BOSTON, July 26, 2012 /PRNewswire/ -- Sovereign Bank, N.A. today announced its tenth consecutive quarter of profitability, with net income of $127 million, for the quarter ended June 30, 2012, an increase of 27.0% compared to $100 million in the second quarter of 2011.
"We are pleased to have reached the milestone of ten consecutive quarters of profitability," said Jorge Moran, Sovereign Bank President and CEO. "Strong loan production in mortgages, small business banking and corporate banking, continuous improvement in asset quality and growth in other income have been the principal drivers of this performance. We have demonstrated our commitment to the communities that we serve in the Northeast through disciplined lending to growing numbers of consumers, large and small businesses, and institutions."
"Sovereign's sustained profitability has produced steady improvements in our capital and liquidity," continued Mr. Moran. "As a result, Sovereign is among the best capitalized banks in the U.S. with a 12.9% Tier I Common Capital Ratio 1. We are uniquely positioned as a regional community-oriented organization which manages its own capital and liquidity and which also benefits by having a global reach. I am grateful to our team members - their hard work has contributed to Sovereign's financial strength, and I want to reiterate the pledge to our customers to create the best possible banking experience."
Robust Lending in Support of Our CommunitySovereign Bank's lending is helping small business and corporations grow and generate economic activity and employment as well as promoting home ownership. Sovereign Bank had a strong quarter in loan production in the areas of mortgages, small business banking and corporate banking. Total loan production for the second quarter 2012 was $5.0 billion, a 43.4% increase over loan production in the second quarter of 2011. Outstanding total loan balances grew by 2.4% during the first half of 2012 to $52.9 billion. For the second quarter of 2012, Sovereign had net interest income of $467.5 million, as compared to $457.8 million in the second quarter of 2011. The most important contributors to interest income were residential mortgages and commercial loans. Continued Improvement in Asset Quality Sovereign's credit quality continues to improve. Nonaccrual loans as a percentage of total loans decreased to 2.12% for the second quarter of 2012, as compared to 3.59% for the second quarter of 2011. This is the ninth consecutive quarter in which Sovereign improved its asset quality.