PHILADELPHIA, June 28 /PRNewswire-FirstCall/ -- Sovereign Bancorp, Inc.
("Sovereign") (NYSE: SOV), parent company of Sovereign Bank ("Bank"), today
announced it expects to report second quarter 2005 earnings of $.46 to $.47
per diluted share in accordance with generally accepted accounting principles
and operating earnings of $.49 to $.50 per diluted share, which excludes
approximately $.03 per share related to the amortization of intangibles.
Speaking before investors in London, England, Jay S. Sidhu, Sovereign's
Chairman and Chief Executive Officer, commented, "Consistent with comments
made during our first quarter earnings call, we remain focused on our
financial objectives and are not going to grow our balance sheet simply for
the sake of growth. Given the continued flatness of the yield curve, we
believe it is prudent not to reach for low margin businesses, especially those
that carry a high level of interest rate risk and hence are willing to accept
lower loan growth until the yield curve steepens. As a result, we accelerated
our share repurchase efforts during the second quarter and repurchased 10
million shares. While the flat yield curve remains challenging, modest net
interest margin pressure should be offset by strong mortgage banking revenue,
strong commercial loan growth, continued strong credit quality and continued
expense control. Despite the current interest rate challenges, we remain
focused on maintaining or improving our operating metrics. Operating return
on average assets is expected to remain consistent with the first quarter
level at approximately 1.30%, and operating return on average tangible equity
is expected to increase about 100 basis points from the first quarter level of
26.52%," continued Sidhu.
Sovereign's detailed earnings for the second quarter will be released at
approximately 4:00 pm ET on Tuesday, July 19, 2005.
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.
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 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 and second quarters 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. 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 CONTACTS: Mark McCollom,
+1-610-208-6426 or mmccollo@sovereignbank.com, or Stacey Weikel,
+1-610-208-6112 or sweikel@sovereignbank.com, or MEDIA CONTACT:
Ed Shultz, +1-610-378-6159 or eshultz1@sovereignbank.com, all of
Sovereign Bancorp
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