First-quarter net income for the Philadelphia-based company rose to $100.1 million, or 20 cents per share, from $48.1 million, or 9 cents, a year earlier.
NEW YORK (Reuters) - Sovereign Bancorp Inc <SOV.N>, the second-largest U.S. savings and loan, on Wednesday said quarterly profit roughly doubled from a year earlier, when the company took a big charge, though credit losses soared.
First-quarter net income for the Philadelphia-based company rose to $100.1 million, or 20 cents per share, from $48.1 million, or 9 cents, a year earlier.
Analysts on average expected profit of 21 cents per share, according to Reuters Estimates.
But profit at Sovereign fell 43 percent, excluding $128.7 million of charges a year earlier to cut jobs and restructure its balance sheet.
!ADVERTISEMENT!"We are continuing to make progress on our goals to reduce risk and improve the quality of our earnings stream," Chief Executive Joseph Campanelli said in a statement. "Current turbulent financial markets provide a challenging credit environment."
In morning trading, Sovereign shares rose 42 cents, or 5 percent, to $8.77 on the New York Stock Exchange.
Sovereign set aside $135 million for credit losses, triple the year-earlier level, and net charge-offs tripled to $74.3 million. Nonperforming assets rose 74 percent to $484.4 million.
Results improved from the fourth quarter, when Sovereign suffered a $1.6 billion loss and canceled its dividend after write-downs for consumer credit losses and a 2006 purchase of Brooklyn, New York's Independence Community Bank Corp.
Campanelli is trying to focus Sovereign on its core Northeast and mid-Atlantic markets, and sell a troubled portfolio of residential mortgages and auto loans.
Lending income dipped 1 percent from a year earlier to $482.2 million, despite an increase in net interest margin to 2.88 percent from 2.70 percent. Average loan balances and deposits both fell $3 billion from a year earlier.
Sovereign has been an unsuccessful investment for Spain's Banco Santander SA <SAN.MC>, which took a 20 percent stake in 2006 and now owns about 25 percent. Santander wrote off 737 million euros (US$1.17 billion) of its investment in February.
Sovereign operates about 750 banking offices in eight U.S. states, and ended March with $81.9 billion of assets.
Through Tuesday, Sovereign shares had fallen 27 percent this year, compared with a 10 percent drop in the KBW Regional Bank Index <.KRX>.
(1 euro = US$1.59)
(Editing by Steve Orlofsky and Derek Caney)
