the actual names of the episodes are:
"Hizzonner the Penguin, Dizzonner the Penguin" from the 2nd season... however...i must be a moron, because i could never understand the name of that episode, until you put it into litteral meaning.
Considering the budget for the show, I'd guess the illustration of the Penguin is done in inks or sign paint on illustration board (see the drop shadow in the photo indicating a thickness to the substrate). The rest of the lettering was probably hand-done by a sign painter employed by the studio's prop department or scenic department.
Heck, the guy who's wearing the sign might even have been the guy who made it! LOL!!