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Sovereign Bancorp


posted slightly higher earnings in the fourth quarter over last year, as interest and fee income made up for a slight contraction in the net interest margin.

The Philadelphia regional, sometimes mentioned as a takeover target, earned $113 million, or 38 cents a share, in the latest quarter, compared with $93.1 million, or 33 cents a share, last year. Analysts surveyed by Thomson First Call were forecasting earnings of 37 cents a share.

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Sovereign had net interest income of $308 million in the fourth quarter of 2003, up 5.2% from last year, while the net interest margin -- a measure of the profitability of loans -- was 3.39% in the latest quarter compared with 3.49% a year ago. The net interest margin was 3.32% in the third quarter.

Consumer banking fees were up $4.9 million, or 10% year over year, while commercial banking feels rose by $5.0 million, or 21%, over last year. Mortgage banking revenue was $15.7 million in the fourth quarter of 2003, compared with $17.5 million in the third quarter of 2003 and $8.3 million in the fourth quarter of 2002.

Sovereign said it was comfortable with the existing Thomson First Call operating earnings estimate of $1.63 a share for 2004.

Sovereign closed Tuesday at $23.43, down $1.08, or 4.4%. It was recently trading in the after-hours session on the Island ECN at $23.36.