Sovereign Bancorp Says Fires CFO

NEW YORK (Reuters) - Sovereign Bancorp Inc SOV.N, the second-largest U.S. savings and loan, said on Thursday it fired Chief Financial Officer Mark McCollom and replaced him with Kirk Walters.

The Philadelphia-based thrift decided "to terminate (McCollom's) employment without cause," according to a separation agreement signed by Sovereign and McCollom, and filed with the U.S. Securities and Exchange Commission. McCollom joined Sovereign in 1996 and became CFO in 2005.

It was not immediately clear why McCollom is leaving. Sovereign did not immediately return a call for comment. A woman who answered McCollom's home phone referred a call to the thrift. McCollom did not immediately return an e-mail seeking comment.

Spain's Banco Santander SA (SAN.MC) owns about 25 percent of Sovereign, which operates about 750 branches in eight northeast U.S. states.

McCollom will step down as CFO on March 3, but remain with Sovereign through May 30, the thrift said. In a statement, Chief Executive Joseph Campanelli thanked McCollom for his "commitment and many contributions" to the company.

Last month, Sovereign posted a $1.6 billion quarterly loss and canceled its dividend, following a larger-than-expected write-down for consumer credit losses and the 2006 acquisition of Brooklyn, New York's Independence Community Bank Corp.

Sovereign wrote down $1.58 billion of goodwill in the quarter, $180 million more than it had estimated nine days earlier.

In connection with his departure, McCollom will receive a $2.1 million cash payment, a $225,000 incentive award, $450,000 under an non-solicitation agreement, and three years of life, disability and medical insurance, the SEC filing showed.

Walters, 52, joins Sovereign from Chittenden Corp, a Vermont bank where he had been chief financial officer. Chittenden was acquired last month by Bridgeport, Connecticut's Peoples United Financial Inc (PBCT.O).

Sovereign shares closed down 9 cents at $12.19. They have fallen 54 percent in the last year.

(Reporting by Jonathan Stempel; Editing by Toni Reinhold/Andre Grenon)