 
 Title of each class Trading Symbol(s) Name of each exchange on which registered 
 Common shares, without par value PRK NYSE American 

 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 
 
 Yes ☒ No ☐ 
 
 Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 
 
 Yes ☒ No ☐ 
 
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, 
 “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act. 
 Large accelerated filer ☒ Accelerated filer ☐ 
 Non-accelerated filer ☐ Smaller reporting company ☐ 
 Emerging growth company ☐ 

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 
 
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 
 
 Yes ☐ No ☒ 
 
 Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 16,253,794 Common Shares, no par value per share, outstanding at July 29, 2022. 
 
 PARK NATIONAL CORPORATION 
 
 CONTENTS 
 Page 
 PART I. FINANCIAL INFORMATION 
 
 Item 1. Financial Statements 
 
 Consolidated Condensed Balance Sheets a t June 30 , 2022 and December 31, 20 21 (unaudited) 
 5 
 
 Consolidated Condensed Statements of Income for the three months and six months ended June 30 , 2022 and 20 21 (unaudited) 
 7 
 
 Consolidated Condensed Statements of Comprehensive (Loss) Income for the three months and six months ended June 3 0 , 2022 and 20 21 (unaudited) 
 9 
 
 Consolidated Condensed Statements of Changes in Shareholders’ Equity for the three months and six months ended June 3 0 , 2022 and 20 21 (unaudited) 
 10 
 
 Consolidated Condensed Statements of Cash Flows for the six months ended June 30 , 2022 and 20 21 (unaudited) 
 12 
 
 Notes to Unaudited Consolidated Condensed Financial Statements 
 14 
 
 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 
 69 
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk 
 101 
 
 Item 4. Controls and Procedures 
 101 
 
 PART II. OTHER INFORMATION 
 103 
 
 Item 1. Legal Proceedings 
 103 
 
 Item 1A. Risk Factors 
 103 
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 
 103 
 
 Item 3. Defaults Upon Senior Securities 
 104 
 
 Item 4. Mine Safety Disclosures 
 104 
 
 Item 5. Other Information 
 104 
 
 Item 6. Exhibits 
 104 
 
 SIGNATURES 
 107 
 
 3 

 Glossary of Abbreviations and Acronyms 
 
 Park has identified the following list of abbreviations and acronyms that are used in the Unaudited Consolidated Condensed Financial Statements, Notes to Unaudited Consolidated Condensed Financial Statements, and Management's Discussion and Analysis of Financial Condition and Results of Operations. 
 
 AFS Available-for-sale LIBOR London Inter-Bank Offered Rate 
 ACL Allowance for credit losses MSRs Mortgage servicing rights 
 Allowance Allowance for credit losses NAV Net asset value 
 AOCI Accumulated other comprehensive (loss) income NewDominion NewDominion Bank 
 ASC Accounting Standards Codification OCI Other comprehensive (loss) income 
 ASU Accounting Standards Update OREO Other real estate owned 
 AUCL Allowance for unfunded credit losses OWS One-way sell 
 CARES Act Coronavirus Aid, Relief, and Economic Security Act Park Park National Corporation and its subsidiaries 
 Carolina Alliance CAB Financial Corporation and its subsidiaries PBRSUs Performance-based restricted stock units 
 CECL Current expected credit loss PCD Purchased credit deteriorated 
 COVID-19 Novel coronavirus PD Probability of default 
 DCF Discounted cash flow PNB The Park National Bank 
 FASB Financial Accounting Standards Board PPP CARES Act Paycheck Protection Program 
 FHLB Federal Home Loan Bank ROU Right-of-use 
 FRB Federal Reserve Bank SARs Stock appreciation rights 
 GDP Gross domestic product SBA Small Business Administration 
 GFSC Guardian Financial Services Company SEC U.S. Securities and Exchange Commission 
 HPI Home price index SEPH SE Property Holdings, LLC 
 HTM Held-to-maturity TBRSUs Time-based restricted stock units 
 IRLC Interest rate lock commitment TDRs Troubled debt restructurings 
 KSOP Park's qualified retirement plan that combines an employee stock ownership plan (ESOP) with a 401(k) plan U.S. GAAP United States Generally Accepted Accounting Principles 
 LDA Loss driver analysis U.S. United States 
 LGD Loss given default 

 4 

 Table of Contents 
 
 PARK NATIONAL CORPORATION AND SUBSIDIARIES 
 Consolidated Condensed Balance Sheets (Unaudited) 
 (in thousands, except share and per share data) 
 
 June 30,
2022 December 31, 2021 
 Assets: 
 Cash and due from banks $ 171,114 $ 144,507 
 Money market instruments 75,327 74,673 
 Cash and cash equivalents 246,441 219,180 
 
 Investment securities: 
 Debt securities available-for-sale, at fair value (amortized cost of $ 1,939,877 and $ 1,727,363 at June 30, 2022 and December 31, 2021, respectively, and no allowance for credit losses at June 30, 2022 and December 31, 2021) 
 1,839,103 1,754,140 
 Other investment securities 81,621 61,268 
 Total investment securities 1,920,724 1,815,408 
 
 Commercial loans held for sale 6,321 — 
 
 Loans 6,958,685 6,871,122 
 Allowance for credit losses ( 81,448 ) ( 83,197 ) 
 Net loans 6,877,237 6,787,925 
 
 Bank owned life insurance 219,579 215,792 
 Prepaid assets 152,573 144,124 
 Goodwill 159,595 159,595 
 Other intangible assets 6,657 7,462 
 Premises and equipment, net 85,531 89,008 
 Affordable housing tax credit investments 54,751 58,711 
 OREO 1,354 775 
 Accrued interest receivable 26,457 23,413 
 Operating lease right-of-use asset 16,314 13,446 
 Mortgage loan servicing rights 16,470 15,264 
 Other 36,666 10,151 
 Total assets $ 9,826,670 $ 9,560,254 

 5 

 Table of Contents 
 
 PARK NATIONAL CORPORATION AND SUBSIDIARIES 
 Consolidated Condensed Balance Sheets (Unaudited) (Continued) 
 (in thousands, except share and per share data) 
 
 June 30,
2022 December 31, 2021 
 Liabilities and Shareholders' Equity: 
 Deposits: 
 Non-interest bearing $ 3,057,977 $ 3,066,419 
 Interest bearing 5,239,677 4,838,109 
 Total deposits 8,297,654 7,904,528 
 
 Short-term borrowings 171,799 238,786 
 Subordinated notes 188,435 188,210 
 Unfunded commitments in affordable housing tax credit investments 21,232 28,484 
 Operating lease liability 17,067 14,339 
 Allowance for credit losses on off-balance sheet commitments 4,131 4,282 
 Accrued interest payable 3,080 3,116 
 Other 73,259 67,750 
 Total liabilities $ 8,776,657 $ 8,449,495 
 
 Shareholders' equity: 
 Preferred shares ( 200,000 shares authorized; No shares issued) 
 $ — $ — 
 Common shares (No par value; 20,000,000 shares authorized; 17,623,104 shares issued at June 30, 2022 and 17,623,118 shares issued at December 31, 2021) 
 460,645 461,800 
 Retained earnings 814,241 776,294 
 Treasury shares ( 1,373,798 shares at June 30, 2022 and 1,403,555 shares at December 31, 2021) 
 ( 139,469 ) ( 142,490 ) 
 Accumulated other comprehensive (loss) income, net of taxes ( 85,404 ) 15,155 
 Total shareholders' equity 1,050,013 1,110,759 
 Total liabilities and shareholders’ equity $ 9,826,670 $ 9,560,254 

 SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 
 6 

 Table of Contents 
 
 PARK NATIONAL CORPORATION AND SUBSIDIARIES 
 Consolidated Condensed Statements of Income (Unaudited) 
 (in thousands, except share and per share data) 
 
 Three Months Ended 
June 30, Six Months Ended 
June 30, 
 2022 2021 2022 2021 
 Interest and dividend income: 
 
 Interest and fees on loans $ 77,787 $ 81,176 $ 150,203 $ 159,913 
 
 Interest and dividends on: 
 Debt securities - taxable 7,624 4,600 13,754 8,856 
 Debt securities - tax-exempt 2,676 2,032 5,123 4,069 
 Other interest income 260 186 413 329 
 Total interest and dividend income 88,347 87,994 169,493 173,167 
 
 Interest expense: 
 
 Interest on deposits: 
 Demand and savings deposits 1,333 401 1,684 787 
 Time deposits 708 1,285 1,428 2,869 
 
 Interest on borrowings: 
 Short-term borrowings 190 182 434 365 
 Long-term debt 2,177 2,275 4,322 4,561 
 
 Total interest expense 4,408 4,143 7,868 8,582 
 
 Net interest income 83,939 83,851 161,625 164,585 
 
 Provision for (recovery of) credit losses 2,991 ( 4,040 ) ( 1,614 ) ( 8,895 ) 
 Net interest income after provision for (recovery of) credit losses $ 80,948 $ 87,891 163,239 173,480 
 
 Other income: 
 Income from fiduciary activities $ 8,859 $ 8,569 17,656 16,742 
 Service charges on deposit accounts 2,563 2,032 4,637 4,086 
 Other service income 4,940 7,159 9,759 16,776 
 Debit card fee income 6,731 6,758 12,857 12,844 
 Bank owned life insurance income 2,374 1,149 3,549 2,314 
 ATM fees 583 655 1,115 1,185 
 Gain on equity securities, net 709 467 3,062 2,277 
 Other components of net periodic pension benefit income 3,027 2,038 6,054 4,076 
 Miscellaneous 1,407 2,411 4,160 5,027 
 Total other income $ 31,193 $ 31,238 $ 62,849 $ 65,327 
 
 7 

 Table of Contents 
 
 PARK NATIONAL CORPORATION AND SUBSIDIARIES 
 Consolidated Condensed Statements of Income (Unaudited) (Continued) 
 (in thousands, except share and per share data) 
 
 Three Months Ended 
June 30, Six Months Ended 
June 30, 
 2022 2021 2022 2021 
 Other expense: 
 Salaries $ 31,052 $ 30,303 $ 61,573 $ 60,199 
 Employee benefits 10,199 10,056 20,698 20,257 
 Occupancy expense 3,040 3,027 6,254 6,667 
 Furniture and equipment expense 2,934 2,756 5,871 5,366 
 Data processing fees 8,416 7,150 15,920 14,862 
 Professional fees and services 6,775 6,973 12,633 12,637 
 Marketing 1,019 1,290 2,336 2,781 
 Insurance 1,245 1,276 2,650 2,967 
 Communication 935 770 1,825 1,892 
 State tax expense 1,167 1,103 2,359 2,211 
 Amortization of intangible assets 403 479 805 958 
 Foundation contribution — 4,000 — 4,000 
 Miscellaneous 2,863 2,217 4,497 4,468 
 Total other expense $ 70,048 $ 71,400 $ 137,421 $ 139,265 
 
 Income before income taxes $ 42,093 $ 47,729 $ 88,667 $ 99,542 
 
 Income taxes 7,769 8,597 15,468 17,579 
 
 Net income $ 34,324 $ 39,132 $ 73,199 $ 81,963 
 
 Earnings per common share: 
 Basic $ 2.11 $ 2.39 $ 4.51 $ 5.02 
 Diluted $ 2.10 $ 2.38 $ 4.48 $ 4.98 
 
 Weighted average common shares outstanding: 
 Basic 16,249,307 16,340,690 16,234,598 16,327,838 
 Diluted 16,361,246 16,472,800 16,346,141 16,455,673 
 
 Regular cash dividends declared per common share $ 1.04 $ 1.03 $ 2.08 $ 2.06 
 Special cash dividends declared per common share $ — $ — — $ 0.20 

 SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 
 
 8 

 Table of Contents 
 
 PARK NATIONAL CORPORATION AND SUBSIDIARIES 
 Consolidated Condensed Statements of Comprehensive (Loss) Income (Unaudited) 
 (in thousands) 
 
 Three Months Ended 
June 30, Six Months Ended 
June 30, 
 2022 2021 2022 2021 
 Net income $ 34,324 $ 39,132 $ 73,199 $ 81,963 
 
 Other comprehensive (loss) income, net of tax: 
 Unrealized net holding (loss) gain on debt securities available-for-sale, net of income tax effect of $( 11,963 ) and $ 1,291 for the three months ended June 30, 2022 and 2021, respectively, and $( 26,786 ) and $( 2,323 ) for the six months ended June 30, 2022 and 2021, respectively. 
 ( 45,002 ) 4,858 ( 100,765 ) ( 8,739 ) 
 Reclassification adjustment for losses included in net income on cash flow hedging derivatives, net of income tax effect of $ 14 for both the three months and six months ended June 30, 2022. 
 52 — 52 — 
 Unrealized gain on cash flow hedging derivatives, net of income tax effect of $ 4 and $ 30 for the three months ended June 30, 2022 and 2021, respectively, and $ 41 and $ 63 for the six months ended June 30, 2022 and 2021, respectively. 
 15 113 154 238 
 Other comprehensive (loss) income $ ( 44,935 ) $ 4,971 $ ( 100,559 ) $ ( 8,501 ) 
 
 Comprehensive (loss) income $ ( 10,611 ) $ 44,103 $ ( 27,360 ) $ 73,462 

 SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 
 
 9 

 Table of Contents 
 
 PARK NATIONAL CORPORATION AND SUBSIDIARIES 
 Consolidated Condensed Statements of Changes in Shareholders' Equity (Unaudited) 
 (in thousands, except share and per share data) 
 
 Preferred
Shares Common
Shares Retained
Earnings Treasury
Shares Accumulated
Other
Comprehensive
Income (Loss) 
 Balance at December 31, 2021 $ — $ 461,800 $ 776,294 $ ( 142,490 ) $ 15,155 
 Net income 38,875 
 Other comprehensive loss, net of tax ( 55,624 ) 
 Dividends on common shares at $ 1.04 per share 
 ( 17,172 ) 
 Cash payment for fractional common shares in dividend reinvestment plan ( 2 ) 
 Issuance of 29,757 common shares under share-based compensation awards, net of 18,658 common shares withheld to pay employee income taxes 
 ( 4,508 ) ( 964 ) 3,021 
 Share-based compensation expense 1,981 
 Balance at March 31, 2022 $ — $ 459,271 $ 797,033 $ ( 139,469 ) $ ( 40,469 ) 
 Net income $ 34,324 
 Other comprehensive loss, net of tax $ ( 44,935 ) 
 Dividends on common shares at $ 1.04 per share 
 $ ( 17,116 ) 
 Share-based compensation expense 1,374 
 Balance at June 30, 2022 $ — $ 460,645 $ 814,241 $ ( 139,469 ) $ ( 85,404 ) 

 10 

 Table of Contents 
 
 PARK NATIONAL CORPORATION AND SUBSIDIARIES 
 Consolidated Condensed Statements of Changes in Shareholders' Equity (Unaudited) (Continued) 
 (in thousands, except share and per share data) 
 
 Preferred
Shares Common
Shares Retained
Earnings Treasury
Shares Accumulated
Other
Comprehensive
Income (Loss) 
 Balance at December 31, 2020 $ — $ 460,687 $ 704,764 $ ( 130,766 ) $ 5,571 
 Cumulative change in accounting principle ( 7,956 ) 
 Balance at January 1, 2021 $ — $ 460,687 $ 696,808 $ ( 130,766 ) $ 5,571 
 Net income 42,831 
 Other comprehensive loss, net of tax ( 13,472 ) 
 Dividends on common shares at $ 1.23 per share 
 ( 20,365 ) 
 Cash payment for fractional common shares in dividend reinvestment plan ( 1 ) 
 Issuance of 21,764 common shares under share-based compensation awards, net of 14,108 common shares withheld to pay employee income taxes 
 ( 3,988 ) ( 44 ) 2,174 
 Share-based compensation expense 1,836 
 Balance at March 31, 2021 $ — $ 458,534 $ 719,230 $ ( 128,592 ) $ ( 7,901 ) 
 Net income 39,132 
 Other comprehensive income, net of tax 4,971 
 Dividends on common shares at $ 1.03 per share 
 ( 17,081 ) 
 Cash payment for fractional common shares in dividend reinvestment plan ( 2 ) 
 Issuance of 4,834 common shares under share-based compensation awards, net of 2,973 common shares withheld to pay employee income taxes 
 ( 743 ) ( 126 ) 483 
 Share-based compensation expense 1,487 
 Balance at June 30, 2021 $ — $ 459,276 $ 741,155 $ ( 128,109 ) $ ( 2,930 ) 

 SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 
 
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 Table of Contents 
 
 PARK NATIONAL CORPORATION AND SUBSIDIARIES 
 Consolidated Condensed Statements of Cash Flows (Unaudited) 
 (in thousands) 
 
 Six Months Ended June 30, 
 2022 2021 
 Operating activities: 
 Net income $ 73,199 $ 81,963 
 
 Adjustments to reconcile net income to net cash provided by operating activities: 
 Recovery of credit losses ( 1,614 ) ( 8,895 ) 
 Accretion of loan fees and costs, net ( 7,132 ) ( 13,675 ) 
 Depreciation of premises and equipment 6,943 6,507 
 Amortization of investment securities, net 1,704 797 
 Net accretion of purchase accounting adjustments ( 241 ) ( 985 ) 
 Gain on equity securities, net ( 3,062 ) ( 2,277 ) 
 Loan originations to be sold in secondary market ( 128,306 ) ( 336,984 ) 
 Proceeds from sale of loans in secondary market 135,241 367,748 
 Gain on sale of loans in secondary market ( 3,227 ) ( 11,007 ) 
 Share-based compensation expense 3,355 3,323 
 Bank owned life insurance income ( 3,549 ) ( 2,314 ) 
 Investment in qualified affordable housing tax credits amortization 3,960 3,712 
 
 Changes in assets and liabilities: 
 Increase in prepaid dealer premiums ( 4,795 ) ( 2,412 ) 
 Increase in other assets ( 2,182 ) ( 15,580 ) 
 (Decrease) increase in other liabilities ( 13,802 ) 10,250 
 Net cash provided by operating activities $ 56,492 $ 80,171 
 
 Investing activities: 
 Proceeds from the redemption/repurchase of Federal Home Loan Bank stock $ — $ 6,549 
 Proceeds from sales of investment securities — 934 
 Proceeds from calls and maturities of: 
 Debt securities AFS 102,660 119,177 
 Purchases of: 
 Debt securities AFS ( 316,878 ) ( 437,800 ) 
 Equity securities ( 2,630 ) — 
 Net decrease in other investments 339 2,611 
 Net loan (originations) paydowns, portfolio loans ( 90,982 ) 133,037 
 Proceeds from the sale of non-mortgage loans — 3,688 
 Investment in qualified affordable housing tax credits ( 7,252 ) ( 6,094 ) 
 Proceeds from the sale of OREO 67 659 
 Life insurance death benefits 7,525 674 
 Purchases of bank owned life insurance ( 7,500 ) — 
 Purchases of premises and equipment ( 3,740 ) ( 7,814 ) 
 Net cash used in investing activities $ ( 318,391 ) $ ( 184,379 ) 
 
 12 

 Table of Contents 
 
 PARK NATIONAL CORPORATION AND SUBSIDIARIES 
 Consolidated Condensed Statements of Cash Flows (Unaudited) (Continued) 
 (in thousands) 
 
 Six Months Ended June 30, 
 2022 2021 
 Financing activities: 
 Net increase in deposits $ 219,870 $ 744,350 
 Net decrease (increase) in off-balance sheet deposits 173,261 ( 102,053 ) 
 Net decrease in short-term borrowings ( 66,987 ) ( 56,369 ) 
 Repayment of long-term debt — ( 5,000 ) 
 Value of common shares withheld to pay employee income taxes ( 2,451 ) ( 2,244 ) 
 Cash dividends paid ( 34,533 ) ( 37,526 ) 
 Net cash provided by financing activities $ 289,160 $ 541,158 
 
 Increase in cash and cash equivalents 27,261 436,950 
 
 Cash and cash equivalents at beginning of year 219,180 370,474 
 
 Cash and cash equivalents at end of period $ 246,441 $ 807,424 
 
 Supplemental disclosures of cash flow information: 
 
 Cash paid for: 
 Interest $ 7,904 $ 9,050 
 
 Federal income tax 10,500 9,350 
 
 Non-cash items: 
 Loans transferred to OREO $ 1,409 $ 78 
 
 Transfers from loans to commercial loans held for sale 6,321 — 
 
 Right-of-use assets obtained in exchange for lease obligations 4,182 180 
 
 New commitments in affordable housing tax credits — 10,000 
 
 AFS debt securities purchase commitment — 38,163 
 
 New commitments in other investment securities 15,000 — 

 SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 
 
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 Table of Contents 
 
 PARK NATIONAL CORPORATION 
 NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 
 
 Note 1 – Basis of Presentation 
 
 The accompanying unaudited consolidated condensed financial statements included in this report have been prepared for Park National Corporation (sometimes also referred to as the “Registrant”) and its subsidiaries. Unless the context otherwise requires, references to "Park", the "Corporation" or the "Company" and similar terms mean Park National Corporation and its subsidiaries. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the results of operations for the interim periods included herein have been made. The results of operations for the three-month and six-month periods ended June 30, 2022 are not necessarily indicative of the operating results to be anticipated for the year ending December 31, 2022. 
 
 The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the instructions for Quarterly Reports on Form 10-Q and, therefore, do not include all information and footnotes necessary for a fair presentation of the consolidated condensed balance sheets, consolidated condensed statements of income, consolidated condensed statements of comprehensive (loss) income, consolidated condensed statements of changes in shareholders’ equity and consolidated condensed statements of cash flows in conformity with U.S. GAAP. These financial statements should be read in conjunction with the consolidated financial statements included in Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA in the Annual Report on Form 10-K of Park National Corporation for the fiscal year ended December 31, 2021 ("Park's 2021 Form 10-K"). Certain prior period amounts have been reclassified to conform to the current period presentation. 
 
 Park’s significant accounting policies are described in Note 1. Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements included in Park’s 2021 Form 10-K. 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. 
 
 The COVID-19 pandemic has caused significant, unprecedented disruption around the world that has affected daily living and negatively impacted the global economy. Additionally, geopolitical conflict (including the conflict in Ukraine) and inflationary pressures have added uncertainty to the overall economic environment. The effects of the COVID-19 pandemic, geopolitical conflict, and inflationary pressures may meaningfully impact significant estimates such as the allowance for credit losses, goodwill, mortgage servicing rights, and pension plan obligations and related expenses. Additionally, the COVID-19 pandemic has particularly impacted certain loan concentrations in the hotels and accommodations, restaurants and food service, and strip shopping centers industries. 
 
 Note 2 - Adoption of New Accounting Pronouncements and Issued But Not Yet Effective Accounting Standards 
 
 The following is a summary of new accounting pronouncements impacting Park's consolidated financial statements: 
 
 Adoption of New Accounting Pronouncements 
 
 Staff Accounting Bulletin ("SAB") No. 121 - In March 2022, the SEC issued SAB No. 121. This SAB adds interpretive guidance for entities to consider when they have obligations to safeguard crypto-assets held for their platform users. Specifically, this SAB provides interpretive guidance on the accounting and disclosure of obligations to safeguard crypto-assets held for platform users. This guidance was applicable no later than the financial statement covering the first interim or annual period ending after June 15, 2022. Management has reviewed its business activities and determined that SAB 121 is not materially impactful to the financial statements as of June 30, 2022. 
 
 Issued But Not Yet Effective Accounting Standards 
 
 ASU 2022-02 - Financial Instruments - Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures: In March 2022, FASB issued ASU 2022-02 - Financial Instruments - Credit Losses (Topic 326) Troubled Debt Restructuring and Vintage Disclosures . ASU 2022-02 eliminates the accounting guidance for TDRs by creditors in Subtopic 310-40, Receivables - Troubled Debt Restructurings by Creditors , while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, the amendments in this ASU require that public business entities disclose current-period gross write-offs by year of origination for financing 
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 Table of Contents 
 
 receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments - Credit Losses - Measured at Amortized Cost. 
 
 For entities, like Park, that have adopted the amendments in ASU 2016-13, the amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those years. Early adoption is permitted, including adoption in an interim period. An entity may elect to adopt the loan modification guidance and related disclosure enhancements separately from the amendments related to vintage disclosures. The amendments in this ASU should be applied prospectively, except for the amendments related to the recognition and measurement of TDRs which may be applied prospectively, or using a modified retrospective transition method. Management intends to adopt this ASU effective January 1, 2023. The adoption of ASU 2022-02 is not expected to have a material impact on the financial statements but will impact disclosure requirements and reduce individually evaluated loan totals. 
 
 Note 3 – Investment Securities 
 
 Investment securities at June 30, 2022 and December 31, 2021, were as follows: 
 
 Debt securities AFS (In thousands) Amortized
Cost Gross 
Unrealized
Holding 
Gains Gross
Unrealized
Holding 
Losses Fair Value 
 June 30, 2022: 
 Obligations of U.S. Treasury and other U.S. Government sponsored entities $ 39,000 $ — $ 1,016 $ 37,984 
 Obligations of states and political subdivisions 425,119 1,388 19,728 406,779 
 U.S. Government sponsored entities' asset-backed securities 922,864 331 59,461 863,734 
 Collateralized loan obligations 535,644 — 21,537 514,107 
 Corporate debt securities 17,250 — 751 16,499 
 Total $ 1,939,877 $ 1,719 $ 102,493 $ 1,839,103 

 Debt securities AFS (In thousands) Amortized
Cost Gross 
Unrealized
Holding 
Gains Gross
Unrealized
Holding 
Losses Fair Value 
 December 31, 2021: 
 Obligations of states and political subdivisions $ 366,933 $ 22,682 $ 24 $ 389,591 
 U.S. Government sponsored entities' asset-backed securities 849,114 13,437 8,088 854,463 
 Collateralized loan obligations 500,066 3 1,395 498,674 
 Corporate debt securities 11,250 169 7 11,412 
 Total $ 1,727,363 $ 36,291 $ 9,514 $ 1,754,140 

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 Investment securities in an unrealized loss position at June 30, 2022, were as follows: 
 
 Unrealized loss position for less than 12 months Unrealized loss position for 12 months or longer Total 
 (In thousands) Fair value Unrealized
losses Fair value Unrealized
losses Fair
value Unrealized
losses 
 Debt securities AFS: 
 Obligations of U.S. Treasury and other U.S. Government sponsored entities $ 37,984 $ 1,016 $ — $ — $ 37,984 $ 1,016 
 Obligations of states and political subdivisions 275,874 19,728 — — 275,874 19,728 
 U.S. Government sponsored entities' asset-backed securities 681,442 38,975 138,318 20,486 819,760 59,461 
 Collateralized loan obligations 489,904 20,637 24,203 900 514,107 21,537 
 Corporate debt securities 9,499 751 — — 9,499 751 
 Total $ 1,494,703 $ 81,107 $ 162,521 $ 21,386 $ 1,657,224 $ 102,493 

 Investment securities in an unrealized loss position at December 31, 2021, were as follows: 
 
 Unrealized loss position for less than 12 months Unrealized loss position for 12 months or longer Total 
 (In thousands) Fair value Unrealized
losses Fair value Unrealized
losses Fair
value Unrealized
losses 
 Debt securities AFS: 
 Obligations of states and political subdivisions $ 1,834 $ 24 $ — $ — $ 1,834 $ 24 
 U.S. Government sponsored entities' asset-backed securities 333,653 4,996 73,431 3,092 407,084 8,088 
 Collateralized loan obligations 429,671 1,395 — — 429,671 1,395 
 Corporate debt securities 2,243 7 — — 2,243 7 
 Total $ 767,401 $ 6,422 $ 73,431 $ 3,092 $ 840,832 $ 9,514 

 At June 30, 2022, Park’s debt securities portfolio consisted of $ 1.8 billion of securities, $ 1.7 billion of which were in an unrealized loss position with unrealized losses of $ 102.5 million. Of the $ 1.7 billion of securities in an unrealized loss position, $ 162.5 million were in an unrealized loss position for 12 months or longer. Of the $ 102.5 million in unrealized losses, $ 59.5 million were related to Park’s U.S. Government sponsored entities' asset-backed securities portfolio. For non-agency debt securities, Park verified that the current credit ratings remain above investment grade. Unrealized losses have not been recognized into earnings as they represent negative adjustments to fair value relative to the rate of interest paid on the securities and not losses related to the creditworthiness of the respective issuers. Management does not intend to sell, and it is not more likely than not that management would be required to sell, the securities prior to their anticipated recovery in respect of the unrealized losses. Management believes the value will recover as the securities approach maturity or market rates change. 
 
 There was no allowance for credit losses recorded for debt securities AFS at either June 30, 2022 or December 31, 2021. Additionally, for the three months and six months ended June 30, 2022 and 2021, there were no credit-related investment impairment losses recognized. 
 
 The amortized cost and estimated fair value of investments in debt securities AFS at June 30, 2022, are shown in the following table by contractual maturity, except for asset-backed securities and collateral loan obligations, which are shown as a single 
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 total, due to the unpredictability of the timing of principal repayments. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. 
 
 (In thousands) Amortized
cost Fair value Tax equivalent yield (1) 
 
 Debt Securities AFS 
 Obligations of U.S. Treasury and other U.S. Government sponsored entities 
 Due one through five years $ 39,000 $ 37,984 2.37 % 
 
 Obligations of state and political subdivisions: 
 Due five through ten years $ 251,333 $ 250,713 3.68 % 
 Due over ten years 173,786 156,066 3.21 % 
 Total (1) 
 $ 425,119 $ 406,779 3.49 % 
 
 U.S. Government sponsored entities' asset-backed securities $ 922,864 $ 863,734 1.96 % 
 
 Collateralized loan obligations $ 535,644 $ 514,107 3.06 % 
 
 Corporate debt securities 
 Due five through ten years $ 17,250 $ 16,499 3.79 % 

 (1) The tax equivalent yield for certain obligations of state and political subdivisions includes the effects of a taxable equivalent adjustment using a 21 % federal corporate income tax rate. 
 
 There were no sales of debt securities AFS during the three-month or six-month periods ended June 30, 2022 or 2021. 
 
 Investment securities having an amortized cost of $ 693.6 million and $ 733.7 million at June 30, 2022 and December 31, 2021, respectively, were pledged to collateralize government and trust department deposits in accordance with federal and state requirements, to secure repurchase agreements sold and as collateral for FHLB advance borrowings. 
 
 Note 4 – Other Investment Securities 
 
 Other investment securities consist of restricted stock investments in the FHLB, the FRB, and equity securities. The restricted FHLB and FRB stock investments are carried at their redemption value. Equity securities with a readily determinable fair value are carried at fair value. Equity securities without a readily determinable fair value are recorded at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions ("modified cost"). Park's portfolio of equity investments in limited partnerships which provide mezzanine funding ("Partnership Investments") are valued using the NAV practical expedient in accordance with ASC 820. 
 
 The carrying amounts of other investment securities at June 30, 2022 and December 31, 2021 were as follows: 
 
 (In thousands) June 30, 2022 December 31, 2021 
 FHLB stock $ 13,413 $ 13,413 
 FRB stock 14,653 14,653 
 Equity investments carried at fair value 1,785 2,129 
 Equity investments carried at modified cost (1) 
 8,191 4,689 
 Equity investments carried at NAV 43,579 26,384 
 Total other investment securities $ 81,621 $ 61,268 

 (1) There have been no impairments or downward adjustments made to equity investments carried at modified cost. An upward adjustment of $ 871,000 was recorded in the three months and six months ended June 30, 2022 as a result of observable price changes. 
 
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 No shares of FHLB stock were repurchased during the three months or six months ended June 30, 2022. During the three months ended June 30, 2021, the FHLB repurchased 22,651 shares of FHLB stock with a book value of $ 2.3 million. During the six months ended June 30, 2021, the FHLB repurchased 65,484 shares of FHLB stock with a book value of $ 6.5 million. No shares of FRB stock were purchased or sold during the three months or six months ended June 30, 2022 or 2021. 
 
 During the three months ended June 30, 2022 and 2021, $ 619,000 and $( 39,000 ), respectively, of gains (losses) on equity investments carried at fair value or modified cost were recorded within "Gain on equity securities, net" on the Consolidated Condensed Statements of Income. During the six months ended June 30, 2022 and 2021, $ 527,000 and $ 396,000 , respectively, of gains on equity investments carried at fair value or modified cost were recorded within "Gain on equity securities, net" on the Consolidated Condensed Statements of Income. 
 
 During the three months ended June 30, 2022 and 2021, $ 90,000 and $ 506,000 , respectively, of gains on equity investments carried at NAV were recorded within “Gain on equity securities, net” on the Consolidated Condensed Statements of Income. During the six months ended June 30, 2022 and 2021, $ 2.5 million and $ 1.9 million, respectively, of gains on equity investments carried at NAV were recorded within “Gain on equity securities, net” on the Consolidated Condensed Statements of Income. 
 
 Note 5 – Loans 
 
 The composition of the loan portfolio at June 30, 2022 and December 31, 2021 was as follows: 
 
 June 30, 2022 December 31, 2021 
 (In thousands) Amortized Cost Amortized Cost 
 Commercial, financial and agricultural: (1) 
 
 Commercial, financial and agricultural (1) 
 $ 1,299,167 $ 1,223,079 
 PPP loans 13,428 74,420 
 Overdrafts 3,763 1,127 
 Commercial real estate (1) 
 1,760,867 1,801,792 
 Construction real estate: 
 Commercial 208,284 214,561 
 Retail 113,115 107,225 
 Residential real estate: 
 Commercial 545,160 533,802 
 Mortgage 1,018,924 1,033,658 
 HELOC 162,533 165,605 
 Installment 4,741 5,642 
 Consumer: 
 Consumer 1,806,226 1,685,793 
 GFSC 748 1,793 
 Check loans 2,112 2,093 
 Leases 19,617 20,532 
 Total $ 6,958,685 $ 6,871,122 
 Allowance for credit losses ( 81,448 ) ( 83,197 ) 
 Net loans $ 6,877,237 $ 6,787,925 

 (1) Included within each of commercial, financial and agricultural loans and commercial real estate loans is an immaterial amount of consumer loans that were not broken out by class. 
 
 In order to support customers, Park participated in the CARES Act Paycheck Protection Program ("PPP"). For its assistance in originating the first round of PPP loans during 2020, Park received an aggregate of $ 20.2 million in fees from the SBA, and for its assistance in originating additional PPP loans during 2021, Park received an aggregate of $ 12.9 million in fees from the SBA. During the three months ended June 30, 2022 and June 30, 2021, $ 1.0 million and $ 5.0 million, respectively, of PPP fee income was recognized within loan interest income. During the six months ended June 30, 2022 and June 30, 2021, $ 2.5 million and $ 9.6 million, respectively, of PPP fee income was recognized within loan interest income. 
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 Loans are shown net of deferred origination fees, costs and unearned income of $ 16.9 million at June 30, 2022, and of $ 19.5 million at December 31, 2021, which represented a net deferred income position in both years. At June 30, 2022 and December 31, 2021, included in the net deferred origination fees, costs and unearned income were $ 473,000 and $ 2.8 million, respectively, in net origination fees related to PPP loans. At June 30, 2022 and December 31, 2021, loans included purchase accounting adjustments of $ 3.2 million and $ 4.2 million, respectively, which represented a net deferred income position at each date. This fair market value purchase accounting adjustment is expected to be recognized into interest income on a level yield basis over the remaining expected life of the loans. 
 
 Overdrawn deposit accounts of $ 3.8 million and $ 1.1 million were reclassified to loans at June 30, 2022 and December 31, 2021, respectively. 
 
 Credit Quality 
 The following tables present the amortized cost of nonaccrual loans, accruing TDRs, and loans past due 90 days or more and still accruing, by class of loan, at June 30, 2022 and December 31, 2021: 
 
 June 30, 2022 
 (In thousands) Nonaccrual
Loans Accruing 
TDRs Loans Past Due
90 Days 
 or More
and Accruing Total
Nonperforming
Loans 
 Commercial, financial and agricultural: 
 Commercial, financial and agricultural $ 10,529 $ 1,472 $ — $ 12,001 
 PPP loans — — — — 
 Overdrafts — — — — 
 Commercial real estate 18,520 8,619 — 27,139 
 Construction real estate: 
 Commercial 314 146 — 460 
 Retail 11 4 — 15 
 Residential real estate: 
 Commercial 1,816 290 — 2,106 
 Mortgage 9,789 6,975 282 17,046 
 HELOC 1,463 310 — 1,773 
 Installment 35 1,325 — 1,360 
 Consumer: 
 Consumer 930 605 221 1,756 
 GFSC 33 — 4 37 
 Check loans — — — — 
 Leases 934 — — 934 
 Total loans $ 44,374 $ 19,746 $ 507 $ 64,627 

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 December 31, 2021 
 (In thousands) Nonaccrual
Loans Accruing 
TDRs Loans Past Due 90 Days or More and Accruing Total
Nonperforming
Loans 
 Commercial, financial and agricultural 
 Commercial, financial and agricultural $ 13,271 $ 9,396 $ — $ 22,667 
 PPP loans — — 793 793 
 Overdrafts — — — — 
 Commercial real estate 40,142 7,713 — 47,855 
 Construction real estate: 
 Commercial 52 169 — 221 
 Retail 716 9 — 725 
 Residential real estate: 
 Commercial 2,366 240 — 2,606 
 Mortgage 11,718 7,779 372 19,869 
 HELOC 1,590 803 — 2,393 
 Installment 82 1,508 — 1,590 
 Consumer 
 Consumer 1,518 700 431 2,649 
 GFSC 79 6 11 96 
 Check loans — — — — 
 Leases 1,188 — — 1,188 
 Total loans $ 72,722 $ 28,323 $ 1,607 $ 102,652 

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 The following tables provide additional detail on nonaccrual loans and the related ACL, by class of loan, at June 30, 2022 and December 31, 2021: 
 
 June 30, 2022 
 (In thousands) Nonaccrual Loans With No ACL Nonaccrual Loans With an ACL Related ACL 
 Commercial, financial and agricultural: 
 Commercial, financial and agricultural $ 9,563 $ 966 $ 709 
 PPP loans — — — 
 Overdrafts — — — 
 Commercial real estate 14,854 3,666 1,160 
 Construction real estate: 
 Commercial 314 — — 
 Retail — 11 1 
 Residential real estate: 
 Commercial 1,816 — — 
 Mortgage — 9,789 73 
 HELOC 125 1,338 138 
 Installment — 35 18 
 Consumer 
 Consumer — 930 363 
 GFSC — 33 6 
 Check loans — — — 
 Leases 784 150 11 
 Total loans $ 27,456 $ 16,918 $ 2,479 

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 December 31, 2021 
 (In thousands) Nonaccrual Loans With No ACL Nonaccrual Loans With an ACL Related ACL 
 Commercial, financial and agricultural: 
 Commercial, financial and agricultural $ 11,494 $ 1,777 $ 1,343 
 PPP loans — — — 
 Overdrafts — — — 
 Commercial real estate 39,151 991 188 
 Construction real estate: 
 Commercial 52 — — 
 Retail — 716 67 
 Residential real estate: 
 Commercial 2,366 — — 
 Mortgage — 11,718 73 
 HELOC — 1,590 99 
 Installment — 82 24 
 Consumer 
 Consumer — 1,518 393 
 GFSC — 79 10 
 Check loans — — — 
 Leases 914 274 43 
 Total $ 53,977 $ 18,745 $ 2,240 

 Nonaccrual commercial loans are evaluated on an individual basis and are excluded from the collective evaluation. Management’s general practice is to proactively charge down loans individually evaluated to the fair value of the underlying collateral. Nonaccrual consumer loans are collectively evaluated based on similar risk characteristics. 
 
 The following tables provide the amortized cost basis of collateral-dependent loans by class of loan, as of June 30, 2022 and December 31, 2021: 
 
 June 30, 2022 
 (In thousands) Real Estate Business Assets Other Total 
 Commercial, financial and agricultural 
 Commercial, financial and agricultural $ 8,165 $ 3,638 $ 251 $ 12,054 
 Commercial real estate 31,401 32 — 31,433 
 Construction real estate: 
 Commercial 1,135 — — 1,135 
 Residential real estate: 
 Commercial 2,406 10 — 2,416 
 Mortgage 361 — — 361 
 HELOC 124 — — 124 
 Leases — 934 — 934 
 Total loans $ 43,592 $ 4,614 $ 251 $ 48,457 

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 December 31, 2021 
 (In thousands) Real Estate Business Assets Other Total 
 Commercial, financial and agricultural 
 Commercial, financial and agricultural $ 9,321 $ 13,366 $ 156 $ 22,843 
 Commercial real estate 52,901 37 — 52,938 
 Construction real estate: 
 Commercial 1,178 — — 1,178 
 Residential real estate: 
 Commercial 2,906 — 57 2,963 
 Mortgage 370 — — 370 
 HELOC 148 — — 148 
 Leases — 1,211 — 1,211 
 Total loans $ 66,824 $ 14,614 $ 213 $ 81,651 

 Interest income on nonaccrual loans individually evaluated for impairment is recognized on a cash basis only when Park expects to receive the entire recorded investment in the loans. The following table presents interest income recognized on nonaccrual loans for the three-month and six-month periods ended June 30, 2022 and 2021: 
 
 Interest Income Recognized 
 (In thousands) Three Months Ended
June 30, 2022 Three Months Ended
June 30, 2021 Six Months Ended 
June 30, 2022 Six Months Ended 
June 30, 2021 
 Commercial, financial and agricultural: 
 Commercial, financial and agricultural $ 13 $ 50 $ 30 $ 107 
 PPP loans — — — — 
 Overdrafts — — — — 
 Commercial real estate 257 507 514 1,022 
 Construction real estate: 
 Commercial 3 4 4 37 
 Retail — — 4 1 
 Residential real estate: 
 Commercial 20 74 40 120 
 Mortgage 36 64 69 143 
 HELOC 2 6 6 10 
 Installment — 1 2 2 
 Consumer: 
 Consumer 14 25 28 48 
 GFSC 1 3 3 8 
 Check loans — — — — 
 Leases 10 24 24 44 
 Total loans $ 356 $ 758 $ 724 $ 1,542 

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 The following tables present the aging of the amortized cost in past due loans at June 30, 2022 and December 31, 2021 by class of loan: 
 
 June 30, 2022 
 (In thousands) Accruing 
Loans
Past Due 
30-89 Days Past Due 
 Nonaccrual 
 Loans and Loans 
 Past Due 90 Days 
 or More and 
 Accruing (1) 
 Total Past 
Due Total 
 Current (2) 
 Total 
Amortized Cost 
 Commercial, financial and agricultural: 
 Commercial, financial and agricultural $ 519 $ 9,413 $ 9,932 $ 1,289,235 $ 1,299,167 
 PPP loans 74 — 74 13,354 13,428 
 Overdrafts — — — 3,763 3,763 
 Commercial real estate 504 175 679 1,760,188 1,760,867 
 Construction real estate: 
 Commercial — — — 208,284 208,284 
 Retail 450 — 450 112,665 113,115 
 Residential real estate: 
 Commercial 17 365 382 544,778 545,160 
 Mortgage 6,859 5,689 12,548 1,006,376 1,018,924 
 HELOC 334 770 1,104 161,429 162,533 
 Installment 4 5 9 4,732 4,741 
 Consumer: 
 Consumer 3,053 299 3,352 1,802,874 1,806,226 
 GFSC 62 22 84 664 748 
 Check loans 6 — 6 2,106 2,112 
 Leases 1,569 — 1,569 18,048 19,617 
 Total loans $ 13,451 $ 16,738 $ 30,189 $ 6,928,496 $ 6,958,685 

 ( 1) Includes an aggregate of $ 507,000 of loans past due 90 days or more and accruing. The remaining loans were past due nonaccrual loans. 
 (2) Includes an aggregate of $ 28.1 million of nonaccrual loans which were current in regards to contractual principal and interest payments . 
 
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 December 31, 2021 
 (in thousands) Accruing 
Loans
Past Due 
30-89 Days Past Due 
 Nonaccrual 
 Loans and Loans Past 
 Due 90 Days or 
 More and 
 Accruing (1) 
 Total Past 
Due Total 
 Current (2) 
 Total 
Amortized Cost 
 Commercial, financial and agricultural 
 Commercial, financial and agricultural $ 2,908 $ 9,547 $ 12,455 $ 1,210,624 $ 1,223,079 
 PPP loans 242 793 1,035 73,385 74,420 
 Overdrafts — — — 1,127 1,127 
 Commercial real estate 65 1,461 1,526 1,800,266 1,801,792 
 Construction real estate: 
 Commercial — — — 214,561 214,561 
 Retail 346 660 1,006 106,219 107,225 
 Residential real estate: 
 Commercial 283 438 721 533,081 533,802 
 Mortgage 6,170 5,933 12,103 1,021,555 1,033,658 
 HELOC 565 1,011 1,576 164,029 165,605 
 Installment 49 31 80 5,562 5,642 
 Consumer 
 Consumer 2,614 618 3,232 1,682,561 1,685,793 
 GFSC 153 52 205 1,588 1,793 
 Check loans 10 — 10 2,083 2,093 
 Leases 60 526 586 19,946 20,532 
 Total loans $ 13,465 $ 21,070 $ 34,535 $ 6,836,587 $ 6,871,122 

 ( 1) Includes an aggregate of $ 1.6 million of loans past due 90 days or more and accruing. The remaining loans were past due nonaccrual loans. 
 (2) Includes an aggregate of $ 53.3 million of nonaccrual loans which were current in regards to contractual principal and interest payments. 
 
 Credit Quality Indicators 
 Management utilizes past due information as a credit quality indicator across the loan portfolio. Past due information at June 30, 2022 and December 31, 2021 is included in the previous tables. The past due information is the primary credit quality indicator within the following classes of loans: (1) overdrafts in the commercial, financial and agricultural portfolio segment; (2) retail loans in the construction real estate portfolio segment; (3) mortgage loans, HELOC and installment loans in the residential real estate portfolio segment; and (4) consumer loans, GFSC loans, and check loans in the consumer portfolio segment. The primary credit indicator for commercial loans is based on an internal grading system that grades all commercial loans on a scale from 1 to 8. Credit grades are continuously monitored by the responsible loan officer and adjustments are made when appropriate. A grade of 1 indicates little or no credit risk and a grade of 8 is considered a loss. Commercial loans that are pass-rated (graded a 1 through a 4) 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 PD is applied to these loans. Loans classified as special mention have potential weaknesses that require management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of Park’s credit position at some future date. Commercial loans graded a 6 (substandard), also considered watch list credits, are considered to represent higher credit risk and, as a result, a higher PD is applied to these loans. Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or the value of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that Park will sustain some loss if the deficiencies are not corrected. Commercial loans graded a 7 (doubtful) are shown as nonaccrual and Park generally charges these loans down to their fair value by taking a partial charge-off or recording a specific reserve. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Certain 6-rated loans and all 7-rated loans are placed on nonaccrual status and included within the individually evaluated category. A commercial loan is deemed nonaccrual, and is individually evaluated, when management 
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 determines the borrower's ability to perform in accordance with the contractual loan agreement is in doubt. Any commercial loan graded an 8 (loss) is completely charged off. 
 
 Based on the most recent analysis performed, the risk category of loans by class of loans as of June 30, 2022 and December 31, 2021 were as follows: 
 
 June 30, 2022 Term Loans Amortized Cost Basis by Origination Year 
 (In thousands) 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Total 
 Commercial, financial and agricultural: Commercial, financial and agricultural (1) 
 
 Risk rating 
 Pass $ 123,708 $ 230,009 $ 186,826 $ 75,102 $ 40,781 $ 66,149 $ 559,039 $ 1,281,614 
 Special Mention — 1,792 807 524 46 198 3,547 6,914 
 Substandard — 87 209 117 1,286 7,844 256 9,799 
 Doubtful 50 — 13 122 114 304 237 840 
 Total $ 123,758 $ 231,888 $ 187,855 $ 75,865 $ 42,227 $ 74,495 $ 563,079 $ 1,299,167 

 Commercial, financial and agricultural: PPP 
 Risk rating 
 Pass $ — $ 10,644 $ 2,784 $ — $ — $ — $ — $ 13,428 
 Special Mention — — — — — — — — 
 Substandard — — — — — — — — 
 Doubtful — — — — — — — — 
 Total $ — $ 10,644 $ 2,784 $ — $ — $ — $ — $ 13,428 

 Commercial real estate (1) 
 
 Risk rating 
 Pass $ 154,408 $ 383,558 $ 409,919 $ 244,402 $ 117,846 $ 357,354 $ 13,815 $ 1,681,302 
 Special Mention 890 953 4,341 16,141 14,692 23,005 997 61,019 
 Substandard — 2,311 2,251 996 4,336 4,880 140 14,914 
 Doubtful — — — — 2,999 633 — 3,632 
 Total $ 155,298 $ 386,822 $ 416,511 $ 261,539 $ 139,873 $ 385,872 $ 14,952 $ 1,760,867 

 Construction real estate: Commercial 
 Risk rating 
 Pass $ 45,167 $ 77,086 $ 38,946 $ 3,224 $ 3,253 $ 3,530 $ 35,144 $ 206,350 
 Special Mention — 944 — — 676 — — 1,620 
 Substandard — — 314 — — — — 314 
 Doubtful — — — — — — — — 
 Total $ 45,167 $ 78,030 $ 39,260 $ 3,224 $ 3,929 $ 3,530 $ 35,144 $ 208,284 

 Residential Real Estate: Commercial 
 Risk rating 
 Pass $ 52,410 $ 131,458 $ 154,590 $ 62,875 $ 40,122 $ 81,606 $ 16,208 $ 539,269 
 Special Mention — 94 1,505 691 — 1,387 145 3,822 
 Substandard 202 473 289 35 314 706 50 2,069 
 Doubtful — — — — — — — — 
 Total $ 52,612 $ 132,025 $ 156,384 $ 63,601 $ 40,436 $ 83,699 $ 16,403 $ 545,160 

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 June 30, 2022 Term Loans Amortized Cost Basis by Origination Year 
 (In thousands) 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Total 
 Leases 
 Risk rating 
 Pass $ 5,146 $ 4,755 $ 4,350 $ 1,953 $ 1,408 $ 936 $ — $ 18,548 
 Special Mention 136 — — — — — — 136 
 Substandard — — 626 131 — 24 — 781 
 Doubtful — — — 122 14 16 — 152 
 Total $ 5,282 $ 4,755 $ 4,976 $ 2,206 $ 1,422 $ 976 $ — $ 19,617 

 Total Commercial Loans 
 Risk rating 
 Pass $ 380,839 $ 837,510 $ 797,415 $ 387,556 $ 203,410 $ 509,575 $ 624,206 $ 3,740,511 
 Special Mention 1,026 3,783 6,653 17,356 15,414 24,590 4,689 73,511 
 Substandard 202 2,871 3,689 1,279 5,936 13,454 446 27,877 
 Doubtful 50 — 13 244 3,127 953 237 4,624 
 Total $ 382,117 $ 844,164 $ 807,770 $ 406,435 $ 227,887 $ 548,572 $ 629,578 $ 3,846,523 

 (1) Included within each of commercial, financial and agricultural loans and commercial real estate loans is an immaterial amount of consumer loans that are not broken out by class. 
 
 December 31, 2021 Term Loans Amortized Cost Basis by Origination Year 
 (In thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Total 
 Commercial, financial and agricultural: Commercial, financial and agricultural (1) 
 
 Risk rating 
 Pass $ 267,016 $ 208,078 $ 100,736 $ 52,705 $ 36,528 $ 59,909 $ 468,749 $ 1,193,721 
 Special Mention 1,608 1,592 429 59 277 — 11,986 15,951 
 Substandard 106 906 401 1,345 549 7,818 484 11,609 
 Doubtful — 30 465 227 463 125 488 1,798 
 Total $ 268,730 $ 210,606 $ 102,031 $ 54,336 $ 37,817 $ 67,852 $ 481,707 $ 1,223,079 

 Commercial, financial and agricultural: PPP 
 Risk rating 
 Pass $ 69,588 $ 4,832 $ — $ — $ — $ — $ — $ 74,420 
 Special Mention — — — — — — — — 
 Substandard — — — — — — — — 
 Doubtful — — — — — — — — 
 Total $ 69,588 $ 4,832 $ — $ — $ — $ — $ — $ 74,420 

 Commercial real estate (1) 
 
 Risk rating 
 Pass $ 376,468 $ 445,780 $ 263,786 $ 154,637 $ 115,571 $ 317,371 $ 14,890 $ 1,688,503 
 Special Mention 786 6,206 32,965 9,354 4,297 17,829 996 72,433 
 Substandard 3,897 2,578 1,385 11,373 5,967 14,541 450 40,191 
 Doubtful — — — — 47 618 — 665 
 Total $ 381,151 $ 454,564 $ 298,136 $ 175,364 $ 125,882 $ 350,359 $ 16,336 $ 1,801,792 

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 December 31, 2021 Term Loans Amortized Cost Basis by Origination Year 
 (In thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Total 
 Construction real estate: Commercial 
 Risk rating 
 Pass $ 96,929 $ 76,867 $ 7,003 $ 4,841 $ 1,856 $ 3,412 $ 22,444 $ 213,352 
 Special Mention 202 — — 691 — — — 893 
 Substandard — 52 — 264 — — — 316 
 Doubtful — — — — — — — — 
 Total $ 97,131 $ 76,919 $ 7,003 $ 5,796 $ 1,856 $ 3,412 $ 22,444 $ 214,561 

 Residential Real Estate: Commercial 
 Risk rating 
 Pass $ 138,801 $ 165,202 $ 67,921 $ 44,896 $ 26,583 $ 70,434 $ 15,507 $ 529,344 
 Special Mention 95 884 106 79 — 497 135 1,796 
 Substandard 735 22 691 41 95 993 29 2,606 
 Doubtful 56 — — — — — — 56 
 Total $ 139,687 $ 166,108 $ 68,718 $ 45,016 $ 26,678 $ 71,924 $ 15,671 $ 533,802 

 Leases 
 Risk rating 
 Pass $ 6,705 $ 5,729 $ 2,628 $ 2,151 $ 705 $ 845 $ — $ 18,763 
 Special Mention 198 111 184 67 21 — — 581 
 Substandard — 698 — 23 19 78 — 818 
 Doubtful — — 332 16 22 — — 370 
 Total $ 6,903 $ 6,538 $ 3,144 $ 2,257 $ 767 $ 923 $ — $ 20,532 

 Total Commercial Loans 
 Risk rating 
 Pass $ 955,507 $ 906,488 $ 442,074 $ 259,230 $ 181,243 $ 451,971 $ 521,590 $ 3,718,103 
 Special Mention 2,889 8,793 33,684 10,250 4,595 18,326 13,117 91,654 
 Substandard 4,738 4,256 2,477 13,046 6,630 23,430 963 55,540 
 Doubtful 56 30 797 243 532 743 488 2,889 
 Total $ 963,190 $ 919,567 $ 479,032 $ 282,769 $ 193,000 $ 494,470 $ 536,158 $ 3,868,186 

 (1) Included within each of commercial, financial and agricultural loans and commercial real estate loans is an immaterial amount of consumer loans that are not broken out by class. 
 
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 Table of Contents 
 
 Park considers the performance of the loan portfolio and its impact on the allowance for credit losses. For residential and consumer loan classes, Park also evaluates credit quality based on the aging status of the loan, which was previously presented, and by performing status. The following tables present the amortized cost in residential and consumer loans based on performing status. Park defines a loan as nonperforming if it is on nonaccrual status, designated as an accruing TDR, or is greater than 90 days past due and accruing. 
 
 June 30, 2022 Term Loans Amortized Cost Basis by Origination Year 
 (In thousands) 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Total 
 Commercial, financial and agricultural: Overdrafts 
 Performing $ 3,763 $ — $ — $ — $ — $ — $ — $ 3,763 
 Nonperforming — — — — — — — — 
 Total $ 3,763 $ — $ — $ — $ — $ — $ — $ 3,763 

 Construction Real Estate: Retail 
 Performing $ 29,000 $ 63,488 $ 10,510 $ 5,039 $ 2,172 $ 2,815 $ 76 $ 113,100 
 Nonperforming — — — — — 15 — 15 
 Total $ 29,000 $ 63,488 $ 10,510 $ 5,039 $ 2,172 $ 2,830 $ 76 $ 113,115 

 Residential Real Estate: Mortgage 
 Performing $ 96,635 $ 210,845 $ 203,217 $ 98,556 $ 58,895 $ 333,730 $ — $ 1,001,878 
 Nonperforming — — — 767 446 15,833 — 17,046 
 Total $ 96,635 $ 210,845 $ 203,217 $ 99,323 $ 59,341 $ 349,563 $ — $ 1,018,924 

 Residential Real Estate: HELOC 
 Performing $ — $ 345 $ 25 $ 154 $ 88 $ 2,391 $ 157,757 $ 160,760 
 Nonperforming — — 36 — — 1,507 230 1,773 
 Total $ — $ 345 $ 61 $ 154 $ 88 $ 3,898 $ 157,987 $ 162,533 

 Residential Real Estate: Installment 
 Performing $ — $ — $ 2 $ 322 $ 76 $ 2,981 $ — $ 3,381 
 Nonperforming — — 10 4 21 1,325 — 1,360 
 Total $ — $ — $ 12 $ 326 $ 97 $ 4,306 $ — $ 4,741 

 Consumer: Consumer 
 Performing $ 441,091 $ 549,090 $ 408,302 $ 197,503 $ 85,565 $ 113,635 $ 9,284 $ 1,804,470 
 Nonperforming 68 192 334 349 265 548 — 1,756 
 Total $ 441,159 $ 549,282 $ 408,636 $ 197,852 $ 85,830 $ 114,183 $ 9,284 $ 1,806,226 

 Consumer: GFSC 
 Performing $ — $ — $ 124 $ 379 $ 120 $ 17 $ 71 $ 711 
 Nonperforming — — — 33 — 4 — 37 
 Total $ — $ — $ 124 $ 412 $ 120 $ 21 $ 71 $ 748 

 Consumer: Check loans 
 Performing $ — $ — $ — $ — $ — $ — $ 2,112 $ 2,112 
 Nonperforming — — — — — — — — 
 Total $ — $ — $ — $ — $ — $ — $ 2,112 $ 2,112 

 Total Consumer Loans 
 Performing $ 570,489 $ 823,768 $ 622,180 $ 301,953 $ 146,916 $ 455,569 $ 169,300 $ 3,090,175 
 Nonperforming 
 68 192 380 1,153 732 19,232 230 21,987 
 Total $ 570,557 $ 823,960 $ 622,560 $ 303,106 $ 147,648 $ 474,801 $ 169,530 $ 3,112,162 

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 December 31, 2021 Term Loans Amortized Cost Basis by Origination Year 
 (In thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Total 
 Commercial, financial and agricultural: Overdrafts 
 Performing $ 1,127 $ — $ — $ — $ — $ — $ — $ 1,127 
 Nonperforming — — — — — — — — 
 Total 1,127 $ — $ — $ — $ — $ — $ — $ 1,127 

 Construction Real Estate: Retail 
 Performing $ 68,374 $ 26,247 $ 5,710 $ 2,743 $ 1,505 $ 1,842 $ 79 $ 106,500 
 Nonperforming — 647 57 — — 21 — 725 
 Total $ 68,374 $ 26,894 $ 5,767 $ 2,743 $ 1,505 $ 1,863 $ 79 $ 107,225 

 Residential Real Estate: Mortgage 
 Performing $ 230,299 $ 217,022 $ 114,077 $ 68,774 $ 59,939 $ 323,678 $ — $ 1,013,789 
 Nonperforming — 626 785 824 574 17,060 — 19,869 
 Total $ 230,299 $ 217,648 $ 114,862 $ 69,598 $ 60,513 $ 340,738 $ — $ 1,033,658 

 Residential Real Estate: HELOC 
 Performing $ 400 $ — $ 121 $ 58 $ 41 $ 2,640 $ 159,952 $ 163,212 
 Nonperforming 89 40 — 37 90 1,811 326 2,393 
 Total $ 489 $ 40 $ 121 $ 95 $ 131 $ 4,451 $ 160,278 $ 165,605 

 Residential Real Estate: Installment 
 Performing $ — $ 3 $ 418 $ 111 $ 1,049 $ 2,471 $ — $ 4,052 
 Nonperforming — 12 5 26 78 1,469 — 1,590 
 Total $ — $ 15 $ 423 $ 137 $ 1,127 $ 3,940 $ — $ 5,642 

 Consumer: Consumer 
 Performing $ 649,638 $ 505,555 $ 259,230 $ 119,222 $ 64,699 $ 62,136 $ 22,664 $ 1,683,144 
 Nonperforming 241 506 755 399 155 593 — 2,649 
 Total $ 649,879 $ 506,061 $ 259,985 $ 119,621 $ 64,854 $ 62,729 $ 22,664 $ 1,685,793 

 Consumer: GFSC 
 Performing $ — $ 243 $ 986 $ 292 $ 63 $ 5 $ 108 $ 1,697 
 Nonperforming — 9 73 5 9 — — 96 
 Total $ — $ 252 $ 1,059 $ 297 $ 72 $ 5 $ 108 $ 1,793 

 Consumer: Check loans 
 Performing $ — $ — $ — $ — $ — $ — $ 2,093 $ 2,093 
 Nonperforming — — — — — — — — 
 Total $ — $ — $ — $ — $ — $ — $ 2,093 $ 2,093 

 Total Consumer Loans 
 Performing $ 949,838 $ 749,070 $ 380,542 $ 191,200 $ 127,296 $ 392,772 $ 184,896 $ 2,975,614 
 Nonperforming 
 330 1,840 1,675 1,291 906 20,954 326 27,322 
 Total $ 950,168 $ 750,910 $ 382,217 $ 192,491 $ 128,202 $ 413,726 $ 185,222 $ 3,002,936 

 Loans and Leases Acquired with Deteriorated Credit Quality 
 In conjunction with the NewDominion acquisition, Park acquired loans with a book value of $ 277.9 million as of the July 1, 2018 acquisition date. These loans were recorded at the initial fair value of $ 272.8 million. Loans acquired with deteriorated credit quality (ASC 310-30) with a book value of $ 5.1 million were recorded at the initial fair value of $ 4.9 million. In conjunction with the Carolina Alliance acquisition, Park acquired loans and leases with a book value of $ 589.7 million as of the April 1, 2019 acquisition date. These loans and leases were recorded at the initial fair value of $ 578.6 million. Loans and leases 
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 acquired with deteriorated credit quality (ASC 310-30) with a book value of $ 19.9 million were recorded at the initial fair value of $ 18.4 million. 
 
 Upon adoption of CECL on January 1, 2021, $ 52,000 of the credit discount on PCD loans was reclassified to the allowance for credit losses. At June 30, 2022 and December 31, 2021, there was no allowance for credit losses on PCD loans. The carrying amount of loans acquired with deteriorated credit quality at June 30, 2022 and December 31, 2021 was $ 5.9 million and $ 7.1 million, respectively. 
 
 Troubled Debt Restructurings 
 Management typically classifies loans as TDRs when a borrower is experiencing financial difficulties and Park has granted a concession to the borrower as part of a modification or in the loan renewal process. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of the borrower's debt in the foreseeable future without the modification. This evaluation is performed in accordance with the Company’s internal underwriting policy. Management’s policy is to modify loans by extending the term or by granting a temporary or permanent contractual interest rate below the market rate, not by forgiving debt. A court's discharge of a borrower's debt in a Chapter 7 bankruptcy is considered a concession when the borrower does not reaffirm the discharged debt. 
 
 In response to the COVID-19 pandemic, Park has worked with borrowers and provided modifications in the form of either interest only deferral or principal and interest deferral, in each case, for initial periods of up to 90 days. As necessary, Park made available a second 90-day interest only deferral or principal and interest deferral bringing the total potential deferral period to six months. Modifications were structured in a manner to best address each individual customer's then current situation. A majority of these modifications were excluded from the TDR classification under Section 4013 of the CARES Act or under applicable interagency guidance of the federal banking regulators. The modified loans were considered current and continued to accrue interest during the deferral period. Section 4013 of the CARES Act expired on December 31, 2021; therefore, modifications occurring after that date are subject to previous TDR classification guidance. 
 
 Certain other loans which were modified during the three-month and six-month periods ended June 30, 2022 and 2021 did not meet the definition of a TDR as the modification was a delay in a payment that was considered to be insignificant. Management considers a forbearance period of up to three months or a delay in payment of up to 30 days to be insignificant. TDRs may be classified as accruing if the borrower has been current for a period of at least six months with respect to loan payments and management expects that the borrower will be able to continue to make payments in accordance with the terms of the restructured note. Management reviews all accruing TDRs quarterly to ensure payments continue to be made in accordance with the modified terms. 
 
 At June 30, 2022 and December 31, 2021, there were $ 14.2 million and $ 20.9 million, respectively, of TDRs included in the nonaccrual loan totals. At June 30, 2022 and December 31, 2021, $ 4.8 million and $ 10.5 million, respectively, of these nonaccrual TDRs were performing in accordance with the terms of the restructured notes. At June 30, 2022 and December 31, 2021, loans totaling $ 19.7 million and $ 28.3 million, respectively, were included in accruing TDR loan totals. Management will continue to review the restructured loans and may determine it is appropriate to move certain nonaccrual TDRs to accrual status in the future. 
 
 At June 30, 2022 and December 31, 2021, Park had commitments to lend $ 1.0 million and $ 3.0 million, respectively, of additional funds to borrowers whose outstanding loan terms had been modified in a TDR. 
 
 At June 30, 2022 and December 31, 2021, there were $ 0.1 million and $ 0.3 million, respectively, of specific reserves related to TDRs. Modifications made in 2022 and 2021 were largely the result of renewals and extending the maturity date of the loans at terms consistent with the original notes. These modifications were deemed to be TDRs primarily due to Park’s conclusion that the respective borrowers would likely not have qualified for similar terms through another lender. Many of the modifications deemed to be TDRs were previously identified as loans individually evaluated for impairment. There were no additional specific reserves recorded during the three-month or six-month periods ended June 30, 2022 as a result of TDRs identified in the respective periods. There were $ 18,000 of additional specific reserves recorded during both the three-month and six-month periods ended June 30, 2021 as a result of TDRs identified in the respective periods. 
 
 Quarterly, management reviews renewals/modifications of loans previously identified as TDRs to consider if it is appropriate to remove the TDR classification. If the borrower is no longer experiencing financial difficulty and the renewal/modification did not contain a concessionary interest rate or other concessionary terms and the terms of the renewal/modification are considered to be market terms based on the current risk characteristics of the borrower, management considers the potential removal of the TDR classification. If deemed appropriate, the TDR classification is removed if the borrower has complied with the terms of the 
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 loan at the date of the renewal/modification and there was a reasonable expectation that the borrower will continue to comply with the terms of the loan subsequent to the date of the renewal/modification. The majority of these TDRs were originally considered restructurings in a prior year as a result of a renewal/modification with an interest rate that was not commensurate with the risk of the underlying loan at the time of the renewal/modification. There were $ 0.8 million and $ 1.0 million of TDR classifications removed during the three-month and six-month periods ended June 30, 2022, respectively. T here were no TDR classifications removed during the three-month period ended June 30, 2021. The TDR classification was removed on $ 3.9 million of loans during the six-month period ended June 30, 2021. 
 
 The terms of certain other loans were modified during the three-month and six-month periods ended June 30, 2022 and 2021 that did not meet the definition of a TDR. Excluding COVID-19 related modifications, there were no substandard commercial loans modified during either of the three-month or six-month periods ended June 30, 2022 and June 30, 2021, which did not meet the definition of a TDR. Consumer loans modified during the three-month and six-month periods ended June 30, 2022, which did not meet the definition of a TDR, had a total amortized cost of $ 11.9 million and $ 23.0 million, respectively. Excluding COVID-19 related modifications, consumer loans modified during the three-month and six-month periods ended June 30, 2021, which did not meet the definition of a TDR, had a total amortized cost of $ 2.7 million and $ 3.7 million , respectively. Many of these loans were to borrowers who were not experiencing financial difficulties but who were looking to reduce their cost of funds. 
 
 The following tables detail the number of contracts modified as TDRs during the three-month periods ended June 30, 2022 and 2021, as well as the amortized cost of these contracts at June 30, 2022 and 2021. The amortized cost pre-and post-modification is generally the same due to the fact that Park does not typically forgive principal. 
 
 Three Months Ended
June 30, 2022 
 (In thousands) Number of
Contracts Accruing Nonaccrual Total Amortized Cost 
 Commercial, financial and agricultural 
 Commercial, financial and agricultural — $ — $ — $ — 
 PPP loans — — — — 
 Overdrafts — — — — 
 Commercial real estate 1 488 — 488 
 Construction real estate: 
 Commercial — — — — 
 Retail — — — — 
 Residential real estate: 
 Commercial — — — — 
 Mortgage 5 332 81 413 
 HELOC 1 30 — 30 
 Installment 3 24 1 25 
 Consumer: 
 Consumer 17 3 171 174 
 GFSC — — — — 
 Check loans — — — — 
 Leases — — — — 
 Total loans 27 $ 877 $ 253 $ 1,130 

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 Three Months Ended
June 30, 2021 
 (In thousands) Number of
Contracts Accruing Nonaccrual Total Amortized Cost 
 Commercial, financial and agricultural 
 Commercial, financial and agricultural 3 $ — $ 334 $ 334 
 PPP loans — — — — 
 Overdrafts — — — — 
 Commercial real estate 3 1,601 207 1,808 
 Construction real estate: 
 Commercial 1 98 — 98 
 Retail — — — — 
 Residential real estate: 
 Commercial 3 — 406 406 
 Mortgage 4 58 195 253 
 HELOC 4 134 33 167 
 Installment 1 2 — 2 
 Consumer: 
 Consumer 42 77 289 366 
 GFSC — — — — 
 Check loans — — — — 
 Leases 1 — 362 362 
 Total loans 62 $ 1,970 $ 1,826 $ 3,796 

 Of those loans which were modified and determined to be a TDR during the three-month period ended June 30, 2022, no loans were on nonaccrual status at December 31, 2021. O f those loans which were modified and determined to be a TDR during the three-month period ended June 30, 2021, $ 0.6 million were on nonaccrual status at December 31, 2020. 
 
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 The following tables detail the number of contracts modified as TDRs during the six-month periods ended June 30, 2022 and 2021, as well as the amortized cost of these contracts at June 30, 2022 and 2021. The amortized cost pre-and post-modification is generally the same due to the fact that Park does not typically forgive principal. 
 
 Six Months Ended 
June 30, 2022 
 (In thousands) Number of
Contracts Accruing Nonaccrual Total Amortized Cost 
 Commercial, financial and agricultural 
 Commercial, financial and agricultural 2 $ — $ — $ — 
 PPP loans — — — — 
 Overdrafts — — — — 
 Commercial real estate 5 1,077 140 1,217 
 Construction real estate: 
 Commercial — — — — 
 Retail — — — — 
 Residential real estate: 
 Commercial 1 — 106 106 
 Mortgage 8 332 145 477 
 HELOC 2 30 20 50 
 Installment 7 51 27 78 
 Consumer: 
 Consumer 41 12 272 284 
 GFSC — — — — 
 Check loans — — — — 
 Leases — — — — 
 Total loans 66 $ 1,502 $ 710 $ 2,212 

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 Six Months Ended 
June 30, 2021 
 (In thousands) Number of
Contracts Accruing Nonaccrual Total Amortized Cost 
 Commercial, financial and agricultural 
 Commercial, financial and agricultural 4 $ — $ 334 $ 334 
 PPP loans — — — — 
 Overdrafts — — — — 
 Commercial real estate 8 1,601 1,099 2,700 
 Construction real estate: 
 Commercial 1 98 — 98 
 Retail — — — — 
 Residential real estate: 
 Commercial 3 — 406 406 
 Mortgage 10 193 300 493 
 HELOC 4 134 33 167 
 Installment 6 42 28 70 
 Consumer: 
 Consumer 76 127 368 495 
 GFSC — — — — 
 Check loans — — — — 
 Leases 1 — 362 362 
 Total loans 113 $ 2,195 $ 2,930 $ 5,125 

 Of those loans which were modified and determined to be a TDR during the six-month period ended June 30, 2022, $ 0.6 million were on nonaccrual status at December 31, 2021. Of those loans which were modified and determined to be a TDR during the six-month period ended June 30, 2021, $ 1.6 million were on nonaccrual status at December 31, 2020. 
 
 The following table presents the amortized cost in loans which were modified as TDRs within the previous 12 months and for which there was a payment default during the three-month periods ended June 30, 2022 and 2021, respectively. For this table, a 
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 loan is considered to be in default when it becomes 30 days contractually past due under the modified terms. The additional ACL resulting from the defaults on TDR loans was immaterial. 
 
 Three Months Ended
June 30, 2022 Three Months Ended
June 30, 2021 
 (In thousands) Number of
Contracts Amortized Cost Number of
Contracts Amortized Cost 
 Commercial, financial and agricultural: 
 Commercial, financial and agricultural — $ — — $ — 
 PPP loans — — — — 
 Overdrafts — — — — 
 Commercial real estate — — 1 220 
 Construction real estate: 
 Commercial — — — — 
 Retail — — — — 
 Residential real estate: 
 Commercial — — — — 
 Mortgage 2 111 5 334 
 HELOC 1 20 — — 
 Installment — — 1 6 
 Consumer 
 Consumer 7 64 14 100 
 GFSC — — — — 
 Check loans — — — — 
 Leases — — — — 
 Total loans 10 $ 195 21 $ 660 

 Of the $ 0.2 million in modified TDRs which defaulted during the three-month period ended June 30, 2022, all were nonaccrual loans. Of the $ 0.7 million in modified TDRs which defaulted during the three-month period ended June 30, 2021, $ 44,000 were accruing loans and $ 0.6 million were nonaccrual loans. 
 
 The following table presents the amortized cost in loans which were modified as TDRs within the previous 12 months and for which there was a payment default during the six-month periods ended June 30, 2022 and 2021, respectively. For this table, a 
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 loan is considered to be in default when it becomes 30 days contractually past due under the modified terms. The additional ACL resulting from the defaults on TDR loans was immaterial. 
 
 Six Months Ended 
June 30, 2022 Six Months Ended 
June 30, 2021 
 (In thousands) Number of
Contracts Amortized Cost Number of
Contracts Amortized Cost 
 Commercial, financial and agricultural: 
 Commercial, financial and agricultural — $ — — $ — 
 PPP loans — — — — 
 Overdrafts — — — — 
 Commercial real estate — — 1 220 
 Construction real estate: 
 Commercial — — — — 
 Retail — — — — 
 Residential real estate: 
 Commercial — — — — 
 Mortgage 2 111 6 373 
 HELOC 2 56 — — 
 Installment — — 2 34 
 Consumer 
 Consumer 11 94 17 113 
 GFSC — — — — 
 Check loans — — — — 
 Leases — — 1 362 
 Total loans 15 $ 261 27 $ 1,102 

 Of the $ 0.3 million in modified TDRs which defaulted during the six-month period ended June 30, 2022, all were nonaccrual loans. Of the $ 1.1 million in modified TDRs which defaulted during the six-month period ended June 30, 2021, $ 84,000 were accruing loans and $ 1.0 million were nonaccrual loans. 
 
 Note 6 – Allowance for Credit Losses 
 
 The ACL is an estimate of the expected credit losses on financial assets measured at amortized cost, which is measured using relevant information about past events, including historical credit loss experience on financial assets with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the financial assets. A provision for credit losses is charged to operations based on management’s periodic evaluation of these and other pertinent factors. 
 
 During the first quarter of 2021, Park adopted ASU 2016-13, including the CECL methodology for estimating the ACL. This standard was adopted prospectively on January 1, 2021, resulting in a $ 6.1 million increase to the ACL and a $ 3.9 million increase to the allowance for unfunded credit losses. A cumulative effect adjustment resulting in an $ 8.0 million decrease to retained earnings and a $ 2.1 million increase to deferred tax assets was also recorded as of the adoption of ASU 2016-13. 
 
 Quantitative Considerations 
 The ACL is primarily calculated utilizing a DCF model. Key inputs and assumptions used in this model are discussed below: 
 
 • Forecast model - For each portfolio segment, a LDA was performed in order to identify appropriate loss drivers and create a regression model for use in forecasting cash flows. The LDA analysis utilized Park's own FFIEC Call Report data for the commercial, financial and agricultural and residential real estate portfolio segments. Peer data was incorporated into the analysis for the commercial real estate, construction real estate, and consumer portfolio segments. Park plans to update the LDA annually; however, due to the impact of COVID-19, the LDA analysis was last updated in the fourth quarter of 2019. 
 • Probability of default – PD is the probability that an asset will be in default within a given time frame. Park has defined default to be when a charge-off has occurred, a loan is nonaccrual, or a loan is greater than 90 days past due. 
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 Whenever possible, Park utilizes its own loan-level PDs for the reasonable and supportable forecast period. When loan-level data is not available reflecting the forecasted economic conditions, a forecast model is utilized to estimate PDs. 
 • Loss given default – LGD is the percentage of the asset not expected to be collected due to default. Whenever possible, Park utilizes its own loan-level LGDs for the reasonable and supportable forecast period. When it is not possible to use Park's own LGDs, the LGD is derived using a method referred to as Frye Jacobs. 
 • Prepayments and curtailments – Prepayments and curtailments are calculated based on Park’s own data utilizing a three-year average. This analysis is updated annually in the fourth quarter and was last updated in the fourth quarter of 2021. 
 • Forecast and reversion – Park has established a one-year reasonable and supportable forecast period with a one-year straight line reversion to the long-term historical average. 
 • Economic forecast - Park utilizes a third party to provide economic forecasts under various scenarios, which are weighted in order to reflect model risk in the current economic environment. The scenario weighting is evaluated by management on a quarterly basis. 
 ◦ As of December 31, 2021, the "most likely" scenario forecasted Ohio unemployment between 3.32% and 3.97% during the next four quarters. In determining the appropriate weighting of scenarios at December 31, 2021, management considered the range of forecasted unemployment as well as a number of economic indicators. While some economic indications continued to be optimistic, the Omicron variant, rising inflation, volatility in consumer confidence, employment, supply chain and workforce challenges continued to cause uncertainty in the overall economic environment. Considering these factors, management determined it was appropriate to maintain the previous quarter weighting, and weigh the "most likely" scenario 50% and the "moderate recession" scenario 50% at December 31, 2021. 
 ◦ As of March 31, 2022, the "most likely" scenario forecasted Ohio unemployment between 3.36% and 3.75% during the next four quarters. In determining the appropriate weighting of scenarios at March 31, 2022, management considered the range of forecasted unemployment as well as a number of economic indicators. While some economic indications were optimistic, the surging inflation, volatility in consumer confidence, workforce challenges, and geopolitical conflict (including the conflict in Ukraine) continued to cause uncertainty in the overall economic environment. Considering these factors, management determined it was appropriate to maintain the previous quarter weighting, and weigh the "most likely" scenario 50% and the "moderate recession" scenario 50% at March 31, 2022. Improved forecasts, largely in the "moderate recession" scenario, resulted in a 4 basis point decline in the weighted quantitative allowance. 
 ◦ As of June 30, 2022, the "most likely" scenario forecasted Ohio unemployment between 3.36% and 3.57% during the next four quarters. In determining the appropriate weighting of scenarios at June 30, 2022, management considered the range of forecasted unemployment as well as a number of economic indicators. While some economic indications were optimistic, the surging inflation, declining consumer confidence, rising interest rates, geopolitical conflict (including the conflict between Russia and Ukraine), and workforce and supply chain challenges continued to cause uncertainty to the overall economic environment. Considering these factors, management determined it was appropriate to maintain the previous quarter weighting, and weigh the "most likely" scenario 50% and the "moderate recession" scenario 50% at June 30, 2022. Deteriorating forecasts, largely in the "moderate recession" scenario, resulted in a 4 basis point increase in the weighted quantitative allowance. 
 
 Qualitative Considerations 
 Park reviews various internal and external factors to consider the need for any qualitative adjustments to the quantitative model. Factors considered include the following : 
 • The nature and volume of Park’s financial assets; the existence, growth, and effect of any concentrations of credit and the volume and severity of past due financial assets, the volume of nonaccrual assets, and the volume and severity of adversely classified or graded assets. Specifically, management considers: 
 ◦ Trends (e.g., growth, reduction) in specific categories of the loan portfolio, as well as adjustments to the types of loans offered by Park. 
 ◦ Level of and trend in loan delinquencies, troubled loans, commercial watch list loans and nonperforming loans. 
 ◦ Level of and trend in new nonaccrual loans. 
 ◦ Level of and trend in loan charge-offs and recoveries. 
 • Park's lending policies and procedures, including changes in lending strategies, underwriting standards and practices for collections, write-offs and recoveries. 
 • The quality of Park’s credit review function. 
 • The experience, ability, and depth of Park’s lending, investment, collection and other relevant management and staff. 
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 • The effect of other external factors such as the regulatory, legal and technological environments; competition; geopolitical conflict; and events such as natural disasters or pandemics. 
 • Actual and expected changes in international, national, regional and local economic and business conditions and developments in the markets in which Park operates that affect the collectibility of financial assets. 
 • Where the U.S. economy is within a given credit cycle. 
 • The extent that there is government assistance (stimulus). 
 
 During 2020, Park added an additional reserve for three industries at particularly high risk due to the COVID-19 pandemic: hotels and accommodations; restaurants and food service; and strip shopping centers. These industries have experienced high levels of deferrals and have been particularly impacted by shut downs of non-essential businesses, increased health department regulations, and changes in consumer behavior. Management expects that a relatively higher percentage of the 4-rated credits in these portfolios will eventually migrate to special mention, substandard, or doubtful. In adopting CECL, management determined it was appropriate to retain this qualitative adjustment as this adjustment takes into account the additional risk in these portfolios, which is not captured in the quantitative calculation. Even though COVID-19 case numbers have declined since December 31, 2021, these industries are still recovering from the pandemic effects. As of June 30, 2022 additional reserves totaling $ 2.6 million were added for these portfolios on top of the quantitative reserve already calculated. This is a decrease from $ 5.2 million as of December 31, 2021 and reflects improvement in COVID-19 cases, eased COVID-19 health department precautions and improving affected industry performance. Management believes there is still residual risk in these portfolios related to pandemic effects and uncertainty in future COVID-19 strains and related impacts. 
 
 A breakout of the 4-rated balances within these portfolios and the additional reserve related to these portfolios is detailed in the following table: 
 
 June 30, 2022 December 31, 2021 
 (in thousands) 4-Rated Balance Additional Reserve 4-Rated Balance Additional Reserve 
 Hotels and accommodations $ 152,081 $ 1,145 $ 148,018 $ 2,226 
 Restaurants and food service 45,797 517 40,648 917 
 Strip shopping centers 172,893 954 184,171 2,033 
 Total $ 370,771 $ 2,616 $ 372,837 $ 5,176 

 Additionally, at June 30, 2022, management applied a 0.75% reserve to all hotels and accommodations loans in the collectively evaluated population to account for increased valuation risk. This 0.75% reserve was reduced from 1.00% at December 31, 2021. At June 30, 2022, Park's originated hotels and accommodation loans had a balance of $ 199.0 million with an additional reserve related to valuation risks of $ 1.5 million. At December 31, 2021, Park's originated hotels and accommodation loans had a balance of $ 203.9 million with an additional reserve related to valuation risks of $ 2.0 million. 
 
 As of June 30, 2022, Park had $ 13.4 million of PPP loans which were included in the commercial, financial and agricultural portfolio segment. These loans are guaranteed by the SBA and thus have not been reserved for using the same methodology as the rest of Park’s loan portfolio. A 10 basis point reserve was calculated for these loans to reflect minimal credit risk. 
 
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 ACL Activity 
 The activity in the ACL for the three-month and six-month periods ended June 30, 2022 and June 30, 2021 is summarized in the following tables: 
 
 Three Months Ended
June 30, 2022 
 (In thousands) Commercial,
financial and
agricultural Commercial
real estate Construction
real estate Residential
real estate Consumer Leases Total 
 ACL: 
 Beginning balance $ 13,288 $ 23,731 $ 4,230 $ 11,584 $ 25,797 $ 231 $ 78,861 
 Charge-offs 723 598 33 46 1,002 — 2,402 
 Recoveries 316 540 29 54 1,058 1 1,998 
 Net charge-offs/(recoveries) $ 407 $ 58 $ 4 $ ( 8 ) $ ( 56 ) $ ( 1 ) $ 404 
 (Recovery of) provision for credit losses ( 134 ) ( 1,334 ) 165 2,027 2,296 ( 29 ) 2,991 
 Ending balance $ 12,747 $ 22,339 $ 4,391 $ 13,619 $ 28,149 $ 203 $ 81,448 

 Three Months Ended
June 30, 2021 
 (In thousands) Commercial,
financial and
agricultural Commercial
real estate Construction
real estate Residential
real estate Consumer Leases Total 
 ACL: 
 Beginning balance $ 16,279 $ 24,487 $ 5,813 $ 14,037 $ 25,729 $ 541 $ 86,886 
 Charge-offs 308 — — 26 736 — 1,070 
 Recoveries 232 210 229 68 1,062 — 1,801 
 Net charge-offs/(recoveries) $ 76 $ ( 210 ) $ ( 229 ) $ ( 42 ) $ ( 326 ) $ — $ ( 731 ) 
 (Recovery of) provision for credit losses ( 981 ) ( 1,948 ) ( 372 ) ( 966 ) 206 21 ( 4,040 ) 
 Ending balance $ 15,222 $ 22,749 $ 5,670 $ 13,113 $ 26,261 $ 562 $ 83,577 

 Six Months Ended 
June 30, 2022 
 (In thousands) Commercial,
financial and
agricultural Commercial
real estate Construction
real estate Residential
real estate Consumer Leases Total 
 ACL: 
 Beginning balance $ 14,025 $ 25,466 $ 5,758 $ 11,424 $ 26,286 $ 238 $ 83,197 
 Charge-offs 913 598 33 81 2,118 6 3,749 
 Recoveries 434 588 530 86 1,975 1 3,614 
 Net charge-offs/(recoveries) $ 479 $ 10 $ ( 497 ) $ ( 5 ) $ 143 $ 5 $ 135 
 (Recovery of) provision for credit losses ( 799 ) ( 3,117 ) ( 1,864 ) 2,190 2,006 ( 30 ) ( 1,614 ) 
 Ending balance $ 12,747 $ 22,339 $ 4,391 $ 13,619 $ 28,149 $ 203 $ 81,448 

 Six Months Ended 
June 30, 2021 
 (In thousands) Commercial,
financial and
agricultural Commercial
real estate Construction
real estate Residential
real estate Consumer Leases Total 
 ACL: 
 Beginning balance, prior to adoption of ASC 326 $ 25,608 $ 23,480 $ 7,288 $ 11,363 $ 17,418 $ 518 $ 85,675 
 Impact of adopting ASC 326 ( 8,257 ) 2,119 ( 1,898 ) 3,121 10,925 80 6,090 
 Charge-offs 454 — — 37 2,280 — 2,771 
 Recoveries 355 296 481 130 2,216 — 3,478 
 Net charge-offs/(recoveries) $ 99 $ ( 296 ) $ ( 481 ) $ ( 93 ) $ 64 $ — $ ( 707 ) 
 Recovery of credit losses ( 2,030 ) ( 3,146 ) ( 201 ) ( 1,464 ) ( 2,018 ) ( 36 ) ( 8,895 ) 
 Ending balance $ 15,222 $ 22,749 $ 5,670 $ 13,113 $ 26,261 $ 562 $ 83,577 

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 ACL Summary 
 Loans collectively evaluated for impairment in the following tables include all performing loans at June 30, 2022 and December 31, 2021, as well as nonperforming loans internally classified as consumer loans. Nonperforming consumer loans are not typically individually evaluated for impairment, but receive a portion of the statistical allocation of the ACL. Loans individually evaluated for impairment include all internally classified commercial nonaccrual loans and TDRs at June 30, 2022 and December 31, 2021, which are individually evaluated for impairment in accordance with U.S. GAAP (see Note 1 - Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements included in Park’s 2021 Form 10-K). 
 
 The composition of the ACL at June 30, 2022 and December 31, 2021 was as follows: 
 
 June 30, 2022 
 (In thousands) Commercial,
financial and
agricultural Commercial
real estate Construction
real estate Residential
real estate Consumer Leases Total 
 ACL: 
 Ending allowance balance attributed to loans: 
 Individually evaluated for impairment $ 703 $ 1,160 $ — $ — $ — $ 11 $ 1,874 
 Collectively evaluated for impairment 12,044 21,179 4,391 13,619 28,149 192 79,574 
 Acquired with deteriorated credit quality — — — — — — — 
 Total ending allowance balance $ 12,747 $ 22,339 $ 4,391 $ 13,619 $ 28,149 $ 203 $ 81,448 
 
 Loan balance: 
 Loans individually evaluated for impairment $ 11,916 $ 27,109 $ 459 $ 2,105 $ — $ 934 $ 42,523 
 Loans collectively evaluated for impairment 1,304,304 1,729,434 320,264 1,728,457 1,809,086 18,683 6,910,228 
 Loans acquired with deteriorated credit quality 138 4,324 676 796 — — 5,934 
 Total ending loan balance $ 1,316,358 $ 1,760,867 $ 321,399 $ 1,731,358 $ 1,809,086 $ 19,617 $ 6,958,685 
 
 ACL as a percentage of loan balance: 
 Loans individually evaluated for impairment 5.90 % 4.28 % — % — % — % 1.18 % 4.41 % 
 Loans collectively evaluated for impairment 0.92 % 1.22 % 1.37 % 0.79 % 1.56 % 1.03 % 1.15 % 
 Loans acquired with deteriorated credit quality — % — % — % — % — % — % — % 
 Total 0.97 % 1.27 % 1.37 % 0.79 % 1.56 % 1.03 % 1.17 % 

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 December 31, 2021 
 (In thousands) Commercial,
financial and
agricultural Commercial
real estate Construction
real estate Residential
real estate Consumer Leases Total 
 ACL: 
 Ending allowance balance attributed to loans: 
 Individually evaluated for impairment $ 1,385 $ 188 $ — $ — $ — $ 43 $ 1,616 
 Collectively evaluated for impairment 12,640 25,278 5,758 11,424 26,286 195 81,581 
 Acquired with deteriorated credit quality — — — — — — — 
 Total ending allowance balance $ 14,025 $ 25,466 $ 5,758 $ 11,424 $ 26,286 $ 238 $ 83,197 
 
 Loan balance: 
 Loans individually evaluated for impairment $ 22,666 $ 47,820 $ 222 $ 2,606 $ — $ 1,188 $ 74,502 
 Loans collectively evaluated for impairment 1,275,783 1,748,854 320,608 1,735,226 1,689,679 19,321 6,789,471 
 Loans acquired with deteriorated credit quality 
 177 5,118 956 875 — 23 7,149 
 Total ending loan balance $ 1,298,626 $ 1,801,792 $ 321,786 $ 1,738,707 $ 1,689,679 $ 20,532 $ 6,871,122 
 
 ACL as a percentage of loan balance: 
 Loans individually evaluated for impairment 6.11 % 0.39 % — % — % — % 3.62 % 2.17 % 
 Loans collectively evaluated for impairment 0.99 % 1.45 % 1.80 % 0.66 % 1.56 % 1.01 % 1.20 % 
 Loans acquired with deteriorated credit quality — % — % — % — % — % — % — % 
 Total 1.08 % 1.41 % 1.79 % 0.66 % 1.56 % 1.16 % 1.21 % 

 Note 7 – Loans Held For Sale 
 
 Mortgage loans held for sale are carried at their fair value. At June 30, 2022 and December 31, 2021, respectively, Park had $ 5.7 million and $ 9.4 million in mortgage loans held for sale. These amounts are included in loans on the Consolidated Condensed Balance Sheets and in the residential real estate loan portfolio segment in Note 5 - Loans, and Note 6 - Allowance for Credit Losses. The contractual balance was $ 5.6 million and $ 9.2 million at June 30, 2022 and December 31, 2021, respectively. The gain expected upon sale was $ 76,000 and $ 166,000 at June 30, 2022 and December 31, 2021, respectively. None of these loans were 90 days or more past due or on nonaccrual status at June 30, 2022 or December 31, 2021. 
 
 During the three months ended June 30, 2022, Park transferred certain commercial loans held for investment, with an amortized cost of $ 6.3 million, to the loans held for sale portfolio. The transferred loans were recorded at the lower of cost or fair value, recording a charge-off in each instance where the fair value of an individual loan was deemed to be below the carrying cost at the time the loans were moved to the held for sale portfolio . 
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 Note 8 – Goodwill and Other Intangible Assets 
 
 The following tables show the activity in goodwill and other intangible assets for the three-month and six-month periods ended June 30, 2022 and 2021. 
 (in thousands) Goodwill Other
intangible assets Total 
 April 1, 2021 $ 159,595 $ 8,781 $ 168,376 
 Amortization — 479 479 
 June 30, 2021 $ 159,595 $ 8,302 $ 167,897 
 
 April 1, 2022 $ 159,595 $ 7,060 $ 166,655 
 Amortization — 403 403 
 June 30, 2022 $ 159,595 $ 6,657 $ 166,252 

 (in thousands) Goodwill Other
intangible assets Total 
 December 31, 2020 $ 159,595 $ 9,260 $ 168,855 
 Amortization — 958 958 
 June 30, 2021 $ 159,595 $ 8,302 $ 167,897 
 
 December 31, 2021 $ 159,595 $ 7,462 $ 167,057 
 Amortization — 805 805 
 June 30, 2022 $ 159,595 $ 6,657 $ 166,252 

 Park evaluates goodwill for impairment during the second quarter of each year, with financial data as of March 31. Based on the qualitative analysis performed as of April 1, 2022, the Company determined that goodwill for Park's reporting unit, PNB, was not impaired. 
 
 Acquired Intangible Assets 
 
 The following table shows the balance of acquired intangible assets as of June 30, 2022 and December 31, 2021. 
 
 June 30, 2022 
 December 31, 2021 
 (in thousands) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization 
 Other intangible assets: 
 Core deposit intangible assets $ 14,456 $ 7,799 $ 14,456 $ 6,994 
 Trade name intangible assets 1,300 1,300 1,300 1,300 
 Total $ 15,756 $ 9,099 $ 15,756 $ 8,294 

 Core deposit intangible assets are being amortized, on an accelerated basis, over a period of ten years. Aggregate amortization expense was $ 403,000 and $ 479,000 for the three months ended June 30, 2022 and 2021, respectively, and was $ 805,000 and $ 958,000 for the six months ended June 30, 2022 and 2021, respectively. 
 
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 Estimated amortization expense related to core deposit intangible assets for each of the next five years follows: 
 
 (in thousands) Total 
 Six months ending December 31, 2022 $ 682 
 2023 1,323 
 2024 1,215 
 2025 1,042 
 2026 887 

 Note 9 – Investment in Qualified Affordable Housing 
 
 Park makes certain equity investments in various limited partnerships that sponsor affordable housing projects. The purposes of these investments are to achieve a satisfactory return on capital, help create affordable housing opportunities, and assist the Company to achieve its goals associated with the Community Reinvestment Act. 
 
 The table below details the balances of Park’s affordable housing tax credit investments and related unfunded commitments at June 30, 2022 and December 31, 2021. 
 
 (in thousands) June 30, 2022 
 December 31, 2021 
 Affordable housing tax credit investments $ 54,751 $ 58,711 
 Unfunded commitments 21,232 28,484 

 Commitments are funded when capital calls are made by the general partner. Park expects that the current commitments will be funded between the remainder of 2022 and 2032. 
 
 Park recognized amortization expense of $ 2.0 million and $ 1.8 million, respectively, for the three months ended June 30, 2022 and 2021, and $ 4.0 million and $ 3.7 million, respectively, for the six months ended June 30, 2022 and 2021, which were included within the provision for income taxes. Additionally, during the three months ended June 30, 2022 and 2021, Park recognized tax credits and other benefits from its affordable housing tax credit investments of $ 2.1 million and $ 2.4 million, respectively, and during the six months ended June 30, 2022 and 2021, recognized $ 4.9 million and $ 5.3 million, respectively, which were included within the provision for income taxes. 
 
 Note 10 – Foreclosed and Repossessed Assets 
 
 Park typically transfers a loan to OREO at the time that Park takes deed/title to the real estate property asset. The carrying amounts of foreclosed real estate properties held at June 30, 2022 and December 31, 2021 are listed below, as well as the recorded investment of loans secured by residential real estate properties for which formal foreclosure proceedings were in process at those dates. 
 
 (in thousands) June 30, 2022 December 31, 2021 
 OREO: 
 Commercial real estate $ 1,354 $ — 
 Residential real estate — 775 
 Total OREO $ 1,354 1354 $ 775 
 
 Loans in process of foreclosure: 
 Residential real estate $ 1,523 $ 1,148 

 In addition to real estate, Park may also repossess different types of collateral. At June 30, 2022 and December 31, 2021, Park had $ 637,000 and $ 3.3 million, respectively, in other repossessed assets which are included in "Other assets" on the Consolidated Condensed Balance Sheets. At December 31, 2021, the other repossessed assets largely consisted of an aircraft acquired as part of a loan workout. 
 
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 Note 11 – Loan Servicing 
 
 Park serviced sold mortgage loans of $ 2.12 billion at June 30, 2022, $ 2.13 billion at December 31, 2021 and $ 2.09 billion at June 30, 2021. At June 30, 2022, $ 3.3 million of the sold mortgage loans were sold with recourse, compared to $ 3.3 million at December 31, 2021 and $ 3.8 million at June 30, 2021. Management closely monitors the delinquency rates on the mortgage loans sold with recourse. At June 30, 2022 and December 31, 2021, management had established reserves of $ 66,000 and $ 57,000 , respectively, to account for expected losses on loan repurchases. 
 
 When Park sells mortgage loans with servicing rights retained, these servicing rights are initially recorded at fair value. Park has selected the “amortization method” as permissible within U.S. GAAP, whereby the servicing rights capitalized are amortized in proportion to and over the period of estimated future servicing income with respect to the underlying loan. At the end of each reporting period, the carrying value of MSRs is assessed for impairment with a comparison to fair value. MSRs are carried at the lower of their amortized cost or fair value. The amortization of MSRs is included within "Other service income" in the Consolidated Condensed Statements of Income. 
 
 Activity for MSRs and the related valuation allowance follows: 
 
 Three Months Ended 
June 30, Six Months Ended 
June 30, 
 (In thousands) 2022 2021 2022 2021 
 Mortgage servicing rights: 
 Carrying amount, net, beginning of period $ 15,704 $ 13,635 $ 15,264 $ 12,210 
 Additions 456 1,269 1,082 2,947 
 Amortization ( 584 ) ( 813 ) ( 1,212 ) ( 1,918 ) 
 Change in valuation allowance 894 225 1,336 1,077 
 Carrying amount, net, end of period $ 16,470 $ 14,316 $ 16,470 $ 14,316 
 
 Valuation allowance: 
 Beginning of period $ 1,126 $ 2,337 $ 1,568 $ 3,189 
 Change in valuation allowance ( 894 ) ( 225 ) ( 1,336 ) ( 1,077 ) 
 End of period $ 232 $ 2,112 $ 232 $ 2,112 

 Servicing fees included in "Other service income" were $ 1.4 million and $ 1.3 million for the three months ended June 30, 2022 and 2021, respectively, and were $ 2.7 million and $ 2.6 million for the six months ended June 30, 2022 and 2021, respectively. 
 
 Note 12 - Leases 
 
 Park is a lessee in several noncancellable operating lease arrangements, primarily for retail branches, administrative and warehouse buildings, ATMs, and certain office equipment within its Ohio, North Carolina, South Carolina, and Kentucky markets. Certain of these leases contain renewal options for periods ranging from one to five years. Park’s leases generally do not include termination options for either party to the lease or restrictive financial or other covenants. Payments due under the lease contracts include fixed payments plus, for many of Park’s real estate leases, variable payments such as Park's proportionate share of property taxes, insurance and common area maintenance. 
 
 Park elected the practical expedient, by class of underlying asset, to not separate non-lease components from the associated lease components. Additionally, Park has elected not to recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less. Park recognizes the lease payments associated with its short-term leases as an expense on a cash basis. 
 
 Management determines if an arrangement is or contains a lease at contract inception. If an arrangement is determined to be or contain a lease, Park recognizes a ROU asset and a lease liability at the lease commencement date. Leases are classified as operating or finance leases at the lease commencement date. At June 30, 2022 and December 31, 2021, all of Park's leases were classified as operating leases. 
 
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 Park’s lease liability is initially and subsequently measured as the present value of the unpaid lease payments at the lease commencement date. Key estimates and judgments related to the lease liability include how management determines (1) the discount rate it uses to discount the unpaid lease payments to present value, (2) the lease term, and (3) lease payments. 
 
 • ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. Generally, Park's management cannot determine the interest rate implicit in a lease because it does not have access to the lessor’s estimated residual value or the amount of the lessor’s deferred initial direct costs. Therefore, Park utilizes its incremental borrowing rate as the discount rate for leases. Park’s incremental borrowing rate for a lease is the rate of interest Park would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. To manage its capital and liquidity needs, Park periodically obtains wholesale funding from the FHLB on an over-collateralized basis. The impact of utilizing an interest rate on an over-collateralized borrowing versus a fully collateralized borrowing is not material. Therefore, the FHLB yield curve was selected by Park's management as a baseline to determine Park’s discount rates for leases. 
 
 • The lease term for all of Park's leases includes the noncancellable period of the lease plus any additional periods covered by either Park's option to extend (or not to terminate) the lease that Park is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. If a lease contract contains multiple renewal options, Park's management generally models lease cash flows through the first renewal option period unless the contract contains economic incentives or other conditions that increase the likelihood that additional renewals are reasonably certain to be exercised. 
 
 • Lease payments included in the measurement of the lease liability are comprised of the following: 
 – Fixed payments, including in-substance fixed payments, owed over the lease term; 
 – For certain of Park's gross real estate leases, non-lease components such as real estate taxes, insurance, and common area maintenance; and 
 – Variable lease payments that depend on an index or rate, initially measured using the index or rate at the lease commencement date. 
 
 The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term. 
 
 Park's operating lease ROU asset and lease liability are presented in “Operating lease right-of-use asset" and "Operating lease liability," respectively, on Park's Consolidated Condensed Balance Sheets. The carrying amounts of Park's ROU asset and lease liability at June 30, 2022 were $ 16.3 million and $ 17.1 million, respectively. At December 31, 2021, the carrying amounts of Park's ROU asset and lease liability were $ 13.4 million and $ 14.3 million, respectively. Park's operating lease expense is recorded in "Occupancy expense" on the Company's Consolidated Condensed Statements of Income. 
 
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 Other information related to operating leases for the three-month and six-month periods ended June 30, 2022 and 2021 follows: 
 
 Three Months Ended Six Months Ended 
 (in thousands) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 
 Lease cost 
 Operating lease cost $ 751 $ 698 $ 1,475 $ 1,419 
 Sublease income ( 63 ) ( 63 ) ( 126 ) ( 126 ) 
 Total lease cost $ 688 $ 635 $ 1,349 $ 1,293 
 
 Other information 
 Cash paid for amounts included in the measurement of lease liabilities: 
 Operating cash flows from operating leases $ 768 $ 770 $ 1,541 $ 1,552 
 ROU assets obtained in exchange for new operating lease liabilities $ 4,182 $ 180 $ 4,182 $ 180 
 Reductions to ROU assets resulting from reductions to lease obligations $ ( 695 ) $ ( 685 ) $ ( 1,393 ) $ ( 1,379 ) 

 At June 30, 2022 and December 31, 2021, Park's operating leases had a weighted average remaining term of 8.7 years and 6.8 years, respectively. The weighted average discount rate of Park's operating leases wa s 2.7 % and 2.3 % at June 30, 2022 and December 31, 2021, respectively. 
 
 Undiscounted cash flows included in lease liabilities have expected contractual payments as follows: 
 
 (in thousands) June 30, 2022 
 Six months ending December 31, 2022 $ 1,524 
 2023 3,293 
 2024 2,205 
 2025 1,877 
 2026 1,796 
 Thereafter 8,866 
 Total undiscounted minimum lease payments $ 19,561 
 Present value adjustment ( 2,494 ) 
 Total lease liabilities $ 17,067 

 In September 2021, the Company entered into a noncancellable operating lease for an additional retail office for an initial term of 12 years, with two five-year renewal options. The lease commenced on July 1, 2022, and therefore, was not recognized as of December 31, 2021 or June 30, 2022 . The fixed payments due on an undiscounted basis over the noncancellable 12-year period of the lease are $ 3.5 million. The Company will assess the lease term as of the lease commencement date, but does not presently expect that either of the five-year renewal periods will be exercised. 
 
 Note 13 – Repurchase Agreement Borrowings 
 
 Securities sold under agreements to repurchase ("repurchase agreements") with customers represent funds deposited by customers, generally on an overnight basis, that are collateralized by investment securities owned by Park. Repurchase agreements with customers are included in "Short-term borrowings" on the Consolidated Condensed Balance Sheets. 
 
 All repurchase agreements are subject to terms and conditions of repurchase/security agreements between Park and the client and are accounted for as secured borrowings. Park's repurchase agreements consist of customer accounts and securities which are pledged on an individual security basis. 
 
 At June 30, 2022 and December 31, 2021, Park's repurchase agreement borrowings totaled $ 171.8 million and $ 213.8 million, respectively. These borrowings were collateralized with U.S. government sponsored entities' asset-backed securities with a fair 
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 value of $ 216.6 million and $ 334.9 million at June 30, 2022 and December 31, 2021, respectively. Declines in the value of the collateral would require Park to pledge additional securities. As of June 30, 2022 and December 31, 2021, Park had $ 1,263 million and $ 1,225 million, respectively, of available unpledged securities. 
 
 The table below shows the remaining contractual maturity of repurchase agreements by collateral pledged at June 30, 2022 and December 31, 2021: 
 
 June 30, 2022 
 (in thousands) Remaining Contractual Maturity of the Agreements 
 Overnight and Continuous Up to 30 days 30 - 90 days Greater than 90 days Total 
 U.S. government and agency securities $ 171,799 $ — $ — $ — $ 171,799 
 
 December 31, 2021 
 (in thousands) Remaining Contractual Maturity of the Agreements 
 Overnight and Continuous Up to 30 days 30 - 90 days Greater than 90 days Total 
 U.S. government and agency securities $ 213,786 $ — $ — $ — $ 213,786 

 Note 14 - Derivatives 
 
 Park uses certain derivative financial instruments (or "derivatives") to meet the needs of its clients while managing the interest rate risk associated with certain transactions. Park does not use derivatives for speculative purposes. A summary of derivative financial instruments utilized by Park follows. 
 
 Interest Rate Swaps 
 Park utilizes interest rate swap agreements as part of its asset-liability management strategy to help manage its interest rate risk position and as a means to meet the financing, interest rate and other risk management needs of qualifying commercial banking customers. The notional amount of the interest rate swaps does not represent the amount exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. 
 
 Borrowing Derivatives : At June 30, 2022, Park had no borrowing derivatives. Interest rate swaps with notional amounts totaling $ 25.0 million at December 31, 2021 were designated as cash flow hedges of certain FHLB advances. 
 
 Loan Derivatives : In conjunction with the Carolina Alliance acquisition, Park acquired interest rate swaps related to certain commercial loans. Simultaneously with borrowers entering into interest rate swaps, Carolina Alliance entered into offsetting interest rate swaps executed with a third party, such that Carolina Alliance minimized its net interest rate risk exposure resulting from such transactions. These interest rate swaps had a notional amount totaling $ 26.8 million and $ 29.7 million at June 30, 2022 and December 31, 2021, respectively. 
 
 All of the Company's interest rate swaps were determined to be fully effective during each of the three-month and six-month periods ended June 30, 2022 and June 30, 2021. As such, no amount of ineffectiveness has been included in net income. Therefore, the aggregate fair value of the swaps is recorded in other assets and other liabilities with changes in fair value recorded in other comprehensive (loss) income. The amount included in accumulated other comprehensive (loss) income would be reclassified to current earnings should the hedges no longer be considered effective. During the three -month and six-month periods ended June 30, 2022, Park recognized expense of $66,000 as the result of the early termination of a borrowing interest rate swap. Park expects the outstanding hedges to remain fully effective during the remaining respective terms of the swaps. 
 
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 Summary information about Park's interest rate swaps as of June 30, 2022 and December 31, 2021 follows: 
 
 June 30, 2022 December 31, 2021 
 (In thousands, except weighted average data) Borrowing Derivatives Loan Derivatives Borrowing Derivatives Loan Derivatives 
 Notional amounts $ — $ 26,823 $ 25,000 $ 29,651 
 Weighted average pay rates — % 4.647 % 2.595 % 4.668 % 
 Weighted average receive rates — % 4.647 % 0.124 % 4.668 % 
 Weighted average maturity (years) 0.0 8.6 0.5 8.2 
 Unrealized losses $ — $ — $ 262 $ — 

 Interest expense recorded on swap transactions was $ 23,000 and $ 152,000 for the three -month periods ended June 30, 2022 and 2021, respectively, and was $ 171,000 and $ 300,000 for the six -month periods ended June 30, 2022 and 2021, respectively. 
 
 Interest Rate Swaps 
 The following table presents the net gains, net of income taxes, recorded in OCI and the Consolidated Condensed Statements of Income related to interest rate swaps for the three -month and six -month periods ended June 30, 2022 and 2021: 
 
 Three Months Ended
June 30, 2022 
 (In thousands) Amount of Net Gain Recognized in OCI (Effective Portion) Amount of Gain (Loss) Reclassified from OCI to Interest Income Amount of Expense Recognized in Miscellaneous Expense 
 Interest rate swaps $ 15 $ — $ 52 

 Three Months Ended
June 30, 2021 
 (In thousands) Amount of Net Gain Recognized in OCI (Effective Portion) Amount of Gain (Loss) Reclassified from OCI to Interest Income Amount of Expense Recognized in Miscellaneous Expense 
 Interest rate swaps $ 113 $ — $ — 

 Six Months Ended 
June 30, 2022 
 (In thousands) Amount of Net Gain Recognized in OCI (Effective Portion) Amount of Gain (Loss) Reclassified from OCI to Interest Income Amount of Expense Recognized in Miscellaneous Expense 
 Interest rate swaps $ 154 $ — $ 52 

 Six Months Ended 
June 30, 2021 
 (In thousands) Amount of Net Gain Recognized in OCI (Effective Portion) Amount of Gain (Loss) Reclassified from OCI to Interest Income Amount of Expense Recognized in Miscellaneous Expense 
 Interest rate swaps $ 238 $ — $ — 

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 The following tables reflect the interest rate swaps included in the Consolidated Condensed Balance Sheets as of June 30, 2022 and December 31, 2021. 
 
 (In thousands) June 30, 2022 December 31, 2021 
 Notional Amount Fair Value Notional Amount Fair Value 
 Included in other assets: 
 Borrowing derivatives - interest rate swaps related to FHLB advances $ — $ — $ — $ — 
 Loan derivatives - instruments associated with loans 
 Matched interest rate swaps with borrower 7,290 129 29,651 1,952 
 Matched interest rate swaps with counterparty 19,533 720 — — 
 Total included in other assets $ 26,823 $ 849 $ 29,651 $ 1,952 
 
 Included in other liabilities: 
 Borrowing derivatives - interest rate swaps related to FHLB advances $ — $ — $ 25,000 $ ( 262 ) 
 Loan derivatives - instruments associated with loans 
 Matched interest rate swaps with borrower 19,533 ( 720 ) — — 
 Matched interest rate swaps with counterparty 7,290 ( 129 ) 29,651 ( 1,952 ) 
 Total included in other liabilities $ 26,823 $ ( 849 ) $ 54,651 $ ( 2,214 ) 

 Mortgage Banking Derivatives 
 Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free standing derivatives. In order to hedge the change in interest rates resulting from its commitments to fund the loans, the Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into. These mortgage banking derivatives are not designated as hedge relationships. The fair value of an interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected exercise of the commitment before the loan is funded. Fair values of these mortgage banking derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. Changes in the fair values of these derivatives are included in "Other service income" in the Condensed Consolidated Statements of Income. 
 
 At June 30, 2022 and December 31, 2021 , Park had $ 5.8 million and $ 13.3 million, respectively, of interest rate lock commitments. The fair value of these mortgage banking derivatives was reflected by a derivative asset of $ 0.1 million and $ 0.3 million at June 30, 2022 and December 31, 2021 , respectively. 
 
 Other Derivatives 
 In connection with the sale of Park’s Class B Visa shares during 2009, Park entered into a swap agreement with the purchaser of the shares. The swap agreement adjusts for dilution in the conversion ratio of Class B Visa shares resulting from certain Visa litigation. At June 30, 2022 and December 31, 2021 , the fair value of the swap liability of $ 447,000 and $ 226,000 , respectively, was an estimate of the exposure based upon probability-weighted potential Visa litigation losses. 
 
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 Note 15 – Accumulated Other Comprehensive (Loss) Income 
 
 Other comprehensive (loss) income components, net of income tax, are shown in the following table for the three month and six month periods ended June 30, 2022 and 2021: 
 
 (in thousands) Changes in pension plan assets and benefit obligations Unrealized net holding gain (loss) on cash flow hedge Unrealized gains (losses) on debt securities AFS Total 
 Beginning balance at April 1, 2022 $ ( 5,792 ) $ ( 67 ) $ ( 34,610 ) $ ( 40,469 ) 
 Other comprehensive income (loss) before reclassifications — 15 ( 45,002 ) ( 44,987 ) 
 Amounts reclassified from other comprehensive loss — 52 — 52 
 Net current period other comprehensive income (loss) — 67 ( 45,002 ) ( 44,935 ) 
 Ending balance at June 30, 2022 $ ( 5,792 ) $ — $ ( 79,612 ) $ ( 85,404 ) 
 
 Beginning balance at April 1, 2021 $ ( 34,421 ) $ ( 573 ) $ 27,093 $ ( 7,901 ) 
 Other comprehensive income before reclassifications — 113 4,858 4,971 
 Net current period other comprehensive income — 113 4,858 4,971 
 Ending balance at June 30, 2021 $ ( 34,421 ) $ ( 460 ) $ 31,951 $ ( 2,930 ) 

 (in thousands) Changes in pension plan assets and benefit obligations Unrealized net holding gain (loss) on cash flow hedge Unrealized gains (losses) on debt securities AFS Total 
 Beginning balance at January 1, 2022 $ ( 5,792 ) $ ( 206 ) $ 21,153 $ 15,155 
 Other comprehensive income (loss) before reclassifications — 154 ( 100,765 ) ( 100,611 ) 
 Amounts reclassified from other comprehensive loss — 52 — 52 
 Net current period other comprehensive income (loss) — 206 ( 100,765 ) ( 100,559 ) 
 Ending balance at June 30, 2022 $ ( 5,792 ) $ — $ ( 79,612 ) $ ( 85,404 ) 
 
 Beginning balance at January 1, 2021 $ ( 34,421 ) $ ( 698 ) $ 40,690 $ 5,571 
 Other comprehensive income (loss) before reclassifications — 238 ( 8,739 ) ( 8,501 ) 
 Net current period other comprehensive income (loss) — 238 ( 8,739 ) ( 8,501 ) 
 Ending balance at June 30,2021 $ ( 34,421 ) $ ( 460 ) $ 31,951 $ ( 2,930 ) 

 During the three -month and six -month periods ended June 30, 2022, there was $ 66,000 ($ 52,000 net of tax) reclassified out of accumulated other comprehensive loss due to a net loss on the early termination of a borrowing interest rate swap. This loss was recorded within"Miscellaneous" other expense on the Consolidated Condensed Statements of Income. During the three -month and six -month periods ended June 30, 2021, there were no reclassifications out of accumulated other comprehensive (loss) income. 
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 Note 16 – Earnings Per Common Share 
 
 The following table sets forth the computation of basic and diluted earnings per common share for the three month and six months ended June 30, 2022 and 2021. 
 
 Three Months Ended 
June 30, Six Months Ended 
June 30, 
 (In thousands, except share and per common share data) 2022 2021 2022 2021 
 Numerator: 
 Net income $ 34,324 $ 39,132 $ 73,199 $ 81,963 
 Denominator: 
 Weighted-average common shares outstanding 16,249,307 16,340,690 16,234,598 16,327,838 
 Effect of dilutive PBRSUs and TBRSUs 111,939 132,110 111,543 127,835 
 Weighted-average common shares outstanding adjusted for the effect of dilutive PBRSUs and TBRSUs 16,361,246 16,472,800 16,346,141 16,455,673 
 Earnings per common share: 
 Basic earnings per common share $ 2.11 $ 2.39 $ 4.51 $ 5.02 
 Diluted earnings per common share $ 2.10 $ 2.38 $ 4.48 $ 4.98 

 Park awarded 52,335 and 61,890 PBRSUs to certain employees during the six months ended June 30, 2022 and 2021, respectively. No PBRSUs were awarded during either of the three months ended June 30, 2022 or 2021. 
 
 No common shares were repurchased during the three months or six months ended June 30, 2022 or 2021. 
 
 Note 17 – Segment Information 
 
 The Corporation is a financial holding company headquartered in Newark, Ohio. The reportable segment for the Corporation is its chartered national bank subsidiary, PNB (headquartered in Newark, Ohio). "All Other", which primarily consists of Park as the "Parent Company", GFSC and SEPH, is shown to reconcile the segment totals to the Consolidated Condensed Statements of Income. 
 
 Management is required to disclose information about the different types of business activities in which a company engages and also information on the different economic environments in which a company operates, so that the users of the financial statements can better understand the company’s performance, better understand the potential for future cash flows, and make 
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 more informed judgments about the company as a whole. Park has one reportable segment, as: (i) discrete financial information is available for this reportable segment and (ii) the segment is aligned with internal reporting to Park’s Chief Executive Officer. 
 
 Operating Results for the three months ended June 30, 2022 
 (In thousands) PNB All Other Total 
 Net interest income $ 83,411 $ 528 $ 83,939 
 Provision for (recovery of) credit losses 3,357 ( 366 ) 2,991 
 Other income 29,255 1,938 31,193 
 Other expense 66,214 3,834 70,048 
 Income (loss) before income taxes $ 43,095 $ ( 1,002 ) $ 42,093 
 Income tax expense (benefit) 8,155 ( 386 ) 7,769 
 Net income (loss) $ 34,940 $ ( 616 ) $ 34,324 
 
 Assets (at June 30, 2022) $ 9,794,711 $ 31,959 $ 9,826,670 

 Operating Results for the three months ended June 30, 2021 
 (In thousands) PNB All Other Total 
 Net interest income $ 82,675 $ 1,176 $ 83,851 
 Recovery of credit losses ( 3,752 ) ( 288 ) ( 4,040 ) 
 Other income 31,126 112 31,238 
 Other expense 67,122 4,278 71,400 
 Income (loss) before income taxes $ 50,431 $ ( 2,702 ) $ 47,729 
 Income tax expense (benefit) 9,535 ( 938 ) 8,597 
 Net income (loss) $ 40,896 $ ( 1,764 ) $ 39,132 
 
 Assets (at June 30, 2021) $ 9,922,623 $ 25,371 $ 9,947,994 

 Operating Results for the six months ended June, 30, 2022 
 (In thousands) PNB All Other Total 
 Net interest income (expense) $ 162,783 $ ( 1,158 ) $ 161,625 
 Recovery of credit losses ( 1,190 ) ( 424 ) ( 1,614 ) 
 Other income 60,502 2,347 62,849 
 Other expense 130,430 6,991 137,421 
 Income (loss) before income taxes $ 94,045 $ ( 5,378 ) $ 88,667 
 Income tax expense (benefit) 17,637 ( 2,169 ) 15,468 
 Net income (loss) $ 76,408 $ ( 3,209 ) $ 73,199 

 Operating Results for the six months ended June, 30, 2021 
 (In thousands) PNB All Other Total 
 Net interest income (expense) $ 164,761 $ ( 176 ) $ 164,585 
 Recovery of credit losses ( 7,946 ) ( 949 ) ( 8,895 ) 
 Other income 63,926 1,401 65,327 
 Other expense 130,698 8,567 139,265 
 Income (loss) before income taxes $ 105,935 $ ( 6,393 ) $ 99,542 
 Income tax expense (benefit) 19,917 ( 2,338 ) 17,579 
 Net income (loss) $ 86,018 $ ( 4,055 ) $ 81,963 

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 The operating results in the “All Other” column are used to reconcile the segment totals to the Consolidated Condensed Statements of Income for the three -month and six -month period s ended June 30, 2022 and 2021. The reconciling amounts for consolidated total assets for the periods ended June 30, 2022 and 2021 consisted of the elimination of intersegment borrowings and the assets of the Parent Company, GFSC and SEPH which were not eliminated. 
 
 Note 18 - Share-Based Compensation 
 
 The Park National Corporation 2017 Long-Term Incentive Plan for Employees (the "2017 Employees LTIP") was adopted by the Board of Directors of Park on January 23, 2017 and was approved by Park's shareholders at the Annual Meeting of Shareholders on April 24, 2017. The 2017 Employees LTIP makes equity-based awards and cash-based awards available for grant to employee participants in the form of incentive stock options, nonqualified stock options, stock appreciation rights ("SARs"), restricted stock, restricted stock units, other stock-based awards and cash-based awards. Under the 2017 Employees LTIP, 750,000 common shares are authorized to be delivered in connection with grants under the 2017 Employees LTIP. The common shares to be delivered under the 2017 Employees LTIP are to consist of either common shares currently held or common shares subsequently acquired by Park as treasury shares, including common shares purchased in the open market or in private transactions. At June 30, 2022, 397,665 common shares were available for future grants under the 2017 Employees LTIP. 
 
 The Park National Corporation 2017 Long-Term Incentive Plan for Non-Employee Directors (the "2017 Non-Employee Directors LTIP") was adopted by the Board of Directors of Park on January 23, 2017 and was approved by Park's shareholders at the Annual Meeting of Shareholders on April 24, 2017. The 2017 Non-Employee Directors LTIP makes equity-based awards and cash-based awards available for grant to non-employee director participants in the form of nonqualified stock options, SARs, restricted stock, restricted stock units, other stock-based awards, and cash-based awards. Under the 2017 Non-Employee Directors LTIP, 150,000 common shares are authorized to be delivered in connection with grants under the 2017 Non-Employee Directors LTIP. The common shares to be delivered under the 2017 Non-Employee Directors LTIP are to consist of either common shares currently held or common shares subsequently acquired by Park as treasury shares, including common shares purchased in the open market or in private transactions. At June 30, 2022, 86,850 common shares were available for future grants under the 2017 Non-Employee Directors LTIP. 
 
 During the six months ended June 30, 2022 and 2021, the Compensation Committee of the Board of Directors of Park granted awards of PBRSUs, under the 2017 Employees LTIP, covering an aggregate of 52,335 and 61,890 common shares, respectively, to certain employees of Park and its subsidiaries. No awards were granted during either of the three months ended June 30, 2022 and 2021. 
 
 As of June 30, 2022, Park has nonvested PBRSUs as well as TBRSUs. The number of PBRSUs earned or settled will depend on the level of achievement with respect to certain performance criteria over a three-year period and are also subject to subsequent service-based vesting. The number of TBRSUs earned or settled will be subject to service-based vesting. 
 
 A summary of changes in the common shares subject to nonvested PBRSUs and TBRSUs for the six months ended June 30, 2022 follows: 
 
 Common shares subject to PBRSUs and TBRSUs 
 Nonvested at January 1, 2022 211,819 
 Granted 52,335 
 Vested ( 48,415 ) 
 Forfeited ( 1,913 ) 
 Adjustment for performance conditions of PBRSUs (1) 
 ( 634 ) 
 Nonvested at June 30, 2022 (2) 
 213,192 

 (1) The number of PBRSUs earned depends on the level of achievement with respect to certain performance criteria. Adjustment herein represents the difference between the maximum number of common shares which could be earned and the actual number earned for those PBRSUs as to which the performance period was completed. 
 (2) Nonvested amount herein represents the maximum number of nonvested PBRSUs and TBRSUs. As of June 30, 2022, an aggregate of 208,431 PBRSUs and TBRSUs are expected to vest. 
 
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 A summary of awards vested during the three and six months ended June 30, 2022 and 2021 follows: 
 
 Three Months Ended 
June 30, Six Months Ended 
June 30, 
 2022 2021 2022 2021 
 PBRSUs and TBRSUs vested — 7,807 48,415 43,679 
 Common shares withheld to satisfy employee income tax withholding obligations — 2,973 18,658 17,081 
 Net common shares issued — 4,834 29,757 26,598 

 Share-based compensation expense of $ 1.4 million and $ 1.5 million was recognized for the three-month periods ended June 30, 2022 and 2021, respectively, and share-based compensation expense of $ 3.4 million and $ 3.3 million was recognized for the six-month periods ended June 30, 2022 and 2021, respectively. 
 
 The following table details expected additional share-based compensation expense related to PBRSUs and TBRSUs outstanding at June 30, 2022: 
 
 (In thousands) 
 Six months ending December 31, 2022 $ 2,747 
 2023 4,405 
 2024 2,866 
 2025 1,192 
 2026 191 
 Total $ 11,401 

 Note 19 – Benefit Plans 
 
 Park has a noncontributory defined benefit pension plan (the "Pension Plan") covering substantially all of its employees. The Pension Plan provides benefits based on an employee’s years of service and compensation. 
 
 There were no Pension Plan contributions for any of the three-month or six-month periods ended June 30, 2022 and 2021. Additionally, no contributions are expected to be made during the remainder of 2022. 
 
 The following table shows the components of net periodic pension benefit (income) expense: 
 
 Three Months Ended 
June 30, Six Months Ended 
June 30, Affected Line Item in the Consolidated 
Condensed Statements of Income 
 (In thousands) 2022 2021 2022 2021 
 Service cost $ 2,437 $ 2,479 $ 4,874 $ 4,958 Employee benefits 
 Interest cost 1,426 1,340 2,852 2,680 Other components of net 
periodic pension benefit income 
 Expected return on plan assets ( 4,449 ) ( 3,933 ) ( 8,898 ) ( 7,866 ) Other components of net 
periodic pension benefit income 
 Recognized net actuarial (gain) loss and prior service costs ( 4 ) 555 ( 8 ) 1,110 Other components of net 
periodic pension benefit income 
 Net periodic pension benefit (income) expense $ ( 590 ) $ 441 $ ( 1,180 ) $ 882 

 Park has entered into Supplemental Executive Retirement Plan Agreements (the “SERP Agreements”) with certain key officers of Park and its subsidiaries which provide defined pension benefits in excess of limits imposed by federal tax law. The expense 
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 for the Corporation related to the SERP Agreements for the three months and six months ended June 30, 2022 and 2021 was as follows: 
 
 Three Months Ended 
June 30, Six Months Ended 
June 30, Affected Line Item in the Consolidated 
Condensed Statements of Income 
 (In thousands) 2022 2021 2022 2021 
 Service cost $ 212 $ 204 425 $ 408 Employee benefits 
 Interest cost 183 149 366 298 Miscellaneous expense 
 Total SERP expense $ 395 $ 353 $ 791 $ 706 

 Note 20 – Fair Value 
 
 The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that Park uses to measure fair value are as follows: 
 
 • Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that Park has the ability to access as of the measurement date. 
 • Level 2: Level 1 inputs for assets or liabilities that are not actively traded. Also consists of an observable market price for a similar asset or liability. This includes the use of “matrix pricing” to value debt securities absent the exclusive use of quoted prices. 
 • Level 3: Consists of unobservable inputs that are used to measure fair value when observable market inputs are not available. This could include the use of internally developed models, financial forecasting and similar inputs. 
 
 Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the balance sheet date. When possible, the Company looks to active and observable markets to price identical assets or liabilities. When identical assets and liabilities are not traded in active markets, the Company looks to observable market data for similar assets and liabilities. However, certain assets and liabilities are not traded in observable markets and Park must use other valuation methods to develop a fair value. The fair value of individually evaluated collateral dependent loans is typically based on the fair value of the underlying collateral, which is estimated through third-party appraisals in accordance with Park's valuation requirements under its commercial and real estate loan policies. 
 
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 Assets and Liabilities Measured at Fair Value on a Recurring Basis : 
 
 The following table presents assets and liabilities measured at fair value on a recurring basis: 
 
 Fair Value Measurements at June 30, 2022 using: 
 (In thousands) Level 1 Level 2 Level 3 Balance at June 30, 2022 
 Assets 
 Investment securities: 
 Obligations of U.S. Treasury and other U.S. Government sponsored entities $ — $ 37,984 $ — $ 37,984 
 Obligations of states and political subdivisions — 406,779 — 406,779 
 U.S. Government sponsored entities’ asset-backed securities — 863,734 — 863,734 
 Collateralized loan obligations — 514,107 — 514,107 
 Corporate debt securities — 16,499 — 16,499 
 Equity securities 1,294 — 491 1,785 
 Mortgage loans held for sale — 5,679 — 5,679 
 Mortgage IRLCs — 125 — 125 
 Loan interest rate swaps — 849 — 849 
 
 Liabilities 
 Fair value swap $ — $ — $ 447 $ 447 
 Borrowing interest rate swap — — — — 
 Loan interest rate swaps — 849 — 849 

 Fair Value Measurements at December 31, 2021 using: 
 (In thousands) Level 1 Level 2 Level 3 Balance at December 31, 2021 
 Assets 
 Investment securities: 
 Obligations of states and political subdivisions $ — $ 389,591 $ — $ 389,591 
 U.S. Government sponsored entities’ asset-backed securities — 854,463 — 854,463 
 Collateralized loan obligations — 498,674 — 498,674 
 Corporate debt securities — 11,412 — 11,412 
 Equity securities 1,630 — 499 2,129 
 Mortgage loans held for sale — 9,387 — 9,387 
 Mortgage IRLCs — 333 — 333 
 Loan interest rate swaps — 1,952 — 1,952 
 
 Liabilities 
 Fair value swap $ — $ — $ 226 $ 226 
 Borrowing interest rate swap — 262 — 262 
 Loan interest rate swaps — 1,952 — 1,952 

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 The following methods and assumptions were used by the Company in determining the fair value of the financial assets and liabilities discussed above: 
 
 Interest rate swaps: The fair values of interest rate swaps are based on valuation models using observable market data as of the measurement date (Level 2). 
 
 Investment securities: Fair values for investment securities are based on quoted market prices, where available (Level 1). If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows (Level 3). 
 
 Fair value swap: The fair value of the swap agreement entered into with the purchaser of the Visa Class B shares represents an internally developed estimate of the exposure based upon probability-weighted potential Visa litigation losses and is classified as Level 3. 
 
 Mortgage Interest Rate Lock Commitments: Mortgage IRLCs are based on current secondary market pricing and are classified as Level 2. 
 
 Mortgage loans held for sale: Mortgage loans held for sale are carried at their fair value. Mortgage loans held for sale are estimated using market prices for similar product types and, therefore, are classified in Level 2. 
 
 The table below presents a reconciliation of the beginning and ending balances of the Level 3 inputs for the three-month and six -month periods ended June 30, 2022 and 2021, for financial instruments measured on a recurring basis and classified as Level 3: 
 
 Level 3 Fair Value Measurements 
 Three months ended June 30, 2022 and 2021 
 
 (In thousands) Equity
Securities Fair value
swap 
 Balance at April 1, 2022 $ 491 $ ( 226 ) 
 Total losses 
 Included in other income / expense — ( 221 ) 
 Balance at June 30, 2022 $ 491 $ ( 447 ) 
 
 Balance at April 1, 2021 $ 490 $ ( 226 ) 
 Total gains (losses) 
 Included in other income / expense — — 
 Balance at June 30, 2021 $ 490 $ ( 226 ) 

 Level 3 Fair Value Measurements 
 Six months ended June 30, 2022 and 2021 
 
 (In thousands) Equity
Securities Fair value
swap 
 Balance at January 1, 2022 $ 499 $ ( 226 ) 
 Total losses 
 Included in other income / expense ( 8 ) ( 221 ) 
 Balance at June 30, 2022 $ 491 $ ( 447 ) 
 
 Balance at January 1, 2021 $ 485 $ ( 226 ) 
 Total gains 
 Included in other income / expense 5 — 
 Balance at June 30, 2021 $ 490 $ ( 226 ) 

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 Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis: 
 
 The following 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 as described below: 
 
 Commercial loans held for sale: Commercial loans held for sale are carried at the lower of cost or fair value. Loans are evaluated quarterly with any subsequent fair value adjustments being recorded to a valuation allowance. Fair value is determined based on third-party broker pricing, resulting in a Level 3 classification. 
 
 Individually evaluated collateral dependent loans: When a loan is individually evaluated, it is valued at the lower of cost or fair value. Collateral dependent loans which are individually evaluated and carried at fair value have been partially charged off or receive specific allocations of the allowance for credit losses. For collateral dependent loans, fair value is generally based on real estate appraisals. 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. 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 the client’s business, resulting in a Level 3 fair value classification. Individually evaluated loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly. Additionally, updated independent valuations are obtained annually for all collateral dependent loans in accordance with Company policy. 
 
 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 individually evaluated collateral dependent loans and OREO are performed by licensed appraisers. Appraisals are generally obtained to support the fair value of collateral. In general, there are three types of appraisals received by the Company: real estate appraisals, income approach appraisals, and lot development loan appraisals. 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. 
 
 • Income approach appraisals typically incorporate the annual net operating income of the business divided by an appropriate capitalization rate, as determined by the appraiser. Management generally applies a 15 % discount to income approach appraised values which management expects will cover all disposition costs (including selling costs). 
 
 • 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. 
 
 Other repossessed assets: Other repossessed assets are initially recorded at fair value less costs to sell when acquired. The carrying value of other repossessed assets 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. At December 31, 2021, other repossessed assets primarily consisted of aircraft acquired as part of a loan workout. Fair value is based on Aircraft Bluebook and VREF Aircraft Value Reference values based on the model of aircraft and adjustments for flight hours, features and other variables. Such adjustments result in a Level 3 classification of the inputs for determining fair value. There were no other repossessed assets carried at fair value at June 30, 2022. 
 
 MSRs: MSRs are carried at the lower of cost or fair value. 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, 
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 management, with the assistance of a third-party specialist, 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. The calculated fair value 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 tables present assets and liabilities measured at fair value on a nonrecurring basis. Individually evaluated collateral dependent loans secured by real estate are carried at fair value if they have been charged down to fair value or if a specific valuation allowance has been established. As of June 30, 2022 and December 31, 2021, there were no PCD loans carried at fair value. A new cost basis is established at the time a property is initially recorded in OREO. OREO properties are carried at fair value if a devaluation has been taken with respect to the property's value subsequent to the initial measurement. 
 
 Fair Value Measurements at June 30, 2022 using: 
 (In thousands) Level 1 Level 2 Level 3 Balance at June 30, 2022 
 Commercial loans held for sale $ — $ — $ 4,926 $ 4,926 
 
 Individually evaluated collateral dependent loans recorded at fair value: 
 Commercial real estate $ — $ — $ 2,525 $ 2,525 
 Residential real estate — — 207 207 
 Total individually evaluated collateral dependent loans recorded at fair value $ — $ — $ 2,732 $ 2,732 
 
 MSRs $ — $ 1,459 $ — $ 1,459 
 
 OREO recorded at fair value: 
 Residential real estate — — — — 
 Total OREO recorded at fair value $ — $ — $ — $ — 
 
 Other repossessed assets $ — $ — $ — $ — 

 Fair Value Measurements at December 31, 2021 using: 
 (In thousands) Level 1 Level 2 Level 3 Balance at December 31, 2021 
 Individually evaluated collateral dependent loans recorded at fair value: 
 Commercial real estate $ — $ — $ 831 $ 831 
 Residential real estate — — 272 272 
 Total individually evaluated collateral dependent loans recorded at fair value $ — $ — $ 1,103 $ 1,103 
 
 MSRs $ — $ 13,482 $ — $ 13,482 
 
 OREO recorded at fair value: 
 Residential real estate — — 775 775 
 Total OREO recorded at fair value $ — $ — $ 775 $ 775 
 
 Other repossessed assets $ — $ — $ 2,750 $ 2,750 

 Commercial loans held for sale are carried at the lower of cost or fair value. At June 30, 2022, Park had $ 6.3 million of commercial loans held for sale. Of these loans, $ 4.9 million were held at fair value. The remaining $ 1.4 million were carried at cost as the fair value of the loans exceeded the book value for each individual credit. For the three months and six months ended June 30, 2022, expense related to commercial loans held for sale was $ 1.2 million, which was recorded in the provision for credit losses prior to the transfer of the loans to held for sale classification. 
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 The table below provides additional detail on those individually evaluated loans which are recorded at fair value as well as the remaining individually evaluated loan portfolio not included above. The remaining individually evaluated loans consist of 1) loans which are not collateral dependent, 2) loans which are not secured by real estate, and 3) loans carried at cost as the fair value of the underlying collateral or the present value of expected future cash flows on each of the loans exceeded the book value for each respective credit. 
 
 June 30, 2022 
 (In thousands) Loan Balance Prior Charge-Offs Specific Valuation Allowance Carrying Balance 
 Total individually evaluated collateral dependent loans recorded at fair value $ 3,892 $ 162 $ 1,160 $ 2,732 
 Remaining individually evaluated loans 38,631 220 714 37,917 
 Total individually evaluated loans $ 42,523 $ 382 $ 1,874 $ 40,649 

 December 31, 2021 
 (In thousands) Loan Balance Prior Charge-Offs Specific Valuation Allowance Carrying Balance 
 Total individually evaluated collateral dependent loans recorded at fair value $ 1,291 $ 240 $ 188 $ 1,103 
 Remaining individually evaluated loans 73,211 384 1,428 71,783 
 Total individually evaluated loans $ 74,502 $ 624 $ 1,616 $ 72,886 

 The (expense) income from credit adjustments related to individually evaluated loans carried at fair value was $( 1.0 ) million and $( 0.4 ) million for the three-month periods ended June 30, 2022 and 2021, respectively, and was $( 1.0 ) million and $ 0.5 million for the six-month periods ended June 30, 2022 and 2021, respectively. 
 
 MSRs totaled $ 16.5 million at June 30, 2022. Of this $ 16.5 million MSR carrying balance, $ 1.5 million were recorded at fair value and included a valuation allowance of $ 0.2 million. The remaining $ 15.0 million were recorded at cost, as the fair value exceeded cost at June 30, 2022. At December 31, 2021, MSRs totaled $ 15.3 million. Of this $ 15.3 million MSR carrying balance, $ 13.5 million were recorded at fair value and included a valuation allowance of $ 1.6 million. The remaining $ 1.8 million were recorded at cost, as the fair value exceeded cost at December 31, 2021. The income r elated to MSRs carried at fair value during the three-month periods ended June 30, 2022 and 2021 was $ 0.9 million and $ 0.2 million, respectively, and was $ 1.3 million and $ 1.1 million for the six-month periods ended June 30, 2022 and 2021, respectively. 
 
 Total OREO held by Park at June 30, 2022 and December 31, 2021 was $ 1.4 million and $ 775,000 respectively . At June 30, 2022, there was no OREO held by Park that was carried at fair value due to fair value adjustments made subsequent to the initial OREO measurement. At December 31, 2021, all of Park's OREO was carried at fair value. The net expense related to OREO fair value adjustments was $ 735,000 and $ 765,000 for the three -month and six-month periods ended June 30, 2022, respectively. There was no expense related to OREO fair value adjustments for the three-month period or six-month period ended June 30, 2021 . 
 
 Other repossessed assets totaled $ 0.6 million at June 30, 2022, of which there were no repossessed assets recorded at fair value. Other repossessed assets totaled $ 3.3 million at December 31, 2021, of which $ 2.8 million were recorded at fair value. There was no expense related to fair value adjustments on other repossessed assets during either of the three-month period or six-month period ended June 30, 2022 and 2021. 
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 The following tables present qualitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at June 30, 2022 and December 31, 2021: 
 
 June 30, 2022 
 (In thousands) Fair Value Valuation Technique Unobservable Input(s) Range 
(Weighted Average) 
 Individually evaluated collateral dependent loans: 
 Commercial real estate $ 2,525 Sales comparison approach Adj to comparables 0.0 % - 85.7 % ( 11.4 %) 
 
 Income approach Capitalization rate 8.0 % ( 8.0 %) 
 
 Residential real estate $ 207 Sales comparison approach Adj to comparables 1.9 % - 119.8 % ( 17.5 %) 
 
 Balance at December 31, 2021 
 (In thousands) Fair Value Valuation Technique Unobservable Input(s) Range 
(Weighted Average) 
 Individually evaluated collateral dependent loans: 
 Commercial real estate $ 831 Sales comparison approach Adj to comparables 0.0 % - 232.0 % ( 28.3 %) 
 
 Residential real estate $ 272 Sales comparison approach Adj to comparables 0.5 % - 78.6 % ( 11.6 %) 
 
 Cost approach Accumulated depreciation 8.3 % ( 8.3 %) 
 
 Other real estate owned: 
 
 Residential real estate $ 775 Sales comparison approach Adj to comparables 5.0 % - 32.5 % ( 19.1 %) 
 
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 Assets Measured at Net Asset Value: 
 
 Park's portfolio of equity investments in limited partnerships which provide mezzanine funding ("Partnership Investments") are valued using the NAV practical expedient in accordance with ASC 820. 
 
 At June 30, 2022 and December 31, 2021, Park had Partnership Investments with a NAV of $ 23.2 million and $ 18.0 million, respectively. At June 30, 2022 and December 31, 2021, Park had $ 20.3 million and $ 8.4 million, respectively, in unfunded commitments related to these Partnership Investments. For the three-month periods ended June 30, 2022 and 2021, Park recognized income of $ 0.1 million and $ 0.5 million, respectively, and for the six-month periods ended June 30, 2022 and 2021 recognized income of $ 2.5 million and $ 1.9 million, respectively, related to these Partnership Investments. 
 
 The fair value of certain financial instruments at June 30, 2022 and December 31, 2021, was as follows: 
 
 June 30, 2022 
 Fair Value Measurements 
 (In thousands) Carrying value Level 1 Level 2 Level 3 Total fair value 
 Financial assets: 
 Cash and money market instruments $ 246,441 $ 246,441 $ — $ — $ 246,441 
 Investment securities (1) 
 1,839,103 — 1,839,103 — 1,839,103 
 Other investment securities (2) 
 1,785 1,294 — 491 1,785 
 
 Commercial loans held for sale 6,321 — — 6,625 6,625 
 
 Mortgage IRLCs 125 — 125 — 125 
 Mortgage loans held for sale 5,679 — 5,679 — 5,679 
 Individually evaluated loans carried at fair value 2,732 — — 2,732 2,732 
 Other loans, net 6,868,701 — — 6,802,832 6,802,832 
 Loans receivable, net $ 6,877,237 $ — $ 5,804 $ 6,805,564 $ 6,811,368 
 
 Financial liabilities: 
 Time deposits $ 674,193 $ — $ 675,858 $ — $ 675,858 
 Other 4,048 4,048 — — 4,048 
 Deposits (excluding demand deposits) $ 678,241 $ 4,048 $ 675,858 $ — $ 679,906 
 
 Short-term borrowings $ 171,799 $ — $ 171,799 $ — $ 171,799 
 Subordinated notes 188,435 — 183,285 — 183,285 
 
 Derivative financial instruments - assets: 
 Loan interest rate swaps 849 — 849 — 849 
 
 Derivative financial instruments - liabilities: 
 Fair value swap 447 — — 447 447 
 Borrowing interest rate swap — — — — — 
 Loan interest rate swaps 849 — 849 — 849 

 (1) Includes debt securities AFS. 
 (2) Excludes FHLB stock and FRB stock which are carried at their respective redemption values, investment securities accounted for at modified cost as these investments do not have a readily determinable fair value, and Partnership Investments valued using the NAV practical expedient. 
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 December 31, 2021 
 Fair Value Measurements 
 (In thousands) Carrying value Level 1 Level 2 Level 3 Total fair value 
 Financial assets: 
 Cash and money market instruments $ 219,180 $ 219,180 $ — $ — $ 219,180 
 Investment securities (1) 
 1,754,140 — 1,754,140 — 1,754,140 
 Other investment securities (2) 
 2,129 1,630 — 499 2,129 
 
 Mortgage loans held for sale 9,387 — 9,387 — 9,387 
 Mortgage IRLCs 333 — 333 — 333 
 Individually evaluated loans carried at fair value 1,103 — — 1,103 1,103 
 Other loans, net 6,777,102 — — 6,783,848 6,783,848 
 Loans receivable, net $ 6,787,925 $ — $ 9,720 $ 6,784,951 $ 6,794,671 
 
 Financial liabilities: 
 Time deposits $ 711,660 $ — $ 714,307 — $ 714,307 
 Other 1,465 1,465 — — 1,465 
 Deposits (excluding demand deposits) $ 713,125 $ 1,465 $ 714,307 $ — $ 715,772 
 
 Short-term borrowings $ 238,786 $ — $ 238,786 $ — $ 238,786 
 Subordinated notes 188,210 — 207,912 — 207,912 
 
 Derivative financial instruments - assets: 
 Loan interest rate swaps 1,952 — 1,952 — 1,952 
 
 Derivative financial instruments - liabilities: 
 Fair value swap $ 226 $ — $ — $ 226 $ 226 
 Borrowing interest rate swap 262 — 262 — 262 
 Loan interest rate swaps 1,952 — 1,952 — 1,952 

 (1) Includes debt securities AFS. 
 (2) Excludes FHLB stock and FRB stock which are carried at their respective redemption values, investment securities accounted for at modified cost as these investments do not have a readily determinable fair value, and Partnership Investments valued using the NAV practical expedient. 
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 Note 21 - Revenue from Contracts with Customers 
 
 All of Park's revenue from contracts with customers within the scope of ASC 606 is recognized within "Other income" in the Consolidated Condensed Statements of Income. The following table presents the Corporation's sources of other income by revenue stream and operating segment for the three-month and six-month periods ended June 30, 2022 and June 30, 2021. 
 
 Three Months Ended
June 30, 2022 
 Revenue by Operating Segment (in thousands) PNB All Other Total 
 Income from fiduciary activities 
 Personal trust and agency accounts $ 2,764 $ — $ 2,764 
 Employee benefit and retirement-related accounts 2,471 — 2,471 
 Investment management and investment advisory agency accounts 3,143 — 3,143 
 Other 481 — 481 
 Service charges on deposit accounts 
 Non-sufficient funds (NSF) fees 1,519 — 1,519 
 Demand deposit account (DDA) charges 913 — 913 
 Other 131 — 131 
 Other service income (1) 
 
 Credit card 715 — 715 
 HELOC 105 — 105 
 Installment 45 — 45 
 Real estate 3,274 — 3,274 
 Commercial 301 500 801 
 Debit card fee income 6,731 — 6,731 
 Bank owned life insurance income (2) 
 1,130 1,244 2,374 
 ATM fees 583 — 583 
 Gain on equity securities, net (2) 
 41 668 709 
 Other components of net periodic pension benefit income (2) 
 2,954 73 3,027 
 Miscellaneous (3) 
 1,954 ( 547 ) 1,407 
 Total other income $ 29,255 $ 1,938 $ 31,193 

 (1) Of the $ 4.9 million of aggregate revenue included within "Other service income", approximately $ 1.7 million is within the scope of ASC 606, with the remaining $ 3.2 million consisting primarily of certain residential real estate loan fees which are out of scope. 
 (2) Not within the scope of ASC 606. 
 (3) "Miscellaneous" income includes brokerage income, safe deposit box rentals, and miscellaneous bank fees totaling $ 1.4 million, all of which are within scope of ASC 606. 
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 Three Months Ended
June 30, 2021 
 Revenue by Operating Segment (in thousands) PNB All Other Total 
 Income from fiduciary activities 
 Personal trust and agency accounts $ 2,626 $ — $ 2,626 
 Employee benefit and retirement-related accounts 2,363 — 2,363 
 Investment management and investment advisory agency accounts 3,116 — 3,116 
 Other 464 — 464 
 Service charges on deposit accounts 
 Non-sufficient funds (NSF) fees 1,144 — 1,144 
 Demand deposit account (DDA) charges 774 — 774 
 Other 114 — 114 
 Other service income (1) 
 
 Credit card 636 — 636 
 HELOC 99 — 99 
 Installment 46 — 46 
 Real estate 6,011 — 6,011 
 Commercial 364 3 367 
 Debit card fee income 6,758 — 6,758 
 Bank owned life insurance income (2) 
 1,062 87 1,149 
 ATM fees 655 — 655 
 Gain (loss) on equity securities, net (2) 
 495 ( 28 ) 467 
 Other components of net periodic pension benefit income (2) 
 1,986 52 2,038 
 Miscellaneous (3) 
 2,413 ( 2 ) 2,411 
 Total other income $ 31,126 $ 112 $ 31,238 

 (1) Of the $ 7.2 million of aggregate revenue included within "Other service income", approximately $ 1.3 million is within the scope of ASC 606, with the remaining $ 5.9 million consisting primarily of certain residential real estate loan fees which are out of scope. 
 (2) Not within the scope of ASC 606. 
 (3) "Miscellaneous" income includes brokerage income, safe deposit box rentals, and miscellaneous bank fees totaling $ 2.4 million, all of which are within scope of ASC 606. 
 
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 Six Months Ended 
June 30, 2022 
 Revenue by Operating Segment (in thousands) PNB All Other Total 
 Income from fiduciary activities 
 Personal trust and agency accounts $ 5,270 $ — $ 5,270 
 Employee benefit and retirement-related accounts 5,031 — 5,031 
 Investment management and investment advisory agency accounts 6,403 — 6,403 
 Other 952 — 952 
 Service charges on deposit accounts 
 Non-sufficient funds (NSF) fees 2,936 — 2,936 
 Demand deposit account (DDA) charges 1,429 — 1,429 
 Other 272 — 272 
 Other service income (1) 
 
 Credit card 1,357 — 1,357 
 HELOC 194 — 194 
 Installment 88 — 88 
 Real estate 6,993 — 6,993 
 Commercial 655 472 1,127 
 Debit card fee income 12,857 — 12,857 
 Bank owned life insurance income (2) 
 2,223 1,326 3,549 
 ATM fees 1,115 — 1,115 
 Gain on equity securities, net (2) 
 2,260 802 3,062 
 Other components of net periodic pension benefit income (2) 
 5,909 145 6,054 
 Miscellaneous (3) 
 4,558 ( 398 ) 4,160 
 Total other income $ 60,502 $ 2,347 $ 62,849 

 (1) Of the $ 9.8 million of aggregate revenue included within "Other service income", approximately $ 3.0 million is within the scope of ASC 606, with the remaining $ 6.8 million consisting primarily of certain residential real estate loan fees which are out of scope. 
 (2) Not within the scope of ASC 606. 
 (3) "Miscellaneous" income includes brokerage income, safe deposit box rentals, and miscellaneous bank fees totaling $ 4.2 million, all of which are within scope of ASC 606. 
 
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 Six Months Ended 
June 30, 2021 
 Revenue by Operating Segment (in thousands) PNB All Other Total 
 Income from fiduciary activities 
 Personal trust and agency accounts $ 5,013 $ — $ 5,013 
 Employee benefit and retirement-related accounts 4,664 — 4,664 
 Investment management and investment advisory agency accounts 6,125 — 6,125 
 Other 940 — 940 
 Service charges on deposit accounts 
 Non-sufficient funds (NSF) fees 2,278 — 2,278 
 Demand deposit account (DDA) charges 1,563 — 1,563 
 Other 245 — 245 
 Other service income (1) 
 
 Credit card 1,216 — 1,216 
 HELOC 188 — 188 
 Installment 80 — 80 
 Real estate 14,449 — 14,449 
 Commercial 782 61 843 
 Debit card fee income 12,844 — 12,844 
 Bank owned life insurance income (2) 
 2,147 167 2,314 
 ATM fees 1,185 — 1,185 
 Gain on equity securities, net (2) 
 1,329 948 2,277 
 Other components of net periodic pension benefit income (2) 
 3,973 103 4,076 
 Miscellaneous (3) 
 4,905 122 5,027 
 Total other income $ 63,926 $ 1,401 $ 65,327 

 (1) Of the $ 16.8 million of aggregate revenue included within "Other service income", approximately $ 2.6 million is within the scope of ASC 606, with the remaining $ 14.2 million consisting primarily of certain residential real estate loan fees which are out of scope. 
 (2) Not within the scope of ASC 606. 
 (3) "Miscellaneous" income includes brokerage income, safe deposit box rentals, and miscellaneous bank fees totaling $ 5.0 million, all of which are within scope of ASC 606. 
 
 A description of Park's material revenue streams accounted for under ASC 606 follows: 
 
 Income from fiduciary activities (gross) : Park earns fiduciary fee income and investment brokerage fees from its contracts with trust customers for various fiduciary and investment-related services. These fees are earned over time as the Company provides the contracted monthly and quarterly services and are generally assessed based on the market value of the trust assets. 
 
 Service charges on deposit accounts and ATM fees : The Corporation earns fees from the Corporation's deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering fees, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Corporation fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are generally recognized at the end of the month, representing the period over which the Corporation satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer's account balance. 
 
 Other service income : Other service income includes income from (1) the sale and servicing of loans sold to the secondary market, (2) incentive income from third-party credit card issuers, and (3) loan customers for various loan-related activities and services. Income related to the sale and servicing of loans sold to the secondary market is included within Other service income, but is not within the scope of ASC 606. Services that fall within the scope of ASC 606 are recognized as revenue when the Company satisfies the Company's performance obligation to the customer. 
 
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 Debit card fee income : Park earns interchange fees from debit cardholder transactions conducted primarily through the Visa payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, net of card network fees, concurrently with the transaction processing services provided to the cardholder. 
 
 ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL 
 CONDITION AND RESULTS OF OPERATIONS 
 
 Management’s discussion and analysis 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: 
 
 • the ever-changing effects of the global novel coronavirus (COVID-19) pandemic - - the duration, extent and severity of which are impossible to predict, including the possibility of further resurgence in the spread of COVID-19 or variants thereof - - on economies (local, national and international), supply chains and markets, on the labor market, including the potential for a sustained reduction in labor force participation, and on our customers, counterparties, employees and third-party service providers, as well as the effects of various responses of governmental and nongovernmental authorities to the COVID-19 pandemic, including public health actions directed toward the containment of the COVID-19 pandemic (such as quarantines, shut downs and other restrictions on travel and commercial, social or other activities), the availability, effectiveness and acceptance of vaccines, and the implementation of fiscal stimulus packages; 
 • Park's ability to execute our business plan successfully and within the expected timeframe as well as our ability to manage strategic initiatives in light of the impact of the COVID-19 pandemic and the various responses to the COVID-19 pandemic; 
 • current and future economic and financial market conditions, either nationally or in the states in which Park and our subsidiaries do business, including the effects of higher unemployment rates, an acceleration in the pace of inflation, U.S. fiscal debt, budget and tax matters, geopolitical matters (including the impact of the Russia-Ukraine conflict and associated sanctions), and any slowdown in global economic growth, in addition to the continuing impact of the COVID-19 pandemic on our customers’ operations and financial condition, any of which may result in adverse impacts on the demand for loan, deposit and other financial services, delinquencies, defaults and counterparties' inability to meet credit and other obligations and the possible impairment of collectability of loans; 
 • factors that can impact the performance of our loan portfolio, including changes in real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers and the success of construction projects that we finance, including any loans acquired in acquisition transactions; 
 • the effect of monetary and other fiscal policies (including the impact of money supply, market interest rate policies and policies impacting inflation, of the Federal Reserve Board, the U.S. Treasury and other governmental agencies) as well as disruption in the liquidity and functioning of U.S. financial markets, as a result of the COVID-19 pandemic and government policies implemented in response thereto, may adversely impact prepayment penalty income, mortgage banking income, income from fiduciary activities, the value of securities, deposits and other financial instruments, in addition to the loan demand and the performance of our loan portfolio, and the interest rate sensitivity of our consolidated balance sheet as well as reduce interest margins; 
 • changes in the federal, state, or local tax laws may adversely affect the fair values of net deferred tax assets and obligations of state and political subdivisions held in Park's investment securities portfolio and otherwise negatively impact our financial performance; 
 • the impact of the changes in federal, state and local governmental policy, including the regulatory landscape, capital markets, elevated government debt, potential changes in tax legislation that may increase tax rates, infrastructure spending and social programs; 
 • changes in laws or requirements imposed by Park's regulators impacting Park's capital actions, including dividend payments and stock repurchases; 
 • changes in consumer spending, borrowing and saving habits, whether due to changes in retail distribution strategies, consumer preferences and behavior, changes in business and economic conditions (including as a result of the COVID-19 pandemic and reactions thereto), legislative and regulatory initiatives (including those undertaken in response to the COVID-19 pandemic), or other factors may be different than anticipated; 
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 • changes in customers', suppliers', and other counterparties' performance and creditworthiness, and Park's expectations regarding future credit losses and our allowance for credit losses, may be different than anticipated due to the continuing impact of and the various responses to the COVID-19 pandemic and inflationary pressures; 
 • Park may have more credit risk and higher credit losses to the extent there are loan concentrations by location or industry of borrowers or collateral; 
 • the volatility from quarter to quarter of mortgage banking income, whether due to interest rates, demand, the fair value of mortgage loans, or other factors; 
 • the adequacy of our internal controls and risk management program in the event of changes in the market, economic, operational (including those which may result from our associates working remotely), asset/liability repricing, legal, compliance, strategic, cybersecurity, liquidity, credit and interest rate risks associated with Park's business; 
 • competitive pressures among financial services organizations could increase significantly, including product and pricing pressures (which could in turn impact our credit spreads), changes to third-party relationships and revenues, changes in the manner of providing services, customer acquisition and retention pressures, and Park's ability to attract, develop and retain qualified banking professionals; 
 • uncertainty regarding the nature, timing, cost and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of Park and our subsidiaries, including major reform of the regulatory oversight structure of the financial services industry and changes in laws and regulations concerning taxes, FDIC insurance premium levels, pensions, bankruptcy, consumer protection, rent regulation and housing, financial accounting and reporting, environmental protection, insurance, bank products and services, bank and bank holding company capital and liquidity standards, fiduciary standards, securities and other aspects of the financial services industry, specifically the reforms provided for in the Coronavirus Aid, Relief and Economic Security (CARES) Act and the follow-up legislation in the Consolidated Appropriations Act, 2021, the American Rescue Plan Act of 2021, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and the Basel III regulatory capital reforms, as well as regulations already adopted and which may be adopted in the future by the relevant regulatory agencies, including the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve Board, to implement the provisions of the CARES Act and the follow-up legislation in the Consolidated Appropriations Act, 2021, the provisions of the American Rescue Plan Act of 2021, the provisions of the Dodd-Frank Act, and the Basel III regulatory capital reforms; 
 • the effect of changes in accounting policies and practices, as may be adopted by the Financial Accounting Standards Board (the "FASB"), the SEC, the Public Company Accounting Oversight Board and other regulatory agencies, may adversely affect Park's reported financial condition or results of operations; 
 • Park's assumptions and estimates used in applying critical accounting policies and modeling, including under the CECL model, which may prove unreliable, inaccurate or not predictive of actual results; 
 • the impact of Park's ability to anticipate and respond to technological changes on Park's ability to respond to customer needs and meet competitive demands; 
 • operational issues stemming from and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems on which Park and our subsidiaries are highly dependent; 
 • the ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks, including those of Park's third-party vendors and other service providers, which may prove inadequate, and could adversely affect customer confidence in Park and/or result in Park incurring a financial loss; 
 • a failure in or breach of Park's operational or security systems or infrastructure, or those of our third-party vendors and other service providers, resulting in failures or disruptions in customer account management, general ledger, deposit, loan, or other systems, including as a result of cyber attacks; 
 • the impact on Park's business and operating results of any costs associated with obtaining rights in intellectual property claimed by others and of adequacy of Park's intellectual property protection in general; 
 • the existence or exacerbation of general geopolitical instability and uncertainty (including the impact of the Russia-Ukraine conflict) as well as the effect of trade policies (including the impact of potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars and other changes in trade regulations, closing of border crossings and changes in the relationship of the U.S. and its global trading partners); 
 • the impact on financial markets and the economy of any changes in the credit ratings of the U.S. Treasury obligations and other U.S. government-backed debt, as well as issues surrounding the levels of U.S., European and Asian government debt and concerns regarding the growth rates and financial stability of certain sovereign governments, supranationals and financial institutions in Europe and Asia and the risk they may face difficulties servicing their sovereign debt; 
 • the effect of a fall in stock market prices on Park's asset and wealth management businesses; 
 • our litigation and regulatory compliance exposure, including the costs and effects of any adverse developments in legal proceedings or other claims and the costs and effects of unfavorable resolution of regulatory and other governmental examinations or other inquiries; 
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 • continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; 
 • the impact on Park's business, personnel, facilities or systems of losses related to acts of fraud, scams and schemes of third parties; 
 • the impact of widespread natural and other disasters, pandemics (including the COVID-19 pandemic), dislocations, regional or national protests and civil unrest (including any resulting branch closures or damages), military or terrorist activities or international hostilities (especially in light of the Russia-Ukraine conflict) on the economy and financial markets generally and on us or our counterparties specifically; 
 • any of the foregoing factors, or other cascading effects of the COVID-19 pandemic that are not currently foreseeable, could materially affect our business, including our customers' willingness to conduct banking transactions and their ability to pay on existing obligations; 
 • the effect of healthcare laws in the U.S. and potential changes for such laws, especially in light of the COVID-19 pandemic, which may increase our healthcare and other costs and negatively impact our operations and financial results; 
 • risk and uncertainties associated with Park's entry into new geographic markets with our most recent acquisitions, including expected revenue synergies and cost savings from recent acquisitions not being fully realized or realized within the expected time frame; 
 • the replacement of the London Inter-Bank Offered Rate (LIBOR) with other reference rates which may result in increased expenses and litigation, and adversely impact the effectiveness of hedging strategies; 
 • and other risk factors relating to the banking industry as detailed from time to time in Park's reports filed with the SEC including those described in "Item 1A. Risk Factors" of Part I of Park's Annual Report on Form 10-K for the fiscal year ended December 31, 2021. 
 
 Park does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement was made, or reflect the occurrence of unanticipated events, except to the extent required by applicable law. 
 
 Non-GAAP Financial Measures 
 
 This Management's Discussion and Analysis (or "MD&A") contains non-U.S. GAAP financial measures where management believes it to be helpful in understanding Park’s results of operations or financial position. Where non-U.S. GAAP financial measures are used, the comparable U.S. GAAP financial measure, as well as the reconciliation to the comparable U.S. GAAP financial measure, can be found herein. 
 
 Items Impacting Comparability of Period Results 
 From time to time, revenue, expenses and/or taxes are impacted by items judged by management of Park to be outside of ordinary banking activities and/or by items that, while they may be associated with ordinary banking activities, are so unusually large that their outsized impact is believed by management of Park at that time to be infrequent or short-term in nature. Most often, these items impacting comparability of period results are due to merger and acquisition activities and revenue and expenses related to former Vision Bank loan relationships. In other cases, they may result from management's decisions associated with significant corporate actions outside of the ordinary course of business. 
 
 Even though certain revenue and expense items are naturally subject to more volatility than others due to changes in market and economic environment conditions, as a general rule volatility alone does not result in the inclusion of an item as one impacting comparability of period results. For example, changes in the provision for / (recovery of) credit losses (aside from those related to former Vision Bank loan relationships), gains (losses) on equity securities, net, and asset valuation adjustments, reflect ordinary banking activities and are, therefore, typically excluded from consideration as items impacting comparability of period results. 
 
 Management believes the disclosure of items impacting comparability of period results provides a better understanding of Park's performance and trends and allows management to ascertain which of such items, if any, to include or exclude from an analysis of Park's performance; i.e., within the context of determining how that performance differed from expectations, as well as how, if at all, to adjust estimates of future performance taking such items into account. 
 
 Items impacting comparability of the results of particular periods are not intended to be a complete list of items that may materially impact current or future period performance. 
 
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 Non-GAAP Ratios 
 Park's management uses certain non-GAAP financial measures to evaluate Park's performance. Specifically, management reviews the return on average tangible equity, the return on average tangible assets, the tangible equity to tangible assets ratio, the tangible book value per share and pre-tax, pre-provision net income. 
 
 Management has included in the tables included within the "Items Impacting Comparability" section of this MD&A information relating to the annualized return on average tangible equity, the annualized return on average tangible assets, the tangible equity to tangible assets ratio, the tangible book value per share and pre-tax, pre-provision net income for the three months ended and at June 30, 2022, March 31, 2022 and June 30, 2021 and for the six months ended and at June 30, 2022 and June 30, 2021. For the purpose of calculating the annualized return on average tangible equity, a non-GAAP financial measure, net income for each period is divided by average tangible equity during the period. Average tangible equity equals average shareholders' equity during the applicable period less average goodwill and other intangible assets during the applicable period. For the purpose of calculating the annualized return on average tangible assets, a non-GAAP financial measure, net income for each period is divided by average tangible assets during the period. Average tangible assets equals average assets during the applicable period less average goodwill and other intangible assets during the applicable period. For the purpose of calculating the tangible equity to tangible assets ratio, a non-GAAP financial measure, tangible equity is divided by tangible assets. Tangible equity equals total shareholders' equity less goodwill and other intangible assets, in each case at period end. Tangible assets equal total assets less goodwill and other intangible assets, in each case at period end. For the purpose of calculating the tangible book value per share, a non-GAAP financial measure, tangible equity is divided by the number of common shares outstanding, in each case at period end. For the purpose of calculating pre-tax, pre-provision net income, a non-GAAP financial measure, income taxes and the provision for (recovery of) credit losses are added back to net income in each case, during the applicable period. 
 
 Management believes that the disclosure of the annualized return on average tangible equity, the annualized return on average tangible assets, the tangible equity to tangible assets ratio, the tangible book value per share and pre-tax, pre-provision net income presents additional information to the reader of the consolidated financial statements, which, when read in conjunction with the consolidated financial statements prepared in accordance with U.S. GAAP, assists in analyzing Park's operating performance, ensures comparability of operating performance from period to period, and facilitates comparisons with the performance of Park's peer financial holding companies and bank holding companies, while eliminating certain non-operational effects of acquisitions. In the tables included within the "Items Impacting Comparability" section of this MD&A, Park has provided a reconciliation of average tangible equity to average shareholders' equity, average tangible assets to average assets, tangible equity to total shareholders' equity, tangible assets to total assets, and pre-tax, pre-provision net income to net income solely for the purpose of complying with SEC Regulation G and not as an indication that the annualized return on average tangible equity, the annualized return on average tangible assets, the tangible equity to tangible assets ratio, the tangible book value per share and pre-tax, pre-provision net income are substitutes for the annualized return on average equity, the annualized return on average assets, the total shareholders' equity to total assets ratio, the book value per share and net income, respectively, as determined in accordance with U.S. GAAP. 
 
 FTE (fully taxable equivalent) Ratios 
 Interest income, yields, and ratios on a FTE basis are considered non-GAAP financial measures. Management believes net interest income on a FTE basis provides an insightful picture of the interest margin for comparison purposes. The FTE basis also allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The FTE basis assumes a corporate federal statutory tax rate of 21 percent. In the tables included within the "Items Impacting Comparability" section of this MD&A, Park has provided a reconciliation of FTE interest income solely for the purpose of complying with SEC Regulation G and not as an indication that FTE interest income, yields and ratios are substitutes for interest income, yields and ratios, as determined in accordance with U.S. GAAP. 
 
 Paycheck Protection Program ("PPP") Loans 
 Park originated $764.7 million in loans as part of the PPP. These loans are not typical of Park's loan portfolio in that they are part of a specific government program to support businesses during the COVID-19 pandemic and are 100% guaranteed by the SBA. As such, management considers growth in the loan portfolio excluding PPP loans, the total allowance for credit losses to total loans ratio (excluding PPP loans), and general reserve on collectively evaluated loans as a percentage of total collectively evaluated loans (excluding PPP loans) in addition to the related U.S. GAAP metrics which are not adjusted for PPP loans. 
 
 Critical Accounting Policies 
 
 Note 1 of the Notes to Consolidated Financial Statements included in Park’s 2021 Form 10-K 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. GAAP and general practices within the financial services industry. The preparation of 
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 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. 
 
 The COVID-19 pandemic has caused significant, unprecedented disruption around the world that has affected daily living and negatively impacted the global economy. Additionally, geopolitical conflict (including the conflict in Ukraine) and inflationary pressures have added uncertainty to the overall economic environment. The effects of the COVID-19 pandemic, geopolitical conflict, and inflation may meaningfully impact significant estimates such as the allowance for credit losses, goodwill, and pension plan obligations and related expenses. 
 
 Allowance for Credit Losses: Park believes the determination of the allowance for credit losses involves a higher degree of judgment and complexity than its other significant accounting policies. The allowance for credit losses is calculated with the objective of maintaining a reserve level believed by management to be sufficient to absorb estimated credit losses over the life of an asset or an off-balance sheet credit exposure. Management’s determination of the adequacy of the allowance for credit losses is based on periodic evaluations of past events, including historical credit loss experience on financial assets with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the financial assets. However, this evaluation has subjective components requiring material estimates, including expected default probabilities, the expected loss given default, the amounts and timing of expected future cash flows on individually evaluated loans, and estimated losses based on historical loss experience and forecasted economic conditions. All of these factors may be susceptible to significant change. To the extent that actual results differ from management estimates, additional provisions for credit losses may be required that would adversely impact earnings in future periods. 
 
 One of the most significant judgments impacting the ACL estimate is the economic forecast for Ohio unemployment, Ohio GDP, and Ohio HPI. Changes in the economic forecasts could significantly affect the estimated credit losses which could potentially lead to materially different allowance levels from one reporting period to the next. 
 
 In calculating the ACL, management weighs several different scenarios, including a baseline (most likely) scenario and an adverse scenario. To create a hypothetical sensitivity analysis, management calculated a quantitative allowance using a 100% weighting applied to an adverse scenario. This scenario considers among other things that: (1) the military conflict between Russia and Ukraine worsens significantly and persists longer than anticipated resulting in a disruption in oil supply and increased inflation; (2) supply chain issues erode, with increased shortages of many goods, also boosting inflation; (3) inflation continues to increase which leads to a recession and increased unemployment; and (4) new cases, hospitalizations and deaths from COVID-19 start to rise significantly again, slowing growth in spending on air travel, retail and hotels. The adverse scenario forecasts unemployment for the next twelve months to range from 6.1% to 8.5%. Excluding consideration of general reserve adjustments, this sensitivity analysis would result in a hypothetical increase in Park's ACL of $20.7 million as of June 30, 2022. Excluding consideration of general reserve adjustments, a corresponding $20.7 million decrease in Park's ACL would occur in a hypothetical scenario if only the baseline (most likely) scenario was used. 
 
 Refer to the "Credit Metrics and Provision for (Recovery of) Credit Losses" section of this MD&A for additional discussion. 
 
 Goodwill: Management believes that the accounting for goodwill also involves a higher degree of judgment than most other significant accounting policies. U.S. GAAP establishes standards for the impairment assessment of goodwill. Goodwill arising from business combinations represents the value attributable to unidentifiable intangible assets in each business acquired. Park’s goodwill, as of June 30, 2022, relates to the value inherent in the banking industry and that value is dependent upon the ability of Park’s national bank subsidiary, 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 could lead to impairment of goodwill that could, in turn, 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 evaluates goodwill for impairment during the second quarter of each year, with financial data as of March 31. Based on the qualitative analysis performed as of April 1, 2022, the Company determined that goodwill for Park's reporting unit, PNB, was not impaired. The fair value of the goodwill, which resides on the books of PNB, is evaluated for potential impairment by reviewing the past and projected operating results for PNB, deposit and loan totals for PNB and banking industry comparable information. 
 
 Pension Plan: The determination of pension plan obligations and related expenses requires the use of assumptions to estimate the amount of benefits that employees will earn while working, as well as the present value of those benefits. Annual pension 
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 expense is principally based on four components: (1) the value of benefits earned by employees for working during the year (service cost), (2) the increase in the liability due to the passage of time (interest cost), and (3) other gains and losses, reduced by (4) the expected return on plan assets for our pension plan. 
 
 Significant assumptions used to measure our annual pension expense include: 
 
 • the interest rate used to determine the present value of liabilities (discount rate); 
 • certain employee-related factors, such as turnover, retirement age and mortality; 
 • the expected return on assets in our funded pension plan; and 
 • the rate of salary increases where benefits are based on earnings. 
 
 Our assumptions reflect our historical experience and management’s best judgment regarding future expectations. Due to the significant management judgment involved, our assumptions could have a material impact on the measurement of our pension plan expense and obligation. 
 
 Comparison of Results of Operations 
 For the Three and Six Months Ended June 30, 2022 and 2021 
 
 Summary Discussion of Results 
 
 Net income for the three months ended June 30, 2022 was $34.3 million, compared to $39.1 million for the second quarter of 2021. Diluted earnings per common share were $2.10 for the second quarter of 2022, compared to $2.38 for the second quarter of 2021. Weighted average diluted common shares outstanding were 16,361,246 for the second quarter of 2022, compared to 16,472,800 weighted average diluted common shares outstanding for the second quarter of 2021. 
 
 Net income for the six months ended June 30, 2022 was $73.2 million, compared to $82.0 million for the first half of 2021. Diluted earnings per common share were $4.48 for the first half of 2022, compared to $4.98 for the first half of 2021. Weighted average diluted common shares outstanding were 16,346,141 for the first half of 2022, compared to 16,455,673 weighted average diluted common shares outstanding for the first half of 2021. 
 
 COVID-19 Considerations 
 
 During 2022 and 2021, Park provided calamity pay and special bonuses to certain associates related to the COVID-19 pandemic. The cost of the calamity pay and special bonuses was $141,000 and $670,000 for the three months ended June 30, 2022 and 2021, respectively, and was $747,000 and $1.5 million for the six months ended June 30, 2022 and 2021, respectively, and is included within salaries expense. 
 
 Paycheck Protection Program: During 2020 and 2021, Park approved and funded 7,701 loans totaling $764.7 million. For its assistance in making and retaining these loans, Park received an aggregate of $33.1 million in fees from the SBA. During the three months ended June 30, 2022 and June 30, 2021, $1.0 million and $5.0 million, respectively, of PPP fee income was recognized within loan interest income. During the six months ended June 30, 2022 and June 30, 2021, $2.5 million and $9.6 million, respectively, of PPP fee income was recognized within loan interest income. 
 
 Loan Modifications: Park has worked with borrowers and provided modifications in the form of either interest only deferral or principal and interest deferral, in each case, for initial periods of up to 90 days. As necessary, Park made available a second 90-day interest only deferral or principal and interest deferral bringing the total potential deferral period to six months. Modifications were structured in a manner to best address each individual customer's then current situation. A majority of these modifications were excluded from the TDR classification under Section 4013 of the CARES Act or under applicable interagency guidance of the federal banking regulators. The modified loans were considered current and continued to accrue interest during the deferral period. Section 4013 of the CARES Act expired on December 31, 2021; therefore, modifications occurring after that date are subject to previous TDR classification guidance. 
 
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 Financial Results by Segment 
 
 The table below reflects the net income (loss) by segment for the first and second quarters of 2022, for the first half of each of 2022 and 2021 and for the years ended December 31, 2021 and 2020. Park's segments include PNB and "All Other" which primarily consists of Park as the "Parent Company", GFSC and SEPH. 
 
 (In thousands) Q2 2022 Q1 2022 Six months YTD 2022 Six months YTD 2021 2021 2020 
 PNB $ 34,940 $ 41,468 $ 76,408 $ 86,018 $ 159,461 $ 123,730 
 All Other (616) (2,593) (3,209) (4,055) (5,516) 4,193 
 Total Park $ 34,324 $ 38,875 $ 73,199 $ 81,963 $ 153,945 $ 127,923 

 Net income for the six months ended June 30, 2022 of $73.2 million represented a $8.8 million, or 10.7%, decrease compared to $82.0 million for the six months ended June 30, 2021. Pre-tax, pre-provision net income for the six months ended June 30, 2022 of $87.1 million represented a $3.6 million, or 4.0%, decrease compared to $90.6 million for the six months ended June 30, 2021. Net income for each of the six months ended June 30, 2022 and 2021 included several items of income and expense that impacted comparability of period results. These items are detailed in the "Items Impacting Comparability" section within this MD&A. 
 
 The following discussion provides additional information regarding the PNB segment, followed by additional information regarding All Other. 
 
 The Park National Bank (PNB) 
 
 The table below reflects PNB's net income for the first and second quarters of 2022, for the first half of each 2022 and 2021 and for the years ended December 31, 2021 and 2020. 
 
 (In thousands) Q2 2022 Q1 2022 Six months YTD 2022 Six months YTD 2021 2021 2020 
 Net interest income $ 83,411 $ 79,372 $ 162,783 $ 164,761 $ 328,398 $ 326,375 
 Provision for (recovery of) credit losses (1) 
 3,357 (4,547) (1,190) (7,946) (8,554) 30,813 
 Other income 29,255 31,247 60,502 63,926 126,802 124,231 
 Other expense 66,214 64,216 130,430 130,698 266,678 268,938 
 Income before income taxes $ 43,095 $ 50,950 $ 94,045 $ 105,935 $ 197,076 $ 150,855 
 Income tax expense 8,155 9,482 17,637 19,917 37,615 27,125 
 Net income $ 34,940 $ 41,468 $ 76,408 $ 86,018 $ 159,461 $ 123,730 

 (1) Park adopted ASU 2016-13 effective January 1, 2021. The allowance for credit losses as of June 30, 2022 and 2021, and as of December 31, 2021 and the related provision for (recovery of) credit losses for the three months and six months ended June 30, 2022 and 2021 and the year ended December 31, 2021 were calculated utilizing this guidance. 
 
 Net interest income of $162.8 million for the six months ended June 30, 2022 represented a $2.0 million, or 1.2%, decrease compared to $164.8 million for the six months ended June 30, 2021. The decrease was a result of a $2.4 million decrease in interest income, partially offset by a $470,000 decrease in interest expense. 
 
 The $2.4 million decrease in interest income was primarily due to a $8.4 million decrease in interest income on loans, partially offset by a $6.0 million increase in investment income. The decrease in interest income on loans was primarily the result of a $8.3 million decrease in interest income on PPP loans and a $170,000 decrease in interest income on all other loans. Excluding PPP loans, there was a $47.3 million increase in average loans from $6.743 billion for the six months ended June 30, 2021 to $6.790 billion for the six months ended June 30, 2022. This increase in average loans was offset by a 3 basis point decline in the yield excluding PPP loans from 4.35% for the six months ended June 30, 2021 to 4.32% for the six months ended June 30, 2022. 
 
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 The $6.0 million increase in investment income was primarily the result of a $652.8 million increase in average investments, from $1.17 billion for the six months ended June 30, 2021 to $1.82 billion for the six months ended June 30, 2022. The increase was partially offset by a decrease in the yield on investments, which decreased 18 basis points to 2.24% for the six months ended June 30, 2022, compared to 2.42% for the six months ended June 30, 2021. 
 
 The $470,000 decrease in interest expense was primarily due to a $538,000 decrease in interest expense on deposits, partially offset by a $68,000 increase in interest expense on borrowings. The decrease in interest expense on deposits was the result of a $99.7 million decrease in average on-balance sheet interest bearing deposits from $5.19 billion for the six months ended June 30, 2021, to $5.09 billion for the six months ended June 30, 2022 as well as the result of a decrease in the cost of deposits of 2 basis points, from 0.14% for the six months ended June 30, 2021 to 0.12% for the six months ended June 30, 2022. The decrease in on-balance sheet interest bearing deposits was due to decreases in both savings deposits and time deposits, which were partially offset by an increase in transaction accounts. During the six months ended June 30, 2022 and 2021, Park made the decision to participate in a program to transfer deposits off balance sheet in order to manage growth of the balance sheet. 
 
 The recovery of credit losses of $1.2 million for the six months ended June 30, 2022 represented a difference of $6.7 million, compared to a recovery of credit losses of $7.9 million for the six months ended June 30, 2021. Refer to the “Credit Metrics and Provision for (Recovery of) Credit Losses” section for additional details regarding the level of the provision for (recovery of) credit losses recognized in each period presented above. 
 
 Other income of $60.5 million for the six months ended June 30, 2022 represented a decrease of $3.4 million, or 5.4%, compared to $63.9 million for the six months ended June 30, 2021. The $3.4 million decrease was primarily related to a $7.4 million decrease in other service income, which was primarily due to declines in fee income from mortgage loan originations and mortgage servicing rights, partially offset by an increase in investor rate locks and mortgage loans held for sale. Additionally, there was a $382,000 decrease in other miscellaneous income. These decreases were partially offset by increases of (i) $1.9 million in other components of net periodic benefit income; (ii) $931,000 in gain on equity securities, net; (iii) $914,000 in income from fiduciary activities, and (iv) $552,000 in income from service charges on deposits. 
 
 A summary of mortgage loan originations for each quarter of 2021, the year ended December 31, 2021 and the first two quarters of 2022 follows. 
 
 (In thousands) Q1 2021 Q2 2021 Q3 2021 Q4 2021 2021 Q1 2022 Q2 2022 
 Mortgage Loan Origination Volume 
 Sold $ 191,116 $ 142,398 $ 123,757 $ 98,007 $ 555,278 $ 69,053 $ 50,013 
 Portfolio 82,613 74,670 66,718 60,685 284,686 53,498 63,104 
 Construction 28,987 37,266 28,486 24,816 119,555 32,928 34,044 
 Service released 1,266 2,204 4,537 5,795 13,802 4,660 4,580 
 Total mortgage loan originations $ 303,982 $ 256,538 $ 223,498 $ 189,303 $ 973,321 $ 160,139 $ 151,741 
 
 Refinances as a % of Total Mortgage Loan Originations 71.1 % 50.0 % 44.8 % 44.2 % 54.2 % 41.7 % 25.9 % 

 Total mortgage loan originations decreased $248.6 million, or 44.4%, to $311.9 million for the six months ended June 30, 2022 compared to $560.5 million for the six months ended June 30, 2021. 
 
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 The table below reflects PNB's other expense for the six months ended June 30, 2022 and 2021. 
 
 (Dollars in thousands) 2022 2021 change % change 
 Other expense: 
 Salaries $ 59,459 $ 57,747 $ 1,712 3.0 % 
 Employee benefits 20,467 19,976 491 2.5 % 
 Occupancy expense 6,255 6,304 (49) (0.8) % 
 Furniture and equipment expense 5,870 5,362 508 9.5 % 
 Data processing fees 15,757 14,697 1,060 7.2 % 
 Professional fees and services 9,553 9,137 416 4.6 % 
 Marketing 2,335 2,780 (445) (16.0) % 
 Insurance 2,642 2,682 (40) (1.5) % 
 Communication 1,800 1,857 (57) (3.1) % 
 State tax expense 2,216 1,989 227 11.4 % 
 Amortization of intangible assets 805 958 (153) (16.0) % 
 Foundation contributions — 4,000 (4,000) N.M. 
 Miscellaneous 3,271 3,209 62 1.9 % 
 Total other expense $ 130,430 $ 130,698 $ (268) (0.2) % 

 Total other expense of $130.4 million for the six months ended June 30, 2022 represented a decrease of $268,000, or 0.2%, compared to $130.7 million for the six months ended June 30, 2021. The increase in salaries expense was primarily related to increases in base salary expense, partially offset by decreases in incentive compensation expense and additional compensation expense. The increase in employee benefits expense was primarily related to increased payroll tax expense and other retirement benefits. The increase in furniture and equipment expense was primarily related to an increase in depreciation expense. The increase in data processing fees was primarily related to an increase in software data processing expense, partially offset by a decrease in debit card processing expense. The increase in professional fees and services expense was primarily due to increases in management and consulting expense, legal expense and directors fees, which were partially offset by decreases in credit costs and other fees. The decrease in marketing expense was due to a decrease in advertising expenses. The decrease in foundation contributions was due to a $4.0 million contribution to Park's charitable foundation having been made during the six months ended June 30, 2021, with no similar contribution being made during the six months ended June 30, 2022. 
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 The table below provides certain balance sheet information and financial ratios for PNB as of or for the six months ended June 30, 2022 and 2021 and the year ended December 31, 2021. 
 
 (Dollars in thousands) June 30, 2022 December 31, 2021 June 30, 2021 % change from 12/31/21 % change from 06/30/21 
 Loans (1) 
 6,957,611 6,868,935 7,031,199 1.29 % (1.05) % 
 Loans less PPP loans (2) 
 6,944,183 6,794,515 6,782,319 2.20 % 2.39 % 
 Allowance for credit losses 81,415 83,111 83,374 (2.04) % (2.35) % 
 Net loans 6,876,196 6,785,824 6,947,825 1.33 % (1.03) % 
 Investment securities 1,904,387 1,807,392 1,454,170 5.37 % 30.96 % 
 Total assets 9,794,711 9,538,217 9,922,623 2.69 % (1.29) % 
 Total deposits 8,575,310 8,157,720 8,481,017 5.12 % 1.11 % 
 Average assets (3) 
 9,723,664 9,814,766 9,707,256 (0.93) % 0.17 % 
 Efficiency ratio (4) 
 57.98 % 58.21 % 56.80 % (0.40) % 2.08 % 
 Return on average assets (5) 
 1.58 % 1.62 % 1.79 % (2.47) % (11.73) % 

 (1) Excluded from total loans at June 30, 2022 were $6.3 million in commercial loans held for sale. 
 (2) Excluded $13.4 million, $74.4 million and $248.9 million of PPP loans at June 30, 2022, December 31, 2021 and June 30, 2021. 
 (3) Average assets for the six months ended June 30, 2022 and 2021 and for the year ended December 31, 2021. 
 (4) Calculated utilizing fully taxable equivalent net interest income which includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate. The taxable equivalent adjustments were $1.7 million for the six months ended June 30, 2022, $1.4 million for the six months ended June 30, 2021 and $2.9 million for the year ended December 31, 2021. 
 (5) Annualized for the six months ended June 30, 2022 and 2021. 
 
 Loans outstanding at June 30, 2022 were $6.96 billion, compared to $6.87 billion at December 31, 2021, an increase of $88.7 million. Loans outstanding at June 30, 2022 were $6.96 billion, compared to $7.03 billion at June 30, 2021, a decrease of $73.6 million. Excluding $13.4 million and $74.4 million of PPP loans at June 30, 2022 and December 31, 2021, respectively, loans outstanding were $6.94 billion at June 30, 2022, compared to $6.79 billion at December 31, 2021, an increase of $149.7 million. Excluding $13.4 million and $248.9 million of PPP loans at June 30, 2022 and 2021, respectively, loans outstanding were $6.94 billion at June 30, 2022, compared to $6.78 billion at June 30, 2021, an increase of $161.9 million. The table below breaks out the change in loans outstanding, by loan type. 
 
 (Dollars in thousands) June 30, 2022 December 31, 2021 June 30, 2021 change from 12/31/21 % change from 12/31/21 change from 06/30/21 % change from 06/30/21 
 Home equity $ 162,616 $ 165,691 $ 167,624 $ (3,075) (1.86) % $ (5,008) (2.99) % 
 Installment 1,820,500 1,685,687 1,700,083 134,813 8.00 % 120,417 7.08 % 
 Real estate 1,134,763 1,142,991 1,182,877 (8,228) (0.72) % (48,114) (4.07) % 
 Commercial (excluding PPP loans) (1) (2) 
 3,821,686 3,797,673 3,731,788 24,013 0.63 % 89,898 2.41 % 
 PPP loans 13,428 74,420 248,880 (60,992) (81.96) % (235,452) (94.60) % 
 Other 4,618 2,473 (53) 2,145 86.74 % 4,671 N.M. 
 Total loans $ 6,957,611 $ 6,868,935 $ 7,031,199 $ 88,676 1.29 % $ (73,588) (1.05) % 
 Total loans (excluding PPP loans) $ 6,944,183 $ 6,794,515 $ 6,782,319 $ 149,668 2.20 % $ 161,864 2.39 % 

 (1) Excluded $13.4 million of PPP loans at June 30, 2022, $74.4 million of PPP loans at December 31, 2021 and $248.9 million of PPP loans at June 30, 2021. 
 (2) Excluded from total loans at June 30, 2022 were $6.3 million in commercial loans held for sale. 
 
 PNB's allowance for credit losses decreased by $1.7 million, or 2.0%, to $81.4 million at June 30, 2022, compared to $83.1 million at December 31, 2021. Net charge-offs were $506,000, or 0.01% of total average loans, for the six months ended June 30, 2022 and were $640,000, or 0.01% of total average loans, for the year ended December 31, 2021. Refer to the “Credit Metrics and Provision for (Recovery of) Credit Losses” section for additional information regarding PNB's loan portfolio and the level of provision for (recovery of) credit losses recognized in each period presented. 
 
 Total deposits at June 30, 2022 were $8.58 billion, compared to $8.16 billion at December 31, 2021, an increase of $417.6 million, or 5.1%. Total deposits at June 30, 2022 were $8.58 billion, compared to $8.48 million at June 30, 2021, an increase of 
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 $94.3 million, or 1.1%. During the six months ended June 30, 2022 and 2021 and the year ended December 31, 2021, Park made the decision to participate in two programs to transfer deposits off balance sheet in order to manage growth of the balance sheet, as deposits increased significantly throughout the COVID-19 pandemic. At June 30, 2022, December 31, 2021 and June 30, 2021, Park had $809.8 million, $983.1 million and $812.2 million, respectively, in deposits which were off-balance sheet. Total deposits would have increased $244.3 million, or 2.7%, compared to December 31, 2021 had the $809.8 million and $983.1 million in deposits remained on the balance sheet at the respective dates. Total deposits would have increased $91.9 million, or 1.0%, compared to June 30, 2021 had the $809.8 million and $812.2 million in deposits remained on the balance sheet at the respective dates. The table below breaks out the change in deposit balances, by deposit type. 
 
 (Dollars in thousands) June 30, 2022 December 31, 2021 June 30, 2021 change from 12/31/21 % change from 12/31/21 change from 06/30/21 % change from 06/30/21 
 Non-interest bearing deposits $ 3,336,212 $ 3,320,413 $ 3,143,998 $ 15,799 0.5 % $ 192,214 6.1 % 
 Transaction accounts 1,845,379 1,502,876 1,504,559 342,503 22.8 % 340,820 22.7 % 
 Savings 2,719,526 2,622,771 3,067,795 96,755 3.7 % (348,269) (11.4) % 
 Certificates of deposit 674,193 711,660 764,665 (37,467) (5.3) % (90,472) (11.8) % 
 Total deposits $ 8,575,310 $ 8,157,720 $ 8,481,017 $ 417,590 5.1 % $ 94,293 1.1 % 
 Off balance sheet deposits 809,792 983,053 812,154 (173,261) (17.6) % (2,362) (0.3) % 
 Total deposits including off balance sheet deposits $ 9,385,102 $ 9,140,773 $ 9,293,171 $ 244,329 2.7 % $ 91,931 1.0 % 

 All Other 
 
 The table below reflects All Other net (loss) income for the first and second quarters of 2022, for the first half of each of 2022 and 2021 and for the years ended December 31, 2021 and 2020. 
 
 (In thousands) Q2 2022 Q1 2022 Six months YTD 2022 Six months YTD 2021 2021 2020 
 Net interest income (expense) $ 528 $ (1,686) $ (1,158) $ (176) $ 1,495 $ 1,255 
 Recovery of credit losses (1) 
 (366) (58) (424) (949) (3,362) (18,759) 
 Other income 1,938 409 2,347 1,401 3,142 1,433 
 Other expense 3,834 3,157 6,991 8,567 16,840 17,657 
 Net (loss) income before income tax benefit $ (1,002) $ (4,376) $ (5,378) $ (6,393) $ (8,841) $ 3,790 
 Income tax benefit (386) (1,783) (2,169) (2,338) (3,325) (403) 
 Net (loss) income $ (616) $ (2,593) $ (3,209) $ (4,055) $ (5,516) $ 4,193 

 (1) Park adopted ASU 2016-13 effective January 1, 2021. The allowance for credit losses as of June 30, 2022 and 2021 and December 31, 2021 and the related recovery of credit losses for the three months and six months ended June 30, 2022 and 2021, and the year ended December 31, 2021 were calculated utilizing this guidance. 
 
 The net interest income (expense) for All Other included, for all periods presented, interest income on subordinated debt investments in PNB, which were eliminated in the consolidated Park National Corporation totals, as well as interest income on GFSC loans and SEPH impaired loan relationships. The net interest income (expense) for All Other included interest expense on $175.0 million aggregate principal amount of 4.50% Fixed-to-Floating Rate Subordinated Notes due 2030 issued by Park in August 2020 (the "Park Subordinated Notes"). 
 
 Net interest income (expense) reflected net interest expense of $1.2 million for the six months ended June 30, 2022, compared to $176,000 for the six months ended June 30, 2021. The change was largely the result of a decrease of $630,000 in loan interest income related to payment collections at SEPH, and a decrease of $595,000 in net interest income from GFSC, partially offset by a decrease in interest expense on borrowings of $239,000 mainly related to the Park Subordinated Notes. 
 
 Refer to the “Credit Metrics and Provision for (Recovery of) Credit Losses” section for additional information regarding the All Other loan portfolio and the level of recovery of credit losses recognized in each period presented. 
 
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 All Other had other income of $2.3 million for the six months ended June 30, 2022, compared to $1.4 million for the six months ended June 30, 2021. The change was largely due to a $1.2 million increase in income from bank owned life insurance, mainly related to a death benefit payout, and a $474,000 increase in gain (loss) on equity securities, net, which went from a $130,000 gain for the six months ended June 30, 2021 to a $603,000 gain for the six months ended June 30, 2022. The increase was partially offset by an $442,000 decrease in income related to Partnership Investments, which went from a $642,000 gain for the six months ended June 30, 2021 to a $199,000 gain for the six months ended June 30, 2022. 
 
 All Other had other expense of $7.0 million for the six months ended June 30, 2022, compared to $8.6 million for the six months ended June 30, 2021. The decrease was largely due to a $419,000 decrease in professional fees and services, a $364,000 decrease in occupancy expenses, a $337,000 decrease in salaries expense, and a $277,000 decrease in other insurance expense. 
 
 The table below provides certain balance sheet information for All Other as of or for the six months ended June 30, 2022 and 2021 and the year ended December 31, 2021. 
 
 (Dollars in thousands) June 30, 2022 December 31, 2021 June 30, 2021 % change from 12/31/21 % change from 6/30/21 
 Loans $ 1,074 $ 2,187 $ 4,446 (50.89) % (75.84) % 
 Allowance for credit losses 
 33 86 203 (61.63) % (83.74) % 
 Net loans 1,041 2,101 4,243 (50.45) % (75.47) % 
 Total assets 31,959 22,037 25,371 45.02 % 25.97 % 
 Average assets (1) 
 28,132 32,692 35,771 (13.95) % (21.36) % 

 (1) Average assets for the six months ended June 30, 2022 and 2021, and the year ended December 31, 2021. 
 
 Park National Corporation 
 
 The table below reflects Park's consolidated net income for the first and second quarters of 2022, for the first half of each of 2022 and 2021 and for the years ended December 31, 2021 and 2020. 
 
 (In thousands) Q2 2022 Q1 2022 Six months YTD 2022 Six months YTD 2021 2021 2020 
 Net interest income $ 83,939 $ 77,686 $ 161,625 $ 164,585 $ 329,893 $ 327,630 
 Provision for (recovery of) credit losses (1) 
 2,991 (4,605) (1,614) (8,895) (11,916) 12,054 
 Other income 31,193 31,656 62,849 65,327 129,944 125,664 
 Other expense 70,048 67,373 137,421 139,265 283,518 286,595 
 Income before income taxes $ 42,093 $ 46,574 $ 88,667 $ 99,542 $ 188,235 $ 154,645 
 Income tax expense 7,769 7,699 15,468 17,579 34,290 26,722 
 Net income $ 34,324 $ 38,875 $ 73,199 $ 81,963 $ 153,945 $ 127,923 

 (1) Park adopted ASU 2016-13 effective January 1, 2021. The allowance for credit losses as of June 30, 2022 and 2021 and December 31, 2021 and the related provision for (recovery of) credit losses for the three months and six months ended June 30, 2022 and 2021, and the year ended December 31, 2021 were calculated utilizing this guidance. 
 
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 Net Interest Income 
 
 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. 
 
 Comparison for the Second Quarters of 2022 and 2021 
 
 Net interest income increased by $88,000, or 0.1%, to $83.9 million for the second quarter of 2022, compared to $83.9 million for the second quarter of 2021. See the discussion under the table below. 
 
 Three months ended 
June 30, 2022 Three months ended 
June 30, 2021 
 (Dollars in thousands) Average
balance Interest Tax
equivalent 
yield/cost Average
balance Interest Tax
equivalent 
yield/cost 
 Loans (1) 
 $ 6,841,376 $ 77,948 4.57 % $ 7,094,099 $ 81,354 4.60 % 
 Taxable investments 1,481,186 7,624 2.06 % 969,647 4,600 1.90 % 
 Tax-exempt investments (2) 
 398,295 3,387 3.41 % 278,384 2,572 3.71 % 
 Money market instruments 136,232 260 0.77 % 720,238 186 0.10 % 
 Interest earning assets $ 8,857,089 $ 89,219 4.04 % $ 9,062,368 $ 88,712 3.93 % 
 
 Interest bearing deposits $ 5,020,698 2,041 0.16 % $ 5,261,608 1,686 0.13 % 
 Short-term borrowings 191,981 190 0.40 % 296,946 182 0.25 % 
 Long-term debt 188,380 2,177 4.63 % 217,909 2,275 4.19 % 
 Interest bearing liabilities $ 5,401,059 $ 4,408 0.33 % $ 5,776,463 $ 4,143 0.29 % 
 Excess interest earning assets $ 3,456,030 $ 3,285,905 
 Tax equivalent net interest income $ 84,811 $ 84,569 
 Net interest spread 3.71 % 3.64 % 
 Net interest margin 3.84 % 3.74 % 

 (1) Loan interest income includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate. The taxable equivalent adjustment was $161,000 for the three months ended June 30, 2022 and $178,000 for the same period of 2021. 
 (2) Interest income on tax-exempt investment securities includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate. The taxable equivalent adjustment was $711,000 for the three months ended June 30, 2022 and $540,000 for the same period of 2021. 
 
 Average interest earning assets for the second quarter of 2022 decreased by $205.3 million, or 2.3%, to $8,857 million for the second quarter of 2022, compared to $9,062 million for the second quarter of 2021. The average yield on interest earning assets increased by 11 basis points to 4.04% for the second quarter of 2022, compared to 3.93% for the second quarter of 2021. 
 
 Interest income for the three months ended June 30, 2022 and 2021 included purchase accounting accretion of $545,000 and $795,000, respectively, related to the acquisitions of NewDominion and Carolina Alliance, as well as $2.3 million and $2.8 million, respectively, of interest income related to payments received on certain SEPH nonaccrual loan relationships, some of which are participated with PNB. Interest income for the three months ended June 30, 2022 and 2021 also included $1.0 million and $5.7 million, respectively, of income related to PPP loans. Excluding the impact of the purchase accounting accretion, SEPH income, and PPP income, the yield on loans was 4.36% and 4.29% for the three months ended June 30, 2022 and 2021, respectively, and the yield on earning assets was 3.88% and 3.66% for the three months ended June 30, 2022 and 2021, respectively. 
 
 Average interest bearing liabilities for the second quarter of 2022 decreased by $375.4 million, or 6.5%, to $5,401 million, compared to $5,776 million for the second quarter of 2021. The average cost of interest bearing liabilities increased by 4 basis points to 0.33% for the second quarter of 2022, compared to 0.29% for the second quarter of 2021. During the year ended December 31, 2020, Park made the decision to participate in a OWS program in order to manage growth of the balance sheet. At June 30, 2022 and 2021, Park had $809.8 million and $812.2 million, respectively, in OWS insured cash sweep deposits which were off-balance sheet. Excluding the impact of these off-balance sheet OWS deposits, the average cost of interest bearing liabilities would have been 0.27% and 0.25% for the second quarters of 2022 and 2021, respectively. 
 
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 Removing the impacts of the accretion of purchase accounting adjustments related to the acquisitions of NewDominion and Carolina Alliance, the interest income related to payments on certain SEPH nonaccrual loan relationships and the interest income related to PPP loans, the net interest margin was 3.68% and 3.47% for the three months ended June 30, 2022 and 2021, respectively. 
 
 Yield on Loans: Average loan balances decreased $252.7 million, or 3.6%, to $6,841 million for the second quarter of 2022, compared to $7,094 million for the second quarter of 2021. The average yield on the loan portfolio decreased by 3 basis points to 4.57% for the second quarter of 2022, compared to 4.60% for the second quarter of 2021. Average loans for the second quarters of 2022 and 2021 included $27.8 million and $363.1 million, respectively, of PPP loans. 
 
 The table below shows the average balance and tax equivalent yield by type of loan for the three months ended June 30, 2022 and 2021. 
 Three months ended 
June 30, 2022 Three months ended 
June 30, 2021 
 (Dollars in thousands) Average
balance Tax
equivalent 
yield Average
balance Tax
equivalent 
yield 
 Home equity loans $ 160,486 4.10 % $ 167,478 3.79 % 
 Installment loans 1,738,493 4.64 % 1,682,154 4.81 % 
 Real estate loans 1,121,377 3.73 % 1,184,891 3.78 % 
 Commercial loans (1) 
 3,816,374 4.80 % 4,057,591 4.78 % 
 Other 4,646 7.05 % 1,985 16.44 % 
 Total loans before allowance $ 6,841,376 4.57 % $ 7,094,099 4.60 % 

 (1) Commercial loan interest income includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate. The taxable equivalent adjustment was $161,000 for the three months ended June 30, 2022 and $178,000 for the same period of 2021. 
 
 Loan interest income for the three months ended June 30, 2022 and 2021 included the accretion of purchase accounting adjustments related to the acquisitions of NewDominion and Carolina Alliance, interest income related to payments on certain SEPH nonaccrual loan relationships and interest income related to PPP loans. Excluding the impact of the purchase accounting accretion, SEPH income, and PPP income, (a) the yield on home equity loans was 3.96%, the yield on installment loans was unchanged at 4.64%, the yield on real estate loans was 3.72%, the yield on commercial loans was 4.44% and the yield on total loans and leases before allowance was 4.36% for the three months ended June 30, 2022; and (b) the yield on home equity loans was 3.43%, the yield on installment loans was unchanged at 4.81%, the yield on real estate loans was 3.77%, the yield on commercial loans was 4.25% and the yield on total loans and leases before allowance was 4.29% for the three months ended June 30, 2021. 
 
 Cost of Deposits: Average interest bearing deposit balances decreased $240.9 million, or 4.6%, to $5,021 million for the second quarter of 2022, compared to $5,262 for the second quarter of 2021. The average cost of funds on deposit balances increased by 3 basis points to 0.16% for the second quarter of 2022, compared to 0.13% for the second quarter of 2021. 
 
 The table below shows for the three months ended June 30, 2022 and 2021, the average balance and cost of funds by type of deposit. 
 
 Three months ended 
June 30, 2022 Three months ended 
June 30, 2021 
 (Dollars in thousands) Average
balance Cost of funds Average
balance Cost of funds 
 Transaction accounts $ 1,703,192 0.09 % $ 1,527,464 0.02 % 
 Savings deposits and clubs 2,633,478 0.14 % 2,943,614 0.04 % 
 Time deposits 684,028 0.42 % 790,530 0.65 % 
 Total interest bearing deposits $ 5,020,698 0.16 % $ 5,261,608 0.13 % 

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 Comparison for the First Half of 2022 and 2021 
 
 Net interest income decreased by $3.0 million, or 1.8%, to $161.6 million for the first half of 2022, compared to $164.6 million for the first half of 2021. See the discussion under the table below. 
 
 Six months ended 
June 30, 2022 Six months ended 
June 30, 2021 
 (Dollars in thousands) Average
balance Interest Tax
equivalent 
yield/cost Average
balance Interest Tax
equivalent 
yield/cost 
 Loans (1) 
 $ 6,835,389 $ 150,532 4.44 % $ 7,116,353 $ 160,264 4.54 % 
 Taxable investments 1,439,811 13,754 1.93 % 892,545 8,856 2.00 % 
 Tax-exempt investments (2) 
 385,068 6,485 3.40 % 278,668 5,150 3.73 % 
 Money market instruments 247,549 413 0.34 % 637,531 329 0.10 % 
 Interest earning assets $ 8,907,817 $ 171,184 3.88 % $ 8,925,097 $ 174,599 3.95 % 
 
 Interest bearing deposits $ 5,095,085 3,112 0.12 % $ 5,195,848 3,656 0.14 % 
 Short-term borrowings 207,482 434 0.42 % 307,617 365 0.24 % 
 Long-term debt 188,324 4,322 4.63 % 219,098 4,561 4.20 % 
 Interest bearing liabilities $ 5,490,891 $ 7,868 0.29 % $ 5,722,563 $ 8,582 0.30 % 
 Excess interest earning assets $ 3,416,926 $ 3,202,534 
 Tax equivalent net interest income $ 163,316 $ 166,017 
 Net interest spread 3.59 % 3.65 % 
 Net interest margin 3.70 % 3.75 % 

 (1) Loan interest income includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate. The taxable equivalent adjustment was $329,000 for the six months ended June 30, 2022 and $351,000 for the same period of 2021. 
 (2) Interest income on tax-exempt investment securities includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate. The taxable equivalent adjustment was $1.4 million for the six months ended June 30, 2022 and $1.1 million for the same period of 2021. 
 
 Average interest earning assets for the first half of 2022 decreased by $17.3 million, or 0.2%, to $8,908 million for the first half of 2022, compared to $8,925 million for the first half of 2021. The average yield on interest earning assets decreased by 7 basis points to 3.88% for the first half of 2022, compared to 3.95% for the first half of 2021. 
 
 Interest income for the six months ended June 30, 2022 and 2021 included purchase accounting accretion of $1.0 million and $1.9 million, respectively, related to the acquisitions of NewDominion and Carolina Alliance, as well as $2.3 million and $2.9 million, respectively, of interest income related to payments received on certain SEPH nonaccrual loan relationships, some of which are participated with PNB. Interest income for the six months ended June 30, 2022 and 2021 also included $2.6 million and $10.9 million, respectively, of income related to PPP loans. Excluding the impact of the purchase accounting accretion, SEPH income, and PPP income, the yield on loans was 4.29% and 4.31% for the six months ended June 30, 2022 and 2021, respectively, and the yield on earning assets was 3.76% and 3.74% for the six months ended June 30, 2022 and 2021, respectively. 
 
 Average interest bearing liabilities for the first half of 2022 decreased by $231.7 million, or 4.0%, to $5,491 million, compared to $5,723 million for the first half of 2021. The average cost of interest bearing liabilities decreased by 1 basis points to 0.29% for the first half of 2022, compared to 0.30% for the first half of 2021. During the year ended December 31, 2020, Park made the decision to participate in a OWS program in order to manage growth of the balance sheet. At June 30, 2022 and 2021, Park had $809.8 million and $812.2 million, respectively, in OWS insured cash sweep deposits which were off-balance sheet. Excluding the impact of these off-balance sheet OWS deposits, the average cost of interest bearing liabilities would have been 0.24% and 0.26% for the first half of 2022 and 2021, respectively. 
 
 Removing the impacts of the accretion of purchase accounting adjustments related to the acquisitions of NewDominion and Carolina Alliance, the interest income related to payments on certain SEPH nonaccrual loan relationships and the interest income related to PPP loans, the net interest margin was 3.58% and 3.54% for the six months ended June 30, 2022 and 2021, respectively. 
 
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 Yield on Loans: Average loan balances decreased $281.0 million, or 3.9%, to $6,835 million for the first half of 2022, compared to $7,116 million for the first half of 2021. The average yield on the loan portfolio decreased by 10 basis points to 4.44% for the first half of 2022, compared to 4.54% for the first half of 2021. Average loans for the first half of 2022 and 2021 included $43.8 million and $366.1 million, respectively, of PPP loans. 
 
 The table below shows the average balance and tax equivalent yield by type of loan for the six months ended June 30, 2022 and 2021. 
 Six months ended 
June 30, 2022 Six months ended 
June 30, 2021 
 (Dollars in thousands) Average
balance Tax
equivalent 
yield Average
balance Tax
equivalent 
yield 
 Home equity loans $ 161,153 3.82 % $ 171,465 3.85 % 
 Installment loans 1,709,775 4.65 % 1,670,193 4.86 % 
 Real estate loans 1,125,980 3.71 % 1,191,253 3.83 % 
 Commercial loans (1) 
 3,834,736 4.58 % 4,081,115 4.64 % 
 Other 3,745 8.81 % 2,327 14.65 % 
 Total loans before allowance $ 6,835,389 4.44 % $ 7,116,353 4.54 % 

 (1) Commercial loan interest income includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate. The taxable equivalent adjustment was $329,000 for the six months ended June 30, 2022 and $351,000 for the same period of 2021. 
 
 Loan interest income for the six months ended June 30, 2022 and 2021 included the accretion of purchase accounting adjustments related to the acquisitions of NewDominion and Carolina Alliance, interest income related to payments on certain SEPH nonaccrual loan relationships and interest income related to PPP loans. Excluding the impact of the purchase accounting accretion, SEPH income, and PPP income, (a) the yield on home equity loans was 3.68%, the yield on installment loans was unchanged at 4.65%, the yield on real estate loans was 3.69%, the yield on commercial loans was 4.32% and the yield on total loans and leases before allowance was 4.29% for the six months ended June 30, 2022; and (b) the yield on home equity loans was 3.46%, the yield on installment loans was unchanged at 4.86%, the yield on real estate loans was 3.81%, the yield on commercial loans was 4.26% and the yield on total loans and leases before allowance was 4.31% for the six months ended June 30, 2021. 
 
 Cost of Deposits: Average interest bearing deposit balances decreased $100.8 million, or 1.9%, to $5,095 million for the first half of 2022, compared to $5,196 for the first half of 2021. The average cost of funds on deposit balances decreased by 2 basis points to 0.12% for the first half of 2022, compared to 0.14% for the first half of 2021. 
 
 The table below shows for the six months ended June 30, 2022 and 2021, the average balance and cost of funds by type of deposit. 
 
 Six months ended 
June 30, 2022 Six months ended 
June 30, 2021 
 (Dollars in thousands) Average
balance Cost of funds Average
balance Cost of funds 
 Transaction accounts $ 1,671,685 0.06 % $ 1,492,733 0.02 % 
 Savings deposits and clubs 2,730,864 0.09 % 2,884,098 0.04 % 
 Time deposits 692,536 0.42 % 819,017 0.71 % 
 Total interest bearing deposits $ 5,095,085 0.12 % $ 5,195,848 0.14 % 

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 Yield on Average Interest Earning Assets: The following table shows the tax equivalent yield on average interest earning assets for the six months ended June 30, 2022 and for the years ended December 31, 2021, 2020 and 2019. 
 
 Loans (1) (3) 
 Investments (2) 
 Money Market
Instruments Total (3) 
 
 2019 - year 5.19 % 2.76 % 2.33 % 4.70 % 
 2020 - year 4.71 % 2.66 % 0.26 % 4.28 % 
 2021 - year 4.53 % 2.22 % 0.13 % 3.86 % 
 2022 - first six months 4.44 % 2.24 % 0.34 % 3.88 % 

 (1) Loan interest income includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate. The taxable equivalent adjustment was $329,000 for the six months ended June 30, 2022, and $704,000, $623,000, and $576,000 for the years ended December 31, 2021, 2020 and 2019, respectively. 
 (2) Interest income on tax-exempt investment securities includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate. The taxable equivalent adjustment was $1.4 million for the six months ended June 30, 2022, and $2.2 million, $2.2 million and $2.4 million for the years ended December 31, 2021, 2020 and 2019, respectively. 
 (3) Interest income for the six months ended June 30, 2022 and for the years ended December 31, 2021, 2020 and 2019 included $2.3 million, $8.0 million,$453,000, and $256,000, respectively, related to payments received on certain SEPH nonaccrual loan relationships, some of which are participated with PNB, as well as $1.0 million, $3.3 million, $4.4 million, and $5.2 million, respectively, of the accretion of purchase accounting adjustments related to the acquisitions of NewDominion and Carolina Alliance. Interest income for the six months ended June 30, 2022 and for the years ended December 31, 2021 and December 31, 2020 included $2.6 million, $18.0 million and $16.7 million, respectively, of income related to PPP loans. Excluding all of these sources of income described in the preceding sentences of this footnote, the yield on loans was 4.29%, 4.27%, 4.63%, and 5.09%, for the six months ended June 30, 2022, and for the years ended December 31, 2021, 2020 and 2019, respectively, and the yield on earning assets was 3.76%, 3.64%, 4.20%, and 4.62%, for the six months ended June 30, 2022 and for the years ended December 31, 2021, 2020 and 2019, respectively. 
 
 Cost of Average Interest Bearing Liabilities: The following table shows the cost of funds on average interest bearing liabilities for the six months ended June 30, 2022 and for the years ended December 31, 2021, 2020 and 2019. 
 
 Interest bearing deposits (1) 
 Short-term borrowings Long-term debt Total (1) 
 
 2019 - year 1.01 % 1.15 % 2.77 % 1.12 % 
 2020 - year 0.41 % 0.40 % 3.55 % 0.52 % 
 2021 - year 0.12 % 0.27 % 4.32 % 0.28 % 
 2022 - first six months 0.12 % 0.42 % 4.63 % 0.29 % 

 (1) Interest expense for the six months ended June 30 2022 and the years ended December 31, 2021, 2020 and 2019 included $5,000, $46,000, $226,000, and $593,000, respectively, of the accretion of purchase accounting adjustments related to the acquisitions of NewDominion and Carolina Alliance. Excluding this income, for the six months ended June 30, 2022 and the years ended December 31, 2021, 2020 and 2019, the cost of funds on interest bearing deposits was 0.12%, 0.12%, 0.41%, and 1.02%, respectively, and the cost of interest bearing liabilities was 0.29%, 0.28%, 0.53%, and 1.13%, respectively. 
 
 Credit Metrics and Provision for (Recovery of) Credit Losses 
 
 The provision for (recovery of) credit losses is the amount subtracted from/added to the allowance for credit losses to ensure the allowance is sufficient to absorb estimated credit losses over the life of a loan. The amount of the provision for (recovery of) credit losses is determined by management based on relevant information about past events, including historical credit loss experience on financial assets with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the financial assets. 
 
 The adoption of ASU 2016-13 on January 1, 2021 resulted in a $6.1 million increase to the allowance for credit losses and a $3.9 million increase to the allowance for unfunded credit losses. A cumulative effect adjustment resulting in an $8.0 million decrease to retained earnings and a $2.1 million increase to deferred tax assets was also recorded. 
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 The table below provides additional information on the recovery of credit losses for the three-month and six-month periods ended June 30, 2022 and 2021. 
 
 Three Months Ended 
June 30, Six Months Ended 
June 30, 
 (Dollars in thousands) 2022 2021 2022 2021 
 Allowance for credit losses: 
 Beginning balance $ 78,861 $ 86,886 $ 83,197 $ 85,675 
 Cumulative change in accounting principle; adoption of ASU 2016-13 — — — 6,090 
 Charge-offs (1) 
 2,402 1,070 3,749 2,771 
 Recoveries 1,998 1,801 3,614 3,478 
 Net charge-offs (recoveries) 404 (731) 135 (707) 
 Provision for (recovery of) credit losses 2,991 (4,040) (1,614) (8,895) 
 Ending balance $ 81,448 $ 83,577 $ 81,448 83,577 
 
 Net charge-offs (recoveries) as a % of average loans (annualized) 0.02 % (0.04) % — % (0.02) % 

 (1) Charge-offs for the three-month and six-month periods ended June 30, 2022 included $1.2 million in charge-offs prior to the transfer of certain commercial loans to held for sale. 
 
 The following table provides additional information related to the allowance for credit losses for Park including information related to specific reserves and general reserves, at June 30, 2022, March 31, 2022, December 31, 2021 and June 30, 2021. 
 
 Park - Allowance for Credit Losses 
 (Dollars in thousands) 6/30/2022 3/31/2022 12/31/2021 6/30/2021 
 Total allowance for credit losses $ 81,448 $ 78,861 $ 83,197 $ 83,577 
 Allowance on PCD loans — — — — 
 Specific reserves on individually evaluated loans 1,874 1,513 1,616 3,915 
 General reserves on collectively evaluated loans $ 79,574 $ 77,348 $ 81,581 $ 79,662 
 
 Total loans $ 6,958,685 $ 6,821,606 $ 6,871,122 $ 7,035,646 
 PCD loans 5,934 6,987 7,149 1,007 
 Individually evaluated loans 42,523 63,209 74,502 86,874 
 Collectively evaluated loans $ 6,910,228 $ 6,751,410 $ 6,789,471 $ 6,947,765 
 
 Allowance for credit losses as a % of period end loans 1.17 % 1.16 % 1.21 % 1.19 % 
 Allowance for credit losses as a % of period end loans (excluding PPP loans) (1) 
 1.15 % 1.22 % 1.22 % 1.23 % 
 
 General reserve as a % of collectively evaluated loans 1.15 % 1.15 % 1.20 % 1.15 % 
 General reserve as a % of collectively evaluated loans (excluding PPP loans) (1) 
 1.15 % 1.21 % 1.21 % 1.19 % 

 (1) Excluded $13.4 million of PPP loans and $14,000 in related allowance at June 30, 2022; $37.4 million of PPP loans and $39,000 in related allowance at March 31, 2022; $74.4 million of PPP loans and $77,000 in related allowance at December 31, 2021; and $248.9 million of PPP loans and $258,000 related allowance at June 30, 2021. 
 
 The allowance for credit losses of $81.4 million at June 30, 2022 represented a $2.6 million, or 3.3%, increase compared to $78.9 million at March 31, 2022. The increase was largely due to a $2.2 increase in general reserves, taking into consideration deterioration in economic forecasts, inflationary pressures, rising interest rates, and geopolitical conflict (including the conflict between Russia and Ukraine), while balancing a decrease in risks associated with the COVID-19 pandemic, particularly in high risk loan portfolios such as hotel and accommodations, restaurants and food service and strip shopping centers. 
 
 The allowance for credit losses of $78.9 million at March 31, 2022 represented a $4.3 million, or 5.2%, decrease compared to 
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 $83.2 million at December 31, 2021. The decline was largely due to a $4.2 million decrease in general reserves, taking into consideration improvement in economic forecasts and a decrease in risks associated with the COVID-19 pandemic, particularly in high risk loan portfolios such as hotel and accommodations, restaurants and food service and strip shopping centers while balancing risks associated with inflationary pressures and geopolitical conflict (including the conflict between Russia and Ukraine). See the section entitled "Allowance for Credit Losses" for further details. 
 
 Generally, management obtains updated valuations for all nonperforming loans at least annually. As new valuation information is received, management performs an evaluation and applies a discount for anticipated disposition costs to determine the net realizable value of the collateral, which is compared against the outstanding principal balance to determine if additional write-downs are necessary. 
 
 Nonperforming Assets: Nonperforming assets include: (1) loans whose interest is accounted for on a nonaccrual basis; (2) TDRs on accrual status; (3) loans which are contractually past due 90 days or more as to principal or interest payments but whose interest continues to accrue; (4) commercial loans held for sale that were previously classified as nonperforming; (5) OREO which results from taking possession of property that served as collateral for a defaulted loan; and (6) other nonperforming assets. At December 31, 2021 and June 30, 2021, other nonperforming assets consisted of aircraft acquired as part of a loan workout. There were no other nonperforming assets at June 30, 2022. 
 
 The following table compares Park’s nonperforming assets at June 30, 2022, December 31, 2021 and June 30, 2021. 
 
 (In thousands) June 30, 2022 December 31, 2021 June 30, 2021 
 Nonaccrual loans $ 44,374 $ 72,722 $ 96,760 
 Accruing TDRs 19,746 28,323 17,420 
 Loans past due 90 days or more 507 1,607 515 
 Total nonperforming loans $ 64,627 $ 102,652 $ 114,695 
 Commercial loans held for sale, previously nonperforming 5,619 — — 
 Total nonperforming loans, including commercial loans held for sale $ 70,246 $ 102,652 $ 114,695 
 
 OREO 1,354 775 813 
 Other nonperforming assets — 2,750 3,164 
 Total nonperforming assets $ 71,600 $ 106,177 $ 118,672 
 
 Percentage of nonaccrual loans to total loans 0.64 % 1.06 % 1.38 % 
 Percentage of nonperforming loans to total loans 0.93 % 1.49 % 1.63 % 
 Percentage of nonperforming assets to total loans 1.03 % 1.55 % 1.69 % 
 Percentage of nonperforming assets to total assets 0.73 % 1.11 % 1.19 % 

 Included in the OREO totals above were $1.4 million of SEPH OREO at June 30, 2022, and $594,000 of SEPH OREO at both December 31, 2021 and June 30, 2021. 
 
 Park classifies loans as nonaccrual when a loan (1) is maintained on a cash basis because of deterioration in the financial condition of the borrower, (2) payment in full of principal or interest is not expected, or (3) principal or interest has been in default for a period of 90 days for commercial loans and 120 days for all other loans. As a result, loans may be classified as nonaccrual despite being current with their contractual terms. The following table details the delinquency status of nonaccrual loans at June 30, 2022, December 31, 2021 and June 30, 2021. Loans are classified as current if they are less than 30 days past due. 
 
 June 30, 2022 December 31, 2021 June 30, 2021 
 (In thousands) Balance Percent of Total Loans Balance Percent of Total Loans Balance Percent of Total Loans 
 Nonaccrual loans - current $ 28,144 0.41 % $ 53,259 0.78 % $ 76,674 1.09 % 
 Nonaccrual loans - past due 16,230 0.23 % 19,463 0.28 % 20,086 0.29 % 
 Total nonaccrual loans $ 44,374 0.64 % $ 72,722 1.06 % $ 96,760 1.38 % 

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 Credit Quality Indicators: When determining the quarterly credit 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 that are pass-rated (graded an 1 through a 4) 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 PD is applied to these loans. Commercial loans graded a 6 (substandard), also considered to be watch list credits, represent higher credit risk than those rated special mention and, as a result, a higher PD is applied to these loans. Commercial loans that are graded a 7 (doubtful) are shown as nonperforming and Park 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. 
 
 The following table highlights the credit trends within the commercial loan portfolio. 
 
 Commercial loans * (In thousands) June 30, 2022 December 31, 2021 June 30, 2021 
 Pass-rated $ 3,737,354 $ 3,712,784 $ 3,798,344 
 Special mention 64,876 75,397 95,110 
 Substandard 84 — 130 
 Individually evaluated for impairment 42,523 74,502 86,874 
 Accruing PCD 5,449 6,630 9,490 
 Total $ 3,850,286 $ 3,869,313 $ 3,989,948 

 * Commercial loans include (1) Commercial, financial and agricultural loans, (2) Commercial real estate loans, (3) Commercial related loans in the construction real estate portfolio, (4) Commercial related loans in the residential real estate portfolio and (5) Leases. 
 
 Park had $64.9 million of collectively evaluated commercial loans included on the watch list at June 30, 2022, compared to $75.4 million at December 31, 2021, and $95.1 million at June 30, 2021. The existing conditions of these loans do not warrant classification as nonaccrual. However, these loans have shown some weakness and management performs additional analysis regarding each borrower's ability to comply with payment terms. 
 
 The $64.9 million of collectively evaluated commercial watch list loans as of June 30, 2022 was elevated compared to pre-pandemic levels, an increase of $38.1 million compared to $26.8 million at March 31, 2020. This $38.1 million increase was largely due to $43.7 million of hotels and accommodations loans that were downgraded to special mention as a result of the impact of COVID-19 offset by problem loan resolutions. In addition to the $43.7 million in hotels and accommodations loans that were downgraded to special mention, $3.5 million in hotels and accommodations loans were downgraded to nonaccrual status. Park is closely monitoring the impact of COVID-19 and related economic recovery on its borrowers' ability to repay their loans in accordance with contractual terms. As additional information becomes available, management will continue to evaluate loans to ensure appropriate risk classification. 
 
 Individually Evaluated Loans: Loans that do not share risk characteristics are evaluated on an individual basis. Park has determined that any commercial loans which have been placed on nonaccrual status or classified as TDRs will be individually evaluated. Individual analysis will establish a specific reserve for loans in scope. Specific reserves on individually evaluated commercial loans are typically based on management’s best estimate of the fair value of collateral securing these loans. The amount ultimately charged off for these loans may be different from the specific reserve as the ultimate liquidation of the collateral may be for an amount different from management’s estimate. 
 
 Individually evaluated commercial loans were $42.5 million at June 30, 2022, a decrease of $32.0 million, compared to $74.5 million at December 31, 2021 and a decrease of $44.4 million, compared to $86.9 million at June 30, 2021. The $42.5 million of individually evaluated commercial loans at June 30, 2022 included $10.5 million of loans modified in a TDR which are currently on accrual status and performing in accordance with the restructured terms, down from $17.5 million at December 31, 2021. 
 
 At June 30, 2022, Park had taken partial charge-offs of $382,000 related to the $42.5 million of individually evaluated commercial loans, compared to partial charge-offs of $624,000 related to the $74.5 million of individually evaluated commercial loans at December 31, 2021. 
 
 Loans Acquired with Deteriorated Credit Quality: In conjunction with the NewDominion acquisition, Park acquired loans with a book value of $277.9 million as of the July 1, 2018 acquisition date. These loans were recorded at the initial fair value of $272.8 million. Loans acquired with deteriorated credit quality (ASC 310-30) with a book value of $5.1 million were recorded at the initial fair value of $4.9 million. In conjunction with the Carolina Alliance acquisition, Park acquired loans and leases with a book value of $589.7 million as of the April 1, 2019 acquisition date. These loans and leases were recorded at the initial 
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 fair value of $578.6 million. Loans and leases acquired with deteriorated credit quality (ASC 310-30) with a book value of $19.9 million were recorded at the initial fair value of $18.4 million 
 
 Upon adoption of CECL on January 1, 2021, $52,000 of the credit discount on PCD loans were reclassified to the allowance for credit losses. PCD loans are individually evaluated on a quarterly basis to determine if a specific reserve is necessary. At both June 30, 2022 and December 31, 2021, there was no allowance for credit losses on PCD loans. The carrying amount of loans acquired with deteriorated credit quality at June 30, 2022 and December 31, 2021 was $5.9 million and $7.1 million, respectively. 
 
 Allowance for Credit Losses: The allowance for credit losses is calculated on a quarterly basis. The methodology for calculating the ACL and assumptions made as of June 30, 2022 are detailed below. 
 
 Quantitative Considerations 
 The ACL is primarily calculated utilizing a DCF model. Key inputs and assumption used in this model are discussed below: 
 
 • Forecast model - For each portfolio segment, a LDA was performed in order to identify appropriate loss drivers and create a regression model for use in forecasting cash flows. The LDA analysis utilized Park's own FFIEC Call Report data for the commercial, financial and agricultural and residential real estate portfolio segments. Peer data was incorporated into the analysis for the commercial real estate, construction real estate, and consumer portfolio segments. Park plans to update the LDA annually; however, due to the impact of COVID-19, the LDA analysis was last updated in the fourth quarter of 2019. 
 • Probability of default – PD is the probability that an asset will be in default within a given time frame. Park has defined default to be when a charge-off has occurred, a loan is nonaccrual, or a loan is greater than 90 days past due. Whenever possible, Park utilizes its own loan-level PDs for the reasonable and supportable forecast period. When loan level-data is not available reflecting the forecasted economic conditions, a forecast model is utilized to estimate PDs. 
 • Loss given default – LGD is the percentage of the asset not expected to be collected due to default. Whenever possible, Park utilizes its own loan-level LGDs for the reasonable and supportable forecast period. When it is not possible to use Park's own LGDs, the LGD is derived using a method referred to as Frye Jacobs. 
 • Prepayments and curtailments – Prepayments and curtailments are calculated based on Park’s own data utilizing a three-year average. This analysis is updated annually in the fourth quarter and was last updated in the fourth quarter of 2021. 
 • Forecast and reversion – Park has established a one-year reasonable and supportable forecast period with a one-year straight line reversion to the long-term historical average. 
 • Economic forecast - Park utilizes a third party to provide economic forecasts under various scenarios, which are weighted in order to reflect model risk in the current economic environment. The scenario weighting is evaluated by management on a quarterly basis. 
 ◦ As of December 31, 2021, the "most likely" scenario forecasted Ohio unemployment between 3.32% and 3.97%, during the next four quarters. In determining the appropriate weighting of scenarios at December 31, 2021, management considered the range of forecasted unemployment as well as a number of economic indicators. While some economic indications continued to be optimistic, the Omicron variant, rising inflation, volatility in consumer confidence, employment, supply chain and workforce challenges continued to cause uncertainty in the overall economic environment. Considering these factors, management determined it was appropriate to maintain the previous quarter weighting, and weigh the "most likely" scenario 50% and the "moderate recession" scenario 50% at December 31, 2021. 
 ◦ As of March 31, 2022, the "most likely" scenario forecasted Ohio unemployment between 3.36% and 3.75%, during the next four quarters. In determining the appropriate weighting of scenarios at March 31, 2022, management considered the range of forecasted unemployment as well as a number of economic indicators. While some economic indications were optimistic, the surging inflation, volatility in consumer confidence, workforce challenges, and geopolitical conflict (including the conflict in Ukraine) continued to cause uncertainty in the overall economic environment. Considering these factors, management determined it was appropriate to maintain the previous quarter weighting, and weigh the "most likely" scenario 50% and the "moderate recession" scenario 50% at March 31, 2022. Improved forecasts, largely in the "moderate recession" scenario, resulted in a 4 basis point decline in the weighted quantitative allowance. 
 ◦ As of June 30, 2022, the "most likely" scenario forecasted Ohio unemployment between 3.36% and 3.57%, during the next four quarters. In determining the appropriate weighting of scenarios at June 30, 2022, management considered the range of forecasted unemployment as well as a number of economic indicators. While some economic indications were optimistic, the surging inflation, declining consumer confidence, rising interest rates, geopolitical conflict (including the conflict between Russia and Ukraine), and workforce 
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 and supply chain challenges continued to cause uncertainty to the overall economic environment. Considering these factors, management determined it was appropriate to maintain the previous quarter weighting, and weigh the "most likely" scenario 50% and the "moderate recession" scenario 50% at June 30, 2022. Deteriorating forecasts, largely in the "moderate recession" scenario resulted in a 4 basis point increase in the weighted quantitative allowance. 
 
 Qualitative Considerations 
 Park reviews various internal and external factors to consider the need for any qualitative adjustments to the quantitative model. Factors considered include the following: 
 • The nature and volume of Park’s financial assets; the existence, growth, and effect of any concentrations of credit and the volume and severity of past due financial assets, the volume of nonaccrual assets, and the volume and severity of adversely classified or graded assets. Specifically, management considers: 
 ◦ Trends (e.g., growth, reduction) in specific categories of the loan portfolio, as well as adjustments to the types of loans offered by Park. 
 ◦ Level of and trend in loan delinquencies, troubled loans, commercial watch list loans and nonperforming loans. 
 ◦ Level of and trend in new nonaccrual loans. 
 ◦ Level of and trend in loan charge-offs and recoveries. 
 • Park's lending policies and procedures, including changes in lending strategies, underwriting standards and practices for collections, write-offs and recoveries. 
 • The quality of Park’s credit review function. 
 • The experience, ability, and depth of Park’s lending, investment, collection, and other relevant management and staff. 
 • The effect of other external factors such as the regulatory, legal and technological environments; competition; geopolitical conflict; and events such as natural disasters or pandemics. 
 • Actual and expected changes in international, national, regional and local economic and business conditions and developments in the markets in which Park operates that affect the collectibility of financial assets. 
 • Where the U.S. economy is within a given credit cycle. 
 • The extent that there is government assistance (stimulus). 
 
 During 2020, Park added an additional reserve for three industries at particularly high risk due to the COVID-19 pandemic: hotels and accommodations; restaurants and food service; and strip shopping centers. These industries have experienced high levels of deferrals and have been particularly impacted by shut downs of non-essential businesses, increased health department regulations, and changes in consumer behavior. Management expects that a relatively higher percentage of the 4-rated credits in these portfolios will eventually migrate to special mention, substandard, or doubtful. In adopting CECL, management determined it was appropriate to retain this qualitative adjustment as this adjustment takes into account the additional risk in these portfolios, which is not captured in the quantitative calculation Even though COVID-19 case numbers have declined since December 31, 2021, these industries are still recovering from the pandemic effects. As of June 30, 2022, additional reserves totaling $2.6 million were added for these portfolios on top of the quantitative reserve already calculated. This is a decrease from $5.2 million as of December 31, 2021 and reflects improvement in COVID-19 cases, eased COVID-19 health department precautions and improving affected industry performance. Management believes there is still residual risk in these portfolios related to pandemic effects and uncertainty in future COVID-19 strains and related impacts. 
 
 A breakout of the 4-rated balances within these portfolios and the additional reserve related to these portfolios is detailed in the following table. 
 
 June 30, 2022 December 31, 2021 
 (in thousands) 4-Rated Balance Additional Reserve Pass Rated Balance Additional Reserve 
 Hotels and accommodations $ 152,081 $ 1,145 $ 148,018 $ 2,226 
 Restaurants and food service 45,797 517 40,648 917 
 Strip shopping centers 172,893 954 184,171 2,033 
 Total $ 370,771 $ 2,616 $ 372,837 $ 5,176 

 Additionally, at June 30, 2022, management applied a 0.75% reserve to all hotels and accommodations loans in the collectively evaluated population to account for increased valuation risk. This 0.75% reserve was reduced from 1.00% at December 31, 2021. At June 30, 2022, Park's originated hotels and accommodation loans had a balance of $199.0 million with an additional 
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 reserve related to valuation risks of $1.5 million. At December 31, 2021, Park's originated hotels and accommodation loans had a balance of $203.9 million with an additional reserve related to valuation risks of $2.0 million. 
 
 As of June 30, 2022, Park had $13.4 million of PPP loans which were included in the commercial, financial and agricultural portfolio segment. These loans are guaranteed by the SBA and thus have not been reserved for using the same methodology as the rest of Park’s loan portfolio. A 10 basis point reserve was calculated for these loans to reflect minimal credit risk. 
 
 Other Income 
 
 Other income decreased by $45,000 to $31.2 million for the quarter ended June 30, 2022, compared to $31.2 million for the second quarter of 2021 and decreased $2.5 million to $62.8 million for the first half of 2022, compared to $65.3 million for the first half of 2021. 
 
 The decrease for the three months ended June 30, 2022 compared to the three months ended June 30, 2021 was primarily due to a decrease in other service income and miscellaneous income, partially offset by increases in income from fiduciary activities, service charges on deposit accounts, bank owned life insurance income, gain on equity securities, net, and other components of net periodic pension benefit income. 
 
 The decrease for the six months ended June 30, 2022 compared to the six months ended June 30, 2021 was primarily due to a decrease in other service income and miscellaneous income, partially offset by increases in income from fiduciary activities, service charges on deposit accounts, bank owned life insurance income, gain on equity securities, net, and other components of net periodic pension benefit income. 
 
 The following table is a summary of the changes in the components of other income: 
 
 Three months ended
June 30, Six months ended
June 30, 
 (In thousands) 2022 2021 Change 2022 2021 Change 
 Income from fiduciary activities $ 8,859 $ 8,569 $ 290 $ 17,656 $ 16,742 $ 914 
 Service charges on deposit accounts 2,563 2,032 531 4,637 4,086 551 
 Other service income 4,940 7,159 (2,219) 9,759 16,776 (7,017) 
 Debit card fee income 6,731 6,758 (27) 12,857 12,844 13 
 Bank owned life insurance income 2,374 1,149 1,225 3,549 2,314 1,235 
 ATM fees 583 655 (72) 1,115 1,185 (70) 
 Gain on equity securities, net 709 467 242 3,062 2,277 785 
 Other components of net periodic pension benefit income 3,027 2,038 989 6,054 4,076 1,978 
 Miscellaneous 1,407 2,411 (1,004) 4,160 5,027 (867) 
 Total other income $ 31,193 $ 31,238 $ (45) $ 62,849 $ 65,327 $ (2,478) 

 Income from fiduciary activities increased by $290,000, or 3.4%, to $8.9 million for the three months ended June 30, 2022, compared to $8.6 million for the same period of 2021 and increased $914,000, or 5.5%, to $17.7 million for the six months ended June 30, 2022 compared to $16.7 million for the same period in 2021. The majority of fiduciary fees are charged on a lag, based on the market value of the assets under management.The average market value of assets under management for the three months ended June 30, 2022 was $7,073 million compared to $7,457 million for the same period in 2021. The average market value of assets under management for the first half of 2022 was $7,294 million compared to $7,259 million for the same period in 2021. 
 
 Service charges on deposit accounts increased by $531,000, or 26.1%, to $2.6 million for the three months ended June 30, 2022, compared to $2.0 million for the same period of 2021 and increased $551,000, or 13.5%, to $4.6 million for the six months ended June 30, 2022, compared to $4.1 million for the same period of 2021. The increases for both the three-month and six-month periods ended June 30, 2022 compared to June 30, 2021 were primarily due to an increase in NSF income. 
 
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 Other service income decreased by $2.2 million, or 31.0%, to $4.9 million for the three months ended June 30, 2022, compared to $7.2 million for the same period of 2021. The primary reason for the decrease for the three months ended June 30, 2022 compared to the same period of 2021 was a decrease in fee income related to mortgage loan originations to be sold in the secondary market of $3.1 million, which was partially offset by an increase in investor rate locks and mortgage loans held for sale of $257,000 and a $432,000 increase in commercial fee income. Mortgage origination volume decreased by $104.8 million, or 40.9%, to $151.7 million for the three months ended June 30, 2022 from $256.5 million for the three months ended June 30, 2021. Other service income decreased by $7.0 million, or 41.8%, to $9.8 million for the six months ended June 30, 2022, compared to $16.8 million for the same period of 2021. The primary reasons for the decrease for the six months ended June 30, 2022 compared to the same period of 2021 were a decrease in fee income related to mortgage loan originations to be sold in the secondary market of $7.8 million and a decrease in mortgage servicing rights income of $929,000, which were partially offset by an increase in investor rate locks and mortgage loans held for sale of $1.2 million. Mortgage origination volume decreased by $248.6 million, or 44.4%, to $311.9 million for the six months ended June 30, 2022 from $560.5 million for the six months ended June 30, 2021. 
 
 Bank owned life insurance income increased by $1.2 million, or 106.6%, to $2.4 million for the three months ended June 30, 2022, compared to $1.1 million for the same period of 2021 and increased $1.2 million, or 53.4%, to $3.5 million for the six months ended June 30, 2022, compared to $2.3 million for the same period of 2021. The increases for both the three-month and six-month periods ended June 30, 2022 compared to June 30, 2021 were due to an increase in received death benefits. 
 
 Gain on equity securities, net, increased $242,000, to a net gain of $709,000 for the three months ended June 30, 2022, compared to a net gain of $467,000 for the same period in 2021 and increased $785,000 to a net gain of $3.1 million for the six month ended June 30, 2022 compared to a net gain of $2.3 million for the same period in 2021. The $242,000 increase for the three months ended June 30, 2022 was related to a $658,000 increase in gain (loss) on other equity securities which went from a $39,000 loss for the three months ended June 30, 2021 to a $619,000 gain for the three months ended June 30, 2022, which was offset by a $416,000 decrease in the gain on equity securities held at NAV, declining from a $506,000 gain for the three months ended June 30, 2021 to a $90,000 gain for the three months ended June 30, 2022. The $785,000 increase for the six months ended June 30, 2022 was related to a $132,000 increase in gain (loss) on other equity securities which went from a $395,000 gain for the six months ended June 30, 2021 to a $527,000 gain for the six months ended June 30, 2022, and a $653,000 increase in the gain on equity securities held at NAV, which went from a $1.9 million gain for the six months ended June 30, 2021 to a $2.5 million gain for the six months ended June 30, 2022. 
 
 Other components of net periodic pension benefit income increased $1.0 million to $3.0 million for the three months ended June 30, 2022 compared to $2.0 million for the same period in 2021, and increased $2.0 million, to $6.1 million for the six months ended June 30, 2022 compared to $4.1 million for the six months ended June 30, 2021. The increases for both the three-month and six-month periods were largely due to an increase in the expected return on plan assets as a result of the increased value of plan assets as well as a decrease in the amortization of unrecognized net actuarial losses. 
 
 Miscellaneous income decreased $1.0 million, or 41.6%, to $1.4 million for the three months ended June 30, 2022, compared to $2.4 million for the same period of 2021 and decreased $867,000, or 17.2%, to $4.2 million for the six months ended June 30, 2022 compared to $5.0 million for the same period of 2021. The decrease for the three months period ended June 30, 2022 compared to the same period of 2021 was primarily a result of decreases in printed check sales income and wire transfer fees, a decrease in the gain on sales of assets, and increased OREO devaluations, which were partially offset by the receipt of settlement income. The decrease for the six months ended June 30, 2022 compared to the same period of 2021 was primarily the result of decreases in printed check sales income, operating lease rent, and wire transfer fees, and an increase in OREO devaluations, offset by an increase in the gain on sales of assets. 
 
 Other Expense 
 
 Other expense decreased by $1.4 million to $70.0 million for the three months ended June 30, 2022 compared to $71.4 million for the same period of 2021 and decreased $1.9 million to $137.4 million for the six months ended June 30, 2022, compared to $139.3 million for the first half of 2021. 
 
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 The following table is a summary of the changes in the components of other expense: 
 
 Three months ended
June 30, Six months ended
June 30, 
 (In thousands) 2022 2021 Change 2022 2021 Change 
 Salaries $ 31,052 $ 30,303 $ 749 $ 61,573 $ 60,199 $ 1,374 
 Employee benefits 10,199 10,056 143 20,698 20,257 441 
 Occupancy expense 3,040 3,027 13 6,254 6,667 (413) 
 Furniture and equipment expense 2,934 2,756 178 5,871 5,366 505 
 Data processing fees 8,416 7,150 1,266 15,920 14,862 1,058 
 Professional fees and services 6,775 6,973 (198) 12,633 12,637 (4) 
 Marketing 1,019 1,290 (271) 2,336 2,781 (445) 
 Insurance 1,245 1,276 (31) 2,650 2,967 (317) 
 Communication 935 770 165 1,825 1,892 (67) 
 State tax expense 1,167 1,103 64 2,359 2,211 148 
 Amortization of intangible assets 403 479 (76) 805 958 (153) 
 Foundation contribution — 4,000 (4,000) — 4,000 (4,000) 
 Miscellaneous 2,863 2,217 646 4,497 4,468 29 
 Total other expense $ 70,048 $ 71,400 $ (1,352) $ 137,421 $ 139,265 $ (1,844) 

 Salaries increased by $749,000, or 2.5%, to $31.1 million for the three months ended June 30, 2022, compared to $30.3 million for the same period in 2021. The increase for the three months ended June 30, 2022 compared to the same period of 2021 was due to an increase of $2.0 million in base salary expense and a reduction in deferred salary cost benefit of $509,000, partially offset by a decrease in additional compensation expense of $605,000, which primarily related to calamity pay and special one-time bonuses as a result of the COVID-19 public health crisis, and a decrease in officer incentive compensation of $1.0 million, compared to the three months ended June 30, 2021. 
 
 Salaries increased by $1.4 million, or 2.3%, to $61.6 million for the six months ended June 30, 2022, compared to $60.2 million for the same period in 2021. The increase for the six months ended June 30, 2022, was due to an increase of $2.6 million in base salary expense and a reduction in deferred salary cost benefit of $625,000, partially offset by a decrease in additional compensation expense of $928,000, which primarily related to calamity pay and special one-time bonuses as a result of the COVID-19 public health crisis and a decrease in officer incentive compensation of $1.0 million, compared to the six months ended June 30, 2021. 
 
 Employee benefits increased $143,000, or 1.4%, to $10.2 million for the three months ended June 30, 2022, compared to $10.1 million for the same period in 2021, and increased $441,000, or 2.2%, to $20.7 for the six months ended June 30, 2022 compared to $20.3 million for the first half of 2021. The $143,000 increase for the three months ended June 30, 2022 compared to the same period in 2021 was primarily due to increased payroll tax expense of $103,000 and a $57,000 increase in Park's KSOP match, offset by a reduction in group insurance costs. The $441,000 increase for the six months ended June 30, 2022 compared to the same period in 2021 was primarily due to increased payroll tax expense of $278,000 and a $158,000 increase in Park's KSOP match. 
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 Occupancy expense increased by $13,000, or 0.4%, to $3.0 million for the three months ended June 30, 2022, compared to $3.0 million for the same period in 2021 and decreased by $413,000, or 6.2%, to $6.3 million for the six months ended June 30, 2022 compared to $6.7 million for the six month ended June 30, 2021. The decrease of $413,000 for the six months ended June 30, 2022 compared to the six months ended June 30, 2021 was primarily related to reductions in rental, maintenance, and janitorial expenses, partially offset by an increase in utilities expense. 
 
 Furniture and equipment expense increased $178,000, or 6.5%, to $2.9 million for the three months ended June 30, 2022 compared to $2.8 million for the same period in 2021, and increased $505,000, or 9.4%, to $5.9 million for the six months ended June 30, 2022 compared to $5.4 million for the six months ended June 30, 2021. The increases for both the three-month and six-month periods ended June 30, 2022 compared to June 30, 2021 related to an increase in depreciation expense. 
 
 Data processing expense increased $1.3 million, or 17.7%, to $8.4 million for the three months ended June 30, 2022 compared to $7.2 million for the same period in 2021, and increased $1.1 million, or 7.1%, to $15.9 million for the six months ended June 30, 2022 compared to $14.9 million for the six months ended June 30, 2021. The increase for both the three-month and six- month periods ended June 30, 2022 compared to the periods ended June 30, 2021 related to an increase in software expenses, partially offset by reduced debit card processing costs. 
 
 Marketing expense decreased $271,000, or 21.0%, to $1.0 million for the three months ended June 30, 2022 compared to $1.3 million for the same period in 2021, and decreased $445,000, or 16.0%, to $2.3 million for the six months ended June 30, 2022 compared to $2.8 million for the six months ended June 30, 2021. The decreases for both the three-month and six-month periods ended June 30, 2022 compared to the periods ended June 30, 2021 related to a decrease in advertising expense. 
 
 The foundation contribution decrease for both the three months and six months ended June 30, 2022, compared to the same periods of 2021, was due to a $4.0 million contribution being made to Park's charitable foundation during the three months and six months ended June 30, 2021 and no similar contribution being made during the six months ended June 30, 2022. 
 
 The subcategory "miscellaneous" other expense includes expenses for supplies, travel and other miscellaneous expense. The subcategory miscellaneous other expense increased $646,000, or 29.1%, to $2.9 million for the three-month period ended June 30, 2022, compared to the same period in 2021, and increased $29,000, or 0.6%, to $4.5 million for the six months ended June 30, 2022, compared to the six months ended June 30, 2021. The $646,000 increase in expense for the three months ended June 30, 2022 compared to the same period ended June 30, 2021 was primarily related to a $222,000 expense related to a derivative liability, an increase of $47,000 in non-loan related losses and an increase of $167,000 in supplies expense. The $29,000 increase in expense for the six months ended June 30, 2022 compared to the same period ended June 30, 2021 was primarily related to a $222,000 expense related to a derivative liability, increased travel expense of $161,000, and an increase of $271,000 in supplies expense, offset by a decrease of $402,000 in the provision for the allowance for unfunded credit losses and a decline of $103,000 in non-loan related losses. 
 
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 Items Impacting Comparability 
 
 From time to time, revenue, expenses, and/or taxes are impacted by items judged by management of Park to be outside of ordinary banking activities and/or by items that, while they may be associated with ordinary banking activities, are so unusually large that their outsized impact is believed by management of Park at that time to be infrequent or short-term in nature. Most often, these items impacting comparability of period results relate to merger and acquisition activities and revenue and expenses related to former Vision Bank loan relationships. In other cases, they may result from management's decisions associated with significant corporate actions outside of the ordinary course of business. 
 
 The following table details those items which management believes impact the comparability of current and prior period amounts. 
 
 THREE MONTHS ENDED SIX MONTHS ENDED 
 (in thousands) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Affected Line Item 
 Net interest income $ 83,939 $ 83,851 $ 161,625 $ 164,585 
 less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions 545 795 1,022 1,905 Interest and fees on loans 
 less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions 2 11 5 32 Interest on deposits 
 less interest income on former Vision Bank relationships 2,305 2,838 2,347 2,943 Interest and fees on loans 
 Net interest income - adjusted $ 81,087 $ 80,207 $ 158,251 $ 159,705 
 
 Provision for (recovery of) credit losses $ 2,991 $ (4,040) $ (1,614) $ (8,895) 
 less recoveries on former Vision Bank relationships (506) (152) (507) (409) Provision for (recovery of) credit losses 
 Provision for (recovery of) credit losses - adjusted $ 3,497 $ (3,888) $ (1,107) $ (8,486) 
 
 Total other income $ 31,193 $ 31,238 $ 62,849 $ 65,327 
 less other service income related to former Vision Bank relationships 500 3 500 61 Other service income 
 Total other income - adjusted $ 30,693 $ 31,235 $ 62,349 $ 65,266 
 
 Total other expense $ 70,048 $ 71,400 $ 137,421 $ 139,265 
 less merger-related expenses related to NewDominion and Carolina Alliance acquisitions — — — 8 Salaries 
 less merger-related expenses related to NewDominion and Carolina Alliance acquisitions — 4 — 8 Insurance 
 less COVID-19 related expenses 141 670 747 1,535 Salaries 
 less severance and restructuring charges 497 46 539 154 Salaries 
 less direct expenses related to collection of payments on former Vision Bank loan relationships 366 300 366 407 Professional fees and services 
 less rebranding initiative related expenses 74 77 154 152 Occupancy expense 
 less rebranding initiative related expenses 262 261 526 523 Furniture and equipment expense 
 less rebranding initiative related expenses — 1 — 591 Data processing fees 
 less rebranding initiative related expenses — 3 — 31 Professional fees and services 
 less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions 403 479 805 958 Amortization of intangible assets 
 less Foundation contribution — 4,000 — 4,000 Foundation contribution 
 Total other expense - adjusted $ 68,305 $ 65,559 $ 134,284 $ 130,898 
 
 Tax effect of adjustments to net income identified above (7) 
 $ (444) $ 429 $ (261) $ 634 
 
 Net income - reported $ 34,324 $ 39,132 $ 73,199 $ 81,963 
 Net income - adjusted (6) 
 $ 32,653 $ 40,745 $ 72,216 $ 84,346 
 
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 THREE MONTHS ENDED SIX MONTHS ENDED 
 (in thousands, except share and per share data) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 
 Diluted EPS $ 2.10 $ 2.38 $ 4.48 $ 4.98 
 Diluted EPS, adjusted (6) 
 $ 2.00 $ 2.47 $ 4.42 $ 5.13 
 
 Annualized return on average assets (1)(2) 
 1.42 % 1.59 % 1.51 % 1.70 % 
 Annualized return on average assets, adjusted (1)(2)(6) 
 1.35 % 1.66 % 1.49 % 1.75 % 
 
 Annualized return on average tangible assets (1)(2)(4) 
 1.45 % 1.62 % 1.54 % 1.73 % 
 Annualized return on average tangible assets, adjusted (1)(2)(4)(6) 
 1.38 % 1.68 % 1.52 % 1.78 % 
 
 Annualized return on average shareholders' equity (1)(2) 
 12.86 % 14.81 % 13.57 % 15.71 % 
 Annualized return on average shareholders' equity, adjusted (1)(2)(6) 
 12.23 % 15.42 % 13.39 % 16.16 % 
 
 Annualized return on average tangible equity (1)(2)(3) 
 15.23 % 17.60 % 16.02 % 18.70 % 
 Annualized return on average tangible equity, adjusted (1)(2)(3)(6) 
 14.49 % 18.33 % 15.81 % 19.25 % 
 
 Efficiency ratio (5) 
 60.38 % 61.65 % 60.76 % 60.20 % 
 Efficiency ratio, adjusted (5)(6) 
 60.63 % 58.45 % 60.41 % 57.82 % 
 
 Annualized net interest margin (5) 
 3.84 % 3.74 % 3.70 % 3.75 % 
 Annualized net interest margin, adjusted (5)(6) 
 3.71 % 3.58 % 3.62 % 3.64 % 
 
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 Financial Reconciliations 
 
 (1) Reported measure uses net income 
 (2) Averages are for the three months and six months ended June 30, 2022 and June 30, 2021. 
 (3) Net income for each period divided by average tangible equity during the period. Average tangible equity equals average shareholders' equity during the applicable period less average goodwill and other intangible assets during the applicable period. 
 
 RECONCILIATION OF AVERAGE SHAREHOLDERS' EQUITY TO AVERAGE TANGIBLE EQUITY: 
 THREE MONTHS ENDED SIX MONTHS ENDED 
 June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2022 
 AVERAGE SHAREHOLDERS' EQUITY $ 1,070,493 $ 1,059,949 $ 1,087,919 $ 1,052,223 
 Less: Average goodwill and other intangible assets 166,516 168,211 166,716 168,449 
 AVERAGE TANGIBLE EQUITY $ 903,977 $ 891,738 $ 921,203 $ 883,774 
 
 (4) Net income for each period divided by average tangible assets during the period. Average tangible assets equals average assets less average goodwill and other intangible assets, in each case during the applicable period. 
 
 RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS 
 THREE MONTHS ENDED SIX MONTHS ENDED 
 June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2022 
 AVERAGE ASSETS $ 9,679,020 $ 9,872,078 $ 9,751,796 $ 9,743,027 
 Less: Average goodwill and other intangible assets 166,516 168,211 166,716 168,449 
 AVERAGE TANGIBLE ASSETS $ 9,512,504 $ 9,703,867 $ 9,585,080 $ 9,574,578 
 
 (5) Efficiency ratio is calculated by dividing total other expense by the sum of FTE net interest income and other income. Fully taxable equivalent net interest income reconciliation is shown assuming a 21% federal corporate income tax rate. Additionally, net interest margin is calculated on a fully taxable equivalent basis by dividing fully taxable equivalent net interest income by average interest earning assets, in each case during the applicable period. 
 
 RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME 
 THREE MONTHS ENDED SIX MONTHS ENDED 
 June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2022 
 Interest income $ 88,347 $ 87,994 $ 169,493 $ 173,167 
 FTE adjustment 872 718 1,691 1,432 
 FTE interest income $ 89,219 $ 88,712 $ 171,184 $ 174,599 
 Interest expense 4,408 4,143 7,868 8,582 
 FTE net interest income $ 84,811 $ 84,569 $ 163,316 $ 166,017 
 
 (6) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, provision for (recovery of) credit losses, total other income and total other expense. 
 (7) The tax effect of adjustments to net income was calculated assuming a 21% federal corporate income tax rate. 
 
 (8) Pre-tax, pre-provision ("PTPP") net income is calculated as net income during the applicable period, plus income taxes, and the provision for (recovery of) credit losses, in each case during the applicable period. PTPP net income is a common industry metric utilized in capital analysis and review. PTPP is used to assess the operating performance of Park while excluding the impact of the provision for (recovery of) credit losses. 
 
 RECONCILIATION OF PRE-TAX, PRE-PROVISION NET INCOME 
 THREE MONTHS ENDED SIX MONTHS ENDED 
 June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 
 Net income $ 34,324 $ 39,132 $ 73,199 $ 81,963 
 Plus: Income Taxes 7,769 8,597 15,468 17,579 
 Plus: Provision for (recovery of) credit losses 2,991 (4,040) (1,614) (8,895) 
 Pre-tax, pre-provision net income $ 45,084 $ 43,689 $ 87,053 $ 90,647 

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 Income Tax 
 
 Income tax expense was $7.8 million for the second quarter of 2022 and consisted of federal income tax expense of $7.4 million and state income tax expense of $341,000. This compares to income tax expense of $8.6 million for the second quarter of 2021 which consisted of federal income tax expense of $8.3 million and state income tax expense of $264,000. The effective income tax rate for the second quarter of 2022 was 18.5%, compared to 18.0% for the same period in 2021. Income tax expense was $15.5 million for the first half of 2022 and consisted of federal income tax expense of $14.8 million and state income tax expense of $646,000. This compares to income tax expense of $17.6 million for the first half of 2021 which consisted of federal income tax expense of $17.1 million and state income tax expense of $529,000. The effective income tax rate for the first half of 2022 was 17.4%, compared to 17.7% for the same period in 2021. 
 
 The difference between the statutory federal corporate income tax rate of 21% and Park's effective income tax rate reflects permanent tax differences, primarily consisting of tax-exempt interest income from municipal investments and loans, qualified affordable housing and historical tax credits, bank owned life insurance income, and dividends paid on the common shares held within Park's salary deferral plan offset by the impact of state income taxes. Park expects permanent federal income tax differences for the 2022 year will be approximately $6.9 million. 
 
 Comparison of Financial Condition 
 At June 30, 2022 and December 31, 2021 
 
 Changes in Financial Condition 
 
 Total assets increased by $266.4 million, or 2.8%, during the first six months of 2022 to $9,827 million at June 30, 2022, compared to $9,560 million at December 31, 2021. This increase was primarily due to the following: 
 
 • Cash and cash equivalents increased by $27.3 million, or 12.4%, to $246.4 million at June 30, 2022, compared to $219.2 million at December 31, 2021. Money market instruments were $75.3 million at June 30, 2022, compared to $74.7 million at December 31, 2021 and cash and due from banks were $171.1 million at June 30, 2022, compared to $144.5 million at December 31, 2021. 
 • Investment securities increased $105.3 million, or 5.8%, to $1,921 million at June 30, 2022, compared to $1,815 million at December 31, 2021. 
 • Loans increased by $87.6 million, or 1.3%, to $6,959 million at June 30, 2022, compared to $6,871 million at December 31, 2021. PPP loans were $13.4 million at June 30, 2022 compared to $74.4 million at December 31, 2021. 
 • Prepaid assets increased by $8.4 million, or 5.9%, to $152.6 million at June 30, 2022, compared to $144.1 million at December 31, 2021. 
 • Other assets increased by $26.5 million, or 261.2%, to $36.7 million at June 30, 2022, compared to $10.2 million at December 31, 2021. This was primarily related to an increase in deferred tax assets. 
 
 Total liabilities increased by $327.2 million, or 3.9%, during the first six months of 2022 to $8,777 million at June 30, 2022, compared to $8,449 million at December 31, 2021. This increase was primarily due to the following: 
 
 • Total deposits increased by $393.1 million, or 5.0%, to $8,298 million at June 30, 2022, compared to $7,905 million at December 31, 2021. During 2020, Park made the decision to participate in an OWS program in order to manage the balance sheet. At June 30, 2022 and December 31, 2021, Park had $809.8 million and $983.1 million, respectively, in off-balance sheet deposits. 
 • Short-term borrowings decreased by $67.0 million, or 28.1%, to $171.8 million at June 30, 2022, compared to $238.8 million at December 31, 2021. 
 • Unfunded commitments in affordable housing tax credit investments decreased by $7.3 million, or 25.5%, to $21.2 million at June 30, 2022, compared to $28.5 million at December 31, 2021. 
 
 Total shareholders’ equity decreased by $60.7 million, or 5.5%, to $1,050.0 million at June 30, 2022, from $1,110.8 million at December 31, 2021. This decrease was primarily due to the following: 
 
 • Accumulated other comprehensive (loss) income, net of taxes changed by $100.6 million, from a positive $15.2 million at December 31, 2021, to a negative $85.4 million at June 30, 2022, largely as a result of unrealized net holding losses on debt securities AFS, net of taxes, of $100.8 million. 
 • Retained earnings increased by $37.9 million during the period primarily as a result of net income of $73.2 million, partially offset by cash dividends on common shares of $34.3 million. 
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 • Treasury shares decreased by $3.0 million during the period as a result of the issuance of treasury shares under share-based compensation awards (net of common shares withheld to pay employee income taxes). 
 
 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. 
 
 Liquidity 
 
 Cash provided by operating activities was $56.5 million and $80.2 million for the six months ended June 30, 2022 and 2021, respectively. Net income was the primary source of cash from operating activities for each of the six-month periods ended June 30, 2022 and 2021. 
 
 Cash used in investing activities was $318.4 million and $184.4 million for the six months ended June 30, 2022 and 2021, respectively. Proceeds from the sale, repayment, or maturity of investment securities provide cash and purchases of investment securities use cash. Net investment securities transactions used cash of $216.5 million for the six months ended June 30, 2022 and used cash of $308.5 million for the six months ended June 30, 2021. Another major use or source of cash in investing activities is the net increase or decrease in the loan portfolio. Cash used by the net increase in the loan portfolio was $91.0 million for the six months ended June 30, 2022 and cash provided by the net decrease in the loan portfolio was $136.7 million for the six months ended June 30, 2021. 
 
 Cash provided by financing activities was $289.2 million and $541.2 million for the six months ended June 30, 2022 and 2021, respectively. A major source of cash for financing activities is the net change in deposits. Deposits (net of off-balance sheet deposits) increased and provided $393.1 million and $642.3 million of cash for the six months ended June 30, 2022 and 2021, respectively. Another major source/use of cash from financing activities is borrowings in the form of short-term borrowings, long-term debt and subordinated notes. For the six months ended June 30, 2022, net short-term borrowings decreased and used $67.0 million in cash. For the six months ended June 30, 2021, net short-term borrowings decreased and used $56.4 million in cash and net long-term borrowings decreased and used $5.0 million in cash. Finally, cash declined by $34.5 million and $37.5 million for the six months ended June 30, 2022 and 2021, respectively, from the payment of dividends. 
 
 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 capital markets, the investment securities portfolio, the core deposit base, FHLB borrowings and the capability to securitize or package loans for sale. The Corporation’s loan to asset ratio was 70.81% at June 30, 2022, compared to 71.87% at December 31, 2021 and 70.72% at June 30, 2021. Cash and cash equivalents were $246.4 million at June 30, 2022, compared to $219.2 million at December 31, 2021 and $807.4 million at June 30, 2021. Management believes that the present funding sources provide more than adequate liquidity for the Corporation to meet its cash flow needs. 
 
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 Capital Resources 
 
 Shareholders’ equity at June 30, 2022 was $1,050.0 million, or 10.7% of total assets, compared to $1,110.8 million, or 11.6% of total assets, at December 31, 2021 and $1,069.4 million, or 10.7% of total assets, at June 30, 2021. 
 
 Financial institution regulators have established guidelines for minimum capital ratios for banks, thrifts and bank holding companies. Park has elected not to include the net unrealized gain or loss on debt securities AFS in computing regulatory capital. Park has adopted the Basel III regulatory capital framework as approved by the federal banking agencies. Under the Basel III regulatory capital framework, in order to avoid limitations on capital distributions, including dividend payments and stock repurchases, and certain discretionary bonus payments to executive officers, Park must hold a capital conservation buffer of 2.5% above the adequately capitalized risk-based capital ratios. The amounts shown below as the adequately capitalized ratio plus capital conservation buffer include the 2.50% buffer. The Federal Reserve Board has also adopted capital requirements Park must maintain to be deemed "well capitalized" and remain a financial holding company. 
 
 Park and PNB met each of the well capitalized ratio guidelines applicable to them at June 30, 2022. The following table indicates the capital ratios for PNB and Park at June 30, 2022 and December 31, 2021. 
 
 At June 30, 2022 
 Leverage Tier 1
Risk-Based Common Equity Tier 1 Total
Risk-Based 
 The Park National Bank 8.83 % 10.87 % 10.87 % 12.30 % 
 Park National Corporation 10.24 % 12.62 % 12.43 % 15.95 % 
 Adequately capitalized ratio 4.00 % 6.00 % 4.50 % 8.00 % 
 Adequately capitalized ratio plus capital conservation buffer 4.00 % 8.50 % 7.00 % 10.50 % 
 Well capitalized ratio (PNB) 5.00 % 8.00 % 6.50 % 10.00 % 
 Well capitalized ratio (Park) N/A 6.00 % N/A 10.00 % 

 At December 31, 2021 
 Leverage Tier 1
Risk-Based Common Equity Tier 1 Total
Risk-Based 
 The Park National Bank 8.58 % 11.05 % 11.05 % 12.56 % 
 Park National Corporation 9.77 % 12.57 % 12.37 % 16.05 % 
 Adequately capitalized ratio 4.00 % 6.00 % 4.50 % 8.00 % 
 Adequately capitalized ratio plus capital conservation buffer 4.00 % 8.50 % 7.00 % 10.50 % 
 Well capitalized ratio (PNB) 5.00 % 8.00 % 6.50 % 10.00 % 
 Well capitalized ratio (Park) N/A 6.00 % N/A 10.00 % 

 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 page 79 of Park’s 2021 Form 10-K (Table 39) for disclosure concerning contractual obligations and commitments at December 31, 2021. There were no other significant changes in contractual obligations and commitments during the first six months of 2022. 
 
 Financial Instruments with Off-Balance Sheet Risk 
 
 PNB is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of 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 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. PNB uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Since many of 
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 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) June 30,
2022 December 31, 2021 
 Loan commitments $ 1,422,968 $ 1,364,224 
 Standby letters of credit $ 23,276 $ 18,216 

 ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 
 
 Management reviews interest rate sensitivity on a 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 page 79 of Park’s 2021 Form 10-K. 
 
 On page 78 (Table 38) of Park’s 2021 Form 10-K, management reported that Park’s twelve-month cumulative rate sensitivity gap was a positive (assets exceeding liabilities) $1,895.3 million or 21.70% of total interest earning assets at December 31, 2021. At June 30, 2022, Park’s twelve-month cumulative rate sensitivity gap was a positive (assets exceeding liabilities) $1,589.0 million or 17.53% of total 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 79 of Park’s 2021 Form 10-K, management reported that at December 31, 2021, the earnings simulation model projected that net income would increase by 7.5% using a rising interest rate scenario and decrease by 15.1% using a declining interest rate scenario over the next year. At June 30, 2022, the earnings simulation model projected that net income would increase by 3.7% using a rising interest rate scenario and would decrease by 7.4% in a declining interest rate scenario. At June 30, 2022, 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. 
 
 ITEM 4 – CONTROLS AND PROCEDURES 
 
 Evaluation of Disclosure Controls and Procedures 
 
 With the participation of the Chairman of the Board and Chief Executive Officer (the principal executive officer) and the Chief Financial Officer, Secretary and Treasurer (the principal financial officer) of Park, Park’s management has evaluated the effectiveness of Park’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of June 30, 2022 (the end of the quarterly period covered by this Quarterly Report on Form 10-Q). Based on that evaluation, Park’s Chairman of the Board and Chief Executive Officer and Park’s Chief Financial Officer, Secretary and Treasurer have concluded that: 
 
 • information required to be disclosed by Park in this Quarterly Report on Form 10-Q and the other reports that Park files or submits under the Exchange Act would be accumulated and communicated to Park’s management, including its principal executive officer and its principal financial officer, as appropriate to allow timely decisions regarding required disclosure; 
 • information required to be disclosed by Park in this Quarterly Report on Form 10-Q and the other reports that Park files or submits under the Exchange Act would be recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and 
 • Park’s disclosure controls and procedures were effective as of June 30, 2022 (the end of the quarterly period covered by this Quarterly Report on Form 10-Q). 
 
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 Changes in Internal Control Over Financial Reporting 
 
 There were no changes in Park's internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during Park's fiscal quarter ended June 30, 2022, that have materially affected, or are reasonably likely to materially affect, Park's internal control over financial reporting. 
 
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 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 which Park's subsidiaries are parties to incidental to their respective businesses. 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 Park's actual results to differ materially from those anticipated. In “ITEM 1A. RISK FACTORS” of Part I of Park’s 2021 Form 10-K, we included a detailed discussion of our risk factors. All of these risk factors should be read carefully in connection with evaluating Park's business and in connection with the forward-looking statements contained in this Quarterly Report on Form 10-Q. Any of the risks described in Park's 2021 Form 10-K 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. 
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 
 
 (a) Not applicable 
 (b) Not applicable 
 (c) The following table provides information concerning purchases of Park’s common shares ("Common Shares") made by or on behalf of Park or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Exchange Act, during the three months ended June 30, 2022, as well as the maximum number of Common Shares that may be purchased under Park’s previously announced stock repurchase authorizations to fund the 2017 Long-Term Incentive Plan for Employees (the "2017 Employees LTIP") and the 2017 Long-Term Incentive Plan for Non-Employee Directors (the "2017 Non-Employee Directors LTIP") and Park's previously announced 2017 and 2019 stock repurchase authorizations: 
 Period Total number of
Common Shares
purchased Average price
paid per
Common
Share 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) 
 April 1 through April 30, 2022 — $ — — 1,195,088 
 May 1 through May 31, 2022 — — — 1,195,088 
 June 1 through June 30, 2022 — — — 1,195,088 
 Total — $ — — 1,195,088 
 
 (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 authorizations to fund the 2017 Employees LTIP and the 2017 Non-Employee Directors LTIP, both of which became effective on April 24, 2017; Park's publicly announced stock repurchase authorization covering 500,000 Common Shares which was announced on January 23, 2017; and Park's stock repurchase authorization covering 500,000 Common Shares which was announced on January 28, 2019 and as to which approval from the Federal Reserve was obtained in the form of correspondence from the Federal Reserve Bank of Cleveland dated April 19, 2019. 
 
 At the 2017 Annual Meeting of Shareholders held on April 24, 2017, Park's shareholders approved the 2017 Employees LTIP and the 2017 Non-Employee Directors LTIP. The Common Shares to be issued and delivered under the 2017 Employees LTIP and the 2017 Non-Employee Directors LTIP may consist of either Common Shares currently held or Common Shares subsequently acquired by Park as treasury shares. No newly-issued Common Shares will be delivered under the 2017 Employees LTIP or the 2017 Non-Employee Directors LTIP. On April 24, 2017, Park's Board of Directors authorized the purchase, from time to time, of up to 750,000 Park Common Shares and 150,000 Park Common Shares, respectively, to be held 
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 as treasury shares for subsequent issuance and delivery under the 2017 Employees LTIP and the 2017 Non-Employee Directors LTIP. 
 
 On January 23, 2017, Park announced that on that same day, the Park Board of Directors authorized Park to purchase, from time to time, up to an aggregate of 500,000 Park Common Shares. On January 28, 2019, Park announced that on that same day, the Park Board of Directors authorized Park to repurchase, from time to time following receipt of any required approval from the Federal Reserve, up to 500,000 Park Common Shares in addition to the 500,000 Park Common Shares which had been authorized for repurchase by the Park Board of Directors on January 23, 2017 and remained available for repurchase as of January 28, 2019. The required approval was received by Park in the form of correspondence from the Federal Reserve Bank of Cleveland dated April 19, 2019. 
 
 Purchases may be made through NYSE American, in the over-the-counter market or in privately negotiated transactions, in each case in compliance with the Ohio General Corporation Law, applicable federal and state securities laws, the rules applicable to issuers having securities listed on NYSE American, regulations promulgated by the Federal Reserve Board and all other applicable laws and regulations, each as in effect at the time of each such purchase. Purchases will be made upon such terms and conditions and at such times and in such amounts as any one or more of the authorized officers of Park deem to be appropriate, subject to market conditions, regulatory requirements, any contractual obligations of Park and Park's subsidiaries and other factors, and in the best interest of Park and Park's shareholders. The January 23, 2017 stock repurchase authorization and the January 28, 2019 stock repurchase authorization are distinct from the stock repurchase authorizations to fund the 2017 Employees LTIP and the 2017 Non-Employee Directors LTIP. 
 
 Item 3. Defaults Upon Senior Securities 
 
 (a), (b) Not applicable. 
 
 Item 4. Mine Safety Disclosures 
 
 Not applicable. 
 
 Item 5. Other Information 
 
 (a), (b) Not applicable. 
 
 Item 6. Exhibits 
 
 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”)) P 
 
 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)) P 
 
 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”)) 
 
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 3.1(e) Certificate of Amendment by Shareholders as filed with the Ohio Secretary of State 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 to Articles as filed with the Ohio Secretary of State on December 19, 2008, evidencing the adoption of an amendment by the 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)) 
 
 3.1(g) Certificate of Amendment by Shareholders as filed with the Ohio Secretary of State 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) Certificate of Amendment as filed with the Ohio Secretary of State on April 26, 2022 in order to evidence the adoption by Park National Corporation's shareholders of an amendment to Park National Corporation's Articles of Incorporation to add a new Article NINTH to eliminate cumulative voting rights in the election of directors (Incorporated herein by reference to Exhibit 3.1 to Park National Corporation's Current Report on Form 8-K dated and filed April 27, 2022 (File No. 1-13006) ("Park's April 27, 2022 Form 8-K")) 
 
 3.1(i) Articles of Incorporation of Park National Corporation [This document represents the Articles of Incorporation of Park National Corporation in compiled form incorporating all amendments. This compiled document has not been filed with the Ohio Secretary of State.] ( Incorporated herein by reference to Exhibit 3.1(i) to Park National Corporation's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 (File No. 1-13006) ("Park's March 31, 2022 Form 10-Q")) 
 
 3.2(a) Regulations of Park National Corporation (Incorporated herein by reference to Exhibit 3(b) to Park’s Form 8-B) P 
 
 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 N a t i o n a l C o r p o r a t i o n ’ s C u r r e n t R e p o r t o n 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) ) 
 
 3.2(e) Certificate Regarding Adoption by the Shareholders of Park National Corporation on April 25, 2022 of Amendments to Section 1.10 and Section 2.04 of Park National Corporation's Regulations to eliminate the textual references to the right of Park National Corporation's shareholders to have cumulative voting apply in the election of directors (Incorporated herein by reference to Exhibit 3.2 to Park 's A pril 27, 2022 (F orm -8-K 1-13006 ) ) 
 
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 3.2(f) Regulations of Park National Corporation [This document represents the Regulations of Park National Corporation in compiled form incorporating all amendments, including those adopted by the shareholders of Park National Corporation on April 25, 2022] (Incorporated herein by reference to Exhibit 3.2(f) to Park's March 31, 2022 Form 10-Q) 
 
 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) 
 
 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 Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022 formatted in Inline XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Condensed Balance Sheets as of June 30, 2022 and December 31, 2021 (unaudited); (ii) the Consolidated Condensed Statements of Income for the three and six months ended June 30, 2022 and 2021 (unaudited); (iii) the Consolidated Condensed Statements of Comprehensive (Loss) Income for the three months and six months ended June 30, 2022 and 2021 (unaudited); (iv) the Consolidated Condensed Statements of Changes in Shareholders’ Equity for the three months and six months ended June 30, 2022 and 2021 (unaudited); (v) the Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2022 and 2021 (unaudited); and (vi) the Notes to Unaudited Consolidated Condensed Financial Statements (electronically submitted herewith). ** 
 
 104 Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document with applicable taxonomy extension information contained in Exhibit 101) 

 ________________________________________ 
 
 *Annexes, schedules and exhibits have been omitted pursuant to Item 601(b)(2) of SEC Regulation S-K, as in effect at the time of filing of the Agreement and Plan of Merger and Reorganization, and Item 601(a)(5) of SEC Regulation S-K, as currently in effect. A copy of any omitted attachment will be furnished supplementally to the SEC or the SEC's staff upon its request. 
 
 ** The instance document does not appear in the interactive data file because its XBRL tags are imbedded within the Inline XBRL document. 
 
 P Park National Corporation filed this exhibit with the SEC in paper form originally and this exhibit has not been filed with the SEC in electronic format. 
 
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 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: August 1, 2022 /s/ David L. Trautman 
 David L. Trautman 
 Chairman of the Board and Chief Executive Officer 
 (Principal Executive Officer and Duly Authorized Officer) 
 
 DATE: August 1, 2022 /s/ Brady T. Burt 
 Brady T. Burt 
 Chief Financial Officer, Secretary and Treasurer 
 (Principal Financial Officer and Duly Authorized Officer) 

 107
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
PARK NATIONAL CORP /OH/ 10-Q
