3Q10 Presentation

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Disclaimer

All financial information herein is presented on a consolidated basis, and includes the financial

statements of the Bank, its subsidiaries, JMalucelli Seguradora, JMalucelli Seguradora de Crédito,

JMalucelli Re., JMalucelli Agenciamento and Paraná Administradora de Consórcio. All

information, except when otherwise indicated, is expressed in Brazilian currency (Reais) and was

prepared based on the accounting practices pursuant to Brazilian Corporate Law, associated with

the regulations and instructions issued by the National Monetary Council (CMN), the Brazilianthe regulations and instructions issued by the National Monetary Council (CMN), the Brazilian

Central Bank (BACEN), the Brazilian Securities and Exchange Commission (CVM), the National

Council of Private Insurance (CNSP), the Brazilian Private Insurance Authority (SUSEP) and the

Accounting Standards Committee (CPC), as applicable.

The information contained in this material regarding future events is exposed to risks and

uncertainties and subject to changes resulting from, but not limied to, market behavior, economic

and political situation of Brazil and legislative and regulatory changes. The information herein is

entirely based on the Bank Administration’s performance expectations and is no guarantee of

future results.

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Qualidade da Carteira de Crédito

PDD 70.649 62.331 13,3% 51.469 37,3%

Carteira (> 90 dias) 74.725 67.023 11,5% 56.151 33,1%

Carteira (> 180 dias) 46.820 38.475 21,7% 30.420 53,9%

Carteira Total* (a) 1.398.582 1.347.703 3,8% 1.330.658 5,1%

Índice de cobertura da carteira (PDD / > 90 dias) 94,5% 93,0% 1,5 p.p. 91,7% 2,9 p.p.

Índice de cobertura da carteira (PDD / > 180 dias) 150,9% 162,0% (11,1 p.p.) 169,2% (18,3 p.p.)

PDD / Carteira Total 5,1% 4,6% 0,5 p.p. 3,9% 1,2 p.p.

Créditos Baixados a Prejuízo (b)8.754 13.250 (33,9%) 7.856 11,4%

Nível de perda (b/a)0,6% 1,0% (0,4 p.p.) 0,6% 0,0 p.p.

4T09 x

4T08R$ 4T09 3T09

4T09 x

3T094T08

Main

Highlights 3Q10

3

* Inclui saldo da cessão com coobrigação.

Inadimplência SFN

PF (>90 dias) = 7,8%PJ (>90 dias) = 3,8%

Inadimplência Paraná Banco

Consignado (>90 dias) = 5,9%PME (>90 dias) = 0,8%


Key Financial Numbers (Consolidated)

Net Income:

R$ 29.5 million39.6% x 3Q09

Profitability:

Total Deposits:

R$ 1,372.0 million46.7% x 3Q09

Total Assets: Profitability:

ROAE: 15.4%

ROAA: 3.8%

NIM: 11.7%

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Total Assets:

R$ 3,260.2 million

22.5% x 3Q09

Loan portfolio:

R$ 1,518.0 million25.9% x 3Q09

Portfolio from AA to C :

95.1% of Parana Banco consolidated portfolio.

Insurance Group

Seguradora’s Net Income :

R$ 9.2 million in 3Q10ROAE of 30.1%

46.5% x 3Q09

Resseguradora’s Net Income :

R$ 5.5 million in 3Q10ROAE of 24.4%

352.2% x 3Q09

Market share - September:Insurance business share :

Seguradora’s Combined Ratio:

45.6%22.8 p.p. x 1Q10

5

Market share - September:

JM Seguradora: 37.9%JM Re: 37.7%

PremiumsJM Seguradora + JM Re:

R$ 189.5 million50.5% x 3Q09

Insurance business share :

51.5% of Net Income

Financial Performance

252,128 303,176

14.0% 11.9%

-5,0%

0,0%

5,0%

10,0%

15,0%

0

100000

200000

300000

88,205 98,905 113,697

(41,500)

15.8%

12.0% 11.7%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

-

50,000

100,000

150,000

200,000

250,000

6

Income from financial operations

Expenses from financial operations

Net Interest Margin - NIM

(109,444)(147,373)

-15,0%

-10,0%

-5,0%

-200000

-100000

0

9M09 9M10

(41,500) (48,881) (57,394)

-25.0%

-20.0%

-15.0%

-10.0%

(150,000)

(100,000)

(50,000)

3Q09 2Q10 3Q10

Net Income from Financial Operations 46,705 50,024 56,303 20.6% 12.6% 142,684 155,803 9.2%

3Q10 x

2Q109M09 9M10

9M10 X

9M09R$ mil 3Q09 2Q10 3Q10

3Q10 x

3Q09

Net Income(R$ thousand)

52.4% 51.5%39.3%

50.2%

39.6%

21,123

31,836 29,479

75,23583,675

-7.4%

11.2%


35.7%52.4% 51.5%

3Q09 2Q10 3Q10 9M09 9M10

Participation of insurance sector

7

3.3%

4.3%

3.1%

4.4%3.8%

3Q09 4Q09 1Q10 2Q10 3Q10

ROAA

10.9%

15.3%

11.7%

16.9%15.4%

3Q09 4Q09 1Q10 2Q10 3Q10

ROAE

Credit Portfolio Quality

SME12.5%

Storeowner Consumer

Credit2.0%

Others1.3%

4.6%4.8%

5.2%

4.3%

4.0% 3.9%

2.8%3.0%

3.4%

2.7%

2.4% 2.4%800.0

1,000.0

1,200.0

1,400.0

1,600.0 Loan Portfolio

(R$ million)

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FIDC I and II Effect

Payroll Deductible

Loan84.2%

1,158.2 1,205.3 1,297.0 1,338.2 1,431.4 1,518.0

2.4% 2.4%

-

200.0

400.0

600.0

2Q09 3Q09 4Q09 1Q10 2Q10 3Q10

Loan Operations Allowance for Doubtful Accounts (PDD)/Loan Portfolio Level H/Loan Portfolio

Credit Portfolio Quality

Allowance for Doubtful Accounts (PDD) 61,377 58,805 4.4% 62,331 (1.5%)

Portfolio overdue (> 60 days) 68,743 67,595 1.7% 73,839 (6.9%)

Portfolio overdue (> 90 days) 56,973 54,251 5.0% 59,231 (3.8%)

Total Portfolio* (a) 1,554,435 1,483,493 4.8% 1,347,703 15.3%

Portfolio Coverage Index (PDD / > 60 days) 89.3% 87.0% 2.3 p.p. 84.4% 4.9 p.p.

Portfolio Coverage Index (PDD / > 90 days) 107.7% 108.4% (0.7 p.p.) 105.2% 2.5 p.p.

Allowance for Doubtful Accounts (PDD) / Total Portfolio 3.9% 4.0% (0.0 p.p.) 4.6% (0.7 p.p.)

Written-off credits (b)8,541 10,530 (18.9%) 12,032 (29.0%)

Loss rate (b/a)0.5% 0.7% (0.2 p.p.) 0.9% (0.3 p.p.)

3Q10 x

3Q09R$ 3Q10 2Q10

3Q10 x

2Q103Q09

9

* Includes balance of assignment with co-obligation.

Delinquency rate - Brazilian Financial System (“SFN”)

Individuals (>90 days) = 6.0%Corporations (>90 days) = 3.5%

Delinquency rate - Paraná Banco

Payroll deductible (>90 days) = 4.0%Small and Mid Enterprises (>90 days) =

2.7%*

Loss rate (b/a)0.5% 0.7% (0.2 p.p.) 0.9% (0.3 p.p.)

Performance – Payroll

182.8 202.9

233.6

340.4 325.1

Payroll-Deductable Loan Origination(R$ million)

-4.5%

46.0%

30.1%

20.0%

3.7% 0.3%

Payroll-Deductible Loan Origination

States

Municipality

INSS

Federal Entities

Others

Payroll Deductible loan portfolio distribution

10

1,071 1,091 1,132

1,206

1,278

3Q09 4Q09 1Q10 2Q10 3Q10

Payroll-Deductible Loan(R$ million)

6.0%

3Q09 4Q09 1Q10 2Q10 3Q10

95.1%

2.5% 2.5%

Quality of the Payroll-Deductible Loan Portfolio

AA - C

D-G

H

Performance – SME

Strategy: To invest in structuring this product in

order to increase the share in this type of credit.

117.0130.0

161.0177.0

189.4

SME Portfolio(R$ million) 7,0%

11

97.0%

2.8% 0.1%

Quality of the SME Portfolio

AA - C

D-G

H

73.5%

8.7%

17.8%

Sector Distribution - SME

Services

Commerce

Industry

3Q09 4Q09 1Q10 2Q10 3Q10

Distribution

7 PLATFORMS

•CURITIBA/PR

•SÃO PAULO/SP

PAYROLL-DEDUCTIBLEPAYROLL-DEDUCTIBLESmall and medium-sized enterprises

- SMESmall and medium-sized enterprises

- SME

12

•SÃO PAULO/SP

•PONTA GROSSA/PR

•MARINGÁ/PR

•LONDRINA/PR

•JOINVILLE/SC

•FLORIANÓPOLIS/SC

84 FRANCHISES

470 BROKERS

14 OWN STORES

Funding

37.7 232.3

1,372.0

Funding Sources(R$ million)

52.4%

12.8%

27.7%

Deposits breakdown

Institutional Investors

Related Parties

Individuals

Other companies

13

Medium Term Notes - MTN

2006 2007 2008 2009 1Q10 2Q10 3Q10

Loans Assigment MTN Deposits

7.1%

12.8%Corporate investors

100,000 December/2009 December/2012 7.375% 100%

35,000 August/2008 August/2011 7.750% 100% + interest rate

Tranche

(US$ thousand)Maturity

Coupon

(p.a.)HedgeGranting Date

Other companies

Capital Structure

Initial Balance 796,534 805,585

Net Income 29,479 31,836

Interest on Equity (5,439) (13,145)

Treasury shares (4,317) (27,892)

Adjustment to market value - Marketable securities 441 150

IRB´s equity quotas updating 28 -

Final Balance 816,726 796,534

Equity Changes (R$ thousand) 3Q10 2Q10

14

37.4% 38.9%36.0%

33.9% 33.2%

3Q09 4Q09 1Q10 2Q10 3Q10

Basel Index

1.491.64 1.66

1.80 1.86

3Q09 4Q09 1Q10 2Q10 3Q10

Portfolio / Shareholder's Equity

Corporate Governance

1Q10 5,506,435.92 0.06 0.57

2Q10 10,645,443.84 0.12 1.41

3Q10 7,938,857.88 0.09 0.84

Total 24,090,737.64 0.27 -

Distributed Gross Value

(R$)

Interest on Equity

per share (R$)

Dividend Yield

(%)

July 2010 July 2010July 2010

Low Credit Risk

Rating

A-

Rating Rating / Ranking Rating

brA- 11.56 A+

Low Credit RiskLow Credit Risk -

Medium term

August 2010

Low Credit Risk

July 2010 July 2010July 2010

Low Credit Risk

Rating

A-

July 2010

Low Credit Risk

Rating

A-

Low Credit Risk

Rating

A-

Rating Rating / Ranking Rating

brA- 11.56 A+

Low Credit RiskLow Credit Risk -

Medium term

August 2010

Low Credit Risk

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IOE: R$ 24.1 million, equivalent to R$ 0.27 per share and 29% pay-out.

S&P upgrade from “brBBB+” to “brA-”

IOE: R$ 24.1 million, equivalent to R$ 0.27 per share and 29% pay-out.

S&P upgrade from “brBBB+” to “brA-”

Qualidade da Carteira de Crédito

PDD 70.649 62.331 13,3% 51.469 37,3%

Carteira (> 90 dias) 74.725 67.023 11,5% 56.151 33,1%

Carteira (> 180 dias) 46.820 38.475 21,7% 30.420 53,9%

Carteira Total* (a) 1.398.582 1.347.703 3,8% 1.330.658 5,1%

Índice de cobertura da carteira (PDD / > 90 dias) 94,5% 93,0% 1,5 p.p. 91,7% 2,9 p.p.

Índice de cobertura da carteira (PDD / > 180 dias) 150,9% 162,0% (11,1 p.p.) 169,2% (18,3 p.p.)

PDD / Carteira Total 5,1% 4,6% 0,5 p.p. 3,9% 1,2 p.p.

Créditos Baixados a Prejuízo (b)8.754 13.250 (33,9%) 7.856 11,4%


4T09 x

4T08R$ 4T09 3T09

4T09 x

3T094T08

Insurance3Q10

16

* Inclui saldo da cessão com coobrigação.

Inadimplência SFN

PF (>90 dias) = 7,8%PJ (>90 dias) = 3,8%

Inadimplência Paraná Banco

Consignado (>90 dias) = 5,9%PME (>90 dias) = 0,8%


Equity R$ 816.7 MM*

JM HoldingJM Holding OthersOthers

50.2 % 49.8 %

Strategic Partnership

Equity R$ 100.8 MM* Equity R$ 20.2 MM* Equity R$ 140.7 MM*

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JM SeguradoraJM SeguradoraJM Seguradora de

CréditoJM Seguradora de

CréditoJM ResseguradoraJM Resseguradora

99.9 %

56.6% 43.4%

This operation is subject to SUSEP’s approval.* Equity on September 30, 2010, w/out Travelers’ investment.

R$ 625 MM investmentR$ 110 MM Dividends

In Brazil:

•Consolidating surety bond operations performance;• Develop Property and Casualty.

Benefits

In Latin America:

• Develop the Surety Bond Reinsurance platform in Latin America;• Jointly seek new business opportunities in Latin America.

• Increase capital through stronger capital structure, enhanced companies’ soundness and premium retention capacity;• Joint use of a world-renowned and respected brand;• Access to higher reinsurance capacity and increased business power.• Know how synergy

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42,4%

3,4%13,1%

3,5%

Market Share - reinsurance premiumsFinancial risk category

IRB BRASIL RESSEGUROS

JMALUCELLI RESSEGURADORA

MAPFRE RE DO BRASIL CIA DE RESSEGURO

MUNICH RE DO BRASIL

187,768 167,452 192,364

346,089

499,334

703,109

518,978

Market Share

Market share evolution – direct premium(R$ thousand)

37,7%

MUNICH RE DO BRASIL RESSEGURADORA

XL RESSEGUROS BRASIL

29.2% 37.0% 42.3% 50.4% 43.0% 32.2% 37.9%

2004 2005 2006 2007 2008 2009 Sep-10

JMalucelli Seguradora Market

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JMalucelli Seguradora: market leadership, profitable operation, low loss ratio, prompt credit analysis, customer selectivity and attractiveness for reinsurers.

Belo Monte: Performance Bond issued in August 2010 totalled R$ 1.05 billion.

JMalucelli Resseguradora: 37.7% of the financial risks group.

JMalucelli Seguradora: market leadership, profitable operation, low loss ratio, prompt credit analysis, customer selectivity and attractiveness for reinsurers.

Belo Monte: Performance Bond issued in August 2010 totalled R$ 1.05 billion.

JMalucelli Resseguradora: 37.7% of the financial risks group.


29.5%

46.3%

30.1%

25,0%

30,0%

35,0%

40,0%

45,0%

50,0%

8.000

10.000

12.000

14.000

JMalucelli Seguradora

23.3% 24.4%25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

8,000

10,000

12,000

14,000

JMalucelli Resseguradora

20

Net Income (R$ thousand) ROAE

6,217

12,492

9,254

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

0

2.000

4.000

6.000

8.000

3Q09 2Q10 3Q10

4,319 3,8115,494

17.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0

2,000

4,000

6,000

3Q09 2Q10 3Q10

Operational Performance (Insurance)

76,155 76,004

184,291

46,126

Insurance Claims(R$ thousand)

21

JM Seguradora has a specialized’ claim department that mediates and regulates all notifications received from customers. The basic principle is legal defense of involved parties and plenty of opportunities for discussion on the issues in question.

JM Seguradora has a specialized’ claim department that mediates and regulates all notifications received from customers. The basic principle is legal defense of involved parties and plenty of opportunities for discussion on the issues in question.

38,273 29,950

16,146

46,126

253 4,025 2,372 6,457 9,056 7,960 6,083

2004 2005 2006 2007 2008 2009 Sep-10

Market JMalucelli Seguradora

Investment Policy

279.544.6

401.328.6 7.1%

Financial Investment Portfolio(R$ million)

DPGE = R$ 164.7DPGE = R$ 164.7DPGE = R$ 164.7DPGE = R$ 164.7

4,0%

22

Profitability: R$ 12.6 million income in 3Q10.Profitability: R$ 12.6 million income in 3Q10.

77.2

19.2%

69.6%

Government Bonds

Fixed Income Equity Investments

Multi-market funds

Total

CDB = R$ 114.8CDB = R$ 114.8CDB = R$ 114.8CDB = R$ 114.8CD

Investor Relations

Marianne C. BaggioIR Analyst

Mauricio N. G. Fanganiello IR Supervisor

Phone: +55 (41) 3351-9765

Cristiano Malucelli IR Officer

Phone: +55 (41) 3351-9950

e-mail: [email protected] website: www.paranabanco.com.br/ir

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This material may include estimates and forward-looking statements. These estimates and forward-looking statements are mostly based on current expectations andprojections of future events and financial trends which impact or may impact our business. Many important factors may have a negative impact on Banco Parana Banco’sresults, such as those anticipated in our estimates and forward-looking statements. These factors include, but are not limited to, domestic and international economicconditions, fiscal, foreign exchange and monetary policies, increased competition in the consigned credit sector, Banco Parana Banco’s funding capacity to support itsoperations, and changes in Central Bank’s standards. The words “believe”, “can”, “may”, “aims”, “estimates”, “continues”, “anticipates”, “intends”, “expects” and other similarwords are intended to identify estimates and projections. The considerations on estimates and forward-looking statements include information concerning results andprojections, strategy, competitive position, sector circumstances, growth opportunities, future regulation and competition impacts.

These estimates and projections refer only to the date that they were expressed, and no undertaking has been made to publicly update or revise them resulting from newinformation, future events or any other factors. Due to the risks and uncertainties set forth herein, the estimates and forward-looking statements in this material many notmaterialize. Considering these limitations, the shareholders and investors should not make any decisions based on the estimates, projections and forward-lookingstatements contained herein.

Phone: +55 (41) 3351-9645IR website: www.paranabanco.com.br/ir

3Q10 Presentation

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