425: Filing under Securities Act Rule 425 of certain prospectuses and communications in connection with business combination transactions
Published on August 21, 2003
Filed by The PNC Financial Services Group, Inc.
Pursuant to Rule 425 under the Securities Act of 1933 and
deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: United National Bancorp
Commission File No. 000-16931
The following is from an investor presentation that took place on August 21,
2003 in connection with the proposed acquisition by The PNC Financial Services
Group, Inc., a Pennsylvania corporation, of United National Bancorp, a New
Jersey corporation:
[PNC Logo] [United National Bancorp Logo]
THE PNC FINANCIAL SERVICES GROUP, INC.
ANNOUNCES THE ACQUISITION OF
UNITED NATIONAL BANCORP
AUGUST 21, 2003
FORWARD-LOOKING INFORMATION
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This presentation contains forward-looking statements with respect to PNC's
outlook or expectations with respect to the Planned acquisition of United
National, the expected costs to be incurred in connection with the acquisition,
United National's future performance, and the consequences of the integration of
United National into PNC. Forward-looking statements are subject to numerous
assumptions, risks and uncertainties, which change over time. The
forward-looking statements in this presentation speak only as of the date of
this presentation, and PNC assumes no duty and does not undertake to update
them.
In addition to factors previously disclosed in PNC's SEC reports (accessible on
the SEC's website at www.sec.gov and on PNC's website at www.pnc.com) applicable
to PNC's business generally (including, upon the acquisition, those aspects
currently operated by United National), the forward-looking statements in this
presentation are subject to the following risks and uncertainties:
^ Completion of the transaction is dependent on, among other things,
receipt of stockholder and regulatory approvals, the timing of which
cannot be predicted with precision at this point and which may not be
received at all.
^ The transaction may be materially more expensive to complete than
anticipated, as a result of unexpected factors or events.
^ The integration of United National's business and operations into PNC,
which will include conversion of United National's different systems
and procedures, may take longer than anticipated or be more costly
than anticipated or have unanticipated adverse results relating to
United National's or PNC's existing businesses.
^ The anticipated cost savings of the acquisition may take longer to be
realized or may not be achieved in their entirety.
^ The anticipated benefits to PNC are dependent in part on United
National's business performance in the future, and there can be no
assurance as to actual future results, which could be impacted by
various factors, including the risks and uncertainties generally
related to PNC's and United National's performance (with respect to
United National, see United National's SEC reports, also accessible on
the SEC's website) or due to factors related to the acquisition of
United National and the process of integrating it into PNC.
UNITED NATIONAL BANCORP
OFFERS COMPELLING STRATEGIC OPPORTUNITIES
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^ Accelerates PNC expansion in fast-growing, affluent region
^ Leverages PNC business mix, product lines, distribution capabilities,
technology platform and customer insights
^ Offers comparatively low integration risk
^ Accretive in first year, with IRR of approximately 15% which is above
return from share repurchases
FASTER GROWING AND MORE AFFLUENT
NEW JERSEY MARKET
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PROJECTED 5-YEAR GROWTH
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COUNTY MEDIAN HOUSEHOLD HOUSEHOLD # OF POPULATION
INCOME INCOME HOUSEHOLDS
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Essex $56,080 19.2% 0.44% 0.33%
Hunterdon 95,990 24.9 5.95 4.88
Middlesex 71,759 17.5 4.18 4.49
Morris 95,971 23.5 5.62 4.60
Somerset 97,249 24.6 7.23 7.44
Union 68,540 17.6 1.21 2.00
Warren 55,829 11.3 6.15 5.36
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Weighted average(1) $73,965 20.8% 3.40% 3.36%
New Jersey $63,768 15.5% 3.72% 3.30%
PNC footprint(2) $54,620 17.3% 2.92% 1.97%
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(1) Weighted based on household counts
(2) PNC six state, sixty-eight county footprint weighted by PNC deposits
Source: SNL Financial and Claritas
EXPANDING IN ATTTRACTIVE MARKETS
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PNC PROFORMA
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COUNTY MARKET SHARE RANK
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NEW JERSEY
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Essex 13.4% 3
Hunterdon 23.8 2
Middlesex 11.3 3 [Map of the Branch Locations
Morris 9.2 5 of PNC and UnitedTrust]
Somerset 20.3 2
Union 4.8 4
Warren 42.5 1
PENNSYLVANIA
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Lehigh 4.3% 6
Northampton 13.7 3
Deposit market share data as of June 2002
Source: SNL Financial
UNITED NATIONAL BANCORP
FINANCIAL HIGHLIGHTS
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UNITED NATIONAL BANCORP SELECTED FINANCIAL DATA
$ billions
Total Assets $3.0 Net income ($ millions) $15.2
Loans $1.9 ROA 1.04%
Deposits $2.2 ROE 11.4%
Shareholders' $0.3 Net interest 3.90%
equity margin
Equity/assets 8.81% Efficiency 63.7%
Financial data as of or for the six months ended June 30, 2003
TRANSACTION SUMMARY
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TRANSACTION VALUE PER SHARE $33.89 per United National share (1)
TRANSACTION TOTAL VALUE $638 million (1)
CONSIDERATION $320 million in cash and 6.55 million
shares of PNC common stock
STRUCTURE Cash election merger
COLLARS None
WALKAWAY Limited price-based walkaway, subject to
top-up right (2)
REQUIRED APPROVALS United National shareholders and
customary regulatory approvals
ANTICIPATED CLOSING January 2004
ESTIMATED EPS IMPACT TO PNC 2004 core accretion of $0.07 per
share (3)
2005 accretion $0.08 per share
(1) Based on PNC closing price of $48.53 as of August 20, 2003.
(2) United National termination right if the value of PNC stock declines by
approximately 30% and underperforms a peer index by 15%, unless PNC
determines to adjust consideration
(3) Excludes estimated conversion expenses of $10.8 million after-tax.
Accretion giving effect to these expenses would be $0.03 per share
A COMPREHENSIVE INTEGRATION PLAN
BEGINS TODAY
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DEVELOPING PLANS TO:
^ Minimize customer disruption by preserving customer-contact business
units - minimal branch consolidations
^ Deploy resources to service private banking and middle market clients
^ Roll-out intensive communication plans to customers and employees
^ Leverage PNC's world-class infrastructure by consolidating operations
and call centers
GROWING THE COMBINED FRANCHISE
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LONGER-TERM OPPORTUNITIES TO:
^ Expand customer base
^ Increase share of wallet from existing customers by expanding product
offerings
^ Enhance customer acquisition channels
^ Leverage brand recognition
POSITIVE IMPACT ON PNC EARNINGS
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$ millions, except EPS ESTIMATED IMPACT
ON NET INCOME
----------------
2004 2005
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United National Bancorp net income (1) $36 $41
Revenue synergies (none assumed) -0- -0-
Anticipated cost savings (2) 16 21
Net increase in amortization of intangibles (3) (3)
PNC net purchase accounting adjustments and
other 3 (3)
Financing cost (5) (5)
Net income available to PNC common $47 (3) $51
Estimated EPS Impact
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Accretion $0.07 (3) $0.08
(1) United National Bancorp net income based on United National management
estimates
(2) Total pre-tax cost savings estimated at $31 million; 74% realized in 2004,
and 100% realized in 2005
(3) Excludes estimated conversion expenses of $10.8 million after-tax.
Accretion giving effect to these expenses would be $0.03 per share
INTEGRATION DRIVEN BY EXPERIENCE
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INTEGRATION TIMING Complete by the end of 2004
COST SAVINGS ESTIMATE $31 million pre-tax - 38% of United National
2004 overhead
ESTIMATED CONVERSION EXPENSES $16 million pre-tax in 2004
COST SAVINGS IMPLEMENTATION TIMEFRAME
$ millions ------------------------
2004 2005
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Compensation and benefits $15 $21
Technology 5 6
Occupancy 2 2
Other 1 2
Total cost savings $23 $31
VALUATION CONSISTENT WITH COMPARABLE
TRANSACTIONS
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U.S. BANK DEALS WITH TRANSACTION VALUE BETWEEN $100 MILLION - $2 BILLION
FROM JANUARY 2002 TO PRESENT
PREMIUM/ PRICE/FORWARD PRICE/LTM PRICE/ PRICE/TANGIBLE
DEPOSITS EARNINGS (1) EARNINGS BOOK VALUE BOOK VALUE
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High 32.2% 23.3x 37.7x 5.07x 5.07x
Median 20.2% 17.1x 19.7x 2.65x 2.85x
Low 4.8% 14.8x 16.6x 1.34x 1.34x
UNBJ 21.1% 19.1x 21.6x 2.39x 3.74x
(1) Forward earnings is the target's earnings estimate for the full calendar
year in which the transaction is announced
(2) United National Bancorp price / forward earnings reflects P/E based on
United National management estimates for 2003
Source: SNL Financial and IDD
APPENDIX
UNITED NATIONAL BANCORP
HISTORICAL FINANCIAL DATA
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AS OF OR FOR THE
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$ millions, except EPS YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
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2000 2001 2002 2002 2003
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Loans $1,287 $1,236 $1,665 $1,249 $1,902
Total assets 2,112 1,963 2,868 2,060 3,032
Deposits 1,527 1,401 2,153 1,443 2,212
Shareholders' equity 141 157 265 158 267
Net income $24.7 $24.8 $20.4 $7.0 $15.2
Diluted EPS 1.59 1.62 1.24 0.47 0.80
ROA 1.16% 1.22% 0.88% 0.70% 1.04%
ROE 20.48 16.25 10.28 8.97 11.43
Net interest margin
(FTE) 3.65 4.04 4.02 4.07 3.90
Tier I leverage ratio 7.85% 10.33% 7.40% 9.59% 7.28%
Total capital ratio 11.74 13.77 11.36 13.19 10.78
Reserves to total loans 0.96% 1.01% 1.23% 1.20% 1.16%
NPLs to total loans 0.52 0.52 0.95 2.61 0.81
Note: United National Bancorp acquired Vista Bancorp on 8/21/02
PROXY STATEMENT/PROSPECTUS INFORMATION
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The PNC Financial Services Group, Inc. and United National Bancorp will
be filing a proxy statement/prospectus and other relevant documents concerning
the merger with the United States Securities and Exchange Commission (the
"SEC"). WE URGE INVESTORS TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER
DOCUMAENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE MERGER OR
INCORPORATED BY REFERENCE IN THE PROXY STATEMENT/PROSPECTUS, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain these documents
free of charge at the SEC's web site (www.sec.gov). In addition, documents filed
with the SEC by The PNC Financial Services Group, Inc. will be available free of
charge from Shareholder Services at (800) 982-7652. Documents filed with the SEC
by United National Bancorp will be available free of charge from
Shareholder Relations at (908) 429-2406.
The directors, executive officers, and certain other members of
management of United National Bancorp may be soliciting proxies in favor of the
merger from its shareholders. For Information about these directors, executive
officers, and members of management, shareholders are asked to refer to United
National Bancorp's most recent annual meeting proxy statement, which is
available on United National Bancorp's website (www.unitedtrust.com) and at the
addresses provided in the preceding paragraph.
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[PNC Logo]