PHILADELPHIA, Jan. 24 /PRNewswire-FirstCall/ -- Sovereign Bancorp, Inc.
("Sovereign") (NYSE: SOV), parent company of Sovereign Bank ("Bank"),
announced today that, consistent with Sovereign's long-standing emphasis on
corporate governance, its Board of Directors had completed its annual review
of best corporate governance practices and, as a result of this review,
amended Sovereign's existing shareholder rights plan.
These amendments eliminate provisions of the plan which previously
permitted redemption of stock purchase rights issued under the plan only by
"continuing directors" (the so-called "dead hand" provision). The amendments
also eliminate plan provisions which permit the Board to trigger the dilutive
effects of the rights plan by declaring a 4.9% or greater beneficial owner of
Sovereign's equity securities to be an "adverse person". Other provisions of
the rights plan remain unchanged.
Jay S. Sidhu, Chairman, President and Chief Executive Officer of
Sovereign, said that the Board's decision to revise the rights plan reflects
Sovereign's continuing commitment to good corporate governance practices, and
to periodically review and improve these practices. "Although we believe that
shareholder rights plans can be a valuable tool in protecting the interests of
shareholders, the Board believes that these changes to Sovereign's plan are
appropriate at this time. The changes are also consistent with input
Sovereign routinely seeks from the professional and service organizations that
provide corporate governance guidance." Mr. Sidhu also said, "The shareholder
rights plan amendments, along with continued superior performance results by
Sovereign, should favorably impact our price to earnings ratio." Sovereign
reported 2004 GAAP earnings of $454 million, with operating and cash earnings
per share up 13% to $1.88 or $617 million in its January 18, 2005 earnings
press release. Mean analyst estimates call for another double-digit increase
in earnings per share in 2005.
Sovereign plans to file an amendment to its current SEC filing on Form 8-K
describing the amendments to the Rights Plan in greater detail, including a
copy of the amended and restated Shareholder Rights Agreement. The Form 8-K
filing will be available at Sovereign's website at
http://www.sovereignbank.com or at the SEC's website at http://www.sec.gov.
Sovereign Bancorp, Inc., ("Sovereign") (NYSE: SOV), is the parent company
of Sovereign Bank, a $58 billion financial institution with more than 650
community banking offices, over 1,000 ATMs and approximately 9,500 team
members in the Northeast United States. Sovereign offers a broad array of
financial services and products including retail banking, business and
corporate banking, cash management, capital markets, trust and wealth
management and insurance. Sovereign is the 18th largest banking institution in
the United States. For more information on Sovereign Bank, visit
http://www.sovereignbank.com or call 1-877-SOV-BANK.
Note:
This press release contains financial information determined by methods
other than in accordance with U.S. Generally Accepted Accounting Principles
("GAAP"). Sovereign's management uses the non-GAAP measures of Operating and
Cash Earnings, and the related per share amount, in their analysis of the
company's performance. This measure, as used by Sovereign, adjusts net income
determined in accordance with GAAP to exclude the effects of special items,
including significant gains or losses that are unusual in nature or are
associated with acquiring and integrating businesses, and certain non-cash
charges. Operating and cash earnings for 2004 represent net income adjusted
for the after-tax effects of merger-related and integration charges and the
loss on early extinguishment of debt, the fourth quarter adoption of EITF 04-
8, other-than-temporary non-cash impairment charges on Fannie Mae and Freddie
Mac preferred equity securities, the amortization of intangible assets and
stock-based compensation expense associated with stock options, restricted
stock, bonus deferral plans and ESOP awards. Since certain of these items and
their impact on Sovereign's performance are difficult to predict, management
believes presentations of financial measures excluding the impact of these
items provide useful supplemental information in evaluating the operating and
cash results of Sovereign's core businesses. These disclosures should not be
viewed as a substitute for net income determined in accordance with GAAP, nor
are they necessarily comparable to non-GAAP performance measures that may be
presented by other companies.
This press release contains statements of Sovereign's strategies, plans,
and objectives for Sovereign Bancorp, Inc. These statements constitute
forward-looking statements (within the meaning of the Private Securities
Litigation Reform Act of 1995), which involve significant risks and
uncertainties. Actual results may differ materially. Factors that might
cause such a difference include, but are not limited to, general economic
conditions, changes in interest rates, deposit flows, loan demand, real estate
values and competition; changes in accounting principles, policies, or
guidelines; changes in legislation or regulation; Sovereign's ability in
connection with any acquisition to complete such acquisition and to
successfully integrate assets, liabilities, customers, systems and management
personnel Sovereign acquires into its operations and to realize expected cost
savings and revenue enhancements within expected time frame; the possibility
that expected one time merger-related charges are materially greater than
forecasted or that final purchase price allocations based on the fair value of
acquired assets and liabilities and related adjustments to yield and/or
amortization of the acquired assets and liabilities at any acquisition date
are materially different from those forecasted; and other economic,
competitive, governmental, regulatory, and technological factors affecting
Sovereign's operations, integrations, pricing, products and services.
SOURCE Sovereign Bancorp, Inc.
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Related links:
http://www.sovereignbank.com
CONTACT:
FINANCIAL: Jim Hogan, +1-610-320-8496, or
jhogan@sovereignbank.com, or Mark McCollom, +1-610-208-6426, or
mmccollo@sovereignbank.com, or Stacey Weikel, +1-610-208-6112, or
sweikel@sovereignbank.com; or MEDIA: Ed Shultz, +1-610-378-6159,
or eshultz1@sovereignbank.com, all of Sovereign Bancorp
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