Park National Corporation · AMEX:PRK
Park National — Raymond James Ohio Bank Tour (May 2012)
35 slides from Park National's conference presentation, May 23, 2012
Slide 1: Raymond James Ohio Bank Tour
1 May 24, 2012 Raymond James Ohio Bank Tour
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 Na tional Corporation and its subsidiaries ("Park" or the "Corporation"). This discussion should be read in conjunction with the consol ida ted f
Slide 3: Park National Corporation Profile
3 3 Park National Corporation Profile (as of March 31, 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 • 1,784 FTEs
Slide 4: Park Executive Management
Park Executive Management C. Daniel DeLawder – Chairman and Chief Executive Officer – Age: 62 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 62 41 41 David L. Trautman President 51 28 28 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 39 5 11 Thomas J. Button SVP – Chief Credit Officer 51 15 26 Thomas M. Cummiskey SVP – Trust 42 12 14 Lynn B. Fawcett SVP – Operations 53 21 21 Robert N. Kent President – Scop
Slide 8: Affiliate Leadership
8 Affiliate Leadership Name Position Age Years with PRK/Affiliate Years In Industry John A. Brown President – Richland Bank 43 20 20 Brett A. Baumeister President – Unity National Bank 46 8 22 William C. Fralick President – Security National Bank 57 36 36 David J. Gooch President – Park National Ban
Slide 9: 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, net losses at Visi
Slide 10: Timeline of Regulatory Issues Pertaining to Vision Bank
Timeline of Regulatory Issues Pertaining to Vision Bank 10 • On June 30, 2011 , Park made the first announcement regarding regulatory concern pertaining to the allowance for loan loss calculation at Vision Bank. Specifically, the Florida Office of Financial Regulation (the “OFR”) and the FDIC took e
Slide 11: Timeline of Regulatory Issues Pertaining to Vision Bank
Timeline of Regulatory Issues Pertaining to Vision Bank 11 • On December 14, 2011 , management announced that the FDIC appeal was denied and that management would revise Park’s Y - 9C and Call Report for Vision Bank for December 31, 2010, March 31, 2011, June 30, 2011, and September 30, 2011. • On J
Slide 12: Restatement – December 31, 2010
12 Restatement – December 31, 2010 Source: Company Filings Dec. 31 2010 (restated) Dec. 31 2010 (as originally reported) Change Net interest income $ 274,044 $ 274,044 $ - Provision for loan losses 87,080 64,902 22,178 Net interest income after provision 186,964 209,142 (22,178) Non interest income
Slide 13: Sale of Vision Bank
Sale of Vision Bank 13 • November 16, 2011 – Park entered into a Purchase and Assumption Agreement with Home BancShares and its wholly - owned subsidiary Centennial Bank to sell substantially all of the performing loans, operating assets and liabilities associated with Vision Bank for a purchase pri
Slide 14: Gain on sale of Vision Bank
Gain on sale of Vision Bank 14 Premium paid $ 27,913 One - time gains 2 98 Loss on sale of fixed assets (2,434) Employment and severance agreements (1,610) Other one - time charges, including estimates (2,000 ) Pre - tax gain $ 22,167 Federal income taxes 7,758 Net gain on sale $ 14,409 Source: Comp
Slide 15: Lessons Learned from Vision Bank
Lessons Learned from Vision Bank 1. Bank Concentration Risks 2. Market Concentration Risks 3. Unequivocal Agreement 4. Understand Market Culture 5. Worst Case X Multiple 6. Physical Inspection of Collateral 7. Adopt PRK Underwriting 8. Seller’s Business Model 9. Attributes of Seller 10. Scrutinize S
Slide 16: TARP Repayment
TARP Repayment • Park repurchased the $100 million of cumulative preferred shares from the U.S. Treasury on April 25, 2012. Total consideration paid of $101 million included accrued interest and unpaid dividends. The warrant associated with the preferred shares was repurchased on May 2, 2012 for $2.
Slide 17: A Successful History of Disciplined Strategic Growth in Ohio
A Successful History of Disciplined Strategic Growth in Ohio (11 acquisitions; 2 De Novos ) 17 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 Com
Slide 18: ROA and ROE History – PRK and PRK, excluding Vision
18 ROA and ROE History – PRK and PRK, excluding Vision Results Count * Calculated using average common equity for Park National Corporation. ** Calculated using average common equity for Park National Corporation, excluding Vision Bank and SE Property Holdings, LLC. *** Adjusted for goodwill impairm
Slide 19: The Park National Bank – The bank of choice
19 Bank Division Year joined Park Hdqtr. Co. deposits Total county Deposits Park % of market share Rank in market Park National 1908 $ 1,300,371 $ 2,169,768 59.9% 1 Fairfield National 1985 364,719 1,714,925 21.3% 1 Richland Bank 1987 449,246 1,695,857 26.5% 1 Century National 1990 342,490 1,159,446
Slide 20: Net income by operating segment
20 Net income by operating segment * As of April 30, 2012, SE Property Holdings had $130 million of 5% notes payable to the Parent Company, which is elimina ted at the Total PRK level. However, the interest income and interest expense on these funds is included in the results for PRK Parent Company
Slide 21: Park National Corporation Income Statement
21 Park National Corporation (PRK) – Income Statement Source: Company Filings (in thousands) Dec. 31, 2009 Dec. 31, 2010 Dec. 31, 2011 2012 Projection Net interest income $273,491 $274,044 $273,234 $238,000 Provision for loan losses 68,821 87,080 63,272 25,000 Net interest income after provision 204
Slide 22: The Park National Bank Income Statement
22 Source: Company Filings The Park National Bank Income Statement (in thousands) Dec. 31, 2010 Dec. 31, 2011 March 31, 2012 2012 Projection Net interest income $ 237,281 $ 236,282 $ 55,846 $ 225,803 Provision for loan losses 23,474 30,220 4,672 15,950 Net interest income after provision 213,807 206
Slide 23: Park National Corporation Statement of Condition
PARK NATIONAL CORPORATION Statement of Condition 23 Source: Company Filings (in millions) Dec. 31, 2010 Dec. 31, 2011 March 31, 2012 Investment securities $ 2,040 $ 1,708 $ 1,857 Loans 4,733 4,317 4,324 Allowance for loan losses (144) (68) (60) Assets held for sale - 382 - Other assets 653 633 656 T
Slide 24: Park National Corporation Loans by Type
24 Park National Corporation Loans by Type Source: Company Filings as of March 31, 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 underwrit te
Slide 25: Nonperforming loans by type
25 Park National Corporation Nonperforming loans by type Source: Company Filings as of March 31, 2012 PNB Guardian SE LLC PRK Amount Percentage Amount Percentage Amount Percentage Amount Percentage Commercial Real Estate Owner Occupied $ 18,581 13.67% $ - 0.00% $ 10,091 12.26% $ 28,672 13.04% Non -
Slide 26: Park National Corporation Nonperforming assets
26 Park National Corporation Nonperforming assets Source: BHC Performance Report and Company Filings (in thousands) March 31, 2012 Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2009 Non - accrual loans 183,227 $195,106 $289,268 $233,544 Renegotiated loans 34,436 28,607 - 142 Loans past due 90 days or more (s
Slide 27: Vision Bank/SE Properties Holdings Nonperforming assets
27 Vision Bank/SE Properties Holdings Nonperforming assets Source: BHC Performance Report and Company Filings (in thousands) March 31, 2012 Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2009 Non - accrual loans 80,341 $98,993 $171,453 $148,347 Renegotiated loans 1,985 2,265 - - Loans past due 90 days or more
Slide 28: SE LLC – Charge-Off History
SE LLC – Charge - Off History 28 SE LLC – Retained Vision Bank Loan Portfolio Charge - Offs as a percentage of unpaid principal balance March 31, 2012 (In thousands) Unpaid Principal Balance Charge - Offs Net Book Balance Charge - Off Percentage Nonperforming loans – retained by SE LLC $ 160,858 $ 7
Slide 29: Nonperforming assets excluding Vision Bank/SE Holdings
29 Source: BHC Performance Report and Company Filings Note: The Texas Ratio is calculated as total nonperforming assets divided by the sum of tangible common equity plus the allowance for loan losses. (in thousands) March 31, 2012 Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2009 Non - accrual loans 102,886
Slide 30: PRK comparison to peers
30 PRK comparison to peers * Calculated for the twelve months ended March 31, 2012. ** Annualized based on dividends and stock price through March 31, 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 Price to
Slide 31: Park National Corporation – Tax equivalent yield
31 Park National Corporation – Tax equivalent yield Source: Company Filings as of March 31, 2012 Tax equivalent yield Dec. 31, 2009 Dec. 31, 2010 Dec. 31, 2011 March 31, 2012 2012 Projection Loans 6.03% 5.80% 5.60% 5.52% Taxable investments 4.90% 4.44% 3.74% 3.33% Tax exempt investments 7.45% 7.24%
Slide 32: PRK short interest position
PRK short interest position 32 Date Short Interest Position PRK Closing Price Average Annual Daily V olume Days to Cover Short Position 04/30/2012 1,426,107 $ 67.25 35,267 * 40.4 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
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 15,405,905 1,426,107 35,267 40.4 9.26% Midwest Peer Median 58,300,000 2,652,880 270,687 9.8 4.55% Midwest Peer
Slide 34: Why invest in Park National Corporation?
Why invest in Park National Corporation? Unique, localized business model makes us the bank of choice for customers. History of dividend payments to shareholders and a strong dividend yield. Favorably positioned to take advantage of growth opportunities in our markets, largely caused by indust
Slide 35: Park National Corporation
PARK NATIONAL CORPORATION Raymond James Ohio Bank Tour May 24, 2012
Park National — Raymond James Ohio Bank Tour (May 2012) on 6ix