Filed by Monroe Bancorp
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:  Monroe Bancorp
Commission File No. 0-31951

 
This filing relates to the proposed merger transaction between Old National Bancorp (“Old National”) and Monroe Bancorp (“Monroe”) pursuant to the terms of an Agreement and Plan of Merger dated as of October 5, 2010 (the “Merger Agreement”) between Old National and Monroe.  The Merger Agreement is on file with the Securities and Exchange Commission (“SEC”) as an exhibit to the Current Report on Form 8-K filed by Monroe on October 6, 2010.

Forward-Looking Statements
 
This filing contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements include, but are not limited to, descriptions of Old National’s and Monroe’s financial condition, results of operations, asset and credit quality trends and profitability and statements about the expected timing, completion, financial benefits and other effects of the proposed merger between Old National and Monroe.  Forward-looking statements can be identified by the use of the words “anticipate,” “believe,” “expect,” “intend,” “could” and “should,” and other words of similar meaning.  These forward-looking statements express management’s current expectations or forecasts of future events and, by their nature, are subject to risks and uncertainties and there are a number of factors that could cause actual results to differ materially from those in such statements.  Factors that might cause such a difference include, but are not limited to: expected cost savings, synergies and other financial benefits from the proposed merger might not be realized within the expected time frames and costs or difficulties relating to integration matters might be greater than expected; the requisite shareholder and regulatory approvals for the proposed merger might not be obtained; market, economic, operational, liquidity, credit and interest rate risks associated with Old National’s and Monroe’s businesses, competition, government legislation and policies, ability of Old National and Monroe to execute its business plans, including acquisition plans, changes in the economy which could materially impact credit quality trends and the ability to generate loans and gather deposits, failure or circumvention of either Old National’s or Monroe’s internal controls, failure or disruption of our information systems, significant changes in accounting, tax or regulatory practices or requirements, new legal obligations or liabilities or unfavorable resolutions of litigations, other matters discussed in this filing and other factors identified in each company’s Annual Report on Form 10-K and other periodic filings with the SEC.  These forward-looking statements are made only as of the date of this filing, and neither Old National nor Monroe undertakes an obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this filing.

Additional Information for Shareholders

In connection with the proposed merger, Old National will file with the SEC a Registration Statement on Form S-4 that will include a Proxy Statement of Monroe and a Prospectus of Old National, as well as other relevant documents concerning the proposed transaction.  Shareholders are urged to read the Registration Statement and the Proxy Statement/Prospectus regarding the merger when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information.  A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Old National and Monroe, may be obtained at the SEC’s Internet site (http://www.sec.gov).  You will also be able to obtain these documents, free of charge, from Old National at www.oldnational.com under the tab “Investor Relations” and then under the heading “Financial Information” or from Monroe by accessing Monroe’s website at www.monroebank.com under the tab “Shareholder Relations” and then under the heading “Financial Reports.”

Participants in This Transaction

Old National and Monroe and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Monroe in connection with the proposed merger.  Information about the directors and executive officers of Old National is set forth in the proxy statement for Old National’s 2010 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 19, 2010.  Information about the directors and executive officers of Monroe is set forth in the proxy statement for Monroe’s 2010 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 29, 2010.  Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement/Prospectus regarding the proposed merger when it becomes available.  Free copies of this document may be obtained as described in the preceding paragraph.

* * * * * * * * * *
 
Set forth below are slides from an investor presentation given on October 6, 2010 by Robert G. Jones, President and Chief Executive Officer of Old National Bancorp, Mark D. Bradford, President and Chief Executive Officer of Monroe Bancorp, Christopher Wolking, Senior Executive Vice President and Chief Financial Officer of Old National Bancorp, and Lynell Walton, Senior Vice President and Investor Relations Officer of Old National Bancorp.
 
 

 
 
 
NYSE:   ONB
Old National Bancorp
Investor Presentation
October 6, 2010
 
 

 
NYSE:   ONB
Lynell Walton
Senior Vice President
Investor Relations Officer
Old National Bancorp
 
 

 
3
Additional Information for Shareholders
  In connection with the proposed merger, Old National Bancorp will file with the
  Securities and Exchange Commission a Registration Statement on Form S-4 that will
  include a Proxy Statement of Monroe Bancorp and a Prospectus of Old National, as well
  as other relevant documents concerning the proposed transaction. Shareholders are urged
  to read the Registration Statement and the Proxy Statement/Prospectus regarding the
  merger when it becomes available and any other relevant documents filed with the SEC,
  as well as any amendments or supplements to those documents, because they will contain
  important information. A free copy of the Proxy Statement/Prospectus, as well as other
  filings containing information about Old National and Monroe, may be obtained at the
  SEC’s Internet site (http://www.sec.gov). You will also be able to obtain these documents,
  free of charge, from Old National at www.oldnational.com under the tab “Investor
  Relations” and then under the heading “Financial Information” or from Monroe by
  accessing Monroe’s website at www.monroebank.com under the tab “Shareholder
  Relations” and then under the heading “Financial Reports.”
  Old National and Monroe and certain of their directors and executive officers may be
  deemed to be participants in the solicitation of proxies from the shareholders of Monroe
  in connection with the proposed merger. Information about the directors and executive
  officers of Old National is set forth in the proxy statement for Old National’s 2010 annual
  meeting of shareholders, as filed with the SEC on a Schedule 14A on March 19, 2010.
  Information about the directors and executive officers of Monroe is set forth in the proxy
  statement for Monroe’s 2010 annual meeting of shareholders, as filed with the SEC on a
  Schedule 14A on March 29, 2010. Additional information regarding the interests of those
  participants and other persons who may be deemed participants in the transaction may be
  obtained by reading the Proxy Statement/Prospectus regarding the proposed merger
  when it becomes available. Free copies of this document may be obtained as described in
  the preceding paragraph.
 
 

 
4
Forward-Looking Statement
  This presentation contains certain forward-looking statements within the meaning of the
  Private Securities Litigation Reform Act of 1995.   These statements include, but are not
  limited to, descriptions of Old National’s and Monroe’s financial condition, results of
  operations, asset and credit quality trends and profitability and statements about the expected
  timing, completion, financial benefits and other effects of the proposed merger.   Forward-
  looking statements can be identified by the use of the words “anticipate,” “believe,” “expect,”
  “intend,” “could” and “should,” and other words of similar meaning.   These forward-looking
  statements express management’s current expectations or forecasts of future events and, by
  their nature, are subject to risks and uncertainties and there are a number of factors that
  could cause actual results to differ materially from those in such statements.   Factors that
  might cause such a difference include, but are not limited to; expected cost savings, synergies
  and other financial benefits from the proposed merger might not be realized within the
  expected time frames and costs or difficulties relating to integration matters might be greater
  than expected; the requisite shareholder and regulatory approvals for the proposed merger
  might not be obtained; market, economic, operational, liquidity, credit and interest rate risks
  associated with Old National's and Monroe’s businesses, competition, government legislation
  and policies, ability of Old National and Monroe to execute its business plan, including
  acquisition plans, changes in the economy which could materially impact credit quality trends
  and the ability to generate loans and gather deposits, failure or circumvention of either Old
  National’s or Monroe’s internal controls, failure or disruption of our information systems,
  significant changes in accounting, tax or regulatory practices or requirements, new legal
  obligations or liabilities or unfavorable resolutions of litigations, other matters discussed in
  this presentation and other factors identified in each Company’s Annual Report on Form 10-
  K and other periodic filings with the Securities and Exchange Commission.   These forward-
  looking statements are made only as of the date of this presentation, and neither Old National
  nor Monroe undertakes an obligation to release revisions to these forward-looking statements
  to reflect events or conditions after the date of this presentation.
 
 

 
5
Non-GAAP Financial Measures
These slides contain non-GAAP financial measures. For
  purposes of Regulation G, a non-GAAP financial measure is
  a numerical measure of the registrant's historical or future
  financial performance, financial position or cash flows that
  excludes amounts, or is subject to adjustments that have the
  effect of excluding amounts, that are included in the most
  directly comparable measure calculated and presented in
  accordance with GAAP in the statement of income, balance
  sheet or statement of cash flows (or equivalent statements) of
  the issuer; or includes amounts, or is subject to adjustments
  that have the effect of including amounts, that are excluded
  from the most directly comparable measure so calculated and
  presented.   In this regard, GAAP refers to generally accepted
  accounting principles in the United States.   Pursuant to the
  requirements of Regulation G, Old National Bancorp has
  provided reconciliations within the slides, as necessary, of the
  non-GAAP financial measure to the most directly
  comparable GAAP financial measure.
 
 

 
NYSE:   ONB
Bob Jones
President
Chief Executive Officer
Old National Bancorp
 
 

 
7
Bloomington
Bloomington is home to
Indiana University with
40,000+ students
Old National Bancorp
Monroe Bancorp
NASDAQ: MROE
ONB to Acquire Monroe Bancorp
 
 

 
8
*At June 30, 2010
Source:   SNL Financial
Monroe Bancorp
  $845 million total assets *
  $790 million total liabilities *
  $336 million in trust assets *
  15 branch locations
 
 

 
9
Shareholder Value
  Immediately accretive to earnings
    Excluding one-time expenses
    Accretive $.06 - $.07 per share over long
  term
  Internal rate of return > 18%
  G&A expense saves > 30%
    In market transaction
    Up to 6 branch consolidations
 
 

 
10
Why Monroe?
  Dominant market share in a strong
  Indiana market
    Median household growth and population
  growth above national average
  Enhances Indianapolis presence
  Immediately accretive to earnings
  Same cultural values
  Strong management team
 
 

 
NYSE:   ONB
Mark Bradford
President
Chief Executive Officer
Monroe Bancorp
 
 

 
12
Why Old National?
  Same cultural values
  Strong Indiana bank
  Improved stock liquidity
  Attractive growth potential
  Opportunity to participate in future
  acquisitions
 
 

 
13
Sources:   *SNL Financial   ** Bloomington Economic Development Corporation
Bloomington Demographics
  Monroe County population of 130,750 *
    Bloomington population of 72,900
  August unemployment of 7.6% *
    Indiana = 9.9%
  Largest employers **
    Indiana University       6,000
    Cook, Inc. (Medical Instruments)     3,000
    Bloomington Hospital     2,830
    Monroe Co. Schools       1,930
    Baxter BioPharma (Pharmaceuticals) 1,200
 
 

 
14
Bloomington
Brownstown
Bedford
Old National Bancorp
Monroe Bancorp
Monroe provides comprehensive
coverage of key Bloomington market
Bloomington Area
 
 

 
15
2009
Rank
Company
Branches
Deposits
$ Millions
Market
Share
% of
Deposits
1
Pro Forma
17
$673,4
29.16%
10.38%
1
Monroe Bancorp (IN)
13
522.8
22.63
77.67
2
JP Morgan Chase (NY)
6
315.4
13.66
.05
3
Universal Bancorp (IN)
9
265.5
11.49
76.88
4
United Commerce Bancorp (IN)
2
167.2
7.24
99.80
5
Old National Bancorp (IN)
4
150.6
6.52
2.59
6
Ellettsville Bancshares (IN)
7
147.2
6.38
80.34
7
Regions Financial Corporation (AL)
4
145.4
6.29
.16
8
Owen Financial Corporation (IN)
5
132.3
5.73
100.00
9
Fifth Third Bancorp (OH)
3
130.7
5.66
.17
Source:   SNL Financial
Bloomington Market Share
 
 

 
16
Avon
Plainfield
Noblesville
Brownsburg
Old National Bancorp
Monroe Bancorp
Indianapolis suburban locations with
favorable demographics
Indianapolis Enhancement
 
 

 
NYSE:   ONB
Chris Wolking
Senior Executive Vice
President
Chief Financial Officer
Old National Bancorp
 
 

 
18
*Based on MROE data Form 10-Q for period ending June 30, 2010
Financial Highlights
  Deal value = $83.5 million (ONB share
  price of $10.47)
    100% ONB stock
    1.275 shares of ONB per share of MROE
  Tangible premium/core deposits * of 5.5%
  Price to tangible book value * of 149.5%
  Market premium of 148.1%
 
 

 
19
Modeling Assumptions
  Estimated one-time charges of $10.8 million (pre-tax)
  Combined cost savings of $9.7 million
    55% captured in 2011
    100% captured in 2012
  Intangible assets of $15.2 million, $9.9 million net of
  tax, amortized using sum of years digits over 7 years
  Goodwill of $38.4 million
  Total loan mark estimated at 8.5% to 9.5% (estimated
  credit mark of 5.5% to 6.5%)
    Including current reserves of 3.20% of total loans at 6-30-
  2010
  7,942,967 shares issued to MROE shareholders
    Excludes outstanding stock options
 
 

 
20
 
ONB
6-30-2010*
Projected at
Closing
Tangible Common Equity/Tangible Assets
9.03%
8.70%
Tangible Common Equity/Risk Weighted Assets
13.98%
13.09%
Total Risk Based Capital/Risk Weighted Assets
16.97%
15.71%
Tangible Book Value Per Share
$7.77
$7.54
*See Appendix for Non-GAAP reconciliations.
Pro Forma Capital
 
 

 
21
Other Transaction Details
  Exchange ratio adjusts downward if ONB is trading
  above $10.98 near closing
  If shareholders equity is less than $55.64 million,
  (following certain adjustments) exchange ratio adjusts
  downward
    Closing condition that consolidated shareholders’ equity
  may not be less than $50.64 million
  If delinquent loans equal or exceed $59.72 million,
  exchange ratio adjusts downward
    Closing condition that delinquent loans may not exceed
  $76.72 million
  Conventional double trigger walk-away provision
 
 

 
NYSE:   ONB
Bob Jones
President
Chief Executive Officer
Old National Bancorp
 
 

 
23
Due Diligence
  Comprehensive review of all
  operations and business lines
  Extensive credit review
    Familiarity with many credit
  relationships and known local markets
    69% of commercial loans were reviewed
  Obtained in-depth look of culture
    Significant time with top five senior
  management members
 
 

 
24
Going Forward
  Transaction does not preclude ONB
  from pursuing additional acquisition
  opportunities
 
 

 
NYSE:   ONB
Old National Bancorp
Thank You!
Q&A
 
 

 
NYSE:   ONB
Old National Bancorp
Appendix
 
 

 
27
(end of period balances- $ in millions)
ONB at   6
-30-2010
Projected at
Closing
Total Shareholders’ Equity
$874.7
$965.9
Deduct:   Goodwill and Intangible Assets
(197.1)
(248.4)
Tangible Shareholders’ Equity
677.7
717.5
Deduct:   Preferred Stock
-0-
-0-
Tangible Common Shareholders’ Equity
$677.7
$717.5
Total Assets
$7,701.1
$8,493.1
Add:   Trust Overdrafts
.1
.1
Deduct:   Goodwill and Intangible Assets
(197.1)
(248.4)
Tangible Assets
$7,504.1
$8,244.7
Tangible Equity to Tangible Assets
9.03%
8.70%
Tangible Common Equity to Tangible Assets
9.03%
8.70%
Non-GAAP Reconciliations
 
 

 
28
(end of period balances- $ in millions)
ONB at
6-30-2010
Projected at
Closing
Total Shareholders’ Equity
$874.7
$965.9
Deduct:   Goodwill and Intangible Assets
(197.1)
(248.4)
Tangible Shareholders’ Equity
677.7
717.5
Deduct:   Preferred Stock
-0-
-0-
Tangible Common Shareholders’ Equity
$677.7
$717.5
Risk Adjusted Assets
$4,847.4
$5,483.1
Tangible Common Equity to Risk Weighted Assets
13.98%
13.09%
Non-GAAP Reconciliations
 
 

 
29
(end of period balances- $ in millions)
ONB at
6-30-2010
Projected at
Closing
Total Shareholders’ Equity
$874.7
$965.9
Deduct:   Goodwill and Intangible Assets
(197.1)
(248.4)
Tangible Shareholders’ Equity
677.7
717.5
Deduct:   Preferred Stock
-0-
-0-
Tangible Common Shareholders’ Equity
$677.7
$717.5
Common Shares Issued and Outstanding
87,171
95,104
Tangible Book Value per Share
$7.77
$7.54
(end of period balances- $ in millions)
ONB at   6
-30-2010
Projected at
Closing
Total Risk Based Capital
$822.8
$861.7
Risk Adjusted Assets
$4,847.4
$5,483.1
Total Risk Based Capital/Risk Weighted Assets
16.97%
15.71%
Non-GAAP Reconciliations
 
 
 
Monroe Bancorp (NASDAQ:MROE)
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