Sovereign Bancorp, Inc. Merrill Lynch Financial Services Conference November 15 , 2004

1. Sovereign Bancorp, Inc.Merrill Lynch Financial Services ConferenceNovember 15, 2004

2. Forward Looking Statement • This presentation contains statements of Sovereign’s vision, mission, strategies, goals, beliefs, plans, objectives, expectations, anticipations, estimates, intentions, financial condition, results of operation, 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; inflation; deposit flows; loan demand; real estate values; competition; changes in accounting principles, policies, or guidelines; integration of acquired assets, liabilities, customers, systems and management personnel into Sovereign’s operations and the ability to realize the related revenue synergies and cost savings within expected time frames; possibility that expected merger-related charges are materially greater than forecasted or that final purchase price allocations based on fair value of the acquired assets and liabilities at acquisition date and related adjustments to yield and/or amortization of the acquired assets and liabilities are materially different from those forecasted; deposit attrition, customer loss, revenue loss and business disruption following Sovereign’s acquisitions, including adverse effects on relationships with employees may be greater than expected; anticipated acquisitions may not close on the expected closing date or it may not close; the conditions to closing anticipated acquisitions, including stockholder and regulatory approvals, may not be satisfied; Sovereign’s timely development of competitive new products and services in a changing environment and the acceptance of such products and services by customers; the willingness of customers to substitute competitors’ products and services and vice versa; the ability of Sovereign and its third party processing and related systems on a timely and acceptable basis and within projected cost estimates; the impact of changes in financial services policies, laws and regulations, including laws, regulations, policies and practices concerning taxes, banking, capital, liquidity, proper accounting treatment, securities and insurance, and the application thereof by regulatory bodies and the impact of changes in and interpretation of generally accepted accounting principles: technological changes; changes in consumer spending and saving habits; unanticipated regulatory or judicial proceedings; changes in asset quality; employee retention; reserve adequacy; changes in legislation or regulation or policy or the application thereof; and other economic, competitive, governmental, regulatory, and technological factors affecting the Company’s operations, pricing, products and services.

3. Additional Information About Waypoint Merger Sovereign and Waypoint will be filing documents concerning the merger with the Securities and Exchange Commission, including a registration statement on Form S-4 containing a prospectus/proxy statement which will be distributed to shareholders of Waypoint. Investors are urged to read the registration statement and the proxy statement/prospectus regarding the proposed transaction when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. Investors will be able to obtain a free copy of the proxy statement/prospectus, as well as other filings containing information about Sovereign and Waypoint, free of charge on the SEC's Internet site (http://www.sec.gov). In addition, documents filed by Sovereign with the SEC, including filings that will be incorporated by reference in the prospectus/proxy statement, can be obtained, without charge, by directing a request to Sovereign Bancorp, Inc., Investor Relations, 1130 Berkshire Boulevard, Wyomissing, Pennsylvania 19610 (Tel: 610-988-0300). In addition, documents filed by Waypoint with the SEC, including filings that will be incorporated by reference in the prospectus/proxy statement, can be obtained, without charge, by directing a request to Waypoint Financial Corp., 235 North Second Street, Harrisburg, Pennsylvania 17101, Attn: Richard C. Ruben, Executive Vice President and Corporate Secretary (Tel: 717-236-4041). Directors and executive officers of Waypoint may be deemed to be participants in the solicitation of proxies from the shareholders of Waypoint in connection with the merger. Information about the directors and executive officers of Waypoint and their ownership of Waypoint common stock is set forth in Waypoint’s proxy statement for its 2003 annual meeting of shareholders, as filed with the SEC on April 21, 2003. Additional information regarding the interests of those participants may be obtained by reading the prospectus/proxy statement regarding the proposed merger transaction when it becomes available. INVESTORS SHOULD READ THE PROSPECTUS/PROXY STATEMENT AND OTHER DOCUMENTS TO BE FILED WITH THE SEC CAREFULLY BEFORE MAKING A DECISION CONCERNING THE MERGER. 

4. Non-GAAP Financial Measures This report 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, and the related per share amounts, in their analysis of the company's performance. These measures, as used by Sovereign, 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 or integrating businesses, and certain non-cash charges. Operating earnings represent net income adjusted for after tax effects of merger-related and integration charges and the loss on early extinguishment of debt. The forward-looking earnings guidance for 2004 excludes the anticipated impact of EITF 04-8, which will be effective in the fourth quarter of 2004. Cash earnings are operating earnings excluding the after-tax effect of amortization of intangible assets and stock-based compensation expense associated with stock options, restricted stock, bonus deferral plans and ESOP awards. 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 that may be presented by other companies.

5. Reconciliation of Cash and Operating Earnings to GAAP Earnings ($ in thousands, all numbers shown net of tax)

6. Reconciliation of Cash and Operating Earnings to GAAP Earnings (Per Share)

7. Overview of Sovereign

8. An Exceptional Franchise Serving from South of Philadelphia to Boston and Beyond… • $60 billion bank • pro forma for Waypoint • 665 branches • pro forma & ~1,000 ATM’s • 18th largest bank in the U.S. pro forma all deals • Top 20 Small Business Lenders in the U.S. Market Share Massachusetts #3 Rhode Island #3 New Hampshire #5 Pennsylvania #5 * New Jersey #6 Connecticut #10 Maryland #39 * Pro forma for Waypoint Key: Sovereign Branches Waypoint Branches Source: SNL DataSource

9. Sovereign’s Footprint

10. Sovereign’s Footprint • We have the second most affluent footprint amongst all large banks:

11. Sovereign’s Footprint: • We have strong market share in the more consolidated states, and are able to grow in the more fragmented states:

12. Northeastern US Banking Climate • Aside from New York money center banks, the Northeastern US market is controlled by 3 large out-of-market consolidators (Bank of America, Wachovia and Royal Bank of Scotland), and a handful of regional banks competing for market share 1) Excludes New York City – headquartered institutions. Data as of 06/30/2004. Assets and Deposits are pro forma for all pending deals.

13. Total US Banking Climate • Conclusion: The northeastern United States has created an opportunity for a super-regional to emerge, similar to Fifth Third Bancorp in the Midwest and BB&T in the South

14. Core Deposits as Compared to Peers As of June 30, 2004

15. Strong Loan and Deposit Mix Loan Mix: 9/04 Balance - $35.3 billion 9/04 Yield – 5.05% 23% 39% 38% Deposit Mix: 22% 42% 9/04 Balance - $33.1 billion 9/04 Cost of Funds – 1.04% 36%

16. Sovereign’s Historical Performance

17. Third Quarter 2004 Financial Highlights: • Net income of $83 million, including special debt redemption charge of $43 million and a merger and integration charge of $18 million; earnings per share of $.24, including charges of $.13 for debt redemption and $.05 for merger and integration • Operating earnings of $143 million, up 31% from 2003; operating earnings per share of $.42, up 14% from 2003 • Cash earnings of $162 million, up 30% from 2003; cash earnings per share of $.47, up 12% from 2003 • Consumer and Commercial loans, excluding impact of acquisitions, increased 28% and 9%, respectively, from the third quarter of 2003 • Consumer and Commercial fee revenues of $63 million and $32 million, respectively, each up 17% from a year earlier • Core deposits up 21% from 2003 and 13% from the second quarter of 2004. Excluding acquisitions, core deposits up 6% from third quarter of 2003 • Sovereign continues to be positioned to benefit from higher interest rates

18. Non-Financial Highlights: • Sovereign Bancorp was added to the S&P 500 index in June • Named to The Forbes Platinum 400 • Identified as one of the most admired financial industry companies in the nation by Fortune for the third consecutive year • Obtained a major banking services contract with the state of Massachusetts, taking the business away from FleetBoston • Received an “outstanding” CRA rating from the OTS • Completed in February of 2004 the acquisition of First Essex Bancorp and in July of 2004 the acquisition of Seacoast Financial Services Corporation • Announced in March 2004 the acquisition of Waypoint Financial Corp., expected to close in January 2005

19. Strengthened Balance Sheet Sovereign Bancorp (BHC): • All high-cost debt now removed from structure • $500 million secured senior note at approximately 8.00% all-in redeemed in September 2004 • Replaced with $300 million unsecured senior note at 3-month LIBOR + 33 bps • ~ $800 million TCE generation in 2005 provides additional flexibility • Maintain double-leverage ratio at ~120% • Strive for further rating agency upgrades Sovereign Bank (Bank): • Maintain bank capital at $500+ million cushion to well-capitalized guidelines • Strive for further rating agency upgrades

20. Strong Earnings Growth 5 year Operating Earnings CAGR of 20% 5 year Cash Earnings CAGR of 21%

21. 1-Year Stock Price Performance 11/05/04 closing price of $22.12

22. 3-Year Stock Price Performance 11/05/04 closing price of $22.12

23. 5-Year Stock Price Performance 11/05/04 closing price of $22.12

24. Achievements Over Last 5-Years September of 2004 marked the five-year anniversary of Sovereign’s announcement of the Fleet/BankBoston branch acquisition. At that time Sovereign set out specific financial goals: • Execute a smooth integration and build the franchise value of the company. Since the third quarter of 2000, Sovereign’s commercial loans have grown 14% and consumer loans have grown 20% on average per year. Core deposits have grown 15% on average per year. Banking fees have increased 30% on average per year. Operating expenses have increased only 1.5% on average per year. Sovereign’s has reduced their efficiency ratio by more than 500 basis points. • Grow net income and earnings per share by 10% per year, leading to $2.00 in cash earnings per share by 2005. Since Sovereign’s successful integration in the third quarter of 2000, the annual growth rate in operating earnings per share has been 10%, and since 2001, Sovereign’s operating net income annual growth rate has been 25%. Cash earnings per share goals for 2004 are $1.85 to $1.90, 2005 cash earnings per share should be well in excess of our goal of $2.00.

25. Achievements Over Last 5-Years • Restore Sovereign Bancorp’s capital ratios to Fed holding company well-capitalized levels by 2005.Sovereign Bancorp reached these levels by early 2003, and today has a Tier 1 leverage ratio of 6.56%, or more than 150 basis points in excess of the well-capitalized guideline. • Restore debt ratings to pre-Fleet acquisition levels by 2005. Sovereign reached those levels by 2004, returning to investment grade status with credit ratings agencies. • Not deviate from our Critical Success Factors. Sovereign has remained committed to their four critical success factors of Superior Asset Quality, Superior Risk Management, Strong Sales and Service Culture and Superior Productivity. • Payoff all high-cost debt by the end of 2006. In September of 2004, Sovereign redeemed one of the last pieces of high-cost debt financing incurred in this transaction

26. Comparative Shareholder Returns

27. Sovereign’s Business Strategy

28. Sovereign’s Business Strategy Combining the best of a large bank with the best of a smaller community bank. • Best of a Large Bank: • Products • Services • Technology • Brand • Delivery channels / distribution system • Talent • Diversification • Sophistication of risk management • Best of a Small Bank: • Flatter structure • Divided into 10 geographic markets • Local decision making • Active community involvement culture • Cross functional lines to deliver bank to customer • Treat customers as “individuals”

29. Sovereign’s 10 Local Markets Mid-Atlantic Division Jim Lynch, Chairman and CEO New England Division Joe Campanelli, Chairman and CEO • New Jersey Market • Central PA / Northern MD Market • Philadelphia, Delaware and Chester counties / Southern NJ Market • Northern PA Market • Bucks / Montgomery counties Market • Massachusetts Market • New Hampshire Market • Rhode Island Market • Connecticut / Western MA Market • Islands – Nantucket / Martha’s Vineyard Market 10 Local Markets, each with a CEO responsible for meeting profitability and revenue goals

30. Sovereign’s Banking Structure Market CEO Commercial Real Estate Lenders Commercial Lenders Cash Management Representatives Small Business Lenders Retail Branches Financial Consultants

31. Absolute Clarity Regarding Target Markets • Consumer  Middle Income Households • We target mass market with average household income of about $75,000+ • We differentiate on the basis of relationship selling and service delivered with high-touch and supported by convenience of technology • Goal to become dominant in all micro markets • Goal to cross-sell 6+ services to every household to entrench relationship and dramatically improve Bank profits

32. Absolute Clarity Regarding Target Markets • Commercial/Business  Small to Middle Market • We target in-market businesses with revenues of $1 - $100 million • We differentiate on the basis of quality of relationship managers, localized quick decision making, supported by superior products and technology • Goal to cross-sell 6+ services to entrench relationship and dramatically improve Bank profits

33. Strategy. With Clear Purpose and Direction. • There is nothing complicated about our strategy for moving forward • We are clear about our strategy, as well as our values, mission and goals • As we execute, we will remain committed to our critical success factors of: • Superior asset quality • Superior risk management • Strong sales and service culture that aligns team member performance with a recognition and rewards system • High level of productivity through revenue growth and efficient expense control

34. Critical Success Factor –Superior Asset Quality

35. Superior Loan Quality At September 30th non-performing assets and net charge-offs levels were the lowest levels in more than four years • Classified and Internally Criticized Loans have shown improvement for 9 quarters ($ in millions) 12/31/0212/31/036/30/049/30/04 Non-Accruals $231 $198 $151 $146 Non-Accruals % of Loans 1.00% .76% .52% .42% NPA’s $257 $220 $176 $169 NPA’s % of Assets .65% .51% .36% .30%

36. Credit Quality • All asset quality measures are pointing toward improved net charge-offs, continuing in 4Q of 2004 and into 2005 • Recent Acquisition of Seacoast and pending acquisition of Waypoint both improve our credit risk profile • Lower NCO’s forecasted and lower credit risk profile will reduce our need for annual loan loss provisioning in coming periods: • NCO’s anticipated to decrease to 40 basis point range for 2005 and beyond • Allowance as a % of loans will be dictated by credit quality and loan mix

37. Critical Success Factor –Superior Risk Management

38. Net Interest Income Sensitivity at 9/30/04 Superior Risk Management Sovereign continues to be well positioned for rising interest rates 4.8% 4.5% 1.7% -6.6%

39. Current A/L Position • Mildly asset sensitive • Net interest income increases 4.5% in a +200 bp shock test* at 9/30/04 • However, net interest income will expand faster than net interest margin • Reinvestment of cash flows still at lower yields than maturing assets • 100+ basis points of rate moves needed to meaningfully move our net interest margin, but net interest income increases immediately * Defined as the expected 12 month impact of an instantaneous 200bp parallel increase to all points of the existing Treasury curve

40. Why Are We Asset Sensitive? At September 30th… • $13.9 billion of assets tied to Prime,LIBOR, or CMT resets within 1 month following an increase or decrease in rates • Only $11.6 billion of liabilities tied to short-term indices Other Treasuries $2.7b 36% Investments 64% Residential Prime $6.5b 54% Commercial 46% Consumer Libor $4.7b 100% Commercial

41. Why Are We Asset Sensitive? Core Deposit Base… • $5.1 billion, or 15% of deposits at zero cost • $17.8 billion, or 54% of total deposits at administered rates – on average, move at ~25% of interest rate movements in a rising rate scenario • Growing equity base increases asset sensitive bias CD’s 22% or $7.4 bn Interest Bearing DDA 26% or $8.6 bn Non-Interest Bearing DDA 15% or $5.1 bn Money Market 26% or $8.4 bn Savings 11% or $3.7 bn

42. Asset/Liability Management • 2005 forecast assumes 3.00% Fed Funds rate by year-end, with ~50 basis point additional flattening of the Treasury curve • Recent debt redemption and new issuance will add ~ 5 to 6 basis points to net interest margin going forward • Core deposit bias allows for “pricing lag” as rates rise – assumed to move at ~25% of overall rise in rates (on average – will vary by category)

43. Critical Success Factor –Strong Sales and Service

44. Strong Sales and Service Culture Retail Accounts and Services per Household

45. Red Carpet Service Guarantees • Red Carpet Service was unveiled in January 2002 as a unique program that differentiates Sovereign from the competition • Six customer service guarantees were introduced at that time, and backed by $5 if Sovereign failed to uphold those guarantees • Red Carpet Service Guarantees were recently expanded to include other business lines within the bank, over 24 guarantees now exist • Guarantees exist within the following business units: • Community Banking • Consumer Lending • Mortgage Banking • ATM’s • Research/Records • Netbanking

46. Critical Success Factor –Productivity andExpense Control

47. Productivity and Expense Control On track to improve the efficiency ratio* more than 100 basis points in 2004 Efficiency Ratio * Efficiency ratio equals G&A expenses as a percentage of total revenue, excluding securities gains

48. Operating Efficiency • Rate of growth in G&A and total expenses is far below revenue growth ($ in millions) 1 1 Excluding merger and integration charges and debt extinguishment charges, total expense growth is 5.6%

49. Our Earnings Goals for 2004 through 2007

50. What to Expect for the Remainder of 2004… • Net income of $1.36 - $1.41 per fully diluted share • Operating earnings of $1.65 to $1.70 per diluted share; 14%-17% implied growth (excludes $.12 of merger integration charges, $.13 of debt restructuring charges, and $.03 -.04 for EITF 04-8 ) • Cash earnings of $1.85 to $1.90 • Net interest margin should expand in the fourth quarter, should see net interest income increase • Credit quality – net charge-offs in $25 million range, other credit metrics continue to improve • Expect commercial loan and core deposit growth during the fourth quarter, after considering acquisition effects • 100+ basis point improvement in efficiency ratio from 2003