Exhibit 99.1
Sovereign Bancorp News Release
FOR IMMEDIATE RELEASE
CONTACT:
Jay S. Sidhu President and Chief Executive Officer
(610) 320 8416 J-sidhu@Sovereignbank.com
Dennis S. Marlo Chief Financial Officer and Treasurer
(610) 320-8437 Dmarlo@Sovereignbank.com
Mark R. McCollom Chief Accounting Officer
(610) 208-6426 Mmccollo@Sovereignbank.com
Sovereign Website Sovereignbank.com
February 29, 2000
Corporate Headquarters: 2000 Market Street, Philadelphia, PA
SOVEREIGN AND FLEETBOSTON ANNOUNCE
RESTRUCTURED TRANSACTION
- - America's largest branch transaction involving acquisition of
285 branches and certain lines of businesses approved by
regulators
- - Sovereign to make staggered payments to FleetBoston for the
acquisition, dependent upon Fleet's compliance with its
non-compete obligations
- - Sovereign Bancorp Tier 1 capital dramatically improves
- - Creates 27th largest bank in United States; 3rd largest in New
England
Philadelphia, PA...Sovereign Bancorp, Inc. ("Sovereign")
(NASDAQ/NMS: SVRN) announced today that it has restructured the
terms of its agreement to purchase approximately $12 billion in
deposits, $9 billion in loans and 285 community banking offices
from FleetBoston Financial ("Fleet"). The acquisition, which
results in the creation of Sovereign Bank New England, the third
largest bank in New England, includes the following: the entire
former Fleet Bank community banking franchise in eastern
Massachusetts; the entire former BankBoston community banking
franchise in Rhode Island; and select community banking offices
of Fleet Bank in southern New Hampshire and BankBoston in
Connecticut. In addition, Sovereign is acquiring a substantial
portion of the middle market and small business-lending group
from Fleet in Massachusetts and New Hampshire, and from
BankBoston in Rhode Island and Connecticut. The acquisition
includes the purchase of fully functioning business units, with
the necessary management, relationship officers, support staffs,
and other infrastructure for the acquired loans and deposits to
be fully serviced. Sovereign has obtained the receipt of all
required regulatory approvals for this acquisition.
Acquisition Timetable
Date Divested Units Deposits Branches Loans
March 24, 2000 Rhode Island $4.0 B 90 $3.2 B
Connecticut
Western Mass
(BankBoston)
June 16, 2000 Eastern Mass $4.0 B 86 $3.5 B
Rhode Island
(Fleet)
July 21, 2000 Central Mass $4.0 B 109 $2.4 B
New Hampshire
(Fleet)
TOTAL $12.0 B 285 $9.1 B
Payment Terms and Improved Capital Ratios
As previously announced, the total potential consideration
for the entire consumer and business banking franchise is 12% of
acquired deposits, or approximately $1.4 billion. Sovereign
will pay approximately $1.1 billion as the purchases are
completed according to the above schedule. Sovereign will pay
the remaining $340 million in periodic installments between
January 2001 and October 2001 if Fleet complies with its non-
compete obligations under the agreement.
"We are pleased to have restructured this transaction and
to have received the necessary regulatory approvals to complete
our acquisition of Sovereign Bank New England," stated Sidhu.
"The conversion timetable that Sovereign and Fleet have agreed
to provides the best solution for our new customers, minimizes
execution risk for both companies, will reduce confusion in the
marketplace and ensures Sovereign that Fleet will honor its
covenant not to solicit any of its customers or employees for a
two year period."
"As an added benefit of the new transaction structure, we
will show significant improvement in our capital ratios, with
Sovereign Bank expecting over 5% Tier 1 capital and Sovereign
Bancorp expecting 3% Tier 1 capital on each of the closing dates
and thereafter. As a result of these capital ratios, we are
expecting higher credit ratings and higher P/E ratios for the
company," Sidhu continued.
Acquisition Integration on Track
Sovereign continues to make significant progress with its
integration plans for Sovereign Bank New England, and is fully
on track for the three scheduled conversions. The staggered
closing plan as shown above will enhance Sovereign's ability to
provide a smooth transition for its new customers in New
England. The revised schedule also allows Sovereign to provide
additional training for its new team members in advance of the
closing dates.
Management in Place
Sovereign has assembled a very experienced and talented
management team to lead Sovereign Bank New England. The Office
of the Chairman of Sovereign Bank New England will be led by
John P. Hamill as Chairman and Chief Executive Officer and
Joseph P. Campanelli as President and Chief Operating Officer.
Mr. Hamill most recently served as a regional President for
Fleet Bank in Massachusetts. Mr. Hamill is also the past
President and Vice Chairman of Shawmut National Corporation, a
predecessor company of Fleet Bank. Mr. Hamill has in excess of
35 years of commercial banking experience, and over 20 years in
New England.
Mr. Campanelli most recently served as President of
Sovereign Bank's Structured Finance Group headquartered in
Boston, Massachusetts. Prior to joining Sovereign Bank in
September of 1997, Mr. Campanelli spent almost 20 years serving
in a variety of senior positions with Fleet Bank and Shawmut
Bank. His previous responsibilities included oversight of
commercial banking activities in Massachusetts, Rhode Island,
and New Hampshire.
In addition to Mr. Hamill and Mr. Campanelli, the
management team of Sovereign Bank New England will include
several seasoned New England banking professionals who will
create a solid foundation as Sovereign enters the New England
market. Sovereign Bank New England will be headquartered in
Boston and will employ over 3,500 team members throughout the
markets that it serves. As its New England presence grows,
Sovereign will continue to recruit top talent with relationships
already in place throughout New England to provide the high
level of personal service that its existing customers have come
to expect.
"We are extremely pleased with the management team that we
have built to lead Sovereign Bank New England. John Hamill, Joe
Campanelli and the other members of senior management are
committed to the New England marketplace, and we are confident
of their ability to grow the franchise," said Jay Sidhu,
Sovereign's President and Chief Executive Officer.
Profile
Including the anticipated acquisition of Sovereign Bank New
England, Sovereign is a pro forma $35 billion financial
institution with approximately 600 community banking offices and
over 1,000 ATMs in Pennsylvania, Delaware, New Jersey,
Connecticut, New Hampshire, Rhode Island and Massachusetts. Pro
forma Sovereign is the 27th largest financial institution in the
United States and the third largest bank headquartered in
Pennsylvania, the closing price of Sovereign's common stock on
Monday, February 28, 2000 was $7.44 per share.
-END-
Note:
This presentation contains estimates of future operating results
for 2000 and beyond for Sovereign Bancorp, Inc. as well as
estimates of financial condition, operating efficiencies and
revenue creation. These 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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