4 Community Banks Out-Earning the Big Guys

2. Park National Corp.

Shares of Park National Corp. (PRK) of Newark, Ohio, closed at $67.63 Thursday, returning 5% year-to-date, following a 5% decline during 2011. The company's ROA during 2011 was 1.62%.

Based on a 94-cent quarterly payout, the shares have a dividend yield of 5.56%.

The shares trade for 1.9 times tangible book value, and for 12 times the consensus 2013 EPS estimate of $5.47. The consensus 2012 EPS estimate is $5.18.

The company had $7.0 billion in total assets as of Dec. 30, and owes $100 million in federal bailout funds received in December 2008, through the Troubled Assets Relief Program, or TARP.

On Feb. 16, Park National completed the sale of its Florida subsidiary, Vision Bank, to Home Bancshares (HOMB) of Conway, Ark., for $27.9 million, while retaining the subsidiaries nonperforming loans. Park National said it would record a "pre-tax gain of approximately $22 million, net of anticipated expenses directly related to the transaction, and increase its already strong capital ratios by approximately 100 basis points."

Vision Bank was undercapitalized, with a very high level of nonperforming loans. Removing that unit removes a serious distraction for Park National, with its strong Ohio operations. The company has restated its 2010 and 2011 results, "recognition of loan loss provisions and other real estate owned devaluations at Vision Bank in 2010 instead of 2011."

The consensus estimate is for Vision Bank to post first-quarter earnings of $1.63 a share, improving from EPS of 59 cents in the fourth quarter, and $1.35 during the first quarter of 2011.

Interested in more on Park National Corp.? See TheStreet Ratings' report card for this stock.

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