Jay Sidhu

Sovereign Bancorp's chief executive officer said yesterday he planned to call a special meeting of the banking company's embattled board of directors to confront the question of the bank's future. Jay Sidhu said he would challenge Sovereign's board chairman and largest shareholder, Frederick Jaindl, over Jaindl's recent statements. Jaindl has said he wants to sell the Reading bank holding company to another large regional bank. Sovereign's eight-member board has been split 4-4 over whether to pursue a merger with some other bank.

Sovereign Bancorp's civil war continued yesterday as the company's board chairman countersued its chief executive officer in federal court in Philadelphia. Frederick Jaindl, the Allentown poultry farmer and bank investor who is Sovereign's biggest shareholder, charged Jay Sidhu, bank president and chief executive, and other top Sovereign officials with breaching their fiduciary duty, wasting company assets and violating federal securities and banking laws. Sidhu last month sued Jaindl and two other Sovereign directors in the same court, accusing them of violating securities laws and acting improperly in trying to sell the bank holding company, which runs 79 savings bank branches in Southeastern Pennsylvania and New Jersey.

Last spring, Jay Sidhu thought he'd spotted a loophole in banking rules that would save his Sovereign Bancorp $10 million a year. But while Sovereign was crawling through, Congress closed the loophole. Sidhu's plan involved buying a little Freehold, N.J., commercial bank with $42 million in deposits, and then shifting $5 billion in Sovereign deposits there. The shift would enable the Wyomissing savings institution to get the much lower deposit insurance premium that commercial banks pay - and save $10 million a year.

Sovereign Bank said yesterday that it would provide up to $250 million in low-interest loans in a new program aimed at Pennsylvania small businesses. The bank will make the money available over three years in amounts ranging from $250,000 to $2.5 million, Sovereign Bank's chief executive officer, Jay Sidhu, told reporters in Philadelphia. Sidhu and other bank officials were joined by Gov. Rendell and the heads of the state departments of banking and economic development. The program is another step in his effort to boost job creation, Rendell said.

banking I Sovereign agrees to buy Carnegie Bank-buying mania continued yesterday as Sovereign Bancorp agreed to buy Carnegie Bancorp for $94 million in stock, as the Philadelphia- area bank expands in Pennsylvania and New Jersey. Under terms of the agreement, shareholders of Carnegie will receive $35.50 in Sovereign stock for each Carnegie share. "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," said Jay Sidhu, president and chief executive of Sovereign, the third-largest Pennsylvania-based bank.

Sovereign Bancorp Inc. said its first-quarter profit plummeted on $128.7 million in charges related to the sale of home-equity loans and previously announced restructuring plans. The Wyomissing, Pa., bank earned $48.1 million, or 9 cents a share, in the quarter, down from $141 million, or 36 cents a share, a year earlier. Joseph P. Campanelli, who replaced longtime chief executive Jay Sidhu in October, said Sovereign was "on track" with its cost-cutting effort and had substantially completed its balance-sheet restructuring.

Sovereign Bancorp Inc. said yesterday it will increase its market share in New Jersey and add $2.5 billion in assets with its $325 million acquisition of Bankers Corp., of Perth Amboy, N.J. "We're always looking for ways to improve total shareholder value. In the past, we've done this through acquisitions," said Mark McCollom, Sovereign's vice president of corporate development. "Size alone is not important to us, but it is important to have meaningful market share in the areas we serve.

Sovereign Bancorp will buy Main Line Bank and its parent company, ML Bancorp, for $345 million in stock, both companies said last night. The move unites two of the Philadelphia area's biggest home lenders. Sovereign, of Reading, and Main Line, of Villanova, have been scrambling to add investment and small-business services in recent months. Consolidation of back-office operations is expected to threaten 150 Main Line jobs, but some of those workers may be transferred to posts at Sovereign offices, said Dennis Marlo, ML Bancorp chairman.

In a move to strengthen its presence in eastern Pennsylvania, Sovereign Bancorp Inc. of Wyomissing said yesterday that it would acquire Main Street Bancorp Inc. of Reading for $170 million in stock. Main Street, which specializes in small-business loans, has 11 of its 43 branches in the Philadelphia area. Last month it shed its branches in Hunterdon County, N.J., and Bucks County; it had one office in each. The Main Street acquisition would make Sovereign the largest bank in Berks County and the second-largest in Schuylkill County.

Management of Sovereign Bancorp Inc. may have won a battle but lost the war for long-term control of the Wyomissing, Pa.-based bank. After months of filing expensive legal actions, pressuring the Pennsylvania General Assembly and Gov. Rendell to change (or not change) the state's merger laws, and questioning each other's motives, Sovereign and its largest shareholder, Relational Investors L.L.C., made peace late Wednesday, a day before Sovereign was scheduled to respond to Relational's federal lawsuit in New York.

In the Region U.S. to speed power-line projects The Obama administration moved to speed up permitting and construction of seven proposed electric transmission lines in 12 states - including Pennsylvania and New Jersey - saying the projects would create 10,000 jobs and help modernize the nation's power grid. The projects, to provide 2,500 miles of new transmission lines, are intended to serve as pilots for streamlined federal permitting and improved cooperation among federal, state, and tribal governments.

Philadelphia-based Sovereign Bancorp, which like many banks has been caught in the recent financial meltdown, was in "advanced talks" last night to sell itself to Banco Santander S.A. of Spain, which was already a part owner, according to published reports. A takeover of Sovereign, which had been the fourth-largest bank in the Philadelphia region with 82 branches, would mark another consolidation of the global financial system, although the immediate impact on Sovereign's operations and its customers was unclear.

Sovereign Bancorp Inc. said its first-quarter profit plummeted on $128.7 million in charges related to the sale of home-equity loans and previously announced restructuring plans. The Wyomissing, Pa., bank earned $48.1 million, or 9 cents a share, in the quarter, down from $141 million, or 36 cents a share, a year earlier. Joseph P. Campanelli, who replaced longtime chief executive Jay Sidhu in October, said Sovereign was "on track" with its cost-cutting effort and had substantially completed its balance-sheet restructuring.

Sovereign Bancorp Inc. said Alan H. Fishman was resigning today as president and chief operating officer in a sign of continued turmoil at the local bank-holding company, which is cutting costs and restructuring its balance sheet to boost profit. Fishman is exercising a clause in his employment contract with Sovereign allowing him to leave - with a multimillion-dollar parachute - after being passed over as chief executive officer when Jay S. Sidhu was ousted in October, according to a corporate regulatory filing yesterday.

Sovereign Bancorp Inc. will write off $29 million in the fourth quarter to pay for persuading chairman and chief executive officer Jay S. Sidhu to quit. The bank disclosed the amount in its third-quarter report to the Securities and Exchange Commission. Sidhu's retirement deal, which he negotiated during a 13-hour board meeting on Oct. 10, includes: $32.9 million in cash for retirement benefits "due to Mr. Sidhu" under plans the bank approved in the 1990s. $40,000 a month for three years in consulting fees.

Sovereign Bancorp Inc. directors met into the evening in Philadelphia yesterday to review the direction of the Wyomissing, Pa.-based bank under chairman and chief executive officer Jay S. Sidhu. The bank made no immediate announcement of a change in Sidhu's status. He faces a revolt of several of his own directors after last month's board election in which a number of institutional investors withheld their votes from three of Sidhu's closest allies. "Boards these days are hypersensitive" to investor criticism, said Chris Young, research director at Institutional Shareholder Services.

Sovereign Bancorp Inc.'s largest investor won't try to stop directors from ousting chairman and chief executive officer Jay S. Sidhu at a special meeting of the Wyomissing, Pa.-based bank's board today. Banco Santander Central Hispano S.A. "will make decisions that correspond to the interest of all investors," and not just its own, the bank said in a statement yesterday. Though Santander did not lead the movement against Sidhu, it will support the majority, said the bank, which is based in Spain.

Management of Sovereign Bancorp Inc. may have won a battle but lost the war for long-term control of the Wyomissing, Pa.-based bank. After months of filing expensive legal actions, pressuring the Pennsylvania General Assembly and Gov. Rendell to change (or not change) the state's merger laws, and questioning each other's motives, Sovereign and its largest shareholder, Relational Investors L.L.C., made peace late Wednesday, a day before Sovereign was scheduled to respond to Relational's federal lawsuit in New York.

Sovereign Bank said yesterday that it would provide up to $250 million in low-interest loans in a new program aimed at Pennsylvania small businesses. The bank will make the money available over three years in amounts ranging from $250,000 to $2.5 million, Sovereign Bank's chief executive officer, Jay Sidhu, told reporters in Philadelphia. Sidhu and other bank officials were joined by Gov. Rendell and the heads of the state departments of banking and economic development. The program is another step in his effort to boost job creation, Rendell said.

Investors pounced on shares of Sovereign Bancorp after its chairman, Jay Sidhu, said last week that the bank was for sale at the right price. The rumor mill matched up the Philadelphia bank with Citizens Bank of Pennsylvania and with Washington Mutual Inc. Fleet Bank is also said to be shopping for bank branches in the hotly competitive Philadelphia market. But do not expect a sequel to 1998's Bank Sign Bingo, the last wave of consolidation to hit these parts. "It may look like the time to do it, but there aren't that many candidates to go," said Arnold G. Danielson, chairman of Danielson Associates.