Park National Corporation · AMEX:PRK
Park National — Sandler O'Neill & Partners East Coast Financial Services Conference 2009
45 slides from Park National's conference presentation, Nov 10, 2009
Slide 1: Sandler O'Neill & Partners East Coast Financial Services Conference
November 11-13, 2009 Sandler O'Neill & Partners East Coast Financial Services Conference
Slide 2: Forward-looking Statements
Forward-looking Statements 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 perfor
Slide 3: Table of Contents
Table of Contents PRK Overview Leadership Team Selected Financial Data Peer Group Comparison Why invest in Park National Corporation? Appendix: Profiles of PRK Affiliate Banks
Slide 4: Park National Corporation overview
Park National Corporation (Park) is a $7.0 billion bank holding company headquartered in Newark, Ohio. Park has two bank subsidiaries and 153 full-service offices: The Park National Bank (11 bank divisions in Ohio) Vision Bank, which has bank divisions in Florida and Alabama. Established in 1908, Th
Slide 5: Our Mission
Maximize long-term return to our shareholders by: Acting at all times with integrity and concern for the well-being of our customers, our community and our associates; Providing financial products and services of such high value that our customers view us as unique; Operating our banks so as to assu
Slide 6: Company Overview and Franchise Map
Company Overview Franchise Map Headquarters: Newark, OH Assets: $7.0 billion Loans: $4.6 billion Deposits: $5.1 billion TC Equity: $508 million TARP: $100 million Market Cap: $856 million * * As of November 3, 2009 153 branches between two bank subsidiaries across 4 states Park National Bank 11 bank
Slide 7: A Successful History of Disciplined Strategic Growth
1908 1908 The Park National Bank is established A Successful History of Disciplined Strategic Growth (14 acquisitions; 2 De Novos) 1985 1985 Acquisition of Fairfield National Bank 1987 1987 Park National Corporation holding company is established Acquisition of Richland Trust Company 1990 1990 Acqui
Slide 8: Park Executive Management
Park Executive Management C. Daniel DeLawder - Chairman and Chief Executive Officer - Age: 60 - Chairman, Chief Executive Officer 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 The Par
Slide 9: Park Executive Management (continued)
Park Executive Management (continued) John W. Kozak - Chief Financial Officer - Age: 54 - Chief Financial Officer of Park since April 1998 (became an executive officer of Park on July 22, 2002); Senior Vice President since January 1999, Chief Financial Officer since April 1998, a Member of the Board
Slide 10: Experienced Management Team
Experienced Management Team Name Position Age Years with PRK Years In Industry C. Daniel DeLawder Chairman & CEO 60 38 38 David L. Trautman President 48 26 26 John W. Kozak Chief Financial Officer 54 29 29 Senior leadership consists of 16 executives with proven local market experience Management tea
Slide 11: Management Team - continued
Management Team - continued Name Position Age Years with PRK Years In Industry Brady T. Burt VP - Chief Accounting Officer 37 3 8 Thomas J. Button SVP - Chief Credit Officer 49 12 23 Thomas M. Cummiskey SVP - Trust 40 10 12 Lynn B. Fawcett SVP - Operations 50 19 19 William C. Fralick President - Sec
Slide 12: Results Count - ROA and ROE History
Results Count - ROA and ROE History - PRK, excluding Vision Park ROA Peer median ROA Park ROE * Peer median ROE YTD Q3 2009 annualized 1.74% -0.22% ** 22.92% -2.65% ** YTD Q2 2009 annualized 1.76% -0.22% 23.16% -3.89% Q1 2009 annualized 1.68% 0.07% 22.63% -0.56% 2008 1.64% -0.04% 21.60% -1.80% 2007
Slide 13: Park National Corporation, excluding Vision - Income Statement
Park National Corporation, excluding Vision - Income Statement (in thousands) Nine months ended Sept. 30, 2009 Dec. 31, 2008 Dec. 31, 2007 Dec. 31, 2006 Net interest income $ 185,382 $ 228,808 $ 210,921 $ 213,244 Provision for loan losses 14,671 23,524 10,051 3,927 Net Interest Income after Provisio
Slide 14: Vision Bank - Income Statement
Vision Bank - Income Statement (in thousands) Nine months ended Sept. 30, 2009 Dec. 31, 2008 Dec. 31, 2007 Dec. 31, 2006 Net interest income $ 19,307 $ 27,065 $ 23,754 N/A Provision for loan losses 28,430 46,963 19,425 N/A Net Interest Income after Provision (9,123) (19,898) 4,329 N/A Non Interest I
Slide 15: Park National Corporation - Income Statement
Park National Corporation - Income Statement (in thousands) Nine months ended Sept. 30, 2009 Dec. 31, 2008 Dec. 31, 2007 Dec. 31, 2006 Net interest income $ 204,689 $ 255,873 $ 234,677 $ 213,244 Provision for loan losses 43,101 70,487 29,476 3,927 Net Interest Income after Provision 161,588 185,386
Slide 16: Asset and Loan Portfolio Comparison
Total assets Dec. 31, 2007 Dec. 31, 2008 Sept. 30, 2009 PRK, excluding Vision 3585037 3800865 3933366 Vision 639097 690472 681735 Asset and Loan Portfolio Comparison Source: SNL Financial; Company Filings Dec. 31, 2007 Dec. 31, 2008 Sept. 30, 2009 PRK, excluding Vision 5645308 6153679 6096609 Vision
Slide 17: Park National Corporation - Balance Sheet
Park National Corporation - Balance Sheet (in millions) Sept. 30, 2009 Dec. 31, 2008 Dec. 31, 2007 Total Investment Securities $ 1,874.0 $ 2,059.1 $ 1,703.1 Total Loans 4,615.1 4,491.3 4,224.1 Total Assets 6,970.7 7,070.7 6,501.1 Total Deposits 5,115.0 4,761.8 4,439.2 Total Liabilities 6,283.4 6,428
Slide 18: Funding Composition
Funding Composition Funding Mix (as of 9/30/09) Demand Deposits Transaction Accounts Savings Time Deposits Other East 817897 1191220 827310 2272143 6406 Deposits Senior Debt Other East 5114976 1026757 141618 PRK Peers Cost of Funds 1.66 1.97 Cost of Deposits % (as of 6/30/09) Deposit Composition (as
Slide 19: Park National Bank - The bank of choice
Park National Bank - The bank of choice Bank Division Name Year joined Park Our bank Total county Park % of market share Rank in market Park National 1908 $ 1,199,404 $ 2,124,888 56.4% 1 Fairfield National 1985 336,748 1,673,954 20.1% 1 Richland Bank 1987 444,249 1,630,709 27.2% 1 Century National 1
Slide 20: Earning Assets Composition
C & I Commercial real estate Residential real estate Real estate construction Consumer East 719369 1141209 1532859 506777 714887 Securities Loans Other East 1833427 4610706 31661 Earning Assets Composition Earning Assets by Type Loans by Type Source: SNL Financial; Company Filings Commercial lending
Slide 21: Loan growth
2000 2001 2002 2003 2004 2005 2006 2007 2008 9/30/2009 Loan growth 184007 -156082 -94956 45215 171784 53600 99316 126005 351277 155473 Increase / (decrease) in loans (in thousands) Source: Company Filings through September 30, 2009. As reported on the statement of cash flows. Six year loan growth =
Slide 22: Investment Portfolio
Investment Portfolio Agency Municipals Agency MBS Equity Securities Percentage 342535 26047 1452733 1559 Investment Portfolio Composition Conservative Portfolio Net unrealized gain position of $80.7 million as of September 30, 2009 No Private Label MBS No Single-Issuer or Pooled Trust Preferreds As
Slide 23: Park excluding Vision - Non-performing assets
Park National Corporation, excluding Vision - Non-performing assets (in thousands) Sept. 30, 2009 Dec. 31, 2008 Dec. 31, 2007 Non-accrual loans $ 82,586 * $ 68,305 * $ 38,113 Renegotiated loans - - 2,804 Loans past due 90 days or more 4,534 4,777 4,088 Total nonperforming loans 87,120 73,082 45,005
Slide 24: Vision Bank - Non-performing assets
Vision Bank - Non-performing assets (in thousands) Sept. 30, 2009 Dec. 31, 2008 Dec. 31, 2007 Non-accrual loans $ 124,478 $ 91,207 $ 63,015 Renegotiated loans 148 2,845 - Loans past due 90 days or more 315 644 457 Total nonperforming loans 124,941 94,695 63,472 Other real estate owned 40,628 19,699
Slide 25: Park National Corporation - Non-performing assets
Park National Corporation - Non-performing assets (in thousands) Sept. 30, 2009 Dec. 31, 2008 Dec. 31, 2007 Non-accrual loans $ 207,064 $ 159,512 $ 101,128 Renegotiated loans 148 2,845 2,804 Loans past due 90 days or more 4,849 5,421 4,545 Total nonperforming loans 212,061 167,778 108,477 Other real
Slide 26: Park excluding Vision - Loan information by category
C & I CRE Residential RE RE construction Consumer East 15133 16682 27833 24401 1167 Park National Corporation, excluding Vision - Loan information by category Loan Portfolio by Type Non-performing loans by Type Source: Company Filings (amounts in thousands, unless otherwise noted) Non-performing - i
Slide 27: Vision Bank - Loan information by category
C & I CRE Residential RE RE construction Consumer East 2288 12491 28945 80868 201 Vision Bank - Loan information by category Loan Portfolio by Type Non-performing loans by Type Source: Company Filings (amounts in thousands, unless otherwise noted) Non-performing - includes nonaccrual loans and loans
Slide 28: Park National Corporation - Loan information by category
C & I CRE Residential RE RE construction Consumer East 17309 29173 56778 105269 3384 Park National Corporation - Loan information by category Loan Portfolio by Type Non-performing loans by Type Source: Company Filings (amounts in thousands, unless otherwise noted) Non-performing - includes nonaccrua
Slide 29: Credit Quality Snapshot
Total nonperforming assets Dec. 31, 2007 Dec. 31, 2008 9/30/2009 PRK, excluding Vision * 51374 79231 93507 Vision 70546 114394 165569 Credit Quality Snapshot Source: SNL Financial; Company Filings * Includes Park National Bank loan participations with Vision Bank of $8.0 million and $9.1 million at
Slide 30: Park National Corporation - ALLL Summary
Park National Corporation - ALLL Summary (in thousands) Sept. 30, 2009 Dec. 31, 2008 Dec. 31, 2007 Average loans YTD $ 4,582,037 $ 4,354,520 $ 4,011,307 ALLL - beginning balance 100,088 87,102 70,500 Charge-offs 38,278 62,916 27,776 Recoveries 5,129 5,415 5,568 Provision for loan losses 43,101 70,48
Slide 31: Credit Quality Snapshot - Net charge-offs
NCOs % of Average Loans 2002 2003 2004 2005 2006 2007 2008 Sept. 30, 2009 annualized PRK, excluding Vision 0.0048 0.0043 0.0028 0.0018 0.0012 0.0039 0.0052 0.0048 Vision 0.0052 0.0569 0.0368 Source: SNL Financial; Company Filings Credit Quality Snapshot
Slide 32: Park Earnings History
Park Earnings History * Adjusted for goodwill impairment charge of $55 million in 2008 and $54 million in 2007. Including the goodwill impairment charges, Park's diluted EPS for 2008 and 2007 was $0.97 and $1.60, respectively. ** Annualized earnings through September 30, 2009 have been utilized in t
Slide 33: Park Earnings History and Price to Tangible Book
Price to Tangible Book % 2000 2001 2002 2003 2004 2005 2006 2007 2008 Sept. 30, 2009 Park National Corporation 4.58 5.31 5.86 5.97 6.32 6.64 6.74 5.4 4.91 4.1 Park Earnings History Source: SNL Financial; Company Filings 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 (annualized) Park National Cor
Slide 34: Capital Ratios
Capital Ratios Capital Ratios @ September 30, 2009 Capital Ratios @ September 30, 2009 Capital Ratios @ September 30, 2009 ($ in thousands) Leverage Ratio Tier I Risk Based Capital Risk Based Capital Park National Corporation 8.66% 11.90% 13.66% Park National Bank 6.28% 8.83% 10.94% Vision Bank 11.4
Slide 35: Tangible Common Equity
Tangible Common Equity TCE Ratio Shares outstanding Q3 2009 7.38% * 14,259,971 * 2008 6.61% 13,971,727 2007 6.85% 13,964,576 2006 9.13% 13,921,529 2005 9.12% 14,092,626 2004 9.71% 14,320,227 2003 10.56% 14,455,027 2002 11.13% 14,481,564 2001 9.83% 14,637,841 2000 10.09% 14,830,953 Source: SNL Financ
Slide 36: Customer Proposition Leads to Core Profitability
Customer Proposition Leads to Core Profitability Yield on Earning Assets % PRK Peers 5.69 5.31 + 38 bps Cost of Funds % PRK Peers 1.78 2.16 - - 38 bps Net Interest Margin % PRK Peers 4.21 3.45 + 76 bps Core ROAA % PRK Peers 1.22 (0.22) + 144 bps Efficiency Ratio % PRK Peers 54.53 72.62 - - 1,809 bps
Slide 37: Why invest in Park National Corporation?
V. Why invest in Park National Corporation? Unique, localized business model makes us the bank of choice for customers Stable, low cost deposit funding, coupled with superior lending rates, contributes to outstanding profitability Favorably positioned to take advantage of excellent growth opportunit
Slide 38: Appendix: Profiles of PRK Affiliate Banks
Appendix: Profiles of PRK Affiliate Banks
Slide 39: Ohio Bank Divisions
Ohio Bank Divisions Bank Divisions 2008 Average Assets (in millions) Park National Bank $ 1,839.0 Century National Bank 711.2 Security National Bank 670.0 First-Knox National Bank 658.2 Richland Bank 527.0 Second National Bank 423.1 PNB of Southwest Ohio & N. KY 416.4 Fairfield National Bank 337.4 U
Slide 40: Park National Bank, Century National Bank and Security National Bank presidents
President: David L. Trautman Age: 48 Years with Park National Bank: 26 Park National Bank first opened for business in 1908 Largest of Park's banking operations Total assets at June 30, 2009: $6,109 million (including all divisions of The Park National Bank) President: Thomas M. Lyall Age: 63 Mr. Ly
Slide 41: Richland, Fairfield and other bank presidents
President: David J. Gooch Age: 40 Mr. Gooch graduated from Miami University in 1991 with a Bachelor of Science in Business Administration with a major in finance and he graduated in 2004 from the Wisconsin Graduate School of Banking. Years with Richland Bank: 5 (12 total years with Park) Richland Ba
Slide 42: United Bank and Unity National Bank presidents
President: Donald R. Stone Age: 51 He has been President of United Bank since January 2001. He received his undergraduate degree from Ohio State with a Bachelors of Science in Business and a MBA from University of Toledo in 1984 and is a graduate of the Graduate School of Banking 1991, Central State
Slide 43: Scope Aircraft Finance president
President: Bob Kent Age: 52 He has spent 6 years at PRK focusing on Aircraft Lending, Finance Company Lending, Corporate Loan Committee, Vision Bank Alabama Credit Liaison. Years with Park/Scope: 6 Scope Aircraft Finance first opened for business in 1975
Slide 44: Florida Bank - Vision Bank
Florida Bank Vision Bank ("Vision Bank"), a Florida state-chartered bank with its main office in Panama City, Florida and financial service offices in Baldwin County, Alabama and in Bay, Gulf, Leon, Okaloosa, Santa Rosa and Walton Counties in the panhandle of Florida. Bank Affiliate 2008 Average Ass
Slide 45: Vision Bank president
President: Joey W. Ginn Age: 50 Mr. Ginn received a B.S. in Finance and M.B.A, with concentration in Accounting, both from the University of South Alabama. He is also a graduate of the Graduate School of Banking of the South at LSU Mr. Ginn has 25 years of banking experience Years with Vision Bank:
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