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 the transcript from a conference call for investors
that took place on October 16, 2003 in connection with financial results for The
PNC Financial Services Group, Inc. for the third quarter 2003.

Bill Callihan:      Good morning and welcome to today's conference call for The
                    PNC Financial Services Group. Participating in the call this
                    morning will be PNC's Chairman and Chief Executive Officer,
                    Jim Rohr and Bill Demchak, the company's Vice Chairman and
                    Chief Financial Officer.

                    As a reminder, the following comments contain
                    forward-looking information. Actual results or future events
                    could differ - possibly materially - and due to a variety of
                    factors including those described in this call and today's
                    earnings release and supplementary financial information and
                    in our 2002 Form 10-K and other SEC reports.

                    These statements speak only as of October 16, 2003 and PNC
                    undertakes no obligation to update them.

                    The following comments also include a discussion of non-GAAP
                    financial measures, which is qualified by the GAAP
                    reconciliation information included in our earnings release,
                    financial supplement, and other documents available on our
                    web site at in the Investor section.

                    Now let me turn over the call to Jim Rohr.

Jim Rohr:           Thanks, Bill, and welcome to everyone joining us this
                    morning. Let me begin by saying that overall we're very
                    pleased with our performance. Most importantly, our reported
                    earnings exceeded Street expectations and our asset quality
                    remained stable with non-performing assets and
                    non-performing loans both lower than the previous quarter.

                    I'd also like to point out a few other notable achievements
                    from the quarter. The Federal Reserve Bank of Cleveland and
                    the Office of the Comptroller of the Currency lifted our
                    written agreements - confirming the quality of our
                    governance and risk management programs. And Moody's
                    recognized this progress just yesterday by affirming our
                    debt ratings with a positive outlook.

                    We also earned recognition from Information Week for our
                    premier technology platform and from Working Mother Magazine
                    for the strong culture our employees have ingrained
                    throughout the company. So we're pleased that we were
                    recognized for success on a number of fronts.

                    But let me now turn to the fact that our team remains
                    focused on executing our growth strategies. In the third
                    quarter we expanded our customer base and grew consumer
                    demand deposits 18% - two key elements of our plan. However,
                    weak loan demand and general economic conditions have
                    dampened our overall business results in what has been a
                    historically low interest rate environment.

                    We could have boosted our short-term revenue by betting the
                    balance sheet and extending the duration of our portfolio,
                    but that goes against our risk management philosophy, so we
                    didn't. Bill Demchak will provide some more detail about
                    these items in a few moments.


                    But first let me highlight some of our broader
                    accomplishments and comment on the strategic significance of
                    each. As you know, our vision is to become a premier
                    financial services marketing company, one defined by
                    high-return business mix, above average growth, and moderate
                    risk profile. How are we going to get there?

                    Well many of you are familiar with the four key elements of
                    the plan. One is to expand our deposit group and banking
                    franchise. Two is to grow our asset management and
                    processing businesses. Three, to leverage our core operating
                    platform and customer base to enhance efficiencies and our
                    growth prospects. And four, to manage this process through
                    best-in-class corporate governance, financial discipline,
                    and risk management.

                    We've taken a number of actions so far this year,
                    particularly in the third quarter, that have helped us to
                    make progress against these three objectives.

                    As I mentioned, we've developed a successful banking model.
                    It continues to grow our targeted customer base and is
                    generating high returns and great cash flow and we're
                    focused on expanding it. As I've mentioned, as Bill will
                    talk in a moment, we've increased demand deposits 18% on an
                    annualized basis.

                    We recently announced also the opportunity to acquire United
                    National as well as to open offices in 40 Stop-and-Shop
                    locations in New Jersey. This will broaden our presence in
                    that state and give us an opportunity to add thousands of
                    core customers, private banking as well as business
                    customers, in markets that are extraordinarily wealthy and
                    rapidly growing.

                    We remain on schedule with our planning for the United
                    National acquisition and we anticipate a January close.


                    Now with both PNC Advisors and PFPC, we continue to focus on
                    operating leverage. PNC Advisors is working to streamline
                    operations and to grow its client base, which is the real
                    challenge in this business.

                    To help with the latter we have re-engineered our sales
                    platform. We have a cost reduction program in place. And at
                    the end of the quarter we launched a very attractive managed
                    account product.

                    At PFPC - there they continue to gain momentum. We had one
                    of the best quarters in terms of new customer acquisitions
                    and the pipeline remains strong. And we also continue to
                    invest in this business, acquiring AdvisorPort, the robust,
                    technology-driven managed account platform in which we have
                    a significant presence.

                    To concentrate on our highest return segments we also
                    divested our retirement services business. I would also like
                    to point out that PFPC is on pace to exceed the $50 million
                    in cost savings we targeted by the end of the year and
                    that's before taking into account the sale of the retirement

                    BlackRock continues to drive premium growth. Some of you may
                    have listened to Larry last night on his call - the fixed
                    income performance of BlackRock continues to be

                    And since the beginning of the year we've also strengthened
                    our equity capabilities there. We've acquired a
                    fund-to-funds manager and expanded BlackRock's private
                    client sales and marketing capabilities.

                    I'm confident that our businesses will take advantage of
                    these initiatives because we've provided a strong platform.
                    We've dramatically enhanced our risk management organization
                    over the last 18 months and you can see that in


                    our performance. From a credit risk perspective, once again,
                    asset quality remains stable. NPAs and NPLs were down as was
                    our loan loss position. And we've built provisions. And
                    we've built excellent reserve coverage relative to our

                    Our technology platform also differentiates PNC in the
                    marketplace. As I mentioned, last week Information Week
                    ranked us first in financial services and number 19 overall
                    in its annual list of 500 technology innovators.

                    When you combine technology with the risk management
                    efforts, business mix and our extraordinary people, that's a
                    platform from which we believe we can deliver above average
                    growth over time.

                    Our strategies work together to provide us with great
                    liquidity, a diverse revenue stream, and strong capital
                    positions. We plan to maintain a disciplined strategy to
                    managing capital and you know we're always - aspires to a
                    total return approach. That includes investing in our
                    businesses, as we're doing with the United National
                    acquisition, and returning capital to our shareholders
                    through dividend payouts and share repurchases. And as you
                    know, our Board of Directors approved a 4% dividend increase
                    only a couple of weeks ago.

                    These combined actions I think leave us well positioned to
                    take advantage of growth opportunities just through
                    executing our strategies and staying focused on the
                    customer. And I'm confident in our team's ability to do just
                    that in a recovering economy.

                    With that, I'll turn it over to Bill to discuss our earnings
                    in more detail. Bill?


Bill Demchak:       Thanks Jim. As you've seen, we reported net income of $281
                    million, or $1 per diluted share, for the third quarter.
                    This generated a 17% return on equity. As is usually the
                    case we had a few items that we would not consider to be
                    part of our normal earnings stream.

                    In excluding those items, and they're detailed in the press
                    release, normalized third quarter earnings were 95 cents per
                    share, which is up from 94 [cents] in the second quarter
                    and, importantly, it's up 8% from normalized results if you
                    look back in the third quarter of 2002.

                    Now without question, the single largest impact on our third
                    quarter disclosures was the early adoption of FIN 46. We
                    began consolidating several variable interest entities, or
                    VIEs, with assets and liabilities of approximately six and a
                    half billion [dollars] on July 1 based on the original
                    effective date of the standard and therefore we didn't need
                    to take advantage of the FASB postponement.

                    Now this having been said, guidance on this subject
                    continues to evolve and we will continue to pursue
                    alternatives that would allow us to possibly de-consolidate
                    some of these entities.

                    Consolidating the VIEs also increased various income and
                    expense items, most of which are reversed in minority
                    interest. And as you would expect, the comparability of many
                    financial ratios were also impacted. In an effort to provide
                    greater transparency pertaining to FIN 46, we provided a
                    consolidating balance sheet and income statement on pages 18
                    and 19 of the press release.

                    Let's take a look at some of the factors that drove the
                    quarter. First of all, business earnings were $291 million
                    in the third quarter, which is a decline of


                    $5 million when compared with the prior quarter. And the
                    primary reason for this decline was margin compression due
                    to lower yields on earning assets. This impact was primarily
                    felt in the regional community bank and was only partially
                    offset by higher earnings in the wholesale bank.

                    It's important to note that while earnings are down in the
                    RCB the decrease is primarily related to the repricing of
                    securities and certainly is not due to a loss of clients or
                    activity. We had another successful quarter in net client
                    growth and as you will see, the growth in the home equity
                    loans and average demand deposits speak for themselves.

                    On a consolidated basis, total revenue was over a billion
                    four [$1.4 billion] on a reported basis, an increase of $121
                    million when compared with the second quarter. The impact of
                    FIN 46 was $117 million and is primarily in other income. As
                    expected in this low rate environment, spread revenue
                    decreased but was more than offset by an increase in
                    non-interest income.

                    Let's start off with net interest income. On a taxable
                    equivalent basis in the third quarter it was $514 million, a
                    decrease of $9 million when compared with the second
                    quarter. The margin for the third quarter was 3.49%, or down
                    42 basis points, on a comparable basis.

                    Now we expect the NII and the margin to decline due to this
                    low rate environment. And in the third quarter interest
                    rates accounted for declines of $24 million in net interest
                    income and 23 basis points in net interest margin on a
                    linked quarter basis.

                    There were also two accounting-related impacts on net
                    interest income, both of which are detailed in the press
                    release and when combined accounted for a


                    $15 million increase in NII but a 19 basis point decline in
                    the margin on a linked quarter basis.

                    The first of these is related to FIN 46. Due to the
                    BlackRock Funds and the commercial paper conduits we brought
                    onto the balance sheet, spread revenue increased
                    approximately $29 million. The second issue was related to
                    FAS 150 and the reclassification of dividends on our trust
                    preferred of $14 million from non-interest expense to
                    interest expense.

                    As we indicated last quarter, we believe the second
                    quarter's NII and margin were somewhat of an anomaly and
                    frankly the more relevant comparison we believe is to the
                    first quarter. In that case, if you exclude the impact of
                    FIN 46 and the trust preferred, the change in NII was a
                    decline of only $7 million and the margin narrowed by eight
                    basis points.

                    On the asset front, average earning assets for the third
                    quarter were $58.4 billion, an increase of $5.2 billion from
                    the second quarter. And the consolidation of the VIEs
                    accounted for substantially all of this increase and were
                    recorded in other earning assets.

                    Home equity loans continued to be one of our best asset
                    classes from a returning growth perspective and in this
                    quarter average home equity loans increased 27% on an
                    annualized basis.

                    On the wholesale banking side, average commercial and
                    commercial real estate loans declined approximately $300
                    million when compared to the previous quarter principally
                    due to soft demand and low credit utilization rates that
                    remain in the mid-40s from our existing clients.


                    But due to our customer focused approach, we are not seeing
                    - while we're not seeing net loan growth - we are pleased
                    with the firm's client growth in the wholesale space from a
                    future revenue generation perspective and we continue to see
                    improved activity in the pipeline.

                    In the RCB our strategy of growing DDA households continued
                    to be successful on several fronts. First we grew DDA
                    relationships by 29,000 and average DDA deposits by $529
                    million, or 18% annualized on a linked quarter basis. And as
                    we discussed before, building this deposit franchise reduces
                    the firm's funding cost and provides us with a strong source
                    of liquidity.

                    But just as important, a DDA account provides us with the
                    opportunity to sell more products and services to those
                    66,000 new clients that we've added in the last 12 months.
                    This quarter consumer fees and service charges on deposits
                    increased 5% when compared with the same quarter a year ago.

                    As previously disclosed during the first half of the year we
                    had an open position to falling interest rates. And with the
                    backup in rates this quarter, we reduced that position by
                    purchasing a combination of short-term securities and
                    received fixed swaps.

                    Going forward in this historic low rate environment, we
                    fully expect that net interest income for the industry will
                    be under pressure as NII lags changes in interest rates and
                    we are no exception.

                    Hopefully a simple example using the yield on the three-year
                    swap rate will help illustrate this point. If you go back to
                    June of 2000 the yield on the three-year swap was 7.2%. In
                    June of 2003 it was 1.95% and today the yield is 2.75%.


                    As a result of this decline, assuming you're not taking on
                    more risk in leveraging your balance sheet, then the
                    alternative is to replace maturing assets with assets that
                    are more than 4% lower in yield.

                    At the same time with rates at these levels it would be
                    difficult to offset this impact again by repricing your
                    deposit costs lower. Therefore we think it's going to take
                    time for the impact of the low rate environment to move
                    through the system.

                    Now one factor that will mitigate this impact on PNC is our
                    distinct revenue mix. Only 36% of our total revenues are
                    spread-related, which is one of the lowest percentages in
                    our peer group. While we have clearly had pressure on our
                    margin, on a relative basis it should have less impact on
                    our revenues overall.

                    Now let me turn quickly to asset quality. Both NPAs and NPLs
                    declined this quarter when compared to the previous quarter,
                    principally due to the continued liquidation of our held for
                    sale loan portfolio, principal reductions, and a previously
                    disclosed charge-off on our asset-based lending unit.

                    This quarter net charge offs were $63 million, which is
                    unchanged when compared to last quarter. This quarter
                    included a $28 million charge related to our largest
                    non-performing asset-based lending credit that we mentioned
                    last quarter and we substantially reserved for last quarter.

                    Net charge-offs to average loans were 73 basis points in the
                    third quarter and our loan loss provision was $50 million or
                    58 basis points of average loans in the third quarter.


                    I'm going to spend a second on our asset-based lending
                    portfolio. First, the credit we took a charge against this
                    quarter is an outlier both in terms of size and structure.
                    This is the largest single relationship we have in the
                    business or had in the business and was supported more by
                    its franchise value than a collateral value.

                    Approximately 99% of the performing credits in this business
                    are underwritten based on the value of collateral with an
                    average commitment size of just $16 million. Less than ten
                    commitments exceed $35 million and represent only 5% of the

                    And finally, the remaining NPAs in this business are modest
                    in size. For example the second largest NPA in Business
                    Credit is only $21 million, and is secured by accounts
                    receivable and inventory.

                    When we evaluate all the various credit risk aspects of our
                    total loan book, we remain comfortable with our asset
                    quality position and believe it should remain stable or
                    could possibly improve in the near term.

                    Turn for a second to non-interest income, in the third
                    quarter non-interest income was $906 million, compared with
                    $776 [million] in the second quarter. And excluding the
                    items we identified in the normalized chart on page 16, and
                    excluding $88 million associated with FIN 46, non-interest
                    income was $795 million. This is an increase of 15%
                    annualized when compared with the second quarter on the same
                    basis, due to higher asset management fees, corporate
                    services, and other income.

                    As you know, we've been focused on improving performance of
                    PNC Advisors and PFPC. Revenues at Advisors grew 3% on an
                    annualized linked


                    quarter basis, excluding $76 million from consolidating the
                    Hawthorn Funds under FIN 46.

                    At PFPC, revenue growth was 13% on a linked quarter
                    annualized basis, excluding the impact of the retirement
                    services revenues from the comparison.

                    It's important to note that PFPC's operating margin for the
                    quarter continued its upward trend and was 23%, which is a
                    dramatic improvement when compared to the 17% just a year
                    ago. And that excludes the $19 million facilities
                    consolidation reversal we did in the third quarter of '02.
                    The improved operating margin reflects a successful
                    execution of the sales and efficiency initiatives we've been
                    talking to you about for some time now.

                    On the corporate services side, revenues increased $18
                    million on a linked quarter basis and excluding the held for
                    sale gains, the increase was $10 million and reflects a
                    positive progress we are making with our wholesale bank
                    strategy of adding or expanding fee-based activities in this
                    client base.

                    As you know, while we don't count equity management gains or
                    losses in our normalized earnings, it is positive to note
                    that the losses were down $13 million when compared to the
                    second quarter. And further, we believe that the valuation
                    trends are finally beginning to stabilize and expect to see
                    continued improvement in this area.

                    Let's move on to non-interest expense. These were $835
                    million in the third quarter, an increase of $20 million
                    when compared to the second quarter of $815 [million]. That
                    excludes the $120 million impact associated with the
                    Department of Justice agreement and the related legal and
                    consulting costs.


                    The linked quarter expense increase reflects the following.
                    First, a $28 million increase as the result of FIN 46, $5
                    million related to staff and $23 million in other, a $22
                    million increase primarily associated with sales-based
                    compensation, corporate governance, and community relations

                    These expense increases were partially offset by the reclass
                    of $14 million in trust preferred dividends, $8 million
                    reduction associated with a sale of the retirement services
                    business, and the benefit of $8 million associated with our
                    expense reduction initiatives.

                    And as you know as we previously mentioned, we have
                    identified approximately $100 million in efficiency
                    initiatives that should be in place by year-end. I'm very
                    confident we'll accomplish this objective. As of the third
                    quarter we have already realized approximately $66 million.

                    Finally in closing, I'd like to add a thought to what Jim
                    has said about capital. As you've heard us say before, PNC
                    uses economic capital to govern capital management and we
                    support this by being well capitalized from a regulatory

                    We ended the quarter with a strong capital position. The
                    recent affirmation of our rating by Moody's confirms this.
                    As Jim said, yesterday they moved us from negative watch to
                    stable. I think Jim actually suggested they might have moved
                    us to positive and while we aspire to get there we're not
                    yet there today.

                    From a regulatory capital perspective, PNC's Tier One
                    capital ratio is 8.2% on September 30. In the press release
                    we detailed the impact on the firm's capital ratios related
                    to adopting FIN 46. Even though we reclassed the trust


                    preferred to debt it still counts as Tier One and I would
                    remind you that Market Street gets regulatory relief until
                    April of next year.

                    Further, since we manage PNC based on economic capital we
                    had already captured the amount of economic capital - or
                    risk - required to support these VIEs and it was included in
                    our capital management plan before we consolidated them.

                    In January we indicated that through the course of the year
                    we would either have or would generate through earnings
                    approximately $1 billion of excess available capital. So far
                    this year we've deployed this capital by repurchasing almost
                    10 million shares that have cost us $452 million, agreeing
                    to acquire United National for approximately 6.6 million
                    shares of PNC stock and $320 million in cash, and finally
                    the $87 million for the Department of Justice agreement.

                    And based on our analysis we ended the quarter with excess
                    economic capital again and continuing to repurchase our
                    shares clearly remands a value-added option.

                    Having said that given the blackout dates associated with
                    the United proxy solicitation, I would expect the repurchase
                    activity this quarter to be lower, when compared with the
                    third quarter.

                    And with that I will turn the call back over to Jim for some
                    closing comments before we take your questions.

Jim Rohr:           Thank you Bill. Before the closing comments we'd be happy to
                    take any of your questions now.


Bill Callihan:      Operator, could you give our participants the instructions
                    for the questions please?

Operator:           At this time I would like to remind everyone in order to ask
                    a question, please press Star then the number 1 on your
                    telephone keypad.

                    Your first question comes from Tom McCandless with Deutsche
                    Bank Securities.

Jim Rohr:           Hi, Tom.

Tom McCandless:     Good morning gentlemen.  How are you all?

Jim Rohr:           Well - yourself?

Bill Demchak:       Just great.

Tom McCandless:     Good, thanks. A couple of questions if I may - how much in
                    the earning asset category do you still have in Fed Funds
                    that you're rolling daily?

Bill Demchak:       It's zero.

Tom McCandless:     So all the excess liquidity has been deployed?

Bill Demchak:       Yes.

Tom McCandless:     Second question is, within the regional community bank, can
                    you speak to some loan growth trends, one is the persistent
                    decline in residential mortgage and the other is more on the
                    commercial side.


                    And I think last quarter there was some positive commentary
                    about perhaps some reemergence of credit demand in small
                    business and middle market and then I think PNC had an
                    economic overview talking about a survey recently that
                    talked about perhaps a promise of some uptick in activity.
                    It did not appear to be manifested in the commercial loan
                    volumes in that business unit this quarter. So a little
                    additional guidance there.

                    And then the last question would be overall expectations for
                    net interest income in the fourth quarter - up, down,

Bill Demchak:       A lot of linked questions. Why don't I start with just the
                    question on residential mortgages. And just to remind you,
                    we don't have a residential mortgage business where we
                    originate and hold. So the bulk of the loans that you see in
                    the RCB are either loans that were there that came from the
                    business we sold over a year ago or loans that we purchased
                    in whole loan form from other originators.

                    So in effect, trying to ascertain sort of client trends or
                    volume trends from that line item is kind of a mistake
                    because it's really a function of whether we chose to deploy
                    liquidity there versus putting it in securities and so

                    You know, I'd contrast that clearly to the home equity line
                    item, which we are in the business of doing, and it's been
                    growing substantially. Jim, maybe you want to comment on the
                    small business loan growth and what we just got out of the
                    economic survey.

Jim Rohr:           Yes, Tom, we just did finish the economic - the update of
                    the economic survey that we did in the second quarter. And
                    the customers came back I think more positive - well, they
                    were more positive than they were in March.


                    I was surprised that they were as positive in March as they
                    were. They were more positive today.

                    The confidence level were well in the 60s in terms of people
                    who think that they will - and this is a survey of 2000
                    middle market and small business customers. Over 60% of them
                    believe they will employ as many people and make more money
                    over the next six months than they did before. So it's a
                    positive outlook by our customers.

                    The one question that you asked is - and I think this is
                    true nationally - is what are you expecting for growth in
                    capital expenditures and borrowing requirements and, you
                    know, that question comes up that there's just a modest
                    amount of improvement, really. And I think the optimism is
                    continuing to improve.

                    I think when we look at our business, our business is
                    improving whether it's, you know, across virtually all of
                    the businesses there's some growth - not robust as yet. So
                    we're delivering our performance based upon modest growth,
                    which is, you know, similar to the economy. Also taking some
                    costs out and buying some of the stock back.

                    So given - and I think we're well positioned to the extent
                    this economy continues to move - I think we're better
                    positioned than others in terms of being able to participate
                    in that because of the business mix that we have as you know
                    Tom. Bill?

Bill Demchak:       Yeah, to answer the third part of your question on margin,
                    you know, current thoughts for the fourth quarter - just in
                    terms of dollar income as opposed to percentage margin - it
                    ought to be roughly around flat.


                    You know, as we mentioned, we closed off the position to
                    lowering rates and took advantage of the big backup that we
                    had sort of through July. So that will, you know, in effect
                    stabilize at least in the short term some of the trend we've
                    seen and our margins falling off.

                    But we'll, you know, as we also said it takes a while to
                    flush through what has been a three-year decline in rates.
                    And so we'll face pressure into next year still.

Tom McCandless:     Just as a last follow up to Bill - to Jim's comment - is
                    there any evidence that you can give us, metrics, measures,
                    etc., that shows that you've grown your commercial customer
                    base in RBC?

Jim Rohr:           We have a modest amount of that information. We have
                    targeted - well, we have some detail on the regional bank
                    that Bill gave you in terms of new households that we've
                    brought onstream. We don't have - I don't have at hand right
                    now - the increase that we have in the customer base on the
                    commercial side. But we can get that back to you and put it
                    in the release.

Tom McCandless:     Thank you.

Jim Rohr:           Next question please?

Operator:           Your next question comes from John McDonald with UBS.

Jim Rohr:           Hi, John.

John McDonald:      Hi, good morning. Bill, I wondered if you could give us your
                    thoughts on the credit quality outlook for the fourth


Bill Demchak:       You know, as I said sort of in the comments, we feel pretty
                    comfortable about where we are and we expect asset quality
                    to remain stable and, you know, if things hold some slight
                    improvement going forward.

John McDonald:      Okay, and do you see further margin improvement possible at

Bill Demchak:       You know, to answer quickly, we do, and, you know, the
                    client momentum, and I'm sure Jim will want to comment on
                    this - the client momentum there has been really strong. So
                    the combination of the efficiency initiatives that continue
                    to roll through their income statement plus client activity
                    makes us feel pretty good about that business.

Jim Rohr:           I think John, we said at the beginning of the year that we
                    had a $40 million cost initiative. We said in the second
                    quarter we thought that we would move that to $50 [million].
                    And I think - I'm certain we'll be in excess of $50 million
                    of cost saves in that business.

                    I mentioned that the new customers - and you've seen
                    announcements whether it was Eaton Vance or Strong or others
                    - that we've been able to principal that we brought onstream
                    in the third quarter or rolled forward with increased
                    activity is important has been realized.

                    And I think you'll - this is the strongest pipeline that we
                    have in place right now than we've had in years, quite
                    frankly. So the combination of new business as well as the
                    cost saves I think will increase the margin over the rest of
                    the quarter.

                    Now that having been said, you know, new business takes a
                    while to come on. Once you get the award it takes, you know,
                    sometimes as long as six months


                    before it comes onstream. So, but the announcement...I'd
                    rather have the announcements than not.

Bill Callihan:      Next question please?

Operator:           Your next question comes from Nancy Bush with NAB
                    Research, LLC.

Jim Rohr:           Hi, Nancy.

Nancy Bush:         Good morning gentlemen, how are you?

Bill Demchak:       Just great.

Jim Rohr:           Fine thank you, how are you?

Nancy Bush:         Good.

Jim Rohr:           Good.

Nancy Bush:         Can you just tell us, I mean, you're generating some pretty
                    extraordinary rates of core deposit growth in the regional
                    community bank. Sort of what is happening at the branch
                    level, you know, to generate this kind of growth?

                    And secondly if I may ask Bill, does the downgrading to junk
                    status of Pittsburgh debt have any impact on the investment
                    portfolio or, you know, anything else to the company?

Bill Demchak:       We'll answer the second question first.  No it does not.

Nancy Bush:         Okay, thank you.


Jim Rohr:           Somebody owns those bonds.  But we didn't buy them or
                    sell them.

Bill Demchak:       Somebody insured those bonds.

Jim Rohr:           Somebody insured those bonds.  In any event...

Bill Demchak:       Core deposit, do you want to...

Jim Rohr:           Yeah. The core deposit growth is the result of four
                    different initiatives. One being branch origination where we
                    have a - as you know Nancy, we now have through our Genesis
                    program have - all of our branches are Web-enabled and tied
                    directly to our award-winning call center.

                    So when you think about the position that we have where
                    we're the dominant ATM provider in the region combined with
                    those two initiatives, the origination at the branch level
                    is very good.

                    Add to that a workplace banking product that from the data
                    that we have would show us as being ahead of our peers in
                    origination and that's based - we also have a very strong
                    position with universities in terms of new account growth

                    But last but not least, we inaugurated a thing almost two
                    years ago now called Chairman's Challenge where we have our
                    non-sales employees involved in referring business.

                    And over the last 18 months over 80% of our non-sales
                    employees have referred and actually brought in new business
                    to the company. And it's been


                    perhaps the most successful sales program in the industry in
                    the last 18 months.

                    So the demand deposits are our focus, you know, that's how
                    you drive profitability. You not only get the spread on the
                    demand deposits but you also get the ATM fees and the
                    foreign charges and the debit fees - debit card fees - and
                    the overdraft fees. And so it's been very successful for us
                    and we're real pleased about how that initiative is working.

Bill Demchak:       The only thing I'd add Nancy is the $529 million growth in -
                    I guess RCB deposits - while we're extremely pleased with
                    that I wouldn't straight-line trend that amount of growth.
                    Instead I would focus on the growth we've been able to
                    maintain in households.

Nancy Bush:         All right, thanks very much.

Jim Rohr:           Next question please?

Operator:           Your next question comes from Brock Vandervliet with
                    Lehman Brothers.

Jim Rohr:           Hi, Brock.

Bill Demchak:       Good morning, Brock.

Brock Vandervliet:  Good morning. I was wondering if you could just comment on
                    overall credit trends? I know Bill we've talked a bit
                    offline about this in the past, what you're seeing going
                    forward and what your level of confidence is that we could
                    see some further relief in the provisioning line. Thanks.


Bill Demchak:       You know, no change from what we've been saying for a couple
                    of quarters now, where, you know, our goal is sort of to get
                    to a 45 basis point provision charge kind of line item.
                    We're working our way through that. You've seen us take over
                    the last couple of quarters, you know, sort of one-off
                    sizeable individual exposures charging those through.

                    But, you know, we feel comfortable that we can hit that sort
                    of number through time. The trends are going in the right
                    way. You know, and we feel pretty good about where we are.

Jim Rohr:           The flow on to not performing status has been reducing and
                    again fell again this quarter. So we're pretty comfortable
                    with that stable environment that Bill projected.

Brock Vandervliet:  Okay, and as a follow up on PFPC, you've talked about the
                    cost savings that you're targeting. How visible will they be
                    in terms of the stated expense line, or is that going to be
                    buried by increases in expenses as business activity picks

Bill Demchak:       It's going to be pretty hard to pull out because both, you
                    know, there's activity level expenses but there's also core
                    investment that we've been making in some of the technology,
                    you know, to build capacity away from the efficiency

                    At some point, you know, we will actually try to break that
                    out as we - maybe as we get toward the end of the year and
                    sort of show the breakdown of spend and save within PFPC.

Jim Rohr:           You can look to the margin to some extent because, you know,
                    the margin at this time last year was 17% and it's up
                    significantly now.


Brock Vandervliet:  Okay, thank you.

Jim Rohr:           Next question please?

Operator:           Your next question comes from Mike Mayo with Prudential.

Jim Rohr:           Good morning, Mike.

Mike Mayo:          Hi. It looks like the assets were down at PNC Advisors, if
                    you could just give some color on that?

Jim Rohr:           Well I think, you know, the PNC Advisors program has been
                    relatively stable to down for the last few quarters. And the
                    initiative that we have there has been to work hard on the
                    retention program and I think that's starting to come around
                    and we put the new managed account platform in place which
                    is a very competitive position.

                    Managed accounts have been the fastest growing part of
                    private banking for the last few years and we frankly did
                    not have a product in that space. And so with the addition
                    of that, that I think is a very competitive product with a
                    number of new managers being added, I think that positions
                    us better than we have been before on the product side.

                    And the sales organization has been changed quite a bit and
                    restructured, you know, because they frankly haven't been as
                    productive as they should be in the last 18 months. So I
                    think we've been - thirdly, not the last but not least, but
                    the cost structure of the private bank I think was outsized
                    and that's being addressed as we speak.


Mike Mayo:          Any metrics on that retention there? I know it's not new
                    news, but you said it's getting better.

Jim Rohr:           It's getting better.  It's significantly better than it was.

Mike Mayo:          Okay, and just a follow up to the other question about the
                    Pittsburgh downgrade. On a conference call with a credit
                    analyst at one of the rating agencies, they thought that
                    might be an issue from a secondary effect standpoint. In
                    other words, to the extent that hurts other companies who
                    you have dealings with. Is that something you're monitoring
                    more closely even if you're not directly hurt by the

Jim Rohr:           No, I don't - I don't think so. I'm not aware of any other
                    company that might be hurt by the downgrade.

Mike Mayo:          Okay, thanks.

Jim Rohr:           I'd be interested in hearing if there was.

Bill Demchak:       We had a meeting yesterday Mike to go through various
                    iterations of what this may or may not mean and nothing
                    really came out of it that causes us concern at this point.

Jim Rohr:           I'm very much involved with a committee here in Pittsburgh
                    in order to, you know, stem the tide on that. And, you know,
                    I'm confident that will be - we have a political process
                    involved. So there are ways for the City of Pittsburgh to
                    deal with this issue.

Mike Mayo:          Okay, thanks.


Jim Rohr:           Next question please?

Operator:           Your next question comes from John Kline with Sandler,

Jim Rohr:           Hi, John, good morning.

Bill Callihan:      John?  Hello?

Operator:           That question has been withdrawn.

Bill Callihan:      Next question please?

Operator:           Your next question - I'm sorry, is from John Kline with
                    Sandler, O'Neil.

Jim Rohr:           Hi, John.

John Kline:         Good morning. I wasn't aware that I withdrew anything. But
                    anyway, my question has to deal with non-performing assets.
                    Kind of just looking at it here, it doesn't seem as if
                    you've got the same sort of kick that some of the other
                    large regional banks did this quarter.

                    Kind of looking through the change in non-performing asset
                    schedule that you have, I see that there were purchases of
                    $42 million. It looks like it's the first time you've done
                    that this year. Curious, you know, what that is. What's
                    driving that?

Bill Demchak:       The bulk of that was the exercise by National Bank of Canada
                    of the put on their business credit portfolio that we had
                    been servicing. So we took on $36 million of non-accrual
                    loans when they exercised that. I should mention we took
                    them on at what we think is a very favorable price, so we're
                    kind of


                    pleased by that. But nonetheless they do show up in the
                    non-performing asset line item. And that is specifically why
                    you didn't see a larger drop quarter to quarter in our NPAs.

John Kline:         Yes, I mean, especially given that your largest
                    non-performer was resolved last quarter, right?

Bill Demchak:       Yeah, I mean, the trends are positive for the retained
                    portfolio. The thing that, you know, causes us to stand out
                    sometimes is the fact that a disproportionate share of our
                    portfolio is in Business Credit, which we like. But by the
                    nature of that business you will have, you know, higher
                    percentages of NPAs against our balances than sort of the
                    unsecured sector.

                    In this particular quarter because we took on the NBOC
                    portfolio we saw that sort of one-time jump of $36 million.

John Kline:         Okay, great.  Thanks.

Jim Rohr:           It's a good catch John because I want you to know that we're
                    not in the strategic business of buying non-performing

John Kline:         Right.

Bill Callihan:      Next question please?

Operator:           Your next question comes from Gerard Cassidy with RBC
                    Capital Markets.

Jim Rohr:           Good morning, Gerard.


Gerard Cassidy:     Good morning Jim. My question has to do with commercial
                    deposits. Have you guys seen any changes in the trends of
                    your commercial customers and what they're doing with their
                    excess liquidity? Are they drawing down on their deposits to
                    possibly be a foreteller sign that maybe loan growth will be
                    picking up next year?

Jim Rohr:           No, we really haven't seen much in the way of any trends
                    with terms of drawing that down. Our balance sheet doesn't
                    really necessarily reflect all of the commercial activity
                    because in order to have a particularly attractive lockbox
                    operation and to a significant extent we sweep balances to
                    the BlackRock Liquidity Fund.

                    So, you know, the amount of money that actually flows
                    through here is significantly greater than what the balance
                    sheet might reflect. But nonetheless we haven't seen a great
                    deal of change in the activity.

Gerard Cassidy:     And the second question is it looks like you had an
                    unrealized gain in the securities portfolio of about $147
                    million at the end of the September period. Where is it now
                    considering rates have changed a bit from that period?

                    And second, what's the best interest rate that we should be
                    looking at to see whether that number will go up or go down?

Bill Demchak:       Good questions. I don't have a detailed number on the gain
                    in the securities portfolio with me. It changed from the end
                    of the quarter until now. It's still substantially a
                    positive number. You know, I would think about sort of the
                    three-year swap rate is the benchmark with respect to
                    repricing our portfolio.

Gerard Cassidy:     Thank you.


Bill Callihan:      Next question please?

Operator:           Your next question comes from Denis Laplante with KBW.

Jim Rohr:           Good morning, Denis.

Denis Laplante:     Good morning Jim. I want to by the way compliment you on
                    your disclosure on FIN 46. It's the best I saw this quarter
                    in a very confusing accounting adoption.

Jim Rohr:           Thank you.

Bill Demchak:       We enjoyed it.

Denis Laplante:     I bet you did. I had a couple of questions on - in the real
                    estate finance line of business - your other income was up.
                    Is that securitization gains in the quarter?

Bill Demchak:       Yes.

Denis Laplante:     And how much were they versus the recent run rate?

Bill Demchak:       It's been trending up. I actually should clarify. They are
                    in effect securitization gains but really what we do is sell
                    the loans into some third party securitization. The end
                    result is the same but the gains come through the sale as
                    opposed to an outright securitization.

                    These have gone up from I think in the third quarter of '02
                    they were $5 million up to $15 million. This quarter they
                    were maybe - they were $12 [million] - looking around the
                    table here - $12 [million] last quarter.


                    I think they're running at above what we would consider a
                    normal run rate. And a large part of that has to do with how
                    wide credit spreads got back in, you know, third and fourth
                    quarter of last year. And that's the pipeline of loans which
                    are now being securitized to tighter spreads.

                    So they're $15 [million] this quarter. You know, I don't
                    know that we can carry that sort of level on an ongoing
                    basis. I think they're a little bit high just because of the
                    swing we saw in credit spreads.

Denis Laplante:     Okay, so that's the $15 million number but there was also a
                    $29 million number in wholesale banking up from $13
                    [million] linked quarter - that was a huge increase. I was
                    wondering what was that.

Bill Demchak:       Yeah, that's the held for sale gains.

Denis Laplante:     That's the held for sale gains.

Bill Demchak:       Yeah.

Denis Laplante:     Okay, good. In terms of the carry value of your NPAs versus
                    contractual value, do you have a sense of what that is?

Bill Demchak:       You know, I don't off the top of my head on the overall
                    portfolio. But what I will say to you is that the residual
                    in the held for sale book which is of course quite small
                    today is marked, you know, at market but at substantial
                    discounts to par. And the value that we took the NBOC loans
                    on - which was this recent $36 million - was down in the
                    sixties somewhere.


                    So they are just with respect to the loans that are in some
                    sort of mark-to-market or marked when we took them on,
                    they're at substantial discounts. And we have, you know,
                    what we think is an appropriate reserve against the NPAs
                    that come through the straight loan book.

Denis Laplante:     Okay. On PFPC if I may, you sold the business so your $188
                    million in revenues does not include roughly as I recall $7
                    million in business sales in the divestiture?

Bill Demchak:       Yes.

Denis Laplante:     Okay so you made up - so your numbers were flat. Was there a
                    gain in those numbers at all from the business sale?

Bill Demchak:       The gain was sort of a rounding error.

Denis Laplante:     Okay, so it didn't even - it was less than a million.

Jim Rohr:           It wasn't a lot.

Denis Laplante:     Okay, okay. And one last question, and within your margin,
                    how much of that was a premium amortization on securities?
                    And will that come back?

Bill Demchak:       Could you repeat that?

Denis Laplante:     In the securities book your net interest margin was probably
                    influenced a little bit by some runoff or maybe it wasn't.
                    But the prepayments and then therefore your amortization of
                    premium accelerated. Was the - have you been able to
                    quantify that?


Bill Demchak:       I don't have that number off the top of my head. I'm sure we
                    have it.

Denis Laplante:     I guess the point of the question is, is that a source of
                    rebound in margin linked quarter?

Bill Demchak:       I don't think it would be. Part of the issue, remember that
                    the, you know, basically what you're suggesting are we
                    buying mortgage securities at premium to par when we put
                    them on the books. There is some of that but we buy such
                    short dated stuff and sort of hybrid ARMs that the premiums
                    aren't that large anyway. So I wouldn't look to that as
                    being a big impact on our margin one way or the other.

Denis Laplante:     Okay, great. That's perfect. One last question, I am sorry -
                    I lied. I had one more. On security gains you've been
                    allowing roughly about 3 or 4 cents a share to fall to the
                    bottom line. In this quarter your operating number you call
                    95. It looks like there's 3 to 4 cents in securities gains
                    that you did not exclude from that so your operating number
                    will be less.

                    Given the tougher environment on gains and rising rates,
                    you're going to have to make up for that. Are you confident
                    you'll be able to do that?

Bill Demchak:       Yes. The, you know, I would tell you that there is no - it's
                    not as if we sort of budget and say okay, we're going to,
                    you know, we're purposely going to take $15 million in a
                    given quarter.

                    Through the course of the quarter there's always some
                    trading opportunity or something rich to something else. And
                    we take advantage of it. And by and large it's come out to
                    be kind of $15 million a quarter.


                    You know, going forward where we get into an environment
                    with rapidly rising rates and so nothing has a gain, it
                    wouldn't shock me if we had $15 million of losses a quarter.
                    But having said that, in a rapidly rising rate environment,
                    our margin and the economy and everything else will be doing
                    better and we expect the company to do better.

Denis Laplante:     Thank you very much.

Bill Callihan:      Next question please?

Operator:           Your next question comes from Claire Percarpio with Janney
                    Montgomery Scott.

Jim Rohr:           Hi, Claire.

Claire Percarpio:   Hi. Two questions - one, do you continue to expect a
                    difference between operating earnings and reported and when
                    do you think that will sort of quiet down?

                    And then second, I just want to ask on PFPC, if you could
                    talk a little bit about the business wins in the pipeline,
                    sort of what the pricing looks like, where you're winning
                    the business. I'm sort of wondering if - are you losing
                    ground in transfer agency and gaining ground in the
                    sub-accounting? And are staff cuts in PFPC complete?

Jim Rohr:           Well let me try and take that backwards. The staff
                    reductions are pretty much complete and the roll forward
                    effect of the cost saves will simply continue throughout the
                    rest of the year and into next year. And so we've made an
                    awful lot of progress in that space.


                    You know, we won fund accounting business in the last couple
                    of - in the last nine months we've won two of the three
                    largest fund accounting changes that have taken place in
                    terms of Wells Fargo and Armada. And we continue to increase
                    our activity in Eaton Vance, Strong, Principal.

                    Some of the new business is coming transfer agency, most of
                    it in fund accounting. Fund accounting is a much higher
                    margin business so we like that mix, quite frankly. And we
                    really can't discuss the pipeline because we've got
                    competitors maybe on the line as well. But we're very, very
                    pleased with the position that we have with probably the
                    strongest pipeline we've had in multi services across the

                    Last but not least, the sub-accounting business is doing
                    extremely well. We are really - our product there is
                    particularly dominant.

Bill Demchak:       I guess just to follow up on your question on normalized
                    versus reported earnings; you know, I guess we'd like to
                    think through time that there would be less volatility
                    between the two numbers but, you know, at the end of the day
                    we're in the banking business and the banking business has
                    risk in it. You know, every quarter there seems to be

                    We also within those two line items because in particular we
                    separate out our equity management activities and a few
                    other things that are sort of away from business volume type
                    earnings. You'll probably always see some disparity between
                    the two.

Claire Percarpio:   Thanks.

Bill Callihan:      Next question please?


Operator:           Your next question comes from Tom McCandless with Deutsche
                    Bank Securities.

Jim Rohr:           Hi, Tom, welcome back.

Tom McCandless:     Hi, I guess we're recycling here. Two questions broadly
                    speaking - is there any kind of early read you could give us
                    with respect to re-upping or re-affirming cost initiatives
                    for 2004, given that you've got some momentum here on that
                    front this year.

                    And then the flip side of that is, is there any discussion
                    or expansion of discussion that you could give us on
                    initiatives related to cross-selling services across your
                    various business units?

Jim Rohr:           Well the - two things. One is we're just in the process of
                    doing the budget right now and, you know, all the excitement
                    around cost savings usually takes place after the first
                    round of that.

                    And I think, you know, everybody has their thinking cap on
                    in terms of cost saves for next year. I would love to
                    believe that the economy is going to come roaring back and
                    the revenues will come flowing in so costs aren't important,
                    but since I've been CEO that hasn't been true. So cost is
                    something that we have to continue to focus on all the time.

                    And I think we will - I'm certain we will have a cost
                    initiative in place kicking off next year in the budget
                    process because that's turned out to be an annual event. And
                    it should be, because we should become more and more
                    efficient all the time.


                    In terms of cross selling, we have not disclosed a lot of
                    data around that simply because the industry data is kind of
                    unusual. But all of the growth that we have for example in
                    the home equity loans are all with existing customers. I
                    think that number is 23% or 24% this year growth in the home
                    equity loans. So I think that is reflective really of how
                    we're leveraging different customer bases in order to
                    enhance other products.

Tom McCandless:     Thanks, Jim.

Bill Callihan:      We have time for I think one more question.

Operator:           Your final question comes from John McDonald with UBS.

Jim Rohr:           Yes, John.  Welcome back.

John McDonald:      Thanks. I think I got my answer. Bill, just a final thing on
                    the valuation and judgments, this is the same question about
                    the normalized versus the reported. What will drive your
                    realization of further gains, net of valuation adjustments
                    going forward?

Bill Demchak:       I'm not sure I follow the question.

John McDonald:      What determines, you know, whether you have those gains? Is
                    that a portfolio that's still running down?

Bill Demchak:       The held for sale gains.

John McDonald:      Yes.


Bill Demchak:       Yeah, there's only - it's a portfolio running down. We have
                    $99 million left on it. You know, it's at the point in its
                    life cycle where a lot of those gains are coming simply
                    because things pulled apart, mature, or get refinanced. So
                    we're selling outfits but other stuff is maturing.

John McDonald:      Okay.

Bill Demchak:       And we're just optimizing value, we're not, you know,
                    attempting to make so much one quarter or the next.

John McDonald:      Okay, that's been a big source of the difference between the
                    normalized and the...

Bill Demchak:       Yeah.

John McDonald:      So that should go away over time.

Bill Demchak:       Well eventually it has to because there's only $99 million

John McDonald:      Okay, thanks a lot.

Bill Callihan:      Thank you.

Jim Rohr:           Well if there are no more questions I'd like just to thank
                    everyone for joining us again. We're all pleased with our
                    performance on a number of fronts in the third quarter. And
                    I like our position.

                    We ended the quarter with a strong balance sheet, a very
                    good mix of businesses I think, and a plan that we're
                    executing on - in terms of - to


                    deliver growth to the shareholders. So right now it's about
                    executing our strategies and staying focused on the

                    Thank you for your support and we're confident that we can
                    continue to deliver for you.