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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 7, 1999
SOVEREIGN BANCORP, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 0-16533 23-2453088
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Ident. No.)
1130 Berkshire Boulevard, Wyomissing, Pennsylvania 19610
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 320-8400
N/A
(Former name or former address, if changed since last report.)
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<PAGE>
Item 5. Other Events.
The press releases of Sovereign Bancorp, Inc. filed as
Exhibits 99.1, 99.2 and 99.3 are hereby incorporated by reference
herein.
Item 7. Financial Statements and Exhibits.
(a) Exhibits.
The following exhibits are filed herewith:
99.1 Press Release, dated April 7, 1999, of Sovereign
Bancorp, Inc.
99.2 Press Release, dated April 12, 1999, of Sovereign
Bancorp, Inc.
99.3 Press Release, dated April 13, 1999, of Sovereign
Bancorp, Inc.
PAGE 1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
SOVEREIGN BANCORP, INC.
Dated: April 14, 1999
/s/ Mark R. McCollom
Mark R. McCollom
Senior Vice President and
Chief Accounting Officer
PAGE 2
<PAGE>
EXHIBIT INDEX
Exhibit Number
99.1 Press Release, dated April 7, 1999, of Sovereign
Bancorp, Inc.
99.2 Press Release dated April 12, 1999, of Sovereign
Bancorp, Inc.
99.3 Press Release dated April 13, 1999, of Sovereign
Bancorp, Inc. <PAGE 3>
Exhibit 99.1
Sovereign Bancorp News Release
FOR IMMEDIATE RELEASE CONTACT:
Dennis S. Marlo (610) 320-8437
April 7, 1999 Mark R. McCollom (610) 208-6426
Linda Hagginbothom (610) 320-8498
Corporate Headquarters: 2000 Market Street, Philadelphia, PA
SOVEREIGN AUTHORIZES A 10% STOCK REPURCHASE PLAN
WYOMISSING, PA.....Sovereign Bancorp, Inc. ("Sovereign")
(NASDAQ/NMS:SVRN) Board of Directors today announced a stock
repurchase program to repurchase up to 10% of Sovereign's
outstanding shares. The repurchase of shares will take place as
market conditions dictate. "We believe that Sovereign stock
continues to be a very compelling value in the current market and
that shareholders will benefit with this stock repurchase
program," stated Jay S. Sidhu, Sovereign's President and Chief
Executive Officer. "Our earnings per share ("EPS") in 1998 were
up by 19% while the stock price went down by 18%. In 1999,
analysts are expecting Sovereign to show about a 9.5% increase in
operating EPS while Sovereign stock price is lower than that at
the beginning of the year, with the company trading at about 10
times expected 1999 earnings and less than 150% of pro forma book
value," Sidhu continued.
"As a result of the significant capital appreciation that
the Peoples Bancorp, Inc. ("Peoples") acquisition will produce,
we will be able to maintain this repurchase program over time
while continuing to enhance present capital levels. Sovereign
remains committed to increase its capital ratios over time, and
our minimum targeted tangible equity ratio of 5.00% remains
unchanged," stated Dennis S. Marlo, Sovereign's Chief Financial
Officer.
In early February 1999, Sovereign announced plans to
repurchase outstanding shares of Peoples stock prior to
Sovereign's closing of the Peoples' acquisition. Adjusted for
the exchange ratio of .80 shares of Sovereign for each
outstanding share of Peoples, Sovereign and Peoples have
collectively repurchased the equivalent of approximately 5.8
million shares of Sovereign stock, which represents about 20% of
Peoples' outstanding shares. Sovereign will also continue to
purchase Peoples shares, as market conditions dictate, through
the Peoples' closing date, which is anticipated to be late May or
early June, 1999.
Prior to any repurchase of Sovereign or additional Peoples'
shares, pro forma Sovereign outstanding shares, at the Peoples'
closing, will be approximately 187 million shares. Pro forma
<PAGE 1> book value at the time of Peoples' closing is expected
to be approximately $8.20 and pro forma tangible book value of
approximately $6.00.
Sovereign is a pro forma $23.4 billion bank holding company
with approximately 300 Community Banking Offices operating in
eastern Pennsylvania, northern Delaware, and New Jersey. The
third largest bank headquartered in Pennsylvania, Sovereign's
closing price of its common stock, on Wednesday, April 7, 1999
was $11.6250 per share.
- THE END -
Note:
This presentation contains estimates of future operating results
for 1999 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. <PAGE 2>
Exhibit 99.2
Sovereign Bancorp News Release
FOR IMMEDIATE RELEASE CONTACT:
April 12, 1999
Dennis S. Marlo (610) 320-8437 [email protected]
Mark R. McCollom (610) 208-6426 [email protected]
Linda Hagginbothom (610) 320-8498 [email protected]
Sovereign Website Sovereignbank.com
Corporate Headquarters: 2000 Market Street, Philadelphia, PA
SOVEREIGN EXPECTS FIRST QUARTER OPERATING EPS OF $0.28
PHILADELPHIA, PA.....Sovereign Bancorp, Inc. ("Sovereign")
(NASDAQ/NMS:SVRN) today announced that it expects its operating
earnings per share ("EPS") for the first quarter of 1999 to be
approximately $0.28, in line with consensus analyst estimates.
The transition of the balance sheet is progressing
rapidly with commercial and consumer loan originations
approximating $1.0 billion combined for the first quarter.
These factors, coupled with lower deposit costs, are helping
to contribute to Sovereign's accelerated earnings.
Sovereign's detailed earnings for the quarter will be
released on Tuesday, April 20, 1999. Sovereign last week had
announced a 10% stock repurchase program to take advantage of
weak stock prices in this environment. Sovereign is a pro forma
$23.4 billion bank holding company with over 300 Community
Banking Offices operating in eastern Pennsylvania, northern
Delaware, and New Jersey. The third largest bank headquartered
in Pennsylvania, Sovereign's closing price of its common stock,
Friday, April 9, 1999, was $13.8750 per share.
- THE END -
Note:
This presentation contains estimates of future operating results
for 1999 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
<PAGE 1> affecting the Company's operations, pricing, products
and services. <PAGE 2>
Exhibit 99.3
Sovereign Bancorp
News Release
FOR IMMEDIATE RELEASE
April 13, 1999
Contact:
Dennis S. Marlo (610) 320-8437 [email protected]
Mark R. McCollom (610) 208-6426 [email protected]
Linda A. Hagginbothom (610) 320-9498 [email protected]
Sovereign Website Sovereignbank.com
Corporate Headquarters: 2000 Market Street, Philadelphia, PA
SOVEREIGN INTRODUCES
INTERNET BANK INITIATIVES
PHILADELPHIA, PA ... Sovereign Bancorp, Inc.
("Sovereign") (NASDAQ/NMS:SVRN) parent company of Sovereign Bank
announced today that its executive management team met with sell
side investment analysts in New York City, to discuss results by
each line of business and Sovereign's technology initiatives that
included plans for forming a separate Internet Bank. The
presentation summarized Sovereign's virtual bank business model,
which has been in development over the last six months. The
company discussed a strategic alliance with FISERV, one of the
nation's leading technology companies; its strategy to serve the
expanding number of web users: creative marketing alliance
strategy: and critical components the company believes are
necessary for the success of this venture. Sovereign's President
and Chief Executive Officer, Jay S. Sidhu, commented, "We believe
that e-commerce is very critical to the longterm success of
Sovereign and the banking industry. Companies that do not
embrace and invest in this paradigm shift will find themselves at
a competitive disadvantage or possibly even become extinct in
just a few years. This web-enabled, low-cost delivery channel
will enable Sovereign to gain experience in this field and
possibly become one of the leaders in e-commerce or in banking,"
Sidhu commented. "We also have offered web banking to existing
Sovereign customers for some months now and are opening about 700
new online accounts each week. This Internet bank initiative
will seek new customers outside of Sovereign's existing
geographic market," Sidhu continued.
Strategic objectives of the Internet bank include the
eventual generation of bottom line value for Sovereign through
increased sales revenue. "We would not be undertaking this
investment if we did not feel very strongly that this will create
<PAGE 1> sustainable, long-term value for our shareholders,"
stated Dennis S . Marlo, Sovereign's Chief Financial Officer.
"This Internet bank will continue to be operated under the same
four critical success factors that have guided Sovereign over the
years - superior asset quality, low interest rate risk, high
productivity and emphasis on sales and service quality and the
growth of team members." continued Marlo.
Also, by adding this method of banking, Sovereign can
gain a valuable e-commerce advantage, Sovereign plans to align
this Internet bank with customer affinity groups such as
universities, employers and retail outlets. "Based upon recent
demographic data obtained on Internet users, we believe that
excellent opportunities exist to market banking services on the
web," stated Sidhu. "The typical internet user profile is very
similar with Sovereign's existing customer base. We also see a
very high potential to create affinity banking relationships for
this Internet bank, to some degree similar to what the national
credit card companies have successfully developed over the past
few years," continued Sidhu.
The critical components of the Internet bank include an
entrepreneurial, incentive-driven team, real time, low cost
digital service to targeted customer groups, and a low cost,
simple to operate, menu of a few banking and investment products,
such as transaction accounts, bill paying services, investment
accounts and brokerage services. "We believe it is important to
offer a streamline package of products that are reliable and easy
to use," stated Sidhu. "Many other companies are limited from
utilizing state of the art technology because their products are
still serviced through legacy systems. By aligning ourselves
with FISERV, we are able to take advantage of the latest
technology and FISERV's relationships with Security First
Technology and Checkthree to give us a head start into banking
e-commerce," Sidhu continued.
Sovereign plans to roll out the Internet bank during
the third or fourth quarter of 1999. Coupled with Sovereign's
recent announcement of a stock repurchase program, Sovereign
believes the Internet Bank initiative will not result in any
material earnings per share dilution for 1999.
Sovereign is a pro forma $23.4 billion bank holding
company with over 300 Community Banking Offices operating in
eastern Pennsylvania, northern Delaware and New Jersey. The
third largest bank headquartered in Pennsylvania, Sovereign's
closing stock price, Tuesday, April 13,1999, was $17.5000 per
share.
-THE END-
Note:
<PAGE 2>
This presentation contains estimates of future operating results
for 1999 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. <PAGE 3>
