Sovereign Bancorp, Inc.
Lehman Brothers
Fourth Annual Conference
New York City
September 14, 2006
Forward-Looking Statements
 This presentation contains statements of Sovereign Bancorp, Inc.’s
(the “Company”) strategies, plans and objectives, estimates of
future operating results for Sovereign Bancorp, Inc. as well as
estimates of financial condition, operating efficiencies, revenue
creation and shareholder value
 These statements and estimates constitute forward-looking
statements (within the meaning of the Private Securities Litigation
Reform Act of 1995) which involve significant risks and
uncertainties. Actual results may differ materially from the results
discussed in these forward-looking statements
 Factors that might cause such a difference include, but are not
limited to: general economic conditions, changes in interest rates,
deposit flows, loan demand, real estate values, and competition;
changes in accounting principles, policies, or guidelines; changes in
legislation or regulation; and other economic, competitive,
governmental, regulatory, and other technological factors affecting
the Company’s operations, pricing, products and services
2
Forward-Looking Statements
In addition, this presentation and filing contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, with respect to the financial condition, results of operations
and business of Sovereign Bancorp, Inc. and the merger of Independence Community Bank Corp.
with and into Sovereign that are subject to various factors which could cause actual results to
differ materially from such projections or estimates. Such factors include, but are not limited to,
the following: (1) the businesses of Independence Community Bank Corp. may not be combined
successfully with Sovereign’s businesses, or such combinations may take longer to accomplish
than expected; (2) expected cost savings from the merger cannot be fully realized or realized
within the expected timeframes; (3) operating costs, customer loss and business disruption
following the merger, including adverse effects on relationships with employees, may be greater
than expected; (4) governmental approvals of the merger may not be obtained, or adverse
regulatory conditions may be imposed in connection with government approvals of the merger;
(5) adverse governmental or regulatory policies may be enacted; (6) the interest rate
environment may adversely impact the expected financial benefits of the merger, and compress
margins and adversely affect net interest income; (7) the risks associated with continued
diversification of assets and adverse changes to credit quality; (8) competitive pressures from
other financial service companies in Independence Community Bank Corp.’s and Sovereign’s
markets may increase significantly; (9) the risk of an economic slowdown that would adversely
affect credit quality and loan originations; (10) other economic, competitive, governmental,
regulatory, and technological factors affecting Sovereign's operations, integrations, pricing,
products and services; and (11) acts of terrorism or domestic or foreign military conflicts; and
acts of God, including natural disasters. Other factors that may cause actual results to differ
from forward-looking statements are described in Sovereign’s filings with the Securities and
Exchange Commission.
3
Overview of Sovereign
An Exceptional Franchise Serving the
Northeastern United States
 17th largest bank in
U.S. with $89 billion in
assets
 785 branches
& over
2,000 ATM’s
 Approx. 12,000 team
members
5 Largest MSA’s in Northeast U.S.
No. of SOV Mkt SOV
CBO's
Share
Rank
Source: SNL DataSource
5
New York
222
2.10%
9
Philadelphia
84
3.05%
7
Boston
175
6.58%
3
Providence
56
6.03%
3
Hartford
29
4.58%
6
Sovereign’s Demographics
Median
Household
Income1 ($)
Connecticut
1
2
3
4
5
Hispanic
Population2
(%)
Number of
Universities3
Number of
Students4
$63,462
10.0%
45
170,616
Maryland
61,384
4.7
62
300,269
Massachusetts
63,171
8.3
122
431,224
New
Hampshire
59,545
1.6
25
68,523
New Jersey
63,135
14.3
58
361,733
New York
51,187
16.8
307
1,107,270
Pennsylvania
48,534
3.2
262
654,826
Rhode Island
49,924
9.1
13
77,417
Sovereign’s
Footprint
59,010
16.05
United States
49,747
14.1
Median Household Income as of 2005
Hispanic Population as of 2004
Number of degree-granting institutions as of 2004
Number of students enrolled in degree-granting institutions as of 2002
Excluding CA, TX and FL 41% of Hispanic population is in Sovereign’s footprint
6
Combined ATM Branding Opportunities
Sovereign ATM sites 905
ICBC ATMs sites 237
CVS Locations - 879
NY/NJ CVS 484
7
Sovereign Has Significantly Transformed Its
Business Model Over The Past Decade…
Loan Composition (%)
Sovereign 1995
Sovereign 2005
Commercial RE
3.5%
HE
9.8%
C&I
0.3%
Consumer
0.9%
Peers 2005
Other
Consumer 1.1%
Residential RE
8.2%
16.7%
Consumer
11.2%
Residential RE
28.4%
C&I
21.5%
C&I
32.0%
HE
22.4%
Commercial RE
16.5%
Residential RE
85.5%
Loan yield: 7.29%
Peer loan yield: 8.89%
Spread to peers: (1.60%)
HE
18.1%
Commercial RE
23.9%
Loan yield: 5.72%
Peer loan yield: 5.95%
Spread to peers: (0.23%)
Deposit Composition (%)
Sovereign 2005
Sovereign 1995
Jumbo CD
2.2% Transaction
10.9%
Retail CD
54.2%
Peers 2005
Jumbo CD
14.9%
Retail CD
14.9%
Savings & MMDA
32.7%
Savings & MMDA
30.2%
Cost of deposits: 4.25%
Peer cost of deposits: 3.56%
Spread to peers: 0.69%
Source: Wall Street Research. Bank peers includes ASO,
BBT, CMA, FITB, KEY, MI, MTB, NCC, PNC, RF, STI and UB
Jumbo CD
11.0%
Transaction
40.0%
Transaction
28.5%
Retail CD
16.1%
Cost of deposits: 2.00%
Peer cost of deposits: 1.69%
Spread to peers: 0.31%
8
Foreign
5.4%
Savings & MMDA
39.0%
…through a Combination of Organic Growth and
Acquisitions…
Deposits ($ billion)
Organic deposits
Net change in deposits from acquisitions/(sales)
$38.0
$2.9
$32.6
$24.5
$5.0
$8.7
$0.9
$4.1
1995
$9.5
$7.3
1997
$12.0
$3.9
$8.5
$2.2
$0.1
$8.6
1996
Organic growth
$12.3
$0.5
1999
($0.3)
$23.7
$25.6
($0.0)
$27.4
$35.1
$28.4
$12.9
2000
(15.7%) (11.0%) (6.5%)
$4.2
$27.3
$1.3
$11.6
$11.5
1998
$26.9
$23.3
2001
7.4%
2002
(3.4%)
9.6%
2003
2004
2005
1.9%
3.7%
7.8%
Assets ($ billion)
Organic assets
Net change in assets from acquisitions/(sales)
$63.7
$54.5
$8.1
$0.9
$7.2
$15.3
1995
1996
Organic growth
$0.1
$15.2
$26.6
$21.9
$17.7
$5.1
$12.6
$5.3
$16.7
1997
1998
(17.8%) (5.7%)
$33.5
$35.5
$1.5
$10.2
$25.1
$23.3
1999
2000
14.7% (12.5%)
2001
6.9%
$43.5
$39.6
($0.3)
$1.5
$35.8
$38.1
2002
7.2%
($0.0)
2003
10.0%
$43.5
$5.4
$6.2
$48.3
2004
11.0%
2005
7.0%
Source: Wall Street Research.
Note: Data as of December 31, 2005; organic asset and deposit data is adjusted for whole company and branch
acquisitions and divestitures. 2005YE data not pro forma for pending acquisition of ICBC
9
$58.3
… While Continuing to Improve in Key
Operating Ratios
Key Operating Ratios
SOV
(%)
1995
Net interest margin
Interest spread¹
Efficiency ratio
Operating leverage²
Operating cash ROAA
Operating cash ROATE
Fee income/Op. revenue
2.54%
2.49
49.9
94.1
0.94
15.9
12.7
Non-CDs/Total deposits
Loans/Deposits
Securities/Assets
TCE/TA
Tier 1 leverage
43.6%
92.8
36.7
2.61
3.98
62.2%
89.2
21.8
1.66
3.09
NCOs/Avg loans
NPAs/Loans & OREO
Reserves/NPLs
0.06%
0.92
88
0.35%
0.85
137

2000
2005
3.06%
2.81
54.3
95.7
0.99
46.9
20.1
 from 95
3.09%
2.81
49.0
120.3
1.26
24.5
28.6
Bank peer
median
Thrift peer
median
2005
2005
0.55%
0.32
(0.9)
NM
0.32
8.6
15.9
3.72%
3.20
59.4
94.1
1.59
22.0
40.2
2.60%
2.37
34.1
109.7
1.12
19.5
17.0
70.1%
114.5
19.7
4.74
6.68
26.5%
21.7
(17.0)
2.13
2.70
61.7%
101.0
16.0
6.48
7.20
46.8%
129.8
17.2
5.41
6.76
0.20%
0.47
231
0.14%
(0.45)
143
0.24%
0.41
346
0.01%
0.40
104
Continued improvement in profitability ratios driven by
• Greater consumer and commercial loans; conservative asset quality
• Non-CD deposit growth
• Expense control


High quality earnings; prudent risk management
Improving capital ratios
Source: Wall Street Research. Note: Financial data as reported, not pro forma for pending acquisitions. Bank peers includes ASO,
BBT, CMA, FITB, KEY, MI, MTB, NCC, PNC, RF, STI and UB; thrift peers include AF, GDW, NYB and WM
¹ Interest spread defined as yield on interest-earning assets less cost of interest bearing liabilities
² Operating leverage defined as ratio of YOY revenue growth over YOY core cash operating expense growth
10
Positive Operating Leverage
2005
2004
% Change
Total Revenue
$2.2bn
$1.9bn
18.7%
G&A Expenses
$1.1bn
$ .9bn
15.5%
Operating Leverage
1.2x
Results in Continued Improvement
in Efficiency Ratio
53.49%
52.90%
51.31%
50.33%
49.00%
2001
2002
2003
2004
2005
Efficiency ratio equals G&A expenses as a percentage of total revenue, defined as the sum of
net interest income and total fees and other income before securities transactions
11
Improving Credit Quality
Non-Performing Loans to
Total Loans
1.03%
Allowance to
Non-Performing Assets
1.00%
0.76%
2001
2002
2003
0.39%
0.43%
2004
2005
Net Charge-offs
to Average Loans
0.58%
285.0%
231.0%
0.55%
0.42%
0.36%
0.20%
2001
2002
2003
2004
2005
12
116.0%
116.0%
2001
2002
149.0%
2003
2004
2005
Consistent Growth in Operating/Cash Earnings
$900
4-year CAGR
GAAP Net Income –
Operating/Cash Earnings –
$
Per Share
55%
41%
19%
7%
$2.50
$800
Net Income
$600
$1.50
$500
$400
$1.00
$300
$200
$0.50
$100
$0
$0.00
2001
2002
2003
Net Inc ome
GAAP EPS
2004
2005
Operating/Cash Net Inc ome
Operating/Cash EPS
Operating/cash earnings excludes most non-cash, non-operating charges. Please see appendix for
reconciliation of net income to operating/cash earnings, as well as related per share amounts.
Source: 2005 annual report
13
Earnings per Share
$2.00
$700
Improving Operating Metrics
Improved Operating Return
on Average Assets
1.26%
1.09%
1.09%
2001
2002
1.14%
2003
Operating/Cash Return on
Average Tangible Equity
1.19%
2004
2005
Average Tangible Equity
($ in millions)
52.31%
35.62%
$2,321
$2,758
$1,662
$720
2001
$1,141
2002
2003
2004
2005
14
2001
2002
27.87%
25.94%
27.71%
2003
2004
2005
Above Average Shareholder Value Creation
3-Year Stock Price Performance
Percent
Appreciation
150.0%
31.7%
30.1%
25.6%
Relative Indexed Prices
125.0%
21.8%
10.5%
100.0%
75.0%
Sep-03
Mar-04
Sovereign
Sep-04
S&P 500 Banks Index
09/01/06 closing price of $20.72
Mar-05
S&P 500
15
Sep-05
Dow Jones
Mar-06
LB Mid-Cap Banks
Sep-06
Above Average Shareholder Value Creation
5-Year Stock Price Performance
Percent
Appreciation
250.0%
225.0%
200.0%
Relative Indexed Prices
96.4%
175.0%
150.0%
40.4%
27.9%
125.0%
15.7%
15.2%
100.0%
75.0%
50.0%
Sep-01
Mar-02
Sep-02
Sovereign
Mar-03
Sep-03
S&P 500 Banks Index
09/01/06 closing price of $20.72
Mar-04
S&P 500
16
Sep-04
Mar-05
Dow Jones
Sep-05
LB Mid-Cap Banks
Mar-06
Sep-06
Above Average Shareholder Value Creation
10-Year Stock Price Performance
Percent
Appreciation
400.0%
350.0%
Relative Indexed Prices
300.0%
193.1%
178.7%
250.0%
116.6%
104.1%
200.0%
101.1%
150.0%
100.0%
50.0%
Sep-96
Dec-97
Mar-99
Sovereign
Jun-00
S&P 500 Banks Index
09/01/06 closing price of $20.72
Sep-01
S&P 500
17
Dec-02
Dow Jones
Mar-04
Jun-05
LB Mid-Cap Banks
Sep-06
The Santander Partnership Building a Better Bank for
Shareholders, Customers
and Community
Global Footprint of Santander
19
Benefits of the Santander Transaction

24% shareholder

Access to capital

Santander partnership provides sharing of best practices and
operational know-how

Positioned for “full” price possible sale to Santander or
another party over 2-5 year period after closing
20
Opportunities to Share Best Practices

Hispanic Market


Auto Finance



Santander is the largest non-captive auto finance player in Europe,
financing 1 million cars; Sovereign is a leading auto finance player in the
northeastern U.S.
Cash Management


40% of Hispanics in Sovereign and Independence footprint are Puerto
Ricans, Santander has the second largest bank in Puerto Rico
Sovereign and Santander are discussing the outsourcing of all Santander’s
U.S. dollar cash management business to Sovereign
Funding/Access to Capital

S&P upgraded Sovereign and subsidiaries one notch following closing

Moody’s upgraded Sovereign and subsidiaries two notches following closing
Operational Enhancements and Technology Sharing

Santander has world-class banking related technology systems which they
intend to share with Sovereign
21
Emerging Markets in the
Northeast United States
Demographic Explosion From Emerging Markets
Compounded Annual Growth Rate in U.S. Population, Hispanic and
Asian Americans between Decades
10%
U.S.
8.6%
Hispanic
7.6%
8%
Asian Americans
6.0%
6%
4.9%
4.7%
4.3%
4%
3.1%
2.6%
2%
1.1%
1.2%
0.9%
0.9%
0%
1980
1990
2000
2010
The Hispanic and Asian-American population growth has
significantly outpaced the General Market over the past 3 decades
23
Our Footprint is a “Hidden Gem” for Hispanics…
In Millions
Bankable Hispanics by Top 5 Geographic Segments
8
Hispanic Bankable Pop: Density per Sq Mi
7
California
44
New York
6
42
Florida
37
Sov States
5
23
Illinois
18
Texas
4
-
16
10
20
30
40
6.92
3
4.28
2
1.98
1.97
1
1.72
California
Sq Mi (Land) 155,519
Texas
Florida
New York
261,797
53,927
47,214
24
Sov States
75,738
50
…and for Asians as well
In Millions
Bankable Asians by Top 5 Geographic Segments
3.0
Asian Bankable Population Density per Sq Mi
78
Haw aii
2.5
42
New York
24
California
2.0
15
Sov States
Texas
1.5
2.82
2
-
20
40
60
80
1.0
0.95
0.5
0.81
0.42
0.42
0.0
California
Sq Mi (Land) 155,519
Sov States
75,738
25
New York
Texas
Hawaii
47,214
261,797
6,423
100
Pilot Program in Rhode Island is Underway
26
Some Local Efforts Emphasize Our Service
Culture
27
Current Situation and
Potential Shareholder
Value Creation
Highlights and Challenges in This
Environment

19% annualized linked quarter organic deposit growth

18% annualized linked quarter organic loan growth

Only 2.5% annualized linked quarter expense growth

Stable asset quality

Margin compression continues

Restructured balance sheet following Independence
acquisition

Independence fully integrated by end of third quarter
29
Major Goals for 2006 – 2007
 Positive operating/cash earnings growth in this flat to
inverted yield curve environment
 Achieve or exceed financial assumptions of
Independence acquisition with flawless integration
 Embark on strategy for capturing larger share of the
Hispanic market
 Maintain expense control discipline
 Stable asset quality
30
Sovereign is committed to building
above-average short-term and long-term
shareholder value while building a better
bank for our customers, communities
and team members
31
Appendix
Operating and Cash Earnings Per Share
 This presentation contains financial information determined by
methods other than in accordance with U.S. Generally Accepted
Accounting Principles (“GAAP”)
 Sovereign’s management uses the non-GAAP measures of Operating
Earnings and Cash Earnings in its analysis of the company’s
performance. These measures typically adjust net income
determined in accordance with GAAP to exclude the effects of special
items, including significant gains or losses that are unusual in nature
or are associated with acquiring and integrating businesses, and
certain non-cash charges
 Since certain of these items and their impact on Sovereign’s
performance are difficult to predict, management believes
presentations of financial measures excluding the impact of these
items provide useful supplemental information in evaluating the
operating results of Sovereign’s core businesses
 These disclosures should not be viewed as a substitute for net income
determined in accordance with GAAP, nor are they necessarily
comparable to non-GAAP performance measures, which may be
presented by other companies
33
One Non-GAAP Financial Measure

Effective in the fourth quarter of 2004, Sovereign moved to
one non-GAAP financial measure – Operating/Cash Earnings
 Provides greater financial transparency
 Provides useful supplemental information when evaluating
Sovereign’s core businesses
 Consistent with SEC’s publicly stated desire for fewer non-GAAP
disclosures

Operating/Cash Earnings represent net income adjusted for
after-tax effects of merger-related and integration charges,
any other non-recurring charges and the amortization of
intangible assets
34
Reconciliation of Operating/Cash Earnings
to GAAP Earnings - Actual
Year Ended December 31,
($ in thousands, all numbers shown net of tax)
2005
Net Income/(loss) as reported
Merger-related and
integration costs
2004
2003
2002
2001
$ 701,587
$ 453,552
$ 401,851
$ 341,985
$ 116,821
8,284
30,134
10,316
3,900
3,900
(1)
Provision for Loan Loss
Restructuring of Balance Sheet
Restructuring Charges
42,605
18,838
6,549
2,589
5,525
Impairment Charge for FNMA and
FHLMC Preferred Stock
20,891
Financing-Related Adjustments
Non-solicitation Expense
Proxy and related professional fees
Amoritzation of Intangibles
Operating/Cash Earnings for EPS
purposes
158,106
3,788
47,984
51,186
50,100
54,121
89,408
$ 764,232
$ 602,268
$ 470,789
$ 410,322
$ 376,409
Note: Further details are available on our web site at www.sovereignbank.com and in our Annual Reports to
Shareholders
(1)
Net Income for EPS purposes
35
Reconciliation of Operating/Cash EPS to
GAAP EPS - Actual
Year Ended December 31,
2005
2004
Diluted Earnings per Share
$
1.68
$
1.31
Merger-related and
integration costs
$
0.02
$
Provision for Loan Loss
Loss on debt extinguishment
Restructuring Charges
$
2003
$
$
1.17
0.09
$
0.04
$
0.01
$
0.01
$
0.12
$
1.31
2002
0.07
0.01
Impairment Charge for FNMA and
FHLMC Preferred Stock
$
2001
$
0.43
$
0.03
$
0.02
$
0.59
0.06
Financing-Related Adjustments
Non-solicitation Expense
Proxy and related professional fees
$
0.01
Amoritzation of Intangibles
$
0.11
$
0.15
$
0.16
$
0.18
$
0.33
Operating/Cash Earnings per Share
$
1.83
$
1.74
$
1.54
$
1.40
$
1.40
Note: Further details are available on our web site at www.sovereignbank.com and in our Annual Reports to Shareholders
36
Sovereign Bancorp, Inc.