Exhibit 99.1
[ICON] Sovereign Bancorp NEWS RELEASE
Corporate Headquarters: 1500 Market Street, Philadelphia, Pa
FOR IMMEDIATE RELEASE
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DATE: 5/22/03 FINANCIAL CONTACTS:
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Jim Hogan 610-320-8496 jhogan@sovereignbank.com
Mark McCollom 610-208-6426 mmccollo@sovereignbank.com
MEDIA CONTACT:
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Ed Schultz 610-378-6159 eschultz@sovereignbank.com
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Sovereign Re-Confirms EPS Guidance For Second Quarter And 2003;
Announces Possible Small Share Repurchase
PHILADELPHIA, PA...Sovereign Bancorp, Inc. ("Sovereign") (NYSE: SOV), parent
company of Sovereign Bank ("Bank"), today re-confirmed its earnings guidance for
the second quarter and full year 2003, in response to questions from investors.
Jay S. Sidhu, Sovereign's Chairman, President and CEO, stated, "Despite a
challenging economy and concerns over potential further interest rate cuts by
the Federal Reserve, Sovereign remains committed to delivering second quarter
GAAP and operating EPS of $0.35 to $0.36 per diluted share, and full year GAAP
and operating EPS of $1.37-$1.38 and $1.44-$1.45 per diluted share,
respectively." Full year operating earnings excludes an after-tax debt
restructuring charge recorded in the first quarter of $.07 per share.
Separately, Sovereign's Board of Directors authorized the potential repurchase
of up to 5 million common shares, or approximately 1.9% of current common shares
outstanding. There is no pre-determined time limit over which these repurchases
will be executed, if at all. If executed, the repurchases would be funded by
internal cash flows and a revolving line of credit. Commented Sidhu, "As we
continue to navigate through uncertain economic times, we believe it is
important to set in place programs that will maximize our financial flexibility.
If economic factors dictate slower loan growth or still higher pre-payments in
the investment portfolio in the second half of 2003, this small buyback program
could be an effective use of our excess capital."
"That said, Sovereign remains absolutely committed to building its capital over
time," continued Sidhu. "Our previously communicated goals of growing Tier 1
capital to 5.50-5.75% by the end of this year, and approaching 7.00% by 2005,
are unchanged. Fueled by strong earnings growth and amortization of certain
intangibles, our tangible common equity is expected to grow in excess of $400
million during 2003. Based upon current trading levels, the cost of this
potential buyback is only a very small fraction of the tangible common equity we
expect to generate during the year," concluded Sidhu.
Sovereign Bancorp, Inc., ("Sovereign") (NYSE: SOV), headquartered in
Philadelphia, Pennsylvania, is the parent company of Sovereign Bank, a $41
billion financial institution with 525 community banking offices, nearly 1,000
ATMs and about 8,000 team members in Connecticut, Massachusetts, New Hampshire,
New Jersey, New York, Pennsylvania, and Rhode Island. Sovereign Bank is one of
the top 25 largest banking
institutions in the United States. For more information on Sovereign Bank, visit
www.sovereignbank.com or call 1-877-SOV-BANK.
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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 in their analysis of the company's performance. These measures
typically 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 in 2002 and 2003 represents net
income adjusted for the after-tax effects of merger- related and integration
charges and the loss on early extinguishment of debt. Cash earnings are
operating earnings adjusted to remove 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, which 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 2003 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; and other economic, competitive, governmental,
regulatory, and technological factors affecting the Company's operations,
pricing, products and services.
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