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An Attractive Franchise Combination
Investor Presentation
November 20, 2001
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\ Conference Call Information
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The senior management team of United National & Vista Bancorp will present an
overview of the transaction and respond to investor questions via conference
call on November 20, 2001, at 1:00 p.m. Eastern Standard Time.
Please call in at least 10 minutes prior to the start of the call.
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* A taped playback of the call will be available through Monday, November 26th.
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Dial-In Number: (800) 937-6563
Pass Code: United National Bancorp Con Call
Play-Back Number: (800) 839-0860 Pin: Pin: 1068
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* Will not be available until one hour after the conference call is completed.
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\ Forward Looking Statement
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This presentation contains forward looking statements with respect to the
financial condition, results of operations and business of United National
Bancorp ("UNBJ") and Vista Bancorp, Inc. ("Vista") and assuming the consummation
of the transaction, a combined UNBJ and Vista, including statements relating to:
(i) the cost savings and revenue enhancements and accretion to reported and cash
earnings that will be realized from the merger; and (ii) the restructuring
charges expected to be incurred in connection with the merger. These forward
looking statements involve certain risks and uncertainties. Factors that may
cause actual results to differ materially from those contemplated by such
forward looking statements include, among other things, the following
possibilities: (i) expected cost savings from the merger cannot be fully
realized or realized within the expected time; (ii) revenues following the
merger are lower than expected; (iii) competitive pressure among depository
institutions increase significantly; (iv) the integration of the business of
UNBJ and Vista costs more, takes longer or is less successful than expected; (v)
the cost of additional capital is more than expected; (vi) changes in the
interest rate environment reduces interest margins; (vii) general economic
conditions, either nationally or in the states in which the combined company
will be doing business, are less favorable than expected; (viii) legislation or
regulatory requirements or changes adversely affect the business in which the
combined company will be engaged; and (ix) changes may occur in the securities
market. Neither UNBJ nor Vista assume any obligation to update forward looking
statements.
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Transaction Summary
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\ Transaction Summary
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Transaction: Acquisition of Vista by UNBJ
Implied Transaction Price: $28.36 per Vista share (a)
Transaction Value: Approximately $151 million
Stock Component to Shareholders: Approximately 4,656,000 shares
Cash Component to Shareholders: Approximately $37.6 million
Cash/Stock Election: Cash/stock election procedure subject to
proration
Consideration Mix: Approximately 75% stock / 25% cash
Walk-Away: 20% absolute & 20% index decline
Accounting Treatment: Purchase accounting (Core deposit
premium amortized over 8 years straight
line)
Lock- up: Option to acquire 19.9% of Vista's
outstanding common stock issued to
United National at an option price of
$21.50 per share
(a) Based on UNJB's closing price of $24.24 on
November 16, 2001.
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\ Transaction Summary
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Synergies: $6.4 million in annual cost saving
(approximately 33.3% of Vista's total
G&A expenses) 85% realized in 2002, 100%
realized in 2003
Restructuring Charge: Estimated at $9.1 million after-tax
($13 million pre-tax)
Board of Directors: Three board seats granted to Vista out
of a pro forma total of 19 UNBJ board
seats
Due Diligence: Comprehensive due diligence completed on
both sides, including credit file
reviews
Required Approvals: Shareholder approvals from both UNBJ &
Vista Normal regulatory reviews
Expected closing date: By April 30, 2002
Pro forma ownership: 23.5% Vista shareholders
76.5% UNBJ shareholders
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\ Transaction Summary
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Deal Value
(based on UNBJ's 11/16/01 close of $24.24): $151 Million
Price / 12 Month Trailing EPS: 19.6x
Price / 2002 EPS: 17.2x
Price / 2002 EPS with Synergies: 12.0x
Price / Book: 252.0%
Price / Tangible Book: 253.0%
Core Deposit Premium: 17.2%
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Strategic Rationale
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\ A Compelling Combination
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> Financial merits of an in-market transaction with strategic elements of a
market expansion deal
- Ability to realize cost saves
- Creation of a stronger competitor with a greater platform to deliver
banking products
> Logical geographic extension
- Strengthens position in Hunterdon and Warren counties in New Jersey
- Market entry into Pennsylvania
> Positions UNBJ as an attractive alternative to larger banks with less
personal service and smaller banks without the range of product offering
> Complementary business models
- Increased small business and middle market lending opportunities for
UNBJ
- Enhances UNBJ's Trust and Investment Services business, adding $53.9
million in assets under management
> Low Execution Risk
- UNBJ already has a significant presence within Vista's footprint
- Compatible business philosophy
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\ Unique Opportunity for Expansion into western
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NJ & new Entry into eastern PA
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\ Pro Forma UNBJ:
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#2 in Hunterdon County and #1 in Warren County
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County Deposit Share - Hunterdon, NJ
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Rank Holding Company Deposits % of List Branches Type
1 FleetBoston Financial Corp. $580,668 30.9 17 Bank
2 Pro Forma - United National Bancorp. 270,301 14.4 11 Bank
2 Commerce Bancorp Inc. 248,211 13.2 6 Bank
3 Wachovia Corp. 212,074 11.3 9 Bank
4 United National Bancorp 203,979 10.8 8 Bank
5 PNC Financial Services Group 180,906 9.6 4 Bank
6 Unity Bancorp Inc. 112,809 6.0 3 Bank
7 Somerset Savings Bank, SLA 93,598 5.0 2 Thrift
8 Hudson United Bancorp 78,369 4.2 6 Bank
9 Vista Bancorp Inc. 66,322 3.5 3 Bank
10 Peapack-Gladstone Financial 39,819 2.1 2 Bank
11 Roselle Savings Bank 25,906 1.4 1 SB
12 Sun Bancorp Inc. 16,574 0.9 1 Bank
13 Summit Federal S&LA 13,987 0.7 1 Thrift
14 Progress Financial Corp. 8,304 0.4 1 Thrift
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GRAND TOTAL $1,881,526 100.0 64
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County Deposit Share - Warren, NJ
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Rank Holding Company Deposits % of List Branches Type
1 Pro Forma - United National Bancorp. $536,948 35.8 12 Bank
1 Vista Bancorp Inc. $352,562 23.5 7 Bank
2 FleetBoston Financial Corp. 190,504 12.7 7 Bank
3 United National Bancorp 184,386 12.3 5 Bank
4 First Hope Bank, A Nat Bk Asc. 161,228 10.8 4 Bank
5 Wachovia Corp. 115,735 7.7 5 Bank
6 PNC Financial Services Group 112,961 7.5 5 Bank
7 Hudson City MHC 104,218 7.0 2 Bank
8 Fulton Financial Corp. 100,450 6.7 3 Bank
9 Valley National Bancorp 69,803 4.7 3 Bank
10 Washington Mutual Inc. 45,170 3.0 1 Thrift
11 Newton Financial Corporation 22,737 1.5 2 Bank
12 Bank of New York Co. 20,380 1.4 1 Bank
13 Summit Federal S&LA 19,301 1.3 1 Thrift
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GRAND TOTAL $1,499,435 100.0 46
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Source: SNL Securities, L.P.
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\ Vista's Market Share
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in Pennsylvania Counties
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County Deposit Share - Northampton, PA
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Rank Holding Company Deposits % of List Branches Type
1 FleetBoston Financial Corp. $611,396 17.60 18 Bank
2 Wachovia Corp. 551,247 15.87 32 Bank
3 Fulton Financial Corp. 492,966 14.19 16 Bank
4 Keystone Savings Bank 373,555 10.75 8 SB
4 PNC Financial Services Group 294,826 8.49 8 Bank
5 First Colonial Group Inc. 277,278 7.98 10 Bank
6 Sovereign Bancorp Inc. 243,662 7.02 10 Thrift
7 Vista Bancorp Inc. 159,478 4.59 5 Bank
8 MNB Corporation 134,161 3.86 6 Bank
9 First Star Bancorp Inc. 126,226 3.63 4 Bank
10 Patriot Bank Corp. 77,047 2.22 4 Bank
11 Premier Bancorp Inc. 59,963 1.73 2 Bank
12 Palm Bancorp 23,319 0.67 2 Bank
13 Harleysville National Corp. 18,484 0.53 2 Bank
14 Allied Irish Banks 15,245 0.44 1 Bank
15 National Penn Bancshares Inc. 14,731 0.42 1 Bank
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TOTAL (1-15) $3,473,584 100.00 129
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County Deposit Share - Lehigh, PA
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Rank Holding Company Deposits % of List Branches Type
1 Wachovia Corp. $1,631,376 40.52 47 Bank
2 Keystone Savings Bank 281,177 6.98 7 SB
3 PNC Financial Services Group 226,360 5.62 6 Bank
4 FleetBoston Financial Corp. 219,123 5.44 12 Bank
5 Sovereign Bancorp Inc. 218,175 5.42 13 Thrift
6 Fulton Financial Corp. 188,143 4.67 7 Bank
7 East Penn Bank 172,892 4.29 6 Bank
8 American Bank 125,047 3.11 1 Bank
9 Semperverde Holding Company 119,565 2.97 3 Bank
10 New Tripoli Bancorp, Inc. 114,977 2.86 1 Bank
20 Vista Bancorp Inc. 14,272 0.35 1 Bank
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TOP 10 $3,296,835 81.89 103
TOTAL (1-22) $4,025,981 100.00 143
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Source: SNL Securities, L.P.
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\ Financially Attractive
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(with Straightforward, Conservative Assumptions)
> As structured, the transaction is 1.5% accretive to GAAP EPS and 5.1%
accretive to cash EPS in the first full year
> Annual cost savings assumed are $6.4 million or 33.3% of Vista's
non-interest expenses with 85% realized in 2002 and 100% realized in 2003.
> Attractive Financing Structure
- Contemplated issuance of $30 million of trust preferred securities in
a low rate environment (i.e. tier 1 capital) significantly increasing
shareholder value
> No revenue enhancements have been assumed, but many opportunities have been
identified
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\ Enhanced Financial Scale Creates a Leading
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NJ Bank
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Financials as of 09/30/01 Pro Forma
($000's) Company
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Assets $2,740,588
Gross Loans $1,604,148
Deposits $2,021,758
Equity(a) $281,868
Trust Assets
Under Management $703,900
2002 Est. Net Income
(with 85% of synergies) $36,160
Market Capitalization (b) $483,000
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(a) Estimated at time of closing
(b) Based on pro forma shares outstanding and UNBJ's price of $24.24 as of
November 16, 2001.
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\ An Attractive and Complementary
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Loan Portfolio
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United
National % of Vista % of % of
Bancorp Total Bancorp Total Pro Forma Total
($000's)
Commercial and Industrial $312,846 26.7% $31,153 7.2% $343,999 21.4%
Real Estate:
Construction & land development 60,952 5.2% 662 0.2% 61,614 3.8%
1-4 family residential 347,616 29.6% 118,402 27.5% 466,018 29.1%
Commercial mortgages 177,222 15.1% 147,127 34.1% 324,349 20.2%
Other 730 0.1% 2,062 0.5% 2,792 0.2%
Consumer 273,966 23.3% 131,410 30.5% 405,376 25.3%
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Total Loans $1,173,332 $430,816 $1,604,148
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Note: Data as of 9/30/01
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\ Strong, Low-Cost Deposit Base
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United
National % of Vista % of % of
Bancorp Total Bancorp Total Pro Forma Total
($000's)
Non-Interest Bearing Deposits $251,222 17.5% $25,786 4.4% $277,008 13.7%
Money Market & Savings 545,205 38.0% 296,543 50.5% 841,748 41.6%
Time Deposits
($100,000 and Over) 195,951 13.7% 51,996 8.9% 247,947 12.3%
Other Time Deposits 442,349 30.8% 212,706 36.2% 655,055 32.4%
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Total Deposits $1,434,727 $587,031 $2,021,758
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Note: Data as of 9/30/01
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Financial Impact
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\ Pro Forma Impact Based on Earnings Estimates
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2002 2003
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($ in Millions except per share amounts)
UNBJ Net Income $27.7 $29.9
Vista Net Income 8.8 9.6
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Combined Earnings $36.5 $39.5
Cost Savings (after-tax) 3.3 3.8
Net Cost of Financing (1.8) (1.8)
New CDI Intangible Amortization (1.4) (1.4)
Amort. of Write-up in AFS Securities (0.4) (0.4)
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Pro Forma Earnings $36.2 $39.7
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Pro Forma Cash Earnings $38.9 $42.4
Pro Forma GAAP Earnings $36.2 $39.7
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Average Diluted Shares Outstanding 19.9 19.9
Pro Forma GAAP EPS $1.82 $2.00
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Cash EPS Accretion/(Dilution) 2.4% 3.9%
GAAP EPS Accretion/(Dilution) 0.0% 1.5%
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* Includes estimated merger related charge.
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\ Strong Pro Forma Financial Position
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At Sept. 30, 2001
(000's) ---------------------------- Pro Forma
Balance Sheet Items: UNBJ Vista at Close (a)
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Assets $1,943,624 $698,772 $2,740,588
Loans 1,173,332 430,816 1,604,148
Intangible Assets 5,590 344 111,550
Deposits 1,434,727 587,031 2,021,758
Equity 160,531 59,662 281,868
Loan Loss Reserve 12,325 6,437 20,762
Capital Securities 20,000 0 50,000
Capital Ratios:
Equity/Assets 8.26% 8.54% 10.28%
Tang. Equity/Assets 7.99% 8.49% 6.48%
Asset quality Ratios (b)
NPAs/Loans + OREO 0.45% 0.77% 0.53%
Loan Loss Reserve/NPL's 242.67% 239.12% 267.17%
Loan Loss Reserve/Loans 1.05% 1.49% 1.29%
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(a) Balance sheet data as of September 30, 2001 as adjusted to include the
impact of one-time charges and other purchase accounting adjustments
including the stock consideration issued to Vista. Equity is estimated as
of March 31, 2002.
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Summary
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\ Summary
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> Creation of a stronger competitor in familiar markets
> Excellent entry opportunity into Eastern Pennsylvania markets
> Immediately accretive to both new GAAP and cash EPS
> Similar cultures and community banking operating models
> Complementary business lines
> Effective use of capital
> Low execution risk
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\ Estimated Annual Cost Savings
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($000's)
Personnel Expense $4,500
Net Occupancy Expense $750
Other Non-Interest Expense $1,150
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Total Non-Interest Expense $6,400
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\ Transaction Expenses
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($000's)
Severance $3,200
Professional Fees $2,250
Facilities Closing Costs $1,150
Equipment Lease $1,000
Additional Loan Loss Provision $1,183
Other $300
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Total One-time After-tax Expenses $9,083
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