Minimal exposure to subprime loans helped Park National and State Auto post stock gains despite having posted losses at some point during the first three quarters of 2008.
"We are your typical community bank in the sense that our loan underwriting standards have been consistent over the years," Kozak said.
However, the company's stock price may have been even higher if it were not for the March 2007 purchase of Florida-based Vision Bank, which did have exposure to subprime lending.
Park National has written down about $110 million because of these loans and as a result, in the third quarter of 2008, had a loss of $38.4 million. This offset record profit by Park National's retail banking operations in Ohio, Kozak said.
"You can always second guess. It's something we didn't think of -- nobody did," he said of the purchase of Vision Bank and the subsequent bursting of the housing bubble. In the long term, he still thinks the purchase will pay off.
Conservative is the word English used to describe State Auto's business model -- and the approach that led to its success in 2008.
"We avoided a lot of the big issues you read about -- subprime, credit default -- and we have a strong capital base," he said, adding that the company has paid a dividend for 70 consecutive quarters.
This approach helped State Auto weather the financial and actual storms of 2008, as catastrophic losses totaled $54.7 million in the third quarter, compared with $14.2 million in the third quarter of 2007. This put the year-to-date net income at a loss of $14.7 million.
"If you're looking for a high-risk, high-reward stock, that's not State Auto," English said. "We're more about prudent operations and expanding in areas that we know in order to grow the company."
Housing woes
The past few years have been difficult ones for M/I Homes -- and many other home builders.
The company's stock traded at $60 in July 2005 and has declined steadily since, dropping under $6 in November before a late-year rally pushed it up to $10.54.
M/I officials declined to comment.
"Home builders took it on the chin a lot sooner than many other sectors of the market," Bishoff said.
"They bought more land than they needed to, developed more properties than they could sell and had to start making adjustments sooner."
The story is the same for Toll Brothers, which reached $57 in July 2005, dropped to $20.06 at the end of 2007, and was up slightly to $21.43 at the end of 2008.
Pulte Homes traded at about $25 for most of the first half of 2007, soon after it went public, dropped to $10.54 at the end of that year, and ended 2008 at $10.93.
So close
Diamond Hill investments ended 2007 at $73.10 and this year at $65, an 11.1 percent drop.
However, the Columbus investment-management and mutual-fund firm gave shareholders a $10 special dividend on Oct. 15 that dropped the stock by a corresponding amount.
"I'm glad we did better than most," Chief Executive Ric Dillon said. "But we weren't perfect and we'll try to get better."
Big Lots was down just 2.3 percent for the year on Dec.
