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Sovereign Profits Inch Higher

The bank reports a small gain after the resignation of its former CEO.

Sovereign Bancorp


reported third-quarter earnings edged higher by just 1.66% compared to the year-earlier quarter.

The Philadelphia bank with $90 billion in assets says that profits were $184 million, or 37 cents a share compared to $181 million, or 45 cents a share in the third quarter of 2005.

Sovereign's earnings included merger and integration charges of $18.5 million, or 4 cents a share for the acquisition of

Independence Community Bank

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. Operating earnings of 41 cents beat the average analyst estimate by 3 cents, according to Thomson Financial.

"The environment for our industry is challenging," says Sovereign's new CEO and President Joseph Campanelli. "We must operate under the assumption that negative industry fundamentals will continue for the foreseeable future."

Sovereign's former CEO, Jay Sidhu resigned last week among growing dissent from shareholders that the bank's stock price was floundering despite his promises to improve shareholder returns. Stockholders were also upset over a controversial three-way deal where Sovereign sold 20% of its stock to

Banco Santander Central Hispano


of Madrid and at the same time acquired the Brooklyn, N.Y. bank.

Shares of Sovereign closed down 13 cents at $23.33