PHILADELPHIA, March 15 /PRNewswire-FirstCall/ -- Sovereign Bancorp, Inc.
("Sovereign") (NYSE: SOV), parent company of Sovereign Bank, announced today
that its Board of Directors has declared a cash dividend increase of 33% on
its common stock. The increase will result in a quarterly cash dividend of
$.08 per share and an annual cash dividend of $.32 per share. The cash
dividend is payable on May 15, 2006 to shareholders of record on May 1, 2006.
Additionally, Sovereign announced a 5% stock dividend, which will be
distributed on May 22, 2006 to shareholders of record on May 1, 2006. The
newly issued shares will be issued in book form and are not eligible for the
cash dividend payable on May 15, 2006; however, they will be eligible for the
anticipated cash dividend to be declared in June.
"These actions taken by our Board of Directors are a reflection of the
financial strength of our company and are consistent with our previous
commitment to shareholders to increase our dividend over time. Our cash
dividend has more than doubled over the past twelve months resulting in an
annual dividend yield, after giving affect to this increase, of approximately
1.5%. We will analyze our cash dividend again in another six months or so for
possible further increases and also consider stock dividends in future years
as well," stated Jay S. Sidhu, Sovereign's Chairman and Chief Executive
Officer.
Despite this dividend increase and stock dividend, Sovereign still
maintains its capital flexibility for 2007 and beyond. Once its pending
acquisition of Independence Community Bank Corp. is completed, Sovereign will
be generating in excess of $1 billion of tangible capital per year. As early
as mid-2007, Sovereign will have the capability to repurchase 5% or more of
its shares annually as long as market conditions dictate this strategy as the
best use of capital.
"These most recent steps are closely tied with our strategy of building a
better bank for our shareholders, and we are pleased that our financial
condition is strong enough to allow our shareholders to benefit from our
success," concluded Sidhu.
In addition to the common stock cash dividend, a dividend payment of
$0.546875 per share is payable on March 31, 2006 on Sovereign's Preferred
Securities issued by Sovereign Capital Trust III (NYSE: SOVPRA) to holders of
record on March 30, 2006.
Sovereign Bancorp, Inc., ("Sovereign") (NYSE: SOV), is the parent company
of Sovereign Bank, a $64 billion financial institution with more than 650
community banking offices, over 1,000 ATMs and approximately 10,000 team
members with principal markets 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,
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: "Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995. Statements in this press release regarding Sovereign
Bancorp's business which are not historical facts are "forward-looking
statements" that involve risks and uncertainties. For a discussion of such
risks and uncertainties, which could cause actual future events to differ from
those contained in the forward-looking statements, see "Forward-Looking
Statements" in the Company's Annual Report on Form 10-K for the most recently
ended fiscal year.
SOURCE Sovereign Bancorp, Inc.
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Related links:
http://www.sovereignbank.com
CONTACT:
FINANCIAL: Mark McCollom, +1-610-208-6426,
mmccollo@sovereignbank.com or Stacey Weikel, +1-610-208-6112,
sweikel@sovereignbank.com; MEDIA: Ed Shultz, +1-610-378-6159,
eshultz1@sovereignbank.com, all of Sovereign Bancorp, Inc.
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