PHILADELPHIA, Oct. 21 /PRNewswire-FirstCall/ -- Sovereign Bancorp, Inc.
("Sovereign") (NYSE: SOV), parent company of Sovereign Bank ("Bank"), today
announced that its Board of Directors has authorized a stock repurchase
program of up to 15.5 million outstanding shares. This buyback program is in
addition to an existing authorization to repurchase up to 5 million shares,
under which 100,000 shares have previously been repurchased by the Company.
Together, the two programs approximate 5% of the total outstanding shares of
the Company, after giving effect to its pending acquisition of Waypoint
Financial and the future issuance of common shares under a convertible trust
preferred stock offering. The two programs have no prescribed time period in
which to fill the authorized repurchase amount.
Commenting on the Board's authorization, Jay S. Sidhu, Sovereign's
Chairman and Chief Executive Officer, said, "The action taken by our Board is
reflective of the financial strength of Sovereign today, as well as our
optimism for our company in the coming quarters and years. Whether viewed on
a 1 year, 3 year, or 5 year basis, Sovereign has produced total shareholder
returns far in excess of market indices or sector-specific measures. Since
2001, Sovereign has also produced annualized growth in operating EPS of
approximately 14%. During this same period of time, we have been
strengthening our capital ratios, as they were not in line with our peer
group.
"As we are soon entering a period where Sovereign will be producing
$500 million or more of excess capital per year, we believe it is important to
have all options available to us to produce the best possible shareholder
value under any economic scenario. Economic conditions and Sovereign's
relative P/E will dictate the timing and magnitude of any such share
repurchases, and we will always evaluate the deployment of capital against
other alternative uses, including increased shareholder dividends. We are
absolutely committed to maintaining comfortable cushions to well-capitalized
levels as prescribed by the Federal Reserve at both our Bank and our holding
company," Sidhu continued.
Share repurchases will be made from time to time and will be effected on
the open market, in block trades, or in privately negotiated transactions, and
in compliance with applicable laws, including Securities and Exchange
Commission Rule 10b-18 and Regulation M.
Sovereign Bancorp, Inc., ("Sovereign") (NYSE: SOV), is the parent company
of Sovereign Bank, pro forma a $60 billion financial institution with more
than 650 community banking offices, over 1,000 ATMs and approximately
9,500 team members in Connecticut, Maryland, Massachusetts, New Hampshire,
New Jersey, New York, Pennsylvania and Rhode Island. In addition to full-
service retail banking, Sovereign offers a broad array of financial services
and products including business and corporate banking, cash management,
capital markets, trust and wealth management and insurance. Pro forma for
pending acquisitions, 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
Earnings and Cash Earnings, and the related per share amounts, in their
analysis of the company's performance. These measures, as used by Sovereign,
adjust 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 represent net income adjusted
for the after-tax effects of merger-related and integration charges and the
loss on early extinguishment of debt. The forward-looking operating earnings
guidance for 2004 excludes the anticipated impact of EITF 04-8, which will be
effective in the fourth quarter of 2004. Cash earnings are operating earnings
excluding the after-tax effect of 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
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 2004 and
beyond for Sovereign Bancorp, Inc. as well as estimates of financial
condition, operating 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: 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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