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FLAGSHIP FINANCIAL ANNOUNCES RESUMPTION OF MERGER DISCUSSIONS WITH SOVEREIGN BANCORP

 FLAGSHIP FINANCIAL ANNOUNCES RESUMPTION OF MERGER DISCUSSIONS
 WITH SOVEREIGN BANCORP
 JENKINTOWN, Pa., Dec. 17 /PRNewswire/ -- Flagship Financial Corporation (NASDAQ-NMS: FLGF) announced today that it has resumed merger discussions with Sovereign Bancorp, Inc. (NASDAQ: SVRN) of Wyomissing, Pa.
 The decision to resume discussions was made after a recent proposal by Sovereign to combine the companies by means of merger in which each share of Flagship common stock would be exchanged for a value of $11.50 per share, consisting of $8 in value of Sovereign common stock and $3.50 in cash. Although Flagship has agreed to evaluate the proposal and to resume discussions, there has been no agreement on price or form of consideration by the parties. Previous discussions were terminated by the parties due to their inability to agree on a purchase price and certain other issues.
 Raymond W. McConnell, chairman of the board and acting chief executive officer of Flagship, stated that "there are some very sound reasons for considering a combination of Flagship and Sovereign and, therefore, we decided to resume discussions." McConnell went on to state "that no assurances can be given that we will be able to reach a definitive agreement." Any proposed merger would be subject to regulatory and stockholder approval.
 Flagship ranks among the 10 largest publicly traded thrifts in Pennsylvania and conducts business through its wholly owned subsidiaries, First American Savings, F.A., and Brandywine Savings Bank. PaSA. First American currently operates 12 offices in southeastern Pennsylvania. Brandywine operates nine offices in Chester County, Pa. The common stock of Flagship is traded on the NASDAQ National Market System under the symbol FLGF.
 /delval/
 -0- 12/17/91
 /CONTACT: Raymond W. McConnell, CEO, 215-576-3071, or Robert K. Lockyer, CFO, 215-576-3075, or Katherine F. Johnston, COO, 215-576-3074, all of Flagship Financial/
 (FLGF SVRN) CO: Flagship Financial Corporation; Sovereign Bancorp, Inc. ST: Pennsylvania IN: FIN SU: TNM


LJ-JS -- PH008 -- 2878 12/17/91 10:42 EST
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Publication:PR Newswire
Date:Dec 17, 1991
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