Business NEWS
Ex-Sovereign Bancorp CEO Jay S. Sidhu Returns To Banking with New Century Bank as CEO
By Amarendra Bhushan for CEOWORLD Magazine Updated:June 19, 2009
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New Century Bank, with branches in Chester and Delaware Counties recently named Jay S. Sidhu Chairman and CEO. Sidhu, best known for significantly increasing the value of Sovereign Bancorp from $500 million to $90 billion, will also chair New Century Bank’s executive committee. At the same time the Bank was able to raise over $13 million in private capital.
Jay Sidhu, the architect of Sovereign Bancorp’s transformation into a Northeast powerhouse, returned to the banking industry as chief executive of Pennsylvania’s New Century Bank (NCYB).
The deal marks Sidhu’s first job in the banking industry since Sidhu was removed as CEO when the Sovereign board lost confidence in him after selling it to Spain’s Banco Santander (STD). He build Sovereign from a bank with $500 million in assets in 1996 to more than $90 billion before he left in 2006.
It is expected Sidhu will use the Phoenixville, Pa., bank as a springboard for other deals. New Century currently has five branches in Pennsylvania with $265 million in assets.
Under Sidhu’s watch, Sovereign Bancorp also delivered an average annual return of more than 24% per year for its shareholders between 1990 and the end of 2006. Over the past two years, Sidhu has been involved in consulting services for the financial industry as well as setting up Sidhu Capital Partners, a private equity firm.
Commenting on Sidhu’s appointment and the successful stock offering Kenneth (Ken) B. Mumma, New Century Bank Founder said, “We are thrilled that Jay has agreed to take the helm of New Century. In this weak economy, we have had our share of challenges, however, with the addition of Jay and the successful capital raise, we believe we have achieved our goal of positioning New Century Bank to successfully move to the next level of growth while creating long-term shareholder value.”
“Jay has been invaluable in helping us to complete our recent stock offering during the short period that he has been on our board,” added Mumma, the Bank’s former Chairman and CEO.
Mumma, who has been named Chair of New Century Bank’s Executive Committee, went on to say, “The additional $13.6 million of equity places the Bank in a strong competitive position with tremendous potential in our market. We believe Jay, with his demonstrated history of achieving success, is the right person to maximize this potential to the benefit of our customers and shareholders.”
Sidhu commented, “I believe that there is a tremendous need for a strong, well-capitalized, community-oriented bank today. New Century Bank has a very good base, excellent capital, and serves a terrific geographic market and we are now well poised to achieve significant growth in customers, revenues and shareholder value. We look forward to continuing to serve our community in a way that makes a substantial impact on the region.”
“I look forward to working with Ken and the New Century Bank board,” Sidhu continued. “With an extremely strong balance sheet, the Bank has substantial opportunities for organic growth as well as for mergers and acquisitions.”
Stradley Ronon Stevens & Young, LLP has acted as the Bank’s legal advisor and Sandler O’Neill & Partners, L.P. served as financial advisor to the Bank in connection with the capital raise.
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