Park National in Newark, Ohio, has agreed to pay $500,000 to settle Securities and Exchange Commission allegations that its loan-loss accounting underplayed credit problems at a troubled acquisition.

The SEC had investigated whether the now $7.4 billion-asset company understated allowances for loan and lease losses at its Vision bank unit in 2010 and 2011. Park National did not admit or deny the SEC allegations in entering the settlement, it said in a securities filing late last week. But in 2012 Park National "voluntarily corrected" accounting errors on certain impaired construction and development and other loans when it restated its financial results for the full year of 2010 and the first three quarters of 2011, the filing said.

The settlement appears to bring to a conclusion yet another tale of a bank's pre-crisis expansion into far-flung markets that went bad. Park National bought Vision Bank in 2007 for $171 million in hopes of capitalizing on rapid growth in the Gulf Coast region; at the time it was the Midwestern bank's seventh deal in seven years.

But credit quality questions emerged quickly and persisted; Park National sold Vision's 17 branches and certain loans and deposits to Centennial Bank, a unit of Home BancShares in Conway, Ark., for just $27.9 million in 2012.

Park National's allowances in 2010 and the three quarters in 2011 were understated because the bank included certain future cash flows anticipated by guarantors in its impairment analysis of problem loans, the filing said. It also blamed collateral valuations by an outside contractor.

Its original allowances in 2010 had fallen short by $22.2 million, and after the restatement the bank's profits dropped by $24.8 million, or 25%, the filing said. Its other restatements also lowered earnings in each of the first three quarters of 2011, including a 17% drop in the first quarter of that year, the filing said.

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