Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Merger or Acquisition (July 2004)
21 slides from Pnc Financial Services Group, Inc. (the)'s merger presentation, Jul 16, 2004
Slide 1: PNC Announces the Acquisition of Riggs National Corporation
The PNC Financial Services Group, Inc. Announces the Acquisition of Riggs National Corporation July 16, 2004
Slide 2: Forward-Looking Information
Forward-Looking Information This presentation contains forward-looking statements with respect to PNC's outlook or expectations with respect to the planned acquisition of Riggs, the expected costs to be incurred in connection with the acquisition, Riggs's future performance, and the consequences of
Slide 3: Riggs National Corporation - Offers Unique Opportunities for Growth
Riggs National Corporation - Offers Unique Opportunities for Growth Expansion into one of the nation's most attractive regions Washington MSA is the 5th wealthiest in U.S. Population growth of 8.4%, significantly higher than the national average of 5.3% Meets PNC's strategic objectives Riggs is driv
Slide 4: Expanding in Attractive Washington, DC Market
Expanding in Attractive Washington, DC Market PNC's Growing East Coast Presence Branches 50 ATMs 151 Deposit market share Washington, DC 1st Washington, DC MSA 8th Results of Successful New Jersey Expansion Acquisition of Riggs National Corporation A Leading Franchise in Washington, DC Branches 283
Slide 5: Fast Growing and Affluent Region
Fast Growing and Affluent Region Washington, DC MSA $69,270 12.2% 8.4% New Jersey $61,179 11.3% 4.5% PNC footprint (1) $52,879 12.6% 2.8% Median Household Income Household Income Population Projected 5-Year Growth PNC six state, 68 county footprint Source: SNL Financial and Claritas (1) Washington,
Slide 6: Provides Solid Foundation for Planned Expansion
Provides Solid Foundation for Planned Expansion Existing 50 Riggs Branch Locations Montgomery, MD $78,969 11.7% 8.2% Prince George's, MD 60,273 9.0% 5.8% Fairfax, VA 90,409 12.6% 7.3% Alexandria, VA 63,334 12.0% 8.1% Prince William, VA 72,211 11.9% 13.9% Loudoun, VA 92,979 17.5% 28.2% Median Househo
Slide 7: PNC Regional Community Banking Model
Grow primary checking relationships Position PNC as the "bank of choice" for checking Diversify sources of customer acquisition Create an exceptional customer experience PNC Regional Community Banking Model - Creating a Valuable Customer Base Growth Strategies ...Provides Opportunities for Deepening
Slide 8: Transaction Summary
Transaction Summary Transaction value per share $24.25 per Riggs National share (1) Transaction total value $779 million (1) Consideration $321 million in cash and 7.5 million shares of PNC common stock Structure Cash election merger Collars and walkaways None Required approvals Riggs National share
Slide 9: Riggs Regulatory Matters to be Resolved Before Closing
Riggs Regulatory Matters to be Resolved Before Closing Due diligence completed and transaction reviewed with regulatory agencies PNC working closely with regulators to focus on continued compliance by Riggs with mandated action plan and regulatory enforcement actions Independent consultant (Promonto
Slide 10: Integration Planning Underway
Integration Planning Underway Leverages PNC's demonstrated integration capabilities Delivered on United National systems integration and cost save promises Sales results running ahead of expectations Integration leader and teams identified Leverages PNC's scalable technology platform
Slide 11: Initiatives to Improve Riggs Revenue Generation
Initiatives to Improve Riggs Revenue Generation Add 30 new branches in the Virginia/Maryland region over the next three years Focus on growing small business and middle market relationships by expanding product capabilities Enhance wealth management and brokerage product offerings
Slide 12: Riggs Financial Highlights
Riggs Financial Highlights Total loans $3,171 ($365) $2,806 Total assets $6,179 ($597) $5,582 Total deposits $4,148 ($1,123) $3,025 Assets under management $6,700 ($3,700) $3,000 Riggs Consolidated As of 3/31/04 Sale/Exit of Non-Core Activities(1) Riggs Proforma $ millions Sale/exit of non-core acti
Slide 13: Cost Savings
Cost Savings Integration timing Simultaneous closing and conversion by March 31, 2005 Cost savings estimate (1) 34% of Riggs 2004 noninterest expense Estimated conversion expenses $36 million after-tax in 2005 $ millions Cost Savings Estimated cost savings exclude incremental expenses associated wit
Slide 14: Impact on PNC Earnings
Riggs earnings contribution before planned expansion (1) $21 $45 $59 Financing cost (11) (11) (11) Net income available to PNC common before planned expansion 10 34 48 Planned expansion (8) (11) (5) Net income available to PNC common $2 $23 $43 Impact on PNC Earnings 2005 Riggs earnings contribution
Slide 15: EPS Impact
EPS Impact 2005 PNC reflects First Call mean estimate for 2005 of $4.50 growing at First Call long-term growth rate of 9% thereafter Riggs net income based on PNC management estimates after completing due diligence and includes cost saves and purchase accounting adjustments Excludes estimated one-ti
Slide 16: Transaction Exceeds IRR Targets
Transaction Exceeds IRR Targets Aggregate offer value ($779) After-tax one-time cash items (67) Net capital asset investments ($4) ($9) Riggs cash earnings contribution (3) 8 $32 $73 $99 Expense savings 21 30 29 28 26 Capital for asset expansion 30 13 (31) (30) (22) Terminal value (12x) 1,438 Increm
Slide 17: Valuation Consistent with Comparable Market Extension Transactions
Valuation Consistent with Comparable Market Extension Transactions Premium / Core Deposits High 45% 47% 3.33x 4.50x 5.21x Median 24% 28% 2.73x 3.36x 3.77x Low 13% 15% 2.02x 2.20x 2.44x Riggs (2) 13% 24% 2.03x 2.06x 4.36x Price / Book Value Price / Tangible Book Value Reported tangible equity adjuste
Slide 18: Summary
Summary Expansion into one of the nation's most attractive regions Meets PNC's acquisition objectives Meaningful opportunities for value creation by leveraging PNC's strengths
Slide 19: Appendix
Appendix
Slide 20: Comparable Market Extension Transactions
Comparable Market Extension Transactions Premium / Core Deposits Royal Bank of Scotland Charter One (2) 31% 32% 3.06x 3.54x 4.04x SunTrust National Commerce Financial 45% 47% 2.44x 4.40x 5.21x Wachovia SouthTrust 38% 39% 3.07x 3.76x 4.33x National City Provident Financial Group 22% 28% 2.21x 2.57x 3
Slide 21: Additional Information About This Transaction
Additional Information About This Transaction The PNC Financial Services Group, Inc. and Riggs 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 STA
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