Park National Corporation · AMEX:PRK
Park National — KBW Investor Conference (August 2023)
35 slides from Park National's conference presentation, Aug 7, 2023
Slide 1: Park National Corporation KBW Investor Conference
Park National Corporation KBW Investor Conference P A R K N A T I O N A L C O R P O R A T I O N
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance
Slide 3: Disclaimer: Non-GAAP Financial Measures
Disclaimer Non-GAAP Financial Measures This presentation contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (“GAAP”). Management believes that the disclosure of these “non-GAAP” financial measures p
Slide 4: Overview of Park National Corporation
P A R K N A T I O N A L C O R P O R A T I O N Overview of Park National Corporation
Slide 5: Overview of Park National Corporation
Overview of Park National Corporation P A R K N A T I O N A L C O R P O R A T I O N 5 • Park’s bank subsidiary, The Park National Bank, is headquartered in Newark, Ohio and was founded in 1908. • $9.9 billion of total assets and $7.8 billion of assets under management(1) as of June 30, 2023. • Park
Slide 6: Attractive Geographic Footprint
Attractive Geographic Footprint P A R K N A T I O N A L C O R P O R A T I O N 6 Ohio North Carolina South CarolinaKentucky Region Deposits Trust AUM(1) Full-Time(2) Employees Counties Served Offices Western Ohio $1.71B $1.16B 173 6 24 Northern Ohio $2.03B $1.24B 217 8 24 Metro $911M $1.09B 165 6 10
Slide 7: Senior Management
Senior Management P A R K N A T I O N A L C O R P O R A T I O N 7 David L. Trautman – Chairman of the Board and CEO – Age: 62 (40 years with Park) • Chairman of the Board since May 2019 and CEO since January 2014 of Park and Park National Bank. • President of Park and Park National Bank from January
Slide 8: Senior Management (continued)
Senior Management (continued) P A R K N A T I O N A L C O R P O R A T I O N 8 Brady T. Burt – Chief Financial Officer – Age: 51 (16 years with Park) • Chief Financial Officer of Park and Park National Bank since December 2012. • Chief Accounting Officer of Park and Park National Bank from April 2007
Slide 9: Experienced Management Team
Experienced Management Team • Park National Bank’s management team consists of leaders with deep local market knowledge. • Senior leadership team averages 25 years of banking experience. • Average senior leadership tenure with Park National Bank is approximately 18 years. P A R K N A T I O N A L C O
Slide 10: Regional bank model and branch optimization
• Strong history of operating in Park’s regional bank model. • Moved to a singular brand, Park National Bank, in 2019 while maintaining local market leadership and advisory boards. • To better align its branch network with banking trends, Park National Bank consolidated 23 branch offices (approximat
Slide 11: Park M&A Strategy
Park M&A Strategy Two-prong strategy guidelines: 1. Traditional M&A • Strong franchise, good reputation and asset quality • Competitive market share • Continuity of management and leadership • Traditional community bank structure • Sticky, low-cost core deposits • Disciplined approach to pricing and
Slide 12: Financial Summary
P A R K N A T I O N A L C O R P O R A T I O N Financial Summary
Slide 13: 2023 Second Quarter Highlights
2023 Second Quarter Highlights P A R K N A T I O N A L C O R P O R A T I O N 13 • Park’s Consolidated Capital Ratios as of June 30, 2023: – Tangible Common Equity to Tangible Assets of 9.49%(1) – Leverage Ratio of 10.46% – Total Risk-Based Capital Ratio of 16.18% • Tangible common book value per sha
Slide 14: Steady Balance Sheet Growth
Steady Balance Sheet Growth P A R K N A T I O N A L C O R P O R A T I O N 14 Total Assets Total Loans (excluding PPP) (1) Total Deposits (2) Total Shareholders’ Equity (Dollars in millions) (Dollars in millions) (Dollars in millions) (Dollars in millions) $8,558 $9,279 $9,560 $9,855 $9,900 2019Y 202
Slide 15: Strong Earnings
Efficiency Ratio & NIE / Average Assets(1) Strong Earnings P A R K N A T I O N A L C O R P O R A T I O N 15 (Dollars in millions) Net Income, ROAA & ROATE(1) Fee Income / Op. Revenue Pre-Tax, Pre-Provision Net Income / Avg. Assets(1) (1) See Reconciliation of Non-GAAP Financial Measures shown on pag
Slide 16: Stable Net Interest Margin
Stable Net Interest Margin P A R K N A T I O N A L C O R P O R A T I O N 16 Overview • Net interest margin has held steady due to stable asset yields and strong core deposits. Pre-Provision Net Interest Income and Net Interest Margin(1) Asset Yields, Liability Costs, and Net Interest Margin(1) (Doll
Slide 17: Diverse Fee Income
Diverse Fee Income P A R K N A T I O N A L C O R P O R A T I O N 17 Overview • Robust levels of fee income provide a hedge against a challenging interest rate environment. • The business lines responsible for generating the majority of fee income are trust and wealth management, mortgage banking, an
Slide 18: Disciplined Approach to Managing Operating Expenses
Disciplined Approach to Managing Operating Expenses P A R K N A T I O N A L C O R P O R A T I O N 18 Efficiency Ratio & Non-interest Expense Non-interest Expense Composition (YTD) Note: Financial data as of June 30, 2023 unless otherwise noted (Dollars in millions) Salaries & Benefits 59% Occupancy
Slide 19: High Quality Capital Structure
High Quality Capital Structure 99% of Park’s Tier 1 Capital is Common Equity P A R K N A T I O N A L C O R P O R A T I O N 19 Common Equity Tier 1 Trust Preferred Receives full Tier 1 Capital treatment Subordinated Notes and Allowance for Credit Losses Tier 1 Capital $1,034 million Tier 2 Capital $2
Slide 20: Robust Capital Ratios
Robust Capital Ratios P A R K N A T I O N A L C O R P O R A T I O N 20(1) Adequately capitalized thresholds plus capital conservation buffer of 2.5% Note: Financial data as of June 30, 2023 unless otherwise noted; capital ratios were modestly impacted by two bank acquisitions which closed in the 201
Slide 21: High-Quality and Diversified Loan Portfolio
High-Quality and Diversified Loan Portfolio P A R K N A T I O N A L C O R P O R A T I O N 21 • Park has a well-secured loan portfolio with geographic and asset class diversity. • Out-of-market portfolio is limited to specialty lending, which has conservative underwriting and is subject to intensive
Slide 22: Indirect Lending Portfolio
Indirect Lending Portfolio P A R K N A T I O N A L C O R P O R A T I O N 22 Note: Financial data as of June 30, 2023 • Park National Bank’s loan portfolio includes $1.9B in indirect loans. • Balances have steadily increased since first exceeding $1B in 2017. 52.64% 26.02% 14.70% 5.16% 0.86% 0.61% In
Slide 23: Indirect Lending Portfolio (continued)
Indirect Lending Portfolio (continued) P A R K N A T I O N A L C O R P O R A T I O N 23 Note: Financial data as of June 30, 2023. Pre-2019 2019 2020 2021 2022 2023 Total All Other 7,416,755 1,379,326 3,557,275 5,172,221 6,212,423 5,462,074 29,200,074 Watercraft 12,389,001 6,969,987 18,102,497 17,705
Slide 24: Specialty Lending
Specialty Lending • Park has successfully operated in the specialty finance area, specifically focusing on turbo-prop and light jets and structured finance lending to non-bank consumer finance companies for many years. Net charge-offs in specialty lending have not materially impacted Park’s overall
Slide 25: Loan Approval Process & Loan Review
Loan Approval Process & Loan Review P A R K N A T I O N A L C O R P O R A T I O N 25 Loan Approval Process • While Park has a legal lending limit of approximately $145 million, its internal hold limit is $46 million. • Park’s highest individual lending authority is $4 million. • Loans which are grea
Slide 26: Healthy Allowance Levels Safeguard Shareholders' Equity
Healthy Allowance Levels Safeguard Shareholders’ Equity P A R K N A T I O N A L C O R P O R A T I O N 26 Allowance / LoansOverview • Allowance for credit losses was 1.21% of total loans as of June 30, 2023. • Strong reserve levels reflect expectation of deteriorating economic conditions and credit s
Slide 27: Stable Asset Quality
Stable Asset Quality P A R K N A T I O N A L C O R P O R A T I O N 27 Net Charge-Offs / Average Loans Classified Loans(2) / Tier 1 Capital + ACL Overview • Conservative underwriting and strong asset quality. • Of the $57.3 million in nonaccrual loans, $36.6 million, or about 64%, were current with r
Slide 28: Stable, Low Cost Core Deposits
Stable, Low Cost Core Deposits P A R K N A T I O N A L C O R P O R A T I O N 28 • With minimal reliance on costly time deposits and a relatively high level of non-interest bearing deposits, Park has cultivated a loyal and low-cost source of funds. • Non-interest bearing deposits represented 33% of t
Slide 29: High Quality Securities Portfolio
High Quality Securities Portfolio P A R K N A T I O N A L C O R P O R A T I O N 29 • Park’s investment securities portfolio is highly rated(1): • 75% are AAA rated • 24% are AA rated • 100% are rated investment grade • 31% of the portfolio is floating rate • All mortgage-backed securities and collat
Slide 30: Historical Borrowing Position
Historical Borrowing Position 30 0% 3% 6% 9% 12% 15% 18% 21% 24% $- $200,000,000 $400,000,000 $600,000,000 $800,000,000 $1,000,000,000 $1,200,000,000 $1,400,000,000 $1,600,000,000 12 /3 1/ 20 07 12 /3 1/ 20 08 12 /3 1/ 20 09 12 /3 1/ 20 10 12 /3 1/ 20 11 12 /3 1/ 20 12 12 /3 1/ 20 13 12 /3 1/ 20 14
Slide 31: Uninsured Deposits Trend
P A R K N A T I O N A L B A N K 31 Uninsured Deposits Trend 77.0% 77.1% 77.7% 77.2% 78.8% 81.4% 83.0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Insured Collateralized Exposed
Slide 32: Appendix
P A R K N A T I O N A L C O R P O R A T I O N Appendix
Slide 33: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures P A R K N A T I O N A L C O R P O R A T I O N 33 Reconciliation of Average Shareholders' Equity to Average Tangible Equity For the Twelve Months Ended For the Three Months Ended 12/31/2019 12/31/2020 12/31/2021 12/31/2022 6/30/2022 9/30/2022 12/31/2022 3
Slide 34: Reconciliation of Non-GAAP Financial Measures (continued)
Reconciliation of Non-GAAP Financial Measures (continued) P A R K N A T I O N A L C O R P O R A T I O N 34 Reconciliation of Fully Taxable Equivalent Net Interest Income to Net Interest Income For the Twelve Months Ended For the Three Months Ended 12/31/2019 12/31/2020 12/31/2021 12/31/2022 6/30/202
Slide 35: Park National Corporation KBW Investor Conference
Park National Corporation KBW Investor Conference P A R K N A T I O N A L C O R P O R A T I O N
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