Park National Corporation · AMEX:PRK
Park National — Piper Sandler East Coast Financial Services Conference (November 2021)
35 slides from Park National's conference presentation, Nov 10, 2021
Slide 1: Park National Corporation: Where you mean more
PARK NATIONAL CORPORATION: Where you mean more Piper Sandler East Coast Financial Services Conference
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 performan
Slide 3: Disclaimer: Non-GAAP Financial Metrics
Disclaimer Non-GAAP Financial Metrics 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 pr
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 over 110 years ago in 1908. • $10 billion of total assets and $7.5 billion of assets under management(1) as of Sept
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 $1.12B $1.10B 165 6 24 Northern Ohio $1.36B $1.08B 217 8 24 Metro $1.69B $1.03B 163 5 9
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: 60 (38 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) Matthew R. Miller – President – Age: 43 (12 years with Park) • President of Park and Park National Bank since May 2019. • Executive Vice President of Park and Park National Bank from April 2017 through April 2019. • Chief Accounting Officer of Park and Park National Ban
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 27 years of banking experience. • Average senior leadership tenure with Park National Bank is approximately 20 years. P A R K N A T I O N A L C O
Slide 10: Division bank model and branch consolidation
• Strong history of operating in Park’s division bank model. • Decided in 2019 to move to one brand (Park National Bank) while maintaining local market leadership and advisory boards. • To better align its branch network with banking trends, Park National Bank consolidated 2 branches in early 2020 a
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: 2021 Third Quarter Highlights
2021 Third 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 September 30, 2021: – Tangible Common Equity to Tangible Assets of 9.13%(1) – Leverage Ratio of 9.32% – Total Risk-Based Capital Ratio of 15.97% • Tangible common book value per
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 Total Deposits Total Shareholders’ Equity (Dollars in millions) (Dollars in millions) (Dollars in millions) (Dollars in millions) $7,538 $7,804 $8,558 $9,279 $10,034 2017Y 2018Y 2019Y 2020Y 2021Q3 $
Slide 15: Strong Earnings Power
Efficiency Ratio & NIE / Average Assets(1) Strong Earnings Power 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 & ROATCE(1) Fee Income / Op. Revenue Pre-Provision Net Revenue / Avg. Assets(1) (1) See Reconciliation of Non-GAAP Financial Metrics shown on pages
Slide 16: Durable Net Interest Margin
Durable 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 declining deposit costs. Pre-Provision Net Interest Income and Net Interest Margin(1) Asset Yields, Liability Costs, and Net Interest Margin(1) (
Slide 17: Diverse & Significant Fee Income
Diverse & Significant 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 very challenging interest rate environment. • The business lines responsible for generating the majority of fee income are trust and wealth management 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 Overview • Disciplined cost management is a key element of Park’s financial success. • The efficiency ratio has consistently been in the mid-to-low 60% range, and management expects continued improve
Slide 19: High Quality Capital Structure
High Quality Capital Structure 98% 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 Allowance for Credit Losses and Subdebt Tier 1 Capital $921.3 million Tier 2 Capital $264.9 millio
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 September 30, 2021 unless otherwise noted; capital ratios were modestly impacted by two bank acquisitions which closed in th
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 very conservative underwriting and is subject to inten
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 52% 25% 15% 6% 1% 1% Indirect Loans by Credit Tier Premier (780+) A+ (740 ‐ 779) A (710 ‐ 739) B (680 ‐ 709) C (640 ‐ 679) D (<640) Note: Financial data as of October 31, 2021. • Park National Bank’s loan portfolio includes
Slide 23: COVID-19 Loan Modifications
COVID-19 Loan Modifications P A R K N A T I O N A L C O R P O R A T I O N 23Note: A majority of these modifications are excluded from Troubled Debt Restructuring classification under Section 4013 of the CARES Act or under applicable interagency guidance of the federal banking regulators. Modified lo
Slide 24: Overview of PPP Involvement
Overview of PPP Involvement P A R K N A T I O N A L C O R P O R A T I O N 24 Note: Financial data as of September 30, 2021 unless otherwise noted • During 2020, Park approved and funded 4,439 loans totaling $543.1 million under the PPP's first round of loans. These first round PPP loans had an avera
Slide 25: Specialty Lending
Specialty Lending • Park has successfully operated in the specialty finance area, specifically focusing on turbo-prop and light jets and structured warehouse lending to non-bank consumer finance companies for many years. Net charge-offs in specialty lending have not materially impacted Park’s overal
Slide 26: 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 26 Loan Approval Process • While Park has a legal lending limit of approximately $139 million, its internal hold limit is $46 million. • Park’s highest individual lending authority is $3 million. • Loans which are grea
Slide 27: 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 27 Allowance / Loans Credit Loss Provision / Net Charge-Offs (1) NPLs include accruing loans 90+ days delinquent. (2) Of the $87.8 million of nonaccrual loans as of 9/30/2021, $68.1 million were cur
Slide 28: 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 28 Net Charge-Offs / Average Loans Classified Loans(2) / Tier 1 Capital + ACL Overview • Conservative underwriting and strong asset quality allowed Park to enter the economic downturn well-prepared. • Of the $87.8 million in nonaccru
Slide 29: 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 29 • With minimal reliance on costly time deposits and a relatively high level of non-interest bearing deposits, Park has cultivated a very attractive, loyal and low-cost source of funds. • Non-interest bearing deposits rep
Slide 30: 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 30 • Park’s investment securities portfolio is highly rated(1): • 91% are AAA rated • 9% are AA rated • 100% are rated investment grade • All mortgage-backed securities and collateralized mortgage obligations are U.S. go
Slide 31: High Levels of Liquidity
High Levels of Liquidity • Park has access to a strong “war chest” of liquidity with multiple sources of funds, including unpledged investment securities, unused available FHLB borrowings capacity, and overnight federal funds sold balances. • Park National Bank had the following sources of liquidity
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 Metrics
Reconciliation of Non-GAAP Financial Metrics 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 Common Equity For the Nine For the Twelve Months Ended For the Three Months Ended Months Ended 12/31/2017 12/31/2018 12/31/2019 12/31/2020
Slide 34: Reconciliation of Non-GAAP Financial Metrics (continued)
Reconciliation of Non-GAAP Financial Metrics (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 Nine For the Twelve Months Ended For the Three Months Ended Months Ended 12/31/2017 12/31/2018 12/31
Slide 35: Park National Corporation: Where you mean more
PARK NATIONAL CORPORATION: Where you mean more
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