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Section 1: S-4 (S-4)

Document




As filed with the Securities and Exchange Commission on March 9, 2018
Registration No. 333-

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________

FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________

Park National Corporation
(Exact name of registrant as specified in its charter)
______________________
Ohio
6021
31-1179518
(State or Other Jurisdiction of
Incorporation or Organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification Number)
______________________

50 North Third Street, P.O. Box 3500
Newark, Ohio 43058
(740) 349-8451
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
__________________

David L. Trautman
Chief Executive Officer and President
50 North Third Street
Newark, Ohio 43055
(740) 349-8451
(Name, address, including zip code, and telephone number, including area code, of agent for service of process)
_____________________
With copies to:
James J. Barresi, Esq.
Squire Patton Boggs (US) LLP
221 E. Fourth Street, Suite 2900
Cincinnati, Ohio 45202
(513) 361-1260
Todd H. Eveson, Esq.
Wyrick Robbins Yates & Ponton LLP
4101 Lake Boone Trail, Suite 300
Raleigh, North Carolina 27607
(919) 781-4000
______________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective and upon completion of the merger described in the enclosed document.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer
Non-accelerated filer
☐ (Do not check if a smaller reporting company)
Smaller reporting company
Emerging growth company

 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.   ☐
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐






CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities to be Registered
 
Amount
to be Registered(1)
 
Proposed Maximum Offering Price Per Share(2)
 
Proposed
Maximum
Aggregate
Offering Price
(2)
 
Amount of Registration Fee(3)
Common Stock, without par value
 
483,679
 
N/A
 
$
48,698,849

 
$
6,064

______________
(1)
Represents the estimated maximum number of shares of Park National Corporation (“Parent”) common stock to be issued upon completion of the merger described in the proxy statement/prospectus contained herein, calculated as the product of (a) the sum of (i) 76,068,177 shares of common stock, par value $0.25 per share, of NewDominion Bank, a North Carolina state-chartered bank (“NewDominion common stock”), outstanding as of March 6, 2018 (including shares of NewDominion common stock underlying NewDominion restricted stock awards but excluding “excluded shares” and “appraisal shares,” as each such term is defined in the merger agreement) and (ii) 2,732,549 shares of NewDominion common stock underlying NewDominion stock options outstanding as of March 6, 2018, multiplied by (b) 0.01023, the exchange ratio under the merger agreement, multiplied by (c) 60%, the percentage of stock consideration under the merger agreement.
(2)
Estimated solely for purposes of calculating the registration fee pursuant to Rules 457(c) and 457(f)(1) under the Securities Act of 1933, as amended (the “Securities Act”). The proposed maximum offering price of Parent common stock is calculated based upon the market value of shares of NewDominion common stock (the securities to be canceled or assumed in the merger) in accordance with Rule 457(c) and is equal to (a) the product of (i) $1.05, the average of the high and low prices of the NewDominion common stock as reported on the OTCPink market of the OTC Markets Group, Inc. on March 6, 2018, multiplied by (ii) 78,800,726, the estimated maximum number of shares of NewDominion common stock to be exchanged for merger consideration, less (b) $34,041,914, the amount of cash consideration to be paid by Parent in connection with the merger.
(3)
Computed in accordance with Rule 457(f) under the Securities Act to be $6,064, which is equal to 0.0001245 multiplied by the proposed maximum aggregate offering price of $48,698,849.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.












Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This document shall not constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.


PRELIMINARY – SUBJECT TO COMPLETION - March 9, 2018
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PROXY STATEMENT OF NEWDOMINION BANK

PROSPECTUS OF PARK NATIONAL CORPORATION


Merger Proposal — Your Vote Is Important

DEAR NEWDOMINION BANK SHAREHOLDERS:
You are cordially invited to attend a special meeting of shareholders of NewDominion Bank (“NewDominion”) which will be held on _______ , 2018, at _______ , local time, at the offices of NewDominion, 1111 Metropolitan Avenue, Suite 500, Charlotte, North Carolina 28204.
At the meeting, you will be asked to approve an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) by and among NewDominion, Park National Corporation, an Ohio corporation (“Parent”) and The Park National Bank, a national banking association and a wholly-owned subsidiary of Parent (“Park National Bank”), that provides for Park National Bank’s acquisition of NewDominion through the merger of NewDominion with and into Park National Bank (the “Merger”). Pursuant to the Merger, each share of voting and non-voting common stock of NewDominion, par value $0.25 per share (except for specified shares of NewDominion common stock held by NewDominion or Parent and shares of NewDominion common stock held by shareholders who properly exercise appraisal rights, which we refer to as “excluded shares”), will be converted into the right to receive, at the shareholder’s election, subject to the proration and allocation procedures set forth in the Merger Agreement, either (i) $1.08 in cash, which we refer to as the “cash consideration” or (ii) 0.01023 shares of Parent common stock, without par value, which we refer to as the “stock consideration.” The cash consideration and the stock consideration is referred to collectively as the “merger consideration.”
The total number of shares of NewDominion common stock (including shares subject to NewDominion restricted stock awards that will settle in connection with the Merger but excluding certain excluded shares, including shares of NewDominion held by Parent) that will be converted into the cash consideration is fixed at 40% of the total number of shares of NewDominion common stock outstanding immediately prior to the completion of the Merger (including shares subject to NewDominion restricted stock awards that will settle in connection with the Merger but excluding excluded shares), and the remaining 60% of shares of NewDominion common stock will be converted into the stock consideration. Based on the number of shares of NewDominion common stock outstanding on _______ , we expect that the payment of the stock portion of the merger consideration will require Parent to issue approximately _______ shares of Parent common stock in connection with the Merger. Holders of shares of NewDominion common stock as of immediately prior to the closing of the Merger will hold, in the aggregate, approximately _______ % of the issued and outstanding shares of Parent common stock immediately following the closing of the Merger (including shares received in respect of equity awards and without giving effect to any shares of Parent common stock held by NewDominion shareholders prior to the Merger).






The value of the cash consideration per share is fixed at $1.08, but the value of the stock consideration will fluctuate as the market price of Parent common stock fluctuates before the completion of the Merger, and may be more or less than the value of the stock consideration on the date of the special meeting or at the time an election is made, and may be more or less than the value of the cash consideration at the completion of the Merger. Based on the average closing stock price of Parent common stock on the NYSE American stock exchange, which we refer to as the “NYSE American,” for the twenty trading days ending on January 19, 2018, the last full trading day before the execution of the Merger Agreement, of $105.56, the value of the stock consideration was $1.08. Based on the closing stock price of Parent common stock on the NYSE American on _______ , 2018, the latest practicable date before the mailing of this proxy statement/prospectus, of $ ____ , the value of the stock consideration was $ ______. You should obtain current stock price quotations for Parent common stock before you vote. Parent common stock is quoted on the NYSE American under the symbol “PRK.” NewDominion common stock is quoted on the OTCPink market of the OTC Markets Group, Inc. under the symbol “NDMN.”
The Merger cannot be completed unless the holders of at least two-thirds of the voting power of the outstanding shares of each class of NewDominion common stock affirmatively vote in favor of the Merger Agreement. Accordingly, our board of directors has unanimously approved and adopted the Merger Agreement and recommends that you vote “FOR” the approval of the Merger Agreement at the special meeting. In considering the recommendation of the board of directors of NewDominion, you should be aware that certain directors and executive officers of NewDominion will have interests in the Merger that may be different from, or in addition to, the interests of NewDominion shareholders generally. See the section entitled “The Merger—Interests of certain persons in the Merger” beginning on page 49 of the accompanying proxy statement/prospectus.
Your vote is very important, regardless of the number of shares of NewDominion common stock you own. To ensure your representation at the NewDominion special meeting, please take time to vote by following the instructions contained in this proxy statement/prospectus and on your proxy card. Please vote promptly whether or not you expect to attend the NewDominion special meeting. Submitting a proxy now will not prevent you from being able to vote in person at the NewDominion special meeting.
Additional information regarding the Merger, the Merger Agreement, NewDominion, Park National Bank and Parent is set forth in the attached proxy statement/prospectus. This document also serves as the prospectus for up to 483,679 shares of Parent common stock that may be issued by Parent in connection with the Merger. We urge you to read this entire document carefully, including the section entitled “Risk Factors” beginning on page 17.
Sincerely,

J. Blaine Jackson
Chief Executive Officer
NewDominion Bank
Neither the Securities and Exchange Commission nor any state securities regulatory body has approved or disapproved of the securities to be issued under this proxy statement/prospectus or determined if this proxy statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.
The securities to be issued in connection with the Merger are not savings or deposit accounts or other obligations of any bank or nonbank subsidiary of any of the parties, and they are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.
This proxy statement/prospectus is dated _______ , 2018, and is first being mailed to NewDominion shareholders on or about __________ , 2018.






REFERENCES TO ADDITIONAL INFORMATION
As permitted by the rules of the Securities and Exchange Commission (the “SEC”), this proxy statement/prospectus incorporates important business and financial information about Parent from other documents that are not included in or delivered with this proxy statement/prospectus. These documents are available to you without charge upon your written or oral request. You can obtain documents incorporated by reference in this proxy statement/prospectus without charge through the SEC’s website at www.sec.gov, from Parent’s website at www.parknationalcorp.com or by requesting them in writing or by telephone at the following address and telephone number:
Park National Corporation
50 North Third Street, P.O. Box 3500
Newark, OH 43058-3500
Attention: Investor Relations
(740) 322-6844

In order to ensure timely delivery of these documents, you should make your request by _________ , 2018 to receive them before the special meeting.
In addition, if you have questions about the Merger or the special meeting, need additional copies of this proxy statement/prospectus or need to obtain proxy cards or other information related to the proxy solicitation, you may contact NewDominion, at the following address or by calling the following telephone number:
NewDominion Bank
PO Box 37389
Charlotte, NC 28237
Attention: Investor Relations
(704) 943-5725

NewDominion does not have a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, is not subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act and accordingly does not file documents or reports with the SEC.
PLEASE NOTE
We have not authorized anyone to provide you with any information other than the information included in this document and the documents to which we refer you. If someone provides you with other information, please do not rely on it as being authorized by us.
See “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference” on pages 85 and 86, respectively.











NEWDOMINION BANK
1111 Metropolitan Avenue, Suite 500
Charlotte, North Carolina 28204
Notice of Special Meeting of Shareholders
Date: __________ , 2018
Time: __________, local time
Place:    1111 Metropolitan Avenue, Suite 500, Charlotte, North Carolina 28204
TO THE NEWDOMINION BANK SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that NewDominion Bank (“NewDominion”) will hold a special meeting of shareholders on __________ , 2018 at the offices of NewDominion, 1111 Metropolitan Avenue, Suite 500, Charlotte, North Carolina 28204, at _______ local time. The purpose of the meeting is to consider and vote on the following matters:
a proposal to approve the Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), dated as of January 22, 2018, by and among Park National Corporation, The Park National Bank and NewDominion. A copy of the Merger Agreement is included as Annex A to the proxy statement/prospectus accompanying this notice;
the approval to adjourn the special meeting to permit further solicitation in the event that an insufficient number of shares are present in person or by proxy to approve the Merger Agreement and the transactions it contemplates; and
to transact any other business that properly comes before the special meeting, or any adjournments or postponements thereof.

Holders of record of NewDominion common stock at the close of business on _________ , 2018 are entitled to receive this notice and to vote at the special meeting and any adjournments or postponements thereof. Shareholders of NewDominion may exercise appraisal rights and dissent from the transactions contemplated by the Merger Agreement and, instead, obtain payment in cash of the appraised fair value of their shares of NewDominion common stock as determined under Article 13 of the North Carolina Business Corporation Act (“NCBCA”). In order for such a shareholder of NewDominion to perfect the holder’s appraisal rights, the shareholder must carefully follow the procedure set forth under Article 13 of the NCBCA. The full text of Article 13 of the NCBCA is included as Annex B to the accompanying proxy statement/prospectus, and a summary of these provisions can be found under the caption “The Merger Agreement — NewDominion shareholder appraisal rights.”
The board of directors of NewDominion unanimously recommends that you vote “FOR” approval of the Merger Agreement and “FOR” approval to adjourn the special meeting to permit further solicitation in the event that an insufficient number of shares are present in person or by proxy to approve the Merger Agreement and the transactions it contemplates.
Your vote is important. To ensure that your shares are voted at the special meeting, please promptly complete, sign and return the proxy form in the enclosed prepaid envelope (or follow the instructions for voting by internet) whether or not you plan to attend the meeting in person. Shareholders of record who attend the special meeting may revoke their proxies and vote in person, if they so desire.
By Order of the Board of Directors

Charles T. Hodges
Chairman of the Board
Charlotte, North Carolina

______________, 2018








TABLE OF CONTENTS
 
 
Page
QUESTIONS AND ANSWERS ABOUT THE MERGER
1
SUMMARY
5
RISK FACTORS
17
Risks relating to the Merger
17
Risks relating to the businesses of Parent and the surviving bank
19
SPECIAL NOTES CONCERNING FORWARD-LOOKING STATEMENTS
20
INFORMATION ABOUT THE SPECIAL MEETING OF NEWDOMINION SHAREHOLDERS
22
Date, time and place of the special meeting
22
Purpose of the special meeting
22
Record date and voting rights for the special meeting
22
Quorum
22
Vote required
23
Shares held by NewDominion directors and executive officers; voting agreements
23
How to vote
23
Revocability of proxies
24
Proxy solicitation
24
Other business; adjournments
24
THE MERGER
25
General
25
The companies
25
NewDominion’s proposals
27
Background of the Merger
27
NewDominion’s reasons for the Merger; recommendation of NewDominion’s board of directors
30
Parent’s reasons for the Merger
32
Opinion of NewDominion’s financial advisor
32
Certain unaudited prospective financial information of NewDominion and Parent
44
Material U.S. federal income tax consequences of the Merger
45
Regulatory approvals
49
Interests of certain persons in the Merger
49
Voting agreements
52
Restrictions on resale of Parent common stock
52
NewDominion shareholder appraisal rights
52
DESCRIPTION OF THE MERGER AGREEMENT
57
General
57
Closing and effective time
57
Consideration to be received in the Merger
57
Fractional shares
62
Treatment of NewDominion equity awards
62
Election as to form of consideration
62
Exchange of certificates
63
Conduct of business pending the Merger and certain covenants
64
No solicitation of transaction or change of recommendation
66
Representations and warranties
67

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Conditions to completion of the Merger
68
Termination
69
Termination fee
70
Management of Park National Bank after the Merger
70
Employee benefit matters
70
Expenses
70
NYSE American stock listing
70
Amendment
70
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF NEWDOMINION
71
COMPARISON OF RIGHTS OF PARENT SHAREHOLDERS AND NEWDOMINION SHAREHOLDERS
73
DESCRIPTION OF PARENT CAPITAL STOCK
78
Authorized capital stock
79
Parent common stock
79
Parent preferred stock
82
Certain anti-takeover effects of Parent’s articles of incorporation and regulations
82
Anti-takeover statutes
83
LEGAL MATTERS
84
EXPERTS
84
SHAREHOLDER PROPOSALS
85
WHERE YOU CAN FIND MORE INFORMATION
85
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
86
 
 
Annex A – Agreement and Plan of Merger and Reorganization
A-1
Annex B – Article 13 of the NCBCA
B-1
Annex C – Opinion of Sandler O’Neill & Partners, L.P.
C-1
Annex D – Financial Statements of NewDominion
D-1



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QUESTIONS AND ANSWERS ABOUT THE MERGER
Q:
What am I being asked to vote on? What is the proposed transaction?
A:
You are being asked to vote on the approval and adoption of the Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) that provides for the merger (the “Merger”) of NewDominion Bank (“NewDominion) with and into The Park National Bank (“Park National Bank”), which is a national banking association and a wholly-owned subsidiary of Park National Corporation (“Parent”). Shareholders who elect and receive stock as part of the merger consideration will become shareholders of Parent as a result of the Merger.
Q:
What will NewDominion shareholders be entitled to receive in the Merger?
A:
If the Merger is completed, each share of NewDominion common stock (both voting and non-voting) outstanding immediately prior to the effective time of the Merger, except for appraisal shares and shares of NewDominion common stock owned by NewDominion or Parent (in each case other than shares held in trust accounts, managed accounts and the like, or otherwise held in a fiduciary or agency capacity, that are beneficially owned by third parties and shares held, directly or indirectly, by Parent, NewDominion or any wholly-owned subsidiary of Parent or NewDominion in respect of a debt previously contracted), will be converted into the right to receive either (i) $1.08 in cash or (ii) 0.01023 shares of Parent common stock, based on the holder’s election and subject to proration. NewDominion shareholders may elect to receive all cash, all stock or cash for some of their shares and stock for the remainder of the shares they own, subject to the election and proration procedures set forth in the Merger Agreement. The total number of shares of NewDominion common stock (including shares subject to NewDominion restricted stock awards that will settle in connection with the Merger) that will be converted into the cash consideration is fixed at 40% of the total number of shares of NewDominion common stock outstanding immediately prior to the completion of the Merger (including shares subject to NewDominion restricted stock awards that will settle in connection with the Merger), and the remaining 60% of shares of NewDominion common stock will be converted into the stock consideration. As a result, if the aggregate number of shares with respect to which a valid cash or stock election has been made exceeds these limits, shareholders who elected the form of consideration that has been oversubscribed will receive a mixture of both cash and stock consideration in accordance with the proration procedures set forth in the Merger Agreement. See the sections entitled “Description of The Merger Agreement —Consideration to be received in the Merger—Cash Election; Stock Election; Non-Election Shares” and “Description of the Merger Agreement—Consideration to be received in the Merger—Proration.” Cash will be paid in lieu of fractional shares. See the section entitled “Description of the Merger Agreement—Fractional Shares.”
Q:
Can I make an election to select the form of merger consideration I desire to receive?
A:
Yes. NewDominion shareholders may elect to receive all cash, all stock or cash for some of their shares and stock for the remainder of the shares they own, subject to the election and proration procedures set forth in the Merger Agreement.
Q:
Why do NewDominion and Parent want to engage in the transaction?
A:
NewDominion believes that the Merger will provide NewDominion shareholders and its customers with substantial benefits, including the opportunity to participate in a stronger and more diversified organization, and Parent believes that the Merger will provide a platform for its continued strategic growth by entering the Charlotte market. As a larger company, Park National Bank can provide NewDominion’s associates with an expanded product set, including larger and more specialized loans and wealth management capabilities. To review the reasons for the Merger in more detail, see “The Merger — Parent’s reasons for the Merger” on page 32 and “The Merger — NewDominion’s reasons for the Merger; recommendation of NewDominion’s board of directors” on page 30.
Q:
What does the NewDominion board of directors recommend?
A:
NewDominion’s board of directors unanimously recommends that you vote “FOR” approval of the Merger Agreement and “FOR” the approval to adjourn the special meeting to permit further solicitation in the event that an insufficient number of shares are present in person or by proxy to approve the Merger Agreement and the transactions it contemplates. NewDominion’s board of directors has determined that the Merger Agreement and

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the Merger are in the best interests of NewDominion and its shareholders. To review the background and reasons for the Merger in greater detail, see pages 27 to 30.
Q:
What vote is required to approve the Merger Agreement?
A:
NewDominion has two voting groups of shareholders that are entitled to vote on the proposal to approve the Merger Agreement. These voting groups are (1) the holders of shares of NewDominion’s voting common stock and (2) the holders of shares of NewDominion’s non-voting common stock. Holders of these two classes of common stock will vote as separate voting groups on the Merger. While holders of shares of NewDominion non-voting common stock typically do not have voting rights, North Carolina law provides voting rights to otherwise non-voting classes of stock in connection with certain fundamental changes to the corporation, such as the proposed Merger.
Under applicable state and federal law, for the Merger to be approved, the Merger Agreement must be approved, ratified and confirmed by the affirmative vote of the holders owning at least two-thirds of the shares of each class of common stock outstanding and entitled to vote at the special meeting. Abstentions and broker non-votes have the effect of votes against the approval and adoption of the Merger Agreement. NewDominion’s directors and executive officers who own shares of NewDominion voting common stock have agreed to vote their shares in favor of the Merger at the special meeting. These NewDominion directors and executive officers and their affiliates beneficially owned 8,999,248 shares of NewDominion voting common stock (inclusive of shares underlying exercisable stock options) or approximately 22.9% of NewDominion’s voting common stock outstanding as of February 28, 2018. Certain holders of NewDominion’s non-voting common stock have also agreed to vote their shares in favor of the Merger at the special meeting. These NewDominion shareholders and their affiliates owned 33,586,481 shares of NewDominion non-voting common stock or 87.8% of NewDominion’s non-voting common stock outstanding as of February 28, 2018. Parent owns the remaining 12.2% of NewDominion’s non-voting common stock, which will be entitled to vote at the special meeting. Parent’s shareholders will not be voting on the Merger Agreement. See “The Merger — Interests of certain persons in the Merger” on page 49 and “The Merger — Voting agreements” on page 52.
Q:
What vote is required to approve the proposal to adjourn the special meeting to permit further solicitation in the event that an insufficient number of shares are present in person or by proxy to approve the Merger Agreement and the transactions it contemplates?
A:
The proposal to adjourn the special meeting, if necessary or appropriate to solicit additional proxies, will be approved if the votes cast at the special meeting, in person or by proxy, in favor of the proposal exceed the votes cast against the proposal. Abstentions and broker non-votes are not included in calculating votes cast with respect to the adjournment proposal, and therefore will have no effect on the outcome of the vote on such proposal.
Q:
Why is my vote important?
A:
NewDominion shareholders are being asked to approve the Merger Agreement and thereby approve the Merger. If you do not submit your proxy or vote in person at the special meeting, it will be more difficult for NewDominion to obtain the necessary quorum to hold the special meeting. In addition, your failure to submit your proxy or attend the special meeting will have the same effect as a vote against the Merger Agreement and make it more difficult to obtain the requisite approval of the Merger Agreement.
Q:
What do I need to do now? How do I vote?
A:
You may vote at the special meeting if you own shares of NewDominion common stock of record at the close of business on the record date for the special meeting, __________ , 2018. Holders of both voting and non-voting NewDominion common stock may vote at the special meeting. After you have carefully read and considered the information contained in this proxy statement/prospectus, please complete, sign, date and mail your proxy card in the enclosed prepaid return envelope as soon as possible. Registered shareholders may also appoint the proxies to vote their shares electronically by Internet by following the instructions contained on the enclosed proxy card. Appointing the proxies named on the proxy card to vote your shares for you will enable your shares to be represented at the special meeting, even if you are unable to attend. Registered shareholders may also vote in person at the special meeting if they so elect. If you do not return a properly executed proxy card (or appoint

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the proxies to vote for you by Internet) and are unable to vote in person at the special meeting, this will have the same effect as a vote against the approval of the Merger Agreement.
Q:
How will my proxy be voted?
A:
If you complete, sign, date and mail your proxy form or validly appoint the proxies to vote by Internet, your proxy will be voted in accordance with your instructions. If you sign, date and send in your proxy form, but you do not indicate how you want to vote, your proxy will be voted FOR approval of the Merger Agreement and FOR the proposal granting authority to adjourn the special meeting if additional votes are needed to approve the Merger. By appointing the proxies to vote your shares at the special meeting, you will also be granting the appointed proxies discretion to vote your shares in accordance with their best judgment on any other matters (procedural or otherwise) that may properly come before the special meeting for action by the shareholders.
Q:
If my shares are held in “street name” by my broker, bank or other nominee, will my broker, bank or other nominee automatically vote my shares for me?
A:
No. If you hold your shares in a stock brokerage account or if your shares are held by a bank or other nominee (that is, in street name), your broker, bank or other nominee will not vote your shares of common stock unless you provide instructions to your broker, bank or other nominee on how to vote. You should instruct your broker, bank or other nominee to vote your shares by following the instructions provided by the broker, bank or nominee with this proxy statement/prospectus. Please note that you may not vote shares held in street name by returning a proxy card directly to NewDominion or by voting in person at the special meeting unless you provide a “legal proxy,” which you must obtain from your bank, broker or nominee.
Q:
Can I revoke my proxy and change my vote?
A:
A shareholder of record may change such holder’s vote or revoke a proxy prior to the special meeting by filing with the secretary of NewDominion a duly executed revocation of proxy or submitting a new proxy form with a later date. A shareholder of record may also revoke a prior proxy by voting in person at the special meeting. A shareholder beneficially owning shares through a broker, bank or other nominee, should follow the instructions provided by such nominee for revoking or changing your vote.
Q:
What if I oppose the Merger? Do I have appraisal rights?
A:
NewDominion shareholders who do not vote in favor of approval of the Merger Agreement and otherwise comply with all of the procedures of Article 13 of the North Carolina Business Corporation Act (the “NCBCA”) will be entitled to receive payment in cash of the fair value of their shares of NewDominion common stock as ultimately determined under the statutory process. A copy of Article 13 of the NCBCA is attached as Annex B to this proxy statement/prospectus. The fair value, as determined under the statute, could be more than the merger consideration but could also be less. The provisions of North Carolina law governing appraisal rights are complex, and you should study them carefully if you wish to exercise these rights. Multiple steps must be taken to properly exercise and perfect such rights.
Q:
What are the tax consequences of the Merger to me?
A:
In general, the conversion of your shares of NewDominion common stock into Parent common stock in the Merger will be tax-free for United States federal income tax purposes. You generally will recognize gain in an amount up to the cash you receive in the Merger, but you may not recognize loss if you receive any Parent common stock in the Merger. Additionally, you will recognize gain or loss on any cash that you receive in lieu of fractional shares of Parent’s common stock. You should consult with your tax adviser for the specific tax consequences of the Merger to you. For a detailed discussion of the tax consequences to you of the Merger, see “The Merger — Material U.S. federal income tax consequences of the Merger” on page 45.
Q:
When and where is the special meeting?
A:
The NewDominion special meeting will take place on _________ , 2018, at _________ , local time, at the offices of NewDominion, 1111 Metropolitan Avenue, Suite 500, Charlotte, North Carolina 28204.

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Q:
Who may attend the meeting?
A:
Only NewDominion shareholders on the record date may attend the special meeting. If you are a shareholder of record, you will need to present the proxy card that you received or a valid proof of identification to be admitted into the meeting. If you hold your NewDominion shares in street name, you will need to present a "legal proxy" or other acceptable documentation from your bank, broker or nominee and valid proof of identification to be admitted into the meeting.
Q:
Should I send in my stock certificates now?
A:
No. Either at the time of closing or shortly after the Merger is completed, the exchange agent for the Merger will send you a letter of transmittal with instructions informing you how to send in your stock certificates to the exchange agent. You should use the letter of transmittal to exchange your NewDominion stock certificates for the merger consideration. Do not send in your stock certificates with your proxy form or your stock election form.
Q:
When is the Merger expected to be completed?
A:
We will try to complete the Merger as soon as reasonably possible. Before that happens, the Merger Agreement must be approved by NewDominion’s shareholders and we must obtain the necessary regulatory approvals. Assuming shareholders vote to approve the Merger and adopt and approve the Merger Agreement and we obtain the other necessary approvals and satisfaction or waiver of the other conditions to the closing described in the Merger Agreement, we expect to complete the Merger mid-year 2018. See “Description of the Merger Agreement — Conditions to completion of the Merger” on page 68.
Q:
Is completion of the Merger subject to any conditions besides shareholder approval?
A:
Yes. The Merger must receive the required regulatory approvals, and there are other closing conditions that must be satisfied. See “Description of the Merger Agreement — Conditions to completion of the Merger” on page 68.
Q:
Are there risks I should consider in deciding how to vote on the Merger Agreement?
A:
Yes, in evaluating the Merger Agreement, you should read this proxy statement/prospectus carefully, including the factors discussed in the section titled “Risk Factors” beginning on page 17.
Q:
Who can answer my other questions?
A:
If you have more questions about the Merger or how to submit your proxy, or if you need additional copies of this proxy statement/prospectus or the enclosed proxy form, you should contact NewDominion Bank, PO Box 37389, Charlotte, NC 28237, Attention: Investor Relations or call (704) 943-5725.


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SUMMARY
This summary highlights selected information in this proxy statement/prospectus and may not contain all of the information that is important to you. To understand the Merger more fully, you should read this entire proxy statement/prospectus carefully, including the annexes and the documents referred to or incorporated by reference into this proxy statement/prospectus. A copy of the Merger Agreement is attached as Annex A to this proxy statement/prospectus and is incorporated by reference herein. See “Where You Can Find More Information” beginning on page 85.
Information about Parent, Park National Bank and NewDominion (See page 25)
Park National Corporation
50 North Third Street, P.O. Box 3500
Newark, Ohio 43058
(740) 349-8451
Park National Corporation, an Ohio corporation (“Parent,” “we,” “our” or “us”) is a financial holding company subject to regulation under the Bank Holding Company Act of 1956, as amended (the “Bank Holding Company Act”). Parent was initially incorporated under Delaware law in 1986 and began operations as a bank holding company in 1987. In 1992, Parent changed its state of incorporation to Ohio.
Headquartered in Newark, Ohio, Parent had $7.5 billion in total assets as of December 31, 2017. Parent organization principally consists of 11 community bank divisions, a non-bank subsidiary and two specialty finance companies. Parent’s Ohio-based banking operations are conducted through its subsidiary, The Park National Bank, and its divisions, which include Park National Bank Division, Fairfield National Bank Division, Richland Bank Division, Century National Bank Division, First-Knox National Bank Division, Farmers Bank Division, United Bank, N.A. Division, Second National Bank Division, Security National Bank Division, Unity National Bank Division, and The Park National Bank of Southwest Ohio & Northern Kentucky Division; and Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance). Effective March 30, 2018, the Farmers Bank Division will merge into the First-Knox National Bank Division and, thereafter, 10 community bank divisions will remain. The Parent organization also includes Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.
Parent’s principal executive offices are located at 50 North Third Street, Newark, Ohio 43055, and its telephone number is (740) 349-8451. Parent’s common shares, each without par value, are listed on NYSE American, under the symbol “PRK.”
The Park National Bank
50 North Third Street, P.O. Box 3500
Newark, Ohio 43058
(740) 349-8451
The Park National Bank, a national banking association, is a wholly-owned subsidiary of Parent. Park National Bank is has its main office in Newark, Ohio and financial service offices in Ashland, Athens, Butler, Champaign, Clark, Clermont, Coshocton, Crawford, Darke, Fairfield, Franklin, Greene, Guernsey, Hamilton, Hocking, Holmes, Knox, Licking, Madison, Marion, Mercer, Miami, Morrow, Muskingum, Perry, Richland, Tuscarawas, Warren and Wayne Counties in Ohio. Park National Bank engages in the commercial banking and trust business, generally in small and medium population Ohio communities in addition to operations within the metropolitan areas of Columbus and Cincinnati. Park National Bank operates 111 financial service offices, including 108 branches, in Ohio through 11 banking divisions with: (i) the Park National Bank Division headquartered in Newark, Ohio; (ii) the Fairfield National Bank Division headquartered in Lancaster, Ohio; (iii) the Richland Bank Division headquartered in Mansfield, Ohio; (iv) the Century National Bank Division headquartered in Zanesville, Ohio; (v) the First-Knox National Bank Division headquartered in Mount Vernon, Ohio; (vi) the Farmers Bank Division headquartered in Loudonville, Ohio; (vii) the United Bank, N.A. Division headquartered in Bucyrus, Ohio; (viii) the Second National Bank Division headquartered in Greenville, Ohio; (ix) the Security National Bank Division headquartered in Springfield, Ohio; (x) the Unity National Bank Division headquartered in Piqua, Ohio; and (xi) The Park National Bank of Southwest Ohio & Northern Kentucky Division headquartered in Cincinnati, Ohio. Effective March 30, 2018, the Farmers Bank Division will merge into the First-Knox National Bank Division and, thereafter, Park National Bank will have 10 community bank divisions.
Park National Bank delivers financial products and services through its 111 financial service offices, a network of 133 automated teller machines, as well as telephone and internet-based banking through both personal computers and mobile devices.

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NewDominion Bank
1111 Metropolitan Avenue, Suite 500
Charlotte, North Carolina 28204
(704) 943-5700
NewDominion, which was incorporated on January 6, 2005, is a North Carolina state-chartered commercial bank that first opened for business on January 10, 2005. NewDominion offers its commercial and retail customers a variety of community banking products and services through its two full-service banking offices located in Charlotte, North Carolina and Mooresville, North Carolina. NewDominion’s primary market focus is on small- to mid-sized businesses and their owners, real estate developers and investors, and individuals in the greater Charlotte area and surrounding communities, such as Lake Norman. NewDominion is supervised and regulated by the Federal Deposit Insurance Corporation, or FDIC, and the North Carolina Commissioner of Banks.
As of December 31, 2017, NewDominion had total assets of approximately $338 million. NewDominion has one wholly-owned subsidiary, X Holdings, LLC, which is an entity that serves as the bank’s trustee for the bank’s deeds of trust.
NewDominion’s principal executive offices are located at 1111 Metropolitan Avenue, Suite 500, Charlotte, NC 28204. Its telephone number is (704) 943-5700, and its website is www.newdominionbank.com. NewDominion voting common stock is quoted on the OTCPink market of the OTC Markets Group, Inc. under the symbol “NDMN.”
The Merger and the Merger Agreement (See pages 25, 57 and Annex A)
The Merger of NewDominion with and into Park National Bank is governed by the Merger Agreement. The Merger Agreement provides that, if all of the conditions set forth in the Merger Agreement are satisfied or waived, NewDominion will be merged with and into the Park National Bank and will cease to exist. After the consummation of the Merger, Park National Bank will continue as the surviving bank and remain a wholly-owned subsidiary of Parent. The Merger Agreement is included as Annex A to this proxy statement/prospectus and is incorporated by reference herein. We urge you to read the Merger Agreement carefully and fully, as it is the legal document that governs the Merger.
What NewDominion shareholders will receive (See page 57)
If the Merger is completed, each share of NewDominion’s voting and non-voting common stock (except for shares of NewDominion common stock owned by NewDominion or Parent (in each case other than shares held in trust accounts, managed accounts and the like, or otherwise held in a fiduciary or agency capacity, that are beneficially owned by third parties and shares held, directly or indirectly, by Parent, NewDominion or any wholly-owned subsidiary of Parent or NewDominion in respect of a debt previously contracted) and appraisal shares) will be converted into the right to either (i) $1.08 in cash, which we refer to as the “cash consideration,” or (ii) 0.01023 shares of Parent common stock, which we refer to as the “stock consideration,” based on the holder’s election and subject to proration. NewDominion shareholders may elect to receive cash consideration for some of their shares and stock consideration for the remainder of the shares they own. The cash consideration and the stock consideration is referred to collectively as the “merger consideration.”
Each NewDominion stock option that has an exercise price per share that is less than $1.08 will be canceled and converted automatically into the right to receive (without interest), with respect to each net share, either cash consideration or stock consideration based on the holder’s election and subject to proration. A “net share” means with respect to a NewDominion stock option, the quotient obtained by dividing (i) the product of (x) the excess, if any, of $1.08 over the per share exercise price of such NewDominion stock option multiplied by (y) the number of shares of NewDominion common stock subject to such NewDominion stock option, by (ii) $1.08. At the effective time, each award in respect of a share of NewDominion common stock subject to vesting, repurchase or other lapse restriction that is outstanding immediately prior to the effective time (which we refer to as a “NewDominion restricted stock award”) will fully vest and be converted into the right to receive, without interest, the merger consideration payable under the Merger Agreement based on the holder’s election in accordance with and subject to the Merger Agreement.
Including payment to be made for cancelling the stock options, the fully diluted total merger consideration is valued at approximately $76.4 million.
The value of the cash consideration is fixed at $1.08. However, the implied value of the stock consideration will fluctuate as the market price of Parent common stock fluctuates before the completion of the Merger. This price will not be known at the time of the special meeting and may be more or less than the current price of Parent common

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stock or the price of Parent common stock at the time of the special meeting or at the time an election is made, and the implied value of the stock consideration may be more or less than the value of the cash consideration at the completion of the Merger.
Exchange of NewDominion common stock (See page 63)
Once the Merger is complete, the exchange agent will mail you transmittal materials and instructions for exchanging your NewDominion stock certificates for shares of Parent common stock to be issued by book-entry transfer.
Material U.S. federal income tax consequences of the Merger (See page 45)
The Merger is intended to qualify as a tax-free reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). As a condition to the completion of the Merger, Squire Patton Boggs (US) LLP, counsel to Parent, and Wyrick Robbins Yates & Ponton LLP, counsel to NewDominion, must deliver opinions, dated the closing date of the Merger, to the effect that the Merger will be treated as a reorganization within the meaning of Section 368(a) of the Code. Assuming the Merger qualifies as a tax-free reorganization, subject to the limitations and more detailed discussion set forth below in the section entitled “Material U.S. federal income tax consequences of the Merger,” a NewDominion shareholder that is a U.S. holder (defined below in the section entitled “Material U.S. federal income tax consequences of the Merger”) and that exchanges all of its shares of NewDominion common stock for Parent common stock and cash pursuant to the Merger will recognize gain (but not loss), and such shareholder’s taxable gain in that case will not exceed the cash received in the Merger.
Tax matters are complicated, and the tax consequences of the Merger to a particular NewDominion shareholder will depend in part on such shareholder’s individual circumstances. Accordingly, you are urged to consult your own tax advisor for a full understanding of the tax consequences of the Merger to you, including the applicability and effect of federal, state, local and foreign income and other tax laws. For a more complete discussion of the material U.S. federal income tax consequences of the Merger, see the section entitled, “The Merger—Material U.S. federal income tax consequences of the Merger” beginning on page 45.
Reasons for the Merger (See pages 30 and 32)
NewDominion’s board of directors believes that the Merger is in the best interests of NewDominion and its shareholders, has unanimously adopted the Merger Agreement and unanimously recommends that its shareholders vote “FOR” approval of the Merger Agreement and the Merger contemplated therein.
In its deliberations and in making its determination, NewDominion’s board of directors considered numerous factors, including the following:
the business strategy and strategic plan of NewDominion, its prospects for the future, projected financial results and expectations relating to the proposed Merger with Park National Bank;
a review of the prospects, challenges and risks of NewDominion remaining independent versus merging with Park National Bank given the current and prospective environment in the financial services industry, including national and local economic conditions, competition and consolidation in the financial services industry and the regulatory and compliance environment;
the ability of NewDominion’s shareholders to benefit from potential appreciation of Parent common stock, and the expectation that the combined entity will have superior future earnings and prospects compared to NewDominion’s earnings and prospects on an independent basis;
the expected cash dividend payments to be received by NewDominion’s shareholders, as shareholders of Parent following the Merger, due to the current quarterly cash dividend payment of $0.94 per share paid by Parent, although Parent has no obligation to pay dividends in any particular amounts or at any particular times;
the advantages of being part of a larger entity, including the expectation of cost savings and operating efficiencies and the ability of a larger institution to compete in the banking environment and to leverage overhead costs, including the cost of financial technology, which the NewDominion board believes is likely to continue to increase in the future;
the financial and other terms of the Merger, including the merger consideration, which NewDominion reviewed with its outside financial and legal advisors;

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the transaction multiples of the Merger consideration to NewDominion’s tangible book value and earnings and the premium over the recent trading price of NewDominion’s stock;
the financial analyses presented by Sandler O’Neill to the board of directors of NewDominion with respect to the Merger and the opinion delivered to the board of directors by Sandler O’Neill on January 22, 2018 to the effect that, as of the date of Sandler O’Neill’s opinion, the merger consideration set forth in the Merger Agreement was fair to the holders of NewDominion common stock from a financial point of view;
the value of Parent common stock and information concerning the financial performance and condition, business operations, capital levels, asset quality, loan portfolio breakdown, and prospects of Parent and Park National Bank, taking into account the results of NewDominion’s due diligence investigation of Parent and Park National Bank;
the greater potential for increased liquidity in the market for Parent common stock, versus an institution of NewDominion’s size;
the familiarity of NewDominion’s board of directors and management team with Park National Bank and its business, operations, culture, customers, directors, executive officers and employees;
the compatibility of NewDominion’s business, operations and culture with those of Park National Bank;
the possible effects of the proposed Merger on NewDominion’s employees and customers; and
the likelihood that the Merger will be completed on a timely basis, including the likelihood that the Merger will receive all necessary regulatory approvals in a timely manner.
Parent’s board of directors concluded that the Merger is in the best interests of Parent and its shareholders. In deciding to approve the Merger, Parent’s board of directors considered a number of factors, including:
management’s view that the acquisition of NewDominion by Park National Bank provides strong entrance to the attractive Charlotte, North Carolina market;
a review of the demographic, economic and financial characteristics of the markets in which NewDominion operates, including existing and potential competition and history of the market areas with respect to financial institutions;
Parent management’s view of the people, culture, credit underwriting standards and overall conservative nature of NewDominion, as Park National Bank management had observed since making an initial investment in NewDominion in November 2016;
Parent management’s review of NewDominion’s business, operations, earnings and financial condition, including its management, capital levels and asset quality;
efficiencies to come from integrating NewDominion’s operations into Park National Bank’s existing operations, including the potential to leverage Park National Bank’s capital, liquidity and operational strengths, product set and capabilities to accelerate growth; and
the likelihood that the Merger will be approved by the relevant bank regulatory authorities without undue burden and in a timely manner.
Opinion of NewDominion’s financial advisor (see page 32 and Annex C)
On January 22, 2018, Sandler O’Neill & Partners, L.P. (“Sandler O’Neill”) rendered its oral opinion to the NewDominion board of directors, which was subsequently confirmed in writing, to the effect that, as of January 22, 2018 and subject to the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Sandler O’Neill as set forth in its opinion, the merger consideration set forth in the Merger Agreement was fair, from a financial point of view, to NewDominion common shareholders.
Sandler O’Neill’s opinion was directed to the NewDominion board of directors and relates only to the fairness of the merger consideration to be received by NewDominion common shareholders, from a financial point of view. Sandler O’Neill’s opinion does not address any other aspect of the Merger and is not a recommendation to any NewDominion shareholder as to how such shareholder should vote at the special meeting.
The full text of Sandler O’Neill’s January 22, 2018 opinion is included as Annex C to this proxy statement/prospectus. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Sandler O’Neill in rendering its opinion. NewDominion shareholders are urged to read the entire opinion carefully in connection with their consideration of the Merger Agreement.

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Board recommendation to NewDominion shareholders (See page 30)
NewDominion’s board of directors believes that the Merger of NewDominion with and into Park National Bank is in the best interests of NewDominion and its shareholders. NewDominion’s board of directors unanimously recommends that you vote “FOR” approval of the Merger Agreement and the Merger contemplated therein.
Interests of officers and directors of NewDominion in the Merger may be different from, or in addition to, yours (See page 49)
When you consider the NewDominion board of directors’ recommendation to vote in favor of the approval of the Merger Agreement, you should be aware that some of NewDominion’s directors and officers may have interests in the Merger that are different from, or in addition to, your interests as shareholders. NewDominion’s board of directors was aware of these interests and took them into account in approving the Merger. These interests include, among others, proposed employee benefits for those who become employees of Park National Bank after the Merger, benefits provided pursuant to employment agreements entered into with certain executive officers of NewDominion, the appointment of certain NewDominion directors to the NewDominion divisional advisory board of Park National Bank, and the provision of merger consideration in exchange for the cancellation of outstanding NewDominion stock options and shares subject to NewDominion restricted stock awards.
Parent and Park National Bank have agreed to maintain in effect the current directors’ and officers’ liability insurance policies maintained by NewDominion or otherwise provide insurance policies of at least the same coverage, subject to limits on availability and cost, for six years. Parent and Park National Bank have also agreed to indemnify and hold harmless the current and former directors, officers and employees of NewDominion and its subsidiaries for all actions taken by them in such capacities prior to the effective time of the Merger, and assume all obligations of NewDominion and its subsidiaries to such directors, officers and employees in respect of indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the effective time as provided in their organizational documents.
NewDominion shareholders will have appraisal rights in connection with the Merger (See page 52)
NewDominion shareholders may assert appraisal rights with respect to the Merger and, upon complying with the requirements of Article 13 of the NCBCA, will be entitled to receive the fair value of their shares in cash instead of the merger consideration.
In general, to preserve their appraisal rights, NewDominion shareholders who wish to exercise these rights must:
be entitled to vote on the Merger;
deliver to NewDominion, at or before NewDominion’s special meeting of shareholders, written notice of the shareholder’s intent to demand payment if the Merger is effectuated;
not vote their shares for approval of the Merger Agreement; and
comply with the other procedures set forth in Sections 55-13-01 through 55-13-31 of the NCBCA.
A copy of Article 13 of the NCBCA pertaining to appraisal rights is attached as Annex B to this proxy statement/prospectus. You should read the text of the statutes carefully and consult with your legal counsel if you intend to exercise these rights.
The Merger and the performance of the surviving bank are subject to a number of risks (See page 17)
There are a number of risks relating to the Merger and to the businesses of Park National Bank, NewDominion and the surviving bank following the Merger. See the “Risk Factors” beginning on page 17 of this proxy statement/prospectus for a discussion of these and other risks and see also the documents that Parent has filed with the SEC and which are incorporated by reference into this proxy statement/prospectus.
NewDominion shareholder approval will be required to complete the Merger and approve the other proposals set forth in the notice (See page 23)
Under applicable state and federal law, for the Merger to be approved, the Merger Agreement must be approved, ratified, and confirmed by the affirmative vote of the holders owning at least two-thirds of the shares of each class of common stock outstanding and entitled to vote at the special meeting. Approval of the proposal to adjourn the special meeting, if necessary, will be approved if the votes cast at the special meeting within a voting group, in person or by proxy, in favor of the proposal exceed the votes cast against the proposal. To establish a quorum within each voting group, shareholders holding at least a majority of the shares of NewDominion common stock entitled to

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vote at the special meeting within each voting group must be present in person or by proxy at the special meeting. Shareholders may vote their shares in person at the special meeting or by signing and returning the enclosed proxy form (or by appointing the proxies to vote their shares by Internet).
NewDominion’s directors and executive officers who own shares of NewDominion voting common stock have agreed to vote their shares in favor of the Merger at the special meeting. These NewDominion directors and executive officers and their affiliates beneficially owned 8,999,248 shares of NewDominion voting common stock (inclusive of shares underlying exercisable stock options) or approximately 22.9% of NewDominion’s voting common stock outstanding as of February 28, 2018. Certain holders of NewDominion’s non-voting common stock have also agreed to vote their shares in favor of the Merger at the special meeting. These NewDominion shareholders and their affiliates owned 33,586,481 shares of NewDominion non-voting common stock or 87.8% of NewDominion’s non-voting common stock outstanding as of February 28, 2018. Parent owns the remaining 12.2% of NewDominion’s non-voting common stock, which will be entitled to vote at the special meeting. Parent’s shareholders will not be voting on the Merger Agreement. See “The Merger — Voting agreements” on page 52.
NewDominion special meeting (See page 22)
The special meeting of shareholders will be held at the offices of NewDominion, 1111 Metropolitan Avenue, Suite 500, Charlotte, North Carolina 28204, on _________ , 2018 at _________ , local time. NewDominion’s board of directors is soliciting proxies for use at the special meeting. At the special meeting, NewDominion shareholders will be asked to vote on a proposal to approve the Merger Agreement.
Record date for the special meeting; revocability of proxies (See pages 22 and 24)
You may vote at the special meeting if you own shares of NewDominion common stock of record at the close of business on __________ , 2018. You will have one vote for each share of NewDominion common stock (whether designated as voting or non-voting) you owned on that date. Shareholders of record may change their vote or revoke a previously given proxy prior to the special meeting by filing with the secretary of NewDominion a duly executed revocation of proxy or submitting a new proxy form with a later date. Shareholders of record may also vote in person at the special meeting.
Completion of the Merger is subject to regulatory approvals (See page 49)
The Merger cannot be completed until Park National Bank receives the necessary regulatory approval of the Office of the Comptroller of the Currency (the “OCC”) and the North Carolina Commissioner of Banks (the “NCCOB”). Park National Bank submitted an application with the OCC and NCCOB on March 1, 2018. The Merger also is subject to the United States Department of Justice’s competitive review process.
Conditions to the Merger (See page 68)
Closing Conditions for the Benefit of All Parties. Each of Parent, Park National Bank and NewDominion’s obligations are subject to fulfillment of certain conditions, including:
no applicable law or order by governmental authority making illegal or preventing or prohibiting the consummation of the Merger;
receipt of all regulatory approvals containing no unduly burdensome conditions and expiration of all statutory waiting periods;
all required consents, authorizations, waivers or approvals having been obtained; and
the registration statement having been declared effective by the SEC and continuing to be effective, and all necessary approvals under securities laws relating to the issuance of the shares of Parent common stock pursuant to the Merger having been received.
Closing Conditions for the Benefit of Parent and Park National Bank. Parent and Park National Bank’s obligations are subject to fulfillment of certain conditions, including:
accuracy of representations and warranties of NewDominion in the Merger Agreement as of the closing date, except as otherwise set forth in the Merger Agreement;
performance by NewDominion in all material respects of its agreements under the Merger Agreement;
adoption of the Merger Agreement at the special meeting by NewDominion shareholders holding the requisite voting power under its charter documents and applicable law;

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delivery by NewDominion of duly executed option cancellation agreements, certificates and documents as provided in the Merger Agreement;
no new enforcement actions initiated against NewDominion by any regulatory agency which, individually or in the aggregate, would reasonably be expected to materially affect NewDominion’s ability to conduct its business as currently being conducted;
holders of no more than 10% of the NewDominion common stock having taken the actions required under the NCBCA to qualify their NewDominion common stock as appraisal shares; and
Parent and Park National Bank receiving a written opinion of Squire Patton Boggs (US) LLP to the effect that the Merger will be treated as a reorganization within the meaning of Section 368(a) of the Code.
Closing Conditions for the Benefit of NewDominion. NewDominion’s obligations are subject to fulfillment of certain conditions, including:
accuracy of representations and warranties of Parent and Park National Bank in the Merger Agreement as of the closing date, except as otherwise set forth in the Merger Agreement;
performance by Parent and Park National Bank in all material respects of its agreements under the Merger Agreement;
delivery by Parent of the evidence of the payment of the merger consideration to the exchange agent, and certain other certificates and documents as provided in the Merger Agreement; and
NewDominion receiving a written opinion of Wyrick Robbins Yates & Ponton LLP to the effect that the Merger will be treated as a reorganization within the meaning of Section 368(a) of the Code.
How the Merger Agreement may be terminated by Parent, Park National Bank and NewDominion (See page 69)
Park National Bank and NewDominion may mutually agree to terminate the Merger Agreement and abandon the Merger at any time. Subject to conditions and circumstances described in the Merger Agreement, Park National Bank, on the one hand, or NewDominion, on the other hand, as the case may be, may terminate the Merger Agreement as follows:
by either party if the Merger is not completed by January 22, 2019; provided, that this right to terminate the Merger Agreement shall not be available to any party whose failure to fulfill any obligation under the Merger Agreement shall have been the cause of, or shall have resulted in, the failure of the Merger to close on or prior to such date;
by either party in the event of a material breach by the other party of its representation or warranty or obligations contained in the Merger Agreement, which breach cannot be or has not been cured within 30 days after the giving of written notice to the breaching party of such breach, and which breach or breaches would result in a failure to satisfy any applicable closing condition; provided that the terminating party is not in material breach of any covenant or agreement under the Merger Agreement;
by either party if final action has been taken by a regulatory agency whose approval is required for the Merger, which final action has become final and nonappealable and does not approve the Merger;
by either party if any governmental authority has enacted, issued, promulgated, enforced or entered any law, or final nonappealable judgment which has the effect of making illegal the consummation of the Merger;
by Park National if the board of directors of NewDominion fails to make a recommendation to NewDominion shareholders to adopt the Merger Agreement or withdraws or modifies its recommendation in a manner adverse to Park National Bank, or NewDominion has materially breached its covenant not to solicit alternative acquisition proposals;
in certain circumstances, by either party if NewDominion has received and would accept a superior acquisition proposal from a third party; or
if the NewDominion shareholders fail to adopt the Merger Agreement.
Termination fees and expenses may be payable under some circumstances (See page 70)
If the Merger Agreement is terminated (i) by Park National Bank because the board of directors of NewDominion fails to make recommendation to NewDominion shareholders to adopt the Merger Agreement or

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withdraws or modifies its recommendation in a manner adverse to Park National Bank, or NewDominion has materially breached its covenant not to solicit alternative acquisition proposals, or (ii) by either party if NewDominion has received and would accept a superior alternative proposal from a third party, Park National Bank may be owed a termination fee from NewDominion in the amount of $4,170,000. See “Description of the Merger Agreement — Termination fee.”
Voting agreements (See page 52)
NewDominion’s directors and executive officers who own shares of NewDominion voting common stock have agreed to vote their shares in favor of the Merger at the special meeting. These NewDominion directors and executive officers and their affiliates beneficially owned 8,999,248 shares of NewDominion voting common stock (inclusive of shares underlying exercisable stock options) or approximately 22.9% of NewDominion’s voting common stock outstanding as of February 28, 2018. Certain holders of NewDominion’s non-voting common stock have also agreed to vote their shares in favor of the Merger at the special meeting. These NewDominion shareholders and their affiliates owned 33,586,481 shares of NewDominion non-voting common stock or 87.8% of NewDominion’s non-voting common stock outstanding as of February 28, 2018. Parent owns the remaining 12.2% of NewDominion’s non-voting common stock, which will be entitled to vote at the special meeting. Parent’s shareholders will not be voting on the Merger Agreement.
The voting agreements will terminate at the earliest to occur of: termination of the Merger Agreement, effectiveness of the Merger, a material modification to the Merger Agreement that adversely impacts the consideration payable to NewDominion shareholders, and 18 months following execution of the voting agreements.
Accounting treatment of the Merger
The Merger will be accounted for as a purchase transaction in accordance with accounting principles generally accepted in the United States.
Certain differences in Parent shareholder rights and NewDominion shareholder rights (See page 73)
Parent is an Ohio corporation and a financial holding company registered under the Bank Holding Company Act of 1956, as amended, while NewDominion is a North Carolina state-chartered commercial bank. Although the rights of the holders of Parent common shares and those of holders of NewDominion common shares are similar in many respects, there are some differences. These differences relate to differences between the provisions of Ohio law governing corporations and the provisions of North Carolina law governing state-chartered commercial banks, as well as differences between provisions of Parent’s articles of incorporation and regulations and NewDominion’s articles of incorporation and bylaws. Certain of these differences are described in detail in the section entitled “Comparison of rights of Parent shareholders and NewDominion shareholders” beginning on page 73. After completion of the Merger, NewDominion shareholders who receive shares of Parent common stock in exchange for their shares of NewDominion common stock will become Parent shareholders and their rights will be governed by Parent’s articles of incorporation and regulations, in addition to laws and requirements that apply to public companies.
Parent shares will be listed on NYSE American (See page 70)
The shares of Parent common stock to be issued pursuant to the Merger will be listed on NYSE American under the symbol “PRK.”
Comparative per share market price and dividend information
Parent’s common shares, each without par value, are listed on NYSE American, under the symbol “PRK.” As of ____________, 2018, the last date prior to distribution of this proxy statement/prospectus for which it was practicable to obtain this information, there were _______ shares of Parent common stock outstanding and Parent had approximately ____ shareholders of record.
NewDominion common shares are quoted on the OTCPink market of the OTC Markets Group, Inc. under the symbol “NDMN,” however, the shares do not have an active trading market and are not traded frequently. As of _____________ , 2018, the last date prior to distribution of this proxy statement/prospectus for which it was practicable to obtain this information, there were ___________ NewDominion voting common shares outstanding, which were held by approximately _______ holders of record, and _______ NewDominion non-voting common shares outstanding, which were held by approximately ______ holders of record.
The table below shows, for the quarters indicated, based on published financial sources, the reported high and low sales prices of Parent common stock during the periods indicated and the cash dividends paid per share of Parent common stock.

- 12 -





 
 
High
 
Low
 
Dividend Paid
Year Ended December 31, 2015
 
 
 
 
 
 
First Quarter
 
$
88.39

 
$
79.46

 
$
0.94

Second Quarter
 
90.00

 
81.01

 
0.94

Third Quarter
 
90.92

 
80.15

 
0.94

Fourth Quarter
 
99.68

 
84.27

 
0.94

Year Ended December 31, 2016
 
 
 
 
 
 
First Quarter
 
$
91.80

 
$
79.01

 
$
0.94

Second Quarter
 
95.45

 
85.35

 
0.94

Third Quarter
 
97.20

 
87.55

 
0.94

Fourth Quarter
 
122.88

 
94.05

 
0.94

Year Ended December 31, 2017
 
 
 
 
 
 
First Quarter
 
$
120.66

 
$
102.20

 
$
0.94

Second Quarter
 
111.55

 
97.85

 
0.94

Third Quarter
 
109.48

 
92.42

 
0.94

Fourth Quarter
 
114.33

 
103.70

 
0.94


The table below shows, for the quarters indicated, based on published financial sources, the reported high and low sales prices of NewDominion common stock as quoted on the OTCPink market of the OTC Markets Group, Inc. during the periods indicated and the cash dividends paid per share of NewDominion common stock.
 
 
High
 
Low
 
Dividend Paid
Year Ended December 31, 2015
 
 
 
 
 
 
First Quarter
$
*
$
*
 
$
0.00

Second Quarter
 
*
 
*
 
0.00

Third Quarter
 
*
 
*
 
0.00

Fourth Quarter
 
*
 
*
 
0.00

Year Ended December 31, 2016
 
 
 
 
 
 
First Quarter
$
*
$
*
 
$
0.00

Second Quarter *
 
0.25

 
0.25
 
0.00

Third Quarter
 
0.30

 
0.25
 
0.00

Fourth Quarter
 
0.52

 
0.22
 
0.00

Year Ended December 31, 2017
 
 
 
 
 
 
First Quarter
$
0.60

$
0.00
 
$
0.00

Second Quarter
 
0.48

 
0.31
 
0.00

Third Quarter
 
0.65

 
0.42
 
0.00

Fourth Quarter
 
0.99

 
0.57
 
0.00

*
NewDominion’s voting common stock was first publicly quoted in the OTCPink marketplace on June 17, 2016.

The following table presents the closing prices of NewDominion common stock and Parent common stock on January 22, 2018, the last trading day before the public announcement of the Merger Agreement, and , 2018, the last practicable trading day prior to the mailing of this proxy statement/prospectus. The table also shows the cash consideration and the estimated equivalent per share stock consideration with respect to each share of NewDominion common stock on the relevant date.
 
 
NewDominion 
Closing Price
 
Parent Closing Price
 
Cash Consideration
 
 
Exchange Ratio
 
 
Estimated
Equivalent Per
Share Value (for
 
Stock Consideration)
January 22, 2018
 
$
0.90
 
$
107.18
 
$
1.08
 
 
 
0.01023
 
 
$
1.10
, 2018
 
 
 
 
 
 
 
$
1.08
 
 
 
0.01023
 
 
 
 

- 13 -





The above table shows only historical comparisons. These comparisons may not provide meaningful information to NewDominion shareholders in determining whether to approve the Merger Agreement. NewDominion shareholders are urged to obtain current market quotations for shares of Parent common stock and NewDominion common stock and to review carefully the other information contained in this proxy statement/prospectus or incorporated by reference into this proxy statement/prospectus in considering whether to approve the Merger Agreement. The market prices of Parent common stock and NewDominion common stock will fluctuate between the date of this proxy statement/prospectus and the date of completion of the Merger. No assurance can be given concerning the market prices of NewDominion common stock or Parent common stock before or after the effective date of the Merger. Changes in the market price of Parent common stock prior to the completion of the Merger will affect the market value of the merger consideration that NewDominion shareholders who receive stock consideration will receive upon completion of the Merger.
Comparative per share data
The following table presents selected comparative per share data for Parent common stock and NewDominion common stock. You should read this information in conjunction with the selected historical financial information included elsewhere in this proxy statement/prospectus, and the historical financial statements of Parent and related notes that are incorporated by reference in this proxy statement/prospectus by reference. The historical per share data is derived from audited financial statements as of and for the years ended December 31, 2016 and 2017.
 
 
Year Ended December 31, 2017
 
Year Ended December 31, 2016
Parent:
 
 
 
 
Diluted Earnings per share
 
$
5.47

 
$
5.59

Cash dividends declared per share
 
3.76

 
3.76

Book value per common share (at period end)
 
49.46

 
48.38

NewDominion:
 
      
 
      
Diluted Earnings per share
 
$
0.06

 
$
0.00

Cash dividends declared per share
 

 

Book value per common share (at period end)
 
0.52

 
0.45


Selected historical financial data of Parent
The selected consolidated financial data presented below is being provided to assist you in your analysis of the financial aspects of the Merger. The annual Parent historical information as of and for each of the years in the five-year period ended December 31, 2017, are derived from Parent’s audited historical financial statements. This information is only a summary and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the notes thereto incorporated by reference into this proxy statement/prospectus from Parent’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The historical results below or contained elsewhere in this proxy statement/prospectus are not necessarily indicative of the future performance of Parent or the surviving bank.

- 14 -





SELECTED FINANCIAL DATA
 
 
December 31,
(Dollars in thousands, except per share data)
 
2017
 
2016
 
2015
 
2014
 
2013
Results of Operations:
 
 
 
 
 
 
 
 
 
 
   Interest income
 
$
286,424
 
 
$
276,258
 
 
$
265,074
 
 
$
265,143
 
 
$
262,947
 
   Interest expense
 
42,665
 
 
38,172
 
 
37,442
 
 
40,099
 
 
41,922
 
   Net interest income
 
243,759
 
 
238,086
 
 
227,632
 
 
225,044
 
 
221,025
 
Provision for (recovery of) loan losses
 
8,557
 
 
(5,101)
 
 
4,990
 
 
(7,333)
 
 
3,415
 
   Net interest income after provision for (recovery of) loan losses
 
235,202
 
 
243,187
 
 
222,642
 
 
232,377
 
 
217,610
 
   Non-interest income
 
80,635
 
 
78,731
 
 
77,551
 
 
75,549
 
 
73,277
 
   Non-interest expense
 
197,368
 
 
199,023
 
 
186,614
 
 
187,510
 
 
181,515
 
   Net income
 
84,242
 
 
86,135
 
 
81,012
 
 
83,957
 
 
76,869
 
   Net income available to common shareholders
 
84,242
 
 
86,135
 
 
81,012
 
 
83,957
 
 
76,869
 
Per common share:
 
 
 
 
 
 
 
 
 
 
   Net income per common share - basic
 
$
5.51
 
 
$
5.62
 
 
$
5.27
 
 
$
5.45
 
 
$
4.99
 
   Net income per common share - diluted
 
5.47
 
 
5.59
 
 
5.26
 
 
5.45
 
 
4.99
 
   Cash dividends declared
 
3.76
 
 
3.76
 
 
3.76
 
 
3.76
 
 
3.76
 
Average Balances:
 
 
 
 
 
 
 
 
 
 
   Loans
 
$
5,327,507
 
 
$
5,122,862
 
 
$
4,909,579
 
 
$
4,717,297
 
 
$
4,514,781
 
   Investment securities
 
1,557,156
 
 
1,504,667
 
 
1,478,208
 
 
1,432,692
 
 
1,377,887
 
   Money market instruments and other
 
262,100
 
 
198,197
 
 
342,997
 
 
204,874
 
 
272,851
 
      Total earning assets
 
7,146,763
 
 
6,825,726
 
 
6,730,784
 
 
6,354,863
 
 
6,165,519
 
   Non-interest bearing deposits
 
1,544,986
 
 
1,414,885
 
 
1,311,628
 
 
1,196,625
 
 
1,117,379
 
   Interest bearing deposits
 
4,348,110
 
 
4,165,919
 
 
4,155,196
 
 
3,820,928
 
 
3,742,361
 
      Total deposits
 
5,893,096
 
 
5,580,804
 
 
5,466,824
 
 
5,017,553
 
 
4,859,740
 
   Short-term borrowings
 
$
229,193
 
 
$
240,457
 
 
$
258,717
 
 
$
263,270
 
 
$
253,123
 
   Long-term debt
 
788,491
 
 
776,465
 
 
793,469
 
 
867,615
 
 
870,538
 
   Shareholders' equity
 
755,839
 
 
737,737
 
 
710,327
 
 
680,449
 
 
643,609
 
   Common shareholders' equity
 
755,839
 
 
737,737
 
 
710,327
 
 
680,449
 
 
643,609
 
   Total assets
 
7,741,043
 
 
7,416,519
 
 
7,306,460
 
 
6,893,302
 
 
6,701,049
 

- 15 -







Ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Return on average assets(x)
 
1.09
%
 
1.16
%
 
1.11
%
 
1.22
%
 
1.15
%
  Return on average common equity(x)
 
11.15
%
 
11.68
%
 
11.40
%
 
12.34
%
 
11.94
%
  Net interest margin(1)
 
3.48
%
 
3.52
%
 
3.39
%
 
3.55
%
 
3.61
%
   Efficiency ratio(1)
 
59.93
%
 
62.34
%
 
60.98
%
 
62.21
%
 
61.40
%
   Dividend payout ratio(2)
 
68.71
%
 
67.29
%
 
71.51
%
 
69.02
%
 
75.39
%
   Average shareholders' equity to average total assets
 
9.76
%
 
9.95
%
 
9.72
%
 
9.87
%
 
9.60
%
Common equity tier 1 capital
 
12.94
%
 
12.55
%
 
12.54
%
 
N/A
 
 
N/A
 
   Leverage capital
 
9.44
%
 
9.56
%
 
9.22
%
 
9.25
%
 
9.48
%
   Tier 1 capital
 
13.22
%
 
12.83
%
 
12.82
%
 
13.39
%
 
13.27
%
   Risk-based capital
 
14.14
%
 
14.32
%
 
14.49
%
 
15.14
%
 
15.91
%
(1) Calculated utilizing fully taxable equivalent net interest income which includes the effects of taxable equivalent adjustments using a 35% tax rate. The taxable equivalent adjustments were $5.0 million for 2017, $2.4 million for 2016, $865,000 for 2015, $845,000 for 2014, and $1.3 million for 2013.
(2) Cash dividends paid divided by net income.
(x) Reported measure uses net income available to common shareholders





- 16 -





RISK FACTORS
In addition to the other information contained in or incorporated by reference into this proxy statement/prospectus, including the matters addressed under the caption “Special Notes Concerning Forward-Looking Statements” on page 20, you should consider the following risk factors carefully in deciding whether to vote to approve the Merger Agreement. Additional risks and uncertainties not presently known to Parent and NewDominion or that are not currently believed to be important to you, if they materialize, also may adversely affect the Merger and Parent and Park National Bank as a surviving bank.
In addition, Parent’s and NewDominion’s respective businesses are subject to numerous risks and uncertainties, including the risks and uncertainties described, in the case of Parent, in its Annual Report on Form 10-K for the year ended December 31, 2017, which are incorporated by reference into this proxy statement/prospectus.
Risks relating to the Merger
Because the market price of Parent common stock may fluctuate, you cannot be certain of the precise value of the stock portion of the merger consideration you may receive in the Merger.
At the time the Merger is completed, each issued and outstanding share of NewDominion common stock (except for shares of NewDominion common stock owned by NewDominion or Parent (in each case other than shares held in trust accounts, managed accounts and the like, or otherwise held in a fiduciary or agency capacity, that are beneficially owned by third parties and shares held, directly or indirectly, by Parent, NewDominion or any wholly-owned subsidiary of Parent or NewDominion in respect of a debt previously contracted) and appraisal shares) will be converted into the right to receive either (i) $1.08 in cash or (ii) 0.01023 shares of Parent common stock, based on the holder’s election and subject to proration.
There will be a time lapse between each of the date of this proxy statement/prospectus, the date on which NewDominion shareholders vote to approve the Merger Agreement at the special meeting, the election deadline by which NewDominion shareholders may elect to receive the cash consideration or the stock consideration (or a combination thereof) and the date on which NewDominion shareholders entitled to receive shares of Parent common stock under the Merger Agreement actually receive such shares. The market value of Parent common stock may fluctuate during these periods as a result of a variety of factors, including general market and economic conditions, changes in Parent’s businesses, operations and prospects and regulatory considerations. Many of these factors are outside of the control of NewDominion and Parent. Consequently, at the time NewDominion shareholders must decide whether to approve the Merger Agreement and, if applicable, to elect to receive stock consideration, they will not know the actual market value of the shares of Parent common stock they may receive when the Merger is completed. The value of the cash consideration is fixed at $1.08, but the actual value of the shares of Parent common stock received by the NewDominion shareholders who receive stock consideration will depend on the market value of shares of Parent common stock on that date. This value will not be known at the time of the special meeting and may be more or less than the current price of Parent common stock or the price of Parent common stock at the time of the special meeting or at the time an election is made, and the implied value of the stock consideration may be more or less than the value of the cash consideration at the completion of the Merger.
Because NewDominion common stock is traded infrequently, it is difficult to determine how the fair value of NewDominion common stock compares with the merger consideration.
NewDominion common stock is quoted on the OTCPink market of the OTC Markets Group, Inc. The market for NewDominion common stock has historically been illiquid and irregular. This lack of liquidity makes it difficult to determine the fair value of NewDominion common stock. Because the merger consideration was determined based on negotiations between the parties, it may not be indicative of the fair value of the shares of NewDominion common stock.
The opinion that NewDominion has obtained from Sandler O’Neill has not been, and is not expected to be, updated to reflect any changes in circumstances that may have occurred since the date of such opinion.
The opinion issued to the NewDominion board of directors by Sandler O’Neill, financial advisor to NewDominion, with respect to the fairness of the merger consideration to be received by NewDominion common shareholders, from a financial point of view, speaks only as of January 22, 2018. Changes in the operations and prospects of Parent or NewDominion, general market and economic conditions and other factors which may be

- 17 -





beyond the control of Parent and NewDominion, and on which the opinion was based, may have altered the value of Parent or NewDominion or the sale prices of shares of Parent common stock as of the date of this proxy statement/prospectus, or may alter such values and sale prices by the time the Merger is completed. Sandler O’Neill does not have any obligation to update, revise or reaffirm its opinion to reflect subsequent developments and has not done so. Because NewDominion does not currently anticipate asking Sandler O’Neill to update its opinion, the opinion will not address the fairness of the merger consideration from a financial point of view at the time the Merger is completed. The NewDominion board of directors’ recommendation that NewDominion shareholders vote “FOR” approval of the Merger Agreement, however, is made as of the date of this proxy statement/prospectus. See “The Merger — Opinion of NewDominion’s financial advisor” and Annex C to this proxy statement/prospectus.
Parent and Park National Bank may be unable to successfully integrate NewDominion’s operations and may not realize the anticipated benefits of acquiring NewDominion.
Parent, Park National Bank and NewDominion entered into the Merger Agreement with the expectation that Park National Bank would be able to successfully integrate NewDominion’s operations and that the Merger would result in various benefits, including, among other things, enhanced revenues and revenue synergies, an expanded market reach and operating efficiencies. Achieving the anticipated benefits of the Merger is subject to a number of uncertainties, including whether Park National Bank is able to integrate and operate NewDominion in an efficient and effective manner, and general competitive factors in the market place. The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of one or more of the surviving bank’s businesses or the loss of key personnel. The diversion of management’s attention and any delays or difficulties encountered in connection with the Merger and the integration of the two banks’ operations could have an adverse effect on the business, financial condition, operating results and prospects of the surviving bank after the Merger. Failure to achieve these anticipated benefits could result in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy and could have an adverse effect on the surviving bank’s business, financial condition, operating results and prospects.
Among the factors considered by the boards of directors of Parent, Park National Bank and NewDominion in connection with their respective approvals of the Merger Agreement were the benefits that could result from the Merger. We cannot give any assurance that these benefits will be realized within the time periods contemplated or even that they will be realized at all.
NewDominion will be subject to business uncertainties while the Merger is pending, which could adversely affect its business.
Uncertainty about the effect of the Merger on employees and customers may have an adverse effect on NewDominion, and, consequently, the surviving bank. Although NewDominion intends to take steps to reduce any adverse effects, these uncertainties may impair NewDominion’s ability to attract, retain and motivate key personnel until the Merger is consummated and for a period of time thereafter, and could cause customers and others that deal with NewDominion to seek to change their existing business relationships with NewDominion. Employee retention at NewDominion may be particularly challenging during the pendency of the Merger, as employees may experience uncertainty about their roles with the surviving bank following the Merger.
Some of the directors and executive officers of NewDominion have interests and arrangements that could have affected their respective decision to support or approve the Merger.
The interests of some of the directors and executive officers of NewDominion in the Merger are different from, and may be in addition to, those of NewDominion shareholders generally and could have affected their decision to support or approve the Merger. These interests include:
Each employee who, in Parent and Park National Bank’s sole discretion, continues employment with the surviving bank will be provided wages or salaries and employee benefits (excluding equity plans) that in the aggregate are substantially comparable to what he or she receives at NewDominion immediately prior to the closing date, subject to certain restrictions;
Certain executive officers of NewDominion have entered into employment agreements with Parent and Park National Bank which provide for continued employment with the surviving bank and certain other benefits;

- 18 -





Following the Merger, a NewDominion divisional advisory board will be created and certain directors from the current board of directors of NewDominion, as agreed among the parties, will be appointed to serve on such NewDominion divisional advisory board;
Provision of merger consideration in exchange for the cancellation of outstanding NewDominion stock options and shares subject to NewDominion restricted stock awards;
Park National Bank and Parent’s agreement to provide officers and directors of NewDominion with continuing indemnification rights for six years following the Merger; and
Park National Bank’s agreement to provide directors’ and officers’ insurance to the officers and directors of NewDominion for six years following the Merger.
In addition, the directors and executive officers of NewDominion who own shares of NewDominion voting common stock have entered into voting agreements that require them to vote all of their shares of NewDominion common stock in favor of the Merger Agreement at the special meeting. The voting agreements cover, in the aggregate, approximately 22.9% of NewDominion’s outstanding shares of voting common stock as of February 28, 2018. As a result, these directors and officers of NewDominion may be more likely to recommend to NewDominion’s shareholders the approval of the Merger Agreement than if they did not have these interests.
Risks relating to the businesses of Parent and the surviving bank
NewDominion’s shareholders will not control Parent’s future operations.
Currently, NewDominion’s shareholders own 100% of NewDominion and have the power to approve or reject any matters requiring shareholder approval under North Carolina law and NewDominion’s articles of incorporation and bylaws. After the Merger, NewDominion shareholders are expected to become owners of approximately 3% of the outstanding shares of Parent common stock. Even if all former NewDominion shareholders voted together on all matters presented to Parent’s shareholders, from time to time, the former NewDominion shareholders most likely would not have a significant impact on the approval or rejection of future Parent proposals submitted to a shareholder vote.


- 19 -





SPECIAL NOTES CONCERNING FORWARD-LOOKING STATEMENTS
This document contains, and the documents into which it may be incorporated by reference may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not limited to, statements relating to the expected timing and benefits of the Merger, including future financial and operating results, cost savings, enhanced revenues, and accretion/dilution to reported earnings that may be realized from the Merger, as well as other statements of expectations regarding the Merger, and other statements of Parent’s and Park National Bank’s goals, intentions and expectations; statements regarding Parent’s and Park National Bank’s business plan and growth strategies; statements regarding the asset quality of Park National Bank’s loan and investment portfolios; and estimates of Parent’s and Park National Bank’s risks and future costs and benefits, whether with respect to the Merger or otherwise. Words like “believe”, “continue”, “pattern”, “estimate”, “project”, “intend”, “anticipate”, “expect” and similar expressions or future or conditional verbs such as “will”, “would”, “should”, “could”, “might”, “can”, “may”, or similar expressions and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements and information are not historical facts, are premised on many factors and assumptions, and represent only management’s expectations, estimates and projections regarding future events. Similarly, these statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict, which may include, but are not limited to, those listed below and the Risk Factors discussed under Item 1A of Parent’s 2017 Annual Report on Form 10-K and in any of Parent’s subsequent SEC filings. Parent intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of invoking these safe harbor provisions. Management’s analysis contains forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. However, such performance involves risks and uncertainties that may cause actual results to differ materially. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:
the inability to close the Merger in a timely manner;
the failure to complete the Merger due to the failure of NewDominion shareholders to approve the merger proposal;
failure to obtain applicable regulatory approvals and meet other closing conditions to the Merger on the expected terms and schedule;
the potential impact of announcement or consummation of the Merger on relationships with third parties, including customers, employees, and competitors;
business disruption following the Merger;
difficulties and delays in integrating the NewDominion business or fully realizing cost savings and other benefits;
Parent’s and Park National Bank’s potential exposure to unknown or contingent liabilities of NewDominion;
the challenges of integrating, retaining, and hiring key personnel;
failure to attract new customers and retain existing customers in the manner anticipated;
the outcome of pending or threatened litigation, or of matters before regulatory agencies, whether currently existing or commencing in the future, including litigation related to the Merger;
any interruption or breach of security resulting in failures or disruptions in customer account management, general ledger, deposit, loan, or other systems;
changes in Parent’s stock price before closing, including as a result of the financial performance of NewDominion prior to closing;

- 20 -





operational issues stemming from, and/or capital spending necessitated by, the potential need to adapt to industry changes in information technology systems, on which Parent, Park National Bank and NewDominion are highly dependent;
changes in legislation, regulation, policies, or administrative practices, whether by judicial, governmental, or legislative action, including, but not limited to, the Dodd-Frank Wall Street Reform and Consumer Protection Act, which we refer to as the “Dodd-Frank Act,” and other changes pertaining to banking, securities, taxation, rent regulation and housing, financial accounting and reporting, environmental protection, and insurance, and the ability to comply with such changes in a timely manner;
changes in the monetary and fiscal policies of the U.S. Government, including policies of the U.S. Department of the Treasury and the Federal Reserve Board;
changes in interest rates, which may affect Park National Bank’s or NewDominion’s net income, prepayment penalty income, mortgage banking income, and other future cash flows, or the market value of Park National Bank’s or NewDominion’s assets, including its investment securities;
changes in accounting principles, policies, practices, or guidelines;
changes in Parent’s or Park National Bank’s ability to access the capital markets;
natural disasters, war, or terrorist activities; and
other economic, competitive, governmental, regulatory, technological, and geopolitical factors affecting Park National Bank’s or NewDominion’s operations, pricing, and services.
Therefore, there can be no assurances that future actual results will correspond to these forward-looking statements. The reader is cautioned not to place undue reliance on any forward-looking statement made by Parent. Forward-looking statements speak only as of the date they are made and, except as required by law, Parent undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made. Persons are advised, however, to consult further disclosures management makes on related subjects in its reports filed with the SEC and in its press releases.

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INFORMATION ABOUT THE SPECIAL MEETING OF NEWDOMINION SHAREHOLDERS
NewDominion’s board of directors is using this proxy statement/prospectus to solicit proxies from the holders of NewDominion common stock for use at the special meeting of NewDominion’s shareholders or any adjournment thereof.
Date, time and place of the special meeting
The special meeting will be held at the offices of NewDominion, located at 1111 Metropolitan Avenue, Suite 500, Charlotte, North Carolina 28204, on _________ , 2018 at ______ , local time.
Purpose of the special meeting
At the special meeting, NewDominion’s board of directors will ask you to vote upon the following:
a proposal to approve the Merger Agreement and thereby approve the Merger;
a proposal to approve an adjournment of the special meeting to permit further solicitation in the event that an insufficient number of shares are present in person or by proxy to approve the Merger Agreement and the transactions it contemplates; and
any other business that properly comes before the special meeting and any adjournment or postponement thereof.
In accordance with applicable law, no other business may come before the special meeting, except for business that properly comes within the purposes described in the notice of meeting, which purposes are described above.
Record date and voting rights for the special meeting
NewDominion has set the close of business on _________ , 2018, as the record date for determining the holders of its common stock entitled to notice of and to vote at the special meeting. Only NewDominion shareholders at the close of business on the record date are entitled to notice of and to vote at the special meeting. As of the record date, there were _____ shares of NewDominion voting common stock outstanding and entitled to vote at the special meeting. As of the record date, there were _____ shares of NewDominion non-voting common stock outstanding and entitled to vote at the special meeting.
NewDominion has two classes of common stock (voting and non-voting), which results in two voting groups of shareholders that are entitled to vote at the special meeting. These voting groups are (1) the holders of shares of NewDominion’s voting common stock and (2) the holders of shares of NewDominion’s non-voting common stock. Holders of these two classes of common stock will vote as separate voting groups at the special meeting. While holders of shares of NewDominion non-voting common stock typically do not have voting rights, North Carolina law provides voting rights to otherwise non-voting classes of stock in connection with certain fundamental changes to the corporation, such as the proposed Merger.
Quorum
For each voting group, the presence in person or by proxy of at least a majority of the shares of such voting group entitled to vote at the special meeting is required for a quorum to be present at the special meeting. Abstentions are counted for purposes of determining the presence or absence of a quorum for the transaction of business at the special meeting.
With respect to shares held in “street name,” the holders of record have the authority to vote shares for which their customers do not provide voting instructions only on certain routine, uncontested items. In the case of non-routine or contested items, the nominee institution holding street name shares cannot vote the shares if it has not received voting instructions from the beneficial owner. When a nominee institution returns a proxy on one or more routine matters, but does not vote on a non-routine matter, these are considered to be “broker non-votes.” Since there are no routine items to be voted on at the special meeting, nominee record holders that do not receive voting instructions from the beneficial owners of such shares will not be able to return a proxy card with respect to such shares; as a result, these shares will not be considered present at the special meeting and will not count towards the satisfaction of a quorum. If you hold your shares in “street name,” please give your broker, bank or other nominee

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instructions on how to vote your shares to ensure your shares are counted as present for purposes of establishing a quorum at the special meeting.
Vote required
Under applicable state and federal law, for the Merger to be approved, the Merger Agreement must be approved by the affirmative vote of the holders owning at least two-thirds of the shares of each class of common stock outstanding and entitled to vote at the special meeting. Approval of the proposal to adjourn the special meeting to permit further solicitation in the event that an insufficient number of shares are present in person or by proxy to approve the Merger Agreement and the transactions it contemplates requires the votes cast at the special meeting within the applicable voting group, in person or by proxy, in favor of the proposal exceed the votes cast against the proposal.
The failure of a NewDominion shareholder to vote or to instruct his or her broker, bank or nominee to vote if his or her shares are held in “street name,” which is referred to herein as a broker non-vote, will have the same effect as voting against the proposal to approve the Merger Agreement but will not effect the meeting adjournment proposal. For purposes of the shareholder vote, an abstention, which occurs when a shareholder attends a meeting, either in person or by proxy, but abstains from voting, will have the same effect as voting against the proposal to approve the Merger Agreement but will not effect the meeting adjournment proposal.
Shares held by NewDominion directors and executive officers; voting agreements
NewDominion directors and executive officers who own shares of NewDominion voting common stock, whose aggregate ownership (inclusive of shares underlying exercisable stock options) represents approximately 22.9% of the outstanding shares of NewDominion voting common stock as of February 28, 2018, have committed to vote their shares in favor of the Merger. Additionally, certain holders of NewDominion’s non-voting common stock have also agreed to vote their shares in favor of the Merger at the special meeting. These NewDominion shareholders and their affiliates owned 33,586,481 shares of NewDominion non-voting common stock or 87.8% of NewDominion’s non-voting common stock outstanding as of February 28, 2018. Parent owns the remaining 12.2% of NewDominion’s non-voting common stock, which will be entitled to vote at the special meeting. Parent’s shareholders will not be voting on the Merger Agreement. See “The Merger—Voting agreements” on page 52 for a description of the provisions of the voting agreements.
How to vote
Shareholders of record may vote in person at the special meeting or by proxy. To ensure your representation at the special meeting, we recommend you vote by proxy even if you plan to attend the special meeting. If you are a holder of record, you can change your vote at the special meeting if you so desire.
The enclosed appointment of proxy, or proxy card, is solicited by the board of directors of NewDominion. The board of directors of NewDominion has selected the individuals named in the enclosed proxy card, or any of them, to act as proxies with full power of substitution. Shareholders of record may vote their shares by proxy at the special meeting by:
completing, signing, dating and returning the proxy card in the enclosed envelope provided for that purpose; or
by following the instructions included on the enclosed proxy card for voting your shares electronically by Internet.
If you properly complete and timely submit your proxy, your shares will be voted as you have directed. You may vote for, against, or abstain with respect to the approval of the Merger and the other proposals. If you are the record holder of your shares and submit your proxy without specifying a voting instruction, your shares will be voted as the NewDominion board of directors recommends and will be voted “FOR” approval of the Merger Agreement and “FOR” the adjournment of the special meeting to permit further solicitation in the event that an insufficient number of shares are present in person or by proxy to approve the Merger Agreement and the transactions it contemplates.
If your shares are held in street name by a bank, broker or other nominee, you must provide the record holder of your shares with instructions on how to vote your shares if you wish them to be counted. Please follow the voting

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instructions provided by your bank, broker or other nominee. Please note that you may not vote shares held in street name by returning a proxy card directly to NewDominion or by voting in person at the meeting unless you provide a “legal proxy,” which you must obtain from your bank, broker or other nominee. If you are a NewDominion shareholder and you do not instruct your broker on how to vote your shares, your broker will not vote your shares at the special meeting and, accordingly, your failure to vote will effectively be a vote against the Merger.
Revocability of proxies
Shareholders of record may revoke a prior given proxy at any time before it is voted by:
filing with NewDominion’s secretary a duly executed revocation of proxy;
submitting a new proxy card (in person or by Internet) with a later date; or
voting in person at the special meeting.
Attendance at the special meeting will not, in and of itself, constitute a revocation of a proxy. All written notices of revocation and other communication with respect to the revocation of proxies should be addressed to: NewDominion Bank, 1111 Metropolitan Avenue, Suite 500, Charlotte, North Carolina 28204, Attention: Patsy Baker, Corporate Secretary. If you own your shares of NewDominion common stock beneficially through a broker, bank or other nominee, you should follow the instructions provided by such nominee with respect to revoking or changing your voting instructions.
Proxy solicitation
In addition to this mailing, proxies may be solicited by directors, officers or employees of NewDominion in person or by telephone or electronic transmission. None of such directors, officers or employees will be directly compensated for such services. NewDominion will pay the costs associated with the solicitation of proxies for the special meeting. These costs may include reasonable out-of-pocket expenses in forwarding proxy materials to beneficial owners. NewDominion will reimburse brokers and other persons for their reasonable expenses in forwarding proxy materials to customers who are beneficial owners of the common stock of NewDominion registered in the name of nominees.
Other business; adjournments
NewDominion is not currently aware of any other business to be acted upon at the NewDominion special meeting. If, however, other matters are properly brought before the special meeting, or any adjournment or postponement thereof, your proxies include discretionary authority on the part of the individuals appointed to vote your shares to act on those matters according to their best judgment.
Adjournments may be made for the purpose of, among other things, soliciting additional proxies. Any adjournment may be made from time to time if the votes cast at the special meeting, in person or by proxy, in favor of the adjournment proposal exceed the votes cast against the proposal.

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THE MERGER
This section of the proxy statement/prospectus describes material aspects of the Merger. While Parent and NewDominion believe that the description covers the material terms of the Merger and the related transactions, this summary may not contain all of the information that is important to you. You should carefully read this entire proxy statement/prospectus, the attached Annexes, and the other documents to which this proxy statement/prospectus refers for a more complete understanding of the Merger. The Merger Agreement attached hereto as Annex A, not this summary, is the legal document which governs the Merger.
General
The NewDominion board of directors is using this proxy statement/prospectus to solicit proxies from the holders of NewDominion common stock for use at the NewDominion special meeting, at which NewDominion shareholders will be asked to vote on the approval of the Merger Agreement and thereby approve the Merger. When the Merger is consummated, NewDominion will merge with and into Park National Bank and will cease to exist. Park National Bank will survive the Merger and remain a wholly-owned subsidiary of Parent. At the effective time of the Merger, holders of NewDominion common stock will exchange each share of NewDominion common stock (both voting and non-voting) for either (i) $1.08 in cash, which we refer to as the “cash consideration,” or (ii) 0.01023 shares of Parent common stock, which we refer to as the “stock consideration,” based on the holder’s election and subject to proration. See “Description of the Merger Agreement — Consideration to be received in the Merger” for a detailed description of the merger consideration and the applicable election and proration provisions.
Only whole shares of Parent common stock will be issued in the Merger. As a result, any fractional shares of Parent’s common stock that NewDominion holders would otherwise be entitled to receive will be exchanged for a cash payment equal to the product of (i) $105.56 (which represents the average closing price of Parent common stock as reported on the NYSE American over the twenty (20) consecutive trading day period ending on the business day immediately prior to the date of the Merger Agreement) and (ii) the fraction of a share of Parent common stock that such holder would otherwise be entitled to receive.
Neither (i) shares of NewDominion common stock held by NewDominion or by Parent or Park National Bank (other than (a) shares held in trust accounts, managed accounts and the like, or otherwise held in a fiduciary or agency capacity, that are beneficially owned by third parties and (b) shares held, directly or indirectly, by Parent, NewDominion or any wholly-owned Subsidiary of Parent or NewDominion in respect of a debt previously contracted), nor (ii) shares of NewDominion common stock held by NewDominion shareholders who elect to exercise their appraisal rights will be converted into merger consideration.
The companies
Parent
Park National Corporation, an Ohio corporation, is a financial holding company subject to regulation under the Bank Holding Company Act of 1956, as amended (the “Bank Holding Company Act”). Parent was initially incorporated under Delaware law in 1986 and began operations as a bank holding company in 1987. In 1992, Parent changed its state of incorporation to Ohio.
Headquartered in Newark, Ohio, Parent had $7.5 billion in total assets as of December 31, 2017. Parent organization principally consists of 11 community bank divisions, a non-bank subsidiary and two specialty finance companies. Parent’s Ohio-based banking operations are conducted through its subsidiary, The Park National Bank, and its divisions, which include Park National Bank Division, Fairfield National Bank Division, Richland Bank Division, Century National Bank Division, First-Knox National Bank Division, Farmers Bank Division, United Bank, N.A. Division, Second National Bank Division, Security National Bank Division, Unity National Bank Division, and The Park National Bank of Southwest Ohio & Northern Kentucky Division; and Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance). Effective March 30, 2018, the Farmers Bank Division will merge into the First-Knox National Bank Division and, thereafter, 10 community bank divisions will remain. The Parent organization also includes Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.

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Parent’s principal executive offices are located at 50 North Third Street, Newark, Ohio 43055, and its telephone number is (740) 349-8451. Parent’s common shares, each without par value, are listed on NYSE American, under the symbol “PRK.”
Financial and other information relating to Parent, including information relating to Parent’s current directors and executive officers, is set forth in Parent’s 2017 Annual Report on Form 10-K and Current Reports on Form 8-K filed during 2018 (other than information in such documents that are deemed not to have been filed), which are incorporated by reference to this proxy statement/prospectus. Copies of these documents may be obtained from Parent as indicated under “Where You Can Find More Information” on page 85. See “Incorporation of Certain Information by Reference” on page 86.
The Park National Bank
The Park National Bank, a national banking association, is a wholly-owned subsidiary of Parent. Park National Bank is has its main office in Newark, Ohio and financial service offices in Ashland, Athens, Butler, Champaign, Clark, Clermont, Coshocton, Crawford, Darke, Fairfield, Franklin, Greene, Guernsey, Hamilton, Hocking, Holmes, Knox, Licking, Madison, Marion, Mercer, Miami, Morrow, Muskingum, Perry, Richland, Tuscarawas, Warren and Wayne Counties in Ohio. Park National Bank engages in the commercial banking and trust business, generally in small and medium population Ohio communities in addition to operations within the metropolitan areas of Columbus and Cincinnati. Park National Bank operates 111 financial service offices, including 108 branches, in Ohio through 11 banking divisions with: (i) the Park National Bank Division headquartered in Newark, Ohio; (ii) the Fairfield National Bank Division headquartered in Lancaster, Ohio; (iii) the Richland Bank Division headquartered in Mansfield, Ohio; (iv) the Century National Bank Division headquartered in Zanesville, Ohio; (v) the First-Knox National Bank Division headquartered in Mount Vernon, Ohio; (vi) the Farmers Bank Division headquartered in Loudonville, Ohio; (vii) the United Bank, N.A. Division headquartered in Bucyrus, Ohio; (viii) the Second National Bank Division headquartered in Greenville, Ohio; (ix) the Security National Bank Division headquartered in Springfield, Ohio; (x) the Unity National Bank Division headquartered in Piqua, Ohio; and (xi) The Park National Bank of Southwest Ohio & Northern Kentucky Division headquartered in Cincinnati, Ohio. Effective March 30, 2018, the Farmers Bank Division will merge into the First-Knox National Bank Division and, thereafter, Park National Bank will have 10 community bank divisions.
Park National Bank delivers financial products and services through its 111 financial service offices, a network of 133 automated teller machines, as well as telephone and internet-based banking through both personal computers and mobile devices.
NewDominion Bank
NewDominion, which was incorporated on January 6, 2005, is a North Carolina state-chartered commercial bank that first opened for business on January 10, 2005. NewDominion offers its commercial and retail customers a variety of community banking products and services through its two full-service banking offices located in Charlotte, North Carolina and Mooresville, North Carolina. NewDominion’s primary market focus is on small- to mid-sized businesses and their owners, real estate developers and investors, and individuals in the greater Charlotte area and surrounding communities, such as Lake Norman. NewDominion has actively pursued its targeted market for deposits, particularly small businesses and professionals. NewDominion endeavors to offer leading edge technology to the marketplace. Such technology includes online banking, mobile banking and deposit functions, and cash management services. NewDominion is supervised and regulated by the FDIC and the North Carolina Commissioner of Banks.
As of December 31, 2017, NewDominion had total assets of approximately $338.3 million, gross loans of approximately $281.2 million, total deposits of approximately $282.3 million, and total shareholders’ equity of approximately $39 million. NewDominion has one wholly-owned subsidiary, X Holdings, LLC, which is an entity that serves as the bank’s trustee for the bank’s deeds of trust. As of December 31, 2017, NewDominion had 56 full-time equivalent employees. NewDominion voting common stock is quoted on the OTCPink market of the OTC Markets Group, Inc. under the symbol “NDMN.”
NewDominion’s principal executive offices are located at 1111 Metropolitan Avenue, Suite 500, Charlotte, NC 28204. Its telephone number is (704) 943-5700, and its website is www.newdominionbank.com. The information on NewDominion's website is not part of this proxy statement/prospectus, and the reference to such website address

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does not constitute incorporation by reference of any information on that website into this proxy statement/prospectus.
NewDominion’s proposals
At the NewDominion special meeting, holders of shares of NewDominion common stock will be asked to vote on the approval of the Merger Agreement and thereby approve the Merger. The Merger will not be completed unless NewDominion’s shareholders approve the Merger Agreement and thereby approve the Merger.
Background of the Merger
By 2010, NewDominion’s nonperforming assets and “Texas ratio” had reached elevated levels, the bank was classified as “significantly undercapitalized” under regulatory capital standards, and it had entered into a Consent Order with state and federal banking regulators requiring it to improve its capital levels and the condition of the bank. As a result, NewDominion replaced its management team and hired John Hipp as its Chief Executive Officer in 2010 and J. Blaine Jackson as its Chief Financial Officer, Marc Bogan as President and Chief Operating Officer and Greg Burke as the Chief Credit Officer in 2011. The new management team of NewDominion began working through the problem assets, established new loan policies and procedures, repositioned the bank’s balance sheet, and raised $10.5 million in common equity from local investors. After Mr. Hipp’s retirement, J. Blaine Jackson was appointed as the Chief Executive Officer in January 2015. In December 2015, NewDominion issued an additional $20.0 million of common equity and convertible preferred equity to certain institutional investors, further solidifying its capital base and positioning NewDominion for growth. Following the efforts by the new management team since their hiring, NewDominion’s Consent Order was terminated by the FDIC and the North Carolina Commissioner of Banks on February 9, 2017.

During 2016 and 2017, NewDominion’s management and its board of directors discussed several potential growth strategies, including operating as a standalone entity, issuing new capital, acquiring a smaller target institution, or partnering with a larger institution or with one of a similar size. From time to time, the management team of NewDominion had held similar talks with other local institutions although no talks materialized into specific proposals.

From time to time in recent years, Parent’s management and board of directors had discussed a strategy of continuing to pursue organic growth and selected possible in-market mergers, while also considering mergers in certain, specifically identified markets, including North Carolina, offering the possibility of greater growth than many of Park National Bank’s more rural markets. Parent has considered a number of such possible mergers in recent years while also building relationships with banks that were deemed to be attractive potential partners.

In July 2016, Parent was introduced to NewDominion by representatives of Sandler O'Neill. Given Parent’s interest in the Charlotte market and the South-East/Mid-Atlantic regions overall, representatives of Sandler O'Neill coordinated a telephone conference between Parent’s Chief Financial Officer and Vice President—Commercial Lender and NewDominion’s Chief Executive Officer, Mr. Jackson, to introduce the parties to one another. During this telephone meeting, Parent and NewDominion discussed the history, strategy and growth prospects of the respective banks. Mr. Jackson introduced the idea of an equity investment by Parent in NewDominion. In particular, the parties discussed a potential transaction by which Parent would purchase 5,000 shares of NewDominion’s outstanding Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A that had been previously issued to an unaffiliated financial institution in 2011, which institution might be amenable to a sale of its NewDominion investment.

Multiple phone conversations between Parent and NewDominion management took place in August 2016 and, on August 17, 2016, members of Parent management made an in-person visit to NewDominion. During that visit, the Chief Credit Officer, Vice President—Commercial Lender and Chief Financial Officer from Parent met with NewDominion’s Chief Executive Officer, Chief Financial Officer and Chief Credit Officer. Soon thereafter, Parent’s management and the Risk Committee of Parent’s board of directors determined that it was in the best interests of Parent to proceed to conduct additional due diligence on NewDominion to further analyze if an initial investment, as proposed by Mr. Jackson, would benefit Parent and its shareholders.


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From September 2016 to mid-November 2016, Parent performed extensive due diligence on NewDominion’s business and operations, including comprehensive loan file review. Following the successful completion of the due diligence procedures, Parent’s board of directors approved an initial investment by Parent in NewDominion.

On November 16, 2016, Parent purchased all 5,000 outstanding shares of NewDominion’s Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A for an aggregate purchase price of $3.5 million. Immediately following the purchase of the preferred stock from the unaffiliated financial institution, Parent exchanged all such preferred stock with NewDominion for 1,795,000 shares of NewDominion’s voting common stock and 4,686,481 shares of NewDominion’s non-voting common stock. Such holdings equated to an 8.55% ownership interest in NewDominion (as of the date of the Merger Agreement).
Commencing in January 2017, Parent was granted board observation rights and was permitted to have an observer attend NewDominion board meetings. Throughout 2017, through a combination of attendance at NewDominion board meetings and loan participations, Parent and Park National Bank management continued to gain more familiarity and comfort with NewDominion’s executive management team. Throughout 2017, there were several visits from NewDominion executive management to engage with Parent management. Parent management also visited NewDominion offices to continue to learn more about NewDominion’s business, operations and management team.
After in-person meetings on October 3-5, 2017, Parent and NewDominion management determined that it would be in the best interests of NewDominion and Parent to explore a possible strategic transaction, subject to further input and approval by their respective boards of directors. Parent’s Executive Vice President met with Mr. Jackson, NewDominion’s Chairman of the Board and other members of NewDominion management on October 11-12, 2017. Parent’s Chief Executive Officer, Chairman of the Board and Executive Vice President subsequently met with Mr. Jackson and the Executive Committee of NewDominion’s board of directors on October 18, 2017 to discuss the possible transaction.

In mid-October, Parent began drafting a proposed Letter of Intent to be submitted to NewDominion. The Letter of Intent was reviewed with the Parent’s board of directors on October 23, 2017. On October 24, 2017, Parent submitted to NewDominion the Letter of Intent for the proposed Merger. The Letter of Intent contemplated a purchase price of $1.08 per share in an all-stock deal. The Letter of Intent also provided that both parties would be allowed to conduct further due diligence, and that Parent would be granted exclusivity with respect to the proposed transaction through January 31, 2018. On October 26, 2017, representatives of Sandler O'Neill reviewed the Letter of Intent with NewDominion’s Board of Directors and discussed the terms of the proposed transaction. During November 3-7, 2017, NewDominion negotiated the terms of the Letter of Intent with Parent and reviewed the Letter of Intent with its legal counsel, Wyrick Robbins Yates & Ponton LLP. The Letter of Intent was executed by NewDominion on November 7, 2017 following approval by the NewDominion board of directors, which had been consulting with Sandler O'Neill as financial advisor. Parent formally retained Boenning & Scattergood, Inc. (“Boenning & Scattergood”) on October 31, 2017 to serve as Parent’s financial advisor.

On November 9, 2017, Parent and NewDominion entered into a Confidentiality Agreement. On November 13, 2017, NewDominion formally retained Sandler O'Neill to serve as its financial advisor and also formally retained the law firm of Wyrick Robbins Yates & Ponton LLP to serve as legal counsel in connection with the proposed transaction. From November 2017 through January 2018, Parent and Park National Bank performed due diligence on NewDominion and NewDominion performed reverse due diligence on Parent and Park National Bank, including management interviews of Parent on January 9, 2018 with participation by Sandler O'Neill and Wyrick Robbins Yates & Ponton LLP. The parties concurrently worked to finalize the drafting of a definitive merger agreement during this period.
On December 4, 2017, Squire Patton Boggs (US) LLP, counsel to Parent and Park National Bank, delivered the initial draft of the Merger Agreement to NewDominion and Wyrick Robbins Yates & Ponton LLP. The initial draft of the Merger Agreement provided for 100% stock consideration. On January 2, 2018, representatives of Wyrick Robbins Yates & Ponton LLP and Sandler O'Neill reviewed the draft of the Merger Agreement with the executive committee of NewDominion’s board of directors and Wyrick Robbins Yates & Ponton LLP provide NewDominion’s comments to the initial draft of the Merger Agreement to Parent’s and Park National Bank’s legal counsel.

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Throughout the month of January 2018, the parties continued to negotiate the terms of the Merger Agreement to resolve the remaining legal and business matters between them, which included confirmation of the implied merger consideration of $1.08 per share of NewDominion stock. The parties also agreed to modify the mix of merger consideration, which was previously set at 100% stock consideration, to allow all NewDominion shareholders the ability to elect stock consideration, cash consideration or a mixture thereof, in exchange for NewDominion shares, subject to the requirement that the aggregate consideration to be issued by Parent would consist of 60% stock consideration and 40% cash consideration.
On January 8, 2018, members of Parent and Park National Bank management, along with representatives from Squire Patton Boggs (US) LLP, held a meeting with financial advisor, Boenning & Scattergood, to discuss the financial aspects of the proposed transaction, including, among other things, a comparison of the proposed transaction to selected bank merger and acquisition transactions announced since November 2016 and certain potential pro forma effects of the transaction on Parent and Park National Bank.
On January 8, 2018, NewDominion held a similar meeting with its Board of Directors and representatives of Wyrick Robbins Yates & Ponton LLP and Sandler O'Neill to review the draft of the Merger Agreement and to discuss the duties of directors in the context of a strategic merger transaction, the status of NewDominion’s due diligence on Parent and Park National Bank and related matters. Written materials and a draft of the Merger Agreement were provided to members of NewDominion’s board of directors for their review in advance of the board meeting.
On January 18, 2018, the boards of directors of Parent and Park National Bank held a special meeting at which management, Squire Patton Boggs (US) LLP and Boenning & Scattergood were represented. Squire Patton Boggs (US) LLP made a detailed presentation regarding the directors’ fiduciary duties under Ohio law, including the directors’ duties of care, loyalty and good faith. Management, with the assistance of legal counsel, reviewed the terms of the Merger Agreement. Written copies of such presentations as well as a draft of the Merger Agreement were provided to the directors for their review in advance of this board meeting. Wyrick Robbins Yates & Ponton LLP provided further comments on the latest draft of the Merger Agreement to Squire Patton Boggs (US) LLP on January 18, 2018.
On January 20, 2018, representatives of Wyrick Robbins Yates & Ponton LLP and Sandler O'Neill reviewed the updated draft of the Merger Agreement with the executive committee of NewDominion’s board of directors and discussed the change in the mix of merger consideration to allow all NewDominion shareholders the ability to elect stock consideration, cash consideration or a mixture thereof, in exchange for NewDominion shares, subject to the requirement that the aggregate consideration to be issued by Parent would consist of 60% stock consideration and 40% cash consideration.
On January 22, 2018, the board of directors of NewDominion held a board meeting, which was attended by senior management of NewDominion and representatives of Wyrick Robbins Yates & Ponton LLP and Sandler O'Neill , during which representatives of management, Wyrick Robbins Yates & Ponton LLP and Sandler O'Neill reviewed with the NewDominion board of directors the proposed financial terms of the transaction documents. Representatives of Wyrick Robbins Yates & Ponton LLP also reviewed with the NewDominion board of directors, as they had previously done, the legal standards applicable to the NewDominion board of directors’ decisions and actions with respect to the proposed transaction. At the January 22, 2018 meeting, Sandler O'Neill rendered its oral opinion to the NewDominion board of directors, which was subsequently confirmed in writing, to the effect that, as of January 22, 2018 and based upon and subject to the factors considered, assumptions, qualifications and limitations set forth in the written opinion, the merger consideration to be received by the holders of NewDominion common stock as set forth in the Merger Agreement was fair, from a financial point of view, to such holders. Detailed written materials, including due diligence memoranda and an updated draft of the Merger Agreement, were provided to members of NewDominion’s board of directors on January 16, 2018 for their review in advance of the board meeting on January 22, 2018.
On January 22, 2018, the boards of directors of Parent and Park National Bank held a board meeting at which Squire Patton Boggs (US) LLP provided an update on, and explanation of, the changes to the terms of the Merger Agreement since the January 18th meeting. Also at this meeting, representatives of Boenning & Scattergood provided the boards of directors of Parent and Park National Bank with a financial analysis of the merger consideration and a strategic analysis of the transaction. Based upon review and discussion of the Merger Agreement

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by the boards of directors of Parent and Park National Bank, the Parent board and the Park National Bank board unanimously approved the Merger Agreement.
The Merger Agreement was entered into by the appropriate officers of Parent, Park National Bank and NewDominion after the closing of the financial markets on January 22, 2018. NewDominion and Parent issued a joint press release on January 23, 2018 announcing the execution of the Merger Agreement.
NewDominion’s reasons for the Merger; recommendation of NewDominion’s board of directors
After extensive review and discussion and careful consideration, NewDominion’s board of directors, at a meeting held on January 22, 2018, unanimously determined that the Merger Agreement is in the best interests of NewDominion and its shareholders. Accordingly, NewDominion’s board of directors adopted and approved the Merger Agreement and unanimously recommends that NewDominion shareholders vote “FOR” the approval of the Merger proposal and “FOR” the approval of the adjournment proposal. 
In reaching its decision to adopt and approve the Merger Agreement and to recommend that its shareholders approve the Merger Agreement, the NewDominion board of directors consulted with NewDominion management, as well as its financial and legal advisors, and considered a number of factors, including, without limitation, the following material factors:
the business strategy and strategic plan of NewDominion, its prospects for the future, projected financial results and expectations relating to the proposed Merger with Park National Bank;
a review of the prospects, challenges and risks of NewDominion remaining independent versus merging with Park National Bank given the current and prospective environment in the financial services industry, including national and local economic conditions, competition and consolidation in the financial services industry and the regulatory and compliance environment;
the ability of NewDominion’s shareholders to benefit from potential appreciation of Parent common stock, and the expectation that the combined entity will have superior future earnings and prospects compared to NewDominion’s earnings and prospects on an independent basis;
the expected cash dividend payments to be received by NewDominion’s shareholders, as shareholders of Parent following the Merger, due to the current quarterly cash dividend payment of $0.94 per share paid by Parent, although Parent has no obligation to pay dividends in any particular amounts or at any particular times;
the advantages of being part of a larger entity, including the expectation of cost savings and operating efficiencies and the ability of a larger institution to compete in the banking environment and to leverage overhead costs, including the cost of financial technology, which the NewDominion board believes is likely to continue to increase in the future;
the financial and other terms of the Merger, including the merger consideration, which NewDominion reviewed with its outside financial and legal advisors;
the transaction multiples of the Merger consideration to NewDominion’s tangible book value and earnings and the premium over the recent trading price of NewDominion’s stock;
the financial analyses presented by Sandler O’Neill to the board of directors of NewDominion with respect to the Merger and the opinion delivered to the board of directors by Sandler O’Neill on January 22, 2018 to the effect that, as of the date of Sandler O’Neill’s opinion, the merger consideration set forth in the Merger Agreement was fair to the holders of NewDominion common stock from a financial point of view;
the value of Parent common stock and information concerning the financial performance and condition, business operations, capital levels, asset quality, loan portfolio breakdown, and prospects of Parent and Park National Bank, taking into account the results of NewDominion’s due diligence investigation of Parent and Park National Bank;


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the greater potential for increased liquidity in the market for Parent common stock, versus an institution of NewDominion’s size;
the familiarity of NewDominion’s board of directors and management team with Park National Bank and its business, operations, culture, customers, directors, executive officers and employees;
the compatibility of NewDominion’s business, operations and culture with those of Park National Bank;
the possible effects of the proposed Merger on NewDominion’s employees and customers; and
the likelihood that the Merger will be completed on a timely basis, including the likelihood that the Merger will receive all necessary regulatory approvals in a timely manner.
The NewDominion board also considered the risks and potential negative factors outlined below, but concluded that the anticipated benefits of the Merger were likely to outweigh substantially these risks and factors. These risks included:
the fact that certain of NewDominion’s directors and officers have interests in the Merger that are in addition to their interests generally as NewDominion shareholders, which have the potential to influence such directors’ and officers’ views and actions in connection with the Merger;
the challenges of integrating NewDominion’s business, operations and employees with those of Park National Bank;
the risk that the benefits and cost savings sought in the Merger would not be fully realized;
the risk that the Merger would not be consummated;
the effect of the public announcement of the Merger on NewDominion’s customer relationships, its ability to retain employees and the potential for disruption of NewDominion’s ongoing business;
the potential risk of diverting management attention and resources from the operation of NewDominion’s business and towards the completion of the Merger;
that while the Merger is pending, NewDominion will be subject to restrictions on how it conducts business that could delay or prevent NewDominion from pursuing business opportunities or preclude it from taking actions that would be advisable if it was to remain independent; and
the termination fee payable, under certain circumstances, by NewDominion to Park National Bank, including the risk that the termination fee might discourage third parties from offering to acquire NewDominion by increasing the cost of a third party acquisition.
The foregoing discussion of the information and factors considered by NewDominion’s board of directors is not exhaustive, but includes the material factors that the board of directors considered and discussed in approving and recommending the Merger. In view of the wide variety of factors considered and discussed by NewDominion’s board of directors in connection with its evaluation of the Merger and the complexity of these factors, the board of directors did not quantify, rank or assign any relative or specific weight to the foregoing factors. Rather, it considered all of the factors as a whole. The board of directors discussed the foregoing factors, including asking questions of NewDominion’s management and legal and financial advisors, and reached general consensus that the Merger was in the best interests of NewDominion and its shareholders. In considering the foregoing factors, individual directors may have assigned different weights to different factors. The board of directors did not undertake to make any specific determination as to whether any factor, or particular aspect of any factor, supported or did not support its ultimate decision to approve the Merger Agreement and the Merger.
The foregoing explanation of NewDominion’s board of directors’ reasoning and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed in the section entitled “Special Notes Concerning Forward-Looking Statements.”



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Certain directors and officers of NewDominion have interests in the Merger different from or in addition to their interests as shareholders generally. You may wish to consider these interests in evaluating NewDominion’s board of directors’ recommendation that you vote in favor of the Merger. See “The Merger — Interests of certain persons in the Merger.” NewDominion directors and executive officers who own shares of NewDominion common stock have agreed to vote their shares in favor of the Merger at the special meeting.
Parent’s reasons for the Merger
Parent’s board of directors believes that the Merger is in the best interests of Parent and its shareholders. In deciding to approve the Merger, Parent’s board of directors considered a number of factors, including:
management’s view that the acquisition of NewDominion by Park National Bank provides strong entrance to the attractive Charlotte, North Carolina market;
a review of the demographic, economic and financial characteristics of the markets in which NewDominion operates, including existing and potential competition and history of the market areas with respect to financial institutions;
Parent management’s view of the people, culture, credit underwriting standards and overall conservative nature of NewDominion, as Park National Bank management had observed since making an initial investment in NewDominion in November 2016;
Parent management’s review of NewDominion’s business, operations, earnings and financial condition, including its management, capital levels and asset quality;
efficiencies to come from integrating NewDominion’s operations into Park National Bank’s existing operations, including the potential to leverage Park National Bank’s capital, liquidity and operational strengths, product set and capabilities to accelerate growth; and
the likelihood that the Merger will be approved by the relevant bank regulatory authorities without undue burden and in a timely manner.
The above discussion of the information and factors considered by Parent’s board of directors is not intended to be exhaustive, but includes a description of all material factors considered by Parent’s board. In view of the wide variety of factors considered by the Parent board of directors in connection with its evaluation of the Merger, the Parent board did not consider it practical to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the specific factors that it considered. In considering the factors described above, individual directors may have given differing weights to different factors. Parent’s board of directors collectively made its determination with respect to the Merger based on the conclusion reached by its members, based on the factors that each of them considered appropriate, that the Merger is in the best interests of Parent’s shareholders.
Opinion of NewDominion’s financial advisor
NewDominion retained Sandler O’Neill to act as an independent financial advisor to the NewDominion board of directors in connection with NewDominion’s consideration of a possible business combination. Sandler O’Neill is a nationally recognized investment banking firm whose principal business specialty is financial institutions. In the ordinary course of its investment banking business, Sandler O’Neill is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.
Sandler O’Neill acted as an independent financial advisor in connection with the proposed Merger and participated in certain of the negotiations leading to the execution of the Merger Agreement. At the January 22, 2018 meeting at which the NewDominion board of directors considered and discussed the terms of the Merger Agreement and the Merger, Sandler O’Neill delivered to the NewDominion board of directors its oral opinion, which was subsequently confirmed in writing, to the effect that, as of January 22, 2018, the merger consideration provided for in the Merger Agreement was fair to the holders of NewDominion voting common stock and non-voting common stock from a financial point of view. The full text of Sandler O’Neill’s opinion is attached as Annex C to this proxy statement/prospectus. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Sandler O’Neill in rendering its opinion. The description of the opinion set forth below is qualified in its entirety by reference to the full text of the opinion.

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Holders of NewDominion common stock are urged to read the entire opinion carefully in connection with their consideration of the proposed Merger.
Sandler O’Neill’s opinion speaks only as of the date of the opinion. The opinion was directed to the NewDominion board of directors in connection with its consideration of the Merger Agreement and the Merger and does not constitute a recommendation to any shareholder of NewDominion as to how any such shareholder should vote at any meeting of shareholders called to consider and vote upon the approval of the Merger Agreement and the Merger. Sandler O’Neill’s opinion was directed only to the fairness, from a financial point of view, of the merger consideration to the holders of NewDominion common stock and does not address the underlying business decision of NewDominion to engage in the Merger, the form or structure of the Merger or any other transactions contemplated in the Merger Agreement, the relative merits of the Merger as compared to any other alternative transactions or business strategies that might exist for NewDominion or the effect of any other transaction in which NewDominion might engage. Sandler O’Neill did not express any opinion as to the fairness of the amount or nature of the compensation to be received in the Merger by any officer, director or employee of NewDominion or Parent, or any class of such persons, if any, relative to the compensation to be received in the Merger by any other shareholder, including the merger consideration to be received by the holders of NewDominion common stock. Sandler O’Neill’s opinion was approved by Sandler O’Neill’s fairness opinion committee.
In connection with its opinion, Sandler O’Neill reviewed and considered, among other things:
A draft of the Merger Agreement, dated January 21, 2018;
Certain publicly available financial statements and other historical financial information of NewDominion that Sandler O’Neill deemed relevant;
Certain publicly available financial statements and other historical financial information of Parent and Park National Bank that Sandler O’Neill deemed relevant;
Certain internal financial projections for NewDominion for the years ending December 31, 2018 through December 31, 2022, as provided by the senior management of NewDominion;
Publicly available consensus median analyst earnings per share estimates for Parent for the years ending December 31, 2018 and December 31, 2019, as well as a long-term earnings per share growth rate for the years thereafter and dividends per share for the years ending December 31, 2018 through December 31, 2022, as provided by the senior management of Parent;
The pro forma financial impact of the Merger on Parent based on certain assumptions relating to purchase accounting adjustments, cost savings and transaction expenses as well as financial projections for NewDominion for the years ending December 31, 2019 through December 31, 2022, as provided by the senior management of Parent;
The publicly reported historical price and trading activity for NewDominion common stock and Parent common stock, including a comparison of certain stock market information for NewDominion common stock and Parent common stock and certain stock indices as well as publicly available information for certain other similar companies, the securities of which are publicly traded;
A comparison of certain financial information for NewDominion and Parent with similar institutions for which information is publicly available;
The financial terms of certain recent business combinations in the bank and thrift industry (on a nationwide and regional basis), to the extent publicly available;
The current market environment generally and the banking environment in particular; and
Such other information, financial studies, analyses and investigations and financial, economic and market criteria as Sandler O’Neill considered relevant.
Sandler O’Neill also discussed with certain members of senior management of NewDominion and its representatives the business, financial condition, results of operations and prospects of NewDominion and held similar discussions with certain members of the management of Parent and its representatives regarding the business, financial condition, results of operations and prospects of Parent.
In performing its review, Sandler O’Neill relied upon the accuracy and completeness of all of the financial and other information that was available to and reviewed by Sandler O’Neill from public sources, that was provided to Sandler O’Neill by NewDominion or Parent or their respective representatives or that was otherwise reviewed by Sandler O’Neill and Sandler O’Neill assumed such accuracy and completeness for purposes of rendering its opinion

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without any independent verification or investigation. Sandler O’Neill relied on the assurances of the respective managements of NewDominion and Parent that they were not aware of any facts or circumstances that would make any of such information inaccurate or misleading. Sandler O’Neill was not asked to and did not undertake an independent verification of any of such information, and Sandler O’Neill did not assume any responsibility or liability for the accuracy or completeness thereof. Sandler O’Neill did not make an independent evaluation or perform an appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of NewDominion or Parent, or any of their respective subsidiaries, nor was Sandler O’Neill furnished with any such evaluations or appraisals. Sandler O’Neill rendered no opinion or evaluation on the collectability of any assets or the future performance of any loans of NewDominion or Parent. Sandler O’Neill did not make an independent evaluation of the adequacy of the allowance for loan losses of NewDominion or Parent, or the combined entity after the Merger, and Sandler O’Neill did not review any individual credit files relating to NewDominion or Parent. Sandler O’Neill assumed, with NewDominion’s consent, that the respective allowances for loan losses for both NewDominion and Parent were adequate to cover such losses and would be adequate on a pro forma basis for the combined entity.
In preparing its analyses, Sandler O’Neill used certain internal financial projections for NewDominion for the years ending December 31, 2018 through December 31, 2022, as provided by the senior management of NewDominion. In addition, Sandler O’Neill used publicly available consensus median analyst earnings per share estimates for Parent for the years ending December 31, 2018 and December 31, 2019, as well as a long-term earnings per share growth rate for the years thereafter and dividends per share for the years ending December 31, 2018 through December 31, 2022, as provided by the senior management of Parent. Sandler O’Neill also received and used in its pro forma analyses certain assumptions relating to purchase accounting adjustments, cost savings and transaction expenses, as well as financial projections for NewDominion for the years ending December 31, 2019 through December 31, 2022, as provided by the senior management of Parent. With respect to the foregoing information, the respective managements of NewDominion and Parent confirmed to Sandler O’Neill that such information reflected (or, in the case of the publicly available consensus median analyst estimates referred to above, were consistent with) the best currently available projections, estimates and judgments of those respective managements as to the future financial performance of NewDominion and Parent, respectively, and the other matters covered thereby, and Sandler O’Neill assumed that the future financial performance reflected in such information would be achieved. Sandler O’Neill expressed no opinion as to such information, or the assumptions on which such information was based. Sandler O’Neill also assumed that there had been no material change in the respective assets, financial condition, results of operations, business or prospects of NewDominion or Parent since the date of the most recent financial statements made available to Sandler O’Neill. Sandler O’Neill assumed in all respects material to its analysis that NewDominion and Parent would remain as going concerns for all periods relevant to its analysis.
Sandler O’Neill also assumed, with NewDominion’s consent, that (i) each of the parties to the Merger Agreement would comply in all material respects with all material terms and conditions of the Merger Agreement and all related agreements, that all of the representations and warranties contained in such agreements were true and correct in all material respects, that each of the parties to such agreements would perform in all material respects all of the covenants and other obligations required to be performed by such party under such agreements and that the conditions precedent in such agreements were not and would not be waived, (ii) in the course of obtaining the necessary regulatory or third party approvals, consents and releases with respect to the Merger, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on NewDominion, Parent or the Merger or any related transaction, (iii) the Merger and any related transactions would be consummated in accordance with the terms of the Merger Agreement without any waiver, modification or amendment of any material term, condition or agreement thereof and in compliance with all applicable laws and other requirements, and (iv) the Merger would qualify as a tax-free reorganization for federal income tax purposes. Finally, with NewDominion’s consent, Sandler O’Neill relied upon the advice that NewDominion received from its legal, accounting and tax advisors as to all legal, accounting and tax matters relating to the Merger and the other transactions contemplated by the Merger Agreement. Sandler O’Neill expressed no opinion as to any such matters.
Sandler O’Neill’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Sandler O’Neill as of, the date thereof. Events occurring after the date thereof could materially affect Sandler O’Neill’s opinion. Sandler O’Neill has not undertaken to update, revise, reaffirm or withdraw its opinion or otherwise comment upon events occurring after the date thereof. Sandler O’Neill expressed no opinion as to the trading values NewDominion common stock or Parent common stock at any time or what the value of Parent common stock will be once it is actually received by the holders of NewDominion common stock.
In rendering its opinion, Sandler O’Neill performed a variety of financial analyses. The summary below is not a complete description of the analyses underlying Sandler O’Neill’s opinion or the presentation made by Sandler O’Neill to NewDominion’s board of directors, but is a summary of all material analyses performed and presented by Sandler

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O’Neill. The summary includes information presented in tabular format. In order to fully understand the financial analyses, these tables must be read together with the accompanying text. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex process involving subjective judgments as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. The process, therefore, is not necessarily susceptible to a partial analysis or summary description. Sandler O’Neill believes that its analyses must be considered as a whole and that selecting portions of the factors and analyses to be considered without considering all factors and analyses, or attempting to ascribe relative weights to some or all such factors and analyses, could create an incomplete view of the evaluation process underlying its opinion. Also, no company included in Sandler O’Neill’s comparative analyses described below is identical to NewDominion or Parent, and no transaction is identical to the Merger. Accordingly, an analysis of comparable companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or merger transaction values, as the case may be, of NewDominion and Parent and the companies to which they are being compared. In arriving at its opinion, Sandler O’Neill did not attribute any particular weight to any analysis or factor that it considered. Rather, Sandler O’Neill made qualitative judgments as to the significance and relevance of each analysis and factor. Sandler O’Neill did not form an opinion as to whether any individual analysis or factor (positive or negative) considered in isolation supported or failed to support its opinion, rather, Sandler O’Neill made its determination as to the fairness of the merger consideration on the basis of its experience and professional judgment after considering the results of all its analyses taken as a whole.
In performing its analyses, Sandler O’Neill also made numerous assumptions with respect to industry performance, business and economic conditions and various other matters, many of which are beyond the control of NewDominion, Parent and Sandler O’Neill. The analyses performed by Sandler O’Neill are not necessarily indicative of actual values or future results, both of which may be significantly more or less favorable than suggested by such analyses. Sandler O’Neill prepared its analyses solely for purposes of rendering its opinion and provided such analyses to NewDominion’s board of directors at its January 22, 2018 meeting. Estimates on the values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold. Such estimates are inherently subject to uncertainty and actual values may be materially different. Accordingly, Sandler O’Neill’s analyses do not necessarily reflect the value of NewDominion common stock or the prices at which NewDominion common stock or Parent common stock may be sold at any time. The analyses of Sandler O’Neill and its opinion were among a number of factors taken into consideration by NewDominion’s board of directors in making its determination to approve the Merger Agreement and should not be viewed as determinative of the merger consideration or the decision of NewDominion’s board of directors or management with respect to the fairness of the Merger. The type and amount of consideration payable in the Merger were determined through negotiation between NewDominion and Parent.
Summary of Merger Consideration and Implied Transaction Metrics. Sandler O’Neill reviewed the financial terms of the proposed Merger. As set forth in the Merger Agreement, at closing, each share of NewDominion’s common stock issued and outstanding immediately prior to the effective time, except for certain shares of NewDominion common stock, as specified in the Merger Agreement, will be converted into and shall thereafter represent the right to receive, at the election of the holder thereof, subject to pro ration, either (i) 0.01023 shares of common stock of Parent (the “stock consideration”), or (ii) $1.08 in cash (the “cash consideration”). The Merger Agreement provides, generally, that shareholder elections may be adjusted as necessary to result in an overall ratio of 60% of NewDominion common stock being converted into the right to receive the stock consideration and 40% of NewDominion common stock being converted into the right to receive the cash consideration. Based on the 20-day average closing price of Parent common stock ending January 19, 2018 of $105.56, Sandler O’Neill calculated an implied transaction price per share of $1.08 and an aggregate implied transaction value of approximately $83.4 million. Based upon historical financial information for NewDominion as of or for the last twelve months (“LTM”) ended December 31, 2017, as provided by NewDominion’s senior management, Sandler O’Neill calculated the following implied transaction metrics:

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Price / NewDominion Book Value Per Share
210
%
Price / NewDominion Tangible Book Value Per Share
210
%
Price / NewDominion Adjusted Tangible Book Value Per Share(1) 
196
%
Price / 2017 Estimated NewDominion Earnings Per Share
17.9x

Price / 2017 Estimated NewDominion Earnings Per Share Excluding Valuation Recapture(2)
41.4x

Price / 2018 Estimated NewDominion Earnings Per Share
20.1x

Price / 2018 Estimated NewDominion Earnings Per Share Excluding Valuation Recapture(2)
57.7x

Price / 2019 Estimated NewDominion Earnings Per Share
42.7x

Tangible Book Premium / Core Deposits (CDs<$100K)
20.2
%
Tangible Book Premium / Core Deposits (CDs<$250K)
17.2
%
Premium to NewDominion’s Market Price as of January 19, 2018
20.0
%
(1) Includes the remaining recapture of NewDominion’s valuation allowance against its Deferred Tax Asset (“DTA”) of $2.7 million.
(2) Net income for the 2017 fiscal year included a $2.7 million recapture of the valuation allowance against NewDominion’s DTA. It is expected that the remaining $2.7 million valuation allowance will be recaptured in 2018, per NewDominion’s projections provided by senior management.

NewDominion Comparable Company Analyses. Sandler O’Neill used publicly available information to compare selected financial information for NewDominion with a group of financial institutions selected by Sandler O’Neill (the “NewDominion Peer Group”). The NewDominion Peer Group consisted of publicly-traded banks and thrifts headquartered in North Carolina and South Carolina with total assets between $250 million and $500 million, excluding announced merger targets. The NewDominion Peer Group consisted of the following companies:
West Town Bancorp, Inc.
First Reliance Bancshares, Inc.
Bank of South Carolina Corporation
Oak Ridge Financial Services, Inc.
Carolina Trust BancShares, Inc.
Aquesta Financial Holdings, Inc.
Community First Bancorporation
Coastal Carolina Bancshares, Inc.
Surrey Bancorp
M&F Bancorp, Inc.
The analysis compared financial information for NewDominion as of or for the LTM ended December 31, 2017 (unless otherwise noted), as provided by NewDominion senior management, with the corresponding publicly available data for the NewDominion Peer Group as of or for the LTM period ended September 30, 2017, with pricing data as of January 19, 2018. The table below sets forth the data for NewDominion and the high, low, median and mean data for the NewDominion Peer Group.
 
 
 
NewDominion Peer Group
 
 
NewDominion
High
Low
Mean
Median
Total Assets (in millions)
 
$338(2)
$488
$268
$383
$390
Loans/Deposits
 
100.0%(2)
100.7%
64.2%
86.2%
89.4%
Non-performing Assets/Total Assets(1)
 
1.02%
4.66%
0.07%
1.29%
0.98%
Tangible Common Equity/Tangible Assets
 
11.53%(2)
13.42%
7.17%
9.69%
9.18%
Leverage Ratio
 
11.02%
14.50%
7.94%
10.11%
9.66%
Total RBC Ratio
 
14.31%(3)
20.28%
11.26%
14.14%
12.85%
CRE Concentration Ratio
 
215.6%(3)
294.1%
75.9%
186.9%
169.6%
LTM Return on Average Assets
 
1.40%(2)
1.29%
(0.12)%
0.59%
0.63%
LTM Return on Average Equity
 
12.56%(2)
12.76%
(1.37)%
6.25%
6.64%
LTM Net Interest Margin
 
3.58%(3)
4.42%
3.34%
3.89%
3.79%
LTM Efficiency Ratio
 
86.5%(2)
94.8%
58.1%
78.2%
79.6%
Price/Tangible Book Value
 
155%(2)
221%
36%
130%
124%
Price/LTM Earnings Per Share
 
NM(4)
24.4x
12.2x
17.3x
17.5x
Current Dividend Yield
 
0.0%
3.2%
0.0%
0.4%
0.0%
LTM Dividend Payout Ratio
 
0.0%
44.3%
0.0%
10.3%
0.0%
Market Value (in millions)
 
$60
$94
$8
$49
$45
(1) Non-performing assets defined as nonaccrual loans and leases, renegotiated loans and leases and real estate owned
(2) Information as of or for the period ending December 31, 2017, as provided by NewDominion senior management
(3) Information as of or for the period ending September 30, 2017

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(4) “NM” refers to a Price/LTM Earnings Per Share that is negative or greater than 40x
Note: Financial information as of or for the period ending December 31, 2017 for Bank of South Carolina Corporation with regards to Total Assets, LTM Return on Average Assets and LTM Dividend Payout Ratio

NewDominion Stock Trading History. Sandler O’Neill reviewed the historical stock price performance of NewDominion common stock for the one-year period ended January 19, 2018. Sandler O’Neill then compared the relationship between the stock price performance of NewDominion’s common stock to movements in the NewDominion Peer Group as well as certain stock indices.
NewDominion One-Year Stock Price Performance

 
Beginning
January 19, 2017
Ending
January 19, 2018
NewDominion
100.0%
257.1%
NewDominion Peer Group
100.0%
114.0%
NASDAQ Bank Index
100.0%
114.1%
S&P 500 Index
100.0%
124.1%

Parent Comparable Company Analyses. Sandler O’Neill used publicly available information to compare selected financial information for Parent with a group of financial institutions selected by Sandler O’Neill (the “Parent Peer Group”). The Parent Peer Group consisted of publicly traded banks headquartered in the Midwest region and Pennsylvania with assets between $5 billion and $10 billion, excluding announced merger targets and Beneficial Bancorp (due to its geographic focus). The Parent Peer Group consisted of the following companies:
Heartland Financial USA, Inc.
Northwest Bancshares, Inc.
Capitol Federal Financial, Inc.
First Merchants Corporation
First Financial Bancorp
First Commonwealth Financial Corp.
S&T Bancorp, Inc.
First Busey Corporation
1st Source Corporation
Enterprise Financial Services Corp.
Meta Financial Group, Inc.
 

The analysis compared publicly available financial information for Parent as of or for the LTM period ended September 30, 2017 with the corresponding publicly available data for the Parent Peer Group as of or for the LTM period ended September 30, 2017 (unless otherwise noted), with pricing data as of January 19, 2018. The table below sets forth the data for Parent and the high, low, median and mean data for the Parent Peer Group.

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Parent Peer Group
 
Parent
High
Low
Mean
Median
Total Assets (in millions)
$7,863
$9,756
$5,228
$7,652
$7,384
Loans/Deposits
89.6%
135.7%
41.1%
93.2%
95.3%
Non-performing Assets/Total Assets(1)
1.58%
1.05%
0.03%
0.53%
0.59%
Tangible Common Equity/Tangible Assets
8.82%
14.88%
5.59%
9.13%
8.76%
Leverage Ratio
9.08%
12.28%
7.64%
10.11%
9.88%
Total RBC Ratio
14.07%
31.04%
12.32%
15.57%
13.76%
CRE Concentration Ratio
105.4%
355.9%
18.5%
178.1%
187.0%
LTM Return on Average Assets
1.06%
1.23%
0.75%
1.07%
1.12%
LTM Return on Average Equity
10.83%
11.20%
6.09%
9.43%
9.46%
LTM Net Interest Margin
3.49%
4.15%
1.79%
3.45%
3.57%
LTM Efficiency Ratio
60.1%
66.8%
41.2%
56.9%
58.6%
Price/Tangible Book Value
240%
356%
138%
242%
247%
Price/LTM Earnings Per Share
20.4x
21.7x
18.0x
19.9x
20.3x
Price/Estimated 2018 Earnings Per Share(2)
15.5x
19.5x
10.8x
14.9x
14.8x
Current Dividend Yield
3.5%
3.7%
0.5%
1.8%
2.1%
LTM Dividend Payout Ratio
71.1%
139.7%
10.8%
43.6%
34.3%
Market Value (in millions)
$1,651
$2,174
$1,013
$1,573
$1,584
(1) Non-performing assets defined as nonaccrual loans and leases, renegotiated loans and leases and real estate owned
(2) Based on median analyst consensus estimates available as of January 20, 2018
Note: Financial information as of or for the period ending December 31, 2017 for First Financial Bancorp with regards to Total Assets, Loans/Deposits, Leverage Ratio, Total RBC Ratio, LTM Return on Average Assets, LTM Return on Average Equity, LTM Net Interest Margin, LTM Efficiency Ratio and LTM Dividend Payout Ratio and for 1st Source Corporation with regards to Total Assets, Loans/Deposits, Tangible Common Equity/Tangible Assets, Total RBC Ratio, LTM Return on Average Assets, LTM Return on Average Equity, LTM Net Interest Margin, LTM Efficiency Ratio and LTM Dividend Payout Ratio

Parent Stock Trading History. Sandler O’Neill reviewed the historical stock price performance of Parent common stock for the one and three-year periods ended January 19, 2018. Sandler O’Neill then compared the relationship between the stock price performance of Parent’s common stock to movements in the Parent Peer Group as well as certain stock indices.
Parent One-Year Stock Price Performance

 
Beginning
January 19, 2017
Ending
January 19, 2018
Parent
100.0%
97.0%
Parent Peer Group
100.0%
108.8%
NASDAQ Bank Index
100.0%
114.1%
S&P 500 Index
100.0%
124.1%

Parent Three-Year Stock Price Performance

 
Beginning
January 16, 2015
Ending
January 19, 2018
Parent
100.0%
131.5%
Parent Peer Group
100.0%
167.8%
NASDAQ Bank Index
100.0%
170.5%
S&P 500 Index
100.0%
139.2%


- 38 -





Analysis of Selected Merger Transactions. Sandler O’Neill reviewed a group of selected merger and acquisition transactions involving U.S. banks and thrifts (the “Nationwide Precedent Transactions”). The Nationwide Precedent Transactions group consisted of bank and thrift transactions announced between January 1, 2017 and January 21, 2018 with disclosed deal values and target assets between $250 million and $350 million.
The Nationwide Precedent Transactions group was composed of the following transactions:
Acquiror
 
Target
CNB Bank Shares, Inc. (IL)
 
Jacksonville Bancorp (IL)
Mackinac Financial Corp. (MI)
 
First Federal of Northern Michigan Bancorp (MI)
Heritage Commerce Corp. (CA)
 
United American Bank (CA)
LCNB Corp. (OH)
 
Columbus First Bancorp, Inc. (OH)
Equity Bancshares, Inc. (KS)
 
Kansas Bank Corp. (KS)
Independent Bank Corp. (MI)
 
TCSB Bancorp, Inc. (MI)
CB Financial Services, Inc. (PA)
 
First West Virginia Bancorp, Inc. (WV)
Investor Group (KY)
 
Bancorp of Lexington, Inc. (KY)
Suncrest Bank (CA)
 
CBBC Bancorp (CA)
Bangor Bancorp, MHC (ME)
 
First Colebrook Bancorp, Inc. (NH)
Peoples Bancorp, Inc. (OH)
 
ASB Financial Corp. (OH)
Business First Bancshares, Inc. (LA)
 
Minden Bancorp, Inc. (LA)
Brookline Bancorp, Inc. (MA)
 
First Commons Bank, National Association (MA)
First American Bank Corp. (IL)
 
Southport Financial Corp. (WI)
Triumph Bancorp, Inc. (TX)
 
Valley Bancorp, Inc. (CO)
PB Financial Corp. (NC)
 
CB Financial Corp. (NC)
Equity Bancshares, Inc. (KS)
 
Eastman National Bancshares, Inc. (OK)
Equity Bancshares, Inc. (KS)
 
Cache Holdings, Inc. (OK)
QCR Holdings, Inc. (IL)
 
Guaranty Bank & Trust Company (IA)
Seacoast Banking Corporation of Florida (FL)
 
Palm Beach Community Bank (FL)
Seacoast Commerce Banc Holdings (CA)
 
Capital Bank (CA)
Sierra Bancorp (CA)
 
OCB Bancorp (CA)
Mid Penn Bancorp, Inc. (PA)
 
Scottdale Bank & Trust Company (PA)
Citizens Community Bancorp (WI)
 
Wells Financial Corp. (MN)
Progress Financial Corp. (AL)
 
First Partners Financial, Inc. (AL)
Old Line Bancshares, Inc. (MD)
 
DCB Bancshares, Inc. (MD)
First Merchants Corp. (IN)
 
Arlington Bank (OH)
HCBF Holding Co. (FL)
 
Jefferson Bankshares, Inc. (FL)

Using the latest publicly available information prior to the announcement of the relevant transaction, Sandler O’Neill reviewed the following transaction metrics: transaction price to LTM earnings per share, transaction price to book value per share, transaction price to tangible book value per share, tangible book value premium to core deposits and one-day market premium. Sandler O’Neill compared the indicated transaction multiples for the Merger to the high, low, mean and median multiples of the Nationwide Precedent Transactions group.
 
 
Nationwide Precedent Transactions
 
NewDominion / Parent
High
Low
Mean
Median
Transaction Price / LTM Earnings Per Share:
17.9x/41.4x(2)
30.0x
5.6x
18.7x
18.6x
Transaction Price/ Book Value Per Share:
210%
226%
123%
168%
161%
Transaction Price/ Tangible Book Value Per Share:
210%/196%(13)
226%
125%
171%
163%
Tangible Book Value Premium / Core Deposits(1):
20.2%
38.0%
3.2%
11.1%
9.3%
1-Day Market Premium
20.0%
223.8%
(32.90)%
49.7%
27.3%
(1) Core Deposits defined as total deposits less Jumbo CDs greater than $100,000

- 39 -





(2) Excludes the recapture of NewDominion’s valuation allowance against its DTA of $2.7 million in 2017
(3) Includes the remaining recapture of NewDominion’s valuation allowance against its DTA of $2.7 million in 2017

Sandler O’Neill also reviewed an additional group of selected merger and acquisition transactions involving U.S. banks and thrifts (the “Regional Precedent Transactions”). The Regional Precedent Transactions group consisted of bank and thrift transactions with targets headquartered in North Carolina, South Carolina and Virginia, announced between January 1, 2016 and January 21, 2018 with disclosed deal values and target assets less than $750 million, excluding mergers of equals.
The Regional Precedent Transactions group was composed of the following transactions:
Acquiror
 
Target
South Atlantic Bancshares, Inc. (SC)
 
Atlantic Bancshares, Inc. (SC)
First Federal Bancorp, MHC (FL)
 
Coastal Banking Co. (SC)
Old Point Financial Corp. (VA)
 
Citizens National Bank (VA)
First Reliance Bancshares (SC)
 
Independence Bancshares, Inc. (SC)
PB Financial Corp. (NC)
 
CB Financial Corp. (NC)
Select Bancorp, Inc. (NC)
 
Premara Financial, Inc. (NC)
United Community Banks, Inc. (GA)
 
Four Oaks Fincorp, Inc. (NC)
United Community Banks, Inc. (GA)
 
HCSB Financial Corp. (SC)
First Community Corp. (SC)
 
Cornerstone Bancorp (SC)
West Town Bancorp, Inc. (NC)
 
Sound Banking Co. (NC)
Carolina Financial Corp. (SC)
 
Greer Bancshares, Inc. (SC)
First Bancorp (NC)
 
Carolina Bank Holdings, Inc. (NC)
First Citizens BancShares, Inc. (NC)
 
Cordia Bancorp, Inc. (VA)
United Community Banks, Inc. (GA)
 
Tidelands Bancshares, Inc. (SC)
Blue Ridge Bankshares, Inc. (VA)
 
River Bancorp, Inc. (VA)
Summit Financial Group, Inc. (WV)
 
Highland County Bancshares, Inc. (VA)
Carolina Financial Corp. (SC)
 
Congaree Bancshares, Inc. (SC)

Using the latest publicly available information prior to the announcement of the relevant transaction, Sandler O’Neill reviewed the following transaction metrics: transaction price to LTM earnings per share, transaction price to book value per share, transaction price to tangible book value per share, tangible book value premium to core deposits and one-day market premium. Sandler O’Neill compared the indicated transaction multiples for the Merger to the high, low, mean and median multiples of the Southeast Region Precedent Transactions group.
 
 
Southeast Region Precedent Transactions
 
NewDominion / Parent
High
Low
Mean
Median
Transaction Price / LTM Earnings Per Share:
17.9x/41.4x²
34.6x
4.5x
17.9x
16.4x
Transaction Price/ Book Value Per Share:
210%
183%
101%
145%
140%
Transaction Price/ Tangible Book Value Per Share:
210%/196%³
183%
101%
146%
142%
Tangible Book Value Premium / Core Deposits¹:
20.2%
12.4%
0.3%
6.4%
6.0%
1-Day Market Premium
20.0%
225.0%
(61.90)%
29.4%
24.0%
(1) Core Deposits calculated as total deposits less Jumbo CDs greater than $100,000
(2) Excludes the recapture of NewDominion’s valuation allowance against its DTA of $2.7 million in 2017
(3) Includes the remaining recapture of NewDominion’s valuation allowance against its DTA of $2.7 million

NewDominion Net Present Value Analyses. Sandler O’Neill performed an analysis that estimated the net present value per share of NewDominion common stock assuming certain internal financial projections for NewDominion for

- 40 -





the years ending December 31, 2018 through December 31, 2022, as provided by the senior management of NewDominion. To approximate the terminal value of a share of NewDominion common stock at December 31, 2022, Sandler O’Neill applied price to 2022 earnings per share multiples ranging from 12.5x to 20.0x and price to December 31, 2022 tangible book value per share multiples ranging from 110% to 160%. The terminal values were then discounted to present values using different discount rates ranging from 10.0% to 15.0%, which were chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of NewDominion common stock. As illustrated in the following tables, the analysis indicated an imputed range of values per share of NewDominion common stock of $0.45 to $0.90 when applying multiples of earnings per share and $0.43 to $0.77 when applying multiples of tangible book value per share.
 
 
Earnings Per Share Multiples
Discount Rate
 
12.5x
14.0x
15.5x
17.0x
18.5x
20.0x
10.0%
 
$0.57
$0.63
$0.70
$0.77
$0.84
$0.90
11.0%
 
$0.54
$0.60
$0.67
$0.73
$0.80
$0.86
12.0%
 
$0.52
$0.58
$0.64
$0.70
$0.76
$0.83
13.0%
 
$0.49
$0.55
$0.61
$0.67
$0.73
$0.79
14.0%
 
$0.47
$0.53
$0.59
$0.64
$0.70
$0.76
15.0%
 
$0.45
$0.51
$0.56
$0.62
$0.67
$0.72
 
 

Tangible Book Value Per Share Multiples
Discount Rate
 
110%
120%
130%
140%
150%
160%
10.0%
 
$0.53
$0.58
$0.63
$0.68
$0.72
$0.77
11.0%
 
$0.51
$0.55
$0.60
$0.65
$0.69
$0.74
12.0%
 
$0.49
$0.53
$0.57
$0.62
$0.66
$0.71
13.0%
 
$0.46
$0.51
$0.55
$0.59
$0.63
$0.68
14.0%
 
$0.44
$0.48
$0.52
$0.57
$0.61
$0.65
15.0%
 
$0.43
$0.46
$0.50
$0.54
$0.58
$0.62

Sandler O’Neill also considered and discussed with the NewDominion board of directors how this analysis would be affected by changes in the underlying assumptions, including variations with respect to the projections. To illustrate this impact, Sandler O’Neill performed a similar analysis assuming NewDominion’s projections varied from 15% above projections to 15% below projections. This analysis resulted in the following range of per share values for NewDominion common stock, applying the price to 2022 earnings per share multiples range of 12.5x to 20.0x referred to above and a discount rate of 13.26%.
 
 
Earnings Per Share Multiples
Variance to Net Income Forecast
 
12.5x

14.0x

15.5x

17.0x

18.5x

20.0x

(15.00
)%
 

$0.42


$0.46


$0.51


$0.56


$0.61


$0.66

(10.00
)%
 

$0.44


$0.49


$0.55


$0.60


$0.65


$0.70

(5.00
)%
 

$0.46


$0.52


$0.58


$0.63


$0.69


$0.74

0.0
 %
 

$0.49


$0.55


$0.61


$0.66


$0.72


$0.78

5.0
 %
 

$0.51


$0.57


$0.64


$0.70


$0.76


$0.82

10.0
 %
 

$0.54


$0.60


$0.67


$0.73


$0.80


$0.86

15.0
 %
 

$0.56


$0.63


$0.70


$0.76


$0.83


$0.90



- 41 -





Sandler O’Neill noted that the net present value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results.
Parent Net Present Value Analyses. Sandler O’Neill performed an analysis that estimated the net present value per share of Parent common stock assuming publicly available consensus median analyst earnings per share estimates for Parent for the years ending December 31, 2018 and December 31, 2019, as well as a long-term earnings per share growth rate for the years thereafter and dividends per share for the years ending December 31, 2018 through December 31, 2022, as provided by the senior management of Parent. To approximate the terminal value of Parent common stock at December 31, 2022, Sandler O’Neill applied price to 2022 earnings per share multiples ranging from 14.0x to 20.0x and price to December 31, 2022 tangible book value per share multiples ranging from 200% to 250%. The terminal values were then discounted to present values using different discount rates ranging from 9.0% to 14.0% chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of Parent common stock. As illustrated in the following tables, the analysis indicated an imputed range of values per share of Parent common stock of $75.11 to $125.87 when applying multiples of earnings per share and $80.08 to $119.70 when applying multiples of tangible book value per share.
 
 
Earnings Per Share Multiples
Discount Rate
 
14.0x

15.5x

17.0x

18.5x

20.0x

9.0
%
 

$92.47


$100.82


$109.17


$117.52


$125.87

10.0
%
 

$88.62


$96.60


$104.58


$112.55


$120.53

11.0
%
 

$84.97


$92.60


$100.22


$107.85


$115.47

12.0
%
 

$81.51


$88.80


$96.09


$103.38


$110.67

13.0
%
 

$78.23


$85.20


$92.17


$99.15


$106.12

14.0
%
 

$75.11


$81.78


$88.45


$95.13


$101.80


 
 
Tangible Book Value Per Share Multiples
Discount Rate
 
200
%
210
%
220
%
230
%
240
%
250
%
9.0
%
 

$98.69


$102.89


$107.09


$111.29


$115.50


$119.70

10.0
%
 

$94.56


$98.58


$102.59


$106.61


$110.62


$114.64

11.0
%
 

$90.65


$94.49


$98.33


$102.17


$106.00


$109.84

12.0
%
 

$86.94


$90.61


$94.28


$97.95


$101.62


$105.29

13.0
%
 

$83.42


$86.93


$90.44


$93.95


$97.46


$100.97

14.0
%
 

$80.08


$83.44


$86.80


$90.16


$93.52


$96.88


Sandler O’Neill also considered and discussed with the NewDominion board of directors how this analysis would be affected by changes in the underlying assumptions, including variations with respect to the estimates. To illustrate this impact, Sandler O’Neill performed a similar analysis assuming Parent’s estimates varied from 15% above estimates to 15% below estimates. This analysis resulted in the following range of per share values for Parent common stock, applying the price to 2022 earnings per share multiples range of 14.0x to 20.0x referred to above and a discount rate of 12.28%.

- 42 -





 
 
Earnings Per Share Multiples
Variance to Net Income Forecast
 
14.0x

15.5x

17.0x

18.5x

20.0x

(15.00
)%
 

$70.49


$76.61


$82.73


$88.85


$94.98

(10.00
)%
 

$73.85


$80.33


$86.81


$93.30


$99.78

(5.00
)%
 

$77.21


$84.05


$90.89


$97.74


$104.58

0.0
 %
 

$80.57


$87.77


$94.98


$102.18


$109.38

5.0
 %
 

$83.93


$91.49


$99.06


$106.62


$114.18

10.0
 %
 

$87.29


$95.22


$103.14


$111.06


$118.98

15.0
 %
 

$90.65


$98.94


$107.22


$115.50


$123.78

Sandler O’Neill noted that the net present value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results.
Pro Forma Merger Analysis. Sandler O’Neill analyzed certain potential pro forma effects of the Merger. In performing this analysis, Sandler O’Neill utilized the following information and assumptions: (i) the Merger closes on June 30, 2018; (ii) publicly available consensus median analyst earnings per share estimates for Parent for the years ending December 31, 2018 and December 31, 2019, as well as a long-term earnings per share growth rate for the years thereafter and dividends per share for the years ending December 31, 2018 through December 31, 2022, as provided by the senior management of Parent; (iii) certain assumptions relating to purchase accounting adjustments, cost savings and transaction expenses, as provided by the senior management of Parent; and (iv) financial projections for NewDominion for the years ending December 31, 2019 through December 31, 2022, as provided by senior management of Parent. The analysis indicated that the Merger could be accretive to Parent’s estimated earnings per share (excluding one-time transaction costs and expenses) in the year ending December 31, 2018 and dilutive to Parent’s estimated tangible book value per share at closing of the Merger.
In connection with this analysis, Sandler O’Neill considered and discussed with NewDominion’s board of directors how the analysis would be affected by changes in the underlying assumptions, including the impact of final purchase accounting adjustments determined at the closing of the Merger, and noted that the actual results achieved by the combined company may vary from projected results and the variations may be material.
Sandler O’Neill’s Relationship. Sandler O’Neill acted as NewDominion’s financial advisor in connection with the Merger and will receive a fee for its services in an amount equal to 1.20% of the aggregate purchase price, excluding those shares of NewDominion common stock held by Parent as of the effective time, which fee at the time of announcement of the Merger was approximately $920,000. A substantial portion of Sandler O’Neill’s transaction fee is contingent upon consummation of the Merger. Sandler O’Neill also received a fee for rendering its opinion equal to $150,000, which opinion fee will be credited in full towards the portion of the transaction fee which will become payable to Sandler O’Neill on the day of closing of the Merger. NewDominion has also agreed to indemnify Sandler O’Neill against certain claims and liabilities arising out of Sandler O’Neill’s engagement and to reimburse Sandler O’Neill for certain of its out-of-pocket expenses incurred in connection with Sandler O’Neill’s engagement. In the two years preceding the date hereof, Sandler O’Neill has provided certain other investment banking services to, and received fees from, NewDominion. Most recently, Sandler O’Neill acted as placement agent in connection with NewDominion’s offer and sale of securities, which transaction occurred in January 2016, for which Sandler O’Neill received a placement agent fee of approximately $210,000. In addition, in the two years preceding the date hereof, Sandler O’Neill has provided certain investment banking services to, and received fees from, Parent. Most recently, Sandler O’Neill acted as financial advisor to Parent and received a retainer fee for such services in June 2016 in an amount equal to $50,000. In addition, in the ordinary course of Sandler O’Neill’s business as a broker-dealer, Sandler O’Neill may purchase securities from and sell securities to NewDominion, Parent and their respective affiliates. Sandler O’Neill may also actively trade the equity and debt securities of NewDominion, Parent and their respective affiliates for Sandler O’Neill’s own account and for the accounts of Sandler O’Neill’s customers.



- 43 -





Certain unaudited prospective financial information of NewDominion and Parent
Neither NewDominion nor Parent as a matter of course make public projections as to future performance, revenues, earnings or other financial results due to, among other reasons, the uncertainty of the underlying assumptions and estimates. However, NewDominion and Parent are including in this proxy statement/prospectus certain unaudited prospective financial information that was made available to Sandler O’Neill, NewDominion’s financial advisor, in connection with the Merger. The inclusion of this information should not be regarded as an indication that any of NewDominion, Parent, Sandler O’Neill, their respective representatives or any other recipient of this information considered, or now considers, it to be necessarily predictive of actual future results, or that it should be construed as financial guidance, and it should not be relied on as such.
This unaudited prospective financial information was prepared solely for internal use by NewDominion and Parent and is subjective in many respects. While presented with numeric specificity, the unaudited prospective financial information reflects numerous estimates and assumptions made with respect to business, economic, market, competition, regulatory and financial conditions and matters specific to NewDominion’s and Parent’s business, all of which are difficult to predict and many of which are beyond NewDominion’s and Parent’s control. The unaudited prospective financial information reflects both assumptions as to certain business decisions that are subject to change and, in many respects, subjective judgment, and thus is susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. Neither NewDominion nor Parent can give assurance that the unaudited prospective financial information and the underlying estimates and assumptions will be realized. In addition, since the unaudited prospective financial information covers multiple years, such information by its nature becomes less predictive with each successive year. Actual results may differ materially from those set forth below, and important factors that may affect actual results and cause the unaudited prospective financial information to be even more inaccurate include, but are not limited to, risks and uncertainties relating to NewDominion’s and Parent’s businesses, industry performance, general business and economic conditions, competition and adverse changes in applicable laws, regulations or rules. The prospective financial information constitutes forward-looking information and is subject to risks and uncertainties, including the various risks set forth in the section of this proxy statement/prospectus entitled “Special Notes Concerning Forward-Looking Statements.” Parent’s results are also subject to the risks and uncertainties described under the heading “Risk Factors” on page 17 of this proxy statement/prospectus and in Parent’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and the other reports filed by Parent with the SEC. NewDominion faces many of these same risks and uncertainties.
The unaudited prospective financial information was not prepared with a view toward public disclosure, nor was it prepared with a view toward compliance with GAAP, published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. In addition, the unaudited prospective financial information requires significant estimates and assumptions that make it inherently less comparable to the similarly titled GAAP measures in Parent’s and NewDominion’s historical audited financial statements. Neither NewDominion’s or Parent’s independent auditors, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the unaudited prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability.
Furthermore, the unaudited prospective financial information does not take into account any circumstances or events occurring after the date it was prepared. NewDominion and Parent can give no assurance that, had the unaudited prospective financial information been prepared either as of the date of the Merger Agreement or as of the date of this proxy statement/prospectus, similar estimates and assumptions would be used. Neither NewDominion nor Parent intend to, and each disclaims any obligation to, make publicly available any update or other revision to the unaudited prospective financial information to reflect circumstances existing since their preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error, or to reflect changes in general economic or industry conditions. The unaudited prospective financial information does not take into account the possible financial and other effects on either NewDominion or Parent, as applicable, of the Merger. The unaudited prospective financial information does not give effect to the Merger, including the impact of negotiating or executing the Merger Agreement, the expenses that may be incurred in connection with completing the Merger, the effect on either NewDominion or Parent, as applicable, of any business or strategic decision or action that has been or will be taken as a result of the Merger Agreement having been executed, or the effect of any business or strategic decisions or actions that would likely have been taken if the Merger Agreement had not been executed, but which were instead altered, accelerated, postponed or not taken in anticipation of the Merger. Further, the unaudited prospective financial information does not take into account the

- 44 -





effect on either of NewDominion or Parent, as applicable, of any possible failure of the Merger to occur. None of NewDominion, Parent or Sandler O’Neill or their respective affiliates, officers, directors, advisors or other representatives has made, makes or is authorized in the future to make any representation to any NewDominion shareholder or other person regarding NewDominion’s ultimate performance compared to the information contained in the unaudited prospective financial information or that the projected results will be achieved. The inclusion of the unaudited prospective financial information in this proxy statement/prospectus should not be deemed an admission or representation by NewDominion or Parent that it is viewed as material information of NewDominion or Parent, particularly in light of the inherent risks and uncertainties associated with such forecasts.
In light of the foregoing, and considering that the NewDominion special meeting will be held many months after the unaudited prospective financial information was prepared, as well as the uncertainties inherent in any forecasted information, NewDominion shareholders are cautioned not to place unwarranted reliance on such information, and NewDominion and Parent urges all NewDominion shareholders to review NewDominion’s and Parent’s historical consolidated financial statements and other information contained elsewhere in this proxy statement/prospectus for a description of NewDominion’s and Parent’s business and financial results.
The following table presents a summary of selected NewDominion unaudited prospective financial data for the years 2018 through 2022 (dollars in millions, except per share data) as provided by the senior management of NewDominion:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018E
 
2019E
 
2020E
 
2021E
 
2022E
Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
369.9
 
$
406.9
 
$
447.6
 
$
492.4
 
$
541.6
Gross loans
 
304.4
 
 
337.1
 
 
375.5
 
 
418.1
 
 
465.4
Total deposits
 
304.3
 
 
334.8
 
 
368.2
 
 
405.1
 
 
445.6
Income Statement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
14.5
 
$
18.7
 
$
22.8
 
$
26.7
 
$
29.7
Interest expense
 
2.1
 
 
4.4
 
 
5.3
 
 
7.4
 
 
8.5
Net interest income
 
12.4
 
 
14.3
 
 
17.4
 
 
19.3
 
 
21.2
Provision for loan losses
 
0.7
 
 
1.0
 
 
1.2
 
 
1.3
 
 
1.4