"Sovereign also stands to benefit if congressional leaders revive a section of the failed bailout proposal aimed at banks. That provision would have given Sovereign and other banks that are holding near-worthless preferred stock of fallen mortgage lenders Fannie Mae and Freddie Mac a tax write-off."
Where is YOUR BAILOUT and WRITE-OFF, Americans?!!!!!!!
"For banks, it's survival of the fittest; Swept up in broader sell-off, Sovereign loses 72% of value" by Ross Kerber, Globe Staff | September 30, 2008
In a bruising day on Wall Street, Sovereign Bancorp was singled out for a beating.
Shares in the third-largest bank in Massachusetts fell 72 percent - a striking loss even on a day when the market as a whole fell sharply after the US House rejected an emergency bailout package for the nation's troubled financial sector. The stock closed at $2.33, down $6.04.
Sovereign was swept up in broad sell-off of midsize banks. Investors feared the credit problems that had forced the sale of Wachovia's banking operations would spread to other institutions, including the Ohio banks Fifth Third Bancorp, down 44 percent, and National City Corp., down 63 percent.
"Sovereign is assumed to be one of the weaklings as the market looks around for who might be next," said Gary Townsend, a hedge-fund manager in Chevy Chase, Md., specializing in bank stocks. He said he has not owned shares of the bank.
Sovereign did not disclose any negative news that would have caused its shares to drop so much.
"We're not aware of anything specific to Sovereign's business that would justify this volatility in our stock," spokesman Andrew Gully said yesterday. The bank is "well-capitalized and fundamentally sound."
This guy's name McCain?
Analysts who follow the bank, as well as one of its large investors, said Sovereign may have suffered from a ricochet effect due to other banks' troubles. Two of Sovereign's largest stockholders were European institutions that lost large stakes in Washington Mutual, which failed last week, and in Wachovia, whose stock lost more than 80 percent of its value yesterday after regulators oversaw the sale of its banking assets to Citigroup Inc.
Read: European Banks to Follow Bush Blueprint for Bailout
These European investors subsequently sold Sovereign shares to avoid the risk of another loss, said the investor, who declined to be identified by name because of the sensitivity of the situation. That sparked a rush by other holders to unload their shares, too. "It was a cascade," the Sovereign investor said.
He identified the two investors as Norway's Norges Bank and London's Toscafund Asset Management, both of which held 5 percent of Sovereign as of July. Neither European firm could be reached for comment.
The Wall Street Journal reported last night that Sovereign's board plans a vote today to replace chief executive Joseph Campanelli with Paul Perrault, a former chief executive of Chittenden Corp., citing unidentified sources. Board members including P. Michael Ehlerman, Sovereign's nonexecutive chairman, wouldn't comment last night.
Sovereign, based near Philadelphia, expanded to Massachusetts largely by buying branches that BankBoston was forced to sell as a condition of its 1999 merger with Fleet Bank. Sovereign ranked third in Massachusetts, with $13 billion in deposits and 231 branches here, according to 2007 federal data.
Sovereign has moved recently to bolster its finances, first by raising $1.9 billion through a pair of stock offerings in May. Then, two weeks ago the bank said it unloaded a portfolio of troubled securities. While it incurred a loss of $254 million on the sale, Sovereign removed the uncertainty that the securities could be worth even less in the future.
Moreover, Sovereign also stands to benefit if congressional leaders revive a section of the failed bailout proposal aimed at banks. That provision would have given Sovereign and other banks that are holding near-worthless preferred stock of fallen mortgage lenders Fannie Mae and Freddie Mac a tax write-off. Sovereign had previously said it would take a charge for its $623 million holdings of those shares.
Bob Hughes, banking analyst at Keefe, Bruyette & Woods, ascribed Sovereign's plunge to "collateral damage" it suffered from other losses cutting through the banking sector. He added that Sovereign's capital position is relatively strong, and that the bank has only $200 million in debt coming due in the near term.
It is OFFENSIVE to use THAT TERM when describing MONEY!!!
When you say "collateral damage" be sure you mean PEOPLE MURDERED because of GEORGE W. BUSH'S LIES, 'kay?!!!
Yesterday's market plunge also hit other large publicly traded banks with operations in Massachusetts, including Bank of America and Citizens Bank's parent, Royal Bank of Scotland. --more--"
The whole damn thing is a house of cards!!!!
LET IT FALL!!!!!!
