Park National Corporation · AMEX:PRK
Park National — KBW Community Banking Investor Conference 2010
40 slides from Park National's conference presentation, Jul 27, 2010
Slide 1: Park National Corporation – KBW Community Banking Investor Conference
PARK NATIONAL CORPORATION KBW Community Banking Investor Conference July 27, 2010
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 I. PRK Overview Il. Leadership Team Ill. Selected Financial Data IV. Why invest in Park National Corporation? Appendix: Profiles of PRK Affiliate Banks PARK NATIONAL
Slide 4: PRK Overview: Company Profile
|. PRK Overview Company Profile + Park National Corporation (Park) is a $7.1 billion bank holding company headquartered in Newark, Ohio. — Park has two bank subsidiaries and 149 full-service offices: * The Park National Bank (11 bank divisions in Ohio and Kentucky) + Vision Bank (2 bank divisions in
Slide 5: Our Mission
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
Slide 6: Company Overview — June 30, 2010
Company Overview — June 30, 2010 . Headquarters: Newark, OH Assets $7.1 billion — Loans: $4.7 billion — Deposits $5.2 billion — TC Equity $573 milion — TARP: $100 million — Market Cap: $989 million * * As of June 30, 2010 + 149 branches between two bank subsidiaries across 4 states — Park National B
Slide 7: A Successful History of Disciplined Strategic Growth
A Successful History of Disciplined Strategic Growth in Ohio (11 acquisitions; 2 De Novos) 2008 1908 1997 “The Park National Acquistion of First. 2000 Bark knox Natonal Bank ‘Acquisition of stabs Farmers Savings Sank United Bank Centuy, Acquistion of Ban) Second National Bank ual nal Bank 0 Acquisit
Slide 8: Leadership Team: Park Executive Management
Il. Leadership Team Park Executive Management + C. Daniel DeLawder — Chairman and Chief Executive Officer — Age: 60 - 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 previ
Slide 9: Park Executive Management (continued)
Park Executive Management (continued) PARK NATIONAL John W. Kozak — Chief Financial Officer — Age: 55 - 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
Slide 10: Experienced Leadership Team
Experienced Leadership Team c Senior leadership consists of executives with proven local market experience GC Leadership team averages 26 years of banking experience . Average management tenure at Park National is approximately 23 years Position C. Daniel DeLawder Chairman & CEO 60 39 39 David L. Tr
Slide 11: Leadership Team — continued
Leadership Team — continued * Years In Position Industry Brady T. Burt VP — Chief Accounting Officer 38 3 a Thomas J. Button SVP — Chief Credit Officer 50 13 24 Thomas M. Cummiskey ‘SVP — Trust 40 10 12 Lynn B. Fawcett SVP — Operations 51 20 20 William C. Fralick President — Security National Bank 5
Slide 12: Park National Bank — The bank of choice
Park National Bank — The bank of choice Headquarter Counties of Operation — Deposits (i jousands) Year joined Park % of market Rank in Bank Division Name Park Our bank Total county share market Park National 1908 $ 1,199,404 $ 2,124,888 56.4% 1 Fairfield National 1985 336,748 1,673,954 20.1% 1 Richl
Slide 13: Customer Proposition Leads to Core Profitability
Customer Proposition Leads to Core Profitability Unique local branding strategy makes PRK the regional bank of choice pe + Dominant market share + Favorable pricing Yield on Earning Assets % 5.45 5.01 Sector leading margin Historic unparalleled profitability continues +44 bps Cost of Funds % 1.49 1.
Slide 14: Park Earnings History
PARK Park Earnings History YTD 2 2010 YTD 01 2010 2009 2008 2007 2006 2005 2004 2003, 2002 2001 2000 * 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, respecti
Slide 15: Park Earnings History
Park Earnings History | sCilutedEPS luted E| 6.74 $7.00 $0.32 30:54 § $6.00 fe es me $540" $5.00 $4.58 gee $4.00 $3.00 $2.80 $2.00 $1.00 | $0.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 une 20 @ Park National Corporation * Adjusted for goodwill impairment charge of $85 million in 2008 and $
Slide 16: Selected Financial Data: ROA and ROE History
Selected Financial Data Results Count - ROA and ROE History Park ROA, Park ROE, Park excluding Peer median Park excluding Peer median ROA Vision ROA ROE* Vision ** ROE YTD Q2 2010 annualized 1.12% 1.74% Not Available 12.35% 20.21% Not Available YTD Q1 2010 annualized 1.11% 118% 0.19% 12.43% 20.69% 1
Slide 17: Increase / (decrease) in loans
Increase / (decrease) in loans (in 500,000 Six year loan growth = $203,568 or $33,928 per year pos 400,000 351,277 300,000 200,000 171,784 100,000 2003 2004 2005 2006 2007 2008 2009 June 30, (94,956) 2010 (100,000) (200,000) (tae,082y $(251,038) PARK sATroNAY Source: Company Filings through June 30,
Slide 18: 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. * Goodwill of $109.0 million was recognized upo
Slide 19: Asset and Loan Portfolio Comparison
Asset and Loan Portfolio Comparison 8,000,000 At June 30, 2010, Vision Bank assets represented 7,000,000 approximately 12.2% of the total assets of Park National eonaio00 Corporation ($863 million of $7.08 billion) 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Dec. 31, Dec. 31. Dec. 31, March
Slide 20: Park National Corporation — Income Statement
Park National Corporation — Income Statement Six months ended (in thousands) June 30, 2010 Dec. 31, 2009 Dec. 31, 2008 Dec. 31, 2007 Net interest income 136,101 273,491 $ 255,873 $ 234,677 Provision for loan losses 29,800 68,821 70,487 29,476 Net interest income after provision 106,301 204,670 185,3
Slide 21: Vision Bank — Income Statement
Vision Bank — Income Statement Six months ended (in thousands) June 30, 2010 Dec. 31, 2009 Dec. 31,2008 Dec. 31, 2007 Net interest income $ 13,805 $ 25,634 $ 27065 $ 23,754 Provision for loan losses 20,200 44,430 46,963 19,425 Net interest income after provision (6,395) (18,796) (19,898) 4,329 Non i
Slide 22: Park National Corporation, excluding Vision — Income Statement
Park National Corporation, excluding Vision — Income Statement . Prior to our acquisition of Vision Bank in 2007, Park had a history of being a top performing bank holding company. Six months ended (in thousands) June 30, 2010 Dec. 31, 2009 Dec. 31, 2008 Dec. 31, 2007 Net interest income $ 122,296 $
Slide 23: Park National Corporation - Balance Sheet
Park National Corporation - Balance Sheet (in millions) June 30, 2010 Dec. 31,2009 Dec. 31,2008 Dec. 31, 2007 Investment securities $1,846 $ 1,864 $ 2,059 $ 1,703 Loans 4,656 4,640 4,491 4,224 Allowance for loan losses (121) (117) (100) (87) Other assets 712 653 620 661 Total assets $ 7,093 $ 7,040
Slide 24: Funding Composition
Funding Composition + 80% core deposits contributes to a cost of deposits well below peer levels Funding Mix (as of 6/30/10) Deposit Composition (as of 6/30/10) NATIONAL Other Demand ae 0.1% Deposits os 171% Senior Debt 15% Time Deposits 38.9% {Transaction Accounts 26.8% Deposits oe ae A% Total depo
Slide 25: Earning Assets Composition
Earning Assets Composition + Commercial lending focus on small, closely held businesses within our market + Consumer mortgage and home equity portfolios are originated by Park within our footprint and have been consistently underwritten for decades * Steady growth across all loan categories — No unf
Slide 26: Investment Portfolio
Investment Portfolio + As of June 30, 2010 our investment portfolio totaled approximately $1.8 billion = $1.31 billion available-for-sale - $0.47 billion held-to-maturity Investment Portfolio Composition Conservative Portfolio Equity Securities + Net unrealized gain position of $71.0 million as of 0
Slide 27: Park National Corporation — Loans by Type
Park National Corporation — Loans by Type (in thousands) June 30, 2010 Dec. 31, 2009 Dec. 31, 2008 Commercial and industrial $766,538 $ 751,277 $ 714,296 Real estate construction Commercial land & development 370,755 406,753 418,421 1-4 family construction 88,860 88,765 115,367 Total real estate con
Slide 28: Vision — Loans by Type
Vision — Loans by Type (in thousands) June 30, 2010 Dec. 31, 2009 Dec. 31, 2008 Commercial and industrial $65,053 $ 70,238 $ 83,980 Real estate construction Commercial land & development 192,051 218,205 251,443 1-4 family construction 17,087 16,990 33,410 Total real estate construction 209,138 235,1
Slide 29: Park, excluding Vision — Loans by Type
Park, excluding Vision — Loans by Type (in thousands) June 30, 2010 Dec. 31, 2009 Dec. 31, 2008 Commercial and industrial $ 701,485 $ 681,039 $ 630,316 Real estate construction Commercial land & development 178,704 188,548 166,978 1-4 family construction 74,773 74,775 81,957 Total real estate constr
Slide 30: Credit Quality Snapshot
Credit Quality Snapshot Total nonperforming assets 300,000 250,000 200,000 150,000 100,000 50,000 0 Dec. 31, Dec. 31, Dec. 31, June 30, 2007 2008 2009 2010 PRK, excluding Vision * OVision * Includes Park National Bank loan participations with Vision Bank of $12.8 million, $14.1 million and $9.1 mill
Slide 31: PRK Summary — Allowance for loan and lease losses
PRK Summary — Allowance for loan and lease losses June 30, Dec. 31, Dec. 31, Dec. 31, (in thousands) 2010 2009 2008 2007 ALLL - beginning balance $116,717 $100,088 $87,102 $70,500 Charge-offs 28,851 59,022 62,916 27,776 Recoveries 3,010 6,830 5,415 5,568 Provision for loan losses 29,800 68,821 70,48
Slide 32: Park National Corporation — Nonperforming assets
Park National Corporation — Nonperforming assets June 30, March 31, Dec. 31, Dec. 31, Dec. 31, (in thousands) 2010 2010 2009 2008 2007 Nonaccrual loans $237,640 $230,498 $233,544 $159,512 $101,128 Renegotiated loans 214 60 142 2,845 2,804 Loans past due 90 days or more (still accruing) 17,283 11,853
Slide 33: Vision Bank — Nonperforming assets
Vision Bank — Nonperforming assets June 30, March 31, Dec. 31, Dec. 31, Dec. 31, (in thousands) 2010 2010 2009 2008 2007 Nonaccrual loans $152,697 $145,013 $148,347 $91,207 $63,015 Renegotiated loans : 4 : 2,845 ~ Loans past due 90 days or more (still accruing) 9,616 9,052 14,277 644 457 Total nonpe
Slide 34: Park National Corporation, excluding Vision — Nonperforming assets
Park National Corporation, excluding Vision — Nonperforming assets June 30, March 31, Dec. 31, Dec. 31, Dec. 31, (in thousands) 2010 2010 2009 2008 2007 Nonaccrual loans $84,943 * $85,485" $85,197" $68,305 * $38,113 Renegotiated loans 214 56 142 ‘ 2,804 Loans past due 90 days or more (still accruing
Slide 35: Historical Review of Vision Bank Commercial Land & Development Loans
Historical Review of Vision Bank Commercial Land & Development Loans June 30, Dec. 31, Dec. 31, Dec. 31, (in thousands) 2010 2009 2008 2007 CLAD loans, period end $ 192,051 $ 218,205 $ 251,443 $ 295,743 Performing CL&D loans, period end 97,562 132,788 191,712 260,195 Impaired CL&D loans, period end
Slide 36: Capital Ratios — June 30, 2010
Capital Ratios — June 30, 2010 Tier | Risk Risk Based ($ in thousands) Leverage Ratio Based Capital Capital Park National Corporation 9.56% 13.28% 15.75% Park National Bank 6.61% 9.43% 11.46% Vision Bank 13.18% 16.52% 17.84% Minimum capital ratio 4.00% 4.00% 8.00% Well capitalized requirement 5.00%
Slide 37: Capital Raising Activities
Capital Raising Activities 2Q 2009 183,200 common shares; net proceeds of $10.5 million 3Q 2009 105,072 common shares; net proceeds of $6.2 million 4Q 2009 500,000 common shares; net proceeds of $29.8 million 4Q 2009 115,800 common shares, to the PRK Defined Benefit Pension Plan; proceeds of $7 mill
Slide 38: Tangible Common Equity
Tangible Common Equity TCE Ratio Shares outstanding 22010 817%" 15,206,854 2009 7.78%" 14,882,780 2008 661% 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 *
Slide 39: Why invest in Park National Corporation?
IV. Why invest in Park National Corporation? PARK NATIONAL 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 gr
Slide 40: Appendix: Profiles of PRK Affiliate Banks
Appendix: Profiles of PRK Affiliate Banks Please visit w : profile of the PRK affiliate banks fora 40
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