SOVEREIGN TO ACQUIRE

                                CARNEGIE BANCORP

     WYOMISSING, PA ... Sovereign Bancorp, Inc. ("Sovereign") (NASDAQ/NMS:SVRN),
parent company of Sovereign Bank, and Carnegie Bancorp ("Carnegie")
(NASDAQ/:CBNJ), parent company of Carnegie Bancorp, N.A., jointly announced
today the execution of a definitive agreement ("Agreement") for Sovereign to
acquire Carnegie. Carnegie is a $423 million commercial bank holding company
headquartered in Princeton, New Jersey whose principal operating subsidiary
operates seven community banking offices throughout central New Jersey
communities and one community banking office in Pennsylvania.

     The terms of the Agreement call for Sovereign to exchange $35.50 in
Sovereign common stock for each outstanding share of Carnegie common stock or a
total consideration of approximately $94 million in Sovereign common stock. The
price will stay fixed at $35.50 per Carnegie share if Sovereign's average stock
price remains between $18.00 and $22.00 per share (collectively, the "Collars")
during the 15-day period prior to the closing of the transaction. If the average
price of Sovereign's stock drops to $18.00 per share or below during the pricing
period prior to closing, Carnegie shareholders would receive a fixed rate of
1.972 shares (the "Maximum Exchange Ratio") of Sovereign common stock for each
share of Carnegie common stock. Conversely, if Sovereign's average stock price
is $22.00 per share or higher, Carnegie shareholders would receive a fixed rate
of 1.614 shares (the "Minimum Exchange Ratio") of Sovereign common stock for
each share of Carnegie common stock. The pricing reflects 282% of Carnegie's
tangible book value and 20.2 times Carnegie's projected 1998 earnings.





     Carnegie has the right to terminate the Agreement if the average stock
price of Sovereign during the 15-day pricing period falls below $14.47 and
Sovereign's decline in value is 15% greater than the percentage decline of a
group of similar financial institutions, subject to Sovereign's right to
increase the exchange ratio in order to result in a minimum price of $28.53 in
Sovereign common stock.

     The merger is subject to approval of various regulatory agencies and
Carnegie shareholders. Sovereign anticipates that the transaction will close in
the second quarter of 1998 and will be accounted for as a pooling of interests.
Sovereign also anticipates recording a one-time after tax merger-related charge
of $7 to $8 million at the closing of the transaction.

     Carnegie Bank, N.A. is a commercial bank, headquartered in Princeton, New
Jersey. Carnegie's customer base consists primarily of small businesses,
professionals, and high net worth individuals. Its business focus has produced
solid financial results with a 1997 YTD net interest margin of 4.53% and ROA of
0.93%.

"The combination of these two institutions significantly enhances Sovereign's
commercial banking division and assists in extending Sovereign's small business
reach into New Jersey," stated Jay S. Sidhu, Sovereign's President and Chief
Executive Officer. "Carnegie's high-touch sales culture and emphasis on asset
quality mirror Sovereign's critical success factors, and we believe this
acquisition is an excellent fit with Sovereign, both geographically and
culturally. We expect the merger to be accretive to Sovereign's earnings within
two to three quarters following the closing of the transaction," Sidhu added.


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     "The addition of Sovereign's resources as a $17 billion bank will enable
Carnegie to further penetrate its existing markets," remarked Thomas L. Gray,
Jr., Carnegie's President and Chief Executive Officer. "As a result of the
proposed merger, Carnegie will become part of a dynamic and successful
organization," Gray continued.

     Pro forma for the Carnegie acquisition and other pending transactions,
Sovereign will have assets totaling $17.4 billion, deposits totaling $9.1
billion, loans of $11.6 billion and operate approximately 180 community banking
offices through the tri-state network.

     "The addition of Carnegie Bank is very complimentary to Sovereign's
existing franchise," commented Sovereign's Chairman, Richard E. Mohn. "Carnegie
will provide Sovereign with unique opportunities to expand our customer reach
into extremely desirable customer segments in New Jersey," Mohn continued.

     In connection with the execution of the Agreement, Carnegie granted a stock
option to Sovereign to purchase, under certain conditions, up to 19.9% of
Carnegie's outstanding shares.

     Sovereign currently has pending the acquisition of ML Bancorp, Inc. ("ML
Bancorp"), a $2.2 billion financial institution headquartered in Villanova,
Pennsylvania. This acquisition is expected to close late in the first quarter of
1998, and will add 28 community banking offices and significant commercial and
mortgage banking capabilities to Sovereign's Pennsylvania franchise. Sovereign
does not anticipate that this transaction with Carnegie will alter either the
proxy mailing date or closing date of its acquisition of ML Bancorp.


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         Sovereign is a pro forma $17.4 billion bank holding company with
approximately 180 community banking offices serving eastern Pennsylvania,
northern Delaware and New Jersey. The third largest bank headquartered in
Pennsylvania, Sovereign's closing price of its common stock on Friday, December
12, 1997 was $21.6250 per share and its preferred stock closed at $131.9688 per
share.


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