Exhibit 99.1
Sovereign Bancorp, Inc. Fourth Quarter 2003
Net Income and Earnings per Share up 21% and 15% Respectively
Financial Highlights
* Net income of $113 million for the fourth quarter of 2003, up 21% from
$93 million a year ago. Full year 2003 net income of $402 million, up
18% from $342 million in 2002.
* Earnings per share for the fourth quarter of 2003 were $.38 per share,
up 15% from $.33 per share in same quarter of 2002. Full year 2003
earnings per share were $1.38 as compared to $1.23 in 2002, up 12%.
* Operating earnings in 2003 were $421 million, up 18% from $356 million
in 2002. Operating earnings per share were $1.45 per share for the
full year 2003, up 13% from $1.28 in 2002.
* Cash earnings for the fourth quarter of 2003 were $127 million, up 14%
from $112 million in the same quarter a year ago. Cash earnings per
share were $.43, up from $.40 per share in the fourth quarter of 2002.
Full year 2003 cash earnings were $482 million, up 13% from $425
million in 2002. Cash earnings per share were $1.66 in 2003 as
compared to $1.52 in 2002, up 9%.
* Net interest margin was 3.39% compared to 3.32% and 3.49% in the third
quarter of 2003 and the fourth quarter of 2002, respectively.
* Consumer and Commercial fee revenues achieved all-time highs during the
quarter, up 10% and 21%, respectively from a year earlier.
* Commercial and Consumer loans grew 7% and 18%, respectively, over the
past year. Total loans were $26.1 billion with an average yield of
5.08%.
* Core deposits were $21.3 billion at December 31, 2003, with a cost of
funds of .59% in the fourth quarter. Core deposits grew 8% over the
past year. Total deposits were $27.3 billion, at December 31, 2003,
with a cost of funds of 1.00% in the fourth quarter.
* The provision for loan losses was $40.0 million in this quarter versus
$36.0 million in the fourth quarter of 2002. The provision exceeded
net charge-offs by $5.2 million in this quarter.
* Non-performing assets decreased $37 million during the quarter (a 14%
improvement) to $220 million, or .51%, of total assets at December 31,
2003, versus $257 million, or .65%, of total assets at December 31,
2002.
* Equity to assets ratio was 7.51% at December 31, 2003, compared to 6.99%
at December 31, 2002. The Tier I leverage ratio expanded by 58 basis
points to 5.58% during the year. Tangible common equity to tangible
assets ("TCE/TA") increased 101 basis points to 4.66% from 3.65% last
year.
PHILADELPHIA, Jan. 20 /PRNewswire-FirstCall/ -- Sovereign Bancorp, Inc.
("Sovereign") (NYSE: SOV), parent company of Sovereign Bank ("Bank"), today
reported net income and earnings per share for the fourth quarter of 2003 of
$113 million or $.38 per diluted share. This compares to net income of $93.1
million, or $.33 per diluted share, for the fourth quarter of 2002. Cash
earnings increased to $127 million, up 14%, compared to $112 million for the
fourth quarter of 2002.
For the year ended December 31, 2003, Sovereign reported net income of
$402 million, or $1.38 per diluted share, as compared to $342 million, or
$1.23 per diluted share, for 2002. Net income included a charge on the early
extinguishment of $302 million of Sovereign debt in 2003 and merger and
integration charges associated with the acquisition of Main Street Bancorp in
2002. Excluding these charges, operating earnings were $421 million, or $1.45
per diluted share, up 18% compared to $356 million, or $1.28 per diluted
share, for the full year 2002. Cash earnings increased 13% to $482 million
from $425 million in 2002. A reconciliation of net income, operating earnings
and cash earnings, as well as the related earnings per share amounts, is
included in a later section of this release.
Commenting on results for the fourth quarter and full year of 2003, Jay S.
Sidhu, Sovereign's Chairman and Chief Executive Officer, said, "2003 was
another successful year for Sovereign. We have delivered on our earnings
guidance for the quarter and on the top end of our guidance for the full year
of 2003. Our growth in annual earnings per share represents a 13% growth
rate. We generated record level revenues in consumer and commercial banking
fees as well as in capital markets revenue in 2003. During the year we
realized a 14% reduction in our non-performing loans. In addition, we have
dramatically improved our capital levels and received upgrades from the rating
agencies. Last week, Sovereign received a further upgrade from Moody's
Investors Service, bringing the bank holding company to investment grade."
Net Interest Income and Margin
Sovereign reported net interest income of $308 million for the fourth
quarter of 2003, an increase of $15.3 million, or 5.2%, compared to the fourth
quarter of 2002. On a linked quarter basis, net interest income increased by
$21.2 million, or 7.4%.
Net interest margin was 3.39% for the fourth quarter of 2003 compared to
3.32% in the third quarter of 2003 and 3.49% in the fourth quarter of 2002.
The expansion of our net interest margin in the fourth quarter of 2003
compared to the third quarter of 2003 was due to specific strategies
implemented to somewhat reduce asset sensitivity. James D. Hogan, Sovereign's
Chief Financial Officer, stated, "We experienced 7 basis points of net
interest margin expansion this quarter as a result of several steps taken in
late September and early October to reduce our asset sensitivity and enhance
net interest income. Although we still remain mildly asset sensitive, these
steps, as well as the growth in earning assets, contributed to the increase of
net interest income of $21.2 million in the fourth quarter." Yield on
earnings assets went down by 15 basis points during the quarter to 5.14%,
while total funding costs decreased by 18 basis points during the quarter to
1.70%.
Non-Interest Income and Expense
Sovereign continued to generate record levels of consumer and commercial
banking fees in the fourth quarter of 2003. Consumer banking fees increased
by approximately $4.9 million, or 10%, compared to the same period in 2002.
The increase was driven principally by deposit fees, which increased by $4.7
million to $45.4 million. On a linked-quarter basis, consumer banking fees
increased slightly to $53.8 million.
Commercial banking fees increased $5.0 million, or 21%, over the same
period a year ago driven by growth in loan fees. On a linked-quarter basis,
commercial banking fees increased $1.6 million, or 6% to $28.8 million.
Mortgage banking revenues were $15.7 million in the fourth quarter of
2003, compared to $17.5 million in the third quarter of 2003 and $8.3 million
in the fourth quarter of 2002, as summarized in the financial tables attached
to this release. Due to changes in prepayment speeds, a small servicing
rights impairment charge of $1.1 million was recorded in the fourth quarter.
Offsetting this charge were gains from sales of mortgage loans and securities
and net gains from mortgage derivative and hedging activity. As of December
31, 2003, mortgage servicing rights, net of reserves of $12.4 million, were
$77.2 million and our servicing portfolio was $6.5 billion, or a capitalized
cost of 118 basis points.
Capital markets revenues in the fourth quarter of 2003 were $4.8 million,
down slightly compared to $5.4 million in the same period a year ago. On a
linked-quarter basis, capital markets revenues declined moderately from $5.4
million due primarily to a slowdown in capital markets activity due to higher
rates.
Fourth quarter 2003 net gains on sales of investments were $10.2 million.
This compares to net gains of $18.8 million recorded in the third quarter of
2003 and $14.4 million in the fourth quarter of 2002.
General & Administrative Expenses
G&A expenses increased by $9.3 million, or 4%, to $222.3 million in the
fourth quarter of 2003 compared to the same quarter a year ago. The
corporation's efficiency ratio was 51.68% in the fourth quarter of 2003 as
compared to the ratio of 53.62% in the fourth quarter of 2002. On a linked-
quarter basis the corporation's efficiency ratio declined from 52.51% as a
result of strong revenue growth in the fourth quarter of 2003. "Expense
control remains a top priority at Sovereign and we hope to see our first
quarter expenses below the fourth quarter," stated Hogan.
Franchise Growth
Sovereign's total loan portfolio increased in the fourth quarter to $26.1
billion due to increases in all loan categories. Commercial and consumer
loans now make up 43% and 38%, respectively, of the total loan portfolio. The
following table depicts Sovereign's loan composition as of December 31, 2003
($ in millions):
Loan Category Ending Balance Q4 2003 Yield % of Loans
Commercial $11,064 4.62 % 43%
Consumer 10,010 5.32% 38
Residential mortgage 5,075 5.65% 19
Total $26,149 5.08% 100%
Sovereign grew core deposits modestly in the fourth quarter. Sovereign's
cost of deposits declined by 6 basis points to 1.00% in the fourth quarter of
2003. Certificates of deposits account for only 22% of total deposits.
The following table summarizes our deposit position as of December 31, 2003
($ in millions):
Deposit Category Ending Balance Q4 2003 Cost % of Total
Deposits
Checking $11,392 .41% 42%
Other core (MMDA & Savings) 9,942 .80% 36
Total Core 21,334 .59% 78
Time deposits 6,010 2.40% 22
Total deposits $27,344 1.00% 100%
Asset Quality
Sovereign's provision for loan losses was $40.0 million this quarter
compared to $36.6 million in the third quarter of 2003 and $36.0 million in
the fourth quarter of 2002. Non-performing assets ("NPAs") were $220 million
at December 31, 2003, compared to $258 million at September 30, 2003. NPAs to
total assets decreased to .51% during the fourth quarter of 2003, compared to
63% at September 30, 2003. The allowance for loan losses to total loans was
1.25% at December 31, 2003, as compared to 1.31% at September 30, 2003 and
1.29% at December 31, 2002. The reduction in this ratio in the fourth quarter
is due primarily to the increase in the percentage of lower credit risk
mortgage loans, as well as positive credit trends across all loan segments.
"Two themes for our asset quality summarize our year-end report:
consistent asset quality for all three loan portfolio segments during 2003 and
hope that credit quality improvement will be manifested in 2004," commented
Dennis S. Marlo, Sovereign's Chief Risk Management Officer. "Our NCOs for the
year were 55 basis points of average loans, while we experienced a 24 basis
point reduction in non-performing loans ("NPLs") from year end 2002 to .76% of
total loans," Marlo continued. "On an absolute basis, NPLs decreased $32
million, or 14% during the year while our loan portfolio increased
approximately $3 billion."
Capital
Sovereign's equity to assets ratio was 7.51% at December 31, 2003. The
Tier I leverage ratio grew by 58 basis points during the year to 5.58% at
December 31, 2003 and tangible common equity to tangible assets increased 101
basis points to 4.66% from 3.65% at December 31, 2002. At December 31, 2003,
Sovereign Bank's Tier 1 Leverage was 6.67% and the bank's risk-based capital
ratio was 12.01%.
Closing Comments
"With 2003 now behind us, we look forward to 2004 and the opportunities it
holds for us: growth opportunities as a result of the Fleet/Bank of America
merger and other merger disruptions in our markets; optimism for continuing
slow, steady economic recovery, and the positive impact this will have on
several of our businesses; and our acquisition of First Essex Bancorp, Inc.,
which is expected to close February 6, 2004. We are comfortable with mean
street estimates of $1.63 in operating earnings and approximately $1.80 in
cash earnings for 2004, excluding an after-tax merger related charge of $.05
to $.06 for our acquisition of First Essex Bancorp, Inc. This represents
annual operating earnings growth of 12.4%, which places us near the top of the
financial services spectrum in terms of consistently delivering these kinds of
results," Sidhu concluded. The 2004 estimate of cash earnings also excludes
an estimated $.17 per share for amortization of intangible assets and stock-
based compensation expense. Sovereign's stock closed at $23.43 per share on
January 20, 2004. Based on the company's guidance of $1.80 per share the cash
P/E ratio would be 13 times 2004 estimated cash earnings.
Sovereign Bancorp, Inc., ("Sovereign") headquartered in Philadelphia,
Pennsylvania, is the parent company of Sovereign Bank, a $43 billion financial
institution with approximately 530 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 is
among the 25 largest banking institutions in the United States. For more
information on Sovereign Bank, visit www.sovereignbank.com or call 1-877-SOV-
BANK.
Interested parties will have the opportunity to listen to a live web-cast
of Sovereign's third quarter earnings call on Wednesday, January 21, 2004
beginning at 8:30 a.m. ET at www.sovereignbank.com >Investor Relations >News
>Conference Calls/Webcasts; or
http://www.firstcallevents.com/service/ajwz395022617gf12.html. The web-cast
replay can be accessed anytime from 11:00 am ET on January 21, 2004 through
12:00 a.m. ET on March 31, 2004. Questions may be submitted during the call
via email to investor@sovereignbank.com. A telephone replay will be accessible
during the above timeframe by dialing 1-800-642-1687, and confirmation id#
4572291.
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 effect effects of merger-related and integration charges and
the loss on early extinguishment of debt. 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; and other economic, competitive,
governmental, regulatory, and technological factors affecting the Company's
operations, pricing, products and services.
Sovereign Bancorp, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS
(unaudited)
Quarter Ended
Dec. 31 Sept. 30 June 30 Mar. 31 Dec. 31
2003 2003 2003 2003 2002
(dollars in millions, except
per share data)
Operating Data
Net income $112.6 $109.2 $104.2 $75.9 $93.1
Operating earnings (1) 112.6 109.2 104.2 94.7 93.1
Cash earnings (2) 127.3 124.4 119.5 110.4 111.7
Net interest income 308.5 287.3 306.8 303.0 293.1
Provision for loan losses 40.0 36.6 42.0 43.4 36.0
Total fees and other income before
securities transactions 121.7 119.1 112.3 103.1 104.2
Net gain on investments and
related derivatives transactions 10.2 18.8 19.4 17.5 14.4
G&A expense 222.3 213.4 217.7 211.1 213.1
Other expenses (3) 23.3 24.5 34.6 64.1 35.6
Performance Statistics
Bancorp
Net interest margin (3) 3.39% 3.32% 3.47% 3.50% 3.49%
Cash return on average assets (2) 1.18% 1.20% 1.16% 1.11% 1.12%
Operating return on average
assets (1) 1.05% 1.05% 1.01% 0.95% 0.93%
Cash return on average equity (2) 15.94% 15.97% 16.50% 15.91% 16.20%
Operating return on average
equity (1) 14.10% 14.03% 14.38% 13.64% 13.49%
Annualized net loan charge-offs to
average loans 0.55% 0.55% 0.53% 0.56% 0.56%
Efficiency ratio (3) (4) 51.68% 52.51% 51.94% 51.98% 53.62%
Per Share Data
Basic earnings per share $0.38 $0.37 $0.40 $0.29 $0.36
Diluted earnings per share 0.38 0.37 0.37 0.27 0.33
Operating earnings per share (1) 0.38 0.37 0.37 0.34 0.33
Cash earnings per share (2) 0.43 0.42 0.42 0.39 0.40
Dividend declared per share .025 .025 .025 .025 .025
Book value (5) 11.12 10.84 10.72 10.95 10.57
Common stock price:
High 24.99 19.68 16.55 14.49 14.72
Low 18.42 15.74 14.07 12.72 11.31
Close $23.75 $18.55 $15.65 $13.85 $14.05
Weighted average common shares:
Basic 292.5 292.2 262.2 261.3 261.3
Diluted 298.5 297.2 283.9 281.4 281.5
End-of-period common shares:
Basic 293.1 292.3 292.0 261.0 261.6
Diluted 299.4 297.4 295.9 281.3 282.2
NOTES:
(1) Operating earnings represent net income excluding the after-tax
effects of special items, including significant gains or losses that
are unusual in nature or are associated with acquiring or
integrating businesses. See reconciliation on page I.
(2) Cash earnings represents operating earnings excluding the after-tax
effects of non-cash charges for the amortization of intangible
assets and stock-based compensation. Stock-based compensation
encompasses arrangements with employees under which the Company's
obligation will be settled by using stock rather than cash and
includes expense related to stock options, restricted stock, bonus
deferral plans, and ESOP expense. See reconciliation on page I.
(3) Effective July 1, 2003, Sovereign elected to change the Company's
accounting policy to treat trust preferred securities as liabilities
and the associated dividends on the trust preferred securities as
interest expense. Previously, this cost was classified within other
expenses. This change in accounting policy did not have any impact
on consolidated shareholders' equity or net income; however, it did
result in an increase in liabilities of $207.6 million at July 1,
2003 and an increase of $5 million and $3 million in net interest
expense, with a corresponding decrease in other expense, for the
three-month periods ended September 30, 2003 and December 31, 2003,
respectively. Prior periods have not been adjusted to conform with
this change in accounting policy.
(4) Efficiency ratio equals general and administrative expense excluding
merger-related and other integration charges as a percentage of
total revenue, defined as the sum of net interest income and total
fees and other income before securities transactions.
(5) Book value equals stockholders' equity at period-end divided by
common shares outstanding.
Year to Date
Dec. 31 Dec. 31
2003 2002
(dollars in millions, except
per share data)
Operating Data
Net income $401.9 $342.0
Operating earnings (1) 420.7 356.2
Cash earnings (2) 481.6 425.3
Net interest income 1,205.6 1,159.6
Provision for loan losses 162.0 146.5
Total fees and other income before
securities transactions 456.2 381.1
Net gain on investments and related
derivatives transactions 66.1 51.4
G&A expense 864.5 820.1
Other expenses (3) 146.5 159.0
Performance Statistics
Bancorp
Net interest margin (3) 3.42% 3.61%
Cash return on average assets (2) 1.16% 1.12%
Operating return on average assets (1) 1.02% 0.94%
Cash return on average equity (2) 16.08% 16.67%
Operating return on average equity (1) 14.04% 14.07%
Annualized net loan charge-offs to
average loans 0.55% 0.58%
Efficiency ratio (3) (4) 52.02% 53.23%
Per Share Data
Basic earnings per share $1.45 $1.32
Diluted earnings per share 1.38 1.23
Operating earnings per share (1) 1.45 1.28
Cash earnings per share (2) 1.66 1.52
Dividend declared per share 0.100 0.100
Book value (5) 11.12 10.57
Common stock price:
High 24.99 15.57
Low 12.72 11.31
Close $23.75 $14.05
Weighted average common shares:
Basic 277.3 258.5
Diluted 290.5 279.0
End-of-period common shares:
Basic 293.1 261.6
Diluted 299.4 282.2
NOTES:
(1) Operating earnings represent net income excluding the after-tax
effects of special items, including significant gains or losses that
are unusual in nature or are associated with acquiring or
integrating businesses. See reconciliation on page I.
(2) Cash earnings represents operating earnings excluding the after-tax
effects of non-cash charges for the amortization of intangible
assets and stock-based compensation. Stock-based compensation
encompasses arrangements with employees under which the Company's
obligation will be settled by using stock rather than cash and
includes expense related to stock options, restricted stock, bonus
deferral plans, and ESOP expense. See reconciliation on page I.
(3) Effective July 1, 2003, Sovereign elected to change the Company's
accounting policy to treat trust preferred securities as liabilities
and the associated dividends on the trust preferred securities as
interest expense. Previously, this cost was classified within other
expenses. This change in accounting policy did not have any impact
on consolidated shareholders' equity or net income; however, it did
result in an increase in liabilities of $207.6 million at July 1,
2003 and an increase of $5 million and $3 million in net interest
expense, with a corresponding decrease in other expense, for the
three-month periods ended September 30, 2003 and December 31, 2003,
respectively. Prior periods have not been adjusted to conform with
this change in accounting policy.
(4) Efficiency ratio equals general and administrative expense excluding
merger-related and other integration charges as a percentage of
total revenue, defined as the sum of net interest income and total
fees and other income before securities transactions.
(5) Book value equals stockholders' equity at period-end divided by
common shares outstanding.
Sovereign Bancorp, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS
(unaudited)
Quarter Ended
Dec. 31 Sept. 30 June 30 Mar. 31 Dec. 31
2003 2003 2003 2003 2002
(dollars in millions)
Financial Condition Data:
General
Total assets $43,505 $41,055 $41,343 $40,934 $39,590
Loans 26,149 24,550 24,329 24,054 23,193
Total deposits and customer
related accounts: 27,344 27,515 27,617 26,746 26,851
Core deposits and other
customer related
accounts 21,334 21,233 21,065 20,015 19,831
Time deposits 6,010 6,283 6,552 6,731 7,020
Borrowings (1) 12,198 9,570 9,507 10,111 8,829
Redeemable capital
securities and other
minority interests (1) 202 202 409 597 597
Stockholders' equity 3,260 3,169 3,131 2,856 2,764
Goodwill 1,027 1,027 1,025 1,025 1,025
Core deposit intangible 269 287 306 324 343
Asset Quality
Non-performing assets $220.4 $257.7 $253.4 $249.9 $257.1
Non-performing loans $199.4 $236.1 $229.2 $221.6 $231.4
Non-performing assets to
total assets 0.51% 0.63% 0.61% 0.61% 0.65%
Non-performing loans to
total loans 0.76% 0.96% 0.94% 0.92% 1.00%
Allowance for loan losses $327.9 $322.7 $319.5 $309.4 $298.8
Allowance for loan losses
to total loans 1.25% 1.31% 1.31% 1.29% 1.29%
Allowance for loan losses
to non-performing loans 164% 137% 139% 140% 129%
Capitalization - Bancorp (2)
Shareholders' equity to
total assets 7.49% 7.72% 7.57% 6.99% 6.99%
Tier 1 leverage capital
ratio 5.58% 5.59% 5.25% 5.02% 5.00%
Tangible equity to tangible
assets, excluding OCI 4.78% 4.72% 4.39% 3.66% 3.60%
Tangible equity to tangible
assets, including OCI 4.66% 4.67% 4.50% 3.81% 3.65%
Capitalization - Bank (2)
Shareholders' equity to
total assets 8.99% 9.49% 9.34% 9.43% 10.39%
Tier 1 leverage capital
ratio 6.67% 6.96% 6.62% 6.59% 7.55%
Tier 1 risk-based capital
ratio 8.54% 8.65% 8.40% 8.50% 9.70%
Total risk-based capital
ratio 12.01% 12.20% 11.05% 11.21% 10.69%
(1) Effective July 1, 2003, Sovereign elected to change the Company's
accounting policy to treat trust preferred securities as liabilities
and Sovereign reclassified these obligations from "redeemable
capital securities and other minority interests" to "borrowings and
other debt obligations." Restatement of prior periods is not
permitted.
(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 December 31, 2003.
Sovereign Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(unaudited)
Dec. 31 Sept. 30 June 30
(dollars in thousands) 2003 2003 2003
Assets
Cash and amounts due
from depository institutions $950,302 $971,697 $1,497,981
Investments:
Available-for-sale 10,102,619 11,109,603 10,832,862
Held-to-maturity 2,516,352 413,152 492,343
Total investments 12,618,971 11,522,755 11,325,205
Loans:
Commercial 11,063,686 10,756,312 10,749,659
Consumer 10,010,289 9,684,319 9,216,825
Residential mortgages 5,074,684 4,109,216 4,362,947
Total loans 26,148,659 24,549,847 24,329,431
Less allowance for loan losses (327,894) (322,684) (319,537)
Total loans, net 25,820,765 24,227,163 24,009,894
Premises and equipment, net 273,278 273,931 273,403
Accrued interest receivable 190,714 175,644 169,288
Goodwill 1,027,292 1,027,292 1,025,292
Core deposit intangible 268,759 287,293 305,540
Bank owned life insurance 801,535 792,607 785,978
Other assets 1,553,713 1,776,910 1,950,556
Total assets $43,505,329 $41,055,292 $41,343,137
Liabilities and Stockholders'
Equity
Liabilities:
Deposits and other customer related
accounts:
Core and other customer
related accounts $21,334,106 $21,232,550 $21,065,090
Time 6,009,902 6,282,630 6,551,565
Total deposits 27,344,008 27,515,180 27,616,655
Borrowings and other debt
obligations (1) 12,197,603 9,570,356 9,507,297
Other liabilities 501,176 599,032 679,204
Total liabilities 40,042,787 37,684,568 37,803,156
Redeemable capital securities
and other minority interests (1) 202,136 201,757 408,987
Stockholders' equity:
Common Stock 1,892,126 1,872,953 1,869,535
Warrants and stock options 13,944 13,230 12,483
Unallocated ESOP shares (26,078) (28,465) (28,465)
Treasury stock (21,927) (22,501) (24,171)
Accumulated other
comprehensive income/ (loss) (52,924) (16,345) 53,368
Retained earnings 1,455,265 1,350,095 1,248,244
Total stockholders' equity 3,260,406 3,168,967 3,130,994
Total liabilities and
stockholders' equity $43,505,329 $41,055,292 $41,343,137
(1) Effective July 1, 2003, Sovereign elected to change the Company's
accounting policy to treat trust preferred securities as liabilities
and Sovereign reclassified these obligations from "redeemable
capital securities and other minority interests" to "borrowings and
other debt obligations." Restatement of prior periods is not
permitted.
Mar. 31 Dec. 31
(dollars in thousands) 2003 2002
Assets
Cash and amounts due
from depository institutions $1,172,529 $972,614
Investments:
Available-for-sale 11,208,359 10,733,564
Held-to-maturity 569,261 632,513
Total investments 11,777,620 11,366,077
Loans:
Commercial 10,507,385 10,326,756
Consumer 8,830,630 8,519,166
Residential mortgages 4,716,348 4,347,512
Total loans 24,054,363 23,193,434
Less allowance for loan losses (309,398) (298,750)
Total loans, net 23,744,965 22,894,684
Premises and equipment, net 277,509 281,427
Accrued interest receivable 167,737 175,291
Goodwill 1,025,292 1,025,292
Core deposit intangible 324,211 343,305
Bank owned life insurance 775,862 765,534
Other assets 1,668,677 1,766,078
Total assets $40,934,402 $39,590,302
Liabilities and Stockholders' Equity
Liabilities:
Deposits and other customer related
accounts:
Core and other customer
related accounts $20,014,913 $19,831,068
Time 6,730,872 7,020,021
Total deposits 26,745,785 26,851,089
Borrowings and other debt obligations (1) 10,110,562 8,829,289
Other liabilities 625,182 548,649
Total liabilities 37,481,529 36,229,027
Redeemable capital securities
and other minority interests (1) 596,541 596,957
Stockholders' equity:
Common Stock 1,586,421 1,580,282
Warrants and stock options 103,131 101,892
Unallocated ESOP shares (28,465) (21,313)
Treasury stock (23,614) (6,060)
Accumulated other
comprehensive income/ (loss) 68,133 28,009
Retained earnings 1,150,726 1,081,508
Total stockholders' equity 2,856,332 2,764,318
Total liabilities and
stockholders' equity $40,934,402 $39,590,302
(1) Effective July 1, 2003, Sovereign elected to change the Company's
accounting policy to treat trust preferred securities as liabilities
and Sovereign reclassified these obligations from "redeemable
capital securities and other minority interests" to "borrowings and
other debt obligations." Restatement of prior periods is not
permitted.
Sovereign Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Quarter Ended
Dec. 31 Sept. 30 June 30 Mar. 31 Dec. 31
2003 2003 2003 2003 2002
(dollars in thousands,
except per share data)
Interest and dividend
income:
Interest on interest-
earning deposits $385 $539 $542 $675 $787
Interest on investment
securities
Available for sale 144,787 132,211 149,468 158,231 154,331
Held to maturity 5,142 5,958 7,580 8,443 9,611
Interest on loans 324,990 325,062 332,123 333,615 349,865
Total interest and
dividend income 475,304 463,770 489,713 500,964 514,594
Interest expense:
Deposits and related
customer accounts 68,647 73,488 84,903 93,651 111,562
Borrowings 98,178 102,990 97,993 104,273 109,900
Total interest
expense 166,825 176,478 182,896 197,924 221,462
Net interest
income 308,479 287,292 306,817 303,040 293,132
Provision for loan losses 40,000 36,600 42,000 43,357 36,000
Net interest
income after
provision for
loan losses 268,479 250,692 264,817 259,683 257,132
Non-interest income:
Consumer banking fees 53,778 53,531 53,285 48,225 48,853
Commercial banking
fees 28,766 27,197 26,787 25,223 23,802
Mortgage banking
revenue (1) 15,725 17,458 8,827 8,008 8,251
Capital markets
revenue 4,814 5,389 9,062 7,749 5,414
Bank owned life
insurance income 10,810 12,080 10,116 10,332 11,801
Other 7,796 3,478 4,208 3,522 6,069
Total fees and other
income before
securities
transactions 121,689 119,133 112,285 103,059 104,190
Net gain on
investments and
related derivatives
transactions 10,232 18,848 19,446 17,531 14,356
Total non-interest
income 131,921 137,981 131,731 120,590 118,546
Non-interest expense:
General and administrative
Compensation and
benefits 98,314 97,788 99,466 93,182 93,084
Occupancy and
equipment 53,437 52,838 51,144 53,342 55,057
Technology expense 19,145 18,652 17,296 17,939 17,575
Outside services 14,148 12,192 13,623 13,473 12,942
Marketing expense 8,385 9,218 10,895 10,326 12,441
Other administrative
expenses 28,894 22,715 25,271 22,826 21,951
Total general and
administrative 222,323 213,403 217,695 211,088 213,050
Other expenses:
Amortization of core
deposit intangibles 17,823 18,246 18,671 19,095 19,580
Trust preferred
securities and other
minority interest expense 5,439 5,434 15,898 16,043 16,058
Loss on debt
extinguishment - 857 - 28,981 -
Merger-related and
integration charges - - - - -
Total other
expenses 23,262 24,537 34,569 64,119 35,638
Total non-
interest
expense 245,585 237,940 252,264 275,207 248,688
Income before
income taxes 154,815 150,733 144,284 105,066 126,990
Income tax expense 42,228 41,500 40,110 29,210 33,905
Net income $112,587 $109,233 $104,174 $75,856 $93,085
Diluted
earnings
per share $0.38 $0.37 $0.37 $0.27 $0.33
Weighted
average
shares:
Basic 292,540 292,169 262,189 261,322 261,269
Diluted 298,508 297,151 283,901 281,365 281,467
(1) Mortgage banking
activity is summarized
below:
Gains on sale of mortgage
loans and mortgage backed
securities 9,457 19,080 16,035 16,652 12,836
Net gains/(loss) recorded
under SFAS 133 7,895 (14,112) 6,651 1,275 1,764
Mortgage servicing fees,
net of mortgage servicing
rights amortization (479) (5,760) (3,391) (2,490) (1,859)
Changes in mortgage
servicing valuation
reserve related to
reversals/(impairments) (1,148) 18,250 (10,468) (7,429) (4,490)
Total mortgage
banking revenues 15,725 17,458 8,827 8,008 8,251
Year Ended
Dec. 31 Dec. 31
2003 2002
(dollars in thousands, except per
share data)
Interest and dividend income:
Interest on interest-earning
deposits $2,141 $4,620
Interest on investment securities
Available for sale 584,697 614,761
Held to maturity 27,123 46,967
Interest on loans 1,315,790 1,393,192
Total interest and dividend
income 1,929,751 2,059,540
Interest expense:
Deposits and related customer
accounts 320,689 458,287
Borrowings 403,434 441,637
Total interest expense 724,123 899,924
Net interest income 1,205,628 1,159,616
Provision for loan losses 161,957 146,500
Net interest income after
provision for loan losses 1,043,671 1,013,116
Non-interest income:
Consumer banking fees 208,819 179,402
Commercial banking fees 107,973 95,083
Mortgage banking revenue (1) 50,018 28,571
Capital markets revenue 27,014 14,995
Bank owned life insurance income 43,338 43,456
Other 19,004 19,588
Total fees and other income before
securities transactions 456,166 381,095
Net gain on investments and
related derivatives transactions 66,057 51,431
Total non-interest income 522,223 432,526
Non-interest expense:
General and administrative
Compensation and benefits 388,750 362,813
Occupancy and equipment 210,761 210,044
Technology expense 73,032 69,424
Outside services 53,436 49,235
Marketing expense 38,824 35,852
Other administrative expenses 99,706 92,739
Total general and
administrative 864,509 820,107
Other expenses:
Amortization of core deposit intangibles 73,835 80,274
Trust preferred securities and other
minority interest expense 42,813 62,835
Loss on debt extinguishment 29,838 -
Merger-related and integration charges - 15,871
Total other expenses 146,486 158,980
Total non-interest expense 1,010,995 979,087
Income before income taxes 554,899 466,555
Income tax expense 153,048 124,570
Net income $401,851 $341,985
Diluted earnings per share $1.38 $1.23
Weighted average shares:
Basic 277,301 258,461
Diluted 290,477 279,039
(1) Mortgage banking activity is
summarized below:
Gains on sale of mortgage loans and
mortgage backed securities 61,224 42,008
Net gains/(loss) recorded under SFAS 133 1,709 535
Mortgage servicing fees, net of
mortgage servicing rights amortization (12,120) (360)
Changes in mortgage servicing
valuation reserve related to
reversals/(impairments) (795) (13,612)
Total mortgage banking revenues 50,018 28,571
Sovereign Bancorp, Inc. and Subsidiaries
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS
(unaudited)
Quarter Ended
December 31, 2003
Average Yield/
(dollars in thousands) Balance Interest (1) Rate
Earning assets:
Investment securities $12,417,048 $159,376 5.13%
Loans:
Commercial 10,880,892 128,094 4.62%
Consumer 9,809,803 131,347 5.32%
Residential mortgages 4,726,609 66,774 5.65%
Total loans 25,417,304 326,215 5.08%
Allowance for loan losses (323,285)
Total earning assets 37,511,067 $485,591 5.14%
Other assets 5,122,980
Total assets $42,634,047
Funding liabilities:
Deposits and other customer related
accounts:
Core and other customer related
accounts $21,180,302 $31,460 0.59%
Time 6,138,121 37,188 2.40%
Total 27,318,423 68,648 1.00%
Borrowings:
Federal Home Loan Bank advances 6,192,197 69,045 4.38%
Fed funds and repurchase
agreements 2,281,145 5,996 1.05%
Other borrowings 2,905,569 23,137 3.15%
Total borrowings 11,378,911 98,178 3.40%
Total funding liabilities 38,697,334 $166,826 1.70%
Other liabilities 769,280
Total liabilities 39,466,614
Stockholders' equity 3,167,433
Total liabilities and
stockholders' equity $42,634,047
Net interest income $318,765
Interest rate spread 2.98%
Net interest margin 3.39%
(1) Tax equivalent basis
Quarter Ended
September 30, 2003
Average Yield/
(dollars in thousands) Balance Interest (1) Rate
Earning assets:
Investment securities $11,280,351 $145,505 5.16%
Loans:
Commercial 10,761,231 130,897 4.77%
Consumer 9,340,289 130,403 5.54%
Residential mortgages 4,335,326 64,616 5.96%
Total loans 24,436,846 325,916 5.28%
Allowance for loan losses (323,743)
Total earning assets 35,393,454 $471,421 5.29%
Other assets 5,773,003
Total assets $41,166,457
Funding liabilities:
Deposits and other customer related
accounts:
Core and other customer related
accounts $21,093,786 $31,967 0.60%
Time 6,430,966 41,521 2.56%
Total 27,524,752 73,488 1.06%
Borrowings:
Federal Home Loan Bank advances 5,968,148 73,111 4.83%
Fed funds and repurchase
agreements 1,303,393 3,328 1.01%
Other borrowings 2,291,656 26,551 4.58%
Total borrowings 9,563,197 102,990 4.25%
Total funding liabilities 37,087,949 $176,478 1.88%
Other liabilities 988,561
Total liabilities 38,076,510
Stockholders' equity 3,089,947
Total liabilities and
stockholders' equity $41,166,457
Net interest income $294,943
Interest rate spread 2.85%
Net interest margin 3.32%
(1) Tax equivalent basis
Quarter Ended
December 31, 2002
Average Yield/
(dollars in thousands) Balance Interest (1) Rate
Earning assets:
Investment securities $11,398,146 $168,614 5.92%
Loans:
Commercial 10,011,388 140,036 5.52%
Consumer 8,236,400 133,822 6.45%
Residential mortgages 4,844,516 77,229 6.38%
Total loans 23,092,304 351,087 6.03%
Allowance for loan losses (293,024)
Total earning assets 34,197,426 $519,701 6.05%
Other assets 5,438,366
Total assets $39,635,792
Funding liabilities:
Deposits and other customer related
accounts:
Core and other customer related
accounts $19,556,573 $55,533 1.13%
Time 7,152,274 56,029 3.11%
Total 26,708,847 111,562 1.66%
Borrowings:
Federal Home Loan Bank advances 5,846,287 78,854 5.30%
Fed funds and repurchase
agreements 1,125,331 3,363 1.17%
Other borrowings 1,914,646 27,683 5.73%
Total borrowings 8,886,264 109,900 4.87%
Total funding liabilities 35,595,111 $221,462 2.46%
Other liabilities 1,303,996
Total liabilities 36,899,107
Stockholders' equity 2,736,685
Total liabilities and
stockholders' equity $39,635,792
Net interest income $298,239
Interest rate spread 3.01%
Net interest margin 3.49%
(1) Tax equivalent basis
Sovereign Bancorp, Inc. and Subsidiaries
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS
(unaudited)
Year Ended
December 31, 2003
Average Yield/
(dollars in thousands) Balance Interest (1) Rate
Earning assets:
Investment securities $12,025,913 637,992 5.31%
Loans:
Commercial 10,619,491 530,968 5.00%
Consumer 9,182,145 521,679 5.68%
Residential mortgages 4,520,506 266,808 5.90%
Total loans 24,322,142 1,319,455 5.42%
Allowance for loan losses (315,075)
Total earning assets 36,032,980 $1,957,447 5.43%
Other assets 5,370,184
Total assets $41,403,164
Funding liabilities:
Deposits:
Core $20,460,107 $148,413 0.73%
Time 6,513,741 172,275 2.64%
Total deposits 26,973,848 320,688 1.19%
Borrowings:
Federal Home Loan Bank
advances 5,948,085 293,982 4.94%
Fed funds and repurchase
agreements 2,050,401 9,877 0.48%
Other borrowings 2,292,602 99,575 4.34%
Total borrowings 10,291,088 403,434 3.92%
Total funding liabilities 37,264,936 $724,122 1.94%
Other liabilities 1,142,485
Total liabilities 38,407,421
Stockholders' equity 2,995,743
Total liabilities and
stockholders' equity $41,403,164
Net interest income $1,233,325
Interest rate spread 2.98%
Net interest margin 3.42%
(1) Tax equivalent basis
Year Ended
December 31, 2002
Average Yield/
(dollars in thousands) Balance Interest (1) Rate
Earning assets:
Investment securities $11,030,458 $681,760 6.18%
Loans:
Commercial 9,482,973 559,152 5.90%
Consumer 7,745,575 520,216 6.71%
Residential mortgages 4,729,353 318,760 6.74%
Total loans 21,957,901 1,398,128 6.37%
Allowance for loan losses (287,141)
Total earning assets 32,701,218 $2,079,888 6.36%
Other assets 5,060,035
Total assets $37,761,253
Funding liabilities:
Deposits:
Core $17,997,216 $205,613 1.14%
Time 7,363,772 252,674 3.43%
Total deposits 25,360,988 458,287 1.81%
Borrowings:
Federal Home Loan Bank
advances 5,996,370 306,825 5.12%
Fed funds and repurchase
agreements 694,640 13,015 1.87%
Other borrowings 1,954,471 121,797 6.23%
Total borrowings 8,645,481 441,637 5.11%
Total funding liabilities 34,006,469 $899,924 2.65%
Other liabilities 1,222,385
Total liabilities 35,228,854
Stockholders' equity 2,532,399
Total liabilities and
stockholders' equity $37,761,253
Net interest income $1,179,964
Interest rate spread 3.12%
Net interest margin 3.61%
(1) Tax equivalent basis
Sovereign Bancorp, Inc. and Subsidiaries
SUPPLEMENTAL INFORMATION
(unaudited)
NON-PERFORMING ASSETS
Dec. 31 Sept. 30 June 30 Mar. 31 Dec. 31
(dollars in thousands) 2003 2003 2003 2003 2002
Non-accrual loans:
Commercial $129,029 $165,317 $156,873 $148,012 $160,806
Consumer 30,921 29,667 30,098 30,524 32,844
Residential mortgages 38,195 39,745 40,783 41,465 36,849
Total non-accrual
loans 198,145 234,729 227,754 220,001 230,499
Restructured loans 1,235 1,335 1,495 1,557 893
Total non-performing
loans 199,380 236,064 229,249 221,558 231,392
Real estate owned, net 17,016 17,556 19,404 23,668 19,007
Other repossessed assets 4,051 4,082 4,779 4,709 6,663
Total non-performing
assets $220,447 $257,702 $253,432 $249,935 $257,062
Non-performing loans as
a percentage of total
loans 0.76% 0.96% 0.94% 0.92% 1.00%
Non-performing assets as
a percentage of total
assets 0.51% 0.63% 0.61% 0.61% 0.65%
Non-performing assets as
a percentage of total
loans, real estate owned
and repossessed assets 0.84% 1.05% 1.04% 1.04% 1.11%
Allowance for loan
losses as a percentage
of non-performing loans 164% 137% 139% 140% 129%
NET LOAN CHARGE-OFFS
Dec. 31 Sept. 30 June 30 Mar. 31 Dec. 31
Quarters ended (in thousands) 2003 2003 2003 2003 2002
Commercial real estate $98 $2,308 $1,770 $2,093 $312
Commercial and industrial
and other 25,755 22,151 19,955 19,935 18,252
Total Commercial 25,853 24,459 21,725 22,028 18,564
Auto loans 5,521 5,038 5,720 5,919 7,787
Home equity loans and other 3,277 2,964 3,490 3,969 3,102
Total Consumer 8,798 8,002 9,210 9,888 10,889
Residential mortgages 138 992 926 793 3,056
Total $34,789 $33,453 $31,861 $32,709 $32,509
DEPOSIT AND OTHER CUSTOMER RELATED ACCOUNT COMPOSITION - END OF PERIOD
Dec. 31 Sept. 30 June 30 Mar. 31 Dec. 31
Quarters ended
(in thousands) 2003 2003 2003 2003 2002
Demand
deposit
accounts $4,306,376 $4,292,621 $4,276,812 $4,133,600 $4,067,784
NOW
accounts 6,068,163 6,294,730 6,197,211 5,818,879 5,889,582
Customer
repurchase
agreements 1,017,544 902,522 1,033,922 983,501 1,078,391
Savings
accounts 3,098,892 3,166,319 3,178,633 3,145,427 3,037,888
Money market
accounts 6,843,131 6,576,358 6,378,512 5,933,506 5,757,423
Certificates
of
deposits 6,009,902 6,282,630 6,551,565 6,730,872 7,020,021
Total $27,344,008 $27,515,180 $27,616,655 $26,745,785 $26,851,089
LOAN COMPOSITION - END OF PERIOD
Dec. 31 Sept. 30 June 30 Mar. 31 Dec. 31
Quarters ended
(in thousands) 2003 2003 2003 2003 2002
Commercial
real
estate $4,353,494 $4,309,687 $4,280,955 $4,125,570 $4,132,644
Commercial
industrial
loans 5,365,062 5,300,034 5,206,559 4,961,473 4,757,822
Other 1,345,130 1,146,591 1,262,145 1,420,342 1,436,290
Total
commercial
loans 11,063,686 10,756,312 10,749,659 10,507,385 10,326,756
Home
equity
loans 6,457,682 6,102,455 5,739,806 5,451,304 5,165,834
Auto
loans 3,240,383 3,261,150 3,161,097 3,063,074 3,038,976
Other 312,224 320,714 315,922 316,252 314,356
Total
consumer
loans 10,010,289 9,684,319 9,216,825 8,830,630 8,519,166
Total
residential
loans 5,074,684 4,109,216 4,362,947 4,716,348 4,347,512
Total
loans $26,148,659 $24,549,847 $24,329,431 $24,054,363 $23,193,434
Sovereign Bancorp, Inc. and Subsidiaries
SUPPLEMENTAL INFORMATION
(unaudited)
DEPOSIT AND OTHER CUSTOMER RELATED ACCOUNT COMPOSITION - Average
Quarters ended Dec. 31 Sept. 30 June 30 Mar. 31 Dec. 31
(in thousands) 2003 2003 2003 2003 2002
Demand
deposit
accounts $4,197,814 $4,186,582 $4,057,542 $3,904,358 $3,984,442
NOW
accounts 6,135,210 6,253,423 5,900,237 5,647,711 5,687,602
Customer
repurchase
agreements 963,885 970,330 1,016,450 1,007,629 1,137,861
Savings
accounts 3,138,766 3,180,188 3,106,420 3,011,833 2,949,045
Money market
accounts 6,744,627 6,503,263 6,054,415 5,833,270 5,797,624
Certificates
of
deposits 6,138,121 6,430,966 6,606,511 6,888,521 7,152,273
Total $27,318,423 $27,524,752 $26,741,575 $26,293,322 $26,708,847
LOAN COMPOSITION - Average
Quarters ended Dec. 31 Sept. 30 June 30 Mar. 31 Dec. 31
(in thousands) 2003 2003 2003 2003 2002
Commercial
real
estate $4,662,734 $4,610,919 $4,410,120 $4,085,483 $4,149,736
Commercial
industrial
loans 5,336,532 5,285,571 5,263,959 5,343,412 4,993,960
Other 881,626 864,741 863,408 861,412 867,692
Total commercial
loans 10,880,892 10,761,231 10,537,487 10,290,307 10,011,388
Home equity
loans 6,241,296 5,824,058 5,537,191 5,258,974 4,857,710
Auto loans 3,248,915 3,203,014 3,100,355 3,034,672 3,056,699
Other 319,592 313,217 314,720 317,669 321,991
Total consumer
loans 9,809,803 9,340,289 8,952,266 8,611,315 8,236,400
Total
residential
loans 4,726,609 4,335,326 4,644,111 4,374,139 4,844,516
Total loans $25,417,304 $24,436,846 $24,133,864 $23,275,761 $23,092,304
Sovereign Bancorp, Inc. and Subsidiaries
RECONCILIATION OF CASH AND OPERATING EARNINGS TO REPORTED EARNINGS
(unaudited)
Operating earnings for 2003 excludes the after tax effects of the loss on
our debt extinguishment of holding company notes that occurred in March 2003.
Operating earnings for 2002 exclude the after tax effects of loan loss
provision and merger expenses related to the Main Street acquisition. Cash
earnings are operating earnings excluding the after-tax effects of non-cash
charges for amortization of intangible assets and stock based compensation.
(dollars in thousands, except per share
data - all amounts are after tax) Quarter Ended
Total dollars
Dec. 31 Sept. 30 Dec. 31
2003 2003 2002
Net income as reported $112,587 $109,233 $93,085
Main Street Bancorp acquisition:
Net merger related and integration
costs - - -
Provision for loan loss - - -
Loss on debt extinguishment - - -
Operating earnings 112,587 109,233 93,085
Amortization of intangibles 12,112 12,387 13,269
Stock based compensation (1) 2,555 2,795 5,356
Cash earnings $127,254 $124,415 $111,710
Weighted average diluted shares 298,508 297,151 281,467
(1) Stock based compensation encompasses arrangements with employees
under which the Company's obligation will be settled by using stock
rather than cash and includes expense related to stock options,
restricted stock, bonus deferral plans, and ESOP expense.
(dollars in thousands, except per share
data - all amounts are after tax) Quarter Ended
Per Share
Dec. 31 Sept. 30 Dec. 31
2003 2003 2002
Net income as reported $0.38 $0.37 $0.33
Main Street Bancorp acquisition:
Net merger related and integration
costs - - -
Provision for loan loss - - -
Loss on debt extinguishment - - -
Operating earnings 0.38 0.37 0.33
Amortization of intangibles 0.04 0.04 0.05
Stock based compensation (1) 0.01 0.01 0.02
Cash earnings $0.43 $0.42 $0.40
Weighted average diluted shares
(1) Stock based compensation encompasses arrangements with employees
under which the Company's obligation will be settled by using stock
rather than cash and includes expense related to stock options,
restricted stock, bonus deferral plans, and ESOP expense.
(dollars in thousands, except per share
data - all amounts are after tax) Year Ended
Total dollars Per Share
Dec. 31 Dec. 31 Dec. 31 Dec. 31
2003 2002 2003 2002
Net income as reported $401,851 $341,985 $1.38 $1.23
Main Street Bancorp acquisition:
Net merger related and integration
costs - 10,316 - 0.04
Provision for loan loss - 3,900 - 0.01
Loss on debt extinguishment 18,838 - 0.07 -
Operating earnings 420,689 356,201 1.45 1.28
Amortization of intangibles 50,100 54,121 0.17 0.19
Stock based compensation (1) 10,819 14,953 0.04 0.05
Cash earnings $481,608 $425,275 $1.66 $1.52
Weighted average diluted shares 290,477 279,039
(1) Stock-based compensation encompasses arrangements with employees
under which the Company's obligation will be settled by using stock
rather than cash and includes expense related to stock options,
restricted stock, bonus deferral plans, and ESOP expense.
SOURCE Sovereign Bancorp, Inc.
-0- 01/20/2004
/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
eshultz@sovereignbank.com, all of Sovereign Bancorp/
/Web site: http://www.sovereignbank.com /
/Audio: http://www.firstcallevents.com/service/ajwz395022617gf12.html /
(SOV)
CO: Sovereign Bancorp, Inc.
ST: Pennsylvania
IN: FIN
SU: CCA MAV ERN ERP