Exhibit 99.1
Sovereign Bancorp, Inc. Announces Second Quarter 2008 Results
PHILADELPHIA, PA...Sovereign Bancorp, Inc. (“Sovereign or the Company”)(NYSE: SOV), parent company of Sovereign Bank (“Bank”), today reported net income for the quarter ended June 30, 2008 of $127.4 million or $.22 per diluted share as compared to $100.1 million or $.20 per diluted share in the first quarter of 2008 and $147.5 million or $.29 per diluted share in the second quarter of 2007. Net income for the six months ended June 30, 2008 was $227.6 million or $0.42 per diluted share compared to $195.5 million or $0.39 per diluted share for the six months ending June 30, 2007.
Highlights for the second quarter of 2008 were as follows:
• | On May 16, 2008 the Company issued $1.39 billion of common stock which increased Sovereign’s tangible common equity ratio and tangible book value per share to 6.04% and $6.90 at June 30, 2008 compared to 3.81% and $6.20 at March 31, 2008. |
• | For the sixth consecutive quarter Sovereign’s net interest margin has expanded and now stands at 3.06%, an increase of 18 basis points from the first quarter of 2008 and 35 basis points from the similar quarter in 2007. |
• | Loan balances at March 31, 2008, declined by 2.57% on a linked-quarter basis primarily due to the securitization of $780 million in residential mortgages and a 7.5% decline in auto loans. |
• | Deposit mix continued to improve with retail and commercial deposits comprising 81.2% of total deposits up from 75.4% a year ago. |
• | Sovereign’s allowance for credit losses as a percentage of total loans increased to 1.47% at June 30, 2008, compared to 1.36% at March 31, 2008 and .92% at June 30, 2007. |
• | Sovereign’s non-performing assets as a percentage of tangible equity and allowance for loan losses was 9.9% at June 30, 2008 compared to 12.2% at March 31, 2008 and 8.1% at June 30, 2007. |
“Sovereign is on solid financial footing as we manage through the current uncertain economic climate,” said Sovereign’s President and CEO Joseph P. Campanelli. “Given the challenging operating environment, I am pleased with our results for the second quarter of 2008, which are consistent with our expectations. They reflect the prudent and proactive strategies we employed in the last year and demonstrate progress in reducing our risk profile, improving the quality of our earnings, and strengthening our operating metrics.”
Net Interest Income and Margin
For the second quarter of 2008, Sovereign reported net interest income of $506 million as compared to $482 million in the first quarter of 2008 and $453 million in the similar quarter of 2007. The Company’s net interest margin expanded 35 basis points during the second quarter of 2008 to 3.06% from the similar quarter a year ago. The main drivers of this expansion have been a reduction in the cost of deposits and short-term borrowings resulting from lower short-term market interest rates coupled with a shift in deposit mix to lower-cost categories.
On a linked-quarter basis, average loan balances were relatively unchanged at $58.2 billion with growth in commercial loans of 2.9% and direct home equity loans of 2.8% which was offset by declines in residential mortgage loans of 5.1% and auto loans of 5.7%. During the second quarter, the Company completed a mortgage securitization which converted $780 million of residential real estate loans into investment securities. This securitization will reduce credit risk and required levels of risk based capital as well as enhance liquidity. Sovereign’s average loan balances increased $1.4 billion from the second quarter of 2007 primarily as a result of growth in commercial loans offset by declines in residential mortgage loans.
Sovereign’s average deposits on a linked quarter basis declined by $1.1 billion which was primarily driven by decreases in costlier wholesale and government deposits of $1.2 billion. Sovereign’s average retail and commercial deposits increased $285 million during the quarter due to growth in demand deposit accounts which was offset by declines in higher cost retail time deposits. Sovereign’s average deposits decreased $3.2 billion from the second quarter of 2007 as the Bank grew retail and commercial deposits $1.2 billion and reduced its reliance on wholesale deposit sources by $4.4 billion.
Non-Interest Income
Consumer and commercial banking fees were $134.7 million, an increase of $5.4 million or 4.2% from a year ago and $7.1 million on a linked quarter basis. The increase from the prior periods is primarily attributable to increased sales of annuity products from our investment services group and higher commercial and consumer deposit fees.
Mortgage banking revenues for the quarter were $37.9 million, compared to a loss of $5.1 million on a linked quarter basis and $26.5 million in the same quarter a year ago. The loss in the prior quarter was attributed to mortgage and multi-family servicing right impairments of $23.6 million which were driven primarily by lower interest rates and higher market prepayment speed assumptions. In the second quarter of 2008, $20.5 million of this impairment was reversed as a result of the normalization in market prepayment speed assumptions at June 30, 2008.
Capital markets revenues for the second quarter of 2008 were $7.2 million compared to $10.4 million in the first quarter of 2008 and $6.0 million in the second quarter of 2007. The decline in revenues on a linked quarter basis was driven by higher volumes of derivative sales to our customers related to the rapid reduction in interest rates earlier in the year by the Federal Reserve.
Net investment gains of $1.9 million in the second quarter of 2008 were due to a gain of $6.5 million related to the sale of MasterCard stock which was partially offset, by a write-down of $4.6 million in the Company’s residual interests in certain off-balance sheet home equity securitizations. Sovereign’s maximum risk of loss on the remaining retained interests for these home equity securitizations is $2 million. The first quarter of 2008 included a net investment gain of $14.1 million related to the mandatory partial redemption of the VISA IPO shares.
Non-Interest Expense
General and administrative expenses were $382 million for the second quarter of 2008, as compared to $359 million in the first quarter of 2008 and $337 million in the similar quarter a year ago. Included in the first quarter of 2008 was a reduction in legal expense of $6.4 million related to the release of reserves established for the VISA litigation. As compared to the first quarter of 2008, the second quarter of 2008 included higher compensation and benefits expenses of $7.6 million primarily due to severance charges and a full quarter of merit increases, higher loan workout/collection and other real estate owned expenses of $5.3 million, and increased marketing expense of $3.5 million.
The increase in general and administrative expenses of $45 million from the second quarter of 2007 was primarily due to increased compensation and benefits expense of $21.2 million, driven by the aforementioned severance charges and merit increases in the second quarter of 2008 as well as higher incentive compensation accruals as a result of changes in the incentive compensation structure for retail and corporate plans to be better aligned with the marketplace. In addition, the Company incurred higher deposit insurance premiums of $7.7 million, higher legal, loan and other real estate owned expenses of $11.1 million related to the challenging credit environment and increased marketing expense of $2.6 million.
Other expenses totaled $42.8 million in the second quarter of 2008 compared to $37.5 million in the first quarter of 2008 and $79.5 million a year ago. Second quarter 2008 results included a decline in the fair market value on one of the Company’s equity method investments of $6.4 million. The second quarter of 2007 results included restructuring charges of $32.7 million related to branch closings, freezing of the Company’s ESOP plan and severance charges.
Asset Quality
Sovereign’s provision for credit losses was $132 million in the second quarter of 2008, compared to $135 million in the first quarter of 2008 and $51 million in the second quarter of 2007. Sovereign increased its allowance for credit losses to $843.5 million, a $45.1 million increase from March 31, 2008, primarily due to continued deterioration in asset quality for the commercial portfolios, particularly in the for-sale housing segment. Sovereign’s allowance for credit losses to total loans at June 30, 2008 increased to 1.47% up from 1.36% at March 31, 2008 and .92% at June 30, 2007.
Net charge-offs were $86.9 million this quarter versus $74.3 million in the prior quarter and $25.7 million in the similar quarter a year ago. Annualized net charge-offs were .60% of average loans for the current quarter, compared to .51% linked quarter and .18% a year ago. Approximately 34% of net charge-offs this quarter were attributable to run-off loan portfolios, net charge-offs related to the indirect auto portfolio outside the Company’s footprint and correspondent home equity loans were $23.3 million and $6.2 million, respectively. This compares to 43% in the first quarter of 2008 as charge-offs on these two portfolios were $28.3 million and $4.0 million, respectively.
Non-performing loans increased to $490.5 million at June 30, 2008 compared to $417.8 million at March 31, 2008 and $282.4 million at June 30, 2007. The increase in non-performing loans on a linked quarter basis was driven primarily by real estate related loan categories: for-sale housing, Alt-A residential and one multi family loan. Non-performing loans to total loans increased 14 basis points to .85% at June 30, 2008 compared to .71% at March 31, 2008 and .52% at June 30, 2007.
Capital
Sovereign’s tangible equity to tangible assets including other comprehensive income (“OCI”) was 6.29% at June 30, 2008 compared to 4.06% at March 31, 2008 and 4.69% a year ago. Tangible common equity to tangible assets including OCI was 6.04% at the end of the second quarter of 2008 compared to 3.81% on a linked quarter basis and 4.44% a year ago. Sovereign’s Tier 1 leverage ratio was 8.34% at June 30, 2008, as compared to 6.21% at March 31, 2008 and 6.40% a year ago. Sovereign Bank’s Tier 1 leverage ratio was 7.27% compared to 6.93% at June 30, 2007. The Bank’s total risk-based capital ratio was 11.41% at June 30, 2008 compared to 10.45% a year ago. The increase in various capital ratios was due to the common stock offering and subordinated debt issuance on May 16, 2008, increased retained earnings and smaller asset size.
About Sovereign
Sovereign Bancorp, Inc.,(“Sovereign”) (NYSE: SOV), is the parent company of Sovereign Bank, a financial institution with principal markets in the Northeastern United States. Sovereign Bank has 750 community banking offices, over 2,300 ATMs and approximately 12,000 team members. 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. For more information on Sovereign Bank, visit <http://www.sovereignbank.com> or call1-877-SOV-BANK.
Investors, analysts and other interested parties will have the opportunity to listen to a live web-cast of Sovereign’s Second Quarter 2008 earnings call on Wednesday, July 23, 2008 beginning at 10:30 a.m. ET atwww.sovereignbank.com<http://www.sovereignbank.com> >Investor Relations>Events &Webcasts; orhttp://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=67999&eventID=1882657. International parties are invited to dial into the conference call at 706-679-7706. The webcast can be accessed at 10:30 a.m. ET on Wednesday, July 23, 2008. Questions may be submitted during the call via email accessible from Sovereign Bancorp’s broadcast and Investor Relations sites. A webcast replay will remain available via Sovereign’s Investor Relations site. A telephone replay will be accessible from 12:30 p.m. ET on Wednesday, July 23, 2008 through 12:00 a.m. ET (midnight) on Wednesday, July 30, 2008 by dialing 1-800-642-1687 in the U.S., international 706-645-9291, confirmation id # 53252875.
—END—
Note:
This press release contains statements with respect to Sovereign’s vision, mission, strategies, goals, beliefs, plans, objectives, expectations, anticipations, estimates, intentions, financial condition, results of operations, future performance and business of Sovereign. These statements constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Sovereign believes that the expectations reflected in these forward-looking statements are reasonable, these statements are not guarantees of future performance and involve risks and uncertainties which are subject to change based on various important factors (some of which are beyond Sovereign’s control). Among the factors which would cause Sovereign’s financial performance to differ materially from that expressed in the forward-looking statements are: the strength of the United States economy in general and the strength of the regional and local economies in which Sovereign conducts operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; adverse changes in the securities markets, including those related to the financial condition of significant issuers in our investment portfolio; the impact of changes in financial services policies, laws and regulations, including laws, regulations and policies concerning taxes, banking, capital, liquidity, proper accounting treatment, securities and insurance, and the application thereof by regulatory bodies and the impact of changes in and interpretation of generally accepted accounting principles in the United States; changes in asset quality; and Sovereign’s success in managing the risks involved in the foregoing. If one or more of the factors affecting Sovereign’s forward-looking information and statements proves incorrect, then Sovereign’s actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements. Any forward looking statements only speak as of the date hereof. Sovereign does not intend to update any forward-looking information and statements, whether written or oral, to reflect any change.
Sovereign Bancorp is followed by several market analysts. Please note that any opinions, estimates, forecasts, or predictions regarding Sovereign Bancorp’s performance or recommendations regarding Sovereign’s securities made by these analysts are theirs alone and do not represent opinions, estimates, forecasts, predictions or recommendations of Sovereign Bancorp or its management. Sovereign Bancorp does not by its reference to any analyst opinions, estimates, forecasts regarding Sovereign’s performance or recommendations regarding Sovereign’s securities imply Sovereign’s endorsement of or concurrence with such information, conclusions or recommendations.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(unaudited)
Quarter Ended | Year to Date | |||||||||||||||||||||||||||
June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | June 30 | June 30 | ||||||||||||||||||||||
(dollars in thousands, except per share data) | 2008 | 2008 | 2007 | 2007 | 2007 | 2008 | 2007 | |||||||||||||||||||||
Interest and dividend income: | ||||||||||||||||||||||||||||
Interest on interest-earning deposits | $ | 997 | $ | 2,964 | $ | 1,615 | $ | 7,117 | $ | 4,144 | $ | 3,961 | $ | 10,380 | ||||||||||||||
Interest on investment securities | ||||||||||||||||||||||||||||
Available for sale | 156,164 | 168,109 | 173,803 | 177,125 | 180,252 | 324,273 | 370,087 | |||||||||||||||||||||
Other | 6,671 | 9,820 | 14,279 | 11,886 | 11,179 | 16,491 | 25,480 | |||||||||||||||||||||
Interest on loans | 837,988 | 895,276 | 949,643 | 954,014 | 943,860 | 1,733,264 | 1,960,827 | |||||||||||||||||||||
Total interest and dividend income | 1,001,820 | 1,076,169 | 1,139,340 | 1,150,142 | 1,139,435 | 2,077,989 | 2,366,774 | |||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||
Deposits and related customer accounts | 228,546 | 315,103 | 395,768 | 408,680 | 409,616 | 543,649 | 822,867 | |||||||||||||||||||||
Borrowings | 267,144 | 278,886 | 277,548 | 284,701 | 276,435 | 546,030 | 602,670 | |||||||||||||||||||||
Total interest expense | 495,690 | 593,989 | 673,316 | 693,381 | 686,051 | 1,089,679 | 1,425,537 | |||||||||||||||||||||
Net interest income | 506,130 | 482,180 | 466,024 | 456,761 | 453,384 | 988,310 | 941,237 | |||||||||||||||||||||
Provision for credit losses | 132,000 | 135,000 | 148,192 | 162,500 | 51,000 | 267,000 | 97,000 | |||||||||||||||||||||
Net interest income after provision for credit losses | 374,130 | 347,180 | 317,832 | 294,261 | 402,384 | 721,310 | 844,237 | |||||||||||||||||||||
Non-interest income: | ||||||||||||||||||||||||||||
Consumer banking fees | 80,969 | 73,191 | 77,420 | 73,113 | 77,268 | 154,160 | 145,282 | |||||||||||||||||||||
Commercial banking fees (2) | 53,747 | 54,453 | 56,695 | 44,155 | 52,046 | 108,200 | 101,454 | |||||||||||||||||||||
Mortgage banking revenue (1) | 37,897 | (5,133 | ) | 9,161 | 3,752 | 26,500 | 32,764 | (80,705 | ) | |||||||||||||||||||
Capital markets revenue | 7,209 | 10,393 | (18,310 | ) | (12,627 | ) | 5,982 | 17,602 | 11,671 | |||||||||||||||||||
Bank owned life insurance income | 19,065 | 19,424 | 20,633 | 24,439 | 20,274 | 38,489 | 40,783 | |||||||||||||||||||||
Other | 6,322 | 5,297 | 7,584 | 8,557 | 8,227 | 11,619 | 17,694 | |||||||||||||||||||||
Total fees and other income before investment gains/(losses) | 205,209 | 157,625 | 153,183 | 141,389 | 190,297 | 362,834 | 236,179 | |||||||||||||||||||||
Net gain/(loss) on investments (3) | 1,908 | 14,135 | (179,209 | ) | 1,884 | — | 16,043 | 970 | ||||||||||||||||||||
Total non-interest income | 207,117 | 171,760 | (26,026 | ) | 143,273 | 190,297 | 378,877 | 237,149 | ||||||||||||||||||||
Non-interest expense: | ||||||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||||
Compensation and benefits (4) | 192,760 | 185,112 | 155,856 | 172,319 | 171,557 | 377,872 | 345,353 | |||||||||||||||||||||
Occupancy and equipment | 74,868 | 78,013 | 77,325 | 75,217 | 75,637 | 152,881 | 156,156 | |||||||||||||||||||||
Technology expense | 25,728 | 24,498 | 25,177 | 23,940 | 23,812 | 50,226 | 47,148 | |||||||||||||||||||||
Outside services | 15,542 | 15,630 | 18,828 | 16,434 | 16,969 | 31,172 | 32,247 | |||||||||||||||||||||
Marketing expense | 19,699 | 16,246 | 13,881 | 16,296 | 17,092 | 35,945 | 25,924 | |||||||||||||||||||||
Other administrative expenses (5) | 53,266 | 39,765 | 46,537 | 37,440 | 31,525 | 93,031 | 59,760 | |||||||||||||||||||||
Total general and administrative | 381,863 | 359,264 | 337,604 | 341,646 | 336,592 | 741,127 | 666,588 | |||||||||||||||||||||
Other expenses: | ||||||||||||||||||||||||||||
Core deposit & other intangibles | 28,106 | 29,122 | 30,141 | 31,066 | 32,257 | 57,228 | 65,510 | |||||||||||||||||||||
Goodwill impairment | — | — | 1,576,776 | — | — | — | — | |||||||||||||||||||||
Other minority interest expense and equity method expense (6) | 14,719 | 8,339 | 27,448 | 6,913 | 14,487 | 23,058 | 32,902 | |||||||||||||||||||||
Proxy and related professional fees | — | — | — | — | (125 | ) | — | (516 | ) | |||||||||||||||||||
Restructuring, other employee severance and debt repurchase charges | — | — | — | 6,029 | 35,938 | — | 55,970 | |||||||||||||||||||||
ESOP expense related to freezing of plan | — | — | — | — | (3,266 | ) | — | 40,119 | ||||||||||||||||||||
Merger-related and integration charges | — | — | — | — | 166 | — | 2,242 | |||||||||||||||||||||
Total other expenses | 42,825 | 37,461 | 1,634,365 | 44,008 | 79,457 | 80,286 | 196,227 | |||||||||||||||||||||
Total non-interest expense | 424,688 | 396,725 | 1,971,969 | 385,654 | 416,049 | 821,413 | 862,815 | |||||||||||||||||||||
Income/ (loss) before income taxes | 156,559 | 122,215 | (1,680,163 | ) | 51,880 | 176,632 | 278,774 | 218,571 | ||||||||||||||||||||
Income tax expense/ (benefit) | 29,120 | 22,080 | (77,180 | ) | (6,330 | ) | 29,180 | 51,200 | 23,060 | |||||||||||||||||||
Net income/ (loss) | $ | 127,439 | $ | 100,135 | $ | (1,602,983 | ) | $ | 58,210 | $ | 147,452 | $ | 227,574 | $ | 195,511 | |||||||||||||
(1) Mortgage banking activity is summarized below: | ||||||||||||||||||||||||||||
Gains/(losses) on sale of mortgage loans and related securities and home equity loans (7) | $ | 4,999 | $ | 3,977 | $ | 4,560 | $ | 3,971 | $ | 3,317 | $ | 8,977 | $ | (111,028 | ) | |||||||||||||
Net gains/(losses) recorded under SFAS 133 | 1,602 | 1,370 | (2,125 | ) | 1,781 | 783 | 2,972 | 395 | ||||||||||||||||||||
Mortgage servicing fees, net of mortgage servicing rights amortization | 1,148 | 3,848 | 1,948 | 972 | 2,224 | 4,995 | 2,471 | |||||||||||||||||||||
Mortgage servicing right recoveries/(impairments) | 19,837 | (18,703 | ) | (2,071 | ) | — | 656 | 1,134 | 656 | |||||||||||||||||||
Net gains on sale of multifamily loans | 9,676 | 9,231 | 7,515 | 2,383 | 5,748 | 18,906 | 16,305 | |||||||||||||||||||||
Net gains/(losses) recorded on commercial mortgage backed securitization | — | — | (666 | ) | (5,355 | ) | 13,772 | — | 10,496 | |||||||||||||||||||
Multifamily servicing right recoveries/(impairments) | 635 | (4,856 | ) | — | — | — | (4,220 | ) | — | |||||||||||||||||||
Total mortgage banking revenues | $ | 37,897 | $ | (5,133 | ) | $ | 9,161 | $ | 3,752 | $ | 26,500 | $ | 32,764 | $ | (80,705 | ) | ||||||||||||
(2) | The third quarter of 2007 includes a LOCOM adjustment of $6.2 million on our loan syndication trading portfolio. | |
(3) | The first quarter of 2008 includes a $14.1 million gain on our membership share allocation of VISA’s IPO shares. Results for the fourth quarter of 2007 include a $180.5 million other-than-temporary impairment charge on FNMA & FHLMC preferred stock. | |
(4) | Second quarter of 2008 results include severance charges of $5.3 million for recently terminated executives. Fourth quarter of 2007 results include $18.7 million of incentive compensation accrual reversals due to corporate objectives not being achieved in 2007. | |
(5) | Other administrative expenses increased from first quarter 2008 levels due to the $6.4 million legal contingency reversal associated with the VISA IPO recorded in the first quarter as well as increased REO expense and loan expenses of $5.3 million. | |
(6) | Second quarter of 2008 results included a fair value adjustment of $6.4 million on one of our equity method investments. | |
(7) | First quarter of 2007 results include a LOCOM adjustment of $119.9 million on correspondent home equity loans that were not sold as of March 31, 2007. |
A
Sovereign Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(unaudited)
CONSOLIDATED BALANCE SHEETS
(unaudited)
June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | ||||||||||||||||
(dollars in thousands) | 2008 | 2008 | 2007 | 2007 | 2007 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and amounts due from depository institutions | $ | 1,140,965 | $ | 1,957,403 | $ | 3,130,770 | $ | 3,992,731 | $ | 1,867,294 | ||||||||||
Investments: | ||||||||||||||||||||
Available-for-sale | 11,118,184 | 10,958,419 | 13,941,847 | 14,307,929 | 13,303,432 | |||||||||||||||
Other investments | 944,606 | 1,134,805 | 1,200,545 | 981,921 | 798,452 | |||||||||||||||
Total investments | 12,062,790 | 12,093,224 | 15,142,392 | 15,289,850 | 14,101,884 | |||||||||||||||
Loans: | ||||||||||||||||||||
Commercial | 32,435,333 | 32,181,592 | 30,912,972 | 29,912,883 | 29,547,839 | |||||||||||||||
Consumer | 24,970,453 | 26,690,190 | 26,866,807 | 27,235,481 | 26,979,279 | |||||||||||||||
Total loans | 57,405,786 | 58,871,782 | 57,779,779 | 57,148,364 | 56,527,118 | |||||||||||||||
Less allowance for loan losses | (808,748 | ) | (775,441 | ) | (709,444 | ) | (629,747 | ) | (503,685 | ) | ||||||||||
Total loans, net | 56,597,038 | 58,096,341 | 57,070,335 | 56,518,617 | 56,023,433 | |||||||||||||||
Premises and equipment, net | 559,986 | 555,773 | 562,332 | 559,040 | 570,074 | |||||||||||||||
Accrued interest receivable | 298,741 | 322,760 | 350,534 | 384,812 | 368,849 | |||||||||||||||
Goodwill | 3,430,653 | 3,430,290 | 3,426,246 | 5,003,022 | 5,003,195 | |||||||||||||||
Core deposit and other intangibles | 314,888 | 342,994 | 372,116 | 402,257 | 433,164 | |||||||||||||||
Bank owned life insurance | 1,820,403 | 1,806,631 | 1,794,099 | 1,773,829 | 1,764,137 | |||||||||||||||
Other assets | 2,971,985 | 3,307,303 | 2,897,572 | 2,683,170 | 2,605,061 | |||||||||||||||
Total assets | $ | 79,197,449 | $ | 81,912,719 | $ | 84,746,396 | $ | 86,607,328 | $ | 82,737,091 | ||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Deposits and other customer related accounts: | ||||||||||||||||||||
Retail and commercial deposits | $ | 38,405,724 | $ | 39,292,245 | $ | 38,350,632 | $ | 37,838,296 | $ | 37,578,525 | ||||||||||
Wholesale deposits | 3,177,527 | 3,756,952 | 4,807,369 | 5,605,720 | 6,120,340 | |||||||||||||||
Government deposits | 3,190,784 | 3,314,420 | 4,003,224 | 3,927,346 | 3,619,838 | |||||||||||||||
Customer repurchase agreements | 2,520,073 | 2,633,112 | 2,754,680 | 2,726,686 | 2,525,932 | |||||||||||||||
Total deposits | 47,294,108 | 48,996,729 | 49,915,905 | 50,098,048 | 49,844,635 | |||||||||||||||
Borrowings and other debt obligations | 22,050,359 | 24,348,829 | 26,126,082 | 26,161,337 | 22,461,638 | |||||||||||||||
Other liabilities | 1,471,894 | 1,743,380 | 1,565,654 | 1,475,954 | 1,504,788 | |||||||||||||||
Total liabilities | 70,816,361 | 75,088,938 | 77,607,641 | 77,735,339 | 73,811,061 | |||||||||||||||
Minority interests | 147,139 | 146,784 | 146,430 | 146,075 | 145,742 | |||||||||||||||
Stockholders’ equity: | ||||||||||||||||||||
Preferred Stock | 195,445 | 195,445 | 195,445 | 195,445 | 195,445 | |||||||||||||||
Common Stock (1) | 7,701,024 | 6,298,254 | 6,295,572 | 6,277,292 | 6,253,146 | |||||||||||||||
Warrants and employee stock options issued | 348,844 | 348,878 | 348,365 | 347,630 | 346,278 | |||||||||||||||
Treasury stock | (10,531 | ) | (11,438 | ) | (19,853 | ) | (20,359 | ) | (21,303 | ) | ||||||||||
Accumulated other comprehensive loss | (720,036 | ) | (749,556 | ) | (326,133 | ) | (218,155 | ) | (121,184 | ) | ||||||||||
Retained earnings | 719,203 | 595,414 | 498,929 | 2,144,061 | 2,127,906 | |||||||||||||||
Total stockholders’ equity | 8,233,949 | 6,676,997 | 6,992,325 | 8,725,914 | 8,780,288 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 79,197,449 | $ | 81,912,719 | $ | 84,746,396 | $ | 86,607,328 | $ | 82,737,091 | ||||||||||
(1) | June 30, 2008 balance reflects proceeds of $1.39 billion from the issuance of 179.7 million shares of common stock on May 16, 2008. |
B
Sovereign Bancorp, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS
(unaudited)
FINANCIAL HIGHLIGHTS
(unaudited)
Quarter Ended | Year to Date | |||||||||||||||||||||||||||
June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | June 30 | June 30 | ||||||||||||||||||||||
(dollars in millions, except per share data) | 2008 | 2008 | 2007 | 2007 | 2007 | 2008 | 2007 | |||||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||||||
Basic earnings (loss) per share | $ | 0.22 | $ | 0.20 | $ | (3.34 | ) | $ | 0.11 | $ | 0.30 | $ | 0.42 | $ | 0.39 | |||||||||||||
Diluted earnings (loss) per share | 0.22 | 0.20 | (3.34 | ) | 0.11 | 0.29 | 0.42 | 0.39 | ||||||||||||||||||||
Dividend declared per share | — | — | 0.08 | 0.08 | 0.08 | — | 0.16 | |||||||||||||||||||||
Common book value per share (1) | 12.13 | 13.43 | 14.12 | 17.76 | 17.92 | 12.13 | 17.92 | |||||||||||||||||||||
Tangible common book value per share (2) | 6.90 | 6.20 | 6.82 | 7.11 | 7.19 | 6.90 | 7.19 | |||||||||||||||||||||
Tangible common book value per share excluding OCI | 7.99 | 7.75 | 7.50 | 7.57 | 7.44 | 7.99 | 7.44 | |||||||||||||||||||||
Common stock price: | ||||||||||||||||||||||||||||
High | $ | 9.89 | $ | 13.07 | $ | 17.73 | $ | 21.94 | $ | 25.16 | $ | 13.07 | $ | 26.42 | ||||||||||||||
Low | 7.14 | 9.28 | 10.08 | 16.58 | 21.14 | 7.14 | 21.14 | |||||||||||||||||||||
Close | 7.36 | 9.32 | 11.40 | 17.04 | 21.14 | 7.36 | 21.14 | |||||||||||||||||||||
Weighted average common shares: | ||||||||||||||||||||||||||||
Basic (3) | 570.1 | 482.2 | 481.2 | 480.2 | 478.3 | 527.2 | 476.7 | |||||||||||||||||||||
Diluted (3) (4) | 571.4 | 482.2 | 481.2 | 480.2 | 512.6 | 528.8 | 511.1 | |||||||||||||||||||||
End-of-period common shares: | ||||||||||||||||||||||||||||
Basic | 662.6 | 482.4 | 481.4 | 480.4 | 479.1 | 662.6 | 479.1 | |||||||||||||||||||||
Diluted | 691.3 | 511.5 | 511.0 | 512.4 | 512.3 | 691.3 | 512.3 | |||||||||||||||||||||
Performance Statistics | ||||||||||||||||||||||||||||
Bancorp | ||||||||||||||||||||||||||||
Net interest margin | 3.06 | % | 2.88 | % | 2.77 | % | 2.74 | % | 2.71 | % | 2.97 | % | 2.71 | % | ||||||||||||||
Return on average assets | 0.64 | % | 0.50 | % | -7.74 | % | 0.28 | % | 0.72 | % | 0.57 | % | 0.47 | % | ||||||||||||||
Return on average tangible assets | 0.67 | % | 0.52 | % | -8.25 | % | 0.30 | % | 0.77 | % | 0.59 | % | 0.50 | % | ||||||||||||||
Return on average equity | 6.73 | % | 5.78 | % | -72.92 | % | 2.63 | % | 6.71 | % | 6.28 | % | 4.49 | % | ||||||||||||||
Return on average tangible equity | 12.44 | % | 11.67 | % | -174.96 | % | 6.34 | % | 16.17 | % | 12.09 | % | 10.93 | % | ||||||||||||||
Annualized net loan charge-offs to average loans | 0.60 | % | 0.51 | % | 0.42 | % | 0.24 | % | 0.18 | % | 0.55 | % | 0.08 | % | ||||||||||||||
Efficiency ratio (5) | 53.68 | % | 56.15 | % | 54.52 | % | 57.12 | % | 52.29 | % | 54.85 | % | 56.61 | % |
NOTES:
(1) | Common book value per share equals common stockholders’ equity at period-end divided by common shares outstanding. | |
(2) | Tangible book value per share equals common stockholders’ equity at period-end excluding goodwill and core deposits and other intangibles, net of any associated deferred tax liabilities divided by common shares outstanding. | |
(3) | On May 16th, 2008, Sovereign issued 179.7 million shares of common stock which raised net proceeds of $1.39 billion to enhance its capital and liquidity positions. As a result, this increased our weighted average shares outstanding during the second quarter by 90.8 million. Therefore, our weighted average share count in the third quarter will increase due to the full quarter impact of this transaction by approximately 88.9 million shares. | |
(4) | The conversion of warrants and equity awards and the after-tax add back of Sovereign’s contingently convertible trust preferred interest expense was excluded from Sovereign’s GAAP diluted earnings per share calculation for the majority of the periods above since the result would have been anti-dilutive. | |
(5) | Efficiency ratio equals general and administrative expense as a percentage of total revenue, defined as the sum of net interest income and total fees and other income before security gains. |
C
Sovereign Bancorp, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS
(unaudited)
FINANCIAL HIGHLIGHTS
(unaudited)
Quarter Ended | ||||||||||||||||||||
June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | ||||||||||||||||
(dollars in millions) | 2008 | 2008 | 2007 | 2007 | 2007 | |||||||||||||||
Financial Condition Data: | ||||||||||||||||||||
Asset Quality | ||||||||||||||||||||
Non-performing assets | $ | 553.9 | $ | 484.4 | $ | 361.6 | $ | 336.7 | $ | 334.0 | ||||||||||
Non-performing loans | 490.5 | 417.8 | 304.3 | 282.4 | 291.5 | |||||||||||||||
Non-performing assets to total assets (1) | 0.70 | % | 0.59 | % | 0.43 | % | 0.39 | % | 0.40 | % | ||||||||||
Non-performing loans to loans (1) | 0.85 | % | 0.71 | % | 0.53 | % | 0.49 | % | 0.52 | % | ||||||||||
Non-performing assets as a percentage of tangible equity and allowance for loan losses | 9.9 | % | 12.2 | % | 8.6 | % | 7.9 | % | 8.1 | % | ||||||||||
Allowance for credit losses | $ | 843.5 | $ | 798.4 | $ | 737.7 | $ | 650.0 | $ | 521.1 | ||||||||||
Allowance for credit losses to total loans (1) | 1.47 | % | 1.36 | % | 1.28 | % | 1.14 | % | 0.92 | % | ||||||||||
Allowance for credit losses to non-performing loans | 172 | % | 191 | % | 242 | % | 230 | % | 179 | % | ||||||||||
Capitalization — Bancorp(2) | ||||||||||||||||||||
Tier 1 leverage ratio | 8.34 | % | 6.21 | % | 5.89 | % | 6.03 | % | 6.40 | % | ||||||||||
Tangible equity to tangible assets excluding OCI (3) | 7.18 | % | 4.97 | % | 4.67 | % | 4.69 | % | 4.84 | % | ||||||||||
Tangible equity to tangible assets including OCI (3) | 6.29 | % | 4.06 | % | 4.28 | % | 4.43 | % | 4.69 | % | ||||||||||
Tangible common equity to tangible assets excluding OCI (3) | 6.92 | % | 4.72 | % | 4.43 | % | 4.45 | % | 4.59 | % | ||||||||||
Tangible common equity to tangible assets including OCI (3) | 6.04 | % | 3.81 | % | 4.04 | % | 4.19 | % | 4.44 | % | ||||||||||
Capitalization — Bank(2) | ||||||||||||||||||||
Tier 1 leverage ratio | 7.27 | % | 6.85 | % | 6.54 | % | 6.63 | % | 6.93 | % | ||||||||||
Tier 1 risk-based ratio | 7.85 | % | 7.49 | % | 7.54 | % | 7.66 | % | 7.83 | % | ||||||||||
Total risk-based ratio | 11.41 | % | 10.24 | % | 10.40 | % | 10.37 | % | 10.45 | % |
(1) | The calculation of this ratio at June 30, 2007 excluded approximately $491 million of correspondent home equity loans that were marked down to fair value as of March 31, 2007. | |
(2) | All capital ratios are calculated based upon adjusted end of period assets consistent with OTS guidelines. The current quarter ratios are estimated as of the date of this earnings release. | |
(3) | On May 16, 2008, Sovereign issued 179.7 million shares of common stock which raised net proceeds of $1.39 billion to bolster its capital and liquidity positions. This increased the ratios above by 182 to 184 basis points. |
D
Sovereign Bancorp, Inc. and Subsidiaries
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS
(unaudited)
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS
(unaudited)
Quarter Ended | ||||||||||||||||||||||||||||||||||||
June 30, 2008 | March 31, 2008 | June 30, 2007 | ||||||||||||||||||||||||||||||||||
Yield/ | Yield/ | Yield/ | ||||||||||||||||||||||||||||||||||
(dollars in thousands) | Average Balance | Interest (1) | Rate | Average Balance | Interest (1) | Rate | Average Balance | Interest (1) | Rate | |||||||||||||||||||||||||||
Earning assets: | ||||||||||||||||||||||||||||||||||||
Investment securities | $ | 12,109,209 | $ | 183,895 | 6.08 | % | $ | 13,034,150 | $ | 200,922 | 6.17 | % | $ | 14,041,230 | $ | 215,663 | 6.15 | % | ||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||
Commercial real estate | 13,052,692 | 188,933 | 5.81 | % | 12,593,687 | 197,816 | 6.31 | % | 11,737,900 | 205,159 | 7.01 | % | ||||||||||||||||||||||||
Commercial and industrial loans (C&I) | 13,005,216 | 169,266 | 5.23 | % | 12,760,425 | 193,990 | 6.11 | % | 12,146,382 | 225,039 | 7.43 | % | ||||||||||||||||||||||||
Other | 1,756,432 | 30,300 | 6.90 | % | 1,754,382 | 30,604 | 6.98 | % | 1,586,118 | 28,565 | 7.20 | % | ||||||||||||||||||||||||
Total Commercial | 27,814,340 | 388,499 | 5.61 | % | 27,108,494 | 422,410 | 6.26 | % | 25,470,400 | 458,763 | 7.22 | % | ||||||||||||||||||||||||
Multi-family | 4,506,471 | 66,984 | 5.95 | % | 4,316,489 | 65,907 | 6.12 | % | 4,637,577 | 72,186 | 6.23 | % | ||||||||||||||||||||||||
Residential | 12,598,466 | 179,025 | 5.69 | % | 13,272,189 | 187,088 | 5.64 | % | 14,429,334 | 203,581 | 5.64 | % | ||||||||||||||||||||||||
Home equity loans and lines of credit | 6,389,801 | 88,669 | 5.58 | % | 6,217,574 | 96,072 | 6.21 | % | 5,933,285 | 101,804 | 6.88 | % | ||||||||||||||||||||||||
Total consumer loans secured by real estate | 18,988,267 | 267,694 | 5.65 | % | 19,489,763 | 283,160 | 5.82 | % | 20,362,619 | 305,385 | 6.00 | % | ||||||||||||||||||||||||
Auto Loans | 6,568,725 | 113,047 | 6.92 | % | 6,967,076 | 121,196 | 7.00 | % | 5,926,390 | 102,865 | 6.96 | % | ||||||||||||||||||||||||
Other | 306,297 | 5,592 | 7.34 | % | 314,006 | 6,404 | 8.20 | % | 388,325 | 8,293 | 8.57 | % | ||||||||||||||||||||||||
Total Consumer | 25,863,289 | 386,333 | 5.99 | % | 26,770,845 | 410,760 | 6.16 | % | 26,677,334 | 416,543 | 6.25 | % | ||||||||||||||||||||||||
Total loans | 58,184,100 | 841,816 | 5.81 | % | 58,195,828 | 899,077 | 6.20 | % | 56,785,311 | 947,492 | 6.69 | % | ||||||||||||||||||||||||
Allowance for loan losses | (785,983 | ) | (721,543 | ) | (493,621 | ) | ||||||||||||||||||||||||||||||
Total earning assets | 69,507,326 | $ | 1,025,711 | 5.92 | % | 70,508,435 | $ | 1,099,999 | 6.26 | % | 70,332,920 | $ | 1,163,155 | 6.63 | % | |||||||||||||||||||||
Other assets | 10,294,424 | 10,422,253 | 11,608,001 | |||||||||||||||||||||||||||||||||
Total assets | $ | 79,801,750 | $ | 80,930,688 | $ | 81,940,921 | ||||||||||||||||||||||||||||||
Funding liabilities: | ||||||||||||||||||||||||||||||||||||
Deposits and other customer related accounts: | ||||||||||||||||||||||||||||||||||||
NOW accounts | $ | 5,209,957 | $ | 10,656 | 0.82 | % | $ | 5,319,562 | $ | 12,682 | 0.96 | % | $ | 5,935,760 | $ | 15,791 | 1.07 | % | ||||||||||||||||||
Savings accounts | 4,107,321 | 6,461 | 0.63 | % | 3,813,768 | 5,827 | 0.61 | % | 4,437,785 | 7,184 | 0.65 | % | ||||||||||||||||||||||||
Money market accounts | 11,348,987 | 57,077 | 2.02 | % | 10,967,638 | 82,965 | 3.04 | % | 9,687,237 | 84,086 | 3.48 | % | ||||||||||||||||||||||||
Time deposits | 11,258,950 | 109,354 | 3.91 | % | 11,927,984 | 134,980 | 4.55 | % | 11,004,592 | 128,170 | 4.67 | % | ||||||||||||||||||||||||
Total retail and commercial deposits | 31,925,215 | 183,548 | 2.31 | % | 32,028,952 | 236,454 | 2.97 | % | 31,065,374 | 235,231 | 3.04 | % | ||||||||||||||||||||||||
NOW accounts- wholesale | 139,664 | 790 | 2.27 | % | 88,574 | 743 | 3.38 | % | 133,590 | 1,776 | 5.33 | % | ||||||||||||||||||||||||
Money market accounts- wholesale | 1,547,158 | 9,034 | 2.35 | % | 1,396,481 | 12,260 | 3.53 | % | 2,521,820 | 34,620 | 5.51 | % | ||||||||||||||||||||||||
Time deposits- wholesale | 1,588,172 | 6,614 | 1.68 | % | 2,406,387 | 19,594 | 3.27 | % | 4,425,195 | 59,703 | 5.41 | % | ||||||||||||||||||||||||
Total wholesale deposits | 3,274,994 | 16,438 | 2.02 | % | 3,891,442 | 32,597 | 3.37 | % | 7,080,605 | 96,099 | 5.45 | % | ||||||||||||||||||||||||
Total government deposits | 3,257,652 | 19,533 | 2.41 | % | 3,819,399 | 30,337 | 3.19 | % | 4,040,559 | 51,692 | 5.13 | % | ||||||||||||||||||||||||
Customer repurchase agreements | 2,571,241 | 9,027 | 1.41 | % | 2,739,973 | 15,715 | 2.31 | % | 2,389,302 | 26,594 | 4.46 | % | ||||||||||||||||||||||||
Total deposits and other customer related accounts | 41,029,102 | 228,546 | 2.24 | % | 42,479,766 | 315,103 | 2.98 | % | 44,575,840 | 409,616 | 3.69 | % | ||||||||||||||||||||||||
Borrowings: | ||||||||||||||||||||||||||||||||||||
Wholesale borrowings | 19,061,915 | 211,195 | 4.44 | % | 19,816,254 | 224,236 | 4.54 | % | 15,396,099 | 194,074 | 5.05 | % | ||||||||||||||||||||||||
Other borrowings | 3,794,900 | 55,949 | 5.90 | % | 3,625,668 | 54,650 | 6.04 | % | 5,227,113 | 82,361 | 6.29 | % | ||||||||||||||||||||||||
Total borrowings | 22,856,815 | 267,144 | 4.69 | % | 23,441,922 | 278,886 | 4.77 | % | 20,623,212 | 276,435 | 5.37 | % | ||||||||||||||||||||||||
Total funding liabilities | 63,885,917 | 495,690 | 3.12 | % | 65,921,688 | 593,989 | 3.62 | % | 65,199,052 | 686,051 | 4.22 | % | ||||||||||||||||||||||||
Non-interest bearing DDA | 6,731,967 | 6,342,945 | 6,421,910 | |||||||||||||||||||||||||||||||||
Other liabilities | 1,593,912 | 1,722,005 | 1,503,851 | |||||||||||||||||||||||||||||||||
Total liabilities | 72,211,796 | 73,986,638 | 73,124,813 | |||||||||||||||||||||||||||||||||
Stockholders’ equity | 7,589,954 | 6,944,050 | 8,816,108 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 79,801,750 | $ | 80,930,688 | $ | 81,940,921 | ||||||||||||||||||||||||||||||
Net interest income | $ | 530,021 | $ | 506,010 | $ | 477,104 | ||||||||||||||||||||||||||||||
Interest rate spread | 2.80 | % | 2.64 | % | 2.41 | % | ||||||||||||||||||||||||||||||
Contribution from interest free funds | 0.26 | % | 0.24 | % | 0.30 | % | ||||||||||||||||||||||||||||||
Net interest margin | 3.06 | % | 2.88 | % | 2.71 | % | ||||||||||||||||||||||||||||||
(1) | Tax equivalent basis |
E
Sovereign Bancorp, Inc. and Subsidiaries
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS
(unaudited)
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS
(unaudited)
Year to Date | ||||||||||||||||||||||||
June 30, 2008 | June 30, 2007 | |||||||||||||||||||||||
Average | Yield/ | Average | Yield/ | |||||||||||||||||||||
(dollars in thousands) | Balance | Interest (1) | Rate | Balance | Interest (1) | Rate | ||||||||||||||||||
Earning assets: | ||||||||||||||||||||||||
Investment securities | $ | 12,571,679 | $ | 384,816 | 6.13 | % | $ | 14,605,167 | $ | 446,257 | 6.12 | % | ||||||||||||
Loans: | ||||||||||||||||||||||||
Commercial real estate | 12,823,189 | 386,749 | 6.06 | % | 11,626,074 | 401,753 | 6.95 | % | ||||||||||||||||
Commercial and industrial loans (C&I) | 12,882,821 | 363,257 | 5.67 | % | 11,857,822 | 439,519 | 7.47 | % | ||||||||||||||||
Other | 1,755,407 | 60,904 | 6.94 | % | 1,553,606 | 55,650 | 7.16 | % | ||||||||||||||||
Total Commercial | 27,461,417 | 810,910 | 5.93 | % | 25,037,502 | 896,922 | 7.21 | % | ||||||||||||||||
Multi-family | 4,411,480 | 132,892 | 6.03 | % | 5,260,766 | 170,970 | 6.51 | % | ||||||||||||||||
Residential | 12,935,327 | 366,113 | 5.66 | % | 15,007,930 | 426,604 | 5.69 | % | ||||||||||||||||
Home equity loans and lines of credit | 6,303,688 | 184,741 | 5.89 | % | 7,705,765 | 267,154 | 6.98 | % | ||||||||||||||||
Total consumer loans secured by real estate | 19,239,015 | 550,854 | 5.74 | % | 22,713,695 | 693,758 | 6.13 | % | ||||||||||||||||
Auto Loans | 6,767,900 | 234,243 | 6.96 | % | 5,558,312 | 189,007 | 6.86 | % | ||||||||||||||||
Other | 310,151 | 11,996 | 7.78 | % | 405,150 | 17,114 | 8.52 | % | ||||||||||||||||
Total Consumer | 26,317,066 | 797,093 | 6.08 | % | 28,677,157 | 899,879 | 6.30 | % | ||||||||||||||||
Total loans | 58,189,963 | 1,740,895 | 6.00 | % | 58,975,425 | 1,967,771 | 6.71 | % | ||||||||||||||||
Allowance for loan losses | (753,763 | ) | (484,122 | ) | ||||||||||||||||||||
Total earning assets | 70,007,879 | $ | 2,125,711 | 6.09 | % | 73,096,470 | $ | 2,414,028 | 6.63 | % | ||||||||||||||
Other assets | 10,358,340 | 11,665,137 | ||||||||||||||||||||||
Total assets | $ | 80,366,219 | $ | 84,761,607 | ||||||||||||||||||||
Funding liabilities: | ||||||||||||||||||||||||
Deposits and other customer related accounts: | ||||||||||||||||||||||||
NOW accounts | $ | 5,136,814 | $ | 22,109 | 0.87 | % | $ | 5,965,077 | $ | 32,231 | 1.09 | % | ||||||||||||
Savings accounts | 4,088,490 | 13,517 | 0.66 | % | 4,504,675 | 14,363 | 0.64 | % | ||||||||||||||||
Money market accounts | 11,158,312 | 140,043 | 2.52 | % | 9,420,306 | 158,346 | 3.39 | % | ||||||||||||||||
Time deposits | 11,593,466 | 244,333 | 4.24 | % | 11,123,501 | 255,676 | 4.64 | % | ||||||||||||||||
Total retail and commercial deposits | 31,977,082 | 420,002 | 2.64 | % | 31,013,559 | 460,616 | 3.00 | % | ||||||||||||||||
NOW accounts- wholesale | 114,119 | 1,533 | 2.70 | % | 308,759 | 8,185 | 5.35 | % | ||||||||||||||||
Money market accounts- wholesale | 1,471,819 | 21,294 | 2.91 | % | 3,077,336 | 84,231 | 5.52 | % | ||||||||||||||||
Time deposits- wholesale | 1,997,280 | 26,208 | 2.64 | % | 4,464,453 | 119,945 | 5.41 | % | ||||||||||||||||
Total wholesale deposits | 3,583,218 | 49,035 | 2.75 | % | 7,850,548 | 212,361 | 5.45 | % | ||||||||||||||||
Total government deposits | 3,538,526 | 49,870 | 2.83 | % | 3,830,241 | 97,401 | 5.13 | % | ||||||||||||||||
Customer repurchase agreements | 2,655,607 | 24,742 | 1.87 | % | 2,326,334 | 52,489 | 4.55 | % | ||||||||||||||||
Total deposits and other customer related accounts | 41,754,433 | 543,649 | 2.62 | % | 45,020,682 | 822,867 | 3.69 | % | ||||||||||||||||
Borrowings: | ||||||||||||||||||||||||
Wholesale borrowings | 19,439,085 | 435,431 | 4.49 | % | 17,607,062 | 443,338 | 5.06 | % | ||||||||||||||||
Other borrowings | 3,710,284 | 110,599 | 5.97 | % | 5,318,968 | 159,332 | 6.00 | % | ||||||||||||||||
Total borrowings | 23,149,369 | 546,030 | 4.73 | % | 22,926,030 | 602,670 | 5.28 | % | ||||||||||||||||
Total funding liabilities | 64,903,802 | 1,089,679 | 3.37 | % | 67,946,712 | 1,425,537 | 4.22 | % | ||||||||||||||||
Non-interest bearing DDA | 6,537,456 | 6,378,845 | ||||||||||||||||||||||
Other liabilities | 1,657,959 | 1,660,284 | ||||||||||||||||||||||
Total liabilities | 73,099,217 | 75,985,841 | ||||||||||||||||||||||
Stockholders’ equity | 7,267,002 | 8,775,766 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 80,366,219 | $ | 84,761,607 | ||||||||||||||||||||
Net interest income | $ | 1,036,032 | $ | 988,491 | ||||||||||||||||||||
Interest rate spread | 2.72 | % | 2.41 | % | ||||||||||||||||||||
Contribution from interest free funds | 0.25 | % | 0.30 | % | ||||||||||||||||||||
Net interest margin | 2.97 | % | 2.71 | % | ||||||||||||||||||||
(1) | Tax equivalent basis |
F
Sovereign Bancorp, Inc. and Subsidiaries
SUPPLEMENTAL INFORMATION
(unaudited)
SUPPLEMENTAL INFORMATION
(unaudited)
NON-PERFORMING ASSETS
June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | ||||||||||||||||
(dollars in thousands) | 2008 | 2008 | 2007 | 2007 | 2007 | |||||||||||||||
Non-accrual loans: | ||||||||||||||||||||
Consumer: | ||||||||||||||||||||
Residential — Alt-A | $ | 85,460 | $ | 64,763 | $ | 51,783 | $ | 42,310 | $ | 25,402 | ||||||||||
Residential — Other | 47,654 | 44,039 | 39,098 | 37,599 | 43,990 | |||||||||||||||
Home equity loans and lines of credit | 20,407 | 17,669 | 16,684 | 12,508 | 12,875 | |||||||||||||||
Correspondent home equity | 44,806 | 42,618 | 39,415 | 41,466 | 51,659 | |||||||||||||||
Auto loans | 1,155 | 876 | 1,359 | 730 | 620 | |||||||||||||||
Other consumer loans | 1,595 | 1,541 | 2,087 | 2,076 | 1,714 | |||||||||||||||
Total consumer loans | 201,077 | 171,506 | 150,426 | 136,689 | 136,260 | |||||||||||||||
Commercial real estate | 117,251 | 95,363 | 61,750 | 63,975 | 69,345 | |||||||||||||||
Multi-family loans | 42,230 | 10,367 | 6,336 | 3,002 | 4,732 | |||||||||||||||
C&I and other | 129,693 | 140,270 | 85,406 | 78,251 | 80,706 | |||||||||||||||
Total non-accrual loans | 490,251 | 417,506 | 303,918 | 281,917 | 291,043 | |||||||||||||||
Restructured loans | 280 | 324 | 370 | 443 | 503 | |||||||||||||||
Total non-performing loans | 490,531 | 417,830 | 304,288 | 282,360 | 291,546 | |||||||||||||||
Real estate owned, net | 48,228 | 49,668 | 43,226 | 43,517 | 34,724 | |||||||||||||||
Other repossessed assets | 15,168 | 16,888 | 14,062 | 10,861 | 7,755 | |||||||||||||||
Total non-performing assets | $ | 553,927 | $ | 484,386 | $ | 361,576 | $ | 336,738 | $ | 334,025 | ||||||||||
Non-performing loans as a percentage of loans (1) | 0.85 | % | 0.71 | % | 0.53 | % | 0.49 | % | 0.52 | % | ||||||||||
Non-performing assets as a percentage of total assets (1) | 0.70 | % | 0.59 | % | 0.43 | % | 0.39 | % | 0.40 | % | ||||||||||
Non-performing assets as a percentage of total loans, real estate owned and repossessed assets (1) | 0.96 | % | 0.82 | % | 0.63 | % | 0.59 | % | 0.59 | % | ||||||||||
Allowance for credit losses as a percentage of non-performing loans | 172 | % | 191 | % | 242 | % | 230 | % | 179 | % | ||||||||||
Non-performing assets as a percentage of tangible equity and allowance for loan losses (1) | 9.9 | % | 12.2 | % | 8.6 | % | 7.9 | % | 8.1 | % |
NET LOAN CHARGE-OFFS
June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | ||||||||||||||||
Quarters ended (in thousands) | 2008 | 2008 | 2007 | 2007 | 2007 | |||||||||||||||
Commercial real estate | $ | 7,748 | $ | 3,339 | $ | 4,591 | $ | 2,401 | $ | 2,766 | ||||||||||
Multi-family loans | 227 | — | — | — | — | |||||||||||||||
C&I and other | 25,246 | 11,789 | 13,647 | 8,387 | 6,820 | |||||||||||||||
Total commercial | 33,221 | 15,128 | 18,238 | 10,788 | 9,586 | |||||||||||||||
Residential — Alt-A | 2,289 | 2,135 | 1,766 | 807 | 362 | |||||||||||||||
Residential — Other | 2,340 | 2,718 | 1,865 | 908 | 1,196 | |||||||||||||||
Home equity loans and lines of credit | 4,399 | 5,351 | 3,808 | 883 | 1,934 | |||||||||||||||
Correspondent home equity | 6,189 | 4,014 | — | — | — | |||||||||||||||
Total consumer loans secured by real estate | 15,217 | 14,218 | 7,439 | 2,598 | 3,492 | |||||||||||||||
Auto loans — In market | 13,317 | 14,488 | 14,918 | 10,162 | 7,953 | |||||||||||||||
Auto loans — Out of market | 23,287 | 28,276 | 19,427 | 9,286 | 4,352 | |||||||||||||||
Other consumer loans | 1,895 | 2,186 | 469 | 734 | 291 | |||||||||||||||
Total consumer | 53,716 | 59,168 | 42,253 | 22,780 | 16,088 | |||||||||||||||
Total loan charge-offs | $ | 86,937 | $ | 74,296 | $ | 60,491 | $ | 33,568 | $ | 25,674 | ||||||||||
COMPONENTS OF THE PROVISION OF CREDIT LOSSES AND ALLOWANCE FOR CREDIT LOSSES
June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | ||||||||||||||||
Quarters ended (in thousands) | 2008 | 2008 | 2007 | 2007 | 2007 | |||||||||||||||
Provision for loan losses | $ | 120,244 | $ | 140,293 | $ | 140,188 | $ | 159,630 | $ | 49,589 | ||||||||||
Provision/(recoveries) for unfunded commitments | 11,756 | (5,293 | ) | 8,004 | 2,870 | 1,411 | ||||||||||||||
Total provision for credit losses | $ | 132,000 | $ | 135,000 | $ | 148,192 | $ | 162,500 | $ | 51,000 | ||||||||||
Allowance for loan losses | $ | 808,748 | $ | 775,441 | $ | 709,444 | $ | 629,747 | $ | 503,685 | ||||||||||
Reserve for unfunded commitments | 34,764 | 23,008 | 28,301 | 20,297 | 17,427 | |||||||||||||||
Total allowance for credit losses | $ | 843,512 | $ | 798,449 | $ | 737,745 | $ | 650,044 | $ | 521,112 | ||||||||||
(1) | The calculation of this ratio at June 30, 2007 excluded approximately $491 million of correspondent home equity loans that were marked down to fair value as of March 31, 2007. |
G
Sovereign Bancorp, Inc. and Subsidiaries
SUPPLEMENTAL INFORMATION
(unaudited)
SUPPLEMENTAL INFORMATION
(unaudited)
ADDITIONAL CREDIT QUALITY STATISTICS
Loan Composition-End of Period ($) | Net Loan Charge-Offs ($) | Total Past Dues Excluding Non-Accruals ($) | ||||||||||||||||||||||||||||||||||
Annualized Net Loan | ||||||||||||||||||||||||||||||||||||
% of Total Loans | Charge-Offs to Average Loans (%) | Total Past Dues to Total Loans (%) | ||||||||||||||||||||||||||||||||||
June 30 | Mar. 31 | June 30 | June 30 | Mar. 31 | June 30 | June 30 | Mar. 31 | June 30 | ||||||||||||||||||||||||||||
Quarters ended (in thousands) | 2008 | 2008 | 2007 | 2008 | 2008 | 2007 | 2008 | 2008 | 2007 | |||||||||||||||||||||||||||
Commercial real estate (1) | $ | 13,271,241 | $ | 12,882,292 | $ | 11,741,479 | $ | 7,748 | $ | 3,339 | $ | 2,766 | $ | 63,624 | $ | 53,486 | $ | 52,730 | ||||||||||||||||||
23 | % | 22 | % | 21 | % | 0.24 | % | 0.11 | % | 0.09 | % | 0.48 | % | 0.42 | % | 0.45 | % | |||||||||||||||||||
Multi-family | 4,669,017 | 4,331,075 | 4,000,527 | 227 | — | — | 49,866 | 27,769 | 19,177 | |||||||||||||||||||||||||||
8 | % | 7 | % | 7 | % | 0.02 | % | 0.00 | % | 0.00 | % | 1.07 | % | 0.64 | % | 0.48 | % | |||||||||||||||||||
C&I and other commercial | 14,495,075 | 14,968,225 | 13,805,833 | 25,246 | 11,789 | 6,820 | 75,395 | 57,635 | 50,065 | |||||||||||||||||||||||||||
25 | % | 25 | % | 24 | % | 0.68 | % | 0.32 | % | 0.20 | % | 0.52 | % | 0.39 | % | 0.36 | % | |||||||||||||||||||
Residential — Alt-A | 2,836,902 | 2,975,648 | 3,182,538 | 2,289 | 2,135 | 362 | 158,111 | 122,094 | 103,830 | |||||||||||||||||||||||||||
5 | % | 5 | % | 5 | % | 0.32 | % | 0.29 | % | 0.05 | % | 5.57 | % | 4.10 | % | 3.26 | % | |||||||||||||||||||
Residential — Other | 9,019,532 | 10,302,260 | 11,204,804 | 2,340 | 2,718 | 1,196 | 233,188 | 212,551 | 169,069 | |||||||||||||||||||||||||||
15 | % | 18 | % | 20 | % | 0.10 | % | 0.11 | % | 0.04 | % | 2.59 | % | 2.06 | % | 1.51 | % | |||||||||||||||||||
Home equity loans and lines of credit | 6,088,654 | 5,844,326 | 5,442,035 | 4,399 | 5,351 | 1,934 | 28,150 | 29,568 | 27,916 | |||||||||||||||||||||||||||
11 | % | 10 | % | 10 | % | 0.30 | % | 0.37 | % | 0.15 | % | 0.46 | % | 0.51 | % | 0.51 | % | |||||||||||||||||||
Correspondent home equity loans (2) (3) | 416,084 | 439,180 | 512,890 | 6,189 | �� | 4,014 | — | 34,585 | 60,072 | 59,907 | ||||||||||||||||||||||||||
1 | % | 1 | % | 1 | % | 5.80 | % | 3.56 | % | 0.00 | % | 8.31 | % | 13.68 | % | 11.68 | % | |||||||||||||||||||
Auto loans — In Market | 4,103,058 | 4,375,816 | 4,393,649 | 13,317 | 14,488 | 7,953 | 80,203 | 83,610 | 65,709 | |||||||||||||||||||||||||||
7 | % | 7 | % | 8 | % | 1.25 | % | 1.32 | % | 0.73 | % | 1.95 | % | 1.91 | % | 1.50 | % | |||||||||||||||||||
Auto loans — Out of Market (3) | 2,203,426 | 2,439,841 | 1,926,361 | 23,287 | 28,276 | 4,352 | 79,750 | 74,534 | 25,032 | |||||||||||||||||||||||||||
4 | % | 4 | % | 3 | % | 4.01 | % | 4.41 | % | 1.12 | % | 3.62 | % | 3.05 | % | 1.30 | % | |||||||||||||||||||
Other consumer | 302,797 | 313,119 | 317,002 | 1,895 | 2,186 | 291 | 11,477 | 8,820 | 10,425 | |||||||||||||||||||||||||||
1 | % | 1 | % | 1 | % | 2.47 | % | 2.78 | % | 0.30 | % | 3.79 | % | 2.82 | % | 3.29 | % | |||||||||||||||||||
Total | 57,405,786 | 58,871,782 | 56,527,118 | 86,937 | 74,296 | 25,674 | 814,349 | 730,139 | 583,860 | |||||||||||||||||||||||||||
100 | % | 100 | % | 100 | % | 0.60 | % | 0.51 | % | 0.18 | % | 1.42 | % | 1.24 | % | 1.03 | % | |||||||||||||||||||
(1) | Balance includes $907 million and $982 million of residential construction loans at June 30, 2008 and March 31, 2008, respectively. | |
(2) | At June 30, 2008 and March 31, 2008, this portfolio has $308.2 million and $321.5 million, respectively, of first lien loans and $107.9 million and $117.6 million, respectively, of second lien loans which have reserves for credit losses of $51.2 million and $59.4 million, respectively. | |
(3) | Note that Sovereign ceased originating correspondent home equity loans in the first quarter of 2006 and effective January 31, 2008 out of market indirect auto loans. |
H
Sovereign Bancorp, Inc. and Subsidiaries
SUPPLEMENTAL INFORMATION
(unaudited)
SUPPLEMENTAL INFORMATION
(unaudited)
DEPOSIT AND OTHER CUSTOMER RELATED ACCOUNT COMPOSITION — End of period
June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | ||||||||||||||||
Quarters ended (in thousands) | 2008 | 2008 | 2007 | 2007 | 2007 | |||||||||||||||
Demand deposit accounts | $ | 7,205,686 | $ | 6,761,773 | $ | 6,444,338 | $ | 6,272,412 | $ | 6,313,408 | ||||||||||
NOW accounts | 5,367,012 | 5,462,791 | 5,546,280 | 5,352,228 | 5,950,960 | |||||||||||||||
Money market accounts | 11,328,406 | 11,334,428 | 10,655,978 | 10,258,960 | 10,005,554 | |||||||||||||||
Savings accounts | 4,113,002 | 3,841,083 | 3,831,636 | 3,984,551 | 4,312,492 | |||||||||||||||
Time deposits | 10,391,618 | 11,892,170 | 11,872,400 | 11,970,145 | 10,996,111 | |||||||||||||||
Total retail and commercial deposits | 38,405,724 | 39,292,245 | 38,350,632 | 37,838,296 | 37,578,525 | |||||||||||||||
NOW accounts- wholesale | 306,937 | 388,604 | 15,082 | 396,318 | 44,638 | |||||||||||||||
Money market accounts- wholesale | 1,577,987 | 1,385,308 | 1,761,693 | 1,553,114 | 1,948,679 | |||||||||||||||
Time deposits- wholesale | 1,292,603 | 1,983,040 | 3,030,594 | 3,656,288 | 4,127,023 | |||||||||||||||
Total wholesale deposits | 3,177,527 | 3,756,952 | 4,807,369 | 5,605,720 | 6,120,340 | |||||||||||||||
Total government deposits | 3,190,784 | 3,314,420 | 4,003,224 | 3,927,346 | 3,619,838 | |||||||||||||||
Customer repurchase agreements | 2,520,073 | 2,633,112 | 2,754,680 | 2,726,686 | 2,525,932 | |||||||||||||||
Total deposits and other customer related accounts | $ | 47,294,108 | $ | 48,996,729 | $ | 49,915,905 | $ | 50,098,048 | $ | 49,844,635 | ||||||||||
LOAN COMPOSITION — End of period
June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | ||||||||||||||||
Quarters ended (in thousands) | 2008 | 2008 | 2007 | 2007 | 2007 | |||||||||||||||
Commercial real estate | $ | 13,271,241 | $ | 12,882,292 | $ | 12,306,914 | $ | 11,821,651 | $ | 11,741,479 | ||||||||||
C&I | 12,746,829 | 13,209,614 | 12,594,652 | 12,355,754 | 12,186,379 | |||||||||||||||
Multi-family loans | 4,669,017 | 4,331,075 | 4,246,370 | 4,038,333 | 4,000,527 | |||||||||||||||
Other | 1,748,246 | 1,758,611 | 1,765,036 | 1,697,145 | 1,619,454 | |||||||||||||||
Total commercial loans | 32,435,333 | 32,181,592 | 30,912,972 | 29,912,883 | 29,547,839 | |||||||||||||||
Residential | 11,856,434 | 13,277,908 | 13,341,193 | 14,009,891 | 14,387,342 | |||||||||||||||
Home equity loans and lines of credit | 6,504,738 | 6,283,506 | 6,197,148 | 6,058,143 | 5,954,925 | |||||||||||||||
Total consumer loans secured by real estate | 18,361,172 | 19,561,414 | 19,538,341 | 20,068,034 | 20,342,267 | |||||||||||||||
Auto loans | 6,306,484 | 6,815,657 | 7,028,894 | 6,853,381 | 6,320,010 | |||||||||||||||
Other consumer loans | 302,797 | 313,119 | 299,572 | 314,066 | 317,002 | |||||||||||||||
Total consumer loans | 24,970,453 | 26,690,190 | 26,866,807 | 27,235,481 | 26,979,279 | |||||||||||||||
Total loans | $ | 57,405,786 | $ | 58,871,782 | $ | 57,779,779 | $ | 57,148,364 | $ | 56,527,118 | ||||||||||
DEPOSIT AND OTHER CUSTOMER RELATED ACCOUNT COMPOSITION — Average
June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | ||||||||||||||||
Quarters ended (in thousands) | 2008 | 2008 | 2007 | 2007 | 2007 | |||||||||||||||
Demand deposit accounts | $ | 6,731,967 | $ | 6,342,945 | $ | 6,399,359 | $ | 6,403,572 | $ | 6,421,910 | ||||||||||
NOW accounts | 5,209,957 | 5,319,562 | 5,297,687 | 5,497,403 | 5,935,760 | |||||||||||||||
Money market accounts | 11,348,987 | 10,967,638 | 10,530,726 | 10,224,580 | 9,687,237 | |||||||||||||||
Savings accounts | 4,107,321 | 3,813,768 | 3,889,735 | 4,144,517 | 4,437,785 | |||||||||||||||
Time deposits | 11,258,950 | 11,927,984 | 11,955,486 | 11,323,566 | 11,004,592 | |||||||||||||||
Total retail and commercial deposits | 38,657,182 | 38,371,897 | 38,072,993 | 37,593,638 | 37,487,284 | |||||||||||||||
NOW accounts- wholesale | 139,664 | 88,574 | 46,146 | 137,919 | 133,590 | |||||||||||||||
Money market accounts- wholesale | 1,547,158 | 1,396,481 | 1,764,249 | 1,858,681 | 2,521,820 | |||||||||||||||
Time deposits- wholesale | 1,588,172 | 2,406,387 | 3,466,108 | 4,068,060 | 4,425,195 | |||||||||||||||
Total wholesale deposits | 3,274,994 | 3,891,442 | 5,276,503 | 6,064,660 | 7,080,605 | |||||||||||||||
Total government deposits | 3,257,652 | 3,819,399 | 3,955,764 | 3,691,557 | 4,040,559 | |||||||||||||||
Customer repurchase agreements | 2,571,241 | 2,739,973 | 2,877,569 | 2,643,836 | 2,389,302 | |||||||||||||||
Total deposits and other customer related accounts | $ | 47,761,069 | $ | 48,822,711 | $ | 50,182,829 | $ | 49,993,691 | $ | 50,997,750 | ||||||||||
LOAN COMPOSITION — Average
June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | ||||||||||||||||
Quarters ended (in thousands) | 2008 | 2008 | 2007 | 2007 | 2007 | |||||||||||||||
Commercial real estate | $ | 13,052,692 | $ | 12,593,687 | $ | 12,139,086 | $ | 11,746,854 | $ | 11,737,900 | ||||||||||
C&I | 13,005,216 | 12,760,425 | 12,311,586 | 12,049,755 | 12,146,382 | |||||||||||||||
Multi-family loans | 4,506,471 | 4,316,489 | 4,154,457 | 3,975,580 | 4,637,577 | |||||||||||||||
Other | 1,756,432 | 1,754,382 | 1,722,710 | 1,632,878 | 1,586,118 | |||||||||||||||
Total commercial loans | 32,320,811 | 31,424,983 | 30,327,839 | 29,405,067 | 30,107,977 | |||||||||||||||
Residential | 12,598,466 | 13,272,189 | 13,744,182 | 14,357,561 | 14,429,334 | |||||||||||||||
Home equity loans and lines of credit | 6,389,801 | 6,217,574 | 6,116,026 | 5,974,643 | 5,933,285 | |||||||||||||||
Total consumer loans secured by real estate | 18,988,267 | 19,489,763 | 19,860,208 | 20,332,204 | 20,362,619 | |||||||||||||||
Auto loans | 6,568,725 | 6,967,076 | 6,996,034 | 6,616,774 | 5,926,390 | |||||||||||||||
Other consumer loans | 306,297 | 314,006 | 312,253 | 320,848 | 388,325 | |||||||||||||||
Total consumer loans | 25,863,289 | 26,770,845 | 27,168,495 | 27,269,826 | 26,677,334 | |||||||||||||||
Total loans | $ | 58,184,100 | $ | 58,195,828 | $ | 57,496,334 | $ | 56,674,893 | $ | 56,785,311 | ||||||||||
I
Sovereign Bancorp, Inc. and Subsidiaries
SUPPLEMENTAL INFORMATION
(unaudited)
SUPPLEMENTAL INFORMATION
(unaudited)
CALCULATION OF TANGIBLE EQUITY TO TANGIBLE ASSETS RATIOS
Quarter Ended | ||||||||||||||||||||
June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | ||||||||||||||||
(dollars in thousands) | 2008 | 2008 | 2007 | 2007 | 2007 | |||||||||||||||
Total Equity | $ | 8,233,949 | $ | 6,676,997 | $ | 6,992,325 | $ | 8,725,914 | $ | 8,780,288 | ||||||||||
Goodwill | (3,430,653 | ) | (3,430,290 | ) | (3,426,246 | ) | (5,003,022 | ) | (5,003,195 | ) | ||||||||||
CDI and other intangibles | (314,888 | ) | (342,994 | ) | (372,116 | ) | (402,257 | ) | (433,164 | ) | ||||||||||
Deferred tax liability on CDI | 104,033 | 113,581 | 123,472 | 133,712 | 144,294 | |||||||||||||||
Deferred tax liability on other intangibles | 6,042 | 6,265 | 6,489 | 6,719 | 6,892 | |||||||||||||||
Deferred tax liability on tax deductible goodwill | 168,400 | 162,678 | 156,956 | 151,234 | 145,512 | |||||||||||||||
Total tangible equity including OCI | $ | 4,766,882 | $ | 3,186,238 | $ | 3,480,880 | $ | 3,612,300 | $ | 3,640,627 | ||||||||||
Total assets | $ | 79,197,449 | $ | 81,912,719 | $ | 84,746,396 | $ | 86,607,328 | $ | 82,737,091 | ||||||||||
Goodwill | (3,430,653 | ) | (3,430,290 | ) | (3,426,246 | ) | (5,003,022 | ) | (5,003,195 | ) | ||||||||||
CDI and other intangibles | (314,888 | ) | (342,994 | ) | (372,116 | ) | (402,257 | ) | (433,164 | ) | ||||||||||
Deferred tax liability on CDI | 104,033 | 113,581 | 123,472 | 133,712 | 144,294 | |||||||||||||||
Deferred tax liability on other intangibles | 6,042 | 6,265 | 6,489 | 6,719 | 6,892 | |||||||||||||||
Deferred tax liability on tax deductible goodwill | 168,400 | 162,678 | 156,956 | 151,234 | 145,512 | |||||||||||||||
Total tangible assets including OCI | $ | 75,730,382 | $ | 78,421,960 | $ | 81,234,951 | $ | 81,493,714 | $ | 77,597,430 | ||||||||||
Tangible equity to tangible assets including OCI | 6.29 | % | 4.06 | % | 4.28 | % | 4.43 | % | 4.69 | % | ||||||||||
Total tangible equity including OCI | $ | 4,766,882 | $ | 3,186,238 | $ | 3,480,880 | $ | 3,612,300 | $ | 3,640,627 | ||||||||||
Accumulated other comprehensive loss | 720,036 | 749,556 | 326,133 | 218,155 | 121,184 | |||||||||||||||
Total tangible equity excluding OCI | $ | 5,486,918 | $ | 3,935,794 | $ | 3,807,013 | $ | 3,830,455 | $ | 3,761,811 | ||||||||||
Total tangible assets including OCI | $ | 75,730,382 | $ | 78,421,960 | $ | 81,234,951 | $ | 81,493,714 | $ | 77,597,430 | ||||||||||
Accumulated other comprehensive loss | 720,036 | 749,556 | 326,133 | 218,155 | 121,184 | |||||||||||||||
Total tangible assets excluding OCI | $ | 76,450,418 | $ | 79,171,516 | $ | 81,561,084 | $ | 81,711,869 | $ | 77,718,614 | ||||||||||
Tangible equity to tangible assets excluding OCI | 7.18 | % | 4.97 | % | 4.67 | % | 4.69 | % | 4.84 | % | ||||||||||
Total tangible equity including OCI | $ | 4,766,882 | $ | 3,186,238 | $ | 3,480,880 | $ | 3,612,300 | $ | 3,640,627 | ||||||||||
Preferred stock | (195,445 | ) | (195,445 | ) | (195,445 | ) | (195,445 | ) | (195,445 | ) | ||||||||||
Total tangible common equity including OCI | $ | 4,571,437 | $ | 2,990,793 | $ | 3,285,435 | $ | 3,416,855 | $ | 3,445,182 | ||||||||||
Total tangible equity including OCI | $ | 75,730,382 | $ | 78,421,960 | $ | 81,234,951 | $ | 81,493,714 | $ | 77,597,430 | ||||||||||
Tangible common equity to tangible assets including OCI | 6.04 | % | 3.81 | % | 4.04 | % | 4.19 | % | 4.44 | % | ||||||||||
Total tangible common equity including OCI | $ | 4,571,437 | $ | 2,990,793 | $ | 3,285,435 | $ | 3,416,855 | $ | 3,445,182 | ||||||||||
Accumulated other comprehensive loss | 720,036 | 749,556 | 326,133 | 218,155 | 121,184 | |||||||||||||||
Total tangible common equity excluding OCI | $ | 5,291,473 | $ | 3,740,349 | $ | 3,611,568 | $ | 3,635,010 | $ | 3,566,366 | ||||||||||
Total tangible equity excluding OCI | $ | 76,450,418 | $ | 79,171,516 | $ | 81,561,084 | $ | 81,711,869 | $ | 77,718,614 | ||||||||||
Tangible common equity to tangible assets excluding OCI | 6.92 | % | 4.72 | % | 4.43 | % | 4.45 | % | 4.59 | % |
CALCULATION OF TANGIBLE BOOK VALUE PER SHARE
June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | ||||||||||||||||
(dollars and shares in thousands) | 2008 | 2008 | 2007 | 2007 | 2007 | |||||||||||||||
Total tangible common equity including OCI | $ | 4,571,437 | $ | 2,990,793 | $ | 3,285,435 | $ | 3,416,855 | $ | 3,445,182 | ||||||||||
Common shares outstanding | 662,641 | 482,443 | 481,404 | 480,436 | 479,150 | |||||||||||||||
Tangible common book value per share including OCI | $ | 6.90 | $ | 6.20 | $ | 6.82 | $ | 7.11 | $ | 7.19 | ||||||||||
Total tangible common equity excluding OCI | $ | 5,291,473 | $ | 3,740,349 | $ | 3,611,568 | $ | 3,635,010 | $ | 3,566,366 | ||||||||||
Common shares outstanding | 662,641 | 482,443 | 481,404 | 480,436 | 479,150 | |||||||||||||||
Tangible common book value per share including OCI | $ | 7.99 | $ | 7.75 | $ | 7.50 | $ | 7.57 | $ | 7.44 |
J
Sovereign Bancorp, Inc. and Subsidiaries
SUPPLEMENTAL INFORMATION
(unaudited)
SUPPLEMENTAL INFORMATION
(unaudited)
CALCULATION OF RETURN ON AVERAGE TANGIBLE EQUITY AND RETURN ON AVERAGE TANGIBLE ASSETS
Quarter Ended | Year-to-Date | |||||||||||||||||||||||||||
June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | June 30 | June 30 | ||||||||||||||||||||||
(dollars in thousands) | 2008 | 2008 | 2007 | 2007 | 2007 | 2008 | 2007 | |||||||||||||||||||||
Total average equity | $ | 7,589,954 | $ | 6,944,050 | $ | 8,721,714 | $ | 8,773,451 | $ | 8,816,108 | $ | 7,267,002 | $ | 8,775,766 | ||||||||||||||
Average goodwill | (3,430,304 | ) | (3,427,259 | ) | (4,985,883 | ) | (5,003,137 | ) | (5,005,116 | ) | (3,428,782 | ) | (5,005,118 | ) | ||||||||||||||
Average CDI and other intangibles | (332,165 | ) | (361,229 | ) | (391,628 | ) | (421,895 | ) | (453,528 | ) | (346,697 | ) | (469,781 | ) | ||||||||||||||
Average deferred tax liability on intangibles | 281,626 | 285,996 | 290,838 | 295,632 | 300,888 | 283,811 | 306,920 | |||||||||||||||||||||
Total tangible average equity including OCI | $ | 4,109,111 | $ | 3,441,558 | $ | 3,635,041 | $ | 3,644,051 | $ | 3,658,352 | $ | 3,775,334 | $ | 3,607,787 | ||||||||||||||
Return on average equity | 6.73 | % | 5.78 | % | -72.92 | % | 2.63 | % | 6.71 | % | 6.28 | % | 4.49 | % | ||||||||||||||
Effect of goodwill | 5.62 | % | 5.76 | % | -100.02 | % | 3.62 | % | 9.18 | % | 5.70 | % | 6.23 | % | ||||||||||||||
Effect of CDI and other intangibles | 0.54 | % | 0.61 | % | -7.86 | % | 0.30 | % | 0.83 | % | 0.58 | % | 0.59 | % | ||||||||||||||
Effect of deferred tax asset | -0.46 | % | -0.48 | % | 5.83 | % | -0.21 | % | -0.55 | % | -0.47 | % | -0.38 | % | ||||||||||||||
Tangible return on average equity including OCI | 12.44 | % | 11.67 | % | -174.96 | % | 6.34 | % | 16.17 | % | 12.09 | % | 10.93 | % | ||||||||||||||
Total average assets | $ | 79,801,750 | $ | 80,930,688 | $ | 82,190,883 | $ | 81,597,168 | $ | 81,940,921 | $ | 80,366,219 | $ | 84,761,607 | ||||||||||||||
Average goodwill | (3,430,304 | ) | (3,427,259 | ) | (4,985,883 | ) | (5,003,137 | ) | (5,005,116 | ) | (3,428,782 | ) | (5,005,118 | ) | ||||||||||||||
Average CDI and other intangibles | (332,165 | ) | (361,229 | ) | (391,628 | ) | (421,895 | ) | (453,528 | ) | (346,697 | ) | (469,781 | ) | ||||||||||||||
Average deferred tax liability on intangibles | 281,626 | 285,996 | 290,838 | 295,632 | 300,888 | 283,811 | 306,920 | |||||||||||||||||||||
Total tangible average equity including OCI | $ | 76,320,907 | $ | 77,428,196 | $ | 77,104,210 | $ | 76,467,768 | $ | 76,783,165 | $ | 76,874,551 | $ | 79,593,628 | ||||||||||||||
Return on Average assets | 0.64 | % | 0.50 | % | -7.74 | % | 0.28 | % | 0.72 | % | 0.57 | % | 0.47 | % | ||||||||||||||
Effect of goodwill | 0.03 | % | 0.02 | % | -0.50 | % | 0.02 | % | 0.05 | % | 0.03 | % | 0.03 | % | ||||||||||||||
Effect of CDI and other intangibles | 0.00 | % | 0.00 | % | -0.04 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||
Effect of deferred tax asset | 0.00 | % | 0.00 | % | 0.03 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||
Tangible return on average assets including OCI | 0.67 | % | 0.52 | % | -8.25 | % | 0.30 | % | 0.77 | % | 0.59 | % | 0.50 | % | ||||||||||||||
K