PHILADELPHIA, May 26 /PRNewswire-FirstCall/ -- Sovereign Bancorp, Inc.
(NYSE: SOV) today said that it welcomes the 13-D filing by Relational
Investors showing its confidence in the future growth prospects of the
company. "We take our communications with our major shareholders and
suggestions made by them very seriously and are always open to how we can make
ourselves better," said Jay Sidhu, Sovereign's Chairman and CEO. "Following
this policy, the company over the past 10 years has delivered over 280% in
total stock appreciation compared to about 204% for S&P 500 bank index and
about 123% for S&P 500. Similarly, we have outperformed these indices over
the past 5-year period, 3-year period and, even in this difficult period for
bank stocks, have performed in line with the bank index and the S&P 500 over
the last 12 months. Our Board and management has a history of being open to
meeting and listening to institutional shareholders and other interested
parties and has clearly articulated its 3-5 year long-term strategy for
becoming a high performing bank as it completes it transition from a
traditional thrift to a strong, regional, customer-focused commercial bank.
We will always maintain our open communication policy and listen to ideas to
make Sovereign the best we can be by executing our community banking model and
continually improving our operating metrics," Sidhu continued.
Sovereign reported in an 8-K filing yesterday that in April 2005, prior to
its recent meeting with Relational Investors, Sovereign's Compensation
Committee had already initiated a process to review its Board and executive
compensation plans with the assistance of an independent, nationally-known
compensation consultant. "I believe that at the conclusion of this review,
Sovereign will have in place compensation programs that we believe will be the
state of the art in the current environment," Sidhu stated. Sidhu also noted
that Sovereign has a long history of strong corporate governance and its
recent I.S.S. Corporate Governance Quotient, independently determined and
reported by Institutional Shareholder Services, one of the world's leading
providers of proxy voting and corporate governance services with 20 years of
experience, is better than 97.6% of the banking companies in the United
States.
Sovereign Bancorp, Inc., ("Sovereign") (NYSE: SOV), is the parent company
of Sovereign Bank, a $59 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,
trust and wealth management and insurance. Sovereign is the 19th largest
banking institution in the United States. For more information on Sovereign
Bank, visit http://www.sovereignbank.com or call 1-877-SOV-BANK.
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 measure of Operating
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
earnings for the first quarter of 2005 represent net income adjusted for the
after-tax effects of merger-related and integration charges, certain
restructuring charges and the amortization of intangible assets. Operating
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
and the amortization of intangible assets. Management's operating earnings
goal for 2005 excludes the after-tax effects of merger-related and integration
charges, certain restructuring charges and the amortization of intangible
assets. 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 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, as well as estimates of future operating results for 2005 for
Sovereign Bancorp, Inc. as well as estimates of financial condition, operating
and cash efficiencies and revenue generation. These statements and estimates
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 from the results discussed
in these forward-looking statements. 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 the Company's
operations, integrations, pricing, products and services.
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, Stacey Weikel, +1-610-208-6112,
swiekel@sovereignbank.com, or MEDIA: Ed Shultz, +1-610-378-6159,
eshultz1@sovereignbank.com
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