EXHIBIT 99.4
Pro Forma Unaudited Combined Condensed Balance Sheet as of June 30, 1997.
The following unaudited pro forma combined condensed balance sheet
information reflects (i) the historical consolidated balance sheets of Sovereign
and Bankers as of June 30, 1997 and (ii) the pro forma combined condensed
balance sheet of Sovereign as of such date, after giving effect to the Merger.
The Merger has been reflected as a pooling of interests effective as of June 30,
1997.
Pro Forma Unaudited Balance Sheet
As of June 30, 1997
(In thousands)
Sovereign
Pro and
Forma Bankers
Sovereign Bankers Adjustments Combined
--------- ------- ----------- ----------
Cash and amounts due from
depository institutions ........... $ 133,910 $ 15,126 $ - $ 149,036
Investment and mortgage-backed
securities ........................ 3,661,919 971,011 (291)(2) 4,632,930
Loans ............................... 6,829,705 1,540,362 - 8,370,067
Allowance for possible loan losses .. (48,948) (7,689) - (56,637)
Goodwill and other intangible
assets ............................ 108,041 3,009 - 111,050
Other assets ........................ 213,945 45,016 - 258,961
----------- ---------- ----------- -----------
TOTAL ASSETS ........................ $10,898,572 $2,566,835 (291) $13,465,407
=========== ========== =========== ===========
Deposits ............................ $ 5,856,717 $1,656,927 $ - $ 7,513,644
Borrowings .......................... 4,345,152 678,806 - 5,023,958
Other liabilities ................... 65,098 27,566 - 92,664
----------- ---------- ----------- -----------
TOTAL LIABILITIES ................... 10,266,967 2,363,299 - 12,630,266
TRUST PREFERRED SECURITIES .......... 97,568 -
---------- --------
Preferred stock ..................... 96,441 - - 96,441
Common stock (1) .................... 301,749 101,281 (25,170)(2)(3) 378,151
Unallocated common stock held by
ESOP .............................. (33,091) - - (33,091)
Treasury stock ...................... (147) (24,879) 24,879(3) (147)
Unrecognized gain on investments .... 4,537 (613) - 3,924
Retained earnings ................... 164,548 127,747 - 292,295
----------- ---------- ----------- -----------
TOTAL SHAREHOLDERS' EQUITY .......... 534,037 203,536 (291) 737,573
----------- ---------- ----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY ............................ $10,898,572 $2,566,835 $ (291) $13,465,407
=========== ========== =========== ===========
- ------------------------
(1) Sovereign common stock has no par value; accordingly,
amounts shown include surplus.
(2) Represents cancellation of Sovereign's investment in Bankers
common stock.
(3) Represents cancellation of treasury shares of Bankers.
1
Pro Forma Unaudited Combined Condensed Statements of Income for
the Six Months Ended June 30, 1997 and 1996 and the Years Ended
December 31, 1996, 1995, and 1994.
The following unaudited pro forma combined condensed statements of
income reflect the historical consolidated statements of income of Sovereign and
Bankers, as indicated below, for each period presented and the pro forma
combined condensed statements of income of Sovereign, after giving effect to the
Merger. The Merger has been reflected as a pooling of interests. The pro forma
combined condensed statements of income for the six months ended June 30, 1997
and 1996 and the years ended December 31, 1996, 1995, and 1994 were prepared on
the assumption that the Merger had been effected as of the beginning of the
applicable six-month or annual period for Sovereign or Bankers, as the case may
be.
Pro Forma Unaudited Income Statement
For the Six Months Ended June 30, 1997
(In thousands, except per share data)
Sovereign
and
Bankers
Sovereign Bankers Combined
--------- ------- ---------
Interest income ............ $360,816 $89,398 $450,214
Interest expense ........... 234,302 55,548 289,850
-------- ------- --------
Net interest income ........ 126,514 2,300 160,364
Provision for possible
loan losses .............. 9,700 2,300 12,000
-------- ------- --------
Net interest income after
provision for possible
loan losses .............. 116,814 31,550 148,364
-------- ------- --------
Other non-interest income .. 16,905 1,222 18,127
Non-interest expense ....... 82,776 10,278 93,054
-------- ------- --------
Income before taxes ........ 50,943 22,494 73,437
Income taxes ............... 20,230 8,172 28,402
-------- ------- --------
Net income ................. $ 30,713 $14,322 $ 45,035
======== ======= ========
Earnings per share ......... $ 0.39 $ 1.13 $ 0.44
======== ======= ========
2
Pro Forma Unaudited Income Statement
For the Six Months Ended June 30, 1996
(In thousands, except per share data)
Sovereign
and
Bankers
Sovereign Bankers Combined
--------- ------- ----------
Interest income ............ $313,564 $71,305 $384,869
Interest expense ........... 195,986 40,863 236,849
-------- ------- --------
Net interest income ........ 117,578 30,442 148,020
Provision for possible
loan losses .............. 2,216 2,150 4,366
-------- ------- --------
Net interest income after
provision for possible
loan losses .............. 115,362 28,292 143,654
-------- ------- --------
Other non-interest income .. 17,660 1,056 18,716
Non-interest expense ....... 77,939 10,056 87,995
-------- ------- --------
Income before taxes ........ 55,083 19,292 74,375
Income taxes ............... 20,794 6,947 27,741
-------- ------- --------
Net income ................. $ 34,289 $12,345 $ 46,634
======== ======= ========
Earnings per share ......... $ 0.45 $ 0.95 $ 0.46
======== ======= ========
3
Pro Forma Unaudited Combined Condensed Income Statement
For the Year Ended December 31, 1996
(In thousands, except per share data)
Sovereign
and
Bankers
Sovereign Bankers Combined
--------- ------- ----------
Interest income ............ $665,489 $153,105 $818,594
Interest expense ........... 423,594 90,879 514,473
-------- -------- --------
Net interest income ........ 241,895 62,226 304,121
Provision for possible
loan losses .............. 11,416 3,950 15,366
-------- -------- --------
Net interest income after
provision for possible
loan losses .............. 230,479 58,276 288,755
-------- -------- --------
Other non-interest income .. 44,163 2,141 46,304
Non-interest expense ....... 198,893 22,591 221,484
-------- -------- --------
Income before taxes ........ 75,749 37,826 113,575
Income taxes ............... 29,935 13,501 43,436
-------- -------- --------
Net income ................. $ 45,814 $ 24,325 $ 70,139
======== ======== ========
Earnings per share ......... $ 0.59 $ 1.90 $ 0.69
======== ======== ========
4
Pro Forma Unaudited Combined Condensed Income Statement
For the Year Ended December 31, 1995
(In thousands, except per share data)
Sovereign
and
Bankers
Sovereign Bankers Combined
--------- ------- -----------
Interest income ............ $537,380 $129,265 $666,645
Interest expense ........... 340,570 73,818 414,388
-------- -------- --------
Net interest income ........ 196,810 55,447 252,257
Provision for possible
loan losses .............. 2,650 5,500 8,150
-------- -------- --------
Net interest income after
provision for possible
loan losses .............. 194,160 49,947 244,107
-------- -------- --------
Other non-interest income .. 32,197 739 32,936
Non-interest expense ....... 135,280 19,999 155,279
-------- -------- --------
Income before taxes ........ 91,077 30,687 121,764
Income taxes ............... 30,671 10,683 41,354
-------- -------- --------
Net income ................. $ 60,406 $ 20,004 $ 80,410
======== ======== ========
Earnings per share ......... $ 0.82 $ 1.51 $ 0.82
======== ======== ========
5
Pro Forma Unaudited Combined Condensed Income Statement
For the Year Ended December 31, 1994
(In thousands, except per share data)
Sovereign
and
Bankers
Sovereign Bankers Combined
--------- ------- ----------
Interest income ............ $389,076 $106,602 $495,678
Interest expense ........... 212,189 51,123 263,312
-------- -------- --------
Net interest income ........ 176,887 55,479 232,366
Provision for possible
loan losses .............. 5,992 3,970 9,962
-------- -------- --------
Net interest income after
provision for possible
loan losses .............. 170,895 51,509 222,404
-------- -------- --------
Other non-interest income .. 18,704 1,683 20,387
Non-interest expense ....... 109,870 21,130 131,000
-------- -------- --------
Income before taxes ........ 79,729 32,062 111,791
Income taxes ............... 29,830 11,058 40,888
-------- -------- --------
Net income ................. $ 49,899 $ 21,004 $ 70,903
======== ======== ========
Earnings per share ......... $ 0.74 $ 1.56 $ 0.77
======== ======== ========
6