Dear Clients and Shareholders,

The Board of Directors and executive management of Sovereign Bank are pleased to announce another quarter of profitability and growth for our institution. As of March 31, 2009, the bank reported roughly $774 million in total assets, a 22% increase from March 31, 2008. Of equal importance, Sovereign posted positive earnings for the period.

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These results are even more impressive when considered in the context of the significant challenges faced by financial institutions in the current economic environment. Thus far, Sovereign Bank’s long-held conservative business model has served our institution well. Of the 109 banks receiving their charters in the United States in 2004 (Sovereign’s FDIC-designated “peer group”), Sovereign Bank was the largest in average asset size and the second most profitable for the year ending December 31, 2008.

Consistent with our history, Sovereign’s executive management and Board of Directors continue honing our business strategy to proactively address market concerns and to optimize our success during these trying times.

In November 2008, Sovereign’s shareholders voted on and approved an amendment to the Articles of Sovereign Bancshares to provide for the issuance of Senior Preferred shares. As outlined then, one application of this provision involved the acceptance and utilization of funds issued through the federal government’s TARP Capital Purchase Program (“CPP”).

We are pleased to inform you Sovereign Bancshares accepted $18,215,000 in funds under this program in the first quarter of 2009. These funds are held by Sovereign Bancshares as Tier 1 eligible non-voting Senior Preferred shares. From a total cost perspective, the program represents the most inexpensive source of Tier 1 capital available in today’s marketplace and an affordable method for eligible banks to bolster their balance sheets. It should also be noted the CPP funds represent an investment in Sovereign Bank by the US Treasury and are not any form of giveaway or “bail-out” funds.

Ever vigilant in our objective to maximize shareholder value while growing the bank in a responsible manner, Sovereign’s Board of Directors and executive management view the CPP funds as a logical means to further fortify our already strong balance sheet and strategically position our institution to better capitalize on anticipated opportunities within the marketplace. With this in mind, we continue to explore diverse avenues for the bank’s success and plan to present new opportunities to our shareholders in the second quarter of 2009.

To our valued clients and shareholders, we thank you for your ongoing patronage of Sovereign for your banking business. And, as always, we appreciate your ongoing referrals of both depository and loan prospects. We look forward to continuing to serve you.