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) April 16, 2004
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WILMINGTON TRUST CORPORATION
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(Exact name of registrant as specified in its chapter)
Commission File Number 1-14659
Delaware 51-0328154
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(State or other jurisdiction of incorporation) (IRS Employer Identification Number)
Wilmington Trust Corporation
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (302) 651-1000
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(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 results of
operations and financial condition for the first quarter and of 2004 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: April 16, 2004
By: /s/ David R. Gibson
---------------------------------
Name: David R. Gibson,
Title: Executive Vice President and
Chief Financial Officer
(Authorized Officer and Principal
Financial Officer)
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WILMINGTON TRUST Wilmington Trust Corporation
Rodney Square North
1100 North Market Street
Wilmington DE 19801-0001
FOR IMMEDIATE RELEASE
WILMINGTON TRUST REPORTS 20% EARNINGS INCREASE, RAISES DIVIDEND
Wilmington, Del., April 16, 2004 - Wilmington Trust Corporation (NYSE: WL) today
reported first quarter 2004 earnings per share of $0.53 on a diluted basis. Net
income was $35.7 million. These were increases of 20.5% and 21.4%, respectively,
from the 2003 first quarter.
The 2004 first quarter was characterized by:
- The 12th consecutive quarter of growth in loan balances, which rose more
than 5% and reached a record high of $6.3 billion, on average;
- 18% growth in Wealth Advisory Services revenue;
- 20% growth in Corporate Client Services revenue;
- Higher income from the money manager affiliates;
- A net interest margin of 3.53%; and
- Stable credit quality.
"Business development continued to be strong, and we generated double-digit
increases in income from our advisory businesses and solid growth in loan
balances," said Ted T. Cecala, Wilmington Trust chairman and chief executive
officer. "Earnings improved 20% while expenses rose 4% and our net interest
margin was 22 basis points lower than it was at this time last year."
Combined assets under management at Wilmington Trust, Cramer Rosenthal McGlynn,
and Roxbury Capital Management totaled $32.7 billion at March 31, 2004. This was
an increase of 16.8% from March 31, 2003, and 1.2% from year-end 2003.
In a reflection of continued growth in net income and stockholders' equity, the
Board of Directors raised the quarterly cash dividend by $0.015 to $0.285 per
share, or $1.14 on an
1
annualized basis. This was an increase of 5.6%. The quarterly dividend is
payable on May 17, 2004, to stockholders of record on May 3, 2004.
This marks the 23rd consecutive year that Wilmington Trust has increased its
cash dividend. According to Mergent, Inc.'s 2003 Dividend Achievers, only 150 of
the more than 11,400 dividend-paying companies that trade on U.S. exchanges have
raised their dividends for 20 or more consecutive years.
First quarter 2004 results, on an annualized basis, generated a return on
average assets of 1.61% and a return on average stockholders' equity of 17.69%.
In comparison, the 2003 first quarter annualized returns were 1.46% and 15.97%,
respectively.
BUSINESS DEVELOPMENT DRIVES ADVISORY INCOME INCREASES
Combined income from the advisory businesses - Wealth Advisory Services,
Corporate Client Services, and the two affiliate money managers - jumped 24.0%,
rising to $59.9 million for the 2004 first quarter from $48.3 million in the
2003 first quarter. This increase reflected the sustained strength of business
development efforts, renewed client confidence in the economic outlook, and
asset appreciation.
Both the Wealth Advisory Services business and the Corporate Client Services
business recorded double-digit increases in revenue. Income from the two
affiliate money managers rose due to an especially strong contribution from
Cramer Rosenthal McGlynn and a return to profitability at Roxbury Capital
Management.
Income from the advisory businesses accounted for 43.1% of total interest and
noninterest income for the 2004 first quarter, up from 38.8% for the year ago
first quarter and level with the 2003 fourth quarter.
At March 31, 2004, assets under management at Wilmington Trust were
$24.2 billion. In comparison, Wilmington Trust's managed assets were $21.6
billion at
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March 31, 2003, and $24.4 billion at December 31, 2003. The linked-quarter
decline reflected trust distributions and tax payments.
WEALTH ADVISORY BUSINESS CONTINUES TO PRODUCE RECORD HIGHS
First quarter 2004 income from the Wealth Advisory Services business was $39.7
million. Compared to the year-ago first quarter, this was an increase of 18.2%.
On a linked-quarter basis, this was an increase of 3.9% from the 2003 fourth
quarter. Strong demand for planning services, new business development, the
multi-manager investment consulting capabilities, and market appreciation
contributed to the increases.
Because the primary services that the Wealth Advisory business provides are
advice and counsel, the sources of Wealth Advisory revenue include fees that are
based on the complexity of the services delivered as well as fees that are based
on asset valuations. The three components of Wealth Advisory revenue are shown
in the supplemental financial information that accompanies this release.
For the 2004 first quarter, trust and investment advisory fees - which are the
fees that are tied to the financial markets - accounted for 67.7% of total
Wealth Advisory income. The corresponding percentages for the 2003 first quarter
and the 2003 fourth quarter were 67.0% and 68.8%, respectively.
Trust and investment advisory fees totaled $26.9 million for the 2004 first
quarter. This was a 19.6% increase from the year-ago first quarter, and a 2.3%
increase from the previous quarter. Approximately 75% of the trust and advisory
fee income was associated with equity market valuations. The remainder reflected
fixed income assets.
Financial and estate planning activities, which comprise the "Other service
fees" line on the supplemental financial statement, generated $7.6 million in
income for the 2004 first quarter. This was 38.2% higher than for the year-ago
first quarter, and 16.9% higher than for the 2003 fourth quarter. Fees from
these activities pertain to the level and type of service provided, and are not
related to movement in the financial markets. Because
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these fees reflect client demand at any given point in time, they may fluctuate
from period to period.
The third component of Wealth Advisory revenue comes from fees associated with
mutual fund investments. Approximately 95% of these investments represent money
market funds and therefore are not tied to equity market movements. For the 2004
first quarter, these mutual fund service fees totaled $5.2 million, which was a
decrease on both a prior-year quarter and linked-quarter basis.
CORPORATE CLIENT SERVICES BREAKS PREVIOUS FIRST QUARTER RECORD
Income from the Corporate Client Services business was $17.9 million for the
2004 first quarter. This was a 20.1% increase from the year-ago first quarter,
and it was the highest first quarter amount ever recorded by this business. On a
linked-quarter basis, the decline in income from the 2003 fourth quarter
reflected the inherent seasonality of this business.
While all components of the Corporate Client Services business contributed to
the year-over-year growth, slightly more than 50% of the increase was generated
by trust and administrative activities that support capital markets
transactions. The markets for asset-backed securitizations, trust-preferred
securities, and traditional debt issues were particularly active. Capital
markets-related fees jumped 23.8% to $7.8 million for the 2004 first quarter.
Income from management services for preferred-jurisdiction entities rose 12.2%
and totaled $5.5 million for the 2004 first quarter. Demand was particularly
strong for services that support entities based in the Caribbean and Europe,
where the market for entity management services is less mature than it is in the
United States.
Income from trust and custody services for 401(k) and other institutional
retirement plans was $2.8 million for the 2004 first quarter. This was a 16.7%
increase from the year-ago first quarter. Market appreciation accounted for some
of the increase, but the growth also
4
reflected demand for experienced and trusted service providers in the wake of
turmoil in the mutual fund settlement industry.
Services provided by the Corporate Client business 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. In the 2004 first quarter, approximately 26% of
Corporate Client revenue was tied to asset valuations. Most of that revenue was
associated with retirement plan assets for which the company serves as trustee
or cash management services that were provided in conjunction with trust or
entity management services.
Details on all components of Corporate Client revenue, including income from
cash management services, are shown in the supplemental financial information
that accompanies this release.
CRAMER ROSENTHAL MCGLYNN'S RESULTS SURPASS EXPECTATIONS
At value-style affiliate money manager Cramer Rosenthal McGlynn (CRM), the
significant improvement in equity market levels from the first quarter of 2003
led to substantial increases in managed assets and income for the first quarter
of 2004.
At March 31, 2004, assets under management at CRM were $5.1 billion. This was
$1.9 billion, or 59.4%, more than at March 31, 2003, and $0.4 billion, or 8.5%,
more than at December 31, 2003.
Income from CRM for the 2004 first quarter was $2.1 million. This was more than
double the 2003 first quarter amount and equal to the 2003 fourth quarter
amount. While managed assets rose on a linked-quarter basis, income did not
because CRM's 2003 fourth quarter revenue included incentives earned on
favorable hedge fund performance.
ROXBURY CAPITAL MANAGEMENT RETURNS TO PROFITABILITY
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The success of affiliate Roxbury Capital Management's (RCM) efforts to return to
profitability was apparent in the growth-style money manager's results. Income
from RCM was $0.2 million for the 2004 first quarter. This was a considerable
improvement from the 2003 first quarter, when a $0.9 million loss was recorded
for RCM, and from the 2003 fourth quarter, when RCM achieved break-even results.
RCM's ability to attract additional assets, particularly to its
small-capitalization-stock product, contributed to the increase. The firm also
continued to make progress in reducing expenses and stemming the flow of lost
business.
At March 31, 2004, RCM's managed assets totaled $3.4 billion. This was an
increase of 6.2% from the 2003 first quarter and fourth quarter. RCM's managed
assets were $3.2 billion at the ends of both periods.
NET INTEREST MARGIN STABILIZES
The net interest margin for the 2004 first quarter was 3.53%. Although this was
an improvement of 1 basis point from the 2003 fourth quarter, it was 22 basis
points below the year-ago first quarter margin of 3.75%.
The linked-quarter 1-basis-point improvement was due to favorable repricing of
certain wholesale certificates of deposit and interest rate swaps associated
with the company's long-term subordinated debt.
The year-over-year decline reflected the challenges of the low interest rate
environment. Compared to the year-ago first quarter, the average yield on
earning assets was 61 basis points lower, while the average cost of funds fell
39 basis points.
Investment portfolio balances, on average, for the 2004 first quarter were $1.90
billion. In comparison, investment balances, on average, for the 2003 fourth
quarter were $1.84 billion. For the year-ago first quarter, they were $1.46
billion. The year-over-year increase reflected the proceeds of the company's
issuance in April 2003 of $250 million
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in long-term subordinated debt. The proceeds were invested primarily in
mortgage-backed instruments.
At March 31, 2004, the average life of the portfolio was 5.25 years and the
duration was 2.37. In comparison, at December 31, 2003, the average life was
5.67 years and the duration was 2.81. On a percentage basis, the composition of
the assets within the investment portfolio remained relatively unchanged between
December 31, 2003, and March 31, 2004.
LOAN BALANCES RISE FOR 12TH CONSECUTIVE QUARTER
Loan balances for the 2004 first quarter, on average, were $6.31 billion. This
was 5.5% higher than average balances for the year-ago first quarter, and 2.3%
higher than average balances for the 2003 fourth quarter.
This 12-quarter growth trend in loan balances is an indication of the company's
geographic focus on the Delaware Valley region, which benefits from a
well-diversified economy, and its commercial lending focus on family-owned or
closely held businesses with annual sales of up to $250 million.
Nearly all of the growth occurred in the commercial portfolio, which rose to
$4.15 billion. This was an increase of 10.2% from the year-ago first quarter,
and 4.1% from the 2003 fourth quarter. Approximately 52% of the year-over-year
growth in the commercial portfolio occurred in the state of Delaware, where the
company continues to hold the leading market share. Approximately 35% of the
year-over-year commercial loan growth occurred in southeastern Pennsylvania,
where the company continues to gain market share.
On a percentage basis, commercial construction and real estate (CRE) lending
represented the fastest-growing segment of the commercial portfolio. CRE
balances, on average, rose to $0.73 billion, which was an increase of 33.1% from
the year-ago first quarter and 5.5% from the 2003 fourth quarter. Approximately
53% of the CRE loan
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growth occurred in Delaware, where the housing market remained strong and the
demand continued to grow for retail and other services to support housing
development.
Residential real estate construction and land development activity accounted for
approximately 38% of the Delaware CRE portfolio. The Delaware housing market is
experiencing an increasing number of buyers in the marketplace, and homebuilder
sales volumes are above historical levels at all price points. The National
Association of Home Builders predicts that, while pricing may normalize, demand
should remain strong, given Delaware's population growth and the increasing
popularity of its beach areas for year-round living and as a retirement
destination.
Traditional commercial and industrial (C&I) loans continued to account for the
majority of the commercial loan portfolio. C&I balances for the 2004 first
quarter, on average, were $2.3 billion. This was an increase of 5.0% from the
year-ago first quarter, and an increase of 4.3% from the 2003 fourth quarter.
Approximately 50% of the C&I loan growth was generated in southeastern
Pennsylvania.
Higher demand for automobile dealer floor plan loans was a factor in the C&I
growth, as dealers borrowed to support new seasonal inventory. In addition, the
light manufacturing sector in southeastern Pennsylvania showed signs of an
upturn, and the company added several new clients from the precision machining
and metal fabrication sectors.
In the retail portfolio, average balances for the 2004 first quarter declined to
$2.16 billion. Average balances for consumer loans and loans secured with liquid
collateral increased modestly, but lower balances in the residential mortgage
portfolio offset this growth.
Residential mortgage balances for the 2004 first quarter, on average, fell 25.8%
from the year-ago first quarter and 6.5% from the 2003 fourth quarter.
Residential mortgage balances decreased due to prepayments, refinancings, and
the company's practice of selling new residential mortgage production into the
secondary market. These declines in
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exposure to mortgage loans were offset by an increase in mortgage-backed
securities in the company's investment portfolio.
Core deposit balances for the 2004 first quarter, on average, were $4.4 billion.
This was an increase of 3.5% from the year-ago first quarter, due to higher
savings, interest-bearing demand, and noninterest-bearing demand balances.
On a linked-quarter basis, core deposit balances, on average, were 1.6% lower
than for the 2003 fourth quarter. Declines in certificate of deposit balances
were the primary cause of the linked-quarter decrease.
CREDIT QUALITY REMAINS STABLE
Net charge-offs, which the company regards as the primary indicator of credit
quality, were 7 basis points for the first quarter of 2004. This was equal to
the 2003 first quarter and 3 basis points lower than for the 2003 fourth
quarter.
Net charge-offs totaled $4.2 million for the 2004 first quarter. This was $0.1
million higher than the year-ago first quarter amount, but $2.2 million lower
than the 2003 fourth quarter amount.
Nonaccruing loans decreased for the fourth consecutive quarter. At March 31,
2004, nonaccruing loans were $40.6 million. This was $24.0 million less than at
the same time a year ago, and $4.8 million less than at December 31, 2003. The
downward trend reflected a combination of previously recorded pay-downs and
charge-offs that were associated with a large credit that was transferred to
nonaccruing status at the end of the 2003 first quarter.
Other real estate owned (OREO) also decreased for the fourth consecutive
quarter. This was due to the successful work out throughout the past year of a
residential beach resort project in Maryland that first was classified as OREO
in December 2002.
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Loans past due 90 days or more, on a period-end basis, totaled $6.2 million.
This was a decrease of $2.1 million from March 31, 2003, but an increase of $0.6
million from December 31, 2003.
The provision for loan losses and the reserve for loan losses were increased in
line with loan growth. The loan loss reserve ratio, at 1.43%, was unchanged from
March 31, 2003, and 1 basis point lower than at December 31, 2003.
At March 31, 2004, 95.90% of loans outstanding were rated "pass" by the
company's internal risk rating analysis. This was a larger percentage on both a
year-ago and linked-quarter basis. The percentage of loans rated pass has been
higher than 95% since 2000 and higher than 92% since 1998. The complete risk
rating analysis is included in the supplemental financial information that
accompanies this release.
The composition of the assets within the loan portfolio remained relatively
unchanged and well diversified across commercial and consumer lines.
EXPENSES REFLECT BUSINESS GROWTH
Expenses for the 2004 first quarter totaled $83.2 million. This was an increase
of 4.5% from the year-ago first quarter and 4.0% from the 2003 fourth quarter.
When fourth quarter and full-year 2003 results were announced, management
predicted that expenses would rise in 2004 in support of business line growth
and the completion of two large technology conversion projects.
On a year-over-year basis, higher salary and wage costs accounted for
approximately 72% of the increase in expenses. While full-time equivalent
headcount declined on a year-over-year basis, salaries and wages rose as more
staff members were added in higher-cost markets, such as Baltimore,
Philadelphia, and Florida.
There were 2,340 full-time-equivalent staff members as of March 31, 2004. In
comparison, there were 2,342 at March 31, 2003, and 2,307 at December 31, 2003.
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Incentive and bonus costs were lower on a year-over-year basis due to
adjustments that were made to various incentive programs. On a linked-quarter
basis, the increase in incentive expense from the 2003 fourth quarter reflected
the higher levels of business development.
On a linked-quarter basis, employee benefits expense accounted for more than 80%
of the growth in expenses. Higher pension and health insurance costs caused the
majority of this increase.
Although management anticipates that certain expenses will rise in 2004, expense
management remains paramount. This philosophy was evident in first quarter
expenditures for occupancy; furniture, equipment, and supplies; advertising;
consulting fees; and travel and entertainment. Expenses declined in many of
these categories. Where increases did occur, the amounts were minimal.
SHARE BUYBACK RESUMES
The company bought back 200,903 shares of its stock during the 2004 first
quarter. This brought the total number purchased under the current
8-million-share program, which commenced in April 2002, to 285,272 shares.
2004 OUTLOOK
Commenting on the outlook for the remainder of 2004, Cecala said:
- "Improving economic statistics suggest that the recovery will continue to
gain momentum.
- "If the financial markets remain at their current levels, we anticipate
double-digit growth in fee-based revenue.
- "Loan growth should continue at the pace we experienced in 2003, which was
in the 6% to 7% range.
- "We believe we have seen most of the margin compression that was brought on
by the Federal Reserve's rate reductions. The margin should be in the 3.52%
to 3.45% range for the remainder of the year.
- "Ongoing expenses will reflect continued investments in technology and
higher employee benefits costs. In addition, we expect to increase our
level of advertising in the next few quarters.
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- "For the 2004 second quarter, we expect total noninterest expenses to be in
the $85 million to $87 million range."
CONFERENCE CALL TODAY
Management will discuss 2004 first quarter results and the outlook for the 2004
second quarter 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 call will be available from 12:00 noon
(EDT) today until 5:00 p.m. (EDT) on Friday, April 23, by calling 877-519-4471
and using PIN number 4403675. 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 that 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. 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 United States and in more than 50 other countries, and commercial
banking services throughout the Delaware Valley region. Its wholly owned bank
subsidiary, Wilmington Trust Company, celebrated its 100th anniversary in 2003
and today is the 15th largest personal trust provider in the United States.
Wilmington Trust and its affiliates have
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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.
# # #
CONTACTS
Investors and analysts: News media:
Ellen J. Roberts Bill Benintende
Investor Relations Public Relations
(302) 651-8069 (302) 651-8268
eroberts@wilmingtontrust.com wbenintende@wilmingtontrust.com
# # #
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WILMINGTON TRUST CORPORATION
QUARTERLY SUMMARY
As of and for the three months ended March 31, 2004
INCOME STATEMENT
Three Months Ended
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% Change From:
-------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, Prior Prior
(in millions, except per share amounts) 2004 2003 2003 2003 2003 Quarter Year
--------------------------------------- ---------- ---------- ---------- ---------- ---------- ------- -----
Net Interest Income
Interest income $ 91.0 $ 90.7 $ 90.5 $ 94.7 $ 92.8 0.3 (1.9)
Interest expense 19.2 20.3 22.4 24.5 24.5 (5.4) (21.6)
---------------------------------------------------------------------------------------------------------
Net interest income 71.8 70.4 68.1 70.2 68.3 2.0 5.1
Provision for loan losses (5.5) (5.0) (5.7) (5.9) (4.9) 10.0 12.2
---------------------------------------------------------------------------------------------------------
Net interest income after provision
for loan losses 66.3 65.4 62.4 64.3 63.4 1.4 4.6
--------------------------------------------------------------
Noninterest Income
Advisory fees:
Wealth Advisory Services 39.7 38.2 35.5 33.1 33.6 3.9 18.2
Corporate Client Services 17.9 19.5 16.4 16.5 14.9 (8.2) 20.1
Cramer Rosenthal McGlynn 2.1 2.1 1.3 1.1 0.7 -- 200.0
Roxbury Capital Management 0.2 -- (0.1) (1.2) (0.9) -- --
---------------------------------------------------------------------------------------------------------
Advisory fees 59.9 59.8 53.1 49.5 48.3 0.2 24.0
Amortization of affiliate other
intangibles (0.4) (0.4) (0.7) (0.3) (0.3) -- 33.3
--------------------------------------------------------------
Advisory fees after amortization
of affiliate other intangibles 59.5 59.4 52.4 49.2 48.0 0.2 24.0
--------------------------------------------------------------
Service charges on deposit accounts 8.2 8.6 8.6 7.8 7.3 (4.7) 12.3
Other noninterest income 5.0 5.0 5.3 6.0 5.8 -- (13.8)
Securities gains -- 0.7 -- -- -- (100.0) --
---------------------------------------------------------------------------------------------------------
Total noninterest income 72.7 73.7 66.3 63.0 61.1 (1.4) 19.0
--------------------------------------------------------------
Net interest and noninterest income 139.0 139.1 128.7 127.3 124.5 (0.1) 11.6
--------------------------------------------------------------
Noninterest Expense
Salaries and wages 32.4 31.6 31.5 31.2 29.8 2.5 8.7
Incentives and bonuses 8.3 7.6 5.4 4.3 9.5 9.2 (12.6)
Employment benefits 10.9 8.3 8.8 8.9 9.6 31.3 13.5
Net occupancy 5.3 5.4 4.8 5.0 5.4 (1.9) (1.9)
Furniture, equipment, and supplies 7.6 7.1 6.6 7.3 7.3 7.0 4.1
Other noninterest expense:
Advertising and contributions 1.6 2.0 1.4 2.8 1.9 (20.0) (15.8)
Servicing and consulting fees 4.6 4.3 4.0 3.9 4.0 7.0 15.0
Travel, entertainment, and training 1.7 1.7 1.8 1.9 1.5 -- 13.3
Originating and processing fees 2.1 2.1 2.1 1.8 1.8 -- 16.7
Other expense 8.7 9.9 8.8 10.0 8.8 (12.1) (1.1)
---------------------------------------------------------------------------------------------------------
Total other noninterest expense 18.7 20.0 18.1 20.4 18.0 (6.5) 3.9
--------------------------------------------------------------
Total noninterest expense 83.2 80.0 75.2 77.1 79.6 4.0 4.5
--------------------------------------------------------------
Income before income taxes and
minority interest 55.8 59.1 53.5 50.2 44.9 (5.6) 24.3
Applicable income taxes 19.8 20.8 18.8 17.4 15.3 (4.8) 29.4
---------------------------------------------------------------------------------------------------------
Net income before minority interest 36.0 38.3 34.7 32.8 29.6 (6.0) 21.6
Minority interest 0.3 0.3 0.3 0.2 0.2 -- 50.0
---------------------------------------------------------------------------------------------------------
Net income $ 35.7 $ 38.0 $ 34.4 $ 32.6 $ 29.4 (6.1) 21.4
==============================================================
Net income per share
Basic $ 0.54 $ 0.58 $ 0.52 $ 0.50 $ 0.45 (6.9) 20.0
Diluted 0.53 0.57 0.52 0.49 0.44 (7.0) 20.5
Weighted average shares outstanding
(in thousands)
Basic 66,156 66,034 65,956 65,790 65,692
Diluted 67,489 67,093 66,670 66,195 66,174
Net income as a percentage of:
Average assets 1.61% 1.73% 1.58% 1.53% 1.46%
Average stockholders' equity 17.69 19.08 17.64 17.04 15.97
WILMINGTON TRUST CORPORATION
QUARTERLY SUMMARY
As of and for the three months ended March 31, 2004
STATEMENT OF CONDITION
% Change From
-------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, Prior Prior
(in millions) 2004 2003 2003 2003 2003 Quarter Year
------------------------------------------------ -------- -------- -------- -------- -------- -------- --------
Assets
Cash and due from banks $ 193.5 $ 210.2 $ 228.5 $ 214.5 $ 207.3 (7.9) (6.7)
----------------------------------------------------
Federal funds sold and securities
purchased under agreements to resell 151.5 3.8 477.7 180.9 3.8 N/M N/M
----------------------------------------------------
Investment securities:
U.S. Treasury and government agencies 468.1 470.0 515.1 548.6 451.5 (0.4) 3.7
Obligations of state and political subdivisions 14.3 16.0 16.1 16.6 16.6 (10.6) (13.9)
Preferred stock 121.2 120.1 119.4 122.4 119.2 0.9 1.7
Mortgage-backed securities 1,038.2 979.0 883.4 1,039.1 707.2 6.0 46.8
Other securities 301.5 294.3 262.5 244.2 250.2 2.4 20.5
----------------------------------------------------------------------------------------------------------
Total investment securities 1,943.3 1,879.4 1,796.5 1,970.9 1,544.7 3.4 25.8
----------------------------------------------------
Loans:
Commercial, financial and agricultural * 2,338.8 2,275.2 2,216.0 2,219.6 2,153.6 2.8 8.6
Real estate - construction * 733.0 699.8 663.4 602.1 604.0 4.7 21.4
Mortgage-commercial * 1,144.5 1,078.2 1,052.6 1,038.0 1,055.0 6.1 8.5
----------------------------------------------------------------------------------------------------------
Total commercial loans 4,216.3 4,053.2 3,932.0 3,859.7 3,812.6 4.0 10.6
----------------------------------------------------
Mortgage-residential 471.9 489.6 545.9 592.3 627.1 (3.6) (24.7)
Consumer 1,073.7 1,077.1 1,055.5 1,037.0 1,029.4 (0.3) 4.3
Secured with liquid collateral 609.1 605.4 565.8 574.6 539.1 0.6 13.0
----------------------------------------------------------------------------------------------------------
Total retail loans 2,154.7 2,172.1 2,167.2 2,203.9 2,195.6 (0.8) (1.9)
----------------------------------------------------
Total loans net of unearned income 6,371.0 6,225.3 6,099.2 6,063.6 6,008.2 2.3 6.0
Reserve for loan losses (91.2) (89.9) (91.2) (87.6) (86.0) 1.4 6.0
----------------------------------------------------------------------------------------------------------
Net loans 6,279.8 6,135.4 6,008.0 5,976.0 5,922.2 2.4 6.0
----------------------------------------------------
Premises and equipment 151.4 152.3 152.0 152.1 154.0 (0.6) (1.7)
Goodwill 243.3 243.2 242.8 247.3 240.1 -- 1.3
Other intangibles 23.6 24.0 24.2 21.3 21.4 (1.7) 10.3
Other assets 171.3 171.9 170.2 176.2 174.5 (0.3) (1.8)
----------------------------------------------------------------------------------------------------------
Total assets $9,157.7 $8,820.2 $9,099.9 $8,939.2 $8,268.0 3.8 10.8
====================================================
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing demand: $1,054.6 $1,025.5 $1,440.0 $ 944.4 $ 919.1 2.8 14.7
Interest-bearing:
Savings 379.0 369.0 364.9 368.7 366.5 2.7 3.4
Interest-bearing demand 2,275.4 2,364.1 2,246.9 2,302.5 2,129.9 (3.8) 6.8
Certificates under $100,000 769.3 788.3 805.6 836.7 867.5 (2.4) (11.3)
Local certificates $100,000 and over 137.6 130.3 129.1 125.8 136.9 5.6 0.5
----------------------------------------------------------------------------------------------------------
Total core deposits 4,615.9 4,677.2 4,986.5 4,578.1 4,419.9 (1.3) 4.4
National certificates $100,000 and over 2,243.0 1,900.0 1,784.2 1,910.2 2,157.2 18.1 4.0
----------------------------------------------------------------------------------------------------------
Total deposits 6,858.9 6,577.2 6,770.7 6,488.3 6,577.1 4.3 4.3
----------------------------------------------------
Short-term borrowings:
Federal funds purchased and securities sold
under agreements to repurchase 885.5 828.5 938.8 1,083.4 627.9 6.9 41.0
U.S. Treasury demand 18.6 48.3 55.6 32.5 10.7 (61.5) 73.8
----------------------------------------------------------------------------------------------------------
Total short-term borrowings 904.1 876.8 994.4 1,115.9 638.6 3.1 41.6
----------------------------------------------------
Other liabilities 152.0 158.1 140.2 133.2 137.0 (3.9) 10.9
Long-term debt 418.6 407.1 410.7 420.8 160.5 2.8 160.8
----------------------------------------------------------------------------------------------------------
Total liabilities 8,333.6 8,019.2 8,316.0 8,158.2 7,513.2 3.9 10.9
----------------------------------------------------
Minority interest 1.0 0.2 0.3 (0.1) -- 400.0 --
Stockholders' equity 823.1 800.8 783.6 781.1 754.8 2.8 9.0
----------------------------------------------------------------------------------------------------------
Total liabilities and stockholders'
equity $9,157.7 $8,820.2 $9,099.9 $8,939.2 $8,268.0 3.8 10.8
====================================================
* 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 three months ended March 31, 2004
AVERAGE STATEMENT OF CONDITION
% Change From
2004 2003 2003 2003 2003 -------------------
First Fourth Third Second First Prior Prior
(in millions) Quarter Quarter Quarter Quarter Quarter Quarter Year
------------------------------------------------ -------- -------- -------- -------- -------- -------- --------
Assets
Cash and due from banks $ 193.9 $ 200.8 $ 190.5 $ 182.4 $ 187.0 (3.4) 3.7
----------------------------------------------------
Federal funds sold and securities
purchased under agreements to resell 16.8 16.2 35.6 38.4 24.1 3.7 (30.3)
----------------------------------------------------
Investment securities:
U.S. Treasury and government agencies 465.3 488.0 517.1 528.8 461.0 (4.7) 0.9
Obligations of state and political subdivisions 14.7 16.1 16.2 16.6 16.5 (8.7) (10.9)
Preferred stock 120.3 118.9 120.7 120.1 114.0 1.2 5.5
Mortgage-backed securities 1,008.8 947.2 961.2 888.8 642.6 6.5 57.0
Other securities 289.4 271.9 249.9 240.9 227.5 6.4 27.2
----------------------------------------------------------------------------------------------------------
Total investment securities 1,898.5 1,842.1 1,865.1 1,795.2 1,461.6 3.1 29.9
----------------------------------------------------
Loans:
Commercial, financial and agricultural 2,325.2 2,229.1 2,202.2 2,190.8 2,214.8 4.3 5.0
Real estate - construction 725.0 687.5 624.9 590.8 544.6 5.5 33.1
Mortgage-commercial 1,103.1 1,073.6 1,039.4 1,054.6 1,008.0 2.7 9.4
----------------------------------------------------------------------------------------------------------
Total commercial loans 4,153.3 3,990.2 3,866.5 3,836.2 3,767.4 4.1 10.2
----------------------------------------------------
Mortgage-residential 481.7 515.0 573.9 604.7 649.0 (6.5) (25.8)
Consumer 1,071.1 1,060.2 1,031.3 1,031.4 1,028.3 1.0 4.2
Secured with liquid collateral 602.6 601.7 583.6 565.4 532.9 0.1 13.1
----------------------------------------------------------------------------------------------------------
Total retail loans 2,155.4 2,176.9 2,188.8 2,201.5 2,210.2 (1.0) (2.5)
----------------------------------------------------
Total loans net of unearned income 6,308.7 6,167.1 6,055.3 6,037.7 5,977.6 2.3 5.5
Reserve for loan losses (89.1) (90.2) (87.1) (84.7) (84.5) (1.2) 5.4
----------------------------------------------------------------------------------------------------------
Net loans 6,219.6 6,076.9 5,968.2 5,953.0 5,893.1 2.3 5.5
----------------------------------------------------
Premises and equipment 151.9 151.9 153.0 153.7 154.9 -- (1.9)
Goodwill 243.2 242.8 247.4 245.8 240.2 0.2 1.2
Other intangibles 23.7 24.1 21.2 21.3 21.6 (1.7) 9.7
Other assets 167.5 171.0 176.7 177.6 176.7 (2.0) (5.2)
----------------------------------------------------------------------------------------------------------
Total assets $8,915.1 $8,725.8 $8,657.7 $8,567.4 $8,159.2 2.2 9.3
====================================================
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing demand $ 842.0 $ 868.2 $ 866.8 $ 796.4 $ 800.7 (3.0) 5.2
Interest-bearing:
Savings 372.1 368.2 368.8 369.4 357.3 1.1 4.1
Interest-bearing demand 2,267.0 2,298.1 2,244.7 2,127.0 2,062.9 (1.4) 9.9
Certificates under $100,000 779.3 794.8 817.6 851.5 874.6 (2.0) (10.9)
Local certificates $100,000 and over 134.8 135.5 128.4 139.6 151.1 (0.5) (10.8)
----------------------------------------------------------------------------------------------------------
Total core deposits 4,395.2 4,464.8 4,426.3 4,283.9 4,246.6 (1.6) 3.5
National certificates $100,000 and over 2,223.9 1,927.4 1,780.9 1,979.5 2,066.3 15.4 7.6
----------------------------------------------------------------------------------------------------------
Total deposits 6,619.1 6,392.2 6,207.2 6,263.4 6,312.9 3.5 4.9
----------------------------------------------------
Short-term borrowings:
Federal funds purchased and securities sold
under agreements to repurchase 893.0 973.6 1,115.2 985.3 778.7 (8.3) 14.7
U.S. Treasury demand 11.8 9.8 20.0 8.4 8.1 20.4 45.7
----------------------------------------------------------------------------------------------------------
Total short-term borrowings 904.8 983.4 1,135.2 993.7 786.8 (8.0) 15.0
----------------------------------------------------
Other liabilities 168.3 153.8 136.1 135.0 152.5 9.4 10.4
Long-term debt 410.8 406.1 405.4 407.9 160.5 1.2 156.0
----------------------------------------------------------------------------------------------------------
Total liabilities 8,103.0 7,935.5 7,883.9 7,800.0 7,412.7 2.1 9.3
----------------------------------------------------
Minority interest 0.3 0.2 -- 0.1 0.1 50.0 200.0
Stockholders' equity 811.8 790.1 773.8 767.3 746.4 2.7 8.8
----------------------------------------------------------------------------------------------------------
Total liabilities and stockholders'
equity $8,915.1 $8,725.8 $8,657.7 $8,567.4 $8,159.2 2.2 9.3
====================================================
WILMINGTON TRUST CORPORATION
QUARTERLY SUMMARY
As of and for the three months ended March 31, 2004
RATES
2004 2003 2003 2003 2003
First Fourth Third Second First
YIELDS/RATES (TAX-EQUIVALENT BASIS) Quarter Quarter Quarter Quarter Quarter
----------------------------------------------- --------- --------- --------- --------- ---------
Earning assets:
FEDERAL FUNDS SOLD AND SECURITIES
PURCHASED UNDER AGREEMENTS TO RESELL 1.01 % 1.09 % 1.12 % 1.32 % 1.40 %
U.S. Treasury and government agencies 3.44 3.32 3.22 3.29 3.73
Obligations of state and political subdivisions 8.55 9.04 8.99 9.01 8.97
Preferred stock 7.42 7.30 7.39 7.40 7.68
Mortgage-backed securities 4.12 4.13 3.64 4.47 4.97
Other securities 2.79 2.87 2.88 2.93 3.17
TOTAL INVESTMENT SECURITIES 3.99 3.98 3.71 4.15 4.55
Commercial, financial and agricultural 4.16 4.18 4.18 4.45 4.53
Real estate - construction 4.42 4.37 4.37 4.56 4.45
Mortgage-commercial 4.82 4.90 5.08 5.47 5.63
TOTAL COMMERCIAL LOANS 4.38 4.41 4.45 4.75 4.81
Mortgage-residential 6.08 6.40 6.63 6.77 6.82
Consumer 6.04 6.15 6.58 6.68 6.85
Secured with liquid collateral 2.51 2.51 2.52 2.73 2.87
TOTAL RETAIL LOANS 5.06 5.20 5.51 5.69 5.88
TOTAL LOANS 4.61 4.69 4.85 5.09 5.21
TOTAL EARNING ASSETS 4.46 4.52 4.56 4.86 5.07
Funds used to support earning assets
Savings 0.13 0.13 0.13 0.15 0.23
Interest-bearing demand 0.37 0.37 0.39 0.45 0.47
Certificates under $100,000 2.12 2.31 2.50 2.80 3.05
Local certificates $100,000 and over 1.44 1.49 1.60 1.78 1.99
CORE INTEREST-BEARING DEPOSITS 0.77 0.82 0.89 1.05 1.17
National certificates $100,000 and over 1.13 1.20 1.48 1.56 1.69
TOTAL INTEREST-BEARING DEPOSITS 0.91 0.95 1.09 1.23 1.36
Federal funds purchased and securities sold
under agreements to repurchase 1.37 1.38 1.39 1.54 1.64
U.S. Treasury demand 0.77 0.80 0.76 1.04 0.99
TOTAL SHORT-TERM BORROWINGS 1.37 1.37 1.38 1.54 1.64
Long-term debt 2.81 3.45 3.63 3.62 6.58
TOTAL INTEREST-BEARING LIABILITIES 1.08 1.16 1.29 1.42 1.52
TOTAL FUNDS USED TO SUPPORT
EARNING ASSETS 0.93 1.00 1.11 1.24 1.32
NET INTEREST MARGIN (TAX-EQUIVALENT BASIS) 3.53 3.52 3.45 3.62 3.75
Year-to-date net interest margin 3.53 3.60 3.60 3.68 3.75
Prime rate 4.00 4.00 4.00 4.25 4.25
Tax-equivalent net interest income
income (in millions) $ 72.9 $ 71.6 $ 69.3 $ 71.4 $ 69.6
Average earning assets 8,224.0 8,025.4 7,956.0 7,871.3 7,463.3
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 three months ended March 31, 2004
SUPPLEMENTAL
Three Months Ended
---------------------------------------------------------------------------------
% Change From:
----------------
Prior
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, Prior Year
WEALTH ADVISORY SERVICES (in millions) 2004 2003 2003 2003 2003 Quarter Quarter
--------------------------------------------- ---------- ---------- ---------- ---------- ---------- ------- -------
Trust and investment advisory fees $ 26.9 $ 26.3 $ 24.9 $ 23.2 $ 22.5 2.3 19.6
Mutual fund fees 5.2 5.4 5.6 5.6 5.6 (3.7) (7.1)
Other service fees 7.6 6.5 5.0 4.3 5.5 16.9 38.2
---------------------------------------------------------------------------------------------------------------
Total $ 39.7 $ 38.2 $ 35.5 $ 33.1 $ 33.6 3.9 18.2
==============================================================
CORPORATE CLIENT SERVICES (in millions)
Capital markets services $ 7.8 $ 10.0 $ 7.5 $ 7.6 $ 6.3 (22.0) 23.8
Entity management services 5.5 5.5 5.2 5.3 4.9 -- 12.2
Retirement services 2.8 2.7 2.4 2.3 2.4 3.7 16.7
Cash management services 1.8 1.3 1.3 1.3 1.3 38.5 38.5
---------------------------------------------------------------------------------------------------------------
Total $ 17.9 $ 19.5 $ 16.4 $ 16.5 $ 14.9 (8.2) 20.1
==============================================================
ASSETS UNDER MANAGEMENT (in billions)
Wilmington Trust $ 24.2 $ 24.4 $ 23.6 $ 22.7 $ 21.6 (0.8) 12.0
Roxbury Capital Management 3.4 3.2 3.1 3.3 3.2 6.2 6.2
Cramer Rosenthal McGlynn 5.1 4.7 4.0 3.8 3.2 8.5 59.4
-------------------------------------------------------------------------------
Combined assets under management $ 32.7 $ 32.3 $ 30.7 $ 29.8 $ 28.0 1.2 16.8
==============================================================
Staffing (FTE) 2,340 2,307 2,302 2,319 2,342
CAPITAL (in millions, except per share amounts)
-----------------------------------------------
Average stockholders' equity $ 811.8 $ 790.1 $ 773.8 $ 767.3 $ 746.4 2.7 8.8
Period-end primary capital 914.3 894.4 874.8 868.9 840.8 2.2 8.7
Per share:
Book value 12.46 12.18 11.87 11.85 11.49 2.3 8.4
Quarterly dividends declared 0.27 0.27 0.27 0.27 0.255 -- 5.9
Year-to-date dividends declared 0.27 1.065 0.795 0.525 0.255
Average stockholders' equity to assets 9.11% 9.05% 8.94% 8.96% 9.15%
Total risk-based capital ratio 12.75 12.37 12.15 11.90 10.20
Tier 1 risk-based capital ratio 7.66 7.42 7.27 7.09 7.11
Tier 1 leverage capital ratio 6.38 6.38 6.19 6.01 6.15
CREDIT QUALITY (in millions)
-----------------------------------------------
Period-end reserve for loan losses $ 91.2 $ 89.9 $ 91.2 $ 87.6 $ 86.0
Period-end non-performing assets:
Nonaccrual 40.6 45.4 50.2 60.4 64.6
OREO 1.1 1.4 1.6 3.2 3.9
Period-end past due 90 days 6.2 5.6 7.3 7.1 8.3
Period-end renegotiated loans -- -- -- -- --
Gross charge-offs 5.4 7.3 3.3 5.1 5.3
Recoveries 1.2 0.9 1.3 0.7 1.2
Net charge-offs 4.2 6.4 2.0 4.4 4.1
Year-to-date net charge-offs 4.2 16.9 10.5 8.5 4.1
Ratios:
Period-end reserve to loans 1.43% 1.44% 1.50% 1.44% 1.43%
Period-end non-performing assets to loans 0.65 0.75 0.85 1.05 1.14
Period-end loans past due 90 days to total
loans 0.10 0.09 0.12 0.12 0.14
Net charge-offs to average loans 0.07 0.10 0.03 0.07 0.07
INTERNAL RISK RATING
-----------------------------------------------
Pass 95.90% 95.83% 95.81% 95.62% 95.52%
Watchlisted 2.64 2.58 2.53 2.60 2.48
Substandard 1.21 1.27 1.25 1.23 1.79
Doubtful 0.25 0.32 0.41 0.55 0.21