Park National Corporation · AMEX:PRK
Park National — Keefe, Bruyette & Woods 2013 Community Bank Investor Conference
33 slides from Park National's conference presentation, Jul 30, 2013
Slide 1: KBW 2013 Community Bank Investor Conference
1 July 30, 2013 Keefe, Bruyette & Woods 2013 Community Bank Investor Conference
Slide 2: Forward-looking Statements
Forward-looking Statements • This presentation presents management's discussion and analysis of the financial condition and results of operations for Park National Corporation and its subsidiaries ("Park" or the "Corporation"). This discussion should be read in conjunction with the consolidated fina
Slide 3: Park National Corporation (PRK) Profile
3 Park National Corporation (PRK) Profile (as of June 30, 2013) • 11 Community Bank Divisions • 2 Specialty Finance Companies • One non-bank workout subsidiary • 29 Ohio & 1 Kentucky counties • 124 bank branches • 7 specialty finance offices • 1,854 FTEs
Slide 4: Park Executive Management
Park Executive Management C. Daniel DeLawder – Chairman and Chief Executive Officer – Age: 63 Chairman, Chief Executive Officer (1999) and Board Member of The Park National Bank and Park National Corporation (Corporation or Park) headquartered in Newark, Ohio. He served previously as President of
Slide 5: Park Executive Management (continued)
Park Executive Management (continued) Brady T. Burt – Chief Financial Officer – Age: 41 Chief Financial Officer of Park since 2012. Formally served as the Chief Accounting Officer with Park since April 2007. Prior to joining Park, Mr. Burt served Vail Banks, Inc. in various capacities, including E
Slide 6: Experienced Leadership Team
6 Experienced Leadership Team Name Position Age Years with PRK Years In Industry C. Daniel DeLawder Chairman & CEO 63 42 42 David L. Trautman President 52 30 30 Brady T. Burt Chief Financial Officer 41 6 12 Senior leadership consists of executives with proven local market experience Leadership t
Slide 7: Leadership Team – continued
7 Leadership Team – continued Name Position Age Years with PRK Years In Industry Adrienne M. Brokaw SVP – Director of Internal Audit 45 1 15 Thomas J. Button SVP – Chief Credit Officer 53 16 27 Thomas M. Cummiskey SVP – Trust 43 13 15 Lynn B. Fawcett SVP – Operations 54 22 22 Robert N. Kent, Jr. Pre
Slide 8: Affiliate Leadership
8 Affiliate Leadership Name Position Age Years with PRK/Affiliate Years In Industry John A. Brown President – Richland Bank 44 22 22 Brett A. Baumeister President – Unity National Bank 47 9 23 William C. Fralick President – Security National Bank 58 37 37 David J. Gooch President – Park National Ban
Slide 9: Highlights of the First Six Months of 2013
9 Highlights of the First Six Months of 2013 • Through June 30, 2013, reduced Vision Bank legacy NPAs by $53.2 million following the sale of the Vision business on February 16, 2012. • Park had net income of $40.7 million ($2.64 per diluted common share) for the first six months of 2013, compared to
Slide 10: Reduction in Vision Bank Legacy Nonperforming Assets (NPAs)
Reduction in Vision Bank Legacy Nonperforming Assets (NPAs) 10 At December 31, 2010, Vision Bank NPAs were $205.1 million. At December 31, 2011, Vision and SEPH (Park’s non-bank workout subsidiary) NPAs were $130.4 million. At February 16, 2012, retained NPAs were $117.8 million. At June 30,
Slide 11: Vision and SEPH NPA Trend
Vision and SEPH NPA Trend 11 Source: Company Filings 12/31/10 12/31/11 02/16/12 06/30/13 Vision/SEPH NPA's $205.1 $130.4 $117.8 $64.6 0 25 50 75 100 125 150 175 200 225 In m ill io n s ($ )
Slide 12: ROA and ROE History – PRK and PRK, excluding Vision & SEPH
12 ROA and ROE History – PRK and PRK, excluding Vision & SEPH Results Count 1 Calculated using average common equity for Park National Corporation. 2 Calculated using average common equity for Park National Corporation, excluding Vision Bank and SE Property Holdings, LLC. 3 Adjusted for goodwill imp
Slide 13: The Park National Bank – The bank of choice
13 Bank Division Year joined Park Hdqtr. Co. deposits Total county Deposits Park % of market share Rank in market Park National 1908 $ 1,180,276 $ 2,042,415 57.8% 1 Fairfield National 1985 379,484 1,743,570 21.8% 1 Richland Bank 1987 473,075 1,742,412 27.2% 1 Century National 1990 393,123 1,213,689
Slide 14: Quarterly Net Income by Operating Segment
Quarterly Net Income by Operating Segment 14 Source: Company Filings (In thousands) 2011 2012 Q2 YTD 2012 1 Q2 YTD 2013 Q1 2013 Q2 2013 PNB $ 106,851 $ 87,106 $ 45,044 $ 40,262 $ 19,940 $ 20,322 GFSC 2,721 3,550 1,715 1,530 740 790 Park Parent Company (1,595) 195 183 323 132 191 Ongoing operations $
Slide 15: Projection of Fiscal 2013 Results
15 Projection of Fiscal 2013 Results Source: Company Filings Projected Net Income (In thousands) Original projection for 2013 50% of midpoint Q2 YTD 2013 Current projection for 2013 Pre-tax, pre-provision income $ 113,000 $ 131,000 $ 61,000 $ 55,600 $ 108,000 $ 114,000 Provision for loan losses 20,0
Slide 16: The Park National Bank Income Statement
16 Source: Company Filings The Park National Bank Income Statement (In thousands) 2011 2012 Q2 YTD 2012 Q2 YTD 2013 Q1 2013 Q2 2013 Net interest income $ 236,282 $ 221,758 $ 111,868 $ 104,471 $ 52,735 $ 51,736 Provision for loan losses 30,220 16,678 8,428 5,252 3,130 2,122 Fee income 67,348 70,739 3
Slide 17: Park National Bank Statement of Condition
Park National Bank Statement of Condition 17 Source: Company Filings (In thousands) June 30, 2012 Dec. 31, 2012 June 30, 2013 % change from 12/31/12 % change from 6/30/12 Loans $ 4,281,430 $ 4,369,173 $ 4,441,617 1.66% 3.74% Allowance for loan losses 56,288 53,131 52,694 (0.82)% (6.39)% Net loans 4,
Slide 18: SEPH / Vision Bank Income Statement
18 Source: Company Filings SEPH / Vision Bank Income Statement (In thousands) Vision/SEPH 2011 2012 YTD Q2 2012 YTD Q2 2013 Q1 2013 Q2 2013 Net interest income $ 26,104 $ (341) $ 1,485 $ (1,002) $ (655) $ (347) Provision for (recovery of) loan losses 31,052 17,882 4,698 (4,670) (3,011) (1,659) Fee i
Slide 19: Park National Bank Loans by Type as of June 30, 2013
19 Park National Bank Loans by Type Source: Company Filings as of June 30, 2013 • Commercial lending focus is on small, closely-held businesses within our markets. • Consumer mortgage and home equity portfolios are originated by Park within our footprint and have been consistently underwritten for d
Slide 20: Nonperforming Loans by Type at June 30, 2013
20 Park National Corporation Nonperforming Loans by Type At June 30, 2013 Source: Company Filings as of June 30, 2013 PNB Guardian SEPH LLC PRK Amount Percentage Amount Percentage Amount Percentage Amount Percentage Commercial Real Estate Owner Occupied $ 20,731 16.78% $ - 0.00% $ 6,345 14.68% $ 27,
Slide 21: Park National Corporation Nonperforming Assets
21 Park National Corporation Nonperforming assets Source: BHC Performance Report and Company Filings (in thousands) Dec. 31, 2011 Dec. 31, 2012 June 30, 2013 Non-accrual loans $ 195,106 $ 155,536 $ 145,398 Renegotiated loans 28,607 29,800 22,413 Loans past due 90 days or more (still accruing) 3,489
Slide 22: Vision Bank/SE Properties Holdings Nonperforming Assets
22 Vision Bank/SE Properties Holdings Nonperforming Assets Source: BHC Performance Report and Company Filings (in thousands) Dec. 31, 2011 Dec. 31, 2012 June 30, 2013 Non-accrual loans $ 98,993 $ 55,292 $ 43,216 Renegotiated loans 2,265 - - Loans past due 90 days or more (still accruing) 122 - - Tot
Slide 23: PNB and Guardian Nonperforming Assets
23 Source: BHC Performance Report and Company Filings (in thousands) Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2012 Jun. 30, 2013 Non-accrual loans $ 117,815 $ 96,113 $ 100,244 $ 102,182 Renegotiated loans - 26,342 29,800 22,413 Loans past due 90 days or more (still accruing) 3,226 3,367 2,970 1,502 Tota
Slide 24: PRK Impaired Loan Summary
PRK Impaired Loan Summary 24 Source: Company Filings Park National Corporation Impaired Commercial Loans at June 30, 2013 (In thousands) Unpaid principal balance (UPB) Prior charge- offs Total impaired loans Specific reserve Carrying balance Carrying balance as a % of UPB PNB $ 121,326 $ 36,795 $ 84
Slide 25: Park National Bank Commercial Loan Portfolio Trends
Park National Bank Commercial Loan Portfolio Trends 25 1 Commercial loans include: (1) Commercial, financial and agricultural loans, (2) Commercial real estate loans, (3) Commercial related loans in the construction real estate portfolio and (4) Commercial related loans in the residential real estat
Slide 26: Park National Corporation – Income Statement
26 Park National Corporation – Income Statement Source: Company Filings (in thousands) Dec. 31, 2011 Dec. 31, 2012 Q2 2013 YTD Net interest income $ 273,234 $ 235,315 $ 110,165 Provision for loan losses 63,272 35,419 1,002 Net interest income after provision $ 209,962 $ 199,896 $ 109,163 Fee Income
Slide 27: Park National Corporation Statement of Condition
PARK NATIONAL CORPORATION Statement of Condition 27 Source: Company Filings (in millions) Dec. 31, 2011 Dec. 31, 2012 Jun. 30, 2013 Investment securities $ 1,708 $ 1,582 $ 1,345 Loans 4,317 4,450 4,511 Allowance for loan losses (68) (56) (55) Assets held for sale 382 - - Other assets 633 667 839 Tot
Slide 28: PRK comparison to peers
28 PRK comparison to peers * Calculated for the twelve months ended June 30, 2013. ** Annualized based on dividends and stock price through June 30, 2013. Source: Company Filings and SNL data of $3 to $10 billion bank holding companies PRK Price to Book % Peer Group Price to Book % PRK Price to tang
Slide 29: PRK short interest position
PRK short interest position 29 Date Short Interest Position PRK Closing Price Average Annual Daily Volume Days to Cover Short Position 07/15/2013 1,053,645 $ 75.70 24,426** 43.1 06/30/2013 1,128,248 $ 68.79 23,004* 49.0 12/31/2012 1,212,786 $ 64.63 32,095 37.8 12/30/2011 1,654,098 $ 65.06 50,130 33.
Slide 30: PRK short interest comparison to peers
PRK short interest comparison to peers 30 Entity Shares Outstanding Short Interest Position Average Daily Volume in 2013 Days to Cover Short Interest as a % of Total Shares Outstanding PRK 15,411,977 1,053,645 24,426 43.1 6.84% Midwest Peer Median 54,787,135 1,877,278 218,350 10.6 3.87% Midwest Peer
Slide 31: A Successful History of Disciplined Strategic Growth in Ohio
A Successful History of Disciplined Strategic Growth in Ohio (11 acquisitions; 2 De Novos) 31 1908 1908 The Park National Bank is established 1985 1985 Acquisition of Fairfield National Bank 1987 1987 Park National Corporation holding company is established Acquisition of Richland Trust Comp
Slide 32: Growth Opportunities
Growth Opportunities PRK successfully completed 11 Ohio- based financial institution mergers from 1985 through 2006. Each bank operates within PRK in an autonomous fashion; each bank retains its local community bank identity, leadership team, and advisory board of directors. Future Merger Object
Slide 33: KBW 2013 Community Bank Investor Conference
33 July 30, 2013 Keefe, Bruyette & Woods 2013 Community Bank Investor Conference
Park National — Keefe, Bruyette & Woods 2013 Community Bank Investor Conference on 6ix