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Item 7. Management’s Discussion and Analysis

2025-02-24 compared with 2024-02-23 · 299 added, 307 removed, 914 unchanged (40% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

FORWARD-LOOKING STATEMENTS

Management's discussion and analysis addresses the financial condition and results of operations for Park National Corporation and our subsidiaries (unless the context otherwise requires, collectively, "Park" or the "Corporation").

This discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.

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:

• Park's ability to execute our business plan successfully and within the expected timeframe as well as our ability to manage strategic initiatives;

• current and future economic and financial market conditions, either nationally or in the states in which Park and our subsidiaries do business, that may reflect deterioration in business and economic conditions, including the effects of higher unemployment rates or labor shortages, the impact of persistent inflation, the impact of continued elevated interest rates, changes in the economy or global supply chain, supply-demand imbalances affecting local real estate prices, U.S.

fiscal debt, budget and tax matters, geopolitical matters (including the impact of the Russia-Ukraine conflict and associated sanctions and export controls as well as the Israel-Hamas conflict), and any slowdown in global economic growth, 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;

• the effect of monetary and other fiscal policies (including the impact of money supply, ongoing increasing 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, 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 net 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, government shutdown, 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 behaviors, changes in business and economic conditions, legislative and regulatory initiatives, or other factors may be different than anticipated;

• 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 inflationary pressures and continued elevated interest rates;

• 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;

• Park's ability to meet heightened supervisory requirements and expectations;

• the effect of changes in accounting policies and practices, as may be adopted by the Financial Accounting Standards Board, the SEC, the Public Company Accounting Oversight Board and other regulatory agencies, 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 which may prove unreliable, inaccurate or not predictive of actual results;

• the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions;

• Park's ability to anticipate and respond to technological changes and Park's reliance on, and the potential failure of, a number of third-party vendors to perform as expected, including Park's primary core banking system provider, which can impact 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;

• Park's 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 the adequacy of Park's intellectual property protection in general;

• the existence or exacerbation of general geopolitical instability and uncertainty 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, the costs and effects of unfavorable resolution of regulatory and other governmental examinations or other inquiries, and liabilities and business restrictions resulting from litigation and regulatory investigations;

• 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 and the Israel-Hamas conflict) on the economy and financial markets generally and on us or our counterparties specifically;

• the potential further deterioration of the U.S.

economy due to financial, political, or other shocks;

• the effect of healthcare laws in the U.S.

and potential changes for such laws which may increase our healthcare and other costs and negatively impact our operations and financial results;

• the impact of larger or similar-sized financial institutions encountering problems which may adversely affect the banking industry and/or Park's business generation and retention, funding and liquidity, including potential increased regulatory requirements and increased reputational risk and potential impacts to macroeconomic conditions;

• Park's continued ability to grow deposits or maintain adequate deposit levels due to changing customer behaviors;

• unexpected outflows of deposits which may require Park to sell assets at a loss;

• 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 this Annual Report on Form 10-K.

Park does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement was made, or reflect the occurrence of unanticipated events, except to the extent required by law.

GAAP FINANCIAL MEASURES

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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.

GAAP financial measures, as well as the reconciliation from the comparable U.S.

GAAP financial measures, can be found herein.

Items Impacting Comparability of Period Results

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Specifically, management reviews the return on average tangible equity, the return on average tangible assets, the tangible equity to tangible assets ratio, and pre-tax, pre-provision net income ("PTPP").

Management has included in this Management's Discussion and Analysis of Financial Condition and Results of Operation, information relating to the return on average tangible equity, the return on average tangible assets, the tangible equity to tangible assets ratio, and pre-tax, pre-provision net income for the years ended December 31, 2023 and December 31, 2022.

For the purpose of calculating the return on average tangible equity, a non-GAAP financial measure, net income for each period is

divided by average tangible equity during the period.

Management has included in this Management's Discussion and Analysis of Financial Condition and Results of Operation, information relating to the return on average tangible equity, the return on average tangible assets, the tangible equity to tangible assets ratio,and pre-tax, pre-provision net income for the years ended December 31, 2024, December 31, 2023, and December 31, 2022.

For the purpose of calculating the 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.

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Tangible assets equal total assets less goodwill and other intangible assets, 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.

For the purpose of calculating pre-tax, pre-provision net income, a non-GAAP financial measure, income taxes and the provision for credit losses are added back to net income, in each case during the applicable period.

Management believes that the disclosure of the return on average tangible equity, the return on average tangible assets, the tangible equity to tangible assets ratio, 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 "ANALYSIS OF EARNINGS - Items Impacting Comparability" section of this Management's Discussion and Analysis of Financial Condition and Results of Operations, Park has provided a reconciliation of average tangible equity from average shareholders' equity, average tangible assets from average assets, tangible equity from total shareholders' equity, tangible assets from total assets, and pre-tax, pre-provision net income from net income solely for the purpose of complying with SEC Regulation G and not as an indication that the return on average tangible equity, the return on average tangible assets, the tangible equity to tangible assets ratio, and pre-provision net income are substitutes for the return on average equity, the return on average assets, the total shareholders' equity to total assets ratio, and net income, respectively, as determined 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 "ANALYSIS OF EARNINGS - Items Impacting Comparability" section of this Management's Discussion and Analysis of Financial Condition and Results of Operations, Park has provided a reconciliation of average tangible equity from average shareholders' equity, average tangible assets from average assets, tangible equity from total shareholders' equity, tangible assets from total assets, and pre-tax, pre-provision net income from net income solely for the purpose of complying with SEC Regulation G and not as an indication that the return on average tangible equity, the return on average tangible assets, the tangible equity to tangible assets ratio, and pre-tax, pre-provision net income are substitutes for the return on average equity, the return on average assets, the total shareholders' equity to total assets ratio, and net income, respectively, as determined in accordance with U.S.

FTE (fully taxable equivalent) Financial Measures

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Net interest income $ 398,019 $ 373,113 $ 347,059

Provision for (recovery of) credit losses 2,904 4,557 (11,916)

Provision for credit losses 14,543 2,904 4,557

Other income 122,588 92,634 135,935

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$ 199,268 $ 156,508 $ 185,016

(1) PTPP net income is calculated as net income, plus income taxes, plus the provision for (recovery of) credit losses, in each case during the applicable period.

Net income for the year ended December 31, 2023 of $126.7 million represented a $21.6 million, or 14.6%, decrease compared to $148.4 million for the year ended December 31, 2022.

(1) PTPP net income is calculated as net income, plus income taxes, plus the provision for credit losses, in each case during the applicable period.

Net income for the year ended December 31, 2024 of $151.4 million represented a $24.7 million, or 19.5%, increase compared to $126.7 million for the year ended December 31, 2023.

Net income for the year ended December 31, 2023 of $126.7 million represented a $21.6 million, or 14.6%, decrease compared to $148.4 million for the year ended December 31, 2022.

Pre-tax, pre-provision net income (non-U.S.

GAAP) for the year ended December 31, 2023 of $156.5 million represented a $28.5 million, or 15.4%, decrease compared to $185.0 million for the year ended December 31, 2022.

Pre-tax, pre-provision net income for the year ended December 31, 2022 of $185.0 million represented a $8.7 million, or 4.9%, increase compared to $176.3 million for the year ended December 31, 2021.

GAAP) for the year ended December 31, 2024 of $199.3 million represented a $42.8 million, or 27.3%, increase compared to $156.5 million for the year ended December 31, 2023.

Pre-tax, pre-provision net income for the year ended December 31, 2023 of $156.5 million represented a $28.5 million, or 15.4%, decrease compared to $185.0 million for the year ended December 31, 2022.

Highlights from the years ended December 31, 2024, 2023, and 2022 included:

• During the year ended December 31, 2024, Park recognized a $6.1 million pension settlement gain due to a combination of lump sum payouts as well as the purchase of a nonparticipating annuity contract which will provide ongoing benefits to vested and retired participants.

There was no pension settlement gain recognized during the years ended December 31, 2023 and December 31, 2022.

• Park completed a series of debt security sale trades in November 2023, selling an aggregate of $291.0 million in available-for-sale ("AFS") debt securities with a net pre-tax loss of $7.9 million for the year ended December 31, 2023.

Among the various objectives of the trade, the liquidity generated from the sale was used to reduce borrowing needs and improve the overall net interest margin.

No gain or loss on the sale of debt securities was recorded in the years ended December 31, 2022 or December 31, 2021.

• Net interest income for the year ended December 31, 2023 of $373.1 million represented a $26.1 million, or 7.5%, increase compared to $347.1 million for the year ended December 31, 2022.

Net interest income for the year ended December 31, 2022 of $347.1 million represented a $17.2 million, or 5.2%, increase compared to $329.9 million for the year ended December 31, 2021.

◦ During the year ended December 31, 2023, Park recorded interest income of $69,000 related to PPP loans, compared to $3.1 million for the year ended December 31, 2022 and $18.0 million for the year ended December 31, 2021.

• Park recognized a $5.6 million gain on the sale of OREO, net, during the year ended December 31, 2022 related to former Vision Bank relationships.

There was no gain on the sale of OREO, net, related to former Vision Bank relationships during the years ended December 31, 2023 or December 31, 2021.

• Park recognized a $12.0 million OREO valuation markup during the year ended December 31, 2022 related to the foreclosure and subsequent sale of a property collateralizing a former Vision Bank relationship compared to $46,000 for the year ended December 31, 2023.

Among the various objectives of the trade, the liquidity generated from the sale was used to reduce borrowing needs

and improve the overall net interest margin.

A net loss on sale of debt securities of $526,000 was recognized during the year ended December 31, 2024.

No gain or loss on the sale of debt securities was recorded in the year ended December 31, 2022.

• During the years ended December 31, 2024 and 2022, Park recognized $115,000 and $5.6 million, respectively, in net gains on the sale of OREO related to former Vision Bank relationships.

There was no gain on the sale of OREO, net, related to former Vision Bank relationships during the year ended December 31, 2023.

• During the years ended December 31, 2023 and 2022, Park recognized $46,000 and $12.0 million, respectively, in OREO valuation markups related to the foreclosure and subsequent sale of properties collateralizing former Vision Bank relationships.

There was no OREO valuation markup related to former Vision Bank relationships during the year ended December 31, 2024.

• During the years ended December 31, 2023, 2022, and 2021, Park incurred $100,000, $1.8 million, and $1.4 million, respectively, in direct expenses related to the collection of payments on former Vision Bank loan relationships.

• During the year ended December 31, 2023, Park contributed $1.0 million to its charitable foundation, compared to $4.0 million for each of the years ended December 31, 2022 and December 31, 2021.

• During the years ended December 31, 2024, 2023, and 2022, Park incurred $215,000, $100,000 and $1.8 million, respectively, in direct expenses related to the collection of payments on former Vision Bank loan relationships.

• During the year ended December 31, 2024, Park contributed $2.0 million to its charitable foundation, compared to $1.0 million for the year ended December 31, 2023 and $4.0 million for the year ended December 31, 2022.

• Park's loans outstanding at December 31, 2024 increased 4.6% compared to December 31, 2023.

Park's loans outstanding at December 31, 2023 increased 4.7% compared to December 31, 2022.

• Park's loan portfolio had net loan charge-offs as a percentage of average loans of 0.07% for the year ended December 31, 2023, compared to net loan charge-offs as a percentage of average loans of 0.03% for the year ended December 31, 2022 and net loan recoveries as a percentage of average loans of 0.05% for the year ended December 31, 2021.

Net income for each of the years ended December 31, 2024, 2023 and 2022, included several items of income and expense that impacted comparability of period results.

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Management targets a dividend payout ratio of 50% each year.

The quarterly cash dividend on Park's common shares was $1.06 per share for the first, second and third quarters of 2024, and $1.56 per share for the fourth quarter of 2024.

The fourth quarter of 2024 included a one-time special cash dividend of $0.50 per share.

The quarterly cash dividend on Park's common shares was $1.05 per share for each of the quarters of 2023.

The quarterly cash dividend on Park's common shares was $1.04 per share for the first, second and third quarter of 2022, and $1.54 per share for the fourth quarter of 2022.

The quarterly cash dividend on Park's common shares was $1.04 per share for the first, second and third quarters of 2022, and $1.54 per share for the fourth quarter of 2022.

The fourth quarter of 2022 included a one-time special cash dividend of $0.50 per share.

The quarterly cash dividend on Park's common shares was $1.23 per share for the first quarter of 2021, $1.03 per share for the second and third quarter of 2021, and $1.23 per share for the fourth quarter of 2021.

The first and fourth quarters of 2021 included a one-time special cash dividend of $0.20 per share.

Please see the discussion of limitations on Park's ability to pay dividends in the section captioned "Supervision and Regulation of Park and its Subsidiaries – Limits on Dividends and Other Payments" in "ITEM 1.

BUSINESS" of this Annual Report on Form 10-K.

CRITICAL ACCOUNTING POLICIES

The significant accounting policies used in the development and presentation of Park’s consolidated financial statements are listed in "Note 1 - Summary of Significant Accounting Policies" of the Notes to Consolidated Financial Statements included in "ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA." The accounting and reporting policies of Park conform with U.S.

CRITICAL ACCOUNTING ESTIMATES

The significant accounting estimates used in the development and presentation of Park’s consolidated financial statements are listed in "Note 1 - Summary of Significant Accounting Policies" of the Notes to Consolidated Financial Statements included in "ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA." The accounting and reporting estimates of Park conform with U.S.

GAAP and general practices within the financial services industry.

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The adverse scenario assumes among other things that:

(1) Tensions with China and Taiwan increase and China briefly interrupts trade through the Taiwan Strait and that the Russian invasion lasts longer than expected.

(1) Tensions with China and Taiwan increase and China briefly interrupts trade through the Taiwan Strait and the Russian invasion lasts longer than expected.

Worries grow that the Hamas-Israel conflict will lead to a wider conflict.

(2) Due to continuing concerns about inflation, the Fed keeps the fed funds rate at the terminal range of 5.25-5.50% through the first quarter of 2024 and, as downturn persist, the Fed begins to lower rates.

(3) Europe goes into a recession.

Populism in Europe rises, raising uncertainties about the longevity of the Euro and causes financial stress to highly indebted nations, especially Italy.

(4) Risk of an extended government shutdown increases,

causing consumer and business confidence to fall.

(5) Concerns about bank failures raise fears of further collapse in the banking industry, reducing consumer confidence and causing banks to tighten lending standards.

(6) Recession occurs in the first quarter of 2024 and lasts through the third quarter of 2024.

(2) Due to continuing concerns about rising inflation, the Federal Reserve raises the federal funds rate.

However, it resumes easing in Q3 2025 as a downturn persists.

(3) Europe goes into a recession as increased tariffs lower exports.

Populism in Europe rises, raising uncertainties about longevity of the Euro and causes financial stress to highly indebted nations, especially Italy.

(4) Impacts of Trump tariffs and deportations are significantly worse than expected.

Tariffs will be levied on China, Canada, Mexico and Europe and the tariff rate will increase more than in the baseline forecast before rolling back in 2026.

Retaliatory tariffs reduce US exports and lead to a global turndown.

Tax revenues are lower than in the baseline creating a higher deficit.

(5) Recession in Q1 2025 which lasts through Q3 2025.

Real GDP declines by 2.6%.

Unemployment rate rises to a peak of 7.7% in the first quarter of 2025.

The stock market falls 35% from the first quarter of 2024 to the third quarter of 2024.

The unemployment rate rises to a peak of 8.3% in Q1 2026.

The stock market falls 35% from Q1 2025 to Q3 2025.

The adverse scenario forecasts Ohio unemployment for the next twelve months to range from 6.6% to 9.5%.

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Excluding consideration of qualitative adjustments, a corresponding $27.5 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 within this "ITEM 7:

Refer to the “CREDIT METRICS AND PROVISION FOR CREDIT LOSSES” section within this "ITEM 7:

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" for additional discussion.

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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 expense is principally based on four components:

Annual pension income/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.

During the year ended December 31, 2024, Park exceeded the pension settlement threshold established in ASC 715-30 and recognized in income a pro-rata portion of the unamortized gain in accumulated other comprehensive loss (pension settlement gain).

Significant assumptions used to measure our annual pension expense include:

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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.

Due to the significant management judgment involved, our assumptions could have a material impact on the measurement of our pension plan income/expense and obligation.

ABOUT OUR BUSINESS

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At December 31, 2024, Park operated 87 financial service offices (including those of PNB and Scope Leasing, Inc.

("Scope Aircraft Finance")) and a network of 115 automated teller machines in 26 Ohio counties, four North Carolina counties, four South Carolina counties and one Kentucky county.

("Scope Aircraft Finance")) and a network of 108 automated teller machines in 24 Ohio counties, five North Carolina counties, four South Carolina counties and one Kentucky county.

SEPH and Guardian each operated one administrative office, located in Newark, Ohio.

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Average total deposits were $8,260 million in 2024, compared to $8,360 million in 2023 and $8,450 million in 2022.

The average interest rate paid on interest bearing deposits was 1.52% in 2023, compared to 0.39% in 2022 and 0.12% in 2021.

The average interest rate paid on interest bearing deposits was 1.97% in 2024, 1.52% in 2023 and 0.39% in 2022.

The average cost of interest bearing deposits for each quarter of 2024 was 1.90% for the fourth quarter, 2.06% for the third quarter, 1.99% for the second quarter and 1.94% for the first quarter.

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Total deposits including off balance sheet deposits $ 8,258,712 $ 8,043,751 $ 214,961

During the years ended December 31, 2023 and 2022, Park decided to continue participation in a program to transfer deposits off-balance sheet in order to manage growth of the balance sheet, as deposits increased significantly throughout the COVID-19 pandemic.

Park is able to increase or decrease the amount of deposit balances transferred off balance sheet based on its balance sheet management strategies and liquidity needs.

The balance of deposits transferred off balance sheet has declined as deposit balances have returned to pre-pandemic levels.

During the years ended December 31, 2024 and 2023, Park decided to continue participation in a program to transfer deposits off-balance sheet in order to manage growth of the balance sheet.

Park is able to increase or decrease the amount of deposit

balances transferred off balance sheet based on its balance sheet management strategies and liquidity needs.

At December 31, 2024 and December 31, 2023, Park had $115.2 million and $1.2 million, respectively, in off balance sheet deposits.

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Commercial deposits 3,931,689 3,797,209 3,846,321 3,488,300 3,535,578

Brokered and bid CD deposits 176,486 164,985 — — 10,928

Total deposits $ 8,143,526 $ 8,042,566 $ 8,234,715 $ 7,904,528 $ 7,572,358

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% change from prior period end 2.7 % (4.6) % (5.1) % 7.3 %

During the year ended December 31, 2023, total deposits, including off balance sheet deposits, decreased by $386.9 million, or 4.6%.

This decrease consisted of a $308.0 million decrease in total retail deposits and a $194.8 million decrease in off balance sheet deposits, partially offset by a $115.9 million increase in total commercial deposits.

The majority of off balance sheet deposits are commercial and thus impact the increase in commercial deposits as the deposits are moved back onto the balance sheet.

Noninterest bearing deposits to total deposits 32.1 % 32.7 % 37.3 % 38.8 % 36.0 %

During the year ended December 31, 2024, total deposits including off balance sheet deposits increased by $215.0 million, or 2.7%.

This increase consisted of a $134.5 million increase in total commercial deposits, a $114.0 million increase in off balance sheet deposits and a $11.5 million increase in brokered and bid CD deposits, partially offset by a $45.0 million decrease in total retail deposits.

The majority of off balance sheet deposits are commercial and thus impact the change in commercial deposits as the deposits are moved on or off the balance sheet.

Included in the total commercial deposits and off balance sheet deposits shown in the previous table are public fund deposits.

These balances fluctuate based on seasonality and the cycle of collection and remittance of tax funds.

The following table

details the change in public fund deposits.

Public funds include Bid Ohio CDs.

The following table details the change in public fund deposits.

Table 5 - Public Fund Deposits

December 31 (In thousands) 2023 2022 2021 2020 2019

(Dollars in thousands) 2024 2023 2022 2021 2020

Public funds included in commercial deposits $ 1,278,325 $ 1,198,418 $ 1,335,400 $ 1,548,217 $ 1,406,101

Bid Ohio CDs 76,497 15,000 — — —

Total public fund deposits $ 1,354,822 $ 1,213,418 $ 1,335,400 $ 1,548,217 $ 1,406,101

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% change from prior period end 11.7 % (9.1) % (13.7) % 10.1 %

Cost of public fund deposits 2.36 % 2.24 % 0.60 % 0.11 % 0.52 %

As of December 31, 2024, Park had approximately $1.4 billion of uninsured deposits, which was 17.6% of total deposits.

Uninsured deposits of $1.3 billion included $288.2 million of deposits which were over $250,000 but were fully collateralized by Park's investment securities portfolio.

Uninsured deposits of $1.4 billion included $395.4 million of deposits that were over $250,000, but were fully collateralized by Park's investment securities portfolio.

As of December 31, 2023, Park had approximately $1.3 billion of uninsured deposits, which was 16.2% of total deposits.

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The year-end balance for short-term borrowings was $90 million at December 31, 2024, compared to $328 million at December 31, 2023 and $227 million at December 31, 2022.

Long-Term Debt:

Long-term debt primarily consists of borrowings from the Federal Home Loan Bank.

In addition, Park had a term note with another financial institution which was paid off on August 2, 2021.

The average balance of long-term debt and the average cost of long-term debt include the subordinated notes discussed in the following section.

In 2023, the average balance of long-term debt was $189 million, compared to $188 million in 2022 and $206 million in 2021.

The average interest rate paid on long-term debt was 4.97% in 2023, compared to 4.69% in 2022 and 4.32% in 2021.

Average total debt (long-term and short-term) was $372 million in 2023, compared to $396 million in 2022 and $493 million in 2021.

Average total debt decreased by $23.6 million, or 6.0% in 2023 compared to 2022, and decreased by $97.4 million, or 19.8%, in 2022 compared to 2021.

Average long-term debt was 51% of average total debt in 2023, compared to 48% of average total debt in 2022 and 42% of average total debt in 2021.

Subordinated Notes:

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provided, however, that if the Benchmark rate is less than zero, then the Benchmark rate will be deemed to be zero.

The Corporation may, at its option, beginning with the interest payment date of September 1, 2025 and on any interest payment date thereafter, redeem the Subordinated Notes, in whole or in part, from time to time, subject to obtaining the prior approval of the Federal Reserve Board to the extent the approval of the Federal Reserve Board is then required under the capital adequacy rules of the Federal Reserve Board, at a redemption price equal to 100% of the principal amount of the Subordinated Notes being redeemed, plus accrued and unpaid interest thereon to but excluding the date of redemption.

The Corporation may, at its option, beginning with the interest payment date of September 1, 2025 and on any interest payment date thereafter, redeem the Subordinated Notes, in whole or in part, subject to obtaining the prior approval of the Federal Reserve Board, if required, at a redemption price equal to 100% of the principal amount of the Subordinated Notes being redeemed, plus accrued and unpaid interest thereon to but excluding the date of redemption.

The Subordinated Notes qualify as Tier 2 capital for Park under the Federal Reserve Board's capital adequacy rules.

In 2024, the average balance of subordinated notes was $189 million, compared to $189 million in 2023 and $188 million in 2022.

The average interest rate paid on subordinated notes was 4.98% in 2024, compared to 4.97% in 2023 and 4.69% in 2022.

See "Note 18 - Subordinated Notes" of the Notes to Consolidated Financial Statements included in "ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA" of this Annual Report on Form 10-K for additional information about the Subordinated Notes.

Average total debt (subordinated notes and short-term) was $310 million in 2024, compared to $372 million in 2023 and $396 million in 2022.

Average total debt decreased by $62.0 million, or 16.7% in 2024 compared to 2023 and decreased $23.6 million, or 6.0% in 2023 compared to 2022.

Average long term subordinated notes were 61% of average total debt in 2024, compared to 51% of average total debt in 2023 and 48% of average total debt in 2022.

Shareholders' Equity:

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GAAP, Park reflects any unrealized holding gain or loss on AFS debt securities, any unrealized net holding gain or loss on cash flow hedging derivatives and any change in the funded status of Park's pension plan, in each case, net of income taxes, as accumulated other comprehensive (loss) income which is part of Park’s shareholders’ equity.

The unrealized net holding loss, net of income taxes, on AFS debt securities was $67.9 million at year-end 2023, compared to an unrealized net holding loss, net of income taxes, of $95.7 million at year-end 2022 and compared to an unrealized net holding gain, net of income taxes, of $21.2 million at year-end 2021.

The unrealized net holding loss, net of income taxes, on AFS debt securities was $62.9 million at year-end 2024, compared to an unrealized net holding loss, net of income taxes, $67.9 million at year-end 2023 and compared to an unrealized net holding loss, net of income taxes, of $95.7 million at year-end 2022.

The unrealized net holding loss on AFS debt securities at December 31, 2024 was impacted by the realization of $415,000 in losses, net of income taxes, during the year ended December 31, 2024 as the result of the sale of $44.6 million in AFS debt securities.

The unrealized net holding loss on AFS debt securities at December 31, 2023 was impacted by the realization of $6.2 million in losses, net of income taxes, during the year ended December 31, 2023 as the result of the sale of $291.0 million in AFS debt securities.

The unrealized net holding loss, net of income taxes, on cash flow hedging derivatives was zero at year-end 2023 and year-end 2022, compared to $206,000 at year-end 2021.

The unrealized net holding loss, net of income taxes, on cash flow hedging derivatives was zero at year-end 2024, year-end 2023 and year-end 2022.

Park's only borrowing cash flow hedging derivative was terminated during 2022.

In accordance with U.S.

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See "Note 21 - Benefit Plans" of the Notes to Consolidated Financial Statements included in "ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA" of this Annual Report on Form 10-K for information on the accounting for Park’s pension plan.

Pertaining to the funding status of the pension plan, Park recognized net other comprehensive income of $8.4 million in 2023, compared to net other comprehensive loss of $888,000 in 2022 and compared to net other comprehensive income of $28.6 million in 2021.

The net other comprehensive income in 2023 was largely due to a $10.5 million net actuarial gain.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA" of this Annual Report on Form 10-K for additional information on the accounting for Park’s pension plan.

At year-end 2024, the balance in accumulated other comprehensive loss pertaining to the pension plan was unrealized income of $16.8 million, compared to unrealized income of $1.7 million at December 31, 2023 and compared to an unrealized loss of $6.7 million at December 31, 2022.

The net other comprehensive income in 2024 was largely due to a $25.2 million ($19.9 million, net of taxes) net unrealized actuarial gain, partially offset by a $6.1 million ($4.9 million, net of taxes) realized pension settlement gain.

The unrealized gain was due to asset returns greater than expected, an increase in the discount rate and assumption updates fo r a change in the mortality table for lump sum distributions, reflecting updates for the 2024 assumption study, partially offset by demographic losses and an increase in the interest credit rate.

The realized pension settlement gain was recognized as a result of a combination of lump sum payouts as well as the purchase of a nonparticipating annuity contract which will provide ongoing benefits to vested participants.

The net other comprehensive income in 2023 was largely due to a $10.5 million ($8.3 million, net of taxes) net actuarial gain.

The gain was due to asset returns greater than expected, partially offset by the impact of demographic losses driven by salary increases greater than assumed and a decrease in the discount rate.

The net other comprehensive loss in 2022 was largely due to $558,000 in prior service cost, as a result of plan amendments, and a $551,000 net actuarial loss.

The net other comprehensive gain in 2021 was due to greater than expected investment returns on pension plan assets as well as a net decrease in the benefit obligation due to assumption changes.

At year-end 2023, the balance in accumulated other comprehensive income pertaining to the pension plan was unrealized income of $1.7 million, compared to an unrealized loss of $6.7 million at December 31, 2022 and compared to an unrealized loss of $5.8 million at December 31, 2021.

The net other comprehensive loss in 2022 was largely due to $558,000 ($441,000, net of taxes) in prior service cost, as a result of plan amendments, and a $551,000 ($435,000, net of taxes) net actuarial loss.

INVESTMENT OF FUNDS

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The average yield on average loan balances for each quarter of 2024 was 6.21% for the fourth quarter, 6.24% for the third quarter, 6.13% for the second quarter and 5.99% for the first quarter.

In addition, loan interest income included $1.2 million, $633,000 and $1.8 million, respectively, of the accretion of loan purchase accounting adjustments related to the acquisitions of NewDominion and Carolina Alliance.

Loan interest income for 2023, 2022 and 2021 included interest and fee income related to PPP loans of $69,000, $3.1 million and $18.0 million, respectively.

Loan interest income for 2023 and 2022 included interest and fee income related to PPP loans of $69,000 and $3.1 million, respectively.

Excluding the impact of the purchase accounting accretion, SEPH income, and PPP income, the average yield on loans was 6.13%, 5.53% and 4.55%, for the years ended December 31, 2024, 2023, and 2022.

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Total loans $ 7,817,128 $ 7,476,221 $ 7,141,891

On a combined basis, year-end commercial, financial and agricultural loans, construction real estate loans and commercial real estate loans increased by $199.8 million, or 5.7%, in 2024.

The increase in 2024 was due to an increase in commercial real estate loans of $118.3 million and an increase in construction real estate loans of $107.5 million, which were partially offset by an decrease in commercial, financial and agricultural loans of $26.1 million.

On a combined basis, year-end commercial, financial and agricultural loans, construction real estate loans and commercial real estate loans increased $56.3 million, or 1.6%, in 2023.

The increase in 2023 was due to an increase in commercial real estate of $81.9 million, partially offset by a decrease of $20.3 million in construction real estate and a $5.3 million decrease in commercial, financial and agricultural loans.

On a combined basis, year-end commercial, financial and agricultural loans, construction real estate loans and commercial real estate loans decreased by $1.8 million, or 0.1%, in 2022.

The decrease in 2022 was due to a decrease in commercial real estate loans of $7.7 million, which were partially offset by an increase in commercial, financial and agricultural loans of $2.3 million and an increase in construction real estate loans of $3.6 million.

Consumer loans increased by $41.0 million, or 2.1%, in 2023 and increased by $215.3 million, or 12.7%, in 2022.

The increase in consumer loans in each of 2023 and 2022 was primarily due to an increase in automobile lending in Ohio.

Consumer loans decreased by $35.6 million, or 1.8% in 2024 and increased by $41.0 million, or 2.1%, in 2023.

The change in consumer loans in 2024 and 2023 was primarily due to fluctuations in automobile lending in Ohio.

Residential real estate loans increased by $170.9 million, or 8.4% in 2024 and increased by $232.7 million, or 12.9%, in 2023.

The increase in 2024 was due to an increase in mortgage loans secured by residential real estate of $106.7 million, an increase in commercial loans secured by residential real estate of $35.0 million, an increase in home equity loans secured by residential real estate of $29.1 million and an increase in installment loans secured by residential real estate of $109,000.

The increase in 2023 was due to an increase in mortgage loans secured by residential real estate of $164.4 million, an increase in commercial loans secured by residential real estate of $59.2 million, an increase in home equity loans secured by residential real estate of $7.2 million and an increase in installment loans secured by residential real estate of $1.8 million.

The increase in 2022 was due to an increase in mortgage loans secured by residential real estate of $41.8 million, an increase in commercial loans secured by residential real estate of $16.4 million, and an increase in home equity loans secured by residential real estate of $1.5 million, partially offset by a decrease in installment loans secured by residential real estate of $1.6 million.

Leases increased by $4.4 million to $24.0 million in 2023 and decreased by $895,000 to $19.6 million in 2022.

Leases increased by $5.8 million to $29.8 million in 2024 and increased by $4.4 million to $24.0 million in 2023.

The table below summarizes the distribution of maturities for loan segments as of December 31, 2024:

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Proceeds from repayments, redemptions and maturities of debt securities were $300 million in 2024, $145 million in 2023 and $186 million in 2022.

During 2024, Park sold certain AFS debt securities with a book value of $42.3 million at a gross loss of $553,000 and sold certain AFS debt securities with a book value of $2.3 million for a gross gain of $27,000.

During 2023, Park sold certain AFS debt securities with a book value of $291.0 million at a gross loss of $7.9 million.

There were no sales of AFS debt securities in 2022 or 2021.

There were no sales of AFS debt securities in 2022.

For the years ended December 31, 2024, 2023, and 2022, the average tax-equivalent yield on the total investment portfolio was 3.74%, 3.73% and 2.66%, respectively.

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Total other investment securities were $104 million at December 31, 2024, $96 million at December 31, 2023 and $87 million at December 31, 2022.

There were $18.2 million in FHLB stock purchases in 2023 and no FHLB stock purchases in 2022 or 2021.

There were $9.2 million in FHLB stock

purchases in 2024, $18.2 million in FHLB stock purchases in 2023 and no FHLB stock purchases in 2022.

Proceeds from the redemption/repurchase of FHLB stock were $18.4 million in 2024, compared to $11.7 million in 2023 and compared to $2.2 million in 2022.

No shares of FRB stock were purchased or sold in any of the years ended December 31, 2024, 2023, or 2022.

Management purchased equity securities totaling $2.2 million in 2023 and $9.2 million in 2022.

There were no equity security purchases in 2021.

During the years ended December 31, 2023, 2022, and 2021, Park entered into partnership agreements with commitments totaling $2.7 million, $16.3 million and $3.0 million, respectively.

Management purchased equity securities totaling $10.2 million in 2024, $2.2 million in 2023 and $9.2 million in 2022.

During the years ended December 31, 2024, 2023, and 2022.

Park entered into partnership agreements with commitments totaling $2.5 million, $2.7 million and $16.3 million, respectively.

Funding of limited partnerships totaled $7.5 million, $5.6 million and $4.8 million during the years ended December 31, 2024, 2023, and 2022, respectively.

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These gains on equity securities were made up of gains (losses) on equity investments carried at fair value as well as gains (losses) on equity investments carried at modified cost and gains (losses) on partnership investments carried at NAV.

For the years ended December 31, 2023, 2022 and 2021, $600,000, $601,000 and $552,000, respectively, of gains on equity investments carried at fair value were recorded within "Gain on equity securities, net" on Park's Consolidated Statements of Income.

For the years ended December 31, 2023, 2022 and 2021, $371,000, $2.4 million and $4.5 million, respectively, of gains on equity investments carried at NAV were recorded within "Gain on equity securities, net" on Park's Consolidated Statements of Income.

For the years ended December 31, 2024, 2023 and 2022, $2.6 million, $600,000 and $601,000, respectively, of gains on equity investments carried at fair value were recorded within "Gain on equity securities, net" on Park's Consolidated Statements of Income.

For the years ended December 31, 2024, 2023 and 2022, $468,000, $371,000 and $2.4 million, respectively, of gains on equity investments carried at NAV were recorded within "Gain on equity securities, net" on Park's Consolidated Statements of Income.

The average maturity of the investment portfolio would lengthen if long-term interest rates were to increase as principal repayments from mortgage-backed securities and CMOs would decrease and callable securities would price to their maturity dates.

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Table 11 - Investment Maturity Distribution

Over One Through Five Years Over Five Through Ten Years Over

One Year or under Over One Through Five Years Over Five Through Ten Years Over

December 31, 2024

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Corporate debt securities $ 979 $ 18,104 $ — $ — $ 19,083

Obligations of U.S.

Government sponsored entities 249 — — — 249

Obligations of states and political subdivisions 250 1,490 75,408 109,735 186,883

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Time deposits 690,938 21,531 3.12 % 572,918 10,699 1.87 % 653,041 3,314 0.51 %

Brokered/bid CD deposits 160,074 8,063 5.04 % 35,952 1,978 5.50 % — — N.M.

Total interest bearing deposits 5,696,185 112,383 1.97 % 5,546,015 84,453 1.52 % 5,356,809 20,960 0.39 %

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Short-term borrowings 24,794 1,382 5.58 % 36,633 2,137 5.83 % 7,195 260 3.62 %

Long-term debt (4)

188,908 9,383 4.97 % 188,439 8,833 4.69 % 205,883 8,887 4.32 %

Subordinated notes 189,399 9,428 4.98 % 188,908 9,383 4.97 % 188,439 8,833 4.69 %

Total interest bearing liabilities 6,006,181 124,946 2.08 % 5,917,970 98,557 1.67 % 5,752,324 31,188 0.54 %

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(1) Loan income includes net loan-related fee (expense) income, purchase accounting accretion and origination expense in the aggregate amount of $(11.6) million in 2024, $(12.1) million in 2023 and $(5.5) million in 2022.

Loan income also includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate in 2023, 2022 and 2021.

Loan income also includes the effects of taxable equivalent adjustments using a 21%

federal corporate income tax rate in 2024, 2023 and 2022.

The taxable equivalent adjustments were $964,000 in 2024, $811,000 in 2023 and $627,000 in 2022.

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The taxable equivalent adjustments were $1.5 million in 2024, $2.9 million in 2023 and $2.9 million in 2022.

(4) Includes subordinated notes.

Average interest earning assets for 2024 decreased $86 million, or 0.9% to $9,086 million, compared to $9,172 million for 2023.

The decrease was largely due to a $486 million decrease in average investment securities and a $5 million decrease in average money market instruments, partially offset by a $405 increase in average loans.

Average interest earning assets for 2023 decreased by $55 million, or 0.6%, to $9,172 million, compared to $9,227 million for 2022.

The decrease was largely due to a $230 million decrease in average money market instruments and a $93 million decrease in average investment securities, partially offset by a $267 increase in average loans.

Average interest earning assets for 2022 increased by $199 million, or 2.2% to $9,227 million, compared to $9,028 million for 2021.

The average yield on interest earning assets increased by 104 basis points to 5.18% for 2023, compared to 4.14% for 2022 and compared to 3.86% for 2021.

The average yield on interest earning assets increased by 60 basis points to 5.78% for 2024, compared to 5.18% for 2023 and 4.14% for 2022.

Loan interest income for 2023, 2022 and 2021 included interest and fee income related to PPP loans of $69,000, $3.1 million and $18.0 million, respectively.

Loan interest income for 2023 and 2022 included interest and fee income related to PPP loans of $69,000 and $3.1 million, respectively.

Excluding the impact of the purchase accounting accretion, SEPH income, and PPP income, the average yield on loans was 6.13%, 5.53% and 4.55%, for the years ended December 31, 2024, 2023, and 2022.

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Average interest bearing liabilities for 2023 increased by $166 million, or 2.9%, to $5,918 million, compared to $5,752 million for 2022.

The average cost of interest bearing liabilities increased by 113 basis points to 1.67% for 2023, compared to 0.54% for 2022 and compared to 0.28% for 2021.

As of December 31, 2023, through-the-cycle beta on interest bearing deposits (measured as the change from December 31, 2021 to December 31, 2023 compared to the change in the Fed Funds target rate) totaled 33%, while the through-the-cycle betas on total deposits and total cost of funds were 22% and 23%, respectively.

The average cost of interest bearing liabilities increased by 41 basis points to 2.08% for 2024, compared to 1.67% for 2023 and 0.54% for 2022.

For the most recent interest rate cycle, peak through-the-cycle beta on interest bearing deposits (measured as the change from December 31, 2021 to September 30, 2024 compared to the peak change in the Fed Funds target rate) totaled 38%, while the peak through-the-cycle betas on total deposits and total cost of funds were both 26%.

During this same time period, betas on loans and total interest earning assets were 32% and 38%, respectively.

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The taxable equivalent adjustments were $964,000 in 2024, $811,000 in 2023 and $627,000 in 2022.

Loan interest income for 2023, 2022, and 2021 included $631,000, $3.7 million and $8.0 million, respectively, related to payments received on certain SEPH nonaccrual loan relationships, some of which are participated with PNB, as well as $633,000, $1.8 million and $3.3 million of purchase accounting accretion for 2023, 2022 and 2021, respectively.

Interest income for 2023, 2022 and 2021 included interest and fee income related to PPP loans of $69,000, $3.1 million and $18.0 million, respectively.

Loan interest income for 2024, 2023, and 2022 included $54,000, $631,000 and $3.7 million, respectively, related to payments received on certain SEPH nonaccrual loan relationships, some of which are participated with PNB, as well as $1.2 million, $633,000 and $1.8 million of purchase accounting accretion for 2024, 2023 and 2022, respectively.

Interest income for 2023

and 2022 included interest and fee income related to PPP loans of $69,000 and $3.1 million, respectively.

Below is a summary of the impact of these items on the tax equivalent yield of loans.

• The amount of interest related to SEPH nonaccrual loan relationships and purchase accounting accretion included in home equity loan interest income for 2023, 2022 and 2021 was $79,000, $173,000 and $479,000, respectively.

• The amount of interest related to purchase accounting accretion included in home equity loan interest income for 2024, 2023 and 2022 was $184,000, $79,000 and $173,000, respectively.

Excluding the impact of these items, the average tax equivalent yield on home equity loans was 8.23%, 8.11% and 4.93%, respectively.

• The amount of interest related to SEPH nonaccrual loan relationships and purchase accounting accretion included in real estate loan interest income for 2023, 2022 and 2021 was $4,000, $170,000 and $243,000, respectively.

• The amount of interest related to purchase accounting accretion included in real estate loan interest income for 2024, 2023 and 2022 was $80,000, $4,000 and $170,000, respectively.

Excluding the impact of these items, the average tax equivalent yield on real estate loans was 5.07%, 4.38% and 3.80%, respectively.

• The amount of interest related to PPP income, SEPH nonaccrual loan relationships and purchase accounting accretion included in commercial loan interest income for 2023, 2022 and 2021 was $1.2 million, $8.2 million and $28.5 million, respectively.

• The amount of interest related to PPP income, SEPH nonaccrual loan relationships and purchase accounting accretion included in commercial loan interest income for 2024, 2023 and 2022 was $935,000, $1.2 million and $8.2 million, respectively.

Excluding the impact of these items, the average tax equivalent yield on commercial loans was 6.23%, 5.80% and 4.66%, for 2024, 2023 and 2022, respectively.

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Time deposits 690,938 3.12 % 572,918 1.87 % 653,041 0.51 %

Brokered/bid CD deposits 160,074 5.04 % 35,952 5.50 % — N.M.

Total interest bearing deposits $ 5,696,185 1.97 % $ 5,546,015 1.52 % $ 5,356,809 0.39 %

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Savings accounts (553) 7,848 7,295 (170) 28,547 28,377

Time deposits (224) 9,587 9,363 (741) (656) (1,397)

Time deposits and brokered/bid CD deposits 5,041 11,876 16,917 (224) 9,587 9,363

Short-term borrowings (1,610) 24 (1,586) (162) 3,488 3,326

Long-term debt 22 528 550 (753) 699 (54)

Subordinated notes 25 20 45 22 528 550

Total interest expense 2,114 24,275 26,389 452 66,917 67,369

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ATM fees 1,840 2,178 2,273

(Loss) gain on the sale of OREO, net (3) 5,611 (4)

Pension settlement gain 6,148 — —

Gain (loss) on the sale of OREO, net 42 (3) 5,611

OREO valuation markup 30 60 12,039

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Income from fiduciary activities increased by $7.0 million, or 19.8%, to $42.5 million, compared to $35.5 million in 2023.

The $34.1 million in 2022 was a decrease of $358,000, or 1.0%, compared to $34.4 million in 2021.

The majority of fiduciary fees are calculated on a lag, based on the market value of the assets under management.

The average market value of the trust assets managed by PNB was $7.69 billion in 2023, compared to $7.22 billion in 2022 and $7.45 billion in 2021.

The increase in fiduciary fee income in 2023 was primarily related to an increase in trust assets due to improvements in equity market values

and new trust accounts.

The decrease in fiduciary fee income in 2022 was primarily related to the decline in equity market values during the year.

Service charges on deposit accounts decreased $1.6 million, or 16.3%, to $8.4 million in 2023 compared to $10.1 million in 2022.

The $35.5 million in 2023 was an increase of $1.4 million, or 4.1%, compared to $34.1 million in 2022.

The majority of fiduciary fees are calculated on a lag, based on the market value of the assets under management.

The average market value of the wealth management assets managed by PNB was $8.58 billion in 2024, compared to $7.69 billion in 2023 and $7.22 billion in 2022.

The increase in fiduciary fee income in 2024 was largely due to an increase in the market value of assets under management as well as updates to the fee structure.

The increase in fiduciary fee income in 2023 was primarily related to an increase in wealth management assets due to improvements in equity market values and new wealth management accounts.

Service charges on deposit accounts increased $556,000, or 6.6%, to $9.0 million in 2024, compared to $8.4 million in 2023.

The $8.4 million in 2023 was a decrease of $1.6 million, or 16.3%, compared to $10.1 million in 2022.

The increase in 2024 was related to increases in service charges on demand deposit accounts, partially offset by decreases in non-sufficient funds (NSF) fee income.

The decrease in 2023 was related to decreases in non-sufficient funds (NSF) fee income.

The increase in 2022 was related to increases in non-sufficient funds (NSF) fee income and service charges on demand deposit accounts.

Other service income decreased $5.0 million, or 32.7%, to $10.3 million in 2023, compared to $15.3 million in 2022.

Other service income increased $1.4 million in 2024, or 14.0%, to $11.7 million, compared to $10.3 million in 2023.

The $10.3 million in 2023 was a decrease of $5.0 million, or 32.7%, compared to $15.3 million in 2022.

The increase in 2024 compared to 2023 was primarily due to an increase in other service income related to mortgage loan originations, including a $950,000 increase in fee income related to mortgage loan originations to be sold in the secondary market and a $400,000 increase in mortgage servicing rights income.

The decrease in 2023 compared to 2022 was primarily related to a decrease in other service income related to mortgage loan originations, including a $2.6 million decrease in fee income related to mortgage loan originations to be sold in the secondary market and a $1.7 million decrease in mortgage servicing rights income, partially offset by a $465,000 increase in income related to investor rate locks and loans held for sale.

The decrease in 2022 compared to 2021 was primarily related to a decrease in other service income related to mortgage loan originations, including a $13.8 million decrease in fee income related to a decrease in mortgage loan originations to be sold in the secondary market and a $2.6 million decrease in mortgage servicing rights income, partially offset by a $1.4 million increase in income related to investor rate locks and loans held for sale.

As noted, Park has experienced a decline in mortgage loan origination volume resulting in a decrease in other service income.

Park has experienced fluctuations in mortgage loan origination volume resulting in increases and decreases in other service income.

A summary of mortgage loan originations for the years ended December 31, 2024, 2023 and 2022 follows.

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Refinances as a % of Total Mortgage Loan Originations 15.3 % 17.4 % 29.4 %

Debit card fee income, which is generated from debit card transactions, increased $476,000, or 1.8%, to $26.5 million in 2023, compared to $26.0 million in 2022.

Debit card fee income, which is generated from debit card transactions, decreased $649,000, or 2.4%, to $25.9 million in 2024, compared to $26.5 million in 2023.

The $26.5 million in 2023 was an increase of $476,000, or 1.8%, compared to $26.0 million in 2022.

The increases in 2023 and 2022 were attributable to continued increases in both the volume of debit card transactions and increases in total sales dollars of debit card transactions.

Debit card transaction volume increased 3.4% in 2023 from 2022 and increased 1.1% in 2022 from 2021.

Total sales dollars of debit card transactions increased 2.5% in 2023 from 2022 and increased 3.7% in 2022 from 2021.

The decrease in 2024 was attributable to a decrease in the average blended interchange rate per transaction, which is influenced by various factors, including the average spend per transaction.

This decrease was partially offset by continued increases in both the volume of debit card transactions and increases in total sales dollars of debit card transactions.

The increase in 2023 was attributable to continued increases in both the volume of debit card transactions and increases in total sales dollars of debit card transactions.

Debit card transaction volume increased 1.3% in 2024 from 2023.

Total sales dollars of debit card transactions increased 1.4% in 2024 from 2023.

Debit card transaction volume increased 3.4% in 2023 from 2022.

Total sales dollars of debit card transactions increased 2.5% in 2023 from 2022.

Park continues to focus on deposit offerings that provide incentives for our customers to use their debit card.

Bank owned life insurance income decreased $762,000, or 12.5%, to $5.3 million in 2023, compared to $6.1 million in 2022.

The $6.1 million in 2022 was an increase of $1.2 million, or 24.6%, compared to $4.9 million in 2021.

The decrease in 2023 and increase in 2022 was related to a decrease in death benefit income of $325,000 recognized in 2023, compared to $1.4 million recognized in 2022 and compared to $440,000 in 2021.

(Loss) gain on the sale of OREO, net, reflected a net loss of $3,000 in 2023, compared to a net gain of $5.6 million in 2022, and a net loss of $4,000 in 2021.

Bank owned life insurance income increased $2.4 million, or 45.6%, to $7.8 million in 2024, compared to $5.3 million in 2023.

The $5.3 million in 2023 was a decrease of $762,000, or 12.5%, compared to $6.1 million in 2022.

The increase in 2024 and the decrease in 2023 was related to death benefit income of $2.0 million recognized in 2024, compared to $325,000 recognized in 2023 and compared to $1.4 million recognized in 2022.

During 2024, Park recognized a $6.1 million pension settlement gain due to a combination of lump sum payouts as well as the purchase of a nonparticipating annuity contract which will provide ongoing benefits to vested participants.

There was no pension settlement gain recognized during 2023 or 2022.

Gain (loss) on the sale of OREO, net, reflected a net gain of $42,000 in 2024, compared to a net loss of $3,000 in 2023, and a net gain of $5.6 million in 2022.

A $5.6 million gain on the sale of OREO, net, was recognized during 2022 and was related to former Vision Bank relationships.

OREO valuation markup income was $60,000, $12.0 million and $64,000 for 2023, 2022, and 2021, respectively.

OREO valuation markup income was $30,000, $60,000 and $12.0 million for 2024, 2023 and 2022, respectively.

The $12.0 million OREO valuation markup during 2022 related to the foreclosure of a property collateralizing a former Vision Bank relationship.

This property was subsequently sold during 2022.

During 2023, Park sold certain AFS debt securities with a book value of $291.0 million at a gross loss of $7.9 million.

No debt securities were sold in 2022 or 2021.

During the years ended December 31, 2023, 2022 and 2021, $600,000, $601,000 and $552,000, respectively, of gains on equity investments carried at fair value were recorded within "Gain on equity securities, net".

Other components of net periodic pension benefit income decreased $4.5 million, or 37.5%, to $7.6 million in 2023, compared to $12.1 million in 2022.

The $12.1 million in 2022 was an increase of $3.9 million, or 48.5%, compared to $8.2 million in 2021.

No debt securities were sold in 2022.

During the years ended December 31, 2024, 2023 and 2022, $2.6 million, $600,000 and $601,000, respectively, of gains on equity investments carried at fair value or modified cost were recorded within "Gain on equity securities, net".

Other components of net periodic pension benefit income increased $1.7 million, or 22.3%, to $9.3 million in 2024, compared to $7.6 million in 2023.

The $7.6 million in 2023 was a decrease of $4.5 million, or 37.5%, compared to $12.1 million in 2022.

The increase in 2024 was largely due to an increase in the expected return on plan assets, partially offset by a decrease in interest cost.

The decrease in 2023 was largely due a decrease in the expected return on plan assets as well as an increase in interest cost.

The increase in 2022 was 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 in 2022.

Miscellaneous income decreased by $5.7 million, or 60.8%, to $3.7 million in 2023, compared to $9.3 million in 2022.

The $9.3 million in 2022 was a decreased of $1.2 million, or 11.1%, compared to $10.5 million in 2021.

Miscellaneous income increased by $2.2 million, or 59.8%, to $5.8 million in 2024, compared to $3.7 million in 2023.

The $3.7 million in 2023 was a decrease of $5.7 million, or 60.8%, compared to $9.3 million in 2022.

The increase in 2024 was primarily due to an increase in the net gain on the sale of assets, an increase in filing fee income, an increase in net gains on the sale of repossessed assets and a decrease in OREO devaluations, partially offset by a decline in miscellaneous income that was received in 2023 as the result of an investment fund liquidation.

The decrease in 2023 was primarily due to a decrease in the net gain on the sale of loans and other assets, a decrease due to the write downs on strategic initiatives, and a decrease in fees earned on off-balance sheet deposit accounts.

The decrease in 2022 was primarily the result of decreases in brokerage income, operating lease rental income, wire transfer fees, and an increase in OREO devaluations, partially offset by gains on the sale of loans and assets, a decrease in repossessed asset devaluations, and an increase in fees earned on off-balance sheet deposit accounts.

Other Expense:

Other expense was $309.2 million in 2023, compared to $298.0 million in 2022 and compared to $283.5 million in 2021.

Other expense was $321.3 million in 2024, compared to $309.2 million in 2023 and $298.0 million in 2022.

Other expense increased by $12.1 million, or 3.9% in 2024, compared to 2023 and increased by $11.3 million, or 3.8%, in 2023 compared to 2022.

18 unchanged sentences

Full-time equivalent employees 1,725 1,782 1,725

Salaries expense increased by $5.9 million, or 4.5%, to $139.2 million in 2023, compared to $133.3 million in 2022, and increased $7.7 million, or 6.1%, to $133.3 million in 2022, compared to $125.6 million in 2021.

Salaries expense increased by $8.1 million, or 5.8%, to $147.3 million in 2024, compared to $139.2 million in 2023.

The $139.2 million in 2023 was an increase of $5.9 million, or 4.5%, compared to $133.3 million in 2022.

The increase in 2024 was due to an increase in salaries expense of $4.9 million, a $2.6 million increase in officer incentive compensation expense, and a $1.2 million increase in additional compensation expense, partially offset by a $340,000 decrease in share-based compensation

expenses related to PBRSU and TBRSU awards granted under the 2017 Employee LTIP and a $288,000 decrease in the vacation expense accrual.

The increase in 2023 was due to an increase in salaries expense of $11.1 million and a $909,000 increase in share-based compensation expenses related to PBRSU and TBRSU awards granted under the 2017 Employee LTIP, partially offset by a $4.4 million decrease in additional compensation expense and a $1.6 million decrease in officer incentive compensation expense.

The increase in 2022 was due to an increase in salaries expense of $7.6 million, a $297,000 increase in expense related to the vacation accrual, and a $565,000 reduction in deferred salary costs, partially offset by a $466,000 decrease in share-based compensation expenses related to PBRSU and TBRSU awards granted under the 2017 Employee LTIP.

Park had 1,725 full-time equivalent employees at year-end 2024, compared to 1,782 full-time equivalent employees at year-end 2023, and 1,725 full-time equivalent employees at year-end 2022.

Park has increased full-time equivalent employees during the last two years as it has invested in people and technology to prepare for future growth and enhance the customer experience.

Employee benefits expense increased $1.8 million, or 4.4%, to $42.3 million in 2023, compared to $40.5 million in 2022, and decreased $1.1 million, or 2.7%, to $40.5 million in 2022 compared to $41.6 million in 2021.

Employee benefits expense decreased by $540,000, or 1.3%, to $41.7 million in 2024, compared to $42.3 million in 2023.

The $42.3 million in 2023 was an increase of $1.8 million, or 4.4%, compared to $40.5 million in 2022.

The decrease in 2024 was due to a $1.9 million decrease in group insurance costs, partially offset by a $680,000 increase in pension plan expense, a $310,000 increase in the KSOP match and a $175,000 increase in payroll tax expense.

The increase in 2023 was due to a $3.5 million increase in group insurance costs, a $1.0 million increase in payroll tax expense and a $347,000 increase in the KSOP match, partially offset by a $3.5 million decrease in pension plan expense.

The decrease in 2022 was due to a $2.2 million decrease in group insurance costs, partially offset by an $826,000 increase in payroll tax expense and a $358,000 increase in the KSOP match.

Occupancy expense decreased by $752,000, or 5.4%, to $13.1 million in 2023, compared to $13.9 million in 2022, and increased $827,000, or 6.3%, to $13.9 million in 2022 compared to $13.0 million in 2021.

Occupancy expense decreased by $298,000, or 2.3%, to $12.8 million in 2024, compared to $13.1 million in 2023.

The $13.1 million in 2023 was a decrease of $752,000, or 5.4%, compared to $13.9 million in 2022.

The $298,000 decrease was primarily due to decreased expense for the rental of leased space and decreased utilities expense, partially offset by increases in maintenance and repairs expense, which included expenses related to a building demolition.

The $752,000 decrease in 2023 was primarily related to decreased lease expense and depreciation expense, partially offset by an increase in maintenance and repair expenses and an increase in utilities expense.

The $827,000 increase in 2022 was primarily the result of a $760,000 write-down in the right-of-use lease asset related to an office relocation and an increase in utilities expense, partially offset by a decrease in maintenance and repair expenses and a decline in real estate tax expense.

Furniture and equipment expense increased $332,000, or 2.8%, to $12.2 million in 2023, compared to $11.9 million in 2022, and increased $1.0 million, or 9.3%, to $11.9 million in 2022 compared to $10.9 million in 2021.

The increases in 2023 and 2022 were primarily related to increased depreciation expense and increased expenses related to repairs and maintenance on equipment.

Data processing fees increased by $5.0 million, or 15.4%, to $37.6 million in 2023, compared to $32.6 million in 2022, and increased $2.1 million, or 6.8%, to $32.6 million in 2022 compared to $30.5 million in 2021.

Furniture and equipment expense decreased $2.3 million, or 18.4%, to $10.0 million in 2024, compared to $12.2 million in 2023.

The $12.2 million in 2023 was an increase of $332,000, or 2.8%, compared to $11.9 million in 2022.

The decrease in 2024 was primarily related to decreased depreciation expense and decreased expenses related to repairs on maintenance and equipment.

The increase in 2023 was primarily related to increased depreciation expense and increased expenses related to repairs and maintenance on equipment.

Data processing fees increased by $2.9 million, or 7.8%, to $40.6 million in 2024, compared to $37.6 million in 2023.

The $37.6 million in 2023 was an increase of $5.0 million, or 15.4%, compared to $32.6 million in 2022.

The increase in 2024 primarily related to an increase in software expenses of $5.9 million, partially offset by a decrease in debit card processing costs of $3.0 million.

The increase in 2023 primarily related to an increase in software expenses of $3.7 million and an increase in debit card processing costs of $1.4 million.

The increase in 2022 primarily related to an increase in software expenses of $2.4 million, partially offset by a decrease in debit card processing costs of $277,000.

Professional fees and services decreased $1.7 million, or 5.4%, to $29.2 million in 2023, compared to $30.8 million in 2022, and increased $3.4 million, or 12.3%, to $30.8 million in 2022 compared to $27.5 million in 2021.

Professional fees and services increased $2.0 million, or 6.8%, to $31.1 million in 2024, compared to $29.2 million in 2023.

The $29.2 million in 2023 was a decrease of $1.7 million, or 5.4%, compared to $30.8 million in 2022.

This subcategory of total other expense includes legal fees, management consulting fees, directors' fees, audit fees, regulatory examination fees and memberships in industry associations.

The $2.0 million increase in 2024 related to increases in management consulting fees, credit services expense, IntraFi insured deposit fees, temporary wages and recruiting fees, partially offset by decreases in legal fees and other fees.

The $1.7 million decrease in 2023 related to decreases in management consulting fees and recruiting fees, partially offset by increases in IntraFi insured deposit fees and temporary wages.

The $3.4 million increase in 2022 related to a increases in management consulting fees, recruiting fees, and IntraFi insured deposit fees.

Marketing expense increased by $136,000, or 2.5%, to $5.5 million in 2023, compared to $5.3 million in 2022 and decreased by $738,000, or 12.2%, to $5.3 million in 2022 compared to $6.1 million in 2021.

The $738,000 decrease in 2022 was primarily due to a decline in advertising expense.

Insurance expense increased by $2.2 million, or 41.1%, to $7.6 million in 2023 compared to $5.4 million in 2022 and decreased by $504,000, or 8.5%, to $5.4 million in 2022 compared to $5.9 million in 2021.

The increase in 2023 and the decrease in 2022 were related to fluctuations in FDIC assessment expense.

Marketing expense increased by $847,000, or 15.5%, to $6.3 million in 2024, compared to $5.5 million in 2023.

The $5.5 million in 2023 was an increase of $136,000, or 2.5%, compared to $5.3 million in 2022.

The $847,000 increase in 2024 was primarily due to an increase in advertising expense.

Insurance expense decreased by $905,000, or 11.8% to $6.7 million in 2024, compared to $7.6 million in 2023.

The $7.6 million in 2023 was an increase of $2.2 million, or 41.1%, compared to $5.4 million in 2022.

The decrease in 2024 and the increase in 2023 were related to fluctuations in FDIC assessment expense.

The subcategory "Miscellaneous" other expense includes expenses for supplies, travel, and other miscellaneous expense.

The subcategory Miscellaneous other expense increased by $1.0 million, or 10.1%, to $11.3 million in 2023 compared to $10.2 million in 2022 and increased $1.4 million, or 16.0%, to $10.2 million in 2022 compared to $8.8 million in 2021.

The subcategory Miscellaneous other expense increased by $1.7 million, or 14.6%, to $12.9 million in 2024, compared to $11.3 million in 2023.

The $11.3 million in 2023 was an increase of $1.0 million, or 10.1%, compared to $10.2 million in 2022.

The increase in 2024 was related to increases in fraud and other non loan related losses as well as an increase in the provision for unfunded credit losses.

The increase in 2023 was related to increases in training and travel expenses and increased expense related to losses as a result of fraud and other non loan related losses and other miscellaneous expenses, partially offset by a decrease in operating lease depreciation expense and a decrease in the expense for the provision for unfunded credit losses.

The increase in 2022 related to increases in training and travel related expenses and an increase in the provision for unfunded credit losses, partially offset by a decrease in operating lease depreciation.

Efficiency Ratio:

24 unchanged sentences

Net interest income - adjusted $ 396,811 $ 371,849 $ 341,576

Provision for (recovery of) credit losses $ 2,904 $ 4,557 $ (11,916)

less recoveries on former Vision Bank relationships (788) (1,319) (3,169) Provision for (recovery of) credit losses

Provision for (recovery of) credit losses - adjusted $ 3,692 $ 5,876 $ (8,747)

Provision for credit losses $ 14,543 $ 2,904 $ 4,557

less recoveries on former Vision Bank relationships (1,304) (788) (1,319) Provision for credit losses

Provision for credit losses - adjusted $ 15,847 $ 3,692 $ 5,876

Total other income $ 122,588 $ 92,634 $ 135,935

less write-downs on strategic initiatives (1,038) — — Miscellaneous income

less Vision related gain on the sale of OREO, net — 5,607 — (Loss) gain on the sale of OREO, net

less pension settlement gain 6,148 — — Pension settlement gain

less impact of strategic initiatives 775 (1,038) — Miscellaneous income

less Vision related gain on the sale of OREO, net 115 — 5,607 Gain (loss) on the sale of OREO, net

less other service income related to former Vision Bank relationships 312 175 788 Other service income

less Vision related OREO devaluations — (416) (594) Miscellaneous income

less Vision related OREO valuation markup — 46 12,009 OREO valuation markup

less net loss on the sale of debt securities (7,875) — — Loss on the sale of debt securities, net

less loss on the sale of debt securities, net (526) (7,875) — Loss on the sale of debt securities, net

Total other income - adjusted $ 115,764 $ 101,742 $ 118,125

3 unchanged sentences

less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions 1,215 1,323 1,487 Amortization of intangible assets

less building demolition costs 458 — — Occupancy expense

less special incentive 1,700 — — Salaries

less Foundation contributions 2,000 1,000 4,000 Foundation contributions

33 unchanged sentences

AVERAGE TANGIBLE EQUITY $ 1,033,451 $ 932,183 $ 910,542

(4) Tangible equity divided by common shares outstanding at period end.

Tangible equity equals total shareholders' equity less goodwill and other intangible assets, in each case at the end of the period.

RECONCILIATION OF TOTAL SHAREHOLDERS' EQUITY TO TANGIBLE EQUITY:

Year Ended December 31,

2023 2022 2021

TOTAL SHAREHOLDERS' EQUITY $ 1,145,293 $ 1,069,226 $ 1,110,759

Goodwill and other intangible assets 164,247 165,570 167,057

TANGIBLE EQUITY $ 981,046 $ 903,656 $ 943,702

(4) Net income for each period divided by average tangible assets during the period.

6 unchanged sentences

AVERAGE TANGIBLE ASSETS $ 9,737,595 $ 9,792,594 $ 9,877,871

(6) Tangible equity divided by tangible assets.

Tangible assets equal total assets less goodwill and other intangible assets, in each case at the end of the period.

RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:

Year Ended December 31,

2023 2022 2021

TOTAL ASSETS $ 9,836,453 $ 9,854,993 $ 9,560,254

Goodwill and other intangible assets 164,247 165,570 167,057

TANGIBLE ASSETS $ 9,672,206 $ 9,689,423 $ 9,393,197

(5) Efficiency ratio is calculated by dividing total other expense by the sum of FTE net interest income and other income.

The reconciliation of FTE net interest income to net interest income is shown below assuming a 21% federal corporate income tax rate.

The FTE net interest income reconciliation is shown assuming a 21% corporate federal income tax rate.

Additionally, net interest margin is calculated on a fully taxable equivalent basis by dividing FTE net interest income by average interest earning assets, in each case during the applicable period.

7 unchanged sentences

FTE net interest income $ 400,451 $ 376,839 $ 350,600

(8) 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 as well as the disclosure of the "Tax effect of adjustments to net income identified above."

(6) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, provision for credit losses, other income, other expense and tax effect of adjustments to net income.

(7) The tax effect of adjustments to net income was calculated assuming a 21% federal corporate income tax rate.

(10) Pre-tax, pre-provision ("PTPP") net income is calculated as net income, plus income taxes, plus the provision for (recovery of) credit losses, in each case during the applicable period.

OTHER RECONCILIATIONS

The following reconciliations are not utilized in Table 21 - Items impacting comparability, but provide reconciliations for values referenced elsewhere within Management's Discussion and Analysis of Financial Condition and Results of Operations.

(8) Tangible equity equals total shareholders' equity less goodwill and other intangible assets, in each case at the end of the period.

RECONCILIATION OF TOTAL SHAREHOLDERS' EQUITY TO TANGIBLE EQUITY:

Year Ended December 31,

2024 2023 2022

TOTAL SHAREHOLDERS' EQUITY $ 1,243,848 $ 1,145,293 $ 1,069,226

Goodwill and other intangible assets 163,032 164,247 165,570

TANGIBLE EQUITY $ 1,080,816 $ 981,046 $ 903,656

Table 21 - Items impacting comparability (continued)

(9) Tangible assets equal total assets less goodwill and other intangible assets, in each case at the end of the period.

RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:

Year Ended December 31,

2024 2023 2022

TOTAL ASSETS $ 9,805,350 $ 9,836,453 $ 9,854,993

Goodwill and other intangible assets 163,032 164,247 165,570

TANGIBLE ASSETS $ 9,642,318 $ 9,672,206 $ 9,689,423

(10) Pre-tax, pre-provision ("PTPP") net income is calculated as net income, plus income taxes, plus the provision for 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.

PTPP is used to assess the operating performance of Park while excluding the impact of the provision for credit losses.

RECONCILIATION OF PRE-TAX, PRE-PROVISION NET INCOME

3 unchanged sentences

Income taxes 33,305 26,870 32,108

Provision for (recovery of) credit losses 2,904 4,557 (11,916)

Provision for credit losses 14,543 2,904 4,557

Pre-tax, pre-provision net income $ 199,268 $ 156,508 $ 185,016

1 unchanged sentence

Income tax expense was $33.3 million in 2024 and consisted of federal income tax expense of $31.8 million and state income tax expense of $1.5 million.

Income tax expense was $26.9 million in 2023 and consisted of federal income tax expense of $25.7 million and state income tax expense of $1.2 million.

This compares to income tax expense of $32.1 million in 2022, which consisted of federal income tax expense of $30.8 million and state income tax expense of $1.3 million.

This compares to income tax expense of $34.3 million for 2021, which consisted of federal income tax expense of $33.2 million and state income tax expense of $1.1 million.

The effective income tax rate was 18.0% in 2024, 17.5% in 2023 and 17.8% in 2022.

The difference between the statutory federal corporate income tax rate of 21% and Park’s effective tax rate reflected 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 common shares held within Park’s salary deferral plan, offset by the impact of state income taxes.

Park's permanent federal tax differences were approximately $6.6 million in 2023, compared to $7.1 million in 2022 and $6.3 million for 2021.

Park's permanent federal tax differences were approximately $7.0 million in 2024, compared to $6.6 million in 2023 and $7.1 million in 2022.

Park expects permanent federal tax differences for 2025 will be approximately $5.5 million.

CREDIT METRICS AND PROVISION FOR (RECOVERY OF) CREDIT LOSSES

The provision for (recovery of) credit losses is the amount added to/subtracted from 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.

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.

CREDIT METRICS AND PROVISION FOR CREDIT LOSSES

The provision for credit losses is the amount added to/subtracted from 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 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 2022-02 on January 1, 2023 resulted in a $383,000 increase to the allowance for credit losses.

1 unchanged sentence

Additionally, as a result of the adoption of this ASU and elimination of the concept of TDRs, total nonperforming loans decreased by $20.1 million effective January 1, 2023 and individually evaluated loans decreased by $11.5 million effective January 1, 2023.

The table below provides additional information on the provision for (recovery of) credits losses and the ACL for 2023, 2022 and 2021.

The table below provides additional information on the provision for credits losses and the ACL for 2024, 2023 and 2022.

Table 22 - ACL Activity

3 unchanged sentences

adoption of ASU 2022-02 — 383 —

Cumulative change in accounting principle;

adoption of ASU 2022-02 383 — —

Charge-offs 18,334 10,863 9,133

Recoveries (8,012) (5,942) (6,758)

Net charge-offs (recoveries) 4,921 2,375 (3,348)

Provision for (recovery of) credit losses:

Net charge-offs 10,322 4,921 2,375

Provision for credit losses:

14,543 2,904 4,557

1 unchanged sentence

Average loans $ 7,627,419 $ 7,222,479 $ 6,955,674

Net charge-offs (recoveries) as a percentage of average loans 0.07 % 0.03 % (0.05) %

Net charge-offs as a percentage of average loans 0.14 % 0.07 % 0.03 %

For the year ended December 31, 2024, gross income of $6.4 million would have been recognized on loans that were nonaccrual as of December 31, 2024 had these loans been current in accordance with their original terms.

3 unchanged sentences

The following table provides additional information related to the allowance for credit losses for Park including information related to individual reserves and collective reserves, at December 31, 2024, December 31, 2023 and December 31, 2022.

Park has determined that any commercial loans which have been placed on nonaccrual status are to be individually evaluated.

Additionally, accruing collateral dependent commercial loans to borrowers experiencing financial difficulty are also to be individually evaluated.

Table 23- Allowance for Credit Losses Summary

2 unchanged sentences

Allowance on accruing PCD loans — — —

Reserves on individually evaluated loans 4,983 3,566 1,616

Reserves on individually evaluated loans - accruing (1)

Reserves on individually evaluated loans - nonaccrual 1,299 4,983 3,566

General reserves on collectively evaluated loans $ 86,667 $ 78,762 $ 81,813

1 unchanged sentence

Accruing PCD loans 2,174 2,835 4,653

Individually evaluated loans 45,215 78,341 74,502

Individually evaluated loans - accrual (1)

15,290 — 11,477

Individually evaluated loans - nonaccrual 53,149 45,215 66,864

Collectively evaluated loans $ 7,746,515 $ 7,428,171 $ 7,058,897

1 unchanged sentence

General reserve as a % of collectively evaluated loans 1.12 % 1.06 % 1.16 %

(1) Includes accruing collateral dependent commercial loans to borrowers experiencing financial difficulty at December 31, 2024 and 2023 and accruing TDRs at December 31, 2022.

The allowance for credit losses of $88.0 million at December 31, 2024 represented a $4.2 million, or 5.0%, increase compared to $83.7 million at December 31, 2023.

The increase was due to a $7.9 million increase in general reserves and a $3.7 million decrease in individual reserves on nonaccrual loans.

The $7.9 million increase in general reserves takes into account changing economic forecasts and prepayment and curtailment speeds, while balancing the risks associated with other economic factors.

Additionally, the $7.9 million increase in general reserves included a $757,000 additional reserve related to Hurricane Helene which impacted borrowers in Park's Carolina region.

The decrease in individual reserves at December 31, 2024 compared to December 31, 2023 was primarily related to $4.2 million in charge-offs related to two relationships that previously carried individual reserves, partially offset by new or increasing reserves on other credits.

The allowance for credit losses of $83.7 million at December 31, 2023 represented a $1.6 million, or 1.9%, decrease compared to $85.4 million at December 31, 2022.

The decrease was largely due to a $3.1 million decrease in general reserves taking into account changing economic forecasts while balancing the risks associated with other economic factors and a $1.4 million increase in individual reserves.

The allowance for credit losses of $85.4 million at December 31, 2022 represented an $2.2 million, or 2.6%, increase compared to $83.2 million at December 31, 2021.

The increase was largely due to a $2.0 million increase in individual reserves and a

$232,000 increase in general reserves, taking into consideration changing economic forecasts while balancing the risks associated with inflation and other economic factors.

Management believes that the allowance for credit losses at year-end 2024 is adequate to absorb estimated life of loan credit losses in the loan portfolio.

10 unchanged sentences

Adoption of ASU 2022-02 — 383 —

Adoption of ASU 2022-02 383 — —

Commercial, financial and agricultural 5,443 1,226 2,056

12 unchanged sentences

Total recoveries $ 8,012 $ 5,942 $ 6,758

Net charge-offs (recoveries) $ 4,921 $ 2,375 $ (3,348)

Provision (recovery) included in net income 2,904 4,557 (11,916)

Net charge-offs $ 10,322 $ 4,921 $ 2,375

Provision included in net income 14,543 2,904 4,557

Ending balance $ 87,966 $ 83,745 $ 85,379

Ratio of net charge-offs (recoveries) to average loans 0.07 % 0.03 % (0.05) %

Ratio of net charge-offs to average loans 0.14 % 0.07 % 0.03 %

Ratio of allowance for credit losses to end of year loans 1.13 % 1.12 % 1.20 %

22 unchanged sentences

Total $ 87,966 100.00 % $ 83,745 100.00 % $ 85,379 100.00 %

As of December 31, 2023, Park had no concentrations of loans exceeding 10% to borrowers engaged in the same or similar industries nor did Park have any loans to foreign governments.

Nonperforming Assets:

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2) loans which are contractually past due 90 days or more as to principal or interest payments but whose interest continues to accrue;

3) OREO which results from taking possession of property that served as collateral for a defaulted loan;

and 4) other nonperforming assets.

and 3) OREO which results from taking possession of property that served as collateral for a defaulted loan.

Prior to the adoption of ASU 2022-02 on January 1, 2023, nonperforming assets included:

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and 4) OREO which results from taking possession of property that served as collateral for a defaulted loan.

and 5) other nonperforming assets.

There were no other nonperforming assets as of December 31, 2023 and 2022.

As of December 31, 2021 other nonperforming assets consisted of aircraft acquired as part of a loan workout.

Generally, management obtains updated appraisal information for nonperforming loans and OREO annually.

As new appraisal information is received, management performs an evaluation of the appraisal and applies a discount for anticipated disposition

costs to determine the net realizable value of the collateral, which is compared to the outstanding principal balance to determine if additional write-downs are necessary.

As new appraisal information is received, management performs an evaluation of the appraisal and applies a discount for anticipated disposition costs to determine the net realizable value of the collateral, which is compared to the outstanding principal balance to determine if additional write-downs are necessary.

The following is a summary of Park’s nonperforming assets at the end of the last three years:

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Nonaccrual loans $ 68,178 $ 60,259 $ 79,696

Accruing TDRs (for years 2022 and prior) (1)

N/A 20,134 28,323

Accruing TDRs (for year 2022) (1)

N/A N/A 20,134

Loans past due 90 days or more and accruing 1,754 859 1,281

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OREO 938 983 1,354

Other nonperforming assets — — 2,750

Total nonperforming assets $ 70,870 $ 62,101 $ 102,465

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Substandard 3,484 3,414 1,965

Individually evaluated for impairment (1)

Individually evaluated for impairment - accrual (1)

15,290 — 11,477

Individually evaluated for impairment - nonaccrual

53,149 45,215 66,864

Accruing PCD 2,095 2,760 4,563

Total $ 4,249,286 $ 4,014,298 $ 3,873,789

(1) Prior to the adoption of ASU 2002-02 on January 1, 2023, accruing TDRs were also included in individually evaluated for impairment loans totals.

(1) Includes accruing collateral dependent commercial loans to borrowers experiencing financial difficulty at December 31, 2024 and 2023 and accruing TDRs at December 31, 2022.

*Commercial loans include:

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Park’s watch list includes all criticized and classified commercial loans, defined by Park as loans rated special mention or worse.

Park had $60.7 million of collectively evaluated commercial loans included on the watch list at December 31, 2023, compared to $81.8 million at December 31, 2022, and $75.4 million at December 31, 2021.

Park had $99.9 million of collectively evaluated commercial loans and accruing individually evaluated for impairment loans included on the watch list at December 31, 2024, compared to $60.7 million at December 31, 2023, and $93.3 million at December 31, 2022.

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 increase in watch list credits during the year ended 2024 was largely due to the downgrade of two non-bank consumer finance company relationships to special mention and/or accruing individually evaluated totaling $28.0 million, partially offset by problem loan resolutions.

The downgraded loans were current in respect to their contractual terms at December 31, 2024.

Delinquencies have remained low over the past 36 months.

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Park has determined that any commercial loans which have been placed on nonaccrual status will be individually evaluated.

Additionally, accruing collateral dependent commercial loans to borrowers experiencing financial difficulty will be individually evaluated.

Individual analysis will establish a reserve for loans in scope.

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Prior to the elimination of TDRs with the adoption of ASU 2022-02 on January 1, 2023, Park also included commercial accruing TDRs as individually evaluated loans.

Individually evaluated commercial loans were $45.2 million at December 31, 2023, a decrease of $33.1 million, compared to $78.3 million at December 31, 2022 and a decrease of $29.3 million, compared to $74.5 million at December 31, 2021.

The $78.3 million of individually evaluated commercial loans at December 31, 2022 included $11.5 million of loans modified in a TDR which were on accrual status and performing in accordance with the restructured ter ms, a decrease from $17.5 million at December 31, 2021.

At December 31, 2023, Park had taken partial charge-offs of $2.3 million related to the $45.2 million of the individually evaluated commercial loans, compared to partial charge-offs of $1.8 million related to the $78.3 million of individually evaluated commercial loans at December 31, 2022 and compared to partial charge-offs of $624,000 related to the $74.5 million of individually evaluated commercial loans at December 31, 2021.

The table below provides additional information related to Park's individually evaluated commercial loans at December 31, 2022, 2021, and 2020.

Table 30 - Individually Evaluated Commercial Loans

Nonaccrual individually evaluated commercial loans were $53.1 million at December 31, 2024, an increase of $7.9 million, compared to $45.2 million at December 31, 2023 and a decrease of $13.7 million, compared to $66.9 million at December 31, 2022.

Accruing individually evaluated commercial loans were $15.3 million at December 31, 2024, compared to no accruing individually evaluated commercial loans at December 31, 2023 and $11.5 million of accruing individually evaluated commercial loans at December 31, 2022.

The $11.5 million of individually evaluated commercial loans at December 31, 2022 consisted of loans modified in a TDR which were performing in accordance with the restructured ter ms.

At December 31, 2024, Park had taken partial charge-offs of $5.0 million related to the $53.1 million of the nonaccrual individually evaluated commercial loans, compared to partial charge-offs of $2.3 million related to the $45.2 million of nonaccrual individually evaluated commercial loans at December 31, 2023 and compared to partial charge-offs of $1.8 million related to the $78.3 million of nonaccrual individually evaluated commercial loans at December 31, 2022.

The table below provides additional information related to Park's nonaccrual individually evaluated commercial loans at December 31, 2024, 2023, and 2022.

Table 30 - Nonaccrual individually Evaluated Commercial Loans

Years ended December 31,

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The carrying amount of accruing loans acquired with deteriorated credit quality at December 31, 2024, 2023, and 2022 was $2.2 million, $2.8 million, and $4.7 million, respectively.

The carrying amount of nonaccrual loans acquired with deteriorated credit quality was $534,000 at December 31, 2023.

There were no nonaccrual loans acquired with deteriorated quality at December 31, 2022 or December 31, 2021.

The carrying amount of nonaccrual loans acquired with deteriorated credit quality was $551,000 and $534,000 at December 31, 2024 and December 31, 2023, respectively.

There were no nonaccrual loans acquired with deteriorated quality at December 31, 2022.

Additional Considerations:

As part of its quarterly allowance process, Park evaluates certain industries which are more likely to be under economic stress in the current environment.

The office sector continues to face challenges as it adjusts to the new normal of work from home brought on by the pandemic.

Nationally, office properties in downtown and urban business districts are seeing the most stress.

As of December 31, 2024, Park had $247.2 million of loans which were fully or partially secured by non-owner-occupied office space, $244.0 million of which were accruing.

This portfolio is not currently exhibiting signs of stress, but Park continues to monitor this portfolio, and others, for signs of deterioration.

CAPITAL RESOURCES

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Park’s objective in managing its liquidity is to maintain the ability to continuously meet the cash flow needs of customers, such as borrowings or deposit withdrawals, while at the same time seeking higher yields from longer-term lending and investing activities.

Cash and cash equivalents increased by $28.5 million during 2023 to $218.3 million at year end.

Cash and cash equivalents decreased by $57.7 million during 2024 to $160.6 million at year end.

Cash provided by operating activities was $178.8 million in 2024, $151.1 million in 2023 and $136.6 million in 2022.

Net income was the primary source of cash provided by operating activities during each year.

Cash provided by investing activities was $64.2 in 2023, cash used in investing activities was $403.7 million in 2022 and $412.1 million in 2021.

Cash used in investing activities was $19.1 million in 2024, cash provided by investing activities was $63.5 in 2023 and cash used in investing activities was $405.5 million in 2022.

Investment securities transactions and loan originations/repayments are the major uses or sources of cash in investing activities.

Proceeds from the sale, repayment or maturity of investment securities provide cash and purchases of investment securities use cash.

Net investment securities transactions provided cash of $418.9 million in 2023, used cash of $137.8 million in 2022 and used cash of $709.5 million in 2021.

Cash used by the net increase in the loan portfolio was $329.8 million in 2023, $271.8 million in 2022 and cash provided by the net paydown in the loan portfolio was $312.2 million in 2021.

Cash used in financing activities was $186.1 million in 2023, cash provided by financing activities was $239.4 million in 2022 and $103.5 million in 2021.

Net investment securities transactions provided cash of $338.5 million in 2024, provided cash of $418.9 million in 2023 and used cash of $137.8 million in 2022.

Cash used by the net increase in the loan portfolio was $341.5 million in 2024, $330.4 million in 2023 and $273.5 million in 2022.

Cash used in financing activities was $217.4 million in 2024, $186.1 million in 2023 and cash provided by financing activities was $239.4 million in 2022.

A major source of cash provided by or used in financing activities is the net change in deposits.

Deposits decreased and used $192.1 million of cash in 2023, and increased and provided $330.2 million of cash in 2022 and $332.2 million of cash in 2021.

These decreases and increases in deposits included a decrease in off-balance sheet deposits of $194.8 million in 2023, $787.1 million in 2022 and increases in off-balance sheet deposits of $273.0 million in 2021.

Other major sources of cash from financing activities are short-term borrowings and long-term debt.

In 2023, net short-term borrowings increased and provided $100.8 million in cash and net long-term borrowings was unchanged.

In 2022, net short-term borrowings decreased and used $11.4 million in cash and net long-term debt was unchanged.

In 2021, net short-term borrowings decreased and used $103.4 million in cash and net long-term debt decreased and used $32.5 million in cash.

Cash used in the repurchase of common shares was $23.0 million in 2023 and $16.0 million in 2021.

No common shares were repurchased in 2022.

Deposits increased and provided $101.0 million of cash in 2024, decreased and used $192.1 million of cash in 2023, and increased and provided $330.2 million of cash in 2022.

These decreases and increases in deposits included an increase in off-balance sheet deposits of $114.0 million in 2024, a decrease in off-balance sheet deposits of $194.8 million in 2023 and a decrease in off-balance sheet deposits of $787.1 million in 2022.

Other major sources of cash from financing activities are short-term borrowings.

In 2024, net short-term borrowings decreased and used $237.8 million in cash.

In 2023, net short-term borrowings increased and provided $100.8 million in cash.

In 2022, net short-term borrowings decreased and used $11.4 million in cash.

Cash used in the repurchase of common shares was $23.0 million in 2023.

No common shares were repurchased in 2024 or 2022.

Finally, cash declined by $77.5 million in 2024, $69.0 million in 2023 and $76.6 million in 2022, from the payment of cash dividends.

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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.

In the opinion of Park's management, the present funding sources provide more than adequate liquidity for Park to meet our cash flow needs.

In the opinion of Park's management, the present funding sources provide more than adequate liquidity for Park to meet our cash flow needs in the short- and long-term.

The following table shows interest rate sensitivity data for five different time intervals as of December 31, 2024:

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1,424,213 — 1,253,802 — — 2,678,015

Time deposits 425,419 263,320 82,153 32,244 3,464 806,600

Time deposits and brokered/bid CD deposits 504,904 293,380 86,439 24,938 2,122 911,783

Other — 1,265 — — — 1,265

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This model is based on actual cash flows and repricing characteristics for balance sheet instruments and incorporates market-based assumptions regarding the impact of changing interest rates on the prepayment rate of certain assets and liabilities.

This model also includes management’s projections for activity levels of various balance sheet instruments and non-interest fee income and operating

This model also includes management’s projections for activity levels of various balance sheet instruments and non-interest fee income and operating expense.

Assumptions based on the historical behavior of deposit rates and balances in relation to changes in interest rates are also incorporated into this earnings simulation model.

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Subordinated notes (3)

17 — — — 189,651 189,651

Operating leases 13 1,882 4,747 4,559 9,334 20,522

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(2) Pension payments reflect 10 years of payments, through 2034.

(3) Subordinated notes are shown above based on their contractual maturity.

Of the $189.7 million in subordinated notes, $15.0 million is currently able to be redeemed and $174.7 million is able to be redeemed on or after September 1, 2025.

As of December 31, 2024, Park had $29.7 million in unfunded commitments related to investments in qualified affordable housing projects which are not included in "Table 32 - Contractual Obligations" above.

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Cash payment for fractional shares in dividend reinvestment plan — (14)

Treasury shares repurchased (16,048) (137,659)

Treasury shares reissued for share-based compensation awards 3,477 34,245

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Balance at December 31, 2022 $ (138,019) 16,263,583

Cash payment for fractional shares in dividend reinvestment plan — (14)

Treasury shares repurchased (23,017) (199,000)

Treasury shares reissued for share-based compensation awards 4,014 38,842

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Common shares (including treasury shares) had a balance of $463.7 million, $463.3 million and $462.4 million at December 31, 2024, 2023, and 2022, respectively.

Accumulated other comprehensive (loss) income, net reflected a loss of $66.2 million at December 31, 2023 and a loss of $102.4 million at December 31, 2022, and reflected income of $15.2 million at December 31, 2021.

During 2023, the change in net unrealized holding (loss) gain on AFS debt securities, net of income tax, was a gain of $27.8 million, which included a $6.2 million, net of income taxes, realized loss on the sale of debt securities.

During 2022, the change in net unrealized holding (loss) gain on AFS debt securities, net of income tax, was a loss of $116.9 million.

Accumulated other comprehensive (loss) income, net reflected a loss of $46.2 million, $66.2 million, and $102.4 million at December 31, 2024, 2023, and 2022, respectively.

During 2024, the change in net unrealized holding (loss) gain on AFS debt

securities, net of income tax, was a gain of $5.0 million, which included a $415,000, net of income tax, realized loss on the sale of debt securities.

During 2022, the change in net unrealized holding (loss) gain on AFS debt securities, net of income tax, was a loss of $116.9 million.

Additionally, Park recognized an other comprehensive gain of $8.4 million, net of tax, related to the change in pension plan assets and benefit obligations in 2023, compared to an other comprehensive loss of $888,000, net of tax, related to the change in pension plan assets and benefit obligations in 2022, compared to an other comprehensive gain of $28.6 million, net of tax, related to the change in pension plan assets and benefit obligations in 2021.

Finally, during 2022, Park recognized an other comprehensive gain of $206,000, net of income tax, related to an unrealized net holding gain on cash flow hedging derivatives, compared to an other comprehensive gain of $492,000, net of income tax, related to an unrealized net holding gain on cash flow hedging derivatives in 2021.

There was no unrealized holding gain or loss on cash flow hedging derivatives in 2023.

Additionally, Park recognized an other comprehensive gain of $15.1 million, net of income tax, related to the change in pension plan assets and benefit obligations in 2024.

The $15.1 million gain in 2024 included $4.9 million, net of income tax, related to a realized pension settlement gain.

Park recognized an other comprehensive gain of $8.4 million, net of income tax, related to the change in pension plan assets and benefit obligations in 2023, compared to an other comprehensive loss of $888,000, net of income tax, related to the change in pension plan assets and benefit obligations in 2022.

Finally, during 2022, Park recognized an other comprehensive gain of $206,000, net of income tax, related to an unrealized net holding gain on cash flow hedging derivatives.

There was no unrealized holding gain or loss on cash flow hedging derivatives in 2024 or 2023.

Financial institution regulators have established guidelines for minimum capital ratios for banks, thrifts and bank holding companies.

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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 7. Management’s Discussion and Analysis