good qtr
Sovereign Announces 1999 Cash Earnings Up 15%, Operating EPS Up 11
PHILADELPHIA--(BUSINESS WIRE)--Jan. 24, 2000--Sovereign Bancorp,
Inc. (NASDAQ/NMS:SVRN)
-- Cash EPS of $1.34, up 15% from the prior year
-- Operating EPS of $1.18, meeting the consensus analyst estimate
and up 11% on an operating basis from 1998
-- Fourth quarter 1999 cash EPS of $.33; operating EPS of $.29
-- Year over year core revenue growth of 29%
-- Commercial loans outstanding increased $250 million during the
quarter; strong commercial banking presence continues
-- Checking deposits increased $183 million during the quarter, 27%
annualized growth rate
-- Merger integration plans for Sovereign Bank New England are on
schedule
-- Asset quality improvement - year-end non-performing assets at
.29% of total assets
-- Formation of Sovereign Capital Markets
Sovereign Bancorp, Inc. ("Sovereign") (NASDAQ/NMS: SVRN), parent
company of Sovereign Bank, today reported cash earnings for 1999 of
$231.5 million, or $1.34 per diluted share, up from $187.9 million and
$1.17 per diluted share reported in 1998. Cash return on tangible
equity was 26.6% in 1999 compared with 21.0% in 1998.
Cash earnings for the fourth quarter of 1999 rose by 21% to $59.8
million versus $49.5 million for the same period last year. For the
quarter ended December 31, 1999 cash EPS was $0.33. Cash return on
tangible equity was 25.6% for the quarter ended December 31, 1999
compared with 27.3% for the quarter ended December 31, 1998.
Operating earnings for 1999 were $202.3 million, an increase of
19% from 1998 operating earnings of $170.0 million. Operating EPS for
1999 was $1.18, an increase of 11% compared to $1.06 reported for
1998. Sovereign's fourth quarter 1999 operating earnings increased 19%
to $52.2 million, or $0.29 per diluted share, versus $43.7 million and
$0.27 per diluted share reported for the fourth quarter of 1998.
Operating earnings exclude the following special charges for 1999
and 1998: merger-related and integration charges related to
acquisitions, as well as the impact on net interest income and shares
outstanding from early issuance of certain debt and equity instruments
issued to finance Sovereign's pending New England retail banking and
middle market lending acquisition from FleetBoston ("Sovereign Bank
New England"). Special charges for the quarter and year ended December
31, 1999 were $23.0 million after tax and $33.8 million after tax for
the year ended 1998. These items are presented in detail on page 10.
Cash earnings are operating earnings excluding amortization of
intangible assets and ESOP-related expense.
Sovereign's 1999 reported net income increased 31% to $179.3
million, or $1.01 per diluted share, versus $136.5 million and $.85
per diluted share in 1998.
.........
Shareholder Value
"Sovereign is totally committed to maintaining its track record
of continually increasing operating earnings at a pace that is faster
than the rest of the banking industry, while increasing franchise
value and following a conservative banking strategy by maintaining
strong asset quality, low interest rate risk, high efficiency ratio
and a strong sales and service-oriented culture. We are disappointed
that our stock is trading at a little over 5 times estimated 12 month
EPS. Insiders presently own approximately 10% of the company and have
decided to increase their investment in the company with all directors
and members of top management planning to buy stock in the open market
shortly," stated Sidhu.
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