--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15d of the
Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported)
July 18, 2003
WILMINGTON TRUST CORPORATION
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its chapter)
Commission File Number 1-14659
Delaware 51-0328154
---------------------------- ---------------------
(State or other jurisdiction (IRS Employer
of incorporation) Identification Number)
Wilmington Trust Corporation
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
---------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (302) 651-1000
--------------------------------------------------------------------------------
(Former names or former address, if changed since last report)
Item 12. Results of Operations and Financial Condition.
The press release of Wilmington Trust Corporation reporting its financial
condition and results of operations for the second quarter of 2003 is attached
hereto as Exhibit A and is being furnished pursuant to Item 12 of form 8-K.
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WILMINGTON TRUST CORPORATION
Dated: July 18, 2003
By: /s/ David R. Gibson
-----------------------------
Name: David R. Gibson,
Title: Executive Vice President and
Chief Financial Officer
(Authorized Officer and Principal
Financial Officer)
2
EXHIBIT A
WILMINGTON TRUST Wilmington Trust Corporation
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
News Release
FOR IMMEDIATE RELEASE Contact: Ellen J. Roberts
Investor Relations
(302) 651-8069
eroberts@wilmingtontrust.com
WILMINGTON TRUST REPORTS SECOND QUARTER EPS OF $0.49
Wilmington, Del., July 18, 2003 - Wilmington Trust Corporation (NYSE: WL) today
reported second quarter 2003 earnings, on a diluted basis, of $0.49 per share.
Net income was $32.6 million. This compares with second quarter 2002 earnings
per share of $0.52 and net income of $34.2 million. Growth in loan balances and
new advisory business revenue was offset by compression in the net interest
margin and the effects of equity markets that remained below their year-ago
levels.
"Sales were strong in all of our businesses and in all of our markets," said Ted
T. Cecala, Wilmington Trust chairman and chief executive officer. "When you
compare the second quarter to the first quarter, you see an 11% increase in net
income and earnings per share. In addition, we have made significant progress in
reducing expenses."
The protracted low interest rate environment, the flattening yield curve, and
the company's asset sensitivity caused the net interest margin to decline to
3.62%. This was 13 basis points lower than for the first quarter of 2003 and 53
basis points lower than for the second quarter of 2002.
Assets under management totaled $30.9 billion and reflected linked-quarter
increases at Wilmington Trust and both of its money manager affiliates,
growth-style manager Roxbury Capital Management, and value-style manager Cramer
Rosenthal McGlynn (CRM). Combined assets under management were 7% higher than
for the prior quarter, and 2.5% lower than for the year-ago quarter.
1
Advisory revenue totaled $49.5 million, which was 2.5% higher than for the prior
quarter, and 3.7% lower than for the year-ago quarter. The year-over-year
decline was due primarily to the impact of equity market conditions on Roxbury's
results.
Expenses were $77.1 million, which was $2.5 million, or 3%, lower than for the
2003 first quarter, and 1.6% higher than for the 2002 second quarter.
Loan balances continued to grow steadily, and surpassed $6 billion, which was an
increase over both the prior quarter and the prior year. Credit quality remained
stable.
On an annualized basis, the second quarter 2003 return on average assets was
1.53% and return on average stockholders' equity was 17.04%, compared with 1.83%
and 19.36%, respectively, for the 2002 second quarter.
In other news, the Board of Directors declared a regular quarterly dividend of
$0.27 per share, up 5.9% from the $0.255 per share paid in the second quarter of
2002. The dividend is payable on August 15, 2003, to shareholders of record on
August 1, 2003.
LOW INTEREST RATES AND BALANCE SHEET EXPANSION COMPRESS THE NET INTEREST MARGIN
The low interest rate environment continued to cause compression in the net
interest margin, as yields declined on loan balances and investment securities,
and deposit pricing reached a new low. Funding costs fell, but asset yields fell
further.
The average yield on assets from which the company earned revenue dropped 21
basis points from the prior quarter, and 96 basis points from the year-ago
quarter. In comparison, the average cost of funds used to support those assets
was 8 basis points lower than for the prior quarter and 43 basis points lower
than for the year-ago quarter.
The company used the low interest rate environment as an opportunity to
strengthen its capital position and add to net interest income. In April, the
company issued long-term debt of $250 million in 10-year subordinated notes. The
proceeds of the debt issue were invested in the
2
securities portfolio, primarily in mortgage-backed securities. These new
investments accounted for the majority of the increase in the size of the
portfolio, on average, which was 23% higher than for the prior quarter and 44%
higher than for the year-ago quarter.
At the same time, the low rate environment reduced the overall average yield of
the investment portfolio by 40 basis points from the prior quarter and 93 basis
points from the year-ago quarter. The net average spread on the invested
proceeds of the debt issue was 1.65%. This narrow spread accounted for 8 basis
points of the decline in the net interest margin.
In the loan portfolio, the growth in balances was offset by a rate environment
that continued to drive a high volume of refinancings and pay offs, which
resulted in lower yields. The average yield on total loans declined 12 basis
points from the prior quarter and 90 basis points from the year-ago quarter.
In the commercial loan portfolio, the average yield was 6 basis points lower
than for the prior quarter and 95 basis points lower than for the year-ago
quarter. Contributing to these lower yields was a decline in the 3-month LIBOR,
which fell 16 basis points during the second quarter, versus a fall of 10 basis
points in the first quarter. Approximately one-third, or $1 billion, of the
commercial portfolio is tied to LIBOR.
The magnitude of the yield declines in the loan and investment portfolios far
outpaced the corresponding adjustments to core deposit pricing. The yield on
core interest-bearing deposits reached a new low of 1.05%. This was 12 basis
points lower than for the prior quarter and 40 basis points lower than for the
year-ago quarter.
"Yields have fallen steadily in each of the past 5 quarters, and the Fed's
recent 25-basis-point reduction in interest rates will cause them to decline
further," Cecala said. "We could see our net interest margin decrease by as much
as another 20 basis points in the third quarter."
3
REGIONAL ECONOMY DRIVES LOAN GROWTH
Compared to many other parts of the United States, the economic base of the
Delaware Valley region is relatively strong, due to its diversification among
the financial services, technology, manufacturing, retail, agricultural, and
tourism sectors. The health of the economy in this area, in which the company's
regional banking business is focused, continued to spur growth in loan balances.
Total loan balances surpassed $6 billion in the second quarter. Compared with
the prior quarter, total loan balances, on average, increased $60.1 million, or
1%. Compared with the prior year, average loan balances rose 7%, or $401
million. Approximately 46% of the growth in total loans came from the Delaware
market, where Wilmington Trust is the dominant banking company. Approximately
54% of the growth resulted from gains in market share throughout southeastern
Pennsylvania.
Increases in commercial loan balances continued to comprise the majority of
overall loan growth. Commercial balances, on average, were $3.8 billion. This
was 1.8%, or $68.8 million, higher than for the prior quarter, and 12.8%, or
$435 million, higher than for the year-ago quarter.
Most of the growth in commercial loan balances occurred in commercial real
estate and mortgage lending. Loans were booked across a variety of residential,
hotel, industrial, and office projects on both a construction and permanent
basis.
Commercial real estate construction balances, on average, were 8.5% higher than
for the prior quarter and 30.5% higher than for the year-ago quarter. This was
due largely to the growing market for primary, resort, and retirement
residential projects. One factor that is fueling the demand for primary
residences is the completion of a limited-access highway that links the northern
and central parts of Delaware. This highway, Delaware Route 1, has shortened
commuting times by as much as 40 minutes, and sparked development in what
formerly were rural parts of the state.
4
Retail loan balances, on average, were $2.2 billion. The overall decline was due
to the ongoing sale of all new residential mortgage production into the
secondary market. Within the retail portfolio, consumer lending secured by
liquid collateral totaled $565.4 million, on average. This was a 6% increase
from the prior quarter and a 30% increase from the prior year. These loans are
tied primarily to relationships with wealth advisory clients.
Core deposit balances, on average, were $4.3 billion. This was a 1% increase
from the prior quarter and an 8% increase from the year-ago quarter, and was in
line with trends experienced over the past 8 quarters. More than 95% of core
deposits were generated in Delaware. "The increase in core deposits corresponds
with the volatility in the financial markets," Cecala said. "Some of our clients
have shown a preference for the relative security of lower-yielding bank
deposits over equity investing."
CREDIT QUALITY HOLDS STEADY
Nonaccruing loans, other real estate owned (OREO), and period-end loans past due
90 days all decreased from the prior quarter. Net charge-offs totaled $4.4
million, and the net charge-off ratio was 7 basis points. This was unchanged
from the prior quarter, in line with historical trends, and 5 basis points
higher than for the year-ago quarter. The period-end reserve ratio was 1.44%,
which was 1 basis point higher than for the prior quarter and 7 basis points
lower than for the year-ago quarter. The ratio of period-end loans past due 90
days was 0.12%, which was a decrease of 2 basis points from the prior quarter.
The $20 million commercial credit (family restaurant and entertainment business)
that was transferred to nonaccruing status at the end of the first quarter
accounted for the majority of the increase in nonaccuring loans from the
year-ago quarter; the 4% increase in the average reserve for loan losses from
the year-ago quarter; and the linked-quarter increase of 20% in the provision
for loan losses. It also accounted for the majority of the increase in loans
rated "doubtful" in the company's internal risk rating analysis.
5
The year-over-year increase in OREO primarily reflected a residential
construction project at a beach resort in Maryland that was classified as OREO
in December 2002. Units in this project are being marketed successfully, and no
loss is anticipated.
The composition of the loan portfolio remained relatively unchanged. The
portfolio is well diversified across commercial and consumer lines.
June 30, Mar. 31, June 30,
LOAN PORTFOLIO COMPOSITION 2003 2003 2002
--------------------------------------- -------- -------- --------
Commercial, financial, and agricultural 37% 36% 35%
Real estate - construction 10 10 8
Commercial mortgage 17 18 17
Residential mortgage 10 10 14
Consumer 26 26 26
ASSETS UNDER MANAGEMENT INCREASE; ADVISORY REVENUE REFLECTS EQUITY MARKETS
PERFORMANCE
Advisory revenue totaled $49.5 million, which was a 2.5% increase from the prior
quarter. The linked-quarter growth was due to higher corporate client revenue,
which rose 11%, and a 57% jump in revenue from CRM. CRM's revenue growth
reflected its 19% linked-quarter increase in assets under management.
On a year-over-year basis, advisory revenue declined 3.7%. Wealth advisory and
corporate client revenue increased during this period. Revenue from CRM remained
level, even though CRM's assets under management were 19% lower than for the
year-ago quarter. These achievements were not sufficient to compensate for the
results at Roxbury Capital Management. Roxbury recorded a $1.2 million loss for
the 2003 second quarter, versus revenue of $3.3 million for the 2002 second
quarter. This swing represented $0.04 per share.
"While the past several quarters have been difficult for Roxbury, their current
investment performance and longer-term outlook are positive. They have taken a
number of steps to help restore a positive operating margin," Cecala said. "We
take the longer-term view, and we regard Roxbury's current situation as
temporary."
6
Several signs suggest that Roxbury will narrow its quarterly losses during the
second half of 2003 and resume making a positive contribution by early 2004.
Although assets under management are 34% lower than they were for the year-ago
quarter, they are 3.1% higher on a linked-quarter basis. To date, the small-cap
product that Roxbury launched in June 2002 has attracted $200 million in new
assets. Monthly net outflows have declined 26% since mid-2002. Monthly expenses
were $500,000 lower at June 30, 2003, than they were on June 30, 2002. Attrition
and the elimination of noncritical support staff reduced headcount from 103 at
June 30, 2002, to 84 at March 31, 2003, and 75 at June 30, 2003.
At Wilmington Trust, assets under management increased to $23.8 billion, which
was 6% ahead of the prior quarter and 8% ahead of the year-ago quarter. Revenue
from wealth advisory services was $33.1 million, which was 4% higher than for
the year-ago quarter.
On a linked-quarter basis, wealth advisory revenue declined 1.5%. This was due
to the timing of approximately $1 million in estate settlement fees that were
recorded in the first quarter. Absent these fees, wealth advisory revenue rose
1.5% from the linked quarter.
The majority of the wealth advisory growth was recorded in Delaware. The other
leading contributors to the growth were New York and Pennsylvania. Pennsylvania
accounted for 15% of the 2003 second quarter growth, up from 13% for the 2003
first quarter and 9% for the 2002 second quarter. The growth was driven by
demand for planning and advice on asset allocation, and sales of the
open-architecture investment consulting product.
A proprietary survey conducted during the quarter of new wealth advisory clients
revealed that their primary reason for opening accounts at Wilmington Trust was
to consolidate accounts and still retain the benefits of using a variety of
advisers, an advantage of the company's investment consulting services. Also
cited as reasons for choosing Wilmington Trust were the company's reputation,
its focus on client service, and the fact that wealth management is a core
business, as opposed to being a smaller business in a larger institution.
"Volatility in the financial markets over the past 3 years has caused many
high-net-worth individuals and families to reevaluate their risk tolerance
levels," Cecala said. "This survey
7
shows that clients place a high value on how our emphasis on asset allocation
and strategic rebalancing can mitigate risk."
Wealth advisory fees are priced at the beginning of each month based on market
valuations at the end of the previous month. Approximately 70% of wealth
advisory income is derived from the market value of assets under management.
Corporate client services revenue was $16.5 million, which was 11% higher than
the prior quarter and 8% higher than the year-ago quarter. All three components
of this business - capital markets services, entity management services, and
retirement services - contributed to the growth.
The largest contributor to corporate client revenue was the capital markets
business, which had revenue of $10.7 million. This was an increase of 19% from
the linked quarter and 9% from the year-ago quarter. Capital markets revenue
accounted for 65% of total corporate client revenue in the second quarter,
versus 60% in the prior quarter and 64% in the year-ago quarter.
Most of the capital markets growth was due to higher sales, primarily in
European jurisdictions, of trustee and administrative services that support
asset-backed securitizations. There was an increase in the number of corporate
debt issues for which the company was appointed trustee, as issuers took
advantage of low interest rates. In addition, the company was appointed trustee
on two large aggregated trust-preferred securities transactions.
The company also was awarded additional liquidating and successor indenture
trustee appointments. Because of industry consolidation, and because it has no
lending or securities underwriting conflict of interests, Wilmington Trust is
one of the few remaining providers of services like these that support
distressed companies.
Revenue from entity management services totaled $3.5 million, which was level
with the prior quarter and 3% higher than the year-ago quarter. Retirement
services revenue was $2.3 million, which was 4% lower than for the prior quarter
and 10% higher than for the year-ago quarter.
8
Corporate client services are performed on a fee-for-service basis that is
priced according to the complexity of the services provided. Most are performed
under multiyear contracts and generate an annuity-like stream of revenue.
Approximately 25% of corporate client revenue is tied to asset valuations; most
of that is associated with retirement plan assets for which the company serves
as trustee.
EXPENSE MANAGEMENT INITIATIVES UNDERWAY
As a result of the expense management initiatives begun at the end of the first
quarter, linked-quarter expenses dropped from $79.6 million to $77.1 million.
This was 3% lower than for the prior quarter, and 1.6% higher than for the
year-ago quarter.
The largest component of this change was the decline in the incentives and
bonuses line, which fell 54.7% from the prior quarter and 41.1% from the prior
year. Approximately $3 million of the decrease was due to the elimination of the
company-wide profit sharing program.
On a full-time-equivalent basis, staff totaled 2,319. This was 23 fewer staff
than at March 31, 2003, and 13 fewer than at June 30, 2002. The reductions were
achieved through normal attrition and efforts to limit growth in the size of the
workforce.
Salary expense was 4.7% higher than for the prior quarter and 6.1% higher than
for the prior year. The increase was due to an extra pay period and a higher
accrual for earned but unused vacation. Employment benefits expense decreased
7.3% from the linked-quarter, because of lower payroll taxes related to
incentive payments. Employment benefit expense was 14.1% higher than for the
year-ago quarter, due to increased health insurance and pension costs.
Other noninterest expense was higher than for the prior and year-ago
quarters, primarily due to:
- An increase in consulting expense for third-party investment advisers used
in the company's open-architecture investment counseling services.
- Advertising and contribution costs.
- Higher legal and audit costs.
9
On April 17, the company said it would reduce its 2003 expense budget by $20
million, from $325 million to $305 million, by curbing discretionary spending,
delaying some capital expenditures, and limiting growth in the size of its
workforce. "Our initial steps at curbing the growth of our expenses have been
successful, and at a run rate of $77 million, our expenses for the full year
will be approximately $310 million. This is level with 2002 expenses," Cecala
said. "We continue to seek additional ways to minimize the growth in our
expenses over the balance of the year."
CONFERENCE CALL TODAY
Management will discuss results in a conference call today at 10:00 a.m. (EDT).
To access the call, dial 800-475-2151. Supporting materials, financial
statements, and simultaneous streaming of the conference call audio will be
available online at wilmingtontrust.com. A rebroadcast of the conference call
will be available from 12:00 noon (EDT) today until 11:59 p.m. (EDT) on Friday,
July 25, by calling 877-519-4471 and using PIN number 4024129. To access the
rebroadcast from outside the United States, dial 973-341-3080 and use the same
PIN number.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements which reflect the company's
current expectations about its future performance. These statements rely on a
number of assumptions and estimates and are subject to various risks and
uncertainties that could cause actual results to differ materially from
expectations. The factors that could affect the company's future financial
results are discussed more fully in the reports the company files with the
Securities and Exchange Commission. The company disclaims any obligation or
intent to update the forward-looking statements in order to reflect events or
circumstances after the date of this release.
ABOUT WILMINGTON TRUST
Wilmington Trust Corporation (NYSE: WL) is a financial services holding company
that provides wealth management and specialized corporate services to clients
throughout the U.S. and in more than 50 other countries, and commercial banking
services throughout the Delaware Valley region. Its wholly owned bank
subsidiary, Wilmington Trust Company, which celebrates its 100th anniversary in
2003, is the 15th largest personal trust provider in the United States.
10
Wilmington Trust and its affiliates have offices in California, Delaware,
Florida, Georgia, Maryland, Nevada, New York, Pennsylvania, Tennessee, the
Cayman Islands, the Channel Islands, and London, and other affiliates in Dublin
and Milan. For more information, visit www.wilmingtontrust.com.
# # #
11
WILMINGTON TRUST CORPORATION
QUARTERLY SUMMARY
As of and for the six months ended June 30, 2003
INCOME STATEMENT
Three Months Ended
------------------------------------------------------------------
June 30, Mar. 31, Dec. 31, Sept. 30, June 30,
(in millions, except per share amounts) 2003 2003 2002 2002 2002
-------- -------- -------- -------- --------
Interest income $ 94.7 $ 92.8 $ 96.9 $ 100.1 $ 99.6
Interest expense 24.5 24.5 27.0 29.3 29.0
-------- -------- -------- -------- --------
Net interest income 70.2 68.3 69.9 70.8 70.6
Provision for loan losses (5.9) (4.9) (5.5) (5.1) (6.1)
-------- -------- -------- -------- --------
Net interest income after provision
for loan losses 64.3 63.4 64.4 65.7 64.5
-------- -------- -------- -------- --------
Noninterest income:
Advisory fees:
Wealth advisory services 33.1 33.6 32.7 31.2 31.7
Corporate client services 16.5 14.9 18.2 17.2 15.3
Cramer Rosenthal McGlynn 1.1 0.7 1.2 1.8 1.1
Roxbury Capital Management (1.2) (0.9) (1.4) 2.4 3.3
-------- -------- -------- -------- --------
Advisory fees 49.5 48.3 50.7 52.6 51.4
Amortization of other intangibles (0.3) (0.3) (0.3) (0.7) (0.2)
-------- -------- -------- -------- --------
Advisory fees after
amortization of other intangibles 49.2 48.0 50.4 51.9 51.2
-------- -------- -------- -------- --------
Service charges on deposit accounts 7.8 7.3 7.8 7.8 7.4
Other noninterest income 6.0 5.8 7.5 5.8 5.7
Securities gains -- -- 2.0 -- --
-------- -------- -------- -------- --------
Total noninterest income 63.0 61.1 67.7 65.5 64.3
-------- -------- -------- -------- --------
Net interest and noninterest income 127.3 124.5 132.1 131.2 128.8
-------- -------- -------- -------- --------
Noninterest expense:
Salaries and wages 31.2 29.8 30.3 30.3 29.4
Incentives and bonuses 4.3 9.5 6.6 7.4 7.3
Employment benefits 8.9 9.6 8.6 7.8 7.8
Net occupancy 5.0 5.4 5.6 5.3 4.8
Furniture, equipment, and supplies 7.3 7.3 7.6 8.2 8.2
Other noninterest expense 20.4 18.0 23.0 18.1 18.4
-------- -------- -------- -------- --------
Total noninterest expense 77.1 79.6 81.7 77.1 75.9
-------- -------- -------- -------- --------
Income before income taxes and
minority interest 50.2 44.9 50.4 54.1 52.9
Applicable income taxes 17.4 15.3 17.9 19.4 18.5
-------- -------- -------- -------- --------
Net income before minority interest 32.8 29.6 32.5 34.7 34.4
Minority interest 0.2 0.2 0.2 0.2 0.2
-------- -------- -------- -------- --------
Net income $ 32.6 $ 29.4 $ 32.3 $ 34.5 $ 34.2
======== ======== ======== ======== ========
Net income per share
Basic $ 0.50 $ 0.45 $ 0.49 $ 0.53 $ 0.52
Diluted 0.49 0.44 0.49 0.52 0.52
Weighted average shares outstanding (in thousands)
Basic 65,790 65,692 65,584 65,631 65,635
Diluted 66,195 66,174 66,148 66,174 66,381
Net income as a percentage of:
Average assets 1.53% 1.46% 1.60% 1.77% 1.83%
Average stockholders' equity 17.04 15.97 17.30 18.66 19.36
Three Months Ended
--------------------
% Change From:
------------------
Prior Prior
(in millions, except per share amounts) Quarter Year
-------- --------
Interest income 2.0 (4.9)
Interest expense -- (15.5)
Net interest income 2.8 (0.6)
Provision for loan losses 20.4 (3.3)
Net interest income after provision
for loan losses 1.4 (0.3)
Noninterest income:
Advisory fees:
Wealth advisory services (1.5) 4.4
Corporate client services 10.7 7.8
Cramer Rosenthal McGlynn 57.1 --
Roxbury Capital Management 33.3 --
Advisory fees 2.5 (3.7)
Amortization of other intangibles -- 50.0
Advisory fees after
amortization of other intangibles 2.5 (3.9)
Service charges on deposit accounts 6.8 5.4
Other noninterest income 3.4 5.3
Securities gains -- --
Total noninterest income 3.1 (2.0)
Net interest and noninterest income 2.2 (1.2)
Noninterest expense:
Salaries and wages 4.7 6.1
Incentives and bonuses (54.7) (41.1)
Employment benefits (7.3) 14.1
Net occupancy (7.4) 4.2
Furniture, equipment, and supplies -- (11.0)
Other noninterest expense 13.3 10.9
Total noninterest expense (3.1) 1.6
Income before income taxes and
minority interest 11.8 (5.1)
Applicable income taxes 13.7 (5.9)
Net income before minority interest 10.8 (4.7)
Minority interest -- --
Net income 10.9 (4.7)
Net income per share
Basic 11.1 (3.8)
Diluted 11.4 (5.8)
Weighted average shares outstanding (in thousands)
Basic
Diluted
Net income as a percentage of:
Average assets
Average stockholders' equity
WILMINGTON TRUST CORPORATION
QUARTERLY SUMMARY
As of and for the six months ended June 30, 2003
INCOME STATEMENT
Six Months Ended
------------------------------------
June 30, June 30, %
(in millions, except per share amounts) 2003 2002 Change
-------- -------- --------
Interest income $ 187.5 $ 195.8 (4.2)
-------- --------
Interest expense 49.0 60.1 (18.5)
Net interest income 138.5 135.7 2.1
Provision for loan losses (10.8) (11.4) (5.3)
-------- --------
Net interest income after provision
for loan losses 127.7 124.3 2.7
-------- --------
Noninterest income:
Advisory fees:
Wealth advisory services 66.7 63.0 5.9
Corporate client services 31.4 28.8 9.0
Cramer Rosenthal McGlynn 1.8 4.7 (61.7)
Roxbury Capital Management (2.1) 7.6 --
-------- --------
Advisory fees 97.8 104.1 (6.1)
Amortization of other intangibles (0.6) (0.2) 200.0
-------- --------
Total advisory fees after
amortization of other intangibles 97.2 103.9 (6.4)
-------- --------
Service charges on deposit accounts 15.1 14.3 5.6
Other noninterest income 11.9 10.8 10.2
Securities gains -- -- --
-------- --------
Total noninterest income 124.2 129.0 (3.7)
-------- --------
Net interest and noninterest income 251.9 253.3 (0.6)
-------- --------
Noninterest expense:
Salaries and wages 61.0 58.9 3.6
Incentives and bonuses 13.7 16.4 (16.5)
Employment benefits 18.5 16.2 14.2
Net occupancy 10.4 9.4 10.6
Furniture, equipment, and supplies 14.7 16.2 (9.3)
Other noninterest expense 38.4 34.0 12.9
-------- --------
Total noninterest expense 156.7 151.1 3.7
-------- --------
Income before income taxes and
minority interest 95.2 102.2 (6.8)
Applicable income taxes 32.8 35.7 (8.1)
-------- --------
Net income before minority interest 62.4 66.5 (6.2)
Minority interest 0.4 0.2 100.0
-------- --------
Net income $ 62.0 $ 66.3 (6.5)
======== ========
Net income per share
Basic $ 0.94 $ 1.01 (6.9)
Diluted 0.94 1.00 (6.0)
Weighted average shares outstanding (in thousands)
Basic 65,741 65,627
Diluted 66,184 66,445
Net income as a percentage of:
Average assets 1.49% 1.80%
Average stockholders' equity 16.52 19.05
WILMINGTON TRUST CORPORATION
QUARTERLY SUMMARY
As of and for the six months ended June 30, 2003
STATEMENT OF CONDITION
% Change From
-------------------
June 30, Mar. 31, Dec. 31, Sept. 30, June 30, Prior Prior
(in millions) 2003 2003 2002 2002 2002 Quarter Year
-------- -------- -------- -------- -------- -------- --------
Assets:
Cash and due from banks $ 214.5 $ 207.3 $ 248.9 $ 253.1 $ 184.7 3.5 16.1
-------- -------- -------- -------- --------
Federal funds sold and securities
purchased under agreements to
resell 180.9 3.8 -- 105.4 302.6 N/M (40.2)
-------- -------- -------- -------- --------
U.S. Treasury and government agencies 548.6 451.5 489.6 593.4 579.8 21.5 (5.4)
State and municipal 16.6 16.6 16.6 17.3 17.5 -- (5.1)
Preferred stock 122.4 119.2 111.8 93.5 82.7 2.7 48.0
Mortgage-backed securities 1,039.1 707.2 507.8 450.8 427.2 46.9 143.2
Other securities 244.2 250.2 222.9 200.1 172.9 (2.4) 41.2
-------- -------- -------- -------- --------
Total investment securities 1,970.9 1,544.7 1,348.7 1,355.1 1,280.1 27.6 54.0
-------- -------- -------- -------- --------
Commercial, financial and
agricultural * 2,219.6 2,153.6 2,137.1 2,132.5 2,017.9 3.1 10.0
Real estate - construction * 602.1 604.0 591.9 450.4 464.4 (0.3) 29.7
Mortgage-commercial * 1,038.0 1,055.0 1,065.9 969.0 995.3 (1.6) 4.3
-------- -------- -------- -------- --------
Total commercial loans 3,859.7 3,812.6 3,794.9 3,551.9 3,477.6 1.2 11.0
-------- -------- -------- -------- --------
Mortgage-residential 592.3 627.1 677.2 740.9 783.2 (5.5) (24.4)
Consumer 1,037.0 1,029.4 1,046.7 1,067.7 1,019.0 0.7 1.8
Secured with liquid collateral 574.6 539.1 506.3 500.5 462.8 6.6 24.2
-------- -------- -------- -------- --------
Total retail loans 2,203.9 2,195.6 2,230.2 2,309.1 2,265.0 0.4 (2.7)
-------- -------- -------- -------- --------
Total loans 6,063.6 6,008.2 6,025.1 5,861.0 5,742.6 0.9 5.6
Reserve for loan losses (87.6) (86.0) (85.2) (86.8) (86.6) 1.9 1.2
-------- -------- -------- -------- --------
Net loans 5,976.0 5,922.2 5,939.9 5,774.2 5,656.0 0.9 5.7
-------- -------- -------- -------- --------
Premises and equipment 152.1 154.0 155.2 138.2 137.5 (1.2) 10.6
Goodwill 247.3 240.1 240.2 239.5 225.7 3.0 9.6
Other intangibles 21.3 21.4 21.7 17.5 18.3 (0.5) 16.4
Other assets 176.2 174.5 176.7 158.3 148.1 1.0 19.0
-------- -------- -------- -------- --------
Total assets $8,939.2 $8,268.0 $8,131.3 $8,041.3 $7,953.0 8.1 12.4
======== ======== ======== ======== ========
Liabilities and Stockholders' Equity:
Noninterest-bearing demand $ 944.4 $ 919.1 $1,189.6 $ 919.4 $ 897.0 2.8 5.3
Savings 368.7 366.5 349.3 343.3 362.7 0.6 1.7
Interest-bearing demand 2,302.5 2,129.9 1,833.6 1,846.0 1,865.9 8.1 23.4
Certificates under $100,000 836.7 867.5 884.1 898.6 882.4 (3.6) (5.2)
Local CDs $100,000 and over 125.8 136.9 135.3 176.5 195.3 (8.1) (35.6)
-------- -------- -------- -------- --------
Total core deposits 4,578.1 4,419.9 4,391.9 4,183.8 4,203.3 3.6 8.9
National CDs $100,000 and over 1,910.2 2,157.2 1,945.2 1,913.2 1,852.2 (11.5) 3.1
-------- -------- -------- -------- --------
Total deposits 6,488.3 6,577.1 6,337.1 6,097.0 6,055.5 (1.4) 7.1
-------- -------- -------- -------- --------
Federal funds purchased and
securities sold under
agreements to repurchase 1,083.4 627.9 692.8 814.5 836.4 72.5 29.5
U.S. Treasury demand 32.5 10.7 41.9 91.7 64.5 203.7 (49.6)
-------- -------- -------- -------- --------
Total short-term borrowings 1,115.9 638.6 734.7 906.2 900.9 74.7 23.9
-------- -------- -------- -------- --------
Other liabilities 133.2 137.0 157.7 138.3 111.4 (2.8) 19.6
Long-term debt 420.8 160.5 160.5 160.5 160.5 162.2 162.2
-------- -------- -------- -------- --------
Total liabilities 8,158.2 7,513.2 7,390.0 7,302.0 7,228.3 8.6 12.9
Minority interest (0.1) -- -- -- 0.1 -- --
Stockholders' equity 781.1 754.8 741.3 739.3 724.6 3.5 7.8
-------- -------- -------- -------- --------
Total liabilities and
stockholders' equity $8,939.2 $8,268.0 $8,131.3 $8,041.3 $7,953.0 8.1 12.4
======== ======== ======== ======== ========
* Certain commercial loan balances reclassified
Commercial loan balances for the 2003 first quarter reflect changes that were
made after an analysis of ledger coding revealed inconsistencies in the
categories in which loans were recorded. This resulted in a reclassification of
approximately $192 million, or 5%, of the commercial portfolio.
The $192 million was moved out of the general commercial and industrial
category. Approximately $90 million of that amount was reclassified as
commercial real estate loans, and the remaining $102 million was moved into the
commercial mortgage category.
WILMINGTON TRUST CORPORATION
QUARTERLY SUMMARY
As of and for the six months ended June 30, 2003
AVERAGE STATEMENT OF CONDITION
2003 2003 2002 2002 2002 % Change From
-------------------
Second First Fourth Third Second Prior Prior
(in millions) Quarter Quarter Quarter Quarter Quarter Quarter Year
-------- -------- -------- -------- -------- --------- --------
Assets:
Cash and due from banks $ 182.4 $ 187.0 $ 201.1 $ 185.9 $ 167.6 (2.5) 8.8
-------- -------- -------- -------- --------
Federal funds sold and securities
purchased under agreements to
resell 38.4 24.1 63.5 16.4 17.4 59.3 120.7
-------- -------- -------- -------- --------
U.S. Treasury and government agencies 528.8 461.0 588.4 591.9 582.6 14.7 (9.2)
State and municipal 16.6 16.5 16.8 17.2 17.4 0.6 (4.6)
Preferred stock 120.1 114.0 99.4 85.4 80.4 5.4 49.4
Mortgage-backed securities 888.8 642.6 434.5 447.6 400.9 38.3 121.7
Other securities 240.9 227.5 213.9 189.0 169.2 5.9 42.4
-------- -------- -------- -------- --------
Total investment securities 1,795.2 1,461.6 1,353.0 1,331.1 1,250.5 22.8 43.6
-------- -------- -------- -------- --------
Commercial, financial and agricultural 2,190.8 2,214.8 2,208.4 2,055.7 1,941.1 (1.1) 12.9
Real estate - construction 590.8 544.6 469.3 448.7 452.6 8.5 30.5
Mortgage-commercial 1,054.6 1,008.0 980.3 986.1 1,007.5 4.6 4.7
-------- -------- -------- -------- --------
Total commercial loans 3,836.2 3,767.4 3,658.0 3,490.5 3,401.2 1.8 12.8
-------- -------- -------- -------- --------
Mortgage-residential 604.7 649.0 708.9 759.0 800.3 (6.8) (24.4)
Consumer 1,031.4 1,028.3 1,031.9 1,027.8 999.0 0.3 3.2
Secured with liquid collateral 565.4 532.9 499.2 483.0 436.3 6.1 29.6
-------- -------- -------- -------- --------
Total retail loans 2,201.5 2,210.2 2,240.0 2,269.8 2,235.6 (0.4) (1.5)
-------- -------- -------- -------- --------
Total loans 6,037.7 5,977.6 5,898.0 5,760.3 5,636.8 1.0 7.1
Reserve for loan losses (84.7) (84.5) (84.9) (85.9) (81.4) 0.2 4.1
-------- -------- -------- -------- --------
Net loans 5,953.0 5,893.1 5,813.1 5,674.4 5,555.4 1.0 7.2
-------- -------- -------- -------- --------
Premises and equipment 153.7 154.9 144.0 138.9 139.1 (0.8) 10.5
Goodwill 245.8 240.2 240.5 245.2 229.0 2.3 7.3
Other intangibles 21.3 21.6 16.6 11.1 11.5 (1.4) 85.2
Other assets 177.6 176.7 159.5 150.3 145.5 0.5 22.1
-------- -------- -------- -------- --------
Total assets $8,567.4 $8,159.2 $7,991.3 $7,753.3 $7,516.0 5.0 14.0
======== ======== ======== ======== ========
Liabilities and Stockholders' Equity:
Noninterest-bearing demand $ 796.4 $ 800.7 $ 970.3 $ 777.3 $ 705.7 (0.5) 12.9
Savings 369.4 357.3 346.5 355.8 364.8 3.4 1.3
Interest-bearing demand 2,127.0 2,062.9 1,812.6 1,767.7 1,818.0 3.1 17.0
Certificates under $100,000 851.5 874.6 891.6 891.8 884.7 (2.6) (3.8)
Local CDs $100,000 and over 139.6 151.1 168.7 178.8 180.1 (7.6) (22.5)
-------- -------- -------- -------- --------
Total core deposits 4,283.9 4,246.6 4,189.7 3,971.4 3,953.3 0.9 8.4
National CDs $100,000 and over 1,979.5 2,066.3 1,987.4 2,027.0 1,764.3 (4.2) 12.2
-------- -------- -------- -------- --------
Total deposits 6,263.4 6,312.9 6,177.1 5,998.4 5,717.6 (0.8) 9.5
-------- -------- -------- -------- --------
Federal funds purchased and
securities sold
under agreements
to repurchase 985.3 778.7 753.0 705.3 794.6 26.5 24.0
U.S. Treasury demand 8.4 8.1 16.3 27.3 15.9 3.7 (47.2)
-------- -------- -------- -------- --------
Total short-term borrowings 993.7 786.8 769.3 732.6 810.5 26.3 22.6
-------- -------- -------- -------- --------
Other liabilities 135.0 152.5 143.5 128.2 118.9 (11.5) 13.5
Long-term debt 407.9 160.5 160.5 160.5 160.5 154.1 154.1
-------- -------- -------- -------- --------
Total liabilities 7,800.0 7,412.7 7,250.4 7,019.7 6,807.5 5.2 14.6
Minority interest 0.1 0.1 0.1 0.1 0.1 -- --
Stockholders' equity 767.3 746.4 740.8 733.5 708.4 2.8 8.3
-------- -------- -------- -------- --------
Total liabilities and
stockholders' equity $8,567.4 $8,159.2 $7,991.3 $7,753.3 $7,516.0 5.0 14.0
======== ======== ======== ======== ========
WILMINGTON TRUST CORPORATION
QUARTERLY SUMMARY
As of and for the six months ended June 30, 2003
RATES
2003 2003 2002 2002 2002
Second First Fourth Third Second
YIELDS/RATES (TAX-EQUIVALENT BASIS) Quarter Quarter Quarter Quarter Quarter
------- ------- ------- ------- -------
Earning assets:
FEDERAL FUNDS SOLD AND SECURITIES
PURCHASED UNDER AGREEMENTS TO RESELL 1.32% 1.40% 1.65% 2.77% 2.46%
U.S. Treasury and government agencies 3.29 3.73 4.14 4.27 4.31
State and municipal 9.01 8.97 9.04 8.97 8.97
Preferred stock 7.40 7.68 7.99 8.13 8.33
Mortgage-backed securities 4.47 4.97 5.38 5.68 5.99
Other securities 2.93 3.17 3.58 3.55 3.59
TOTAL INVESTMENT SECURITIES 4.15 4.55 4.80 4.95 5.08
Commercial, financial and agricultural 4.45 4.53 4.83 5.20 5.45
Real estate - construction 4.56 4.45 4.62 5.23 5.19
Mortgage-commercial 5.47 5.63 5.88 6.34 6.40
TOTAL COMMERCIAL LOANS 4.75 4.81 5.08 5.53 5.70
Mortgage-residential 6.77 6.82 6.83 6.82 6.90
Consumer 6.68 6.85 7.03 7.20 7.38
Secured with liquid collateral 2.73 2.87 3.17 3.35 3.44
TOTAL RETAIL LOANS 5.69 5.88 6.11 6.25 6.44
TOTAL LOANS 5.09 5.21 5.47 5.81 5.99
TOTAL EARNING ASSETS 4.86 5.07 5.32 5.65 5.82
Funds supporting earning assets
Savings 0.15 0.23 0.24 0.25 0.25
Interest-bearing demand 0.45 0.47 0.51 0.60 0.57
Certificates under $100,000 2.80 3.05 3.29 3.46 3.50
Local CDs $100,000 and over 1.78 1.99 2.38 2.36 2.70
CORE INTEREST-BEARING DEPOSITS 1.05 1.17 1.35 1.46 1.45
National CDs $100,000 and over 1.56 1.69 1.92 2.14 2.26
TOTAL INTEREST-BEARING DEPOSITS 1.23 1.36 1.57 1.72 1.74
Federal funds purchased and securities sold
under agreements to repurchase 1.54 1.64 1.86 2.04 2.19
U.S. Treasury demand 1.04 0.99 1.22 1.51 1.50
TOTAL SHORT-TERM BORROWINGS 1.54 1.64 1.85 2.02 2.18
Long-term debt 3.62 6.58 6.61 6.61 6.60
TOTAL INTEREST-BEARING LIABILITIES 1.42 1.52 1.73 1.89 1.93
TOTAL FUNDS USED TO SUPPORT
EARNING ASSETS 1.24 1.32 1.46 1.63 1.67
NET INTEREST MARGIN (TAX-EQUIVALENT BASIS) 3.62 3.75 3.86 4.02 4.15
Tax-equivalent net interest income
income (in millions) $ 71.4 $ 69.6 $ 71.2 $ 72.1 $ 71.9
Average rates are calculated using average balances based on historical cost and
do not reflect market valuation adjustments.
WILMINGTON TRUST CORPORATION
QUARTERLY SUMMARY
As of and for the six months ended June 30, 2003
SUPPLEMENTAL
Three Months Ended
--------------------------------------------------------------------------
% Change From:
-----------------
Prior
June 30, Mar. 31, Dec. 31, Sept. 30, June 30, Prior Year
OTHER NONINTEREST EXPENSE (in millions) 2003 2003 2002 2002 2002 Quarter Quarter
--------- --------- ---------- ---------- --------- -------- -------
Advertising and contributions $ 2.8 $ 1.9 $ 2.8 $ 2.1 $ 3.0 47.4% (6.7)%
Servicing and consulting fees 3.9 4.0 4.7 3.3 2.9 (2.5) 34.5
Travel, entertainment, and training 1.9 1.5 2.0 2.0 2.1 26.7 (9.5)
Originating and processing fees 1.8 1.8 2.0 1.7 2.0 -- (10.0)
Other noninterest expense 10.0 8.8 11.5 9.0 8.4 13.6 19.0
-------- -------- --------- --------- --------
Total $ 20.4 $ 18.0 $ 23.0 $ 18.1 $ 18.4 13.3 10.9
======== ======== ========= ========= ========
Staffing (FTE) 2,319 2,342 2,361 2,351 2,332
ASSETS UNDER MANAGEMENT (in billions)
Wilmington Trust $ 23.8 $ 22.5 $ 21.7 $ 21.5 $ 22.0 5.8 8.2
Roxbury Capital Management 3.3 3.2 3.7 3.9 5.0 3.1 (34.0)
Cramer Rosenthal McGlynn 3.8 3.2 3.5 3.7 4.7 18.8 (19.1)
-------- -------- --------- --------- --------
Combined assets under management $ 30.9 $ 28.9 $ 28.9 $ 29.1 $ 31.7 6.9 (2.5)
======== ======== ========= ========= ========
CAPITAL (in millions, except per share
amounts)
Average stockholders' equity $ 767.3 $ 746.4 $ 740.8 $ 733.5 $ 708.4 2.8 8.3
Period-end primary capital 868.9 840.8 826.4 826.0 811.1 3.3 7.1
Per share:
Book value 11.85 11.49 11.30 11.28 11.03 3.1 7.4
Dividends declared 0.27 0.255 0.255 0.255 0.255 5.9 5.9
Average stockholders' equity to assets 8.96% 9.15% 9.27% 9.46% 9.43%
Total risk-based capital ratio 11.90 10.20 10.19 10.57 10.94
Tier 1 risk-based capital ratio 7.09 7.11 7.07 7.36 7.67
Tier 1 leverage capital ratio 6.01 6.15 6.11 6.25 6.53
CREDIT QUALITY (in millions)
Period-end reserve for loan losses $ 87.6 $ 86.0 $ 85.2 $ 86.8 $ 86.6
Period-end non-performing assets:
Nonaccrual 60.4 64.6 42.4 44.4 47.1
OREO 3.2 3.9 3.1 0.3 0.3
Period-end past due 90 days 7.1 8.3 12.5 22.2 5.5
Period-end renegotiated loans -- -- -- -- --
Gross charge-offs 5.1 5.3 7.9 5.8 3.5
Recoveries 0.7 1.2 0.8 0.8 2.3
Net charge-offs 4.4 4.1 7.1 5.0 1.2
Ratios:
Period-end reserve to loans 1.44% 1.43% 1.41% 1.48% 1.51%
Period-end non-performing assets
to loans 1.05 1.14 0.76 0.76 0.83
Period-end loans past due 90 days
to total loans 0.12 0.14 0.21 0.38 0.10
Net charge-offs to average loans 0.07 0.07 0.12 0.09 0.02
INTERNAL RISK RATING
Pass 95.62% 95.52% 95.65% 95.62% 95.23%
Watchlisted 2.60 2.48 2.57 2.29 2.41
Substandard 1.23 1.79 1.53 1.83 2.26
Doubtful 0.55 0.21 0.25 0.26 0.12