PARK NATIONAL CORP /OH/

Previous wording

Management has included in the tables included within the "Items Impacting Comparability" section of this MD&A information relating to the annualized return on average tangible equity, the annualized return on average tangible assets and pre-tax, pre-provision net income for the three months ended June 30, 2025 and June 30, 2024 and for the six months ended June 30, 2025 and June 30, 2024. For the purpose of calculating the annualized return on average tangible equity, a non-U.S. GAAP financial measure, net income for each period is divided by average tangible equity during the period. Average tangible equity equals average shareholders' equity during the applicable period less average goodwill and other intangible assets during the applicable period. For the purpose of calculating the annualized return on average tangible assets, a non-U.S. GAAP financial measure, net income for each period is divided by average tangible assets during the period. Average tangible assets equals average assets during the applicable period less average goodwill and other intangible assets during the applicable period. For the purpose of calculating pre-tax, pre-provision net income, a non-U.S. GAAP financial measure, income taxes and the provision for credit losses are added back to net income, in each case during the applicable period.

Current wording

Management has included in the tables included within the "Items Impacting Comparability" section of this MD&A information relating to the annualized return on average tangible equity, the annualized return on average tangible assets and pre-tax, pre-provision net income for the three months ended September 30, 2025 and September 30, 2024 and for the nine months ended September 30, 2025 and September 30, 2024. For the purpose of calculating the annualized return on average tangible equity, a non-U.S. GAAP financial measure, net income for each period is divided by average tangible equity during the period. Average tangible equity equals average shareholders' equity during the applicable period less average goodwill and other intangible assets during the applicable period. For the purpose of calculating the annualized return on average tangible assets, a non-U.S. GAAP financial measure, net income for each period is divided by average tangible assets during the period. Average tangible assets equals average assets during the applicable period less average goodwill and other intangible assets during the applicable period. For the purpose of calculating pre-tax, pre-provision net income, a non-U.S. GAAP financial measure, income taxes and the provision for credit losses are added back to net income, in each case during the applicable period.

Previous wording

As noted above, in calculating the ACL, management weighs different scenarios, including a baseline (most likely) scenario and an adverse scenario. At June 30, 2025, management applied a 50% weighting to the baseline scenario and applied a 50% weighting to the adverse scenario. To create hypothetical sensitivity analyses, management calculated a quantitative allowance using a 100% weighting applied to a baseline scenario and a quantitative allowance using a 100% weighting applied to an adverse scenario. The adverse scenario assumes among other things that: (1) Worries that the Israel-Hamas conflict will widen and Russia's invasion of the Ukraine will persist longer than expected. Risk grows that China may block the Taiwan Strait, causing business and consumer confidence to decline. Retaliatory tariffs reduce U.S. exports and lead to a global downturn. (2) Due to continuing concerns about rising inflation, the Federal Reserve raises federal funds rates. However, the Federal Reserve resumes easing rates as the recession persists. (3) Europe goes into a recession as increased tariffs lower exports. Populism in Europe rises, raising uncertainties about the longevity of the Euro zone and causes financial stress to highly indebted nations. These developments further lower U.S. exports and the corporate earnings of foreign subsidiaries of U.S. companies. (4) Impacts of Trump tariffs and deportations are significantly worse than expected. Tariff rates rise from about 2% to 27% and the administration does not roll them back significantly until the second half of 2027. Retaliatory tariffs reduce U.S. exports and lead to global turn-down. Tax revenues are lower than in the baseline creating a higher deficit. (5) A recession occurs in the third quarter of 2025 and lasts through the first quarter of 2026 resulting in real GDP declining by 2.6%, unemployment rates rising to a peak of 8.3% in the third quarter of 2026, and the stock market falling 35% from the second quarter of 2025 to the first quarter of 2026. The adverse scenario also forecasts Ohio unemployment for the next twelve months to range from 7.0% to 9.6%. Excluding consideration of qualitative adjustments, this sensitivity analysis would result in a hypothetical increase in Park's ACL of $28.7 million as of June 30, 2025 if only the adverse scenario was used. Excluding consideration of qualitative adjustments, a corresponding $28.7 million decrease in Park's ACL would occur in a hypothetical scenario if only the baseline (most likely) scenario was used.

Current wording

As noted above, in calculating the ACL, management weighs different scenarios, including a baseline (most likely) scenario and an adverse scenario. At September 30, 2025, management applied a 50% weighting to the baseline scenario and applied a 50% weighting to the adverse scenario. To create hypothetical sensitivity analyses, management calculated a quantitative allowance using a 100% weighting applied to a baseline scenario and a quantitative allowance using a 100% weighting applied to an adverse scenario. The adverse scenario assumes among other things that: (1) Worries that the Israel-Hamas conflict will widen and Russia's invasion of the Ukraine will persist longer than expected. Risk grows that China may block the Taiwan Strait, causing business and consumer confidence to decline. Retaliatory tariffs reduce U.S. exports and lead to a global downturn. (2) Due to continuing concerns about rising inflation, the Federal Reserve raises federal funds rates. However, the Federal Reserve resumes easing rates as the recession persists. (3) Europe goes into a recession as increased tariffs lower exports. Populism in Europe rises, raising uncertainties about the longevity of the Euro zone and causing financial stress to highly indebted nations. These developments further lower U.S. exports and the corporate earnings of foreign subsidiaries of U.S. companies. (4) Impacts of Trump tariffs and deportations are significantly worse than expected. Tariff rates rise from about 2% to 26% and remain at those rates through the end of 2028. Retaliatory tariffs reduce U.S. exports and lead to global turn-down. Tax revenues are lower than in the baseline creating a higher deficit. (5) A recession occurs in the fourth quarter of 2025 and lasts through the second quarter of 2026 resulting in real GDP declining by 2.6%, unemployment rates rising to a peak of 8.4% in the fourth quarter of 2026, and the stock market falling 35% from the third quarter of 2025 to the second quarter of 2026. The adverse scenario also forecasts Ohio unemployment for the next twelve months to range from 7.0% to 9.7%. Excluding consideration of qualitative adjustments, this sensitivity analysis would result in a hypothetical increase in Park's ACL of $30.2 million as of September 30, 2025 if only the adverse scenario was used. Excluding consideration of qualitative adjustments, a corresponding $30.2 million decrease in Park's ACL would occur in a hypothetical scenario if only the baseline (most likely) scenario was used.

Previous wording

The following table reflects Park's net income for the first and second quarters of 2025, for the first half of 2025 and 2024 (the six months ended June 30), and for the year ended December 31, 2024.

Current wording

The following table reflects Park's net income for the first, second and third quarters of 2025, for the first nine months of 2025 and 2024 (the nine months ended September 30), and for the year ended December 31, 2024.

Previous wording

Net interest income of $213.4 million for the six months ended June 30, 2025 represented a $19.9 million, or 10.3%, increase compared to $193.5 million for the six months ended June 30, 2024. The increase was a result of a $13.1 million increase in interest income and a $6.8 million decrease in interest expense.

Current wording

Net interest income of $324.4 million for the nine months ended September 30, 2025 represented a $29.8 million, or 10.1%, increase compared to $294.6 million for the nine months ended September 30, 2024. The increase was a result of a $18.3 million increase in interest income and a $11.5 million decrease in interest expense.

Previous wording

The $13.1 million increase in interest income was due to a $19.6 million increase in interest income on loans, partially offset by a $6.5 million decrease in investment income. The $19.6 million increase in interest income on loans was primarily the result of a $343.1 million (or 4.55%) increase in average loans, from $7.53 billion for the six months ended June 30, 2024 to $7.88 billion for the six months ended June 30, 2025, as well as an increase in the yield on loans, which increased 26 basis points to 6.32% for the six months ended June 30, 2025, compared to 6.06% for the six months ended June 30, 2024. The $6.5 million decrease in investment income was primarily the result of a $144.3 million (or 9.64%) decrease in average investments, including money market investments, from $1.50 billion for the six months ended June 30, 2024 to $1.35 billion for the six months ended June 30, 2025. The decrease in investment income was also due to a decrease in the yield on investments, including money market investments, which decreased 54 basis points to 3.46% for the six months ended June 30, 2025, compared to 4.00% for the six months ended June 30, 2024.

Current wording

The $18.3 million increase in interest income was due to a $26.1 million increase in interest income on loans, partially offset by a $7.8 million decrease in investment income. The $26.1 million increase in interest income on loans was primarily the result of a $315.6 million (or 4.16%) increase in average loans, from $7.58 billion for the nine months ended September 30, 2024 to $7.90 billion for the nine months ended September 30, 2025, as well as an increase in the yield on loans, which increased 20 basis points to 6.32% for the nine months ended September 30, 2025, compared to 6.12% for the nine months ended September 30, 2024. The $7.8 million decrease in investment income was primarily the result of a $86.8 million (or 5.90%) decrease in average investments, including money market investments, from $1.47 billion for the nine months ended September 30, 2024 to $1.38 billion for the nine months ended September 30, 2025. The decrease in investment income was also due to a decrease in the yield on investments, including money market investments, which decreased 50 basis points to 3.47% for the nine months ended September 30, 2025, compared to 3.97% for the nine months ended September 30, 2024.

Previous wording

The $6.8 million decrease in interest expense was due to a $5.0 million decrease in interest expense on deposits, as well as a $1.8 million decrease in interest expense on borrowings. The decrease in interest expense on deposits was the result of a decrease in the cost of deposits of 22 basis points, from 1.97% for the six months ended June 30, 2024 to 1.75% for the six months ended June 30, 2025. This decrease was partially offset by a $146.0 million (or 2.59%) increase in average on-balance sheet interest bearing deposits from $5.64 billion for the six months ended June 30, 2024, to $5.78 billion for the six months ended June 30, 2025. The increase in on-balance sheet interest bearing deposits was due to increase in savings accounts and time deposits, which were partially offset by decreases in transaction accounts and brokered and bid CD deposits. The decrease in interest expense on borrowings was the result of a decrease in the cost of borrowings of 24 basis points, from 4.17% for the six months ended June 30, 2024 to 3.93% for the six months ended June 30, 2025 as well as a $68.2 million (or 20.21%) decrease in average borrowings from $337.3 million for the six months ended June 30, 2024, to $269.2 million for the six months ended June 30, 2025.

Current wording

The $11.5 million decrease in interest expense was due to a $8.8 million decrease in interest expense on deposits, as well as a $2.7 million decrease in interest expense on borrowings. The decrease in interest expense on deposits was the result of a decrease in the cost of deposits of 26 basis points, from 2.00% for the nine months ended September 30, 2024 to 1.74% for the nine months ended September 30, 2025. This decrease was partially offset by a $153.1 million (or 2.70%) increase in average on-balance sheet interest bearing deposits from $5.68 billion for the nine months ended September 30, 2024, to $5.83 billion for the nine months ended September 30, 2025. The increase in on-balance sheet interest bearing deposits was due to increases in savings accounts and time deposits, which were partially offset by decreases in transaction accounts and brokered and bid CD deposits. The decrease in interest expense on borrowings was the result of a decrease in the cost of borrowings of 29 basis points, from 4.11% for the nine months ended September 30, 2024 to 3.82% for the nine months ended September 30, 2025 as well as a $69.1 million (or 21.56%) decrease in average borrowings from $320.4 million for the nine months ended September 30, 2024, to $251.3 million for the nine months ended September 30, 2025. The balance of average borrowings was impacted by the redemption of subordinated debt. On September 1, 2025, $175 million of subordinated debt was repaid, followed by an additional repayment of $15 million of subordinated debt on September 30, 2025.

Previous wording

The provision for credit losses of $3.6 million for the six months ended June 30, 2025 represented a decrease of $1.7 million, compared to $5.3 million for the six months ended June 30, 2024. Refer to the “Credit Metrics and Provision for Credit Losses” section for additional details regarding the level of the provision for credit losses recognized in each period presented.

Current wording

The provision for credit losses of $7.6 million for the nine months ended September 30, 2025 represented a decrease of $3.0 million, compared to $10.6 million for the nine months ended September 30, 2024. Refer to the “Credit Metrics and Provision for Credit Losses” section for additional details regarding the level of the provision for credit losses recognized in each period presented.

Previous wording

The table below reflects Park's total other income for the six months ended June 30, 2025 and 2024.

Current wording

The table below reflects Park's total other income for the nine months ended September 30, 2025 and 2024.

Previous wording

Other income of $57.9 million for the six months ended June 30, 2025 represented an increase of $2.9 million, or 5.3%, compared to $55.0 million for the six months ended June 30, 2024. The $1.9 million increase in income from fiduciary activities was largely due to an increase in the market value of assets under management. The $601,000 increase in service charges on deposits was largely due to an increase in maintenance fees on deposits. The $1.2 million increase in other service income was mainly due to an increase in mortgage related other service income. The $920,000 decrease in bank owned life insurance income was primarily related to a decrease in death benefits received during the six months ended June 30, 2025. The change in loss on sale of debt securities, net was due to net losses on the sale of debt securities of $398,000 recorded during the six months ended June 30, 2024 compared to no net losses on sale of debt securities during the six months ended June 30, 2025. The change in gain (loss) on equity securities, net was mostly due to increases in net gains in equity securities carried at fair value as well as a decrease in the net loss on capital investments during the six months ended June 30, 2025 compared to the same period of 2024. The decrease in miscellaneous income was largely due to an increase in net loss on sale and disposal of assets, largely due to the impact of strategic initiatives.

Current wording

Other income of $88.5 million for the nine months ended September 30, 2025 represented a decrease of $3.0 million, or 3.3%, compared to $91.5 million for the nine months ended September 30, 2024. The $2.6 million increase in income from fiduciary activities was largely due to an increase in the market value of assets under management. The $817,000 increase in service charges on deposits was largely due to an increase in maintenance fees on deposits. The $1.9 million increase in other service income was mainly due to an increase in mortgage and commercial related other service income. The $1.4 million decrease in bank owned life insurance income was primarily related to a decrease in death benefits received during the nine months ended September 30, 2025. The change in pension settlement gain was due to a $5.8 million pension settlement gain during the nine months ended September 30, 2024, which was related 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 during the nine months ended September 30, 2025. The change in loss on sale of debt securities, net was due to net losses on the sale of debt securities of $398,000 recorded during the nine months ended September 30, 2024 compared to no net losses on sale of debt securities during the nine months ended September 30, 2025. The change in gain on equity securities, net was mostly due to increases in the net gain on capital investments which was more than offset by a decrease in net gains (losses) in equity securities carried at fair value during the nine months ended September 30, 2025 compared to the same period of 2024. The decrease in miscellaneous income was primarily due to a decrease in net gains on the sale and disposal of assets, largely due to the impact of strategic initiatives.

Previous wording

The table below reflects Park's total other expense for the six months ended June 30, 2025 and 2024.

Current wording

The table below reflects Park's total other expense for the nine months ended September 30, 2025 and 2024.

Previous wording

Total other expense of $157.1 million for the six months ended June 30, 2025 represented an increase of $4.7 million compared to $152.4 million for the six months ended June 30, 2024. The increase in salaries expense was primarily related to increases in base salary expense, incentive compensation expense, and share-based compensation expense. The decrease in employee benefit expense was primarily due to a decrease in group insurance expense and retirement related expense, partially offset by an increase in payroll tax related expense. The increase in occupancy expense was related to increases in rental of lease space expense and utilities expense. The decrease in furniture and equipment expense was primarily due to decreases in depreciation expense. The increase in data processing fees was mainly related to an increase in software related expenses, partially offset by a decrease in ATM and debit card processing expense. The increase in professional fees and services expense was primarily due to increases in legal expenses, consulting expenses and trust system provider expense. The decrease in miscellaneous expense is primarily due to a decrease in expense for the allowance for unfunded credit losses and other non-loan related losses.

Current wording

Total other expense of $236.6 million for the nine months ended September 30, 2025 represented a decrease of $1.5 million compared to $238.1 million for the nine months ended September 30, 2024. The increase in salaries expense was primarily related to increases in base salary expense, incentive compensation expense and share-based compensation expense. The decrease in employee benefit expense was primarily due to a decrease in group insurance expense and retirement related expense, partially offset by an increase in payroll tax related expense. The decrease in furniture and equipment expense was primarily due to decreases in depreciation expense. The increase in data processing fees was mainly related to an increase in software related expenses, partially offset by a decrease in ATM and debit card processing expense. The increase in professional fees and services expense was primarily due to increases in consulting expenses and trust system provider expense, partially offset by decreases in other fees, recruiting expense, director fees and appraisal fees. The decrease in foundation contributions was the result of a $2.0 million contribution made during the nine months ended September 30, 2024, with no contribution being made during the nine months ended September 30, 2025. The decrease in miscellaneous expense is primarily due to a decrease in expense for the allowance for unfunded credit losses and other non-loan related losses as well as a decrease in other miscellaneous expenses.

Previous wording

The table below provides certain balance sheet information and financial ratios for Park as of or for the six months ended June 30, 2025 and 2024 and the year ended December 31, 2024.

Current wording

The table below provides certain balance sheet information and financial ratios for Park as of or for the nine months ended September 30, 2025 and 2024 and the year ended December 31, 2024.

Previous wording

(1) Average assets for the six months ended June 30, 2025 and 2024 and for the year ended December 31, 2024.

Current wording

(1) Average assets for the nine months ended September 30, 2025 and 2024 and for the year ended December 31, 2024.

Previous wording

(2) Efficiency ratio is calculated by dividing total other expense by the sum of fully taxable equivalent net interest income and other income. Fully taxable equivalent net interest income includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate. The taxable equivalent adjustments were $1.3 million, $1.2 million and $2.4 million for the six months ended June 30, 2025 and 2024 and the year ended December 31, 2024, respectively.

Current wording

(2) Efficiency ratio is calculated by dividing total other expense by the sum of fully taxable equivalent net interest income and other income. Fully taxable equivalent net interest income includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate. The taxable equivalent adjustments were $2.0 million, $1.8 million and $2.4 million for the nine months ended September 30, 2025 and 2024 and the year ended December 31, 2024, respectively.

Previous wording

Loans outstanding at June 30, 2025 were $7.96 billion, compared to (i) $7.82 billion at December 31, 2024, an increase of $146.1 million, and (ii) $7.66 billion at June 30, 2024, an increase of $298.8 million. The table below breaks out the change in loans outstanding, by loan type.

Current wording

Loans outstanding at September 30, 2025 were $7.99 billion, compared to (i) $7.82 billion at December 31, 2024, an increase of $175.6 million, and (ii) $7.73 billion at September 30, 2024, an increase of $261.8 million. The table below breaks out the change in loans outstanding, by loan type.

Previous wording

Park's allowance for credit losses was $89.8 million at June 30, 2025, compared to $88.0 million at December 31, 2024, an increase of $1.8 million, or 2.1%. Refer to the “Credit Metrics and Provision for Credit Losses” section for additional information regarding Park's loan portfolio and the level of provision for credit losses recognized in each period presented.

Current wording

Park's allowance for credit losses was $91.8 million at September 30, 2025, compared to $88.0 million at December 31, 2024, an increase of $3.8 million, or 4.3%. Refer to the “Credit Metrics and Provision for Credit Losses” section for additional information regarding Park's loan portfolio and the level of provision for credit losses recognized in each period presented.

Previous wording

Total deposits at June 30, 2025 were $8.24 billion, compared to (i) $8.14 billion at December 31, 2024, an increase of $94.2 million and (ii) $8.31 billion at June 30, 2024, a decrease of $74.7 million. Total deposits including off balance sheet deposits at June 30, 2025 were $8.49 billion, compared to (i) $8.26 billion at December 31, 2024, an increase of $234.1 million and (ii) $8.31 billion at June 30, 2024, an increase of $180.3 million.

Current wording

Total deposits at September 30, 2025 were $8.33 billion, compared to (i) $8.14 billion at December 31, 2024, an increase of $186.4 million and (ii) $8.21 billion at September 30, 2024, an increase of $115.3 million. Total deposits including off balance sheet deposits at September 30, 2025 were $8.48 billion, compared to (i) $8.26 billion at December 31, 2024, an increase of $222.0 million and (ii) $8.21 billion at September 30, 2024, an increase of $266.1 million.

Previous wording

During the six months ended June 30, 2025, total deposits including off balance sheet deposits increased by $234.1 million, or 2.8%. This increase consisted of a $253.5 million increase in total commercial deposits and a $139.9 million increase in off balance sheet deposits, partially offset by a $148.5 million decrease in brokered and bid CD deposits and a $10.8 million decrease in 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.

Current wording

During the nine months ended September 30, 2025, total deposits including off balance sheet deposits increased by $222.0 million, or 2.7%. This increase consisted of a $414.6 million increase in total commercial deposits and a $35.6 million increase in off balance sheet deposits, partially offset by a $156.6 million decrease in brokered and bid CD deposits and a $71.6 million decrease in 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.

Previous wording

As of June 30, 2025, Park had approximately $1.5 billion of uninsured deposits, which was 17.9% of total deposits. Uninsured deposits of $1.5 billion included $420.4 million of deposits that were over $250,000, but were fully collateralized by Park's investment securities portfolio.

Current wording

As of September 30, 2025, Park had approximately $1.5 billion of uninsured deposits, which was 18.1% of total deposits. Uninsured deposits of $1.5 billion included $398.0 million of deposits that were over $250,000, but were fully collateralized by Park's investment securities portfolio.

Previous wording

Comparison for the Second Quarters of 2025 and 2024

Current wording

Comparison for the Third Quarters of 2025 and 2024

Previous wording

Net interest income increased by $11.2 million, or 11.4%, to $109.0 million for the second quarter of 2025, compared to $97.8 million for the second quarter of 2024. See the discussion under the table below.

Current wording

Net interest income increased by $9.9 million, or 9.8%, to $111.0 million for the third quarter of 2025, compared to $101.1 million for the third quarter of 2024. See the discussion under the table below.

Previous wording

Yield on Loans: Average loan balances increased $335.1 million, or 4.4%, to $7,922 million for the second quarter of 2025, compared to $7,587 million for the second quarter of 2024. The average yield on the loan portfolio increased by 24 basis points to 6.37% for the second quarter of 2025, compared to 6.13% for the second quarter of 2024.

Current wording

Yield on Loans: Average loan balances increased $261.1 million, or 3.4%, to $7,942 million for the third quarter of 2025, compared to $7,681 million for the third quarter of 2024. The average yield on the loan portfolio increased by 10 basis points to 6.34% for the third quarter of 2025, compared to 6.24% for the third quarter of 2024.

Previous wording

Cost of Deposits: Average interest bearing deposit balances increased $142.3 million, or 2.5%, to $5,769 million for the second quarter of 2025, compared to $5,627 million for the second quarter of 2024. The average cost of funds on deposit balances decreased by 26 basis points to 1.73% for the second quarter of 2025, compared to 1.99% for the second quarter of 2024. The table below shows for the three months ended June 30, 2025 and 2024, the average balance and cost of funds by type of deposit.

Current wording

Cost of Deposits: Average interest bearing deposit balances increased $166.5 million, or 2.9%, to $5,932 million for the third quarter of 2025, compared to $5,765 million for the third quarter of 2024. The average cost of funds on deposit balances decreased by 32 basis points to 1.74% for the third quarter of 2025, compared to 2.06% for the third quarter of 2024. The table below shows for the three months ended September 30, 2025 and 2024, the average balance and cost of funds by type of deposit.

Previous wording

Net interest income increased by $19.9 million, or 10.3%, to $213.4 million for the second quarter of 2025, compared to $193.5 million for the second quarter of 2024. See the discussion under the table below.

Current wording

Net interest income increased by $29.8 million, or 10.1%, to $324.4 million for the first nine months of 2025, compared to $294.6 million for the first nine months of 2024. See the discussion under the table below.

Previous wording

Average interest earning assets for the first half of 2025 increased by $198.8 million, or 2.2%, to $9,231 million for the first half of 2025, compared to $9,033 million for the first half of 2024. The average yield on interest earning assets increased by 18 basis points to 5.90% for the first half of 2025, compared to 5.72% for the first half of 2024.

Current wording

Average interest earning assets for the first nine months of 2025 increased by $228.8 million, or 2.5%, to $9,284 million for the first nine months of 2025, compared to $9,055 million for the first nine months of 2024. The average yield on interest earning assets increased by 13 basis points to 5.90% for the first nine months of 2025, compared to 5.77% for the first nine months of 2024.

Previous wording

Loan interest income for the six months ended June 30, 2025, included $2.0 million in interest related to payments received on certain SEPH nonaccrual loan relationships. Excluding the impact of this interest, for the six months ended June 30, 2025, the average yield on total loans was 6.26%, the average yield on interest earning assets was 5.85% and the net interest margin was 4.64%.

Current wording

Loan interest income for the nine months ended September 30, 2025, included $2.0 million in interest related to payments received on certain SEPH nonaccrual loan relationships. Excluding the impact of this interest, for the nine months ended September 30, 2025, the average yield on total loans was 6.29%, the average yield on interest earning assets was 5.87% and the net interest margin was 4.67%.

Previous wording

Average interest bearing liabilities for the second quarter of 2025 increased by $98.4 million, or 1.7%, to $6,038 million, compared to $5,940 million for the second quarter of 2024. The average cost of interest bearing liabilities decreased by 27 basis points to 1.83% for the second quarter of 2025, compared to 2.10% for the second quarter of 2024.

Current wording

Average interest bearing liabilities for the first nine months of 2025 increased by $84.0 million, or 1.4%, to $6,083 million, compared to $5,999 million for the first nine months of 2024. The average cost of interest bearing liabilities decreased by 28 basis points to 1.83% for the first nine months of 2025, compared to 2.11% for the first nine months of 2024.

Previous wording

Yield on Loans: Average loan balances increased $343.1 million, or 4.6%, to $7,878 million for the first half of 2025, compared to $7,535 million for the first half of 2024. The average yield on the loan portfolio increased by 26 basis points to 6.32% for the first half of 2025, compared to 6.06% for the first half of 2024.

Current wording

Yield on Loans: Average loan balances increased $315.6 million, or 4.2%, to $7,899 million for the first nine months of 2025, compared to $7,584 million for the first nine months of 2024. The average yield on the loan portfolio increased by 20 basis points to 6.32% for the first nine months of 2025, compared to 6.12% for the first nine months of 2024.

Previous wording

The table below shows the average balance and tax equivalent yield by type of loan for the six months ended June 30, 2025 and 2024.

Current wording

The table below shows the average balance and tax equivalent yield by type of loan for the nine months ended September 30, 2025 and 2024.

Previous wording

Commercial loan interest income for the six months ended June 30, 2025, included $2.0 million in interest related to payments received on certain SEPH nonaccrual loan relationships. Excluding the impact of this interest, the average tax equivalent yield on commercial loans was 6.24% for the six months ended June 30, 2025 and the average tax equivalent yield on total loans was 6.26% for the six months ended June 30, 2025.

Current wording

Commercial loan interest income for the nine months ended September 30, 2025, included $2.0 million in interest related to payments received on certain SEPH nonaccrual loan relationships. Excluding the impact of this interest, the average tax equivalent yield on commercial loans was 6.25% for the nine months ended September 30, 2025 and the average tax equivalent yield on total loans was 6.29% for the nine months ended September 30, 2025.

Previous wording

Cost of Deposits: Average interest bearing deposit balances increased $146.0 million, or 2.6%, to $5,781 million for the first half of 2025, compared to $5,635 million for the first half of 2024. The average cost of funds on deposit balances decreased by 22 basis points to 1.75% for the first half of 2025, compared to 1.97% for the first half of 2024. The table below shows for the six months ended June 30, 2025 and 2024, the average balance and cost of funds by type of deposit.

Current wording

Cost of Deposits: Average interest bearing deposit balances increased $153.1 million, or 2.7%, to $5,832 million for the first nine months of 2025, compared to $5,679 million for the first nine months of 2024. The average cost of funds on deposit balances decreased by 26 basis points to 1.74% for the first nine months of 2025, compared to 2.00% for the first nine months of 2024. The table below shows for the nine months ended September 30, 2025 and 2024, the average balance and cost of funds by type of deposit.

Previous wording

Yield on Average Interest Earning Assets: The following table shows the tax equivalent yield on average interest earning assets for the six months ended June 30, 2025 and for the years ended December 31, 2024, 2023 and 2022.

Current wording

Yield on Average Interest Earning Assets: The following table shows the tax equivalent yield on average interest earning assets for the nine months ended September 30, 2025 and for the years ended December 31, 2024, 2023 and 2022.

Previous wording

(1) Loan interest income includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate. The taxable equivalent adjustment was $545,000 for the six months ended June 30, 2025, and $964,000, $811,000 and $627,000 for the years ended December 31, 2024, 2023 and 2022, respectively.

Current wording

(1) Loan interest income includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate. The taxable equivalent adjustment was $826,000 for the nine months ended September 30, 2025, and $964,000, $811,000 and $627,000 for the years ended December 31, 2024, 2023 and 2022, respectively.

Previous wording

(2) Interest income on tax-exempt investment securities includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate. The taxable equivalent adjustment was $737,000 for the six months ended June 30, 2025, and $1.5 million, $2.9 million and $2.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Current wording

(2) Interest income on tax-exempt investment securities includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate. The taxable equivalent adjustment was $1.1 million for the nine months ended September 30, 2025, and $1.5 million, $2.9 million and $2.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Previous wording

Cost of Average Interest Bearing Liabilities: The following table shows the cost of funds on average interest bearing liabilities for the six months ended June 30, 2025 and for the years ended December 31, 2024, 2023 and 2022.

Current wording

Cost of Average Interest Bearing Liabilities: The following table shows the cost of funds on average interest bearing liabilities for the nine months ended September 30, 2025 and for the years ended December 31, 2024, 2023 and 2022.

Previous wording

The table below provides additional information on the provision for credit losses for the three-month and six-month periods ended June 30, 2025 and 2024.

Current wording

The table below provides additional information on the provision for credit losses for the three-month and nine-month periods ended September 30, 2025 and 2024.

Previous wording

Net charge-offs were $1.2 million or 0.06% annualized, of total average loans, for the three months ended June 30, 2025, compared to $1.6 million, or 0.09% annualized, of total average loans, for the three months ended June 30, 2024. Net charge-offs were $1.8 or 0.05% annualized, of total average loans, for the six months ended June 30, 2025, compared to $2.5 million, or 0.07% annualized, of total average loans, for the three months ended June 30, 2024. Included in recoveries for the three months ended June 30, 2025 was $717,000 in recoveries from former Vision Bank loan relationships compared to $117,000 in recoveries for the three months ended June 30, 2024. Included in recoveries for the six months ended June 30, 2025 was $1.8 million in recoveries from former Vision Bank loan relationships compared to $1.1 million in recoveries for the six months ended June 30, 2024.

Current wording

Net charge-offs were $2.1 million or 0.10% annualized, of total average loans, for the three months ended September 30, 2025, compared to $4.7 million, or 0.24% annualized, of total average loans, for the three months ended September 30, 2024. Net charge-offs were $3.8 million or 0.07% annualized, of total average loans, for the nine months ended September 30, 2025, compared to $7.1 million, or 0.13% annualized, of total average loans, for the nine months ended September 30, 2024.

Previous wording

The total allowance for credit losses of $89.8 million at June 30, 2025 represented a $1.8 million, or 2.1%, increase compared to $88.0 million at December 31, 2024. The increase was due to a $2.3 million increase in general reserves partially offset by a $525,000 decrease in individual reserves on nonaccrual loans.

Current wording

The total allowance for credit losses of $91.8 million at September 30, 2025 represented a $2.0 million, or 2.2%, increase compared to $89.8 million at June 30, 2025. The increase was due to a $1.8 million increase in individual reserves on nonaccrual loans and a $167,000 increase in general reserves.

Previous wording

The total allowance for credit losses of $89.8 million at June 30, 2025 represented a $1.7 million, or 1.9%, increase compared to $88.1 million at March 31, 2025. The increase was due to a $1.9 million increase in general reserves, partially offset by a $270,000 decrease in individual reserves on nonaccrual loans.

Current wording

The total allowance for credit losses of $91.8 million at September 30, 2025 represented a $3.8 million, or 4.3%, increase compared to $88.0 million at December 31, 2024. The increase was due to a $2.5 million increase in general reserves and a $1.3 million increase in individual reserves on nonaccrual loans.

Previous wording

The increase in general reserves at June 30, 2025 compared to March 31, 2025 and December 31, 2024 included a $1.4 million additional qualitative reserve related to several special purpose mortgage loan programs to assist borrowers in attaining home ownership. As of June 30, 2025, the loans in these special purpose mortgage loan programs totaled $207.9 million. Delinquency rates within these special purpose mortgage loan programs have become higher than those of Park's traditional 30-year mortgage portfolio loans. These special purpose mortgage loan programs require very little, if any, down payment, and the loan-to-value on these loans are generally at 90% or above. For these reasons, management expects that the PD and LGD related to loans within these programs will be higher than that of Park's standard 30-year portfolio loans and established a qualitative factor related to the increased risk of loss on mortgage loans within these programs. Management will continue to evaluate this portfolio as additional information becomes available.

Current wording

The increase in general reserves at September 30, 2025 compared to December 31, 2024 included a $1.1 million additional qualitative reserve related to several special purpose mortgage loan programs to assist borrowers in attaining home ownership. As of September 30, 2025, the loans in these special purpose mortgage loan programs totaled $225.0 million. Delinquency rates within these special purpose mortgage loan programs have become higher than those of Park's traditional 30-year mortgage portfolio loans. These special purpose mortgage loan programs require very little, if any, down payment, and the loan-to-value on these loans are generally at 90% or above. For these reasons, management expects that the PD and LGD related to loans within these programs will be higher than that of Park's standard 30-year portfolio loans and established a qualitative factor related to the increased risk of loss on mortgage loans within these programs. Management will continue to evaluate this portfolio as additional information becomes available.