PARK NATIONAL CORP /OH/ (PRK)

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Non-U.S. GAAP Financial Measures

This Management's Discussion and Analysis of Financial Condition and Results of Operations (or "MD&A") contains non-U.S. GAAP financial measures where management believes them to be helpful in understanding Park’s results of operations or financial position. Where non-U.S. GAAP financial measures are used, the comparable U.S. GAAP financial measures, as well as the reconciliation from the comparable U.S. GAAP financial measures, can be found herein.

Items Impacting Comparability of Period Results

From time to time, revenue, expenses and/or taxes are impacted by items judged by management of Park to be outside of ordinary banking activities and/or by items that, while they may be associated with ordinary banking activities, are so unusually large that their impact is believed by management of Park at that time to be infrequent or short-term in nature. Most often, these items impacting comparability of period results are due to merger and acquisition activities and revenue and expenses related to former Vision Bank loan relationships. In other cases, they may result from management's decisions associated with significant corporate actions outside of the ordinary course of business.

Even though certain revenue and expense items are naturally subject to more volatility than others due to changes in market and economic environment conditions, as a general rule volatility alone does not result in the inclusion of an item as one impacting comparability of period results. For example, changes in the provision for/(recovery of) credit losses (aside from those related to former Vision Bank loan relationships), gains (losses) on equity securities, net, and asset valuation adjustments, reflect ordinary banking activities and are, therefore, typically excluded from consideration as items impacting comparability of period results.

Management believes the disclosure of items impacting comparability of period results provides a better understanding of Park's performance and trends and allows management to ascertain which of such items, if any, to include or exclude from an analysis of Park's performance; i.e., within the context of determining how that performance differed from expectations, as well as how, if at all, to adjust estimates of future performance taking such items into account.

Items impacting comparability of the results of particular periods are not intended to be a complete list of items that may materially impact current or future period performance.

Calculation of Non-U.S. GAAP Financial Measures

Park's management uses certain non-U.S. GAAP financial measures to evaluate Park's performance. Specifically, management reviews the return on average tangible equity, the return on average tangible assets and pre-tax, pre-provision net income.

Management has included in the tables included within the "Items Impacting Comparability" section of this MD&A information relating to the annualized return on average tangible equity, the annualized return on average tangible assets and pre-tax, pre-provision net income for the three months ended March 31, 2026 and March 31, 2025. 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.

Management believes that the disclosure of the annualized return on average tangible equity, the annualized return on average tangible assets and pre-provision net income presents additional information to the reader of the condensed consolidated financial statements, which, when read in conjunction with the condensed consolidated financial statements prepared in accordance with U.S. GAAP, assists in analyzing Park's operating performance, ensures comparability of operating performance from period to period, and facilitates comparisons with the performance of Park's peer financial holding companies and bank holding companies, while eliminating certain non-operational effects of acquisitions. In the tables included within the "Items Impacting Comparability" section of this MD&A, Park has provided a reconciliation of average tangible equity from average shareholders' equity, average tangible assets from average 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 annualized return on average tangible equity, the annualized return on average tangible assets and pre-tax, pre-provision net

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income are substitutes for the annualized return on average equity, the annualized return on average assets and net income, respectively, as determined in accordance with U.S. GAAP.

FTE (fully taxable equivalent) Financial Measures

Interest income, yields, and ratios on a FTE basis are considered non-U.S. GAAP financial measures. Management believes net interest income on a FTE basis provides an insightful picture of the interest margin for comparison purposes. The FTE basis also allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The FTE basis assumes a federal corporate income tax rate of 21 percent. In the tables included within the "Items Impacting Comparability" section of this MD&A, Park has provided a reconciliation of FTE interest income solely for the purpose of complying with SEC Regulation G and not as an indication that FTE interest income, yields and ratios are substitutes for interest income, yields and ratios, as determined in accordance with U.S. GAAP.

Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates.

Allowance for Credit Losses: Park believes the determination of the allowance for credit losses involves a higher degree of judgment and complexity than its other significant accounting policies. The allowance for credit losses is calculated with the objective of maintaining a reserve level believed by management to be sufficient to absorb estimated credit losses over the life of an asset or an off-balance sheet credit exposure. Management’s determination of the adequacy of the allowance for credit losses is based on periodic evaluations of past events, including historical credit loss experience on financial assets with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the financial assets. However, this evaluation has subjective components requiring material estimates, including expected default probabilities, the expected loss given default, the amounts and timing of expected future cash flows on individually evaluated loans, and estimated losses based on historical loss experience and forecasted economic conditions. All of these factors may be susceptible to significant change. To the extent that actual results differ from management estimates, additional provisions for credit losses may be required that would adversely impact earnings in future periods.

One of the significant judgments impacting the ACL estimate is the economic forecasts for Ohio unemployment, Ohio GDP, and Ohio HPI. These economic forecasts inform the regression model used to calculate cash flows during the reasonable and supportable forecast period. Additionally, multiple economic forecast scenarios are weighted to arrive at the quantitative reserve. Changes in the economic forecast or weighting could significantly affect the estimated credit losses which could potentially lead to materially different allowance levels from one reporting period to the next.

As noted above, in calculating the ACL, management weighs different scenarios, including a baseline (most likely) scenario and an adverse scenario. At March 31, 2026, 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) Russia’s invasion of Ukraine will persist longer than expected. Risk increases that China might block the Taiwan Strait. Business and consumer confidence declines. Declines in European economies and retaliatory tariffs hurt US exports and corporate earnings in subsidiaries. (2) The conflict between the US and Iran results in the Strait of Hormuz being closed longer than expected causing oil prices to rise to $107 per barrel in Q2 2026 compared to $76 in baseline. (3) The combination of recession and rising inflation cause the Federal Reserve to lower federal funds rates in Q2 2026 but only slightly below baseline for a couple of quarters. As the recession persists and inflation subsides the Federal Reserve subsequently reduces the federal funds rate more significantly. (4) Europe goes into a recession as increased tariffs lower exports. Populism in Europe rises, raising uncertainties about longevity of the Euro zone and causes financial stress to highly indebted nations, especially Italy. These developments further lower US exports and corporate earnings of foreign subsidiaries of US companies. (5) The tariff rate rises to 19%, more than the 11% in baseline, and it remains there through the end of 2028. There is full and permanent extension of the Tax Cuts and Jobs Act with enhancements included in the One Big Beautiful Bill Act. Growth in Medicaid and food assistance funding is reduced but rising health care costs will keep upward pressure on public health spending and the discretionary non-defense budget is capped below historic average. Defense spending is expected to grow. Tax revenues are lower than in the baseline creating a higher deficit and concerns about national debt level raises uncertainty over the course of tax policy. Though no crisis materializes, business and consumer sentiment is damaged. (6) Recession Q1 2026 and lasts through Q4 2026 and real GDP declines by 2.6%. Unemployment rate rises to a peak of 8.5% Q2 2027. Stock market falls 35% from Q1 2026 to Q4 2026. Excluding consideration of qualitative adjustments, this sensitivity analysis would result in a hypothetical increase in Park's ACL of $32.5 million as of March 31,

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2026 if only the adverse scenario was used. Excluding consideration of qualitative adjustments, a corresponding $32.5 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 Credit Losses" section of this MD&A for additional discussion.

Pension Plan: The determination of pension plan obligations and related expenses requires the use of assumpti

[Excerpt truncated for page length; source filing is linked above.]

ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

NON-U.S. GAAP FINANCIAL MEASURES

Management's discussion and analysis contains non-U.S. GAAP financial measures where management believes it to be helpful in understanding Park’s results of operations or financial position. Where non-U.S. GAAP financial measures are used, the comparable U.S. GAAP financial measures, as well as the reconciliation from the comparable U.S. GAAP financial measures, can be found herein.

Items Impacting Comparability of Period Results

From time to time, revenue, expenses and/or taxes are impacted by items judged by management of Park to be outside of ordinary banking activities and/or by items that, while they may be associated with ordinary banking activities, are so unusually large that their impact is believed by management of Park at that time to be infrequent or short-term in nature. Most often, these items impacting comparability of period results are due to merger and acquisition activities and revenue and expenses related to former Vision Bank loan relationships. In other cases, they may result from management's decisions associated with significant corporate actions outside of the ordinary course of business.

Even though certain revenue and expense items are naturally subject to more volatility than others due to changes in market and economic environment conditions, as a general rule volatility alone does not result in the inclusion of an item as one impacting comparability of period results. For example, changes in the provision for credit losses (aside from those related to former Vision Bank loan relationships), gains (losses) on equity securities, net, and asset valuation adjustments, reflect ordinary banking activities and are, therefore, typically excluded from consideration as items impacting comparability of period results.

Management believes the disclosure of items impacting comparability of period results provides a better understanding of Park's performance and trends and allows management to ascertain which of such items, if any, to include or exclude from an analysis of Park's performance; i.e., within the context of determining how that performance differed from expectations, as well as how, if at all, to adjust estimates of future performance taking such items into account.

Items impacting comparability of the results of particular periods are not intended to be a complete list of items that may materially impact current or future period performance.

Non-U.S. GAAP Financial Measures

Park's management uses certain non-U.S. GAAP financial measures to evaluate Park's performance. Specifically, management reviews the return on average tangible equity, the return on average tangible assets, the tangible equity to tangible assets ratio, 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, 2025, December 31, 2024, and December 31, 2023. For the purpose of calculating the 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 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 the tangible equity to tangible assets ratio, a non-U.S. GAAP financial measure, tangible equity is divided by tangible assets. Tangible equity equals total shareholders' equity less goodwill and other intangible assets, in each case at period end. Tangible assets equal total assets less goodwill and other intangible assets, in each case at period end. For the purpose of calculating 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.

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

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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. GAAP

FTE (fully taxable equivalent) Financial Measures

Interest income, yields, and ratios on a FTE basis are considered non-U.S. GAAP financial measures. Management believes net interest income on a FTE basis provides an insightful picture of the interest margin for comparison purposes. The FTE basis also allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The FTE basis assumes a corporate federal statutory tax rate of 21%. In the tables included within the "ANALYSIS OF EARNINGS - Net Interest Income" section of this Management's Discussion and Analysis of Financial Condition and Results of Operations, Park has provided detail of FTE interest income solely for the purpose of complying with SEC Regulation G and not as an indication that FTE interest income, yields and ratios are substitutes for interest income, yields and ratios, as determined in accordance with U.S. GAAP.

OVERVIEW

The table below reflects Park's net income for the years ended December 31, 2025, 2024 and 2023.

(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, 2025 of $180.1 million represented a $28.7 million, or 18.9% increase compared to $151.4 million for the year ended December 31, 2024. 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.

Pre-tax, pre-provision net income (non-U.S. GAAP) for the year ended December 31, 2025 of $232.8 million represented a $33.5 million, or 16.8%, increase compared to $199.3 million for the year ended December 31, 2024. Pre-tax, pre-provision net income (non-U.S. 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.

Net income for each of the years ended December 31, 2025, 2024 and 2023, included several items of income and expense that impacted comparability of period results. These items are detailed in the "ANALYSIS OF EARNINGS - Items Impacting Comparability" section of this Management's Discussion and Analysis of Financial Condition and Results of Operations.

DIVIDENDS ON COMMON SHARES

Cash dividends declared on Park's common shares were $5.53 in 2025, $4.74 in 2024 and $4.20 in 2023. Dividends declared as a percentage of net income was 50%, 51% and 54% for 2025, 2024 and 2023, respectively. Park has historically targeted a dividend payout ratio of 50% each year.

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The quarterly cash dividend on Park's common shares was $1.07 per share for the first, second, third and fourth quarters of 2025. Additionally, in the fourth quarter of 2025 there was a special cash dividend of $1.25 per share. The quarterly cash dividend on Park's common shares was $1.06 per share for the first, second, third, and fourth quarters of 2024. Additionally, in fourth quarter of 2024 there was a 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 and there was no special dividend in 2023.

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 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.  The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes.  Actual results could differ from those estimates.

Allowance for Credit Losses: Park believes the determination of the allowance for credit losses involves a higher degree of judgment and complexity than its other significant accounting policies. The allowance for credit losses is calculated with the objective of maintaining a reserve level believed by management to be sufficient to absorb estimated credit losses over the life of an asset or an off-balance sheet credit exposure. Management’s determination of the adequacy of the allowance for credit losses is based on periodic evaluations of past events, including historical credit loss experience on financial assets with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the financial assets. However, this evaluation has subjective components requiring material estimates, including expected default probabilities, the expected loss given default, the amounts and timing of expected future cash flows on individually evaluated loans, and estimated losses based on historical loss experience and forecasted economic conditions. All of these factors may be susceptible to significant change. To the extent that actual results differ from management estimates, additional provisions for credit losses may be required that would adversely impact earnings in future periods.

One of the significant judgments impacting the ACL estimate is the economic forecasts for Ohio unemployment, Ohio GDP, and Ohio HPI. These economic forecasts inform the regression model used to calculate cash flows during the reasonable and supportable forecast period. Additionally, multiple economic forecast scenarios are weighted to arrive at the quantitative reserve. Changes in the economic forecast or weighting could significantly affect the estimated credit losses which could potentially lead to materially different allowance levels from one reporting period to the next.

As noted above, in calculating the ACL, management weighs different scenarios, including a baseline (most likely) scenario and an adverse scenario. At December 31, 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 US exports and lead to a global downturn. (2) The combination of a recession and rising inflation causes the Federal Reserve to lower federal funds rates in Q1 2026 but only slightly below baseline for a couple of quarters. As a recession persists and inflation subsides, the Federal Reserve subsequently reduces the federal funds rate more significantly. (3) Europe goes into a recession as increased tariffs lower exports. Populism in Europe rises, raising uncertainties about longevity of the Euro zone and causes financial stress to highly indebted nations, especially Italy. These developments further lower US exports and corporate earnings of foreign subsidiaries of US companies. (4) Impacts of tariffs and deportations are significantly worse than expected. Tariff rate rises from about 19% and it remains there through the end of 2028. Retaliatory tariffs reduce US exports and lead to global turndown. Tax revenues are lower than in the baseline creating a higher deficit and concerns about national debt level raise uncertainty about the course of tax policy. Full extensions of the Tax Cuts and Jobs Act personal provisions are passed as well as increased state/local tax deductions, certain business tax provisions, and other tax credits/deductions do not expire. Growth in Medicaid funding is reduced and foreign aid funding remains capped. Defense and immigration spending will continue to rise. (5) Recession Q1 2026 and lasts through Q3 2026 and real GDP declines by 2.6%. Unemployment rate rises to a peak of 8.4% Q1 2027. Stock market falls 35% from Q1 2026 to Q3 2026. Excluding consideration of qualitative adjustments, this sensitivity analysis would result in a hypothetical increase in Park's ACL of $30.0 million as of December 31, 2025 if only the

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adverse scenario was used. Excluding consideration of qualitative adjustments, a corresponding $30.0 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 CREDIT LOSSES” section within this "ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" for additional discussion.

Pension Plan: The determination of pension plan obligations and related expenses requires the use of assumptions to estimate the amount of benefits that employees will earn while working, as well as the present value of those benefits. Annual pension 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:

•the interest rate used to determine the present value of liabilities (discount rate);

•certain employee-related factors, such as turnover, retirement age and mortality;

•the expected return on assets in our funded pension plan; and

•the rate of salary increases where benefits are based on earnings.

The most significant of these assumptions is the discount rate and the expected return on assets. The discount rate utilized for the December 31, 2025 calculation was 5.95% and the expected return on plan assets was 6.92%. This compares to the discount rate utilized for the December 31, 2024 calculation of 5.89% and the expected return on plan assets of 6.92%. Presented below is the estimated impact on Park's projected benefit obligation ("PBO") and 2025 pension expense assuming changes in the significant assumptions.

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 income/expense and obligation.

ABOUT OUR BUSINESS

Through our national bank subsidiary, PNB, Park is engaged in a general commercial banking and trust and wealth management business, primarily in Ohio, Kentucky, North Carolina, South Carolina, and, as of February 1, 2026, Tennessee, with the exception of nationwide aircraft loans and nationwide asset-based lending to consumer finance companies. Management believes there are a significant number of consumers and businesses that seek long-term relationships with community-based financial institutions of quality and strength.  While not engaging in activities such as foreign lending, nationally syndicated loans or investment banking, Park attempts to meet the needs of our customers for commercial, real estate and consumer loans, and investment, fiduciary and deposit services.

Park’s subsidiaries compete for deposits and loans with other banks, savings associations, credit unions and other types of financial institutions.  At December 31, 2025, Park operated 87 financial service offices (including those of PNB and Scope Leasing, Inc. ("Scope Aircraft Finance")) and a network of 107 automated teller machines in 24 Ohio counties, five North Carolina counties, four South Carolina counties and one Kentucky county. SEPH operated one administrative office, located in Newark, Ohio.

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SOURCE OF FUNDS

Deposits: Park’s major source of funds is deposits from individuals, businesses and local government entities.  These deposits consist of non-interest bearing and interest bearing deposits.

Average total deposits were $8,462 million in 2025, compared to $8,260 million in 2024 and compared to $8,360 million in 2023. The average interest rate paid on interest bearing deposits was 1.71% in 2025, 1.97% in 2024 and 1.52% in 2023. The average cost of interest bearing deposits for each quarter of 2025 was 1.61% for the fourth quarter, 1.74% for the third quarter, 1.73% for the second quarter and 1.76% for the first quarter.

The table below provides a summary of deposit balances as of December 31, 2025 and 2024, along with the change over the past year.

During the years ended December 31, 2025 and 2024, 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, 2025 and December 31, 2024, Park had $105.3 million and $115.2 million, respectively, in off balance sheet deposits.

The table below breaks out the change in deposit balances, by deposit type, for Park.

During the year ended December 31, 2025, total deposits including off balance sheet deposits increased by $90.3 million, or 1.1%. This increase consisted of a $213.2 million increase in total commercial deposits and a $46.5 million increase in retail deposits, partially offset by a $159.5 million decrease in brokered and bid CD deposits and a $9.9 million decrease in off balance sheet 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. Public funds include Bid

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Ohio CDs. The following table details the change in public fund deposits held on and off Park's balance sheet.

As of December 31, 2025, Park had approximately $1.5 billion of uninsured deposits, which was 18.5% of total deposits. Uninsured deposits of $1.5 billion included $382.6 million of deposits that were over $250,000, but were fully collateralized by Park's investment securities portfolio. As of December 31, 2024, Park had approximately $1.4 billion of uninsured deposits, which was 17.6% of total deposits. Uninsured deposits of $1.4 billion included $395.4 million of deposits that were over $250,000, but were fully collateralized by Park's investment securities portfolio. The uninsured amounts, those in excess of the $250,000 FDIC insurance limit, are estimates based on the methodologies used for the Corporation's regulatory reporting requirements.

The following table provides a summary of the portion of the Corporation's time deposits, by account, that are in excess of the FDIC insurance limit of $250,000, by remaining time until maturity, as of December 31, 2025:

Short-Term Borrowings: Short-term borrowings consist of securities sold under agreements to repurchase, Federal Home Loan Bank advances, Federal Funds purchased and other borrowings.  These funds are used to manage the Corporation’s liquidity needs and interest rate sensitivity risk.  The average rate paid on short-term borrowings generally moves closely with changes in market interest rates for short-term investments.  The average rate paid on short-term borrowings was 1.45% in 2025, compared to 2.60% in 2024 and 2.58% in 2023. The year-end balance for short-term borrowings was $82 million at December 31, 2025, compared to $90 million at December 31, 2024 and $328 million at December 31, 2023.

Subordinated Notes: Park assumed, with the 2007 acquisition of Vision Bank's parent holding company, $15.5 million of floating rate junior subordinated notes.  The $15.5 million of junior subordinated notes were purchased by Vision Bancshares Trust I ("Trust I") following the issuance of Trust I's $15.0 million of floating rate preferred securities. The interest rate on these junior subordinated notes adjusted every quarter at 174 basis points above the three-month CME Term SOFR.  The maturity date for the junior subordinated notes was December 30, 2035, and, since December 30, 2010, Park has had the right to prepay the junior subordinated notes, without penalty. On September 30, 2025, Park redeemed in full, $15.0 million in Trust Preferred Securities at a redemption price in cash equal to 100% of the principal amount of the Trust Preferred Securities, plus accrued and unpaid interest.

On August 20, 2020, Park completed the issuance and sale of $175 million aggregate principal amount of its 4.50% Fixed-to-Floating Rate Subordinated Notes due 2030 (the "Subordinated Notes"). Beginning on September 1, 2025, Park had the right to redeem the Subordinated Notes, in whole or in part. On September 1, 2025, Park redeemed in full, $175 million outstanding of the Subordinated Notes at a redemption price in cash equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest.

The repayments were made using available cash on hand and did not involve any refinancing or issuance of new debt.

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As of December 31, 2025, Park has no subordinated debt outstanding. At December 31, 2024, the Subordinated Notes, net of unamortized issuance costs, totaled $189.7 million and qualified as Tier 2 capital for Park under the Federal Reserve Board capital adequacy rules.

In 2025, the average balance of subordinated notes was $128 million, compared to $189 million in 2024 and $189 million in 2023. The average interest rate paid on subordinated notes was 4.91% in 2025, compared to 4.98% in 2024 and 4.97% in 2023.

See "Note 17 - 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.

Total Debt: Average total debt (subordinated notes and short-term) was $208 million in 2025, compared to $310 million in 2024 and $372 million in 2023. Average total debt decreased by $101.6 million, or 32.8% in 2025 compared to 2024 and decreased $62.0 million, or 16.7% in 2024 compared to 2023. Average long term subordinated notes were 61% of average total debt in 2025, compared to 61% of average total debt in 2024 and 51% of average total debt in 2023.

Shareholders' Equity: The ratio of total shareholders' equity to total assets was 13.80% at December 31, 2025, compared to 12.69% at December 31, 2024 and 11.64% at December 31, 2023. The non-GAAP ratio of tangible shareholders’ equity [shareholders' equity ($1,352.8 million) less goodwill ($159.6 million) and other intangible assets ($2.4 million)] to tangible assets [total assets ($9,805.0 million) less goodwill ($159.6 million) and other intangible assets ($2.4 million)] was 12.35% at December 31, 2025, compared to 11.21% at December 31, 2024 and 10.14% at December 31, 2023.

In accordance with U.S. GAAP, Park reflects any unrealized holding gain or loss on AFS debt securities 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 $32.3 million at year-end 2025, compared to an unrealized net holding loss, net of income taxes, of $62.9 million at year-end 2024 and an unrealized net holding loss, net of income taxes, $67.9 million at year-end 2023. The unrealized net holding loss on AFS debt securities at December 31, 2025 was impacted by the realization of $1.8 million in losses, net of income taxes, during the year ended December 31, 2025 as the result of the sale of $79.1 million in AFS debt securities. 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.

In accordance with U.S. GAAP, Park adjusts accumulated other comprehensive (loss) income to recognize the net actuarial gain or loss and prior service cost reflected in the funding status of Park’s pension plan.  See "Note 20 - 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 additional information on the accounting for Park’s pension plan. At year-end 2025, the balance in accumulated other comprehensive loss pertaining to the pension plan was unrealized income of $19.6 million, compared to unrealized income of $16.8 million at December 31, 2024 and compared to unrealized income of $1.7 million at December 31, 2023.

The net other comprehensive income in 2025 was largely due to a $3.6 million ($2.8 million, net of taxes) net actuarial gain. The gain was due to asset returns greater than expected and an increase in the discount rate, partially offset by assumption updates for a change in the mortality table for lump sum distributions, reflecting updates for the 2025 assumption study, demographic losses and an increase in the interest credit rate.

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 for 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.

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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.

INVESTMENT OF FUNDS

Loans:  Average loans were $7,924 million in 2025, compared to $7,627 million in 2024 and $7,222 million in 2023. The average yield on loans was 6.33% in 2025, compared to 6.14% in 2024 and 5.55% in 2023. Approximately 46% of Park’s loan balances mature or reprice within one year (see Table 32).  The average yield on loans for each quarter of 2025 was 6.34% for the fourth quarter, 6.34% for the third quarter, 6.37% for the second quarter and 6.26% for the first quarter.

Loan interest income for 2025, 2024, and 2023 included $2.0 million, $54,000 and $631,000, respectively, related to payments received on certain SEPH nonaccrual loan relationships, some of which are participated with PNB. In addition, loan interest income included $668,000, $1.2 million and $633,000, respectively, of the accretion of loan purchase accounting adjustments related to the acquisitions of NewDominion and Carolina Alliance. Loan interest income for 2023 included interest and fee income related to PPP loans of $69,000.

Excluding the impact of the purchase accounting accretion, SEPH income, and PPP income, the average yield on loans was 6.29%, 6.13% and 5.53%, for the years ended December 31, 2025, 2024, and 2023. Excluding the impact of the purchase accounting accretion, SEPH income, and PPP income, the average yield on loans was 6.33% for the fourth quarter of 2025, 6.33% for the third quarter of 2025, 6.32% for the second quarter of 2025, and 6.21% for the first quarter of 2025.

At December 31, 2025, loan balances were $8,051 million compared to $7,817 million at year-end 2024, an increase of $234 million, or 3.0%. At December 31, 2024, loan balances were $7,817 million, compared to $7,476 million at year-end 2023, an increase of $341 million, or 4.6%.

The table below reports year-end loan balances by type of loan for the past three years.

On a combined basis, year-end commercial, financial and agricultural loans, construction real estate loans and commercial real estate loans increased by $143.7 million, or 3.9%, in 2025. The increase in 2025 was due to an increase in commercial real estate loans of $214.3 million, which were partially offset by an decrease in commercial, financial and agricultural loans of $57.4 million and a decrease in construction real estate loans of $13.2 million. 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 a decrease in commercial, financial and agricultural loans of $26.1 million.

Consumer loans decreased by $87.1 million, or 4.6% in 2025 and decreased by $35.6 million, or 1.8% in 2024. The change in consumer loans in 2025 and 2024 was primarily due to decreases in automobile lending in Ohio due to strategic balance sheet management.

Residential real estate loans increased by $174.9 million, or 8.0% in 2025 and increased by $170.9 million, or 8.4% in 2024. The increase in 2025 was due to an increase in commercial loans secured by residential real estate of $108.3 million, an increase in home equity loans secured by residential real estate of $37.6 million and an increase in mortgage loans secured by residential real estate of $29.1 million. The increase in 2024 was due to an increase in mortgage loans secured by residential

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real estate of $106.7 million, an increase in commercial loans secured by residential real estate of $35.0 million and an increase in home equity loans secured by residential real estate of $29.1 million.

Leases increased by $2.5 million to $32.4 million in 2025 and increased by $5.8 million to $29.8 million in 2024.

The table below summarizes the distribution of maturities for loan segments as of December 31, 2025:

(1) Nonaccrual loans of $66.5 million are included within the one year or less classification above.

The table below summarizes the composition of the loan portfolio by fixed and adjustable rate as of December 31, 2025 that are contractually due after December 31, 2026:

Investment Securities: Park’s investment securities portfolio is structured to minimize credit risk, provide liquidity and contribute to earnings. As conditions change over time, Park’s overall interest rate risk, liquidity needs and potential return on the investment portfolio will change.  Management regularly evaluates the securities in the investment portfolio as circumstances evolve.  Circumstances that could result in the sale of a security include: to better manage interest rate risk; to meet liquidity needs; or to improve the overall net interest margin.

AFS debt securities are carried on the books at their estimated fair value with the unrealized holding gain or loss, net of income taxes, accounted for as accumulated other comprehensive (loss) income. The debt securities that are classified as AFS are free to be sold in future periods in carrying out Park’s investment strategies.

Beginning in 2021, Park began investing in the AAA and AA rated tranches of Collateralized Loan Obligations ("CLOs"). CLOs had a fair value as of December 31, 2025 of $56.1 million. Management closely monitors the credit status of these securities. At December 31, 2025, the market value of overcollateralization was greater than 125% for each CLO. The market value of overcollateralization is a measure of the underlying collateral value of the instrument relative to our specific tranche position, and our AAA or AA rated senior tranches are supported by subordinate tranches.

Average taxable debt investment securities were $785 million in 2025, compared to $1,082 million in 2024 and $1,387 million in 2023. The average yield on taxable debt investment securities was 3.02% in 2025 compared to 3.86% in 2024 and 3.81% in 2023. Average tax-exempt debt investment securities were $218 million in 2025 compared to $219 million in 2024 and $400 million in 2023. The average tax-equivalent yield on tax-exempt debt investment securities was 3.36% in 2025, compared to 3.19% in 2024 and 3.47% in 2023.

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Total debt securities (at amortized cost) were $730 million at December 31, 2025, compared to $1,076 million at December 31, 2024 and $1,419 million at December 31, 2023. Management purchased debt securities totaling $88 million in 2025, $3 million in 2024 and $4 million in 2023. Proceeds from repayments, redemptions and maturities of debt securities were $355 million in 2025, $300 million in 2024 and $145 million in 2023.

During 2025, Park sold certain AFS debt securities with a book value of $79.1 million at a gross loss of $2.3 million. 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.

For the years ended December 31, 2025, 2024, and 2023, the average tax-equivalent yield on the total investment portfolio was 3.10%, 3.74% and 3.73%, respectively.  The weighted average remaining maturity of the total investment portfolio was 4.9 years at December 31, 2025, 4.7 years at December 31, 2024 and 4.8 years at December 31, 2023. Obligations of U.S. Government sponsored entities and U.S. Government sponsored entities' asset-backed securities were approximately 49.9% of the total investment portfolio at year-end 2025, 47.1% of the total investment portfolio at year-end 2024 and 44.4% of the total investment portfolio at year-end 2023.

Other investment securities (as shown on Park's Consolidated Balance Sheets) consist of restricted stock investments in the FHLB and the FRB and equity securities which include equity investments in other financial institutions and equity investments in limited partnerships which provide mezzanine funding.  Total other investment securities were $113 million at December 31, 2025, $104 million at December 31, 2024 and $96 million at December 31, 2023. There were $494,000 in FHLB stock purchases in 2025, $9.2 million in FHLB stock purchases in 2024 and $18.2 million in FHLB stock purchases in 2023. Proceeds from the redemption/repurchase of FHLB stock were $1.1 million in 2025, compared to $18.4 million in 2024, and $11.7 million in 2023. No shares of FRB stock were purchased or sold in any of the years ended December 31, 2025, 2024, or 2023. Management purchased equity securities totaling $5.8 million in 2025, $10.2 million in 2024 and $2.2 million in 2023. During the years ended December 31, 2025, 2024, and 2023, Park entered into partnership agreements with commitments totaling $157,000, $2.5 million and $2.7 million, respectively. Funding of limited partnerships totaled $8.1 million, $7.5 million and $5.6 million during the years ended December 31, 2025, 2024, and 2023, respectively.

"Gain on equity securities, net" on Park's Consolidated Statements of Income were $4.7 million, $3.1 million and $971,000 for the years ended December 31, 2025, 2024 and 2023, respectively. These gains on equity securities were made up of gains (losses) on equity investments carried at fair value or modified cost 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, 2025, 2024 and 2023, $3.5 million, $2.6 million and $600,000, respectively, of gains on equity investments carried at fair value or modified cost were recorded within "Gain on equity securities, net" on Park's Consolidated Statements of Income.

For the years ended December 31, 2025, 2024 and 2023, $1.2 million, $468,000 and $371,000, 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.  At year-end 2025, management estimated that the average maturity of the investment portfolio would lengthen to 5.4 years with a 100 basis point increase in long-term interest rates and would lengthen to 5.7 years with a 200 basis point increase in long-term interest rates. Likewise, the average maturity of the investment portfolio would shorten if long-term interest rates were to decrease as the principal repayments from mortgage-backed securities and CMOs would increase and callable securities would price to their call dates. At year-end 2025, management estimated that the average maturity of the investment portfolio would decrease to 4.3 years with a 100 basis point decrease in long-term interest rates and to 4.2 years with a 200 basis point decrease in long-term interest rates.

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The table below sets forth the carrying value of investment securities, as well as the percentage held within each category at year-end 2025, 2024 and 2023:

The carrying value of investments in debt securities at December 31, 2025, is shown in the following table by contractual maturity, except for asset-backed securities and collateralized loan obligations, which are shown as a single total, due to the unpredictability of the timing in principal repayments. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

ANALYSIS OF EARNINGS

Net Interest Income: Park’s principal source of earnings is net interest income, the difference between total interest income and total interest expense.  Net interest income results from average balances outstanding for interest earning assets and interest bearing liabilities in conjunction with the average rates earned and paid on them.  (See the table below for three years of history on the average balances of the balance sheet categories as well as the average rates earned on interest earning assets and the average rates paid on interest bearing liabilities.)

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(1)Loan income includes net loan-related origination fee (expense) income, purchase accounting accretion and origination expense in the aggregate amount of $(11.1) million in 2025, $(11.6) million in 2024 and $(12.1) million in 2023.  Loan income also includes the effects of taxable equivalent adjustments

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using a 21% federal corporate income tax rate in 2025, 2024 and 2023. The taxable equivalent adjustments were $1.1 million in 2025, $964,000 in 2024 and $811,000 in 2023.

(2)For the purpose of the computation for loans, nonaccrual loans are included in the daily average loans outstanding.

(3)Interest income on tax-exempt investment securities includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate in 2025, 2024 and 2023. The taxable equivalent adjustments were $1.5 million in 2025, $1.5 million in 2024 and $2.9 million in 2023.

Average interest earning assets for 2025 increased $185 million, or 2.0% to $9,271 million, compared to $9,086 million for 2024. The increase was largely due to a $297 million increase in average loans and a $186 million increase in average money markets, partially offset by a $299 million decrease in average investment securities. Average interest earning assets for 2024 decreased $86 million, or 0.9% to $9,086 million, compared to $9,172 million for 2023. The average yield on interest earning assets increased by 12 basis points to 5.90% for 2025, compared to 5.78% for 2024 and 5.18% for 2023.

Loan interest income for 2025, 2024, and 2023 included $2.0 million, $54,000 and $631,000, respectively, related to payments received on certain SEPH nonaccrual loan relationships, some of which are participated with PNB. In addition, loan interest income included $668,000, $1.2 million and $633,000, respectively, of the accretion of loan purchase accounting adjustments related to the acquisitions of NewDominion and Carolina Alliance. Loan interest income for 2023 included interest and fee income related to PPP loans of $69,000. Excluding the impact of the purchase accounting accretion, SEPH income, and PPP income, the average yield on loans was 6.29%, 6.13% and 5.53%, for the years ended December 31, 2025, 2024, and 2023. Excluding the impact of the purchase accounting accretion, SEPH income, and PPP income, the average yield on earning assets was 5.87%, 5.77% and 5.17%, for the years ended December 31, 2025, 2024, and 2023, respectively, and the net interest margin was 4.72%, 4.39% and 4.09%, for the years ended December 31, 2025, 2024, and 2023, respectively.

Average interest bearing liabilities for 2025 increased by $36 million, or 0.6%, to $6,042 million, compared to $6,006 million for 2024. Average interest bearing liabilities for 2024 increased by $88 million, or 1.5%, to $6,006 million, compared to $5,918 million for 2023. The average cost of interest bearing liabilities decreased by 31 basis points to 1.77% for 2025, compared to 2.08% for 2024 and 1.67% for 2023.

The table below shows for the years ended December 31, 2025, 2024, and 2023, the average balance and tax equivalent yield by type of loan.

(1) Commercial loan interest income includes the effects of taxable equivalent adjustments using a 21% federal corporate income tax rate in 2025, 2024 and 2023. The taxable equivalent adjustments were $1.1 million in 2025, $964,000 in 2024 and $811,000 in 2023.

Loan interest income for 2025, 2024 and 2023 included $2.0 million, $54,000 and $631,000, respectively, related to payments received on certain SEPH nonaccrual loan relationships, some of which are participated with PNB, as well as $668,000, $1.2 million and $633,000 of purchase accounting accretion for 2025, 2024 and 2023, respectively. Interest income for 2023 included interest and fee income related to PPP loans of $69,000. Below is a summary of the impact of these items on the tax equivalent yield of loans.

•The amount of interest related to purchase accounting accretion included in home equity loan interest income for 2025, 2024 and 2023 was $73,000, $184,000 and $79,000, respectively. Excluding the impact of these items, the average tax equivalent yield on home equity loans was 7.29%, 8.23% and 8.11%, respectively.

•The amount of interest related to purchase accounting accretion included in real estate loan interest income for 2024 and 2023 was $80,000 and $4,000, respectively. Excluding the impact of these items, the average tax equivalent yield on real estate loans was 5.07% and 4.38%, respectively. There was no purchase accounting accretion included in real estate loan interest income for 2025.

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•The amount of interest related to PPP income, SEPH nonaccrual loan relationships and purchase accounting accretion included in commercial loan interest income for 2025, 2024 and 2023 was $2.0 million, $935,000 and $1.2 million, respectively. Excluding the impact of these items, the average tax equivalent yield on commercial loans was 6.23%, 6.23% and 5.80%, for 2025, 2024 and 2023, respectively.

•Excluding the impact of interest related to PPP income, SEPH nonaccrual loan relationships and purchase accounting accretion, the average tax equivalent yield on total loans and leases was 6.29%, 6.13% and 5.53%, for 2025, 2024 and 2023, respectively.

The table below shows for the years ended December 31, 2025, 2024, and 2023, the average balance and cost of funds by type of deposit.

The following table displays (for each quarter of 2025) the average balance of interest earning assets, the net interest income and the tax equivalent net interest income and net interest margin.

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In the following table, the change in tax equivalent interest due to both volume and rate has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.

Other Income:  Other income was $119.9 million for 2025, compared to $122.6 million for 2024 and $92.6 million for 2023.

The following table displays total other income for Park in 2025, 2024 and 2023.

Income from fiduciary activities increased by $3.3 million, or 7.7%, to $45.8 million in 2025, compared to $42.5 million in 2024. The $42.5 million in 2024 was an increase of $7.0 million, or 19.8%, compared to $35.5 million in 2023. 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 $9.07 billion in 2025, compared to $8.58 billion in 2024 and $7.69 billion in 2023. The increase in fiduciary fee income in 2025 was largely due to an increase in the market value of assets under management. 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.

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Service charges on deposit accounts increased $1.1 million, or 11.7%, to $10.1 million in 2025, compared to $9.0 million in 2024. The $9.0 million in 2024 was an increase of $556,000, or 6.6%, compared to $8.4 million in 2023. The increases in 2025 and 2024 were related to increases in service charges on demand deposit accounts, partially offset by decreases in non-sufficient funds (NSF) fee income.

Other service income increased $2.7 million, or 23.3%, to $14.5 million in 2025, compared to $11.7 million in 2024. The $11.7 million in 2024 was an increase of $1.4 million, or 14.0%, compared to $10.3 million in 2023. The increase in 2025 compared to 2024 was primarily due to an increase in other service income related to mortgage loan originations and commercial related other service income, including a $957,000 increase in fee income related to mortgage loan originations to be sold in the secondary market, a $578,000 increase in mortgage servicing rights income and a $458,000 increase in commercial related other service income. 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. Park has experienced increases in mortgage loan origination volume resulting in increases in other service income. A summary of mortgage loan originations for the years ended December 31, 2025, 2024 and 2023 as follows.

Debit card fee income, which is generated from debit card transactions, decreased $80,000, or 0.3%, to $25.8 million in 2025, compared to $25.9 million in 2024. The $25.9 million in 2024 was a decrease of $649,000, or 2.4%, compared to $26.5 million in 2023. The decreases in 2025 and 2024 were 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. Debit card transaction volume increased 0.99% in 2025 from 2024 and increased 1.3% in 2024 from 2023. Total sales dollars of debit card transactions increased 3.2% in 2025 from 2024 and increased 1.4% in 2024 from 2023. Park continues to focus on deposit offerings that provide incentives for our customers to use their debit card.

Bank owned life insurance income decreased $1.2 million, or 14.9%, to $6.6 million in 2025 compared to $7.8 million in 2024. The $7.8 million in 2024 was an increase of $2.4 million, or 45.6%, compared to $5.3 million in 2023. The decrease in 2025 and the increase in 2024 was related to death benefit income of $463,000 recognized in 2025, compared to $2.0 million recognized in 2024 and $325,000 recognized in 2023.

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 2025 or 2023.

During 2025, Park sold certain AFS debt securities with a book value of $79.1 million at a gross loss of $2.3 million. 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.

During the years ended December 31, 2025, 2024 and 2023, $3.5 million, $2.6 million and $600,000, respectively, of gains on equity investments carried at fair value or modified cost were recorded within "Gain on equity securities, net". For the years ended December 31, 2025, 2024 and 2023, $1.2 million, $468,000 and $371,000, respectively, of gains on equity investments carried at NAV were recorded within "Gain on equity securities, net".

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Other components of net periodic pension benefit income increased $113,000, or 1.2%, to $9.4 million in 2025, compared to $9.3 million in 2024. The $9.3 million in 2024 was an increase of $1.7 million, or 22.3%, compared to $7.6 million in 2023. The increase in 2025 was largely due to a decrease in interest cost, partially offset by a decrease in the expected return on plan assets. The increase in 2024 was largely due to an increase in the expected return on plan assets.

Miscellaneous income decreased by $1.9 million, or 32.6%, to $4.0 million in 2025, compared to $5.9 million in 2024. The $5.9 million in 2024 was an increase of $2.2 million, or 59.3%, compared to $3.7 million in 2023. The decrease in 2025 was primarily due to a decrease in net gains on the sale and disposal of assets, largely due to the impact of strategic initiatives, and an increase in the loss on sale of repossessed assets. 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.

Other Expense: Other expense was $324.4 million in 2025, compared to $321.3 million in 2024 and $309.2 million in 2023. Other expense increased by $3.0 million, or 0.9% in 2025 compared to 2024 and increased by $12.1 million, or 3.9% in 2024 compared to 2023. The following table displays total other expense for Park for 2025, 2024 and 2023.

Salaries expense increased by $5.4 million, or 3.7% to $152.7 million in 2025, compared to $147.3 million in 2024. The $147.3 million in 2024 was an increase of $8.1 million, or 5.8%, compared to $139.2 million in 2023. The increase in 2025 was due to an increase of $3.2 million in salaries expense, a $1.5 million increase in officer incentive compensation expense and a $1.1 million increase in share-based compensation expenses related to PBRSU awards granted under the 2017 Employee LTIP, partially offset by a $336,000 decrease in additional compensation expense. 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.

Park had 1,694 full-time equivalent employees at year-end 2025, compared to 1,725 full-time equivalent employees at year-end 2024 and compared to 1,782 full-time equivalent employees at year-end 2023.

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Employee benefits expense decreased by $1.4 million, or 3.3%, to $40.4 million for 2025, compared to $41.7 million for 2024. The $41.7 million for 2024 was a decrease of $540,000, or 1.3%, compared to $42.3 million in 2023. The decrease in 2025 was due to a $1.4 million decrease in group insurance costs, a $408,000 decrease in supplemental retirement plan expense and a $390,000 decrease in pension plan expense, partially offset by a $254,000 increase in payroll tax expense and a $291,000 increase in KSOP match expense. 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.

Occupancy expense increased by $563,000, or 4.4%, to $13.4 million in 2025, compared to $12.8 million in 2024. The $12.8 million in 2024 was a decrease of $298,000, or 2.3%, compared to $13.1 million in 2023. The $563,000 increase in 2025 was primarily due to increased expense for the rental of leased space and increased depreciation and amortization expense, partially offset by decreased maintenance and repairs expense. The $298,000 decrease in 2024 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.

Furniture and equipment expense decreased $1.2 million, or 12.2%, to $8.8 million in 2025, compared to $10.0 million in 2024. The $10.0 million in 2024 was a decrease of $2.3 million, or 18.4%, compared to $12.2 million in 2023. The decrease in 2025 was primarily related to decreased depreciation expense. The decrease in 2024 was primarily related to decreased depreciation expense and decreased expenses related to repairs on maintenance and equipment.

Data processing fees increased by $4.7 million, or 11.6%, to $45.3 million, compared to $40.6 million in 2024. The $40.6 million in 2024 was an increase of $2.9 million, or 7.8%, compared to $37.6 million in 2023. The increase in 2025 was primarily related to an increase in software expenses of $5.7 million, partially offset by a decrease in debit card processing costs of $1.0 million. 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.

Professional fees and services increased $306,000, or 1.0%, to $31.5 million in 2025, compared to $31.1 million in 2024. The $31.1 million in 2024 was an increase of $2.0 million, or 6.8%, compared to $29.2 million in 2023. 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 $306,000 increase in 2025 was related to increases in management consulting fees, temporary wages and legal expense, partially offset by decreases in directors fees, other fees and recruiting fees. 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.

Marketing expense decreased by $244,000, or $3.9%, to $6.1 million in 2025, compared to $6.3 million in 2024. The $6.3 million in 2024 was an increase of $847,000, or 15.5%, compared to $5.5 million in 2023. The $244,000 decrease in 2025 was primarily due to decreases in organization dues, special events and customer entertainment expense. The $847,000 increase in 2024 was primarily due to an increase in advertising expense.

Insurance expense decreased by $380,000, or 5.6%, to $6.4 million, compared to $6.7 million in 2024. The $6.7 million in 2024 was a decrease of $905,000, or 11.8%, compared to $7.6 million in 2023. The decreases in 2025 and 2024 were related to decreases in FDIC assessment expense.

The subcategory "Miscellaneous" other expense includes expenses for supplies, travel, and other miscellaneous expense. The subcategory Miscellaneous other expense decreased by $4.4 million, or 34.0%, to $8.5 million in 2025 compared to $12.9 million in 2024. The $12.9 million in 2024 was an increase of $1.7 million, or 14.6%, compared to $11.3 million in 2023. The decrease in 2025 was related to decreases in fraud and other non loan related losses, provision for unfunded credit losses and other miscellaneous expenses. 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.

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Efficiency Ratio: The following table details the calculation of the efficiency ratio for the years ended December 31, 2025, 2024, and 2023.

Items Impacting Comparability (non-U.S. GAAP): From time to time, revenue, expenses, and/or taxes are impacted by items judged by management of Park to be outside of ordinary banking activities and/or by items that, while they may be associated with ordinary banking activities, are so unusually large that their outsized impact is believed by management of Park at that time to be infrequent or short-term in nature. Most often, these items impacting comparability of period results relate to merger and acquisition activities and revenue and expenses related to former Vision Bank loan relationships. In other cases, they may result from management's decisions associated with significant corporate actions outside of the ordinary course of business.

The following table details those items which management believes impacts the comparability of current and prior period amounts.

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Income Taxes:

Income tax expense was $41.3 million in 2025 and consisted of federal income tax expense of $39.1 million and state income tax expense of $2.2 million. 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. The effective income tax rate was 18.6% in 2025, 18.0% in 2024 and 17.5% in 2023.

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 $7.4 million in 2025, compared to $7.0 million in 2024 and $6.6 million in 2023. Park expects permanent federal tax differences for 2026 will be approximately $6.3 million.

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. A cumulative effect adjustment resulting in a $303,000 decrease to retained earnings and an $80,000 increase to deferred tax assets was also recorded. 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.

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The table below provides additional information on the provision for credits losses and the ACL for 2025, 2024 and 2023.

For the year ended December 31, 2025, gross income of $5.9 million would have been recognized on loans that were nonaccrual as of December 31, 2025 had these loans been current in accordance with their original terms. Interest income on nonaccrual loans may be recorded on a cash basis and be included in income only when Park expects to receive the entire recorded investment of the loan. Of the $5.9 million that would have been recognized, approximately $4.1 million was included in interest income for the year ended December 31, 2025 as a result of payments made.

At year-end 2025, the allowance for credit losses was $93.0 million, or 1.15%, of total loans outstanding, compared to $88.0 million, or 1.13%, of total loans outstanding at year-end 2024, and $83.7 million, or 1.12% of total loans outstanding at year-end 2023.

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, 2025, December 31, 2024 and December 31, 2023. 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 and a review of classified credits is performed to identify any additional loans which do not share similar risk characteristics and are to be individually evaluated.

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The allowance for credit losses of $93.0 million at December 31, 2025 represented a $5.0 million, or 5.7%, increase compared to $88.0 million at December 31, 2024. The increase was due to a $5.6 million increase in general reserves, partially offset by a $560,000 decrease in individual reserves on nonaccrual loans. The $5.6 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 $5.6 million increase in general reserves included a $2.3 million additional qualitative reserve related to several special purpose mortgage loan programs to assist borrowers in attaining home ownership. As of December 31, 2025, the loans in these special purpose mortgage loan programs totaled $234.2 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.

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 took 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.

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The composition of the ACL at December 31, 2025 and December 31, 2024 was as follows:

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Management believes that the allowance for credit losses at year-end 2025 is adequate to absorb estimated life of loan credit losses in the loan portfolio. See "Note 1 - Summary of Significant Accounting Policies" of the Notes to Consolidated Financial Statements included in "ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA" of this Annual Report on Form 10-K, and the discussion under the heading “CRITICAL ACCOUNTING POLICIES” earlier in this Management's Discussion and Analysis of Financial Condition and Results of Operations, for additional information on management’s evaluation of the adequacy of the allowance for credit losses.

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ACL Detail by Loan Type: The following tables breakdown the allowance for credit losses and components by loan type.

The table below provides a summary of Park's loan loss experience over the past three years: