Wilmington (NYSE:WL)
Historical Stock Chart
From Jul 2019 to Jul 2024
Wilmington Trust Corporation (NYSE: WL) reported today that net income
for the 2007 first quarter was $43.0 million and earnings per share (on
a diluted basis) were $0.62 per share. This was $0.02 less than for the
year-ago first quarter.
“Revenue growth was good for each of our
businesses. Loan balances, on average, rose for the 16th consecutive
quarter and surpassed $8 billion for the first time. The Wealth Advisory
and Corporate Client Services businesses each recorded double-digit
increases in revenue. Also, the net interest margin and credit quality
were stable,” said Ted T. Cecala, Wilmington
Trust's chairman and chief executive officer. “Offsetting
these results was expense growth that outpaced revenue growth because of
the expansion investments we made in 2006. These initiatives affected
our expense levels immediately, but the corresponding increases in
revenue will occur more gradually as we continue to grow our company for
the long term.”
In 2006 the company opened three new offices in the United States and
one in Europe, significantly expanded Wealth Advisory and Corporate
Client Services capabilities, completed an acquisition, and added staff
in each business. The company also invested substantially in technology
to support WTDirect, the Internet-only delivery channel introduced in
November with a high-interest savings account.
On an annualized basis, first quarter 2007 results produced a return on
average assets of 1.59% and a return on average equity of 16.42%. The
corresponding returns for the first quarter of 2006 were 1.76% and
17.42%, respectively.
CASH DIVIDEND RAISED FOR 26TH
CONSECUTIVE YEAR
The Board of Directors approved a 6% increase in the quarterly cash
dividend, raising it by $0.02, from $0.315 per share to $0.335 per
share. On an annualized basis, this increased the dividend from $1.26
per share to $1.34 per share. The quarterly dividend will be paid on May
15, 2007, to stockholders of record as of May 1, 2007.
This increase marks the 26th consecutive year that Wilmington Trust has
raised its cash dividend. According to the winter 2007 edition of
Mergent, Inc.’s Dividend Achievers,
only 108 of the 10,000 companies that trade on North American exchanges
have raised their dividends for 26 or more consecutive years.
EFFICIENCY RATIOS
As illustrated by the efficiency ratio, the company spent slightly more
than 60 cents for each dollar of revenue generated in the 2007 first
quarter, which was an increase from prior periods. This happened because
Regional Banking and Wealth Advisory Services expansion investments made
throughout 2006 added to expenses immediately, but the corresponding
increases in revenue will occur more gradually as the business from each
of these investments grows. In the Corporate Client Services business,
higher revenue from investment and cash management services offset
higher expenses from expansion, and efficiency improved.
Efficiency ratios
2007 Q1
2006 Q4
2006 Q1
Regional Banking
43.68%
41.56%
41.49%
Wealth Advisory Services
85.93%
76.47%
77.00%
Corporate Client Services
70.82%
72.79%
79.05%
Wilmington Trust consolidated
60.28%
56.40%
57.02%
In general, lower efficiency ratios indicate higher profitability.
INVESTMENT SECURITIES PORTFOLIO
Compared to the year-ago first quarter, balances in the investment
securities portfolio were higher because of securities added during the
2006 fourth quarter to collateralize short-term cash sweeps for clients.
Compared to the 2006 fourth quarter, balances were slightly lower. As a
percentage of total assets, the size of the investment securities
portfolio was relatively the same as for prior periods.
Government agencies surpassed mortgage-backed instruments as the largest
concentration of securities in the portfolio, largely because the
company opted to invest in shorter-term instruments and because of
higher volumes of prepayments of mortgage-backed securities. All of the
mortgage-backed securities in the portfolio are AAA-rated instruments
issued by U.S. government agencies for which the underlying collateral
is residential mortgages. There are no subprime mortgages in this
underlying collateral.
Investment securities portfolio
At 3/31/07
At 12/31/06
At 3/31/06
Balances (in millions)
$1,977.4
$2,114.6
$1,840.3
As a percentage of total earning assets
20%
21%
20%
Average life (in years)
4.59
4.93
6.27
Duration
2.05
2.24
2.71
Percentage invested in fixed income instruments
81%
82%
78%
As a percentage of total assets
18%
19%
18%
The average life and duration declined because the balances of
short-term investments increased and the negative yield curve caused
paydowns of mortgage-backed instruments to accelerate.
THE REGIONAL BANKING BUSINESS
The Regional Banking business continued to benefit from the Delaware
Valley’s diversified economy. According to the
Federal Reserve Bank of Philadelphia, February 2007 unemployment rates
for Delaware, Pennsylvania, and New Jersey were below the U.S. national
average and the regional economic outlook was positive for the remainder
of 2007.
At Wilmington Trust, loan balances rose for the 16th consecutive quarter
and exceeded $8 billion for the first time on an average-balance basis.
Most of the loan growth was in the commercial portfolio.
Commercial banking expansion initiatives during 2006 accelerated the
pace of loan growth from markets outside Delaware. Compared to the
year-ago first quarter, Pennsylvania market loan balances rose 11%,
while Delaware market loan balances increased 6%.
Loans (dollars in billions, on average)
2007 Q1
2006 Q4
2006 Q1
Total loans outstanding (in billions, on average)
$8.07
$7.91
$7.45
Delaware market loans (in billions, on average)
$5.84
$5.74
$5.49
Delaware market loans as a % of total loans
72%
73%
74%
Pennsylvania market loans (in billions, on average)
$1.82
$1.78
$1.63
Pennsylvania market loans as a % of total loans
23%
23%
22%
Other market loans as a % of total loans
5%
4%
4%
Commercial loans
During 2006, the company opened new commercial banking offices in the
Lehigh Valley area of eastern Pennsylvania and in Princeton, New Jersey,
and increased the number of commercial bankers in its Baltimore office.
These expansion activities contributed to the year-over-year and
linked-quarter growth in commercial loan balances.
Commercial loans (in millions, on average)
2007 Q1
2006 Q4
2006 Q1
Commercial, industrial, and agricultural loans
$2,466.2
$2,430.5
$2,448.1
Commercial real estate/construction (CRE) loans
$1,669.8
$1,634.9
$1,322.0
Commercial mortgage loans
$1,339.9
$1,281.4
$1,229.8
Total commercial loans
$5,475.9
$5,346.8
$4,999.9
% of commercial loans from Delaware market
70%
70%
70%
% of commercial loans from Pennsylvania market
29%
29%
29%
% of commercial loans from other markets
1%
1%
1%
Commercial, industrial, and agricultural loan balances were higher on an
average-balance basis due to demand for working capital and inventory
financing in a variety of industry sectors in eastern Pennsylvania,
central New Jersey, and southern Delaware.
Of the commercial real estate/construction (CRE) loans booked during the
2007 first quarter, approximately 72% were for single-family tract homes
in eastern Pennsylvania, throughout Delaware, and on Maryland’s
Eastern Shore. The rest were for a variety of retail and professional
office projects.
Increases in CRE loans in Delaware resulted from the continued growth in
population and housing demand. For the 12 months ended July 2006,
Delaware was the 15th fastest growing state in the United States, and
Delaware's growth rate was more than double that of any other state in
the northeast (according to the U.S. Census Bureau).
Most of the first quarter increase in CRE loans in Delaware was split
evenly between Kent and Sussex Counties, which is where most of the
population growth is occurring. This is spurring demand for retail and
other services, and approximately 44% of the CRE loans booked in
Delaware during the first quarter were for retail and other
service-related projects.
In the commercial mortgage portfolio, loans booked during the 2007 first
quarter were for a variety of professional office, industrial, retail,
and hotel properties throughout the Regional Banking geographic
footprint. Approximately 36% of the first quarter increase in commercial
mortgage balances was for projects in Delaware; approximately 29% was
for projects in Maryland; approximately 13% was for projects in New
Jersey; approximately 11% was for projects in Pennsylvania; and
approximately 11% was for a Delaware-based client’s
project in Virginia.
Retail loans
Consumer lending continued to drive the growth in total retail loan
balances. The two main contributors to the increase in consumer loans
were indirect loans and the category recorded as “other”
consumer loans, which includes home equity loans. Consumer preference
for fixed-rate loans caused an increase in home equity loan balances and
accounted for the decrease in home equity lines of credit, most of which
have floating rates.
Consumer loans (in millions, on average)
2007 Q1
2006 Q4
2006 Q1
Home equity lines of credit
$309.5
$318.9
$325.1
Indirect loans
$687.2
$676.1
$646.8
Credit card loans
$63.6
$62.6
$59.6
Other consumer loans
$452.0
$438.5
$392.4
Total consumer loans
$1,512.3
$1,496.1
$1,423.9
% of consumer loans from Delaware market
77%
78%
81%
% of consumer loans from Pennsylvania market
7%
7%
6%
% of consumer loans from other markets
16%
15%
13%
The increases in indirect loan balances were due mainly to higher
volumes of loans for late-model used cars, which the company provides
through automobile dealers. Activity in Maryland, New Jersey, and
Pennsylvania contributed to the growth.
Residential mortgage balances were higher than for prior periods because
prepayment and refinancing volumes declined and because originations of
mortgages that qualify as low income mortgages under the Community
Reinvestment Act (CRA) increased. These increases corresponded with
housing growth in CRA-eligible communities in Delaware. The company
retains its CRA mortgage production but sells most other newly
originated residential mortgages into the secondary market and does not
record those loans on its balance sheet.
Residential mortgages
2007 Q1
2006 Q4
2006 Q1
Balances (in millions, on average)
$542.1
$524.8
$463.3
Origination volumes (in millions)
$54.7
$52.2
$46.8
Origination units
225
244
201
Fixed vs. floating rates
At 3/31/07
At 12/31/06
At 3/31/06
Percent of fixed-rate residential mortgages
77%
75%
76%
At March 31, 2007, Wilmington Trust’s
residential mortgage delinquency rate was 15 basis points below the U.S.
national average and compared favorably with other metropolitan areas.
The following table compares first quarter 2007 delinquency rates with
rates from the fourth quarter of 2005, when delinquencies were at their
most recent low, as reported by The Wall Street Journal on
April 11, 2007.
Residential mortgage delinquency rates
2007 Q1
2005 Q4
Wilmington Trust
2.72%
4.25%
Wilmington/Maryland/New Jersey metropolitan area
3.42%
2.10%
United States
2.87%
2.03%
Wilmington Trust does not engage in subprime residential mortgage
lending and there are no subprime loans in the residential mortgage
portfolio.
Core deposits
The categories of core deposits that increased were savings deposits and
certificates of deposit (CDs) of less than $100,000. Rate promotions
offered in 2006 accounted for much of the 8% year-over-year increase in
CD balances, on average.
Savings deposits rose 35% between December 31, 2006, and March 31, 2007,
due largely to the success of the high-interest savings account
available through WTDirect, the Internet-only delivery channel
introduced in November 2006. As of April 20, 2007, the annual percentage
yield on this account was 5.26% for depositors who maintain average
daily balances of at least $10,000.
Core deposits (in millions, on average)
2007 Q1
2006 Q4
2006 Q1
Noninterest-bearing demand
$749.1
$793.6
$763.5
Savings
365.3
294.7
326.0
Interest-bearing demand
2,250.4
2,304.8
2,346.8
CDs < $100,000
1,012.9
1,009.3
938.6
Local CDs ? $100,000
457.7
535.8
463.3
Total core deposits
$4,835.4
$4,938.2
$4,838.2
From Delaware clients
93%
94%
94%
From Pennsylvania clients
5%
5%
5%
From other markets
2%
1%
1%
Balances recorded as local CDs $100,000 and over (local CDs) are
included in core deposits because these CDs reflect client deposits, not
wholesale or brokered deposits. Most local CDs are from commercial
banking clients in the Delaware Valley and local municipalities, which
frequently use these CDs to generate returns on their excess cash.
Local CDs ? $100,000 by client
category
At 3/31/07
At 12/31/06
At 3/31/06
Consumer banking clients
75%
74%
70%
DE commercial banking clients
8%
11%
13%
PA commercial banking clients
7%
8%
1%
Wealth Advisory Services clients
10%
7%
16%
Corporate Client Services clients
--
--
--
Funding
Core deposits continued to be the company’s
primary source of funding.
Sources of funding (on average)
2007 Q1
2006 Q4
2006 Q1
Core deposits
52%
53%
56%
National funding
34%
34%
31%
Short-term borrowings
14%
13%
13%
Loan-to-deposit ratio
1.01%
0.98%
0.99%
The company augments core deposits with national funding because the
Regional Banking business makes loans in a four-state region but gathers
deposits primarily in Delaware. Purchasing national funds is a
cost-effective way to add deposits without building and operating a
large-scale expansion of the branch office network outside Delaware. The
repricing characteristics of national funding are matched closely with
the repricing characteristics of floating rate loans, as shown in the
net interest margin discussion in this release.
During the 2006 fourth quarter, the company diversified its funding
sources by launching WTDirect and adding national money market deposits.
Previously included in interest-bearing demand deposit balances,
national money market deposits now are reported separately. Fourth
quarter 2006 deposit balances were adjusted to reflect this change.
Credit quality
Credit quality remained stable, with the net charge-off ratio at the low
end of historical levels. Since 1996, the annualized net charge-off
ratio has ranged from a low of 14 basis points for 2005 to a high of 44
basis points for 2000. The $3.3 million charged off during the 2007
first quarter included a combination of commercial and consumer loans,
but none was a commercial construction/real estate or commercial
mortgage loan.
At the end of the 2007 first quarter, 97% of loans outstanding had pass
ratings in the internal risk rating analysis. The percentage of
pass-rated loans has been 97% or higher for six consecutive quarters.
Credit quality (dollars in millions)
2007 Q1
2006 Q4
2006 Q1
Net charge-offs (in millions)
$3.3
$5.9
$1.8
Net charge-off ratio (basis points)
4 bps
7 bps
2 bps
At 3/31/07
At 12/31/06
At 3/31/06
Nonaccruing loans
$23.1
$31.0
$35.5
Other real estate owned (OREO)
$4.8
$4.8
$0.2
Renegotiated loans
$4.8
--
$4.9
Loans past due 90 days
$7.3
$5.8
$10.1
Ratio of nonperforming assets to loans (basis points)
40 bps
44 bps
54 bps
Nonaccruing loans declined as some returned to accruing status and
others were paid in full. Multiple projects in Delaware, Maryland, and
Pennsylvania accounted for the linked-quarter increase in loans past due
90 days.
Other real estate owned (OREO) remained unchanged from the second
quarter of 2006, when a parcel of agricultural land in New Jersey was
transferred to OREO from nonaccruing status.
The amount recorded as renegotiated loans consisted of one personal loan
to a commercial banking client in New Jersey.
Changes in the provision and reserve for loan losses reflected
management's assessment of risk in light of loan growth; the internal
risk rating analysis; the levels of net charge-offs, loan recoveries,
and loan repayments; the stability of the regional economy; and
regulatory guidelines.
Provision for loan losses
2007 Q1
2006 Q4
2006 Q1
Provision for loan losses (in millions)
$3.6
$6.5
$4.0
Reserve for loan losses
At 3/31/07
At 12/31/06
At 3/31/06
Reserve for loan losses (in millions)
$94.5
$94.2
$93.6
Loan loss reserve ratio
1.17%
1.16%
1.24%
NET INTEREST MARGIN
The net interest margin was 3.67%, the same as for the 2006 fourth
quarter, as there were no changes in short-term market interest rates
and the yield on earning assets matched the rate on funds used to
support earning assets.
The market interest rate environment was considerably different in the
year-ago first quarter and for much of 2006. The Federal Open Market
Committee raised short-term interest rates four times between January
and June 2006 for a total of 100 basis points. After those increases,
most of the company's floating rate loans had repriced by August, but
deposits continued to reprice throughout the second half of 2006. The
resulting lag between loan and deposit repricing was the main cause of
the 15-basis-point decline in the margin from the year-ago first
quarter. The table below illustrates the change in the pace of repricing.
Changes in yields and rates (in basis points)
2007 Q1vs. 2006 Q4
2007 Q1vs. 2006 Q1
Change in yield on total earning assets
3 bps
57 bps
Change in rate on total funds to support earning assets
3 bps
72 bps
Savings deposit rates were considerably higher than for prior periods
because they include the high-rate savings account available through
WTDirect. The average rate on this account for the 2007 first quarter
was 4.93%. Clients must maintain an average daily balance of at least
$10,000 to obtain the highest WTDirect rate.
The margin reflected the company’s interest
rate risk management strategy of using national funding with maturations
that match the repricing characteristics of floating rate loans, as
shown in the table below.
As a percentage of total balances
At 3/31/07
At 12/31/06
At 3/31/06
Loans outstanding with floating rates
73%
74%
77%
Commercial floating rate loans repricing in ?
30 days
93%
93%
81%
Commercial loans tied to a prime rate
61%
61%
58%
Commercial loans tied to the 30-day LIBOR
34%
35%
34%
National CDs maturing in ? 90 days
77%
55%
77%
Short-term borrowings maturing in ? 90
days
95%
92%
87%
The percentage of national CDs maturing in 90 days or less decreased
over the last nine months of 2006 due to changes in the yield curve.
With little difference between 90-day rates and longer-term rates, the
company opted to purchase instruments with longer terms.
Effective January 1, 2007, the company changed the way it calculates the
quarterly net interest margin to a day-weighted methodology more in line
with industry standards. The new methodology calculates the margin by
dividing tax-adjusted net interest income by the number of days in the
quarter, multiplied by 365, and then divided by average earning assets
for the quarter. Prior periods have been adjusted to reflect this change.
Net interest margin
2007
2006
Q1
Q4
Q3
Q2
Q1
Previously reported
n/a
3.65%
3.83%
3.80%
3.77%
Adjusted for new methodology
3.67%
3.67%
3.85%
3.84%
3.82%
Under the old methodology, the margin for the 2007 first quarter would
have been 3.62%.
THE WEALTH ADVISORY SERVICES BUSINESS
Wealth Advisory Services (WAS) revenue was 11% higher than for the
year-ago first quarter mainly because of strong growth in trust and
investment advisory revenue and fees for other services. The Maryland
market recorded a 74% increase in sales year over year. Compared to the
2006 fourth quarter, sales from the New York market rose 22% and sales
from the California market rose 11%.
Wealth Advisory Services revenue (in millions)
2007 Q1
2006 Q4
2006 Q1
Trust and investment advisory services
$36.9
$36.1
$34.2
Mutual fund fees
$5.1
$5.1
$4.7
Planning and other services
$9.5
$10.1
$7.4
Total Wealth Advisory Services revenue
$51.5
$51.3
$46.3
Revenue from trust and investment advisory services rose 8% from the
year-ago first quarter and 2% on a linked-quarter basis. In comparison,
the S&P 500 Index, which management considers a good proxy for the
equity investments in client accounts, increased 10% year over year and
1% during the 2007 first quarter. Fees for trust and investment advisory
services are based on the valuations of assets in client accounts. For
the 2007 first quarter, approximately 48% of client assets were invested
in traditional equities and approximately 27% were invested in fixed
income securities.
The 28% year-over-year growth in revenue from planning and other
services was due in large part to the substantial expansion of family
office services that began in June 2006. As part of this expansion, WAS
opened new offices in Princeton, New Jersey, and Stamford, Connecticut,
and added staff with expertise in structuring family offices as legal
entities and in developing strategies for executive compensation and
inherited wealth. These initiatives complemented the services for sports
and entertainment industry professionals offered by the company’s
Beverly Hills-based subsidiary, Grant Tani Barash & Altman, and
positioned Wilmington Trust among the largest full-service family office
practices in the industry.
Fees for planning and other services are based on the nature and
complexity of the service provided, not on asset valuations. In some
cases, these fees are based on the client's annual income.
THE CORPORATE CLIENT SERVICES BUSINESS
Corporate Client Services (CCS) revenue was 18% higher than for the
year-ago first quarter, as all components of the business recorded
year-over-year increases. First quarter sales exceeded $5 million for
the first time and were 31% higher than for the year-ago first quarter.
Corporate Client Services revenue (in millions)
2007 Q1
2006 Q4
2006 Q1
Capital markets services
$10.2
$10.4
$9.1
Entity management services
$7.1
$7.1
$6.5
Retirement services
$3.4
$2.9
$2.7
Investment/cash management services
$3.3
$3.0
$2.1
Total Corporate Client Services revenue
$24.0
$23.4
$20.4
The 12% increase in capital markets revenue reflected strong demand for
services that support trust-preferred securities, collateral trust and
default administration, defeasance of commercial mortgage-backed
securitizations, and tender option bonds. Sales of capital markets
services were 27% higher than for the year-ago first quarter.
The slight linked-quarter decline in capital markets revenue reflected
the fact that demand for these services is typically stronger in the
fourth quarter than in any other quarter. The decline also was due to a
slowdown in the U.S. housing market that began in the second quarter of
2006 and reduced demand for asset-backed securitizations (ABS) in which
real estate is the underlying collateral.
Some of the real estate-backed securitizations for which CCS provides
trust and administrative services hold a blend of prime and subprime
residential mortgages. Prevailing concerns about the subprime market
have little, if any, effect on CCS because the corresponding fees are
based on services provided regardless of the underlying collateral.
Securitizations backed by U.S. residential mortgages accounted for
approximately 6% of total CCS revenue for the 2007 first quarter.
The 9% year-over-year increase in entity management revenue resulted
from expansion in and continued demand from European markets, especially
for administrative and corporate governance services for structured
finance transactions in Ireland, the United Kingdom, and Germany. CCS
opened an office in Frankfurt, Germany, in August 2006 following passage
of the German True Sale Initiative, which facilitates ABS transactions
in that country. The May 2006 acquisition of a corporate services
business in the Cayman Islands also contributed to the revenue growth.
On a linked-quarter basis, entity management revenue was flat due to
seasonality in non-U.S. business.
Market appreciation, additional retirement plan contributions, and
demand for executive compensation plan trusts accounted for the
increases in retirement services revenue. Approximately $300,000 of 2007
first quarter retirement services revenue was associated with paying
agent services for plan distributions and is not expected to occur again
in 2007.
More proactive marketing generated the increases in CCS investment and
cash management revenue. Approximately 43% of this revenue was tied to
the valuations of domestic fixed income instruments and reflected the
use of the company’s expertise in fixed
income management on behalf of CCS clients. The remaining investment and
cash management revenue was based on money market mutual fund balances.
AFFILIATE MONEY MANAGERS
Assets under management at value-style manager Cramer Rosenthal McGlynn
reached $11.20 billion, another record high. This was $600 million more
than at the end of December 2006 and $1.50 billion more than at the end
of the year-ago first quarter. These increases, which were due mainly to
new business inflows, generated an 18% increase in first quarter revenue
from CRM. On a linked-quarter basis, revenue from CRM declined because
hedge fund performance fees were lower and compensation and benefits
costs were higher, which is typical for the first quarter.
Affiliate manager revenue (in millions)
2007 Q1
2006 Q4
2006 Q1
Cramer Rosenthal McGlynn
$4.7
$5.3
$4.0
Roxbury Capital Management
$0.1
$0.1
$0.9
Total revenue from affiliates
$4.8
$5.4
$4.9
Assets under management (in millions)
At 3/31/07
At 12/31/06
At 3/31/06
Cramer Rosenthal McGlynn
$11,215.7
$10,623.8
$9,733.9
Roxbury Capital Management
$3,121.6
$3,138.1
$3,515.7
At growth-style manager Roxbury Capital Management (RCM), managed asset
levels and revenue declined from the year-ago first quarter because RCM
terminated its micro-cap and fixed income products during the second
half of 2006. Revenue from RCM was flat on a linked-quarter basis as it
continued to record expenses related to the fund terminations.
ADJUSTMENTS TO WILMINGTON TRUST ASSETS
UNDER MANAGEMENT
Effective January 1, 2007, amounts of assets under management at
Wilmington Trust (excluding the affiliate money managers) were adjusted
to include approximately $2 billion of institutional and individual
client assets not held in trust accounts. Prior periods were changed to
reflect this adjustment. Assets under administration include assets
under management.
Client assets at Wilmington Trust
(in billions)
3/31/07
12/31/06
9/30/06
6/30/06
3/31/06
Assets under management
Previously reported
n/a
$29.0
$27.2
$26.4
$27.2
Adjusted amount
$31.8
$31.3
$29.1
$28.3
$29.2
Assets under administration
Previously reported
n/a
$105.3
$100.5
$100.7
$102.1
Adjusted amount
$112.1
$107.5
$102.4
$102.7
$104.0
NONINTEREST EXPENSES
Staffing-related costs continued to account for the majority of
noninterest expenses.
Expenses (dollars in millions)
2007 Q1
2006 Q4
2006 Q1
Full-time-equivalent staff members
2,579
2,562
2,475
Salaries and wages
$41.8
$40.3
$36.9
Stock option expense
$3.1
$2.2
$2.2
Total incentives and bonuses
$14.0
$10.3
$10.3
Total staffing-related expenses
$70.4
$62.0
$60.7
Total noninterest expenses
$110.5
$104.9
$97.5
Noninterest expenses increased because expansion investments made
throughout 2006 raised staffing- and occupancy-related costs. During the
12 months ended March 31, 2007, these investments added 104 staff
members and included:
The Wealth Advisory Services expansion in June 2006 of family office
services, which added 34 staff members and one new office;
New commercial banking and wealth management offices in Pennsylvania
and New Jersey and staff additions throughout the Regional Banking
footprint;
European expansion and the addition of new product capabilities in the
second half of 2006 in the Corporate Client Services business; and
The November 2006 launch of WTDirect, the company’s
Internet-only outlet, which accounted for most of the year-over-year
increase in advertising costs.
Most of the full-time-equivalent staff members added during the first
three months of 2007 were in Regional Banking in the Delaware branch
office network.
Employment benefits expense and incentives and bonuses were the main
causes of the increase in noninterest expenses from the fourth quarter
of 2006. Approximately $3 million of the linked-quarter increase in
employment benefits expense was for payroll tax payments and 401(k) plan
contributions that reset at the start of each year.
Incentives and bonuses were higher, in part, because sales volumes
increased. In addition, incentives and bonuses for the 2007 first
quarter included approximately $2 million of expense that is not
expected to occur again in 2007. Approximately $1 million of this amount
was for restricted stock grants issued to retirement-eligible staff.
Because restricted stock awards fully vest upon retirement, U.S.
generally accepted accounting principles require the company to
recognize the full expense of these grants when they are awarded,
instead of amortizing the expense over the vesting period.
In other categories of expenses:
The timing of maintenance contract billing accounted for most of the
linked-quarter decrease in furniture, equipment, and supplies expense.
Amounts recorded as subadvisor expense vary according to the mix of
investments in client portfolios among fixed income and equity
instruments, active and passive funds, and domestic and international
securities.
Higher legal fees as well as costs associated with credit and debit
cards were the main causes of the increases in other expense.
The amount recorded as minority interest for the 2007 first quarter
included an adjustment of approximately $500,000 associated with
Wilmington Trust Conduit Services, the subsidiary that was formed in the
fall of 2006 to provide administrative services for collateralized debt
obligations. Absent this amount, minority interest for the quarter would
have been approximately $100,000, which is what management anticipates
for each of the remaining quarters in 2007.
SHARE REPURCHASES
During the 2007 first quarter, the company repurchased 47,291 shares of
its stock at a total cost of $2.0 million and an average price per share
of $42.52. This brought the total number of shares repurchased under the
current 8-million-share program, which commenced in April 2002, to
1,398,532, leaving 6,601,468 shares available for repurchase.
OUTLOOK FOR 2007
Commenting on the outlook for the remainder of 2007, Cecala said:
“The economy in our Regional Banking
footprint is healthy and stable. Although we are seeing a slight
slowing in the pace of growth in the commercial real
estate/construction portfolio, we expect to offset that with loan
growth from our commercial banking expansion in eastern Pennsylvania,
New Jersey, and Maryland.
“As you can see from our savings account
balances, the Internet-only high interest savings account we are
offering through WTDirect has proven to be a successful new source of
cost-effective funding. Since we make commercial loans in four states
but gather core deposits mainly in Delaware, we will continue to
pursue other ways to add core deposits efficiently, without incurring
the costs of a large-scale expansion of our branch office network, and
reduce our use of national funding.
“We see nothing on the horizon to suggest a
change in credit quality. The net charge-off ratio remains at a
historically low level and 97% of loans outstanding have pass ratings
in the internal risk rating analysis.
“The net interest margin has stabilized.
Unless the Federal Reserve changes short-term rates, we would not
expect to see the margin decline.
“We expect year-over-year growth in
Corporate Client Services and Wealth Advisory Services to be on pace
with what we saw for the first quarter.
“Noninterest expenses should be in the $108
to $109 million range for each of the remaining quarters in 2007. The
expansion investments we made in 2006 came on line throughout the
second half of the year and weren’t fully
evident until the fourth quarter.
“Total staffing-related costs should be
lower for the second, third, and fourth quarters than they were for
the first quarter. Payroll taxes and the company 401(k) plan matching
costs will decline progressively as they reach their limits. In
addition, first quarter incentives and bonuses included approximately
$2 million of payments we do not expect to repeat in 2007.”
CONFERENCE CALL
Management will discuss the 2007 first quarter results and outlook for
the future in a conference call today at 10:00 a.m. (EDT). Supporting
materials, financial statements, and audio streaming will be available
at www.wilmingtontrust.com.
To access the call from within the United States, dial (888) 868-9083
and enter PIN 8563843. From outside the United States, dial (973)
935-8512 and enter PIN 8563843.
A rebroadcast of the call will be available from 12:30 p.m. (EDT) today
until 5:00 p.m. (EDT) on Friday, April 27, by calling (877) 519-4471
inside the United States or (973) 341-3080 from outside the United
States. Use PIN 8563843 to access the rebroadcast.
FORWARD-LOOKING STATEMENTS
This presentation contains forward-looking statements that reflect our
current expectations about our future performance. These statements rely
on a number of assumptions and estimates and are subject to various
risks and uncertainties that could cause our actual results to differ
from our expectations. Factors that could affect our future financial
results include, among other things, changes in national or regional
economic conditions; changes in market interest rates; significant
changes in banking laws or regulations; increased competition in our
businesses; higher-than-expected credit losses; the effects of
acquisitions; the effects of integrating acquired entities; a
substantial and permanent loss of either client accounts and/or assets
under management at Wilmington Trust and/or our affiliate money
managers, Cramer Rosenthal McGlynn and Roxbury Capital Management;
unanticipated changes in regulatory, judicial, or legislative tax
treatment of business transactions; and economic uncertainty created by
unrest in other parts of the world.
ABOUT WILMINGTON TRUST
Wilmington Trust Corporation (NYSE: WL) is a financial services holding
company that provides Regional Banking services throughout the Delaware
Valley region, Wealth Advisory Services for high-net-worth clients in 36
countries, and Corporate Client Services for institutional clients in 86
countries. Its wholly owned bank subsidiary, Wilmington Trust Company,
which was founded in 1903, is one of the largest personal trust
providers in the United States and the leading retail and commercial
bank in Delaware. Wilmington Trust Corporation and its affiliates have
offices in California, Connecticut, Delaware, Florida, Georgia,
Maryland, Nevada, New Jersey, New York, Pennsylvania, South Carolina,
Vermont, the Cayman Islands, the Channel Islands, London, Dublin, and
Frankfurt. For more information, visit www.wilmingtontrust.com.
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the three months ended March 31, 2007
HIGHLIGHTS
Three Months Ended
Mar. 31,
Mar. 31,
%
2007
2006
Change
OPERATING RESULTS (in millions)
Net interest income
$
90.9
$
87.3
4.1
Provision for loan losses
(3.6)
(4.0)
(10.0)
Noninterest income
91.4
82.7
10.5
Noninterest expense
110.5
97.5
13.3
Net income
43.0
44.1
(2.5)
PER SHARE DATA
Basic net income
$
0.63
$
0.65
(3.1)
Diluted net income
0.62
0.64
(3.1)
Dividends paid
0.315
0.30
5.0
Book value at period end
15.90
15.30
3.9
Closing price at period end
42.17
43.35
(2.7)
Market range:
High
44.55
44.80
(0.6)
Low
39.74
38.54
3.1
AVERAGE SHARES OUTSTANDING (in thousands)
Basic
68,525
68,070
0.7
Diluted
69,653
69,434
0.3
AVERAGE BALANCE SHEET (in millions)
Investment portfolio
$
2,005.8
$
1,878.9
6.8
Loans
8,072.0
7,445.3
8.4
Earning assets
10,135.1
9,341.7
8.5
Core deposits
4,835.4
4,838.2
(0.1)
Stockholders' equity
1,062.2
1,026.4
3.5
STATISTICS AND RATIOS (net income annualized)
Return on average stockholders' equity
16.42%
17.42%
(5.7)
Return on average assets
1.59%
1.76%
(9.7)
Net interest margin (taxable equivalent)
3.67%
3.82%
(3.9)
Dividend payout ratio
50.00%
46.26%
8.1
Full-time equivalent headcount
2,579
2,475
4.2
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the three months ended March 31, 2007
QUARTERLY INCOME STATEMENT
Three Months Ended
% Change From:
Mar. 31,
Dec. 31,
Sept. 30,
June 30,
Mar. 31,
Prior
Prior
(In millions)
2007
2006
2006
2006
2006
Quarter
Year
NET INTEREST INCOME
Interest income
$
180.0
$
182.0
$
175.0
$
165.0
$
152.8
(1.1)
17.8
Interest expense
89.1
89.6
82.0
74.6
65.5
(0.6)
36.0
Net interest income
90.9
92.4
93.0
90.4
87.3
(1.6)
4.1
Provision for loan losses
(3.6)
(6.5)
(6.6)
(4.2)
(4.0)
(44.6)
(10.0)
Net interest income after provision for loan losses
87.3
85.9
86.4
86.2
83.3
1.6
4.8
NONINTEREST INCOME
Advisory fees:
Wealth Advisory Services
Trust and investment advisory fees
36.9
36.1
33.0
33.1
34.2
2.2
7.9
Mutual fund fees
5.1
5.1
5.3
5.0
4.7
----
8.5
Planning and other services
9.5
10.1
8.8
8.9
7.4
(5.9)
28.4
Total Wealth Advisory Services
51.5
51.3
47.1
47.0
46.3
0.4
11.2
Corporate
Client Services
Capital markets services
10.2
10.4
8.7
8.8
9.1
(1.9)
12.1
Entity management services
7.1
7.1
6.8
6.6
6.5
----
9.2
Retirement services
3.4
2.9
2.9
2.9
2.7
17.2
25.9
Investment / cash management services
3.3
3.0
2.7
2.5
2.1
10.0
57.1
Total Corporate Client Services
24.0
23.4
21.1
20.8
20.4
2.6
17.6
Cramer Rosenthal McGlynn
4.7
5.3
4.6
5.5
4.0
(11.3)
17.5
Roxbury Capital Management
0.1
0.1
----
0.3
0.9
----
(88.9)
Advisory fees
80.3
80.1
72.8
73.6
71.6
0.2
12.2
Amortization of affiliate intangibles
(1.1)
(1.1)
(1.1)
(1.0)
(1.0)
----
10.0
Advisory fees after amortization of affiliate intangibles
79.2
79.0
71.7
72.6
70.6
0.3
12.2
Service charges on deposit accounts
6.8
7.1
7.3
7.0
6.9
(4.2)
(1.4)
Other noninterest income
5.4
6.2
5.5
6.8
5.2
(12.9)
3.8
Securities gains/(losses)
----
0.2
0.1
(0.1)
----
(100.0)
----
Total noninterest income
91.4
92.5
84.6
86.3
82.7
(1.2)
10.5
Net interest and noninterest income
178.7
178.4
171.0
172.5
166.0
0.2
7.7
NONINTEREST EXPENSE
Salaries and wages
41.8
40.3
39.5
37.8
36.9
3.7
13.3
Incentives and bonuses
14.0
10.3
8.9
10.3
10.3
35.9
35.9
Employment benefits
14.6
11.4
11.4
11.9
13.5
28.1
8.1
Net occupancy
6.8
6.7
6.7
6.3
5.9
1.5
15.3
Furniture, equipment, and supplies
9.7
10.3
9.2
9.9
9.0
(5.8)
7.8
Other noninterest expense:
Advertising and contributions
2.7
3.2
2.2
2.1
1.9
(15.6)
42.1
Servicing and consulting fees
2.4
2.9
2.8
2.4
2.3
(17.2)
4.3
Subadvisor expense
2.5
2.3
2.7
2.9
2.8
8.7
(10.7)
Travel, entertainment, and training
2.2
3.4
2.5
2.3
2.2
(35.3)
----
Originating and processing fees
2.5
3.1
2.8
2.4
2.8
(19.4)
(10.7)
Other expense
11.3
11.0
9.9
10.0
9.9
2.7
14.1
Total other noninterest expense
23.6
25.9
22.9
22.1
21.9
(8.9)
7.8
Total noninterest expense before impairment
110.5
104.9
98.6
98.3
97.5
5.3
13.3
Impairment write-down
----
----
72.3
----
----
----
----
Total noninterest expense
110.5
104.9
170.9
98.3
97.5
5.3
13.3
Income before income taxes and minority interest
68.2
73.5
0.1
74.2
68.5
(7.2)
(0.4)
Applicable income taxes
24.6
26.3
(5.0)
27.2
24.3
(6.5)
1.2
Net income before minority interest
43.6
47.2
5.1
47.0
44.2
(7.6)
(1.4)
Minority interest
0.6
(0.3)
(0.1)
0.1
0.1
----
500.0
Net income
$
43.0
$
47.5
$
5.2
$
46.9
$
44.1
(9.5)
(2.5)
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the three months ended March 31, 2007
STATEMENT OF CONDITION
% Change From:
Mar. 31,
Dec. 31,
Sept. 30,
June 30,
Mar. 31,
Prior
Prior
(In millions)
2007
2006
2006
2006
2006
Quarter
Year
ASSETS
Cash and due from banks
$
222.2
$
249.7
$
268.4
$
258.5
$
219.2
(11.0)
1.4
Federal funds sold and securities purchased under agreements to
resell
68.9
68.9
38.4
66.7
44.9
----
53.5
Investment securities:
U.S. Treasury
102.5
125.2
230.8
181.4
136.8
(18.1)
(25.1)
Government agencies
743.9
807.1
533.0
416.5
394.5
(7.8)
88.6
Obligations of state and political subdivisions
9.1
9.5
9.4
10.4
10.5
(4.2)
(13.3)
Preferred stock
74.2
90.5
91.0
88.1
90.2
(18.0)
(17.7)
Mortgage-backed securities
656.2
689.5
726.8
751.0
806.4
(4.8)
(18.6)
Other securities
391.5
392.8
391.3
389.8
401.9
(0.3)
(2.6)
Total investment securities
1,977.4
2,114.6
1,982.3
1,837.2
1,840.3
(6.5)
7.4
Loans:
Commercial, financial, and agricultural
2,455.2
2,533.5
2,378.1
2,445.5
2,445.9
(3.1)
0.4
Real estate - construction
1,665.5
1,663.9
1,610.9
1,574.3
1,411.9
0.1
18.0
Mortgage - commercial
1,378.3
1,296.1
1,254.5
1,222.8
1,245.4
6.3
10.7
Total commercial loans
5,499.0
5,493.5
5,243.5
5,242.6
5,103.2
0.1
7.8
Mortgage - residential
553.5
536.9
518.7
503.0
473.4
3.1
16.9
Consumer
1,503.9
1,517.0
1,489.7
1,452.4
1,408.5
(0.9)
6.8
Secured with liquid collateral
532.0
547.5
528.3
557.2
553.9
(2.8)
(4.0)
Total retail loans
2,589.4
2,601.4
2,536.7
2,512.6
2,435.8
(0.5)
6.3
Total loans net of unearned income
8,088.4
8,094.9
7,780.2
7,755.2
7,539.0
(0.1)
7.3
Reserve for loan losses
(94.5)
(94.2)
(93.6)
(94.3)
(93.6)
0.3
1.0
Net loans
7,993.9
8,000.7
7,686.6
7,660.9
7,445.4
(0.1)
7.4
Premises and equipment
148.8
150.3
151.6
151.2
148.7
(1.0)
0.1
Goodwill
291.5
291.4
291.1
363.0
348.5
----
(16.4)
Other intangibles
34.2
35.4
38.8
38.9
35.0
(3.4)
(2.3)
Other assets
254.0
246.0
251.9
236.9
200.2
3.3
26.9
Total assets
$
10,990.9
$
11,157.0
$
10,709.1
$
10,613.3
$
10,282.2
(1.5)
6.9
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand
$
792.0
$
913.6
$
861.3
$
813.8
$
830.2
(13.3)
(4.6)
Interest-bearing:
Savings
422.7
313.8
292.5
313.1
328.0
34.7
28.9
Interest-bearing demand
2,336.1
2,417.5
2,417.5
2,355.9
2,352.1
(3.4)
(0.7)
Certificates under $100,000
1,014.2
1,012.6
995.5
991.1
960.4
0.2
5.6
Local certificates $100,000 and over
447.6
474.4
574.7
550.6
513.3
(5.6)
(12.8)
Total core deposits
5,012.6
5,131.9
5,141.5
5,024.5
4,984.0
(2.3)
0.6
National money market deposits
142.5
143.1
----
----
----
(0.4)
----
National certificates $100,000 and over
2,970.6
3,054.1
2,742.7
2,760.6
2,707.2
(2.7)
9.7
Total deposits
8,125.7
8,329.1
7,884.2
7,785.1
7,691.2
(2.4)
5.6
Short-term borrowings:
Federal funds purchased and securities sold under agreements to
repurchase
1,153.5
1,145.8
1,161.7
1,160.0
984.2
0.7
17.2
U.S. Treasury demand
----
13.0
7.0
24.5
0.6
(100.0)
(100.0)
Total short-term borrowings
1,153.5
1,158.8
1,168.7
1,184.5
984.8
(0.5)
17.1
Other liabilities
229.8
221.3
196.4
183.1
169.4
3.8
35.7
Long-term debt
389.5
388.5
395.2
393.4
393.2
0.3
(0.9)
Total liabilities
9,898.5
10,097.7
9,644.5
9,546.1
9,238.6
(2.0)
7.1
Minority interest
0.2
----
0.3
0.3
0.3
----
(33.3)
Stockholders' equity
1,092.2
1,059.3
1,064.3
1,066.9
1,043.3
3.1
4.7
Total liabilities and stockholders' equity
$
10,990.9
$
11,157.0
$
10,709.1
$
10,613.3
$
10,282.2
(1.5)
6.9
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the three months ended March 31, 2007
AVERAGE STATEMENT OF CONDITION
2007
First
2006
Fourth
2006
Third
2006
Second
2006
First
% Change From:
Prior
Prior
(In millions)
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
Year
ASSETS
Cash and due from banks
$
213.9
$
218.2
$
206.9
$
209.3
$
208.0
(2.0)
2.8
Federal funds sold and securities purchased under agreements to
resell
57.3
144.8
28.8
18.8
17.5
(60.4)
227.4
Investment securities:
U.S. Treasury
123.6
177.4
157.0
146.7
144.6
(30.3)
(14.5)
Government agencies
728.9
642.1
475.9
394.1
400.8
13.5
81.9
Obligations of state and political subdivisions
9.1
9.4
9.6
10.5
10.5
(3.2)
(13.3)
Preferred stock
85.1
90.7
89.4
89.2
91.4
(6.2)
(6.9)
Mortgage-backed securities
668.8
705.5
735.1
780.1
828.4
(5.2)
(19.3)
Other securities
390.3
392.5
390.0
397.3
403.2
(0.6)
(3.2)
Total investment securities
2,005.8
2,017.6
1,857.0
1,817.9
1,878.9
(0.6)
6.8
Loans:
Commercial, financial, and agricultural
2,466.2
2,430.5
2,407.7
2,463.5
2,448.1
1.5
0.7
Real estate - construction
1,669.8
1,634.9
1,588.7
1,517.5
1,322.0
2.1
26.3
Mortgage - commercial
1,339.9
1,281.4
1,238.5
1,212.8
1,229.8
4.6
9.0
Total commercial loans
5,475.9
5,346.8
5,234.9
5,193.8
4,999.9
2.4
9.5
Mortgage - residential
542.1
524.8
507.8
484.2
463.3
3.3
17.0
Consumer
1,512.3
1,496.1
1,470.5
1,441.6
1,423.9
1.1
6.2
Secured with liquid collateral
541.7
545.2
546.1
556.3
558.2
(0.6)
(3.0)
Total retail loans
2,596.1
2,566.1
2,524.4
2,482.1
2,445.4
1.2
6.2
Total loans net of unearned income
8,072.0
7,912.9
7,759.3
7,675.9
7,445.3
2.0
8.4
Reserve for loan losses
(93.2)
(91.6)
(93.5)
(91.8)
(90.4)
1.7
3.1
Net loans
7,978.8
7,821.3
7,665.8
7,584.1
7,354.9
2.0
8.5
Premises and equipment
150.3
151.5
152.1
150.3
148.5
(0.8)
1.2
Goodwill
291.4
290.7
362.3
357.3
348.3
0.2
(16.3)
Other intangibles
34.8
38.1
38.5
37.3
35.6
(8.7)
(2.2)
Other assets
245.0
241.2
229.0
209.6
193.6
1.6
26.5
Total assets
$
10,977.3
$
10,923.4
$
10,540.4
$
10,384.6
$
10,185.3
0.5
7.8
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand
$
749.1
$
793.6
$
737.2
$
742.0
$
763.5
(5.6)
(1.9)
Interest-bearing:
Savings
365.3
294.7
304.1
321.2
326.0
24.0
12.1
Interest-bearing demand
2,250.4
2,304.8
2,374.1
2,364.4
2,346.8
(2.4)
(4.1)
Certificates under $100,000
1,012.9
1,009.3
988.1
980.9
938.6
0.4
7.9
Local certificates $100,000 and over
457.7
535.8
546.5
540.0
463.3
(14.6)
(1.2)
Total core deposits
4,835.4
4,938.2
4,950.0
4,948.5
4,838.2
(2.1)
(0.1)
National money market deposits
143.0
69.9
----
----
----
104.6
----
National certificates $100,000 and over
2,992.1
3,042.2
2,864.6
2,656.1
2,647.7
(1.6)
13.0
Total deposits
7,970.5
8,050.3
7,814.6
7,604.6
7,485.9
(1.0)
6.5
Short-term borrowings:
Federal funds purchased and securities sold under agreements to
repurchase
1,318.5
1,221.4
1,048.8
1,146.0
1,082.0
7.9
21.9
U.S. Treasury demand
5.4
10.0
6.8
16.0
11.7
(46.0)
(53.8)
Total short-term borrowings
1,323.9
1,231.4
1,055.6
1,162.0
1,093.7
7.5
21.0
Other liabilities
231.5
183.0
193.9
164.4
180.0
26.5
28.6
Long-term debt
388.8
391.1
394.2
393.3
399.0
(0.6)
(2.6)
Total liabilities
9,914.7
9,855.8
9,458.3
9,324.3
9,158.6
0.6
8.3
Minority interest
0.4
0.2
0.4
0.3
0.3
100.0
33.3
Stockholders' equity
1,062.2
1,067.4
1,081.7
1,060.0
1,026.4
(0.5)
3.5
Total liabilities and stockholders' equity
$
10,977.3
$
10,923.4
$
10,540.4
$
10,384.6
$
10,185.3
0.5
7.8
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the three months ended March 31, 2007
YIELDS AND RATES
YIELDS/RATES (tax-equivalent basis)
2007
First
Quarter
2006
Fourth
Quarter
2006
Third
Quarter
2006
Second
Quarter
2006
First
Quarter
EARNING ASSETS:
Federal funds sold and securities purchased under agreements to
resell
5.05
%
5.23
%
4.61
%
5.00
%
4.17
%
U.S. Treasury
4.11
3.97
4.03
3.54
3.43
Government agencies
4.70
4.50
4.19
3.94
4.00
Obligations of state and political subdivisions
9.00
8.79
8.68
8.82
8.89
Preferred stock
7.50
7.70
7.57
7.62
7.70
Mortgage-backed securities
4.25
4.18
4.02
4.17
4.23
Other securities
6.28
6.43
6.37
6.16
5.60
Total investment securities
4.95
4.87
4.74
4.69
4.60
Commercial, financial, and agricultural
8.04
8.02
8.06
7.70
7.33
Real estate - construction
8.60
8.69
8.72
8.38
8.00
Mortgage - commercial
8.03
8.11
8.09
7.82
7.44
Total commercial loans
8.21
8.24
8.27
7.93
7.53
Mortgage - residential
5.95
5.76
5.77
5.78
5.92
Consumer
7.41
7.39
7.33
7.10
6.86
Secured with liquid collateral
6.81
6.87
6.87
6.44
5.97
Total retail loans
6.98
6.95
6.91
6.70
6.48
Total loans
7.81
7.82
7.83
7.53
7.19
Total earning assets
7.22
7.19
7.21
6.97
6.65
FUNDS USED TO SUPPORT EARNING ASSETS:
Savings
1.29
0.51
0.42
0.39
0.32
Interest-bearing demand
1.20
1.19
1.10
1.04
1.02
Certificates under $100,000
4.35
4.22
3.87
3.51
3.27
Local certificates $100,000 and over
5.00
4.81
4.71
4.35
3.95
Core interest-bearing deposits
2.42
2.35
2.17
1.99
1.81
National money market deposits
5.53
5.39
----
----
----
National certificates $100,000 and over
5.43
5.46
5.37
5.05
4.53
Total interest- bearing deposits
3.73
3.68
3.47
3.18
2.88
Federal funds purchased and securities sold under agreements to
repurchase
4.97
5.03
5.05
4.73
4.25
U.S. Treasury demand
5.02
5.03
5.16
4.80
4.27
Total short-term borrowings
4.97
5.03
5.05
4.73
4.25
Long-term debt
6.77
6.76
6.79
6.70
6.34
Total interest-bearing liabilities
4.04
4.00
3.82
3.56
3.23
Total funds used to support earning assets
3.55
3.52
3.36
3.13
2.83
Net interest margin (tax-equivalent basis)
3.67
3.67
3.85
3.84
3.82
Year-to-date net interest margin
3.67
3.79
3.84
3.83
3.82
Prime rate
8.25
8.25
8.25
7.90
7.43
Tax-equivalent net interest income (in millions)
$
91.9
$
93.5
$
94.1
$
91.5
$
88.3
Average earning assets at historical cost
10,163.3
10,105.2
9,694.5
9,560.0
9,375.6
Average fair valuation adjustment on investment securities
available for sale
(28.2)
(29.9)
(49.4)
(47.4)
(33.9)
Average earnings assets
10,135.1
10,075.3
9,645.1
9,512.6
9,341.7
Average rates are calculated using average balances based on
historical cost and do not reflect fair valuation adjustments.
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the three months ended March 31, 2007
SUPPLEMENTAL INFORMATION
Three Months Ended
% Change From:
Mar. 31,
Dec. 31,
Sept. 30,
June 30,
Mar. 31,
Prior
Prior
2007
2006
2006
2006
2006
Quarter
Year
NET INCOME
Net income per share
Basic
$
0.63
$
0.69
$
0.08
$
0.69
$
0.65
(8.7)
(3.1)
Diluted
0.62
0.68
0.07
0.67
0.64
(8.8)
(3.1)
Weighted average shares outstanding (in thousands)
Basic
68,525
68,455
68,647
68,475
68,070
Diluted
69,653
69,680
69,933
69,776
69,434
Net income as a percentage of:
Average assets
1.59
%
1.73
%
0.20
%
1.81
%
1.76
%
Average stockholders' equity
16.42
17.66
1.91
17.75
17.42
ASSETS UNDER
MANAGEMENT *
(in billions)
Wilmington Trust
$
31.8
$
31.3
$
29.1
$
28.3
$
29.2
1.6
8.9
Roxbury Capital Management
3.1
3.1
3.1
3.3
3.5
----
(11.4)
Cramer Rosenthal McGlynn
11.2
10.6
9.8
9.4
9.7
5.7
15.5
Combined assets under management
$
46.1
$
45.0
$
42.0
$
41.0
$
42.4
2.4
8.7
* Assets under management include estimates for values associated
with certain assets that lack readily ascertainable values, such
as limited partnership interests.
ASSETS UNDER
ADMINISTRATION **
(in billions)
Wilmington Trust
$
112.1
$
107.5
$
102.4
$
102.7
$
104.0
4.3
7.8
** Includes Wilmington Trust assets under management
FULL-TIME
EQUIVALENT
HEADCOUNT
Full-time equivalent headcount
2,579
2,562
2,520
2,515
2,475
CAPITAL (in millions, except per share amounts)
Average stockholders' equity
$
1,062.2
$
1,067.4
$
1,081.7
$
1,060.0
$
1,026.4
(0.5)
3.5
Period-end primary capital
1,186.7
1,153.5
1,157.9
1,161.2
1,136.9
2.9
4.4
Per share:
Book value
15.90
15.47
15.55
15.54
15.30
2.8
3.9
Quarterly dividends declared
0.315
0.315
0.315
0.315
0.30
----
5.0
Year-to-date dividends declared
0.315
1.245
0.93
0.615
0.30
Average stockholders' equity to assets
9.68
%
9.78
%
10.28
%
10.23
%
10.09
%
Total risk-based capital ratio
12.53
12.10
12.32
11.70
12.10
Tier 1 risk-based capital ratio
8.64
8.25
8.28
7.67
7.70
Tier 1 leverage capital ratio
7.64
7.39
7.34
6.98
6.94
CREDIT QUALITY
(in millions)
Period-end reserve for loan losses
$
94.5
$
94.2
$
93.6
$
94.3
$
93.6
Period-end non-performing assets:
Nonaccrual
23.1
31.0
32.0
29.5
35.5
OREO
4.8
4.8
4.8
4.8
0.2
Renegotiated loans
4.8
----
----
9.9
4.9
Period-end past due 90 days
7.3
5.8
7.7
4.7
10.1
Gross charge-offs
5.1
7.1
8.6
5.7
3.2
Recoveries
1.8
1.2
1.3
2.2
1.4
Net charge-offs
3.3
5.9
7.3
3.5
1.8
Year-to-date net charge-offs
3.3
18.5
12.6
5.3
1.8
Ratios:
Period-end reserve to loans
1.17
%
1.16
%
1.20
%
1.22
%
1.24
%
Period-end non-performing assets to loans
0.40
0.44
0.47
0.57
0.54
Period-end loans past due 90 days to total loans
0.09
0.07
0.10
0.06
0.13
Net charge-offs to average loans
0.04
0.07
0.09
0.05
0.02
INTERNAL RISK RATING
Pass
96.89
%
97.39
%
97.41
%
97.28
%
97.20
%
Watchlisted
2.32
1.82
1.73
1.89
1.97
Substandard
0.77
0.79
0.86
0.76
0.76
Doubtful
0.01
----
----
0.07
0.07
WILMINGTON TRUST CORPORATION QUARTERLY SUMMARY
As of and for the three months ended March 31, 2007
QUARTERLY BUSINESS SEGMENT REPORT
Three Months Ended
Mar. 31,
Dec. 31,
Sept. 30,
June 30,
Mar. 31,
(In millions)
2007
2006
2006
2006
2006
REGIONAL BANKING
Net interest income
$
83.9
$
84.4
$
85.7
$
83.9
$
81.0
Provision for loan losses
(3.6)
(6.4)
(6.7)
(3.7)
(3.8)
Noninterest income
12.5
13.6
13.1
13.1
12.1
Noninterest expense
42.5
41.1
39.9
38.4
39.0
Income before taxes & minority interest
50.3
50.5
52.2
54.9
50.3
Regional Banking efficiency ratio
43.68%
41.56%
40.02%
39.22%
41.49%
WEALTH ADVISORY SERVICES
Net interest income
$
6.3
$
6.6
$
6.4
$
6.3
$
6.5
Provision for loan losses
----
(0.1)
0.1
(0.5)
(0.2)
Noninterest income
47.6
47.7
43.6
44.5
43.4
Noninterest expense
46.4
41.6
38.8
40.6
38.5
Income before taxes & minority interest
7.5
12.6
11.3
9.7
11.2
Wealth Advisory Services efficiency ratio
85.93%
76.47%
77.45%
79.76%
77.00%
CORPORATE CLIENT SERVICES
Net interest income
$
3.7
$
4.3
$
4.4
$
3.4
$
2.8
Provision for loan losses
----
----
----
----
----
Noninterest income
26.8
26.1
23.6
23.1
22.5
Noninterest expense
21.6
22.2
19.9
19.3
20.0
Income before taxes & minority interest
8.9
8.2
8.1
7.2
5.3
Corporate Client Services efficiency ratio
70.82%
72.79%
70.82%
72.56%
79.05%
AFFILIATE MANAGERS *
Net interest income
$
(3.0)
$
(2.9)
$
(3.5)
$
(3.2)
$
(3.0)
Provision for loan losses
----
----
----
----
----
Noninterest income
4.5
5.1
4.3
5.6
4.7
Noninterest expense
----
----
72.3
----
----
Income before taxes & minority interest
1.5
2.2
(71.5)
2.4
1.7
TOTAL WILMINGTON TRUST CORPORATION
Net interest income
$
90.9
$
92.4
$
93.0
$
90.4
$
87.3
Provision for loan losses
(3.6)
(6.5)
(6.6)
(4.2)
(4.0)
Noninterest income
91.4
92.5
84.6
86.3
82.7
Noninterest expense
110.5
104.9
170.9
98.3
97.5
Income before taxes & minority interest
$
68.2
$
73.5
$
0.1
$
74.2
$
68.5
Corporation efficiency ratio
60.28%
56.40%
95.64%
55.29%
57.02%
* Affiliate managers comprise Cramer Rosenthal McGlynn and Roxbury
Capital Management.
Segment data for prior periods may differ from previously
published figures due to changes in reporting methodology and/or
organizational structure.