Park National Corporation · AMEX:PRK
Park National — Sandler O'Neill East Coast Financial Services Conference 2012
36 slides from Park National's conference presentation, Nov 14, 2012
Slide 1: Sandler O'Neill East Coast Financial Services Conference
1 November 15, 2012 Sandler O’Neill East Coast Financial Services 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 financ
Slide 3: Park National Corporation (PRK) Profile
3 Park National Corporation (PRK) Profile (as of September 30, 2012) • 11 Community Banks • 2 Specialty Finance Companies • One non-bank workout subsidiary • 29 Ohio & 1 Kentucky counties • 124 bank branches • 7 specialty finance offices • 1,820 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) John W. Kozak – Chief Financial Officer – Age: 57 Chief Financial Officer of Park (1998); Senior Vice President since January 1999, a Member of the Board of Directors since December 2006, and Vice President from 1991 to 1998, of The Park National Bank; Chief F
Slide 6: Experienced Leadership Team
6 Experienced Leadership Team Name Position Age Years with PRK Years In Industry C. Daniel DeLawder Chairman & CEO 63 41 41 David L. Trautman President 51 29 29 John W. Kozak Chief Financial Officer 57 32 32 Senior leadership consists of executives with proven local market experience Leadership
Slide 7: Leadership Team – continued
7 Leadership Team – continued Name Position Age Years with PRK Years In Industry Brady T. Burt VP – Chief Accounting Officer 40 5 11 Thomas J. Button SVP – Chief Credit Officer 52 15 26 Thomas M. Cummiskey SVP – Trust 43 13 15 Lynn B. Fawcett SVP – Operations 53 22 22 Robert N. Kent, Jr. President –
Slide 8: Affiliate Leadership
8 Affiliate Leadership Name Position Age Years with PRK/Affiliate Years In Industry John A. Brown President – Richland Bank 43 21 21 Brett A. Baumeister President – Unity National Bank 46 8 22 William C. Fralick President – Security National Bank 58 36 36 David J. Gooch President – Park National Ban
Slide 9: Highlights of 2012
9 Highlights of 2012 • In February, sold Vision Bank for a pre-tax gain of $22.2 million. • In April, paid off TARP and redeemed warrants to U.S. Treasury. Capital remains strong with Leverage, Tier I, and Total Capital of 9.03%, 13.13%, and 16.32%, respectively, at September 30, 2012. • In April, i
Slide 10: Vision Bancshares, Inc. Acquisition
Vision Bancshares, Inc. Acquisition On March 9, 2007, Park acquired all the stock and outstanding stock options of Vision Bancshares, Inc. for $87.8 million in cash and 792,937 shares of Park common stock valued at $83.3 million or $105.00 per share. Following our acquisition, cumulative net los
Slide 11: Reduction in Vision Bank Legacy Nonperforming Assets (NPA's)
Reduction in Vision Bank Legacy Nonperforming Assets (NPA’s) 11 At December 31, 2010, the NPA’s at Vision Bank were $205.1 million. At December 31, 2011, the NPA’s at Vision and SEPH (Park’s non-bank workout subsidiary) were $130.4 million. Post-sale, nonperforming assets were $117.8 million i
Slide 12: Vision and SEPH NPA Trend
Vision and SEPH NPA Trend 12 Source: Company Filings 12/31/10 12/31/11 02/16/12 09/30/12 Vision/SEPH NPA's 205.1 130.4 117.8 80.7 50 75 100 125 150 175 200 225 In m ill io n s ($ )
Slide 13: A Successful History of Disciplined Strategic Growth in Ohio
A Successful History of Disciplined Strategic Growth in Ohio (11 acquisitions; 2 De Novos) 13 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 14: ROA and ROE History – PRK and PRK, excluding Vision & SEPH
14 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 15: The Park National Bank – The bank of choice
15 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 16: Quarterly Net Income by Operating Segment
Quarterly Net Income by Operating Segment 16 (In thousands) Q1 2012 Q2 2012 Q3 2012 Projected Q4 2012 Projection 2012 Park National Bank $21,561 $23,483 $22,068 $21,661 $88,773 Guardian 806 909 971 993 3,679 PRK Parent Company 49 134 274 (191) 266 Ongoing operations $22,416 $24,526 $23,313 $22,463 $
Slide 17: Net income by operating segment
17 Net income by operating segment * Park National Bank had gains from the sale of investment securities of $11.9 million and $23.6 million in the years ended December 31, 2010 and 2011, respectively. Absent these gains from the sale of investment securities, net income was $95.2 million in 2010 and
Slide 18: The Park National Bank Income Statement
18 Source: Company Filings The Park National Bank Income Statement (in thousands) Dec. 31, 2010 Dec. 31, 2011 3Q 2012 YTD 2012 Projection Net interest income $ 237,281 $ 236,282 $ 167,234 $ 221,450 Provision for loan losses 23,474 30,220 12,553 16,379 Net interest income after provision $ 213,807 $
Slide 19: Park National Bank Statement of Condition
Park National Bank Statement of Condition 19 Source: Company Filings (in millions) Dec. 31, 2010 Dec. 31, 2011 Sep. 30, 2012 Annualized % Change From 2011 Investment securities $ 1,927 $ 1,604 $ 1,651 3.91% Loans 4,075 4,172 4,311 4.45% Allowance for loan losses (73) (55) (53) (4.86%) Other assets 5
Slide 20: Park National Bank Loans by Type
20 Park National Bank Loans by Type Source: Company Filings as of September 30, 2012 • Commercial lending focus 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
Slide 21: SEPH / Vision Bank Income Statement
21 Source: Company Filings SEPH / Vision Bank Income Statement (in thousands) Dec. 31, 2010 Dec. 31, 2011 Q3 2012 YTD 2012 Projection Net interest income $ 27,867 $ 26,104 $ 597 $ (507) Provision for loan losses 61,407 31,052 17,044 18,294 Net interest income after provision $ (33,540) $ (4,948) $ (
Slide 22: Park National Corporation Nonperforming Loans by Type
22 Park National Corporation Nonperforming Loans by Type At September 30, 2012 Source: Company Filings as of September 30, 2012 PNB Guardian SEPH PRK Amount Percentage Amount Percentage Amount Percentage Amount Percentage Commercial Real Estate Owner Occupied $ 18,818 14.16% $ - 0.00% $ 7,312 12.43%
Slide 23: Park National Corporation Nonperforming assets
23 Park National Corporation Nonperforming assets Source: BHC Performance Report and Company Filings (in thousands) Dec. 31, 2010 Dec. 31, 2011 Sep. 30, 2012 Non-accrual loans $289,268 $195,106 $160,064 Renegotiated loans - 28,607 31,368 Loans past due 90 days or more (still accruing) 3,590 3,489 2,
Slide 24: Vision Bank/SE Properties Holdings Nonperforming Assets
24 Vision Bank/SE Properties Holdings Nonperforming Assets Source: BHC Performance Report and Company Filings (in thousands) Dec. 31, 2010 Dec. 31, 2011 Sep. 30, 2012 Non-accrual loans $171,453 $98,993 $58,838 Renegotiated loans - 2,265 - Loans past due 90 days or more (still accruing) 364 122 - Tot
Slide 25: PRK Impaired Loan Summary
PRK Impaired Loan Summary 25 Source: Company Filings Park National Corporation Impaired Commercial Loans at September 30, 2012 (In thousands) Unpaid principal balance Prior charge- offs Total impaired loans Specific reserve Carrying balance Carrying balance as a % of UPB PNB $ 130,392 $ 37,764 $ 92,
Slide 26: Park National Bank and Guardian Nonperforming Assets
26 Source: BHC Performance Report and Company Filings (in thousands) Dec. 31, 2009 Dec. 31, 2010 Dec. 31, 2011 Sep. 30, 2012 Non-accrual loans $85,197 $117,815 $96,113 $101,226 Renegotiated loans 142 - 26,342 31,368 Loans past due 90 days or more (still accruing) 3,496 3,226 3,367 2,076 Total nonper
Slide 27: Park National Bank Commercial Loan Watch List Trends
Park National Bank Commercial Loan Watch List Trends 27 Commercial loans 1 (In thousands) December 31, 2010 December 31, 2011 September 30, 2012 Pass rated $ 2,046,016 $ 2,131,007 $ 2,176,573 Special Mention 85,287 66,254 49,908 Substandard 78,529 29,604 20,380 Impaired 2 90,694 95,109 92,628 Commer
Slide 28: Park National Corporation – Income Statement
28 Park National Corporation – Income Statement Source: Company Filings (in thousands) Dec. 31, 2010 Dec. 31, 2011 Q3 2012 YTD 2012 Projection Net interest income $ 274,044 $ 273,234 $ 178,424 $ 235,154 Provision for loan losses 87,080 63,272 30,231 35,458 Net interest income after provision $ 186,9
Slide 29: Park National Corporation Statement of Condition
PARK NATIONAL CORPORATION Statement of Condition 29 Source: Company Filings (in millions) Dec. 31, 2010 Dec. 31, 2011 Sep. 30, 2012 Investment securities $ 2,040 $ 1,708 $ 1,653 Loans 4,733 4,317 4,401 Allowance for loan losses (144) (68) (56) Assets held for sale - 382 - Other assets 653 633 755 To
Slide 30: Park National Corporation – Tax Equivalent Yield
30 Park National Corporation – Tax Equivalent Yield Source: Company Filings as of September 30, 2012 Tax equivalent yield Dec. 31, 2009 Dec. 31, 2010 Dec. 31, 2011 Sep. 30, 2012 YTD 2012 Projection Loans 6.03% 5.80% 5.60% 5.40% Taxable investments 4.90% 4.44% 3.74% 3.22% Tax exempt investments 7.45%
Slide 31: PRK comparison to peers
31 PRK comparison to peers * Calculated for the twelve months ended September 30, 2012. ** Annualized based on dividends and stock price through September 30, 2012. Source: Company Filings and Sandler O’Neill, using SNL data of $3 to $10 billion bank holding companies PRK Price to Book % Peer Group
Slide 32: PRK short interest position
PRK short interest position 32 Date Short Interest Position PRK Closing Price Average Annual Daily Volume Days to Cover Short Position 09/30/2012 1,314,366 $ 70.02 31,429 * 41.8 12/30/2011 1,654,098 $ 65.06 50,130 33.0 12/31/2010 922,074 $ 72.67 38,840 23.7 12/31/2009 1,127,086 $ 58.88 51,959 21.7 1
Slide 33: PRK short interest comparison to peers
PRK short interest comparison to peers 33 Entity Shares Outstanding Short Interest Position Average Daily Volume in 2012 Days to Cover Short Interest as a % of Total Shares Outstanding PRK 15,400,000 1,314,366 31,429 41.8 8.53% Midwest Peer Median 58,500,000 2,948,651 250,673 11.8 5.04% Midwest Peer
Slide 34: Growth Opportunities
Growth Opportunities The state of Ohio has 40 publicly traded banks and bank holding companies with assets under $1 billion. The state of Indiana has 19 publicly traded banks and bank holding companies with assets under $1 billion. PRK successfully completed 11 Ohio-based financial institution
Slide 35: Why invest in Park National Corporation?
Why invest in Park National Corporation? Localized business model makes us the bank of choice for customers. History of consistent dividend payments to shareholders and a strong dividend yield. Well positioned to take advantage of growth opportunities in our markets, largely caused by industry
Slide 36: Sandler O'Neill East Coast Financial Services Conference
36 November 15, 2012 Sandler O’Neill East Coast Financial Services Conference
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