What changed in this filing

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Item 1. Business

2025-02-24 compared with 2024-02-23 · 107 added, 148 removed, 500 unchanged (34% of the section changed)

The disclosures set forth in this Item are qualified by "ITEM 1A.

RISK FACTORS" and the section captioned "FORWARD-LOOKING STATEMENTS" in "ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" of this Annual Report on Form 10-K and other cautionary statements set forth elsewhere in this Annual Report on Form 10-K.

Park National Corporation (“Park”) is a financial holding company subject to regulation under the Bank Holding Company Act of 1956, as amended (the “Bank Holding Company Act”).

Park began operations as a bank holding company in 1987.

Park’s principal executive offices are located at 50 North Third Street, Newark, Ohio 43055, and its telephone number is (740) 349-8451.

Park’s common shares, each without par value (the “common shares”), are listed on NYSE American, under the symbol “PRK.”

Park maintains an internet site which can be accessed at http://www.parknationalcorp.com .

Information contained on Park’s internet site does not constitute part of, and is not incorporated into, this Annual Report on Form 10-K.

Park makes available free of charge on or through its internet site Park’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as Park’s definitive proxy statements filed pursuant to Section 14 of the Exchange Act, in each case as soon as reasonably practicable after Park electronically files such material with, or furnishes it to, the Securities and Exchange Commission (the “SEC”).

Park’s principal business consists of owning and supervising its subsidiaries.

Although Park directs the overall policies of its subsidiaries, including lending policies and financial resources, most day-to-day affairs are managed by the respective officers of Park’s subsidiaries.

RISK FACTORS" and the section captioned "FORWARD-LOOKING STATEMENTS" of this Annual Report on Form 10-K and other cautionary statements set forth elsewhere in this Annual Report on Form 10-K.

Park National Corporation (“Park”) is a financial holding company regulated under the Bank Holding Company Act of 1956 (the “Bank Holding Company Act”).

Founded as Park National Bank of Ohio, in Newark, Ohio, Park’s legacy dates to 1908.

As a bank holding company, Park was established in 1987.

Park is headquartered at 51 North Third Street, Newark, Ohio 43055, and can be reached at (740) 349-8451.

Its common shares trade on NYSE American under the symbol “PRK.” Park's internet site http://www.parknationalcorp.com provides access to annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, amendments, and definitive proxy statements filed under the Securities Exchange Act of 1934 (the “Exchange Act”).

These documents are available as soon as practicable after Park files them electronically with the SEC.

Park's primary business is to own and oversee its subsidiaries, engaged primarily in the business of banking.

While Park sets overall policies, including lending and financial strategies, the officers of its subsidiaries handle day-to-day operations.

Human Capital

Park is a community banking team that delivers an exceptional breadth and depth of resources to individuals and businesses.

Our culture is deeply rooted in making an impact within the communities we serve.

Our commitment to our community is more than words and is demonstrated through our associates' dedication to rolling up their sleeves to give back in meaningful ways.

At Park, banking is about more than money, and our jobs are more than the work we do.

Park provides an experience that ignites a passion to serve, unlocks potential to grow and fuels the life our associates want to build for themselves and those they love.

We believe the way we treat our clients, associates, and communities is what sets us apart from the competition and sustains our success.

We provide opportunities for growth and advancement by empowering our associates and offering ongoing training to develop knowledge and skills.

We strive to provide a safe, fair, caring and courteous work environment.

At Park, banking is about more than money, and jobs are about more than work.

Park provides a work experience that ignites associate passion to serve, unlocks potential to grow, and fuels the life of associates who want to build for themselves and those they love.

Park provides opportunities for growth and advancement by empowering associates and offering ongoing training to develop knowledge and skills.

Park strives to provide a safe, fair, caring and courteous work environment.

Associate Profile

Our associates are driven by purpose.

We call it Serving More, and it's what drives our associates.

We genuinely care about helping our customers and communities and we do the right thing, whether that means taking time to listen, seeing the world through someone else's eyes or doing what's best for them, not us.

It all adds up to work that's deeply meaningful and so much more than just a job.

We operate 96 financial service offices in Ohio, northern Kentucky, and the Carolinas, with support staff located throughout our footprint and at various administration offices.

As of December 31, 2023, we had 1,799 active associates, consisting of 1,653 full-time and 146 part-time resulting in 1,782 full-time equivalent associates.

At December 31, 2023, our associate population was 68% female and 32% male, with an average tenure of 9 years.

Our branch delivery channels employ 33.4% of those associates.

We are dedicated to ensuring equal employment opportunities for all.

Our hiring and promotion practices prioritize individuals who best match position requirements and exhibit strong potential for advancement.

Our Performance Management philosophy emphasizes rewarding associates based on performance.

Through an annual goal-setting process and prompted quarterly updates, supervisors and associates collaboratively track progress.

The annual associate evaluation process directly influences base salary reviews, fostering a culture that encourages personal and professional improvement.

We value and rely on the experience and knowledge of our associates to help identify areas for enhancement.

Park associates are driven by purpose, a theme associates refer to as "Serving More." The organization prioritizes doing the right thing, whether that means listening attentively, empathizing with others, or prioritizing the best interests of others.

This commitment makes the work deeply meaningful.

Park operates 87 financial service offices in Ohio, northern Kentucky, and the Carolinas.

As of December 31, 2024, Park had 1,771 active associates, comprising 1,620 full-time and 151 part-time, which equates to 1,725 full-time equivalent associates.

Of these, 68% are female and 32% are male, with an average tenure of 9 years.

The branch delivery channels employ 32.8% of those associates.

Park is committed to equal employment opportunities, hiring, and promoting individuals who meet position requirements and show strong potential for growth.

Park’s performance management emphasizes rewarding associates based on performance.

Through annual goal-setting and quarterly updates, supervisors and associates collaboratively track progress.

The annual evaluation process influences pay and salary reviews, fostering a culture of continuous improvement.

Park values associates' experience and knowledge to identify enhancement areas.

Career Pathways and Professional Development

Park's professional growth programming is supported by our culture, which puts compassion before competition.

Our associates have the freedom to own their journey through genuine support from their leaders.

We provide development opportunities to maximize associate performance, strengthen engagement, and drive our competitive advantage.

We enhance associates' knowledge and skills with high-quality, accessible training and professional development opportunities to support Park's mission of promoting long-term prosperity of the people and organizations we serve.

Our Learning and Development team is a strategic business partner dedicated to supporting the organization and helping associates meet their objectives.

In 2023, this team continued building an infrastructure for the development of associates aligned with overall business outcomes.

This included growing the team to further streamline training, enhance the onboarding experience, oversee associate development, implement learning solutions that promote belonging and connection, and support training needs across all lines of business.

Park fosters professional growth with a culture that prioritizes compassion over competition.

Associates take ownership of their journey with genuine support from leaders and access to development opportunities that enhance performance, engagement, and competitiveness.

Comprehensive training and professional development align with Park's mission to promote long-term prosperity for its stakeholders.

The Learning and Development team bolsters Park's objectives by streamlining training, improving onboarding, overseeing associate development, and implementing learning solutions that foster belonging and connection.

Launching in 2025, Park will continue to solidify its commitment to grow with its associates through its new Leadership Pathways program that will implement learning solutions that promote a sense of belonging and connection through culture building.

these efforts, we are committed to ensuring that our associates have the tools and resources they need to thrive and contribute to the success of our organization.

Compensation & Benefits

Park's family-first benefits package showcases our value of supporting what matters most to our associates.

Our investment in family, life/work balance, health and wellbeing, and financial security fuels the lives our associates want to build for themselves and those they love.

Our compensation program includes market-aligned salary grades, an annual incentive compensation program for eligible associates, referral and rewards incentive programs available to associates based on job function, a long-term incentive plan ("LTIP") for select associates, and premium pay for associates working extended hours.

Park offers comprehensive benefit options to encourage and support associates to live healthy and financially secure lives.

Available benefits include an employee stock ownership plan ("KSOP") with a company matching contribution, a defined benefit pension plan, health and life insurance, dependent care assistance, a health flexible spending plan, a long-term disability plan, paid time off, tuition reimbursement for qualified schooling and an employee assistance program.

As part of our strategic plan, we are conducting a comprehensive review of all associate benefits.

The first phase of this review, covering paid time off ("PTO") and the pension plan, was completed in 2022.

In 2023, the focus was on the health plan and flexible spending account ("FSA") benefits, including medical, dental, vision, COBRA, health and dependent care FSAs.

Enhancements to these benefits, including new administration, took effect January 1, 2024 and better position us to attract and retain associates.

The Park National Bank’s ("Park National Bank's" or "PNB's") commitment to fostering a sense of belonging among its employees is integral to cultivating a workplace environment that promotes diversity, equity, and inclusion.

By actively prioritizing inclusivity through training like PNB's Outward Inclusion and Outward Mindset programs, Park creates a space where individuals from diverse backgrounds feel valued and accepted.

This sense of belonging goes beyond mere representation and is rooted in the company's dedication to understanding and embracing the unique perspectives, experiences, and contributions of each employee.

When employees feel a genuine connection to their workplace, it not only enhances their job satisfaction but also encourages them to bring their authentic selves to work.

This authenticity, in turn, catalyzes a positive feedback loop, fostering an atmosphere that celebrates differences and encourages open dialogue, which generates creative solutions and out-of-the-box ideas.

In essence, a strong sense of belonging serves as the cornerstone for a more profound and lasting impact on diversity, equity, and inclusion within the organizational framework.

Belonging is a thread that Bank is weaving into every touchpoint of the employee life cycle and throughout what the bank calls, “Moments that Matter,” which embody key professional and personal moments such as new hire luncheons, work anniversary milestones, and baby and sympathy announcements.

Park's benefits package is designed to support what matters most to associates, including by investment in family, life/work balance, health and wellbeing, and financial security.

Park’s compensation program includes market-aligned salary grades, an annual incentive compensation program for eligible associates, referral and rewards incentive programs available to associates based on job function, a long-term incentive plan ("LTIP") for select associates, and premium pay for associates working extended hours.

Available benefits also include an employee stock ownership plan ("KSOP") with a company matching contribution, defined benefit pension plan, health and life insurance, dependent care assistance, health flexible spending plan, long-term disability plan, paid time off, tuition reimbursement for qualified schooling, and an employee assistance program.

Employee Culture & Retention

Park associates are united by a spirit of empathy and compassion and a genuine desire to serve others, whether customers, communities or colleagues.

Associates value an environment where they can grow personally and professionally.

We believe that is why so many choose to build a career and stay with Park.

Our voluntary turnover was 14.9% for 2023.

As of December 31, 2023, 87% of our associates were shareholders through participation in our KSOP, under which we provide a discretionary 50% match for each associate’s regular contribution.

At Park, we pride ourselves on fostering a listening culture and regularly ask our associates to participate in an employee engagement survey so that we can better understand their perspective on all aspects of working for Park and take action on any areas of concern.

We also benchmark this survey against other financial institutions.

We are proud that 80% of our associates participated, and that our engagement survey scores were higher in 2023 than our previous survey in 2021, and we met or exceeded the industry benchmark in each of the eight metrics measured.

Our associate tenure reflects the effect of our efforts.

By the end of 2023, 35% of our associates had been with our organization 10 years or more.

Park associates are driven by empathy, compassion, and a genuine desire to serve customers, communities, and colleagues.

They value an environment for personal and professional growth, which is why many choose long-term careers with Park.

In 2024, Park's voluntary turnover was 14.3%.

By the end of the year, 89% of Park associates were shareholders through the organization’s KSOP, which includes a discretionary 50% match for each associate’s regular contribution.

Park fosters a listening culture by regularly conducting employee engagement surveys to understand associate perspectives and address concerns.

In 2024, 81.7% of our associates participated.

Park’s commitment to associate retention is evident in the organization’s tenure statistics:

34% of our associates had been with our organization 10 years or more.

Banking Operations

Park’s banking operations are conducted through Park National Bank, a national banking association.

Park National Bank engages in the commercial banking and trust business, generally in small and medium population areas in Ohio, North Carolina and South Carolina communities in addition to operations within the metropolitan areas of Columbus and Cincinnati, Ohio;

Charlotte, North Carolina;

and Louisville, Kentucky.

As of the date of this Annual Report on Form 10-K, Park National Bank operated 96 financial service offices, including 91 branches, in Ohio, Kentucky, North Carolina and South Carolina.

Park National Bank delivers financial products and services through its 96 financial service offices and a network of 115 automated teller machines, as well as telephone and internet-based banking through both personal computers and mobile devices, including ParkDirect, a mobile bank experience.

Park National Bank engages in the commercial banking, consumer banking, and wealth management, including trust and investment services.

Geographically, Park is focused on small and medium population areas in Ohio, North Carolina, South Carolina, and the metropolitan areas of Columbus, Cincinnati, Charlotte, and Louisville.

As of December 31, 2024, Park National Bank operated 87 financial service offices, including 82 branches, in Ohio, Kentucky, North Carolina and South Carolina.

Park National Bank delivers financial products and services through its 87 financial service offices and a network of 107 automated teller machines, as well as telephone and internet-based banking by computer or mobile device, including with ParkDirect, a Park National Bank-tailored mobile banking application for Park customers.

There is one reportable segment for the Corporation.

Consumer Finance Subsidiary

Guardian Finance, an Ohio consumer finance company, operates as a separate subsidiary of Park.

Guardian Finance formerly provided consumer finance services in the central Ohio area.

As of the date of this Annual Report on Form 10-K, Guardian Finance had one administrative office in Licking County, Ohio.

During 2019, Guardian Finance stopped seeking new loans.

At December 31, 2023, Guardian Finance loans outstanding totaled $101,000.

Guardian Finance Service Company (“Guardian Finance”), an Ohio corporation and subsidiary of Park, provided consumer finance services in central Ohio, and is currently engaged solely in servicing the entity’s outstanding loans.

In 2019, Guardian Finance ceased issuing new loans.

As of December 31, 2024, Guardian Finance had $88,000 in outstanding loans and one administrative office in Licking County, Ohio.

SE Property Holdings, LLC ("SEPH")

SEPH is a limited liability company, organized in 2011 under the laws of the State of Ohio, and a direct subsidiary of Park.

The initial purpose of SEPH was to purchase other real estate owned (“OREO”) from Vision Bank, a bank subsidiary of Park until February 16, 2012, and continue to market such properties for sale.

By letter dated January 30, 2012, the Federal Reserve Board authorized Park to engage in the business of extending credit through SEPH.

As a result, SEPH is permitted to engage in lending activities and was able to succeed to the rights and obligations of Vision Bank in respect of the loans held by Vision Bank when Vision Bank merged into SEPH on February 16, 2012 (the "Vision Bank-SEPH Merger").

SEPH has operations in Ohio, with the sole purpose of such operations being to sell OREO in an effective and efficient manner and work out or sell problem loan situations with the respective borrowers.

SEPH, an Ohio limited liability company and Park subsidiary, was organized in 2011 to purchase and sell OREO from Vision Bank.

Based on authorization from the Federal Reserve Board, SEPH is permitted to engage in lending activities and succeeded to the lending rights and obligations of Vision Bank when Vision Bank merged into SEPH on February 16, 2012 (the "Vision Bank-SEPH Merger").

SEPH operates in Ohio and other states in which Vision Bank originated loans, focused on selling OREO and resolving problem loans.

Scope Leasing, Inc.

(which does business as “Scope Aircraft Finance”), a subsidiary of Park National Bank, specializes in aircraft financing.

The customers of Scope Aircraft Finance include small businesses and entrepreneurs who utilize the aircraft for business or pleasure.

(doing business as “Scope Aircraft Finance”), an Ohio corporation, is a subsidiary of Park National Bank specializing in aircraft financing.

Customers of Scope Aircraft Finance include primarily small businesses and entrepreneurs who utilize aircraft for business or pleasure.

Scope Aircraft Finance serves customers throughout the U.S.

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In connection with the merger of Vision Bancshares, Inc.

(“Vision”) into Park in March of 2007 (the “Vision Merger”), Park became the successor to Vision under (i) the Junior Subordinated Indenture, dated as of December 5, 2005 (the “Indenture”), pursuant to which Vision issued $15.5 million of junior subordinated notes to Vision Bancshares Trust I, a Delaware statutory trust (the “Vision Trust”).

(“Vision”) into Park in March of 2007 (the “Vision Merger”), Park became the successor to Vision under the Junior Subordinated Indenture, dated as of December 5, 2005 (the “Indenture”), pursuant to which Vision issued $15.5 million of junior subordinated notes to Vision Bancshares Trust I, a Delaware statutory trust (the “Vision Trust”).

The junior subordinated notes were issued by Vision in connection with the sale by the Vision Trust of $15.0 million of floating rate preferred securities to institutional investors on December 5, 2005.

Park also became the successor to Vision in (i) the Amended and Restated Trust Agreement of the Vision Trust, dated as of December 5, 2005 (the “Trust Agreement”), and (ii) the Guarantee Agreement, dated as of December 5, 2005 (the “Guarantee Agreement”).

Through these contractual obligations, Park has fully and unconditionally guaranteed all of the Vision Trust’s obligations with respect to the floating rate preferred securities.

Both the junior subordinated notes and the floating rate preferred securities mature on December 30, 2035 (which maturity may be shortened), and carried a floating interest rate per annum, reset quarterly, equal to the sum of three-month LIBOR plus 148 basis points until the cessation of LIBOR on June 30, 2023.

Since July 1, 2023, they carry a floating rate based on three-month CME Term SOFR plus 174 basis points.

Through these contractual obligations, Park has fully and unconditionally guaranteed all the Vision Trust’s obligations with respect to the floating rate preferred securities.

Both the junior subordinated notes and the floating rate preferred securities mature on December 30, 2035 (which maturity may be shortened), and, since July 1, 2023, carry a floating rate based on three-month CME Term SOFR plus 174 basis points.

Payment of interest on the junior subordinated notes, and payment of cash distributions on the floating rate preferred securities, may be deferred at any time or from time to time for a period not to exceed 20 consecutive quarters, subject to specified conditions.

Under the terms of the Indenture and the related Guarantee Agreement, Park, as successor to Vision, is prohibited, subject to limited exceptions, from declaring or paying dividends or distributions on, or redeeming, repurchasing, acquiring or making any liquidation payments with respect to, any shares of Park’s capital stock (i) if an event of default under the Indenture has occurred and continues;

Under the terms of the Indenture and Guarantee Agreement, Park, as successor to Vision, is prohibited, subject to limited exceptions, from declaring or paying dividends or distributions on, or redeeming, repurchasing, acquiring or making any liquidation payments with respect to, any shares of Park’s capital stock:

(i) if an event of default under the Indenture has occurred and continues;

(ii) if Park is in default with respect to the payment of any obligations under the Guarantee Agreement;

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Park Investments, Inc.

("PII"), which is a subsidiary of Park National Bank, operates as an asset management company.

("PII"), a subsidiary of Park National Bank, operates as an asset management company.

Commencing in 2015, Park began purchasing and holding municipal bonds within PII.

As of December 31, 2024, PII held municipal securities with an amortized cost of $203.4 million.

River Park Properties, LLC;

Park ABQ, LLC;

and X Holdings, LLC are subsidiaries of Park National Bank that hold certain OREO properties or other nonperforming assets.

X Holdings, LLC;

and X Holdings Nevada, LLC are subsidiaries of Park National Bank that hold certain OREO properties or other nonperforming assets.

The operations of these subsidiaries are not significant to the consolidated Park entity.

River Park Properties, LLC and Park ABQ, LLC, former subsidiaries of Park National Bank that held certain OREO properties or other nonperforming assets, were dissolved in 2024, as the entities were no longer engaged in business.

87A Orange Beach, LLC;

Morningside Holding, LLC;

Swindall Holdings, LLC;

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Farm Holdings, LLC;

Marina Holdings Z, LLC;

Marina Holding WE, LLC;

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The operations of these subsidiaries are not significant to the consolidated Park entity.

Morningside Holding, LLC and Marina Holdings Z, LLC, former subsidiaries of SEPH that held certain OREO properties or other nonperforming assets, were dissolved in 2024, as the entities were no longer engaged in business.

Services Provided by Park’s Subsidiaries

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• a national portfolio of loans to non-bank consumer finance companies;

• trust and wealth management services;

• wealth management, including trust and investment services;

• aircraft financing;

• cash management;

• commercial cash management;

• safe deposit operations;

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• ParkDirect, a personal banking app.

Park believes that the deposit mix of Park National Bank is currently such that no material portion has been obtained from a single customer and, consequently, the loss of any one customer of Park National Bank would not have a materially adverse effect on the business of Park National Bank.

Park believes that Park National Bank's current deposit mix is diverse enough that the loss of any single customer would not significantly impact Park National Bank's business.

Lending Activities

Park National Bank deals with consumers and a wide cross-section of businesses and corporations located primarily in the 26 Ohio counties, one Kentucky county, four North Carolina counties and four South Carolina counties served by the financial service offices of Park National Bank.

At December 31, 2023, Park National Bank had no concentration of loans to borrowers engaged in the same or similar industries that exceeded 10% of total loans nor did it have any loans outstanding to persons domiciled outside the U.S.

As a result of the Vision Bank-SEPH Merger, SEPH holds loans originated by Vision Bank previously serviced by the financial service offices of Vision Bank.

It is expected that SEPH will originate loans only to further the collection efforts with respect to the loans transferred to SEPH by operation of law as a result of the Vision Bank-SEPH Merger.

Park National Bank deals with consumers and businesses primarily in the 24 Ohio counties, one Kentucky county, five North Carolina counties and four South Carolina counties where Park National Bank has office locations.

SEPH, through the Vision Bank-SEPH Merger, manages loans formerly serviced by Vision Bank, with minimal new origination expected.

Such origination (or modification) volume has been and is expected to continue to be insignificant to the consolidated Park entity.

Park National Bank makes lending decisions in accordance with the written loan policies adopted by Park, which are designed to maintain acceptable loan quality.

Park National Bank originates and retains for its own portfolio commercial and commercial real estate loans, commercial leases, residential real estate loans, home equity lines of credit, and installment loans.

Park National Bank also originates fixed-rate residential real estate loans for sale to the secondary market.

There are certain risks inherent in making loans.

These risks include changes in the credit worthiness of borrowers over the time period in which loans may be repaid, interest rate changes over the time period in which loans may be repaid, risks resulting from changes in the national and local economies, risks inherent in dealing with borrowers and, in the case of loans secured by collateral, risks resulting from uncertainties about the future value of the collateral.

To maintain acceptable loan quality, loan decisions are made to align with Park’s written policies and procedures.

Park National Bank retains commercial and commercial real estate loans, commercial leases, residential real estate loans, home equity lines of credit, and installment loans for its portfolio, and also sells fixed-rate residential real estate loans to the secondary market.

Park National Bank acknowledges there are certain risks inherent in making loans.

These risks include borrower credit changes, interest rate fluctuations, economic shifts, borrower reliability, and potential changes in collateral value.

Commercial Loans

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The commercial loan portfolio of Park’s current subsidiaries includes loans to a wide variety of corporations and businesses across many industrial classifications in the counties where Park National Bank operates, with the exception of nationwide aircraft loans and nationwide asset-based lending to consumer finance companies.

The primary industries represented by these customers include real estate rental and leasing, finance and insurance, construction, accommodation and food services, health care and social assistance, other services, manufacturing, retail trade, agriculture, forestry, fishing and hunting, and professional, scientific, and technical services.

The primary industries represented by these customers include real estate rental and leasing;

construction;

finance and insurance;

accommodation and food services;

other services (except public administration);

health care and social assistance;

manufacturing;

retail trade;

agriculture, forestry, fishing and hunting;

and professional, scientific, and technical services.

Commercial loans are evaluated for the adequacy of repayment sources at the time of approval and are regularly reviewed for any possible deterioration in the ability of the borrower to repay the loan.

The credit information required

generally includes, depending on the amount of money lent, financial statements, third-party prepared financial statements, two years of federal income tax returns and a current credit report.

The credit information required generally includes, depending on the amount of money lent, financial statements, two years of federal income tax returns and a current credit report.

Loan terms include amortization schedules commensurate with the purpose of each loan, identification of the source of each repayment and the risk involved.

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CRE loans made for Park National Bank’s portfolio generally have a variable interest rate.

For more information concerning the loan maturity distribution in the CRE loan portfolio, please see "Table 8 - Loan Maturity Distribution" included in "ITEM 7.

For more information concerning the loan maturity distribution in the CRE loan portfolio, please see "Table 8 - Loan Maturity Distribution" included

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" of this Annual Report on Form 10-K.

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While Park National Bank has a loan limit of $161.4 million, the total exposure of the largest single borrower within the commercial portfolio was $75.0 million at December 31, 2024.

Park has an independent, internal loan review program which annually evaluates all commercial loan relationships greater than $1.0 million, all new commercial loans greater than $1.0 million in its metropolitan markets of Columbus, Ohio;

Park has an independent, internal loan review program which annually evaluates all commercial loan relationships equal to or greater than $1.0 million, all new commercial loans equal to or greater than $1.0 million in its metropolitan markets of Columbus, Ohio;

Cincinnati, Ohio;

Louisville, Kentucky;

and Charlotte, North Carolina, all new commercial loans greater than $500,000 in all other markets, and a risk-based sample of commercial relationships less than $1.0 million.

Charlotte, North Carolina;

and within its loans to non-bank consumer finance companies and aircraft financing sectors, all new commercial loans equal to or greater than $500,000 in all other markets, and a risk-based sample of commercial relationships less than $1.0 million.

If a loan has deteriorated, Park takes prompt action designed to increase the likelihood that it will be repaid.

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This is a national lending unit of Park National Bank.

These asset-based loans are collateralized by cash flows from

individuals, typically auto loans issued by a consumer finance company that is, in turn, a borrower from Park National Bank.

These asset-based loans are collateralized by cash flows from individuals, typically auto loans issued by a consumer finance company that is, in turn, a borrower from Park National Bank.

These loans typically present a higher level of risk due to the underlying collateral and such risks are mitigated by more conservative underwriting and an intensive loan monitoring regimen commensurate with asset-based lending.

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At December 31, 2024, of the $1,910 million in consumer loans, $1,719 million were originated through indirect lending, while the remaining $191 million were considered direct loans.

At December 31, 2023, GFSC had no consumer loans with outstanding balances.

Credit approval for direct and indirect consumer loans requires income sufficient to repay principal and interest due, stability of employment, an established credit record and sufficient collateral for secured loans.

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Park’s management may decide to retain certain 15-year, fixed-rate residential mortgage loans, rather than sell in the secondary market.

Park's management made a decision to retain certain 15-year, fixed-rate residential mortgage loans in 2023.

At December 31, 2024 and 2023, Park reported $586 million and $551 million, respectively, of 15-year, fixed-rate residential mortgage loans on Park's Consolidated Balance Sheets.

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The SEPH employees work with a third-party work-out specialist to ensure effective and efficient resolution to the non-performing loans and OREO, while working closely with the borrowers of the loans to maximize collection efforts.

Park expects that the OREO will reduce over time and result in cash inflow to Park.

The financial services industry is highly competitive.

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The primary factors in competing for loans are the terms of the loan, interest rates charged and overall services provided to borrowers.

The primary factors in competing for deposits are interest rates paid on deposits, account liquidity, convenience and hours of office locations, convenience and availability of mobile banking options, and accessibility to trained and competent staff.

The primary factors in competing for deposits are interest rates paid on deposits, account liquidity,

convenience and hours of office locations, convenience and availability of mobile banking options, and accessibility to trained and competent staff.

Competitors of Park may have greater resources and, as such, additional technology offerings and higher lending limits, which may adversely affect the ability of Park to compete.

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Currently, the OCC is primarily responsible for examining Park National Bank’s compliance with the CFPB regulations and federal consumer financial protection laws.

However, should Park’s total consolidated assets exceed $10.0 billion for four consecutive quarters, the CFPB will become primarily responsible for examining Park National Bank’s compliance with such laws and regulations.

Federal Deposit Insurance

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The DRR reached 1.35% on September 30, 2018.

As a result, the previous surcharge imposed on banks with assets of $10.0 billion or more was

As a result, the previous surcharge imposed on banks with assets of $10.0 billion or more was lifted.

In addition, preliminary assessment credits were determined by the FDIC for banks with assets of less than $10 billion for the portion of their assessments that contributed to the increase of the DRR to 1.35%.

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The FDIC rules further changed the method of determining risk-based assessment rates for established banks with less than $10.0 billion in assets to better ensure that banks taking on greater risks pay more for deposit insurance than banks that take on less risk.

In the event Park’s total consolidated assets exceed $10.0 billion for four consecutive quarters, Park National Bank will become subject to the FDIC’s large bank pricing methodology, which may result in a different, and potentially higher, assessment rate.

In the event Park’s total consolidated assets exceed $10.0 billion for four consecutive quarters, Park National

Bank will become subject to the FDIC’s large bank pricing methodology, which may result in a different, and potentially higher, assessment rate.

Federal Home Loan Bank

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The federal banking agencies have established a system of prompt corrective action to resolve certain of the problems of undercapitalized depository institutions.

This system is based on five capital level categories for insured depository

institutions:

This system is based on five capital level categories for insured depository institutions:

“well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.”

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For example, a bank that is not “well capitalized” generally is prohibited from accepting brokered deposits and offering interest rates on deposits higher than the prevailing rate in its market, and the holding company of any undercapitalized depository institution must guarantee, in part, specific aspects of the bank’s capital plan for the plan to be acceptable.

In order to be “well-capitalized,” a bank must have a common equity tier 1 capital ratio of at least 6.5%, a total risk-based capital of at least 10.0%, a tier 1 risk-based capital ratio of at least 8.0% and a leverage ratio of at least 5.0%, and the bank must not be subject to any written agreement, order, capital directive or prompt corrective action directive to meet and maintain a specific capital level for any capital measure.

maintain a specific capital level for any capital measure.

Park’s management believes that Park National Bank meets the ratio requirements to be deemed “well-capitalized” according to the guidelines described above.

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Park is subject to contractual restrictions on the declaration and payment of dividends under the terms of certain of Park's debt instruments.

Under the terms of the Indenture governing the $15.5 million of junior subordinated notes issued by Vision to the Vision Trust and the related Guarantee Agreement, Park, as successor to Vision in accordance with the First Supplemental Indenture, is prohibited, subject to limited exceptions, from declaring or paying any dividends or distributions on any shares of its capital stock:

Indenture, is prohibited, subject to limited exceptions, from declaring or paying any dividends or distributions on any shares of its capital stock:

(i) if an event of default under the Indenture has occurred and continues;

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In addition, the Volcker Rule prohibited a banking entity from having an ownership interest in, or certain relationships with, a hedge fund or private equity fund, also known as “covered funds,” subject to a number of exceptions.

In July 2019, the federal bank regulatory agencies that adopted the Volcker Rule adopted a final rule to exempt certain community banks, including Park National Bank, from such rule consistent with the Regulatory Relief Act.

Under the final rule, community banks with $10.0 billion or less in total consolidated assets and total trading assets and liabilities of 5.0% or less of total consolidated assets were excluded from the restrictions of the Volcker Rule.

Community banks with $10.0 billion or less in total consolidated assets and total trading assets and liabilities of 5.0% or less of total consolidated assets were excluded from the restrictions of the Volcker Rule.

However, in the event Park’s total consolidated assets exceed $10.0 billion for four consecutive quarters, Park National Bank will become subject to the Volcker Rule.

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Federal and state regulations limit the ability of banks and other financial institutions to disclose non-public information about consumers to non-affiliated third parties.

These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a non-

affiliated third party.

These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a non-affiliated third party.

These regulations affect how consumer information is transmitted through diversified financial companies and is conveyed to outside vendors.

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One statement indicates that financial institutions should design multiple layers of security controls to establish several lines of defense and to ensure that their risk management processes also address the risk posed by compromised customer credentials, including security measures to reliably authenticate customers accessing internet-based services of the financial institution.

The other statement indicates that a financial institution’s management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, resumption and maintenance of the financial institution’s operations after a cybersecurity attack involving destructive malware.

The other statement indicates that a financial institution’s management is expected to maintain sufficient business continuity planning processes to ensure the

rapid recovery, resumption and maintenance of the financial institution’s operations after a cybersecurity attack involving destructive malware.

A financial institution is also expected to develop appropriate processes to enable recovery of data and business operations and address rebuilding network capabilities and restoring data if the financial institution or its critical service providers fall victim to this type of cybersecurity attack.

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Park employs an in-depth, layered, defensive approach that leverages people, processes, encryption and multi-factor authentication technology to manage and maintain cybersecurity controls.

Park employs a variety of preventative and detective tools to monitor, block and provide alerts regarding suspicious activity, as well as to report on any

suspected advanced persistent threats.

Park employs a variety of preventative and detective tools to monitor, block and provide alerts regarding suspicious activity, as well as to report on any suspected advanced persistent threats.

Notwithstanding the strength of Park’s defensive measures, the threat from cybersecurity attacks is severe, attacks are sophisticated and increasing in volume, and attackers respond rapidly to changes in defensive measures.

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The Patriot Act gives the U.S.

government powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing and broadened anti-money laundering requirements.

government powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased

information sharing and broadened anti-money laundering requirements.

Title III of the Patriot Act encourages information sharing among bank regulatory agencies and law enforcement bodies.

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The applicability date for the majority of the changes to the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027.

The impact the changes to the CRA will have on Park National Bank’s operations cannot be predicted at this time.

The impact the changes to the CRA will have on Park National Bank’s operations cannot be predicted at this time, but is being evaluated.

Corporate Governance

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The Dodd-Frank Act requires that the federal bank regulatory agencies, including the Federal Reserve Board and the OCC, establish joint regulations or guidelines related to incentive-based compensation.

No final rule implementing this provision of the Dodd-Frank Act has, as of the date of the filing of this Annual Report on Form 10-K, been adopted, but a proposed rule was published in 2016 that expanded upon a prior proposed rule published in 2011.

No final rule implementing this provision of the Dodd-Frank Act has, as of the date of the filing of this Annual Report on Form 10-K, been adopted, but a proposed rule was published in 2016, and again in 2024, that expanded upon a prior proposed rule published in 2011.

The proposed rule is intended to:

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The bank regulators also use their authority under the Federal Trade Commission Act to take supervisory or enforcement action with respect to unfair or deceptive acts or practices by banks that may not necessarily fall within the scope of a specific banking or consumer finance law.

In October 2017, the OCC rescinded its guidance on deposit advance products in light of the CFPB’s pending small dollar loan rule related to payday, vehicle title and certain high cost installment loans that was issued in November 2013 (the “Small Dollar Rule”).

The Small Dollar Rule, however, has been the subject of further regulatory review and a court order staying compliance in connection with a legal challenge.

The CFPB issued its final Small Dollar Rule on July 22, 2020, which became fully effective on October 20, 2020.

Specifically, the CFPB revoked provisions that:

(i) provide that it is an unfair and abusive practice for a lender to make a covered short-term or longer term balloon-payment loan, including payday and vehicle title loans, without reasonably determining that consumers have the ability to repay those loans according to their terms;

(ii) prescribe mandatory underwriting requirements for making the ability-to-repay determination;

(iii) exempt certain loans from the mandatory underwriting requirements;

and (iv) establish related definitions, reporting, and recordkeeping requirements.

However, due to continuing appellate litigation regarding the constitutionality of the CPFB’s funding structure, which stems, in part, from legal challenges to the Small Dollar Rule, the effective date for nationwide compliance with the Small Dollar Rule remains uncertain at this time

Separately, in May 2018, the OCC published guidance that encourages national banks and federal savings associations to offer responsible short-term, small-dollar installment loans with terms between two and twelve months and equal amortizing payments.

Pursuant to the OCC’s guidance on this issue, banks are encouraged to offer these products in a manner that is consistent with sound risk management principles and clear, documented underwriting guidelines.

Further, the federal bank regulatory agencies issued interagency guidance on May 20, 2020, to encourage banks, savings associations, and credit unions to offer responsible small-dollar loans to customers for consumer and small business purposes.

As of the date of the filing of this Annual Report on Form 10-K, Park National Bank has not decided to offer such products, although this position may change as Park National Bank refines its business plan in the future.

As a consumer finance company incorporated under Ohio law, Guardian Finance is subject to regulation and supervision by the ODFI.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business